asked the Chairman of Committees:

What steps are being taken to measure and reduce the carbon footprint of Members and staff of the House of Lords travelling on parliamentary business.

My Lords, the House participates with the House of Commons in a scheme to offset carbon emissions produced from parliamentary air travel booked through the Travel Office. Payments are made into the Government Carbon Offsetting Fund, which funds projects to reduce emissions in the developing world. A high proportion of European Select Committee travel is undertaken by rail rather than air because many of the destinations, such as Brussels, are easily accessible by train.

My Lords, I thank the Lord Chairman for that excellent reply; it is good to know that the House is taking the issue seriously. He will be aware that CO₂ emissions for plane journeys to Glasgow amount to 95.4 kilograms, compared with 21.3 kilograms for train journeys. On journeys to Brussels and Paris, the advantage in favour of Eurostar is 10:1. Does he agree that the House could do rather more to encourage everyone to travel by means that are cost-effective and environmentally friendly? Is there some way in which Members of the House could have the carbon footprint of their journeys identified and pointed out to them?

My Lords, we are well aware of the advantages of rail travel, for journeys where that is appropriate, over air travel. However, I would hesitate to recommend to noble Lords who live in Scotland or Northern Ireland that they should take the train or the boat.

Hear, hear!

My Lords, I can see that I have hit the right note on that, which is always encouraging when I am answering a question. However, I agree with the noble Lord that we should do our best. In the last period, we spent £4,486 on the Government Carbon Offsetting Fund.

My Lords, does the noble Lord agree that one way of proceeding would be for a duty, as regards the nub of this Question, to be placed on every committee of this House when they meet in the autumn, and then for the House Committee to consider the reports of each committee so that we can decide how to proceed on this issue?

My Lords, when organising trips, the Committee Office’s policy is that they should be undertaken by the most environmentally friendly means. However, air is probably the only option for a Select Committee trip to Washington. If you are going to Brussels, Paris, or other destinations in Europe, train is not only the most environmental but the most convenient option. I assure the House that the Committee Office takes these matters into account.

My Lords, is the noble Lord aware that statistics from Defra clearly show that if individual Members and staff gave up their motor cars and rode to the palace on horseback or in a bullock cart every day for work, the methane carbon footprint created would be equal to about 10,000 road miles of a Chelsea tractor? Does the Chairman of Committees therefore agree that, ultimately, the total carbon footprints created by the livestock and transport industries are about the same size? Should the Government penalise the farmer and the parliamentarian motorist at the same level of green taxation? Would we then not all be obliged to reduce our individual carbon footprint, following the inspirational lead of the right honourable gentleman the Secretary of State for Environment, Food and Rural Affairs, by becoming a nation of vegetarian bicyclists?

My Lords, that is an extremely interesting question from the noble Lord, although I am disappointed by it because I had hoped that I would be able to give vent to my views on changing the clocks to European time. I am sure that the noble Lord made many interesting points, but I cannot answer them at this stage.

My Lords, can the Lord Chairman give the House some examples of the way that the parliamentary offset fund is being spent?

No, my Lords. It goes into the government scheme operated by Defra, but where the money goes, I would not know.

My Lords, can the Chairman of Committees confirm that for those of us who book our air tickets over the internet, it would be appropriate for Members to tick the carbon offsetting box when we do so?

My Lords, I would not dream of advising the House on whether to do that; that must be a matter for personal choice.

My Lords, does not the noble Lord agree that carbon footprints approaching your Lordships’ House are made considerably worse by the fact that so many roads are up and so many detours have to be taken, so one is standing for so long with engines running in traffic as a result? Does he agree that that does not help?

My Lords, I am sure that it does not help, but it is a matter for Westminster City Council rather than for me.

My Lords, will the Chairman of Committees express sympathy for all Members on the Bishops’ Bench who are at the Lambeth conference over the next two weeks, because of its carbon footprint?

My Lords, if that were all that I was expected to express sympathy for in the Lambeth conference, that would be easy to do, but I gather that it has other problems.

asked Her Majesty’s Government:

What plans they have for reviewing the rules on street photography.

My Lords, the freedom of the press and media is one of the bedrocks of democracy in this country. Although police officers have the discretion to ask people not to take photographs for public safety or security reasons, the taking of photographs in a public place is not subject to any rules or statute. There are no legal restrictions on photography in a public place and no presumption of privacy for individuals in a public place. There are no current plans to review this policy.

My Lords, I thank my noble friend for that reply, but is he aware that magazines for photographers are reporting that photographers, including professional press photographers, are being challenged by police and private security guards when taking photographs in the street and other public places? Photographers are sometimes filmed themselves; they are told to move on or asked for their name and address. They feel that they are being harassed. Although that development no doubt relates to the changed security situation, will my noble friend seek discussions with the Association of Chief Police Officers and other interested parties with a view to establishing clearer guidelines to be consistently applied and a mutually acceptable balance between security needs and the legal right to take photographs in public places?

My Lords, I have a great deal of sympathy for the viewpoint expressed by my noble friend. I, too, have heard those concerns; indeed, friends and family have been affected by this. My right honourable friend Tony McNulty, the Home Office Minister for Security, Counter-terrorism, Crime and Policing, will shortly meet Mr Jeremy Dear, the general secretary of the National Union of Journalists, to discuss some of the issues that my noble friend raised in his Question, as well as guidelines for journalists. We will also make contact with the Association of Chief Police Officers and the National Policing Improvement Agency about the provision of national guidelines for use by police forces.

My Lords, I congratulate the noble Lord, Lord Rosser, on asking this Question. Why has it taken the Government so long to address this matter when the petition on the No. 10 website went up some six months ago? The Government must have been aware of the extent of the concern among photographers.

My Lords, I have read some journals on this issue recently. Most of the concern appears to be about interaction with private security operatives. I recognise the sensitivity of the issue, which is why we are more than happy to meet Mr Jeremy Dear. The Home Secretary recently wrote to him expressing our desire to ensure that people are free and able to take photographs in public places, which is why we are taking a serious look at this issue.

My Lords, can the Minister advise the House how many prosecutions and convictions have been made for the offence of photography contrary to Section 1 of the Official Secrets Act 1911?

My Lords, I do not have those data. I asked what statistics there might be on this issue, but I do not have any. I am prepared to talk to our officials to see whether there have been any prosecutions, but I am not aware of any.

My Lords, are there any restrictions on CCTV cameras? Are they considered to be street photography, as that is where they are usually placed? Are they treated any differently or can anyone put up a CCTV camera anywhere?

My Lords, other than the fact that they are subject to planning rules and restrictions, I doubt whether there are a great number of restrictions on CCTV cameras. The use of the material has, quite rightly, to be governed by data protection legislation. From time to time that emerges as an issue, as I am sure the noble Baroness is aware.

My Lords, is the noble Lord aware of a report in the press today about a father who was prevented from photographing his children in a fairground by a crazy woman who thought that her child was also being photographed and that the photograph might be put on the internet? All of us who have children or grandchildren like to photograph them. Is it not time that the hysteria that has built up was quelled?

My Lords, I quite agree. We need to have a sense of proportion on such issues. Photography in schools and the capturing of images of other people’s children have emerged as a matter of public debate. The noble Countess is on the right lines: we need to keep a sense of proportion. By and large, most people do, but one does hear of these irritating cases.

My Lords, I am sure that many in the House will welcome the noble Lord’s intention to look at the issuing of guidelines for the police. How would the Government make those guidelines apply in practice to the private security industry, which creates the impression of having a slightly more cavalier attitude than the police?

My Lords, we as a Government were responsible for the creation of the Security Industry Authority, with which this matter would perhaps bear being the subject of some discussion. Of course, we have the benefit of having the chair of the authority on our Benches. I have no doubt that we can engage in further discussions with her and perhaps bring about a meeting of minds, because I think that there is an issue here.

My Lords, is my noble friend aware that there is a particular issue with the nation’s railways, with the specialist press carrying many articles about photographers on the railway being harassed by officious security staff and sometimes station staff across the network? Will he draw the attention of the train operating companies and Network Rail to the excellent guidelines produced by the British Transport Police? They make it clear not only that photographers are welcome on the railway, but that they are also an aid to security, as they provide an extra set of eyes to spot when things are amiss.

My Lords, I suspect that the practice at railway stations varies from place to place. I am aware of the issue because my daughter explained to me recently that one of her friends, who was doing a photography project, was prevented from taking photographs at Brighton station. To my mind, that seems rather odd. Railways are not public spaces in the same way as streets and footpaths are, but there is an issue here. We need to encourage a sensible approach, involving all bodies that provide public services.

My Lords, are there not two sides to this? I support absolutely the freedom of the press to go about their business, but does not that freedom carry a certain responsibility? One sees regularly on television the atrocious behaviour of some paparazzi. I hope that the guidelines will be aimed also at the behaviour of photographers.

My Lords, the noble Lord is right: photographers have to exercise a degree of common sense and try to work with people. Perhaps that is not the right way to put it, but it ought to be the case. Photographers have to act responsibly in the public domain. Most of them do, and we should encourage that.

asked Her Majesty’s Government:

Whether they will add a separate category to the 2011 census for Romany Gypsies and Irish Travellers.

My Lords, it is not possible to confirm which questions and response categories will be included in the census until the consultation and question-testing programme is complete and formal approval has been given by Parliament in 2010. It is proposed, however, to include a category for Gypsies or Irish Travellers in an ethnic group question.

My Lords, I thank my noble friend for that reasonably positive Answer. Will the Government urge all service providers to adapt their ethnic minority monitoring categories so that, at last, we can learn more about the real situation of this most discriminated-against minority?

My Lords, I pay tribute to my noble friend for the work that she has done on this issue. Although my reply is guarded because, obviously, there is still work to be done, I assure her and the House that the intention is to include a category for Gypsies and Irish Travellers, subject to final approval. This will also be a signal for all agencies to recognise this important categorisation.

My Lords, I was pleased to hear the Minister’s confirmation of the statement made by Mr Ian Wright on 22 May about the inclusion of a tick-box for Gypsies and Travellers. Does the Minister agree that at the census content workshop in March, representatives of the Gypsies and Travellers, and of the CRE, were unanimous in asking for two separate categories to be included; namely, Gypsy and Irish Traveller? The only reason given by the ONS for not doing so was lack of space on the form. Will the Minister ask the ONS to divide the available space into two, using a smaller typeface if necessary, so that the two separate categories can be accommodated and local authorities will have the data that they need for their local development frameworks, in which Gypsies and Travellers have to be provided with separate land?

My Lords, the House will recognise that space on the form is of great value, given the multitude of demands for information that the census alone can provide. That is why the decision was made to include one tick-box and not two, although I hear what the noble Lord says about his dissatisfaction with that. However, it is recognised that the addition of this category will help public policy in future and, on the whole, Gypsies and Travellers have welcomed this contention.

My Lords, does the Minister agree that, although it might be quite romantic to know about Gypsies, caravans and all that lovely stuff, they can be a massive problem for people who live in rural areas?

My Lords, the Government have been called many things, but I do not recall romantic being one of them. This concept is not a romantic one; it is concerned with factual issues to guide public policy to reduce the very problems which the noble Lord suggests arise from time to time. When we are in a better position to assess the population concerned, we will be better able to provide it with the necessary sites and make provisions in other respects and to avoid the tensions that occur when provision is not there.

My Lords, does the Minister agree that the 10 million Roma in Europe, as the European Court of Human Rights has made clear, are the most vulnerable and despised minority in Europe and that the states have a positive obligation to protect them?

My Lords, that is certainly an important consideration. However, the noble Lord will also recognise that they are a distinct group from the Irish Travellers, so the issue is about being able to identify accurately the resources that need to be attributed to these categories to reduce the pressure of past neglect which the noble Lord has correctly identified.

My Lords, do the Government plan to raise the racist maltreatment of Romany Gypsies in certain countries of the EU, with the special connivance of Prime Minister Berlusconi, who has boasted that his Government are the new Falange?

My Lords, this Question started off being about the British census, so it is a large departure to go to policy on eastern Europe. However, an example is the best illustration of what should be done, and the Government will set the right one.

My Lords, how do the Government, and indeed local government, communicate formally with Travellers and therefore get the census forms to them if they do not have fixed addresses?

My Lords, it is quite a challenge, of course, but there is the National Federation of Gypsy Liaison Groups, the Cardiff Gypsy and Traveller Project and the Gypsy Council, and the Government have consulted all three.

asked Her Majesty’s Government:

What is their response to the recent report by the Healthcare Commission on maternity services, Towards Better Births.

My Lords, we welcome the Healthcare Commission’s report, which acknowledges that the majority of women have a positive experience of pregnancy and childbirth. However, we cannot be complacent. Women tell us that they want more choice in their maternity care. That is why, to make that happen, among other things, we announced in January an additional £330 million of funding for maternity care, and in February action to recruit an additional 4,000 midwives by 2012.

My Lords, I thank the Minister for that Answer, but will she reassure me that the Government’s intention to guarantee all women a choice of where to give birth will not mean that women with high-risk pregnancies can choose a home birth? Does she agree that it is unacceptable for women to feel pressurised into considering a home birth, as the Healthcare Commission reported last week, particularly if home birth is regarded as a default choice by women who are worried about understaffed or badly equipped labour wards but who might then expose themselves and their babies to danger should they need the emergency transfer service, which itself might be underfunded and unable to cope?

My Lords, we want to ensure that women have as many choices as possible, and minimise the risks to themselves and their babies. Current evidence supports the fact that when healthy women are offered the option of home birth, there is every indication of success. However, the noble Baroness is correct: it is not, as she put it, a default position. The key to ensuring a safe childbirth is an early assessment of the mother’s and baby’s needs. We are trying to ensure that PCTs will be judged on whether they can increase the number of women who access maternity care by the twelfth week of pregnancy. This early access enables a healthcare professional to assess the mother’s and baby’s needs and, indeed, whether the pregnancy is high-risk. At that stage the mother will be advised about the risks of a home birth. Clearly, part of this equation is that, when things go wrong, PCTs need to have planned the right response to ensure the safety of mother and baby.

My Lords, the Minister will recall the extremely good report Maternity Matters, which listed all that should be done in maternity services, and said that these would be implemented by 2009. Why, then, were there fewer training places for midwives this year than in the three previous years? Why are there not enough jobs in the National Health Service now for qualified midwives to take up?

My Lords, I think we would agree that it is essential that staff providing maternity care are properly trained. We are committed to increasing the number of midwives, and the number of training places has increased by 20 per cent in recent years. We are pushing midwives through that supply chain into those jobs. It is the duty of PCTs to recruit midwives at the right level to provide the right services.

My Lords, have the Government also made a commitment to providing enough bathrooms and bedrooms? The report identified that some hospitals have an inadequate number of both.

My Lords, the report drew attention to this. We are investing £162 million a year in maternity services, and the £330 million I mentioned is in addition to that. There is no excuse for that extra cash not supporting the implementation of Maternity Matters and the modernisation of options for place of birth. We have examples of where the money is being well spent to improve facilities, but clearly there is more work to be done.

My Lords, following the point made by the noble Baroness, Lady Tonge, about student midwives, I was interested to hear the Minister say that she believed there were more student places. That does not coincide with the reply given to one of her honourable friends in the House of Commons, according to the Royal College of Midwives, which states clearly that the number of training places fell last year compared to the previous years. Does the Minister agree that what is critical is not more government policy but implementing present policy and matching the increase in the number of births, which rose by 90,000 in the past six years, with the number of training places? How does the Minister propose to attract students to become potential midwives?

My Lords, we have more midwives than ever before working in the National Health Service. We are committed to training and ensuring that more midwives are recruited, in recognition of the rising birth rate. SHAs are taking a number of actions, such as implementing “return to practice” programmes and providing flexible retirement schemes. We are encouraging more midwives to stay in the workforce and providing support workers’ programmes. I will check the statistics and get back to the noble Baroness, as I was not aware of the one that she mentioned. My brief says that the number of student places is increasing.

My Lords, can the Minister explain what action the Government can take, given that 32 per cent of trusts fail to meet the standard of having a consultant on the labour ward—indeed, there is a national shortfall of consultants—and that 83 per cent of them do not have in place neonatal resuscitation training for midwives and obstetric staff? I declare an interest as I have been asked by both Royal Colleges to chair a working party to look at the learning environment.

My Lords, the noble Baroness points to some important issues. The new RCOG Standards for Maternity Care published last week covers many of these issues and includes standards for obstetrician staffing and consultant presence on maternity wards. It provides that all obstetric units must have a lead obstetrician and a labour ward manager, as well as a minimum of 40 hours’ consultation presence, with 60 hours in larger units. At least twice a day, and during the weekend and bank holidays, there should be a physical round made by the consultant. We are pursuing that standard with great energy.

My Lords, as a happy grandfather, I am very grateful to the NHS at University College, London, where my grandson was born recently. Does my noble friend not agree that the terms “high risk” and “home delivery” together are something of an anathema to obstetricians and that there is a high risk of birth asphyxia, about which we are most concerned, which is quite unpredictable in some home births in high-risk cases? Does she agree that encouraging the wrong patients into that birth scenario is extremely unwise?

My Lords, my noble friend is absolutely right, and his question reflects the aim of the original Question.

My Lords, the report said that recommendations were not adequately adhered to for antenatal care and that women experienced poor communication, care and support after their babies were born. What do the Government have in mind to address those two points?

My Lords, we are aware that sometimes mothers may have had an excellent experience during the birth but find that the postnatal care does not match up to it. That is why we commissioned NICE to undertake work on developing clinical guidelines for routine postnatal care as part of a series of guidelines related to maternity care. As ever, the key is getting the NICE recommendations implemented at the local level.

rose to move, That the 2nd Report from the Select Committee (HL Paper 142) be agreed to.

The noble Lord said: My Lords, the report relates to a proposal for a new, one-off, ad hoc committee on the Barnett formula, a proposal for the continuation for a further Session of the existing ad hoc committee on intergovernmental organisations, and a proposal that the Liaison Committee’s advice restricting the size of sub-committees of the European Union Committee to 11 be withdrawn. We also report to the House the fact that the House of Commons is not in favour of establishing a Joint Committee on the UK Statistics Authority, a proposal which we supported in our previous report.

The House will recall that the committee has previously not supported the case for a committee on the Barnett formula for reasons we set out in our report. The noble Lord, Lord Barnett, accordingly came back to us with a revised proposal, narrowing the orders of reference for such a committee and excluding the consideration of political aspects of the devolution settlements or the application of public expenditure within different regions of the United Kingdom. We think that this revised proposal now meets our concerns and we accordingly recommend that an ad hoc committee on the Barnett formula be set up in the new Session with the orders of reference set out in our report. As we suggest in our report, we think that such an inquiry could be relatively short and we suggest that the committee could report by the 2009 Summer Recess.

