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Lords Chamber

Volume 718: debated on Tuesday 30 March 2010

House of Lords

Tuesday, 30 March 2010.

Prayers—read by the Lord Bishop of Lincoln.

Aviation: Regulatory Framework

Question

Tabled by

To ask Her Majesty’s Government whether the consultation on proposals to update the regulatory framework for aviation complies with the criteria set out by the Better Regulation Executive.

My Lords, I beg leave to ask the Question standing in my name on the Order Paper and declare an interest as a director of the Light Aviation Association and vice-president of the General Aviation Alliance, both of which are non-paid.

My Lords, this consultation has been conducted in accordance with Better Regulation Executive criteria. A wide range of stakeholders have been consulted over a 14-week period, targeting those likely to be most affected by proposals. These include events in Scotland and Northern Ireland, and with consumer and general aviation bodies.

My Lords, I thank the noble Lord for his reply. This consultation on the implementation of Sir Joseph Pilling’s views on the strategic review of the CAA 2008 will result in major changes to the mandate of the CAA by including consumer interests, as well as its existing role of safety regulator. Why was there no consultation on Pilling’s major changes with Better Regulation Executive guidelines? The Government, by sleight of hand here, have moved on to the implementation stage without consulting on the major changes they intend.

My Lords, it is entirely open to those responding to the consultation to offer any views they wish on the strategic issues as well as implementation issues. The consultation ran for 14 weeks. It was extended by a week for consultees unable to meet the original deadline and the responses suggest that the general aviation sector, which the noble Lord represents, has been able to respond. Of the 132 responses received, 57 are from the general aviation sector.

Does the noble Lord consider that the remit of the CAA sufficiently covers the general aviation sector? With the railways, there is a specific person responsible for dealing with the more peripheral aspects of the industry, if I might call it that. The CAA remit needs to be broadened to ensure that it includes an important sector like general aviation.

My Lords, those are views that can be expressed in the consultation, and we will take full account of them when we respond.

What is the usual length of time between the feasibility study or consultation and the laying of a regulation? Is the Secretary of State aware that in some respects the Department for Transport seems to allow years to elapse before it comes through with a regulation change?

My Lords, I cannot give the noble Baroness that information, but the consultation ended only on 18 March so it will be some time before we are able to respond and draw up appropriate regulations.

My Lords, does the Secretary of State agree that the proposition that the Civil Aviation Authority should in future be responsible for the conflicting interests of the consumers on the one hand and of the providers on the other is fundamentally flawed and must be reconsidered?

My Lords, those responding to the consultation can express that view. However, I should make clear that in his report Sir Joseph Pilling concluded that the CAA was a highly successful organisation, but, as he says,

“its framework and approach could arguably be modernised and improved, taking account of the lessons to be learned from relative newcomers in the regulatory field”.

If the noble Lord has concerns about the extensive analysis which Sir Joseph Pilling conducted in his review, I would be happy to hear them.

My Lords, I declare an interest of sorts as a humble private pilot. Will the Secretary of State take full account of the views of general aviation in considering the responses to the Pilling proposals? General aviation is a very important part of the overall aviation sector. It is the framework from which new pilots come in to the industry. It is very important that the regulator of that field focuses on safety as its primary consideration and that the focus of the authority is not lost within a wider remit.

I can give the noble Viscount the assurance that he seeks. I can also tell him that, when the consultation document was published, it was sent to 11 general aviation representative organisations which were identified as those most likely to be affected by the proposals. However, at their suggestion, we have since forwarded the consultation to 29 other general aviation organisations and, as I say, we extended the consultation period to give them greater time to respond. They have been fully engaged in the consultation. As I said in response to an earlier question, a very large number of general aviation organisations and individuals have responded and we will take full account of their views.

Banking: Government Support

Question

Asked By

To ask Her Majesty’s Government what have been the costs to date (a) gross, and (b) net, of supporting banks and building societies during the financial crisis.

Budget 2010 included an estimate for the net cost of all financial sector interventions of £6 billion. However, this is based on current market prices. The actual net cost, if any, will depend on a number of factors, most notably the eventual sale price achieved for the Government’s shareholdings. The Chancellor made it clear in his Budget speech that the Government intend to get all taxpayers’ money back.

My Lords, I am grateful to the Minister for that clarification of the net position. However, the FSA, in its Financial Risk Outlook 2010, says that the banks have to find some £440 billion worth of loans and finance by 2012 to replace maturing debt. More than £300 billion is finance provided by the taxpayer under the credit guarantee scheme and the special liquidity scheme, due to end in 2012. Will the banks not find it very challenging to finance these paybacks? Indeed, how will they do it? Will it be by increased deposits, securitisation of loans and mortgages, convertible gilts, rollover of government finance, or a combination of these things?

My Lords, the process of restructuring the liabilities of the banks is already on course. The special liquidity scheme closed at the end of January with £185 billion outstanding. The credit guarantee scheme, which was launched with a maximum potential exposure of £250 billion, closed at the end of February with £125 billion of drawings. Banks are increasingly raising funds in their own name without recourse to either the SLS or the CGS, and the market for covered bonds and MBSs is beginning to develop as well. It is important to remember that money does not disappear from the system. The money that banks have to repay will go back into the system and the banks will have to bid for that to refund themselves in the future. I regard this as an entirely manageable challenge.

What plans does the Minister have to sell the shares owned by the Government on behalf of the taxpayer of those taxpayer-owned banks?

We continue to make good progress. We announced the restructuring of Northern Rock as at 1 January. As the House is aware, we have also announced the end of the guarantee on deposits. So far as our shareholding in the Royal Bank of Scotland and Lloyds Banking Group is concerned, we are committed to returning them to full private ownership in due course. Since the middle of last year, we have been looking at a variety of options including full disposal, convertible issues, partly paid issues and other forms of innovative distribution, because they are large investments. We are absolutely committed to recovering in full—and more—the value that the taxpayer has placed at risk in acquiring the shares, and to doing so in a way that fosters competition and enhances financial stability.

My Lords, could the Minister give a commitment that there will be no quick sale of shares in the RBS and Lloyds Banking Group, not only—as he just said—to maximise the return to the taxpayer when they are sold, but so that the Government can continue to exercise some influence on those banks’ lending levels, particularly to small and medium-sized businesses, in the difficult period ahead?

The House is of course aware that we have entered into commitments with the Royal Bank of Scotland and Lloyds Banking Group that amount to £94 billion of new lending for business, of which half will be for small and medium-sized enterprises. So far as the timing of the sale is concerned, the key thing is to ensure that we get good value for the taxpayer; I have made it clear that that is our priority. We will not enter into any silly scheme to distribute shares at a huge discount to friends in the City or hedge funds, in order to reward them for their support.

Will the Minister not accept that, if Northern Rock had been properly regulated in the beginning, it would not have needed the advance of these massive sums? Surely to have a business plan that borrows money on the overnight markets and lends in mortgages over 20 years is completely unsustainable.

As the noble Lord will know, the FSA has been frank in its forensic audit of its failings in the regulation of Northern Rock. But let us be clear that the failure of a banking institution can never be primarily placed at the door of the regulators; it must lie with the board of directors and the owners of the business.

When the Minister wound up the economic debate last week, he was kind enough to say that he would obtain from the FSA the answer to my question about the £61.5 billion of credit card debt held by British banks on which interest is being paid, of which £9 billion was securitised at between only 10p and 20p in the pound. How much of the remainder has been written down on the balance sheets of the banks? It is a big sum and important. Has he had that information yet?

The noble Lord is aware that I said that I would write to the FSA and obtain that information, and I have confirmed that in a letter to him. He may be wrong to talk about the securitisation of credit card debt at 10p in the pound. The receivables may well have been sold on, but securitisation is the wrong term to describe that process.

My Lords, my noble friend Lord Roberts’s supplementary question was about the £440 billion that needs to be refinanced by 2012, and the Minister was remarkably sanguine about the ability of banks to do that. How much of that £440 billion relates to the RBS and Lloyds, and can the Minister assure us that it can be refinanced without the taxpayer having to put the money up yet again?

The amount that the FSA referred to in its financial risk report was at a point in time, and the figure is different now. Those banks continue to improve their liability management, as we have seen from recent reports from Lloyds, which says that it will be back in profit this year—further evidence of its recovery under government support. Noble Lords will no doubt be pleased to see that the share price of the Royal Bank of Scotland has quadrupled since its low. Those banks are beginning to refinance themselves, and I have high confidence that they will not require continued dependence on the Government for funding once the SLS and CGS are finally paid off, as they will be by 2014.

My Lords, my question is on a connected and important issue. Is the Minister fully confident that bonuses paid to directors, executives and staff of the state-controlled and owned banks in Britain will be subject to proper and full UK direct taxation in all cases?

I can only say that I am confident that those who have received bonuses and payments will seek to comply with their responsibilities in terms of disclosure. There will be people in these banks who are subject to UK tax on only a portion of their income, if some of their service is provided outside the United Kingdom—as, for instance, would be the case with Mr Diamond of Barclays, who I have read is eligible for £64 million in reward. The answer that I would really wish to give the House is that the shareholders must be more vocal and visible in challenging these levels of reward.

Is not the real test of government policy how quickly and to what extent the banks begin to lend to SMEs to get the economy moving again?

Banks are definitely lending to SMEs. What we need to focus on is their gross lending, which is their extension of new loans to existing and new customers. As I said earlier, £94 billion has been committed by the Royal Bank of Scotland and Lloyds in new loans this year. Both banks increased their market share last year and were undoubtedly to the fore in meeting customer needs. But at the same time that some customers were borrowing, others were repaying their liabilities to their banks; net borrowing was therefore lower. The critical factor is gross borrowing—the availability of credit to support economic activity.

Is my noble friend describing a win-win situation, in so far as when we come to sell some of these now state-owned banks back to the private sector, there is the prospect of making a profit? That wholly justifies the Government’s swift and determined intervention during the financial crisis to buy in those banks in order to save the banking system.

My Lords, in life I have many times anticipated win-win situations, but I have yet to experience one. However, the total amount of taxpayers’ money currently at risk in terms of the difference between the market valuation and the amount that we have invested is only £6 billion. I say “only” carefully, because it is a very large amount of money, but in the context of the effective rescuing of the banking system it represents very good value for money. I remind noble Lords that my right honourable friend the Chancellor of the Exchequer told the other place last week that we have already earned £8 billion in fees from the banks for the support which we have provided over the past 18 months.

Airports: New Runways

Question

Asked By

To ask Her Majesty’s Government what assessment they have made of how many new runways will be required at United Kingdom airports before 2050; and how many of those will be needed to serve London.

My Lords, the 2003 Future of Air Transport White Paper supported four new runways, subject to environmental considerations and commercial decisions by airport operators. The Government intend to consult next year on a new draft national policy statement on airports. They will also respond to the Committee on Climate Change’s recent report on options for reducing carbon emissions from aviation to 2050.

My Lords, I thank the Secretary of State for that Answer. Of those four new runways, how many are at existing airports and which are they? How many are at new sites and where would they be?

My Lords, the four were at Heathrow, Stansted, Birmingham and Edinburgh. Since then, the airport owners of Birmingham and Edinburgh have concluded that second runways will not be needed before 2030. Birmingham International Airport is pursuing an extension to its existing runway, for which it received planning permission this month.

As the Minister may be aware, the airports programme is likely to be extended, due to various legal and other technicalities, so will he reconsider the possibility of linking Euston, St Pancras and King’s Cross with a proper tunnel? That would create a London north terminal, connected to the Underground at both the Euston and St Pancras ends, so that people making international journeys could do so by rail soon and in much more comfort.

The noble Lord makes an important point about the connections between Euston, St Pancras and King’s Cross. As he will know, in the Government’s recent Command Paper on high-speed rail, we proposed that further work should take place on the precise issue that he highlights—that is, how a rapid people mover could be put in place between Euston, St Pancras and King’s Cross. The distance between these stations is of course much smaller than that between most airport terminals and, if it were possible to get between these stations rapidly, the benefits could be huge, not least for passengers who arrive at Euston but wish to leave on international trains from St Pancras.

My Lords, I declare an interest as a supporter of the Stop Stansted Expansion campaign. Consequently, I am not a great fan of airport expansion of any kind. However, following my noble friend’s very welcome and far-sighted announcement of a high-speed rail policy, does he agree that airport policy in the future should be realigned so that new capacity is put where the infrastructure will serve it best?

My Lords, we will take account of all these issues when we publish the national policy statement next year.

My Lords, will the Secretary of State tell the House how the recent judgment on the inquiry into a third runway at Heathrow will affect the Government’s policy and, if they are ever re-elected, what plans they will have to reopen the consultation on a proper, up-to-date basis?

My Lords, we will consult on the national policy statement. Under the Planning Act 2008, we are required to have such a consultation and that consultation will take place. However, I should quote the words of the judge in last week’s ruling. He said:

“On the basis of the intentions of the secretary of state and BAA, as presently understood, the 2008 Act provides a complete legal framework for consideration of all the issues on which the claimants rely”.

Those were the words of the judge. A complete legal framework is in place for considering the issues relating to the further expansion of Heathrow. That complete legal framework includes the consultation that will take place on the new national policy statement.

My Lords, why have there always been objections to making far better use of Manston? It already has an airfield; it is, I think, already in use by the military; it could easily be linked up with the railway at Dover; and it is very close to the continent for ease of travel.

My Lords, how can I put this tactfully? There are people for and against the expansion of Manston airport and its use in the way that the noble Baroness described. I have been long enough in this job to know that my best position on these issues is to remain neutral.

My Lords, first, I declare an interest as the president of HACAN and as a veteran of both inquiries into the fourth and fifth terminals at Heathrow. In view of the recent High Court decision on the third runway but the Government’s determination to go ahead whatever, can the Minister say what limits—real limits—he would put on expansion at Heathrow?

As the noble Baroness will know, the decision that the Government took last January included a whole set of conditions that would need to be satisfied and limits on the number of air traffic movements. In particular, there is a limit on the number of air traffic movements before 2020 of 605,000 and a limit thereafter, subject to further conditions being met, of 702,000. Therefore, the decision includes limits of the kind that I think the noble Baroness wishes to see implemented.

My Lords, when my noble friend publishes the national policy statement, will it include an update of the forecasts, which must now be about 10 years out of date, and will it also be airport or runway-specific? Will it recommend particular locations or will it leave that to the operators to decide?

My Lords, is it not the case that, whether the Minister likes it or not, the third runway at Heathrow has been kiboshed by the courts as a direct and predictable result of the Government’s absurd Climate Change Act, which was passed with enthusiasm, acclaim and complete thoughtlessness by all parties in this House and in the other place? If the Minister thinks that the third runway is important—and I agree with him—is not the only possible solution to suspend the Act, not least because even the Government have admitted that it makes no sense without an international agreement, which Copenhagen showed was not attainable?

My Lords, I think that that was a rhetorical question. I am not sure that I need to answer it, since most of its content relates to the climate change agenda and not to airports. So far as the issue of carbon reduction and Heathrow is concerned, when the Government took the decision last year to allow the third runway application to proceed, they also asked the Committee on Climate Change for its advice on the target of ensuring that carbon emissions from aviation in 2050 were below the level in 2005. The noble Lord, Lord Turner, who chairs the committee, reported in December and concluded:

“The Report finds that there is potential for aviation demand to increase while still meeting the Government’s target—in the most likely scenario, a 60% increase in demand is allowed”.

That 60 per cent increase in demand is very significantly more than the increase in demand that would be caused by the third runway, so there is no incompatibility whatever between meeting our climate change and carbon reduction targets and allowing the expansion of Heathrow to take place, which is manifestly in the public interest and the wider economic interest.

Nigeria

Question

Asked By

To ask Her Majesty’s Government whether they will make representations to the Government of Nigeria in response to the recent killings near Jos, Nigeria.

My Lords, we condemn the recent violence near Jos, which resulted in such a terrible loss of life. I raised UK concerns with Foreign Minister Maduekwe on 20 January, and my honourable friend the Minister of State Ivan Lewis spoke to the Foreign Minister on 15 March, underlining the need for the Nigerian Government to ensure that those responsible for crimes are prosecuted and the need to address the underlying causes of the violence. The British High Commissioner in Abuja visited Jos in February and will continue to raise concerns about intercommunal violence with the Nigerian Government and traditional and religious leaders.

I thank the Minister for her reply. Is she aware that the recent slaughter of up to 500 Christians and other non-Muslims was just the latest in a series of attacks by Islamic extremists? On a recent visit to Jos, I met both the Muslim and Christian leaders who were very interested in an initiative which I helped to establish in Indonesia, with rather a long name, I regret, the International Islamic Christian Organisation for Reconciliation and Reconstruction, or IICORR for short. Is the Minister aware that the Foreign Office funded an interfaith delegation from Indonesia which helped to contain further conflict in Ambon? Would the Government consider a similar initiative for the Muslim and Christian leaders in Jos that might help to stem the violence there?

I commend the commitment of the noble Baroness, Lady Cox, to promoting reconciliation and reconstruction in the plateau states of Nigeria. Of course we are aware that communities in Nigeria remain suspicious and resentful of each other, even though in the past they have lived harmoniously together. It is important that victims are supported and that those who perpetuate violence are brought to book. I suggest that the noble Baroness sends me her proposal about the organisation she mentioned so that we can give it full consideration.

My Lords, considering that prior to the latest communal massacre in the neighbourhood of Jos there was clear notice in internet traffic of what was about to happen, has any consideration been given by the Nigerian authorities to setting up an early warning system and a rapid response force to prevent future outbreaks? Can the Minister say what measures the Nigerian Government have taken to implement the promise they made to the universal periodic review last year to promote interethnic and interracial harmony?

I thank the noble Lord. I confirm that the Nigerian Government under the current acting President have taken a number of actions such as have been suggested by the noble Lord. Of course, there was a great deal of media coverage and contact through text messaging that was firing the conflict at that time. It is something that we are asking the Nigerian Government to address urgently. It is important that acting President Jonathan acts quickly to improve security. We are heartened that, for instance, he has ordered a crackdown on the flow of small arms, which were a huge contributor to the violence that has occurred in that region, not just in January and March but over many years.

My Lords, does my noble friend agree that the recent violence, together with the violence to which she referred in January and last November, has left many hundreds of families homeless and in desperate need of shelter? Do the Government have any plans for emergency humanitarian aid to assist those homeless people, especially as the rainy season will soon be upon them and they desperately need shelter?

My noble friend makes an extremely important point, because thousands of people have been displaced as a result of the violence. DfID is considering supplying extra humanitarian assistance to those who have been displaced, especially as the rainy season is approaching. We are now considering funding of an extra £200,000 to ICRC, which is currently undertaking an assessment, and we have earmarked that funding so that, when the assessment is made, we can take the necessary action.

Does the Minister accept that the noble Baroness, Lady Cox, is entirely right to bring this concern before the House, because we are dealing here with butchery on a horrific scale? Anyone who has seen the videos on the internet of cold-blooded executions will be appalled by what they have seen. This is not just a matter of a distant horror; this is Africa's major energy-producing country threatened with total instability and danger. Will she keep the House informed about what emerge as the underlying causes? There seems to be considerable doubt about whether they were about retaliation, a deliberate extremist Islamic attack on Christians, or something else. These are matters that we want to follow very closely, and I hope that she will keep us informed.

The noble Lord makes an extremely important point, but I would say that apportioning blame will not assist us to make the proper analysis of why we have seen the outbreak of this kind of violence in 2001, 2004, 2008 and 2010. The noble Lord may be interested in reading a recent Chatham House report, which stated that it is about rights, access to resources and access to power, as well as poverty and unemployment. I think that issues of access to land and power are behind the violence that we have seen; then they take on a religious dimension.

Standing Orders (Public Business)

Motion to Amend

Moved by

Standing Order 19 (Election of Lord Speaker)

In paragraph (2), after “current Parliament,” insert “who are subject to statutory disqualification, who are suspended from the service of the House,”

In paragraph (3), after “Privileges” insert “and Conduct”

Standing Order 65 (Sessional Committees)

Delete “Personal Bills Committee” and insert “National Security Strategy Committee”.

