Tuesday, 25 March 2008.
The Committee met at half-past three.
[The Deputy Chairman of Committees (Baroness McIntosh of Hudnall) in the Chair.]
Before the Minister moves that the first statutory instrument be considered, I remind the Committee that in the case of each statutory instrument the Motion before the Committee will be that the Committee do consider the statutory instrument in question. I should perhaps make it clear that the Motion to approve the statutory instrument will be moved in the Chamber in the usual way.
Sex Discrimination (Amendment of Legislation) Regulations 2008
rose to move, That the Grand Committee do report to the House that it has considered the Sex Discrimination (Amendment of Legislation) Regulations 2008.
The noble Baroness said: The draft regulations were laid before the House on 6 March, and I confirm that their provisions are compatible with the European Convention on Human Rights.
The United Kingdom has a long tradition of legislating to protect people from discrimination. We have had protection from sex discrimination in employment, education, the provision of goods, facilities, services and the management of premises in Britain since 1975 and in Northern Ireland since 1976. It is in this context that the Government welcome the fact that European law is catching up with long-standing principles that are enshrined in our domestic law by extending existing European protection in employment-related areas to non-employment areas.
We welcome the European Council gender directive, which is implemented by way of these regulations in Great Britain and Northern Ireland. It will ensure consistency in sex discrimination protection throughout the European Union. Our proposals for implementation have been the subject of public consultation both here and in Northern Ireland. In Britain, that was alongside the consultation on the proposed Equality Bill, from 12 June to 4 September; and the Northern Ireland Executive consultation followed from 30 July to 21 September, setting out proposals that mirrored closely those for Great Britain.
The regulations introduce some new protections and extend others in existing sex discrimination law in the fields of goods, facilities and services—I am tempted to say “GFS” from now on; it might shorten our debate by about 20 minutes—and premises. In short, these regulations are a welcome stepping stone to the further reform of discrimination law that is intended to take place through the Government’s proposed Equality Bill in Great Britain. At the same time, there are some differences between what is required by the gender directive and the existing UK protections.
The regulations are being made under the European Communities Act 1972. The small number of amendments to the Sex Discrimination Act 1975 and the Sex Discrimination (Northern Ireland) Order 1976 are required so that additional protection in line with the gender directive applies to both women and men in the provision to the public of goods, facilities and services—regardless of whether such goods, facilities and services are provided free or are charged for—and the disposal or management of premises.
The most significant proposals on which we consulted between June and September 2007 in Great Britain, and in Northern Ireland between July and September, were the following. The first was a specific prohibition on sex and sexual harassment in the provision of GFS. Our legislation currently provides protection from discrimination but not from harassment. The second proposal was protection from discrimination and harassment in relation to GFS and premises for people intending to undergo, or who are undergoing or who have undergone, gender reassignment. That would extend protection to an estimated 5,000 people who are at present excluded from protection in the field of GFS. The third would express protection from discrimination in the field of GFS and premises for women on the grounds of their pregnancy and maternity. We do not have that explicit protection in this area of our legislation, although in fact many cases are likely to be covered by existing sex discrimination law. Fourthly, the regulations would introduce greater transparency where insurers offer differential premium and benefit levels on the basis of gender. The fifth proposal is a shift in the burden of proof requirements.
So, we have here a welcome opportunity to improve our existing laws in advance of an Equality Bill in Britain. The timetable for amending our legislation is determined by the directive, which required member states to implement it by 21 December 2007. It is important therefore that we act at the earliest possible opportunity to bring ourselves in line with European law.
I am sure that Members of the Committee will have noticed that these important regulations, which replace those laid before the House on 28 November, amend legislation in Great Britain and Northern Ireland. Let me explain why we have done that. Northern Ireland Ministers have competence to legislate on discrimination matters, and the intention was for similar regulations to be introduced there to the same timetable. However, it became clear late in the process that the First Minister and the Deputy First Minister could not reach joint agreement on all the policy proposals to implement the gender directive. A failure by part of a member state to comply with the directive will be considered by the European Commission as a breach by the whole member state—here, the UK—and that clearly was not an option.
Although implementation is now already late, the Government considered that the most effective means of ensuring that the UK as a whole could comply with the directive was for regulations implementing the directive in Britain and Northern Ireland to be taken forward at Westminster. Northern Ireland Ministers have not objected to this course of action and we have had the support of Northern Ireland officials in drafting the regulations. Legislating in this way offers the most effective means of putting these additional protections in place in Great Britain and Northern Ireland as soon as possible after the deadline of 21 December 2007, which we are committed to doing.
I have spoken about the wide consultations on the changes. The Government presented the proposals for the draft regulations alongside the wider proposals for an Equality Bill for Great Britain in a single consultation package, so that stakeholders could see how the proposals fitted into the wider landscape of discrimination law reform. There was an equivalent consultation in Northern Ireland. We have noted and drawn on the consultations in drafting our final proposals.
These proposals are complex. I hope that Members of the Committee will forgive me if I go into a bit of detail as it is important to understand the range of changes. Protection against discrimination and harassment on grounds of gender reassignment is not new in UK law. We are simply extending the protection that already exists for employment. The Sex Discrimination Act and, in Northern Ireland, the sex discrimination order already provide protection from discrimination and harassment in employment and related areas for people who are planning to undergo, who are undergoing or who have already undergone gender reassignment. But we are clear that we need to extend protection on those grounds outside the workplace if we are fully to implement the directive.
The directive does not expressly confer protection in this field, but a joint European Council and Commission statement recognises the application of the principle of equal treatment in the directive to grounds of gender reassignment. The principle, that the right not to be subjected to direct discrimination on grounds of sex includes changing sex or gender reassignment, is not new. It was set by the European Court of Justice in a 1996 employment case. In interpreting the reach of the directive, we have taken our lead from the Council and Commission statement and from that 1996 judgment. In 1999, we introduced regulations outlawing discrimination on the grounds of gender reassignment in Britain and Northern Ireland in the field of employment.
We now have the opportunity to extend discrimination law protection on the grounds of gender reassignment to goods, facilities, services and premises. It might be helpful if I reaffirm what is not covered by these regulations in that respect, given that, in 2007, we had debates on related issues when we introduced the Equality Act (Sexual Orientation) Regulations 2007. These regulations make similar changes.
As I think Members of the Committee will agree, it is unnecessary for me to repeat what I said in the extensive debate we had on those issues a year ago except to make the following points. Religious worship and observance fall outside the scope of the directive, so these regulations do not in any way affect such activities; nor do they prevent people holding the belief that it is wrong to seek to undergo gender reassignment. But the regulations prohibit discrimination and harassment in areas covered by the directive, such as services normally provided on a commercial basis. For legal certainty, and in response to comments we received from the Equal Opportunities Commission during the consultation period, we have clarified that in new paragraph 9(c) of Schedules 1 and 2 to the regulations.
The regulations simply outlaw a person being denied access to a shop or being the subject of abuse by a sales person, for example, because they intend to undergo, are undergoing, or have undergone gender reassignment. As we argued in relation to the 2007 regulations, an exception for individual religious believers to be exempt from the regulations—for example, the Christian owner of a commercially-run bookshop or cafe—would effectively create an individual conscience clause that would introduce a test that is so subjective that it would render the regulations ineffective for the purposes of implementing the directive and would therefore be unenforceable.
Apart from the directives, Parliament has already made its views clear that it is quite wrong in the United Kingdom today for people to be discriminated against because of the prejudices of others. The regulations extend those rights to a very small group of people who are currently unprotected in these areas. We are right to act with Europe to increase protection for people on the ground of their gender reassignment.
The regulations achieve the right balance between protecting religious liberty and human rights under the law, ensuring that people are free to hold and observe their religious beliefs but not to manifest them in such a way that treats one group of people differently from others.
I turn to harassment. Protection from harassment in the UK originated in domestic case law and was put on a statutory footing following implementation of earlier European directives. In employment and related areas, in 2003, we expressly outlawed harassment on the grounds of disability, sexual orientation and religion or belief; and on the grounds of age in 2006. In the case of race, the relevant directive has a wider reach, so in 2003, we outlawed harassment not only in employment and related areas, but also in goods, facilities, services and premises. In 2005 we introduced protection against sex, sexual and gender reassignment harassment in employment and related areas. Now the regulations will make it unlawful for a provider of goods, facilities, services or premises to subject a person who seeks to obtain those goods or use those services, or who is supplied with them, to sexual harassment, sex harassment or harassment on the grounds of their gender reassignment.
There is, however, an additional change to which I want to draw attention. It was made following a judicial review brought by the former Equal Opportunities Commission. In March 2007, the court ruled that the definition of sex harassment in the Sex Discrimination Act 1975 should be recast to provide a slightly broader definition by reference to the relevant European directive, which itself provides a new definition of sex harassment. Put simply, that would, in the employment context, mean that where one person is telling a sexist joke to another person at work, and a nearby employee overhears and considers that this has violated their dignity or created a hostile or offensive environment for them, they could make a claim that they have been subject to harassment related to sex. Such a situation is not covered by the existing definition of sex harassment, so that is an important change.
Regulations giving effect to that ruling were laid before Parliament on 14 March and are to commence on 6 April 2008. Because the sex discrimination order in Northern Ireland broadly mirrors sex discrimination law in Britain, equivalent amendments are being made to it.
Although the judgment addressed specific situations in employment and related areas and is related to the implementation of the relevant European directive covering employment and related areas, the gender directive uses the same definition of sex harassment as the European employment directive. The regulations therefore apply the same new definition of sex harassment introduced on 6 April, which will give effect to the judicial review judgment, to the fields of goods, facilities, services and premises. We will therefore have consistency within the Act. I hope that that will meet the concerns of the Equality and Human Rights Commission which, I know, wanted to be clear how the new definition would apply outside the employment area. In essence, therefore, from the date that the regulations come into force, a person seeking to access goods, facilities, services and premises will also be protected from sex harassment based on the new broader definition. This in turn addresses the concerns of the JCSI, which brought the House’s attention to the draft 2007 regulations in this respect. I am pleased to be able to say that the most recent report from the JCSI did not draw the attention of the House to any issues with regard to the regulations.
The Merits Committee also considered the draft 2007 regulations. It concluded that the special attention of the House need not be drawn to them, but it did publish the Christian Institute’s evidence, which asserted that the draft regulations would implement the gender directive in a way that would infringe religious liberties and free speech. Annexe 2 of the Merits Committee’s 5th report of Session 2007-08 lays out our response. Likewise, the committee’s 15th report has not brought the special attention of the House to the regulations, but it has included further evidence from the Christian Institute and from the Lawyers’ Christian Fellowship, which raised similar concerns, and further information from the Government Equalities Office.
That gives me the opportunity to say that, although I believe that I have already addressed many of the concerns that were expressed, I will pick up on the specific concern that we have unjustifiably broadened the definition of harassment. The claim is made because we have used “or” to link two aspects of harassment, whereas the gender directive uses “and”. Thus, in our regulations, a person need show only an “offensive environment” or that their dignity was violated. We have adopted this approach for the simple reason that the wider definition was established by case law in other areas of discrimination and that to change the definition not only would be inconsistent with other areas of discrimination law but would breach the principle of non-regression. In other words, it would dilute our law, and we cannot do that. In any event, the directive allows us to provide extra protection to the protection that is strictly required by it.
Many of the other points raised about gender reassignment harassment related to specific circumstances. Simply, if a claim of gender harassment in the provision of goods, facilities, services or premises is brought, the courts will need to balance out the competing interests of the transsexual person and the Christian service provider.
On pregnancy discrimination, the regulations explicitly prohibit discrimination against pregnant women who are seeking access to goods facilities, services and premises, thereby ending a reliance on sex discrimination case law. In so doing, we have adopted as far as possible the approach already established in employment. However, I reassure people who feel that we may have introduced a loophole into the law. Although the consultation did not seek views on defining pregnancy discrimination, the civil aviation sector expressed concerns that where airlines have policies not to carry late-term pregnant women on flights, these policies may amount to direct pregnancy discrimination, which is obviously prohibited.
