My Lords, before the Minister moves that the first statutory instrument be considered, I remind noble Lords that in the case of each statutory instrument, the Motion before the Committee will be that the Committee do consider the statutory instrument. I also make it clear that the Motions to approve the statutory instruments will be moved in the Chamber in the usual way. Noble Lords will all be aware that if there is a Division in the House, the Committee will adjourn for 10 minutes.

That the Grand Committee do report to the House that it has considered the Welsh Zone (Boundaries and Transfer of Functions) Order 2010.

Relevant Document: 8th Report from the Joint Committee on Statutory Instruments.

My Lords, the draft order does two things. First, it sets out the boundaries of the Welsh zone. Secondly, it transfers the exercise of fisheries functions in that zone from Ministers of the Crown to Welsh Ministers.

I will set out some background to the establishment of the zone before turning to the rationale for the change. The Marine and Coastal Access Act 2009 amended the Government of Wales Act 2006 to include a definition of the Welsh zone and allow the transfer of ministerial functions connected to fisheries, fishing and fish health to Welsh Ministers in that part of the zone that is outside territorial sea limits. The 2006 Act, as amended, defines the Welsh zone as the sea adjacent to Wales which is, first, within British fishery limits, and, secondly, specified in an Order in Council under Section 58, or in an order under Section 158.

This order is brought forward under Section 58 of the 2006 Act. The boundaries of the zone are defined in Article 3 and the co-ordinates in the schedule to the order. To the north of Wales, points 1 to 8 in Part 1 of the schedule replicate the boundary between England and Wales in the Dee estuary by following the line that was defined in the National Assembly for Wales (Transfer of Functions) Order 1999. At the end of those points, the boundary follows a simplified median line between Wales and north-west England until it makes contact with the Isle of Man territorial sea at point 11. The Isle of Man territorial sea limit is then followed in a westerly direction until the point where contact is made with the boundary of the Northern Ireland zone. From that point, the boundary follows the Northern Ireland zone in a south-westerly direction until point 12, where the Northern Ireland zone meets the extent of British fishery limits.

Similarly, the southern boundary of the Welsh zone begins by following the boundary between England and Wales in the Severn estuary and the Bristol Channel, along the line that was defined in the 1999 transfer of functions order. It then follows a simplified median line in a south-westerly, and then westerly, direction until the boundary reaches the extent of British fishery limits at point 22 of Part 2 of the schedule. The western boundary of the zone is the British fishery limit.

I draw the Committee’s attention to the fact that the Welsh zone includes both the territorial sea adjacent to Wales, out to 12 nautical miles, and the sea outside the territorial boundary but within the defined limits. Welsh Ministers already exercise fisheries functions within the boundary of the territorial sea, and this order merely extends the area in which they may exercise those functions to include the area of the Welsh zone outside the territorial sea—in other words, beyond 12 nautical miles.

Functions that can be transferred to the Welsh Ministers by an Order in Council under Section 58 of the 2006 Act are, in that part of the zone beyond the territorial sea, limited by Section 58(1)(a) to functions connected with fishing, fisheries or fish health. The fisheries functions that are to transfer from Ministers of the Crown to the Welsh Ministers are listed in Article 4 of this order.

The functions are to be vested in the Welsh Ministers on the same basis that they are exercisable by them at present in the territorial sea adjacent to Wales. The functions to be transferred include powers under the Sea Fish (Conservation) Act 1967, the principal Act used for the regulation of commercial fishing throughout England and Wales. It includes the power to restrict fishing for sea fish, including regulating the fishery for a specific species at a specific time or a specific location, and regulating the size of the fish that can be caught or landed and the methods by which that fishing is undertaken. The Welsh Ministers will also be able, under the Fisheries Act 1981, to make provision for the enforcement of EU restrictions and obligations relating to sea fish.

The duty on Welsh Ministers under the Sea Fisheries (Wildlife Conservation) Act 1992 to have regard to the conservation of marine flora and fauna in discharging functions under sea fisheries legislation will also be extended to cover the whole of the zone.

While most functions are being transferred entirely to the Welsh Ministers, in cases where a function is at present exercisable by them concurrently with UK Ministers in the territorial sea, it will also be exercisable on a concurrent basis in the rest of the Welsh zone. These concurrent functions are listed in Article 5 and include further functions under the Sea Fish (Conservation) Act 1967 in relation to the licensing of fishing vessels. The concurrent nature of the UK licensing functions is central to the principles of a single UK fishing licence. Also included are powers under the Sea Fisheries Act 1968 to regulate the conduct of sea fishing operations with regard to the identification and marking of fishing boats, as well as functions under the British Fishing Boats Act 1983 relating to the qualification for British fishing boats to be used in fishing, trans-shipment and the landing of sea fish.

I will now move briefly to the policy underpinning this order. Noble Lords might like to note that, as set out in the Explanatory Memorandum that accompanies the order, the Welsh Ministers’ overriding policy aim is to create viable and sustainable fisheries in the waters around Wales, as described in the Wales fisheries strategy.

The creation of the zone will simplify the jurisdiction, better reflect practical realities and enable the more coherent management of fisheries off the Welsh coast. The vast majority of the Welsh fishing fleet operates within the zone, and its creation would put Wales on a similar footing to the other devolved Administrations, each of which already has a fisheries zone.

I draw the Committee’s attention to the fact that Parliament has already agreed the principle of the Welsh zone by virtue of its inclusion in the Marine and Coastal Access Act 2009. The order simply gives the zone practical effect.

A further effect of establishing the zone is to define the boundaries of the Welsh offshore region, one of the eight marine planning regions in UK waters created by the Marine and Coastal Access Act. The Act provides for the Welsh Ministers to be the marine plan authorities for both the Welsh offshore and inshore regions, and to prepare marine plans for these regions. The Welsh offshore region would not be defined in the absence of this order.

The draft order has already been approved by the Welsh Ministers, and I commend it to the Committee.

My Lords, I thank the noble Lord for making this order so clear. I took part in the debates around the Marine and Coastal Access Bill and this order is a logical follow-up. I remember asking questions at that time about how the various borders would be set up and agreed. I am delighted to hear that, although we have waited some time for this order, it is being made as a direct result of consultations with the Scottish, Irish and, presumably, the English.

Before I go any further, I point out that point 22 of Part 2 of the schedule does not exist. It exists on the map, but not on the list of longitude and latitude in the schedule.

It is at the top of page 6.

I apologise for that and withdraw my remarks. I had turned the page, but missed it.

We clearly had good negotiations with the other parties concerned—the Irish, the Northern Irish, the Isle of Man, Scotland and wherever. A sizeable chunk of our local seas—St George’s Channel and the Irish Sea—is the responsibility of Wales. From the beginning of proceedings on the Marine and Coastal Access Bill it was made clear that Welsh Assembly Ministers wished to take direct control of the management of this part of the sea fisheries of the United Kingdom. Given the scale of things, that seems to be eminently sensible.

However, I have a few questions. First, what consultation is anticipated between Ministers of the Crown and Welsh Ministers in relation to the functions that are concurrently exercised? As I understand it, that includes areas directly beyond the Welsh zone up to the international zone between the limits of the UK and Ireland.

Secondly, Article 6 provides:

“Any provision of section 4 or 4A of the Sea Fish (Conservation) Act 1967 requiring the consent of the Treasury to the exercise of a function does not apply in relation to the exercise of the function by the Welsh Ministers”.

Why is this?

Thirdly, Article 8 provides:

“Paragraph 1(1) of Schedule 4 to the Government of Wales Act”—

it relates to the transfer of property and so on—

“does not apply to any documentary or electronic records to which … a Minister of the Crown is entitled in connection with any function exercisable by the Minister of the Crown and transferred by this Order”.

What arrangements, if any, will be put in place for access by Welsh Ministers to such records?

Those are my key questions. In summary, this is an eminently well thought-out statutory instrument. I hope that the Welsh Assembly will take this on board—it is a big task, involving licensing of fishing boats, management of sea fisheries, protection and all sorts of things that come to us from Europe and central government. I am sure that Welsh Ministers will need support, we wish them good fortune in carrying out their responsibilities and I hope that they will get stuck in right away. I support the order.

I thank my noble friend for his lucid explanation. I rejoice at the finding of point 22. The Welsh Assembly cares greatly for the future of what remains of the fishing industry. Does the order enable any measures to enhance a Welsh fishing industry that is currently under considerable and major pressure? What does the industry comprise? This information would help us to understand the objective of the order. Is it concerned with deep-sea fishing for cod and herring? What is encompassed here?

Can the Minister tell us where in Wales there is a fishing industry today; that is, which ports relate to this order—one that I fully support and welcome? Would I be right to assume that there is a small and viable fishing industry in far flung Pembroke, probably based at Haverfordwest? Further, can he define the difference between the Welsh zone and the seaward boundary of the territorial zone? Does my noble friend know that when I had the honour to work in what was then the Welsh Office with ministerial responsibilities, while deciding the route of the A55 expressway from Chester to Holyhead, I found it necessary to obtain navigation rights to the west of Conwy and the east of Bangor so as to put the highway into what is now called the Irish Sea but which locally might be considered to be the bay of Conwy?

It is privilege to take part in the discussion of this order, and in particular to follow my compatriot the noble Lord, Lord Jones, who speaks with a wealth of experience of the fishing industry, the routing of roads and so on, in north Wales. I appreciate his words. I do not know if anyone else present had family who were a part of the fishing industry. My great-grandfather was a trawler-man in Conwy. He drowned in 1869, so we go back a long way in the fishing story of north Wales. But I know that others come from coastal areas as well.

This is very Welsh, but is my friend the noble Lord, Lord Roberts, aware that my ancestors were boat-builders in Conwy and then migrated to the boat-building industry in Flintshire at Connah’s Quay? Together, we can make some historic references.

I thank my cousin for that intervention, and I am only sorry that my other cousin here today, my noble friend Lord Livsey, has to leave us or he would be leading on this order.

The order specifies the boundaries of the Welsh zone and brings certain functions that deal with fishing, fisheries and fish health under the control of Welsh Ministers. As part of the Marine and Coastal Access Act 2009, the Welsh Assembly Government wanted to bring fisheries functions in-house under the control of Welsh Ministers, hence the establishment of the Welsh zone under the 2009 legislation. It makes sense for Wales to have a zone and so bring it in line with Scotland and Northern Ireland. We on the Liberal Democrat Benches welcome the new powers over fisheries for the Welsh Assembly Government and want to see them work well. The order makes the boundaries of the Welsh zone clear, and I welcome that. Again, I am grateful to the Minister for giving us such a lucid explanation of what is involved, and to the team backing him on this order.