We also considered a proposal by the noble Lord, Lord Soley, that the ad hoc committee on intergovernmental organisations, which the House established at the beginning of this Session, be continued for a further Session. We did not support this suggestion, for two reasons, as set out in the report. First, we consider it very important to uphold the principle that ad hoc committees are appointed for a specific purpose and for a specific and finite length of time. The appointment of an ad hoc committee on an open-ended basis goes against this principle. Secondly, we are not convinced that the mechanism of an ad hoc committee with the terms of reference of the intergovernmental organisations committee is the right way to address the sorts of issue which the noble Lord, Lord Soley, has suggested as potential future subjects of inquiry. If the noble Lord wishes to pursue this, we suggest that he might reconsider how best to achieve it.

I should mention two other matters. The House will recall that in our previous report we gave our support in principle to the establishment of a Joint Committee on what is now the UK Statistics Authority. We noted that the Leader of the House had agreed to relay our views to the Leader of the House of Commons. The Leader of the House has now reported back to us that she has not been able to persuade her colleagues in the Commons of the merits of this idea. Given this, we do not see any practical way to pursue the suggestion further.

Finally, we endorse the principle that the maximum number of members of a sub-committee of the European Union Committee should be raised to 12—the same as that of other sub-committees. I beg to move.

Moved, That the 2nd Report from the Select Committee (HL Paper 142) be agreed to.—(The Chairman of Committees.)

My Lords, I offer my thanks to the Lord Chairman and members of the Liaison Committee for agreeing to my request that there should be an ad hoc committee to review the Barnett formula. It will be known that I have been pursuing this for quite a long time so I am naturally rather pleased at the decision. I am confident that the Select Committee will in due course provide a historic report of enormous value in making a sensible decision in this case and help prevent the break up of the United Kingdom, which I assume none of us wants to see but which was a danger without some review of this formula.

Obviously, I could not be a member of a committee to review my own formula. I wish the committee well—unless it is thought that I should be a member. I should be happy to be but it would be wrong to review my own formula. That should be done by others and I am happy to leave it in their most capable hands. I strongly support the recommendation of the Liaison Committee and recommend it to the House.

My Lords, I thank the noble Lord and the Liaison Committee for their helpful comments over the past year or two, and the members of the Clerks’ Department on the Intergovernmental Organisations Select Committee—the ad hoc committee referred to by the noble Lord. I place on record that I of course originally asked for a sessional committee. I share the Liaison Committee’s view that an intergovernmental organisations select committee should not be ad hoc but sessional. All members of the committee and other Members of this House who have discussed this with me believe there is a need for such a sessional committee. We will return to the Liaison Committee with such an application.

I have a couple of other points in relation to this. First, it would have helped if the report that will come out next Monday on the control of globally transmitted infectious diseases had been before the committee in time. It was not because—as I know the noble Lord fully accepts—the two Ministers could not give evidence on the date originally agreed at the beginning of June and had to delay until the end of June. It would have been wrong to produce the report without having the Ministers’ comments before the committee. The report will now be out next Monday.

When the noble Lord looks at the report—I hope that other Members of this House will do so—he will find that it meets the aims discussed at the last Liaison Committee and published in House of Lords Paper 118, which suggested a more thematic approach to this. By addressing the profoundly important question of infectious diseases we were able to focus not on the governance of intergovernmental organisations—I have always been clear that a committee of this or any House should not do that—but on the way British taxpayers’ money is used and how government departments focus on and use the decisions and functions of intergovernmental organisations.

The report on infectious diseases makes important recommendations. I make this point as clearly as I can. Members will see when they look at the report the welcome response we got from those who gave evidence to us; it came not only from people in this country—the British Government welcomed it—but also from the World Health Organisation and a number of other organisations. In view of the first Question this afternoon, I emphasise we had to go abroad only twice: once to Geneva and once to Paris. We took the rest of the evidence through video links. I hope to use the Skype system should we be able to continue our work in future.

In doing that, I again emphasise that many of the intergovernmental and non-governmental organisations involved in the spread of infective diseases told us how important this was and that they wished other Parliaments were doing it. Indeed, in the case of the United States, we not only took evidence via a video link but two people from separate organisations came over to see us, one of whom came entirely at the expense of the institution for which he worked. That is an indication of the seriousness and importance of the issue.

I share the view that it should not be an ad hoc committee. I say that again because that was my original application. However, the importance of the intergovernmental organisations is enormous, not only in what is happening in global governance but in terms of the money that goes in from the British taxpayer. For example, the committee was concerned about the proposal by one of our members to look at a peacekeeping operation. Regardless of whether or not the British are involved in a peacekeeping operation, we have to pay between 5 or 6 per cent of it. That is an important matter for the taxpayer and I ask the chairman of the committee to consider this when we come back to him in the next Session.

My Lords, very briefly, I am sad that another place has declined to accept the unanimous view of the Liaison Committee of this House that the Statistics Authority should be monitored by a Joint Committee of both Houses. I am grateful to the Leader of the House, who sought to persuade her opposite number in another place that this was a good idea, and I regret that she was unable to prevail. The fact that it has taken nearly six months between the decision of the Liaison Committee and the communication she reported to it last week is not, I hope, a reflection of the attitude of another place towards this House. It is a sad moment but we will hear more of this because my right honourable friends in another place have said that they support us and I hope the Houses may be able to revisit the issue in a couple of years’ time.

My Lords, I welcome the intervention of the noble Lord, Lord Jenkin. It may not appear from the rather polite minute just how much indignation there was in the committee at the actions of the other place in refusing to set up a Joint Committee. I remember that when the Bill went through this House much of the support for the concept of a scrutiny committee was on the basis that in this House there was particular and specific expertise. The noble Lord, Lord Moser, who is in his place, is one example of those who would have contributed to the work of such a Joint Committee.

I hope the other place will think again about this issue, otherwise my solution—having learnt the hard way about how the other place will deal with it—is that we write more specifically into such Bills an insistence that when we are talking about parliamentary scrutiny the other place cannot then redefine that as House of Commons scrutiny. I was very clear when this Bill went through this House that when we talked about parliamentary scrutiny we meant scrutiny by experts in both Houses.

My Lords, I speak as a member of the Liaison Committee. I was very pleased that when the noble Lord, Lord Jenkin, first made the proposal it was approved by the Committee, as has been noted, and was then passed by the whole House some months ago. I also express my appreciation to the Leader for her efforts in getting this through.

I shall explain why I regard it as a serious setback for the Government’s intentions behind this legislation. From the beginning it was made clear that the new Statistics Authority—it was then called a “board”—would have Parliament as its ultimate master, rather than Ministers. That was the whole point that led the then Chancellor, Gordon Brown, to suggest this. Ministers would be replaced in this crucial authority by Parliament. That meant much more than occasional questions or reports; it meant that there would be serious parliamentary monitoring, year after year, of what the authority did. That has now been rejected by the authorities in the other place, for what I regard as rather pathetic reasons—at least, the reasons that I have been told. It is a setback, first, for the Government in their original intentions; secondly, for the working of the new authority; and, thirdly, for government statistics generally. It is a serious matter in all those respects.

My Lords, is the Chairman of Committees aware that the problem of the other place regarding scrutiny by it as being scrutiny by Parliament is replicated in a very major way in the Planning Bill, which is currently going through this House? Will he therefore bend some efforts towards trying to resolve this conundrum in favour of “Parliament” meaning “both Houses”?

My Lords, it is now 30 years since my noble friend introduced the idea of having a Barnett formula. It was expected to last only one, two or maybe three years. The situation has changed but the formula has lasted 30 years, which was quite unexpected. We need to examine this properly, and I am glad to see that the committee has been set up.

My Lords, I welcome the decision by the Liaison Committee to set up an ad hoc committee on the Barnett formula, particularly with the provisos that have been included to take some of the politics out of it. It is a sensitive subject.

I congratulate the noble Lord, Lord Barnett, on the persistence with which he has gone about this. I suspect that it is a bit like the Schleswig-Holstein question, but in this case the noble Lord is very much alive and understands it. Not many people, especially those who pontificate on it in the press and elsewhere, understand it, but it is vital. I have no idea how these things are done, but I suggest that the noble Lord should not be allowed to be a First World War general and say, “Over the top, lads! By God, I wish I was going with you”, but should be very much a part of the ad hoc committee, if for no other reason than that he understands it and its implications.

This is a sensible decision. The committee has important work to do in ensuring fairness and equity throughout the whole of the United Kingdom.

My Lords, I shall say something about the statistics committee, which I have thus far—I use the words advisedly—failed to achieve. The reason that the time lag was so long was that I consulted way beyond my opposite number in order to try to put the case. Indeed, I have said to the noble Lords, Lord Moser and Lord Jenkin, that the game is not over yet, if I can put it like that. We should continue to raise the points, specifically because it is true that, whenever we use the word “Parliament”, it is my view that we should be clear that it means both Houses of Parliament—appropriately, which may mean that on occasion we decide that we do not wish to be part of something, or it is inappropriate for various reasons. In this instance, that is not the case. We should continue to pursue it, and perhaps we will have more to say about it by the time of the next Liaison Committee.

My Lords, I am grateful to all noble Lords who have spoken on this report. The noble Baroness the Leader of the House has dealt with the matter of the statistics committee. Unfortunately, as she has said, it is not possible to form a Joint Committee if the other half does not want to know about it.

With regard to the noble Lord, Lord Barnett, and his formula, I thank him for his kind words and I am grateful for the words of support for them from the noble Lords, Lord Sheldon and Lord Forsyth. Membership of the committee will be a matter for the Committee of Selection, but it will have heard what has been said in this debate.

The noble Lord, Lord Soley, is welcome to come back to the committee on a future occasion and we will look at the proposal on its merits. Regarding the fact that the report of the noble Lord’s committee was not available at the time of the deliberation of this Liaison Committee, I would just say that it always meets at this time of year to consider what is going to be done in the next Session.

However, the fact that the report was not available is a slightly two-edged sword. The Liaison Committee’s report deals with the matter on completely separate grounds to whatever the report might or might not have said. It is probably a good thing that the report was not available. Although I am sure it will be admirable, we would not want our decision to have been influenced by whether we thought the report was good or bad.

On Question, Motion agreed to.

My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.

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

House again in Committee on Amendment No. 130EW.

[The CHAIRMAN OF COMMITTEES in the Chair.]

I wonder whether I might be permitted, before we move on to the amendments, to make a brief statement following on from where we left Monday’s proceedings. Following the debate in this House on Monday evening, my ministerial colleagues and I reflected on the thoughtful contributions made by the noble Lords, Lord Lucas and Lord Oakeshott, and the noble Baroness, Lady Noakes. I was in particular struck by the constructive approach taken by the noble Lord, Lord Oakeshott. He has acknowledged that the risks are great and that we are in uncharted territory, so something has to be done. He has also urged the Government to put more detail of his attentions in the Bill, to give clarity to the industry and to ensure that a workable arrangement is reached between the industry and the Pensions Regulator on this important issue.

In our consultation, we requested responses on our proposed legislative approach. In that document, we suggested taking a broad amending power in primary legislation to follow with the specific detail of the changes in regulations. We did this for a number of reasons. First, we wish to give this House sufficient notice of our intent, which an introduction at Report stage would not do. There was insufficient time following consultation for an alternative legislative approach at Committee. Secondly, we wished to be thorough in consultation, and, having consulted widely on our policy intentions, to follow with a second consultation on the details in secondary legislation. This would help to mitigate the undesirable consequences of regulation, to which the noble Lord, Lord Lucas, and the noble Baroness, Lady Noakes, referred this week. Thirdly, we believe that, as the DWP does not have a pensions Bill every year—thankfully—the need to react to future unforeseen issues in pensions avoidance might be best served in this way.

As we have consistently demonstrated, our intention is to work with our stakeholders closely, both on the draft legislation and on the regulatory guidance that would detail the specific requirements on schemes and their sponsors. However it is clear from this week’s discussions that noble Lords would prefer a greater amount of this legislation in the Bill, to ensure that the regulator’s powers are constrained by primary legislation.

The noble Lord, Lord Oakeshott, felt that we were asking for a blank cheque to be given to secondary legislation. While this has never been our intent, this view has been reflected in some feedback received from key stakeholders. We agree with the principle. The slippage of our anticipated date of Royal Assent from July to later this year, gives us the opportunity to put more detail in the Bill. I am confident that we will find an appropriate way forward which addresses those concerns.

I am happy to assure noble Lords that our intention remains to work closely with them and stakeholders over the summer and to return in the autumn with more of the proposed detail included in this amendment. We have discussed the potential for setting up a working group in this area with the CBI. It is supportive of the need to extend the regulator’s powers to deal with new market developments, but shares the noble Lords’ concern that more detail should be place in primary legislation. Alongside this we will work with the Pensions Regulator as it develops guidance to ensure that that guidance is clear and gives appropriate reassurance to business.

It is therefore right that we work through the amendments tabled by the noble Lord, Lord Lucas, and the noble Baroness, Lady Noakes, some of which we can agree with in principle, so that I can be as clear as possible on the Government's position on the points raised. However, I should be clear that nothing in this detail or the discussion we have already had has persuaded us to withdraw the government amendment, which we consider is a proper foundation on which to build an effective and proportionate safeguard to counter the threat to pension provision.

I am grateful for the opportunity to clarify where we left matters the other evening; I think it might help our discussions on the amendments that have been tabled.

moved, as an amendment to Amendment No. 130EW, Amendment No. 130EY:

It is entirely appropriate that the noble Baroness, Lady Noakes, is now going through these amendments in detail since the Government—unfortunately, and rather to my surprise, following what I thought was a constructive response from the noble Lord, Lord McKenzie of Luton, on Monday night—have decided to press ahead with this amendment. Given that we all accept that a lot more works needs to be done and a lot more detail needs to be in the Bill, I would have thought that it would be more sensible to withdraw the amendment so that work can take place over the summer. However, the Government have obviously taken their decision.

I thank the noble Lord, Lord McKenzie, for the kind words and considerable amount of re-playing of my speech in the statement. I could say to him that flattery will get you almost anywhere. But it would have been a lot more helpful if his boss, the Minister for pension reform, had taken the trouble to read my speech. Perhaps he might have spent a little more time reading it and a little less time making increasingly frenzied phone calls to my colleagues in the Commons yesterday. I think he made three calls to our present spokesman and one to our former spokesman. But he did not favour me with a call, so I spent most of my time hearing the things that he was saying about what I had said which indicated clearly that he had not read my speech. I thought—and I thank the Minister for this—that my speech was reasonably balanced and constructive; I certainly did not recognise any of it in the calls that “Macho Mike” was making on Tuesday.

I am pleased to say that the tone has suddenly changed overnight. I have in my pocket four messages asking me to ring Mike O’Brien, so I am glad that we are suddenly all friends again. Seriously, however, this is not the way to go about things at this early stage of scrutiny on a Bill and wastes quite a lot of time. The noble Baroness, Lady Hollis, will remember that, as I have said, we had a similar situation in 2004; but we have probably had six, seven or eight Ministers in Mr O’Brien’s position since then, all called different things. Just a little checking of what happened, or even taking some notice of his noble friend Lord McKenzie, would have been sensible. We should learn a lesson from this. It was not a constructive way to go about things, and I am glad that people have now, I hope, read my speech. I put a lot of thought into it, and we have been here before.

This is not a party political issue. As we did in 2004, we are all of us trying to get the right Bill that will work for an important and serious issue. I welcome a more constructive approach. I do not think that a meeting, although Mr O’Brien has now kindly offered one, would be appropriate at the moment. The right way to do it would be for the Government to consult properly over the summer, not just with the CBI, the BVCA, the TUC and anyone with a legitimate and substantial interest in these matters. When the Government have completed those consultations and worked out what they want to do, and have some draft amendments, I would very much welcome the opportunity to meet Mr O’Brien and the noble Lord, Lord McKenzie; I hope that that will be taken up. Indeed, if the noble Baroness, Lady Noakes, came as well, it would be wonderful to get government amendments to which we could all put our names.

However, Mr O’Brien must remember that we on these Benches are legislators, not stakeholders. We will ultimately need to decide, but I suggest that that is the right way to go about it. Again, I put on the record my serious concern over the dangers for British pension funds from what is going on in the buy-out industry. We are in uncharted waters. The covenant of some of these companies that are offering buy-outs is not undoubted; we have seen what has happened in America, with substantial reinsurance companies unable to meet their obligations. Speaking as someone who has been managing pension funds for 30 years and who ran the Courtaulds pension fund for five years, I would not be happy to have my pension fund taken away from the sponsoring employer behind it and sold off to one of these companies. These “zombie funds” are an accident waiting to happen. One can foresee many private-equity-backed companies going into receivership over the next year or two with serious consequences for their pension funds.

I am totally with the Government on what they are trying to achieve. I support what the Pensions Regulator is trying to do. However, there is a right way to go about these things, properly taking into account the views expressed by people with a legitimate interest. I hope that that process will happen over the summer.

Listening to the debates on Monday evening and today—I am losing track of the Committee days now—I confess to a slight sense of déjà vu, to coin a phrase, to which noble Lords have referred. Back in 2004, I was rightly persuaded by the noble Lord, Lord Hunt, that there was a real issue of moral hazard in that Bill; and that, in establishing the TPR to avoid Maxwell-type rip-offs, we might tip over into preventing mergers, acquisitions and restructuring of companies. Those things would be highly desirable, both for the employees whose jobs might otherwise be at risk and for the health of British industry. The question then, as now, was how we assessed the balance between those risks and ensured that restructurings in good faith were not subsequently undermined by any rigid appliance of compliance rules by the TPR.

I was delighted to listen to the speech by the noble Baroness, Lady Hollis. I always find her persuasive, and she was particularly so on this occasion. She set out all our common objectives very well. Perhaps I put a little more emphasis on trying to amend Amendment No. 130EW, merely to set out the Government’s stated intentions more clearly in the Bill—that is perhaps a kind way of putting it—and to make clear the limits of the power.

I entirely agree with the noble Baroness, Lady Hollis, that the Pensions Regulator needs the flexibility to deal with the attempts that will be made, particularly in difficult economic circumstances, to sidestep the pension fund liability. By and large, I do not think that Governments proceed with malevolence towards companies running pension funds, but I do think that they are guilty of serial idiocy. Certainly, I would convict us of that, in our 1995 Bill, in not realising how things would play out. I picked up an echo of that from what the Minister said when last we met. He said:

“On the fair value point touched on by the noble Lord, it is not the Government’s intention that a transaction, whereby a person purchases assets or securities at fair value, would normally trigger the regulator’s use of its anti-avoidance powers, provided that, as part of the transaction, the pension scheme was properly considered and adequately addressed. However, the fact that a person had purchased assets or securities at fair value would not necessarily provide the reassurances needed. That would be only the first step in ensuring that capital was available to mitigate the risks to the scheme; it does not of itself get the capital to the scheme”.—[Official Report, 14/7/08; col. 1089.]

