House of Lords
Wednesday, 7 April 2010.
Prayers—read by the Lord Bishop of Gloucester.
NHS: Dog Attacks
My Lords, in the financial year 2008-09, the latest year for which data are available, there were 5,221 hospital inpatient admissions in England where the cause of injury was recorded as being bitten or struck by a dog. The figure does not include people attending only accident and emergency departments for treatment or those attending their general practitioner.
My Lords, I thank the noble Baroness for her Answer. Given that the majority of dog owners are responsible people—and I declare an interest as a past dog owner—it is extremely disappointing that the Government have failed to ensure that irresponsible dog owners are held to account for the increasing numbers of attacks by aggressive dogs. The public need to be reassured. Are dog owners to be issued with ASBOs if their dogs cannot be issued with DOGBOs? Are there any data to identify which breeds are more prevalent in the attacks, and if so, are the Government using these data?
The Government launched a review of the Dangerous Dogs Act on 9 March and it will finish on 1 June. The noble Baroness is right that the legislation covering, for example, a person bitten in someone’s private home is currently covered only by the Dogs Act 1871. We intend to review that because it does not provide for redress. I am very happy to go into the details of which dogs are covered if the noble Baroness wishes me to—
My Lords, I will ask a health question. I am sure the Minister will agree that, at the other end of the spectrum, for many people, especially the elderly, a dog or a cat is a friend, and often a great mainstay in their lives. Can she say what consideration is being given to animals that help to keep people fit and healthy, especially if they have to go into hospital or long-term care?
The noble Baroness asks a very important question, and she is absolutely right. In many care homes and sheltered housing locations for the elderly the rules have changed over the past few years as people have recognised that having a cat, a dog or even a bird can be of assistance and provide company for people who are ill and possibly lonely.
My Lords, I declare an interest as somebody who bears the scars of an Alsatian. Can the noble Baroness say whether the Government are likely to follow the Scottish legislation, where dog control notices can be issued against people who have failed to control their animals? The notices require them to take a number of measures, such as keeping their animals on a lead or muzzled when they are in public, in order to stop accidents taking place.
I am aware that there is different legislation in the devolved Administration, and indeed there is a Private Member’s Bill in front of the Scottish Parliament at the moment. A number of the ideas being put forward in that Bill, such as dog control notices, have been mentioned in the consultation that we have launched and will be considered during that process.
My Lords, there have been a number of discussions with the medical profession about the importance of doctors in accident and emergency departments referring cases to the police when they feel that there has been a knife or gun attack. The General Medical Council has gone through a series of consultations on this subject. Have there been similar discussions about cases where dogs have clearly savaged individuals? Does the medical profession feel that such cases should be reported to the police?
Tragedies in which very small children have died in such cases are obviously not included in the Minister’s statistics. However, can she tell us whether the damage done to adults and children in such cases is just of a traumatic type, or is there any lingering transmission of disease from the dogs which necessitates longer hospitalisation?
My Lords, the Royal Mail pension liability is a matter for the company and the trustees of the pension plan. I understand the parties are currently working together to complete the ongoing March 2009 triennial plan valuation, which is scheduled to be finished by June of this year. The previous valuation in 2006 showed a deficit of £3.4 billion.
I thank the Minister for that Answer. The Government have failed to provide the legislative framework for the Hooper review, which would have provided reassurance for thousands of Royal Mail workers worried about their pensions, before a general election. How could the Government have been in power for 13 years and left such a mess and such insecurity for Royal Mail workers?
My Lords, I am struggling to come to terms with this new-found compassion for Royal Mail, which has not always been expressed in that manner by the Opposition. In relation to what the Government have tried to do, we have a good track record of investing heavily in Royal Mail. We have committed ourselves to universal mail provision. We have not held back in our support for Royal Mail. For example, in 2007 we provided some £850 million towards a £1 billion escrow account to support the pension plan, and we made available a further £1.2 billion for the company to fund modernisation.
My Lords, I fear the Minister is being somewhat obfuscatory in his answer. Only last week or the week before, many of us received a letter from Adam Crozier, the chief executive of the Royal Mail, indicating that the pension liability was £10 billion, not the £3 billion to which the Minister referred. I am sure he is aware of that. I am sure he is also aware that when the Postal Services Bill was going through your Lordships’ House, the noble Lord, Lord Mandelson, indicated that the Government were not prepared to do anything about the liability for the pension fund unless the necessary reforms to Post Office working were put in place. Is the Minister satisfied that Adam Crozier’s letter set out appropriate measures to put those reforms in place? If so, do the Government stand behind the liability?
That has not yet been fully validated because this matter is going through the proper valuation process with the trustees. We believe that the pension scheme is a matter for the company and the trustees to work out between them. We made clear our view that if we were going to take on that liability, it would have to be as a part of the Hooper review recommendations. They are threefold, as I am sure the noble Lord remembers, including external investment and the modernisation programme. The good news is that, as we speak, an agreement has been reached between the CWU and Royal Mail and a ballot will take place this week on the modernisation agreement, so there has been progress in the right direction.
My Lords, I believe that I have answered that question. It is not a question of saying whether the Government stand behind it. We believe that this is a matter for Royal Mail and the trustees. They are working to find a way forward. They have until June of this year and can apply to the Pensions Regulator to extend that deadline if necessary. We have proved that we support Royal Mail through the generous funding that we have given to the pension scheme and the modernisation programme. Nevertheless, we believe that at this point the obligation is on the company and the trustees to find a solution to this problem.
Does the Minister agree that among the wreckage that this Government are leaving behind, one of the great missed opportunities has been the failure to reintroduce the Postal Services Bill? He has already been asked a question about it that he has not answered. According to the First Secretary of State, that Bill was much improved and strengthened in this House and was the best chance of securing the universal postal service while protecting Royal Mail pensions. Why has he not reintroduced that Bill?
The First Secretary of State made it quite clear why we felt that we could not proceed at the time. We did not believe that the investment scenario was the right one to attract the necessary investor in the scheme and we do not believe that that situation has changed. We refute the political hyperbole of the noble Lord’s use of the term “wreckage”. Royal Mail has very recently concluded a modernisation agreement with the Communication Workers Union. We believe that to be a fundamental step forward in ensuring a modernised Royal Mail which will provide a successful universal postal service.
My Lords, does my noble friend agree with me that the steps the Government have taken in relation to the recession have probably restored the value of the pension fund by around 20 per cent, owing to the recovery that has taken place in the stock market?
My Lords, is the Minister aware that his replies will have given great comfort to a number of shyster employers and owners of companies with huge pension deficits who could follow the Government’s example and simply walk away if the employees do not do what they would like them to do?
That is a very florid interpretation by the noble Lord, Lord Tebbit. No, I would not agree with that. We have provided some £850 million towards a £1 billion escrow account to support the pension scheme and a further £1.2 billion for the company to fund modernisation. If you can find other companies that are doing that and walking away at the same time, I would be interested to hear of them.
Does my noble friend agree that it is rather unfair of the noble Lord, Lord Tebbit, to be talking about shyster employers, unless he is talking about those who keep coming out of the woodwork to support the Conservatives in the most partisan way during this election campaign?
My Lords, the Government’s approach to employment relations will continue to be guided by three key principles: fairness aimed at providing the necessary protection for workers; flexibility aimed at providing choice and opportunity for individuals, combined with the freedom for businesses to create wealth and employment; and partnership aimed at increasing the number of workplaces where there is mutual trust and well informed co-operation, which is surely the best foundation for solving business problems.
My Lords, I thank the Minister for that Answer. His right honourable friend the Schools Secretary says that it is not enough to protect front-line services, but that every aspect of every public sector employee’s job should be sheltered from the effects of Labour’s great depression. Does he agree?
No, is the short answer. I know that the noble Lord, Lord De Mauley, would seek to imply that somehow this Government are responsible for what has been widely accepted as a worldwide recession. We have already made clear our attitude towards public sector pay, for example.
I think that there was a touch of irony there from my noble friend. No, of course that would not help the situation. We value the public services. We know that they have a vital role to play in the future. We have made clear our commitment to front-line public services. Some financial savings will have to be made and we have indicated where those will take place.
Does the Minister not accept that there is a problem for this Government in presiding over an improvement in employment relations in the UK, when they are so dependent on funding the forthcoming general election with trade union money, particularly from the trade union Unite?
I suppose it was a vain hope. I would say only this to noble Lords: we have made absolutely clear our attitude towards the recent round of industrial disputes. However, the real analysis—if the noble Lord is interested in that—is a success story, because the number of working days lost this year remains very low by historical standards. In the 1980s, 7.2 million days on average were lost. I reject the view that somehow this Government are in hock to the trade unions. We believe in a responsible approach to employment relations which encourages both sides to resolve their problems.
My Lords, what we as a Government have tried to do is to act responsibly by indicating that in dealing with the deficit, some difficult decisions will have to be taken. Our record on unemployment is that we have created maximum employment over many years—it reached its height at something like 29 million, which is as near to full employment as one can get—and we do not believe that an increase in national insurance will have the effect that the noble Lord has predicted. Our main point is that we have been absolutely honest in saying that as we recover from the deficit, we will have to make difficult choices. I wish that the Opposition could arrive at the same conclusion.
My Lords, has the Minister observed, as some of us behind him have, that the three Questions that have been asked so far from the opposition Benches have all been supplied by central casting in such a way that all the questioners asking supplementary questions have had to resort to scripts?
Would the noble Lord accept that one reason why the number of industrial disputes fell in the 1990s was because of laws introduced by the noble Lord, Lord Tebbit, which the party opposite opposed? I was proud to serve as his junior Minister. Will he get the facts right? Compared to 1997, the number of working days lost last year showed a substantial increase. It has risen again this year in what many people describe as a simmering spring of discontent.
My Lords, I was wondering when the seasonal analysis would emerge. I thought preparation would be helpful, so I will quote from the Economist on 3 April, which stated:
“A quick look at the numbers confirms that modern fears are overblown. Despite the odd conspicuous walkout, industrial relations have been serene for nearly two decades ... Official statistics going back to 1891 suggest that strikes have never been less frequent”.
Unfortunately, this is not just due to the noble Lord, Lord Tebbit, but to a generally improved climate in employment relations, with fair and balanced legislation.
Media: Foreign Ownership
My Lords, I had thought of asking whether I could deal with the Questions en bloc, but I did not think it was procedurally acceptable—and as the Lord Speaker is here, I thought that I had better not.
The Government do not propose any new measures to regulate non-European ownership of British print media publications. The press is self-regulated, having adopted a voluntary code of practice which imposes requirements relating to accuracy and balance in reporting. Complaints are handled by an independent Press Complaints Commission.
I thank the very industrious Minister. In the mean time, does he feel that the famously flabby Press Complaints Commission has the true grit necessary to do effective monitoring over the election campaign period in order to ensure that the oligarch-owned monopoly area free newspapers do not dish out a relentless series of election news stories of a hardline capitalist nature to the detriment of the Liberal Democrat Party and other progressive parties?
My Lords, on the question of regulation, we strongly believe that a press free from state intervention is fundamental to a strong democracy. Of course, with that freedom comes responsibility, as well as an obligation to abide by the law. All newspapers, including foreign-owned ones, sign up to a self-regulatory code of practice covering accuracy and balance of reporting which is enforced by the Press Complaints Commission.
My Lords, we all accept the need for a free press but does my noble friend agree that there is something slightly the matter with foreign owners living abroad and with no loyalty to this country being able to control the editorial policies of our leading papers? Does he further agree that this is something that the Government should look at very seriously after the election? It is not democracy and it is not sensible.
We would not agree with everything that my noble friend says in relation to that issue; nor would we be able to say that we are opposed to any foreign investment in British newspapers. Whether the next Government will look at this issue is best left to them.
My Lords, is there not a great danger of our press being extremely vulnerable? We are told that the economics of the printed press are now extremely fragile. Do we have defences in place to stop major titles falling into the hands of foreign owners, in the way that our football clubs have done, without any proper check on the responsibility of those buying up such titles?
My Lords, the Secretary of State has powers to intervene and could do so if he believed that the merger might give rise to concerns relevant to the media public interest consideration, the need for accurate presentation of news and free expression of opinion in newspapers, and the need for a sufficient plurality of views in newspapers in the UK or a significant part of it. Therefore, where we feel that there is an undue monopoly, the Secretary of State has the ability to intervene. I quote a recent example although it happens rarely. The media plurality powers have been used only once so far—in relation to the proposed acquisition by BSkyB of a significant shareholding in ITV. That was a slightly different situation because it cut across the media rather than relating to just one aspect.