The boundaries of the Welsh zone have been negotiated between the UK Government and the Welsh Assembly Government. Welsh Ministers will be able to exercise all the functions they need within the zone, so it is very much a tidying-up exercise rather than the transfer of new powers. We understand why the boundaries of the zone were left to an order, but perhaps I could ask, first, if any consideration was given to transferring these functions as part of the 2009 Act? Secondly, are the Government sure that they have transferred all the functions referring to Wales to the Welsh zone? Has anything somehow been left out of the transfer?

The Explanatory Memorandum states that the Welsh Assembly Government are confident that the creation of the Welsh zone will not weaken the UK position in European Union fisheries matters. We agree, but have any procedures been put in place for cross-governmental working to ensure that the Welsh voice is heard, and heard loudly, at the European level? My final question is this: will additional resources be allocated to the Welsh Assembly Government to enable them to carry out their new responsibilities? Other than those questions, we welcome the order.

My Lords, I have only one basic question to ask the Minister about the order, and that is in regard to the cost of its implementation as far as Wales is concerned. We are talking about the accretion of responsibility by Welsh Ministers for functions relating to fishing, fisheries and fish health over an extensive area. Yes, they have been responsible for the functions previously and currently, either on their own or concurrently with Ministers of the Crown, but within a limited area, which I understand is up to what is described as the “seaward boundary of the territorial sea”. In common parlance, that means up to the 12-mile limit. However, this zone is far bigger. As the Minister explained, it extends to the boundaries of the British fishery limits, as defined by the latitude and longitude co-ordinates in the Schedule, and reaches towards the Isle of Man in the north and St George’s Channel in the south.

Paragraph 10.2 of the Explanatory Memorandum states:

“The administrative burden for the Welsh zone will transfer from the Department for Environment, Food and Rural Affairs to the Welsh Assembly Government. There will be no budgetary transfer from the UK Government to the Welsh Assembly Government in connection with this Order”.

What exactly is the administrative burden? How many people are involved in carrying it and at what cost? Will there be staff transfers from Defra? How many people are involved in exercising the functions performed currently in the limited area and how many will be employed in connection with the bigger zone, which will obviously involve more work? There is a transfer of functions from Ministers of the Crown to Welsh Ministers under Article 4. The take-up of these functions will involve costs and it would be interesting to know what they are or are likely to be. These questions need to be asked and answered because Civil Service numbers have a habit of growing even in the midst of a recession and we should at least be aware of them.

My Lords, it was interesting to hear the noble Lord, Lord Roberts of Llandudno, speaking of the powers that will be transferred to the Welsh Assembly Government. However, given the sad state that things are in at the moment, very few powers will be gained. This is a general look forward to when powers might be transferred from Europe. The main powers the Assembly will wish to exercise relate to conservation, the designation of marine protected areas and so on, but I wonder whether, as in so many other parts of the United Kingdom, historic overseas fishing rights are being exercised within the six to 12-mile limits. Where that occurs in other parts of the United Kingdom, we have less control in the six to 12-mile limit area, and perhaps the same will be true for the Welsh Assembly.

My Lords, I thank all noble Lords who have taken part in this short debate. I congratulate them on the interest they are taking in the order and the support that they have given for it. I also congratulate them on the perspicacity of the questions they have put to me, which I will do my best to answer. Obviously if I leave things unsaid at the end of the debate, I shall write to noble Lords and put that right.

I am pleased that the Committee takes the view that the Government do—that the change proposed in the order is sensible and will make the management and enforcement of fisheries around the Welsh coast simpler, and make a sustainable marine environment easier to achieve. We certainly take the view that it is right for a single Administration—Welsh Ministers—to become responsible for fisheries around the Welsh coast rather than the current rather cumbersome arrangements whereby five organisations are responsible for managing Welsh waters. The order helps to achieve that aim by establishing the Welsh zone, within which the Welsh Ministers will be responsible for fisheries functions.

The noble Lord, Lord Glentoran, asked specifically about consultation. The Welsh Assembly Government consulted all relevant UK government departments about the proposal and received positive feedback from them. They then canvassed the other United Kingdom fisheries administrations to provide lists of relevant parties and, in May 2008, wrote directly to over 300 individuals and organisations. Sadly, only 13 responses were received. Of those, only two were against the proposal. One was from the National Federation of Fishermen’s Organisations, a body that—given the existence of national federations in the other UK nations—broadly represents the English fishing industry. The second respondent was the South Wales Sea Fisheries Committee, whose major concern was that the Welsh Ministers’ gaining responsibility for the offshore area would divert resources away from inshore fisheries. That is not our view, and it is not the view of the Welsh Assembly Government. We and they feel that the creation of the zone will not require extra resources or necessitate the reallocation of resources away from the inshore area.

The other point of the question asked by the noble Lord, Lord Glentoran, was about consultation continuing. There will be regular dialogue between the Welsh Assembly Government and Defra on concurrent functions as part of the existing arrangements. Both the Welsh Assembly Government and the United Kingdom Government would need to agree before concurrent functions were exercised. In practice, therefore, licensing arrangements will continue as at present. There will be formal dialogue at ministerial level to agree such matters. Similar arrangements are already in place between the United Kingdom Government and Scotland and Northern Ireland.

The noble Lord, Lord Glentoran, also asked whether Welsh Ministers would require Treasury consent to exercise functions under the 1967 Act. Treasury consent or approval will cease where the Welsh Ministers issue licences to fishing boats or for the trans-shipment of fish under Sections 4 and 4A respectively of the Sea Fish (Conservation) Act 1967. The way in which Treasury consent or approval will cease or continue on those functions transferring to the Welsh Ministers under the order reflects how those same Treasury consent or approval requirements do or do not apply to the current exercise of those functions by Welsh Ministers within the territorial sea limits. That reflects the corresponding provision in the National Assembly for Wales (Transfer of Functions) Order 1999.

The noble Lord, Lord Glentoran, asked what arrangements were in place for access by the Welsh Ministers to records of a Minister of the Crown and whether that would be transferred to them. Administrative arrangements will be in place to ensure that, if needed, the Welsh Assembly Government can have access to retained records—for example, for disclosure in any court proceedings. That provision is a common feature in orders transferring ministerial functions to the Welsh Assembly Government.

My noble friend Lord Jones asked whether the order would enable measures to be taken to enhance the fishing industry. The Welsh Ministers will have the same powers in the Welsh zone as currently afforded in the territorial seas. These enable Welsh Ministers both to manage and to develop fisheries in line with the aims of the Wales fisheries strategy. There are many ports in Wales. Milford Haven and Holyhead are the main ones, but there is smaller inshore fishing all around the Welsh coast, from the Gower to Anglesey. Such fishing takes place mainly in the Welsh zone.

My noble friend also asked about the difference between the Welsh zone and the seaward boundary of the territorial sea. The territorial sea extends to 12 nautical miles from the baselines. The Welsh Ministers already have functions within its boundaries. The Welsh zone extends their jurisdiction to the British fishery limits and this order draws the boundaries where the zone meets the sea, which is the responsibility of the United Kingdom Government, the Northern Ireland Government, the Isle of Man and the Republic of Ireland.

The noble Lord, Lord Roberts of Llandudno, asked whether all functions in the zone have been transferred to Welsh Ministers. The answer is yes: all fisheries functions have been transferred. He also asked—an interesting question—whether these functions could have been transferred by the 2009 Act. As the noble Lord well knows, an Act can, in theory, do anything that Parliament decides, but we felt—and, indeed, the Welsh Assembly Government felt—that the detail of the precise functions was more appropriate to an order. The existing functions of the Welsh Ministers were devolved by a transfer of functions order.

The noble Lord also asked whether the Welsh voice will be heard in Brussels. I think he asked that because he is aware that international negotiation is a reserved matter, on which Defra leads for the United Kingdom Government. However, there is always close consultation with the devolved Administrations to ensure that matters which are of concern to them are taken into account. It is certainly my experience in this House that the Welsh voice has never gone silent or unheard. I am sure the same applies in Brussels.

The noble Lord, Lord Roberts of Conwy, asked about resources and the cost to the Welsh Assembly Government of implementing the zone. The Welsh Assembly Government are confident that the changes will not result in an extra administrative burden. The zone will be cost-neutral and should not displace resources currently used to manage the inshore region. Enforcement in this area is currently undertaken by the Royal Navy. Its costs are met proportionately by the relevant fisheries departments on the basis of the relative size of the industries of each nation. The Welsh Assembly Government will continue to use the Royal Navy to undertake enforcement in the Welsh zone under the current contract. Under the current arrangements, where UK enforcement results in prosecution, many of the vessels are escorted to Welsh ports and the prosecutions are led, administratively, by the Assembly Government’s officials at courts in Wales.

The noble Lord, Lord Roberts of Conwy, also asked how many people in the Welsh Assembly Government were working on the zone and whether any would transfer to the Welsh Assembly Government as a result of the order. Around 25 people in the Welsh Assembly Government work on fisheries matters. Ten of these transferred into the Welsh Assembly Government from Defra in 2008 in anticipation of this change.

The only person I have not answered is the noble Duke, the Duke of Montrose. I do not know whether I have guidance that will allow me to do so. If he will forgive me, I will write to him.

I have just one question which I do not think the Minister has answered. What extra resources will be made available to the Welsh Assembly Government to carry out these functions?

My Lords, the answer is that none were sought and none are required.

That the Grand Committee do report to the House that it has considered the Code of Audit Practice 2010 for Local Government Bodies.

Relevant Document: 7th Report from the Joint Committee on Statutory Instruments.

My Lords, the Audit Commission, in accordance with its obligations under the Audit Commission Act 1998, has prepared codes of audit practice to prescribe how auditors must carry out their statutory functions when auditing local government and local National Health Service bodies. The codes are to be used by the independent professional auditors that the Audit Commission appoints to audit local government and NHS bodies.

The commission, as previously, has prepared separate codes for local government and the NHS. This reflects the different accounting, corporate governance and performance management frameworks in the two sectors.

The codes prescribe the way in which the external auditors of local authorities and NHS bodies should discharge their statutory duties when auditing the accounts of those bodies. The codes must be approved by affirmative resolution by both Houses of Parliament every five years, and the end of the five-year period for the current codes is 9 March 2010. These draft codes have already been debated in another place.

In preparing the codes, the commission has worked closely with and consulted key stakeholders, including the representative associations of local government and health bodies, finance directors, the accountancy profession and their partner firms. The preparation of separate codes has facilitated the process of agreeing the NHS code with the Care Quality Commission. In line with the Audit Commission Act, the commission has obtained the agreement of the Care Quality Commission to the changes made in the NHS version of the code.

