My Lords, it is with regret that I have to inform the House of the death of Lord Beaumont of Whitley on 8 April. On behalf of the whole House, I express our condolences to his family and friends.

My Lords, with the leave of the House, I wish to make a personal statement.

During the discussion on the Statement on Zimbabwe on 3 April, I said:

“Unless the present head of the UNDP is withdrawn, there will not be very much confidence in the UN’s role in the future of Zimbabwe. Two successive UNDP leaders have been far too close to Mugabe and indeed, in one case, have taken land from him”.—[Official Report, 3/4/08; col. 1187.]

I do not resile from my reservations about the UNDP’s relations with the Government of Zimbabwe. However, I said in good faith and believing it to be fact that one of the two heads of the UNDP in Zimbabwe had accepted favours of, I thought, land. I now recognise that I was wrong in believing what I said to be a generally accepted fact. I have and had no evidence to support my statement. I therefore wish to apologise, first, to the House for making a statement that I should not have made and, secondly, to Mr Angelo and Mr Zacarias for the unfavourable imputations that I have made against their reputations.

asked Her Majesty’s Government:

When they will next discuss future reform of the European Union budget with regard to common agricultural policy restructuring in the Council of Ministers.

My Lords, the Agriculture Council will discuss the reform of the common agricultural policy as part of this year’s CAP health check. Separately, European Union spending, including the common agricultural policy, is currently subject to the EU budget review, but no timetable for discussion in the Council of Ministers has yet been established.

My Lords, page 20 of the recent Foreign Office pamphlet, Guide to the European Union, says that the CAP has now been reformed and that it,

“no longer produces wine lakes or butter mountains. It is now moving … towards protecting the countryside”.

Is the Minister confident that this great change can be achieved fully without mass penury among farmers?

Yes, my Lords, but the CAP is still the most visible and expensive part of the Common Market. It hampers innovation, interferes with trade and does not bring Europe anywhere near to competing in the global economy, so it needs reform.

My Lords, we all know that the World Trade Organisation Doha development round has stalled primarily because of agricultural subsidies, in particular with regard to the United States and the European Union. Do the Government think that it is justified that we in the European Union, for example, subsidise our cows by $2 a day when nearly 1 billion people around the world live on less than $1 a day? Does the Minister sympathise with those who accuse the West and the European Union in particular of preaching fair and free trade but of practising protectionism?

My Lords, I agree with much of the sentiment of the noble Lord’s question, but the fact is that the CAP needs reform. Not only are the figures he quoted correct, but I resent the fact that British taxpayers are subsidising the production of tobacco in Europe.

My Lords, on reform of the common agricultural policy, will the Minister say what the Government’s attitude will be to the payment for and regulation of biofuels and how the European Union should encourage or otherwise the growth of biofuels within the EU?

My Lords, to be honest, no, because that goes way beyond the Question. It is an ongoing issue. We are waiting for the formal response to the CAP health check on 20 May. The negotiations on the EU budget will start much later than that. By then, we will have a new European Parliament and a new European Commission. I am sure that all these matters will be discussed, but I regret that I cannot go beyond what I have said today.

My Lords—

My Lords, given that much has changed since the CAP health check was proposed, what do the Government now see as their priorities in the discussions?

My Lords, the removal of the remaining production subsidies still has to be a key element. The reduction and the abolition of milk quotas are examples that we have put forward. Each country has its own priorities and we will not all get our priorities. The health check is not reform in the sense that we would normally use the term, but if we can get a degree of agreement for more spending on the environment and the landscape rather than on food production, that would be to the benefit of everyone.

My Lords—

My Lords, I think that it is this corner.

My Lords, we have heard once from the Cross-Benchers. We have not heard from the party of one in the corner. Perhaps we have time for both.

My Lords, I am most obliged to the Leader of the House. I welcome the Minister’s answers, but is he not facing an uphill task in getting reform, bearing in mind that the German and French Ministers have publicly stated that they are against any reform of the CAP?

My Lords, I do not think that my noble friend is accurate. In recent months at European Councils, I have been face to face with German and French Ministers and have listened to them point to the changes that they want. The French take over the presidency next month. They have made it clear that their four themes are food security, balanced trade, rural cohesion and new environmental challenges. It remains to be seen how the French will play their hand. The Germans want some reform, but they do not agree with all the reforms that we want.

My Lords, does the noble Lord agree that the recent sharp rise in world food prices and the probability that that rise will be sustained for a considerable period put the whole issue of CAP reform, the Doha round and the budget review in a different light? Would the Government be prepared to give the House the benefit of some studies that they might make on the impact of the rise in food prices on all these issues, which would make subsidisation of agricultural products a much less attractive proposition than it was before?

My Lords, the noble Lord’s latter point is absolutely right. The Prime Minister has written to the Prime Minister of Japan as chair of the G8 to put this issue on the G8’s agenda. There is no single answer on the rise in commodity prices, but two poor harvests and the drought in Australia have contributed enormously to the drop in total grain stocks around the world. On top of that, the demand for food in China and India has changed. As I said, these issues will be raised at the G8 at the request of the Prime Minister.

My Lords, is not one reason for the increase in food prices the EU’s insistence that a proportion of our petrol be made up of biofuels, which is adding greatly to the cost of grain and to food shortages?

My Lords, there is no evidence of that at present and there is a good reason for the policy. However, all these policies are subject to review. I do not think that an argument can be made for food price rises in Europe resulting from biofuels, but it is slightly different in the United States.

asked Her Majesty’s Government:

What action they will take to increase the number of apprenticeships in the private sector to 400,000 per year by 2020, as recommended in the Leitch review of skills.

My Lords, World-class Apprenticeships: Unlocking Talent, Building Skills for All, sets out the actions planned to deliver 400,000 public and private sector apprenticeships in England as part of meeting my noble friend Lord Leitch’s recommendation of 500,000 UK apprenticeships by 2020. The key to this is establishing the National Apprenticeship Service in 2009. Apprenticeship policy is a devolved matter and decisions on apprenticeship arrangements in Northern Ireland, Scotland and Wales are matters for the devolved Administrations.

My Lords, I thank the noble Baroness for that Answer. Does she agree that the National Apprenticeship Service faces a big challenge, in view of the fact that in the private sector in this country there is only a 10 per cent take-up of apprenticeships, out of 1.4 million VAT-registered businesses? In view of that, the scheme has to be robust. Will the Minister assure us that there will be members on the board who have experience in the workplace so that they are able to represent, in particular, small businesses? Moreover, will small businesses be given the financial and other help they need? If so, in what way?

My Lords, I am delighted to be able to reassure the noble Lord that the National Apprenticeship Service will mark a major step forward in the realisation of the development of apprenticeships throughout the UK. I have reason to be optimistic about this because the Government have seen the number of those successfully completing apprenticeships rise from 40,000 in 2001-02 to over 100,000 today. While we believe that there is reason to be optimistic, the noble Lord is right to say that this is a major challenge.

My Lords, the Minister said in her reply that the target included the public as well as the private sector. Can she make clear what specific action the Government have taken in connection with their Skills Pledge to encourage enterprises and concerns in the public sector to offer apprenticeships? Further, will she consider the extent to which young people in secure settings can be helped by public-sector employers to gain apprenticeships?

My Lords, the noble Lord is extremely knowledgeable about these matters and he is absolutely right to draw attention to the important role of the public sector. As a Government we have to take the lead and put our own house in order because we do not do as well as we should. For example, in my department the Permanent Secretary, Ian Whatmore, is leading a government-wide initiative to make sure that we make our full contribution and that we expect to see new apprenticeships created in government, starting with at least 500 new apprenticeships this year. Moreover, in DIUS we aim to ensure that we have new apprenticeships beginning this year as well.

My Lords, can the Minister cite any hard evidence to show that targets have improved the quality of apprenticeships rather than simply increased the time needed for filling in forms by employers?

My Lords, the noble Baroness asks a very interesting question. I argue absolutely that this Government have rescued apprenticeships from obscurity. We have seen an enormous change in the quality of apprenticeships; that is exemplified by the increase in the number of completions. We are looking for high quality apprenticeships where there is close involvement and which are employer-led. The noble Baroness is right to highlight that that is a challenge, but this Government take it very seriously and are prepared to invest by 2010 over £1 billion in making it happen.

My Lords, is not the real issue not the number of young people in apprenticeship programmes but that of quality? What consultation takes place of apprentices who have been through the system, many of whom complain about the inadequacy of training arrangements at the workplace and in colleges of further education?

My Lords, my department takes very seriously the involvement of learners and students in the development of our policies. The noble Lord is right to highlight quality and to draw attention to the fact that in the past not all apprenticeships have lived up to the standards that we would expect, but we believe that access to apprenticeships will play a key role in achieving the kind of skills that we need in this economy to compete globally in the future. With the kind of work that the National Apprenticeship Service will make possible through the involvement of expert members on the board—I apologise for not picking up that question—and through the provision of services for small or medium-sized sized employers, we aim to get more apprenticeships with more employers in all sectors so we can deliver a practical vocational option for all young people who feel that they can benefit.

My Lords, I congratulate the Government on their action on apprenticeships. How many apprenticeships are being started and followed through in prisons? This group of people are among the least well educated and in need of the greatest support, and they could start important training while inside.

My Lords, I apologise to the noble Baroness. That is a very good question. I do not have those figures in my brief, but I will write to her on the matter. I know that we have a Question coming up on that subject shortly.

My Lords, given the lack of employer commitment to apprenticeships, what incentives might be offered through taxation, including perhaps tax breaks, which could be of particular help to small businesses?

My Lords, my department is thinking carefully about the incentives that we can offer to employers. The most important incentive for taking part in an apprenticeship scheme is to ensure that the skills base of their business is improved. That is highly valuable to employers. We must remember that the training provided in association with apprenticeships is free to the employer. We are looking at what other incentives we can offer. We are going to pilot the question of direct payments and look at how that can particularly help small to medium-sized employers.

asked Her Majesty’s Government:

What steps they are taking to address genetic problems arising from marriages between first cousins.

My Lords, cousin marriage is a cultural practice common to a number of ethnic communities. The risk of having a child affected by a genetic disorder following cousin marriage is a complex and sensitive issue. The Department of Health has funded a number of initiatives since the 2003 genetics White Paper to increase the understanding and awareness of the possible risk in affected communities.

My Lords, I thank the Minister for that Answer. Given the general tolerance in the population of risk factors in birth, does he agree that it would be wrong to castigate cousin marriages, but that somewhere between the White Paper and the Harper review of a couple of months ago we have lost sight of the importance in this field, first and most important, of the training of genetic counsellors to deal with this sensitive issue; secondly, of school education about genetic risks; and, thirdly, of carrier matching and other non-invasive ways of testing for problems and possibly prenatal diagnosis?

My Lords, the noble Baroness makes an important point. I would like to put on record the Government’s commitment to this. The role of the healthcare professional and of the Government is to provide support and advice to empower people to make informed choices based on clear information and advice. The healthcare professional’s role is to allow the individual to assess these risks and to make their own decisions about what to do; it is not to tell them who they should marry. As a result the Government have made a significant investment in this field, not only in the training of genetic counsellors but in changing the curriculum of primary care colleagues with the collaboration of the Royal College of General Practitioners. We will see more and more genetic knowledge being disseminated through postgraduate education.

My Lords, is the department acting on the recommendation of the Genetic Interest Group that there should be collaboration between regional genetic centres, services for haemoglobin disorders and paediatricians in order to support, identify and offer appropriate counselling to at-risk couples?

Yes, my Lords, we are. I bring to the House’s attention the review of Our Inheritance, Our Future. Published only last week, it refers to the consultation we have carried out since the White Paper was published with more than 50 different stakeholders, including scientists, professionals and patient groups, who overwhelmingly welcomed the progress and investment that have been made since publication. I will ensure that this document is made available to the House.

My Lords, in some parts of the world first-cousin marriages are very common, particularly in the Middle East. On a recent visit to Saudi Arabia I was struck by how much more openly the genetic issues arising from first-cousin marriages are being addressed and discussed. How much interchange is there with countries where this practice is widespread and how much co-operation on research or research projects is under way?

My Lords, I agree with my noble friend’s comments. This issue affects more than 1 billion people around the globe, and 20 to 50 per cent of the marriages between them are consanguineous, most commonly between first cousins. There is collaboration in certain fields. It is important to realise that taking people’s history into account is probably the best way to assess the risk of first-cousin marriages. As we know, there are more than 100 different autosomal recessive disorders. Collaborations exist whereby we can identify certain areas where we can counsel the patient and try to identify some of these risks through antenatal screening.

My Lords, is my noble friend aware that my great-great-great-grandfather, Sir John Acton, the Bourbon Prime Minister of the Kingdom of the Two Sicilies, married his niece with the benefit of papal dispensation, and that their grandson was the first Lord Acton, who was a Liberal and not a Bourbon, and of whom the noble Lord, Lord McNally, thoroughly approves? From what has been discussed so far, I am not clear that there is a genetic risk. I hastily add that none of my nine brilliant brothers and sisters nor I is as clever as our great-grandfather.

My Lords, there is a risk but, as my noble friend suggested, it is very small. Communities that practise cousin marriages have twice the risk of having a child affected by inherited genetic disorder. The overall risk is still very low at about 4 per cent, whereas the risk in the general population is 2 per cent. To the list of the noble Lord’s family I would add Albert Einstein and others, who were probably more mathematically inclined and were aware of the risks.

My Lords, do the Government have any evidence whether there are any differences as regards the tendency of different ethnic groups to incur the risks of first-cousin marriage? I hope this will be a rather easier question to answer than the previous one.

My Lords, I am not aware of any differences between ethnic groups but I am aware of certain autosomal recessive disorders that might be higher in some ethnic groups. I will be more than happy to write to the noble Lord on one specific disorder which we see in Ashkenazi Jews and which we screen for quite regularly.

My Lords, what is being done on health education in communities where such practices are prevalent? What advice is being offered to entry clearance officers abroad regarding cases where such marriages may be used for the purpose of entry to the United Kingdom?

My Lords, the department has funded two projects that have looked at ways of raising community awareness of genetic risk. In Blackburn, a genetic counsellor worked with families who already had an affected child in order to raise understanding of future risks for the family and then worked through the family to offer services to other relatives concerned about their own risks. In Leicester, the local genetics service worked with community groups to raise awareness of the possible risks and the availability of a local specialist genetic service to provide advice and information. Local health services in Bradford also have plans to develop community outreach work to raise awareness, particularly in communities at higher risk.

My Lords, on the genetic problems arising, could further attention be made to the welfare and education of the children involved?

My Lords, as awareness of the risk is disseminated among communities that are at a slightly higher risk, I am sure that that process of information dissemination will be inherited through the children.

asked Her Majesty’s Government:

Whether they have made any representations to Transport for London on plans to change the road traffic arrangements for Parliament Square.

My Lords, the proposed changes to Parliament Square under the World Squares for All project are the responsibility of the Mayor of London and Westminster City Council, as highway authority. The Government continue to work alongside Transport for London as the proposals for this scheme take shape.

My Lords, I suppose that I thank the noble Lord for that reply. Will the relevant authorities continue to make sure that taxis are available for those of us who depend on them to get to Parliament? Also, on parking outside St Margaret’s Church, will this amenity still be available for brides and mothers-in-law to be picked up and put down, as well as disabled and important mourners following memorial services at the church?