There we are seeing part of a process—which, I agree, we started and which has carried on since—which is making the pension fund gradually into some sort of super-creditor, giving it rights over and beyond that of an ordinary, unsecured creditor, moving it ever more into a position where it has additional, superior rights. We see echoes of that in other parts of the amendment. My difficulty is that we are pushing companies in the direction of receivership, because it is the forum under which these conflicts are most clearly dealt with. I hope that we all agree with the noble Lord, Lord Oakeshott, that receivership is not the best option. The best option is for a pension fund to continue to be looked after by a company that recognises its obligations. In that way you can, over the long term, get much more for the pensioners than you ever can from receivership, particularly in difficult circumstances. To do that we must recognise that the pension fund is taking a risk, making a commercial decision and entering into a partnership with the company. We should also recognise that the company is using money that the pension fund might otherwise try to lay its hands on. We have to allow for that commercial relationship to proceed without the possibility of a great backwash retrospectively against what seemed sensible decisions at the time.

As my noble friend Lady Noakes has said, clearance has grown into a great industry. There are professional clearance advisers who do nothing else and make a great deal of money. We may push companies into a position whereby every decision might be viewed as depriving the pensioners of access to assets, such as paying a dividend, selling an operation, or, in relation to the terms of trade with some associated overseas company, entering into a big contract, which has sunk many companies. If all those decisions are to be questioned and there is personal liability for the directors as a result, it will become extremely difficult to run companies with defined benefit schemes of any magnitude. We must think very carefully if we are going to threaten or enact regulations that push companies in the direction of receivership.

I should again declare my interest as a partner of the national commercial law firm Beachcroft. However, I no longer have to declare an interest as president of the Chartered Insurance Institute, because at lunchtime I handed over the chain of office to Trevor Matthews, who later this month will become chief executive of Friends Provident.

It is very important that we do nothing to stifle innovation, because that has been right at the heart of the pension industry and must continue always to bear that in mind as a material factor. I thank the noble Baroness, Lady Hollis, for her kind remarks about our previous discussions of matters like this, but in particular I support my noble friend Lady Noakes in what she said. Perhaps the only contribution that I want to make to this debate is for the Minister. In many respects I have been down this road before. The one thing that I always tried to avoid during the many years that I was a Minister was pressure from within the department, particularly from my fellow Ministers—usually from the Treasury and the committees that look after legislation—to legislate in a rush. That is particularly important in this Bill.

I agree with the noble Lord, Lord Oakeshott, although I shall not go down his road and make a speech about his speech. He was absolutely right to say to the Minister that we need time to get this right. Thanks to all sorts of pressures, including Statements and various other matters, many of our debates on this Bill were truncated and we are now in the seventh day of Committee. We will almost certainly need further time and there is, therefore, a wonderful opportunity for the Minister. I say this from the Back Benches. There is much more discussion still to be had on this Bill. He would be very popular if he were now to say to the House, “We just need time to reflect”. We can either recommit or come back to this Committee stage in the overspill Session.

This has been a helpful place to start our deliberations today. The noble Lord, Lord Hunt, said that whatever we do we should not stifle innovation. I very much agree. Of course, innovation can bring with it uncertainty—unknowns—which is why my noble friend Lady Hollis is absolutely right to say that we need some headroom in our regulatory armoury to cope with it. I say to the noble Lord, Lord Hunt, that I do not feel under any pressure from within the department to rush into legislation. We have the time to take this forward in the way that he and every noble Lord who spoke suggested. If there is a difference between us today, it is that we want to start with the building block of the government amendment, recognising that it needs to be built on, rather than withdrawing it and coming back with something afresh.

That is how we wish to proceed, especially because we do not want the message to get out to those who, we know, do not want these changes to regulatory power that there is a process by which they can prevent them. I know that that is not the position of the overwhelming majority of stakeholders, but we know there are some out there, especially in the venture capital world, who do not want these powers. That is absolutely clear and we must be careful not to give any succour to them.

Frankly, it would be nice if we could conclude the Committee stage this side of the Recess, just because it might make the summer holidays a little more bearable. The important thing is that we spend the time that we need to get this right. If we do spill over, I am sure that the Whips will be on to me, but we need to get this right. I still hope that, with the time that we have available, we can conclude, but it is not entirely within my hands.

The noble Lord, Lord Lucas, talked about super-creditors and whether we are changing the status of pension funds. I do not think that anything in the Government’s proposals would suggest that that is the case. I accept entirely the need to build reassurance in respect of those issues. The noble Lord used the phrase, “a great backwash retrospectively”. I know that he is concerned about retrospection. We will come to an amendment on which I hope that I can give him further reassurance.

My noble friend Lady Hollis is right. The current flexible clearance system has worked well. Before my time and before I was engaged in this legislation, there were fears about it. I am grateful for her support and for her input on the lessons of history. It comes back to innovation. There are new forms of pension activity out there, which are difficult prospectively to define in a way that means that we do not need to have some discretion in our powers.

The noble Lord, Lord Oakeshott, berated my colleague the Minister for Pensions. In defence of my honourable friend, I should explain that he was concerned that we might lose the government amendment, not because there was no recognition that we needed and were keen to work together over the next few months to build on it, but because of the impression that it might create. We need to be firm about that. I believe that he tried to reach the noble Lord. Ultimately, we hope that we have been able to communicate in a satisfactory way.

The noble Lord, Lord Oakeshott, is right. We are trying to get to the same place, although we might have a little bit of a spat about the journey and how we reach that place. However, this is important and comes back to consensus. At the end of the day, it will be quite difficult, with all the engagement that we will have, to write something as specific as some Members of the Committee want. If we have to have discretion in powers at the margins, it is important for people to understand why. They can gain that understanding from engagement with us as stakeholders or as legislators. There is a clear commitment to liaise with the Committee to make sure that noble Lords have a chance for input into the process before we return on Report.

The noble Baroness, Lady Noakes, said that no account had been taken of consultation. With respect, I do not believe that that is the situation. The legislative approach was to enable consultation responses to be considered in drafting regulations. As I have said previously, the consultation document indicated that we would bring forward a broad enabling power.

The thrust of one point was whether companies are unsaleable if they have DB schemes. We do not believe that to be the case. Clearances are still available. Just this or last week a significant legal firm wrote in Pensions Week that it certainly is not advising against investing in firms with DB schemes.

We need to ensure that, as part of the objectives of the Pensions Regulator, employers do not sidestep their pension obligations and that the regulator has a number of powers to enable it to deal with that. In considering whether, without regulations, there is a material risk to the security of members’ benefits or to the PPF, the Secretary of State will have to form a judgment after getting the views of the Pensions Regulator and other stakeholders. It clearly would not be appropriate to exercise the power if it did not reduce the existing material risks or, indeed, if it created serious new risks. I reassure noble Lords that it is not our intention, by introducing these provisions, to increase such risks.

The Government’s new clause includes safeguards covering the power to amend provisions, including the requirement to consult the regulator and other key stakeholders. We will be dealing with an amendment that specifically broadens the range of people whom we are required to consult. We have sympathy with that. It will ensure scrutiny by relevant parties, who will be alert to—and will actively seek to prevent—material increases in such risks. The consultation process should identify any unintended consequences that could increase these risks.

The noble Baroness’s amendment touches on the wider issue of ensuring an appropriate level of regulation. I agree that it is essential that we strive to achieve the difficult balance required, by enabling the regulator to meet statutory objectives while avoiding placing undue burdens on the sponsors of defined benefit schemes. It has been a fundamental principle that the regulator should act reasonably and take a risk-based approach. We now have a number of years’ operational experience, which serves to demonstrate the efficacy of that approach. I reassure the noble Baroness that it is not the Government’s intention to use the new power to change this fundamental approach; we simply intend to ensure flexibility in the face of an increasingly sophisticated and fast-moving market.

The noble Lord, Lord Lucas, talked about making pension schemes higher priority creditors. We do not believe that these proposals would increase the priority of pension schemes, which must be treated fairly alongside creditors of equal priority. I am sure that we agree on that. Ros Altmann has pointed out that some organisations are thought to make money out of the jettisoning of pension obligations. I am sure that noble Lords across the Committee consider that behaviour unacceptable.

The noble Baroness touched on the burdens of clearance. This is voluntary. TPR has published detailed guidance on when and where it is appropriate. The regulator has always, where reasonable, met the commercial needs of applicants within their deadlines. I suggest that clearance is generally a small additional cost in the global cost of a transaction and that it is part of standard due diligence.

I hope to persuade the noble Baroness not to press her amendment. I think, from all the contributions and indeed from our discussions on Monday, that we are on the same page. We need to stay there and move ahead together to end up in a good place.

I thank the Minister for that response and thank all noble Lords for taking part in the debate. Much of it has been more like a Second Reading debate than a Committee debate on the amendments before us. However, there is no harm in that, because the issues are important.

I agree with the noble Lord, Lord Oakeshott, that this is not a party-political issue. I have heard that the Government have been trying to portray this as a party-political spat, so I place it on record that I never intended to raise these issues in a party-political manner. I hope that the Government will not continue to spread that claim.

I agree with the noble Lord, Lord Oakeshott, that it would be helpful, after the Government have had further discussions with those affected, for us all to get together again in September. I also agree with the noble Lord that it is not enough just to talk to the CBI. The Government need to engage with all groups. I heard the code in what the Minister said about wanting this in the Bill so that those who did not want powers could be told that there would be powers. That unfairly characterises the position of some who are involved in turnaround and private equity. I am not in the camp that despises private equity. It has been a great force for good in our economy; it has achieved great efficiencies in many industries and has created employment. We should not regard anything that comes from the private equity industry as being necessarily bad. The industry does not seek simply to rape and plunder pension schemes; that is absolutely not what it is about. I hope that the Minister will go back to his department and tell it that it also needs to engage with bodies with which it may be less comfortable, because they have legitimate concerns that are important to the UK economy and that need to be taken into account.

The noble Baroness, Lady Hollis, talked about the parallel with the 2004 Act, in which I was not involved to the same degree of detail. She said that the things that were being discussed were in the Bill. The difference in this case is that the subject of Amendment No. 130EW was not in the Bill when it was considered in another place and is still not in the Bill. The Government are seeking to put something into the Bill without proper consultation. It is appropriate to pause at this point. It is not as though the Government have a permanent right to recreate the Bill that they would have introduced if they had thought of things further back. Otherwise, the parallels are good because, as I understand it, people discussed the issues seriously during that summer and came back with workable amendments, to the satisfaction of everyone involved. I hope that we can get to that stage.

The noble Baroness asserts that the regulator’s powers are not adequate. There is some doubt about that, but those outside the Government who believe that some changes need to be made to the powers are also sure that those powers need to be more constrained. That is the likely difference. The question is not whether new powers are required but whether they need to be constrained in other ways.

Like my noble friend Lord Hunt, I hope that the Government will always bear in mind the fact that stifling innovation is seriously harmful. If they try to take powers that would allow them to respond to any conceivable innovation that they deemed to be malign, they could end up circumscribing the way in which ordinary commercial transactions occur and harming the economy. That is clearly undesirable and something in which I am sure the Minister does not want to become involved.

My noble friend Lord Lucas raised some important issues, but we will return to retrospection, fair value and the new super-creditor, which, in many respects and despite the Minister’s assurances, it looks as though the Bill is on the road to creating. These are important matters, which we need to discuss for longer.

My Amendment No. 130EY was discussed briefly in the context of the previous 45-minute debate, in which the Minister repeated that the Government do not intend to introduce regulations that do not deal with risks, particularly if the risks increase. My only point is that this is not reflected in the Bill. I hope that he will reflect further on whether the Bill properly reflects the balanced consideration that needs to be taken into account. This is not simply a question of whether the rights of members of a pension protection fund need to be protected. There should be a positive obligation on the Secretary of State to consider whether his actions will make matters worse in some respects. That is the point of the amendment. I will not press the amendment to a vote today, as the Minister asked, but I hope that this is one of the things that he will consider further during the summer. I beg leave to withdraw the amendment.

Amendment No. 130EY, as an amendment to Amendment No. 130EW, by leave, withdrawn.

moved, as an amendment to Amendment No. 130EW,

I appreciate the concerns of the noble Baroness about the interests of employers and directors’ duties under company law. The interaction between pensions and company law is an important consideration, and I welcome the opportunity to discuss it. The regulator already has a duty under existing legislation to consider the interests of directly affected parties, and when considering whether to issue a contribution notice or a financial support direction, the regulator is required to have regard to matters when deciding if it is reasonable for employers to make payments to the scheme or to put support in place. We recognise that it is important that legitimate business is not hampered by these changes and that employers have a degree of certainty that if they properly consider and address the issues of their pension scheme, they are unlikely to be subject to these new powers. It is equally important that the regulator’s powers are sufficiently robust to respond to new risks in an evolving market.

The interaction of pensions and company law is important. The Government’s intention is that the duties in these two sets of legislation should rightly sit alongside each other. The noble Baroness may be concerned that directors who otherwise act in accordance with duties under the Companies Act should not be liable to regulatory action. Directors have certain duties to current employees but under pensions legislation they also have duties to scheme members’ interests. It is of course a matter for directors to balance these duties along with their other responsibilities. These situations are not unusual.

I reassure the noble Baroness that it is not the Government’s or the regulator’s intention that in the normal course of their duties directors should be subject to regulatory action where their actions have no materially detrimental effect on scheme members’ benefits. The 2004 Act already places requirements on the regulator to consider whether it would be reasonable to use its anti-avoidance powers. It must have regard, where relevant, to all the facts of the case. For example, it must have regard to the degree of involvement in the Act and the involvement that the person has had with the scheme.

To directly address these concerns, our intention is to strengthen these constraints to require that the regulator must have regard, where relevant, to the reasonableness of the person’s actions—for example, a director in light of his duties in that capacity—and the value of benefits the person received from the company sponsor or the scheme. I highlight the regulator’s existing duties. Under existing legislation, the regulator must consider the interests of members and those directly affected by its interventions. To include consideration of the interests of those persons only indirectly affected could lead to delay and disproportionate expense for the regulator. That would not be appropriate.

The noble Baroness touched again on removing “good faith”. I know we are going to come on to this. It applies to only one of the tests: that of preventing debts becoming due. This means it is relevant for only certain other events directly related to the pension scheme—for example, compromising debts due to schemes. This is not typical activity regulated under the Companies Act. The ordinary director functions such as paying dividends are considered under limb one of the tests in the Act: preventing recovery of a debt. This has never been prefaced by good faith. We are not aware of any problems that that has created.

On standing behind schemes, we believe it is right in this country that employers have flexibility in supporting pension schemes. Insurance levels of insolvency would be disproportionate but this means the employer must make contributions where appropriate, with a clear impact on likely returns to shareholders.

Could I clarify that? The Government’s paper talked about shareholders and investors standing behind schemes, not employers. That was what I sought to draw out when I raised the issue. The Minister has not addressed it.

The noble Baroness is right. I do not have a copy of the document in front of me. I would be happy to look at it and write to her on it more specifically. I cannot give her an answer off the cuff, unless one comes from the Box quickly.

On whether the changes raise dangers for directors, I stress that we are consulting on additional reasonableness factors which will have regard to the actions of the person being evaluated under the regulator’s power. Sorry, I have not got a particularly coherent note. I assure noble Lords that we want the final legislation to strike the right balance, providing adequate protection for members and the PPF without undue costs to business. As we have discussed, the Government intend to further consult on the detailed regulations, working with stakeholders to get the balance right. The noble Baroness has pressed us on what I acknowledge is an area of concern and we need to more effectively address these issues as we move towards the final shape of the legislation and the regulations.

Perhaps I may pick up on a point that the Minister made earlier. I think he said that there was a firm of lawyers which was totally happy to advise its clients to invest in companies with defined benefit funds. Can he pass on its name and contact details? I would love to broaden my understanding of what lawyers are saying.

I am not sure that I said that they were totally happy—I am not sure that lawyers are ever totally happy. I can say that as an accountant. I think the firm was Wragge and Co. I made reference to an article last week in Pensions Week in which it made this point. I shall make sure the noble Lord gets the specific reference and a copy of the article.

I, too, would be interested to see a copy of the article. If it contains what the Minister says it does, it contradicts many of the representations that we have received, where different advice has been given.

I thank the Minister for his response; I shall consider carefully what he said. I am not 100 per cent convinced that he has addressed the issue. Here we have a newly minted version of the directors’ duties, which have only just come into force, but with no reference to pensions. Alongside that, some tough potential regulatory powers are coming in which will have an impact on the way directors behave. I presume that that impact is sufficiently aligned with what the Government intended. Many of us were less than convinced that restating the directors’ duties was the right thing to do but the Government were very clear in their own mind that it needed to be done. Weeks after those duties came into effect, however, the Government are effectively creating something which is potentially in conflict. Given the different standards, working out that conflict may be difficult for directors.

This applies to the issue of good faith, for example. If you asked any corporate lawyer what he would say to directors to make sure that they stayed within Section 172, good faith would be at the top of the list, as it always has been. Yet good faith will not be necessarily taken into account in future if the Government use the powers in Amendment No. 130EW as they claim they want to.

I am not sure that this is the right amendment for the Bill, but nor am I sure that these important issues have been dealt with by the Minister; therefore, we may return to them, in one form or another, on Report. I beg leave to withdraw the amendment.

Amendment No. 130EZ, as an amendment to Amendment No. 130EW, by leave, withdrawn.

moved, as an amendment to Amendment No. 130EW, Amendment No. 130F:

When the Minister comes to reply, I hope he will be able to cover the areas where the Government believe contribution notices may well attach to individuals. Considerable concern has been expressed that the way in which the Government will use the powers could significantly increase the likelihood that individuals would come within the scope. That has not been the case to date because of the way the tests have been working. If that is the case in future, however, it could have significant implications for whether individuals want to be directors of companies with defined benefit schemes. It would be harmful to those schemes if good quality directors were not prepared to do that, so it is important to get a sense of the size of the potential risk.

I recognise the concern about the impact that personal liability will have on the willingness of people to be directors where defined benefit schemes are involved. We need to seek to ensure that that is not the outcome. I agree that that is not where we want to be.