The codes are high-level documents that prescribe the way in which auditors of local government and of local NHS bodies carry out their audit functions. They omit material that simply summarises the requirements of professional auditing standards. Changes to the codes are minimal, reflecting legislative and technical changes since the current codes were approved, including the abolition of the audit of best-value performance plans for specified local government bodies and the replacement of the Healthcare Commission by the Care Quality Commission. Consultation on the draft codes has seen the proposed changes to the codes endorsed by stakeholders.

The codes set the scope of the audit and auditor’s objectives, and the general approach to be adopted by auditors in meeting their responsibilities. They also underline the need for auditors to preserve their independence and to ensure the security and confidentiality of data received or obtained in the course of the audit. In addition, they prescribe how auditors should carry out their statutory functions in respect of the audit of financial statements, the core of the audit process. They cover the auditor’s responsibilities to satisfy himself or herself that the audited body has put in place proper arrangements for securing economy, efficiency and effectiveness in its use of resources—in other words, value for money.

The codes also cover reporting the results of the audit work to the audited body, including through the published annual audit letter and, where appropriate, how auditors should exercise their statutory reporting powers. Public reporting by auditors is a powerful way of holding public bodies to account.

Lastly, the local government code sets out how auditors should engage with local electors who choose to exercise their rights to ask questions about local authorities’ accounts.

The codes come into effect when they have been approved here and in another place and, once in place, will continue to provide assurance that public bodies will be subject to effective independent audit.

The codes are very important documents, being key elements of the accountability framework for local government and the National Health Service at a time when there is intense interest in spend by public bodies, where there is a drive to stretch every public pound and to cut waste. I beg to move.

My Lords, I thank the Minister for his comprehensive explanation of the two codes. I declare at the outset an interest as chairman of my parish. As my honourable friend Bob Neill said in another place yesterday, we on these Benches take no great issue with either of the codes, which have received only minor adjustments since Parliament last approved them in 2005.

I have three questions that I would like the Minister to address. As he explained, the changes to the code include the abolition of the audit of best-value performance plans for specified local government bodies. What is the rationale for this? Will the Minister set out why best-value performance plans need no longer be audited? Is this simply a red-tape cutting measure?

Secondly, I turn to the question of fees for having audits done. Local authorities are statutorily obliged to be audited, and the cost of compliance must be met from their funds; yet even the smallest authorities must stump up for an audit. If the turnover of a small body is anything up to £200,000 per annum, it will require a basic audit. There is concern that the cost of the audit may be out of all proportion to the sums that are being audited. I would appreciate it if the noble Lord would comment on the cost of these small audits, and say whether he believes that the auditing of those financial statements really adds value.

With this in mind, in recent years Governments in several parts of the world, notably Europe, have repeatedly raised the turnover threshold below which businesses and organisations can exempt themselves from statutory audits. In several member states the threshold is set at £6.5 million in turnover, or £3.9 million in gross balance-sheet total assets, which allows a significant swathe of businesses and organisations to exempt themselves from statutory audits.

My third point picks up on the theme of section 5 of the local government code, which gives electors the opportunity to scrutinise for themselves their local government grants. We welcome the measure as a step towards greater openness and transparency. However, perhaps the noble Lord will explain why that openness is not extended to the accounts of NHS bodies. I welcome the Minister's response.

My Lords, these codes are not controversial. I thank the Minister for explaining their purpose and the degree of consultation that has taken place. The principles of external audit require independent and robust examination, and the codes provide for that. My understanding is that the Local Government Association has no issues that it wants to raise in relation to the codes, and that the Care Quality Commission is satisfied with the code that relates to local NHS bodies. However, it is important that the codes are reviewed every five years.

I looked back at the discussion on these orders in 2005, when we broadly welcomed them. I noted the comments of my noble friend Lady Scott of Needham Market about the valuable work of the Audit Commission in acting as an external auditor. The principle must be that people should have confidence that local authorities and NHS bodies are properly subject to such auditing. These regulations enable the Audit Commission to do its work. We support the approach outlined in the codes.

My Lords, I declare my interest in this matter because I am a member of the board of the Audit Commission, which is responsible for approving the codes before they are submitted to the Secretary of State for laying before Parliament.

It is true to say that nearly all public comment about the work of the Audit Commission focuses on our high-profile national value-for-money reports on our inspection and assessment work—particularly the comprehensive area assessment or its predecessor, the comprehensive performance assessment or CPA. There is relatively little comment about the work of the commission’s appointed auditors. Yet, as the commission’s name implies, audit is its core business. It is easy to take the audit process for granted. It occurs mostly behind the scenes and is generally regarded as an unexciting, and some would say even boring, activity. Having spent two days with auditors in a local authority setting, I have sympathy with that idea.

However, audit in the public sector is an essential element in the process of accountability for public money and the proper conduct of public business. The fact that we in this country enjoy very high standards of financial probity and propriety across the public sector is in large part a result of the strength of the public audit regime.

These codes of audit practice are an important part of that regime. They prescribe how independent auditors appointed by the commission should meet their statutory and professional responsibilities. They underpin the statutory independence of auditors, which enables them to speak without fear or favour. The codes are deliberately pitched as high-level principles, and that is a good thing. They are principles-based documents rather than “how to” manuals. This enables the commission in the guidance and advice that it gives to auditors, and auditors themselves, to focus audit work on emerging risks. That is surely a matter of great importance these days. This ensures that our public audit regime can adapt and respond to developments in the operating environments of local government and NHS bodies.

The commission made some fundamental changes to the codes in 2000 and 2005, but this time it has decided to make only minor changes to reflect legislative change since the code was last approved and various tidying-up amendments. This approach has been welcomed by stakeholders. In summary, these are important documents underpinning an important, if unsung and often boring, activity, and I hope that the Committee will support them.

My Lords, I am grateful to the three noble Lords who have spoken in support of these codes of practice. The noble Lord, Lord Adebowale, spoke about the importance of audit. He is absolutely right; it is part of the accountability process for local government and the NHS. He rightly explained the history of these proposals and the fact that only minor changes have been made between the previous set and those before us this afternoon. The noble Lord, Lord Rennard, talked about the importance of independent audit in giving us confidence in local government and its expenditure of public funds. I very much support the noble Lord in that. Particularly at this time, when there will be pressure on public finances, it is important that people are assured that money is spent in best-value terms and is properly accounted for through audit processes.

The noble Earl, Lord Cathcart, raised three questions for me. In the first, he talked about section 5 of the local government code and asked why there was no equivalent for NHS bodies. The rights of electors of local government bodies reflect the fact that those bodies are funded by local taxation and date back to the mid-19th century. NHS bodies are of course funded by national taxation. The noble Earl may well point out that, given the range of support that comes from central to local government, perhaps there should be some qualification of that; but that is the history of why that process is in place. He asked about the abolition of reporting on best-value performance plans. This is about reducing the burden on local authorities and the Government legislated to remove the statutory requirement.

So far as small bodies are concerned, I should say first that the code of audit practice itself does not address any thresholds; it simply provides for the approach for small audits. The thresholds are set out in other legislation. At the moment, the requirement for the audit of small bodies is when there is a turnover of more than £1 million. That is specified in the regulations. Schedule 1 to the code specifies a proportionate approach to the conduct of the audit, but the commission is discussing with CLG raising the threshold for small bodies to align with small companies—the £6.5 million level. In terms of the importance of that on fees, the code continues to specify separate audit arrangements for smaller audited bodies such as parish and town councils, and the new, lighter-touch audit regime has established itself well. The new code maintains that. While the commission has reduced the burden of audit on small parish councils, it has done so recognising that there continues to be a need for appropriate and proportionate audit of bodies spending public money and potentially taking on new responsibilities. The limited assurance arrangements have significantly reduced audit costs for smaller bodies, and the number of complaints regarding audit arrangements for parish councils. The previous approach had become unsustainable and disproportionate.

I hope that dealt with each query that the noble Earl raised. If there are no further points, I will simply commend the codes to the House.

That the Grand Committee do report to the House that it has considered the Code of Audit Practice 2010 for Local NHS Bodies.

Relevant Document: 7th Report from the Joint Committee on Statutory Instruments.

That the Grand Committee do report to the House that it has considered the Environmental Permitting (England and Wales) Regulations 2010.

Relevant Document: 7th Report from the Joint Committee on Statutory Instruments.

My Lords, the regulations are being made to streamline and simplify our environmental permitting arrangements while—this is important—continuing to safeguard the environment and human health. Noble Lords will know that many potentially polluting activities, such as incinerators, sewage treatment plants and radioactive waste discharges from nuclear power stations, need a permit. When the Environment Agency or the local authority grant an environment permit, they are permitting an activity, subject to conditions to control pollution. The regulations cut red tape and provide an easier and more flexible way of doing that. They are consistent with the Government’s policy on better regulation, allowing us to focus on protecting the environment at a lower cost. That is vital at a time when we must be mindful of the impacts of climate change, and must not be deflected by unnecessary bureaucratic processes.

Back in 2005, the Better Regulation Task Force challenged my department, Defra, to improve our permitting regulations, saying that,

“various licensing requirements are set out in different pieces of legislation and may impose different administrative requirements on industry ... yet their objective, to protect the environment, is the same”.

We responded with the environmental permitting regulations 2007, which came into force in April 2008. They, with guidance, were the key product from the first phase of a productive partnership between Defra, the Environment Agency, the Welsh Assembly Government and other stakeholders—a partnership now expanded to include the Department of Energy and Climate Change. The regulations we are debating today build on the sound base of the 2007 regulations, integrating the permitting systems for radioactive substance regulation, discharges into groundwater and water discharge concerns.

Furthermore, we are taking this opportunity to consolidate into the regulations the permitting parts of the mining waste directive and the batteries directive, along with the outcome of the waste exemptions review. These have already been subject to parliamentary scrutiny. We estimate that these regulations will save £45 million, which when added to the savings of the first phase of the programme will mean a total saving of £121 million for business, regulators and others over the next 10 years. While we are still in the early days of implementation of the programme, savings from standard permits have already allowed the Environment Agency to lower its fees. I am sure that it will bring solace to the Committee when I say that the regulations are more than 170 pages shorter than previous law. They repeal and re-enact much of the Radioactive Substances Act which is basically 1950s legislation, part of the Water Resources Act 1991, the Groundwater Regulations 2009 and the 2007 regulations. They also replace a number of other statutory instruments that are now redundant.

