To ask Her Majesty’s Government what assessment they have made of the effects on local justice of the closure of magistrates’ and county courts and of holding such courts in multi-use buildings.

Come on!

I beg your pardon; I am not playing for time. My Lords, the Government are committed to the principle of local justice. However, our court estate must reflect changes in population, transport and communication links, technology, workload and the needs of today’s communities. These are the factors that will be in mind when judging where to locate courts.

My Lords, will my noble friend the Minister give a commitment that, in making final decisions on which county and magistrates’ courts will be closed, they will take into account: the fact that local justices and local courts have been the bedrock of criminal justice in this country for many centuries, and successfully so; that the cost and inconvenience to public users of distant courts is considerable, and for the one-third who have to use public transport is unsupportable; that the magistrates’ courts reckon that only a third of the 100-plus magistrates’ courts closures are justifiable: and, finally, that the better alternative would be to revert to using multi-purpose buildings, such as town halls, which would be much cheaper?

My Lords, the attraction of multi-purpose buildings has a superficial appeal. The problem is that many of them that might offer that up have no facilities for custody or for victims and witnesses and poor security for professional staff and judges. Therefore, although we will look at the case for that use, the best way is to have modern, purpose-built courts that can dispense justice efficiently. On the first part of my noble friend’s question, yes, we are well aware of the long-standing role of magistrates. Next year will be the 750th anniversary of magistrates in this country.

My Lords, I declare an interest as a former president of the Sussex Magistrates’ Association, and I am sorry to say that the magistrates’ court at Lewes is currently under threat of closure. Does the Minister agree that the more work we can channel into the magistrates’ courts, the better? If so, why do we not now consider raising their jurisdiction limit from six months’ imprisonment to 12 months’ imprisonment?

My Lords, I take note of that advice. One of the objectives in the Government’s review of sentencing, which will be published shortly, is to ensure that a proper volume of work goes through the magistrates’ courts.

Apart from the inconvenience to the public, is there not a danger that, when justice becomes less local, justices will not be able to reflect the prevalence of certain offences in their district in the sentences that they give? Is there not also a danger that good justices will be lost to the system because of the extra travelling time involved?

My Lords, to a certain extent those are concerns, and we will keep them under close review. However, we live in a more mobile age and justices will be given assistance with travel costs. The longest journey to court—this is an extreme under the new proposals—will be 40 miles, and most journeys will be much less. I understand the concerns but they do not outweigh the fact that, as the Lord Chief Justice, the noble and learned Lord, Lord Judge, said:

“It is obvious that a number of courts in different parts of England and Wales no longer fulfil any sufficiently valuable public purpose”.

My Lords—

Trumpington!

My Lords, why was Bow Street magistrates’ court, home of the Bow Street Runners, the first court and a listed building, allowed to be sold as a hotel when, I am told, there was an offer from a group of ex-police officers to buy it and turn it into a museum? Is the Minister also aware that it was the only court without a blue light outside because Queen Victoria did not like it?

I was not aware of that. I do not know whether this was undertaken by the previous Administration but the most distinguished ex-Lord Chancellor, the noble and learned Lord, Lord Falconer, is nodding. He obviously did the dirty deed. One of the things that I have asked for in the review is that we keep a check on which courts are listed buildings and what is likely to happen to them.

In none of the Minister’s answers has he mentioned the victims of crime having to attend magistrates’ courts or county courts that are some distance further from their homes than they otherwise would be. Is he aware of the number of cases that are adjourned because somebody does not turn up to court? A victim of crime may have to attend court two, three or four times before their case is heard. What assessment has the Minister made of the financial, let alone emotional, cost of victims returning to court several times to have their case heard?

I think the roar of approval is very apt. It is something that we are looking at very carefully. One of the issues that I know the Lord Chancellor is looking at is the almost casual ease with which adjournments are agreed to. As well as good justice, we want to see efficient and quick justice in the magistrates’ courts. Certainly, the point that the noble Baroness refers to is one that needs to be addressed with some urgency.