There are assurances in the existing legislation on the use of the powers, and I will take this opportunity to outline them. I would also like to clarify that current legislation allows for personal liability in respect of contribution notices and financial support directions. Under public law, the regulator must act proportionately and only where reasonable. That intrinsic requirement is augmented by the current legislation that provides for the safeguards.

It is already possible, under Sections 38 and 43 of the 2004 Act, for the regulator to issue a contribution notice and financial support direction to individuals, but those powers are subject to the checks and balances that I will try to outline. I particularly draw noble Lords’ attention to the reasonableness tests of Sections 38(7) and 43(7), which list the reasonableness factors.

The regulator is required to have regard to relevant factors to establish whether it is reasonable to act. That includes consideration of whether it is reasonable to impose liability on an individual. Among other factors, the regulator could consider the individual’s conduct, their financial circumstances and, under Section 38(7)(e), the purpose of an act or a failure to act. Further protection is afforded through the determinations panel. If, following detailed consideration of the case and reasonableness factors, the regulator wishes to proceed, a case must be made to the panel, which will hear both sides of the case. It may proceed only if the panel determines it may do so.

In addition to the existing safeguards, as I mentioned earlier, the Government have consulted on additional reasonableness factors: the reasonableness of the person’s actions in the circumstances and the value of any benefits that they had received directly or indirectly from the employer or scheme. That was specifically to address concerns such as those highlighted. Part and parcel of the new factors will be due consideration of the individual’s legal duties, for example, as a director. In most, but not all, cases, it will not be reasonable for the regulator to pursue individuals, given their financial circumstances. In the majority of cases, the appropriate entity pursued will be corporate—the company or corporate shareholders. There will be rare cases where the regulator may need individuals to be the target of a contribution notice, for example where the employer is an individual or a major and influential shareholder. This exposure to personal liability is not new in respect of the regulator’s powers and is paralleled in company law. Trustees in their capacity as trustees should not be at risk from contribution notices if they perform their role properly.

We will return to dividends later in connection with other amendments. However, would the Minister explain what is meant by looking at the “financial circumstances” of an individual? That comes close, I think, to saying that the regulator would go after those with deep pockets and not on a matter of principle. The Minister also mentioned conduct but he separately mentioned financial circumstances, which seemed a little worrying. Would the Minister expand on that?

The reference to the “financial circumstances” of the person in looking at tests about whether something is reasonable is in the existing legislation. For example, Section 38(7)(f) refers to,

“the financial circumstances of the person”.

Therefore, that is not a new provision. As I said earlier, we are seeking to add to these requirements of a reasonableness test, but they will remain. I am not aware that they have created problems in their application to date. However, it is an existing test.

I thank the Minister for pointing that out. Of course, “person” in the context of Section 38(7) refers to all legal persons and not just individuals. I was querying it in the context of individuals.

The test covers both. A person covers an individual, as I understand it. So, whether it is a person or a corporate body, it will be subject to those provisions.

I thank the Minister for what he has said. Yes, I am sure that I, and the people to whom I have been talking, will take advantage of the next few months to see whether we can probe further to clarify exactly how the Minister intends individuals to be liable, and to see how that can be covered and dealt with to ensure that people do not feel unreasonably at risk. I am encouraged by the Minister’s attitude and I beg leave to withdraw the amendment.

Amendment No 130F, as an amendment to Amendment No. 130EW, by leave, withdrawn.

moved, as an amendment to Amendment No. 130EW, Amendment No. 130FA:

The noble Lord has drawn attention in these amendments to the important roles played by insolvency practitioners, turnaround specialists and other “company doctors”. We do not have a problem with venture capitalists: they play an important role in our financial system. However, I would just note again that an association is seeking to roll back some of the powers that we are seeking to take.

The Government agree that practitioners acting competently and clearly in line with their duties should not fear later sanctions. Although we recognise that in turnaround and insolvency situations there are hard choices to make, it would be wrong to enable parties to satisfy their other unsecured creditors by avoiding their obligations to pension schemes. However, it would also be wrong for regulations aimed at protecting pension schemes to stymie sensible transactions that treat all parties fairly and equitably. That is why the current legislation already provides a specific safeguard for insolvency practitioners. This protection was established in the 2004 Act as insolvency practitioners have a statutory duty to ensure that they treat all creditors fairly and equitably.

No such duty is placed on company doctors, who do not normally owe any duty to creditors. They are not defined in law and it is not clear who might claim protection under this provision. I must add that there is no evidence that the current regulatory regime inhibits turnaround specialists, and we do not intend that our proposals in Amendment No. 130EW would change that. We certainly do not intend to remove the current specific safeguard for insolvency practitioners.

Furthermore, there are already a number of important safeguards in existing legislation that apply to the regulator’s use of its anti-avoidance powers. These work well and provide protection for those involved in turnaround situations. As a public body, the regulator is required to act reasonably. In addition, there are specific requirements in statute, to which we referred when discussing earlier amendments. Significantly, decisions to use the power to issue a contribution notice are made not by the regulator’s investigating arm but by its determinations panel—a body that is separate from the investigating team. The panel will review evidence and provide opportunity for representations from relevant parties.

I hope that those remarks will offer the noble Lord some reassurance. As I said, clearance procedures are available in turnaround situations as well. I recognise that there are speed issues in some of these situations, but I am not aware that that has been an issue in preventing people getting clearances where appropriate. I think that the issue is the lack of a definition of who would be included and differentiating those from insolvency practitioners, who have clear statutory duties in how they treat creditors. That is why there is protection for them and why we think it would be wrong to widen that in an undefined way.

I am grateful for what the Minister said about insolvency practitioners. I accept what he said about the difficulties of defining company doctors and turnaround specialists. But, say, a professional—these are professionals, one way or another—is put into a company by a bank, for example, where there is concern about the bank’s security and he hires someone to go in and save the business, so far as possible. That person would potentially be taking actions, or be associated with actions, which could have a detrimental effect on the pension scheme. The concern is that, unless there is some way of protecting those concerned, individuals working on that which is a healthy corporate activity—it is not insolvency, this is at the informal end, where banks, or possibly controlling shareholders, put somebody in to turn the business around—they are subject to the full range of penalties which the regulator could throw at them.

The Minister mentioned clearance procedures, but I think that he answered the point himself, in that clearance procedures do not work when you are trying to deal with these fast-moving actions of turning businesses around. There is a real issue of potentially eliminating activity which is good for the economy because of fears for individuals getting caught up in this increasing net of regulated powers. Can the Minister comment on that?

I agree that we would not want to inhibit the sort of activity which, as both the noble Baroness and the noble Lord said, makes important contributions to corporate rescues in a range of situations, keeping businesses alive, the employees in employment and the pension schemes in existence. I do not see that either the existing powers that the regulator has, or anything new that is being proposed, really creates risks for such practitioners.

I shall explain. It is the potential shift, as enacted by the proposed regulations, to the test of whether something has a detrimental effect. That does not exist at the moment; it is a new test which is likely to be introduced and it is that which has widened significantly the range of situations that those professionals would be worried about being sucked into. For example, they may well say that the right thing to do is to get rid of failing business X in order to keep business Y within a group, or a company, going. In doing so, assets leave the group and, it could be construed with the benefit of hindsight—we will come on to that later—that that has had a detrimental effect on the interests of members. Therefore there would be some way in which those people would be drawn into what the regulator could throw at them.

Perhaps I may help further. The key point is that it is important that all creditors are treated fairly and equitably in these arrangements and that the reasonableness of actions takes account of circumstances and recognises constraints such as time pressures. One of the reasonableness tests would also look at benefits received under the proposals.

Large fees?

It would be a judgment as to whether those fees are normal under the commercial circumstances of the transaction that is being undertaken. There is a real danger that we are creating concerns that do not need to be real concerns. But over the next couple of months we need to make sure that we cover all of these bases and give the necessary reassurances.

With regard to the detrimental effect on the widened range of situations, we have proposed setting out circumstances in which the power can be exercised using the new test. We will certainly consider putting this in legislation to deal with the specific concerns that have been raised. We do not want these arrangements to get in the way of the sorts of transactions and work that the noble Baroness and the noble Lord have both identified. I am sure that we can end up in a situation where we can give the reassurances, but to define a further group of people—company or turnaround specialists, or whatever—is not the right way to go about it. It is not an effective and practical way of proceeding in any event.

I found the Minister’s final words encouraging. Yet again, we shall have some fruitful discussions over the next few months. I beg leave to withdraw the amendment.

Amendment No. 130FA, as an amendment to Amendment No. 130EW, by leave, withdrawn.

moved, as an amendment to Amendment No. 130EW, Amendment No. 130FB:

The noble Lord is right that we have touched on good faith in our previous discussions and I understand the concerns to which he has referred. I fully understand, and agree with, the need to provide protection to those who act competently and with good intentions to protect members’ benefits. However, I do not agree that a good faith test is necessarily the best way in which to provide this protection. It may be helpful if I begin by outlining why I hold that view.

At first sight, a good faith test seems inherently reasonable and attractive. It appears perfectly fair that a contribution notice should not be issued against somebody who is seeking to do the right thing. However, the issues can be more complicated. The concern is that the legal application of good faith serves to set such a high evidential burden that it can be circumvented by those at whom regulation is targeted. It places the regulator in a position in which it would have to prove bad faith, which in law comes close to dishonesty. By its nature, such activity and intent is something that would be kept well disguised, with little evidential proof for the regulator to identify.

In addition to constructing a high hurdle, good faith also provides for a very wide and general protection. The effect of this generality is to safeguard both those who should be protected and those whose activities are rightly the target of the regulator. Furthermore, there is a risk that applying a good faith test as set out in the amendment would exclude the possibility that the regulator could issue a contribution notice if there was detriment to a pension scheme as a result of incompetence and recklessness.

The Government consulted on adding the effect of an act being materially detrimental to scheme benefits. The consultation document sets out a number of safeguards for using these grounds, such as listing the circumstances under which this alternative approach would be used and a test of material detriment. A good faith test would preclude any test based on material detriment. That said, the proposed removal of the good faith test in situations where a party’s actions have prevented a debt from becoming due has generated considerable comment in the consultation exercise and a number of alternative approaches have been put forward.

I shall take away the points made by the noble Lord in our earlier debates and consider them alongside the consultation responses, to ensure that the approach that we put forward in draft regulations in due course is both effective and proportionate. I hope that that will enable to noble Lord to withdraw his amendment.

I am sure that it will be helpful if the Minister takes this away, but I shall probe him on shifting to this test of the detrimental effect of a transaction, including what is reasonably foreseeable. I take the already cited example of the payment of a dividend. Last year a company might have been healthy and profitable, paying dividends. It might have engaged in share buy-backs or paid special dividends if it had made a big profit. A year on, however, the credit crunch hits, the market falls away, losses ensue and the company cannot pay a dividend. In the mean time, the employer covenant is significantly weakened. If you look back, it is clear that it could reasonably have been foreseen that the dividend paid when times were good would have a detrimental effect, because resources left the group. When resources leave the group at any point, that has a potential detrimental effect on the pension scheme.

One comes back to the question of what is reasonably foreseeable and to what extent hindsight will be used. If we go back a year, some companies—for example, building companies—predicted that the housing market would go under because it had been so frothy for such a long time. I do not think that many people would have predicted the precise set of circumstances involved in the credit crunch and its acceleration, but many people predicted that the good times for building companies and commercial property companies would come to an end. Therefore, on one reading it is entirely foreseeable, and reasonably so, that payments of special dividends or share buy-backs would have a detrimental effect given the ordinary course of a cycle. We should remember that we have not abolished cycles. Whatever the Chancellor used to try to pretend that he had done, he has not abolished cycles, and we are seeing the effect of it at the moment.

I am concerned that, when analysed with the benefit of hindsight—and not very much hindsight, as it happens—ordinary transactions could be seen to have had the reasonably foreseeable consequence of having a material detrimental impact on a pension scheme. Those issues are causing people a lot of concern. I do not think that the Minister has yet addressed that. There seems to be an assertion that dividends will not be a problem. However, dividends are the biggest example of a transaction in the corporate year of significant resources leaving the group through a positive decision of the directors. As I mentioned, special dividends might be paid and capital might be returned. There might be share buy-backs and the repayment of unsubordinated debt—all things that appear to be normal in the circumstances of the time. However, you do not have to roll forward for long to see what the impact will be. The Minister has not explained what impact the Government think these new regulations will have on ordinary transactions. I should be grateful to hear his comments.

I shall try to help the Committee. The important thing to bear in mind is that it is not envisaged that any of the tests will be ones of hindsight. The tests will be applied in the circumstances of the scheme and the employer at the time of the act. Therefore, when the powers are considered, it will be crucial to understand what was known, or should have been known, at the time the act was undertaken and at the time the dividend was declared.

I am always cautious about putting on the record off-the-cuff remarks that somebody might point to as establishing precedent. However, it would be difficult to blame people where the economic climate changed after the directors of a company had declared a dividend that was based on the current and projected financial situation of the company and which took account of the scheme covenant. As I say, it is not a hindsight test. That should cover these concerns.

I shall explain myself again. I think that hindsight will inevitably be used because it is difficult to escape from it and place yourself entirely in contemporaneous circumstances. When looking at what is reasonably foreseeable, people judge things by what has actually happened. I go back to the example that I gave where it could have been foreseen—and many people would have foreseen—that certain markets would deteriorate over a relatively short timescale. There is not necessarily agreement that the timescale will be the following 12 months or the following two years, but it is reasonably foreseeable that the cycle will result in some financial problems coming over the horizon. You do not need hindsight to get the test of what is reasonably foreseeable; all kinds of things are perfectly reasonably foreseeable and do not require huge feats of imagination. The question is how, as most things are reasonably foreseeable in business life, the Government will differentiate them.

It seems to me that, when directors are declaring a dividend, they take account of the current financial circumstances of the company and make their best judgment of the future financial circumstances of the company. They take account of the position of creditors, the cash flow of the company and the covenant to the scheme. A judgment is made, taking account of all those factors, on whether it is prudent to pay a dividend and the level of the dividend.

Nothing is totally predictable in life or in business. I am sure that many boards would recognise that, if times are good now, there may be downturns in the future. It seems to me that dividends declared in the context of that total judgment now could not be revisited with the benefit of hindsight just because circumstances arose that were not taken account of and could not reasonably have been foreseen at the time. I do not quite understand why there is such a level of concern. These are judgments—are they not?—that directors have to take every day, quite apart from issues associated with pensions, in declaring dividends for their companies and to their shareholders.

The Minister is absolutely right that directors have to make such judgments every day, but the judgments that they make in year 1 could be completely overturned by economic circumstances.

Let us take the example of retail. A year ago, retail businesses might have been having some difficulties, but none of them would have predicted the kind of retail environment in which they are now operating. Many household names are doing profit forecasts and are reporting losses, not just reduced profitability. In a relatively short period, financial circumstances can change. That change in financial circumstances could easily be construed as being something that was foreseeable. The concern is that, while the Minister says that ordinary transactions will not be judged with the benefit of hindsight, particular judgments of what is foreseeable will come to much the same thing. I am not sure that the Minister is really grasping the rapidity with which things move in the commercial world.

Linked to that is the question of what directors are going to have to get clearance on. If there is any concern—there is concern because of the way in which the test is shifting through detrimental effect and the way in which the Government want to include a course of actions, rather than single acts or omissions—increasingly directors will be driven by their lawyers to queueing up for clearances all the time, or ordinary transactions will be inhibited. That is the nature of the concern, which I am not sure that the Minister has yet grasped.

I believe that I understand the point that the noble Baroness has made. A number of the consultation responses suggested that the likelihood, as well as the possibility, of detriment might be considered, which may alleviate some of the concerns. We see some attraction in that, but we perhaps need to consider it further. We need to make sure that we do not inhibit the routine judgments that the boards must make about the general finances of their company and the ability to pay dividends. I really do not see why additional concerns should come from these proposals, but I acknowledge that we need to clarify these things as we proceed over the next couple of months, because we do not want to inhibit the routine, normal activity of directors. However, I hang on to the point that the sorts of judgments that have to be made in declaring the dividends of a company relate not only to the pension scheme but to a whole raft of issues concerning the finances and the future of an enterprise. Therefore, I say with respect that there is nothing particularly new about this issue.

I thank the Minister for that. We are not going to progress that aspect much further. Perhaps I may return to another point made by the Minister about the good faith test, which is what the amendment is largely concerned with. He said that the evidential burden in relation to good faith was a problem. Does he, via the regulator, have evidence of where the good faith test has been a problem, or is this a hypothesis that has not proved to be a problem in practice?

That is a good question on which I need to refer back. I cannot, off the top of my head, deal with that point, which is not covered in my brief. I accept that the point should be clarified. I shall do that.

I am encouraged by what the Minister said. The fundamental problem here is that moving from “good faith” to “could not reasonably have been foreseen” is a shift. You can take a dividend decision in good faith and make a proper professional judgment by balancing all the things that you know and believe, but, as my noble friend Lady Noakes said, all sorts of horrible things can be reasonably foreseen. One can reasonably foresee, as the Minister can, I think, a time when Conservatives might sit on his Benches. That is not necessarily something that he takes into account in the judgments that he makes on this Bill.

I return to what I said earlier about there being a shift towards making pensions a super-creditor. You are raising the stakes and the consequences for directors in the decisions that they take, particularly if in the end the decisions turn out to have disadvantaged pensioners, rather than making sure that they are given a reasonable place in the decision-making in the first place. I am sure that we shall enjoy our discussions on this. I beg leave to withdraw the amendment.

Amendment No. 130FB, as an amendment to Amendment No. 130EW, by leave, withdrawn.

moved, as an amendment to Amendment No. 130EW, Amendment No. 130FC:

The Government made a statement on 14 April that the principal amendments that they were seeking to make to the regulator’s anti-avoidance powers would be introduced with effect from 14 April 2008. Retrospective legislation is rarely introduced unless it is for very good reasons. It was crucial that the Government’s announcement of their proposals did not prompt the kind of market behaviour that they are attempting to address before the legislation came into effect. I understand the concern that the Government’s amendment would allow wide-ranging retrospective changes. This is a serious point and I should like to share in more detail how we intend this power to operate.

The power operates in accordance with the general law and, in particular, can be exercised only in a way that is compatible with the European Convention on Human Rights. This means that the Government, or future Governments, could make retrospective provision only if they had already announced their plans in the way that we did in April this year. The power, therefore, is not as wide as it might first appear. It provides for retrospection, but only in relation to novel situations of material risk, and consultation would be required before the power could be used to introduce changes.