As I have already said, but which bears repeating because it is key, the regulations still deliver the environmental and human health protection we care about. For example, in the new EP regulations offence for water discharge and groundwater activities, the terms “cause” and “knowingly permit” have the same meaning as in previous legislation. The majority of businesses that are low-risk will face fewer forms, fewer inspections and simpler guidance. Speaking in the debate on the 2007 regulations, the Minister, my right honourable friend Joan Ruddock, the Member for Lewisham Deptford, said that,

“businesses will no longer be burning the midnight oil dealing with overly complex systems”.—[Official Report, Commons, First Delegated Legislation Committee, 26/11/07; col. 9.]

That may add to an improvement in the environment as burning the midnight oil is not the most attractive of ministerial activities. Under these regulations and subject to national security considerations relating to radioactive substances, an operator requires only a single environmental permit for activities on the same site, thus making it cheaper, quicker and easier to apply for permits while continuing to protect the environment.

Before I close, I must draw noble Lords’ attention to an error in the regulations, which was unfortunately spotted after they were laid and for which I apologise. It relates to the storage limits for waste oils that are allowed under a waste exemption. Where the current limit says 400 cubic metres, it should say three cubic metres. An amendment will be made to correct the error before the regulations come into force.

In future, we intend to implement the results of the radioactive substances exemption orders review through the environmental permitting regulations. We will continue to look for other suitable regimes that could be integrated into the new permitting system, if the costs and benefits add up. For now, this new permitting system will make it easier for regulators to do their job of safeguarding the environment and easier for business to comply. This can only be a good thing, when we must focus our energies on combating the threat of climate change. These regulations have been widely supported and accordingly I commend them to the Committee.

My Lords, I thank the Minister for his presentation and introduction of the regulations. They are indeed a blockbuster, by any standards, of mind-boggling detail. I suppose that I should not grumble, because I remember that when we were discussing the previous lot of permitting regulations, among other considerations we had the whole question of lion faeces, only to discover that the noble Baroness, Lady Barker, knew of spontaneous combustion of lion faeces. The reason that they were limited to five tonnes was obvious to us all as a result. It shows the virtues of our debates that we find out so much about the background. I accept what the Minister said: it is extremely useful to have so much of the environmental legislation in one volume to try to ease the burden on those who have to seek permits.

The regulations are empowered under the Pollution Prevention and Control Act 1999, and bring under one roof, as it were, 18 directives. The Explanatory Memorandum summarises the European scrutiny history for six of those 18 directives, but does not contain scrutiny details for the rest. I wonder why not. It seems to be an anomaly that the background to those directives is not available to us.

This has obviously been a magnum opus. It was passed to Committee on 24 February and brought to us exactly one week later. Frankly, it is difficult for noble Lords to get their minds around such detail in that short a time, so I may have missed some things. I seek clarification on specific points covered in the regulations, but first I ask why a document of this size and such detail does not carry on each page an indication of its subject matter. I know that legislation is different from an ordinary working document, and I understand why, but even an index would be helpful. It is a huge working document, and I wonder whether we are allowing previous form to dominate how we put such documents together. If it were properly annotated or indexed, it would be much easier for people to use it; it would make it much more user-friendly. Headings on the top of pages, supplementing the index at the beginning of the document, might help enormously, and a detailed contents list of subjects might also be useful.

How many local authority recycling schemes will exceed the quantities specified in Chapter 3 of Part 1 of Schedule 3? That will clearly be important for existing recycling plants. Am I correct in supposing that, were the volume of waste to expand beyond the quantities specified, it would be sufficient to remove a certain proportion of it to another site? Could people avoid falling foul of the regulations by just setting up another site? Is that really in the public interest?

Fluorescent tubes have a paragraph to themselves in Schedule 3 at page 113, with reference made to mercury concentration. I have not been able to find a specific reference to eco-friendly light bulbs, although I understand that environmental specialists are increasingly concerned that they are likely to pose a threat to the environment on disposal. What plans are in preparation for the treatment of such bulbs?

Chapter 4 of Schedule 3 deals with the disposal of waste and, on page 122, the conditions for exempting disposal by incineration. Will those considerations result in the exemption of 600 or so farm incinerators that were caught by the original transposition of the EU waste directive, or will they be covered by Section 6.8 on page 78?

I now turn to page 128, in Part 2, paragraph 2(e) and, on page 129, Part 3, paragraph (2)(f). They specify that all maintenance on small sewage treatment works is to be recorded and the records kept for at least five years after the work is done. Can the Minister confirm that those requirements will apply only to work carried out after 5 April this year? Regulation 62, on page 35, allows the Secretary of State or the Welsh Ministers to reserve for themselves the decisions on permits for a particular application or class of application. Will the Minister please give an example of each?

My Lords, I, too, thank the Minister for his explanation of the regulations. I have a few questions about mineral extraction. He will be aware that the UK minerals industry and the china clay industry in particular are very concerned about aspects of the regulations. They argue that the regulations could have a severe impact on their operations, without providing the additional protection for health or the environment that would justify them.

First, is the Minister satisfied that the balance between imposing further regulatory burden and safeguarding public health and the environment is correct in the regulations? Secondly, and perhaps more specifically, are we imposing a higher degree of regulation here than other European Union countries are imposing? I understand that Germany and Sweden have decided that their existing regulations are sufficient. They see no need to change their regulatory systems in the light of the mining waste directive, so is it necessary to place additional burdens, with which their European competitors will not have to comply, on UK-based firms? Finally, I note from the Minister’s opening remarks that the draft regulations were subject to significant consultation. Does he now feel that the regulations broadly satisfy the concerns of those who responded to the consultation?

I declare an interest as a member of the all-party minerals group. I agree with every word that the noble Lord, Lord Rennard, said; he has obviously been approached in the same way that I was about this matter. I also attended the meeting of the all-party group where the issue was discussed by people directly involved in mineral recovery and operations. The china clay industry, in particular, was mentioned and it is the most adversely affected.

As a parliamentary candidate more than 30 years ago, I visited the china clay industry in Cornwall. At that time china clay was for producing ceramics—that is, fine china. That has changed dramatically over the years and the china clay industry now plays an important role in the manufacturing of paint; the processing of paper—it is one of the biggest fillers in paper; the processing and manufacturing of rubber and plastics for the automobile industry; ceramics, which are still produced; and pharmaceuticals. Some of these are very important to our economy. To damage anything which is producing, for example, parts in the form of plastics for the automobile industry, is absolutely short-sighted. Why should we throw away an industry that we are happy with and is producing good money for this country, to force its products to be made in some other country that does not comply with any of these regulations?

As the noble Lord, Lord Rennard, has mentioned, Germany and Sweden have already decided that the existing regulations are enough and they do not need them. It is very worrying. I also agree with the noble Lord that the measure would not protect the environment and health. It would have a damaging effect in many cases, in particular because there is no right of appeal. If a right of appeal was written into this directive, it would make a vast difference and would mean that the mineral industry would have a fair opportunity. At the moment its only option would be to go to judicial review, which is very costly and might not be effective. It is only just that there should be a right of appeal. I present this today and I depend on the Minister’s answer. Unless the Government can see their way to suggesting something like this, I may wait until the regulations are put before the full House and raise an objection at that time.

I make no apology for following my noble friend Lady Gardner on the same point. We all recognise that the local authority emergency planning services have a responsibility put on them by these regulations. It is perfectly fair that plans must be put in place in case of an emergency. To get those plans in place, the co-operation not only of the extractive industry is needed, but that of other third parties as well. It is this issue that lies at the heart of our concern. Paragraph 14(2) of Schedule 20, set out on page 162, is quite explicit that the Environment Agency as the regulator must refuse an application relating to a category A mining waste facility on receipt of a notice from the emergency planner, the local authority, stating that the operator has not provided the necessary information. It might not be the operator; it might be other people or third parties.

The local authorities will be unsure, when taking on these new responsibilities, whether they know precisely what they are asking for. There is only a matter of months until the permit dates so in that situation one would expect there to be collaboration with the local authorities and the extractive industries to determine just what information is needed. I am quite convinced that the china clay industry and any other extractor would wish to provide the information required. If, however, the local emergency planning services are not yet clear, their instinct will invariably be to cover themselves by putting in a precautionary note saying that they are not sure they have the information required. Therefore, under paragraph 14(2) with no ability to appeal or mediate, the regulator—the Environment Agency—simply has no option but to refuse a permit, which effectively closes a business down.

Members of the Committee will recognise that that is draconian. It is reasonable to ask the Minister to assure us that some reconsideration could be given to this in the timescale, recognising that we are not asking for the extractive industries to be exempt from emergency planning. That is not the point. It is simply that if there is uncertainty as to what is required and time runs out, it seems unreasonable for the business to be closed down. I hope the Minister can give us those assurances.

My Lords, I am privileged to live in Cornwall, between St Austell and Truro. When I walk out of the back of my garden, I look across to what are known as the Cornish Alps. They are called that because they are white. They have been even whiter than usual this winter. They are white because they are china clay waste. When people talk about Cornwall they think of the coves, the almost long-gone fishing industry and the rural areas, but they forget that it was once the heart and genesis of much of Britain’s Industrial Revolution. Trevithick invented the steam engine on rails there. We have not just an important industrial past, but a future.

That is why, like many noble Lords, I am particularly concerned about one aspect of this legislation, which generally I welcome as productive and good. My concern is about the section on waste. As the noble Earl has just said, the wording of paragraph 14(2) concerns me greatly. It says that the regulator “must refuse”. There are no two ways about it; there is a statutory obligation for the regulator to make a refusal if the information necessary to complete a relevant emergency plan or draw up an external plan is not there. It does not give a definition, rather it leaves the onus of deciding what information is necessary completely with the authority, the emergency planners and the Environment Agency.

What is also of concern—I should declare an interest as a member of Cornwall Council, which would be an emergency planner in this process—is that all bureaucracies are inevitably conservative and cautious in what they do. If a piece of secondary legislation says that they must do something but does not make it clear, that puts the emphasis on them not crossing the line so they are tempted to make a refusal in cases where there is any doubt. The outcome of that refusal may be that an important facility has to cease operation immediately. This would be in the not-so-distant future, on 1 May 2012, if the regulations have not been complied with. This is an unreasonably onerous provision that almost tempts its own fulfilment, and a cessation of operations. As has been pointed out, there is no appeal mechanism except perhaps that of judicial review, which would be amazingly expensive and onerous for a responsible producer and employer, and would take a lot of time as well. Therefore I, too, would like an assurance from the Minister. I was going to ask for a test of reasonableness to be applied, but the regulations do not allow for that, which is why I am particularly concerned.