My Lords, I am most grateful to the noble Baroness for the questions. Obviously taxi access is essential to the Palace of Westminster. These plans are work in progress. Clearly the concerns of the bereaved going to services will have to be properly considered. I am sure that the scheme, which is being consulted on, will protect the interests of those who need immediate access to all the relevant buildings.

My Lords, this is a great opportunity to transform the whole environment around the British Parliament. I assume that not just the Government but Parliament as a whole will have some strong opinions about what is offered. Some of us think that closing two sides of the square rather than one would create an enormous opportunity to have a large public space. Even what was achieved in Trafalgar Square with the closure of one side was rather impressive. Surely the Government have a positive view on this and ought to express it vigorously to Westminster City Council, which appears to regard the interests of the inhabitants of the houses around Smith Square and between Smith Square and here as rather more important than the wider interests of reshaping the environment for the Palace of Westminster.

My Lords, the noble Lord is right to draw attention to the success of the Trafalgar Square scheme. The Government are involved in discussions and the Palace of Westminster authorities are represented on the World Squares for All steering group. The views expressed by the noble Lord are very helpful, and I will certainly ensure that they are passed on.

My Lords, can the Minister say how long this has been going on? I recall that this discussion started about eight years ago, when some noble Lords and I were shown lovely plans of what might happen in Parliament Square. If the mayor and Westminster City Council have taken eight years not to agree, when will something happen? Will our grandchildren be the first to see a result?

My Lords, discussions about Parliament Square have been going on ever since Sir Charles Barry designed the first layout back in 1868. I am sure that there is a great sense of urgency in the mayor’s office, as noble Lords will understand. This has to be resolved for the Olympics and the Paralympics in 2012.

My Lords, does the Minister agree that, although the reorganisation of Trafalgar Square, which is a much larger square, has improved public access, it has made things for traffic completely impossible? Also, my noble friend Lady Trumpington asks me to remind him that he did not answer her question about St Margaret’s Church.

My Lords, I beg to differ with the noble Baroness. I thought I had said that—

No.

My Lords, I shall repeat some of what I said. I am sure that the interests of mourners and visitors to the church will be properly considered and fully taken into account. Public authorities are spending a lot of time working up plans and procedures. All noble Lords should have received information about the proposals on offer. I think that there will be long-term improvements to traffic flow around the square if the plans that I have seen are brought into effect.

My Lords, will my noble friend ensure that any changes make it easier for Members of this House who have offices in the buildings on the other side of the road to get here for Divisions? All the changes that have taken place recently, both to traffic control and, above all, to security, have created an obstacle course for Members to get here in time to vote.

My Lords, if these plans come to fruition, there should be an 80 per cent reduction in traffic flows in front of the parliamentary buildings, so it should be much easier for those who work in buildings outside the parliamentary estate to make their way into the building for Divisions.

My Lords, judging by the waffle that has come out of the Minister, should we not just wait for Boris on 1 May?

My Lords, I have tried to give pretty precise answers to questions. I have told the House that there have been discussions since 1868, I have explained the position with the church and I have made it painfully obvious that the parliamentary authorities are involved in detailed discussions. The worst possible thing for London would be the election of Boris Johnson.

My Lords, I hope that the Minister thinks that my noble friend Lady Trumpington was right to ask this Question. Can he explain why, over several years, the Government have failed to have Mr Brian Haw’s rubbish removed while at the same time they have penalised decent and reasonable protesters in Parliament Square?

My Lords, the presence of protesters on the pavements on the edge of Parliament Square is a matter for Westminster City Council. Mr Haw has a right to protest and that right has been enshrined and protected. While one may disagree with the particular views of an individual, they have a right to make those views known.

My Lords, I declare an interest: I live on the corner of Great Peter Street, Great Smith Street and Marsham Street. Last year, when Parliament Square was closed, there was chaos. Does the Minister agree that the problem concerns not only Parliament Square but the surrounding area?

My Lords, my noble friend is right to draw attention to traffic problems in the area. We have something like 33 million pedestrian visitors to Parliament Square, of whom fewer than half a million ever make it to the centre. There is a strong view that opening it up and making pedestrian access possible from the south side would greatly improve the environment.

My Lords, my noble friend Lord Davies of Oldham will repeat a Statement on financial stability as soon as possible after 3.30 pm.

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

Moved, That it be an instruction to the Committee of the Whole House to which the European Union (Amendment) Bill has been committed that they consider the Bill in the following order:

Clauses 1 to 3

The Schedule

Clauses 4 to 8.—(Baroness Ashton of Upholland.)

On Question, Motion agreed to.

My Lords, I beg to move that the Bill be now further considered on Report.

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

Clause 21 [Credit for period of remand on bail: terms of imprisonment and detention]:

moved Amendment No. 62:

My Lords, I am most grateful to the noble Lord, Lord Henley, for allowing us to discuss this matter again. I shall not tempt fate by describing why I said we were on a roll when we debated it last time. The noble Lord is right that the measure comes as a result of the review of prisons by the noble Lord, Lord Carter, and it is one of the steps that we would like to take to help manage demand for prison places. We have discussed prisons for some weeks now, and noble Lords will know of the challenge of the current demand for prison places. The Carter proposals are a mixture of an expansion of places over the next few years, together with what is described as demand management. Our proposal is one of those initiatives to reduce demand for prison places.

I confirm to the noble Lord that to qualify for the curfew credit, defendants must have been subject to an electronically monitored curfew for at least nine hours per day to reflect the position that being subject to a curfew does not equal a deprivation of liberty, whereas remand to custody clearly does. Each curfew day will provide potential credit against sentence of no more than half a day. The court will be required to take into account the defendant’s compliance with the curfew when deciding the period to be credited. The credit will not be made on the basis that the defendants have been deprived of their liberty; they will be credited for the fact that they have complied with their bail conditions while having their liberty restricted on a preventive rather than punitive basis. The credit will be made on the basis that even though being under a curfew is less arduous than being remanded in custody, both are intended as a preventive measure designed to secure the judicial process rather than to punish the offender. The provisions will apply only to defendants bailed under the Bail Act, as amended by the Bill, who are subject to an electronically monitored curfew bail condition of at least nine hours per day.

I know that the noble Lord, Lord Henley, feels that this is a reward to watch “Match of the Day”, but it is not. The curfew times and hours will be decided by the court, which will take into account the nature of the bail represented by the defendant. Of course, the curfew may be imposed for periods when the defendant is considered more likely to offend or to interfere with witnesses. Such periods might often be during the evening and into the early hours when defendants can get into trouble after a night out at the pub. That is why typical curfew hours tend to be overnight. The curfew can be tailored to cover other risks. For example, the court could curfew a football hooligan during match times or a shoplifter during peak shopping hours.

On the question of a perverse incentive, we believe that this is a sensible preventive measure that will provide an incentive to those remanded on bail who are subject to an electronically monitored curfew to comply with their conditions. Of course in relation to the perverse incentive that is where I would rely on the discretion of the sentencer to arrive at the right decision. Given all our debates on the question of the discretion of the judiciary, surely the noble Lord, Lord Henley, could rely on that.

My Lords, will the Minister say what he means by that? Subsection (2) of proposed new section 240A, states that,

“the court must direct that the credit period is to”,

be taken into account. Does that mean that the Minister has in mind that the judge might impose a longer sentence than otherwise to allow for a sufficient period in prison, in which case he would probably be breaching the sentencing rules?

My Lords, I am sure that is right. I thought the noble Lord, Lord Henley, was suggesting that, in certain circumstances, defence lawyers would request particular conditions because it would then lead to a certain time being taken off the defendant if subsequently convicted. I was answering that point.

My Lords, I would have more sympathy for the noble Lord’s amendment if I knew what the Conservative Party proposes to do in order to reduce the present overcrowding in prisons. Everything that has so far been proposed by the Government to this end has been opposed by the Conservatives. It would be helpful if they could put something positive in its place. In the mean time, this seems to be moving in the right direction; therefore I oppose the amendment.

My Lords, the Minister cited, in support of his arguments, the Carter review of prisons, which he described as a mixture of expansion of places and a degree of what he described as “demand management.” We have supported—or supported in part—the expansion of places; we certainly object to the idea of Titan prisons as part of that expansion. I would paraphrase “demand management” as letting out early slightly more people than they should, which is a mistake, and keeping people out who should possibly be in, which this is a measure of. It is not the right way to go about it. It is not right that someone who is, admittedly, confined to home, but having rather a comfortable time, should have that time taken into account if he receives a custodial sentence later on. No doubt, if he is a football hooligan, he is still able to watch television. That is why this particular case is the wrong way to go about it and why I intend to press this amendment and seek the opinion of the House.

moved Amendment No. 65:

My Lords, I beg leave to repeat the Statement on financial stability made in another place by the Chancellor of the Exchequer.

“With your permission, Mr Speaker, I should like to make a Statement about this morning’s announcement by the Bank of England to improve conditions in the financial markets. The scheme has been developed following extensive discussions with the Treasury and the Financial Services Authority.

“I also want to report on the recent G7 meeting in Washington on restoring financial stability to financial markets. I will also report on measures we are taking here at home to strengthen the stability of the banking system, as well as to help homeowners with their mortgages.

“Before I set out in further detail the Bank of England’s special scheme, let me remind the House of the background against which it has been developed.

“The financial markets throughout the world remain turbulent, following the problems that arose in the US housing market last year. Functioning financial markets rely on banks and building societies being able to raise finance from each other—and from other investors—including through securitisation markets and inter-bank lending markets. These funds can then be used to finance lending to businesses and consumers, including for the provision of mortgages.

“But global financial markets are not currently functioning normally. Across the world there is a lack of confidence in credit markets—most notably mortgage-backed securities. That lack of confidence was prompted by the downturn in the US housing market and in particular by the problems associated with sub-prime mortgages there. Banks are reluctant to lend to each other, and as a result lending to customers is more expensive and more restricted.

“Along with other central banks, the Bank of England has over the past few months made additional funding available to the markets through its regular market operations. The UK financial system remains fundamentally strong and the Bank of England’s action has helped to take some of the pressure out of the system by giving the banks additional liquidity to continue their usual banking operations. Last week, it made a further £15 billion available, over three months, as part of its open markets operations. And the governor has said that he is committed to providing the liquidity assistance that the system as a whole needs to function normally.

“Here at home, the economy continues to grow. Last week’s figures confirm that unemployment remains low and employment high. That and the recent interest rates cut will provide wider support for the housing market and the wider economy.

“As banks here and across the world disclose their losses and strengthen their financial positions, which will help to rebuild confidence, the Bank of England can now take action to ease conditions in the financial markets, particularly in relation to mortgage-backed securities.

“The special scheme announced by the Bank of England today is a further step towards tackling these problems, which have become more evident in recent weeks, with the increasing cost and decreasing availability of lending by banks and building societies.

“Under the new scheme, for a six-month period, the banks and building societies and other institutions that are eligible for the Bank's standing facility will be able to enter into agreements with the Bank of England under which they exchange high-quality asset-backed securities for Treasury bills. They can then hold these bills or trade them in the markets. Each exchange agreement will be for a maximum of a year, but can be renewed at the Bank’s discretion, so that the exchange could ultimately be for up to three years.

“The arrangement is available only for assets existing at the end of December and does not apply to new lending since then. At the end of the scheme, the banks will return the Treasury bills to the Bank of England, and will receive back the securities which they had provided as collateral. This means that the banks will continue to hold the risk on the securities they provide, so it is them rather than the Bank of England that will be exposed to any fall in value.

“At all times, the banks must provide as security to the Bank of England assets worth significantly more than the Treasury bills they receive in return. If the value of their assets falls, the banks must provide more assets to the Bank of England or return some of their Treasury bills. They will be charged a commercial rate, so there is no subsidy to the banking sector.

“The Bank of England expects the initial take-up to be £50 billion. It will monitor the position daily, both to check new bids from the banks and to track the value of the assets exchanged as collateral.

“The Treasury is supporting the scheme announced by the Bank of England by lending to it—at a commercial rate—the Treasury bills that they will then exchange with the banks and building societies. As the House will know, the Government stand behind the Bank as its sole shareholder and we are making this clear by providing an indemnity. The Bank of England believes that these measures will support the banking sector during the present period of uncertainty and will help to restore the stability that the financial markets need, both now and in the longer term. This will help alleviate the problems that have seen banks reluctant to lend to each other, and in turn support the provision of new mortgage lending.

“Maintaining economic and financial stability is the Government’s key priority. In addition to the Bank of England’s announcement, I confirm to the House that the Government will take further action, at home and internationally, to restore stability in financial markets. It is important that banks continue to make full disclosure of their exposure to losses and do so as soon as possible. That is why, at the G7 and IMF committee meetings in Washington, we agreed that banks should be as open as possible, as quickly as possible, in order to remove the continuing uncertainty as to their true positions. This process has started throughout the world, including here in Britain, with banks disclosing their losses and making proposals to rebuild their capital positions. Transparency is an essential part, along with other steps we are taking, of stabilising financial markets.

“In Washington last week, the Financial Stability Forum agreed a range of actions, some to be implemented in the next three months, others in the longer term. We agreed to strengthened oversight of risk management, including capital and liquidity; clearer standards for valuation and transparency; and changes in the role and use of credit ratings. We will strengthen international co-operation, so that we are better able to prevent crises and deal with problems that occur. We are also working with the IMF to allow it to play a greater role in providing an early warning of threats to financial stability, so that the relevant authorities can take early action to prevent these actions in the future.

“Here at home, we are about to finish consulting on the reforms to the banking system that I announced in January. These reforms will make it easier to intervene in the event that a bank gets into trouble, in order to protect depositors and maintain the stability of the financial system. Because it is important that we get this right, I will continue to hold further discussions with the industry on the detail of these proposals before bringing forward legislation. We will also make changes to the Bank of England to emphasis its role in maintaining financial stability. The responses we have received so far to the consultation have made it clear that, given the importance of these reforms, it is crucial that we have further discussion. Once that is completed, I can confirm that it remains our intention to introduce legislation this Session to strengthen financial stability and depositor protection. The legislation needs to be on the statute book early next year, when some provisions of the Banking (Special Provisions) Act are due to expire.

“Finally, we are determined to do everything we can to help homeowners, so I am meeting the Council of Mortgage Lenders, the Finance and Leasing Association and major lenders tomorrow, along with the Chief Secretary to the Treasury and the Housing Minister. Since 2004, mortgage lenders have been required by statute to treat their customers fairly, and at our meeting I will be discussing how banks and building societies can help people whose fixed rate mortgages are coming to an end, as well as helping people who may get into difficulties in repaying their mortgages. Banks and building societies have a duty to treat their customers fairly and, in the light of everything we are doing with them, I want to discuss with them how they can pass on the benefits of falling interest rates, as well as wider government support to mortgage holders. The Government will continue, along with the Bank of England and the Financial Services Authority, to do everything they can to maintain stability.

“The announcement by the Bank of England this morning will help to resolve the problems in the wholesale financial markets, with their subsequent impact on the retail markets—so helping business, individuals and, in particular, the mortgage market. I commend this Statement to the House”.