The regulations therefore include a clarifying health and safety provision. An airline therefore does not discriminate on grounds of pregnancy if it refuses to allow a woman in the late stages of pregnancy to fly because it is reasonable for it to believe that to allow her to fly would create a risk to her health and safety and if it applies this health and safety policy similarly to people with other physical conditions which it reasonably considers would create a risk to their health and safety. A comparable case might be that of someone with a heart condition. The provision applies equally to sports that could put a pregnant woman at risk. I am given the example of bungee jumping, although other things would probably come into that category.
On maternity discrimination, there are new protections for women who have recently given birth. The directive does not offer a definition of maternity, but responses to the consultations overwhelmingly supported our proposal to define it by reference to the period of time that has elapsed since childbirth so as to provide the greatest legal certainty. We therefore decided that the length of time that has elapsed since childbirth will determine the period of protection from maternity discrimination. That received general agreement, but there was less agreement on the length of the protected period. The consultation suggested 52 weeks as a basis for discussion, while the wide variety of respondents’ views ranged from as little as eight weeks, in the case of some insurers, to as much as three years in the case of pro-breastfeeding lobbyists. We have ruled out the higher and lower extremes as being difficult to justify, given that we believe that the purpose of the provision is to protect the unique relationship between a mother and her newborn child. We have opted for a period of 26 weeks following the birth of the child as an appropriate period of time for a new mother to be protected from maternity discrimination. We have arrived at that period of time because it is a sensible balance, meeting, but not exceeding, what was intended by the directive.
On insurance changes—and I am getting to the end—Section 45 of the Sex Discrimination Act and Article 46 of the Sex Discrimination (Northern Ireland) Order currently enable the insurance industry to treat men and women differently, provided that the treatment is reasonable and is supported by reliable actuarial evidence. The directive allows us to continue to permit gender-based differences in insurance premiums and benefits, but it now requires that data relevant to the use of gender as an underwriting factor are compiled, published and updated. This publication requirement is new. It will enable customers to see how differences in premiums and benefits on grounds of gender arise, for example in motor insurance.
The differences in treatment between men and women must be proportionate to the underlying data. However, the regulations make an exception for costs relating to pregnancy or maternity. Those must not be reflected in differences in premiums and benefits, which can sometimes be the case at present. The Government will defer this specific provision relating to pregnancy and maternity costs until 22 December 2008, to give the insurance industry sufficient time to prepare for the change with minimal disruption.
The new express ban on discrimination on grounds of pregnancy is likely to impact on existing insurance practices where, for example, pregnant women are sometimes refused travel insurance altogether in the final weeks of their pregnancy. With effect from December 2008, insurers will not be able to increase premiums for women to reflect the cost of pregnancy or maternity. For example, they will not be able to charge more to expectant mothers or those expecting twins or a multiple birth. We have worked closely with the insurance industry to arrive at these plans and in developing our implementation proposals. The Treasury has published guidance for the industry on the procedures that must be followed to comply with the directive.
Finally, the burden of proof is very straightforward. In the areas that we have been discussing, the burden of proof will now be reversed. Where the claimant can show a prima facie case of discrimination, or facts from which it can be presumed that discrimination has taken place, the burden will shift to the respondent to show why there was no such discrimination.
For the purposes of today’s debate, I have concentrated on those areas that may be of most interest to Members of the Committee. Once we implement this directive in the United Kingdom, we will have increased legal protection for people who wish to access or use goods or services provided to the public as set out by the directive, without fear of discrimination on grounds of sex, gender reassignment, pregnancy or maternity, or sex, sexual or gender reassignment harassment. I commend the regulations to the House. I beg to move.
Moved, That the Grand Committee do report to the House that it has considered the Sex Discrimination (Amendment of Legislation) Regulations 2008. 13th report from the Joint Committee on Statutory Instruments.—(Baroness Andrews.)
I start by thanking the Minister for that very extensive speech. There are a lot of subjects wrapped up in the regulations, and I do not want to concentrate on most of the subjects on which she has enumerated this afternoon. When I hear a speech lasting 22 minutes from a Minister introducing regulations, I have a nasty suspicion that there is something to hide. I am going to absolve her of that today, but perhaps not in the future; we shall see.
We are discussing today an important review of the Sex Discrimination Act 1975 and the Sex Discrimination Act 1975 (Amendment) Regulations 2007, which were made on the back of the Act. It is a shame that this discussion did not take place when it was initially intended to in December, but the Government have shown only too frequently of late that they find sticking to timetables more than a little testing. So to begin discussion of this long awaited topic we will need to refresh our memories on what it is about. As the noble Baroness said, these amending regulations bring statute law into line with case law. They are also a response to the Equal Opportunities Commission’s ruling that the previous regulations amending the Act fell short of the 2004 European Community’s gender directive’s intention to ensure that women in the workplace are not subjected to,
“any unwanted conduct related to their sex which violates their dignity or creates an intimidating, hostile, degrading, humiliating or offensive environment”.
That is a very clear definition of harassment. This is to be illegal in future in the areas about which the noble Baroness spoke, and it is absolutely right that that should be the case.
The result is that instead of depending on individuals making complaints about sex discrimination, the duty places the legal responsibility on public authorities to demonstrate that they treat men and women fairly. The duty will affect policy making, public services such as transport, and employment practices such as recruitment and flexible working. These Benches stand in firm support of any directive or action that any Government can take to remove sexual prejudice or exploitation. We therefore support the implementation of the regulations and the intention that lies behind them.
Before I explain why I am not entirely satisfied with these new regulations I feel it necessary to make it clear for the record that I believe that much in them is good. Indeed, this was set out clearly and extensively in the noble Baroness’s long speech. They will realise some very sensible decisions. They do not blindly extend protection to an apparently vulnerable sex regardless of the circumstances. For example, it is correct, in paragraph 7.24, that women on flights and those partaking in certain “extreme” sports are excluded from sexual discrimination when heavily pregnant. But, a word of caution, there are bound to be arguments about the legal definition of “heavily”.
The regulations being discussed today have been much anticipated. The judicial review held in late February 2007 exposed the Government’s previous regulations made in 2005 to have been a failure. Lack of clarity in the drafting meant that women risked losing the full protection against pregnancy discrimination that they now have under UK case law. It also did not stipulate that pregnancy and maternity leave must be counted by employers as continuous service for the purposes of promotion. That sentence sounds a little odd—quite how pregnancy can be continuous service rather defies my imagination. The High Court ruled that the 2005 regulations not only failed to implement the 2004 gender directive but made life worse for pregnant women than the then law.
So, it is as clear as daylight that there is an immediate and obvious need for new regulations. But I have been disappointed to see how slowly the Government have responded to this need. Perhaps they do not find regulations particularly pressing or as thrilling as getting new legislation on to the statute book. If one looks around the Grand Committee, one sees that these regulations are receiving not nearly the attention they would have had if they been discussed in the Chamber. Whatever the case, as the Explanatory Notes explain in paragraph 7.9, the Government decided to consult on the gender directive as part of a wider consultation on proposals for an Equality Bill, as the noble Baroness mentioned. However, the original start of the consultation got pushed back from the planned start date of March. This was due to the need,
“to focus on getting the policy for an equality Bill right”.
That is all well and good in theory but these regulations are not one and the same as the Equality Bill. The noble Baroness explained that a little but it would be extremely helpful if she would expand on that in her response.
I was glad, too, that the noble Baroness agreed with me that the regulations were delayed because the Government acceded to the request of the First Minister in Northern Ireland that the regulations should cover the whole of the United Kingdom so that they need not be debated separately in the Province. There is a history behind that but I do not think it would be profitable for us to go into it today.
Whatever the reason for this delay, the start of the consultation period had disappointing implications for the 2007 regulations. As the consultation was finally published on 12 June and the responses had to be received by 4 September, there was less than three months’ consultation and it was over the summer period. That is not exactly an example of good government. Can the Minister explain why there was such a delay in starting the consultation process? I should also be interested to hear from her whether it is normal practice these days to hold consultation over the summer period when many people are on holiday and the consultation cannot be given the consideration that in normal circumstances it deserves.
It is perhaps not unsurprising then that the consultation process has not come up with entirely sufficient answers to all that is proposed in the regulations. I refer the Committee to the definition of harassment at paragraph 7.8 of the Explanatory Notes. It seems as though this definition of harassment is still being consulted on as a result of the Equal Opportunities Commission judicial review. To avoid further delay and further uncertainty, could this issue not be tidied up in the very near future? How far is the judicial review from reaching a verdict?
Given the Equal Opportunities Commission revelation that where sexual discrimination is most “rife” is in the employment domains of bars, restaurants and hotel trades, which are estimated to employ more than 670,000 women, I find the explanation in the Explanatory Notes that the new regulations will cost business around £12 million only too likely. Although it is of course a necessary cost, it is a considerable one. I fear that some less honourable businesses may shirk it to cut financial corners. Can the Minister assure me that the Government have made special provisions to ensure that all businesses will comply fully with the legislation when it comes into force? What steps have the Government taken to try to minimise the cost of these regulations to business to make them seem more attractive?
Even from a brief glance at the regulations one can see that one of their clear occupations is with the reconsideration of transsexualism or gender reassignment. I shall take a random example: Regulation 4. This regulation amends subsection (2A) of the Sex Discrimination Act to extend protection from direct discrimination on grounds of gender reassignment to some 5,000 people, as I understood the Minister to say. This, in addition to the other protective extensions provided within the regulations, will certainly result in a significant increase in the number of employment tribunal cases made in the United Kingdom. Can the Minister assure me that arrangements have been made so that the tribunals will be able to cope sufficiently with this increase in hearings?
Everyone should have an equal chance. I am relieved that the Government have the sense to go some way towards realising this very simple but very important objective in their new regulations. They did, after all, need to right the wrongs of their former legislation and make our culture a more just place for women to live and work in. I hope that this time the Government have it right and that we will not have to go through this whole operation again.
The Minister deserves our sympathy and gratitude for having to explain at great speed such an obscure and complicated subject. We will all need to read and think about her important speech hereafter because a great deal of what she said is of great importance not only to people in Parliament but well beyond.
The subject is very complicated. I find it particularly so because there are different directives and different regulations. I shall probably get this wrong, in which case I shall be corrected. There are the Sex Discrimination Act 1975 (Amendment) Regulations 2008, which implement Council Directive 113 and are concerned with implementing the principle of equal treatment between men and women in the access to and supply of goods and services available to the public. There is also another set of regulations, the Sex Discrimination (Amendment of Legislation) Regulations 2008, which are to come into force on the same day, 6 April. They implement another directive, which I will come to. As the Minister said, implementation should have been completed by 21 December 2007, but the process of implementation was delayed for various reasons, which I understand and sympathise with. The Minister has explained that there is a pressing need to implement the directive; we agree.
Directive 113 is clear that there should be no direct discrimination, including less favourable treatment for women by reason of pregnancy and maternity. The Minister has explained why the Government have chosen to limit protection to the first 26 weeks after birth. It is strongly arguable that that limit of 26 weeks is not consistent with the decisions of the European Court of Justice in Lewen against Denda and in Brandenburg against Sass, as applied by the High Court in judicial review proceedings in the EOC against the Secretary of State for Trade and Industry.
This is not the place to argue whether that is right or wrong, but there is no material difference between the wording of the equal treatment amendment directive 2002/73/EC, known as ETAD, and the directive here being implemented. In my view, it is strongly arguable that to comply with the directive, the period of protection ought to be extended. This is obviously a very important issue, which affects a large number of women and men.
During the Discrimination Law Review consultation, the EOC raised a number of important concerns, only some of which are being met in these and the other regulations. Others are outstanding. I have drawn those to the Minister's attention. Again, this is not the place in which to go into each and every one, but we are grateful for the Minister's assurance that there will be discussions as a matter of urgency, so that the matters raised by the commission and its successor, the Equality and Human Rights Commission, may be taken into account in developing policy on the proposed performing legislation and to secure full compliance with the UK's Community obligations.
Perhaps I may give an example—I will not give a whole series of them. Article 2(a) of the directive defines direct discrimination as occurring,
“where one person is treated less favourably on the ground of sex, than another is, has been or would have been treated in a comparable situation”.
It says “on grounds of sex”, not “on grounds of her sex”. But Section 2(1)(a) of the Sex Discrimination Act 1975, for which I suppose I am partially responsible as one of its architects more than 30 years ago, is narrower and applies only to the grounds of the complainants’ sex, rather than on grounds of sex. Incidentally, that is also narrower than the definition of direct racial discrimination in the Race Relations Act 1976, which refers to racial grounds but does not require the grounds to be the complainants’ ethnicity. That is one important problem about the concept of discrimination.