The noble Lord’s amendment would mean that, should it be necessary to amend or correct the original regulations for whatever reason, that could not be done from 14 April 2008, which would create the very risk that, in our view, should be mitigated. That would compromise our ability to ensure that we get the balance right between adequate protection and not hindering legitimate business activity. I hope that that clarifies matters for the noble Lord, because I acknowledge that he is concerned about the issue.

Does the Minister accept my noble friend’s amendment or not?

I am not in a position formally to accept the amendment, but I think that I have outlined where we stand on the issue. I do not think that we are apart on what we are trying to achieve but, if the noble Lord feels able to withdraw his amendment, we would look to consider the matter further on Report. We need to make it clear where we are; I do not think that we have a difference of view as to where we should be.

I am grateful for that reply. Yes, we will need to explore the matter a bit. The noble Lord says that he wants to keep 14 April available as a date to make changes to the regulations if required. I will have to explore with him exactly what sort of changes may be required, but we seem to agree in principle, so I beg leave to withdraw the amendment.

Amendment No. 130FC, as an amendment to Amendment No. 130EW, by leave, withdrawn.

moved, as an amendment to Amendment No. 130EW, Amendment No. 130FD:

Clearance is the voluntary process for obtaining from the Pensions Regulator a clearance statement, which gives an assurance that the regulator will not use its anti-avoidance powers in relation to the event in the application. That assurance would remain in place but, quite properly, the regulator would not be bound by such a statement if the circumstances were materially different from the content of the application. There are already safeguards in Sections 42 and 46 of the Pensions Act 2004, and I can assure the noble Lord that we have no plans to change the clearance process.

I agree with the implication of the noble Lord’s amendment that clearance has been a successful process. It has been a key element in providing clarity and certainty for the industry. It has enabled the delivery of good regulation, with minimum intervention and use of powers, as well as the promotion of good behaviour and practice. The regulator has operated this system effectively since its inception, and has received positive feedback from its industry stakeholders. There is no intention to change that. I trust that the noble Lord takes reassurance from that expressed intent.

The amendment may inadvertently endanger that element of legislation. It gives new conditions under which a clearance statement would fall away or not bind the regulator, different from those conditions already set out in the 2004 Act. Adding new conditions that would apply only to those provisions newly inserted by regulations made under the power could create confusion.

In addition, given that under the amendment the protection of clearance will stand where there is material inaccuracy in the information submitted, and will fall away only when there is some form of intent behind the inaccuracy, the purpose of clearance is significantly undermined. In terms of behavioural impact, the amendment may discourage diligence by the applicant in providing information, leading to further time-consuming investigations by the regulator and costs to business.

I reassure the noble Lord as strongly as I can that we need to make it as clear as possible that clearance given on the basis of full and proper facts cannot be reopened; that is sacrosanct.

I am delighted to hear that. I accept the Minister’s criticism of the wording of my amendment. I suspect I shall still argue that the correct amendment should find its way into the Bill. This is a fundamental part of the way in which the system works and should not be attacked under any circumstances by secondary legislation. Again, I have several months in which to argue that with the Government. I beg leave to withdraw the amendment.

Amendment No. 130FD, as an amendment to Amendment No. 130EW, by leave, withdrawn.

moved, as an amendment to Amendment No. 130EW, Amendment No. 130FE:

The Minister already has referred to fair value in terms that I simply have not understood. All kinds of transactions are done for fair value and they should be judged at that time. But the Minister has suggested that they have to be judged by reference to some later events and circumstances. Lots of circumstances have been put to us. For example, a group of companies may buy a business and merge it with an existing company with a defined benefit scheme. The transaction is for fair value, but it does not work out. Somehow, with the benefit of hindsight, we come back to seeing that it has had a detrimental impact. If the new business had not been merged with the defined benefit scheme business, the covenant would not have been weakened. The Minister will know that lots of mergers fail for all kinds of reasons, so this is quite a significant business risk. But the original transaction of putting the businesses together is a fair value transaction; that is, buying the other business and putting them together.

The concern is that these sorts of transactions will fall foul of the provision that is coming up. It is important for the Minister to be more explicit about the problems that the Government have with fair value transactions, because he has not been unequivocal about them to date.

Again, I appreciate the concern of Members of the Committee that I should make clear our intentions under these proposals. It is not the Government’s intention that a transaction whereby a person purchases assets or securities at fair value would normally trigger the regulator’s use of its anti-avoidance powers, provided that as part of the transaction the pension scheme was properly considered and adequately addressed.

The fact that a person had purchased assets or securities at fair value would not alone necessarily provide the assurances needed. That would be only the first step in ensuring capital was available to mitigate the risks to the scheme; it does not of itself get the capital to the scheme. Earlier, the noble Lord quoted my comments from Monday.

Normal arm’s-length, fair value transactions should swap an asset for cash or another asset and therefore have nil effect on scheme security; that is, there would be no detriment, no type A event, as defined by the regulator’s guidance. However, the noble Lord’s amendment would turn this on its head and make it a defence. The regulator is not in the business of arguing about whether something is fair value; that is a different area of law. The regulator would look at the effect on the scheme. Current guidance from the regulator states that normal commercial transactions, at arm’s length and fair value, would not be caught by the legislation, and corporates should be able to go about normal business.

I assure the noble Lord that normal, arm’s-length, fair value transactions that swap an asset for cash or another asset and have, or are likely to have, no materially detrimental effect on scheme security, are not a target of the regulator’s activity. However, I draw attention to the fundamental issue of the mitigation of material risks to the security of scheme members’ benefits, to the Pension Protection Fund and to those responsible employers who pay the Pension Protection Fund’s levy.

Current powers enable the regulator to take action where, for example, business and asset sales from the employer or the wider employer group are realised, particularly where the transaction is not at arm’s length or fair value, or the sale proceeds are not retained; or where part of the operating business is sold at fair value for the assets, but all the pension scheme liabilities are transferred to a weaker covenant with the sold part of the company. Therefore, in a situation where companies from a group are sold, the regulator’s powers currently are—and need to remain—such that they permit action if pensions liabilities were avoided through the sale. The noble Lord’s amendment would change this and make fair value a defence. I do not think that that was the intent. This would place the regulator in the inappropriate position of arguing about whether something was fair value or not. The regulator’s proper focus should be on the effect on the scheme. I hope that I have clarified the issue.

I return to my example of a fair value transaction coming into the group, followed by a merger, followed by the failure of that merger. The Minister talked about assets leaving the group, about sales and mitigation. This is a different situation. I am trying to tease out the impact of that type of fair value transaction.

If the merger was undertaken at fair value, taking account of the protection of the scheme and the covenant to the scheme, and the merger subsequently failed, it is difficult to see how that failure could be taken into account as part of the judgment on the original merger. When these transactions take place, as long as the position of the scheme is considered and properly protected, the fact that the beneficial effect conceived for the merger does not result should not be the subject of action by the regulator. We have to look at what happens when the merger is put together. The fact that subsequently it may fail is a separate issue.

I agree with the Minister that it should not be the subject of regulatory action. My question is whether the new powers will allow the regulator to go for that sort of transaction.

I think not. However, we will put this on the list of things to clarify over the next couple of months.

Again, I am grateful for that answer. It seems that these sorts of transactions will have to go for clearance. When you swap a business for cash, you are getting into the situation that the noble Lord, Lord Oakeshott, described in relation to buy-out schemes. That involves a substantial reduction in security, and therefore has to be washed through the Pensions Regulator. That is a sustainable position if it is understood. I beg leave to withdraw the amendment.

Amendment No. 130FE, as an amendment to Amendment No. 130EW, by leave, withdrawn.

[Amendment No. 130FF, as an amendment to Amendment No. 130EW, not moved.]

I remind noble Lords that the Committee stage of the Pensions Bill will resume tomorrow. I beg to move that the House do now resume.

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

House resumed.

moved Amendment No. 1:

My Lords, I am extraordinarily grateful to the noble Lord, Lord Hanningfield, for tabling this amendment. It enables me to reiterate one or two arguments that we rehearsed at an earlier stage of the Bill. It also gives me the opportunity to thank him and his colleagues—and colleagues on the Liberal Democrat Benches—for the spirit of co-operation and support that the Government have enjoyed throughout the deliberations on the Bill in your Lordships’ House. It has been a model. Since the noble Viscount, Lord Colville of Culross, is here, I thank him for his very helpful engagement with the Bill during the special Select Committee procedure. I have no doubt that it resolved many problems and difficulties that people encountered with the Bill, and discussions were conducted in a spirit of constructive amity—that is perhaps the nicest way to put it. My heartfelt thanks go to him and to all colleagues who have been involved in this. It has been a very useful process.

Amendment No. 1 is moved with good spirit. Clause 23 would require the Office of Rail Regulation to produce a report on what it has done or proposes to do to meet its new Crossrail construction-related objective, as provided by new Clause 22, and on how it has exercised or proposes to exercise any of its functions in relation to the operation of Crossrail services. The ORR must do this from time to time, when it considers it to be appropriate. I assume that the noble Lord’s amendment is intended to require the ORR to produce reports no less frequently than annually. However, the amendment as I read it would not achieve this. It says that it must,

“publish every 12 months or from time to time”.

My guess is that the rail regulator could carry on producing reports from time to time. It would not have to do so within a 12-month period, so the amendment is defective in its intent. Whether that was deliberate on the noble Lord’s part, I do not know, but I might give him the benefit of the doubt, particularly as I am in a generous mood.

The purpose of the clause is to make transparent how the ORR exercises its functions in relation to Crossrail. Clearly, reports need to be sufficiently frequent to fulfil this purpose. The frequency may sensibly vary depending on the stage of the project to reflect the peaks and troughs in decisions that the ORR needs to take. As I said in Grand Committee, I doubt whether a report produced less frequently than annually would be satisfactory, at least until the Crossrail services are running at the required frequency and, importantly, punctuality.

The clause already contains the safeguard that the Secretary of State can at any time require the ORR to produce a report. She might exercise this, for example, if there was a particular issue on which she wished to ensure that the ORR will publish a timely report. However, she could equally well use the power if she felt that the frequency chosen by the ORR was inadequate, and she could proactively ensure a particular frequency of reports. Therefore the clause provides the necessary flexibility to ensure that the timing of reports can be tailored to what is most useful for the particular stage of the project; yet it has the necessary safeguard against the frequency dropping too low.

I share the wish of the noble Lord, Lord Hanningfield, to see sufficiently timely reports from the ORR, but the clause will achieve this objective. We, like him, want to see timely information in the right place at the right time. It should be produced in a form that people can understand and to a specification that is transparent, so that people are well advised and understand the nature of the project and its progress, and the right elements of financial accounting and audit are properly in place. We think that we achieve that in the legislation. Although I think the noble Lord shares that aspiration, I rather suspect that his amendment does not achieve it.

My Lords, I think we all share the same aspiration to make certain that there is enough information on this enormous project and that the ORR issues regular reports, so could not the Government give in a little on their wording? The phrase “from time to time” is very ambiguous. I am sorry if the wording of my amendment is not exactly right, but everyone knows that I want to make certain that we get at least an annual report. Could not the wording be slightly firmer? We all agree that we want the information. There is no disagreement about this or about the policy or philosophy behind it; there is simply a difference as to whether or not it will happen. Could not the Government make certain that that happened?

My Lords, I am impressed by the noble Lord’s humility, but it strikes me that we cannot afford to slip into legislative ambiguity of the sort that he seeks to put into place with his amendment. I give this simple assurance that, so far as we are concerned, “from time to time” means that the information will be provided in a timely fashion and reasonably regularly so that people can feel updated. I do not want to put ambiguity into the Bill, which is why I must ultimately resist the amendment.

My Lords, I thank the Minister for that reply. For today, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

moved Amendment No. 2:

My Lords, I support the amendment moved by the noble Lord, Lord Low. I have raised several times the amount of disruption that the years of construction will cause everyone, both on rail and road. Everyone needs to be given adequate notice. I moved an amendment along those lines in Committee. Obviously, disabled people will suffer far more. They need adequate notice and a lot of planning is needed for this enormous project, which will take some years, as the noble Lord said. I hope the Minister can give some assurances and help to everyone, particularly disabled people, on this subject. This is along the lines of the amendment that I moved in Committee. I very much support it.

My Lords, we, too, sympathise entirely with the sentiment and wishes of the noble Lord, Lord Low. I ask the Minister to assure us that every reasonable step is being taken to meet the needs of the disabled traveller.

My Lords, as a member of the Select Committee, I assure the noble Lord, Lord Low of Dalston, that while hearing petitions, including some from local authorities specifically about issues relating to disabled people, committee members spent a good deal of time probing promoters to ensure that the maximum was done to meet the interests of people with disabilities, both during construction and as part of the overall programme. We were convinced in many instances, almost against out better judgment, that we had to give way on a number of issues. In particular, we vigorously pressed the promoters to contemplate introducing lifts at Manor Park. We then discovered that that would require building virtually a whole new platform and that for many months trains would have to be redirected. The total cost of introducing such changes ran into millions of pounds. The likelihood was that, if this happened in one or two other places, overall there would be a substantial additional cost.

The other side of the coin is that Crossrail will deliver many benefits for people with disabilities. In many areas there will be brand new stations and brand new, easier access, with no problem of having to step up in order to board trains. I think we are all—certainly in this House—of the view that it is vital to move forward and try to get this legislation in place so that the real business can begin fairly soon after Royal Assent. I do not know the intricacies of this, or the consequences of this legislation for the Crossrail project. Is there any chance that it would mean further delays or further requirements for consultation, and possibly even substantial additional costs? Ultimately, I would hope that, one way or another, we could spend that money, but in the short term there is a finite amount of money available for the development of Crossrail.

With all that has been happening lately, including the credit crunch and so on, many of us who are keen to see Crossrail go ahead must, increasingly, as each week goes by, worry a little more about whether the money will be there to see this project become reality. I would like to ascertain, before taking a decision on this, whether there is any possibility of delays in enacting the legislation and, in turn, delivering the benefits in many other areas for disabled people that Crossrail will produce. That apart, if a mechanism can be found to enhance and increase consultation between representatives of people with disabilities, the promoters and the department, I would be happy—as I am sure would other members of the Select Committee—to add all the weight I can in support of that.

My Lords, I am glad that the noble Lord, Lord Brooke, has spoken about this. He and his colleagues sitting behind him, who were valuable members of the Select Committee, listened to a good deal of evidence about this. I do not know what the noble Lord, Lord Bassam, will say about formally including provisions of this sort in the Bill. In Select Committee we discussed the involvement of local groups, which would discuss all the time how people would be affected as these matters proceeded, particularly during construction, which is what my noble friend Lord Low was talking about. That will be one of the most critical issues. Some local groups will be there, and are there already. I only hope that the Government and the promoters of this legislation will encourage other areas to set up functioning local groups to do exactly the sort of thing that my noble friend has been talking about: give notice of what is going to happen, and advise on how to get around obstacles and all the other problems that might arise from a temporary construction that may not be all that temporary. If the Government give a little encouragement to the setting-up and maintenance of local groups that involve themselves in these issues, it might almost be a better answer for my noble friend than anything in his amendment.

My Lords, I am pleased that we have an opportunity to discuss this subject, because I generally take the view that we do not spend enough time focusing on the practicalities and nuts and bolts of how people are variously affected by hard-nosed, practical and crunchy bits of legislation like this. It is a refreshing opportunity to be able to do that and I thank the noble Lord, Lord Low, for bringing forward this amendment.

I am also grateful to my noble friend Lord Brooke for alighting on an issue that has been of considerable concern to me throughout our consideration of the Bill: delay. The noble Viscount, Lord Colville, and I have both been concerned to ensure that no unforeseen delays arise, but during the process we have taken careful account of the important issues. This is one of those pleasant occasions where one can say that we have managed to make the progress that we needed to achieve—indeed, we have made rather better progress than I thought that we might at one stage—and the costs in delays, which are perhaps unquantifiable, even though people have said that they could be as much as £50 million a week, have been avoided. With that in mind, this is a timely issue to draw out.

My response will take a little time, as it should, because I want to go through how disability issues will be resolved during the process of the Crossrail development and I want to provide the sort of reassurance that I know the noble Lord, Lord Low, seeks. As he says, things should happen in a way that helps those who are most vulnerable and disabled both in the construction of the project and in terms of the services that it will provide. Historically, people with physical disabilities have not necessarily been best served by sub-surface rail lines. I suppose that the Jubilee line extension, as the most recent addition to our Underground network, is probably better designed than most. Much has been learnt from that experience, which will count for a lot in the way in which Crossrail develops.

The noble Lord made several other points that bear careful thought: the importance of disability equality schemes; the continuing importance of consultation with organisations such as Guide Dogs; and the need to appoint project managers who have a direct role in dealing with disability issues as and when they arise during the project development. The noble Lord, Lord Roberts, asked that all reasonable steps be taken, which is an important point. My noble friend Lord Brooke told us that, when the Select Committee looked at the detail of the project, it spent some considerable time rehearsing many of the disability issues, which has greatly aided us.

The amendment would ensure that the Crossrail- nominated undertaker—the body to be appointed under the Crossrail Act for the purpose of constructing and maintaining the Crossrail system—is subject to the general duty imposed on public authorities that was inserted in the Disability Discrimination Act 1995 by the Disability Discrimination Act 2005. The purpose of Section 49A(1) is to ensure that bodies that exercise public functions promote disability rights issues when exercising those functions. The amendment would also ensure that the nominated undertaker produces a disability equality scheme under the Disability Discrimination (Public Authorities) (Statutory Duties) Regulations 2005, which is predominantly a statement of how the public authorities listed in the 2005 regulations are satisfying their Section 49A(1) duty. No one could disagree with the commendable purpose of the noble Lord’s amendment, but in fact it is unnecessary. I shall explain carefully why that is by addressing both elements in turn.

It is currently envisaged that Cross London Rail Links will be appointed as the nominated undertaker for the majority of the works. CLRL is already subject to the provisions of Section 49A(1) in the 1995 Act. It has carried out and will continue to carry out its functions with due regard to its duties under that provision. As with any other public authority subject to Section 49A(1), a senior manager has overall responsibility for disability rights issues within the company. That is one of the purposes behind the amendment of the noble Lord. He has made an important point by stressing that that post must be used to ensure that there is effective connection and liaison with local groups; the point was also made by the noble Viscount, Lord Colville. I echo that wholeheartedly and agree that it is essential.

What has impressed me most about this project, certainly during the time that I have been involved with it, has been the enthusiasm and commitment demonstrated by the Crossrail project team to work at issues raised by local groups and organisations. Many came before the Select Committee to make their case. The Mayfair Residents’ Association is one that comes to mind, as does the residents’ organisation in Spitalfields. The project team should be congratulated on spending the time that it did on trying to resolve the issues that such groups brought before it. I have every confidence that that process will continue through the project development and on to construction. It is essential, and noble Lords have been wise to address the issue.