After “Privileges” insert “and Conduct”

Standing Order 78 (Committee for Privileges)

After each “Privileges” insert “and Conduct”

Standing Order 79 (Claims of Peerage)

After “Privileges” insert “and Conduct”

Standing Order 81 (Claims of Irish Peerages in abeyance)

After “Privileges” insert “and Conduct”

Standing Order 82 (Report of Committee for Privileges if improper arrangement entered into between co-heirs)

After “Privileges” insert “and Conduct”.

My Lords, the first four Motions standing in my name on the Order Paper today are consequential on decisions taken previously by the House in agreeing to reports from the Privileges Committee, the Procedure Committee and the Liaison Committee. I beg to move the first Motion standing in my name on the Order Paper.

Motion agreed.

House of Lords: Code of Conduct

Motion to Resolve

Moved by

To move to resolve that the Code of Conduct for Members of the House of Lords adopted on 30 November 2009 be amended as follows:

In Paragraph 16 delete “Rules” and insert “Code of Conduct”.

Delete Paragraph 17 and insert:

“17. After investigation the Commissioner reports his findings to the Sub-Committee on Lords’ Conduct; the Sub-Committee reviews the Commissioner’s findings and, where appropriate, recommends a disciplinary sanction to the Committee for Privileges and Conduct. The Member concerned has a right of appeal to the Committee for Privileges and Conduct against both the Commissioner’s findings and any recommended sanction”.

In Paragraph 18 after “Privileges” insert “and Conduct”.

Delete Paragraph 19 and insert:

“19. In investigating and adjudicating allegations of non-compliance with this Code, the Commissioner, the Sub-Committee on Lords’ Conduct and the Committee for Privileges and Conduct shall act in accordance with the principles of natural justice and fairness”.

Delete Paragraph 21 and insert:

“21. No Member shall lobby a member of the Committee for Privileges and Conduct or the Sub-Committee on Lords’ Conduct in a manner calculated or intended to influence their consideration of a complaint of a breach of this Code”.

In Paragraph 22 delete “Sub-Committee on Lords’ Interests” and insert “Sub-Committee on Lords’ Conduct”.

In Paragraph 24 delete “Sub-Committee on Lords’ Interests” and insert “Sub-Committee on Lords’ Conduct”.

In Paragraph 25 delete “Rules” and insert “Code of Conduct”.

My Lords, I trust that it is for the convenience of the House if I speak to the reports on the code of conduct, the scrutiny reserve on EU legislation and the scrutiny of opt-in decisions on EU legislation in one very brief speech. I have agreed this with the noble Baroness's office this morning. I do so because I was not able to be present for the substantive debate on 16 March, and I cannot let these decisions pass without at least minimal comment.

First, on the code of conduct, I simply comment that paragraph 54 of the new code is a scandal. It states:

“Members are not required to register pension arrangements, unless conditions are attached to the continuing receipt of the pension that a reasonable member of the public might regard as likely to influence their conduct as parliamentarians. Such conditions attaching to pensions from European Union institutions do not normally require the pension to be registered or declared in proceedings in the House”.

The scandal arises because continuing conditions are indeed attached to EU pensions, because such pensions can be removed if the holder does not respect continuing obligations arising from their time in office. It is therefore wholly wrong to exempt EU pensions from the requirement that they be registered and declared in our debates. I have agreed to speak very briefly, so I will say no more on this point now. Students of the decline and extinction of British democracy can find the whole sordid story in a short debate in your Lordships’ House on 19 July 2007, at cols. 402-418 of Hansard.

I can deal even more briefly with the new rules on our scrutiny of European legislation and of opt-in decisions under Title V. Put briefly, none of these manoeuvres will make any difference to the powers already acquired by Brussels under the Lisbon treaty, nor to the steady advance of the project of European integration at the expense of our national parliamentary sovereignty. They are pure window dressing, designed to fool the people into thinking that the project has somehow become more benign and democratic.

On the scrutiny reserve, I remind your Lordships that the Government admit to overriding it no fewer than 435 times in the past five years. As most EU legislation is now agreed by majority voting, the Government, who have some 9 per cent of those votes, are powerless to respect this new code even if they wanted to. The best that can be achieved under the scrutiny reserve is that, after either House merely debates the legislation in question, the reserve is automatically lifted. We do not vote on it because we have no power over it—some safeguard, that.

Nor do I take any comfort from the eight-week delay in agreeing new measures because Ministers can simply override it, and they will. The whole concept of national Parliaments being able to stop EU legislation under the Lisbon treaty is, in any case, fraudulent, because in the end Brussels can go ahead with whatever it wants to do. I give one brief, current example. The Government say that they will not opt in to the proposed new European public prosecutor, but of course the octopus has a tentacle ready to deal with such futile posturing. It will extract British citizens for trial in another European jurisdiction by using the infamous European arrest warrant. There will always be a way around any national interest.

The battle lines are now clearly drawn between the political class and the people—between those who are determined to appease the project of European integration, to its inevitable and frightening conclusion, and those of us who have decided to join the resistance. I very much regret that the Government and your Lordships’ House have decided to throw in their lot with the former.

My Lords, I note what the noble Lord says, although I do not share his views. I should make it clear to the noble Lord that the opportunity to debate these issues was when the relevant papers were before the House for agreement. I very much regret the fact that the noble Lord was not present at that time to make his views known. The decisions having now been taken by the House, these Motions are simply intended to give effect to those decisions, not to create an opportunity to revisit them.

Motion agreed.

European Union Documents: Scrutiny Reserve

Motion to Resolve

Moved by

To move to resolve that:

(1) Subject to paragraph (5) below, no Minister of the Crown shall give agreement in the Council or the European Council in relation to any document subject to the scrutiny of the European Union Committee in accordance with its terms of reference, while the document remains subject to scrutiny.

(2) A document remains subject to scrutiny if—

(a) the European Union Committee has made a report in relation to the document to the House for debate, but the debate has not yet taken place; or

(b) in any case, the Committee has not indicated that it has completed its scrutiny.

(3) Agreement in relation to a document means agreement whether or not a formal vote is taken, and includes in particular—

(a) agreement to a programme, plan or recommendation for European Union legislation;

(b) political agreement;

(c) agreement to a general approach;

(d) in the case of a proposal on which the Council acts in accordance with the procedure referred to in Article 289(1) of the Treaty on the Functioning of the European Union (the ordinary legislative procedure), agreement to the Council’s position at first reading, to its position at second reading, or to a joint text; and

(e) in the case of a proposal on which the Council acts in accordance with Article 289(2) of the Treaty on the Functioning of the European Union (a special legislative procedure), agreement to a Council position.

(4) Where the Council acts by unanimity, abstention shall be treated as giving agreement.

(5) The Minister concerned may give agreement in relation to a document which remains subject to scrutiny—

(a) if he considers that it is confidential, routine or trivial, or is substantially the same as a proposal on which scrutiny has been completed;

(b) if the European Union Committee has indicated that agreement need not be withheld pending completion of scrutiny; or

(c) if the Minister decides that, for special reasons, agreement should be given; but he must explain his reasons—

i. in every such case, to the European Union Committee at the first opportunity after reaching his decision; and

ii. if that Committee has made a report for debate in the House, to the House at the opening of the debate on the report.

Motion agreed.

European Union Proposals: Scrutiny of Opt-in Decisions

Motion to Resolve

Moved by

To move to resolve that, in relation to notification to the President of the Council of the European Union of the wish of the United Kingdom to take part in the adoption and application of a measure following from a proposal or initiative presented to the Council pursuant to Title V of Part Three of the Treaty on the Functioning of the European Union:

(1) No Minister of the Crown may authorise such notification within 8 weeks after the proposal or initiative has been presented to the Council.

(2) A Minister may however authorise such notification sooner than provided by paragraph (1) if he decides that for special reasons this is essential; but he should explain his reasons—

(a) in every such case, to the European Union Committee at the first opportunity after giving that authorisation; and

(b) in the case of a proposal awaiting debate in the House, to the House at the opening of the debate.

(3) Where the European Union Committee is scrutinising the question of notification independently of the substance of the measure to which it relates, scrutiny of the substance of the measure will continue to be governed by the Resolution of the House of 30 March 2010, as amended.

Motion agreed.

Representation of the People (Timing of the Canvass) (Northern Ireland) Order 2010

European Parliamentary Elections (Northern Ireland) (Amendment) Regulations 2010

Electoral Law Act (Northern Ireland) 1962 (Amendment) Order 2010

Motions to Approve

Moved By

To move that the draft orders and regulations laid before the House on 3 and 24 February be approved.

Relevant Documents: 8th and 9th Reports from the Joint Committee on Statutory Instruments, considered in Grand Committee on 25 March.

Motion agreed.

Constitutional Reform and Governance Bill

Order of Consideration Motion

Moved By

That it be an instruction to the Committee of the Whole House to which the Constitutional Reform and Governance Bill has been committed that they consider the Bill in the following order:

Clauses 1 and 2, Schedule 1, Clauses 3 to 19, Schedule 2, Clauses 20 to 23, Schedule 3, Clauses 24 to 38, Schedule 4, Clauses 39 to 46, Schedule 5, Clauses 47 to 50, Schedule 6, Clauses 51 and 52, Schedule 7, Clauses 53 and 54, Schedule 8, Clauses 55 to 61, Schedule 9, Clauses 62 to 65, Schedule 10, Clauses 66 to 74, Schedule 11, Clause 75, Schedule 12, Clauses 76 to 80, Schedules 13 and 14, Clauses 81 to 86, Schedule 15, Clauses 87 to 95.

Motion agreed.

Export Control (Iran) (Amendment) Order 2010

Motion to Resolve

Moved By

To move to resolve that this House regrets that Her Majesty’s Government have laid before Parliament the Export Control (Iran) (Amendment) Order 2010 (SI 2010/144) without explaining to Parliament how it would be implemented; and calls on the Government to explain why they consider the European Commission to be the appropriate institution for exercising this United Kingdom policy most effectively.

Relevant Document: 10th Report from the Merits Committee

My Lords, it is appropriate that this debate, which I hope will be very short, should come straight after the important resolutions that have just been moved by the Leader of the House—which may or may not be considered tough enough and radical enough—that govern European Union scrutiny reserve and opt-in procedures, since the matter that I am raising touches on the distribution of powers between this House and the EU institutions, although in a way that is rather different from the way in which they are usually handled and described through the scrutiny procedures.

This Export Control (Iran) (Amendment) Order has a clear-enough purpose. It is to extend the list of goods and technology that it is an offence to supply, sell or transfer to Iran. I make it crystal clear that we entirely agree with the policy. Any pressures that can help to curb the destructive ambitions of a repulsive regime are welcome, particularly if that regime is now moving in an unapproved way towards weaponising its nuclear power and threatening to destroy neighbouring countries. This is not the place to go into wider issues about making strengthened sanctions work, which are currently being discussed in a number of forums, or to discuss the prospects of getting Chinese and Russian co-operation, without which no sanctions will be fully effective. That is a much wider issue.

Why then are we concerned about this amended order? Although it is a small item, it stands at the crossroads of much larger ones. In this case, I have the excellent report by the Merits of Statutory Instruments Committee to thank for identifying the issue and urging that we give it further examination. The outcome of the order is to give the European Union Commission new powers, although admittedly very modest ones, over our national policy, in this case, in the highly sensitive area of shaping and determining our foreign policy. The Merits Committee stated:

“The Commission will now be able to amend these Annexes without reference to the Council, on the basis of information supplied to them by EU Member States, and not just on the basis of determinations made by either the UN Security Council or the UN Sanctions Committee as was the case under the previous Regulation. The Department for Business, Innovation and Skills (BIS) have said that they do not think this amendment causes problems in practice and have explained that the nature of an amendment to an Annex would determine whether they would lay a new SI or not. As the Annexes will be directly applicable to the UK, the House may therefore wish to satisfy itself that there are sufficient safeguards in place around this extended”—

I emphasise the word “extended”—

“power of the Commission”.

It is that satisfaction that I now seek in the interests of your Lordships' House and of serving our proper duty to be vigilant in protecting this Parliament’s powers and safeguarding any further transfer of powers that may be taking place.

As I say in my regret Motion, I find it a little difficult to understand how this type of regulation and the power shift implicit in it can take place without the Government at least explaining to Parliament how it would be implemented in practice and how our sovereignty will be affected. When the Minister replies, I would like him to explain that to noble Lords and also why the Government consider that the European Union Commission is the appropriate institution for taking this power and exercising this aspect of UK policy most effectively. It is obvious that the overall application of sanctions pressures by the European Union should be in the hands of the institutions, but the power to shape our own foreign policy considerations should surely rest with us.

Handing yet more powers—I have to say that—to the European Union institutions needs deep consideration. Some may think it is a marvellous idea; some may think it has gone too far. It needs deep thought and, frankly, I do not believe that this order has had very much of that either. I am concerned about the lack of time that has been spent on scrutinising the implications of this order—although the Merits Committee have done an excellent job—and I am concerned about the precedent it sets for the future. If we are an effective legislature, we should not let something like this simply pass without very careful examination and comment. I beg to move.

My Lords, we on these Benches express gratitude to the Merits Committee for bringing this to the attention of this House and the other place, and also to the noble Lord, Lord Howell of Guildford, for raising it in the debate today. It is an important point. I, too, thank the Minister for coming from the BIS today to answer this debate and hope that he will be able to reassure the House on the points raised by the noble Lord, Lord Howell of Guildford. As stated in the SI, the power of the Commission is increased not by an enormous amount but at the margin by a moderate amount, which I, on these Benches, would suggest is a practical measure which should not really cause excessive anxieties in the consideration of these matters. I think it is right that the evolution of the Union has been characterised not only by literal treaties and implementation—and Lisbon is the latest—which enable a much greater degree of co-ordination and the extension in majority voting, quite rightly, in many areas, but also pragmatically, with now a much larger number of countries. Obviously common sense must prevail, therefore, in the way in which the sovereign member states, the sovereign countries—fully sovereign, only conceding rights to the collectivity by freewill of the parliamentary and governmental representatives on every occasion—can decide to assign to the Commission this modest increase in powers.

We take comfort from paragraph 2 of the SI details which refers to the fact that although the 2007 regulation, for example, was directly applicable in all EU member states, national implementation legislation is and was

“required in relation to licensing, enforcement, offences and penalties”.

Furthermore, in the BIS evidence and answers given to the Committee, in Appendix 1 of the report and then in A.4 towards the end, the reassurances are expressed there quite properly and in a satisfactory way, stating that,

“sanctions Regulations often give the Commission some scope for amending Annexes”,

It also states that the Commission is now being given a slightly broader power than usual and

“we do not think that this causes problems in practice. This is because the wording of Articles 2(1)(a)(iii) and 3(2) of the 2007 Regulations set out limits for what the Annexes can include (broadly, only items with WMD end-uses can be listed)”.

I welcome any reassurance the Minister can give.

In conclusion, I thank the noble Lord, Lord Howell for raising this matter. I would just widen it out into the geo-political implications in the Middle East with the British Government, the European Union and the wider international community being resolutely even-handed in the way in which they deal with these problems that are producing a much darker situation in the Middle East with the threat of war, renewed violence and so on. Because of the failure of the international community in not seeking a proper resolution of the Israeli-Palestinian dispute, the rage and anger of the Arab man and woman in the street, and in other non-Arab Muslim countries, is on the increase. Whatever the nature of the regime in Tehran— and I think there is ample and justified criticism about the things that the present Ahmadinejad Government are up to—if there is not a balanced policy and a balanced approach by the UK Government and the Union, that rage and anger will continue. Saddam Hussein was rightly expelled from Kuwait after one year of occupation; Israel is still in the occupied territories now after 34 years. This therefore must be solved by the international community, along with Israel, a country which I much admire, and the less powerful but equally needful Palestinians. And on that note I end, hoping the Minister might have time to refer to that if it is not considered to be out of order.

My Lords, I thank the noble Lord, Lord Howell, for his comments. I think we all share his concern that EU legislation should be subjected to proper scrutiny and that this House and the other place should have the opportunity properly to scrutinise both EU measures and the domestic legislation that implements them.

First, it is simply not true that the Government laid the order without explaining to Parliament how it would be implemented. The December EU Council regulation that led to the order was cleared from scrutiny without comment but was cleared by the European Union Select Committee in this House and by the equivalent committee in another place. The committees had the benefit of a full Explanatory Memorandum.

Secondly, I am very clear that it is appropriate for the European Commission to exercise the powers that were delegated by the regulation. As the FCO Explanatory Memorandum to the regulation says, it improves the speed and efficiency of the process in Brussels. It does not cede any further policy control to the Commission, as any revisions to the list must still come from the United Nations Security Council, from the UN sanctions committee or from member states.

That is not, of course, a complete answer to the noble Lord’s questions. To be clear, we are talking about two instruments. The first instrument is an EU Council regulation that was adopted in December 2009 and amended the earlier 2007 Council regulation that imposed sanctions against Iran. The Commission has always been able to make minor amendments to that regulation. The December regulation simply added a power for the Commission to amend the lists of prohibited and of controlled goods and technology on the basis of information provided by member states. The second instrument—an order under the European Communities Act 1972 and the Export Control Act 2002—just updated a 2007 order that created offences and penalties and supplemented the original EU Council regulation.

The order is very short, and the Merits Committee has not suggested that it implemented the December regulation inappropriately. Indeed, there was very little scope for policy choices on implementation. As noble Lords will know, we do not have to transpose the substantive provisions of EU regulations into national legislation as we do with directives. The debate is ostensibly about the order, but most of the argument has been about the regulations.

In preparing for this debate, I have taken the opportunity to look back over the explanatory material which the Foreign and Commonwealth Office prepared for the December EU Council regulation and the explanatory material which BIS then prepared for the order. I am very clear that the Commission’s powers to amend the EU regulations were properly set out there, and that the Commission can amend the list of controlled goods and technology,

“on the basis of information provided by either the United Nations Security Council or the sanctions committee, or by member states”,

and that there is no formal reference back to the Council.

The FCO memorandum was submitted in mid-October, so there is no question of there having been insufficient time for comments. It may be that the Government can consider ways in which articles with provision for the Commission to amend sanctions regulations can be highlighted even further, but I do not accept the accusation implied by the Motion that we did not do enough to bring the effect of the December regulation on the 2010 order to the House’s attention.

Some commentators in the Opposition might say that we have ceded too much control to Europe. My response is that we have not ceded any powers, as the Lisbon treaty did not change the intergovernmental nature of common foreign or security policy or member states’ responsibility for foreign policy. EU member states make foreign policy decisions unanimously and case by case. That is what we have done here. We worked at the EU to get the right EU-wide policy on Iran that included a tough sanctions package to accompany and reinforce existing UN measures.

This has had a greater impact than unilateral UK action. I am in complete agreement that we need to be careful about what powers are delegated to the Commission and on what terms. However, I am satisfied that, in the particular circumstances of this case, the delegation was appropriate. As the noble Lord, Lord Sykes, says, there is a delicate situation in the Middle East. No reasonable person would disagree that there is a real threat posed by Iran’s proliferation of sensitive nuclear activities—it is in defiance of five UN Security Council resolutions—and that this threat needs to be carefully managed, ensuring that each member state has the time and opportunity to consider any proposed changes in approach.

I thank the Minister for giving way. I have two corrections. One is on his part: it is Dykes, not Sykes. The other is on mine: I meant to say 43 years of occupation.

I thought that I did say that; please accept my apologies.

We need to join with our European partners on this. The threat can be more effectively tackled at a European Union, rather than at a national level, by ensuring that there are uniform measures binding on all member states. Without such action, we could not guarantee that member states would have equivalent controls in place on exports to Iran, with the consequent risk that Iran would be able to further its nuclear ambitions by procuring equipment within the EU.