There is also a similar problem with gender reassignment, where Section 2A of the Sex Discrimination Act is narrower than the directive, both on direct and indirect discrimination. I perfectly understand the reasons for adopting the definition of harassment as it has been in the regulations, but may I strike a cautionary note? As the Minister may know, we in this House have again and again resisted the notion of religious harassment involving violating a person’s dignity on religious grounds for free speech reasons in debates that were similar to the debates that we had about religious hate speech, which were important. While I understand the very broad definition being given to harassment and the concept of gender, it should not be taken as a precedent on the basis that one size fits all and that one would do precisely the same in the area of religion, which gives rise to rather different issues.
On insurance, in response to the consultation, the EOC welcomed the proposal that the data on which insurance companies rely to calculate premiums are to be made available to the public. However, the commission explained in some detail, in answer to question 80 of the consultation, its view that the implementing regulations do not comply with the directive. The Minister has explained that the Government have worked closely with the insurance industry in developing the implementation proposals. I ask him for an assurance that the Government will also work closely with the commission to ensure full compliance with the directive by 22 December 2008.
My own view is that it is as unfair to discriminate for the purpose of insurance on the grounds of sex on the basis of actuarial data as it is on racial grounds. I have always believed that one should look at each person on the basis of his or her merits and not on the basis of their gender. Indeed, I think that women will now die as quickly as men if they lead the same appalling lives of stress and strain in this place or elsewhere, and so to generalise on the basis of the death rates of all women or all men is an invidious and unfair generalisation. Therefore, although the Government, on behalf of the insurance industry, have taken a more moderate line than that, I hope that in the long run actuarial premiums will no longer be calculated on the basis of gender-based statistics.
I remember the great American judge, Sandra Day O’Connor, in a leading case many years ago pointing out that some generalisations, even if true, should not be acted on—she was referring particularly to gender—so the mere fact that there are different death rates between men and women should not, if you aggregate all of them, lead to differential premiums. You should look at the individual person on the basis of their occupation, age and a number of other factors. In any case, we would like an assurance that the commission will be closely involved in those discussions.
On freedom of religion, I am delighted that no one here today seems to be taking up a different cause for fighting faiths. I entirely agree with the Minister that religious worship and observance fall outside the scope of the directive and are not affected by the regulations. The commission expressed concerns during the consultation, in paragraphs 79.2 to 79.14, about the compatibility with the directive of sweepingly broad religious exemptions, and I fully share those concerns.
The sprawling, tangled, impenetrable thickets of British anti-discrimination legislation are obscure and incomprehensible to everyone except a handful of specialist lawyers. Although I regard myself as a specialist lawyer, I, too, find some of it almost incomprehensible. The legislation contained in many inconsistent statutes and in hundreds, if not thousands, of regulations is in urgent need of comprehensive, user-friendly reform, so that everyone can enjoy access to justice. There is a pressing business need, as well as a need based on simple justice for victims, for the introduction at long last of a single equality Act that works in practice to eliminate discrimination based on sex and other grounds and to promote genuine equality of opportunity and treatment. My party will support the Government if they introduce legislative reforms that meet the high standards needed by employers, trade unions, service providers and vulnerable individuals and groups.
These regulations are the latest example of the Government’s use of the powers conferred by the European Communities Act 1972 to add further layers of subordinate legislation to give effect to EU equality legislation. That has a great advantage for Governments, especially if they have a pressing parliamentary timetable, but it has the disadvantage of making it virtually impossible for Parliament to improve the legislation before it comes into force and for ordinary mortals to understand the meaning and effect of what is being done for their benefit, still less to translate the relevant legal principles and rules into practice. Here, I echo what has been said about tribunals, which are not well geared to deal with complicated cases of this kind.
Equality without discrimination is an axiom of fair and rational behaviour, but if it is not to remain theoretical and illusory, it needs to be underpinned by a proper law and put into practice. Let me give one example of the fatuity of the way in which we legislate. It is not about gender, but about race. For reasons which I do not need to elaborate on—the Minister knows what I mean because she answered my Written Question last week—a black person has to face a heavier burden of proof than a Sikh or a Jew in bringing a race or a gender case. It is completely fatuous and is because of the narrow, legalistic reading of the relevant race directive, which caused the Government to say that although it referred to race and ethnicity, it did not mention colour, so the burden of proof should not be eased for a black person in the way that it is for everyone else. That is simply one striking example of rubbish on the statute book that can be put right now only by primary legislation.
We fully support these regulations, subject to the reservations that I have given, on the basis that a crust is better than no bread. However, we look forward to receiving a more wholesome loaf and, if we may, to suggesting a recipe to some of the cooks.
I am extremely grateful for the welcome given to these regulations and I entirely take the point made by the noble Lord, Lord Skelmersdale, that all parties are united in their determination to outlaw discrimination. We are very grateful for his party’s support on that. I always feel slightly intimidated in debates like this when I am confronted by two Members of the Committee with very wide experience, both of whom are forensic but who come from slightly different angles. It has been a useful debate and I apologise for speaking for a rather long time. I did that not because we have anything to hide but because it is extremely important, given the complexity and technicality of these regulations and the fact that they are part of an ongoing discourse, to put on record the implications as far as we could anticipate them.
I am glad that the noble Lord, Lord Skelmersdale, recognised the sense of urgency, but he also raised some important questions about the timetable. I cannot add a great deal to what I said about the timetable as it proceeded past the autumn, but because we were discussing with Northern Ireland, under the Memorandum of Understanding, how we could take these forward, given the complications that had arisen, it was necessary for some debate to be had, so there was another delay in the process.
As for the summer consultation, it became more complex and wider in general because we bundled consultation on this with consultation on the Equality Bill. Moreover, the machinery of government changes; new Ministers had come in, inevitably with slightly different perspectives and views on how to add what they wanted to the consultation. However, the consultation period was for the full 12 weeks. That is the good practice as set up with the Cabinet Office, and we observed it in this case.
The noble Lord’s other important questions were particularly practical and it is important to clarify them. He asked, for example, about the costs to business. These changes are relatively minor compared with the sorts of requirements imposed on business since 1975 not to discriminate on the grounds of sex. Those were the big changes, and these are relatively small. He is, however, quite right. This is the sort of issue where we continue to listen to business and discuss. We will be watching the implications of the change.
The noble Lord also raised the issue of tribunal capacity. These cases will go to the courts and not to tribunals. Protection under the 1975 Act has existed since 1975. We can draw some comfort from the fact that there have been very few such cases. We therefore do not anticipate a great number of additional cases arising from this. Because the transgender population is so small, I think it unlikely that it would place a great burden on the processes.
I feel particularly qualified to answer that. We do not define “heavily pregnant” in the regulations, and it would be an act of absolute foolishness to try to do so. It was an example. If a service provider is aware that a woman is pregnant and that it raises a health and safety issue, they should take that into account. We were not trying to draw a legislative boundary based on the size of the bump of the lady in question. It is just an illustration. The qualification for health and safety reasons is very pragmatic and common sense. I appreciate what the noble Lord said about how the regulations were proportionate in that sense.
I am grateful to the noble Lord, Lord Lester, for giving me advance warning of the sorts of issues he wanted to raise. I addressed some of them in my remarks on the specific changes we made to the definition of “harassment”, for example, in relation to the judicial review. As the two sets of regulations have virtually identical titles, perhaps I may say again, for purposes of clarification, that the regulations that actually introduce these changes are the Sex Discrimination Act 1975 (Amendment) Regulations 2008, which amend the 1975 Act. The regulations that we are discussing today come into force at the same time. Both sets are governed by the Sex Discrimination Act 1975, so the change of definitions will apply equally to both. Of course, they have only slightly different titles, so it is a bit confusing.
On religious harassment—
I am grateful for that, but the problem is that we are considering only one of two sets of regulations. My points go beyond this debate, which is why we hope there will be close consultation with the Commission. Both sets of regulations will have to be compatible with both directives. That is what I am really on about.
Absolutely. As I was going to say, because we have been so aware of the EHRC’s concerns and because we are in a process which will culminate in a new Equality Act, we are absolutely intent on continuing the dialogue that we have had with the EHRC. We know that there are outstanding issues; the noble Lord referred to some of them. A meeting is fixed to take place in the next couple of weeks. As we go through this process it is important that we keep close to this in the way that we said we would when we talk for example about insurance provisions.
We certainly anticipate and will observe the reaction of the industry, and we will certainly work closely with the EHRC on this. As I say, we have dealt with what we could in these regulations. We have been concerned about timing, infraction procedures and so on, for the reasons that noble Lords understand. This is absolutely an ongoing dialogue. We did not want to get into any more trouble through delay and so on. The EHRC, along with other lobby groups, obviously has a very important role in assessing the reconciliation of regulations and where we go from here, and we really do want to continue the dialogue. The regulations are a stepping stone to the broad sunlit uplands that we aim to reach in due course. It is very useful that we have that to look forward to and that we can take that dialogue forward.
The noble Lord made a couple of other points. This House has made clear its views on religious harassment on more than one occasion. We consulted on the case for explicit statutory protection on the ground of religion as part of discrimination law, and we will set out our position when we consult on the whole thing.
I think that I have addressed most of the issues that the noble Lord raised. I am grateful again for the way in which the Committee has responded to the regulations. I appreciate that the regulations have not been the easiest set to follow in some respects—indeed, they have a long and complex history—but I am grateful for the support that they have received and commend them to the Committee.
On Question, Motion agreed to.
Legislative Reform (Health and Safety Executive) Order 2008
rose to move, That the Grand Committee do report to the House that it has considered the Legislative Reform (Health and Safety Executive) Order 2008.
The noble Lord said: The draft Legislative Reform (Health and Safety Executive) Order 2008 was laid before the House by the Department for Work and Pensions on 18 February. The order amends the Health and Safety at Work etc. Act 1974 to consolidate the Health and Safety Commission and Health and Safety Executive into one statutory body.
The proposal to create a unitary body originated from the Health and Safety Commission and the current Health and Safety Executive themselves, and has the agreement of the Department for Work and Pensions. It aims to merge the two current statutory health and safety bodies into a unified governing body to improve clarity in promoting the cause of better health and safety at work. Further aims are to improve communication, accountability and strategic oversight, and to provide a better challenge function to management.
The Health and Safety Commission and the current Health and Safety Executive were established under the Health and Safety at Work etc. Act 1974, following the 1972 report of the Robens commission, which recommended that there be a single governing body. However, the then Government opted for a two-tier structure in which the Health and Safety Commission would exercise strategic control of the Health and Safety Executive and of local authorities in their performance of health and safety functions.
The Health and Safety Commission takes policy decisions on health and safety, advises Ministers and secures compliance through the Health and Safety Executive and local authorities. Its duties include proposing regulations, approving codes of practice, giving broad direction to investigations and inquiries, arranging for the provision of information services and conducting research. The Health and Safety Executive is the operating arm for the Health and Safety Commission. It prepares proposals for the commission, makes recommendations and carries out the commission's decisions.
The current governance structure is outdated. The existence of two separate bodies remains confusing in that it reduces the impact of important communications, and there is insufficient opportunity for non-executive input into the work of the Health and Safety Executive. In making improvements to tackle these issues, we will abolish the two existing bodies, the Health and Safety Commission and the executive, and will create a single new body called the Health and Safety Executive, retaining a well known and much respected name.
Article 2 of the draft order abolishes the two existing Crown non-departmental public bodies. Article 4 and Schedule 1 create the new body, which will also be a Crown NDPB. Article 5 has the effect of transferring the functions, including regulatory functions, and the powers of the abolished bodies to the new entity. All other provisions of the order are consequential, incidental or transitional.
During the consultation process, it was proposed that a formal statement specifying the precise terms in which the board of the new executive will delegate its powers on enforcement issues to officials be published in advance of the new arrangements coming into effect. That statement has now been agreed by the commission, and will be made available in public before the merger comes into effect, as part of a wider authorisation covering the delegation of functions. The order now requires such authorisations to be published. This approach is one of four amendments made in light of the ministerial consultation exercise.