CLRL is not a listed public authority under the 2005 regulations. However, the Secretary of State for Transport and Transport for London are both listed in the regulations and both produce their own disability equality schemes, which have previously covered CLRL and the Crossrail project. Once CLRL becomes a fully owned subsidiary of TfL, it is expected that it will continue to be covered by TfL’s disability equality scheme in the same manner as any other TfL Group company, such as London Underground. It is therefore unnecessary and potentially inappropriate for CLRL to be required to produce a separate disability equality scheme in the terms sought in the noble Lord’s amendment. Indeed, in December 2006, CLRL undertook a disability impact assessment of its policies and procedures, which formed part of the Department for Transport’s disability equality scheme in January of last year.

The disability impact assessment was an assessment of CLRL’s policies and procedures as a company. Impacts of the Crossrail project, including construction, were identified in the Crossrail equality impact assessment, which was published in January 2006. The EqIA considered seven priority groups, which included disabled people with mobility or sensory impairments, learning difficulties or mental health problems, and proposed mitigation to adverse impacts on these priority groups at policy level. As the project develops and progresses towards the design stage, it is anticipated that an update of the EqIA will take place. I can therefore assure the noble Lord that disability and equality assessment, monitoring and review will continue throughout the design, construction and early operational life of the project and that mitigation will continue to be developed. This will be done in consultation with relevant groups, including Guide Dogs and others as appropriate. Of course, some will be more appropriate at different stages, particularly once CLRL has a suitable level of design and detail to consult on. CLRL has also confirmed that it will indeed be working with the Disabled Persons Transport Advisory Committee, as the amendment anticipates.

I am aware that the noble Lord has particular concerns about the impacts of construction of the project on disabled people and I hope that I can offer some further reassurance on this issue. As set out in the Crossrail construction code, the nominated undertaker will, where reasonably practicable, ensure that people with reduced mobility and other forms of disability as specified in the Disability Discrimination Act 1995 will continue to have access to services and buildings where such access and services are temporarily disrupted during the Crossrail construction works. Where the normal means of access has to be diverted or blocked off, alternative safe routes for people with reduced mobility will be identified, taking into account existing hazards and obstructions such as pavement kerbs and street lighting poles.

The first draft of the Crossrail construction code and the planning memorandum were published by CLRL in December 2005. A number of bodies, in particular local authorities that have a duty to ensure that the issues of disabled people are promoted, have raised matters that are addressed in these documents. The terms of these documents are now agreed with local authorities and have valuably been finalised.

Under Schedule 7 to the Bill, the nominated undertaker will have to obtain the approval of a local authority for specific construction arrangements. When considering such requests for the approval of construction arrangements, the authority will be able to take account of the effects that the proposals would have on people with reduced mobility. During construction, the nominated undertaker and contractors will be required to provide community relations personnel to communicate to all those who may potentially be affected. They will be focused on engaging with the wider community to provide appropriate information and will be the first line of response to resolve issues of continued concern. The nominated undertaker will seek to engage with residents of ethnic minority backgrounds, residents with disabilities or other priority groups that may be differentially affected at different times by construction.

In summary, the Department for Transport is committed to working closely with TfL and CLRL to ensure that Crossrail is in a stronger position to develop its design, construction and operational planning, both to meet statutory requirements and to deliver a railway fit for the purpose of serving the needs of the whole community. I hope that that answers the main points offered.

CLRL met Guide Dogs in January of this year. Guide Dogs raised many of the issues that have been raised in your Lordships’ House this evening. It did not express at that stage any dissatisfaction with the answers that it received, particularly as there was a commitment to continued dialogue. It will of course have the opportunity to comment on the Crossrail construction code, the planning memorandum and documents such as the equality impact assessment.

Finally, there will be a local group for every area. I understand that the Paddington group and the Tottenham Court Road group are already up and running. The Bond Street and Whitechapel groups are to be set up and run from next month. The anticipation is that all areas will be covered by the end of the year. The focus for that local liaison is firmly in our minds and is, as we debate and deliberate, being put in place. I am grateful to all those who are party to that.

I hope that I have answered and given reassurance on the main points. I certainly understand the spirit in which the amendment was moved. Crossrail stands ready to receive other approaches as are necessary to ensure that this project, which is important for the mobility of everyone in the capital but particularly those who suffer a disability, is greatly enhanced in the future and that we have an addition to our railway network that provides better access than any other part of the network has done hitherto. I am sure that your Lordships’ House will want to hear more on this in due course. I undertake to do all that I can to ensure that people are kept informed and up to date as is necessary on the way in which this project develops. I am grateful to the noble Lord, Lord Low, for this opportunity to offer the reassurances that I have been able to give this evening.

My Lords, I am extremely grateful to the Minister for his full and careful reply to all the issues raised. I am most grateful to all other noble Lords who have spoken, who all made relevant points.

I should say unambiguously, as I hope I did in my earlier remarks, that I am in absolutely no doubt about the great benefits that will accrue to disabled people as a result of the construction of Crossrail. As I hope will have been clear, my amendment was in no sense moved in a spirit that this is a bad-news development. Overall is it good news for disabled people if we can just handle it in the right way. The Minister has gone out of his way to reassure me that that will be the case. I certainly hope that making appropriate provision for disabled people will not cause any undue delay to the project; indeed, I hope that it will not cause any delay at all. It is obviously to the public good that the project should go ahead with all due dispatch.

On works undertaken to meet the needs of disabled people, any legal requirement would require only that reasonable adjustments be made. No undertaking would be expected to go to unreasonable expense. I hope that there are no continuing worries on that score. I express my gratitude to the Select Committee for the depth with which it probed these issues and the concern that it showed for them.

As I said, the Minister responded extremely fully. I am most grateful to him for that. He covered all the bases and went out of his way to explain how the needs of disabled people would be covered without a disability equality scheme. CLRL has a disability equality duty, as its activities are covered under parent schemes. That point is covered. I was grateful to hear the Minister say that there is an expectation that the arrangements will need to be reviewed and updated. We can all take comfort from the Minister’s reassurance that that review and updating, and indeed the examination of everything as the project goes along, will be done in full consultation with relevant groups—not just Guide Dogs, which the Minister kindly mentioned, but other relevant groups, particularly local groups, some of which, as he was able to tell us, have already been set up.

The Minister has given us a full reassurance, for which I am grateful and which I am sure all noble Lords were glad to hear. I agree with him that it is good that we have been able to give this issue a full airing this evening. Now that we have done that, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

rose to move, That the draft scheme laid before the House on 18 June be approved.

The noble Lord said: My Lords, criminal injuries compensation is part of the Government’s wider commitment to put victims at the heart of the criminal justice system. We have transformed the way that victims of crime are supported. Victims now have a legal right, for the first time ever, to a high quality of service from the police, the Crown Prosecution Service and the courts. We have introduced 165 witness care units across England and Wales to support victims and witnesses to attend court. At court itself we have introduced special measures such as giving evidence by videolink or with the support of an intermediary to ensure that victims who are vulnerable or intimidated can give their best evidence.

The criminal injuries compensation scheme is another part of our strategy to support and protect victims of crime. It provides payment at public expense to innocent victims of violent crime in Great Britain. Compensation is based on a tariff, or scale, of awards for injuries of comparable severity. There are 25 tariff bands ranging from £1,000 to £250,000. More seriously injured victims can get additional compensation for loss of earnings and special expenses, subject to an overall ceiling of £500,000 in respect of any one claim or any one death.

Last year the Criminal Injuries Compensation Authority paid out £235 million in compensation, and since the scheme’s inception in 1964 it has paid out more than £4 billion to more than 1 million victims of violent crime. Ours is the most generous scheme within the European Union and one of the most generous in the world. For example, in 2007, the United States of America paid out £221,783,000; in the same year, the Great Britain scheme paid out £183,900,000. Considering that the population of the United States is five times greater than ours, the House will acknowledge how generous our scheme is.

In September 2005 we consulted on whether to refocus the scheme on victims of the most serious crime while also improving the practical and emotional support available to victims. Many respondents to the consultation wanted the practical and emotional support it proposed. We have taken this forward through the victim support plus model, where Victim Support contacts the victim within 48 hours of referral from the police and a thorough needs assessment is carried out identifying the individual support needed. But respondents also commented that these direct services should not be at the expense of awards for less serious injuries. We agree. We will not, therefore, be refocusing the scheme and have funded Victim Support to roll out its model of practical and emotional help across the country.

Criminal injuries compensation does not exist in a vacuum. It is intimately linked to the other support, protection and information that victims of crime receive from the criminal justice system. When we started the Rebuilding Lives consultation we were at the start of a major period of reform—for example, the introduction of witness care units and the victims’ code of practice. We wanted to be clear on the results of these reforms before making any changes to the scheme; in particular, we were keen to see the results of Victim Support’s new victim support plus scheme. In these pilots, 88 per cent of victims said that they felt their needs were completely met, and 92 per cent of victims judged the quality of service to be excellent or good. So the success of its pilots influenced our decision to roll out that initiative across the country, just as it influenced our decision not to refocus the scheme but to instead look at making its administration more efficient and more victim-focused.

As a result, the main changes we are bringing before the House relate to the appeals provisions of the scheme. These have become necessary as a consequence of the Tribunals, Courts and Enforcement Act 2007. The provisions that we are inviting noble Lords to approve today are therefore mainly focused on these changes, and the basic structure and rules of the existing scheme will remain much as before.

The criminal injuries compensation scheme currently in operation incorporates the functions of both the Criminal Injuries Compensation Authority and the Criminal Injuries Compensation Appeals Panel. The main reason for bringing these changes before the House is the 2007 Act, which creates a two-tier tribunal structure, the first-tier tribunal and the upper tribunal, and requires that the Criminal Injuries Compensation Appeals Panel, along with a number of other government tribunals, will be absorbed in the first-tier tribunal on 3 November this year. From that date, the Criminal Injuries Compensation Appeals Panel will cease to exist as a separate body and therefore cannot remain part of the criminal injuries compensation scheme. From the same date, the appeals rules and procedures of the first-tier tribunal will be set out within the relevant tribunal procedure rules, which have yet to be laid before the House. That is why the coming into force date of this draft scheme is 3 November.

As opportunities to amend the scheme arise so rarely, we also want to make a number of other changes. These have become necessary with the passage of time since the scheme was last changed in 2001 and in the light of operational experience. In the main, they are needed to clarify meaning or intent where there is doubt or ambiguity, to provide greater clarity, to restore the original intention of the scheme where court judgments or operational experience suggest that the previous wording was not doing the job, and to help streamline some scheme processes. All the changes are clearly set out in annex B to the Explanatory Memorandum that has been laid before Parliament with the draft scheme. The changes are all clearly shown as “tracked” changes, and I shall briefly mention some of the more significant ones.

Perhaps most importantly, we have substantially recast the paragraphs dealing with additional compensation for loss of earnings and future earning capacity; the payment of awards in fatal cases; and the reduction of compensation on the grounds of benefits received from other sources. Our aim was to modernise the rules to make them simpler and more logical, and to avoid cases of claimants getting double payment from the state in some circumstances.

As to other changes, we have made it clear in paragraph 8 that not only must the injury have been sustained in Great Britain but it must have been directly attributable to an act occurring in Great Britain. This is specifically to clarify the original intention of the scheme that both the incident and the injury must have taken place in Great Britain. For example, following the 9/11 terrorist attacks in the USA in 2001, the authorities there determined that qualifying relatives of those killed and who had witnessed the events on live television in Great Britain were eligible for compensation for the mental injuries suffered. Thirty-seven applications were made, of which 26 received awards, totalling £68,000. Our scheme was never intended to cover such cases and this alteration puts the meaning beyond doubt.

We are strengthening the criteria for withholding or reducing awards on account of the claimant’s previous unspent criminal convictions and the criteria dealing with time limits for applying for compensation and accepting offers of award. The reason for clarifying how long an applicant has to apply is that the time limit for making applications has been set at two years since the introduction of the statutory tariff-based scheme in 1996. The power to waive that time limit has been used frequently, but inconsistently, within the authority and this clarification is to insure against anomalies or unfairness.

We have not altered the number and value of the 25 tariff bands but we have made a number of changes to the tariff of injuries. We have made changes to some of the descriptions of awards for sexual offences using terminology from the Sexual Offences Act 2003 to ensure consistency, and we have inserted some new categories and made some other changes to rectify inconsistencies. We have substantially recast the section dealing with compensation for brain damage to recognise the wide range of brain injuries and to enable the award to be more closely aligned to the injury suffered. We have increased the awards made payable for injuries to teeth in recognition of the reality that victims will often have to use some of the award to pay for corrective dental treatment.

We have also inserted a number of new injury descriptions, changed the descriptions of others and moved one or two injuries into higher or lower tariffs where operational experience and medical and legal advice have suggested this would now be appropriate. The tariff now lists some 450 injuries. If parliamentary approval is given, as I have said, the draft scheme would come into force on 3 November 2008.

We believe that the changes we are proposing will complement the radical changes that the authority has been making to its end-to-end case working and business processes over the past two years or so. I am happy to say that these changes have already led to improvements in how the authority operates. This will all help to result in a more efficient operation, providing a better, faster and more transparent service to victims of violent crime and making the best use of the available resources. I commend the draft new scheme and invite the House to accept it. I beg to move.

Moved, That the draft scheme laid before the House on 18 June be approved. 23rd Report from the Joint Committee on Statutory Instruments.—(Lord Bach.)

My Lords, I hope that I can be relatively brief. On Monday, my honourable friend David Burrowes debated this at some length with the Minister’s colleagues in another place. Most of his questions about consultation were dealt with on that occasion, so I want to add only a couple of points.

First, to pick up one of the Minister’s last remarks, he talked about the increase in awards for dental treatment for damaged teeth. If people have to pay a lot more for restorative work for teeth, that seems to suggest that there are considerable failings in NHS dental services on that front. I would be interested in his comments on that.

My second point, which is more substantive, is about the various orders relating to the transfer of tribunal functions, which I understand we will be dealing with on our first day back, 6 October. The Minister will be aware that I recently saw his colleague, Mrs Bridget Prentice, about those orders because of some concerns that we have had about them. Mrs Prentice promised that there would be further consultation on those orders and said that they might have to be relaid—nothing to do with the criminal injuries compensation scheme, but purely in relation to Pensions Appeal Tribunals and matters relating to war pensioners. If they are not amended and there are disruptions, as it were, in this House and the orders do not go through, what will happen to the scheme that we are going to agree to on this occasion, the Criminal Injuries Compensation Scheme 2008? It is important that the Minister addresses this question. The two have to go together. It is important that we have the new tribunals in place, but, as the Minister is well aware, we cannot amend those orders if there are problems with the Pensions Appeal Tribunals when we come to discuss this on our first day back.

My next question for the Minister is, I appreciate, a difficult one. His department, in its Explanatory Memorandum, which is good and very clear, reckons that compensation claims amount to something in the order of £200 million a year. He was quite right to emphasise the generosity of the scheme that is in place now and how it compares with similar schemes in the United States. I appreciate that he cannot say whether the Government estimate that the scheme will increase in future, but it would be helpful if he could tell us how much it has grown over the years and how much of that growth is due to inflation and how much to a growth in the number of claims. That is, what is inflation and what is an increase in crime or perhaps an increase in awareness of the scheme and the fact that people feel that they have an entitlement to claim on that front? I leave the Minister with those questions and I would be grateful if he would assist me when he comes to reply.

My Lords, like the noble Lord, Lord Henley, I see that my colleague, Mr David Howarth, dealt comprehensively with the scheme in another place just a few days ago. I will therefore keep my remarks brief.

Like Mr Howarth, I am pleased that the scheme does not pursue some of the ideas in Rebuilding Lives that would have been rather damaging. I particularly welcome the fact that the Government have not proceeded with a proposal to exclude victims who suffered the crime at work, as that would have been quite unjust. A suggestion was made in the consultation paper that the employer should take on that burden and pay compensation through insurance. That would have undermined the entire scheme, so I am glad that it is not being proceeded with. I hope that the Minister can assure us that there is no intention at any point to bring that idea back.

I have two specific points about the detail of the scheme. Paragraph 35(1)(d)(iii) deals with care costs, but there seems to be a change from the 2001 scheme in that regard. The new scheme restricts care costs to applicants’ core costs, such as the cost of helping them with bodily functions and meal preparations, whereas the previous scheme seemed to deal with all one’s care costs. Why has that change been made? Is it justifiable to place the extra cost on the individual victim?

In a similar vein, I have a question about the earnings limit. Financial loss under the criminal injuries compensation scheme is restricted, unlike civil liability damages, to one and a half times average earnings, so someone cannot get whatever earnings they have lost; they are limited to one and a half times the average. However, the definition of “average earnings” appears to have changed from the one used in the 2001 scheme. In 2001, “average earnings” were defined as “gross average industrial earnings”, whereas in the new scheme they are defined as “median gross weekly earnings”. Why has that change been made? What difference is it expected to make? On the face of it, given that earnings are skewed with a very long tail at the high end, changing that average, which meant “mean”, to this average, which means “median”, represents a reduction in the amount of money available. On the other hand, changing from industrial earnings to earnings in general might have the opposite effect. What is the change expected to do?

Besides that, we have covered the ground fairly comprehensively between the two Houses, and we on these Benches are broadly content with the scheme.

My Lords, I am grateful to both Front-Bench spokesmen for what they have had to say and for their support for the scheme and I thank the noble Lord, Lord Henley, for his praise for the Explanatory Memorandum.

The noble Lord asked a number of questions. The first one was about teeth. I reject utterly his suggestion that somehow this has had something to do with a decline in the way in which dental practice occurs in this country. In our view there has been a considerable improvement, and I do not say that just because sitting beside me is the former Minister in charge of dentistry throughout the country. The fact is that awards for injuries to teeth are being increased to reflect the fact that the necessary corrective dental treatment is sometimes not available—that is the reality of the situation in the NHS—and the victim has to use the compensation award to meet the costs of treatment. We would have been criticised if we had not agreed to that. Although paragraph 35 of the scheme allows for the cost of private health treatment, including dental work, that provision does not take effect until the first 28 weeks of loss. The amendment helps victims who are not incapacitated for 28 weeks but still need to meet some of their dental costs.

As for the noble Lord’s remarks and his question about orders, the issue is extraordinarily hypothetical. I can tell him that my honourable friend Bridget Prentice, whom he referred to, has had some helpful discussions with veterans’ associations. No doubt we can look forward with delight to a good debate on our return after Recess; in fact, it may be what keeps us going during those long weeks away. With regard to the impact of the situation on this statutory instrument, it does not affect the scheme changes. If the date of the coming into force of the tribunal SI is delayed, we will amend the coming into force of the scheme by negative resolution.