My Lords, is it not time that any acquisition of British media from abroad should be made conditional on compliance with EU regulations and the Press Complaints Commission editorial requirements, and that that condition should be enforceable by law so that the problems adverted to by several Members this afternoon would be avoided?
My Lords, to my knowledge they are subject to those regulations. The problems referred to so far have been of concern. There has been concern about the takeover of a couple of newspapers by one foreign owner, but that is all that has been mentioned so far. Therefore, they are obligated to subscribe to and observe the rules, both voluntary and compulsory, that currently apply.
My Lords, is there not something incongruous about national newspapers which trumpet in banner headlines that they know how the Government should run their business, and condemn them for how they do so, when their own businesses are in such a parlous condition that they have to sell newspapers such as the Independent for a pound to a foreign oligarch?
My Lords, is the Minister aware that the newspapers which most strongly support the Conservative Party are either substantially controlled by non-domiciles or are controlled in offshore tax havens such as Bermuda which minimises their tax contribution to the United Kingdom? Is there not a contradiction between their vigorous support for British national sovereignty and the determination of those who control them to avoid paying British tax?
My Lords, perhaps I may slightly correct the noble Lord: “former KGB” might be appropriate. I know he is a stickler for accuracy. We shall have to judge this takeover by what happens in practice. I repeat the point I made previously: all newspapers, including foreign-owned newspapers, sign up to a self-regulatory code of practice covering accuracy and balance of reporting, which is enforced by the Press Complaints Commission.
Business of the House
Motion on Standing Orders
That Standing Order 41 (Arrangement of the Order Paper) be suspended until the end of the Session so far as is necessary to give Her Majesty’s Government the power to arrange the order of business; and that Standing Order 47 (No two stages of a Bill to be taken on one day) be suspended for the same period.
My Lords, the Motion standing in my name on the Order Paper is customary at this point in a Parliament. It suspends two of our Standing Orders so that, before Parliament is prorogued later this week, the House may consider the items of business set out yesterday by my noble friend Lord Bassam of Brighton. I hope that the Motion will find favour with this House.
Given that one of the amendments to my Motion is about the Constitutional Reform and Governance Bill, it may be helpful if I make it clear that, following discussions between the main parties, agreement has been reached that Clause 53 of the Bill, which would have ended hereditary by-elections, will be withdrawn. The Government will also withdraw Clause 56, which would have made provision for the resignation of Members of this House.
In relation to the transitional provisions on the tax status of Members of your Lordships' House, an amendment has been tabled to provide for a three-year cooling-off period before a former Member of this House can take a seat in another place. The Government will also withdraw Part 3 of the Bill, which would have provided for a referendum on voting systems. I understand that my noble friend Lord Bach will also be in a position to offer concessions on some other matters as we progress this evening.
I realise that some noble Lords will be disappointed, but we have acted in good faith to achieve a consensus and, following those concessions, I believe that there is significant cross-party agreement for the provisions in this Bill. I beg to move.
Amendment to the Motion
My Lords, the amendment suspends Standing Order 49, which says that no amendment can be moved to a Third Reading of a Bill unless notice has been given to the Clerk no later than the day before and in time for it to be printed and circulated.
Obviously, the reason for tabling this amendment is that some of the Bills scheduled for later today, including the Constitutional Reform and Governance Bill, and tomorrow might need to have amendments tabled to them after Report, in time for Third Reading, so that we can avoid the dangers of rushing our process. Mistakes and errors of judgment can so often occur in the wash-up stage. I have experienced that in the past.
For brevity, I shall concentrate on one Bill, but from what I hear from several Benches, other Members of your Lordships' House may wish to contribute in regard to other Bills scheduled for today and tomorrow. At the outset, I wish to make one point clear: the Leader of the House said that the “main parties” agreed to the deletions in the Constitutional Reform and Governance Bill, but that does not include my noble friends on these Benches, nor do I believe it includes the Cross-Benchers, nor any Back-Benchers. I shall return to that point. We believe that the key clauses in the Bill should not have been struck out as part of the unholy alliance between the Government and the Conservative Front Benches. This casual and cavalier treatment of important issues does nothing for the reputation of your Lordships' House.
I was led to believe when I joined your Lordships' House that we were self-regulating, that we sought to be transparent and accountable, less partisan than the other place and that consultation was much more effective at this end of the building. Yet, on these negotiations, all the Back-Benchers, the Liberal Democrats and the Cross-Benchers have been excluded. This is not a wash-up, it is a stitch-up, and a squalid little stitch-up. It was conceived in speed and in secrecy behind closed doors. I would like to think that the Leader of the House and the Government Chief Whip did their best to ensure that the interests of your Lordships' House were represented in the negotiations. The facts suggest otherwise. It looks as if this was entirely dictated by Downing Street—either by the Prime Minister himself or the Commons Government Chief Whip.
In brief, our interests in your Lordships' House have been completely overruled. Why? Because the full reform of your Lordships' House has not taken place, and therefore the other place feels that they can snap their fingers at our interests. There has been plenty of time to bring forward proposals. The past 13 years have amounted to a missed opportunity. I want to concentrate on the issue of the continuation of the hereditary principle. Ninety-one weeks ago, a White Paper was produced, negotiated between the parties. At about the same time, there was a reference to electoral reform. Today, the Prime Minister is proposing a double referendum on those issues—13 years after the commitment was first made. Why should we believe this manifesto commitment when all the previous ones have been so clearly ignored?
This House deserves carefully managed stages to discuss the Bill and revisit all the Minister’s previous promises on the issues; hence our amendment. There is a whole catalogue of commitments made in Labour manifestos and publications over the past 13 years. Starting in 1996, Mr Tony Blair stated in his personal credo, which he titled, New Britain: My Vision of a Young Country, that he would bring,
“an end to hereditary peers sitting in the House of Lords, as a first step to a proper directly elected second chamber, and the chance for the people to decide after the election the system by which they elect the Government of the future”.
Then, the 1997 manifesto stated:
“The House of Lords must be reformed. As an initial, self-contained reform, not dependent on further reform in the future, the right of hereditary peers to sit and vote in the House of Lords will be ended by statute”.
The 2001 manifesto stated:
“We are committed to completing House of Lords reform, including the removal of the remaining hereditary peers, to make it more representative and democratic”.
At the last election in 2005, the Labour Party was quite sure, stating:
“In our next term we will complete the reform of the House of Lords so that it is a modern and effective revising Chamber”.
On 10 June last year, Mr Gordon Brown seemed to think that Labour had succeeded in that aim. He told the Commons:
“In the last 12 years, we have … ended the hereditary principle in the House of Lords”.—[Official Report, Commons, 10/6/09; col. 797.]
In the interminable debates on the Bill introduced by my noble friend Lord Steel, supported on all sides of the House, most notably by the noble Lord, Lord Norton of Louth, my noble friend reiterated the determination to dispose of this anachronism. Ministers have agreed on every occasion on its urgency and importance. Only a few days ago, on Second Reading of the Constitutional Reform and Governance Bill, the noble Lord, Lord Bach, repeated that commitment as being urgent. He said,
“we think strongly that the time has come to end the farce of these elections”.—[Official Report, 24/3/10; col.1051.]
Yet when it comes to the crunch, they take the earliest opportunity to capitulate to the dinosaurs on the Conservative Front Bench.
After 13 years of dither, delay and downright deceit, why should anyone believe another Labour promise on reform of the Lords? With Mr Brown, it is always jam tomorrow, but tomorrow never comes. Labour manifestos have been fantasies, and the one that Labour will publish in the next few days looks as if it will be just the same again.
I turn to the Conservatives. The noble and learned Lord, Lord Howe of Aberavon, with whom I enjoy debating, participated in an exchange of views on the electoral system and the coming election at a meeting at the British Academy on 10 March. He argued most persuasively that the only change that should take place in the forthcoming campaign should be a change of government and that after that there should be no other change whatever. That sits slightly uncomfortably with the Cameron campaign slogan, but I thought at the time that he was taking a characteristically independent line. I am not sure now; it might have been prophetic. The Conservatives are going to make the most serious sticking point of this wash-up process keeping things in this House precisely the same. “No change” seems to be the new Conservative slogan. So much for “Vote for change”. They will go into the election fighting in the last ditch to protect the hereditary principle in your Lordships' House, and they want to make certain at the same time that the public have no role whatever in deciding how our democracy should be reformed. Back to the future with the dinosaurs.
Where was that notable advocate of radical change in the composition of your Lordships' House, the noble Lord, Lord Strathclyde, who has argued so persuasively for this major reform? Did he take part in these dubious discussions between the Front Benches in the carve-up that has taken place in recent days?
It need not have been like this. We could have had a full Bill soon after the July 2008 White Paper on Lords reform. There was no progress because the Government were split. We could have had effective control against big money buying British politics in the Act in 2009. Was it not extraordinary to hear the Prime Minister at Prime Minister’s Questions today twice refer to the problems caused by the noble Lord, Lord Ashcroft, and the investment of foreign, offshore funds in British politics to buy seats? Was it not extraordinary to hear him referring to that when he and his Government have done nothing about it? How are they going to deliver it now if it is not in the Bill when it could have been? Similarly, on electoral reform, there was a complete failure to act on the promise and on the Jenkins report.
Whatever happened to the Prime Minister’s promise to surrender or limit the prerogative powers, not least the power to decide when to go to the country, to hold an election? Today, he says he is in favour of fixed-term Parliaments. That is a fat lot of use in the last few days of this five-year Parliament. What an extraordinary promise to make now. Why did he not process it when he could have done?
All these missed opportunities could even now be achieved if Ministers really care. The 1997 precedent, to which I made reference in the House yesterday, gives a mechanism for Ministers, if they so wish, to make serious progress on issues where there is cross-party agreement, not necessarily complete consensus around the House, but at least enough to carry the day in the normal democratic way in the Division Lobby.
This morning the noble Lord, Lord Mandelson, tried to pin the blame for yet more postponement of reform on these issues on the Conservatives. He asked us to believe that the 13-year delay had been caused simply by waiting for the right moment. With mind-boggling cheek, he said, “This is the beginning of reform”. This is not even the beginning of the end, it is not even the end of the beginning; we have not started. This is a sad, bad day for your Lordships' House. The Government are treating us as pawns in their electoral game. As so many Members of your Lordships' House have been saying in the past 24 hours, this is no way to do serious business. My noble friend Lord Shutt yesterday put it so well,
“the wash-up is a wash-out”.—[Official Report, 6/4/10; col. 1369.]
At the very least, there should be some mechanism by which the whole House is involved in discussions in the open with due time to assess priorities and practicalities. In the mean time, we are determined that there should be a proper process allocated for the limited changes that will be available to us in the Constitutional Reform and Governance Bill and in other Bills this evening and tomorrow. That is the purpose of our amendment. However, if the two other Front Benches are determined to defend the hereditary principle to the death—or perhaps I should say beyond—let them at least do it in full debate today, after this business Motion, rather than skimming over it at the bitter end, the fag end of this Parliament. I beg to move.
Is there a problem? I believe that this is a debatable Motion and therefore I shall start debating it.
I was shocked to hear that the only people who have been involved in discussions on this so-called wash-up have been the Government and the Official Opposition.
My Lords, I was not proposing to trouble your Lordships with my thoughts on my amendment at this stage. I thought that it might be preferable for your Lordships to listen to the noble Lord, Lord Tyler, and to consider, discuss and dispose of his amendment before we moved on to mine. However, I am in the hands of the House and will do whatever the House prefers. It seems from the various nods that I can see that your Lordships would like to hear from me now and I will formally move my amendment in a while.
My Lords, I suggest to your Lordships that the first instinct of the noble Lord, Lord Trefgarne, was right. What the noble Lords, Lord Tyler and Lord Trefgarne, want to do are two separate things, so I think that it would be wise for the amendments to be discussed separately.