Can the Minister indicate the Government’s response to the 10 specific recommendations made by the Magistrates’ Association last month in the light of future plans mooted abroad by the Lord Chancellor? In asking that question, I declare an interest both as a former magistrate and, in that capacity, as someone who has had to oversee the merger and closure of courts.

My Lords, I assure the noble Viscount that we have been in the closest touch with the Magistrates’ Association. We have listened carefully to its recommendations. I hope some of its concerns will be reflected in the statement that we will make in response to these consultations before the end of the year.

To ask Her Majesty’s Government what support they will give to educational psychology.

Educational psychologists play an extremely important role in supporting children and young people who have special educational needs, and their families.

The Children’s Workforce Development Council administers a voluntary subscription scheme for local authorities to fund the entry training of educational psychologists to help ensure supply. This scheme has become unsustainable because so many local authorities are not contributing. We want to place the training of educational psychologists on a more secure footing in the context of the forthcoming Green Paper on SEN.

I thank the Minister for that semi-positive reply. Does he accept that many children who have social and emotional problems need educational psychologists to support them and their families? Does he further accept that without the help of educational psychologists many of these children simply will not receive the support they need? Could he give more details about the recruitment and training of psychologists? What will the Government do to insist that these educational psychologists are present in schools?

I certainly accept the two points made by the noble Baroness, Lady Massey, about the importance of educational psychologists and the role that they play. As I explained in my first Answer, the difficulty with training is that the money that has been given to local authorities so that they can make a voluntary contribution to the Children’s Workforce Development Council is not being paid. Only 16 local authorities have paid that money. We clearly need a better solution than the current one to make sure that funding for training is on a secure footing, which it clearly is not at present. In addition to that, the Green Paper, which looks more generally at the whole future of special educational needs, will look at the question of educational psychologists and, for example, whether we should separate funding from assessment. That is an extremely important issue, which we debated in this House a couple of weeks ago, and it would be part of that process.

My Lords, is the Minister aware of any cost-benefit analysis of the value of early assessment of children’s difficulties by properly qualified professionals? Does he agree that there is probably an opportunity cost if those professionals are not available?

I very much agree with my noble friend that there clearly must be an opportunity cost if those professionals are not available. I have not seen any cost-benefit analysis but I do not need to be convinced of the benefit and the good that educational psychologists do.

My Lords, given that 50 per cent of adult mental health problems begin in childhood, and that educational psychologists are utterly crucial in identifying those and providing the children concerned with the right care, does the Minister agree with the noble Baroness, Lady Massey, and me—I think he was agreeing with us—that leaving training to the vagaries of the local authority is simply not working? Can he reassure us that educational psychology will join the other healthcare professions in having a training strategy that is determined by central bodies rather than being left to the vagaries of local authorities?

I am not sure that I can give the noble Baroness the specific assurance for which she has asked. However, I can give the assurance that all these issues and the best sustainable system will be considered by my honourable friend Sarah Teather as part of the Green Paper consideration. There are a number of ways in which one can approach this matter and I know that she will be keen to give it the fullest possible consideration.

My Lords, does my noble friend agree that it is not simply the training of educational psychologists that is a problem but the number available, given that so much of their time is spent purely on annual statements? Will he give the House an assurance that when his right honourable friend—sorry, he is my right honourable friend as well—devolves all budgets to individual schools, the funding for educational psychologists and their training will come from a separate pot rather than from individual school budgets?

As I am sure my noble friend knows, currently educational psychologists are funded separately and the relevant money does not come from schools’ budgets. I accept his point that it is important not just to get the training right, although that is important, but that one has to look at the numbers as well. The advice we have received from the CWDC is that the numbers seem to be appropriate, but I agree that one needs to keep that very much under review.

My Lords, in anti-bullying week, can the Minister say what the future prospects are for educational psychologists to carry on their work not only with vulnerable children but with their families and school professionals if the Educational Psychology Service has such a question mark over it? Can he also say what contact he has had with local authorities and schools on this issue?