This is not just about UK policy; the knowledge that we have about Iran’s nuclear procurement necessitates changes from time to time and we need to remain vigilant. It is essential that the EU has the ability to act quickly. The alternative to the process used in these regulations would be to seek the agreement of the Council to changes of this kind. In my view, this would be inappropriate for as serious and volatile a situation as that in Iran.

Finally, the Commission’s power to amend the list of controlled goods, software and technology in the Iran Sanctions regulation is still very closely circumscribed. Without UN involvement, it can only act on the basis of information supplied by member states and only in relation to goods, software and technology,

“which could contribute to enrichment-related, reprocessing or heavy water-related activities, to the development of nuclear weapon delivery systems, or to the pursuit of activities related to other topics about which the International Atomic Energy Agency (IAEA) has expressed concerns or identified as outstanding”.

In addition, the Council is able to amend the common and foreign security policy measure on which the Iran Regulation is based. That gives member states a further level of control. In practice, member states would ask for additions to the controlled list in the context of a working group. The Commission can only act on the basis of information supplied by member states and in practice, such information would be given in the context of a working group with all member states operating by consensus. Therefore, the UK should be able to block any proposition which raises national concerns.

Once again, I am grateful to the noble Lord, Lord Howell, for giving us an opportunity to debate this important issue, but I hope, in view of the further explanation I have given, that he will feel able not to press his Motion.

My Lords, I am extremely grateful to both the noble Lord, Lord Dykes, and to the Minister for addressing this issue and responding to my Motion in a very detailed way. I accept what the Minister says in his assurance that the Commission’s powers—which are new powers, although of a very modest kind—will be clearly circumscribed, in his words, and that therefore, we are fulfilling our duty to be on guard and to watch anything that concerns the powers of your Lordships’ House, or, indeed, of this Parliament.

I cannot resist one comment on the assertion that popped into his brief, and which I have heard so many times before, that the Lisbon treaty did not impinge upon our foreign policy under national control. The general public will stand astonished and bewildered at all the hoo-ha going on about control of the European External Action Service; and about the role of our former distinguished Member, the noble Baroness, Lady Ashton; about the quarrels about what her powers should be, with national governments’ foreign ministers saying she should not take too many; and about the Commission saying she should take more. All that has led to great bitterness and dispute in Brussels, and clearly arises from the Lisbon treaty. To argue that the Lisbon treaty did not affect foreign policy leaves the layman utterly bewildered. It may be technically true, but in the real world it really is not true at all.

I was unable to resist that remark, but I try to sweeten it by saying that the Minister has presented a perfectly sensible response to a matter that I think it was right to raise before the House. In the light of what he says, I beg leave to withdraw my Motion.

Motion withdrawn.

National Assembly for Wales (Legislative Competence) (Local Government) Order 2010

Motion to Approve

Moved By

That the draft order laid before the House on 10 February be approved.

Relevant Document: 9th Report from the Joint Committee on Statutory Instruments.

My Lords, the draft LCO inserts 10 new matters into field 12, the local government field, of Schedule 5 to the Government of Wales Act 2006. It was approved by the National Assembly for Wales on 9 February and by the other place on 23 March. The legislative competence order was announced by the then First Minister, the right honourable Rhodri Morgan, as part of the Welsh Assembly Government’s legislative programme for 2009-10 on 14 July 2009. It will confer competence on the National Assembly to legislate in relation to the recruitment, retention and remuneration of all local government councillors and with regard to the structure and role of community councils.

This legislative competence will enable Welsh Ministers to achieve three outcomes. First, the Assembly will be able to legislate to ensure that local government provides relevant information to the public about what it does, thereby making councils more accountable and promoting public engagement. Future measures could introduce requirements on councils and councillors to provide information to local people on council activities and the work that councillors carry out.

Secondly, this legislative competence order will give the Assembly the power to introduce measures to remove the barriers and disincentives to people standing for election to local authorities and improve the skills and capacity of councillors once elected. For example, legislation could require local authorities to ensure appropriate training and development for their elected members. Welsh Ministers also believe that reform of councillors’ allowances could similarly help to recruit and retain a wider range of people as councillors.

Finally, the order will give the Assembly the power to legislate to develop and strengthen the role of community councils so that they are able to deliver a wider range of services and actions locally. This request for competence is in response to a desire by Welsh Ministers to address issues arising from three reviews of aspects of local government in Wales. The Aberystwyth University report in 2003 comprehensively reviewed the activities of community councils across Wales. It identified the constraints that community councils believe they face and set out a number of proposals for enhancing their roles. The Assembly Government have given a commitment to seek legislation to address issues identified in the review.

Secondly, the Assembly Government established an expert panel to look at any issues that affected the recruitment, retention and development of councillors in Wales. The report of the panel, entitled Are We Being Served?, was published for consultation by the Assembly in August 2009. The consultation’s responses are informing proposals for a future Assembly measure.

Finally, the Independent Remuneration Panel for Wales is considering the remuneration structures for councillors in Wales. A report by the panel setting out proposals for fundamental reform of the remuneration arrangements for councillors in Wales is expected next month. However, the panel has already called for the National Assembly to gain legislative competence over remuneration. As is always the case, the LCO has been subject to detailed and thorough scrutiny by the Constitution Committee of this House, the Welsh Affairs Committee in the other place, and a committee of the Assembly. The Government are of course grateful to these committees for their helpful and constructive recommendations. The Constitution Committee concluded that this LCO does not raise any issues of constitutional principle. The Welsh Affairs Committee expressed concern about the use of the term “communities” in the LCO. While the committee is correct—that the word is used in a range of different contexts—in this LCO the term “communities” is limited in its application to community institutions described in the Local Government Act 1972. These deal with local government at its most local level and extend only to community and town councils and community meetings. This link back to the 1972 Act is important in ensuring consistence in the use of terminology. The Explanatory Memorandum has been amended at paragraph 8.11 to clarify this issue.

The Welsh Affairs Committee also suggested the LCO should be renamed to give readers a clearer idea of its nature and focus. After very careful consideration it has been concluded that the current convention should continue so that the title of an LCO reflects the names of the most significant fields in Schedule 5 to which the matters relate. For this LCO, local government is therefore the most appropriate title. The Secretary of State for Wales has, however, written to the committee to say that in the new Parliament he would be happy to consider that the more descriptive titles be included in material published with an LCO, such as the Explanatory Memorandum.

I hope the House agrees that it is entirely appropriate for legislative competence in this already devolved policy area to be transferred to the National Assembly. This would provide the Assembly with comprehensive competence over local government in Wales and would enable Welsh Ministers to bring forward legislation to deliver the reforms they wish to see introduced. I commend the order to the House.

My Lords, I thank the Minister for laying this order before us so clearly. The primary purpose of this LCO is to confer competence upon the Welsh Assembly to make primary legislation in relation to community councils in Wales. According to the Explanatory Memorandum, the Assembly Government wish to enhance and strengthen the role of community councils and enable them to deliver a wider range of services and actions locally. To that extent, we welcome the order.

We believe strongly that power should be devolved to the closest possible level to the citizen. In many cases, it is the community council that is closest to and most responsive to the needs of the citizen and if the Assembly Government propose to develop the role of the community councils in this regard, we applaud it. Other matters covered by the proposed order are the remuneration of county and county borough councillors and the recruitment of candidates to serve on county, county borough and community councils.

There are two questions I would wish to put to the Minister. The first relates to matter 12, which would provide the Assembly with competence to make provision relating to grants by Welsh Ministers to community councils. At the moment, the bulk of community council income is provided by way of council tax precept. It would be a concern if community councils were to have to rely exclusively or even primarily upon grants from the Assembly Government and the principle of the council tax precept were to be undermined or displaced. What assurances can the Minister give in that regard?

My second question relates to matter 12.13, which would allow the Assembly to put in place measures to help raise standards of local government by community councils. As the Explanatory Memorandum points out, in England this is presently achieved by the quality parish and town council scheme, which is established on a voluntary basis. Why have the Welsh Ministers decided not to pursue the voluntary route but rather to opt for legislation? Further than that, I have no other observations.

My Lords, we welcome these measures for the local councils and, particularly, the community councils in Wales. As the Minister has quite correctly stated, the order is conceived through three reports. The Aberystwith University College of Wales, as it was then, produced a report which identified the constraints that community councils believed they faced. The report concluded that existing procedures for establishing a community council were too restrictive, as the Minister has mentioned, and that those for dissolving community councils were too lax. These procedures have been tightened up as a result of the recommendations of the report and the scrutiny of the Welsh Affairs Committee and the Assembly. The issue of directly funding councils was also taken into account. The second report, Representing the Future—which was produced by the Councillors Commission established by the Assembly—dealt with the future of community councils; and the third report was produced by the Independent Remuneration Panel and addressed the remuneration of councillors. A number of matters arise from this legislation which I wish to address.

The voting procedures are addressed in paragraph 7.10 of the Explanatory Memorandum. In our view, this is a lost opportunity in voting terms. We could have introduced a proportional system of voting but the Government and the Assembly appear not to have gone along that route. That is to be regretted. Issues connected with population sparsity are not properly addressed within Wales and the Official Opposition during their tenure reduced the calculations of population sparsity regarding need and we are now in a far worse state financially than perhaps we would have been.

One of the problems with this legislation is that the aspirations are great but the economic rewards for trying to achieve the end results that we all desire will not be met. For example, the aspirations on grants will certainly be difficult to achieve in the current economic climate. On the other hand, collaboration between community councils is extremely important, as is the transparency and participation within them.

There is mention of the national park authorities—of which there are three in Wales—and we cannot understand why all members are not elected from within the areas of the national parks; the majority are appointed by the Assembly. In the case of councils, many councillor representatives on the national park authorities do not live within the areas of those bodies. In fact, I can name people who live 80 miles away from national parks but are still representatives.

The question of scrutiny was addressed by both the Minister and the noble Lord, Lord Glentoran. It is interesting that, in the Explanatory Memorandum, paragraph 8.5 refers to the fact that exercising competence might have unintended consequences in,

“raising unrealistic expectations of what smaller community and town councils could undertake and deliver”.

Expectations in many communities in Wales are great and can be achieved. For example, in 1987, three people came to me and suggested that it would be a good idea to have a book festival in Wales and to bring the authors there and so on. They asked me what I thought of that, and I said that we should do it immediately—and the Florence family did it. We know today that that is not entirely funded by grants from the Welsh Assembly, but add-on match funding has produced a very successful festival. I was involved in that from the beginning, as I was in the Brecon Jazz Festival, which has been equally successful. So communities should be given their head, and they can do it when they are given the opportunity.

There are other factors that we believe are important. This is a small leap for the National Assembly and, as we will discuss in the next LCO, there is a very long way to go. The matters that we are discussing are small but very important to Wales. We welcome this LCO.

My Lords, I wish to speak briefly on this order. It is obvious that much of the order was conceived in more prosperous times before the recession and the era of staggering financial deficit and severe restriction on public expenditure that now engulfs us. Indeed the Aberystwyth report to which the noble Lord, Lord Livsey, referred, which set out proposals to enhance the role of community councils in Wales, dates back to 2003. The National Assembly’s positive response and commitment to strengthen these councils to deliver a wider range of services dates back to 2004.

I recall quite vividly the discussions that we had on establishing community councils in Wales during the passage of the 1972 Act. At that time, the country suffered from a superfluity of small, often ineffective local authorities. The thrust of the reform was to reduce their number and to create bigger, more efficient units at county, district and borough level. The concept of community councils, unique to Wales but corresponding to parish councils in England, was developed to ensure that communities had a voice on local issues that would be heard by the higher authorities. The councils were deliberately not given many powers and were financed by precept levied at district level. The outcome is that we have some 730 community and town councils, half of them with a population of fewer than 1,000, eight with more than 20,000 and Barry, the largest, with 45,000. There are 8,000 councillors in all. The pattern is very variegated.

What this order proposes and will lead to potentially is an extra tier of executive local government. While this may have been demand-appropriate to the more prosperous times gone by, it is and will be an increasingly questionable proposal in the years immediately ahead, bearing in mind the costs that are implicit in various provisions of the order related to remuneration of councillors, direct funding by the Assembly Government and so on. It is worth reminding ourselves that Wales moved to a unitary local authority system in the early 1990s and now has 22 authorities that combine the powers of county and district councils. If they have a subsidiary tier to perform some of their functions at a local level, it is likely that this will be permissive rather than obligatory in nature, if only because of the great variety of community councils in size and innate strength. The powers to promote or improve the economic, social or environmental well-being of their area present a novel opportunity for community councils and may well be much in demand. Again, the issue of the availability of resources is bound to arise and there may well be a case for direct funding by the Assembly Government of local projects that fall into this category.

While there is a prima facie case for saying that this order promotes local democracy—it enables the Assembly Government to empower community councils—and is therefore to be welcomed, as my noble friend Lord Glentoran said, there is another side to that coin: this order gives additional powers to the Assembly to be more closely involved and to intervene at the very local level at which community councils operate. Everything depends on how these powers are exercised. “Power to the people” sounds good and is right, but “power over the people” is not so—a single word makes all the difference. We can only hope for the best.

My Lords, I join in what appears to be a unanimous verdict of approval for this order. If ever there was a field where the presumption is that devolution should occur unless there is a very good reason to the contrary, it is local government. I find myself in agreement with practically everything that the noble Lord, Lord Livsey, has said in this matter. He has said it in some considerable detail and it would not be improved by repetition on my part. As one who was president of Aberystwyth for 10 years and chairman of its council for that period, I revel in the fact that the 2003 initiative has been approached with such approval and finds fruition today.

I am not entirely sure what the argument of the noble Lord, Lord Roberts of Conwy, was about community councils. I do not assume that he is saying that there should be no such councils and that the whole tier should be abolished. That would be a retrograde step and would go entirely contrary to the direction that the noble Lord, Lord Glentoran, indicated.

I assure the noble Lord that it was a Conservative Government who established community councils in Wales in the Local Government Act 1972.

I take that point, although one could be a little churlish and say that the councils were there before, as parish councils. They were amalgamated—sensibly, if I may say so—in the legislation that the noble Lord refers to.

There are difficulties. One could wax eloquent for hours on this matter and indeed fringe on the metaphysical on the question of exactly where one draws the line between local influence and local taxation. Noble Lords will remember that the American colonies’ cry was, “No taxation without representation”. I suppose that we can say now that the issue is, “No representation without taxation”. There is indeed a case for some independence in the raising of money. On the other hand, there is also a case for subvention from central funds. With regard to the future of community councils, one should try to maintain the blend between a fairly light local subvention and a slightly greater subvention from local funds. I do not cavil at the name “community council”. It is a term of art and it is entirely proper that it should be used in this context.

My Lords, I am grateful to the noble Lords who have spoken in what I detect are supportive voices for the order, although I think that the noble Lord, Lord Roberts, followed a slightly more pessimistic vein than I would have hoped for on such a constructive order. However, I think that his view has been counterbalanced by rather more optimistic perspectives with regard to the community councils from the noble Lords, Lord Livsey and Lord Elystan-Morgan.

I will deal with the issues that I think noble Lords are particularly concerned about. First, the noble Lord, Lord Glentoran, was concerned about whether the establishment of a granting power for potential extra resources to individual community councils would replace the current funding arrangements. That is not the intention. The Welsh Ministers have no intention of replacing the present structure of the community councils, which will continue to receive their income via a precept. What is sought is a power to enable Welsh Ministers to provide funds for additional functions that may be bestowed on community councils. That would depend on community councils seeking initiatives that require additional funding. It would be for the Assembly to make that judgment, but surely it is right that we are transferring power so that the Welsh Assembly makes that judgment rather than anyone else so that it meets the democratic requirements in those terms.

I suppose that the noble Lord, Lord Roberts, would say that he has introduced an element of realism into the debate rather than pessimism, but I think that he is overly gloomy, certainly with regard to the issue that the noble Lord, Lord Livsey, raised about council opportunities and festivals. Community councils do not take initiatives in those areas dependent solely on how well off they are. If that were the case, we would have our festivals in very different locations from where many of them are. It very much relates to the inspiration, commitment, energy and activity of the local people who get festivals off the ground, as the noble Lord mentioned with regard to the Brecon Jazz Festival, although there are many other events across the whole of the United Kingdom that noble Lords could easily draw on. They are a reflection not of comparative resources in the locality, but of particular initiatives of people who are prepared to get things done. We all salute those communities, which achieve these things very well.

The order is entirely consistent in these terms. It is a step forward in democracy: first, by transferring the overall powers to the Welsh Assembly rather than letting them rest with the Secretary of State answerable to this Parliament; and, secondly, by attempting to enhance the powers of communities. I am grateful to the noble Lord, Lord Roberts, for identifying with great accuracy the enormous divergence of community councils in Wales. It is true that there is a great difference, but we are seeking to make provision possible. How far powers are exercised and the extent to which local community councils respond will depend on all the initiatives that I have indicated.

As the noble Lord rightly identified, some community councils are very significant indeed. We appreciate that Barry council is a pretty significant institution in its own right. Why is it so large and yet still a community council? Of course, it depends on the conurbation that one relates to. In the case of Barry and in other parts of Wales, by definition the authority to which the community councils relate are far distant and are not numerous in population, let alone at the level of the community councils. However, we are seeking an enhancement of the community councils.

The noble Lord, Lord Livsey, was optimistic about these proposals and supportive of them, for which I am grateful to him. I do not think that the issue of voting transparency crops up very much, nor does the issue of the methods by which councils are elected. I do not think that the Assembly thinks it necessary to have powers in this area to fulfil its obligation of enhancing the powers of community councils. It has not sought that particular power or competence. The noble Lord is of course fully entitled to his viewpoint, but it is not shared by the Assembly.

The noble Lord, Lord Glentoran, asked why the Welsh Assembly Government were not proceeding with a more voluntary approach, rather than this element of legislative competence. Rhodri Morgan made it clear, when he was concerned with the development of this competence, that he was very much in favour of it going forward on a voluntary basis. In a sense, this legislative translation is a back-up; it is a reserve power, where achievement may be at a lower level than one would otherwise want to see. There is the expectation, as in all relationships with community councils, that a great deal of initiative has to come from the councils. It is collaborative with the Welsh Assembly Government, in a way that is similar for community councils throughout the United Kingdom. We all recognise how important that aspect of local initiative is.

The noble Lord, Lord Roberts, was worried about whether we have inserted an additional tier of local government and I could see the demons that were beginning to lurk—extra bureaucracy and extra cost in difficult times. He warned us against the problems that we might create. I emphasise that this is not about an additional tier; it is about enhancing the competences of community councils where they wish to take initiatives. It is not about creating an additional tier.

The order should not create anxieties about additional bureaucracies or the notion that the difficult economic times that we are in would flatten aspiration. If the extension of democracy depended on levels of economic growth and levels of well-being, we would have to say that an awful lot of developments in democracy have taken place against economic backgrounds vastly different from the position that modern democratic states in the main enjoy today. After all, our own nation’s democracy was scarcely won at a time of great economic flourishing and neither the American Revolution nor the French Revolution—steps forward in democracy—took place against a background of enormous optimistic hope. In fact, people were fighting against being taxed in periods of considerable economic difficulty. Therefore, I do not accept that argument, which is also too limited. The noble Lord, Lord Roberts, does himself a disfavour in these terms.

This is about creating a structure for the future, not just for the next six or seven years of economic difficulty while we pay off debt—I am all too well aware of the strains and stresses that face us in the relatively short term. This order is about enabling powers for the long term. I say to the noble Lord, Lord Roberts, that perhaps, having made his little jibe at the present economic circumstances, he needs a wider and more optimistic perspective on the virtue of this enhancement of democracy in Wales.

Motion agreed.

National Assembly for Wales (Legislative Competence) (Transport) Order 2010

Motion to Approve

Moved By

To move that the draft order laid before the House on 4 March be approved.

Relevant Document: 12th Report from the Joint Committee on Statutory Instruments.