If it is the will of the House, I will respond to the points made by the noble Lord, Lord Tyler. We can then do whatever the noble Lord, Lord Tyler, wishes to do, after which we can move on to the amendment in the name of the noble Lord, Lord Trefgarne. In response to the noble Lord, Lord Tyler—
I do not wish to be difficult, but things seem to have changed somewhat. I understood that these were two separate amendments and I was speaking to the first of them. Then the Government Chief Whip intervened to say that it had been agreed that both amendments should be taken together, which I accepted. However, the noble Lord, Lord Trefgarne, has now said that he had not accepted that the amendments should be taken together. As he rightly said, the amendments are totally different; they are about different things. I wish that we could get this cleared up, because I want to say one or two more things about the amendment in the name of the noble Lord, Lord Tyler. Are we taking them together or are we taking them separately?
My Lords, this is a self-regulating House. It seems to be the will of the House that, first, we take the amendment from the noble Lord, Lord Tyler, to which I think that the noble Lord is going to speak. When we have disposed of that, we will move on to the amendment from the noble Lord, Lord Trefgarne.
I thank the noble Baroness very much. I am glad we have got that clear. As I was saying before I was interrupted, the noble Lord, Lord Tyler, has made many good points in support of his amendment. But I am shocked that the discussions have been so narrow and between only the Government Front Bench and the Official Opposition Front Bench. I should have thought that in matters of this sort, there should be a wider discussion involving the Liberals and the Cross-Benchers. As an independent Labour person, I would not expect to be consulted, but it would be very nice if others could be consulted as well.
For those reasons, I support the amendment by the noble Lord, Lord Tyler. I will say no more on his amendment, but I shall speak on the amendment in the name of the noble Lord, Lord Trefgarne.
My Lords, I have no difficulty whatever with my noble friend’s Motion and I disagree very much with a lot of what the noble Lord, Lord Tyler, has said. This is not the first time that this situation has arisen. There is a precedent; namely, every general election. It is not a satisfactory way to make law. What worries me—it has happened in the past, but this is the first time I have had the opportunity to say so in either House—is that the laws we will pass will go before the courts and perhaps a fellow citizen will be disadvantaged because of poor drafting or an intention which was wrong.
No one ever goes back and says, “How on earth did Parliament pass this?” and someone then says, “Hang on a minute, it was done in wash-up”. I say that things are agreed between both sides in a very general term because of one good example that I always use; that is, the very first child support legislation in the 1990s. Everyone agreed that it was a good idea, but it was never properly scrutinised. As those who were Members of Parliament in the other place know, it was an absolute disaster and it was unwound because of the lack of scrutiny.
I have a suggestion. We are not very good at post-legislative scrutiny anyway and pre-legislative scrutiny has only just started. The consequence of not having fixed-term Parliaments is that we will always have a situation whereby there will be a great deal of legislation that we do not want to waste. Substantial effort has been put into a lot of it, although not all of it. It would be ludicrous beyond belief to waste it all. I shall make no point about any particular part of the legislation.
However, not all of that legislation is properly scrutinised. I think that there would be a case for institutionalising that this House—jointly preferably, but this House is the revising Chamber—should systematically say that an ad hoc committee of the House should look and monitor the wash-up package after six months and 18 months. It should get a report from the Clerk, the Clerk in the other place and the relevant department on how that legislation has worked. If defects are caused by the lack of scrutiny, the committee should find an institutional way to put them right before they become a disaster.
That would not need a lot of resources or cost a lot of money. Nor would it stop the difficulties and the rows that we will have now. But it would stop our fellow citizens being disadvantaged by laws being passed that have not been properly scrutinised and challenged. In a way, it would give this House a chance to get off its knees regarding scrutiny and revision relative to the other place. It would be a golden opportunity for us, while we still have our powers of scrutiny and revision, to say, “Look, we will do the wash-up, but by heavens we will monitor its effects on the public”. I think that that would be good for law-making in the future because it would mean that each wash-up would be a bit more efficient than the one before.
This would not solve the problem of the noble Lord, Lord Tyler, although I think that his suggestions are completely impractical, but for those of us who want to strengthen both this place and Parliament, this is an opportunity for us to say to the two Front Benches: what about having a look at monitoring wash-up legislation afterwards?
My Lords, will the noble Lord clarify whether he is suggesting a format such as the introduction of an amendment to each of the Bills going through in the wash-up with the proposal that such a monitoring exercise might be instituted, or does he have another proposal? It seems to be such a valuable proposition that it should in some way be institutionalised, but it is hard to see how that might be done without the possibility of introducing amendments at Third Reading.
I am not proposing this for today, but for after the election. When we come to set up our structures, there is no reason, whatever the fallout of the election, why this House should not look at how to progress through the next Session. I have suggested periods of six and 18 months. You cannot look at the legislation straightaway because it may not come into operation directly after Royal Assent.
This needs thinking about, but the wash-up today is not the time. That is my point on the suggestion, but I thank the noble Lord for his obvious support.
My Lords, funnily enough, I have some sneaking sympathy for the noble Lord, Lord Tyler, which I know is probably quite an unpopular thing to say from the Tory Benches at this moment. But I say it because had the noble Lord been in the smoke-filled room, he could not have got out of the consequences, which now he can.
The noble Lord is right when he says that an enormous number of the things the Government said they were going to do have not been done, and that makes it even worse that everything is coming through right at the end during the wash-up period. I am going to go on saying this tonight again and again because I feel so strongly about it. Things that would take a two-thirds majority of American states and a similar majority of the Senate to get passed are going through in our Bills without even being looked at in the Commons, let alone here. That is a completely and utterly disgraceful way to deal with legislation.
If we are going to have a wholly appointed House, I would accept that there is no need for hereditary Peer by-elections. As I have conceded several times in your Lordships’ House, I am the first to say that the reason I am allowed to boss you about is because one of my forebears got drunk with Pitt or Walpole—a form of “Thank you very much for that last bottle of port”—but that is not acceptable in a modern state. However, we were left here quite specifically to make sure that the House was not an appointed Chamber. My noble friend Lord Cranborne said, certainly privately to me and probably on the record, that he did not trust anybody to go to stage two because a fully appointed House would be too convenient for the occupiers of those smoke-filled rooms. That is why the Liberals have got it wrong about hereditary peerage by-elections. I know that I am in a minority in this opinion, but the dottier the system, the more it forces people to consider an at least partially elected second Chamber. That is what we have to have so that we can use our very considerable powers properly.
On the noble’s point about the referendum on voting, that was a choice of one rather than between all the different kinds of proportional representation. It was a sort of galloped-at fence, hoping that nobody would notice, as well as being a sop to the Liberal Cerberus. It has not worked because they have whipped the sop away.
My Lords, I hope the noble Earl will forgive me for intervening briefly to say that the issues he is raising in this debate relate to policy. Later on, when the constitutional reform Bill is before us, there will be many opportunities to debate policy. At the moment, however, we are speaking specifically to the Motion I moved and to the amendment moved by the noble Lord, Lord Tyler.
I shall respond to two or three issues that have been raised. In response to the amendment to suspend Standing Order 49, I understand the arguments that the noble Lord has put. However, that has not been customary in recent wash-ups and we have done very well without the suspension of that standing order, so I would personally prefer not to suspend it today.
With regard to the process of the wash-up, as my noble friend Lord Rooker and others have said, it is a tried and tested procedure that has been going on for decades.
The Chief Whip used the word “tradition” about four times yesterday, and now the noble Baroness is using the term “tried and tested”. What she and both sides have to realise is that this system of wash-up is washed up. It has no credibility.
The reason why I am intervening, and I hope that I am being constructive, is that I wish I had said what the noble Lord, Lord Rooker, said. We are going through this process now, but this has to be the last wash-up of this kind. If the noble Baroness has any sense—I hope that the Bench opposite her has as much sense—she will listen to what he says and act on it to ensure that this never happens again.
The noble Lord had not finished listening to what I was going to say. I was going to say two things. The first was a bit cheeky: in government, we have understood for many years how wash-up works, and perhaps it is because the Liberal Democrat Benches have not been in government for some time that they are not aware of these procedures. However, that is a rather cheeky thing to say.
I have watched some bad things go through in wash-up; there have been mistakes, which have been acknowledged and have had to be tidied up later. My recollection of wash-up is that it is non-controversial things that go through, not highly controversial issues. This is a misuse of the wash-up process.
My Lords, if the noble Earl wished, I could seek information that detailed a number of very controversial Bills that have been subject to the wash-up process in the past.
I was going to say in response to my noble friend Lord Rooker that he made some very good points. This is a process about which many people clearly feel uneasy, if I might put it like that, and so perhaps we should be looking at it. However, now is not the time to do that. We are where we are. Today I have an obligation, as Leader of this House and Leader of the government Benches, to get our legislation through. I am delighted that we have found a consensus with noble Lords opposite—
Will the noble Baroness give a little thought to the proposition that over the years, instead of the wash-up procedure applying to a small number of Bills, a larger number of Bills have been subjected to it? There is great resentment about that.
The only point on which I would disagree with the noble Lord, Lord Rooker, is that he referred to the mischiefs that arise because we do not have a fixed-term Parliament. On this occasion, it was a fixed-term Parliament—everyone has known that it was going to end round about now—and it really was not sensible of the Government to bring forward so much controversial legislation so late.
My Lords, I understand what the noble Lord is saying. He would not expect me to agree with him on every point he makes, but I accept what he says. As I say, following this election, we should all, as legislators and Members of this House, perhaps in discussion with the other place, seek better ways of engaging in the wash-up process. That, though, is for then. Now we have the Motion in front of us that I have moved, and an amendment from the noble Lord, Lord Tyler, with which I fundamentally disagree.
With regard to issues relating to the reform of this House, which will be dealt with later on in today’s debate, I would point out that this Government have done more than any other Government in 100 years to reform this House.
What about life Peers?
As is common on all sides of the House, I have the greatest respect for the noble Baroness. However, she admits that this is a highly unsatisfactory process and that we should seriously look at changing it in the new Parliament. If it is highly unsatisfactory, we should not go along with it now in the way she would like us to.
I have been a Member of one or other of the Houses of Parliament for 36 years—I realise a number of noble Lords have been here longer—which is a reasonable amount of experience. I have never known the wash-up process to be used on this huge scale, which is quite exceptional and undesirable. When I say “huge scale” I mean in the light of the criteria which are normally used and the substance of what is being washed up. As my noble friend Lord Tebbit said, this procedure gives an incentive for a Government to introduce a swathe of contentious legislation at the last moment in order that it may be rushed through in the wash-up without adequate scrutiny. That is clearly an undesirable precedent and we should not go along with it.
The wash-up is needed. I was involved in a wash-up before the 1979 election when the Labour Government introduced a finance Bill which, for practical and legal reasons—including the income tax laws and the Provisional Collection of Taxes Act—had to be rushed through. That is one category that has to go through. There were meetings between the noble Lord, Lord Healey—
It is a long intervention. The noble Lord, Lord Healey, the noble and learned Lord, Lord Howe, the noble Lord, Lord Barnett—I am anxious to hear what the Leader of the House has to say—and I took part in those meetings and we agreed on that Bill. Other legislation which has been given a great deal of scrutiny in both Houses reasonably needs to be completed, and legislation of an emergency nature—such as terrorism legislation—also needs to be rushed through.
I shall conclude briefly. The Constitutional Reform Bill is a major constitutional measure which has not been adequately or properly scrutinised and should not be part of the wash-up.
The noble Lord is making valid points but he is trying the patience of the House; at this stage we need to move on. However, I should say three things to the noble Lord. I did not say that this is an unsatisfactory procedure; I said that many people feel uneasy with it. That is why, after the election, we should look at it; it is not an unsatisfactory procedure. I should also say to the noble Lord that the scope of the wash-up has not changed. I hear what he says about the Constitutional Reform Bill, but that has not changed. During wash-up, Governments do not put matters into Bills; they take them out. With that, I shall sit down and turn to the noble Lord, Lord Tyler.
I have never been so popular, my Lords. I hope all Members of your Lordships’ House will recognise that this modest amendment simply says that we can improve the process. It is not suggesting that we should throw it out, that we should stop or go on all night; it simply seeks to ensure that we put on record the needs of this House—not of anyone else—for a better process. That issue has been reflected in all the contributions that have been made, except, of course, from the Government Front Bench. The noble Lords, Lord Rooker, Lord Tebbit and Lord Lawson, have all expressed anxiety about the process. It is a simple amendment, a simple suggestion; I wish to test the opinion of the House.