I certainly agree with the noble Baroness that educational psychologists play an extremely important role, not least in the context of anti-bullying. My honourable friend Sarah Teather, the Minister for Children and Families, has had a whole series of meetings with local authorities about these important issues. The department generally has been talking to a range of local authorities about the future arrangements for special needs education. I agree that it is vital to get those right. I certainly give her the undertaking that we will continue to keep a very close eye on it. We need to ensure that there are enough educational psychologists and that they are properly trained. I do not accept that there is a serious question mark over the future, but I do accept that we have a short-term issue about training and getting the funding from local authorities, which we have to address.

To ask Her Majesty’s Government what actions they are taking to control rises in health care costs.

My Lords, the Government have guaranteed that health spending will increase in real terms in each year of the Parliament. However, in order to meet rapidly rising demands while improving quality, substantial improvements in economy and efficiency will be required across all areas of health spending. This response is best led by the NHS locally, while the centre will focus on reforming the health service to create a long-term sustainable NHS.

My Lords, I thank the Minister for his reply. Does he agree with me that putting more funding now into research into terrible conditions such as dementia, in which I include Alzheimer’s disease—for which there is no cure—will ultimately bring down healthcare costs? We must find a cure, and I ask the Minister to commit more research funding to the terrible condition of dementia.

My Lords, my noble friend is quite right to identify dementia as a particular cost pressure over the next few years. The coalition Government signalled in their programme our intention to prioritise funding for dementia research. The spending review confirmed that and committed to real-terms increases in spending on health research. This investment is indeed essential if we are to increase the quality, productivity and cost-effectiveness of the NHS.

My Lords, I return to a question which I posed previously to the Minister and which remains unanswered. Does he not agree that if patients in the health service knew what the costs of their treatment, care and drugs were, as they do in the private sector, this would create a downward pressure, which would reduce costs overall?

My Lords, I know that this is a question to which the noble Lord and other noble Lords regularly return, and it has a superficial attraction. The problem with it, I am advised, is that patients who are informed of the cost of their treatment—some patients, at any rate—take that as a deterrent to accepting the treatment in the first place. That is something we need to avoid. Nevertheless, there is an underlying point here; there is a need to provide better information to patients about their treatment so that they can take ownership of their state of health.

My Lords, what consideration are the Government giving to seven-day working in the NHS, including renegotiating Agenda for Change, to make better use of the NHS’s equipment, promote early diagnosis and decrease morbidity from complications of treatment that is not overseen by senior staff—particularly over weekends and bank holidays?

My Lords, creating a seven-day service is a particular concern of mine, and the noble Baroness is quite right to raise it, particularly given her long experience in the health service. As for Agenda for Change, any alterations to existing terms and conditions, such as the unsocial hours payment or sick pay, would need to be negotiated in partnership with NHS Employers and trade unions, through the NHS Staff Council.

My Lords, I know it is extremely difficult, but has my noble friend had the opportunity to explore how much of the increase in health service costs in recent years has come about because of the increase in administration and management costs? I refer not simply to the salaries of administrators and managers but to the administration for the administrators, and to the amount of time that clinical and professional staff must spend in servicing the requirements put on them by administrators and management.

My noble friend is right to pinpoint this area. If my memory serves me correctly, the average annual increase in management and administration costs over the past 10 years has been 6.2 per cent per year, which is by far and away higher than the increase in costs in clinical areas, for example. That is why we are determined to reduce the administrative cost of running the NHS, and we are in the process of planning for exactly that.

Does the noble Earl agree that that is an opportunity for us to look at saving costs in the health service by ensuring that we think of methods to persuade people to attend their day clinics? The cost of people not attending—DNA, as it is called in the health service—is huge, particularly in day surgery.

The noble Baroness is quite right, and I am well aware that she speaks from personal experience. Many hospital trusts, and indeed GPs’ surgeries where applicable, have devised inventive ways of reminding patients of their appointments, either on the day or on the day before, perhaps by text. Good practice in this area is something that we need to focus on.

My Lords, clinical leadership is critical if we are to secure the greatest benefit for patients from NHS spending and the appropriate use of resources. What strategies do Her Majesty's Government have for developing clinical leadership in the NHS? I declare an interest as patron of UCL Partners’ NHS staff college.