My Lords, I thank the Minister for repeating the Statement made in another place. We support the principle of the Bank of England making greater liquidity available to banks. My honourable friend George Osborne has been calling for the use of a wider range of securities within Bank of England facilities, so this move is welcome.

It has taken the Government and the Bank a long time to get to this position. The US Federal Reserve Bank liberalised its collateral requirements over a month ago, and in the UK the various attempts to date to inject additional liquidity have achieved little, and LIBOR has remained stubbornly high even when the bank rate has been reduced.

In general, the UK has been behind the pace in dealing with the credit crunch as it has unfolded. The Minister will need no reminding that the Government’s dithering over Northern Rock was in large measure responsible for the end result; a nationalised bank with a £100 billion balance sheet underwritten by the taxpayer. We have no timetable for the so-called temporary ownership to end that, so the taxpayer will be standing behind that balance sheet for some time to come.

I mention Northern Rock to put today’s announcement of a further £50 billion in context. It looks rather modest. Furthermore, I understand that the total amount of bank and building society debt that needs to be refinanced this year could be as high as £750 billion, so there has to be a serious question over whether today’s move will be sufficient. The Statement implies that the £50 billion facility may be increased. Under what circumstances will the Bank of England extend the facility beyond the first £50 billion? What will trigger this? Will Parliament be informed?

The Government’s spin on today’s news is that it will help those with mortgages. The Statement referred to tomorrow’s meeting between the Chancellor and the Council of Mortgage Lenders as if that will solve some of the difficulties facing lenders and borrowers. The Chancellor needs to be aware that the Council of Mortgage Lenders’ response to the Bank’s announcement this morning was:

“The recent trend of mortgage products being removed and mortgage prices increasing for new customers will be affected more by how LIBOR responds to the announcement. The improved liquidity is unlikely to reverse the trend to higher mortgage costs we have seen in recent weeks”.

No joy there, then. The Financial Times Alphaville site said:

“The spin may be about the housing market. But this is really about the money markets”.

The cost of the special liquidity scheme is linked to LIBOR, but LIBOR is part of the problem of rising mortgage interest rates. Can the Minister explain how a LIBOR-related lending facility will help the mortgage market? There is no requirement for the banks to use the proceeds from this facility to reinvest in residential mortgages, so if the Government really have an objective of supporting the mortgage market, how will they ensure that they get value for money from taxpayers’ backing of this new facility?

The “haircuts” that the Bank proposes to use are very large. In the extreme case, a fixed interest rate, 10 to 30-year own name covered bond for which no market price is observable, denominated in euros or dollars, could pick up a haircut of 35 percentage points. Haircuts are a way of expressing risk. Can the Minister explain how the Government and the Bank have arrived at their risk percentages? Does this represent a view that the mortgage market in the UK and the rest of the EU is carrying risks of up to 35 per cent in loss of value?

Let me be clear, we support the prudent use of taxpayers’ money, and if 35 per cent is the Government’s appraisal of risk, that is what should drive the haircuts; but the Government must come clean on their risk assessment. Will the Minister tell the House what view the Government have on the risks inherent in the current mortgage book of UK banks and building societies and their European counterparts?

The eligible collateral is restricted to AAA-rated securities, but the Government have been critical of the rating agencies. The Prime Minister said that we need to,

“sort out the credit rating agencies and the mistakes that they have made”.

What changes have been made to sort out the credit rating agencies to stop them making mistakes? I am not aware of any changes, so what credence can we place on the AAA ratings that are required? Is this a tacit acceptance that the Government can come up with no better way of appraising the quality of the securities that taxpayer money will be backing?

The eligible securities within the special liquidity scheme seem on the whole to be sensible, and we support the exclusion of securities linked to US mortgages, but can the Minister explain the inclusion of credit card-backed securities? Why have the Government allowed US credit card-backed securities to be included? What is the rationale for excluding US mortgages but including US credit card debts?

Will the Minister say how the Bank of England is going to make sure that this new facility is propping up sound banks and not another Northern Rock? The Financial Services Authority is responsible for banking regulation and the Bank has little information about individual banks. Will the Bank be carrying out due diligence on banks before it agrees to deal with them at the window? Does the FSA have any role in this? If it does, how can the Bank and the Government be sure that the judgments made by the FSA are sound, especially given the outcome of the report on its disastrous handling of Northern Rock?

Tackling inter-bank liquidity is important but so too is the strength of banks’ balance sheets—the Minister referred to this in his Statement. We have heard about the possible rights issue by Royal Bank of Scotland. What are the Government and the FSA doing to ensure that banks play their part in strengthening their balance sheets, whether through additional capital or retained profits? We heard in the Statement about international discussions, but what practical steps are the Government taking in this country?

This announcement is a helpful step forward. It remains to be seen whether it will have the effects that the Government desire and it raises as many questions as it answers. I hope that the Minister will answer the questions that I have put to him.

My Lords, I, too, thank the Minister for repeating the Statement. I think that all noble Lords would agree that we are now in a rather bizarre situation. After years in which the banks were trying to persuade all of us to take out bigger and bigger overdrafts, the Government have now in effect created a massive overdraft facility for the banks. We are seriously concerned that in doing so the Chancellor has exposed the taxpayer to the risks of a massive bank bail-out.

As to how we got to this position, a number of things are clear. The banks have in some respects been helpful about it. By their own testimony through their representative body, the Institute of International Finance, they have been guilty of,

“major points of weakness in business practice”,

including massive levels of pay, bonuses up to 10 times basic salaries and serious shortcomings in the management of risk. They are not simply passive victims of bad luck. British banks lent too much too quickly and too carelessly. The big losses with which they are now faced must be identified by them and then covered by bank shareholders. That is the way in which trust will be restored and interbank lending resumed at acceptable levels. However, it is clear that going back to the shareholders is an extremely unpalatable option for many bank executives, not least because they fear that they may lose their jobs if they do. It is much easier to go to the Government and get a bail-out from them.

The Chancellor has pointed out that the taxpayer is protected because bank assets will be transferred at a discount. The noble Baroness asked a number of questions about this, but we need to know how big a discount we are talking about. Given that the IMF has judged that the housing market may be 25 per cent to 30 per cent overvalued, any discount of less than 30 per cent appears at face value to place the taxpayer at significant risk. Can we therefore have an assurance that the discount will be at least at that level? The Bank of England has said that it expects that the initial take-up will be £50 billion. Is there any sense anywhere of what the final take-up will be? Have the Bank and the Government in effect given an open-ended commitment that they will make available as much money as the banks need?

If there is to be any departure, as it appears there may be, from the traditional terms on which the Bank of England lends to the banks, it is only reasonable that new tough and binding conditions should be placed on the banks rather than the extremely vague assurances about future behaviour that we have heard today. We suggest three conditions for the new facility. The first is that bank shareholders, not the taxpayer, should pay for the losses from previous bank lending. This means rights issues to raise shareholder capital. It appears that the Royal Bank of Scotland is taking the lead in taking such a step, but our view is that other banks should be eligible for funding from this source only if they also commit themselves to the same course of action. Otherwise, the banks simply pocket the Bank of England’s money to boost their reserves rather than lending it on.

Secondly, the banks must be willing to sign up to a set of procedures that prevent large-scale repossessions and that are binding not only on the larger and more socially responsible banks, which would probably do this anyway, but on every bank that takes advantage of this facility. We are grateful that the Government at least now acknowledge for the first time that there may be a repossession problem, but it is important that, having acknowledged it, they work with the banks to ensure that repossessions are kept to a minimum.

Thirdly—this is a more long-term point—surely boom-and-bust lending cycles must be countered in future by more proactive intervention by the Bank of England that requires the banks to hold higher reserves during boom periods. The Government cannot prevent the current housing bubble from bursting, but they must ensure that these bursts of irresponsible lending do not happen again.

The Bank of England is giving generous support to help banks to get out of a mess that is entirely of their own making, but the banks must now take the firm action that is needed to return to sound banking practices to ensure that they do not repeat the excesses of recent years.

My Lords, I am grateful to the noble Baroness, Lady Noakes, and the noble Lord, Lord Newby, for their comments on the Statement. On this occasion, I am particularly grateful to the noble Baroness, who both prefaced and summed up her remarks by saying that she supported the Bank of England’s initiative. I will endeavour to answer her requests for reassurance as fully as I can.

The principle is important. I understand the general anxieties expressed by the noble Lord, Lord Newby, but I thought that I had made it clear in my Statement, as I will seek to do when I refer specifically to the questions asked by the noble Baroness, that the Bank is taking scrupulous care to ensure that the banks, not the taxpayer, will take responsibility for the situation in which they find themselves. The Bank of England will ensure that the collateral that is provided is in excess of the resources made available to the banks in order to ensure that there cannot be a bill at the end for the taxpayer. That is the principle on which the scheme will operate. In articulating that obvious anxiety, which the Government share and which the Bank of England has taken care in its proposals to allay, the noble Lord should accept that the risk will be taken by the banks and their shareholders and not by the British taxpayer. I emphasise that point particularly as it is the principle that underpins the scheme.

I also hear what the noble Lord says about the mortgage market and the difficulties that individuals are in. That is exactly why my right honourable friend the Chancellor is holding meetings tomorrow with the mortgage lenders. He will discuss with them the impact of the tightening position on credit, particularly as it affects those on fixed-term mortgages that are coming to an end. It is expected that these discussions will be fruitful on how we can enhance protection for banks and building societies so that they can offer various strategies to mortgage lenders to help to minimise repossession. The noble Lord will recognise that repossession levels are low in comparison with the housing crisis in 1991. Nevertheless, they are increasing and any increase is worrying. It is important to have strategies that reduce the likelihood of repossession. I want to assure the noble Lord on that.

The noble Baroness asked me a number of questions and made a number of statements, one or two of which I felt were a shade controversial. I do not accept that there was dithering over Northern Rock. As we discussed at the time—

Oh!

My Lords, if noble Lords opposite had been able to identify dithering, they would also have been able to produce a solution that the Government could have adopted at that time. However, they clearly did not, unless this side of the House is being asked to believe that noble Lords opposite—not too explicitly, but secretly—hoped for the early public ownership of Northern Rock, which is a contention that I find somewhat dubious, to put it at its mildest. Noble Lords opposite only ever emerged with the suggestion that Lloyds TSB had a proposal way back last August that would have solved all the problems. Such a proposal would have fallen at the first fence of state aid in Brussels. It was never realistic. Therefore, anyone who believes that noble Lords opposite, their party or their leadership in the other place have ever put forward a credible proposition to deal with the situation earlier than we did, under the terms that we have and guaranteeing stability for the bank and the wider financial system, is living in cloud-cuckoo-land. Noble Lords opposite can make those contentions but those contentions are treated outside with the derision that they deserve.

Nevertheless, the noble Baroness was right to ask me about the relationship between improved and increased liquidity, the mortgage market and the position for the ordinary mortgage holder. We have two objectives. One is to secure financial stability so that the banks can carry out interbank trading, which we all recognise is restricted in a way that is causing grievous difficulties for all forms of credit. But there is a particular problem for the mortgage market and mortgage holders, which is why the Chancellor has made it absolutely clear that he is taking additional measures on this and why we are having discussions with mortgage lenders tomorrow.

There will be a second broad outcome from these proposals beyond the improvements in financial liquidity that will feed through the system and improve the capacity for loans at lower rates. In addition, there is a specific problem for mortgage holders and a short-term problem for many as their mortgage terms come to an end, which is why we are holding discussions with mortgage lenders to seek to make provisions that take into account the short-term needs of such individuals.

The noble Baroness asked about credit rating. She will appreciate that there is no instant solution to the issue that some triple-A credit rating worldwide has looked considerably more dubious than would have been anticipated. That is why we intend to take action on credit rating. However, it is a worldwide issue, which is why what action to take is being discussed at the international level. The problem is not easy to resolve. Given that, while the noble Baroness has the right to ask me the question, she is also obliged to recognise that there is no flip answer.

So far as the Bank of England is concerned, it will be necessary for it not only to take as collateral only that which is highly rated according to existing credit rating, but in addition to become involved in further searches beyond that. The Bank cannot automatically assume that a triple-A credit rating provides the safeguard and benefit that otherwise we would have hoped it did. In other words, the Bank is all too well aware of the issue. When taking these positions as collateral, it will be obliged to examine them with the greatest care—and that applies to all the other aspects of credit rating. The noble Baroness referred in particular to credit card-backed securities. Some of those can be entirely secure, and the Bank of England will be reassured on that front. Where there are doubts, the Bank has made it clear that, when it takes more collateral, the value of that collateral will be higher than the resources that it makes available in order to safeguard the public and the taxpayer against any default.

The noble Baroness asked me a number of other pertinent questions. She emphasised her concern about the rise in assessments for haircuts. We all know that this is an important aspect of the scheme, so I say to her only that the Bank of England, which is used to managing these issues, will need to take great care in this area. It is the Bank’s business to do so. I emphasise that this is a Bank of England scheme in which the Bank takes responsibility on behalf of the public for the assessments that it makes on the scheme’s operation. The noble Baroness asked how the FSA can be trusted in its role, given its past record. I hope that she and her colleagues will pay due regard to the action taken by the FSA to improve the quality of its work.

I apologise to the House. The noble Baroness asked me a volley of questions, but I have exceeded my time and I must abide by the rules of the House. I therefore also apologise to the noble Baroness and undertake to write to her on the points that I have not covered.

My Lords, the Chancellor is to see the banks and mortgage lenders tomorrow, so perhaps I may raise a number of points that might be put to them. For example, should we not also be talking to the accountancy bodies? Has my noble friend noticed that the banks, which I agree should be more transparent, published accounts with clear audit certificates but within a short time of doing so wrote off billions of pounds? Can he try to find out why a clear audit certificate was given? Moreover, is he aware that mortgage lenders are charging householders up to £1,000 for renewal of mortgages? That surely seems excessive, although perhaps he should also talk to solicitors about their charges; here I beg the forgiveness of many in your Lordships’ House. There is one other point that the Chancellor may think worth considering during his discussions with mortgage lenders. The point about repossessions was made by the noble Lord on the Liberal Democrat Front Bench. Will the mortgage lenders be able to give any assurances on that front during the meeting tomorrow?

My Lords, one of the crucial issues to be discussed tomorrow is how action can be taken by mortgage lenders to limit repossessions to the absolute minimum. We all recognise that there may be circumstances in which houses need to be repossessed; we also recognise that that cuts off the flow of repayments from the individuals concerned when it is better for society for them to retain their homes and perhaps to have temporary assistance until circumstances improve and they are able to resume repayments. These issues will be discussed with mortgage lenders tomorrow.

On the more general issue of what is wrong with a range of professions and professional activity in our society, I am not sure how much of that can fall within the framework of this rather humble Statement, but I hear what the noble Lord says that part of our difficulties may have occurred from the fact that the audit of banks has been less rigorous than it might have been. I also hear that his next target may well be solicitors who arrange mortgages. But sufficient unto the day is the evil thereof. I have already indicated what action the Government intend to take on the broad issues consonant with his statement.

My Lords, would it not clarify these matters if, instead of talking about billions, the Government were to talk about hundreds or thousands of millions, or, better still, what the figure represents in any given case to an average taxpayer? As the banks cannot get rid of their mortgage-based assets because other banks do not believe what they say they are worth, how will the Bank of England decide how much collateral concerns any particular securitised package? Further, has the National Audit Office been considered for an appropriate method of valuation?