Amendment to the Motion
My Lords, the second amendment to the Motion in the name of the noble Baroness stands in my name. As this is a manuscript amendment and has not therefore appeared before today, I hope that your Lordships will forgive me if I read it. It is to the effect that we should add, at the end of the noble Baroness’s Motion, “except in its application to the Constitutional Reform and Governance Bill”.
I am not opposed to the principle of a wash-up process. It is right, is it not, that when Parliament comes to an end, particularly in slightly unexpected circumstances—as it did, for example, in 1979—there should be an orderly process of bringing important and uncontroversial legislation to the statute book, particularly where it has far advanced its legislative process. However, I put it to your Lordships that the Constitutional Reform and Governance Bill does not fall into that category. It is a major constitutional measure by any standards. It has not even been fully considered by the other place. When it was introduced there, there were some 50-odd clauses; it now has 94 clauses. More or less half of the Bill has not been properly considered by the other place and was introduced by the Government only in the very last stages of its consideration in that place.
Now it comes to your Lordships’ House. We have had a Second Reading; we are invited now to have a Committee stage to ram through the Bill, not only in Committee but in all its other stages, later today. This is a major constitutional Bill. A large part of it is to do with the Civil Service. I have no serious difficulty with what is proposed there, but we have been talking about legislation to regularise the Civil Service for 20, 30 or 40 years. It is not urgent that that goes through now. It could easily be in another Bill, properly considered in another Parliament. There are many other important clauses of the Bill with which I would not have any great difficulty. The noble Baroness referred to the provisions about non-domiciled taxation for Members of your Lordships’ House and of the other place. There are also provisions about whether Peers can leave the House if they are not prepared to comply with those conditions.
The noble Baroness has said that she intends to remove from the Bill the provisions relating to the ending of the hereditary Peer by-elections. Frankly, I do not feel terribly strongly about that. Although I am a hereditary Member of your Lordships’ House and had the benefit of being elected here back in 1999, I am one of a minority of Members on my side of the House who are in favour of Conservative Party policy—a largely elected House—on this matter. I recognise that there is a wide body of opinion which takes a different view from that. I am careful not to press my view too loudly in Conservative quarters on this side of the House.
In due course, no doubt, there will be legislation to deal with the by-elections and, perhaps, with the hereditary Peers. Last year there was a Bill from the noble Lord, Lord Steel, which would have ended the by-elections for hereditary Peers. I think it was the noble Lord, Lord Hunt, who, speaking from the government Front Bench on that occasion, gave me an assurance that the by-elections were part of the deal done back in 1999 and would remain in place until the whole of House of Lords reform was completed. I was very pleased to receive that assurance. I am therefore even more pleased to hear from the noble Baroness this afternoon that the proposals in the Bill to end the by-elections are to be removed.
This is a major constitutional Bill by any standards. It is not right that it should be whizzed through your Lordships’ House on a Wednesday afternoon, with all the remaining stages compressed into one and the Bill not properly considered. We will regret what we pass today if we follow that process. I beg to move the amendment in my name.
My Lords, I support this amendment. We are belittling ourselves and lowering the reputation of the House by indulging the thought that we may look at 45 pages of amendments to a major constitutional reform Bill, running through the evening and the night, and try to bustle them through. It seems so obviously out of place in whatever the wash-up procedure may be that, by any definition, we ought not to attempt any such posture.
We have quite often in this House criticised what has happened in the other place, such as the absence of a proper Committee stage on Bills. There have been Bills that have scarcely been considered properly in the other place. We have criticised that and said, “That it is not the way things should be done; we will do a proper job here”. That is, in my experience, what we do to the best of our ability, apart from during this wash-up process. I therefore strongly support the amendment. We should simply drop this constitutional reform Bill and decide that it will not be part of the package that is considered later today.
My Lords, very briefly, I support this amendment. I am not against the wash-up in principle, but this—I am told by my friends from all parties in the other place—is an abuse of the process. There has never been anything like this before. The noble Lord, Lord Rooker, as a rule, puts his hand straight on the point: there just is not time to discuss anything. That is the desperate sadness of today.
This Bill creates a most astonishing situation. I was a member of the Joint Committee. The evidence of the noble and learned Lords, Lord Irvine of Lairg and Lord Falconer of Thoroton, was that they would never have let this Bill be presented to Parliament as a draft Bill because it lacked conformity with the rule of law and with constitutional principle. Yet here it is today. How did it get there? It was because the Government destroyed the entitlement of the Lord Chancellor to withdraw, or amend substantially, a Bill for those reasons. They did it by setting up in 2007 the combined appointment of Lord Chancellor and Secretary of State for Justice, with the result that the governance of Britain triology that had never been anywhere near Parliament was pushed around with a lot of glossy paper. It had never been through Parliament and had never been discussed. It could then be implemented. Why? It was because there was no Lord Chancellor to advise the Government. Certainly, not even Homer could advise himself. So then you got in the position that the Government could govern by decree—and they did—and we are now in that situation with this Bill. I do not want to go back over abolishing the office of Lord Chancellor—we know all about that—but what has happened could not have happened if the Government had not abolished it. They did not do it by statute—it was not abrogated—they imposed this entitlement into abeyance, and there it is—in limbo.
One looks at the number of amendments on this Bill. There is certainly one to which I shall not speak, which proposes that if you have been here for about 30 years, you have to go—you are turfed out because you are too old. That is a matter for other people to decide, certainly not me. That matter is not perhaps so important but there are many amendments here that are. You cannot deal with the mass of these amendments. I wish to support all the amendments of my noble friend Lord Marlesford, but there is no time even to get up and talk to them. Frankly, one way or another, this Bill has to die. It cannot go through. We cannot go on past 10 o’clock to two or three in the morning as we did in the old days. When I first came here we went on all night, but there is no use in doing that. We cannot do it anymore. This Bill should just slumber and be taken away.
My Lords, I rise very briefly to support my noble friend’s amendment and concur wholeheartedly with the words of the noble Lord, Lord Neill. Your Lordships’ Select Committee on the Constitution produced a report on this Bill that was referred to by many speakers in the Second Reading debate. I am, as always, extremely grateful to the Minister, the noble Lord, Lord Bach, for his response, but time has precluded the normal debate on the report.
I shall cite two brief passages. First, we said:
“It is inexcusable that the Government should have taken so long to prepare this Bill that it has effectively denied both Houses of Parliament—and especially this House—the opportunity of subjecting this important measure of constitutional reform to the full scrutiny which it deserves”.
The committee went on to say:
“In any event, we consider it to be extraordinary that it could be contemplated that matters of such fundamental constitutional importance as, for example, placing the civil service on a statutory footing should be agreed in the ‘wash-up’ and be denied the full parliamentary deliberation which they deserve”.
Last year, the Select Committee on the Constitution published a report on fast-track procedures and said that it was a fundamental constitutional principle that proper consideration should be given to the scrutiny of Bills, even to the extent of taking multiple stages in one day. As my noble friend Lord Lawson said, this is not a trivial and uncontentious Bill; it is highly contentious. I agree, as always, with an enormous amount of what the noble Lord, Lord Rooker, said. The Bill is highly contentious and of fundamental constitutional importance. It should not be dealt with late at night. It should be put over into the next Parliament.
My Lords, I follow the noble Lord, Lord Goodlad, who reminded us of the observations of the Select Committee on the Constitution on this Bill. I agree with the comments in that report. I should therefore be supporting the amendment of the noble Lord, Lord Trefgarne, but I, and my noble friends and successors in office in the Civil Service want the Civil Service provisions to take statutory force. They are not perfect, but they are 95 per cent or 97 per cent perfect, and there may be chances at another time to make the small improvements that we seek. However, if the noble Lord, Lord Trefgarne, seeks to divide the House, I shall not be content with his amendment because I want Part 1 to go through. If the Government choose to be as ruthless as they like with other parts of the Bill, I shall be wholly content.
My Lords, 162 amendments to the constitutional renewal Bill have been tabled. How many days do we normally provide for 162 amendments? Is it three or four? How many days do we provide for a Report stage with 162 amendments? Probably another two days. I sound almost as if I am in support of the noble Lord, Lord Tyler, in his previous amendment. It is a quarter to five and we have not yet started to debate that Bill. We have another Bill to consider between now and then.
All right; we have four Bills before then. That makes it worse, does it not? Are we mad? This cannot be the way to consider constitutional Bills. I agree with the noble Lord, Lord Armstrong; we need a Civil Service Bill, but I agree with the noble Lord, Lord Trefgarne—that we have been saying this. I think that Harold Wilson—bless his memory—was saying this. Nothing happened then. Throughout my life I remember editorials in newspapers occasionally saying that we need a Civil Service Bill. Is it absolutely essential that we consider a Civil Service Bill which, as the noble Lord, Lord Armstrong, says, could do with some revision and gallop through it at God-knows-what time tonight? The principle of this procedure is so wrong that I will happily support the noble Lord, Lord Trefgarne—not because, as others have said, I necessarily disagree with things in the Bill. There is a lot of good in the Bill relating to the Civil Service, but there is also a lot of waffle about treaties. I see the arguments about hereditary by-elections, but that issue is linked with general reform of your Lordships' House—and we know how easy it will be to get that through, because every noble Lord has a different view about how we should proceed. That is one reason why nothing has been done since my great-grandfather talked about it to Lord Salisbury in the 1880s.
There is nothing new in these problems. Therefore, let us not abuse the system, which is what this is—abuse of the system by a Government who do not show Parliament the respect that it deserves. It is up to us to stand up for Parliament as a whole, to hold Ministers to account and very occasionally to say to them: “No, you cannot have your way. You have had your hands in the sweetie pot for too long and you will not get this sweetie because it is bad for you”.
My Lords, there is general agreement on the significance of the content of the Bill, including the schedules and the amendments that we have received. I have come but recently to this House and am learning about the process of wash-up. I am trying to understand what is going on and why the process exists. However, I find it shocking that we should even contemplate this abrogation of duties—because that is how I would see our conduct if we were to pass the Bill through the wash-up process. We have a duty to ensure that when we make major constitutional change, we do so in a considered and proper manner.
My Lords, I wish to be consistent with what I said at Second Reading, when I warmly supported the conclusion of your Lordships’ Select Committee on the Constitution. The committee was right to say that this is no way to carry through constitutional reform. I still believe that. I will make one point in addition to what I said the other day. There is much cross-party agreement that most of the content of the Bill is entirely acceptable to your Lordships. If that is the case, what is the problem with waiting until the next Parliament? Whichever party comes into power, there should be no problem, after the Bill has been properly scrutinised, in finding agreement on these points.
I take the point made by the noble Lord, Lord Armstrong of Ilminster, for whom I have the greatest respect. I understand from many of my friends in the Civil Service that they want this to happen. Well, let us see it happen early in the next Parliament. If there is that degree of agreement on all sides of the House that the content of the Bill is largely right, I do not see the necessity to push it through now. We can wait until whichever Government is in power after the election, when it will command the support of all sides of both Houses.
My Lords, if we were company directors trying to push something through like this on the governance of the company, we would be prosecuted, imprisoned and disbarred as directors: it is as simple as that. Therefore, I agree with the noble Lord, Lord Grenfell, that there should be no problem with either party presenting what will be substantially this Bill to the next Parliament.
My Lords, I support the amendment tabled by the noble Lord, Lord Trefgarne. To try to push through in the wash-up a constitutional Bill of 93 clauses, 133 pages and 15 schedules is a constitutional outrage. I sincerely hope that noble Lords on all sides of the House will support the amendment.
At Second Reading, Members who spoke in the debate were overwhelmingly critical of the Bill. I will quote one remark made by the noble Baroness, Lady Boothroyd. She made a very good speech. She asked,
“how many constitutional Bills have gone through … in wash-up in the past 10 years?”.—[Official Report, 24/3/10; col. 964.]
The answer by the noble Lord, Lord Bach, was “none”. In fact, the noble Baroness, Lady Boothroyd, said that she could not remember a more flagrant example of mismanagement of a constitutional Bill during her very long experience in public life. I believe that the House should take note of the comments of a very experienced, senior parliamentarian who was the Speaker of another place. If that is her view, all noble Lords should take it very seriously.