I was interested and encouraged by the Minister’s initial remarks. He pointed out humbly that there was a mistake in the regulations that would be put right by the time that they were put to the House. Perhaps I might suggest a way out. Perhaps we have discovered a mistake in the word “must”, which was not meant by the secondary legislation Bill team. Perhaps we could keep it within this room and decide that this, too, was a typographical error, and look forward to seeing a change not just in the three cubic metres or whatever it was, but also in this area when the legislation comes back to the Grand Committee. It is important because this is a safe industry. There have been no major accidents involving mineral waste tips since the tragedy of Aberfan, and there is already good environmental health and safety legislation to ensure that the standard of emergency planning, health and safety and environmental protection in this industry is very high.

My Lords, I am grateful to all noble Lords who contributed to this relatively short debate. The noble Lord, Lord Taylor, said that this was a blockbuster of a document. It is, but, as has been widely appreciated, it brings together and simplifies what has gone before to produce a document of greater assistance to all those who need to be aware of their obligations and so must use it. It is preferable to the diverse regulations from different sources that we had in the past.

I will attempt to answer the detailed questions that have been asked, but I will emphasise the broad overall position. First, the principle is clear: we want both to protect the environment and human health, and nothing in the document in any way detracts from the previous provisions with regard to those important objectives. Secondly, the regulations are 170 pages shorter than existing law, so if the noble Lord finds some of this complex, that goes to show that even when one makes every effort to improve, one is still justifiably open to criticism if not every requirement is met. I emphasise that the purpose behind the document is one that all noble Lords would subscribe to.

With his microscopic analysis, the noble Lord, Lord Taylor, was bound to cause me to fall short in certain respects. I confess that I fall short in relation to the department’s material and archives. He asked why the European Union scrutiny is not available for 12 of the 18 directives and why we provided it for only six. This is because the information that we have within the files of the department covers only the six. However, that does not mean that there will be no scrutiny. If further scrutiny data are required by any Member of the Committee, I shall take steps to obtain and provide them. I am sure the noble Lord will appreciate that the resources of the department are not limitless and that we illustrated the European documents as far as we were able to within our resources. However, I shall take steps to meet any request relating to the 12 other EU scrutiny documents.

The noble Lord, Lord Taylor, also asked about incinerators. The regulations covering the level of environmental protection are unchanged by this document. They are not affected by these regulations and will continue. This is because we consider that incinerators are properly controlled.

I winced temporarily when the noble Lord asked why there is no mention of eco-friendly light bulbs and plans for the treatment of such bulbs. The issue is not relevant to these regulations. However, the noble Lord is right to identify that there is an issue with regard to eco-friendly light bulbs. The issue is complex enough for me to crave his indulgence and allow me to write to him on how we are tackling it. I merely state that eco-friendly light bulbs were not included in these regulations because of different provisions. I shall certainly write to him on that.

He also asked how many recycling schemes there were. I shall have to do research on that question because I certainly do not have the figures in my head and, from what I can see, neither do any of my expert advisers immediately attendant upon me. I hope he will indulge me on this. I shall try to meet his request.

On the question of the maintenance of small sewage works and record keeping, the requirements apply only after 6 April this year and so there is a timescale in which a response to this can be met. The noble Lord also asked about groundwater permits and whether they are spread evenly across local authorities. Noble Lords will have sympathised with me when they saw my sharp intake of breath when I heard that question. First, they will not be spread evenly across local authorities, if that was the process; and, secondly, I would not know the answer in detail anyway. I can assure the noble Lord, Lord Taylor, that this is not a question for the local authorities. These permits are granted by the regulator, the Environment Agency, so the question of differential impacts upon local authorities does not arise.

The noble Lord asked me about the impact assessment and the fact that the list of operators does not include anyone from the extraction industry. The impact assessment for the mining waste directive has been used in formulating this impact assessment. We have not consulted the industry again because we were able merely to incorporate the existing impact assessment for the industry into the analysis provided.

The reason for our concern is that the implementation of almost all secondary legislation requires a sense of fair play and co-operation between those being regulated and the regulators. Obviously, there is considerable concern that the way in which these regulations are impacting on mineral extraction, which is a major industry in this country, could put the industry under considerable pressure if the regulators were dilatory or did not play their part in the process by assisting in the proper regulation of these sites. The industry is not looking for an exemption, but for a way of handling its obligations under the law. Are the Government truly tuned in to that sensitivity?

My Lords, indeed I am—as are the Government. We recognise the issues that arise around compliance. I say to the Committee that the industry has its interests, but we also have an obligation to the country that we serve to get these things right.

I shall merely mention the disasters that have occurred in the past and are never to recur because we have the necessary controls and requirements. To take the most obvious one, Aberfan was a tragedy of the most appalling kind because we did not have sufficient control over the regulation of waste management from the extractive industries. I know it is a long time ago now, and because it is in the distant past it may be thought that it is always straightforward to guard against such an event in future, but for that to be true the safeguards need to be in place. I recognise that on all fronts we have moved on a great deal from that time and we have regulations in place; I am merely indicating to the Committee that, in seeking to fairly represent the interests of the industry, we must take the greatest care that we do not in any way dilute the overall objectives of ensuring that practices are entirely safe. The Government are bound to recognise that as their major obligation and duty.

On the issue of the china clay industry, which the noble Lord, Lord Teverson, raised, we think that we have the balance right with regard to regulation in these circumstances. This partly relates to the question that the noble Lord, Lord Rennard, also raised about our comparative position to that of other states. I do not say for a moment that because Germany and Sweden, for example, have not seen any need to change their regulations, they are upholding lower standards than we are; they may meet the European directives and requirements and meet the standards that we do because they were already operating standards at that level so did not need to change. However, we are not in the business of comparative analysis with other countries, unless they can identify that the way that they are going about things is more cost-effective as well as meeting the standards of safety both for the environment and for people, which is what we ourselves are seeking. I say to the noble Lord, Lord Rennard, on this issue and on the point that the noble Lord, Lord Teverson, raised about china clay, that we think that we have the balance right, which is why we have presented the regulations in these terms.

I appreciate the concerns that have been expressed today. I will look at the record, and where I may have been remiss in responding—some of the points were very detailed—I will ensure that proper responses are made to Members. However, I emphasise once again that these regulations meet the standards that we expect with regard to our objectives. They do so as a streamlining exercise. They help us to protect the environment and human health and they are risk-based and proportionate, but they are considerably less diverse, less bulky, less onerous and easier to follow—despite the reservations that the noble Lord, Lord Taylor, identified—and less costly. We estimate that the regulations will save business and the regulators £45 million over the next 10 years, and they may save both those in the industry and indeed parliamentarians some time in reading fewer pages than was the case with the regulations that they have replaced. They are also the product of partnership. We therefore feel that, after considerable consultation, we have the balance right.

That the Grand Committee do report to the House that it has considered the Legislative Reform (Dangerous Wild Animals) (Licensing) Order 2010.

Relevant Document: 3rd Report from the Regulatory Reform Committee.

My Lords, the draft order reforms the Dangerous Wild Animals Act 1976, which governs the private keeping of dangerous wild animals, by reducing the administrative and financial burdens imposed on local authorities, who are responsible for enforcing the Act. The keepers of dangerous wild animals will also gain from the changes made through the effective halving of application fees and associated vets’ bills over a two-year period and a reduction in the frequency of form-filling and inspections.

Further to an independent review of the Act’s effectiveness in 2001 and subsequent consultations, the following proposals, intended to be in line with the Government’s intention to deregulate whenever we can, were included in the draft order now before the Committee. The proposals extend the period of validity of a licence from a maximum of one calendar year to two, and provide that licences, other than licence renewals, will come into force immediately on their being granted rather than, as was previously the case, from either the date of grant or the beginning of the following year.

A further proposal to remove the mandatory requirement for inspections to be carried out in respect of certain applications for a replacement or second licence and to allow instead discretionary, targeted inspections was challenged by the Delegated Powers and Regulatory Reform Committee of this House when the original draft order was laid. The committee, which we hold in the greatest respect, was not satisfied that that proposal would preserve sufficiently well the Act’s existing protections to the public.

We share the Committee’s concern that all necessary protections in the 1976 Act should be maintained; indeed, a legislative reform order is not permitted to remove any such protection. Following further consultation with local authorities on that challenged proposal, it was clear that there was less appetite than previously thought for the flexibility the proposal was intended to provide. Of course, we have accordingly dropped the proposal and the revised draft order is before the Committee.

The surviving proposed changes contained in the draft order are ones with which the scrutinising committees of both Houses have pronounced themselves content as being changes that will lead to a reduction in the administrative and financial burden on both local authorities and the keepers of such animals while retaining the public safety and welfare provisions of the Act, together with all the necessary protections contained therein. I beg to move.

My Lords, I thank the Minister for presenting the draft order. My notes also start with the interesting history of how it has come to be adjusted. Normally, we would welcome deregulation and the Government's intention in this respect, but it is clear that concern was expressed by local authorities that there would be no real saving to them if the original proposal went through. To give credit where it is due, the department took those opinions on board and dropped that proposal from the order. The most controversial element of the order has therefore disappeared from the table and I can see little to object to in the remaining two proposals.

We should join in congratulating the Delegated Powers and Regulatory Reform Committee on its eagle-eyed scrutiny of the original draft. However, I should like the Minister to give us a little more detail about the consequences of proposal 2. The maximum period of a licence will be doubled to two years but, while I applaud the efforts to reduce red tape and bureaucratic interference, what efforts will the Government make to ensure that suitably rigorous standards of animal welfare and public safety are upheld under the new inspection regime?

I have two further forensic points to make; the Minister knows that I like to pick out a few queries. On page 2, under proposed new subsections (3) and (3A)(a) and (b), the licence validity is to be extended from one to two years. A further extension consequent to allowing a licence to continue beyond its expiry date because the renewal permission is not received before expiry should surely be limited to a fixed period. In other words, in a situation where the licence expiry period has overrun, it would start again from the renewal date and not from the date on which it should have originally expired. That seems to be anomalous.

Section 1(6)(a)(iv) of the Dangerous Wild Animals Act 1976, which is to be found on page 20 of the Accompanying Statement, concerns insurance. At the moment, a licence lasts for a year and one of the conditions for it is that an animal keeper shall have insurance. We know that all insurance policies are renewed on an annual basis. How can local authorities ensure that a second year of insurance is in place? Will there be some sort of arrangement whereby the licence holder has to provide evidence that the animals have been reinsured? How does the new regime operate? I am all in favour of the two-year period of renewal, but we should be mindful of this provision for insurance. Other than for those points, we welcome the order.