We have also specifically deleted, from the executive’s power to authorise the exercise of its powers by other persons, the possibility of authorising any person to legislate by subordinate instrument. We are not proceeding with the removal of a provision relating to withholding all or parts of reports produced in relation to investigations or inquiries. This is because reports are already subject to the Freedom of Information Act, and removal of the current provision could create inconsistency.
The commission and the executive adopted the principle of better regulation many years ago, and the proposal was to underwrite that position legally. However, during consultation, it came to our attention that the introduction of the proposal may duplicate the introduction of a general requirement on all regulatory bodies to abide by such principles. This is to be brought in by a new order, the Legislative and Regulatory Reform (Regulatory Function) Order 2007, which comes into effect on 6 April 2008. Accordingly, such principles will be incorporated into the working practices of the executive.
The Legislative Reform (Health and Safety Executive) Order is laid under the Legislative and Regulatory Reform Act 2006, which allows legislative reform orders to be made either under Section 1 to remove or reduce a legislative burden or under Section 2 to promote regulatory principles of transparency, accountability, proportionality, consistency and targeting. Within certain parameters, Section 2 expressly covers transfers of regulatory functions between bodies in order to promote principles of better regulation. The Department for Work and Pensions has proposed that the draft order be made under Section 2. The draft order is the first legislative reform order to be made under that section.
The relevant tests in the 2006 Act for an order submitted under Section 2 are as follows. The first test is that there has been proper consultation on the proposal, which is Section 13. Two consultation exercises were carried out on the merger of the Health and Safety Commission and the Health and Safety Executive. Both showed overwhelming stakeholder support for a merger. The second test is that the conditions of Section 2 are met: that is, that the order serves the purpose of securing the exercise of regulatory functions in compliance with the principles of transparency, accountability, proportionality, consistency and targeting.
The third test is that various conditions in Section 3(2) are met. These are: the policy objective intended to be secured by the provision could not be satisfactorily secured by non-legislative means; the effect of the provision is proportionate to the policy objective; the provision, taken as a whole, strikes a fair balance between the public interest and the interests of any person adversely affected by it; the provision does not remove any necessary protection; the provision does not prevent any person from continuing to exercise any right or freedom which that person might reasonably expect to continue to exercise; and the provision is not of constitutional significance.
The order was considered by the Delegated Powers and Regulatory Reform Committee on 12 March. The committee considered that the draft order met the tests in the 2006 Act: that it is not otherwise inappropriate to be made by delegated legislation; and that it meets the tests applied to other instruments by the Joint Committee on Statutory Instruments.
The 2006 Act allows the Government to propose the negative, affirmative or super-affirmative procedure for each legislative reform order, with Parliament allowed to upgrade the procedure if it so wishes within 30 days from the date on which the instrument was laid. The Government proposed the affirmative procedure for this draft order, and the Delegated Powers and Regulatory Reform Committee considered that this was not inappropriate.
This is an important order which when implemented will provide a more robust governance framework, improve working practices and create a stronger voice for health and safety in Great Britain. I commend it to the Committee and beg to move.
Moved, That the Grand Committee do report to the House that it has considered the Legislative Reform (Health and Safety Executive) Order 2008. 6th report from the Regulatory Reform Committee.—(Lord McKenzie of Luton.)
The Grand Committee will be extremely grateful to the Minister for introducing this non-contentious order in his usual careful way. It is, as he said, laid under the Legislative and Regulatory Reform Act 2006, which we on this side of the Committee believe is not used nearly enough. Plenty of other subjects should have the attention of the Government, because regulations were laid down many years ago and today give the distinct impression of being overkill.
Today's debate is a classic example because an awful lot of water has flowed under the bridge since 1974, when the Health and Safety at Work etc. Act was introduced. That it was necessary in the first place is evidenced by the reduction in accidents at work since then, due partially to the efforts of employers and employees, but mostly, I believe, by the attention to detail of the members and staff of the executive. It was a great treat the other evening to meet the new chief executive of the new body.
Some of that water has been the evolution of corporate governance. I do not believe that, if we were enacting the Health and Safety at Work etc. Act today, we would dream of setting up two non-departmental public bodies to do the job of imposing what the Explanatory Memorandum calls,
“particular duties in specific circumstances and sectors, and also health and safety regulations made under the Act”.
The commission, which this order abolishes, was established as the principal body in the regulation of health and safety at work in Great Britain. The executive, on the other hand, was what the Minister has just called the operative arm which, along with its staff, advises and assists the commission in its functions and has specific responsibility, along with the environmental health officers, for enforcement and prosecution. It is notable, however, that the commission has never had the authority to direct the executive in the execution of its duty. The two non-departmental public bodies thus operated at arm’s length. There is absolutely no reason in this day and age why a single body should not do both jobs.
When this proposal hit the floor, it did so running. I note that during the consultation period there were only questions of detail on the composition of the new body. The main areas of concern were the number of members on the board, whether it should consist entirely of non-executive members, and who should be consulted before their appointment.
I observe that the Government have stuck to their original intentions with one notable exception—they have decided to increase their originally proposed board from a chairman and nine members to a chairman and 11 members. The Minister well knows my views about numbers of board members because we had a discussion the other day about the size of the Child Maintenance and Enforcement Commission, when I said that such boards should be as small as possible, so I hope that a chairman and 11 members fulfil that criterion. Time will tell, but I must ask the Minister whether there is provision in this order or in the Health and Safety at Work Act to increase, or I hope to decrease, the size of the board.
It is my hope too that the revamped executive will be able to do something about the appalling state this nation has got itself into regarding protection of the individual, which has gone way over the top. This is a subject dear to my heart, as I said in a debate responded to by the Minister’s predecessor, the noble Lord, Lord Hunt of Kings Heath. For schools to stop small boys playing conkers, which is after all a traditional playground activity, or to prevent children climbing trees, will do nothing to make them responsible and careful adults. It is an absolute disgrace that one school cancelled its annual Guy Fawkes bonfire party last year because children might get too close to the bonfire and become scorched, or at worst burnt. Although I accept that teachers have a duty of care, I cannot accept that if a child is told not to do something and then goes ahead and does it, it is necessarily the teacher’s fault, or that if an employer holds a health and safety meeting of his staff and one of them ignores it, it is automatically the employer's fault.
The trouble is that over the last 30 years a compensation culture has grown up in this country which was never intended by Governments of either complexion. I can illustrate this by relating a story about my wife, who broke her leg while on holiday in Sri Lanka by slipping down some steps and falling awkwardly. On her return, to her horror, the first friend who came to see her asked almost immediately whom she was going to sue. Her answer was, of course, no one, as the accident was caused through her own admitted carelessness.
It is my belief that the “no win, no fee” agreements have got completely out of hand, and that the courts have been unduly lenient. It is one thing if someone damages their back by slipping on a wet floor at work when there is no warning notice—the subject of a television commercial that is doing the rounds—but quite another if an accident happens due to pure carelessness. The fact that a tree happens to be in a playground and a climbing child falls and breaks an arm, a leg or a collarbone is not to my mind an immediate reason to sue the school.
I discovered another version of trying it on when I had the honour to be a junior Minister in the Northern Ireland Office and there was a spate of people claiming to have ankle injuries because of uneven flagstones in Belfast. We conducted a little survey and discovered that some people claimed to have tripped over paving slabs several times—the same paving slabs that had been relevelled—a few weeks apart. They were the same people! The Secretary of State soon put a stop to that scam. It is the duty of us all to find a way that enables the genuine cases to get compensation while ensuring that those who made the main contribution to the accident get nothing. The “no win, no fee” legislation will then work as intended, which is a scenario much to be desired.
That said, I believe that the Health and Safety Executive has done a good job over the years, notwithstanding that it is often blamed for things that are nothing to do with its operations. The legislation handed down to it by the commission, and its visits to warn firms and establishments of dangers that might be impending, have proved the right approach, so I have no doubt that the new executive will be able to continue these operations and do its bit to make Britain a still safer place in which to work.
We on these Benches have nothing other than praise for the order, for the simple reason that it cuts red tape. Whenever this is accomplished, the Government should give themselves a small pat on the back, to be perfectly honest. Surely turning two bodies into one is a step forward. As for the attack by the noble Lord, Lord Skelmersdale, on the compensation culture, I agree, but with the caveat that everyone is always against excessive health and safety legislation until it is their child who is at risk. A new challenge for this body will be to try to get some reality about this. I have spoken before about reminding people that children heal when they fall over and cut knees and that this is quite normal and healthy, but that is rather different from allowing a climbing frame with a rusting and jagged piece on the edge of it to be in a playground. The concept of reasonableness is surely what stands behind all this, and a single body will surely have just a little more chance of ensuring that this measure gets through. I support the order.
I declare my interest as the vice-chairman of the Royal Society for the Prevention of Accidents and as president of the National Health Safety Groups Council and the London Health Safety Groups Council. I met Judith Hackett, who is the chair of the Health and Safety Commission, and the president and the vice-president of the Health and Safety Executive, who all asked me to thank the Government for the order, which I believe is the handiwork of Bill Callaghan, the previous chair of the commission.
The order is the second to have been made on the subject; the first was found to be defective by the councils and the chairmen. Anyway, we at last have it. It will not have been enacted before the Easter Recess, but it is on its way, and we congratulate the Government on it.
I am grateful for the support that the order has received from the three noble Lords who have spoken. The noble Lord, Lord Skelmersdale, talked about the progress that we have made since 1974 on health and safety, and about the important role that the commission and the Health and Safety Executive have played in that. That is absolutely right. There are still challenges out there that change as the nature of the workforce changes, which is why the improved governance arrangements provided for in the order are so important.
The noble Lord also referred to enforcement and the importance of ensuring that enforcement action was independent and could not be fettered either by Ministers, by the commission or by the new board of the executive, as it will be. That is an absolutely clear principle, which has been maintained throughout this process. He referred to the number of proposed members on the board. At the moment, the order is essentially permissive; it allows for there to be between seven and 11 members—there are currently nine members plus the chair—and there are no plans at the moment to increase its size. The debate on what the appropriate size should be focused in particular on the need to ensure that there is scope for the range of skills that are needed on the board to bring full weight to bear on the issues that need to be addressed. He also talked about the protection of individuals and, in his terms, some of the nonsense that goes on. We always need to be careful in these situations not to perpetuate myths. Undoubtedly, in some instances, there are those with responsibility for enforcing health and safety who go over the top; and there are instances in which people use health and safety as a reason for not doing something that they would otherwise want to do. When investigated, however, many of the myths of conkers and of benches being three inches too high or too low are simply not true. The key to all this is to recognise that the people who create the risks have responsibility for managing them. This is not about eliminating risk but about managing it.
The noble Lord referred to the compensation culture driving some of these issues. We need to think very carefully about this and to recognise that some people have been damaged at work by diseases with a long latency period and have struggled to get compensation 20, 30 or 40 years after the incident that has damaged their health, sometimes fatally.
The Minister is being unusually unkind in that explanation. I was talking about those accidents that are currently successfully sue-able—in other words compensable—and which were almost entirely the fault of the individual whom the accident befell. Clearly, I am not talking about something where the responsibility is 90 per cent or more on the employer or former employer; if he is talking about pneumoconiosis, for example.
I take that point, but I recall a debate in your Lordships’ House a couple of years ago when one of the committees of the House looked at whether we have a compensation culture. I think that the conclusion was to the contrary. In a sense, this debate is outwith the order, and we can perhaps return to it at some future stage.
I am grateful to the noble Lord, Lord Addington, for his support and for that of his party. I am grateful to the noble Lord, Lord Brougham and Vaux, who has a strong commitment to health and safety and is very active and engaged in the health and safety stakeholder community. He was right to remind us that this provision was in large measure the handiwork of Sir Bill Callaghan, the retired chair of the commission, and it has been taken up enthusiastically by his successor. I am grateful for the support that we received, and I commend the order.
On Question, Motion agreed to.
Official Statistics Order 2008
rose to move, That the Grand Committee do report to the House that it has considered the Official Statistics Order 2008.
The noble Lord said: The order is part of a wider programme of work implementing the Statistics and Registration Service Act, which gained Royal Assent last summer after a thorough and helpful scrutiny process in this House. Before explaining what the order does in detail, I should remind the committee about that Act and the wider statistical reform programme.