The noble Lord, Lord Armstrong, made the very valid point that many parts of the Bill—particularly the one concerning the Civil Service and the setting up of the Civil Service Commission—are wanted. However, I think that the noble Lord, Lord Grenfell, answered that by saying that a Bill could quickly be introduced in the next Parliament. There is of course another alternative: the four, not just the two, Front Benches should go away during the debates on the four Bills that are to be dealt with before the Constitutional Reform and Governance Bill to see whether they can thrash out something that will be acceptable to most people in this House. Going back to the noble Lord, Lord Armstrong, perhaps there are matters within the clauses dealing with the Civil Service that can be amended and the Bill improved. Therefore, I hope that noble Lords will support the amendment of the noble Lord, Lord Trefgarne, if he puts it to a vote.
My Lords, before the Government reply, perhaps I may deal briefly with the question raised by the noble Lord, Lord Armstrong. In the committee’s report, we recommended that the Civil Service aspect should be dealt with in a single Bill. In his evidence, the noble and learned Lord, Lord Irvine of Lairg, said that that was the only part of the Bill that was of importance. The Government are making a series of concessions on the amendments. If they were prepared to make a concession in accordance with the recommendation by the committee on which the noble Lord, Lord Armstrong, served, that could deal with his concerns. I do not know anything about the Civil Service but it is very important that people who do should be listened to.
My Lords, in view of the observations that the noble Lord, Lord Armstrong, made about the part of the Bill dealing with the Civil Service and in view of the long history of waiting for such a Bill, I would be extremely sorry to see that part disappear. Will the Leader of the House consider whether that part should be allowed to proceed and the rest of the Bill, some of which at least is highly controversial and certainly very constitutional in its character, be withdrawn?
My Lords, perhaps I may ask the noble Lord, Lord Strathclyde, a question before he comes to speak. In the event that the Trefgarne amendment was approved, proceedings on the Constitutional Reform and Governance Bill would effectively close. Can he assure the House that in those circumstances a Conservative Government, if by any chance they were elected, would give priority to a constitutional reform Bill, recognising that there are sections of the Bill that have to go through because the Commons needs them—in particular, the sections dealing with the parliamentary standards authority?
My Lords, or better, could the noble Lord assure us that, if he were to have the opportunity, instead of reintroducing a vast portmanteau of constitutional miscellaneous provisions, as this Bill effectively is, a new Government would follow better practice and introduce discrete legislation to place the Civil Service on a statutory footing and discrete legislation to deal with the IPSA? Would they also enable Parliament to look at those extremely important issues with proper care and not try to steamroller a whole bundle of things through together?
My Lords, I strongly support the amendment in the name of my noble friend Lord Trefgarne. This is all very disappointing. Although I have enormous regard for the Leader of the House, I stand on the basis of our duty as a House of Parliament—to some extent a sovereign House of Parliament. Last week, there was a parliamentary Question about a pageant for Parliament and I asked the Leader of the House whether we could not be proud of the House doing its job properly and scrutinising legislation put forward by the Executive. The Leader of the House replied as follows:
“My Lords, that is what we do day in and day out. This House in particular is extremely good at it”.—[Official Report, 29/3/10; col. 1184.]
I say, “Hear, hear” to that, but I am sorry that this appears to be a day out.
Whatever anyone says, this Bill has not been scrutinised; we cannot pretend that this very important Bill has had anything like the scrutiny that it needs. The point made by the noble Lord, Lord Rooker, was interesting, but, quite frankly, I am not sure that it is sensible to pass legislation on the basis that it is possibly deeply flawed and will need correcting in 18 months’ time. The noble Lord, Lord Rooker made the point that we must not waste the time that has already been spent on scrutinising it, but it would be much better to build on that time in a Bill in the next Parliament, rather than pass this Bill and then have to undo it all, which would take a great deal longer and would be much more untidy.
I have looked at some of the precedents. The Library has produced a very useful note of all the previous wash-up periods. It is absolutely true, as others have said, that we have moved into a new level of importance of Bills included in the wash-up. This is a crucial one. There is quite a good precedent in March 1997, the tail end of the Conservative Government. There was an attempt by the late Lord Ackner to omit the Crime (Sentences) Bill from the wash-up. I read the debate on that and the noble Baroness, Lady Williams of Crosby, said:
“The agreement that has been reached in another place is in no way binding on this House, which did not reach that agreement itself.
She went on to say:
“There can be almost no example more harsh of the power of the Executive than an agreement made between the two Front Benches without adequate consideration of the much wider considerations which cover this Bill”.—[Official Report, 18/3/97; col. 779.]
The late Lord Ackner moved his amendment, which was narrowly defeated by the then Conservative Government, who, at that time, had some 800 hereditaries still in the House. This is so clearly an important constitutional Bill and there is absolutely no reason to think that this Government, if returned, or the Conservative Government, if elected, would lose significantly by putting forward this Bill early in the next Parliament. I hope that noble Lords will agree with the amendment of my noble friend Lord Trefgarne.
My Lords, it seems to me that the issues are crystallising very clearly. It is all about the content of the constitutional reform Bill. If the Government are prepared to accept the proposal that the IPSA and the Civil Service are the only parts which remain in what should be the Civil Service Bill, it would be possible for my noble friend to withdraw his amendment and for us to proceed. If not, I fear that we are here for a very long time.
On that point, we are flying blind at the moment. I would like to pursue the suggestion made by the noble Lord, Lord Stoddart. We on these Benches would be willing to contribute to discussions to see whether parts of the Bill can be rescued. I say to the noble Earl, Lord Onslow, that actually the Civil Service Bill pledge is 140 years old: it was made by Gladstone. As I often remind this House, it is 100 years since we first looked at Lords reform, so suggesting that parts of the Bill are a bounce stretches the term.
I offer to contribute the not inconsiderable talents of my noble friend Lord Tyler to any discussions. I put it on record, so that it will save his speech, that my noble friend Lord Rodgers shares many of the misgivings about the constitutional Bill.
I must first declare an interest as a non-dom, and draw attention to the fact that when it came out in the open that I was not fully legally here, the Government promised that they would pass the legislation before the general election. Therefore, the point that the noble Lord just raised is of great personal interest to me as, without retaining the non-dom provision—I will not be the only one affected, there will be others—I understand that I will not even get a Writ for the next Parliament, which would be very disappointing after 30 years here.
I cannot possibly resist the invitation by the noble Lords, Lord Campbell-Savours and Lord Howarth, to respond about the intentions of a future Conservative Government—particularly when they failed to ask the same questions of those on their own Front Bench, clearly not expecting them to have a glorious fourth term. It has taken us a long time to get here, and far longer than I had anticipated. Indeed, I was preparing for the wash-up in October 2007. If we had dealt with it then, we would have had two and a half years of glorious Conservative government.
None of that changes the fact that this Parliament has only a few hours left to run. A large number of substantial Bills await completion. That is not a satisfactory position, as many noble Lords, including the noble Lord, Lord Rooker, have said. After 13 years in office, there is no need for last-minute legislation being made up on the hoof. After 13 years of experience, there was no need to overload a short fifth Session of Parliament, but this Government’s bad habits continue to the very last minute of the last hour, and we are now where we are.
In the Bills before us there are good ideas, bad ideas and, as in most Bills, unnecessary ideas. Parliament is faced with the dilemma of how to deal with them. The noble Lord, Lord Richard, standing in my place in 1997, told the House:
“It is right … that an opposition should co-operate with the Government in trying to succeed in providing a sensible ending to the Government's legislative programme. That we have done … I do not think that it is possible to unravel the package that has been agreed”.—[Official Report, 18/3/97; col. 779.]
We have sought to be as constructive as the Opposition were in 1997 and, indeed, as we were at the end of the Parliaments in 2001 and 2005. We have reached an understanding of measures that we believe can reasonably be recommended to your Lordships. There is a long established precedent referred to by the noble Lord, Lord Richard, in 1997, that this House should try to bring business to a reasonable conclusion in a seemly and agreed way in the last days of a Parliament. I think that we should stick to that. But—and this is reflected in the amendment moved by my noble friend Lord Trefgarne—while the content of the other Bills as amended is far less controversial, we recognise that the Constitutional Reform and Governance Bill is in a different category. It is shameful that Parliament finds itself in this position on the Bill. What humbug when we hear from the Prime Minister today that constitutional reform is his top priority. The Bill was introduced into the House of Commons in July 2009. It had a Second Reading there last October and had two days in Committee before being carried over with a view to getting it here early in this Session. Committee stage in the Commons did not start again until 19 January: 76 days after the previous Committee sitting. Nearly four weeks then elapsed between Committee and Report in another place and three weeks before it was given a Second Reading after introduction here. There is no reason, beyond the wish or the incompetence of the Government and Mr Straw, why we are now right up against the wire, so let no one criticise this House for looking twice at the Bill.
It is in many respects a highly controversial Bill covering a huge range of subjects with a Long Title that runs to 26 lines and fills a whole page. It is also the worst offender of all when it comes to being cobbled together as it went along, with measures such as electoral change being shoved in at the very last minute. In the Constitutional Reform and Governance Bill there are complex and far-reaching issues that would normally receive the fullest consideration in both Houses. There are also a number of issues that affect your Lordships. It is not satisfactory that these should have been pushed through so late and now so fast. Your Lordships’ Constitution Committee was right to warn of the dangers of the Bill as a whole being passed in the so-called wash-up. Before the Government’s press release machine starts to operate, let us remind ourselves that the Constitution Committee of your Lordships’ House includes the former Leader, the noble Baroness, Lady Jay of Paddington, the noble and learned Lord, Lord Irvine of Lairg, and the noble Lords, Lord Hart and Lord Pannick, who are some of the greatest luminaries of this House. It is not a Conservative Party stitch-up.
Significant areas of the Bill that was examined by the Committee have now been set aside, including plans to impose large-scale architecture for retirement without proper consideration by the House. It was quite wrong that your Lordships should not have full time to consider such proposals. Changes to the electoral system have also gone—quite rightly, I believe—but what is now proposed should remain and I believe it has broader support. There is, for example, the Civil Service part of the Bill where those of your Lordships, such as the noble Lord, Lord Armstrong of Ilminster, who have served at the highest level of the service have advised us that, on balance, it should go through. There are arrangements for parliamentary scrutiny of treaties, with which we have no difficulty, and we would support them if the Government continue to seek progress for them. I should also tell the House that in the event of a Conservative Administration after the general election most of the clauses in the Bill would not be a priority for us. That would include the Civil Service clauses. It is important that we should agree them in this Parliament.
If the House none the less feels that there is need for more time, I hope that what is not put at risk are two core areas of the Bill that have the widest cross-party agreement. The first is the provisions relating to the exclusion of non-doms from active membership of the House. I have expressed the view that, however difficult it was to draft it correctly, those who make UK laws should pay UK taxes. That is agreed by all the party leaders, and, with all respect to those who have honestly and faithfully served this House, I hope that these provisions will pass into law. The second vital area is the provision relating to the IPSA. These clauses affect the other place only. They were extensively discussed there and are wanted by all parties in another place in time for the start of the new Session.
The noble Lord says that those clauses affect the other place only, but how does a referendum on AV affect us? Does it not affect the other place only? What possible justification can the Official Opposition have for blocking a referendum that was carried by a two to one majority in the elected House?
The noble Lord simply does not understand where we now are. There are only a few hours left of this Parliament. If the Government continue to leave the clauses in, not only will we not get this Bill but we will not get any Bills, because the issue is so controversial, not least among people in the noble Lord’s party. The party of government has quite rightly decided to drop the clauses on proportional representation to save the rest of the Bill. I support the Government on that. There are also one or two minor parts—although I am sure that my noble friend Lady Gardner of Parkes does not think that they are minor for her—with which we would agree. For our part, we are alive to the mood and the will of the House, as I hope the Government will be, too.
My Lords, my noble friend says that he is alive to the mood of the House. The noble Lord, Lord Trimble, said a moment ago that there are three aspects of the Bill with which it is reasonable that we should agree—the Civil Service provisions, the IPSA provisions and the non-dom provisions—and that everything else should be dropped. Does my noble friend agree that that seems to be the will of the House? The will of the House might be tested on that, but that might be a sensible outcome.
My Lords, that might very well be a sensible outcome, but I wish to hear from the Government first, because they must have an opportunity to consider the debate that has taken place in the House this afternoon. After all, we will not be dealing with the legislation for a few more hours yet.