My Lords, the order was approved by the National Assembly on 2 March and in committee in the other place this morning. The LCO was announced by the then First Minister, Rhodri Morgan, last July as part of the Welsh Assembly Government’s third legislative programme. It does two things. First, it devolves legislative competence to the Assembly on concessionary travel. Secondly, it broadens the Assembly’s existing competence in relation to learner transport.

The concessionary travel scheme in Wales provides free travel on local bus services for the disabled, their companions and those aged over 60. A rail pilot scheme is also in operation on certain rail lines. The LCO inserts a matter into field 10—the highways and transport field—of Schedule 5 to the Government of Wales Act 2006, to allow the Assembly to legislate about concessionary travel on bus services in Wales and rail services provided under a franchise agreement to which the Welsh Ministers are a party. Those are currently services operated in Wales under the Arriva Trains Wales franchise. Under current arrangements, Welsh local authorities negotiate directly with bus operators the amount of reimbursement due as a result of the scheme. The amounts are then paid by the Welsh Assembly Government, who believe that that arrangement does not build in sufficient incentives to control costs.

Competence, which this order provides, would allow the Assembly to legislate to exercise more rigorous control over the scheme, thereby safeguarding its longer-term viability. It could, for example, allow the Assembly Government to administer the scheme directly; enable the Welsh Ministers to negotiate reimbursement directly with operators; or allow the amending of all or part of the legislative framework for the scheme as a whole, including the process for appeals.

Perhaps it would help if I clarified what was meant by “learner” transport. We mean students, chiefly those in school, but the concept relates to further education as well, so we are talking about support for those in education. The LCO would allow the Assembly to legislate in relation to the kinds of vehicles used by local authorities to provide learner transport and the safety and security features they should have. For example, local authorities could be required to use only vehicles that had certain characteristics, such as being single-deck vehicles fitted with seatbelts and closed circuit television.

There is cross-party support for this proposal in the Assembly following consultation on, and scrutiny of, the Learner Travel (Wales) Measure 2008. The proposal supports Welsh Ministers’ policy objective to reduce car use to and from school by improving the security, comfort, convenience and safety of school buses, and hence their attractiveness to learners. The Assembly already has competence over most aspects of learner travel, subject to a number of general or floating exceptions in Part 2 of Schedule 5. These include an exception relating to the regulation of the use and construction of motor vehicles on roads and the conditions under which they may be used, and an exception for transport security. Both those exceptions constrain the Assembly’s ability to legislate in respect of the equipment in vehicles used for learner transport and the security of those travelling in such vehicles.

The LCO removes some of the restrictions, but only in relation to vehicles used specifically for learner transport. In other words, some of the restrictions placed on the Assembly’s existing competence are eased by redefining the boundaries of the exception. It is important to be clear, however, that the LCO does not devolve competence in relation to the technical standards of vehicles. Those apply throughout Great Britain and will continue to be determined by the UK Government, often within the framework of European law.

Pre-legislative scrutiny of the LCO was carried out by the Constitution Committee of this House, the Welsh Affairs Committee in the other place and a committee of the Assembly. The Constitution Committee concluded that the LCO did not raise any issues of constitutional principle. As this is the last LCO from the Assembly Government’s current legislative programme to be subject to pre-legislative scrutiny, on behalf of the Government I thank the committee for the scrutiny that it has carried out in relation to this and the other LCOs considered recently. The committee has played an invaluable role in the process of devolving legislative competence to the Assembly. The Welsh Affairs Committee recommended that the Explanatory Memorandum be amended to specify how the use of the term “bus services” in the LCO related to its use in other transport legislation. Paragraph 7.10 of the memorandum has been amended to make it clear that the term is compatible with that used in the Transport Act 2000. It potentially encompasses all bus services in Wales and is widely drafted to enable the Assembly to differentiate between services, or to specify in legislation particular services such as community transport or long-distance coach services.

I hope that the House will agree that it is appropriate that these powers in respect of concessionary travel and learner transport are devolved to the National Assembly to allow the Assembly Government to implement their policies.

My Lords, that was another excellent explanatory speech from the noble Lord. I am glad that it is the last of these LCOs; they seem to have gone on and on, but we have had good times as well, and I am sure that it is all in a good cause.

This draft LCO makes provision to confer legislative competence on the Welsh Assembly in the field of transport by inserting matters relating to school transport and concessionary bus and rail travel. There has been considerable pressure in south Wales for improvements to safety standards in school buses since the unfortunate death over seven years ago of Stuart Cunningham-Jones in the Vale of Glamorgan. Safety standards on school buses should be the highest possible and, if legislation comes forward which achieves that, it will certainly be welcomed by all. Indeed, this cannot be said to be a Wales-only issue and it would be even more welcome if the Government had considered pursuing the issues addressed by this LCO on an England and Wales level. There will be some impact on the providers of school transport and, although no consultation has taken place before this LCO, extensive consultation will clearly have to take place with transport providers before any measure is produced pursuant to the competence transferred.

So far as the question of concessionary transport is concerned, the Explanatory Memorandum indicates that the competence is sought to enable the Assembly to legislate to exercise more rigorous control of the scheme—for example, by allowing the Assembly Government to negotiate directly for the reimbursement of operating costs with operators, and to administer the scheme directly rather than through local authorities. The memorandum points out that the current mechanism of reimbursing operators via local authorities fails to build in sufficient incentives to control costs, since local authorities are reimbursed by the Assembly Government for the full cost concerned. Clearly that must be a significant problem if the Assembly Government seek legislative competence to address it. Can the Minister give any indication as to the extent to which the Assembly Government consider that local authorities are not sufficiently controlling costs?

It is unfortunate that the Assembly Government seem to consider that the only solution to the problem is to centralise control over it. Paragraph 7.8 also points out that there is a potential conflict of interest in that, under the current range of executive powers, Welsh Ministers may negotiate reimbursement directly with local bus operators acting as the agents of local authorities, but are themselves the appeal authority in cases of dispute. What is envisaged to replace this procedure? Will there be, for example, a separate appeals panel, independent of Welsh Ministers?

The memorandum also indicates that the competence of the Assembly will be limited in relation to concessionary travel by restricting competence over rail travel to Welsh services provided under a franchise agreement to which the Welsh Ministers are a party—to all intents and purposes, Arriva Trains Wales.

Can the Minister indicate whether there is any possibility of extending the scheme to non-franchise companies in Wales—Virgin Trains, First Great Western and CrossCountry? If concessionary travel is confined to Arriva Trains, is there not a possibility that those services will be heavily overused?

Finally, perhaps I may gently complain that there are omissions in certain parts of the Explanatory Memorandum. Paragraphs 7.4 and 7.8 are incomplete. That is a little regrettable, given that those paragraphs are important.

I support the order and await the Minister’s response.

My Lords, from these Benches we welcome the order also. We welcome the increase in the power of the devolved Welsh Assembly. We perhaps regret that such a power was not there at the beginning, but at least we are slowly getting these new powers.

The two main items relate to concessionary travel and learner buses. I declare an interest as someone who benefits from concessionary travel, as perhaps most of us in the Chamber do. Concessionary travel has been a tremendous success. Wales led with concessionary travel for the elderly and then for the disabled. It has kept routes open that otherwise would have been closed. It has provided new opportunities for people who were perhaps confined to their localities and could not afford to travel. It has filled those empty buses. I know that in my own area of Llandudno we have a 10-minute service along the north Wales coast—something that we never had before. It would be catastrophic if, because of cuts in funding—whether savage or not—the amount available for the Welsh Assembly to maintain the concessionary travel system were to be reduced.

One thing that the Assembly will have to do in consultation with this Government in Westminster is to tackle the question of cross-border travel. You can travel to the Welsh border—it is no longer at Offa’s Dyke, but it might as well be—and thereafter you are on a different system in an English county. We have to think, “How on earth can we get a UK-wide concessionary scheme for those in Scotland, Wales and England who benefit only from their own national schemes?”. We must look at that in Cardiff and here also.

Many matters are still to be resolved regarding the learner transport problem. The noble Lord, Lord Glentoran, has already mentioned the safety of vehicles. One Scottish border company on 24 December last year had its licence to carry children to school withdrawn because of serious defects seen in vehicles used as school buses. Are we certain that the inspection of school buses is sufficiently thorough? It has only recently been suggested to me that sometimes a lorry, a bus or even a car is taken with fresh tyres to an inspection. When it has gone through, those tyres are replaced with the previous tyres that were slightly defective. Do we need more spot checks, not only in Wales but elsewhere on not only these but all buses?

I wrote to the Minister a few weeks ago asking for the figures on school buses which have been forced off the road because they were defective. The answer I received was that there is no special category for school buses—but there should be. School buses carry people who are totally vulnerable and not adults who can keep an eye on them. We need a special category for school buses.

In order to compete, certain companies might also be using buses that are not the most up to date but have seen the wear and tear of many years. Should double-decker buses be used for school transport? Should pupils be urged to sit three to a double seat? That happens. Why are safety belts compulsory only for those over 14 years of age and not for those who are three years and older, as the British Safety Council urges? Should there be not only the driver but someone else on a school bus, especially if the use of double-decker buses is to continue? When there is a distraction or something else that needs attending to, the driver will be distracted from his duties.

I support the order and apologise for any unforeseen noise that might have emanated from my mobile telephone.

My Lords, it may surprise you that an English Bishop from an English diocese rises to intervene in this debate. However, we represent in an indirect way our colleagues from the Welsh dioceses, and I know from prior consultation that they are grateful that these orders are before the House and wish them to be given a fair wind.

My second reason for intervening is a general principle. Devolution is a process, not a single act. We do not need to be too apologetic about any profusion of such LCOs—they are indicative of a process which continues in relation to how the Welsh Assembly Act evolves in practice. The process that we are undertaking today is welcome.

I am personally grateful for these orders because, thirdly, I declare an interest. I retire next year, and we have acquired a property in Haverfordwest in Pembrokeshire. Thereby I anticipate being a beneficiary—so the interest needs to be declared—particularly in relation to this order. Perhaps I may hark back to the previous debate. I anticipate also that I might want to get involved in some of those community activities that will now have a much more local accountability. For that I am grateful. It has often been said that Pembrokeshire is “Little England beyond Wales”. I am glad that as a result of these orders, it will be a little less England and a bit more Wales.

Before the Minister responds, perhaps I may point out to him the context in which this LCO is being made. Yesterday, the National Assembly for Wales produced its transport policy. One of its main aspects relates to climate change and sustainability. I should point out that sections in the document address, “Transport across Wales”, “The north-south corridor”—including air travel—and the east-west corridors. Wales has a very poor transport infrastructure; sometimes I refer to it as a third-world infrastructure. The document includes “Smarter Choices guidance” to,

“increase more healthy and sustainable travel”;

measures to:

“Strengthen the role of transport planning … Introduce Welsh Transport Entitlement Card for bus and rail services (by 2014)”;

and so on. This LCO is very important in that context.

With regard to climate change, I was approached by the former chief executive of the Environment Agency, the noble Baroness, Lady Young, who said that we should ban north/south air travel between Cardiff and Anglesey. I asked her whether she realised that 50 aircraft from Heathrow went over my house each day at 10,000 to 16,000 feet, crossed and dissected by aircraft from Leeds, Newcastle and Edinburgh going to the Mediterranean. I asked her whether, in this context, she thought that a single plane carrying 35 passengers from Cardiff to Anglesey would make much difference. Therefore, I am sure that the Minister would welcome this document because we have a long way to go on sustainable transport in Wales.

My Lords, I am grateful to all noble Lords who have participated in this brief debate. I begin with an apology on behalf of the Government. As the noble Lord, Lord Glentoran, accurately identified, we made an error in the Explanatory Memorandum. Due to a printing mistake, a sentence was accidentally omitted from the version of the memorandum first laid before Parliament. When officials became aware of this, the correct version was tabled, but I apologise that that sad event occurred.

The noble Lord, Lord Glentoran, began by saying that he was glad that this was the last of the Welsh LCOs in this Parliament. It certainly is, although, as the noble Lord would anticipate me saying, normal service will be resumed after the interruption of the general election. However, I think that he had his response from the right reverend Prelate, who said what is undoubtedly the case. Devolution was certainly sparked by that significant act of devolution, but it is a process and these LCOs represent the process. Therefore, I think that the noble Lord, Lord Glentoran, will have to contain his enthusiasm for when the next order is before us in what I am sure will be the not-too-distant future. He will appreciate that the Welsh Assembly and Welsh Ministers can readily identify areas in which enhanced competence will enable them to serve the people of Wales more effectively. Therefore, we expect that the process defined by the right reverend Prelate will assuredly continue.

The noble Lord, Lord Glentoran, raised several specific issues. It is true that there are anxieties about the concessionary scheme and its costs throughout the United Kingdom but the Assembly feels that the people of Wales will be better served if the Assembly Government can play their part in negotiations. It means that the Assembly will be able to amend the mechanism for reimbursing bus operators as policy developments. There are no issues with the administration of the scheme but there is always an issue relating to costs. The Assembly Government are seeking—and the noble Lord, Lord Roberts, enjoined them to do exactly this—to enhance the value of and protect the scheme because it is extremely valuable to the people of Wales. However, of course there are costs associated with it, and the Assembly Government are seeking to ensure that they are in a position to work with local authorities and bus operators to agree the reimbursement mechanism. That, I think, is a development which the noble Lord, Lord Glentoran, who is ever concerned about costs, should welcome.

We have no doubt that all aspects of the concessionary scheme raise challenging issues. The noble Lord, Lord Roberts, referred to the cross-border problem. When a concessionary scheme, rightly, is subject to individual decisions in Scotland, Wales and England, those countries will be bound to reach different decisions and there will always be the problem of the cross-border relationship. The answer given by the noble Lord, Lord Roberts, if I heard him correctly, was that there should be a UK scheme. However, there are also virtues in the more obvious country-by-country approach, because England, Scotland and Wales can have their own clear objectives.

This order is predominantly about buses. It relates to Wales in the restricted area that I identified but, with the exception of long-distance coach travel and rail, which I mentioned when introducing the order, it is predominantly about buses, which overwhelmingly are a local concept. Therefore, it is right, first, that local authorities should be concerned with concessionary travel and, secondly, that England, Wales and Scotland should, if they wish, have different schemes to meet the different priorities that they identify.

With regard to rail, the noble Lord, Lord Glentoran, asked why concessionary travel is limited only to Arriva. Welsh Ministers are able to grant concessionary travel only in relation to the franchise services to which they are directly a party, and of course the other rail services are not a direct party. Therefore, with this enhanced competence they are restricted to the one franchise to which they are directly a party. That is the nature of that problem.

I thank the noble Lord for giving way. For clarification, is that because the remaining railway companies are all cross-border and operate on a much larger scale? If so, is it not possible to put some sort of an organisation together ?

My Lords, the noble Lord is right but I emphasise that it is certainly an aspiration of both the Government and the Welsh Assembly Government to see a mutually recognised travel scheme—an issue that was raised by the noble Lord, Lord Roberts. Regular discussions take place between the Department for Transport and the devolved Administrations on this issue but it is pretty complicated, and of course rail is even more difficult because of the nature of the franchises. However, I am saying not that the Welsh Assembly Government are not fully cogniscent of the issues that both noble Lords have identified but that they are seeking competence in the area where they can play a more significant part, and I think that that should be welcomed.

The noble Lord, Lord Roberts, was very concerned about the safety of the buses provided for learners. I declare an interest in that I once enjoyed filling the role of president of RoSPA and am still a vice-president. Consequently, I always tackle safety issues with the greatest of interest and concern, and therefore inevitably I have a great deal of sympathy with the noble Lords, Lord Roberts and Lord Glentoran, when they raise these issues in the context of Wales. School buses are not a devolved matter. Questions of safety and the provision of safety, particularly seat belts—the noble Lord mentioned three children sitting on two seats, which does not sound particularly safe to me—all come within the remit of the UK Government. Vehicles are inspected by the Vehicle and Operator Services Agency and of course the MOT requirement applies across the whole country and is not at all a devolved matter. However, the noble Lord is right that we pay extra attention to the safety of school transport.

This LCO will enable the Assembly, if it wishes, to restrict the use of double-decker buses if it is decided that they involve safety factors because of the possible lower levels of supervision when two decks are involved. In addition, if the Assembly did decide that three children on two seats was dangerous enough to increase the number of accidents and injuries, the Assembly could take that power. We are giving the Assembly exactly the competence to address itself to the issue that the noble Lord has raised. With regard to seatbelts, that power already exists with regard to school buses and therefore there is no need for devolution in those terms. On the safety issues, I am with the noble Lords in expressing their concern and anxiety. This order gives the competence to the most appropriate authority for dealing with this in Wales; namely, the Welsh Assembly. Consequently we can anticipate that the kind of anxieties that noble Lords have expressed today about safety will be taken up by Members of the Assembly.

The noble Lord, Lord Glentoran, raised the issue of appeals. Currently the Welsh Ministers have power to regulate the process once an application has been made to them under Section 156(4)(c) of the Transport Act 2000. The basic mechanism that precedes a consideration of appeal is set out in the Transport Act 2000 and the Welsh Ministers have no competence to change these. In view of what the noble Lord has said about the question of appeals, it may be that that could be the burden of an early LCO to address itself to this competence as well. At the present time they do not have that competence in view of our national legislation with regard to appeals.

I am grateful to the noble Lord, Lord Livsey, for his contribution to the debate. Air transport did not figure too extensively in my brief but I hear exactly what he says. At times one can feel that Wales is such a small part of the total transport system of the UK that anything that is regulated on a United Kingdom basis—I am pretty sure he understands why air traffic control is—can raise particular difficulties for local services in Wales. He mentioned the Cardiff to Anglesey air route. The Government have no proposals—nor has the National Assembly for Wales put forward any proposals—for the division of air traffic control. The noble Lord will have to see that as a UK-wide issue. As he probably knows, it is a bit wider than just the UK when it comes to the very complex issues of air traffic control. I beg to move.

Motion agreed.

Social Security (Loss of Benefit) Amendment Regulations 2010

Motion to Approve

Moved By

To move that the draft order laid before the House on 20 January be approved.

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

My Lords, I beg to move that the draft Social Security (Loss of Benefit) Amendment Regulations 2010, which were laid on 20 January 2010, be approved. I confirm that, in my view, the statutory instrument is compatible with the European Convention on Human Rights.

These amending regulations support the tough new powers introduced by Section 24 of the Welfare Reform Act 2009, which widened and extended the existing loss of benefit powers contained within the Social Security Fraud Act 2001. Section 24 introduced a new four-week loss of benefit or “one strike” sanction for all first-time benefit fraud offences, not just for cases which result in convictions but also those which result in an administrative penalty or caution.

The new “one strike” sanction is all about deterring people from committing benefit fraud in the first place. The Department for Work and Pensions paid out more than £135 billion in social security benefits last year. The vast majority of this money was paid out correctly to those who were entitled to it; however £1.1 billion is estimated to have been stolen through benefit fraud. So, although the department has an extensive and successful strategy to tackle benefit fraud, more still needs to be done. This new sanction will increase and strengthen the deterrent effect of the existing sanctions regime and stop more people committing benefit fraud in the first place. However, if someone does commit benefit fraud they will do so knowing that they face losing four weeks’ benefit on top of having to pay the money back and the risk of a criminal record.

I reassure noble Lords that only benefit fraud cases which result in a conviction, an administrative penalty or a caution will be liable to the new sanction. Cases where the customer has simply made a mistake will not result in a loss of benefit sanction. Such cases are dealt with separately outside of fraud investigation. The existing loss of benefit sanction, sometimes referred to as “two strikes”, will continue alongside the new provisions to maintain a tougher 13-week loss of benefit sanction for those few persistent repeat offenders who are convicted twice within five years.