Secondly, where will these figures appear in government figures? Thirdly, as it is likely that much of the refinancing of the banks is going to come from sovereign wealth funds overseas—which may mean that the effect of this crisis is that huge chunks of the British banking system and the City of London are taken into foreign ownership—have the Government any specific proposals on policy with regard to sovereign wealth funds?

My Lords, I hear what the noble Lord says. I have some sympathy about the necessity of translating figures into those which the ordinary person in the street is rather more familiar with. He will appreciate that when we are talking about the amount of liquidity that will be made available to the system through this scheme of the Bank of England we have got to give a ballpark figure of the total sum involved. The £50 billion indicates that. It is not a fixed final limit; it is an indication of the amount of money that is likely to be made available to the banks against the collateral which they are likely to be able to provide.

The Government respect the independence of the National Audit Office, which will make judgments on where these figures eventually appear. What is important at this stage is that the practicalities of the operation of the scheme should be effective. The bank will need all its resources in its evaluation in those terms, together with the FSA where it has expertise to contribute. Of course the Bank of England is more aware than any institution in the country of the problems on credit ratings with regard to assets and of what the banks currently offer with a range of assets which are either unquantifiable or maybe rated much lower than the banks had hitherto thought them to be. But the Bank of England will require collateral which it can verify meets the requirements of safeguarding the interests of the taxpayer.

My Lords, I join with others who expressed their approval of the Government’s actions in this matter, and, indeed, of the motivations which underpin those actions. Can the noble Lord assure the House that the banks’ take-up of this accommodation is subject to two specific matters; first, that the moneys concerned should be hypothecated to assisting mortagees and would-be mortgagees as otherwise the whole thrust of the Government’s initiative becomes purposeless? Secondly, taking up the point raised by the noble Lord, Lord Barnett, about transparency, it is perfectly clear that a situation is developing whereby the intentions in the Companies Acts with regard to the auditing of accounts are being frustrated, either deliberately or for some other reason. Nevertheless, it should be made clear that there has to be the most candid expression of the calculation of losses that have occurred due to the collapse of the sub-prime mortgage market. Indeed, there should be a reasonable appreciation and calculation of the likely contingent losses. Otherwise, there will be a continuing loss of confidence and the whole disclosure system that the Companies Acts guarantee will have been brought into desuetude.

My Lords, it is that latter feature of the lack of confidence that this scheme is designed to alleviate; that is, the banks’ inability to lend to each other because of their lack of confidence in the collateral being offered. It is that element which this scheme seeks to remedy by providing additional resources to increase financial liquidity, thereby reducing inter-bank lending rates and in due course helping the general position as regards the total cost of borrowing. The noble Lord will appreciate that the Chancellor was at pains to emphasise that he wants to meet mortgage lenders tomorrow to discuss the very real problem that exists in the mortgage market and for ordinary individuals caught up in these very difficult circumstances. However, this scheme cannot be hypothecated to the mortgage market. It is designed on a much broader canvas than that in terms of the liquidity position of the banking institutions. I accept the concept that the noble Lord puts forward; namely, that an important issue to address is that of individual mortgage holders, as the Chancellor has recognised, but this scheme is about a broader issue than that.

My Lords, can this be the same Minister who, not six months ago, told us that Northern Rock’s mortgage book was an absolutely rock-solid asset on which funding could be provided by the taxpayer? Will he answer the key question put by both Front and Back Benches: what haircut is being taken and how was it calculated? What is the Government’s assumption about the biggest fall in house prices that can occur? We are entitled to know that, when more than £50 billion of our money is being put on the line on that assumption. Can the Minister say what the haircut will be? Can he also explain how these huge sums of money will be provided off-balance-sheet? The Statement said that the Treasury was providing a guarantee. If there is a guarantee, there is a liability. Why is that not on the Government’s books? This is Enron-style accounting which will get us into considerable difficulties.

The Minister said in an aside about those who had advocated the Lloyds TSB solution in the summer that it would have fallen at the first fence because of state aid. Lloyds TSB asked for £30 billion and for it to be secured on the loan book. If that would fall at the first fence because of state aid, why will not this scheme?

My Lords, this is an operation by the Central Bank concerned with financial liquidity. The noble Lord will recognise that the Bank of England is following patterns which have already been carried out by the European Central Bank and by the Fed and therefore the issue is entirely different from that of one particular institution, as Lloyds TSB is and was last summer when it put forward its proposal which would have raised issues of state aid. I do not in any way, shape or form resile from my position. With regard to the elaborate fiction which the noble Lord manages to portray through the sharpness of his questioning, I notice that it is not often sustained by his Front Bench as being the solution which all ought to have pursued at that time. I have not at any stage seen the Conservative Party prepared to indicate that, had they been in power by last September, the whole issue of Northern Rock would have been solved in a trice by their approach. It just will not do. The proposal was only a proposal; it never really reached first base in terms of a bid; it was vulnerable to the judgments of Europe and it did not go any further. Quite frankly that is a hare that will not run for the noble Lord. I am coming on to haircuts in a moment.

The issue of specific haircuts, which the noble Lord asked me about a moment ago, is a matter for the Bank of England. It is going to fix those levels. That is its role and its job. What the Statement makes absolutely clear and what the Chancellor is very concerned to emphasise is that the Bank of England has to ensure that the operation of this scheme imposes no costs on the taxpayer. The Bank of England will be required to assure itself that the collateral which it takes is valid and viable. Some areas may not match the criteria needed by the Bank, but for the banking system as a whole, there is no doubt that the additional liquidity, which the Bank has been making available in any case on a shorter term basis as part of its normal operations, is of assistance in these difficult times.

My Lords, we are extremely grateful to the Minister—I think all of us are—for confirming that the Lloyds TSB initiative was cut down by European law before anyone had begun to see whether it would be a runner. That is what he said and he cannot confuse it by talking and talking and talking to try and get away from that. Is it the policy of her Majesty’s Government in this rescue—which we all applaud, of course—that those who created this problem out of greed, verality, incompetence or stupidity should not have to pay any penalty for it and can be bailed out at the expense of poor people who are having their tax increased this year?

My Lords, since we are having a few moments on Northern Rock, no one is suggesting that Northern Rock is being bailed out without any costs to shareholders or to the chief executive or chairmen. The suggestion that in their past actions the Government have been involved in a soft bail-out for those who have made mistakes is just not right in the illustration of Northern Rock. With regard to Lloyds TSB, of course it did not go before Brussels. It was never a proposal; it was not much more than an inquiry and a position put forward which would have failed at the first fence. As far as the Government are concerned, that is as far as it went. The noble Lord has to give the Government credit. If there had been an easy solution from a bank last August—a proposal that would have dealt with Northern Rock—is he seriously suggesting that the Government would have gone through six months of harassment over the issue? That just will not do.

On the more general issue, I emphasise that the banks take the risks in relation to this scheme. Risks stay with the banks. Where banks are not able to sustain their levels of lending, they are in trouble. We all recognise that. However, we have an obligation to sustain the wider financial institutions in a way that guarantees to each and every one of us and to our fellow citizens the necessary resources. Within that, the Government are acting to protect taxpayers and at the same time to increase the necessarily liquidity, which is not there at present, which is why the banks are in this mess.

My Lords, notwithstanding the gratuitous slash at lawyers by the noble Lord, Lord Barnett, it is clear to me that the lawyers are having some difficulty understanding this proposal. My noble friend Lady Noakes is absolutely correct. Both last night and this morning, long before any Statement was made to either House of Parliament, this had been widely leaked across the media. It is outrageous that the spin put on it was that those people who apply for mortgages now would find themselves in a healthier position than today. If I am a bit slow or I have not paid attention to a bit, will the Minister point me to it? I found absolutely nothing in the Statement which says that those people who are applying for mortgages today will find themselves in a better position than they were last Friday.

My Lords, if the noble and learned Lord suggests that there is Government spin on the issue, it is not present in the Statement, which I repeated to the House this afternoon, and it has not been in any of our statements. The Statement concerns financial stability. In so far as there are leaks, I regret that, but broadly the nation has been aware that this is a Bank of England scheme designed to improve liquidity for banks where credit is drying up and becoming more expensive. We all know the nature of that problem. Of course, there is an issue with mortgage holders and we all recognise the difficulties that they are facing. That is why the Chancellor is at pains to emphasise this. Separately from this scheme, he is meeting mortgage lenders tomorrow to discuss with them ways of ameliorating the problems that mortgage holders may find in the immediate situation. However, this Statement concerns the wider financial system and that is how it has been presented.

moved Amendments Nos. 66A and 66B:

moved Amendment No. 66C:

moved Amendments Nos. 66D and 66E:

moved Amendment No. 66F:

moved Amendments Nos. 66G and 66H:

moved Amendment No. 69:

My Lords, the Minister asked me whether I would be pleased at the concession that the Government have made on this matter. Of course I am, and I acknowledge that freely. While not every concern that we expressed has been recognised, the substance has—and for that, I am much in his and the Government’s debt.

On Question, amendment agreed to.

Clause 42 [Power of Court of Appeal to disregard developments in the law: England and Wales]:

moved Amendment No. 70:

moved Amendment No. 70A:

My Lords, the noble and learned Lord, Lord Lloyd of Berwick, should not be surprised by the Government’s change of tack on this issue. He should have learnt by now that even if the Government accept the wisdom and substance of an amendment tabled by a member of the Opposition or the Cross Benches, they find it difficult to accept the exact wording. It is in that context, and no other, that one should see what has emerged from the government Benches.

As far as the noble and learned Lord’s amendment is concerned, who am I to question something crafted by such a distinguished couple as the noble and learned Lord on one hand and the president of the Queen’s Bench on the other? I wait with interest to hear the Government’s reasons for wanting something a little more tautly drawn.

My Lords, I intervene briefly because I cannot look at this from the point of view of an academic lawyer or the problems that have arisen in the past. I look at it as it stands, or indeed from the point of view of the Appellate Committee of your Lordships’ House—I have only had the privilege of appearing before it, that is all. My appreciation of what goes on there is of absolutely no interest to anybody. But I am a little worried. If the law changes, are you really going to be put out in the interests of doing justice, broadly? I cannot put it another way. It seems to me to go against the grain—although if it goes with the grain of the academics, I could not care less. I am interested in justice, not the interests of the academics. There is a distinction to be drawn between a development in the law and the development of the means of getting evidence to enforce it. That is an important distinction. It should never be foreclosed upon by the Appellate Committee of the House. It has not done so and I do not suppose that it will do so, but would it and where does this lead us? I am not asking these questions to be difficult or tiresome; I simply do not understand that this will, in the end, deliver what I understand as plain justice.

My Lords, I have discussed this with the noble and learned Lord, Lord Lloyd of Berwick, and the president of the Queen’s Bench Division. This is a very sensible amendment and I support it.

My Lords, it beggars description that when the noble and learned Lord, Lord Lloyd of Berwick—who, in the immortal words of Bertie Wooster on Jeeves, was certainly fed on fish from an early age—and the president of the Queen’s Bench come up with a wording to satisfy a small and technical point, the Government then have to go away and try to do it better. If they have been given a Rolls-Royce, why can they not sit in it and drive it, as opposed to fiddling with it, trying to make it a four-wheel drive vehicle?

My Lords, if by contemporary standards of justice there has been a miscarriage of justice in the past, it is surely for the Court of Appeal to right that injustice. The purpose of the amendment of the noble and learned Lord, Lord Lloyd of Berwick, is to ensure that that is done. We on these Benches support it entirely.

My Lords, with that introduction, perhaps I should have had some more sardines for my breakfast this morning. Clause 42 amends Section 2 of the Criminal Appeal Act 1968 to give the Court of Appeal a discretion to disregard developments in the law since the date of conviction. The noble and learned Lord, Lord Lloyd of Berwick, is concerned that the clause is too wide in its effect. We understand his concern to be that it would allow the Court of Appeal to disregard the law as it is now in any case where it was considering whether a conviction was unsafe, in whatever manner the case reached the court, and whether a development in the law was one of the grounds of appeal. The matter has been discussed with the noble and learned Lord, and we have been exploring the possibility of reducing the ambit of the clause to make clear that it applies only to cases referred to the Court of Appeal by the Criminal Cases Review Commission.

My Lords, first, a possible answer for the noble Lord, Lord Campbell of Alloway, is that the amendment would certainly in no way inhibit the judges of the Court of Appeal doing justice in a particular case—it would, in fact, enable them to do it more expeditiously than would a possible amendment which is being floated by the Government.

On the Minister’s reply, I am of course glad that the Government now accept that the existing clause is far too wide. He suggests that my amendment is still too wide, because it would enable the Court of Appeal to dismiss an appeal that has merit and which it would not otherwise dismiss but allow because it is conjoined with another ground of appeal that happens to be based on change of law. I do not understand that. It is not just a question that the Court of Appeal would never in its life do such a silly thing but it is not something that flows from the language of my amendment as I see it.

Having said that, I will try to attempt the thing that the noble Lord, Lord Kingsland, says can never be done: to persuade the Government that someone else’s wording is better than theirs. In that hope, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

moved Amendment No. 71:

moved Amendment No. 72:

moved Amendments Nos. 74 to 76:

moved Amendment No. 77A:

moved Amendments Nos. 78 and 79:

moved Amendment No. 79A:

My Lords, there has been some confusion about the case despite comments from the Benches on our left. I will, however, rise to the occasion. I was slightly distracted by the incredible pace of debate this afternoon.

We have received the letter from the Minister, the noble Lord, Lord Hunt of Kings Heath, and are grateful that the Government have taken on board the philosophy behind what we were trying to do, if not the absolute wording of our amendments. On that basis, we are grateful to the Government for having come this far because, eventually, the objective that we all wanted to achieve has been covered—more or less.

On Question, amendment agreed to.

moved Amendment No. 79B:

moved Amendments Nos. 79C to 79E:

moved Amendments Nos. 79G to 79K:

moved Amendment No. 79L:

moved Amendment No. 80:

My Lords, we broadly support the propositions advanced by the noble Baroness, Lady Falkner. I note that the Standing Committee for Youth Justice produced a compelling paper, arguing in her favour. The philosophies of that paper and the proposed amendment are identical. The Government are denying themselves an important degree of flexibility in dealing with this class of offenders, which is open to them in dealing with adult offenders. That seems puzzling when you consider that more informal ways of dealing with offences for the under-18s generally have a better impact with respect to recidivism than court-imposed penalties. That the Government have not conceded that this approach is the better one just adds to one’s amazement.

My Lords, it seems to go without saying that the longer one keeps the young away from the experienced ungodly, the better. To raise this age from 17 to 18 seems to go down that line. A distinguished judge said to me the other day, “I know prison doesn’t work—but Michael, what am I to do?” That seems to sum up the problems that we have with prison. What we know is that the less you mix the older with the younger, the better. For that reason, I support the noble Baroness in her argument.

My Lords, I, too, support the amendment, as I did on a previous occasion. I am certain that the noble Lord, Lord Judd, if he were here, would have been on his feet much earlier. I do so for the reasons stated—the maximum flexibility in dealing with the young, acknowledging the different stages of growing up and giving them the maximum chance of not going into a fully-fledged prison environment. I support the amendment and hope that the Government will think again.