Again, my Lords, the noble Lord is absolutely right to focus on clinical leadership, which will be critical if we are to deliver the improvements in the quality of care that we wish to see, and also to roll out the vision laid out in the Government's White Paper. The department has a number of initiatives under way, as do deaneries in strategic health authority areas around the country, to promote clinical leadership. There are also active programmes in acute trusts. Without good clinical leadership, the programme cannot proceed as we all hope and wish.

My Lords, can my noble friend say what proportion of total National Health Service costs is represented by drugs and medicines? Might it not be that if there were tighter control over the dissemination of pills and medicines, particularly in outpatient departments, there could be important savings?

My Lords, my noble friend is right that drugs and medicines account for a sizeable proportion of the NHS bill. Successive rounds of the pharmaceutical price regulation scheme, combined with what we call the category M scheme for generic drugs, have held down the cost of drugs to the NHS very successfully over the years. However, this is an area to which we are devoting a great deal of attention, not least in our plans for value-based pricing in the longer term.

To ask Her Majesty’s Government whether the imposition of fixed fee schedules and restricted hospital and consultant networks for the provision of services to private medical insurance subscribers, as now practised by the two principal insurers in this field, is in the public interest.

My Lords, I beg leave to ask the Question standing in my name on the Order Paper. In doing so, I declare an interest as a policyholder with AXA PPP.

My Lords, private medical insurers are entitled to offer policies on a variety of terms and offering different levels of benefit. The Financial Services Authority’s Insurance Conduct of Business Sourcebook does not prevent insurers restricting choice of healthcare provider. However, it does require that the insurer provides information on any such restrictions. Provided that policyholders are covered as they expect in the event of a claim, this is to the benefit of consumers as cost control serves to keep premiums at an affordable level.

I thank the Minister for that reply. Is he aware that the Office of Fair Trading is receiving a large number of complaints from individuals who believed that they had fully comprehensive healthcare insurance with organisations such as BUPA and PPP but are now finding in many instances that their recovery is only partial, that they are restricted in the choice of consultant to whom they may be referred, despite their GP’s advice, and also that they are not allowed to go to certain hospitals? Is this not contrary to the policy that should be carried out, and is the Minister aware that last week my noble friend Lord Crisp said that private healthcare insurance was becoming a lottery, and that the Financial Services Authority should examine the matter in the light of these complaints?

My Lords, private medical insurance policies are held by some 6 million people. I am grateful to the noble Lord, who is a very distinguished member of the profession, for drawing attention to this matter because it is clearly important for those 6 million people and for the country as a whole that this is a well functioning market. However, that market is the business of the policyholders, the insurance companies and the doctors. The FSA’s role is to make sure that essentially policyholders are sold policies on terms that are fully disclosed to them and that those terms are upheld. In June this year, the FSA carried out a review of the conduct of business rules and found no evidence of risk of consumer detriment in the PMI market which could be addressed by changing its regulatory approach. However, I am sure that the FSA, like the OFT, hears complaints coming in.

My Lords, is my noble friend aware that quite often medical insurance companies require a direct debit payment and that it is only after the direct debit payment has been made that they inform the person that certain things which they thought were going to continue to be covered no longer are?

My Lords, I do not pretend to be an expert on the precise ways in which medical insurers carry out every aspect of their business, but clearly, as I said, it is critical that people understand what policies they are buying and that the policy terms are met. That is the critical interest of the Financial Services Authority in this matter.

My Lords, would the Minister care to comment on the complaints from National Health Service consultants that, when there is a failure by the private healthcare system, patients are put into the National Health Service in front of other people? Would he also care to comment on my view that there is no comprehensive healthcare policy through private insurance and that everyone in the country is dependent on the NHS?

My Lords, I am happy to confirm the really critical point, which is that the National Health Service is available to the population as a whole and that this is therefore an area in which the nation has access to the best-quality healthcare. If, on top of that, people wish to invest their money in private healthcare policies, it is important that those policies work effectively. However, as the noble Baroness points out, it is critical that the health service is there for everyone. As she raises the question of complaints, it is worth pointing out that the complaints that are relevant to this Question are those that go to the Financial Services Authority or the Financial Ombudsman Service. The latest figures that I have are for 2008. There were 514 complaints to the Financial Ombudsman Service in that year, of which 170 were upheld, and that represents one complaint upheld for every 8,000 people treated under private medical insurance.