I turn now to the provisions in the draft regulations which set out the details of how the new sanction for benefit fraud offences will work. Almost all of the amending regulations reflect the existing Social Security (Loss of Benefit) Regulations 2001 and merely insert references to the new sections in the Social Security Fraud Act 2001. In particular, the details of which benefits are disqualifying and/or sanctionable, which are withdrawn or reduced and the hardship provisions all remain the same. This means that the same safeguards exist for customers who are vulnerable or seriously ill, and that the sanction cannot be applied to bereavement payments, retirement pension, benefits paid for children or those that cover the extra costs of disability. In addition, entitlement to “passported” benefits such as housing benefit, council tax benefit and free school meals is also unaffected, with specific references in the new regulations to income-related employment and support allowance and pension credit to ensure that “passported” housing and council tax benefit are not sanctioned at the same time as those benefits. Additionally, the regulations allow for statutory adoption pay, statutory paternity pay and the health in pregnancy grant to be excluded from the sanction.

The introduction of the new provision also created an opportunity to simplify the existing process, and as a result the start date of the disqualification period for both one and two strikes has been aligned with the benefit payment period. The new sanction will apply only if a benefit offence was committed after the commencement of the new provision. There will be no retrospective effect. The new regulations also delete the reference in the existing regulations to a housing benefit sanction following eviction on grounds of anti-social behaviour, as this measure is no longer in force. Further changes take account of Section 33 of the Welfare Reform Act 2009, to explain when a jobseeker is not to be treated as a person in hardship. The new sanction will be included in a future Targeting Benefit Thieves media campaign, and customer notifications will be revised to ensure that customers are aware of the consequences of committing benefit fraud and the punishments that can be applied.

In conclusion, last year over 56,000 benefit thieves knowingly withheld information or deliberately failed to report a change in their circumstances in order to steal money from the benefit system that is there to protect those who are most in need. We have a duty to protect the integrity of that benefit system and we remain committed to improve and build upon the good progress we have already made by reducing benefit fraud to half the level it was in 2001. This new loss of benefit sanction will help us do this. I therefore seek approval for the regulations, and I commend them to the House.

My Lords, I thank the Minister for introducing the regulations, as my noble friend Lord Skelmersdale did when the parent provision was discussed in this House last year. As the Minister said, it is important that benefit fraud is addressed quickly and effectively, not only to save the taxpayer—although such a motivation is of course enormously important—but to retain public confidence in the system and ensure that benefits are targeted accurately towards those who need them most. I echo the Minister's closing remarks.

However, I take this opportunity to probe a little further the statistics on just how prevalent benefit fraud is. In our debates on the Welfare Reform Act 2009, the Minister said that the Government had reduced fraud across all benefits to 0.6 per cent of benefit spend; he repeated that figure just now.

That figure sounds like good news, although it is rather less impressive when we learn the absolute figure, which he gave us earlier: that benefit fraud, although halved since 2001, still accounts for £1.1 billion. How much of that £1.1 billion is fraud within the working-age benefits system, and what percentage of working-age benefits is fraudulently obtained? That £1.1 billion is an enormous amount of money, but even so, it does not reflect the true cost to the taxpayer. Undeclared work while claiming unemployment benefit, for example, hits the taxpayers’ purse twice: once in benefits wrongly claimed and, secondly, in income tax not paid. It is quite right, therefore, that the Government should take steps to deter claimants from fraudulent claims. Restricting benefits will, we hope, prove an effective method of achieving that.

I am reassured to hear the Minister say that administrative errors will not be penalised. Given the complexity of the benefits system, I would also be interested to hear whether there has been a similar improvement recently in the number of administrative errors made and the amount of money that they have cost the taxpayer.

My Lords, I, too, thank the Minister for explaining the regulations, which one might call “one strike and you’re out” rules—in other words, a new four-week loss of benefit provision, or “one strike” sanction, for all first-time benefit fraud offences. As the Minister pointed out, the purpose of the new rules is to act as a deterrent to benefit fraud of all sorts.

We on these Benches are as keen as anyone to eliminate fraud in the benefit system. Those caught making fraudulent claims, if five or six-figure sums are involved, invariably make the front pages of the red-top newspapers and bring the whole benefit system into disrepute. The lurid headlines created tend to make many people think that all benefit claimants are fraudsters, so anything that can be done to stop genuine fraud must be a good thing.

At present, the two-strike rule enables benefit to be withdrawn or reduced for a period of 13 weeks where a person is convicted in a court of law of benefit fraud twice and the second offence was committed within five years of the date of conviction for the first offence. The new rules starting next month under the Welfare Reform Act 2009 apply to those whose cases—estimated to be about 50,000 a year—result in an administrative penalty or caution, not just to those prosecuted in court. I understand that, for certain more vulnerable claimants, benefits would be abated, not completely withdrawn. That is very important, particularly if there are children in the household, who will have to pay the price for a parent's fraudulent claim. I hope that those entitled to hardship payments will be told about them automatically, and that those genuinely entitled to benefits will be encouraged to claim. It is worth repeating that fraud is estimated to be 0.6 per cent of the amount spent on benefits, with underclaiming of benefits estimated to be 9 per cent.

Fraud is one thing, and misunderstanding is another. Error—both customer error and Jobcentre Plus official error—is yet another problem. When I spoke on the parent clause in the Welfare Reform Bill last autumn, I had evidence from Citizens Advice that a lot of claimants were being sanctioned for fraud when they had genuinely misunderstood the position, either through lack of adequate English or lack of a clear explanation of the situation from a benefits adviser. That is very worrying. Citizens Advice tells me that its evidence still shows that some vulnerable clients are sanctioned for failing to comply with benefit rules through a failure to understand what is required of them. Citizens Advice fears that, under the new rules, people may feel pressurised to accept a caution to avoid further penalties, and states that many people do not realise that the interview is “under caution” until they attend. Consequently, they may not ask anyone to accompany them or seek legal advice before attending the interview.

It is, of course, particularly important for people with learning difficulties or other mental difficulties to have the support of a representative, friend or family member. The full implications of accepting a caution should be spelt out to the client, and the letter informing them of their interview should ensure that they understand that they can take someone with them. By accepting a caution, under these rules, they could now lose benefit as well as being sanctioned. If someone simply receives a letter from the DWP requesting that they attend an interview “under caution”, why would they know exactly what that meant? Finally, will the Minister confirm that if someone receives an administrative penalty, that will not count as a criminal record in future?

I, too, support the regulations. The Minister made helpful comments about the extent of fraud referred to by other speakers—£1.1 billion. How much money, if any, is recovered once the fraud has been identified? Secondly, can the Minister confirm the point made by the noble Baroness, Lady Thomas, about the amount of unclaimed benefit? It would be very helpful to have that on the record.

My Lords, I am grateful for the support that all noble Lords who have spoken have given to the regulations. I shall try to deal with each of the points raised. I agreed with the noble Lord, Lord Freud, when he said that this is not only a question of justice and stopping people taking from the system unfairly, it is about retaining public confidence in the system. That is important. He asked specifically about the extent to which fraud occurred in working-age benefits. The latest figures to March 2009 show fraud at 0.8 per cent of all benefit expenditure: £1.1 billion, as I explained. A breakdown by type of benefit—working age, pension, and so on—is published by DWP. I do not have those figures to hand, but I will be happy to provide them to the noble Lord and other noble Lords who have spoken in the debate.

The noble Lord also asked about what was happening about error: are we administering the system more effectively? We are now applying the same rigour to error as we do to fraud. Official error overpayments are at their lowest level since 2002-03, and the latest statistics show that overpayments due to official error have fallen, despite a background of significantly increased work pressures faced by the department and local authorities during the economic downturn. He again turned to the issue of undeclared income, which we debated in our recent deliberations on the Child Poverty Bill. I am not sure that there is much we can add to that debate today. Clearly, the issue of tax evasion is important and the Government have put significant resources into trying to clamp down on it. However, it remains for us all to be vigilant, just as we need to be vigilant around benefit fraud.

The noble Baroness, Lady Thomas, again supported these regulations and I am grateful for that. She referred, as did the noble Lord, Lord Laming, to the fact that we know that significant amounts of benefit are still not claimed. Again, I do not have that data to hand, but we discussed it on the Child Poverty Bill. For one more recent order, I think that we put some statistics on the record. I am happy to do that again in due course.

From recollection, those benefits where there is the lowest take-up are pension credit, council tax benefit and housing benefit. On the latter two, people often do not realise that those benefits can be claimed when you are in work as well as out of work. The Government have done a lot to focus attention on that, particularly by enabling claims for pension credit, council tax benefit and housing benefit to be made in one telephone call that covers them all. We are also looking at new ways of using the administrative data that we have, specifically to try and target people who we believe might be entitled to council tax benefit and housing benefit.

The noble Baroness, Lady Thomas, referred to interviews under caution. My information is that the letter which asks them to attend states that they can bring somebody with them. If the noble Baroness has any examples where that is not happening, I will be very happy to look into it. There is also a leaflet explaining those issues.

The noble Lord, Lord Laming, asked about recoveries of overpayments. The data which I have to hand for 2008-09 are that we have recovered something like £281 million, while £286.4 million has been written off. Obviously, there is still some way to go to recover the full amount due. The level and rate of recovery are limited as well, because it is generally, if not always, being recovered from people on low incomes.

Reverting to the point made by the noble Baroness, Lady Thomas, there are two separate interviews. In one, they are under caution and in another they are offered a caution, so a two-stage process is involved. I believe that that has dealt with each of the points that were raised. If not, I will be happy to try and have another go if noble Lords prompt me on it. Subject to that, however, perhaps we might move to acceptance of these orders.

Motion agreed.

Jobseeker’s Allowance (Work for your Benefit Pilot Scheme) Regulations 2010

Motion to Approve

Moved By

To move that the draft order laid before the House on 24 February be approved.

Relevant Documents: 9th Report from the Joint Committee on Statutory Instruments

My Lords, these regulations were laid in draft before the House on 24 February and debated in the other place on 23 March. I am satisfied that their provisions are fully compatible with our obligations under the European Convention on Human Rights. They lay out a legal framework for a Work for your Benefit pilot scheme in four Jobcentre Plus districts, which will constitute a six-month programme of externally provided work experience and employment support for those jobseeker’s allowance customers who are not successful in finding a job during the Flexible New Deal stage.

The draft regulations state when a person must take part in the Work for your Benefit scheme and set out the sanctions regime which will apply should they fail to do so without good cause. They also contain a number of safeguards to protect our most vulnerable customers, while at the same time ensuring a continuation of the job search activity that is central to the jobseeker’s agreement.

I know that noble Lords will be familiar with the scheme from our debates during the passage of the last Welfare Reform Bill, which received Royal Assent last November. Nevertheless, I will remind noble Lords of the details of the Work for your Benefit scheme, before outlining the specific provisions of the draft regulations which we are here to debate. At the heart of Work for your Benefit is the idea that the best way we can help the long-term unemployed is by keeping them as close to the labour market as possible. To this end, the scheme provides a programme of work experience and employment support for those JSA customers who face particularly challenging barriers to returning to work. It will serve as an additional layer of support beyond the Flexible New Deal stage.

The scheme will see external providers sourcing work experience programmes for jobseekers as a way of helping them to gain or regain the skills, routine and mindset required for their move into sustainable work. The nature of the work experience on offer will vary widely according to the needs of participants, but it will mean a working week of 30 hours for most people, as well as up to 10 hours of externally provided employment support. Any easements and flexibilities limiting availability for work within a customer’s jobseeker’s agreement will apply to the placements, so those available only for part-time work will have that commitment honoured.

The placements, however, are not jobs. They will exist over and above the staffing requirements of organisations. Safeguards will be in place to ensure that current or future jobs are not threatened, while organisations providing the placements will be required to sign declarations stating that this is the case. We envisage around 5,000 customers participating in the pilot scheme, who will normally be referred to the Work for your Benefit scheme after two years of unemployment. There will, however, be scope for up to 250 people to be referred to the scheme at an earlier point in their claim, should their adviser deem it beneficial.

Lone parents will not be subject to early referral, given their parenting responsibilities. Eligible lone parents will, however, be required to take part in the scheme if they reach the end of Flexible New Deal without finding sustained employment. We do not believe that it can ever be acceptable to write a person off as unemployable. We should continue to offer support, regardless of how long a person has been out of work, so we will expect lone parents to engage with the support on offer once their children become older. The requirement to participate in Work for your Benefit will only apply to lone parents claiming jobseeker’s allowance—that is, lone parents with older children.

All the flexibilities we have put in place for lone parents within the jobseeking regime will of course continue to apply in Work for your Benefit. For example, lone parents may only be required to participate in term time. We have also recently introduced a new right for lone parents with a child of 12 and under, restricting their availability for work to their child’s normal school hours. These protections continue this Government’s commitment to helping lone parents achieve a constructive work-life balance.

Noble Lords may also be aware that yesterday we published Building Bridges to Work: New Approaches to Tackling Long-Term Worklessness. That paper includes a package of measures to support the long-term unemployed and those on sickness benefits getting back to work. One element of this package is a jobseeker’s guarantee, giving jobseekers a guaranteed offer of a job, internship, volunteering placement or work experience after two years of being out of work. That guarantee ensures that we are supporting those who have been hardest hit by the recession. However, we still want properly to test and evaluate the approaches to support we will deliver in the Work for your Benefit pilots. The pilots will therefore run in parallel to the new guarantee in pilot areas, allowing us to gather evidence on the impact of full-time work experience to inform our longer-term strategy and further development of the jobseeker guarantee. It is right, however, that in this economic climate we do not wait two years for evaluation before we put in place extra support nationally.

The draft regulations will allow us to implement a pilot scheme in four English Jobcentre Plus districts. These are: Greater Manchester Central; Greater Manchester East and West; Cambridgeshire and Suffolk; and Norfolk. In particular, the regulations will state who will be required to take part in the Work for your Benefit scheme and establish a sanctions regime to underpin the pilots. Customers will be required to participate in the scheme either when they are randomly allocated to that option prior to commencing the Flexible New Deal or when they are referred by their Jobcentre Plus adviser at an earlier point in their claim. Customers who fail to participate in the scheme without good cause will be subject to a regime of escalating sanctions. Jobseeker’s allowance may be withheld for two weeks in the first instance of a breach of agreement, four weeks for a second breach, and two weeks for a third or subsequent act or omission.

For the new scheme to be successful, we must encourage those JSA claimants who are selected to participate to engage fully. Mandatory programmes engage greater numbers of people, and they are sometimes necessary to help those who face the greatest barriers to work. Those other benefits which a customer may be claiming will not be affected by the sanctions regime. Only jobseeker’s allowance payments will be suspended in the course of a breach of the jobseeker’s agreement for customers on Work for your Benefit. As in other employment programmes, the regulations provide for hardship payments to be available for customers in vulnerable groups to ensure they can continue to receive their jobseeker’s allowance at a reduced rate.

These regulations also ensure that participants continue to meet the entitlement conditions for jobseeker’s allowance while they are participating in full-time activity. Our external providers will facilitate a full range of job search support for up to 10 hours per week for the duration of the scheme, so by virtue of taking part in the scheme, customers will be actively seeking work. In addition, to provide flexibilities to smooth the transition to work, the regulations allow customers 48 hours to attend an interview and up to one week to start work.

I finish by restating the Government’s commitment to helping into work all those who can work. We have revolutionised our service provision for jobseekers, and the innovative nature of the Flexible New Deal is an example of this. However, even the bespoke support offered by the Flexible New Deal cannot help everyone into work, so we want to trial the new Work for your Benefit scheme as an extra layer of support. Moving our most vulnerable customers as close to the labour market as possible is essential to realising their potential. This pilot aims to furnish long-term jobseekers with the skills and habits needed to re-enter the world of work, but it will also grant them access to externally provided job search support and advice.

I thank noble Lords for their valuable contributions during the passage of the Bill last year. I hope that they will agree to these regulations so that we may put our words into practice. I beg to move.

My Lords, I thank the Minister for introducing these regulations, which we welcome. The merits and pitfalls of a Work for your Benefit scheme were closely scrutinised in this House when the Welfare Reform Act 2009 went through. Indeed, we spent many days on this matter assessing the potential unintended consequences it could have on the most vulnerable recipients of benefits. At the end of that process, we had a much clearer idea of the detail of who this scheme is intended to help, what safeguards there are to stop it requiring impossible steps and the help it would provide to those participating. That help is desperately required. There are still 1.5 million people claiming jobseeker’s allowance, and even worse, a record 8,160,000 economically inactive people.

The Government like to come up with all sorts of productive activities that a person no longer claiming unemployment might be doing, but with employment levels at the lowest they have been for 16 years, it is clear that those people are not getting back into work, and with the already hugely oversubscribed higher education sector facing £1 billion of cuts over the next three years, I doubt very much that all those economically inactive people are improving their chances via further education. This scheme provides another stage at the end of the Flexible New Deal and provides another route for a recipient for whom the system has already been proven to have failed. With fewer than one in four people in 2009 leaving Labour's New Deal to find a job, we welcome this scheme as a route to engaging a recipient with workplace activity.

As such, I could wish that the Government had found a way to roll out this scheme on a faster timetable than is currently their intention. As noble Lords know, consultation on these proposals was carried out nearly two years ago, and yet the vast majority of those who will benefit from this scheme will not have this option available to them for more than four years. The Explanatory Memorandum makes it clear that interim evidence will not be published until the summer of 2011 and that the full evaluation will not come out until late 2013 or, possibly, early 2014.

Of course, it is valuable to discover how well Work for your Benefit will perform in this country, but the considerable time that the Government have insisted on before we have the answer means that the Government—whoever that might be—will be flying blind on how this element of their programme fits in with other elements for many years to come. Quite apart from the Government’s guarantee, which the Minister mentioned a short while ago, I am thinking, in particular, of the “invest to save” approach on the Government’s model and the work programme on a future Conservative Government’s model. In each case, we are looking at programmes in which providers are incentivised to individualise their offering to clients and to work with them for an extended period. The issue I have a concern with is that this entirely separate pilot will not give us information on what is likely to be the real world post-2013. Participants in these pilots will not have experienced the “invest to save”/work programme approach, so the findings may not tell us all that much about what happens in a future world. I would be most grateful for the Minister’s views on how the Government’s programmes in this area might interrelate.

My Lords, I, too, thank the Minister for explaining these regulations, which bring in four pilot schemes—two urban and two rural—for the controversial Work for your Benefit provisions starting in November this year for two years.

It is important to be sure just what the pilots are intended to show. The Explanatory Memorandum states:

“The aim of the scheme is to test whether mandatory work experience, coupled with job search support, helps the long term unemployed find and sustain work”.

By “work”, I gather that we are talking about a minimum of three months, after which the provider will be paid for getting that person into work. We have heard the view of the Official Opposition again today. I do not know whether they think that we do not need this pilot at all. They certainly think that we do not need a two-year pilot but should just get on with the scheme. “Further and faster” seem to be their watchwords, but the evidence from other countries, as the Government have acknowledged, is mixed about whether a Work for your Benefit scheme increases the likelihood of a long-term unemployed person finding work.

There is a view that such schemes can even reduce employment chances by limiting the time available for job search and failing to provide the skills and experience that are valued by employers. One finding from DWP research report 533, A Comparative Review of Workfare Programmes in the United States, Canada and Australia, by Crisp and Fletcher, is not a surprise. It was that workfare, which is similar to Work for your Benefit, was least effective in getting people into jobs in weak labour markets where unemployment was high.

We have had the argument endlessly about whether this is the time to be introducing the Work for your Benefit scheme. The Government have consistently said that this is exactly the time to give people more support in looking for employment. No one can possibly argue with providing more genuine support for jobseekers. However, if the jobs are not there, they are not there, and no amount of Jobcentre Plus smoke and mirrors can find them. I wonder what sort of work placements will be offered to Work for your Benefit claimants. We simply do not know. I understand that companies have to sign a declaration that the placement will be in addition to existing or expected job vacancies.

We fear that there are likely to be cuts in the near future in public sector employment. Perhaps these work placements will be in that sector. The Minister in another place spoke about the strong recovery in places such as Cambridge, because of all the new technology there. Cambridgeshire is certainly one of the pilot areas for this scheme. The others are Suffolk, Norfolk and Greater Manchester. Has the department made any assessment of the likely strength of the jobs market in all the pilot areas?