I, too, thank the Minister and his team for the careful explanation of the process by which changes have been made to these orders. Having looked at the report, it seems that there is little to say beyond what is in it. However, we should note that the Select Committee on Regulatory Reform has done its job, the Government have listened, and so I shall say simply that the revised order has our support and we welcome it.

I am grateful to both noble Lords, although perhaps a little more grateful to the noble Lord, Lord Rennard, because he has not asked me any awkward questions. No doubt, however, he wants to hear the answers. First, I endorse entirely the remarks of the noble Lord, Lord Taylor, about the Delegated Powers and Regulatory Reform Select Committee and its eagle-eyed approach to all regulations, not just these. I hope that I paid due respect to the committee in my opening remarks. We are particularly grateful to the committee because its position was justified. On reflection, having looked at this matter again and after consultation, we could see the value of the points being made and have changed the position accordingly.

There are obvious anxieties about lengthening the period between inspections from one year to two. I assure the noble Lord, Lord Taylor, that the renewal date of a new licence, if granted, will commence from the original expiry date of the licence it replaces. Otherwise, as the noble Lord indicated, we would effectively be granting somewhat in excess of two years for the continuation of a licence. We accept that point entirely. Possibly I could have set out the position a little more explicitly in my opening remarks. If I did not, I apologise to the Committee and I am grateful to the noble Lord for drawing my attention to the matter.

We certainly want to bring the benefits of reduction of the impact of regulation to this area, not least because we have little cause for anxiety. I say this against a background where, not long ago, colleagues of mine playing the 17th hole of their favourite course were somewhat aghast to discover that what looked like a rather large Alsatian standing a little above them on a raised path beyond the green was not an Alsatian but a real live wolf. The wolf was subsequently arrested having done no harm to the golfers—who would harm a golfer? But then, who would harm a horse rider? The wolf disturbed a horse, which threw its rider. The Committee will recognise the anxiety expressed locally that the owner of two wild animals—which were kept near to a zoo but had nothing to do with it; the zoo is perfectly safe and has never given the slightest cause for anxiety—permitted one to escape. The Committee will be delighted to know that sufficient sanctions were enjoined to make sure that it does not happen again.

When I discussed this with my officials, they were full of the proper reassurances from recent documentation that no such mishap had occurred. However, there was a mishap a little further back and that is why these regulations are important. We need to make sure that animals are kept in good order and are looked after properly. By the same token, wild animals need to be kept under the necessary constraints to prevent them causing the most appalling harm if things go wrong.

The noble Lord also asked me for clarity on the issue of insurance. Following the last consultation, local authorities are clear that they are obliged to take their responsibilities under the Act seriously. Our emendations, which are designed to reduce regulation, do not mean that local authorities should be less rigorous in meeting their obligations on inspection; those obligations remain. As far as insurance is concerned, it is for the keepers to take out proper public safety liability; that is their responsibility. I have no doubt that keepers do so in circumstances where the keeping of wild animals, particularly those which are a potential danger to the public if not kept properly, could have such disastrous consequences.

That the Grand Committee do report to the House that it has considered the Extradition Act 2003 (Amendment to Designations) Order 2010.

Relevant Document: 8th Report from the Joint Committee on Statutory Instruments.

My Lords, the Extradition Act 2003 has played a vital role in ensuring that the UK’s extradition relations with countries around the world work efficiently and effectively. Today, in an effort to further improve international co-operation, we seek to add Libya to the schedule of territories designated as extradition partners under Part 2 of the Act.

We are concerned here with further secondary legislation required to amend the Extradition Act 2003 (Designation of Part 2 Territories) Order 2010. This instrument affects the UK’s extradition arrangements with Libya. This order reflects the fact that the UK and Libya have signed an extradition treaty and exchanged instruments of ratification. Designation of Libya as a category 2 country will enable the advantages of this agreement to be given full effect in the United Kingdom.

The extradition treaty between the UK and Libya, signed by the then Foreign Office Minister and the Libyan Minister for European Affairs in November 2008, is one of a package of measures designed to increase co-operation between the law enforcement agencies of our two countries. The package of measures also includes agreements on mutual legal assistance in criminal matters, on prisoner transfer and on mutual legal assistance in civil and commercial matters. The measures will play an important role in improving judicial co-operation between the UK and Libya. They were an integral part of wider discussions with Libya to improve diplomatic relations between our countries.

The extradition treaty allows extradition to be requested for any offence that attracts a maximum penalty of at least 12 months’ imprisonment in both the UK and Libya. The evidential requirements set out in the treaty mean that both the United Kingdom and Libya must provide a prima facie evidential case against any person whom they wish to extradite.

There are currently no formal extradition arrangements between the UK and Libya, outside a number of international conventions, to which we are both party, which deal with a limited number of specific offences concerning serious criminal conduct such as terrorism or drug smuggling. The introduction of a formal basis for extradition for conduct covered by the bilateral extradition treaty will lead to a more efficient and effective process of extradition between our two countries. This is preferable to relying on the ad hoc provisions in domestic extradition law for the many serious offences such as murder and rape that do not fall under the international conventions to which I have referred.

One key advantage of the new arrangements is that they will improve our ability to achieve justice for British victims of serious crimes. The extradition treaty between the United Kingdom and Libya will provide both Governments with a sound formal framework for future co-operation. We are clear that we will not allow criminals to escape justice by crossing international borders, and we are committed to assisting our international partners to do the same.

The amendments are necessary to ensure that the United Kingdom can comply with its obligations under the bilateral extradition treaty with Libya. That is what the order seeks to achieve, and I urge noble Lords to support it. I beg to move.

My Lords, I thank the Minister for explaining the order. Does he agree that it is hardly acceptable that although the extradition treaty between the UK and Libya was signed on 17 November 2008 and ratified in April 2009, the Home Office was not informed until January of this year? That seems an extraordinary delay. Has the delay meant that the treaty has not taken effect up to this point? Presumably that must be the case. Have any extradition requests been received from Libya since November 2008? If so, what has been their fate?

I turn to the substance of the order. The Minister will be aware that concerns have been expressed by Members in this House and another place about the designation of countries as category 2 territories under the Extradition Act; and in particular the standard of proof that those countries are required to provide to justify their extradition requests. This is an area that I would like to probe. Under Sections 71(2) to 71(4) of the Extradition Act, a judge may issue a warrant if he has reasonable grounds for believing that there is evidence that would justify the issue of a warrant under his jurisdiction. However, in respect of category 2 countries, the Act specifies that information, rather than evidence, is to be provided.

Later, the Act states that, at the extradition hearing itself, the judge must decide,

“whether there is evidence which would be sufficient to make a case requiring an answer by the person if the proceedings were the summary trial of information against him”.

The Minister mentioned the prima facie evidence requirement. However, Sections 84(7) and 86(7) qualify that for designated category 2 countries. Those sections state that in relation to requests from category 2 countries, the judge must ignore the efficiency of evidence or information test.

I am concerned and confused. At the extradition, may the judge take into account only human rights considerations and bars to extradition such as double jeopardy, passage of time and extraneous consideration? If that is the case, what is the meaning of “information”? In practice, there seems to be no clear requirement in the Extradition Act for the information provided by designated category 2 countries to satisfy what seems to be a normal requirement—that of the UK's domestic courts.

My further point concerns the interplay between the Act and the treaty in this context. Paragraph (2)(b) of Article 6 states that the requesting state must provide,

“such evidence as would justify committal for trial under the laws of the requested State”.

Likewise, the Explanatory Memorandum states:

“The evidential requirements set out in the Treaty mean that both the United Kingdom and Libya must provide evidence establishing a prima facie case against any person whom they wish to extradite”.

My question is: which takes precedence? Does the treaty have precedence over the Act in referring to evidence rather than information? It is crucial to have clarity from the Minister about that.

Can the prima facie case be re-established at the extradition hearing? Your Lordships' House debated these issues at length during the passage of the Policing and Crime Bill, and I will not rehearse the detail of old arguments, but at that time, I asked the noble and learned Baroness the Attorney-General whether a judge should not be able, at the point of the extradition hearing itself, again to establish the information being provided by category 2 countries in order to meet domestic standards. I fear that she did not, at that moment, give me an answer, but in this context, in relation to Libya, I would be grateful if the Minister could be explicit on that point. That is a simple check and safeguard, such as would increase public confidence in the extradition process. That would itself be valuable.

The Minister will be aware that another concern of many is the mission creep of extradition treaties. This treaty is limited to any offence which attracts a maximum penalty of at least 12 months both the UK and Libya, or where a sentence of at least four months’ imprisonment has been imposed on conviction, as the Minister rightly said. However, Article 2(3) states that:

“For the purposes of this Article it shall not matter whether or not the laws of the Parties place the relevant conduct within the same categories of offences or denominate the offence by the same or similar description”.

Where does that leave us? That seems to make nonsense of the previous requirement. How, in such circumstances, will the UK authorities make an appropriate assessment of an incoming extradition request in the context of two other requirements of the treaty—first, paragraph (2)(a) of Article 6, which requires Libya to provide,

“a statement of facts of the offence(s), of their legal classification and reference to applicable law in that instance”,

and,

“the relevant text of the law prescribing punishment for the offence for which extradition is requested”;

and, secondly, paragraph (2)(c) of Article 4, which states that extradition can be refused if,

“legislation is enacted in one of the states rendering the act unpunishable”?

Can the Government explain the apparent contradictions in that?

Many Members of your Lordships’ House will be aware of the human rights concerns about conditions in Libya. The United States’ State Department’s most recent annual human rights report was critical of Libya for torture, arbitrary arrest, lengthy pre-trial and sometimes incommunicado detention, poor prison conditions, the denial of fair public trial by an independent judiciary and a lack of judicial recourse for alleged human rights violations. Will those aspects be taken into account when the Government consider extradition requests? In practice, despite the lack of definition in the Act about what constitutes a human rights consideration, would such consideration be regarded as covering the dangers of mistreatment for the person who might otherwise be extradited?

That is not an academic point. The fate of political prisoners and the disappeared who have never been accounted for is on record. There is an example in the father of the novelist Hisham Matar, who disappeared in 1990 and has not been seen since. He may have been imprisoned. That reminds us that Libya does not have a spotless record. That case was some time ago, but in the light of the commitments that HMG are entering into, and particularly in the light of what the Minister himself said about judicial co-operation, it would be helpful to know whether the Government have taken and are taking active measures to help Libya to improve its criminal justice system and abide by international human rights obligations.