My Lords, the Minister says that the FSA is content that the system is working well. However, does he accept that many people who feel that they have been let down by their policies do not share that view? As the noble Lord, Lord Crisp, pointed out last week, this problem seems to be more general than just one or two people not reading their instructions properly. Could the Minister possibly go back to the FSA and ask it to look at this problem again in the light of the concerns that have been raised about it in recent months?

I thank my noble friend for raising that point. Of course I am happy to convey to the FSA the points that have been raised this afternoon.

My Lords, the noble Lord has taken a remarkably complacent view in his answers about the position of policyholders. Surely the FSA’s responsibility to ensure that financial institutions treat their customers fairly requires that this matter be investigated and that better information be given to policyholders about the limitations of their cover.

My Lords, I think I have responded to the noble Lord’s points in the answers that I have given to a number of questions.

My Lords, I declare a similar interest to that of the noble Lord, Lord Walton. Is not the trouble the fact that the terms, which many of the 6 million knew they had, understood they had and have had over many years, are often changed so that people can no longer go to the doctors and hospitals recommended by their GPs, but have to go to ones nominated by the company? People cannot deal with that situation because, when they took out the policy, they had the cover that they required. In many cases, they no longer are offered the cover they thought they had and had reason to expect that they had.

My Lords, as I have said, it is absolutely the focus of the FSA and the conduct of business rules that people who buy private medical insurance, just as they buy household or any other insurance, are properly sold and have explained to them the terms of the policy and that the terms of the policy are carried through. Normally, these are annual policies and the terms of policies in this area, just as in other areas of insurance that no doubt we all buy, change from year to year.

My Lords, immediately after the Motion in the name of the noble and learned Lord, Lord Falconer of Thoroton, my noble friend Lord Strathclyde will repeat a Statement on the G20, followed immediately by my noble friend Lord McNally, who will repeat a Statement on legal aid and civil costs reform.

My Lords, given the very large number of noble Lords—more than 50—who wish to speak in the Second Reading debate and given the heavy business programme that we have today, and the relatively light business programme for tomorrow, will my noble friend the Leader of the House consider the possibility of deferring these two Statements, fascinating though I am sure they will be, until tomorrow?

My Lords, perhaps in the first instance, I might respond. My noble friend makes a constructive and interesting suggestion. I would be happy to discuss in the usual channels postponing those Statements until tomorrow while the debate on the Motion of the noble and learned Lord, Lord Falconer, continues.

My Lords, I have great respect for the noble Baroness, Lady Anelay, and I know that she will do her best to accommodate the House, if at all possible—I know only too well how difficult it is to schedule business. Given that the earliest we can start the Second Reading debate is six o’clock today—it is more likely to be later than that; given that it would be most unusual to delay Statements, particularly the important one from the Prime Minister—I cannot remember it happening more than once or twice in the past and it will be completely out of date by tomorrow and it is bad enough having it today; and given that tomorrow’s business is incredibly light and will finish by six o’clock tomorrow—it is a debate on an interim report from the Leader’s Group on Members leaving the House, which we have been discussing on and off for nine years—surely the Second Reading debate could be split, three hours today and three hours tomorrow, at no inconvenience to anyone, as far as I can discern. I do not expect an instant reply as the noble Baroness will obviously have to discuss it with other people. To me that seems to be a common-sense solution.

My Lords, my noble friend Lord Grocott has made an eminently sensible suggestion and, as Chief Whip on this side, I am more than happy to enter into discussion on his sensible proposal.

My Lords, I am intrigued by the estimate of the noble Lord, Lord Grocott, on the length of business for today and tomorrow. I know that the more than 20 Members who have signed up to speak in tomorrow’s debate consider the future of the membership of this House to be a very serious matter, as I do, and are therefore very concerned that they should not be disrupted.

I am also intrigued that the noble Lord, Lord Grocott, refers to the fact that Second Reading is not expected to start today until six o’clock or later. No doubt, the Opposition have a greater idea about how long their debate on the Motion of the noble and learned Lord, Lord Falconer, will persist. I do not know. It is not time limited. Clearly, if it is a straightforward matter to resolve, it should take markedly shorter than that.