Because of everything that I have said, I hope that by now my noble friend will have realised that I cannot support his amendment, as it would frustrate the passage of what will be a truncated Bill, which we and the Government have in good faith agreed and recommended. I hope that, after the Leader of the House has spoken, my noble friend will withdraw his amendment so that we can finish this Parliament as quickly and in as seemly a way as possible and look forward to a new Government and a new Parliament, where I hope that we will legislate a little less and a little better.
My Lords, interestingly enough, I think that this has been a good and useful debate. I will answer one point that has been made before I get to the crux of the matter. I hold the noble Lord, Lord Goodlad, and the work of his committee in the greatest esteem. This is clearly not a trivial Bill; it is a very significant Bill. However, I think that most noble Lords are concerned about the process, not the contents, of the Bill. I hear what the noble Lord, Lord Strathclyde, says about the process. I listened to and read the Second Reading debate and I am acutely aware of the discontent around the House about the process of the Bill. However, it has become clear in this afternoon’s debate that there is consensus around three or four parts of the Bill—
No, my Lords, I would say three or four. Let me enumerate them. I am talking about the Civil Service clauses, the IPSA clauses, the non-dom clauses and the clauses that are of special importance to the noble Baroness, Lady Gardner of Parkes. That is four issues. I think that we could find consensus around those four specific issues.
This is a government Bill, but of course it is not my Bill. As noble Lords would expect, it is my duty to go back to my right honourable friend the Secretary of State and Lord Chancellor to discuss with him how he would like to proceed. I will suggest to him that we have a meeting and that we have discussions of course with the noble Lord, Lord Strathclyde, for whose co-operation I am grateful, the noble Lord, Lord McNally, and the noble Baroness, Lady D’Souza.
The noble Lord says “Hey”. Cross-Benchers, such as the noble Lord, Lord Armstrong, are playing a key role in this Bill. When we look at the Civil Service provisions, we should look at the enormous expertise of people such as the noble Lord, Lord Armstrong. That is why I suggest that we also listen to the noble Baroness, Lady D’Souza. I am not saying that this is a precedent—
Before the Leader of the House comes to a conclusion, and while welcoming what she has said about further discussion, will she bear in mind that this debate has not expressed the views of all those who have remained silent? It has been dominated by those who for a miscellany of reasons would like the Bill to make no further progress. The fact is that most of us agree with her that the procedure which has been followed was unsatisfactory. But most of us believe, notwithstanding that, that large parts of the Bill were considered by the Joint Committee, and other parts of the Bill were brought forward because of the sheer necessity of restoring trust in Parliament. That part of the mood of the House should not be overlooked in any further discussions.
My Lords, the noble Lord makes an excellent point. I completely agree with him that—to use a mixed metaphor—the voice of the silent majority should not be overlooked. I totally understand where the noble Lord is coming from. It may be that there can be even broader agreement in relation to other parts of the Bill. I do not know. These things need to be explored.
At this point, I would echo the views of the noble Lord, Lord Strathclyde, and I, too, would ask the noble Lord, Lord Trefgarne, to withdraw his amendment and allow us to go back to have discussions with my right honourable friend the Secretary of State for Justice to see how we can proceed. Many elements of this Bill are of the utmost importance. We have heard from the noble Lord, Lord Strathclyde, that, should there be an incoming Conservative Government, the Civil Service would not be at the top of their legislative list.
A huge amount of work has gone into, for example, the Civil Service parts of this Bill. There has been detailed scrutiny of that part of the Bill. I would agree that that perhaps was not in this House, but in other parts of Parliament. I certainly—
My Lords, I should like to make a procedural point of considerable importance. In sitting down, the noble Baroness is inviting my noble friend to either withdraw or insist on his amendment. He is being asked to do so before we know what the answer of her right honourable friend will be when he comes back. Surely, the proper procedure is to adjourn this debate, continue with other business and return to it when we have the answer.
My Lords, at the moment we are debating a Motion which I tabled. The noble Lord tabled an amendment. It is correct procedurally that we follow that procedure. I am trying to facilitate the will of the House in saying that we will come back later. Indeed, in my opening speech I said that I understand that my noble friend Lord Bach will also be in a position to offer concessions on some other matters as we progress this evening. In many ways, I am coming full circle and returning to the spot where I started. With that, I will sit down.
Perhaps I may ask the Minister a rather practical question. If the noble Lord who moved the amendment wishes to divide the House, what on earth are we to do? We do not know the outcome. The situation is exactly what the noble Lord, Lord Elton, has said. Perhaps I may respectfully support him because I would wish to support the noble Lord, Lord Trefgarne, unless I am satisfied that only the four points mentioned are those that will go forward. If there are going to be more than four points, I would prefer to support the amendment from the noble Lord, Lord Trefgarne.
My Lords, it would be improper for me to say exactly what position we will come to later. It is entirely reasonable that I have discussions with my right honourable friend; that is the proper thing to do. I have given the House my assurance that I will do my utmost to ensure that, when we come back later this evening, it will be to discuss those parts of the Bill on which there can be the broadest consensus around the House. I am afraid that the noble and learned Baroness will have to make her mind up on that basis.
My Lords, perhaps I may suggest, as a way of dealing with the procedural difficulty, that the noble Baroness could alter her Motion so that it excludes the Constitutional Reform and Governance Bill in the mean time. Later, at the beginning of the Bill’s Committee stage, the Motion could be renewed as it applies to the Bill. That is my suggestion.
My Lords, that is an interesting suggestion from the noble and learned Lord, for whom I have an enormous amount of time. But time is pressing. As the noble Lord, Lord Strathclyde, has said, we have hours left in this Parliament. We want parts of this Bill and we want other Bills, so we must proceed. I cannot accept the invitation.
My Lords, if the noble Baroness wants time, she should accept what my noble friend Lord Elton has said, and then we can get on with the rest of the business. She would come back to say either yea or nay, and we would proceed from there. If she says yes, an enormous amount of time will be saved. Surely that is what everyone thinks would be a sensible way forward.
My Lords, I must say that I am in a very nasty dilemma. As several noble Lords have said, the noble Baroness is not able to give an assurance that the Government will now confine the Bill to the four elements that a number of noble Lords have said they would approve, and at a pinch, I would too. If the noble Baroness is prepared to say that she will recommend to her right honourable friends that we proceed only as proposed, I guess that I would be content. But she is not even prepared to say that. The noble Baroness is the Leader of your Lordships’ House and a member of the Cabinet, but she is not prepared even to give her recommendation.
I am sure that the noble Lord listened carefully to what I said earlier. I think that I have moved a huge amount. I have had no conversations with my right honourable friend the Secretary of State for Justice, and I think that I have gone as far as I can go.
My Lords, just before my noble friend makes his final decision, perhaps I may suggest that if he withdraws his amendment and we agree the Motion moved by the Leader of the House, we will continue with the business. But when the Motion is called to go into Committee on the constitutional Bill, if at that stage my noble friend is not satisfied, he can call his vote.
My Lords, I am obliged to my noble friend for that intervention. Let me summarise the position. There are four aspects of the Bill which are likely to attract the support of most noble Lords. I am a bit stretched, but I, too, will accept the consensus if that is the view of your Lordships’ House.
I will say now that I hope and expect the noble Baroness to come back in an hour or so, having persuaded her right honourable friend to that course, and then we shall be content. But if, as my noble friend anticipates, we get to the Committee stage of this Bill later tonight and such an assurance is not forthcoming from the noble Baroness, I am afraid that your Lordships are going to be here all night. On that basis, I beg leave to withdraw the amendment.
Amendment to the Motion withdrawn.
Financial Services Bill
Committee (3rd Day)
Clause 5 agreed.
Clause 6 : Enhancing public understanding of financial matters etc
38: Clause 6, page 4, line 13, leave out “2(2)” and insert “2 (the FSA’s general duties)—
(a) in subsection (2)”
My Lords, it will be appreciated that this Bill has been the subject of considerable discussion and the government amendments reflect the discussions that we have been able to enjoy with the opposition. These issues have also been the subject of considerable consideration elsewhere.
Amendments 38 and 39 require the FSA, when discharging its general functions, to have regard to the desirability of enhancing public knowledge and understanding of financial matters, including the financial system. The amendments place a new obligation on the FSA that complements the education body’s remit to lead the financial education agenda. This outcome-focused provision also complements the more operational requirement in Part 1 of the new Schedule 1A to the FSMA to ensure that the new body is capable of exercising its consumer financial education function. It also provides a clearer framework for collaboration between the body and the FSA.
Amendment 40 requires the FSA, when discharging its consumer protection regulation objective, to have regard to information provided by the education body to the FSA as part of the consumer financial education function. This expands on the FSA’s obligations to protect consumers, set out in Section 5(2) of the FSMA, whereby it must already consider the differing degrees of risk to consumers of various kinds of financial transaction, and consumers’ information and advice needs. Along with Amendments 36 to 39, this will further strengthen the framework for collaboration between the FSA and the new body.
Amendment 59 will ensure an independent board that is made up of suitably qualified and informed individuals, while avoiding any unintended constraints on the board’s composition. It allows sufficient flexibility for a variety of different people to be appointed to the board.
The government amendments include authorised persons, those who represent the interests of consumers and those with knowledge of education. Amendment 68A and 68B require that the consumer education body must specify in the annual plan how it will measure the success of its objectives, including both annual and long-term objectives. This is a response to concerns raised in debate and in discussions with stakeholders.
Amendments 75 to 77 and 80 provide for fees to be collected by the FSA from firms authorised by the FSA under the Financial Services and Markets Act 2000. However, payment service providers are regulated by the FSA under the Payment Services Regulations 2009. As such, the Bill does not give the FSA the power to levy these firms to contribute towards the costs of the consumer education body. These are therefore technical amendments that are designed to correct this minor lacuna in the Bill. I beg to move.
My Lords, we have said from the outset that we support the work that is planned for the consumer financial education body. The FSA’s own research has shown what a shockingly low level of financial capability exists in the UK, and the sooner that a proper co-ordinated start is made on that, the better. On that basis, we are content for Clause 6 and Schedule 1 to remain in the Bill, as amended by the Government’s amendments. My noble friend Lord Eccles had given notice of his intention to oppose Clause 6 and Schedule 1. I confirm that he will not be opposing stand part today.
Our support for these parts of the Bill does not mean that we regard the way in which the body is being created as perfect and there is scope for scepticism as to whether the money guidance project, which is waiting to be rolled out by the new body, will raise standards of financial capability. I am sure that it will do some good, but whether financial capability will be raised is a moot point.
The Minister will know that my noble friends and I had together tabled more than 40 amendments to Clause 6 and Schedule 1 and we regret that we will be unable to debate our concerns today. Some of our concerns are met, in part, by the Minister’s amendments, but others will remain undebated. I hope that if my party is elected in a few weeks’ time we will have an opportunity to revisit this part of the Bill when we bring forward legislation to implement our vision of the future of the FSA.
Amendments 38 and 39 are, in effect, a government U-turn, and Amendment 40 builds on the rather touching idea in Clause 6 that this new body should be educating the FSA about the benefits and risks of financial dealing. The amendments do no harm, a category into which I would also place Amendments 75, 76, 77 and 80. Amendments 68A and 68B respond to concerns that lay behind one of our amendments—that the planning cycle of the new body was too short term and insufficiently focused on measuring success or failure. We welcome the Government’s amendments.
That leaves only government Amendment 59, which responds in part to amendments which both I and my noble friend Lord Hodgson had tabled concerning the make-up of the board of the new body. I regard Amendment 59 as vague. It does not seem to move the argument much forward and could be regarded as positively dangerous because it could sanction a board comprised solely of academics who specialise in consumer financial education and awareness. It also provides no obvious place for someone who does not have that background but could provide a sense of challenge from a diverse perspective. If we had reached government Amendment 59 in Committee in the ordinary course, I had planned to oppose it for the reasons I have just given, although I would have given them at greater length. However, we are not in the ordinary course and I shall let it pass.
My Lords, I rise from the substitutes’ bench to lead for the Liberal Democrats on the remaining stages of this Bill because our star striker on it, my noble friend Lord Newby, is abroad. I declare an interest as a pension fund investment manager for the past 34 years and, specifically, as a director of an investment management firm which is regulated by the FSA.