The noble Lord also asked about the scheme’s growth over a number of years. It will be best if I write to him with a table of the increases paid each year. I opened this short debate by saying that £235 million had been paid out in the last year, which was a considerable increase on the previous year. What matters to innocent victims of crime is that their applications, if they come within the scheme’s ambit, should be paid as quickly as possible. I am happy to say that our record on that has improved markedly since 2006.

I am also grateful to the noble Baroness, Lady Falkner, for her comments, although I am not sure that I am so grateful for her extremely detailed questions. However, as she knows, I did have some notice of her questions. Let me deal first with care costs. These provisions often have something in common with previous benefits legislation. The amendment on care costs, which the noble Baroness picked up, follows the wording of Section 72 of the Social Security Contributions and Benefits Act 1992—it has taken us a bit of time to catch up with that wording. The intention is to make existing practice clear. Only core personal care costs are covered; these include dignity-based help that people need if they have been incapacitated, but not social care costs or peripheral costs such as arrangements for having housework or gardening done. We tend to see this amendment as a clarification rather than a change in emphasis.

The noble Baroness also asked about earnings. The change of the loss of earnings calculation from one type of Office for National Statistics figure, which is no longer to be produced, to another has the effect of changing the arrangements from mean to median. We think that the practical effects—I hope that the noble Baroness will be content with this—are negligible, as most victims do not earn one and a half times the median gross weekly earnings. Individuals may be affected, but we are faced with the practical problem of not having the figures that the ONS used to produce to keep things in line with how they previously were.

My Lords, I thank the Minister for that. Would he be able to provide figures in writing on how many people this might affect?

My Lords, I will take that away and see whether figures can be provided. No doubt they will be hypothetical at this stage, but we will do that. However, we do not think that this will make a huge difference.

I return briefly to the noble Lord, Lord Henley. I now have figures on the value of all payments—interim and final—over the last number of years. I will, of course, send those to him and to the noble Baroness, Lady Falkner. The figures have gone up from £20 million in 1996-97 to £207 million in 2007-08. The difference between that and the £235 million is due to the fact that some are still being paid under the old tariff system. I have done my best to answer the questions. I thank noble Lords again for supporting this scheme.

On Question, Motion agreed to.

asked Her Majesty’s Government what is their response to the report of the Constitution Committee on Pre-Legislative Scrutiny in the 2006–07 Session.

The noble Lord said: My Lords, I am grateful to the Government for providing time for the House to ask for its response to your Lordships’ Select Committee on the Constitution’s report on pre-legislative scrutiny in the 2006-07 Session and to the Minister for being in his place to provide that response during an exceptionally busy time in the parliamentary year.

I had suspected that he might be a crypto-Stakhanovite; that suspicion is deepening a little. I shall not rehearse at length the case for pre-legislative scrutiny. Suffice it to say that it enhances Parliament’s capacity to influence legislation at a formative stage and gives an opportunity to individuals and interested parties to contribute to the deliberations of committees. From the Government’s point of view, it should lead to better legislation and save precious time during the later legislative stages of Bills.

In your Lordships’ committee’s 2004 report, it welcomed the use of pre-legislative scrutiny but wished to see it improved and extended. This enthusiasm is shared by others. Jack Straw told the committee in evidence on 23 October 2007:

“Business managers are always anxious to see bills go into pre-legislative scrutiny because it makes them on the whole better bills and it improves their chances of going through”.

The noble Lord, Lord Rooker, recently introduced the Climate Change Bill by saying:

“I must take this opportunity to say how helpful the pre-legislative scrutiny has been in developing the Bill. It was incredibly helpful to civil servants and parliamentary draftsmen in Whitehall”.—[Official Report, 27/11/08; col. 1124.]

The noble Lord also said that the Bill had benefited greatly from the Joint Committee’s careful examination.

During the Second Reading of the Human Fertilisation and Embryology Bill, the noble Baroness, Lady Crosby, noted that the Bill, as introduced, was a,

“remarkable example of how the legislature should be brought into the drafting and scrutiny of Bills to a much greater extent than is generally true”.—[Official Report, 19/11/07; col. 685.]

So we have the three distinguished scrutineers, and there are many d’Artagnans ready to join them, not least the noble Lord, Lord Norton, who is in his place and is a member of your Lordships’ Constitution Committee.

In the years since the publication of the committee’s 2004 report, the amount of pre-legislative scrutiny markedly declined. In response to that decline, my predecessor, the late Lord Holme of Cheltenham, wrote to the noble Baroness, Lady Amos, then Leader of the House, in January 2007, to ask whether she would agree to write a letter at the end of each Session enumerating the Bills published, wholly or partially in draft, and giving an explanation of the figures and any relevant trends. The noble Baroness rejected that request on the grounds that she was not convinced that it would add any real benefit. The committee, accordingly, announced that it would produce and publish statistics on the volume of draft Bills at the end of each Session, together with comment.

This is the first such report, and sorry reading it makes. The figures showing the decline are in the report before the House. They show that the ratio of draft Bills to government Bills fell from one in three in 2003-04 to one in nine in 2006-07. In the long 2005-06 Session, it was one in 15. The number of draft Bills dropped by two-thirds during that period, contrary to the Government’s 2005 commitment at least to maintain the proportion of Bills published in draft.

In response to the strictures of the House of Commons Liaison Committee in its 2005-06 annual report, the Government stated that they were aware that the number of draft Bills published in recent years had not reached the same total as those published in one or two earlier years, but that they hoped that the number of draft Bills published each year would be above the number achieved in the 2005-06 Session. Yet, they introduced just four draft Bills in the 2006-07 Session, the same number as in 2005-06.

Your Lordships’ committee, therefore, resolved to call on the Government to increase the number of draft Bills published per Session to at least the 2003-04 level, to ensure that all draft Bills were published in good time, allowing 12 weeks for scrutiny at the very minimum and, if possible, considerably more, and, where possible, to spread their release throughout the parliamentary year. We also resolved to urge the Government not to undermine the parliamentary scrutiny process by launching additional consultations once pre-legislative scrutiny is in process or, indeed, after it has been completed. No one appreciates the exigencies of parliamentary business management more than I do; I appreciate that we occasionally have emergency Bills—three, recently—but most are not emergency Bills. It would be comforting to know who in the Government is in charge of the pre-legislative scrutiny procedure.

The Minister may also wish to revisit the decision of the noble Baroness, Lady Amos, not to write to the committee on this matter at the end of every Session. I know that noble Lords look forward to the Minister’s response to the report, as to all his contributions, with eager anticipation.

My Lords, we are greatly indebted to the noble Lord, Lord Goodlad, and his committee for their work in drawing close attention to the limitations of pre-legislative scrutiny in Parliament, and not merely for their recommendations but for eliciting factual information which has not always been forthcoming voluntarily from the Government. It has to be said that that rather restrictive attitude is somewhat surprising in view of the support that Ministers have generally given on a number of occasions—most notably that of the Lord Chancellor, Jack Straw, to which the noble Lord, Lord Goodlad, referred.

The importance of pre-legislative scrutiny scarcely needs to be emphasised. However, I think it is beginning to become a significant question whether our procedures are adequate to draw forth an in-depth examination of legislation that is not emergency. This House would do well to consider whether a system of pre-legislative scrutiny should be the norm not the exception. In a number of other developed democracies, committees exist purely for that purpose; they are not necessarily a chamber of parliament. In New Zealand there is a pre-legislative committee chaired by a former Prime Minister. In that case there is a predominance of lawyers examining the legislation, and I am quite sure that that would not necessarily commend itself to this Parliament. None the less, that committee’s work is valued by the New Zealand legislature. There are in other democracies other examples of deliberate examination of legislative proposals, not necessarily as part of the amending process but as an attempt to view the fitness for purpose—to use that rather unattractive contemporary expression—of what is being proposed and to allow, before positions become entrenched, the opportunity for those interested in the subject matter to ventilate their views and to give the benefit of their advice.

One indication given by the Leader of the House in her response to the House of Lords Constitution Committee report which we are considering filled me with dismay. She said that,

“it will not be possible to give a general undertaking to publish most bills in draft or regularly to achieve the figures reached in 2003-04”.

We all recognise that circumstances arise when it is necessary to enact legislation quickly, in an accelerated programme, where public necessity dictates, but, as the noble Lord, Lord Goodlad, said, that is certainly the exception. Most legislation is considered quite a long time in advance within government. It is not satisfactory to accept that there are administrative requirements that make it impossible to make pre-legislative scrutiny the norm. The flexibility of the ordering of Bills is entirely a matter for government. It is not beyond the bounds of Ministers to take a more ordered view of how they will proceed overall.

I would not wish to give the impression that the Government are not aware of these matters. It is highly desirable and commendable that they have published their legislative programmes in advance, as it gives at least some scope for public discussion before matters are set in concrete. There is growing awareness of the need to improve legislation, but, as the committee has drawn to the House's attention, these aspirational commitments have not been fully met by a follow-up, which would certainly be desirable.

It is a matter for consideration—perhaps particularly so at a time when the Government have published proposals for the reform of this House—whether pre-legislative deliberation and scrutiny should be thought of in that context. One of the notable functions of this House is that it is able, when it is given the opportunity, to do a very good job of such scrutiny. I think that that is widely recognised from a number of examples that I have personally witnessed, and am witnessing, of pre-legislative scrutiny. It is clear that this House is particularly well suited to this deliberative process.

It is not necessarily an adversarial process, but is about seeking to elicit information, test ideas and judge whether the draftsmanship is adequate to reflect the intentions behind the Bill. My judgment is that that is not necessarily a function that has to be carried out by an adversarial, elected House of Parliament. It could be conducted by an appointed council of state, and that could be ancillary to the role of an elected upper House. I throw that idea in the Minister’s direction without expecting him to respond in any kind of detail at all. None the less, I consider that some response is required from the Government which goes some way to indicating how they would propose to extend, and extend the effectiveness of, pre-legislative scrutiny.

There is some public concern about the quality of our legislation that is not connected with hostile partisan political attitudes but with the practitioners who have to interpret it, the professionals who have to rely on it and the general consumer of legislation. Those are the concerns and interests that can be best dealt with before the matter becomes part of the cut and thrust of debate in the Committee and Report stages.

My Lords, I congratulate my noble friend Lord Goodlad on raising this important question. The Constitution Committee’s report on pre-legislative scrutiny follows, as my noble friend mentioned, its report Parliament and the Legislative Process, which was published in 2004, when I was the chairman. It is important to put the present debate in the context of that report.

The 2004 report looked at the legislative process holistically, addressing pre-legislative, legislative and post-legislative scrutiny. At that time, the most significant developments had occurred in respect of pre-legislative scrutiny, and it looked as if that would continue to be the case. The value of pre-legislative scrutiny was widely recognised. The experience of Bills committed for pre-legislative scrutiny demonstrated its utility for improving the quality of legislation.

The case for extending scrutiny was recognised not only by the committee but also by the Government. Paragraph 28 of the 2004 report states:

“We not only welcome the use of pre-legislative scrutiny but wish to see it improved and extended. The Modernisation Committee in 2002 stressed that it wished to see publication in draft become the norm. The Deputy Leader of the House, Phil Woolas, has stated that ‘a bill should be published in draft form unless there are good reasons for not doing so’ and has made clear that ‘it is the Government’s intention and policy to increase the amount of legislation that is subject to pre-legislative scrutiny’”.

I reiterate this direct quote from Mr Woolas, who said that,

“it is the Government’s intention and policy to increase the amount of legislation that is subject to pre-legislative scrutiny”.

What has happened since? There has been a major improvement in the legislative process and there has been a significant development in respect of post-legislative scrutiny. The Constitution Committee, in its 2004 report, recommended that a Bill should, at some point during its passage, be subject to scrutiny by an evidence-taking committee. The other place has introduced Public Bill committees. This is a very welcome development, albeit one that has been little noticed outside the Palace of Westminster, and indeed has perhaps not been fully appreciated by this House. It is something that we should be examining.

In its 2004 report, the committee also recommended that Acts should normally be subject to post-legislative review by departments, with those reviews then submitted to departmental Select Committees in the other place. The Government referred the proposal to the Law Commission, which reported in October 2006; its report largely followed that of the committee, but also recommended the creation of a Joint Committee to consider post-legislative reviews not taken up by departmental Select Committees. The Government took their time in responding but in the event produced a very welcome report in March this year. Though not endorsing the proposal for a Joint Committee, it did accept that departments should review Acts normally within three to five years of enactment and send the reviews to Select Committees. I trust that we shall, in due course, be debating the Government’s response.

My point for the moment is that there has been very welcome progress with both the legislative process and post-legislative scrutiny. What has happened with pre-legislative scrutiny? There has been, in effect, as my noble friend indicated, a regression. The Government have clearly abandoned the policy announced by Phil Woolas. As the data in the report that is the subject of this debate makes clear, the highpoint for the number of Bills subject to pre-legislative scrutiny was 2003-04.

What justification do the Government offer for this post-2004 regression? In their response to the latest report, they state:

“The Government also has been disappointed at the lower numbers of draft bills published in recent sessions”.

It is written as though this is something external that is happening to Government, for which they have no responsibility. It continues:

“But, as has been indicated in the past (for example in the reply to the Commons Liaison Committee in 2007), it will not be possible to give a general undertaking to publish most bills in draft or regularly to achieve the figures reached in 2003–04. The main practical obstacle remains the need to have the freedom to bring forward much legislation on a timetable which does not allow for publication of the proposed legislation in draft form. As the Committee notes, the number planned for publication in the current session is significantly higher than in the preceding sessions”.

I have asked before, but received no answer: what on earth does this mean? I ask the Minister to explain what is meant by the following sentence:

“The main practical obstacle remains the need to have the freedom to bring forward much legislation on a timetable which does not allow for publication of the proposed legislation in draft form”.

Why does it need that freedom? Why is it a practical obstacle, as opposed to political resistance from Ministers to having their Bills examined in draft? There is no justification offered for the Government’s statement in their response either to the committee’s report or to the Liaison Committee in the other place.

Why do the Government then go on to say:

“As the Committee notes, the number planned for publication in the current session is significantly higher than in the preceding sessions”?

That does not obviously flow from what has gone before; if anything, it undermines it. It is possible to publish several Bills in draft, more so than in the immediately preceding Sessions. Why can this not be maintained and extended?

As the Constitution Committee recognises, certain Bills obviously cannot be published in draft; for example, the Criminal Evidence (Witness Anonymity) Bill. However, as my noble friend said, emergency legislation is the exception and not the norm. The Government have provided no clear principled or practical reason why there should not be more Bills published in draft and committed to pre-legislative scrutiny. The case for such publication and pre-legislative scrutiny is generally accepted, including by the Government, so why are they not delivering on what in 2004 was their declared policy? I know there is some incentive for departments to publish in draft, yet there seems to be a reluctance to go down this route and a failure on the part of senior Ministers to impose such a policy.

The Government have failed to justify this step backwards. They have made progress in other areas of the legislative process, so why not in respect of pre-legislative scrutiny?

I conclude by referring to the time provided for pre-legislative scrutiny. When Bills are referred for pre-legislative scrutiny, the committee should normally have at least three months to consider the Bill. That is included in the Cabinet Office guidance to departments. Like the noble Lords, Lord Maclennan and Lord Tyler, I serve on the Joint Committee on the draft Constitutional Renewal Bill. We began work in May and we have to report by 22 July, when we are meeting—this is for legislation that is essentially five Bills in one. The pressure on the Joint Committee has been enormous.

The Government’s response to the Constitution Committee’s observations on this point is wholly inadequate. In effect, it is that it is “one of those things”. If the political will is there, the situation can be improved. I am aware of the pressures on parliamentary counsel, but more can be done to stagger the introduction of Bills and make greater use of the provision for carryover. These points are covered in the Constitution Committee’s 2004 report. There is scope for improvement. What is lacking is not necessarily the resources but rather the resolve to improve the situation. The Government’s response is indicative of that. I look forward to the Minister offering far more this evening than is embodied in this rather sorry response.

My Lords, with your permission I shall speak in the gap. I have been sitting on the pre-legislative Joint Committee on the Marine Bill and endorse some of the points made by other speakers. The process has been very effective, and witnesses have been able to appear, including a fascinating witness from the EC who enabled us to take an alternative view on what we are doing. That should happen more often. The consensus emerged about the changes needed to the Bill which, I hope, will be incorporated.

I half-endorse the grumbling of previous speakers, although we should always remember that the best should not be the enemy of the good. Our committee has been able to sit for eight weeks this summer and has done very useful work, even though we did not have the ideal 12 weeks. With those points I should like to endorse the committee.

Another criticism was that scrutiny committees should not be meeting if there are additional reports in the pipeline. Our committee had additional reports in the pipeline. We should just live with that; it is better to have pre-legislative scrutiny than none at all.

My Lords, I am glad to contribute to the debate, not least because I entirely endorse the comments of the noble Lords, Lord Goodlad and Lord Norton of Louth, and my noble friend Lord Maclennan. As the noble Lord, Lord Norton, has already said, three of us are involved in the pre-legislative scrutiny of the draft Constitutional Renewal Bill, to which I shall come back in a moment; this has been an important exercise and it has conditioned my thinking on this.

I note in passing how important it is to have a few poachers turned gamekeepers in this House. There are two former Chief Whips, members of the old boys’ club, here this afternoon. In the notable case of the noble Lord, Lord Goodlad, we have a former government Chief Whip. As such, he comes with all the experience of the business managers of the other place, which will stand us in good stead in his committee and in his service to your Lordships’ House. Useful work is clearly being undertaken. So many of the recommendations of the Norton report, to which we go back at regular intervals, are still relevant to what we are doing here today.

It is important to step back for a moment to remind ourselves why we undertake pre-legislative scrutiny: to improve the eventual product of Parliament. The quality of what we produce in this building is often justifiably criticised, but pre-legislative scrutiny is one way in which we can make dramatic and useful improvements. It is therefore important that we are concerned not only with the number of Bills that go through this process, but their importance and significance—indeed, somebody mentioned their length. Although I take seriously the point of the noble Lord, Lord Goodlad, about the reduction from one in three in the year to which he referred to one in 15, the significance of that legislation is also important. It is not just quantity but quality.

I have a long commitment, as do my noble friends, to improving pre-legislative scrutiny and making it more applicable and work better. Indeed, in the other place, I worked closely with the late Robin Cook on these issues. I see that the Minister indicates that Robin Cook applied considerable energy and effort, and attempted to bring Members of all parties along with him to make a success of this exercise.