In line with the wider government agenda of delegating ministerial power to credible, independent institutions with a clear remit set by the Government and Parliament, the primary goal of the reforms is to reinforce the independence, integrity and quality of the statistics produced in government, helping to improve evidence-based policy-making, contributing to better public services and long-term stability in the UK economy and for the wider public good.
At the heart of the Statistics and Registration Service Act is the creation of a new independent body, the UK Statistics Authority, which is known in the Act as the Statistics Board, with a statutory responsibility to promote and safeguard the production and publication of UK official statistics that serve the public good. The authority will begin its work fully on 1 April 2008. Two of the Statistics Authority’s main functions are to monitor and report on all official statistics, wherever they are produced, and independently to assess the quality of a core set of key official statistics for formal approval as “national statistics”.
The order relates to the definition of official statistics; the set of statistics that the authority must monitor and report on. Under the Act, all statistics produced by the Statistics Authority, government departments, the devolved Administrations and other Crown bodies are automatically deemed to be official statistics. This means that numerous bodies are automatically under the oversight of the Statistics Authority.
However, the Act also allows us to add further statistics by order. This is necessary for bodies that are clearly producers of important statistics but which fall outside the core definition in the Act. That may include, for example, NHS bodies such as the Health and Social Care Information Centre, which produces statistics on, for example, the number of people in the country who are obese.
The order that we are proposing today is particularly pressing for those bodies that produce national statistics in the current system, such as the Health and Social Care Information Centre and the Higher Education Statistics Agency. Under the Act, statistics must be official statistics before they can be national statistics. To allow current producers of statistics to continue to produce national statistics at the start of the new system, these statistics must therefore first be specified as official statistics by order. If we do not make this order, these key statistics will no longer have “national statistic” status. These statistics will of course need to pass an assessment by the authority to continue as national statistics in the longer term, but we are taking about the immediate future.
Not all of the bodies on the list are national statistics producers. We are taking this opportunity to add a number of other bodies as official statistics producers. This may not be a complete list of all future official statistics, however. We want to work further inside government, and with the new Statistics Authority as it establishes itself, in order to ensure that the boundary of the official statistics system is set in the appropriate place. After that work has been done, it is likely—I know that this prospect will be greeted with great enthusiasm by the Committee—that we will bring another order before the Committee to add further bodies to the list in due course.
We have, of course, consulted the new Statistics Authority on the order, as required under the Act. The authority was keen to be sure that all current national statistics could continue to be national statistics under the new system, and that we had processes in place to ensure that the eventual scope of official statistics would be as comprehensive as possible. I am glad to say that we have been able to reassure the new authority on both points.
In summary, then, the order needs to be made now to ensure that a core set of crucial statistics can continue to be branded as national statistics come the start of the new system. I hope that the Committee will agree that this is necessary and appropriate, and can support the order, which is a necessary part of implementing the vital reforms to the statistical system that the Government have put forward to improve the quality and integrity of statistics for the public good. I beg to move.
Moved, That the Grand Committee do report to the House that it has considered the Official Statistics Order 2008. 12th Report from the Joint Committee on Statutory Instruments.—(Lord Davies of Oldham.)
I thank the Minister for explaining the order. We on this side of the Committee supported the Statistics and Registration Service Act 2007, the strengthening of which we are proud to have contributed to as it passed through both Houses. For all of us, as the Minister said, the integrity of statistics is important. We welcome the Statistics Board, and look forward to its work guarding against the spin which has so undermined public trust in statistics.
There was a useful final report from the Statistics Commission last week on first releases, from which it was clear that, of the 37 sets of statistics released in 2007 that it chose to review, judged under six different sets of parameters, 20 per cent got a red traffic light, 57 per cent scored an amber, and only 23 per cent got a green light. That is some indictment, and shows the magnitude of the task ahead of the Statistics Board.
There also remains an issue concerning the distinction between national and official statistics. We who are closely involved might understand the difference, but a layman, I suggest, will have considerable difficulty understanding it and, importantly, the different level of scrutiny applied to each. There is the important matter of the lack of independence in the selection of statistics referred to the Statistics Board. It is apparently for Ministers to refer a particular series of statistics to the board to consider whether such figures should be national statistics. Surely it ought to be for the Statistics Board rather than Ministers to decide what statistics should be defined as national statistics. Only national statistics will have to comply with the code of practice.
The Minister will correct me if I am wrong, but the Minister decides whether an official series of statistics is suitable for reference to the board. Only then can the board decide whether that should be a national statistic, in which case the code of practice should apply or it loses its designation. Furthermore, if the Statistics Board has a code of practice to ensure the rigour of the preparation and production of statistics, should it not apply to all official statistics, not just national ones, especially, as I mentioned earlier, if no layman can be expected to appreciate the difference between them?
This brings me to the lack of an appropriate sanction for failure to comply with the code. Section 13 of the Act makes it clear that failure to comply with the code,
“in relation to any statistics”,
means that the designation of the statistics as national statistics may not be confirmed. It goes on:
“(but no action shall lie in relation to any such failure)”.
No action? Surely, if we have a code of practice that is designed to ensure the integrity of statistics and the body responsible for producing that series, especially if it is a government department, fails to meet the requirement of the code, just to have the designation “national” removed is not much of a sanction. The code needs to have teeth so that deficiencies can be remedied.
There also remains the important issue over the timing of the pre-release of statistics to Ministers. Despite the fact that pre-release periods were much reduced by the Act, we on these Benches still think that they are too long. We, and I am sure the new Statistics Board, will be keeping that under review.
My honourable friend the Member for Tunbridge Wells referred in the other place on Thursday to the fact that, under Section 11, the code of practice is not to deal with the pre-release access to official statistics. He pointed out that decisions on the timing of pre-release access will be handled by the appropriate authority, which rather astonishingly in the circumstances is the Parliamentary Secretary at the Cabinet Office rather than the Statistics Board. That will do little to enhance public confidence in the process of the release of statistics. The Minister’s answer was simply that there had been consultation and that the department would have to consider its findings before it reported back. It seems, to put it mildly, rather odd that we are being asked to wade through this order before that reporting back has been done.
I note from the first Liaison Committee report of the 2007-08 Session, in response to a case powerfully put by my noble friend Lord Jenkin of Roding, that the Leader of the House agreed to relay to the Leader of the other place the committee’s recommendation that a Joint Committee of both Houses should be established to scrutinise the Statistics Board. I gave notice to the Minister that I would be asking him today whether the Leader of the House had had a response from the Leader of the other place, and if so what that answer was.
I note from the debate on this order in the other place on Thursday that the Minister responded to the same question that the Select Committee on Public Administration was the selected parliamentary scrutineer of the Statistics Board. I would be grateful to hear from the Minister why the Government think that a Committee of a single House, with already a very high remit, is more appropriate for this function than a specialist Joint Committee of both Houses with specific expertise in statistics that your Lordships’ House can bring. The latter, as my honourable friend the Member for Tunbridge Wells said on Thursday, would provide greater reassurance to the public over the integrity of the preparation and release of statistical information.
Lastly, I observe that there is a haphazardness about the process of selection of the statistics that are covered by the order. The Minister went some way towards explaining this, but the list of bodies producing statistics so covered is in fact fairly short, containing only 37 bodies ranging from the Chief Constable of Northern Ireland to the various Armed Forces museums via some, but surely not all, the agencies producing statistics on various important government services. I would be grateful if the Minister could expand on the process for that selection. He mentioned that there would be more such bodies and more such orders. Perhaps he could explain why they cannot be dealt with here.
We welcome the broad thrust of the order, but it gives rise to rather more questions than it answers. I am worried that it will neither improve the integrity of statistics nor contribute to an increase in public confidence in them. It is significant that, in its final report published last week, the Statistics Commission, which is about to be wound up, singled out for criticism no fewer than three government departments, saying that they went,
“to some lengths to ensure that the press receive ‘the departmental line’ on the figures, through separate press releases giving a departmental steer on the numbers with attributable quotes from ministers”.
That emphasises, as I said earlier, the scope of the problem facing the Statistics Board. We look to the Minister for an assurance that things will improve dramatically.
I am grateful to the Minister for carefully setting out the background to the order. It reminds me of the heady days of last year when we considered the Bill. The Minister gave a masterful exposition of the difference between official and national statistics, which reminded me why we sought to abolish this difference.
Given that one of the arguments for the order is, as I understand it, that by making the statistics produced by these bodies official statistics they can in some cases become national statistics in due course, the relevant list is very curious because it contains both significant and relatively insignificant bodies. I can, for example, imagine why the statistics produced by the Audit Commission for Local Authorities and by the National Health Service in England and Wales might become national statistics and be of considerable concern. However, I find it very difficult to understand why the Hearing Aid Council would produce statistics of equal significance. I think that the reason for this lies in the somewhat tortured and artificial distinction between official and national statistics which the noble Lord, Lord De Mauley, pointed out.
I have three questions about the order. First, it concerns England and Wales. What will happen in Scotland? Is there a process that the new Statistics Board will follow to ensure that when bodies in England and Wales are included in the framework an equivalent process takes place in Scotland so that the Hearing Aid Council for Scotland, for example, can be brought within the purview of the legislation?
My second question relates to the revenue implications of the order and more generally the current position in respect of resources available to the Statistics Board. When considering the Bill we spent a lot of time discussing whether the new Statistics Board would have an adequate number of highly qualified statisticians to do its work, particularly bearing in mind the move to Newport. Considerable fears were expressed in this House and by members of the statistics community that the new board would in effect be hobbled because it would not have enough highly qualified statisticians to do its work properly. As the order adds bodies that will be scrutinised by the Statistics Board, the question of resources is obviously highly relevant.
My third question relates to other orders that will come forward under the Bill. This is the first such order and must be about the least significant one that we are likely to see. Significant issues are still to emerge, not least of which is the question of pre-release activity on which the Government sensibly engaged in consultation that is now completed. However, if it is important that these bodies should be legally within the framework of the Statistics Board on day one, it is also important that the Statistics Board should have a legal framework on day one within which to operate in respect of pre-release. Can the Minister tell us when the order relating to pre-release will come forward?
We have no problems with the substance of the order, but it gives rise to a number of underlying issues that still cause us concern.
I promise not to delay the patient Minister for long. Like other noble Lords, I welcome the creation of the new board under the chairmanship of Sir Michael Scholar. As the Minister set out—I use his words—among its many duties from 1 April will be its responsibility to assess the quality and integrity of all key statistics in an independent manner.
As the Minister has stressed today, I realise that this is the first order that will be brought before us and that it is a first shot. Further orders will be laid and schedules listing other organisations will be before us before long.
I do not wish to diminish the importance of the organisations on this list—from the Hearing Aid Council to the Royal Navy Submarine Museum. They are all extremely important. The reason for my short intervention is to ask the Minister to explain whether any consideration has been given so far to the inclusion of the Bank of England—the key organisation that will make the new body more effective and which should be included on a subsequent schedule. If the Bank of England is omitted from its work, the new body will have far less credibility in future than we all hope it will possess. If the Minister has not considered the inclusion of the Bank of England on this schedule, would he elaborate on whether he expects this to change when he lays the next order? What consideration might he and his colleagues give to the inclusion of the Bank of England?
As the Minister has explained, and other Members of the Committee have observed, the Government retain the right to determine the scope of national statistics and the organisations that can be placed on this and subsequent schedules. I shall not delay the Committee in underlining why the Bank of England should be included in future. It is clear that the credibility of the new body will depend on the Bank of England appearing on a future schedule. I very much hope that the Minister will be able to explain, if not today perhaps in writing as soon as possible, what consideration has been given to that organisation.
I am grateful to the three Members of the Committee who contributed to this debate. I appreciate their questions and their assertion that we are all concerned about the integrity and validity of statistics, and their recognition that the Act passed last year makes significant movement in that direction. I am also grateful that the Committee has welcomed this order. I appreciate their criticisms, some of which I shall attempt to explain in the form of constructive action that the Government will take to meet the anxieties that have been expressed. However, in one or two cases I shall have to disappoint noble Lords opposite.