My Lords, let me make it clear that the Government cannot support the amendment as it stands, but we welcome the opportunity to reiterate the assurances given in Committee that we are committed to resolving this issue in the longer term. We do not dispute the logic of the noble Baroness in moving her amendment. It is an anomaly that 17 year-olds are treated as adults for remand placement purposes, but as children in every other part of the youth justice system.

During the debate in Committee, we voiced our sympathy with the thrust of the amendment, and I do so again today. I also set out the steps that had been taken to look at this issue and the complexities that had been uncovered that had prevented us from so far reaching an acceptable solution. Unfortunately, there are complexities. We know that the issue needs to be resolved. Our public response to the consultation Youth Justice: The Next Steps has made that commitment public. As the noble Baroness, Lady Falkner, was right to remind the House, the United Nations Convention on the Rights of the Child has identified this issue as requiring resolution. We have accepted our obligation to consider how we can do that. We will not lose sight of this issue and we will pursue a resolution of the problem.

We have already undertaken work to explore how we can correct this anomaly. The aim of this work echoed entirely the sentiment behind the amendment. It looked at replication of the remand placement structure for 12 to 16 year-olds for 17 year-olds. However, this has proved to be more problematic than merely changing the age in the current legislation as the amendment does. I say, with regret, that we have yet to find a workable solution.

The test for bail is essentially the same for both adults and young people, and it is not the subject of the amendment. The central issue is the placement of those aged 17. If the offender is remanded in custody, for 17 year-olds in practice it will be in a young offender institution and those aged 16 and under will normally be remanded to the care of the local authority. The amendment seeks to bring 17 year-olds into line with the provisions applying for young people aged 16 and under. In practice, that would mean that if the court orders a secure remand, a 17 year-old would be placed either in a secure training centre or a local authority secure children’s home. However, if remanded to the care of the local authority, the decision on the placement then lies with it, and the placement could be secure or non-secure, and it could include them living at home.

In an ideal world, we would want 17 year-olds to have similar options. However—this is critical—we do not believe that they should be placed routinely in children’s homes, because Section 23 of the Children and Young Persons Act 1969 also provides for the placement of the very youngest and most vulnerable young people into local authority accommodation. We rely on the argument made in part by the noble Earl, Lord Onslow, just now, that we do not want to mix up the very young with 17 year-olds in children’s homes. We do not think it appropriate to introduce 17 year-olds to local authority accommodation and to allow them to mix with a vulnerable group of younger children, particularly those who are there for welfare reasons alone.

My Lords, that is exactly the argument that I did not use. The argument that I used was that to put 17 year-olds with older criminals is wrong, not the other way around. It is essential in my view that they should not be mixed with older criminals and the Government seem to have accepted that but, like St Augustine, they say, “Make me chaste; but not just yet”.

My Lords, of course I know what argument the noble Earl was putting, and we agree with that argument. Ideally, 17 and 18 year-olds should not mix. The argument against putting 17 year-olds in children’s homes is that they would then mix with vulnerable children aged perhaps from 11 upwards, or maybe even younger than that. That is why I prayed in aid his argument. We do not deny its validity—in fact what I am saying now accepts its validity—but other options have to be considered. It is not a straightforward issue. We fear that the amendment is a little too simple and does not take into account the other interlinking factors that are equally important and which must be addressed alongside this issue. We spoke to the Standing Committee for Youth Justice on this subject following the Committee stage in this House. It is aware of the complexities involved and takes the point I have just made. We have already discussed with the standing committee how it might assist us in taking this matter forward.

I shall set out again—as briefly as I can, as I do not wish to take up too much of the time of the House, although this is an important topic—what other factors will have to be considered if we are to change the remand status of 17 year-olds. First, consideration would need to be given to the status of 17 year-olds under police bail, which is covered by the Police and Criminal Evidence Act. Any change in this provision may increase demand for juvenile accommodation in police custody suites because, as the House will know, young people have to be separated from adults in police detention and females have to be under the care of a woman officer. This has special relevance in this context because of the read-across to the provision of appropriate adults under Code C and the status of 17 year-olds under this Act. The House will want to know that the Home Office is currently reviewing the codes under PACE and we will need to ensure that this is addressed. We also need to look at the care status of young people under such a provision.

Finally, and most important, we need to consider the impact of any changes to 17 year-old remand status on the Bail Act itself. If we are to consider making changes to that important legislation, we need to ensure that they are undertaken in a coherent and consistent manner. We need to consider what the consequences of such changes will be. One issue has already been identified: under this amendment, 17 year-olds who are likely to interfere with witnesses and have been refused bail might end up with a non-secure remand. Noble Lords will agree that that cannot be right and that we would be failing in our duty to protect victims and the public if we did not address that issue.

We are very aware of our obligations under the UN Convention on the Rights of the Child and the commitment that we made following our response to the document Youth Justice—The Next Steps. I say again that we will review how we can ensure that 17 year-olds are treated appropriately for the purposes of remand, but such a review has to be done as a whole so that it takes into account all the relevant issues. It is thus with regret that I cannot agree to this amendment on behalf of the Government, but I assure the noble Baroness and the House that we will continue working in order to change what I have already conceded is an anomaly that needs to be changed.

My Lords, I thank noble Lords who have supported the broad thrust of the thinking behind this amendment. It is clear that there is growing concern over the increase in custodial rates and the poor outcomes associated with young people being held in custody. During the debate on the previous amendment tabled by the noble Lords, Lord Henley and Lord Kingsland, on which we divided, the Minister mentioned the Carter review and reminded us that there was a genuine attempt by the Government to reduce numbers in custody.

Philosophically, we can go down this road where we all acknowledge that custody does not work for everyone. We particularly recognise that in the case of young people. Throughout the weeks that the Bill has been in this House, we have recognised that custody is often deleterious and that people who are locked up as young people or children are more likely to end up in custody as adults. During the debate on the previous amendment, the Minister reiterated that there was a genuine attempt to bring down numbers, yet it is now four years since a consultation paper, the responses to it and the Government’s promise that we would look at this. For a young person who was 17 then and who was incarcerated, it has been a very long four years—25 per cent of their life—of waiting. That part of the person’s life has gone, damaged as it is.

There are numerous cases—6,561 is not an insignificant amount—of people who are still treated in that manner. We have our international commitments, for which we have fine words, but there is little point in signing up to international conventions if we are not really going to take them seriously and incorporate them into law. The Minister’s emollient words are there for the record and I have absolutely no doubt that he is completely sincere, but this is, I am afraid, a counsel of despair. We are still where we are and, I say with all due respect to those fine words, we do not have any commitment to look at this in the round within a certain timeframe and to bring in measures. That is why I was keen to table even a limited amendment that addressed this. I thought that it was better to move forward in a very limited way than to go beyond this into policing and other areas. However, we are where we are, and given the extremely long list of business ahead of us this evening, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

moved Amendment No. 81:

My Lords, it seems to me mad that we are not much more careful about sending young people aged under 18 to prison. I know that I said this on the previous amendment, but I shall probably say it again and again, because it is mad. It is counterproductive and does not do any good. The only way anything can be done for these wretched children is through education and care, with attention to their mental health, their drug problems and so on. They should not be banged up in adult prisons under any circumstances whatever. In the 21st century, we should not be doing that and we are not a civilised country if we go on doing it. For those reasons, I support the Liberal Democrats. The less we do it, the cheaper it will be. Possibly, we would keep a few more out of permanent trouble, which is what we should always be trying to do.

My Lords, I supported this amendment on the previous occasion and of course I do so now. It is absurd that 18 should be thought to be the right age for this. Some 18 year-olds are really childish, while others may only think that they are big guys. To place them in accommodation with hardened criminals does not make any sense.

The other point made by the noble Lord, Lord Thomas of Gresford, concerned the background of these children. It has taken a long time to get the whole business of how they are treated and how they are restrained looked at, but even now it has been put off for yet a few more weeks while a wider look is taken at what the Government are prepared to do. The time has come for the Government to accept that no 18 year-old should be detained in a prison setting. I am only sorry that there are not more noble Lords who have spoken previously on this issue to set out the position more forcefully than has been the case today.

My Lords, I am one of those to whom my noble friend referred as having previously spoken on this. I do not think that it is necessary for me to say anything other than that I support the amendment.

My Lords, I, too, support the amendment. As have so many Members of your Lordships’ House on so many occasions, I point out that we in England and Wales bear the legal shame so far as western Europe is concerned on the incarceration of children. I have said many times before, and I make no apology for repeating it, that on a pro rata basis we incarcerate more children than Germany, France, the Netherlands and Norway put together.

There are huge problems, of course. If these young people are not to be incarcerated in the institutions that exist at the moment, where are they to be put? In many cases local authorities do not have secure accommodation facilities for children and young persons, so if the only practical alternative is to place them in children’s homes, I can see the problem; indeed, it was articulated by the noble Lord, Lord Bach, in relation to the earlier amendment.

The question is therefore what might be called contaminatory influences. If a 17 year-old is placed in a children’s home with children of the age of 11 upwards, how much contamination is experienced and suffered by the younger ones through that person’s presence? If, on the other hand, that 17 year-old is placed with an 18 year-old in a different sort of institution and where the 18 year-old may well be a much more shell-backed criminal altogether, how do we gauge that level of contamination? I appreciate that it is a difficult issue. However, I applaud the general principle that we should use every possible artifice, exercise our imagination and expend all our energy to ensure that we send fewer children to prison.

My Lords, I support strongly what my noble friend Lord Elystan-Morgan has just said. In fact, we are not talking about sending children aged 18 to adult prisons. As I understand it, the amendment concerns secure accommodation, young offender institutions and secure training centres. But what my noble friend has said is absolutely right: it is a question of the lack of resources at the local level for local secure accommodation. That is what is needed. One or two people have to be taken away from the community; there is no doubt about that. I do not know how many noble Lords have been, as I have, to young offender institutions and to secure training centres. I have been to both. They are not the dreadful places that they are made out to be. The standard of some of the staff is extremely high. However, the basic fact is that sufficient resources are not available at the local level for secure local authority places.

My Lords, Amendment No. 81 is similar to the amendment moved by the noble Baroness, Lady Linklater, in Committee. We had a full and passionate debate then, as we have had this afternoon in perhaps a smaller way. A number of concerns were expressed, with the emphasis very much on what remains to be done.

Let me point out briefly what the Government have done over the past few years to ensure that young people under 18 are accommodated entirely separately from young adults and older prisoners. Perhaps the key development was the decision in April 2000 to give the Youth Justice Board responsibility for oversight of the secure estate for children and young people. The board immediately established a discrete estate for boys under 18—in other words, one in which they did not have contact with anyone in custody over that age. It was, and is, a diverse estate, comprising young offender institutions, secure training centres and secure children’s homes—three different types of accommodation catering for differing age groups and differing levels of vulnerability.

Achieving similar separation for girls was much more difficult. Compared with the number of boys in custody, the number of girls is low. That presented problems if we were to succeed in providing establishments of adequate size in reasonably distributed locations. Anyone who was there will not forget hearing the noble Lord, Lord Ramsbotham, who is not in his place today, speaking to the equivalent amendment in Committee and recalling his horror at finding 15 year-old girls in Holloway prison when he inspected it in 1995 in his role as Her Majesty’s Chief Inspector of Prisons. The Committee agreed that that was not acceptable. Claiming a small amount of credit for the present Government, I should say that they are to be congratulated in small part on taking the steps necessary to ensure that that does not happen now. That was done by means of a phased programme, first removing all girls under 16 from Prison Service accommodation, then removing all girls under 17 and finally building a series of new special units for 17 year-old girls. Those units have a particular focus on the needs of the young women whom they accommodate and have been favourably reported on by Her Majesty’s inspectors.

The current amendment proposes a single type of establishment for all young people under 18. The Government do not believe that that is either workable or desirable. Just as it was right to separate under-18s from over-18s, it is necessary to keep older teenagers apart from younger ones—indeed, in some ways, the difference between the average 14 year-old and the average 17 year-old is far greater than that between many 17 and 18 year-olds. We do not believe that appropriate separation is possible without a range of types of establishment.

The diversity of the under-18s estate is a strength and not a weakness. That is not to say that the present arrangements are the last word; clearly there is scope for continued development in the field. For example, ministerial colleagues and I have referred to the work that is being done at Wetherby to build a new special unit for more vulnerable 15 and 16 year-old boys. I would simply ask that everyone concerned with this issue—and I know that the House is very taken with it—recognises not only the scope for further improvement but to some extent what has already been achieved. We have commented a lot on making sure that custody really is a last resort for young people of this age and we have shown our commitment to providing the courts with effective community interventions that offer an alternative to custody.

I am advised that it is arguable—no more than that—that, because of a drafting error, the new clause that is this amendment would not achieve its intended effect of removing the Secretary of State’s power to specify by order additional types of custodial establishment in which a detention and training order could be served, a power that, if it still remained, could be used to reinstate young offender institutions and secure training centres. I mention that because it would be wrong of me not to say that I had received that advice. Because of the general arguments that I have employed this afternoon, I ask the noble Lord to withdraw his amendment.

My Lords, I am grateful to the Minister for his reply. However, we think that there is a basic principle involved and that the provision put forward by the Government is not sufficient. I am grateful to all noble Lords who have spoken on the amendment. I particularly recall the noble Lord, Lord Elystan-Morgan, referring to our position in the league of shame in Europe. It is important that we should mark our disquiet and our feeling that what is happening at the moment is unacceptable, whether it relates to young offender institutions or secure training centres. No doubt those institutions contain people who are concerned and who work hard to achieve results with young people, but one of the problems is that, as those staff are within the Prison Service, they look for promotion upwards into the adult Prison Service. Some of the specialisation and talents that they develop within the YOIs and STCs are lost. For those reasons, we feel that it is necessary to test the opinion of the House on the issue.

moved Amendment No. 82:

My Lords, we on these Benches support this amendment. The noble Lord, Lord Kingsland, referred to the meeting that we had with the noble and learned Baroness the Attorney-General. She was good enough to write to me on 14 March. I assume that she sent a copy to the noble Lord, Lord Kingsland. She set out in her letter the way in which designated caseworkers are trained at the present time. That training involves training courses, e-learning—which I take to mean dealing with various questionnaires put on the internet—observation of court procedures and a comprehensive resource pack.

The candidates have a five-day foundation course, after which they are expected to take the e-learning module and attend a further one-day, face-to-face training course. Thereafter they have to do 16 CPD—continuing professional development—hours a year. Very properly, I have to do 12 hours of continuing professional development each year. I know nothing about the legislation that goes through this House, of course. That is about it: a five-day foundation course, a certain amount of experience in court watching what goes on for a period of time and a one-day further course. On that basis they are to be entitled to appear in court to carry out contested cases.

My Lords, I, too, support the amendment. I am very grateful to the noble and learned Baroness the Attorney-General for keeping me in the loop with copies of letters written to noble Lords and also for a letter of last week from her to me. I retain some concerns. We are dealing with the administration of justice in a criminal court. As the noble Lord, Lord Thomas of Gresford, has pointed out, the training of a designated caseworker, even with the pack, will not be sufficient in some cases. One has to bear in mind that in the magistrates’ court now, magistrates are lay men, the defendant may or may not be represented—probably not by a lawyer—the clerk need not necessarily be a lawyer in the criminal courts these days and is quite often a lay man and if the prosecutor has no real experience of the law and a point of law is raised, there will be real difficulty. We also need to be sure that the prosecutor has the ability to cope with the unexpected.