For example, has there been any training that would support reform of Libya’s criminal justice system? If so, has it had any discernible impact? Have the Libyan Government shown any willingness to improve the openness to scrutiny of their system to make it more accountable? These are important points in the operation of an extradition system that is likely to command public acceptance and respect in this country.

The assent of these Benches to the designation of Libya as a category 2 country under this order is extremely conditional on its satisfactory operation, which we shall monitor rigorously. Indeed, on a more general point, as the Leader of the Opposition said in another place, in our view the workings of the Extradition Act need to be reviewed. So we have some concerns about the order, but we will watch its operation and take a view on whether it is satisfactory.

My Lords, I, too, thank the Minister for his introduction of this order.

The Explanatory Memorandum on the treaty, on the Foreign and Commonwealth Office website, describes it as,

“one element in a package of judicial co-operation measures”,

which will,

“enhance our ability to work in close co-operation with … Libya on a range of judicial co-operation issues”.

There is an obvious question: have we missed out because of the eight-month delay? Are there any consequences from that?

I had thought that there was a good deal of coverage of the treaty at the time. My memory may be serving me wrongly, but there has been particular interest in Libya and our relations with that country. Indeed, in preparation for this afternoon, I read an announcementissued by the Ministry of Justice in the summer, at the time of the controversy surrounding Mr al-Megrahi, that the agreement was now in force. Obviously it has not quite noticed either. However, we are where we are and one does not want to spend too much time on criticisms of the administrative problems. Following on from this, is there anyone in this country whose extradition is currently sought by Libya? Is there anyone in Libya whose extradition the UK currently seeks?

The central question—the point on which the noble Baroness finished—concerns the safety of extradition to Libya. Amnesty International—which is not permitted to visit—has described this in damning terms and I intend to quote a number of extracts from its most recent report because it is important to put them on the record. The report states:

“Libya’s human rights record and continuing violations cast a shadow over its improved international diplomatic standing. Freedom of expression, association and assembly remained severely restricted in a climate characterized by the repression of dissident voices and the absence of independent human rights NGOs. Refugees, asylum-seekers and migrants continued to be detained indefinitely and ill-treated. At least eight foreign nationals were executed. The legacy of past human rights violations remained unaddressed”.

It continues:

“The government did not tolerate criticism or dissent and maintained draconian legislation … political expression and group activity is banned and those who peacefully exercise their rights to freedom of expression and association may face the death penalty. The authorities continued to take action against anyone who openly addressed such taboo topics as Libya’s poor human rights record or the leadership of Mu’ammar al-Gaddafi”.

The report refers to the State Security Court,

“whose proceedings do not conform to international fair trial standards … The defendants did not have access to court-appointed counsel outside the courtroom and … were not allowed to appoint counsel of their own choosing”.

It further states:

“The right to freedom of association was severely curtailed … The authorities failed to address the long-standing pattern of impunity for perpetrators of gross human rights violations ... There were persistent reports of torture and other ill-treatment of detained migrants, refugees and asylum-seekers”.

It refers to the mass expulsions of nationals of various countries and states:

“At least 700 Eritrean men, women and children were detained and were at risk of forcible return despite fears that they would be subjected to serious human rights abuses in Eritrea”.

I do not find the report reassuring.

I am aware of the provisions of the Extradition Act and the “procedural safeguards”—the term used—in place to protect against extradition in particular circumstances. I have given the Minister notice of my question—although not long notice, I accept—about how this works. Does the court consider the regime in general terms or can it consider only the circumstances of the individual in question? Does the individual have to persuade the court of his vulnerability? To put it another way, what is the presumption, what is the burden, on the individual? I find it difficult to imagine how an individual who is seeking to persuade a court that he is in particular danger because of the human rights attitude of the country which is seeking his extradition can provide evidence of that.

I also have a technical question. Am I right in thinking that the order, and the treaty that is the context for it, supersede the memorandum of understanding for protection against torture that this country had with Libya? Does that now apply only to deportation?

I thank both noble Baronesses for their contributions. As ever, the noble Baroness, Lady Neville-Jones, was forensic in her questions. Answering them is always at least uncomfortable for a Minister. I will start with what is almost a disclaimer: if I do not do justice to the questions, I will certainly look at Hansard and ensure that I send fuller replies to both noble Baronesses.

The first question was about whether the delay has had any impact. There have been no extradition requests from Libya nor any in the other direction, so, whatever the unfortunate nature of the delay, it has not on this occasion caused major problems.

Both noble Baronesses were rightly concerned about safeguards and evidence, and about what is meant by prima facie evidence and what the requirement is. Prior to issuing a warrant for arrest, a district judge would have to consider if there was evidence providing reasonable grounds. Libya has not been designated as a country that need only provide information, as opposed to evidence. During the extradition hearing, Libya would have to establish a prima facie case and could not be relieved of the burden of establishing such a case. Therefore, there could be no question of inconsistency between the treaty and the Extradition Act.

Both noble Baronesses were rightly concerned about the human rights record in Libya and how we will build in safeguards to protect both our own citizens and others from misuse of the treaty. We see human rights as extremely important. The judge in question must consider several facts. The first is identity. Extradition will be barred if the judge is not satisfied that the person before him is the person being sought. It will be barred if dual criminality is not established. The evidence must pass the test of reasonable suspicion. Extradition will be barred if the request is made for improper reasons—that is, if the judge decides that the request has been made to persecute or punish a person, or that the person will face prejudice at his or her trial on the grounds of race, religion, nationality, gender, sexual orientation or political opinion.

I understand the concern about mission creep. It is something that we must be constantly on guard against, because it applies in so many areas of international corporation, and in international treaties. The treaty does allow extradition offences that are not described in exactly the same way; the noble Baroness was correct in making that statement. It has long been clear that, in extradition cases, the key consideration is whether the conduct underpinning the extradition request constitutes a crime in the state receiving the request. If the question were whether the conduct was criminalised in exactly the same way in both countries, this would prevent extradition solely because of differences between countries in the drafting of laws, which is common. It is important to be clear that this is not an extension of the principle that has covered extradition for many years, namely that of dual criminality. Nothing in the treaty changes that.

The noble Baroness, Lady Hamwee, raised a number of questions. The easiest one to deal with is whether the treaty subsumes previous international obligations. The answer is that it provides for the first time a comprehensive framework for extradition between the two countries. Prior to the conclusion of this, as has been rightly stated, extradition relations were piecemeal under international multilateral agreements and discrete areas of criminality. The multilateral agreement will continue to apply between the countries but, in view of the more comprehensive agreement which now exists, and even though the previous agreements still exist, we expect any extradition requests to be made under this agreement, rather than under the international obligations entered into by both countries.

Another key question was: who has to supply evidence when there is a request for the extradition of someone from the United Kingdom? Within the framework of the new Libyan extradition treaty, and under the Extradition Act 2003, it is for the requesting state—in this case, Libya—to establish the evidential case justifying extradition. It would be for the Libyans to convince a UK court that there was evidence against the person in question that established, as I said previously, a prima facie case of guilt of the relevant offence. It would be for the authorities in Libya to assemble the evidence, which would then be presented and judged in a British court.

The other question that has been raised is the broader issue of human rights. The noble Baroness read extracts from Amnesty International reports which deal with issues as broad as freedom of association, which are constrained in a whole series of countries, not least Libya. She asked what we are doing. Such rights are a broader issue. We are strong supporters of the European Union’s attempts to negotiate a framework agreement with Libya that will provide a platform for dialogue on co-operation in the wide area of human rights and fundamental freedoms.

What have we done to assist the Libyan authorities in any way? Since 2004 the Foreign and Commonwealth Office has funded a large prison project, which is being implemented by the International Centre for Prison Studies in King’s College. Clearly, there are advantages to the United Kingdom in assisting Libya. Although there are rightly still criticisms of the Libyan record on human rights, it is a fact that it has improved. The Libyan media is not as free as we would wish, and domestic political opposition is clearly not as free and open as it should be. However, those issues can be better addressed in an ongoing, collaborative new relationship with that country. In that sense, the more we can build in treaties, milestones and even cornerstones, the easier it will be to build normal relationships—not only as we understand them in this country but as they are understood, and will be understood in the future, in many parts of the world where, at the moment, perhaps they are not.

To the extent that I have failed to answer the questions, I shall certainly look at Hansard and give both noble Baronesses a detailed reply. I commend the order to the Committee.

I obviously did not make myself clear. I was not asking about the prima facie evidence of the alleged crime, or about general improvement of human rights in Libya. It was a narrower question. The legislation refers to a person; I do not know whether he is the accused, an appellant or someone else in a particular situation. If that person seeks to rely on the provisions of the Extradition Act, to which a judge must have regard in considering whether to grant the extradition order, what must the individual do? Is he able to point only to the general human rights situation and argue that because of that context he would be in danger; or must he go further and give evidence of his own position and particular threats against him and people who have done what he is alleged to have done? I suggested that some of that might be very difficult. If the Minister can answer this now, that would be helpful. If he cannot, I just want him to be clearer than I have obviously been able to make it about what my question is.

The noble Baroness is absolutely right and I apologise to her. I did not understand the point and that must be down to my stupidity rather than her putting it unclearly.

Baroness Hamwee: I did not suggest that.

In truth, that is the case because the noble Baroness gave me notice of the question and I managed to misinterpret it in my own mind, and then in seeking expert opinion, I misled the experts.

When looking at the ECHR and other issues, the important thing I have been asked is whether the district court will have to look at the regime generally or at the specific circumstances of the case. That is the question as I now understand it. The answer is that it will have to consider both. The person whose extradition is being sought will be able to draw the court’s attention to the circumstances in Libya generally. If it concerns a crime with a sentence of more than 12 months for something that we may not recognise in the United Kingdom as being an offence, such as freedom of association, the rights of the media and so on, that can be brought to the attention of the court. Moreover, the person can bring in their personal circumstances in terms of whether they would be in danger and whether it is likely that they would be given a fair trial. A case could be made on the ground that extradition would risk a breach of the judgments reached by the European Court of Human Rights. That would be a factor that had to be taken into account by the district judge. I hope that my rather clumsy attempt to answer the question is sufficient. For my own conscience, if nothing else, I will write to the noble Baroness with a more articulate and expanded version of this response.

That the Grand Committee do report to the House that it has considered the Gambling Act 2005 (Operating Licence Conditions) (Amendment) Regulations 2010.

Relevant Document: 4th Report from the Joint Committee on Statutory Instruments.