We support the amendments and the provisions in the Bill. The noble Baroness referred to the low standards of financial education—I would say financial illiteracy—as a serious problem in this country. Heaven knows, more education is needed. Automatic enrolment into NEST is rapidly coming down the track and there is a considerable danger that a serious accident is waiting to happen. Given the detailed provisions in the Bill, we need to get across to people how serious the problem is, particularly if you are saving for a pension and expecting returns of, perhaps, 6 or 8 per cent a year. There will now be a 2 per cent skim-off from the front of all contributions in NEST while, at the same time, many people will be paying debt interest rates of 20 or 25 per cent on their credit card bills. Getting across that message and that integrated advice will be exceptionally important.
If the Conservatives win the election—indeed, this is already causing some problems—staff of the FSA who operate in these and other areas could be left in the kind of limbo of not knowing the plans for the future. However, obviously that part of the Bill is no longer there and so, with those points, I support the amendments.
I shall say a few words about Clause 6 stand part and Schedule 1 stand part. Even at this late stage, I think that the Government have got wrong the shape of what they propose. I hope that I can convince them that there is a reason for reassessing their approach to this important topic. Before I do so, I declare an interest: I am a non-executive of a company which provides compliance training and fund management services to independent financial advisers. The Committee should be aware that it is directly in the area which we are discussing today. The company is regulated by the FSA and I am an authorised person.
Clause 6 is headed:
“Enhancing public understanding of financial matters etc”.
With that, no one could disagree; it must be a very good objective. However, once one moves from the strategy, as expressed in that strap line, to the means by which it should be carried out, one becomes very much more doubtful.
As my noble friend Lady Noakes said, I, she and others on this side of the Chamber tabled a number of specific amendments to address these points which we have been unable to discuss. However, I should like the Government to take on board three or four major points in relation to their approach.
The first is my long-standing concerning about the title, “consumer financial education council”. “Consumer” conveys the wrong basis for the terms of trade in this important area. The Minister’s people will no doubt look up the definition of “customer” and “consumer” in the dictionary and say that they are very similar, and that it is a distinction without a difference—I can almost see the speaking note from here. But—and it is a very big “but”—there is a difference in the real world between customers and consumers. A consumer has a very short, transitory relationship—you consume toothpaste or soft drinks, for example. A customer has, or expects to have, a longer-lasting relationship, based on trust, professional standards and delivery of a service over time. You are not a consumer of the services of a law firm; you are a customer. Paragraph 10 of the Explanatory Notes to the Bill emphasises the need for and importance of a long-term relationship. To make this shift, to effect a subtle but important change of public attitudes towards this sector of the market, we need to change the terms of trade.
The Minister will be aware of the enormous amount of work that the FSA has done on the Retail Distribution Review, or RDR. That very worthwhile piece of work, which has been a long time in gestation, will be endangered, even have a stake driven through its heart, by the proposals before us. At its heart, RDR proposes the creation of a new profession of financial advisers, with levels of competence and ability demonstrated by the passing of examinations. The scope will range from simple advice focusing on basic needs, perhaps given by a single person, to complex, multidisciplinary advice, available only from a firm employing different specialists. Just as one does not expect a single solicitor to be available to advise on property, contracts, estates and wills, and litigation, so one should not expect a single person to be able to advise on inheritance tax planning, pensions, mortgage protection and so on. These firms will have customers and long-lasting relationships. They cannot and should not properly be described as consumers.
There is the other side to the coin: we need to find ways to attract new, younger blood to the financial advisory profession. It is well known that the average age of IFAs is the mid-50s. It is expected that between 20 per cent and 30 per cent of them will be unable or will choose not to achieve QCA level 4 by 2012, when, under RDR, it will become obligatory. We will therefore have a shortage of advisers at a time when saving will never have been so important for the reasons that the noble Lord, Lord Oakeshott, mentioned.
Why has this been so? It has not been seen as an attractive profession for a younger person to work in. Using and continuing with the consumer-type terminology does not help to create that profession. We need to assist in the transformation of this IFA industry, creating a new profession that attracts competent, dedicated people to work in it, with proper career prospects, so giving confidence to investors and savers so they will be well looked after. That is my first problem with what the Government propose.
My second problem is that the tasks of the new body are wrongly defined. New Section 6A(2) in Clause 2 says:
“The consumer financial education function includes, in particular … promoting awareness of the benefits of financial planning … promoting awareness of the financial advantages and disadvantages in relation to the supply of particular kinds of goods or services … promoting awareness of the benefits and risks associated with different kinds of financial dealing”.
All that is perfectly and properly worth while, but to use an educational comparator, this is an A-level syllabus. As my noble friend Lady Noakes made clear, we need to start at least in parallel at a much more basic approach, which is what we were going to try to encourage the Government to do in our amendments that we never got to discuss in Committee, because it was cut short. We need to discuss the management of debt, the control of personal spending, living within an income and protection against disaster; all those things need to form part of the council’s remit. At the moment, it is starting at far too high a level and is not going to tackle the really important part of the market.
A couple of years ago I talked to the chief executive of a major life insurance company who said that at the height of the boom, the persistence of a pension scheme—that is, the time that it lasted, usually a pension scheme and associated life insurance—was four years. People were putting money into a pension and then deciding what they should do, taking it out and putting it into a holiday, extending their house, moving or whatever else. Those are the sorts of issues that we should be tackling, because nobody can possibly have a satisfactory investment in a pension if they think that they are going to roll it out after four years. It is a long-term investment. Nowhere in the terms of reference of this body do I see sufficient attention to the basics. I see lots of stuff about much more sophisticated arrangements but nothing about the real hard core of basic financial knowledge and education for people. Instead, we have castles in the air.
On the body itself in Schedule 1, I recognise that the Government have tabled some amendments, for which I am grateful. However, despite what I see—and maybe the Minister can reassure me on this—the FSA continues to have apparently untrammelled powers of appointment to the consumer financial education body, with the exception of the chair or chief executive, which requires Treasury approval. While Amendment 59, referred to by my noble friend, has some relevance, there is nothing there about geography. This could be a very M25-centric body, unless we had people drawn from the regions. There is nothing about the type of experience that people should have and nothing to ensure that this is a sufficiently broad-based body, which will command and give consumer confidence and confidence within the industry.
If the Government read through the Financial Services and Markets Act and looked at Clause 9 on the practitioner panel, they would see it lay down the sorts of people whom the authority must appoint—in this case, the FSA, including,
“individuals who are authorised persons … persons representing authorised persons … persons representing recognised investment exchanges, and … persons representing recognised clearing houses”.
There is a much clearer way of ensuring that the body is able to represent and make an effective contribution. It goes further in Clause 10, on the consumer panel, which requires that:
“The Authority must secure that the membership of the Consumer Panel is such as to give a fair degree of representation to those who are using, or are or may be contemplating using, services otherwise than in connection with businesses carried on by them”.
So a great deal needs to be done on the structure of how the panel is set up. Finally, there is the question of reviewing the work of the body itself. I am disappointed that the Government have not written into the Bill the need for it to adhere to the principles of good regulation: that it should carry out its work—as the Better Regulation Task Force manuals say—in an efficient, effective and economic way.
To summarise, I understand what the Government are driving at with Clause 6 and Schedule 1. I support the broad brush but, as shown by the title, it is the wrong approach and will not help with enforcing and carrying through the RDR. It has inappropriate terms of reference and, potentially, an unbalanced structure within the body itself. The approach needs a lot more work to make it effective. I hope—not with much confidence—that the Government might, even at this late hour, think again about how this body could be made better, because it is so important for the future creation of an effective savings culture in this country.
My Lords, I am grateful for the contributions to this short debate and I note that the noble Baroness accepted with great generosity the government amendments, which were meant to be responsive to the points made by the Opposition and the anxieties they expressed. I heard her reservation about Amendment 59, but we do not need to interpret that as being unduly restrictive. After all, her noble friend from the Back Benches, the noble Lord, Lord Hodgson, has emphasised how much the issue of financial education needs to be addressed with the greatest care. With Amendment 59, we are quite clearly insisting that the necessary relevance to the consumer financial education function is contained in the appointment. That seems to me to be absolutely right.
We are dealing here with what the noble Lord, Lord Hodgson, accurately identified as an area that needs very great and considerable attention; he was buttressed by the contribution from the noble Lord, Lord Oakeshott, particularly on pensions. We all appreciate greatly how much that issue has to be embedded in the public consciousness, so that short-term decisions on such long-term considerations can no longer be the basis on which anyone acts on the pensions position. We particularly all appreciate the extent to which personal and private provision will play such an important part in the future. I do not think that Amendment 59 does anything but specify what is absolutely necessary, but I am grateful to the noble Baroness for indicating that she will not oppose it on this occasion and that she accepts the other amendments in the spirit in which they were given—of contributing to a joint position on this part of the Bill.
I very much appreciate the concern and, indeed, the expertise of the noble Lord, Lord Hodgson, on this issue. He will forgive me if I chide him a little. At one moment, he was saying that it just will not do that we have the wrong phraseology in this title, while at the end he was saying that the important thing is that we must insist upon consumer confidence—which is exactly what we have expressed in the Title of the Bill. His own speech indicated that the extent of the interchange on the concepts of customer or consumer ought not to detain us a great deal.
I feel that we may be dancing on the head of a pin here; after all, he says that there is no such thing as a short-term relationship for a customer. Well, I hate to say this but in one day’s travel on a train you are likely to hear the rail company referring to you as a customer. I recognise that you may be lucky if you have a short-term acquaintance there, as the journey is often more protracted than one had expected. Nevertheless, the noble Lord will recognise that these terms are close to being interchangeable, and not ones that ought to concern us in legislation.
That may be, but we ought not to be governed by these contemporary fads and fancies. I have known the reaction of many people who regard themselves as passengers on the railway and other forms of transport. The distinction between “consumer” and “customer” in the effectiveness and efficiency of the service that is delivered has largely escaped me. Therefore, although the noble Lord has made some very important points, this issue of nomenclature is not that significant. On the noble Lord’s more general point, I agree with him entirely.
We are in danger of indulging in an English language hierarchy, which I would hesitate to speak on with authority from this Dispatch Box. I was going to say how much I agreed with the noble Lord, Lord Hodgson, about the importance of financial education. We should recognise that there is a nuts-and-bolts dimension to this. Noble Lords will appreciate the extent to which the Government share this viewpoint. That is why we have, over this past decade, put a great deal of emphasis on financial education in schools. The basis of understanding must be communicated to schoolchildren. When they become adults they will find themselves with responsibility for their futures, in which it is very important that they understand the basics of how they save and make dispositions of their resources in the financial sector.
However, the representations in these debates by the noble Lord, Lord Hodgson, will certainly be taken on board by the body. Its task will be to increase the level and perception of financial education in this country, and it will be judged on how effectively it does so. The Government position on this is clear. This is an important function of the FSA and it is important that it is in the Bill. I am grateful that the Opposition have worked and fought hard over the nature of the financial education. What we have now is a package that provides the FSA with the necessary role that it must play in this very important area. I am grateful for noble Lords’ contributions today. I commend Amendment 38.
Amendment 38 agreed.
Amendments 39 and 40
39: Clause 6, page 4, line 14, at end insert “, and
(b) in subsection (3) (matters to which FSA must have regard in discharging its general functions), after paragraph (g) insert—“(h) the desirability of enhancing the understanding and knowledge of members of the public of financial matters (including the UK financial system)””
40: Clause 6, page 4, line 15, at end insert—
“( ) In section 5(2) (the protection of consumers), after paragraph (b) insert—
“(ba) any information which the consumer financial education body has provided to the Authority in the exercise of the consumer financial education function;”.”
Amendments 39 and 40 agreed.
Clause 6, as amended, agreed.
Schedule 1 : Further provision about the consumer financial education body
59: Schedule 1, page 52, line 31, at end insert—
“( ) The Authority may appoint a person to be a member of the board only if it is satisfied that the person has knowledge or experience which is likely to be relevant to the exercise by the body of the consumer financial education function.”
Amendment 59 agreed.
Amendments 60 to 68 had been withdrawn from the Marshalled List.
Amendments 68A and 68B
68A: Schedule 1, page 54, line 28, at end insert—
“(ab) how the extent to which each of those objectives is met is to be determined;”
68B: Schedule 1, page 54, line 32, at end insert—
“( ) In sub-paragraph (4) references to objectives for a financial year include objectives for a longer period that includes that year.”
Amendments 68A and 68B agreed.