Two things put forward by the noble Lord, Lord Kingsland, are particularly important. One relates to offences that are not subject to imprisonment. Although the purists among us might prefer a lawyer to conduct the case, as a matter of reality, in the old days a warrant officer sometimes did the case so there is a real precedent for that. But that was not the kind of case where someone might go to prison. Without the absolute assurance that those who have had the pack, a few days’ training and the experience of going into court will have someone at their elbow to tell them what to do when the unexpected arises, they might find themselves not sufficiently independent and certainly not sufficiently clued up about the unexpected. There will be a danger of a miscarriage of justice as a result of which someone might go to prison, particularly a defendant who is unrepresented as so frequently happens in magistrates’ courts. Therefore, I very strongly support the fact that the matter should be up front and that those without legal training should not be able to prosecute where imprisonment is a possibility.

I am also very concerned about the regulation of the designated caseworker. I listened with a degree of dismay to what is apparently the present position. Although I, too, respect the ILEX training, I do not believe that its code of conduct begins to be adequate for the importance of the work that it does. The noble and learned Baroness the Attorney-General says that it is working towards a code of conduct similar to that of the Bar and the Law Society. I am absolutely delighted to hear that, but I would prefer designated caseworkers not to be able to undertake the work until they are actually regulated by that code of conduct. Bearing in mind not just the hours but the days and days spent on the Legal Services Act last year, where everyone was regulated up hill and down dale, particularly for the Bar and solicitors, it is ironic that a group who are not legally trained are able to carry out prosecutions which might involve imprisonment on the creep system, about which we have been told, without the matter coming back to your Lordships' House and the other place. It seems to me that such people should not be able to creep into imprisonment cases, admirable though I am sure they are. If the Minister tells us that some of them are legally qualified, that is fine. However, she will also have to tell us that a great many of them would like to be legally qualified but that they have not yet got to that point. It seems to me that until they get to that point, they need regulation as good as barristers and solicitors and that they should not be able to prosecute cases where someone might go to prison. I am very supportive of the amendment.

My Lords, an old expression states that if you pay peanuts, you get monkeys. In this case, I suspect that miscarriages of justice could happen, which would arise because people are not properly trained. By miscarriages of justice I mean that the guilty go free and the innocent go to prison. If somebody is not properly trained or regulated, that is more likely to happen than with a proper barrister. That is always possible, as we know of cases where that has happened and should not have done. I suggest that this will happen exactly if that lower standard of people is allowed to prosecute without any regulation or training. The noble Lord, Lord Thomas, read out how much training they have to have; frankly, it is practically less than that for driving a pony in an amateur dressage test. What is required is tiny, and that is not good enough.

Oh!

My Lords, If I make good jokes, I am delighted but it brings the point home. That is what should happen, and I therefore support the amendment.

My Lords, when the noble and learned Baroness the Attorney-General responds, which I feel sure she will be doing in a few minutes, might she deal with the attitude of the Magistrates’ Association? In this clause, we are dealing with procedures in the magistrates’ courts. The magistrates deal with 95 per cent or more of all criminal cases tried each year, which is something like 2 million. Is it not the case that the Government, so far as this provision was concerned, got off to a thoroughly bad start with the Magistrates’ Association?

The noble and learned Baroness the Attorney-General will know that the association said, in its briefing prepared for this House before Second Reading, that its priority was,

“for cases to be properly and efficiently presented to us in court”.

Did it not also say:

“We are strongly opposed to this proposal”?

Of course, that was before the adjustments made in the right direction by the Government. However, when the noble and learned Baroness responds, could she say whether the magistrates have been consulted specifically on whether they are content with the present clause—without the deficiencies being remedied, as they would be in the amendment from my noble friend—and what their position is?

My Lords, this amendment does not have the effect of banning all non-legal staff from court prosecutions. Indeed, it is right that there should be such a power and responsibility within a limited parameter. Nevertheless, I believe that the amendment is to be supported for limiting that within proper bounds. One can summarise the case thus: these people are carrying out an essentially professional function, certainly insofar as more serious cases are concerned. It is only right that they should be professionally qualified and disciplined, and should be answerable to a professional code of conduct insofar as matters outside the ambit of the amendment are concerned.

My Lords, I entirely agree with the noble Lord, Lord Kingsland, that it is essential for people fulfilling these duties to be subject to behaving in accordance with how a prosecutor ought. To my mind, it does not matter whether that will in fact lead to prison since, in many cases, being convicted may be very serious for a person who has never been in trouble before even if he is not to be imprisoned for it.

My Lords, I declare an interest as a barrister. The Bar is opposed to the proposal and the chairman has written to a number of your Lordships. I also declare an interest having once occupied the role of chairman of the Bar Council, so noble Lords can apply or discount what I am about to say. I stress that noble Lords have covered the ground. Without the invidious nature of picking out one of the speeches, I was impressed by the way in which the noble and learned Baroness, Lady Butler-Sloss, summarised things.

Anyone who has ever sat as a judge or an arbitrator knows that you are enormously dependent on the quality, accuracy and fairness of the advocacy that comes to you and on whether you get proper assistance, for example, in relation to powers of sentencing or whether enactments have been repealed or amended. Stone’s Justices’ Manual shows the incredible part played in enacting laws and amending earlier ones. The law is difficult; sentencing is difficult; and lay magistrates are entitled to the highest possible quality.

My Lords, like my noble friend Lord Bledisloe, I do not see where the problem of requiring training and providing for some form of regulation lies. For reasons that so many speakers have already given, which I shall not elaborate, it is quite obvious that it is essential to have people with experience and training to assist the court. This is as plain and ordinary a case for training and regulation as any that the House has discussed for a very long time.

My Lords, I shall be extremely brief. As a previous magistrate and someone who is surrounded by lawyers in my family, I may be one of those who have been trained almost by default in many of the procedures. Having listened to the debate, I am completely convinced by the noble Lord, Lord Kingsland, and the noble Lord, Lord Thomas of Gresford, and I pay tribute to my noble and learned friend Lady Butler-Sloss.

There are crucial things that I would want in a court. A magistrate has a clerk of the court, who is the legal expert on areas of sentencing, for example. However, the issue is not only about that. We need to know that people are being addressed by staff who are thoroughly qualified, able and, above all, independent and regulated. What the noble Lord, Lord Thomas of Gresford, said about training for barristers is crucial. The time taken to experience what happens in a court and so on is vital. The fact that they continue to learn and are independently regulated by ILEX is hugely important. I am thoroughly in favour of the amendment, which I hope will be put to a vote—indeed, all the amendments are crucial.

My Lords, I thank all noble Lords who have spoken. First, I need to say to the noble Lord, Lord Kingsland, that as a fully paid-up member of the profession I do not think that the Bar is under threat. In the past 10 years, the CPS has been increasingly successful in attracting senior members of the Bar and solicitors to work for it. As a result, the quality of advocacy has been significantly enhanced. I do not think that the noble Lord is suggesting that senior members of the Bar who are attracted by employment in the CPS should be debarred from so doing. That form of protectionism is far from his heart.

Quality is most important and I agree with all those who have emphasised it. I do not think that the young Bar is frightened of competition either. I hear what the noble Lord, Lord Thomas of Gresford, says about training. He referred to those DCWs who do not do contested cases. The training for those who do such cases is much greater. I gently say to him that one often finds that those who have had 20 or 30 years’ experience working in the Courts Service before becoming designated caseworkers know a thing or two more than a 21 year-old young barrister who is doing his or her first cases.

Quality is important and I remind the House that the DCWs about whom we are talking have been around and able to perform this work since 1998. They have gained a great deal of practical experience in the court process and through that experience they are well equipped. Who does this work? The average age of a designated caseworker is between 30 and 49; 68 per cent are women and 32 per cent are male; and 71 per cent are in the age bracket that I have just described. They are seen as a good, sound resource. Many of them participate in obtaining qualifications. Twenty-nine are studying for legal qualifications; 22 are studying for their legal practice certificate; and seven are on the Bar vocational course. Between 1998 and 2008, 566 DCWs were trained by the CPS. The noble and learned Lord, Lord Slynn, and the noble Viscount, Lord Bledisloe, are right that training can be tailored to meet needs.

DCWs will be doing three tiers of work. Some will do summary cases only. Let me give the House the flavour of summary cases. They include common assault, drink-driving, threatening behaviour, harassment, taking without consent, wasting police time, assaulting a police officer, being found in enclosed premises and motor vehicle interference. For non-imprisonable offences, DCWs can go to the dizzy heights of prosecuting speeding, careless driving, no insurance, no driving licence, no MOT, construction and use regulations for motor vehicles, ticket touting, touting for hire services, begging, selling alcohol to a person who is drunk, kerb crawling, soliciting, the offence of dogs worrying livestock—a terribly difficult matter—being drunk in a public place and obstructing the highway. We are not talking about the most serious offences, although I am not suggesting that these offences are unimportant.

We are considering an incremental situation starting with tier 1, so that when someone first becomes able to present cases they will be summary offences only. Tier 2 will be summary offences only and non-imprisonable. A gradual increase is appropriate at this stage. I understand those who say that all the matters dealt with by designated caseworkers should be non-imprisonable. I made it clear the last time we debated this matter that that would be regulated by the director’s instructions. We have an opportunity to regulate what DCWs do. I understand the comment of the noble Earl, Lord Onslow, about paying peanuts and getting monkeys, but I assure him that DCWs do not fall within that category. Miscarriages of justice occur when the quality of the advocacy is not good.

My Lords, that is exactly the point that we are making. Somebody should be regulated and tested to make sure that they can do all the things that the noble and learned Baroness says. That is all one is asking for. In other words, the fact that they can do all these things is one thing, but they should be trained and they should be disciplined if they get it wrong.

My Lords, they are trained; they are regulated by the CPS; they are properly managed. They have access to supervision by a trained lawyer all the way through. The new procedure, which noble Lords will be aware of, is that a qualified lawyer will look at each case, will be responsible for the charging decision that is made and will be able to prepare matters in order to decide whether a case is amenable and should be dealt with by a DCW or some other form of representation. The noble Earl’s concerns about management, control, testing, training and ensuring quality are certainly covered by the management structure of the CPS. I remind the House of the National Audit Office report, which spoke very favourably about the quality of DCWs. I understand the concern that has been expressed, but that concern is not merited.

I would like to answer before the noble Lord, Lord Thomas of Gresford, rushes to his feet. I ask him to give me that courtesy, if he would not mind.

In the concerns that have been expressed, the noble Lord, Lord Kingsland, raised the issue of the codes within the regulatory framework of the Institute of Legal Executives. As I said, professional integrity is the cornerstone of the current Crown Prosecution Service statement of ethical principles. It is enshrined in the codes of conduct and advocacy of the Institute of Legal Executives. The harmonisation of these codes with those of the institute will ensure that designated caseworkers provide the same ethical safeguards to the court as the other legal professions. It follows, therefore, that compliance with the current and future codes within the regulatory framework of the Institute of Legal Executives takes precedence. Regulation by the institute will be every bit as meaningful and robust for designated caseworkers as it is for barristers and solicitors. I do not envisage any circumstance where a designated caseworker or, indeed, a Crown prosecutor would face criticism from his or her line manager for putting those ethical responsibilities first.

In responding to Amendment No. 82, I believe that it is important to emphasise that the CPS voluntarily sought regulation from the Institute of Legal Executives for its designated caseworkers. There is nothing to be gained by placing such regulation on a statutory footing. As I hope I made clear in my letters, to do so would require a significant amendment to the Legal Services Act 2007. At present, and by virtue of the fact that designated caseworkers are granted their rights of audience through statute, they are currently exempt from regulation under the Legal Services Act. This, I believe, was debated when that matter was going through. To amend the Legal Services Act would be disproportionate and unnecessary, given the public commitment of the CPS to working closely with the Institute of Legal Executives to bring about meaningful regulation. I am very happy that the noble Lord, Lord Kingsland, referred to that matter in his remarks.

Perhaps the overriding concern is reflected in Amendments Nos. 83 and 84. A designated caseworker may deal with cases where the nature of the offence may leave the defendant liable to a sentence of imprisonment. I have made it clear that the Crown Prosecution Service would internally limit the deployment of designated caseworkers, using the DPP’s statutory powers under the Prosecution of Offences Act 1985 to issue general instructions. I remind the House that those instructions have been in situ for the past 10 years; they have worked extremely well and no one has suggested that they have not properly regulated the way in which designated caseworkers have done their jobs. This would have the same practical effect as limiting the clause. I have also made it clear that there would be the added safeguard of the Attorney-General, who would have to consent to any change. I am happy to repeat those undertakings today.

However, in light of the concerns that have been expressed both on the last occasion and today, I also propose that an independent review be undertaken by Her Majesty’s Crown Prosecution Service Inspectorate and that independent advice be provided to the Attorney-General before any decision is made to remove or amend the internal restriction. I hope that this added safeguard will reassure the House on this important point. There would be an independent scrutineer of whether it was appropriate to make a change before any such change took place.

An important general point needs to be taken into account in considering the merits of this clause. The ability of the Crown Prosecution Service to grow and encourage the development of designated caseworkers through the Institute of Legal Executives route is one that we should all commend. We have for many years expressed a desire to make the profession more open to both genders and to people from minorities. We know that women and members of the black and minority ethnic community often find it difficult to go immediately from school to university but work very well once they are in a situation where they can be trained and come forward. We have found that designated caseworkers have been a very rich vein. One designated caseworker is now the chief prosecutor in Devon and Cornwall; she is acknowledged to be of real value.

There is merit for the criminal justice system. Fellows of the institute who attain the advocate certificate have wide-ranging powers. To limit those powers in the clause would be to miss an opportunity to use their talents to prosecute a wider range of summary trials, including those where imprisonment is a sentencing option. I remind the House that it takes five years of additional training before an ILEX member can get an advocate’s certificate, so that they are fully conversant with all those important technical issues.

The noble and learned Lord, Lord Mayhew, asked about the Magistrates’ Association. He is absolutely right: the Magistrates’ Association expressed anxiety about the move and was antipathetic to it. The noble and learned Lord, Lord Mayhew, is also right that it spoke about the unamended version of the first iteration of this clause. I have written to it subsequently. I do not have a letter from it, but I understand that in conversations with the CPS it has indicated that it is happier now with the status. However, it still expressed some concerns about the details. I am afraid that I do not have anything in writing, so I cannot tell noble Lords what particular detail might have caused continuing difficulty. The association is certainly happier. The issue about which it was concerned was similar to that voiced in this House about imprisonable offences.

I turn, finally, to where we are now. Amendment No. 84A would remove paragraph (d) of the definition of a preventative civil order. The effect of this amendment, which the noble Lord, Lord Kingsland, did not speak to, but I assume he still wishes to—

My Lords, I had imagined that that matter would be dealt with by the noble Lord, Lord West of Spithead, but I did not see him in his place so I omitted to say anything about it. However, we think it wholly inappropriate for a non-legally qualified CPS employee to deal with a VOO, which is an assessment of whether somebody is safe to remain at large in society. It is wrong for somebody who is not legally qualified to deal with a matter which could lead to indefinite incarceration.