Perhaps one sign of a confusion of policy is that, as the Minister said, Jobcentre Plus officers are encouraged to identify for early access to the Work for your Benefit scheme some claimants who have been unemployed for less than two years, if they think that they will benefit from it. However, these people, who might think that they are being singled for preferment or extra help, will actually be in a sanctions regime, as though they were demotivated and work-shy.

Another finding from the Crisp and Fletcher report is that workfare is least effective for individuals with multiple barriers to work. These are, of course, precisely the people who are likely to be unemployed for two years. Several employment providers, in responding to the No One Written Off consultation, were concerned about the inflexible six-month running period of the Work for your Benefit scheme, making the point that it should be individually tailored to suit the individual’s needs.

WorkDirections, which is a well respected provider, suggested designing the length of the placement by asking the clients some simple questions at the action-planning stage. For example, what are the constraints that the clients are facing? What does the client need to gain? How long will it take to gain the relevant skills, knowledge or experience? How can progress be verified? In other words, a six-month one-size-fits-all placement is too inflexible.

If it is clear after, say, three months that the particular placement is not suitable for a particular individual, and may even be counterproductive, what will happen to that individual? Will JCP monitor the progress that is being made by individual claimants throughout the 26 weeks? Will the claimant have any choice over the work experience that they undertake, or will they be left to do the whole six months, come what may? I know that the phrase “good cause” will be used by the Minister as a reason why a claimant could stop a placement, but I do not think that “good cause” encompasses unsuitability of the work placement. If the claimant knows that the particular placement that they have been allocated is not giving them the right sort of experience, for example, will they be able to take the matter up with the provider or should they take it up with Jobcentre Plus? The last thing that we want is for claimants just to default on a placement and, by doing that, to receive a sanction because the particular placement was totally unsuitable for them. I am all for the personalisation agenda and for work experience placements, especially their length, being designed to suit an individual, but this is not what we are getting with this pilot.

Finally, I am disturbed that claimants will be allocated randomly to the pilots. This seems totally at odds with the whole tailored-to-the-individual approach that the Flexible New Deal was supposed to give people. My honourable friend Steve Webb in another place, who is a social scientist, makes the point that a Flexible New Deal provider should already have given the claimant work experience during the two years that the claimant was unemployed. It seems distinctly odd that such a claimant might be randomly assigned to a Work for your Benefit scheme when their only problem is that there is no suitable job available. I wonder whether part of the reason for this whole scheme is to clamp down on those who are suspected of moonlighting—claiming and working on the sly. The noble Lord, Lord Freud, mentioned this.

This may be the last time that the Minister and I are sparring across the Chamber on DWP matters and I should like to end by thanking him for all his hard work in this rather unfashionable area of government activity. I also thank him very much for his unfailing courtesy in the way in which he has fulfilled those duties, particularly answering all our questions, however difficult. We are most grateful to him for all his work.

My Lords, I, too, thank my noble friend for bringing forward these regulations. I should like to add a little more optimism to the debates. I recognise that there are many complexities in the jobseeker’s allowance Work for your Benefit pilot scheme, but does my noble friend accept that, in working with DWP, as many of the sector skills councils are, there are opportunities for private employers that are already expressing an interest to ensure for the longer term that these young people—they are mostly young people, although some are older—are brought into the sector of work? In this way, the understanding of going to work, getting up and all the interests that we know employers have are fulfilled.

I seek a couple of assurances from my noble friend. First—I think that he has already stated this—I hope that the pilot will not have to run its full length before we start to look at increasing the opportunities. Secondly, I hope that there is a clear understanding of how this will work, so that individuals know that this is not a job but an opportunity for a placement and so that employers clearly understand that what they are bringing for these young people is the opportunity to understand the world of work, without necessarily guaranteeing employment. There has been some confusion over that. Certainly I welcome this opportunity on behalf of many of the sector skills councils.

My Lords, I start by thanking the noble Baroness, Lady Thomas, for her kind remarks. I would not necessarily accept that this might be my last time in this role at the Dispatch Box, but we will have to see. I thank all noble Lords who have spoken in the debate. I have to start off with the confession that in my opening presentation I made an error when I said that the sanction for a third act or omission was two weeks, when in fact it is 26 weeks. My apologies for that; it ought to be put clearly on the record.

The noble Lord, Lord Freud, gave us his view of where we are in terms of employment and unemployment statistics. He will be aware that the latest figures showed that there were 2.4 million more people in employment than there were in 1997. The employment rate is 0.5 percentage points lower, at 72.2 per cent, but the long-term claimant unemployment count is 58 per cent lower and the long-term youth claimant unemployment is 28 per cent lower. That shows that a Government who are active in looking at employment policies can make a difference. In particular, if you look at the expectations that pundits have around unemployment, given the recession, you see that unemployment is half a million lower than was expected last year, with 365,000 more lone parents in work and 600,000 more disabled people in work. The noble Lord made reference to the inactivity rate—the figure of 8 million, I think—but he will know full well that this is partly attributable to the fact that there are more people and so there will inevitably be a higher number. Also, the figure covers many more students than there used to be in full-time education, which is something that I am sure we would both welcome.

The noble Lord asked about the evaluation of the work programme. We are already testing a cross-benefit approach through the personalised employment programme from spring of next year. That includes the new funding model, which of course will be familiar to him. He asked how this fits in with our other schemes. Work experience is only one element of the potential support. It is important that we test this element and ensure that it is as good as it can be. We will include work experience as part of the wider support that is included in the jobseeker’s guarantee, which we announced yesterday.

The noble Baroness, Lady Thomas, asked whether this is the right economic climate for these proposals. We need to keep people who are out of work as close to the labour market as possible, regardless of economic conditions. This gives them the best chance of capitalising on the recovery when it occurs. We will not repeat the mistakes of the past and ignore unemployed people when they most need help.

The noble Baroness also referred to research reports on workfare. The research shows that similar programmes in other countries have had varying success. However, we do not intend blindly to mirror what has gone before. We want to learn from others’ experience and to develop a programme that meets our own needs and moves people into work. This is why the programme includes up to 10 hours per week of additional support from the provider.

The noble Baroness asked where these placements will come from in the current economic climate. I will also deal with the point made by my noble friend Lady Wall. Work for your Benefit placements are not permanent jobs; they are work experience placements and can be located in any number of organisations, including in the public sector, where appropriate. We do not expect the number of participants to be large and we will run pilots in limited areas, but we will ensure that placements are in addition to any existing or expected vacancies and that they do not result in companies taking on Work for your Benefit customers at the expense of recruitment. All employers who offer work experience placements must sign a declaration—the noble Baroness sought confirmation of this—that states that the placement is in addition to existing or expected vacancies in their organisations. It is very important, as my noble friend says, that this is a transparent process.

The noble Baroness also asked about the work that people will do. The type of work experience will be different for everyone. We will ask providers to source individual work experience placements that are based on the needs and aspirations of the individual. This bespoke work experience will have a far more realistic chance of helping jobseekers into work. It is therefore not a one-size-fits-all approach; it is very much to the contrary. In comparison, workfare tends to be work experience in isolation and is without the additional employment support and training that are included in the Work for your Benefit programme. In addition, workfare placements have tended to be one-size-fits-all, which is not what is intended here. Work for your Benefit will provide work experience that is based solidly on the needs and aspirations of participants, so their aspirations will be taken into account.

The noble Baroness also asked about random allocation. Random allocation is the most robust method of evaluation, as we are testing two different options against each other.

I hope that I have dealt with each of the points that noble Lords have made. My noble friend Lady Wall made the point that the pilots will proceed over a couple of years, but our announcement yesterday means that we will proceed with the job guarantee for everyone who has been out of work for two years, and we will not await the finalisation and the evaluation of the pilot, as I explained in my introduction. With those comments, I seek approval for these regulations.

Motion agreed.

Mortgage Repossessions (Protection of Tenants Etc.) Bill

Second Reading

Moved by

My Lords, I am honoured to be taking forward this Bill, which was introduced in another place by Dr Brian Iddon, Member of Parliament for Bolton South East. I pay tribute to his diligence and hard work in steering this Private Member’s Bill through all its stages in the other place, liaising with the Government and working with all the various bodies concerned with the issues covered by the Bill. I also thank the four charities that have campaigned for this legislation—Citizens Advice, Shelter, Crisis and the Chartered Institute of Housing—and I declare my own interest as chair of the Property Ombudsman Council, which seeks to resolve disputes between tenants, landlords and managing agents, as well as handling complaints against estate agents.

I am also extremely grateful to the government Whips for finding the time for the Second Reading of this Bill, which should enable its progression into law before the end of this Parliament. The good that I believe will flow from the enactment of this legislation can be attributed to Dr Iddon, to the charities that have persisted in arguing the case and to the genuinely honourable politicians from all parties who have given it their support.

Fortunately, my comments on this Bill can be brief, first, because consultation on the Bill’s content last summer, which was organised by the Department for Communities and Local Government, took on board important points raised by relevant professional bodies and associations—the Bill has the backing of the Residential Landlords Association, the British Property Federation, the National Housing Federation, the Royal Institution of Chartered Surveyors and the National Landlords Association, among others—and, secondly, because the Bill has strong cross-party support: the Government have given their full backing and the CLG has given expert input; the Liberal Democrats in this House have urged progress in bringing forward this legislation; and the Conservatives in the other place have been extremely supportive of the measures in the Bill. I will therefore confine myself to a short description of the significance of the Bill and I will be very willing to respond in my closing remarks to any points raised by your Lordships.

The Bill seeks to protect the so-called unauthorised tenants of residential-turned-let—RTL—tenancies who are at risk of sudden eviction because their landlord has fallen into arrears and the lender has commenced repossession proceedings. In these cases, the landlord has rented out a property without the consent of the lender, who is almost always an owner-occupier who pays a lower rate on their borrowing than buy-to-let landlords. The tenants are unprotected by the relevant legislation and, when the lender seeks to repossess the property, tenants may be given no notice, even if they are only part-way through the fixed term of a tenancy agreement.

Citizens Advice has furnished me with numerous examples of the problems that this brings. A citizens advice bureau in the north-east reported a client who was given 24 hours to vacate the property. He was a single man in receipt of incapacity benefit with no savings. The bailiffs arrived before he could even get all his possessions out of the house and several precious items were lost in the process. A CAB in the north-west reported the case of a couple who received a visit from the bailiffs, without any prior notice, to repossess their flat due to the landlord’s mortgage arrears. Their possessions were locked inside and they had to spend the night in a hotel.

Tenants who have been required to pay rent in advance face the added blow of standing to lose substantial sums. A Surrey CAB reported the case of tenants who had paid not only the deposit but six months’ rent in advance. When they returned from overseas, the locks had been changed and their belongings were locked in the flat. The landlord promised to refund the rent, but this did not happen. Sometimes, unbeknown to the tenant, the landlord has already been in serious arrears before letting the property. A Wiltshire CAB reported the case of a couple with two children who took on a 12-month fixed-term tenancy in September 2009, unaware that the landlord was in mortgage arrears of some £6,000. The couple are now awaiting the outcome of possession proceedings.

The Department for Communities and Local Government has estimated that there could have been more than 2,500 repossession cases of this kind last year, but advice agencies think that this is the tip of an iceberg. CLG estimates that some 330,000 RTL households are at risk of short-notice eviction if their home is repossessed. Since many of these households will never apply to a local authority for housing, they are unlikely to end up in any official statistics. There seems a real danger in these difficult economic times of more repossessions in the owner-occupied sector. If so, the number of RTL evictions could rise further.

The Bill does not provide any long-term security for RTL tenants, but it does allow the courts to delay evictions for up to two months. First, the Bill provides that after the notice of court proceedings is sent to a property informing any occupier that repossession is a possibility, tenants who pick up this letter, usually addressed to the tenant or occupier, will have the right to be heard at the possession hearing. The Bill gives the judge discretion to delay the repossession for up to two months at that hearing.

Secondly, it is possible that the tenant did not see the notice, which may have been missed among the usual junk mail; perhaps, following reassurance from the landlord, the tenant did not expect a possession to be granted and has taken no action; or, indeed, the tenancy may have started after the notice was served. The Bill therefore requires the lender to give notice at the property after an order for possession has been granted by the courts and before it is executed. This allows tenants who did not apply for a two-month postponement at the possession hearing to do so at this later stage. It is entirely at the discretion of the judge whether any period of notice will be granted and the court may make this conditional on rent payments continuing between the tenant and the lender. Alternatively, the lender may agree to the tenant continuing in situ and can appoint a receiver of rent to manage the property. The Bill does not inhibit them from doing this.

The Bill will protect thousands of RTL tenants from becoming homeless by providing a breathing space of up to two months for them to search for alternative accommodation. In every respect, this seems a much needed and significant reform to end an unintended injustice. I strongly commend the Bill to your Lordships. I beg to move.

My Lords, I support the thought that lies behind the Bill and I have one or two short points to make about it. The first point is that the Bill achieves for unauthorised tenants the sort of delay that has been available under rules of court for a long time in relation to squatters and their unauthorised occupation of premises.

There is an important distinction between an order for possession and a warrant for possession. An order for possession is binding on the parties to the litigation—in the ordinary case where it is a mortgagee’s application, the party will be the mortgagor—but it is not binding on anyone else. A warrant for possession, on the other hand, is binding on everybody in occupation of the property. A litigant, a claimant, who gets an order for possession has then to go and obtain a warrant for possession in order to execute the order that he has. All one really needs in order to control an unreasonable use of the eviction procedure is to require notice to be given to everyone in occupation, with a delay to allow them to intervene in the proceedings and to assert, if they wish to do so, a right to be there which the claimant—in the case we are considering, the mortgagee—is bound to respect.

Of course, there will be some who cannot do that, and the Bill provides for a delay of up to two months in that category. However, all of this could, I respectfully suggest, have been achieved quite easily through amendment to rules of court. It may be that it is simpler now to proceed with the Bill, but it could have been done by rules of court without bothering Parliament to legislate on the matter.

My second point is that the Bill is directed to the position of persons claiming to be tenants but not to have tenancies which are binding on the mortgagee. The persons in occupation may claim to be tenants, but the putative landlord through whom they claim may have nothing whatever to do with the mortgagor. It is not necessarily going to be the mortgagor who granted the tenancies; it may be some unauthorised person, some squatter in the first instance who, finding the property empty, has moved in with friends and then purported to grant tenancies to others.

The Explanatory Memorandum proceeds on the footing that it is going to be the mortgagor, or somebody claiming under the mortgagor, who has granted the unauthorised tenancies, but it is important to recognise that that may not be the case. The tenancies may have their origin in some other source; from a squatter or someone who has simply moved in, finding the property empty. The language of the Bill draws no distinction between those two categories, but the Explanatory Memorandum and the Short Title to the Bill appear to do so. I wonder whether the drafting needs to be looked at again, either to make it clear that it comprehends both types of unauthorised tenants—those claiming through the mortgagor and those claiming through a person unconnected with either mortgagor or mortgagee.

Those are the only two points I wanted to make on this otherwise entirely supportable Bill.

My Lords, I cannot follow the noble Lord in matters of law. Looking at the intention of the Bill as it has been presented to me, the possibility that a legal process might unintentionally make people homeless, or at least involve them in great expense or inconvenience, is something that, where it can be avoided, should be avoided. I believe that the intention behind the Bill is to prevent somebody finding themselves, at sometimes only a few hours’ notice, thrown on the streets. That is something we should all support. People employed in our Whips’ Office have experienced this: through no fault of their own, they suddenly discover that the property they thought they had legal possession of is being taken away and they are exposed—this is somebody who has been paying rent.

This is a comparatively modest measure and if I had to quibble at all, I would say that three months would be better than two. Possibly on a short-term tenancy, two months might be adequate, but three months might have given more flexibility. That would seem to be a very sensible course of action. It may also end up saving the Government money, since they would not have to worry about emergency accommodation, although, as has been pointed out, many of those affected by this are probably sorting things out themselves, but probably at considerable expense. The loss of deposits and, indeed, rent already paid, will happen, as the noble Lord, Lord Best, said. Somebody who has got themselves into arrears on a mortgage is probably not the best person to chase up for a lost deposit, which is a common area of disagreement between tenants and landlords.

I suggest that the Bill be given a fair passage, as a very sensible way of dealing with a very real problem. If we have it in place, we may well be able to avoid a degree of discomfort and probably homelessness as well. I recommend that we give it all speed.

My Lords, I declare that I have interests in property rental. I, too, welcome the Bill of the noble Lord, Lord Best. I shall keep my comments brief, because the Bill is largely uncontroversial and, indeed, passed through the other place with cross-party support. My honourable friend Stewart Jackson MP described the Bill in Committee as,

“very much for the public good”.—[Official Report, Commons, Mortgage Repossessions (Protection of Tenants Etc.) Bill Committee, 10/2/10; col. 6.]

As the noble Lord, Lord Best, made clear, the Bill is required because circumstances in the housing market have moved on a bit since Parliament last legislated for the protection of tenants, and a loophole has become apparent. That loophole may affect around 2,000 to 3,000 people a year. That might not seem like very many, but given that the consequences may be a family being thrown out of their home on to the street, it is extremely important that we move to close it. As has been said, estimates from the homeless charities Shelter and Crisis put the figure at a possible 224,000 unauthorised tenants who are at risk. If the figure is accurate, it makes the case for this Bill even more pressing.

As the noble Lord has explained, the Bill is designed to protect a category of tenants who are renting properties which they should not be because the landlord has acted in contravention of his agreement with the mortgage lender. If the landlord defaults, the mortgagee will begin to claim possession against the property, leaving any tenant in a difficult position. The problem will not be the same with buy-to-let properties because the mortgagee will know at the outset that there is going to be a tenant in the property and therefore protections will apply.

Where the mortgagee is ignorant of the tenants, perhaps because of bad faith on the part of the landlord mortgager, the noble Lord, Lord Best, is asking that we approve a two-month notice period to be given to the tenant. We fully support that idea because two months does not significantly delay the mortgagee’s claim on the property. It would be different if the tenant could apply repeatedly for a stay under the Bill, and I understand that both the noble Lord and the sponsor of the Bill in another place, Brian Iddon, have worked closely with the department to get the wording right. Only one postponement is permitted on an application by the tenant to the court. In order to make an application, of course, the tenant will need to know that moves on the property are afoot. I am pleased to see that the noble Lord has considered that point because under Clause 2, the mortgagee must give the tenant notice of the execution of any possession order, and specifically he must give notice,

“at the property of any prescribed step taken for the purpose of executing the order”.

But the prescribed steps are to be defined by the Secretary of State, so can the noble Lord, Lord Best, or the Minister give some indication of what those prescribed steps may be?

Despite that request for clarification, I can give the Opposition’s support for the Bill and I congratulate the noble Lord on bringing forward these sensible proposals. We hope very much that this Bill will be allowed to pass into law.

My Lords, I am grateful to the noble Lord, Lord Best, for bringing forward this measure. The Government became aware of the issue of unauthorised tenants and short notice evictions just over a year ago, and since then have been 100 per cent supportive of any measures to ensure that tenants who find themselves unexpectedly subject to short notice eviction as a result of landlords’ arrears and repossessions have adequate time to find an alternative home and move into it. It is a testament to the robustness of the legislation that this Bill has come from another place unchanged from when it was first published. It has not had to be redrafted to take account of any amendments, and this in itself says something about the need for and urgency of this legislation.

The noble Lord, Lord Best, has explained why it is needed and I do not intend to repeat that, but the Council of Mortgage Lenders has recently revised its forecast for possessions in 2010 to 53,000. The Government have a package of support in place for home owners who are in arrears and under threat of repossession. Help is available to ensure that repossession is always a last resort. However, some of these repossessions will be from landlords unable or unwilling to meet their mortgage payments, and some of these properties at risk will contain tenants where the landlord has not obtained consent to let from the lender. This makes the tenant unauthorised and puts them at risk of losing their home in a very abrupt manner. It is only by legislating in the way proposed in the Bill that unauthorised tenants will be protected if their landlord falls into arrears and is subsequently repossessed by the lender.