The noble Lord, Lord De Mauley, returned to one of the fundamental and most significant issues that we debated last year, which he will have known having read our proceedings; namely, who should select the statistics? The noble Lord says that he still finds the position adopted by the Government unsatisfactory and that this should be done by the authority. We had a very intensive debate on this issue last year. The Government’s view was that Ministers should do the initial selection regarding the work of their departments but, the authority—as it now is, but the board as we discussed it then—will have a fundamental role in evaluating and commenting on such statistics. The essence of the board’s role is assessment and scrutiny of the quality of official statistics, which is why it has been brought into existence to fulfil that most important of roles.
I hear what the noble Lord says about the difficulty that the layman will have with the distinction between official and national statistics. There is no easy way to solve that issue. I have looked at others' attempts to produce a definition of the difference between the two and have seen them struggle. My honourable friend in the other House made an analogy according to military ranks. I thought that that was a path which I would certainly not follow today. I just make the obvious point that, when statistics have been defined as national statistics, they are of increasing import in the role of the board in assessment and scrutiny. That is why the order is necessary to guarantee that those statistics that are already national should continue under the new regime once established on 1 April.
The difficulty with the establishment of the board—or the authority, as it is to be known—is that it drops into an ever moving stream of the evolution of statistics. We are not setting up a board with a clean sheet where it can say, “Now we will approach the whole of the work that we have to do afresh”—far from it. It is dropping into a very important role as an assessor, analyst and evaluator of statistics that are in constant flow. The order reflects that difficulty. Although I very much respect the broad case made by the noble Lord, Lord De Mauley, about some of his anxieties, he probably underestimated that aspect. It is inevitable that the Government are involved in constant work to meet the necessary framework within which the board will operate, but everything is not cut and dried at this point. That is why we will need the additional orders.
The noble Lord, Lord Newby, referred to one of the most important of those orders, which concerns pre-release. That work has not been completed yet. It needs to be in place, but, of course, it is subject to parliamentary approval and will be tabled as an order. I agree with the noble Lord that it is likely that noble Lords opposite and the Government will think that order at least as important as this one, but I will not put them in rank order.
The noble Lord will recognise that the significance of this order is that it gives us the framework in which national statistics will be defined as such for the Statistics Board—a very important concept. I do not disagree with the noble Lord, Lord Newby, that, if last year's debates were anything to go by, he is likely to subject the concept of pre-release to as much interest as he does this order.
The noble Lord, Lord De Mauley, referred to an issue debated extensively during the passage of the Act on which the Government have made some progress. As he said, as a follow-up to the passage of the Act, there has been correspondence between the Leaders of the two Houses about whether there should be a Joint Committee. Of course, they are the proper authorities to look at the issue of Joint Committee scrutiny. The noble Lord will recognise that one of the great strengths of the structure that we established last year was to create a new structure of scrutiny for statistics. It is transferred from the Treasury—his colleagues were very assertive that that should be so—to the Cabinet Office. It was argued at the time as one of the great strengths of the Cabinet Office that it had some responsibility across government and could provide that surveillance. Of course, that is also true of the Select Committee that scrutinises its work; the Public Administration Select Committee. It enjoys that strength too.
Regarding the proposal for a Joint Committee, the noble Lord is really saying that this Select Committee of the other place may not be adequate to do the job of scrutinising the Cabinet Office in this important work with regard to the Statistics Authority; when the Government take an entirely different view. In all parts of the other place and this place there is general respect for the work of Select Committees, the extent to which they keep their departments up to the mark and the power of their reports. The Public Administration Select Committee has a superb record, and several of its reports in recent years have been at the forefront of public concern and debate. That committee is poised to take responsibility for this work with regard to the Cabinet Office. That seems to the Government entirely appropriate.
Of course, I am at one with one of the noble Lord’s arguments; that there are key colleagues in this House who have vast experience of statistics and who can bring a dimension to the debate—we saw that during the passage of the legislation—which it is difficult for the other place to match. But I do not think that it can be gainsaid that the Select Committee structure provides an excellent basis for scrutiny of the process on behalf of the people whom Parliament represents. We can all have every confidence that the Public Administration Select Committee, which will take responsibility for this scrutiny work as far as the Cabinet Office is concerned, will do its work to great satisfaction.
Does that mean that noble Lords have no role with regard to the scrutiny of statistics? I am all too well aware of the skill with which this House deploys its resources and the way in which it holds the Government to account. I am not sure that I have done this, but my ministerial colleagues often say that they think their jobs are a good deal more difficult at this end than they are for colleagues at the other end—I am getting a few nods from colleagues, who are well equipped to respond. If any issues or problems crop up regarding statistics—the work of the Statistics Authority or of Ministers with regard to the material that they present to it—I have not the slightest doubt that we would have the fullest scrutiny at this end; and I can enumerate those key figures who will play their full part in that. I have not the slightest doubt that this House will play its part in that work, but I defend the Government’s decision that the government department that now supervises statistics is the Cabinet Office, and it is appropriate that its Select Committee should be responsible for supervising its work.
The noble Lord, Lord Newby, asked me about Scotland, largely because he knows that I always quake the moment any devolved Administration issue arises. Any of us close to the devolved Administrations have every right to quake when we are operating in the British Parliament, and are all too well aware of the challenges which can be thrown up in the Scottish Parliament and Welsh Assembly. They are responsible for the production of statistics in Scotland, subject to the scrutiny of the Scottish Parliament. They have every reason to look closely at the models that we are establishing for parliamentary scrutiny and will be engaged in similar processes themselves. The noble Lord ought not to worry unduly about that.
With my past interest in Newport, I took the opportunity of the wonderful occasion of the Welsh victory against the French in the Grand Slam the week before last to speak to a Newport colleague about resources, how the office was bedding down in Newport and whether some of the forebodings articulated in the middle of last year had come to pass. I got the report back that things were settling down extremely well in Newport. There is no problem with recruitment of expertise. The noble Lord asked about the revenue implications. I have no doubt at all that one of the aspects of the move was an advantage in redistribution of work and resources to parts of Britain other than London. Also, however, it has revenue implications in so far as it is somewhat less costly to run these big operations outside London than inside. That is the plus factor, which I remember we discussed last year at considerable length during the passage of the legislation.
I mention the issue that the noble Lord raised on the other orders. I can promise him those, one of which I know that he will enjoy debating. There will be a second version of this order. I confess that that is because not all the work has been completed on the bodies that should be included. If they look somewhat arbitrary, there is an element of that in virtually all statistics. Some of these bodies are able to produce readily assimilable material which is a guide to their work, but may not be on the same level as that of other organisations. That will be a feature of such a disparate range of bodies, but we are determined to include all those bodies which generate official statistics that may be considered worthy of being, in due course, national statistics.
The noble Lord, Lord Ryder, asked me about the Bank of England. Of course, I quaked again at that. We have had our moments of debate on the Bank of England over the past few months in a different context. The Bank has its own code of practice for statistics. The Government will certainly want to discuss this with the Bank, and are doing so against a background where we are now only a matter of months from a significant reform of the role of authorities such as the Bank of England and the FSA, and their work in scrutinising the banking sector. That work is continuing, but the noble Lord will have to await the outcome of those deliberations before he is able to turn a searchlight on the Bank of England’s own code of statistics and its effectiveness. The code established by the Statistics Authority will now certainly be an important benchmark against other codes.
I may not have answered every single question. I can see to his agitation that I have not answered the question of the noble Lord, Lord Ryder, to his satisfaction. I do not have a great deal more to add at this stage. If I can supplement the answer I have given him, I will, of course, write to him and ensure that other Members of the Committee receive a copy of that letter. I do not have anything beyond that, but the noble Lord will recognise that the work of the tripartite authorities, particularly banking scrutiny, is the subject of considerable work in government in the preparation of legislation which we have already announced to be only a matter of months away. He will appreciate that the issue which he has raised is bound to be included in that framework.
On Question, Motion agreed to.
Town and Country Planning (Fees for Applications and Deemed Applications) (Amendment) (England) Regulations 2008
rose to move, That the Grand Committee do report to the House that it has considered the Town and Country Planning (Fees for Applications and Deemed Applications) (Amendment) (England) Regulations 2008.
The noble Lord said: I apologise to the Committee in advance for any errors that I make; I am rather full of cold, so you will have to bear with me, but I will try to be as clear as I can about this important order.
The regulations were laid before the House on 5 March. They introduce new levels of planning application fees and one new fee. If approved by this House and in another place, the regulations would come into effect on 6 April, the next common commencement date.
The principle underlying the planning fee regime is that would-be developers, rather than the council tax payer, should meet the bulk of the costs incurred by local planning authorities. A local planning authority’s work in this area includes the validation and registration of applications, followed by statutory notification, consultation and publicity, so that interested parties can comment. It involves maintaining an electronic and a paper version of the planning register and incorporating any revisions to the plans. It also includes writing to applicants and objectors, undertaking site visits, assessing the merits of each case and considering any representations about it.
The Government’s policy is that, in aggregate across England, the income generated by planning application fees should, as far as possible, cover the estimated total costs incurred by local planning authorities as a result of those activities. The last fee increase was in 2005, based on evidence gathered in 2003. In 2006, the Department for Communities and Local Government commissioned independent research to look afresh at the extent to which costs incurred by local authorities are recovered from fees paid by applicants.
The research, published on the Department for Communities and Local Government’s website, included a survey of local planning authorities and their resources. Arup’s report suggests that the total cost of the development control service is approximately £290 million to £365 million per annum, but fee income for 2005-06 was only £232 million. It concluded that, in aggregate, fee income has dropped below what is required to meet costs; whereas an overall increase of around 25 per cent would enable authorities not only to meet those costs but to maintain their standards of performance.
However, the Government would prefer to shield householder applicants from the full increase. Their fees are to go up by 11 per cent—that is, an extra £15. Other basic fees will go up by 25 per cent. The effect of this overall is a 23 per cent increase in planning fees—a figure at the lower end of what local authorities felt would be necessary for them to maintain a good and efficient service.
We believe that a greater increase would be right for the maximum fee which the regulations impose in some fee categories. Last year, in our consultation, we were proposing to abolish these maxima altogether, an idea that many local authorities supported. However, following representations and on reflection, an increase is now proposed. For most types of development where a fee cap is currently imposed, the maximum would be raised to £250,000, or £125,000 if the application is for outline permission. By contrast, the maximum fee for certain minerals and waste applications would go up only to £65,000. I acknowledge the point made by the CBI, the Quarry Products Association and other consultees that financial returns in relation particularly to mineral extraction sites tend to be disproportionately low. Only a small minority of projects trigger payment on that scale, but it is precisely those large and complex proposals that local councils find most difficult to assess and determine promptly with existing resources. For some large-scale major applications the separate arrangements for funding planning performance agreements will help, but for every other type of scheme, no matter how demanding of resources, the administrative cost ought to be met from planning fee income.
I remind the Committee that four out of five authorities in England are now achieving the planning application handling targets we set for them in the context of best value indicators and the planning delivery grant regime. We have also seen efficiencies in the delivery of local authority services where authorities have been required to deliver their overall responsibilities efficiently. Indeed, they have a good track record in achieving efficiency savings; not only have they exceeded their SR04 target one year early but they have forecast achievement of further efficiencies by the end of 2007-08 that would be in excess of the SR04 target.
The Merits Committee of the House has expressed concerns about where the incentive lies for an authority to control costs. In addition to the overall efficiency savings I have outlined, there is a real incentive for local planning authorities to determine planning applications efficiently and effectively because, where the cost of handling a planning application exceeds the fee payable, any shortfall must be covered from other council revenue or through subsidy from council tax, both of which are hard pressed.
We propose to introduce one new fee, which is for a request to the local planning authority for confirmation of compliance with one or more conditions imposed on a planning permission. That is designed to give developers greater confidence, especially where they wish to proceed to the next stage of a phased development or to sell the land on. The fee would be £85, or £25 if in connection with householder development. The only fee not to change will be that imposed in 2006 for monitoring mining and landfill sites.
The increases set out in the draft regulations before the Committee will keep planning application fees at a modest level for developers, compared to overall project costs, while enabling local councils to recover a fair proportion of their administrative costs from those who benefit most from the service provided and from any permission given. Research suggests that, if we did not secure increases at the level proposed, the deficit for local planning authorities would be in the region of £65 million in 2008-09. For those reasons, I commend the regulations to the Committee. I beg to move.