My Lords, I hope that I will be able to assist the noble Lord. The effect of the amendment, as he suggests, would be to remove the general power of designated caseworkers to conduct post-conviction applications or other civil proceedings to obtain preventive orders that do not come within the ambit of paragraphs (a) to (c) of the definition. At present, the only orders to fall within paragraph (d) are the sexual offender prevention orders. However, while sexual offender prevention orders would fall within this paragraph, the role of the prosecutor is confined to reminding the court that it has the power to make such an order and not to lead any evidence. That is literally what they do: they just remind the court. I do not think that the noble Lord would take issue with somebody being entitled to remind the court of its duty in that regard.

In essence, therefore, the primary purpose of paragraph (d) is to ensure that designated caseworkers have rights of audience to conduct proceedings were any new orders to be introduced through future legislation. This would of course be subject to the director’s guidance as to whether the CPS thought it appropriate for them to appear. In reaching such a decision, due regard would have to be paid to ensuring that their powers were no more than those capable of being exercised by a Crown prosecutor. I hasten to add that violent offender orders would not come within the remit of a designated caseworker, as Part 7 of the Bill provides for applications for such orders to be made by the police and not by prosecutors. So that would not be within their purview. I understand the noble Lord’s anxiety on that, and I am happy to assure him that I can ease his troubled heart.

My Lords, the noble and learned Baroness wished me to remain in my seat until she had finished her response. I have done so, although I wanted to ask, in the context of what she was saying, about an article by Frances Gibb which appeared in the Times on 19 February. It was headed:

“‘Barely trained’ paralegals will be forced to take CPS cases to trial”.

The noble and learned Baroness must have read it, as it is very much within her area. It states:

“An internal survey for the Crown Prosecution Service has found that only half the 400 paralegals who will take on the contested—or ‘not guilty’—trials felt that they had had enough training. A third said that they were under pressure to do court work that fell beyond their abilities”.

That is described as an “internal survey” for the Crown Prosecution Service. Was there such a survey—was that a correct statement? If so, how does it accord with everything that the noble and learned Baroness has told us about the training of those intended to undertake this work?

My Lords, I understand that a survey has been carried out but I do not know its final results; I have not seen a report. However, I can point to issues to which I alluded in Committee—namely the reports from Her Majesty’s inspectorate and from the Audit Commission, both of which speak highly of outcomes and the professionalism of those who undertake this work. I can also reiterate the CPS’s commitment to ensuring that designated caseworkers who undertake representation in court have the necessary skills. As noble Lords will know, there are designated caseworkers who do not appear in court. We have, as I said earlier, a number of tiers of designated caseworkers. One of the benefits of the tiers is that those who qualify as designated caseworkers can move through the system obtaining greater training and opportunities, either becoming ILEX members or taking solicitors’ or barristers’ exams. We therefore have the full spectrum.

My Lords, I have listened with enormous interest to this debate. It seems that much the most important thing was said by my noble and learned friend Lord Mayhew when he asked about the magistrates’ view. The most important thing that the noble and learned Baroness has said to us is that the magistrates have said that they are happier, but not yet happy. She was unable to tell us the precise areas in which they are not happy because they have not yet written to her.

Speaking as somebody who sat not as a magistrate but as the Scottish equivalent, an honorary sheriff, I think that the whole question hangs on whether the magistrates feel that cases will be put properly before them and they will get the help they need in making decisions. I suspect that magistrates need that help more than other judges do, and it is important that they get it. That seems the overwhelming problem. It is a complicated matter, but if the magistrates are not yet happy with the arrangement, the House ought not to reject the amendment.

It is difficult, my Lords. I wrote to the chairman of the Magistrates’ Association on 12 March, and I know from experience that when the Magistrates’ Association is keenly concerned and/or anxious, it will write back speedily. I have not yet received a response. Because I had not received a response, an inquiry was made, and the indication which I have given to the House was given to those who instruct me. I therefore cannot help the noble Baroness on the magistrates’ current position. All I can do is to assure the House that the CPS’s primary concern is to ensure that the quality of the prosecution given to the magistrates is of the highest quality.

We have had no reason to think that the designated caseworkers who have been given power to present cases have been found wanting; they have not. They have done their job and done it well. That is something for which they should be commended.

My Lords, I thank the noble and learned Baroness for her full reply and thank all noble—and noble and learned—Lords who have spoken in this debate. I ask forgiveness from all of your Lordships if I do not refer to each excellent contribution.

The noble and learned Baroness expressed concern about my troubled heart. If I may plagiarise a famous line from the film “Casablanca”, my heart is my least vulnerable organ.

The noble and learned Baroness seemed to suggest that the leitmotif of my intervention was that the Bar was under threat. I respectfully suggest that either I misspoke, as a famous lady across the Atlantic said, or at least I did not speak with enough clarity. My proposition is not that the Bar is under threat from the Government’s proposals, but that the defendant is under threat as a result. That is the basis for all the concern that we have been expressing this afternoon.

I agree with the noble and learned Baroness that the Government share our view that, at this juncture, it is appropriate for non-qualified CPS employees to deal only with summary offences that do not have a sentence of imprisonment at the end. There is no difference between us on that matter. The only question is whether we want to go a step further some years hence. Should the Government have to come back with primary legislation or can this matter be dealt with more informally? The noble and learned Baroness with typical generosity made a concession in saying that she would introduce a further safeguard of an independent qualified lawyer to look at a proposal by the CPS to make this transition. I am grateful to her for going to the trouble of doing that, but on balance I still prefer our amendment.

I have no doubt whatever about the quality of DCWs. There are many extremely well-qualified DCWs in the CPS, but the noble and learned Baroness will have heard many of your Lordships express concerns about the adequacy of the training that they are likely to receive. I am particularly exercised by the fact that, although a deal will be struck with ILEX on these matters, which I hope will be satisfactory—I am thinking particularly of the remarks of the noble Viscount, Lord Bledisloe, on the issue—it is also important that they are seen to be properly qualified. That is why the intermediation of an approved regulator is so important. I accept that that is prohibited in the 2007 Act because of the provision in Schedule 3; but if these amendments are passed by the House that will be a later proposal and therefore the provision in the 2007 Act will fall.

I am grateful for the Minister’s assurance about the VOOs, but frankly this matter should not be handled in any circumstances and in any way by DCWs. For all those reasons, I wish to test the opinion of the House.

moved Amendments Nos. 83 to 84A:

moved Amendment No. 85:

My Lords, my name is attached to the amendment. The noble Lord, Lord Ramsbotham, clearly set out why it is so fundamentally important, so I will cover only a few of the main issues. We know that children in care are overrepresented in the secure estate population. Approximately 40 to 49 per cent of children and young people in custody have been in local authority care, and about 18 per cent are still subject to statutory care orders. This is a particularly vulnerable group of children who are most likely to experience resettlement problems on release.

We on these Benches believe that any child removed from their ordinary care arrangements by the state should be understood to be looked after by the state, both in the spirit of the term and by statute. Even those children who are sent to custody directly from their parental home, without being subject to any current or former care arrangements with the local authority, are, to all intents and purposes, being removed from any effective parental supervision and responsibility. In other words, it should be recognised that they move into the care of the state. The Government will argue that, under current arrangements, the youth offending team will have case responsibility. We would say that the main function of youth offending teams is to prevent reoffending, and that while they are required to take account of the holistic needs of the child, they do not have a primary welfare function. While they were originally established as multi-agency teams, with staff from a number of sectors, over time these links have become extremely tenuous and youth offending teams now often consist of generic youth justice workers. For this reason, we feel that children who are looked after, whatever their status and whether or not they are eligible care-leavers, should continue to have involvement from their own child and family social worker throughout their period in custody. That would be the holistic way to manage them, and it is not currently the case.

My Lords, I, too, support this amendment completely. I am sure that it will be the Minister’s case, when he replies in a moment, that to a large extent this already represents the pattern of things. That being so, my plea would be that there is no earthly reason why it should not be spelled out in statute. At no time is the need for this support as great as when a young person goes into custody. This is the interface between the two systems—two systems that unfortunately show a massive over-representation in the custodial system of children who have been in care. They are over-represented by something like 15 to 1—I think that is the relevant statistic. Therefore there can be no earthly argument for not spelling this out in a specific way. It does not extend the law; it does not extend the practice; but it clarifies the minds considerably of those who are involved in these responsibilities.

My Lords, I have seldom been happier to see my noble friend Lord Judd—and he certainly is a friend, even if he is on a different Bench—appear suddenly on the Labour Benches. We have been missing him all day and he has arrived for just the right clause.

I very much support this clause. As my noble friend Lord Ramsbotham said, our debates on the Children and Young Persons Act went through it, too. We are dealing with the most vulnerable group of people that you can think of. They have almost certainly suffered from the many problems that we have heard read out during these debates. Having a supportive worker in touch with them could make all the difference to whether they reoffend. I stress one thing—emphasis is laid on the particular worker chosen having the necessary skills, and I do think that that is frightfully important. But as well as that, there should be some degree of choice for the young person concerned. I hope that that will be borne in mind. Above all, they need a mentor who will take them through the more difficult periods of coming out of some form of custody and back into the real world—giving them advice on education, skills training and other things. I very much support this amendment.

My Lords, I, too, support this amendment and also speak to Amendment No. 85A, which is linked. Actually, it is a stage before Amendment No. 85—it is a new amendment that comes through the Standing Committee for Youth Justice. The committee has asked me to put this forward, which I am very happy to do. It bears a certain resemblance to my earlier amendment, to make Section 37 of the Children Act 1989 part of the youth justice system. This is intended to amend the Children and Young Persons Act 1969, Section 9, in a similar way. We are back, on both amendments, to the welfare of the child appearing in the youth court.

The local authority has an obligation, where a child is looked after or in need, to provide proper proposals for that child and, where appropriate, a care plan. Lying behind Amendment No. 85A is the need for careful communication and working together between the social workers of the home local authority and the YOTs. Often, there is a lack of that working together, and a lack of communication. In too many cases, there appears to be a feeling by home social services departments that, when the child is coming up before the youth court, it is the job of the YOTs, which of course include a social worker, to get on and deal with the child. They get asked by the YOTs, from time to time, what proposals they have for the child. All too often, the home local authority says, “We’ll wait to see the outcome of the court proceedings”. That is not good enough, because the YOTs, and the magistrates of the youth court, would find it extremely helpful to know what social services think should happen; and to know the contents of the care plan for the child who is looked after. There should be a genuine working together between the local authority, which has the care of the child, and the YOT that is taking over—but should not be taking over to the exclusion of the home local authority and, of course, the court, which needs all the help that it can get.

My Lords, we return to the question of youth justice. I suppose there have been two overriding themes in our debates; first the question of the number of young people in custody and the support given to them and, secondly, the important question of the inter-relationship between the criminal justice system and local authorities.

Noble Lords are absolutely right to bring us back to this point, because clearly if we are to have an effective criminal justice system and if we are to achieve the outcomes that we wish to achieve in the prevention of offending and reoffending—to come back to our previous debates on this—it is absolutely critical that there is a strong partnership relationship between local government and the criminal justice system, particularly the YOTs. That point is very well made indeed. I certainly accept the argument made by the noble Lord, Lord Ramsbotham, that we have to secure consistency of approach. I very much agree with that and with the intention behind much of this amendment, which is to ensure that local authorities provide the right kind of support to children and young people in custody who they have looked after or who remain in their care. There are many aspects of the intention behind this amendment that the Government support. As noble Lords will be aware, the amendment duplicates much of the effect of Clause 16 of the Children and Young Persons Bill, which was recently debated in your Lordships’ House.

The policy intent underlying the provision in the Children and Young Persons Bill in relation to children in custody is to make sure that services for that very vulnerable group of children are effectively co-ordinated, so that they have the necessary support to re-establish themselves in their home area. For some young people, this support will mean being provided with accommodation, foster care or a children’s home, for example, and this would mean that they would again become “looked after” in the formal sense.

The Children and Young Persons Bill will ensure that there is a statutory framework in place so that local authorities maintain contact with children who they have looked after and who are involved with youth justice services. The purpose of that contact will be to maintain continuity with the child and to assess what support the child may need on release, including whether they should again be provided with accommodation by the local authority.

As the noble Lord, Lord Ramsbotham, implied, following the response of my noble friend Lord Adonis in the debate on the Children and Young Persons Bill, we will use the powers in that Bill to require the local authority to visit children who were provided with voluntary accommodation by the authority who are no longer looked after as their status is dependent on provision of accommodation. That will ensure that all the children within the scope of proposed new subsection (1)(b) of the amendment will receive visits. As my noble friend Lord Adonis has made clear, the intention is that these visits will ensure the continued involvement of local authority children’s services by maintaining regular contact between the child and the local authority.

We are not at present able to make firm commitments as to the detailed content of the regulations and guidance about how the visiting duty towards looked-after children in custody will be discharged. We will, however, ensure that the arrangements for local authority representatives are compatible with the sentence planning, case conference and resettlement meetings while the child is in custody. I say to the noble Baroness, Lady Howe, that I very much warmed to her use of the word “mentor” in that regard. We have made it clear that as far as possible—one has to understand the practical challenges involved here—we would expect the local authority representative undertaking these visits to be a professional who is known to the child. We do not think that this function should be carried out by a member of a youth offending team, and we will make that clear in statutory guidance.

The visiting role should, overall, mean that local authority representatives ensure that the child is properly safeguarded, that their welfare is promoted, that staff in youth justice services have the relevant information about the child’s past experiences and that children’s services are fully participating in planning for supporting the child in the community on release. In developing the new regulations and the guidance we will consult widely, which will involve the Youth Justice Board, Her Majesty’s Prison Service, voluntary sector organisations and local government, so that the input from children’s services complements and adds value to the support already provided by the youth justice system.

I appreciate that this issue has been raised in debates and that my noble friend Lord Adonis has corresponded with the noble Lord, Lord Ramsbotham, with more detail about how we intend to ensure that children who are or who have been looked after in custody receive better support. I reiterate that the Government share similar concerns to the noble Lord and other noble Lords, and that we are taking action on that basis.

Amendment No. 85A was spoken to by the noble and learned Baroness, Lady Butler-Sloss. I congratulate her on the ingenuity of her drafting, since she has used the points that I made against her when we debated this in Committee. The amendment would extend the existing power to direct an investigation to require a local authority to include in its report to the court plans or proposals for working with the child or, if it had no such plans or proposals, why it made that decision. In addition, the amendment would require the local authority, where the child is looked after, to provide the court with a copy of the full care plan, as she so eloquently described in her speech, including additional steps to take if the child were to be convicted of the offence.

I remain of the belief that there is little need for this power in view of the responsibility under the Crime and Disorder Act 1998 for youth offending teams to provide reports to the court on young offenders. The youth offending team is attached to the local authority, and its multi-agency status should mean that it is best placed to draw together all the relevant information when compiling a report on a young offender. That is probably why the courts do not use the Section 9 power to order a local authority to undertake an investigation of the young offender.