The purpose of these regulations is to increase the maximum participation fee for prize gaming in bingo premises and the maximum amounts that may be paid in prize money in respect of such gaming. The regulations we are debating today refer to a type of gaming where players are notified of the prizes in advance rather than where the winnings are made up from the stakes of the participants.

Prize gaming forms an integral part of the business model for the bingo industry. Many operators have traditionally offered what is referred to as “prize” or “interval” bingo under prize gaming rules; that is, smaller, faster games run in between sessions of mainstage bingo. The industry generally regards prize or interval bingo as an essential revenue stream that can account for up to 20 per cent of bingo sales in some clubs.

The Committee will be aware that in June last year, the Government introduced the Gambling Act 2005 (Limits on Prize Gaming) Regulations 2009. The regulations increased the limits on participation fees and prize levels for prize gaming in a number of different types of premises. It was the Government’s original intention that all venues entitled to offer prize gaming should benefit from an uplift in stake and prize levels. However, prize gaming in relation to bingo premises is regulated under a separate framework within the Gambling Act and is governed by a separate parliamentary procedure. I know that the noble Lord, Lord Clement-Jones, will recall this from our deliberations on the Gambling Bill that we so much enjoyed a number of years ago. As a result, the 2009 regulations could be applied only to adult gaming centres, family entertainment centres and fairs, and not to bingo halls.

Since June 2009, therefore, the Government have held discussions with a number of stakeholders about whether these new prize gaming limits ought to be applied to prize gaming in bingo halls. Following the completion of those discussions, there is no reason why not. Throughout the discussions there have been three key points for the Government to consider: first, whether the economic and social case for increasing prize gaming limits in adult gaming centres, family entertainment centres and fairs could equally be applied to the bingo industry; secondly, whether any new limits could translate straight across into the bingo industry’s business model or would need to be refined in order to meet its needs; and, thirdly, whether increasing limits for prize gaming risked undermining the character of bingo premises as softer gambling environments.

When the Government reviewed stake and prize levels for category C and D gaming machines in 2008, they included proposals for prize gaming. That was in response to a number of compelling points made by stakeholders. The Government could not ignore the fact that issues raised around prize gaming and the needs of small businesses such as seaside arcades were comparable to those raised in connection with the category C and D machines.

In June 2009, following two public consultation exercises, the Government duly increased the participation fee and prize levels for prize gaming in certain venues accordingly—that is, to a maximum £1 participation fee and £70 prize. It soon became clear in discussions with the industry that a similar case existed in relation to bingo, in terms both of the needs of the industry and of the risk to the licensing objectives.

Many bingo premises continue to feel the effects of a severe long-term economic downturn across the industry, and while the Government have stepped in to help where they can—most notably when in February last year we increased the number of B3 gaming machines that bingo premises could offer—many operators still appear to be facing difficult trading conditions.

Prize bingo generates significant levels of income for many bingo clubs, and the Government want to see these businesses benefit in the same way as adult gaming centres and family entertainment centres did in June 2009. The regulations that we are debating today will therefore not only allow bingo operators to retain an important revenue stream but also enable them to develop and maximise that revenue to its fullest potential.

We should be aware that the current regulations governing prize gaming limits in bingo premises operate on a slightly different basis from those in respect of other types of premises. They specifically distinguish between premises where games are played in the presence of children and where they are not. This allows the operators to offer different maximum prize limits accordingly, thus reflecting the different levels of risk that each type of premises poses in relation to the licensing objectives of the Act.

At present, bingo clubs can offer a maximum stake of 50p and a maximum prize of £35 where children are permitted on the premises, and a maximum prize of £50 where they are not. Following discussions with a number of stakeholders, we have concluded that this difference in maximum prize levels between games played in the presence of children and those that are not should indeed be preserved; in our view, to do otherwise would run the risk of undermining an important revenue stream, especially for many smaller and medium-sized clubs.

These regulations will introduce a new maximum stake of £1 and a maximum prize of £70 where those under 18 years of age are permitted on the premises when a game is being played. Where under-18s are not present, we propose a maximum prize of £100. Of course, the Government are keeping the licensing objectives at the forefront as well as the risks that the new limits might pose to them.

As the Committee will know, the prize gaming limits implemented through the Gambling Act are intended to reflect Parliament’s view that prize gaming should remain a low-risk gambling activity suited to venues that are more oriented towards the family or the wide community. The limits were considered necessary in order to mitigate the effects of any significant commercial exploitation of the prize gaming rules that might undermine the nature and character of prize gaming as a low-level gambling activity.

Such concerns were paramount when the Government’s original proposals regarding prize gaming were included as part of the two public consultation exercises carried out in 2008. None of the responses to these consultations raised any issues that would suggest problems with these similar proposals, so the Government wrote to stakeholders informing them of their plans and, following further discussions, we are confident that these new limits for bingo balance the needs of the industry with the Government’s commitment to consumer protection.

The regulations will ensure that the bingo industry can, in these difficult economic times, secure established revenue streams and develop further a product that is highly popular with players, while retaining the character of prize gaming originally intended through the Gambling Act. We are confident that these regulations do not prejudice the licensing objectives and in particular the protection of children and the vulnerable.

The regulatory framework implemented by the Gambling Act recognises that gambling is not a homogenous activity. Rather, it covers a range of experiences. As a result, the cornerstone of the Government’s gambling policy is to regulate gambling premises based on the levels of risk that they pose to the licensing objectives of the Act. Bingo is, of course, a low-risk gambling activity. Indeed, the Committee will appreciate the important social functions that bingo clubs perform within their areas and many other local communities. The bingo industry continues to face significant economic pressures. Given the valuable role that bingo clubs play in many people’s lives, the Government believe it is right for them to benefit from a similar increase in prize gaming limits to those which other types of premises benefited from in June last year. I commend these regulations to the Committee and I beg to move.

My Lords, given that this order merely brings into line the limits between one establishment and another of similar nature, and that these regulations have been debated in relation to establishments that already have these limits, I see no point in objection.

My Lords, I thank the Minister for his full introduction, which was a bit of a contrast to the response of the noble Lord, Lord Howard. Just to add to the Minister’s regulatory pleasures, I shall be fairly brief, but perhaps not as brief as the noble Lord, Lord Howard.

The key question on the issues faced by the bingo industry is: what has taken the Government so long to come up with these regulations? Between 2003 and 2009 some 115 bingo premises closed, with a loss of 4,000 jobs. Since April last year, it is estimated that a further 24 have closed. The Explanatory Notes explain that an affirmative resolution such as that which we are debating is needed to approve an increase in participation fees for prize gaming in bingo premises—but the opportunity was there last March, when stakes and prizes for category C and D machines were increased, as the Minister said. Why could not this consultation—he called it a “discussion”, which was interesting—have taken place at the same time as that for category C and D machines? That is rather strange and does not appear to be the action of a Government who are concerned to nurture a valued form of gambling which is enjoyed by more than 3 million people in this country.

The Government have done some good things in this area. They have removed VAT on participation fees and they have permitted the doubling of the number of category B machines allowed on bingo premises. However, they then proceeded to fiddle with GPT, which cost the industry some £1.5 million. They do not have a completely blameless record in that respect. The Minister should answer the question about the uplift in stakes and prizes for category B machines. This is of great significance to the bingo industry and to the seaside arcades that he mentioned.

The wait for this review has been agonising. The commitment to it was made 18 months ago. What is the situation? What is the hold-up? Where is it coming from? However, we support the regulations and, in fact, we strongly welcome them. I look forward to the Minister’s reply.

My Lords, I am grateful to both noble Lords for their contributions. If I am slightly more grateful to the noble Lord, Lord Howard, I am sure that the noble Lord, Lord Clement-Jones, will understand why. Brevity being the soul of legislation, the noble Lord, Lord Howard, was succinct enough for me to limit my response to him to expressing my gratitude for his support for these benign and constructive regulations.

I hear what the noble Lord, Lord Clement-Jones, says about the regulations; would that they had been introduced earlier. The bingo industry has benefited from actions taken by the Government over the past few years. The increase in stake and prize levels for category C gaming machines that we introduced in June last year has benefited the industry, and in February 2008 we doubled to eight the number of B3 gaming machines that bingo clubs could offer.

We have the interests of the bingo industry very much in our minds and we recognise the pressures on it. However, the noble Lord, Lord Clement-Jones, with his usual standards of fairness, will recognise that most industries are under pressure in a period of recession, and certainly those industries that cater for leisure time and somewhat limited surplus funds are bound to feel the impact more than others.

The consultation that we held last year led to improvements for the industry. I accept the noble Lord’s point that Governments can always act more rapidly on consultations, but we have to be assured about the issues. The whole construct of the Gambling Act—on the preparation of which he and I spent many happy hours in distant years gone by—contained very clear principles, particularly in relation to gambling where children are present; and when introducing actions to liberalise and extend limits in the industry, we have to go back to the first principles that govern the Act.

Bingo halls are an important part of the social fabric of many areas. We want to see them flourish and sustained but, by the same token, we do not want their social ethos to change and we certainly do not want them, in any way, shape or form, to represent any conceivable risk to social life, either in terms of gambling or its effect on children. That is why we are so careful with this industry.

I accept the noble Lord’s criticism. It is always easier in opposition to suggest that the Government could do things more adroitly if only they followed the principles of the opposition parties, which have good ideas every second day and then discover that they take rather longer to implement. In government, the responsibilities are such that we have to measure matters with some care. However, given that noble Lords are prepared to give a fair wind to these regulations, we have reached our major objective of parliamentary consent to beneficial orders.

Does the Minister have any comfort for me on category B machines?

My Lords, as regards category B machines, I know that the noble Lord is concerned about undue delay. However, the review of these machines is bound to be controversial. The key issue for many stakeholders will be the high street bookmakers and their concern to protect a significant revenue stream. Parity with bookmakers is a serious issue.

The casino sector is also seeking government intervention in relation to stake and prize levels for category B machines in existing casinos. Its chief concern is the impact of the current economic climate on its position. Unlike in the 2008 review of C and D machines, with its focus on seaside arcades, there is not the same economic case to justify our intervention to increase stake and prize levels for category B machines. Industry opinion is not uniform on this. Earlier, I freely acknowledged the strength of the bingo industry’s case, but that is not the case with regard to category B machines. Of course, that reflects the fact that the different sectors of the industry have different concerns. Community groups express anxieties in these areas, but not with regard to bingo halls.

I hear what the noble Lord says on the matter. We are concerned about all sections of the industry that are going through difficult times. No doubt some in the industry can express the obvious case that it would improve their business position if we altered our position on category B machines, but there is not the same unity of position as is represented by the bingo halls. That is why I concentrated on bingo halls today.