An unauthorised tenant is often stuck in a form of no-man’s-land where neither the mortgage lender nor a judge in a possession case is able to recognise the tenant’s existence or take account of them and their circumstances. This is a strange, historical quirk of our mortgage and property law that can easily be resolved by the Bill before us. As we have heard, the legislation will give unauthorised tenants affected by landlord repossession an opportunity to seek a delay to that repossession in order to find an alternative home. If they are a genuine tenant, they should find a lender who is sympathetic to their situation. The Bill gives some protection to tenants in that if the lender in question is less than sympathetic and refuses to recognise the tenant, they have the ability to engage with the court to resolve the issue. This offers a level of comfort and assurance to any tenants in this position that there are means for fair consideration and, if necessary, an independent process to consider and remedy their situation.

This same process will of course protect lenders from spurious and vexatious applications by individuals who do not have a genuine tenancy. The Bill will put unauthorised tenants on a level playing field with authorised tenants, giving the former the rights that they have always believed they had. It is unfair that unauthorised tenants should have to suffer short notice eviction or the risk of it where the situation is not of their making, but that of a landlord who has failed to comply with the terms of his or her mortgage.

Perhaps I may pick up on a couple of points that have been made. The noble and learned Lord, Lord Scott of Foscote, suggested that these amendments could be made by rules of court rather than by legislation. We have been advised that this would be a lengthy process and we could not take that route as it would not be appropriate to confer benefits on tenants through court rules. This has to be done through legislation. He also asked whether the Bill applies to all types of unauthorised tenant, those who have a relationship with the mortgagee and mortgager and those who do not. I should say that squatters, who he mentioned, are excluded by Clause 1(8) because unauthorised tenancies are defined as those tenants who have an agreement with their landlord that does not bind the lender. Obviously, squatters would not have any agreement on which they could rely to use the protections of the Bill.

My Lords, the problem arises where an original squatter purports to grant tenancies to others, who take him to be a person who can grant the tenancies.

My Lords, I think it is a question of with whom the tenancy agreement is made; that is the advice I have received.

The noble Earl, Lord Cathcart, asked whether we could give an indication of the prescribed steps. These are outlined in the draft secondary regulations and explain the time periods for all parties to follow in serving the notice and acting upon it. It is not intended to be burdensome or difficult.

The decision to legislate is not one that should be taken lightly. Unfortunately, regulation and good practice are inadequate in this case, so legislation is the only way to remedy the legal gap in protection for unauthorised tenants who find themselves being evicted as a result of their landlord’s arrears and repossession. The Government therefore continue to support the Bill and I commend it to the House.

My Lords, I am grateful for the support expressed on all Benches for the Bill, and perhaps I may respond to some of the points that have been made. The expert input of the noble and learned Lord, Lord Scott, has been answered at least in part by the Minister. I think he would agree that even if an amendment to the rules of court might have been a better route, at this stage in the proceedings it is probably best to do it in the way being proposed.

I take the point that if a squatter entered empty premises and then issued something that appeared to be a proper tenancy agreement to others, those others would not be covered by this legislation. I suppose that such cases are relatively rare, and perhaps the Bill cannot do everything that it might. I fear that under Clause 1(8), it is likely that they would be ruled out when the case went to court and the two months’ period was asked for.

Surely these people would not be ruled out; rather that they would fall within it. I hope that the intention is that they should.

The point is that the judge has absolute discretion in these matters and would probably interpret his responsibilities as not giving, in those cases, the period of two months’ grace before an eviction took place. But the noble and learned Lord, Lord Scott, is absolutely correct to say that perhaps it would be up to the judge to make a decision on the merits of the case before him or her.

The noble Lord, Lord Addington, expressed his support for the Bill and made the point that possibly a period of three months would be better than two months. However, the two-month period at least has symmetry with assured shorthold tenancies which have the opportunity, once the tenancy is running, for two months’ notice to be granted. It is the same period as for tenants in those circumstances, so there is logic behind it. Again, I am grateful to the noble Lord for his support and that of his Benches.

The noble Earl, Lord Cathcart, made the point that this absolutely prevents repeated postponements, which was an anxiety of those representing lenders; this allows a two-month postponement and no more. He also asked about the prescribed steps for notifying occupiers the second time around. I know that there has been debate as to whether, for example, the envelope should say on the outside that it has come from the courts—drawing special attention to it—or whether that would be rather alarmist; should it instead be in a plain envelope? It will at least be addressed to the tenant or occupier, not just to the occupier, which may slightly distinguish it from other mail. We are yet to have the full details, which will be in regulations, and these will give us an opportunity to ensure they come out correctly.

I am also very grateful to the Minister, not just for his comments but for giving this Bill the Government’s absolute backing from the beginning, without which it would not have been possible. I conclude by asking the House to give the Bill a Second Reading.

Bill read a second time and committed to a Committee of the Whole House.

Sunbeds (Regulation) Bill

Second Reading

Moved By Baroness Finlay of Llandaff

That the Bill be read a second time.

Baroness Finlay of Llandaff: My Lords, this Bill would protect children, it has government and cross-party support, and it applies to England and Wales. It is important because it would prevent children from accessing sunbeds and could enable adults to make fully informed decisions about their sunbed use. The Bill gives local enforcement officers powers to inspect salons and to penalise salon operators if under-18s are found to be using their sunbeds.

The Bill also contains provisions to bring forward regulations to ensure that under-18s are not able to hire or buy sunbeds; all sunbed salons are staffed; and clear and accurate health information is displayed in all salons and other places where sunbeds are being used for commercial purposes. It also allows for such regulations to prevent operators from making unsupported claims about sunbed use benefits.

I must thank Julie Morgan and Siân James for their tireless work on this important Bill in the other place and for the privilege of asking me to take it forward. I am also grateful to Cancer Research UK for its support in communicating the strong evidence base behind this Bill, and the Chartered Institute for Environmental Health, which advised on the practical implementation measures associated with the Bill.

Why this Bill, and why now? In the past year, the evidence for the carcinogenic effect of sunbeds has come together conclusively. Malignant melanoma is the most common cancer in the 15 to 34 age group, and it kills more than 2,000 young people each year. In August 2009, a comprehensive meta-analysis, published in Lancet Oncology, concluded that the risk of skin melanoma,

“is increased by 75 per cent when use of tanning devices starts before 30 years of age”.

Following this, the International Agency for Research on Cancer upgraded its assessment of sunbeds to its highest level of cancer risk. In November last year, the independent Committee on Medical Aspects of Radiation in the Environment—COMARE—also assessed the evidence and concluded that legislation is needed to prevent the commercial use of sunbeds by under-18s. This concurred with the same earlier conclusion from the World Health Organisation and the European Scientific Committee on Consumer Products. The US Food and Drug Administration is considering strengthening its measures on sunbeds.

We now lag behind Belgium, Finland, France, Norway, Portugal, Spain, Sweden, USA, Australia and New Zealand, where specific legislation is already in place to protect under-18s from the dangers of sunbeds. Here in the UK, the Scottish Government’s Public Health etc. (Scotland) Act 2008 includes a ban on under-18s using sunbeds. The Health Minister in Northern Ireland announced last week that as soon as possible he would be bringing forward strong legislation on sunbeds. The Secretary of State for Health in England and the Minister for Health and Social Services in Wales are committed to bringing regulations forward straight away when this Bill’s passage is successful.

There has been wide consultation on the Bill. In the other place, 215 MPs signed the EDM on under 18 year-olds and sunbeds, showing massive support for this Bill from across all parties. This Bill is needed because voluntary regulation has failed. The Bill is proportionate to the problem.

The Sunbed Association has over 1,100 members, including retailers, distributors and salons. Representatives met me to discuss the Bill and have been most helpful trying to clarify issues around regulation of the industry. It has its own code of conduct that is compatible with the Bill and has emailed me to say:

“The Association totally supports the Bill, in terms of a ban on sunbed use by anyone under 18 years, and a ban on unsupervised tanning (unstaffed tanning salons). A minimum age restriction and the need for tanning salons to be manned by trained staff at all times have always been requirements in the Association’s Code of Practice. Our Code also requires the provision/display of health and safety information”.

The association has sent me this code of practice, which is based on the European standard; it will be most helpful in drawing up guidance on implementation of this Bill. The association raises concerns that the output standard from Europe, which states that the output from a sunbed must not exceed a maximally weighted irradiance of 0.3 watts per square metre, is not universally observed. This standard is a living document which is due for revision from this June, and I know there are ongoing discussions with the industry about this.

I visited a supervised salon in Cardiff recently, owned by a family with teenage children. They do not allow children to use their sunbeds and they welcome legislation as it will support their high standards of practice. Unfortunately, not all salon owners are so responsible. Many tanning salons are unsupervised or operate on only the most cursory checks, if any, on young people before letting them use the sunbeds. Cancer Research UK commissioned a piece of focus group research with under-18s in 2009. The following quotes are shocking, but far from unique:

“I just walked in and she was, like, ‘Have you got your coins for the machine?’ and that was that”,

from Stoke-on-Trent;

“They didn’t ask my age because we went with my friend’s sister”,

from Bushey;

“I think they’re just not bothered about the money and they’re under-age too”,

from Newcastle.

Research commissioned by CRUK found that more than a quarter of a million children have used sunbeds in England. Among 15 to 17 year-old girls, sunbed use was particularly high, especially in Liverpool and Sunderland, where half of the girls in this age category use sunbeds and 18 per cent of young people who have not used a sunbed would consider doing so in the future. Voluntary regulation of tanning salons has clearly failed.

Professor Lesley Rhodes at Manchester University tells me they are now seeing a rapid rise in melanoma in young people and severe photodamage to skin collagen, which causes premature ageing, in early adulthood. Professor Paula Grey, director of public health in Liverpool—the city with the big problem—in welcoming the Bill and highlighting their upward trend in malignant melanoma, wrote:

“In Liverpool the voluntary code has not worked. The evidence from local surveys and questionnaires highlights that, in many salons, there is a lack of skin typing, no advice on goggles, no warnings of overuse and no age restrictions on under-16s. In Liverpool, 49 per cent of young people between the ages of 14 to 17 years are using sunbeds. Thirty per cent of young people are using them more than three times a week and this equates to 150 sessions per year—eight times the World Health Organisation’s recommended adult exposure limit”.

The COMARE report concluded that poor compliance is found against a variety of control measures where strict legislative controls do not exist. COMARE and WHO are clear about the proportionality of stricter controls on sunbed salons. Local authorities already visit sunbed salons but at present they do not have the powers to ensure that salons are operating responsibly. The Bill would redress the balance and give them powers to ensure that under-18s are not using sunbeds and, further to the introduction of associated regulations, to ensure that a number of other good practice guidelines are adhered to. The key point is that the legislation will not place a major additional burden on local authorities in terms of extra workload as these businesses are already being inspected. Rather, it will ensure that current working is more effective and safeguard the health of young people.

I should make it clear that this Bill would not prevent adults using sunbeds, but the responsible side of the industry agrees that sunbed salons should be supervised to protect children and that providing information to sunbed users should not be optional; adults need to be able to make informed choices about decisions that affect their health. Under-18s are not allowed to buy alcohol or knives, so the Bill would bring the age at which one can use commercial sunbeds in line with other age restrictions across the UK. It is practical and ensures clarity of message.

In conclusion, the Bill would protect our children; it is necessary, workable and enforceable; it could save lives. I commend it to the House.

My Lords, I congratulate the noble Baroness, Lady Finlay, on this typically thoroughly-researched, targeted and focused legislation for which she is rightly known. On a day when it is snowing in Scotland, I was preparing for this debate and I thought about my Scottish childhood—I freely admit it—when beachwear consisted of Aran jumpers because it was so cold. However, it was not so many years ago that friends of mine suffered badly from sunburn in Aberdeen, which was previously unheard of. So the background to the Bill is one in which our climate is changing, which adds some weight to the debate. We on these Benches welcome and support the Bill. Like all legislation, it could perhaps do with some revision but, as a first step, it is a sound basis on which to proceed.

In my research for the Bill I was glad to see a paper from the British Association of Dermatologists; its acronym is BAD but, from its briefing, it seems a very good organisation. It is absolutely unequivocal in calling for a ban on coin-operated and unmanned sunbeds. Its reason for doing so is that the evidence base is so strong. In this House in recent times we have debated different measures to tackle the issue of cancer prevention and sometimes we have disputed the evidence, but this time the evidence from this country is clear and unequivocal.

The British Association of Dermatologists makes a good point when it indicates that many people are completely unaware of the risks of these machines—indeed, some people labour under the impression that they are beneficial to health—and it cites the moves in Scotland towards licensed premises and licensed machines as being of benefit. It is right that local authorities should be given powers to ensure that there is compliance with a licensing regime and that standards are met. There is a responsible end of the industry which deserves to be supported. As the noble Baroness said, a great many people go about their business in a perfectly reasonable and honest way and we would not wish to prevent them doing so.

I was particularly taken by a study in Northern Ireland. I know that the Bill applies in England and Wales but, although I am not keen on legislation which seeks to go into other jurisdictions and choose examples of how one might selectively go about doing things, it seems to me that this study is highly relevant and very valuable. It was conducted by a team led by Mr Art O’Hagan and studied 322 tanning salons in Northern Ireland over an eight-week period in July and August 2007. It came up with some remarkable findings. Over a quarter of the premises used type 4 sunbeds, which are for medical and not cosmetic use, and it is possible that many others were using sunbeds which emitted UV rays way in excess of those. Most of the salon owners—62 per cent—did not know what level of radiation was being emitted by their machines; 39 per cent of the premises reported that they did not regularly test their devices and did not know when the last inspection had been; and in 71 per cent of tanning salons the operating manuals for the beds were not available and there was no reliable oversight of the machines. Faulty machines can produce very high levels of radiation, cause burning of the skin and potentially lead to skin cancer.

It is interesting that in one-fifth of the tanning salons, the customers’ skin type was not discussed with them. Of the indigenous population of Northern Ireland who felt that they had very dark skin, 40 per cent were skin types I and II—light-skinned people who are particularly at risk. People with skin types V and VI—dark Asian or black skinned—are much less open to damage from UV rays. If you combine badly managed enterprises with people who do not know their own risk factors, you could end up with a potentially lethal situation.

Worryingly, the study found that in 38 per cent of cases people were charged for using protective eye goggles. We know that these machines can cause severe damage to eyes and, particularly, cataracts. All in all, the findings from Northern Ireland are very relevant to England and Wales.

Other studies, such as the one carried out at the Ninewells Hospital in Dundee which was a precursor to some of the Scottish measures, have also found that the levels of UVB radiation from machines were increasing; the machines are becoming much stronger than they were in the past.

I said that I do not like cherry picking from other jurisdictions but in America, William James, the president of the American Academy of Dermatology, said that his group has seen a startling increase in skin cancer among women in their teens and twenties. He went on to say:

“What was formerly considered a disease of older men is ballooning in young women, the very target audience and the number one customer of the tanning industry”.

My colleagues in Liverpool, where we know there is a particular problem, are very supportive of the Bill. Ron Gould, a Liberal Democrat councillor, has been working for a number of years to try to bring about exactly the sort of measures contained in the Bill. He wishes to see them on a statutory basis so that local authorities can go after unlicensed premises which are acting unsafely and target particularly vulnerable groups within the city’s population. There are more than 300 premises with sunbeds in Liverpool and across the Mersey on the Wirral, and an outbreak of dermatological problems at some of them is becoming very serious.

The evidence base is sufficiently strong for us to accept the Bill; it may not be perfect but it is a good way to proceed. It does not, for example, limit the access of children and young people to private sunbeds—that is outwith its ambit—but it makes a start. I have one reservation. We are placing yet another duty on local authorities, albeit not one of the biggest. The duty will also fall disproportionately on different local authorities. I therefore ask the Minister whether the department might work with those local authorities in which there is a particular incidence and prevalence of the problem not only to assist them with ensuring that there is compliance but in funding targeted awareness campaigns. One thing that is becoming very apparent is that we do not just have the broad headlines on health and illnesses associated with this; we are getting very good at mapping to a high level the incidence of this in the most vulnerable communities.

All in all, this is a good piece of legislation and I am very pleased to lend support from these Benches.

My Lords, I begin by saying that I have nothing but praise for the noble Baroness, Lady Finlay, for bringing forward this Bill today and for introducing it so powerfully and so well. In adding my strong support for all that she has said, I declare an interest as chairman of RAFT, the Restoration of Appearance and Function Trust, a medical research charity which for many years has been carrying out ground-breaking research into the prevention and treatment of skin cancer. The work of RAFT, which incidentally runs much wider than just skin cancer research, is unique in the medical research world, and I am proud to be associated with it. The entire board of trustees at RAFT is, needless to say, behind this Bill to a man and woman.

Whenever we regulate to prohibit an activity we have to ask ourselves two key questions. The first question is whether the case for prohibition is based on good scientific evidence of actual harm being done; and the second is whether the aims underlying the regulation could be achieved equally effectively by other means. I am absolutely clear that this Bill passes both tests. The science behind it is now indisputable; we know that melanoma is now the most common cancer in young people aged 15 to 34 and that it kills more than 2,000 people every year. Its incidence is doubling every 10 years. Although women are more likely to contract it, men are more likely to die from it. Its incidence is associated with affluence, and is highest in south-west England, though it is also high in much of Scotland, Ireland and southern England, perhaps because of the high numbers of fair-skinned people in those areas.

We also know that sunbeds contribute to the annual death toll from skin cancer. The International Agency for Research on Cancer recently stated that there is, “no doubt sunbeds cause cancer”, upgrading sunbeds to be definitely “carcinogenic to humans”, with a 75 per cent increased risk in melanoma in people who started using sunbeds regularly before the age of 35. The new assessment puts sunbeds on a par with smoking or exposure to asbestos. Sunbeds emit high-intensity radiation over a short time, which is predominantly UVA. Those intensities can be equivalent to or higher than midday Mediterranean sunlight. A study last year by DeAnn Lazovich et al, based at the Division of Epidemiology and Community Health in the United States, concluded:

“Melanoma risk was particularly pronounced among users of high intensity … devices and high pressure … devices. Risk increased as the total years …, total hours … or total sessions increased … Conclusions—Because prevalence of exposure was high and detailed lifetime information about indoor tanning use and potential confounders were collected, this study overcomes many of the limitations of earlier reports. Our results provide strong evidence that indoor tanning is a risk factor for melanoma”.

In a large cohort study conducted by the Karolinska Institute into indoor tanning and melanoma risk, the authors conclude:

“Solarium use in early adulthood and midlife increased the risk of melanoma in this large cohort study”.

Sharply increased numbers of melanoma cases in Iceland have been associated strongly with sunbed use in a recent international study, which concludes:

“It is highly plausible that the high prevalence of sunbed use contributed to the sharp increase in incidence of melanoma in Iceland, especially of trunk melanoma”.

While it is right for me to add that the three papers I have mentioned have not yet been peer reviewed, they were all presented at the 7th world melanoma conference in Vienna last year. All of them confirm what Cancer Research UK and the WHO have been saying for a considerable time on the basis of quite separate evidence. The recent COMARE report has added to that evidence. The bald fact is that the use of sunbeds by those under the age of 35 significantly increases the risk of developing skin cancer later on. In England, more than a quarter of a million children have used sunbeds. In some areas of the country, as we have heard, sunbed usage among teenage girls is extremely high, at around 50 per cent. It is clear that a lot of this usage is completely unsupervised, with coin-operated machines being accessible in some tanning salons without any restrictions or questions being asked. One should say here that members of the Sunbed Association take a responsible approach and abide by a very clear code of practice on these matters. However, members of the Sunbed Association account for only 20 per cent or so of all sunbed outlets; the rest are not subject to any controls at all.