I say to the noble and learned Baroness and to the noble Baroness, Lady Falkner, that I understand their points about what they described as local authority disengagement. I understand their concerns, and I accept that more needs to be done to ensure that youth justice bodies and children’s services work together more closely, but it is not a matter of legislative provision; it is a matter of practice. The question is how we ensure that we get better practice. I do not think there is any doubt about that. We are looking at the youth crime action plan, where we are looking at the relationship between youth offending teams and children’s services, which will inform the further development of plans for the youth justice system. I hope that will pick up many of the points that noble Lords have raised today.

Since this debate very much turns on the performance of local government and its inter-relationship with the criminal justice system, I add that we think that the Children and Young Persons Bill is addressing a gap in the statutory provisions. The joint sponsorship of youth justice by my department and that of my noble friend Lord Adonis is a very strong step in the right direction in ensuring a much more complementary and integrated approach, and getting that right at national level has an influence on how YOTs and local authorities should work together in the future.

I have already mentioned in our previous debates the impact of the YOTs inspection regime. As noble Lords will recall, that is a regular inspection, which identifies successes and weaknesses in the performance of YOTs. That enables us to pinpoint areas where performance needs to be improved. I mentioned again the youth crime action plan which will be informed by our debates.

Finally, I shall mention the local authority performance framework in general. While I would not wish to bore the House with a detailed exposition of our new approach to performance management within local government, given the critical importance of youth justice in helping local authorities meet some of the pressures that they face, I am sure that focusing on a smaller number of statutory targets will help to ensure the consistency we all want to see.

I do not accept that changes in statute are required. What is required is an improvement in performance and consistency. I hope that I have enabled noble Lords to be satisfied that the Government are far from complacent in this area. We are committed to doing all we can to improve performance and to ensure that there is an integrated approach between YOTs and local authorities so that these very vulnerable young people get the right kind of support.

My Lords, I thank the Minister for replying in his customary full and courteous way. I listened in particular to the last mention he made of the importance of the YOT inspection regime because that is crucial if there is to be any reassurance about oversight and improvement in performance. I have been greatly reassured by correspondence with the noble Lord, Lord Adonis, in which he stated that it is intended that the instructions should be in the guidance. However, the oversight has always concerned me. Up until now, the oversight that should have been there has not achieved its aim. I hope that the guidance will include direction to YOT inspection teams that they should check to see that every young person in care has a case worker with him. If there was full assurance that that was the case, the performance would be overseen.

However, as the Minister will be aware, I still remain unhappy that that is not in statute. I have been watching it very closely for the past 12 years and it particularly concerned me that the oversight of child protection procedures that should have been taking place in young offender establishments did not take place because somehow people thought that it did not apply. I accept what the Minister said, but I feel that I must test the opinion of the House.

My Lords, I beg to move that further consideration on Report be now adjourned. In moving the Motion, I suggest that the Report stage begin again not before 8.42 pm.

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

rose to move, That the draft regulations laid before the House on 11 March be approved.

The noble Lord said: My Lords, we are committed to securing the United Kingdom’s borders, improving immigration control and reducing identity abuses as part of our wider national identity scheme. We introduced the biometric registration powers in the UK Borders Act to allow the Secretary of State to issue, in time, secure and reliable biometric documents to all foreign nationals who are subject to immigration control. By recording a person’s fingerprints, we can fix them to a single identity and make it possible to check their identity against centrally held records. This will help to strengthen our border security and to combat illegal migration and identity abuses. These powers will also be the way in which we comply with a forthcoming European regulation that will require the UK to issue a biometric card whenever it grants a foreign national leave to remain.

We will roll out the identity cards from the end of November 2008. The cards will confirm the holder’s immigration status and entitlements to work and to access public funds in the UK. The regulations are the first set of regulations to be made under the biometric registration powers in the UK Borders Act, and are designed to enable us to operate a pilot to test the biometric enrolment technology and processes. We will test some of the processes and technology by enrolling the fingerprints and photographs of around 10,000 foreign nationals who are subject to immigration control. Under this pilot, the biometric immigration document, which is the technical name for the document issued under the Act, will be issued to those granted leave to remain in the form of a vignette sticker attached inside their passports. This is the same as the one that is currently issued because the pilot is about testing limited biometric enrolment processes and not about testing the actual identity card.

I will set out what the regulations are designed to achieve. The first five regulations concern the name of the regulation, the date of the pilot, definitions and the categories of those who are required to apply for a biometric immigration document. The regulations will affect those foreign nationals applying for leave to remain as types of student, spouses, civil partners or unmarried partners under the immigration rules. They will be required to apply for the document, as will their dependants, when making an application in person at the public inquiry office in Croydon, or, if applying by post, if they reside in one of the London postcode areas listed in the schedule to the regulations. It is also provided that the application for leave to remain is made within the period of the pilot.

The next set of regulations, Regulations 6 to 9, concern the collection of biometric information. Regulation 6 enables an authorised person to require a person applying for a biometric immigration document to provide a record of their fingerprints and a photograph of their face. Where the Secretary of State already has a person’s biometric information, Regulation 7 allows her to use or retain the biometric information she already has in her possession, rather than requiring the person to come in for a second time to enrol their biometric information where this is unnecessary. Regulation 8 provides safeguards for registering the biometric information of children under 16. In essence, biometrics can be taken from a child under 16 only if a parent, guardian or other adult who takes responsibility for the child is physically present. The processes by which the biometric information may be recorded are set out in Regulation 9. This regulation permits an authorised person to require the person to make and attend an appointment within a specified timeframe and place and to specify any documents that they must bring to the appointment, or action which they must take, to establish their identity.

Regulations 10 to 13 are concerned with the use, retention and destruction of biometric information held by the Secretary of State. Regulation 10 sets out the various purposes for which the Secretary of State can use biometric information collected under these regulations. They reflect the purposes contained in Section 8 of the UK Borders Act 2007, but with two additions. Regulations 11 to 13 set out when and how biometric information held by the Secretary of State should be destroyed or access to that information blocked. They are similar to the safeguards in the existing biometrics legislation.

Provisions about the issue of biometric immigration documents are set out in Regulation 14. The Secretary of State may issue a document to a person to whom she has decided to grant leave to remain. This regulation also provides that the document has effect from the date of issue, and that it ceases to have effect on the date that the person’s leave to remain ends. Regulation 15 provides for the contents of the biometric immigration document, which for the purposes of this limited pilot is the same as the current vignette sticker attached inside a passport. The Secretary of State may cancel or require the surrender of a biometric immigration document that she has issued. These powers are set out in Regulations 16 and 17.

In circumstances where a person is required to apply for a biometric immigration document and fails to comply, Regulation 18 will enable the Secretary of State to refuse to issue a biometric immigration document, to disregard the person’s application for leave to remain and to refuse the person’s application for leave to remain. This could be, for example, where the person refuses to give his biometrics when required to do so.

Once a person has complied with a biometric registration requirement his or her application will continue to be considered in line with normal immigration processes. Postal customers will be informed of their immigration decisions by post and those who have successfully applied for a premium same day service will continue to receive a decision on the day of their appointment.

I am pleased to have brought these regulations before noble Lords today. It is essential that we run the biometric registration pilot to enable a successful introduction of the identity card for foreign nationals later this year. The rollout of identity cards is part of our strategy for tackling illegal migration-associated abuses arising from such activities. I beg to move.

Moved, That the draft regulations laid before the House on 11 March be approved. 14th Report from the Joint Committee on Statutory Instruments.—(Lord West of Spithead.)

My Lords, I thank the Minister for his succinct way of introducing these regulations, which certainly presage the start of identity cards. We will find out in due course whether they will be just for foreign nationals or for everyone in this country. We were of the impression that the enthusiasm for ID cards in general had worn thin, but clearly that is not so in terms of the UK Borders Act and where that came from.

Before going into the details, I want to ask the Minister about the state of preparedness of any IT system which is to hold this biometric information and the details of everyone recorded on it. The Government do not have a happy record on IT systems. Is this a new system or is it already up and running? Is it on the back of the passport system, which was initially such a disaster and caused much confusion a couple of years ago? Broadly, where are we with the IT system? Is it capable, ultimately, of being expanded to take on all those who are to be included as time goes on?

It appears that the pilot will effectively last from 28 April to 25 July, with applications from dependants being received only between 16 June and 25 July. Perhaps the Minister can explain this convoluted timetable. I understood him to say—but it is nowhere in the regulations—that these biometric cards will be available or will be used from the end of November. I do not understand the timescale that starts in April. Nor do I quite understand the reason for the original applicant having to make the application so far in advance of his dependants. I should think that one would want it all done together. Presumably, one knows the situation as regards each applicant at the same time.

Regulation 5 specifically refers, as do others, to a person under the age of 18 who makes an application. I presume that this means someone between the age of 16 and 18. But if so, that is not clear. It needs to be clear in the regulations, because a student could be under 16 years old. Will that be all right? The Minister says that the pilot effectively applies to anyone living in London. No other postcodes are listed. What will be the process whereby an applicant will provide his face and his fingers for photographing and printing when they are making a written application? It seems unlikely that such features will already be recorded and kept. How will they be taken if the application is made by post? Will it mean that whoever makes the application will have to go to a centre to have their biometric details taken? The only place mentioned in the regulations is Croydon. I hope that it is not the Government’s intention that all 10,000 applicants should wander out to Croydon to have this matter sorted out.

This is a three-month trial. What will happen to the information obtained during that trial? I think that the Minister said that the documents will be valid until and unless the person was removed or sent away from this country. Will the Minister confirm that? How likely is it that those who need to make such applications will try to stay outside these time limits to avoid having to supply their photographs and prints? The anticipation is that there will 10,000 applications, but if people know that this is a pilot and that they can delay their application, the chances are that they may try to do so.

Is there a timetable for a further rollout? What group is it anticipated will be next? We have the various tiers under the new immigration rules. Will it start at tier 4, for example, or will there be a differential on how these applications are made? I anticipate that this will be the first of many such regulations, so it would be helpful to know the order.

I cannot say that I am content with the regulations. I do not think that any of us is clear that this biometric information will make us much safer and secure, but the regulations are there and we must cope with them as best we can.

My Lords, as the Minister stated, the pilot will affect anyone who applies for leave to remain in the UK and falls into one of the categories in Regulation 4; namely, students, prospective students, student nurses, people who want to re-sit an examination or to write up a thesis, sabbatical officers, spouses or civil partners and the unmarried or same-sex partner of someone already present and settled in the UK. We on these Benches are concerned about the new immigration regulations, which restrict so many people from outside the EU, particularly those from African states who need to be trained here to learn skills to take back to their native lands. Because of the qualifications required, these people now will not be allowed into the UK. We must look again at that.

There are expected to be 10,000 applications in the first three months of this pilot scheme. We had pilot schemes in three areas for asylum and immigration applicants under that Act. If I remember rightly, there were pilots in east London, Greater Manchester and the East Midlands, and they were withdrawn. Pilot areas can be looked at and one can say, “Gosh, this is not working, so we will withdraw the scheme”. But this pilot is merely the thin end of the wedge. As this is to be applied throughout the UK, it is not a pilot; it is just the first stage. It is also the first stage of the implementation of identity cards, which the Liberal Democrats have opposed from the start.

We know exactly what is happening here. The Government have created 69 passport personal interview offices for the 600,000 people a year who apply for a passport for the first time to undergo a personal interview. We are told that 73,000 interviews have been held so far—no doubt the Minister will put me right if I have given the wrong figure—and not one applicant has been refused. So I would ask whether this is really fulfilling the need that was originally envisaged. The 69 personal interview offices took a long time to open, but in some 30 areas there is a remote facility. A council office or other building is taken over and the interview is conducted with a video link. Is this the beginning of setting up a framework for identity cards as well as passports? If so, how will you take someone’s fingerprints or iris scan by video? The time will come when we have to say, “Gosh, this isn’t working”. The noble Baroness asked about people who apply by post. How will their fingerprints be recorded? We can see many problems here. I do not see how biometrics can possibly stop illegal working because foreign nationals and later on everybody with ID cards will be here legally. People holding passports or identity cards can be admitted legally, so how will that help in the battle against terrorism or against those coming to the UK without good intentions?

I do not want to take too much time, but I want to ask about the initial cost of this scheme. About six months ago I asked about the cost of the 69 passport personal interview offices. The answer from the Home Office was that they would cost £69 million to set up, or £1 million per office. It is a very costly scheme. So I ask the Minister how much this particular scheme is going to cost and, as has already been mentioned, how safe and reliable will the information to be gathered be? Will a disk get lost somewhere? Will there be sufficient security to ensure that people’s information remains totally confidential? I would be grateful if the Minister could respond to these questions.

My Lords, I thank both noble Lords for their input. As is often the case with dinner time debates, a small number of noble Lords are present. However, the points raised are pertinent and I thank both noble Lords. The noble Baroness, Lady Hanham, suggested that perhaps we are not that keen on ID cards any more. I have to say that I do not agree. There is still a very good case for ID cards. While I would not introduce them solely on the basis of counterterrorism, even though people say that they are useful in that context, there are much broader reasons for them. I still believe that on balance it is a good thing to take this route.

As regards the preparedness of the IT system, I can tell the noble Baroness that the system will be based on one that is already in place. It will not be based on the passport system and the noble Baroness was right to say that there were some problems with it initially. This type of system is already being used overseas in biometric visa processes. I believe that we have taken 1.6 million of these since 2002, so we are fairly content with the IT system and believe that it will work under pressure.

I have to agree with the noble Baroness that the timing seems to be rather confusing. Basically, we start the pilot on 28 April for single people aged 18 and over without dependants. On 25 June, we allow those with dependants to become involved in the pilot. The postal element will be complete by 25 July. However, people will continue to go to Croydon to go through the process right up until the full introduction of cards. At that point we will move into the production of cards. It is quite confusing, but that is the breakdown.

On the age of applicants, this applies to all applicants under the age of 18 who need to apply for leave to remain and therefore to all children. The point about the age of 16 applies only, I believe, when applicants have to be accompanied to have their fingerprints taken.

The trial will test the processes and the technology. On how written applications are to be made, those who write in will have to attend a biometric event in Croydon at some stage. Initially this is for those in the London postal areas. That is the position as I understand it, but if I am wrong I will write to the noble Baroness. On the point made by the noble Lord, Lord Roberts, there are a number of centres around the UK and the processes and technologies being introduced in Croydon will in future be available in all those centres. People will then be able to attend the centre closest to where they are located.

My Lords, I want to ask a little more about going to Croydon and postal applications. What the regulations do not say is that everyone making an application will have to go to Croydon to have their fingerprints taken and their face photographed. There is a sort of airy-fairy view here that someone will be able to apply by post and everything will be in place, but presumably so few biometric details are being held anywhere that everyone will have to trudge out to Croydon. I hope that that will be made clear in the application documents, because it certainly is not clear in the regulations.

My Lords, I will make sure that it is made clear. Those whose fingerprint data are already being held because their fingerprints have been taken abroad will not have to go to Croydon. However, I will come back to the noble Baroness in writing on the point.

My Lords, I apologise profusely for coming in at the last minute, but I had not realised that this debate was taking place in the dinner hour. I want to put one important point to the Minister. A few weeks ago, I entered the United States and was duly fingerprinted. To my surprise, the official told me that my fingerprints were not the same as they were the last time I came in. I was then interrogated while an enormous queue of people with queries formed. What is the probability of having the wrong fingerprints in an immigration investigation?