It is significant, as the noble Lord, Lord Goodlad, has pointed out, that a great many more Bills went into pre-legislative scrutiny when Mr Cook was Leader of the House of Commons, not least those undertaken by Joint Committees. In passing, I point out, as I am a member of the Joint Committee looking at the draft Constitutional Renewal Bill, that a special role can be played in Parliament by Joint Committees. They bring together the ethos of this House with some of the expertise available in the other place. We accelerate the process because we bring together the analysis of both Houses in one exercise, rather than having to do it sequentially and thereby lose some time.

Reference has been made to the Joint Committee on which we are serving having been given an extraordinarily short time to deal with incredibly complicated matters, diverse to the point of disruption. Some of the issues that we have been addressing are so peculiar in their own way that they do not happily fit into a coherent draft Bill. Without betraying any of the likely consequences of our examination, we may well make that comment. To do it in just 10 weeks! We are meeting twice a week, on Tuesdays and Wednesdays, with our amazing Clerks from both Houses updating us between the meetings. It is extraordinary, and I pay tribute to the Clerks for that exercise, but it cannot be said to be a well organised process if we are putting them under that pressure.

In addition, we should recognise that one of the huge values of pre-legislative scrutiny is that we take evidence. As the noble Lord, Lord Hunt of Chesterton, said, it is extremely important that we take evidence from outwith the parliamentary estate on important issues that we address. I note, for example, that when the Joint Committee under the noble Lord, Lord Puttnam, looked at the Communications Bill, evidence was taken from experts that could possibly not have been brought together by the normal process of examination.

In that context, my noble friend Lord Maclennan is right to say that, when taking evidence in a Joint Committee, you get well away from the normal adversarial process so often seen at the other end of the building—and occasionally in your Lordships’ House. In this process, you would not know what party or group those taking the evidence or those giving it were from. That effective, impartial assessment of complicated issues was especially apparent in the pre-legislative scrutiny of the Communications Bill.

Briefly, on parallel consideration of these issues between the two Houses, it would be inappropriate to comment in detail on what happens in the other place. However, I note—because I was involved in it—that this House was looking at these issues from 2002 to 2004 when the modernisation Select Committee, on which I served for a number of years, was doing so in the other place. I take seriously the work done in this House by an interesting group of party leaders while this was being discussed by the modernisation committee. It was referred to as the Leaders’ Group on working practices in the House of Lords, and produced a report on 29 April 2002 that went into a great deal of detail about the working practices of the House.

We all know what happens with the London bus syndrome: Bills all appear immediately after the Queen’s Speech in December or November, and they all need a Second Reading. A number come to this House; perhaps too few, but that is a separate issue. A great number go to the House of Commons, and then they all go into Committee. As a result, there is a blockage; we have a number of Bills coming at the same time. Sometimes there are 10 or a dozen Bills for Second Reading in just a few weeks, and then they all go into Committee.

Those pressures can be alleviated, partly by better spreading of the draft legislation for pre-legislative scrutiny, partly by allocating in which House they should start, but also by ensuring that carryover is used in appropriate cases. In 2002, this House made the sensible decision of linking the issues of pre-legislative scrutiny with carryover. Clearly, if you are to have appropriate time set aside for pre-legislative scrutiny, you may find that the resulting Bill needs to be carried over into the following Session. Unfortunately, against the pressures that I and others—particularly Robin Cook—tried to steer through in the other place, the same deal was not struck, nor was the same link made. I therefore fear that the other place is far less clever in organising pre-legislative scrutiny and the resulting link with carryover. That is an important link, for better digestion of the legislative programme through the year and—where necessary, by agreement between the parties—carryover into the following Session. I hope that the Minister will allude to that issue. Even if he cannot give a definitive view, I hope that we can go back to it.

We owe a great debt, not only to the noble Lord, Lord Goodlad, for what he has done with this committee in more recent months on behalf of your Lordships’ House, but also to previous chairs: the noble Lord, Lord Norton, and our much lamented former colleague, the late Lord Holme of Cheltenham, who made a signal contribution to the improved working of this House. This is a useful report. I hope that we will have a positive response from the Minister this evening. More than that, however, I hope that we will see some of the improvements that have been alluded to by all noble Lords who have spoken this evening.

My Lords, I congratulate my noble friend Lord Goodlad on bringing his report to your Lordships' House and on explaining it with his customary incisiveness.

Generally speaking, pre-legislative scrutiny is a desirable constitutional development. The members of a scrutiny committee have a real opportunity to influence the Government’s thinking. Moreover, the existence of the committee, sitting in public, animates and engages outside interests and individuals who have preoccupations about one or more of the draft Bill’s provisions. By the time it becomes a Bill, and begins its journey through the legislature, many more people have become familiar with its contents and the issues to which it gives rise. This increased awareness goes a little way to redress the balance of power between Parliament and the Executive. Faced with a better informed House, the Government will usually have to work harder to achieve the passage of a Bill, and to give more ground than they would otherwise have done.

Soon after the Prime Minister became Prime Minister, he committed himself to changing the balance of power between Parliament and the Executive. Indeed, there is a draft Bill on constitutional renewal presently under consideration by a joint legislative committee—as we have heard more than once tonight—much of the contents of which purport to contribute to achieving this constitutional objective. However, as my noble friends Lord Goodlad and Lord Norton of Louth powerfully said, in the arena of pre-legislative scrutiny there seems little or no sign of the Government pursuing the Prime Minister’s declared aim.

This is evident from the Government’s response to your Lordships’ Select Committee’s report. It is resoundingly negative. The Government refused the committee’s request to give a,

“general undertaking to publish most bills in draft or regularly to achieve the figures reached in 2003-04”.

Yet the Government’s legislative plans for the coming session were published in May. Surely there could be greater use of pre-legislative scrutiny within this timescale, as the noble Lord, Lord Tyler, emphasised.

Chapter 1 of the Government’s 2008 draft legislative programme states that its aim is,

“to set out the Government’s current proposals for legislation, to be considered by Parliament in its next session, for comment and consultation before the final programme is published in the Queen’s Speech towards the end of the year”.

Given this aim, why are the Government so reluctant to let Parliament conduct detailed pre-legislative scrutiny of their proposed measures?

Moreover, the Government were unwilling to give the committee any comfort on its specific requests, as my noble friend Lord Goodlad explained. They declined to provide guidance on the compiling and publishing of statistics for draft Bills and draft clauses; were not prepared to furnish a general undertaking to publish most Bills in draft form; and refused to agree to guarantee that a committee engaged in pre-legislative scrutiny should have at least three months at its disposal.

The Minister will no doubt tell us, on the one hand, that the Government remain committed to the principle of pre-legislative scrutiny for most Bills; but, on the other, that constraints such as the availability of parliamentary draftsmen, competing demands on civil servants within departments and, quite simply, events, make specific commitments on numbers or timing impossible to make.

My response is that, despite these constraints, the Government always respect the legislative timetable and procedures of each of the two Houses of Parliament with respect to the passage of Bills in circumstances where the above-mentioned constraints are just as relevant. Why should pre-legislative scrutiny not be regarded in most cases—as I believe all speakers said this evening—as an additional mandatory stage in the passage of a Bill?

My Lords, I thank the noble Lord, Lord Goodlad, for instituting the debate and for chairing the committee which produces excellent reports. Although we have had a limited number of speakers, this has been a high-quality debate.

I was disappointed to hear that the Government’s response was deemed negative. I assure noble Lords that we respond positively to pre-legislative scrutiny where it is appropriate. We will continue to look at these matters in the light of the committee’s report and our discussion tonight. The Government remain committed to the use of pre-legislative scrutiny and certainly understand the benefits it can have in terms of the quality of the legislation that is eventually passed, engagement with stakeholders and increased knowledge gained by Members of both Houses who take part in it. When the substantive Bill is produced, the debates on it in your Lordships' House and the other place are inevitably enhanced because of the experience that Members bring to them.

Eighteen months ago, I well remember suddenly finding myself in the Department of Health. On almost my first day in the new job I had to deal with the first Committee day of the Mental Health Bill, which would have been a challenge in itself. However, it turned out to be even more of a challenge because many of the noble Lords who took part in the debates on that Bill had served on the pre-legislative scrutiny committee. Therefore, they came to those debates armed with huge knowledge and expertise, and sometimes with preformed judgments on some of the issues. Therefore, I experienced at first hand the benefit of pre-legislative scrutiny and have no doubt at all that it can be very beneficial for some legislation.

I very much enjoyed the speeches of the noble Lords, Lord Norton, Lord Tyler and Lord Maclennan, and the way in which they placed this debate in a much wider context. Mention was made of the 2004 report, which took a holistic view of the legislative process; of the work of the Modernisation Committee of the House of Commons; and of the late Robin Cook, who was such an energising moderniser of Parliament. If one looks at the changes that have taken place in the past 10 years, one is in no doubt that there has been impressive progress in improving parliamentary scrutiny. It is easy to forget that detailed Explanatory Notes to Bills have been with us for only a few years. Prior to 1997, Members had to rely on notes on clauses, which were not widely disseminated. Impact assessments are also published with Bills. In the wider scrutiny sense, we have the Westminster Hall debates and Public Bill Committee hearings in the other place, to which the noble Lord, Lord Norton, rightly drew attention. Topical questions were introduced in the other place, no doubt following the experience of your Lordships’ House, which increased the number of such questions that can be asked. In addition, the draft legislative programme is published in advance of the Queen’s Speech.

The noble Lord, Lord Kingsland, rightly referred to the statement by my right honourable friend the Prime Minister last summer, The Governance of Britain Green Paper and the draft constitutional reform Bill, to which my noble friend Lord Hunt also referred. That shows that considerable progress is being made. However, I accept that we ought not to be complacent. The noble Lord, Lord Tyler, was absolutely right to say that the opportunity that we have to debate House of Lords reform in the light of the White Paper issued on Monday also gives this House an opportunity to look at its own procedures and the way in which it deals with legislation.

I modestly—or not modestly at all—refer to the Labour Peers Working Group on Lords reform. One of the sections in it suggested an alternative way of dealing with legislation. I cannot say that it has got very far, but we have an opportunity in the next year or so, particularly leading up to the election, and following on from the White Paper, to think rather more about whether there are ways in which this House could improve the way in which it scrutinises legislation. I would very much welcome that.

We heard a lot about New Zealand yesterday. We were going to send the noble Lord, Lord Thomas of Gresford, there to investigate the way in which it deals with witness anonymity. It would be interesting to look at the approach suggested by the noble Lord relating to pre-legislative scrutiny.

I asked officials for a list of the Bills where pre-legislative scrutiny has taken place and the impact that it has had, and it is very positive. I shall mention three of them. On the Legal Services Bill, the Government accepted a large number of the Joint Committee’s recommendations; the reckoning is approximately three-quarters. We have already heard the tribute paid by the noble Baroness, Lady Williams, on the Human Fertilisation and Embryology Bill. The majority of recommendations in the committee’s report on the Climate Change Bill were accepted. There is no doubt at all that that strengthened the Bill in terms of policy and legislative handling.

On the question of numbers, ratios and the Government’s current approach, the Government published 58 draft Bills between 1997 and the beginning of the current Session. We have published a further seven so far this Session: the Cultural Property (Armed Conflict) Bill; the Constitutional Renewal Bill; the Marine Bill; the Heritage Protection Bill; the Marine Navigation Bill; the Immigration Bill and the Apprenticeship Reform Bill. The draft legislative programme flagged an intention to publish two further Bills on construction contracts and on communications data.

If we take the seven Bills published so far this Session, in the current Session, the Government have introduced some 23 main programme Bills for Royal Assent. One-third of those were either emergency Bills—the Banking Reform Bill and the Criminal Evidence (Witness Anonymity) Bill—or Bills that were previously published in draft. One must be careful about the ratios.

I know that noble Lords think that there should be more than seven, and I accept that every noble Lord who has spoken would like there to be more, but that is evidence that the Government have not backed away from the general principle of wishing to publish Bills in draft where it is appropriate and where there will be real benefit from it. However, there are sometimes good reasons why—

My Lords, I am grateful to the Minister for giving way with his customary kindness. He has just said that the Government support the use of pre-legislative scrutiny where appropriate. My understanding was that the Government had accepted the principle of exercising the pre-legislative scrutiny procedure in the case of most Bills; and that what held the Government back were factors such as the lack of parliamentary draftsmen and difficulties within government departments about priorities. Which is it? Is it that the Government simply take the view that it is entirely at the discretion of the Government as to which Bills they subject to pre-legislative scrutiny; or is it only because of those constraints that the Government do not subject most Bills to pre-legislative scrutiny?

My Lords, there are a series of factors and considerations that need to be taken into account. The noble Lord is not going to get me to answer in the way that he wants me to answer.

My Lords, does not this go to the heart of the debate and in particular the speech made by my noble friend Lord Norton of Louth? He suggested that the Government were going backwards in this matter. I suspect that the Minister would not be prepared to accept that allegation. It seems to me, from the noble Lord’s reaction to my first intervention, that the Government do not know what their policy is on pre-legislative scrutiny and, even if they do, they are not prepared to tell your Lordships’ House.

My Lords, I really think that that is rather unfair. I thought that I had made the Government’s policy on pre-legislative scrutiny very clear. After all, it was this Government who introduced and developed pre-legislative scrutiny, alongside other modernisations and improvements—

My Lords, I may be able to help the noble Lord. He is saying that there are reasons why Bills are not published in draft. Part of the problem is that we are not told what those reasons are. One way to completely change the emphasis and address that very point is embodied in a recommendation of the Constitution Committee in 2004. Paragraph 34 states:

“Acknowledging that this entails an important shift of emphasis, we recommend that the Government should move from deciding which bills should be published in draft each session to deciding which bills should not be published in draft. Where the decision is taken not to publish a bill in draft, then the reasons should appear in the Explanatory Notes to the bill”.

That would get at the point, we would know the reason, and it would provide a much clearer emphasis on what the Government are seeking to achieve.

My Lords, I am not sure that I agree with that. In the end, it has to be for the Government to decide—

My Lords—

My Lords, what is so fascinating here is that we are developing the concept of debate within a Question for Short Debate; so be it.

My Lords, I am grateful to the Minister for giving way; I am going to come to his aid. Very useful evidence was given to the Select Committee on Modernisation about what the problem was. It was not the problem of manpower among parliamentary draftsmen. Indeed, it was recognised that spreading the load would be more effective. It was not the problem of producing draft Bills rather than complete Bills, because that, too, was recognised. If the Minister is finding it difficult to find suitable alibis for the position that the Government have taken, I suggest that he looks at the evidence given to the Modernisation Committee in the other place.

Finally, in that respect, it would certainly help if there was better discussion between the parties at a very early stage after the Queen’s Speech about what was and was not appropriate for pre-legislative scrutiny. Again, that was one of the recommendations of Mr Robin Cook.

My Lords, it is not that I do not have answers to these questions; it is that every time I start to read out my brief, noble Lords intervene. I am quite happy to carry on in this very entertaining way. I have often thought that rather than having staid, officially written responses to Questions for Short Debate, it would be much better to have this kind of discussion. That is particularly so when it comes to such an important matter as how we can improve the job that we are here to do, particularly in your Lordships’ House, which is to get better scrutiny of legislation.

I will not read through the list, but there are clearly substantive reasons why the Government would consider that it is not appropriate to have pre-legislative scrutiny for some Bills. Clearly, some Bills have external time constraints. The noble Lord, Lord Goodlad, referred to the emergency Bills that we have recently debated in your Lordships’ House. There may be other Bills that are implementing policies following a review and extensive consultation. Where that has occurred, there may be some hesitation in also having pre-legislative scrutiny, due to time factors and the fact that it would cover ground that had already been extensively covered in a consultation.

There are time pressures in the government timetable. I have had experience of dealing with many Bills in different government departments. While of course it is important that there should be sufficient time for pre-legislative scrutiny, proper drafting and proper consultation, the reality of government is that, with the best will in the world, sometimes there is not the time. Sometimes Governments have to make decisions that lead to legislation for which it is simply not possible or practical to undertake pre-legislative scrutiny.

There will be some occasions where publishing Bills in draft may not add greatly to the knowledge of the proposed legislation. Some short Bills, for example, may legislate for the implementation of international agreements.

My Lords, Can the Minister say whether there is a Minister in the Government with overall responsibility for pre-legislative scrutiny and, if so, who that is?

Yes, my Lords, I was going to come to that. In fact, I have gone over my time. I do not know whether the House is happy for me to do that. My understanding is that pre-legislative scrutiny is the responsibility of the business managers in the two Houses. The Leader of the House of Commons is also chair of L Cabinet Committee—the Cabinet committee that all Ministers are in fear of, because it is in charge of the legislative programme. Therefore, it is L Cabinet Committee that must clear legislation. Noble Lords may not believe it, but it keeps a very tight rein and close eye on Ministers preparing Bills and on the legislative process. I certainly have the scars on my back to prove it.

A number of other questions were raised. I know that there is an issue about statistics and how they should be measured. I hope that officials from government may meet the officials who service the noble Lord’s committee to see whether there can be further discussion about statistics. Clearly, there is a question about how you measure pre-legislative scrutiny.

On the House of Lords White Paper, the noble Lord, Lord Tyler, asked on Monday whether the intention was to publish draft clauses. The Government have signalled that, depending on the outcome of the White Paper deliberations, it may be possible to publish draft clauses. How should they be measured in terms of whether they are considered to constitute a Bill? There are some interesting matters that we might discuss.

On the question about my noble friend Lady Amos, when she was Leader of the House, and the publication of the information for which the noble Lord asked, the noble Lord will have read the response from my noble friend. I am happy to talk to my noble friend Lady Ashton about what information the Government might publish that would be of help to the House and the committee. The Government want to be co-operative in this matter.

Let me reiterate by, first, thanking the noble Lord and his committee for their invaluable report. Despite what may be perceived as the negativity of the response, I hope that he will not see it in that way. The Government remain committed to pre-legislative scrutiny. There is clearly a debate between us as to the extent of pre-legislative scrutiny and the criteria under which the Government decide which Bills are appropriate for it. I have no doubt that we will continue to have that debate. I also suspect that the work that will now take place on post-legislative scrutiny will throw up some interesting conclusions, which will be of help in improving the legislative process as a whole.

I pay tribute to the noble Lord, Lord Norton, for his championing of post-legislative scrutiny, which I believe offers much hope for the future. In the mean time, I assure noble Lords that the Government will continue to look with favour on pre-legislative scrutiny and will continue to evaluate Bills to ensure that, where appropriate, they will be considered for that process.

House adjourned at 8.15 pm.