Moved, That the Grand Committee do report to the House that it has considered the Town and Country Planning (Fees for Applications and Deemed Applications) (Amendment) (England) Regulations 2008. 12th Report from the Joint Committee on Statutory Instruments.—(Lord Bassam of Brighton.)
Listening to the Minister reminds me of what a vexed local question planning invariably is. There is no getting away from that. Equally, there is no getting away from the vexed problem that all local authorities have when dealing with their budgets in total, of which, for planning authorities, planning runs away with a considerable amount of cost. No one can object to the principle that the cost of planning ought largely to be borne by those who are undertaking development. It was good to hear that what you might call the household proposals are to be protected by a lower increase in fee. Having said that, a better way to protect them would be to take the very small applications out of the playing field altogether, and I know that in various places there are some moves in that direction. Apart from that, the proposals are not wholly unreasonable in the circumstances. I have no reason to oppose them, and the Minister can go away happy that this is a part of an updating of the financial situation that we do not have any difficulty with.
We on this side of the Committee are quite happy with what is proposed. However, there seems to be something of a dilemma for the Government and local authorities in that, in seeking to protect householders while keeping business happy, local authorities will not be able to raise the income that they would like to have done. I think that the Minister would accept that this may be problematic for local authorities which, as he has pointed out, have done extremely well in creating efficiencies. There probably is not much further that they can do, although one hopes that they continue to try.
There is also a problem with cutting the service down too far. The capacity for development control officers to maximise things like Section 106, and whatever follows from it, requires investment in officer time. It might be a false economy overall to reduce by too much the capacity for local authorities to raise money. So, it is a difficult juggling act and I accept that. The Government have probably got it about right here, but I ask the Minister how they intend to monitor this in future, to ensure that local authorities are not too disadvantaged.
The maxima are in some cases still quite low; I do not know whether the Minister can say a word or two about that. Very large planning applications are hugely costly and go on a long time. One is ongoing in my area which we would have hoped to have had resolved well over a year ago. In fact, I have had another letter from the noble Baroness about the ongoing appeal. Costs are being racked up here all the time. I would not think that £250,000 would begin to cover the local authority’s costs on that one.
Finally, what has happened to Michael Lyons’s proposal that local authorities ought to be able to set their own local planning fees according to local circumstance?
I am grateful to the noble Lord, Dixon-Smith, and the noble Baroness, Lady Scott, for their support for our increased fees. It is perhaps worth saying that the increases have also been supported by the Local Government Association.
The noble Baroness asked what we would do to monitor the implementation of the fees. Following the approval of the fees, the Department of Communities and Local Government has undertaken to review the impact in 12 months’ time and hold further discussions with the Local Government Association and other stakeholder groups about how best to fund the planning system in future.
We also recognise that the planning fees regulations need consolidation. While that is something that we have not been able to contemplate during the recent spate of planning reform activity, we will obviously look to it in future. Because the increases are across the board, they do not impact more heavily on particular sectors of business or the community. The mechanisms for calculating fees are not being altered. As I explained, there is only one entirely new fee; that, too, was welcomed.
The noble Baroness, Lady Scott, made a valid point about the size of applications and the relative impact in terms of cost burden on the local authority. Obviously, any scheme for raising fees and charges has some imbalances in it. We think that we have got the balance about right here. The noble Baroness also asked whether we had thought about fees being set locally. We consulted on that point, because there has been an expression of interest in the past. However, I am afraid that it has not attracted widespread support from planning authorities. Of course, fashions and habits change and it is something we would keep an open mind about for the future. In April, we will publish a new explanatory fees circular, which will set out how fees work. As I have said, we will informally review the impact next year. Obviously, we will seek to identify with the LGA and others areas of communal ground on how to ensure that we more than adequately continue to resource planning services in the future.
I do not think that I need to cover anything else. I am grateful to both noble Lords for their support. In conclusion, it perhaps should be noted that the impact of the fees increases will not add significantly to the cost of development for developers. The typical planning application for a major development accounts for something like 0.3 per cent of the total cost of development, so it is a very small amount. But it has to be calibrated at the right level to ensure that we properly collect income into the local authorities.
I hope that the noble Lord will appreciate that 3 per cent plus 3 per cent plus 3 per cent plus 3 per cent, which is the way the system tends to work, soon becomes a large sum. Although of itself this may be small, a whole lot of other things are going on and development costs are inflating at above the average rate.
I did not say 3 per cent. I said 0.3 per cent, so the figure is less than one-third of a per cent. I take the point made by the noble Lord, but in reviewing the fees structure and the overall inflation in development costs, we do not think that we have added significantly to the burden on development. It would not be our wish to do so. However, we want to encourage adequate, full-cost recovery. As I have explained, it is likely that these increases will net nationally some £65 million to bridge that gap which the research by Arup identified.
On Question, Motion agreed to.
Bedfordshire (Structural Changes) Order 2008
rose to move, That the Grand Committee do report to the House that it has considered the Bedfordshire (Structural Changes) Order 2008.
The noble Baroness said: We are debating the order which brings into effect the two unitary authorities for Bedfordshire. This is the last of the orders implementing restructuring proposals from this round that will be brought to this House for the immediate future. I feel that this is something of a solemn moment after the heat and burden of the day. I am sure that Members of the Committee are as sorry as I am to see the end of the passage of this order. The reason why this order is the last of those that have been presented to this House is because the process in Bedfordshire has been more complex than that in the other areas.
I do not want to reiterate much of what I have said on the previous orders, because we have been over it quite a few times. I also lack any cavalry behind me, but I am sure that they will be along in a moment. However, I need to outline the process because in Bedfordshire the situation was different. Members of the Committee will know that the process began in October 2006 with the local government White Paper, and we indicated that there was dissatisfaction with the confusion and weakness in two-tier working. Knowing Bedfordshire as I have come to know it in the past few years, I have to say that local governance in Bedfordshire could be viewed as an example of this confusion. It has not been a happy situation. It suffers from over-governance with four principal councils providing services to a population of just over 400,000 people. So we gave an invitation to councils to come forward with proposals for unitary local government or with proposals for enhanced two-tier working to overcome the challenges. As I said, on each occasion, the choice whether to come forward was absolutely up to them.
It has been more complex in Bedfordshire, which is why this is the last order and why the timetable is challenging—I take that point. The complexity has arisen because in response to the invitation we received not only competing proposals but a proposal which met the criteria, but which was in our judgment unviable without a satisfactory unitary solution for the rest of the county.
The chronology is slightly complex, so I will explain. In January 2007, in the first stage of the process in Bedfordshire, we received three separate proposals for unitary structures in response to the original invitation. There was a proposal from the county council for a unitary county; a proposal from Bedford Borough Council for a unitary Bedford; and a joint proposal from Mid and South Bedfordshire District Councils for a new Central Bedfordshire unitary for the rest of the county.
We assessed the proposals and judged that the Central Bedfordshire proposal did not meet the five criteria set out in the invitation; therefore, unlike the county and borough’s proposals, it did not proceed to stakeholder consultation. Noble Lords will remember the five criteria—they are a bit like the five tests—that we set out in the original invitation, which those two proposals were judged to meet. One was the strength of strategic leadership; another was the degree to which local communities and neighbourhoods would be involved in decision-making in future; the third was the value for money in improving public services—in other words the long-term outcomes that we seek. They also involved judgments about whether the proposals were financially affordable; and whether there was a range of support sufficient to make us believe that if the proposals went ahead, they would be a success.
In the case of Bedfordshire, we came to the judgement that both the county council’s and the borough council’s proposals met each of these five criteria. However, the Bedford Borough proposal was the one that we judged would deliver to a greater extent the long-term outcomes that we were seeking. We made the means by which we would choose between the two competing proposals that each met the criteria clear in the consultation paper published on 6 June 2007. In July, we announced that we were “minded to” implement Bedford Borough’s proposal. We made that announcement in the full knowledge that if the proposal were to be implemented, the rest of Bedfordshire would be unviable as a two-tier local government area.
That was not, as may have been suggested, a perverse decision. Our view was that the county council’s proposal would not deliver the long-term outcomes that we seek to the same extent. We wanted the best outcomes for the people of Bedfordshire and therefore decided, despite the fact that there was no viable alternative for the rest of Bedfordshire, to announce that we were minded to implement Bedford’s proposal.
We also announced at the same time our intention to issue a further invitation to all the remaining councils in Bedfordshire to put forward unitary proposals for the rest of the county. That was on 19 November. We could not have issued that earlier for two reasons. First, in the light of several challenges brought by councils against the Secretary of State in relation to the “minded to” decisions and the first pre-statutory invitation, it was appropriate to wait for the Local Government and Public Involvement in Health Act 2007 to receive Royal Assent before issuing an invitation, so that we could make that invitation on the basis of the provisions in the Act. Secondly, in the routine that we followed, we identified certain risks to Bedford Borough’s financial case. We therefore requested extra information, and it was sensible to wait until that had been thoroughly assessed by the independent financial experts. In fact, they confirmed that the risks were neither material nor significant.
We gave councils four weeks to respond to that because we wanted to minimise the period of uncertainty, which has always been a consideration. We also made clear in July that we were going to issue a further invitation for the remainder of Bedfordshire, so councils had an extensive opportunity to get together to do the preparatory work. We hoped that all the remaining councils in Bedfordshire would co-operate to submit a joint proposal, but that did not prove possible. Instead, we received a new and much improved proposal from Mid and South Bedfordshire district councils for a unitary for the rest of Bedfordshire to be called Central Bedfordshire.
So, as we were required to do by the 2007 Act, we began a further consultation in December, in which we asked stakeholders to specifically comment on the extent to which the central Bedfordshire proposal, together with Bedford Borough’s proposal—the two-unitary solution for Bedfordshire—were likely to meet the outcomes specified by the five criteria set out in the invitation. We also requested that respondents consider whether the two-unitary option on the table or the single-unitary proposal made earlier by the county council would better achieve the long-term outcomes specified by the criteria. There were two options to consider. We allowed eight weeks for consultation, which was justified because of the preparatory work, the long and protracted process and the fact that there had been an earlier consultation on the proposals from Bedford Borough and the county council. We felt that an eight-week consultation period would allow us to press on towards implementation on 1 April 2009 and thus avoid another year of uncertainty and potential disruption.
The two critical issues were support and affordability. I know that we have gone over this ground quite a lot in Committee and in the House. The definition of “broad cross-section of support” is whether a new unitary authority would genuinely meet its objectives and work for local people because it had the support of critical partners outside local government, including health or police services, which would have to make it work. That is not the same as popular support; it was not a test of public opinion.
We left it to the local authorities to solicit opinion locally in the way that they thought effective. We received evidence reflecting divided opinion, divided politics and divided loyalties. It is clear from that that the two-unitary solution commands support from three of the four principal councils in Bedfordshire, but there was strong opposition from the county council. Those divided loyalties were reflected in local polls, and a poll conducted by the county council showed that 46 per cent of those polled preferred the single-unitary proposal. Bedford Borough, however, submitted a petition with over 30,000 signatures in support of its proposal. The county council submitted a petition with 30,000 signatures as part of its “save our services” campaign. It was very evenly divided, as was stakeholder opinion. While there was a consensus from the majority of respondents in support of a unitary local government solution, in whatever form, for Bedfordshire, it is fair to say that a majority of representations received from public sector stakeholders expressed a preference for the county’s single-unitary proposal.
However, as I said before, it is not and never has been about majority opinion. The two-unitary solution has support from some public sector stakeholders, the business community, education and housing, as well as some third sector support and support from some town and parish councils. We thought that was sufficient support to ensure that it would work.
In terms of affordability, as we followed for the other unitaries, the transitional costs must be expected to be more than offset by the savings that the proposal is estimated to generate within a period of less than five years. We used an independent assessment; we did not come to the judgments alone. The financial cases were subjected to rigorous and independent scrutiny by ex-local authority chief finance officers employed by the department through CIPFA and IPF. They went over all the figures for both the Bedford Borough and Central Bedfordshire proposals in the light of the further information that we requested. They undertook their own modelling and made their own assessment of the risks, and concluded that the two-unitary solution was a medium risk, but that it met the affordability criterion with a payback period of less than five years. They concluded that the levels of savings envisaged were about £18 million a year, which is the high end of the sort of savings that we have seen from other unitaries. In short, the proposals met the affordability criteria and will deliver savings that can be reinvested in local services or in reducing council tax.