Amendments 69 to 74 had been withdrawn from the Marshalled List.
Amendments 75 to 77
75: Schedule 1, page 56, line 1, at end insert “or payment service providers”
76: Schedule 1, page 56, line 4, after “persons” insert “or payment service providers”
77: Schedule 1, page 56, line 5, after “person” insert “or payment service provider”
Amendments 75 to 77 agreed.
Amendments 78 and 79 had been withdrawn from the Marshalled List.
80: Schedule 1, page 56, line 15, at end insert—
“( ) “Payment service provider” means a person who is a payment service provider for the purposes of the Payment Services Regulations 2009 as a result of falling within any of paragraphs (a) to (f) of the definition in regulation 2(1).”
Amendment 80 agreed.
Amendments 81 to 86 had been withdrawn from the Marshalled List.
Schedule 1, as amended, agreed.
Amendments 87 to 102 had been withdrawn from the Marshalled List.
Clause 7 agreed.
Clause 8 : Promotion of international regulation and supervision
Amendments 103 to 107 had been withdrawn from the Marshalled List.
Debate on whether Clause 8 should stand part of the Bill.
My Lords, we seek to remove from the Bill the clauses relating to the FSA’s international remit. The Council for Financial Stability—Clauses 1 to 4—the FSA’s international remit—Clause 8—and the provisions relating to collective proceedings—Clauses 18 to 25—were casualties of the wash-up process. In order to secure the passage of the remainder of the Bill, the Government have agreed to withdraw these provisions from the Bill. That is why I have provided notice of my intention to oppose Clause 8 standing part of the Bill and lay government Amendments 322A and 332B, which make necessary consequential changes to Clauses 30 and 38. I will, in a moment, do the same for Clauses 18 to 25. Tomorrow, on Report, I will withdraw the Government’s support for Clauses 1 to 4 relating to the Council for Financial Stability.
I should point out that the Government continue to believe that all these provisions are necessary, sensible and desirable. However, in the interests of securing other important elements of the Bill on which greater consensus exists, the Government have agreed to withdraw them. I therefore urge noble Lords to support these government amendments.
Clause 8 disagreed.
Clause 9 : Executives' remuneration reports
108: Clause 9, page 7, line 11, leave out “The first”
It is clearly appropriate for full parliamentary scrutiny to apply in instances where the regulations placed on firms will be strengthened. Similarly, it is appropriate for Parliament to scrutinise fully any efforts to reduce the regulatory requirements placed on firms, particularly where such regulations are designed to prevent excessive risk taking. We believe it is very unlikely that any future Government would wish entirely to remove the reporting requirements in this clause. However, in order to ensure that this cannot happen without adequate scrutiny, Amendments 108 and 109 will require the affirmative resolution procedure to be used for any and all regulations made under these powers. I do not believe that it is necessary for sunset clauses to apply in these cases for two main reasons: first, because these clauses are designed as permanent rather than temporary enhancements to the regulatory regime; and, secondly, because they do not prescribe the specific content of regulation—instead, they provide enabling powers. These are designed precisely in order to allow for further subsequent consultation on the detail and to enable future international standards and agreements to be built into these requirements.
Sunsetting these clauses would cause confusion and a lack of clarity about the regulatory requirements the industry is expected to meet. In light of this and the strong international commitment to many of these clauses, and given that much of their detailed content will be specified in FSA rules and subject to further consultation, I do not consider that it would be appropriate to sunset these provisions.
My Lords, I will speak to the remuneration clauses together. The noble Lord has spoken to Amendment 108, which affects Clause 9. It is perhaps as well that we are dealing with these remuneration clauses in wash-up as I had envisaged that we would have several interesting and lengthy debates on the clauses had we discussed them in an ordinary Committee.
I hold no candle for bankers’ bonuses but I share the very real concerns that the financial services sector and others have raised about the powers in Clause 11 in particular, which, inter alia, have no parliamentary oversight. An excess of regulatory zeal when implementing these powers—and, indeed the disclosure regulations under Clause 9—could be damaging to the UK. I shall not labour the point but say merely that whatever Government are in power after May will have to monitor how these powers are used and their impact on the international competitiveness of our financial services sector.
Clauses 9 to 11 would, I believe, benefit from the sunset clause that the noble Baroness, Lady Valentine, has tabled, and to which I hope she will speak in a moment. On an ordinary Committee day, the noble Baroness’s amendment would have received our enthusiastic support. The clauses would also have benefited from the report after three years, proposed by the amendment we had tabled, but that amendment has fallen by the wayside.
I turn to the amendments tabled by the Government. We of course have no problem with Amendments 108 and 109, given that we tabled similar amendments in the first instance to which the Minister had added his name. Indeed, the Marshalled List still shows that that is the case as regards Amendment 109, although not Amendment 108. It is right that all the regulations made under Clause 9, not just the first, are subject to the affirmative procedure.
I speak to Amendment 336 which would apply sunset clauses to the clauses of the Bill relating to remuneration, living wills, short selling and the FSA’s disciplinary powers. I must declare my interest as chief executive of London First—a not-for-profit business membership organisation.
As set out on the website of the Department for Business, Innovation and Skills, sunset clauses are particularly appropriate when proposals are made based on a particular set of market conditions in an area characterised by fast-moving events. The financial services industry is characterised by its fast-moving nature, and the turbulent economic circumstances that currently prevail make it important to revisit this legislation, once stability has returned.
I regret that this Bill has been pushed into wash-up and hence that time has not been available for adequate consultation and scrutiny. The complexity of this legislation and the volatile economic climate lead me to suggest the application of sunset clauses. I do not intend to divide on my amendment, but I support the recommendations made earlier by the noble Lord, Lord Rooker, on a review in due course of wash-up legislation, which would, in part, deal with my concerns.
My Lords, we have some sympathy with the arguments of the noble Baroness, Lady Valentine, on sunset clauses, but not with those in relation to disclosure of remuneration—the point that the noble Baroness, Lady Noakes, touched upon. If I heard her correctly, the noble Baroness is concerned about an excess of regulatory zeal in dealing with well paid bankers’ remuneration packages. If only. There has been precious little sign of that so far. There is plenty of room for more. There would be no danger of damaging the UK’s competitive position. What has damaged that is the lack of dealing with such packages and the wild operations in the City of London that have done much damage to Britain’s reputation as a place to do business. We support the Government on this amendment.
I support the noble Baroness, Lady Valentine. She made some extremely sensible points about the need for a sunset clause. As she rightly pointed out, legislation that is rushed through in response to a particular set of events may well prove to be outdated and unnecessary. If Parliament as a whole has a chance to examine the efficacy of the provisions some years hence, sufficient time will have elapsed to see how the dust has settled and how the new architecture, whatever it may be, has taken shape. The noble Baroness’s amendment is entirely sensible.
My Lords, I express appreciation from these Benches for the gracious approach of the noble Baroness, Lady Noakes. I fully agree that all issues of regulation need to be tempered by tests of reasonableness and proportionality. We must have regard to competition. However, we must have regard to competition which is responsible and does not place the financial system—and thereby the taxpayer—at risk.
In response to the points on a sunset clause eloquently made by the noble Baroness, Lady Valentine, and supported by the noble Lord, Lord Hodgson, these clauses are not designed as short-term fixes which might be removed once stability has returned. Rather, they are designed fundamentally to improve the regulatory regime and its effectiveness. Improved remuneration practices and robust contingency plans, for example, are crucial regulatory requirements that should become a permanent feature of our strengthened regulatory regime. We are undoubtedly moving towards much greater stability, but we should not be seduced into believing that the restoration of stability means that the problems of the past will never revisit us. The powers contained in these clauses are designed to empower the regulatory bodies with appropriate measures, and shareholders with appropriate information, whereby they may fulfil their right and proper functions in terms of contributing towards the abatement of any risks to financial stability.
I also note the support given to these clauses by the noble Lord, Lord Oakeshott, who is speaking as a substitute on this occasion, but who is evidence of the considerable strength in depth on the Liberal Benches on these issues.
Amendment 108 agreed.
109: Clause 9, page 7, line 13, leave out subsections (7) and (8)
Amendment 109 agreed.
Clause 9, as amended, agreed.
Amendments 110 to 154 had been withdrawn from the Marshalled List.
Clauses 10 and 11 agreed.
Clause 12 : Rules made by FSA about recovery and resolution plans
155: Clause 12, page 12, line 30, at end insert—
“( ) An authorised person may provide information (whether received under subsection (6) or otherwise) that would otherwise be subject to a contractual or other requirement to keep in confidence if it is provided for the purposes of anything required to be done as a result of section 139B or 139C or this section.”
The amendments in this group are technical and aim to clarify in the Bill the position of an “authorised person” or a “skilled person” with regard to certain information that would otherwise be subject to a contractual or other requirement to keep in confidence. The current crafting of new Section 139E(6) creates a gateway for other parties to provide confidential information relevant to the preparation of a recovery or resolution plan to an authorised person or a skilled person under specified circumstances. The amendment to new Section 139E makes clear that an authorised person may, for example, include such information in its recovery or resolution plan and submit it to the FSA without having to seek the consent of a third party.
The amendment to Schedule 2 addresses the same point, but relates to a skilled person appointed under Section 139E(2). A skilled person under the new provision is to be treated under Section 348 of the FSMA in the same way as a skilled person appointed to make a report under Section 166, and would accordingly be subject to restrictions on disclosure. A corresponding amendment will need to be made to the table in Part 1 of Schedule 1 to the Financial Services and Markets Act 2000 (Disclosure of Confidential Information) Regulations 2001 to provide the necessary gateway for the skilled person to disclose information to the FSA. I beg to move.
My Lords, we shall not oppose the Minister's amendments, although we are always wary about statutes overriding the need to keep information confidential. That will have to be a debate for another day. We shall also not oppose Clause 12 standing part of the Bill because we agree with the principle that banks ought to prepare living wills. However, I should place on record our concerns about Clause 12, because we shall not have the opportunity to debate the several amendments that we had tabled.
We had been advised that this clause was not actually necessary to enable the work currently being undertaken under the auspices of the FSA’s requirements for resolution and recovery plans. The sheer breadth of the new powers and the fact that they can be used by the FSA to go way beyond the large banks at which the clause is clearly aimed in the first instance has concerned other parts of the financial services industry. We are less than clear about the role of the Treasury in these new powers and we do not understand why the use of the powers is mandatory for all time. The Government normally pray in aid flexibility by using “may” for drafting requirements, but they have drafted these new powers in the “must” form.
The sunset clause proposed by the noble Baroness, Lady Valentine, in Amendment 336 applied also to Clause 12 and I regret that we shall not have the opportunity to include that in this Bill. This underlines the importance of the Government of the day, whoever they are, keeping the impact of this sweeping clause under review. What is right for today may not be right in a few years’ time.
My Lords, we on these Benches have no objections to the clause. However, following the remarks of the noble Baroness, Lady Noakes, perhaps I could ask the Minister, although the main provision here is for dealing with banks, what other institutions it is intended that the provisions should cover.
My Lords, I am grateful to the noble Baroness, Lady Noakes, and to the noble Lord, Lord Oakeshott, for their comments. The noble Baroness questioned whether Clause 12 was necessary. I agree with the noble Baroness that the clause is drafted widely and should be used with care. It is the sort of clause that should be kept under review when it comes to implementation. However, there can be no doubt that the experiences and the pain of the past two years have shown us that we must ensure that financial institutions are structured in a manner that means that they can never again place such extraordinarily large calls on the taxpayer and society.
In answer to the noble Lord, Lord Oakeshott, there is no intention that these powers should be used more broadly than to regulate banks. However, in the early stages of the financial crisis, in late 2008 and early 2009, our concerns were not limited to banks. Other major financial institutions were beginning to excite concern and were the subject of regular meetings between myself, my officials and representatives of the FSA. That experience taught me that the powers proposed here would be a valuable addition to the regulatory responses available in order to protect the interests of savers, those with insurance policies and those with other forms of investment. It is with that in mind that the clause has been drafted.
Amendment 155 agreed.
Clause 12, as amended, agreed.
Clause 13 : Power of FSA to prohibit, or require disclosure of, short selling
167A: Clause 13, page 14, line 25, at end insert—
“( ) The Authority must, when making short selling rules, have regard to any international agreement as to measures to be taken in respect of short selling.”