This is the point at which we have to look at regulation as being the only answer. Self-regulation and guidance simply have not worked, as the noble Baroness, Lady Finlay, said, because too many businesses operate outside it. Such self-regulation as there is in the sunbed industry is not for the most part subject to independent supervision. The Bill before us therefore takes what I believe is a proportionate approach by focusing on the risks to young people, in whom there is clear evidence of actual harm now being done, and in whom the most harm is done by sunbed usage, and by homing in on young people's access to commercial tanning salons. As we have heard, however, the regulation-making powers in the Bill would enable appropriate restrictions to be extended in due course to the hire or purchase of sunbeds by young people. It would be helpful to hear from the Minister whether the Government intend to consult on implementing measures in this context.

As we debate this Bill today, it is not possible for us to say whether we shall be able to scrutinise it in detail in Committee, because of the possibility that Parliament may be dissolved during the next couple of weeks. In these circumstances, I hope I may be allowed to ask one or two Committee-type questions relating to Clause 5 of the Bill and the power to require information to be provided to sunbed users. I welcome the clause, but seek guidance on its practical implications. Regulations under the clause could bring advertisements by sunbed operators either wholly or partially under statutory control, rather than being subject to control by the Advertising Standards Authority as they are at present. That concerns me, because advertising controls are one area of non-statutory regulation that is working well.

All the media channels that are currently being used by sunbed operators are subject either to the Committee of Advertising Practice's code, known as the CAP code, or the Broadcast Committee of Advertising Practice's radio advertising standards code, which are both adjudicated upon by the ASA. The CAP code will shortly be extended to other business websites and other online space. These codes reflect the provisions of the Consumer Protection from Unfair Trading Regulations 2008, including those on misleading or aggressive advertising. An advertisement may be considered misleading either by containing false information or else by omitting pertinent information. The codes also contain rules that advertising should not be a cause of harm, and there will shortly be additional rules relating to social responsibility. On top of that, under the current system there is proactive daily monitoring of advertisements in all relevant media to check on their compliance with the codes.

Both the Government and the Office of Fair Trading regard the ASA as the “established means” for enforcing the consumer protection regulations. Will the Government therefore consider issuing guidance to the Sunbed Association to make compliance with the CAP code a requirement of their own code in respect of on-premises advertising material as a means of helping sunbed operators comply with the legislation? For non-broadcast advertising, I am aware that there is a wealth of free advice available to businesses from the Committee of Advertising Practice, which would make this an attractive way forward for the industry. Broadcast advertising of sunbeds is in a different category, but there is no reason why radio advertisements should not be made subject to advance mandatory clearance by the Radio Advertising Clearance Centre.

With regard to the age restriction contained in the Bill, does the Minister acknowledge that the advertising codes are already capable of reflecting the law where access to products is restricted by age, which suggests that they could do so equally well and equally effectively in this context? What consultation will the department engage in to clarify the role of those responsible for regulating advertisements in this area?

On the face of things, part of Clause 5 looks otiose in that the existing advertising codes effectively prohibit sunbed operators from making claims about unproven health benefits in their advertisements. Am I right about that?

I end by expressing the hope that the Bill reaches the statute book. As a means of protecting the young, especially those from deprived backgrounds, it is a public health measure of the greatest importance. The provisions of the Bill enjoy the support of the BMA, the Local Government Association and the Chartered Institute of Environmental Health, and they have been subject to consultation. I believe that the Bill will enjoy wide public acceptance. I therefore wish the noble Baroness, Lady Finlay, all success after today in taking it forward to its parliamentary conclusion.

My Lords, I welcome the opening remarks of the noble Baroness, Lady Finlay, and I am delighted that she is taking this Bill through your Lordships’ House. I am happy to be speaking to it today and I repeat that the Government support it.

The Bill is about tackling a public health issue and protecting young people. As a result of this Bill, people will have a greater awareness of the risks of using sunbeds and of sun damage generally. It seeks to prevent under-18 year-olds from using sunbeds by making it a criminal offence for sunbed businesses to offer them sunbeds. There are also provisions that set the scene for future regulation of sunbed use. The Government have already made clear our commitment to consult on the further regulations as soon as possible after the Bill passes.

I join the noble Baroness in thanking Julie Morgan MP and Siân James MP for their work in getting the Bill through another place where it was clear that it had cross-party support. I am pleased to see that this is reflected in your Lordships’ House today. Quite simply, the Bill could save lives.

The noble Baroness has already outlined the scientific evidence and other noble Lords have given us the benefit of research. I do not intend to repeat all that, but it clearly shows that the evidence is there that sunbeds are a health risk when misused, and the risks are greater for young people. That is why there is a case for legislation.

Skin cancer is on the rise. Estimates suggest that skin cancer rates will triple over the next 20 to 30 years. Malignant melanoma is the most common cancer in young adults aged 15 to 34. One study estimated that melanomas from sunbed use cause around 100 deaths a year in the UK.

The International Agency for Research on Cancer now classifies the use of sunbeds in its highest risk category, category 1—carcinogenic to humans. That is the same category as tobacco. Research commissioned by Cancer Research UK found that in England 6 per cent of 11 to 17 year-olds had used sunbeds. These findings show that voluntary self-regulation by the industry has not worked and point to the need for legislation.

The evidence is clear and I hope noble Lords will agree that this is an important piece of legislation that will contribute to improving cancer outcomes and reduce the incidence of skin cancer. However, the dangers from using sunbeds are not only linked to skin cancer; as noble Lords have mentioned, there are other health conditions such as eye damage, photosensitivity and premature skin ageing.

Short-term ideas of beauty can have severe long-term costs. We need to challenge the idea that being tanned means being beautiful. As someone who is very light-skinned and burns easily in the sun—I get my sunhat out at the first sign of sunlight—I think it is important that we challenge this on the grounds that we can show that we are not prematurely aged because we protect ourselves from the sun. The Bill will raise awareness of the dangers of using sunbeds and protect young people.

In response to the questions put by the noble Baroness, Lady Barker, we will be working closely with the representatives of local authorities about all the issues to do with enforcement. Indeed, we have been liaising closely with the Local Authorities Co-ordinators of Regulatory Services regarding the costs of enforcing the Bill, and the costs were quoted on the basis of estimates provided by LACORS in the impact assessment that goes with the Bill. Obviously, much of the enforcement work can be carried out as part of routine inspection activity, and compliance and enforcement visits can be carried out on a risk-assessment basis.

Both the noble Baroness and the noble Earl mentioned the issue of raising awareness. The department has been involved in the SunSmart campaign for several years now, a campaign that is done jointly with stakeholders such as Cancer Research UK and which is designed to raise awareness of the risks of radiation and the risks linked to that from sunbeds. If the Bill is passed, it will ensure that there is a specific focus on sunbeds in future campaigns.

The noble Earl spoke about the regulation-making powers regarding sale or hire. There will be consultation on this because it is a statutory obligation. The noble Earl raised several questions about advertising. The noble Lord, Lord Smith of Finsbury, also wrote to me about precisely this matter. I reassure the noble Earl and the noble Lord that we will ensure that regulation-making powers, particularly under Clause 5(3), and associated enforcement activity do not duplicate legislation or enforcement regimes that are already in place and are already working well. We will not compromise the important role of the Advertising Standards Agency in this matter.

The noble Earl made an interesting and useful suggestion, which we should like to consider, about how to integrate the different regimes as we move forward. We will take note of that and investigate it. We are taking regulation-making powers on this but we will not be duplicating existing regulations, so we do not think that Clause 5 is unnecessary. I hope that that will reassure the noble Earl.

I am pleased to give the Government’s support to the Bill. I thank the noble Baroness, Lady Finlay, for championing it through your Lordships’ House, and I wish it well as it moves forward.

My Lords, I am grateful to all noble Lords who have spoken for the almost unanimous support in the House for the Bill.

I am grateful to the noble Baroness, Lady Barker, and to the noble Earl, Lord Howe, for having cited some of the dermatological research—I should perhaps have declared at the outset that I am married to a dermatologist, although he has not had any input into this Bill. This is a problem particularly of the fair-skinned, who burn much more easily and who are much more liable to be the group that, sadly, are caught up in the tanning culture. They get exposed to sunbeds as well as to the sun.

My other comment relates to the local authority burden. One has to remember that when a young parent dies of melanoma, leaving an orphaned child or two orphaned children, the cost to the local authority is massive. These costs are in completely different budgets but if we can cut down the mortality rate in young people and all that goes on afterwards, I suggest that a little bit of investment in driving up standards and inspections would be well offset, and probably more than offset—although, as far as I know, nobody has actually done the sums.

If I may comment on my visit to the salon, the information is not in the advertising. There is another layer of information that has to be much more personalised. It is usually women, but not always, who come in to use a sunbed. They misclassify their skin types, as was said so eloquently by the noble Baroness. They think that they are a darker skin type than they are. They are unaware of the number of moles that they may have. Those who have a lot of moles, or who have moles of different sizes and shapes, and pigmentation moles in particular, should not be using sunbeds. The appropriate use of eye protection is important. In the salon that we visited the salon owners had themselves made a face protector that people could use as one was not commercially available. They were aware of the risk to some people of parts of the face, which was good practice and we welcomed it. The information falls into many layers. It is not just the broad information that may be covered in advertising.

I am grateful to the Minister for her support for the Bill. I now simply ask the House to give it a Second Reading.

Bill read a second time, and committed to a Committee of the Whole House.

Manchester City Council Bill [HL]

Commons Amendments

Motion on Amendment 1

Moved by

My Lords, the two Bills that are before us today—the Manchester City Council Bill, followed by the Bournemouth Borough Council Bill—were deposited before Parliament as long ago as November 2006. While I will speak to the first Bill, I put on record that I do not intend to do the same on the second Bill, which I am dealing with on behalf of the noble Lord, Lord Eden, who sends his apologies that he is unable to be in the House this afternoon.

Since these Bills were deposited, they have taken up an enormous amount of parliamentary time and have been scrutinised in great detail by Select Committees in both Houses. There was a good debate in your Lordships’ House on Third Reading back in November 2007. Since then, there have been five separate occasions when the Bills have together exercised Members in the Chamber of the Commons. Commanding majorities in favour of the Bills were obtained on the numerous Divisions that were required in the other place. In both Houses, individual pedlars presented detailed evidence in support of their petitions. Both Houses have listened to the petitioners. The House of Lords Select Committee, chaired by my noble friend Lord Harrison, in allowing the Bill to pass, requested and obtained undertakings from the councils that their officers would be properly trained to enforce the Bills. The Commons Select Committee went a stage further and made a significant amendment. That is Amendment 1 in the Marshalled List, which is the only amendment in this first group of amendments.

Before turning to the amendments, I give a brief reminder of the purposes of these two Bills. They both deal exclusively with street trading and they are both well precedented. The most contentious elements of the Bills have been the alteration of the pedlars’ exemption, which I shall come to shortly. The Bills also extend the street-trading regime to the provision of services, which, I am informed, includes henna tattooing in Bournemouth and teeth whitening in Manchester. The Bills would also enhance the enforcement powers of council officers and the police by allowing them to seize articles in cases where they believe that unlicensed street trading is being carried out, and they would allow the court to forfeit those items.

Amendment 1 is the only amendment that was made in the other place by the Select Committee, after it had heard detailed representations from the promoters and the petitioners. Amendment 1 rewrites the key provision of the Bills—namely, Clause 5. As introduced, the Bills followed a fairly long line of precedents promoted by other local authorities. The provision would have placed a restriction on the exemptions that pedlars enjoy from the street-trading licence regime under the Local Government (Miscellaneous Provisions) Act 1982. The exemption allows pedlars to trade under the authority of a pedlar’s certificate, even in streets where the council has prohibited street trading. The Bill, as originally introduced and as passed from this House, would have restricted the pedlar’s exemption so that it applied only where the pedlar was trading from house to house. In other words, unless he was trading from house to house, he would need to obtain a street trading licence in controlled streets and would be prohibited from trading in prohibited streets.

In addition to allowing house-to-house trading, the amendment allows pedlars to trade in licensed and prohibited streets so long as they comply with a number of detailed restrictions. To some extent, that seems to put in statutory form the common-law rules that generally require a pedlar to travel as he trades. The councils accept that, with the amendments, there is now clear guidance for pedlars in Manchester and Bournemouth about many of the issues with which the councils were concerned, particularly those about pedlars who did not move on at all and would stay in the same street or use large barrows to display their goods.

Noble Lords may wish to know the councils’ views about the recent government consultation on pedlars and street traders in the context of this discussion. The councils welcome the fact that the Government have taken the matter up at a national level and wait to hear what proposals emerge. Of course, there is no certainty about what will emerge and, more importantly, when. If the Government take the view that the Bournemouth and Manchester Acts need amending as a result of their proposals, of course that can be achieved through government legislation.

My Lords, I am grateful to the noble Lord, Lord Bradley, for the explanation of the amendments. We have had a stream of such Bills coming through the House over the years. I very much hope that these will be the last of them. As he said, consultation is taking place at central government level out of which will come—I hope, because it is not a politically contentious matter—an agreed programme to be enacted when whatever Government we have have the time. It has long been inappropriate that we should deal with such local Bills on what is essentially a national issue. Now that consultation is in place, it seems entirely inappropriate that we should deal with any further Bills on the subject. We should wait for the national consultation to finish and proceed down that route. I hope that promoters of similar Bills that are on the stocks will not proceed with them in the new Parliament, or that if they do they will be given extremely short shrift. We have much better things to do with our time than to go through this tortuous private procedure in respect of stuff that is being dealt with at a national level.

That is not least the case because the human rights implications of such Bills are not properly dealt with in private Bill procedure. They are not dealt with by the Joint Committee and our own committee—the Opposed Bill Committee—refused to look at the subject. Particularly when we are clearly dealing with the human rights of pedlars and others in the Bill, it seems inappropriate that there be no proper consideration of the matter.

The original attempt—it has now been amended—by Bournemouth and Manchester to tie up pedlary was inappropriate when it was made, and is certainly inappropriate now. At this stage of the economy, we ought to encourage people to take up their own enterprises—to get involved in business and do something to help themselves out of the situation in which they find themselves. Being allowed to trade house-to-house and on the streets is a way in which some big businesses have been founded, as I am sure that the noble Lord is aware. We should not close that option out for people, merely for the sake of tidiness.

I am grateful to the other place for having made this major amendment. It improves the position considerably, but there are a few detailed matters on which I would be grateful for the detailed guidance of the noble Lord, Lord Bradley. Does “location” mean a static location—in other words, that I am standing five feet outside No. 15 Portobello Road, for example—or does it have a wider sense? Are we dealing with a point? What is the technical interpretation of the word?

What is the exact definition of a “bona fide customer”? If someone is inquiring about a pedlar’s wares, is he a bona fide customer or does he have to do something more to establish himself as one? Is anyone a bona fide customer who is in some way not a false customer—some aide of the pedlar who rushes up and starts inquiring about the goods whenever the local authority’s officials pounce?

What is the definition of “trading”? When these local authority officials are trained, what will they be told that trading consists of? A pedlar, as I am sure the noble Lord is aware, will spend a lot of time displaying and talking about the wares that they are selling. Is that trading, or does that require some active exchange of goods and money? I should be very grateful for the noble Lord’s help on those points.

I am grateful for the contribution from the noble Lord and I share his views regarding the desirability of national legislation on these matters. As he and I have rightly pointed out, a huge amount of parliamentary time has been taken up with a whole series of private Bills of an identical nature which have tried to achieve the same objective for different councils around the country.

On a number of occasions the noble Lord has raised these technical and detailed matters, and they have been very carefully scrutinised by the Select Committees on issues of trading, location and suchlike. Guidance has been emanating from local councils to ensure that these definitions can be properly pursued in due course. I am sure that he will have looked carefully at those deliberations and that as these Bills come into force, we will be able to look carefully at the issues he raised and ensure that they are properly progressed by those local authorities.

Motion agreed.

Motion on Amendments 2 to 10

Moved by

My Lords, I move on to the second and final group of amendments, Amendments 2 to 15. All were made at consideration stage in the other place and were tabled by the honourable Member for Christchurch, Christopher Chope. Mr Chope has been a gritty champion of the petitioning pedlars’ cause over the past few years. The promoters, in wishing to draw the remaining stages of the consideration of the Bills to a close, decided to agree to a number of Mr Chope’s amendments, with which we are now dealing.

In short, these largely technical amendments have four main purposes. First, Amendments 2 to 8 alter the test that a council officer or constable must satisfy before taking action under Clause 6 to seize items connected with unlawful street trading. In general terms, before the amendments were made, the test was that there had to be reasonable grounds to “suspect” that an offence had been committed. With these amendments, the test is that there should be reasonable grounds to “believe” that an offence had been committed.

Secondly, on Amendment 9 to Clause 7, if the council seizes an item under Clause 6, it has to be returned at the end of the relevant court proceedings unless certain circumstances apply under Clause 7. One of those is that any award of costs made in favour of the council has to be paid within 28 days. Amendment 9 removes a clarification which stated that those costs must include removal, storage and disposal costs.

Thirdly, on Amendment 10, Clause 9 sets out circumstances in which compensation is payable for unlawful seizure of items under the Bill. One of the circumstances, unsurprisingly, is that the defendant in the proceedings has been acquitted. As the Bill stood, this was qualified, in that the defendant would have to wait for any compensation until the time allowed for appealing against an acquittal had expired. That qualification is removed by the amendment.

Finally, Amendments 10 to 15 have the unfortunate effect of removing Clauses 10 to 14, but again, that is a sacrifice that the promoters were, in the end, content to make. Those clauses would have enabled the councils and the police to deal with street trading offences by way of fixed penalty notices.

At this point, I should mention the consequential amendments in my name. As a result of the late concession to Mr Chope on the deletion of Clauses 10 to 14, there was no opportunity to make the amendments necessary elsewhere in the Bill where the fixed penalty notice clauses are mentioned. Therefore, my Amendments 11A to 11F would achieve that tidying-up exercise. I beg to move.

Motion agreed.

Motion on Amendment 11

Moved by

That the House do agree with the Commons in their Amendment 11 and do propose Amendments 11A to 11F as consequential amendments to the Bill.

11: Leave out clause 10

11A: Page 4, leave out lines 26 to 28

11B: Page 4, leave out line 39

11C: Page 4, line 40, leave out “(b)” and insert “(a)”

11D: Page 4, line 42, leave out “(c)” and insert “(b)”

11E: Page 6, line 6, after “seizure” insert “and”

11F: Page 6, line 8, leave out from “seizure” to end of line 10

Motion agreed.

Motion on Amendments 12 to 15

Moved by

Motion agreed.

Bournemouth Borough Council Bill [HL]

Commons Amendments

Motion on Amendment 1

Moved by

My Lords, I have already spoken to this amendment, having referred to it in the previous debate. I beg to move.

Motion agreed.

Motion on Amendments 2 to 10

Moved by

My Lords, I take this opportunity to say that I think this House should be grateful to my honourable friend Mr Chope for what he has done to this Bill. Perhaps when time permits, we should contemplate our own procedure on private Bills to see why it is so difficult to achieve something like that in this House, which should be the contemplative and practical House. Pedlars have been very lucky to find a friend in Mr Chope but I think that our own procedures have not stood the test.

Motion agreed.

Motion on Amendment 11

Moved by

That the House do agree with the Commons in their Amendment 11 and do propose Amendments 11A to 11F as consequential amendments to the Bill.

11: Leave out clause 10

11A: Page 4, leave out lines 26 to 28

11B: Page 4, leave out line 39

11C: Page 4, line 40, leave out “(b)” and insert “(a)”

11D: Page 4, line 42, leave out “(c)” and insert “(b)”

11E: Page 6, line 6, after “seizure” insert “and”

11F: Page 6, line 8, leave out from “seizure” to end of line 10

My Lords, I spoke to these amendments with Amendment 2 on the previous Bill and do not intend to repeat my words. I beg to move.

Motion agreed.

Motion on Amendments 12 to 15

Moved by

Motion agreed.

House adjourned at 3.33 pm.