As I said earlier, a decision on which proposal to implement where there are alternative proposals is not about support or affordability; it is about which one delivers to the greater extent the long-term outcomes that we are seeking. After considering all the relevant information, the Secretary of State concluded that the two-unitary solution would deliver those long-term outcomes to the greater extent, particularly as a two-unitary Bedfordshire would be better focused on the different needs of urban Bedford and the predominantly rural middle and south of the county.
The JCSI has drawn this order to the attention of the House because of what it considers an unusual use of the powers in the Local Government and Public Involvement in Health Act 2007 in the provisions cancelling district council elections in 2008. As we have said before in relation to the other restructuring orders, we do not agree that the use of this power is novel or unusual. There are strong legal arguments in support of the position that there is a power under the 2007 Act to make such provision and we note in this latest report that, significantly, the JCSI has not expressed any doubts about the vires. So we are now in agreement on that point.
In our view there is a powerful policy case for cancelling the district council elections. We explained in our memorandums that, were they to go ahead, their purpose would be open to question since those elected on this occasion would not have the key functions—for example, setting budgets and council taxes for the next year—that they would normally be expected to undertake as councillors. Therefore, all sorts of questions would be raised about whether candidates would be prepared to stand. The elections would be very confusing. We argue that they would be positively damaging as people would think that they were normal elections when that was not the case. The electorate would be invited to vote for people whose powers and term of office would be unusually limited. It could be argued that it would be wasteful of resources to hold elections for members who would have a term of office for less than 11 months, and would not have the power to take the decisions that councillors would normally be expected to take. It is for that reason—the practicality of needing to cancel the elections—that we have laid this order before the House so soon after we announced our decision and why we have pressed for its early consideration by the House.
The Merits Committee invited the Government, in the light of Bedfordshire County Council’s judicial review challenge currently before the High Court, to,
“explain more fully what action they would take if the High Court’s ruling meant that the Order could not go ahead”.
I am happy to do that now. The county council’s challenge is to the Secretary of State’s decision of 25 July 2007 that she was “minded to” implement the proposal made by Bedford Borough Council. Significantly, the decision taken under the Act which this order seeks to implement is not subject to challenge. We consider that it is unlikely therefore that the order would be quashed and in our view there is no purpose served by speculating about an outcome which is unlikely to materialise.
Even if the court were to conclude that the decision of 25 July 2007 was in some respect flawed, that decision has been superseded by our decisions taken since the Act has come into force, and this raises serious doubt about whether it would be appropriate for the court to grant any relief to the county council. This reasoning reflects the Court of Appeal’s conclusion in the related Shrewsbury and Congleton case that decisions or actions made in advance of the orders coming into force under the Act were no more than preparatory steps; the only issue which ultimately mattered was the legal effect of the decisions taken under the 2007 Act.
On that basis we feel that it is essential to continue with this process and push on towards the 1 April 2009 implementation, which is what everybody in Bedford wants. We know that that implementation will be challenging but we believe there is now an evident and growing willingness and an urgency to make the decision which has been taken work. In Bedfordshire officials and elected members alike are beginning to come together in a determination to work through what is best now for the people of Bedfordshire as swiftly and as clearly as possible.
The mayor of Bedford and the leaders of Mid and South Bedfordshire district councils have written to me confirming this outcome. In his letter, the mayor says:
“I want to assure you that there is huge commitment, enthusiasm and capability from both Members and officers to achieve the timetable proposed in the Order. We believe the strategy of sooner rather than later is absolutely the correct one to have taken and will achieve the minimum disruption to service users at the minimum cost to local and national taxpayers.”
The leaders from the district councils set out in an extensive letter the preparations that they have already made for the Central Bedfordshire council. They ask me to stress,
“the work already done and the enthusiasm we have already generated in the process, so that the House of Lords is clear about what is happening on the ground”.
They go on to say:
“There is huge enthusiasm in our area to respond to the timetable proposed in the Order, which we believe is achievable, and we would respectfully ask you to urge the House of Lords to approve the Order.”
The people who need to deliver these changes are fully and actively committed to making them work, and are working hard to ensure that they make the most of the benefits. They obviously now need and seek the approval of Parliament. I sincerely hope that Members of the Committee will now assist this process and support the order. I beg to move.
Moved, That the Grand Committee do report to the House that it has considered the Bedfordshire (Structural Changes) Order 2008. 14th Report from the Joint Committee on Statutory Instruments, 15th Report from the Merits Committee.—(Baroness Andrews.)
Yes, it does; it is quite interesting.
I find it ironic that the Minister pleads post facto legislation—I do not think it is retrospective legislation—as justification for this process. If post facto legislation is a new term, I am sorry but it is appropriate in this case. As the Minister probably rightly argues, if there is a judgment on the original judicial review, it has in effect been superseded by legislation subsequently passed. Even if the judgment went against the Government, I suspect that the Minister is absolutely right that the lawyers would say that what the Government have done should stand.
I also accept the difficulty we face in that we are now electorally right up against the gun. Any delay would be very unfortunate. It is a reality, and I would have to plead when we come to other cases—as we unquestionably will, because there are a few more carcasses in the game larder that must be brought out when they are suitably ripened—that they be brought out with sufficient time not to be rushed in quite the way Bedfordshire will be, and as Cheshire was a little while ago.
I am bound to say that this is yet another chapter in this local government restructuring. It seems that both Cheshire and Bedfordshire will leave a nasty taste in the mouths of their local communities. Of course, the communities and their councillors will come together and make these proposals work. I have said time and again that local councillors have had to make systems imposed upon them work, whether or not they are good, right or effective. It is what local councillors do, and I repeat my tribute to them. Whether I should be concerned if the Government go around the country leaving a nasty taste in local communities’ mouths is entirely another matter. However, I cannot help but feel that that will probably be one of the effects of this exercise; although it will unquestionably die as time passes and people get used to the new system.
I have not been able to decide entirely what the Government’s purposes are in undertaking this exercise; they are certainly not to deliver the most cost-effective and efficient delivery of services. It is not the most representative system. The existing system is far more representative, if you count the number of democratic representatives, than the new systems will ever be. I wonder if this is change for change’s sake. I have always argued that everything that is done can always be done better, but that does not necessarily mean it is right to change things.
Anyway, there is nothing more I can say on this particular cusp. This has arrived at the point where any further obstacles would do harm to Bedfordshire, which I am not in the business of doing. Therefore, even if I do not particularly like the proposal, I shall not oppose it in any way.
I am grateful to the Minister for her detailed explanation of the timing, but we are perilously late getting these orders through. Will she say how perilously close we are? My understanding is that if the orders were not passed today, it would be too late to cancel the elections. That is what I was told. It cannot be right—the orders will not officially be passed until they have been through the House on Thursday—but we are very much at the 11th minute of the 11th hour. Perhaps this is a cheap point, but I will make it anyway: it sometimes feels that central government are very much on the backs of local authorities for not getting things done in a timely fashion, and it sometimes behoves the Government to do the same. This does not look good from the point of view of the local authorities.
With regard to elections, it is probably due to my inability to read the order properly, but I was struggling to find the references to when the mayor of Bedford will be up for re-election. I found the piece about the councillors, but I was struggling to find when the mayor would be re-elected. It occurs to me that the current mayor was elected as the mayor of a borough, and that being a mayor of a unitary authority, providing education and social services, is a quite different job. The mayor should have a new mandate.
I note that the Minister has breathed a sigh of relief at this order being the last in the current tranche. In many ways, however, it is a first: this is the forerunner of the unitary bids by county towns. We will be dealing with those further on in the pipeline; certainly in my own area of Suffolk we are very exercised by this. Most of us can understand why county towns, particularly historic boroughs, want unitary status—that is perfectly understandable—but it leaves the question, which the Minister has spent quite a lot of time on today, of how one deals with the rest of the county where there is no geographic coherence or sense of identity. On the whole, people in shire counties identify either with their town or with the county, and Bedfordshire has shown that up nicely.
I do not feel very much clearer about what criteria will be used when deciding the fate of Ipswich and Suffolk, Norwich and Norfolk or Exeter and Devon. I get a sense that I ought now to understand the ground rules, but I do not entirely feel that I do.
Once again we have heard examples of the different ways in which the protagonists have put forward the information about community support. That emphasises the point we have made before, that perhaps in future tranches the Government themselves need to take more of a hold on this so that the claims of support have some validity that we can all buy into.
There is a big dilemma in these county town areas. It bothers me that if we decide that the county towns are not of themselves large enough on current boundaries but they then expand too far, they lose the coherence that was the point of the bid in the first place as well as leaving the rest of the county rather stuck. It might be that a trade-off between coherence and size needs to be made here. I sincerely hope that we will have an opportunity to debate that in a more significant way than just when the orders come through.
Finally, the noble Baroness has made quite a lot of the question of whether there is enough support to make something work, which is clearly important. It might be naive, but I would so much prefer to have a system of local government that had more to say for itself than a resigned acceptance of the inevitable; which is what we are getting in a lot of these places. I wish that we could have a little bit more than that.
I wonder whether I can ask one question. I apologise to the Committee for having arrived after the Minister had started speaking, but I did catch at the end of her remarks a reference to the Merits Committee’s request that;
“we invite the Government to explain more fully to the House what action they would take if the High Court’s ruling meant that the draft Order could not go ahead”.
Listening to the noble Baroness, the answer seemed to be, “We don’t believe that the court case will go the wrong way”. Does she have a more direct answer to the Merits Committee than, “We think it is going to be all right.”?
Can I just say how grateful I am for the way in which noble Lords opposite have worked with the Government on these orders? I am very conscious that, with this order in particular, we have come up to the wire. There are lessons that we can learn in the process. I am sure that when we reflect on—to use the wonderful analogy—the game hanging in the larder, we will consider how we do it and learn from the process.
The problem with Bedfordshire, as I explained, was that the politics were so complex that the timetable became extremely attenuated, and one of the consequences was the foreshortening of the consultation periods. Because everyone was going over the ground continually from last July, we felt that was sufficient, but we did all that we could to expedite it within the scope that we had. We are where we are. I did not quote at great length from the letters from the district councils, but a phenomenal amount of work is going on to put the new processes in place and to make sure that the services will be up and running, and that is going on with support from across the county.
In answer to the question of what would happen if by any chance the order was not passed—I hear that in another place both opposition parties have agreed not to oppose the order—a Motion will be on the Floor of the House on Thursday, and it will take effect on Thursday. If for any reason that did not happen, we would have to go ahead with the elections anyway; it would be too late. We were conscious of the timetable, and I make no bones about that.
On what the noble Baroness said about the future processes, we will all reflect seriously on what we can do to improve processes in the future as we come up to the three unitaries. There are also some lessons that we can learn about consultation and other things, which I want us to learn. The mayor is not in the order because the order does not affect the mayoral cycle. The mayor will come up for election as and when that is due—
I am grateful to the noble Baroness. Perhaps it ought to have been considered that there should be another election, because it leaves the mayor to run education and social services with no mandate for some time. I know that it is too late for this order, but perhaps the Government might consider that point.
Indeed, I take that point. The mayor was a very strong advocate of the unitary proposal. Now, he has been elected on a working mandate. In view of what the noble Baroness has said about consultation processes, relations with the new unitaries and so on, the consultation process would welcome any views. We certainly want to draw the attention of those who will make the decision to what has been said in this House at various stages about these processes. Of course, the process is open to noble Lords to take part and to make their views absolutely clear.
Finally, I turn to the question asked by the noble Baroness, Lady Hamwee. I responded as I did to the Merits Committee because that is our absolutely serious judgment—for the reasons not least picked up by the noble Lord, Lord Dixon-Smith. We have not speculated on what the implications would be if the order were to be quashed. My understanding is that, with the order having gone through, it might not be possible for the court to do anything other than accept that it had gone through. I have gone as far as I can in trying to explain why, in terms of the process and the timing, we do not think that it is likely that the court will come to that conclusion.
I am grateful to all Members of the Committee who have spoken. We will follow up what has been said. I am very willing, as are our officials, to talk to noble Lords about future processes in the context of the orders that will come forward in due course, and about the principles and the processes that have led us to this situation today. I am very grateful for the support.
On Question, Motion agreed to.