It is the expectation of this House that Second Readings where there are about 50 speakers commonly are scheduled for one day only. The former Captain of the Gentlemen-at-Arms, the noble Lord, Lord Grocott, was very much aware of that. He was still Captain of the Gentlemen-at-Arms when I became Opposition Chief Whip, and we worked closely together on that basis: that the normal procedures should be upheld. I am extremely keen that normal procedures continue and that this House has the opportunity properly to consider all business. That also involves the Government being able to take part in discussions whereby the normal procedures continue, and we have obviously been involved in doing just that on a constructive basis.

The noble Lord, Lord Grocott, refers to the fact that it is unusual for Statements to be deferred. That is not quite true, but I know that we can trade statistics between each other. A couple of weeks ago, the Opposition themselves asked that a Statement should be deferred by a day—very constructively—because it was not time-limited, and I had every expectation that they might wish to do the same on this occasion. The G20 debate would be as substantive and important to this House tomorrow as it is today. Clearly, the Opposition have decided to take a different view and wish to delay the start of the Second Reading debate today.

As I mentioned at the beginning, I am very much open to discussions through the usual channels. I heard what the noble Lord, Lord Bassam, said. I am willing to take up discussions across the whole range of timing today, but it is the normal procedure that where we have a speakers list as it was on Wednesday, Thursday, Friday and at the weekend, there should be one day for Second Reading. I should remind the House that it is my duty and that of the usual channels to organise the business of the House on behalf of all Back-Bench interests. That means providing certainty as to timing in advance, so that all noble Lords may make a disposition of their outside work and other commitments to be here. Therefore, when a request is made at a late stage today, it would clearly be improper of me to agree that the Second Reading should somehow be changed when others have already made the commitment to be here today to take part in and conclude Second Reading.

My Lords, I thought I heard the noble Baroness, Lady Anelay, suggest that we may have discussions, and I hope that they can be constructive, but I think that it goes broader than just discussing the issue of the Statements. I understand entirely what the noble Baroness is saying, and I share her concern to stick to first principles in the organisation of business, but events overtake circumstances and we need some flexibility. It is flexibility that the House is seeking here, and I hope that we can proceed on that basis.

My Lords, I ask the noble Baroness, when she is considering this matter, to bear in mind that the Companion also states that the House normally rises at 10 o'clock, and that the House has risen at later than 10 o'clock on a number of occasions already this year.

My Lords, as ever, the noble Countess is careful and proper in the way that she refers to procedure of the House, on which she is authoritative. I have of course looked at the Companion, as the noble Countess would expect. It states:

“It is a firm convention that the House normally rises by about 10 p.m. on Mondays to Wednesdays, by about 7 p.m. on Thursdays, and by about 3 p.m. on Fridays. The time of meeting of the House can be varied to meet the convenience of the House. In exceptional circumstances the House has met on Saturday and on Sunday”—

which I do not propose.

I was of course keen to ensure that my memory was more accurate than perhaps it might be without having looked at the statistics. The noble Lord, Lord Grocott, will not be surprised that I looked at the position when I became Opposition Chief Whip, when he was the Government Chief Whip. In that period, 2006-07, the House sat beyond 10 o'clock on 36 occasions; and in the following year, 2007-08, on 53.

That Lord Stevenson of Balmacara be appointed a member of the Select Committee.

That Lord Liddle be appointed a member of the Select Committee in place of Lord Paul.

That Lord Kennedy of Southwark be appointed a member of the Joint Committee.

Motion agreed, and a message was sent to the Commons.

That it be an instruction to the Grand Committee to which the Budget Responsibility and National Audit Bill [HL] has been committed that they consider the Bill in the following order:

Clauses 1 to 3, Schedule 1, Clauses 4 to 20, Schedule 2, Clauses 21 and 22, Schedule 3, Clauses 23 to 26, Schedules 4 and 5, Clause 27, Schedule 6, Clauses 28 to 31.

That the draft regulations laid before the House on 11 October be approved.

Relevant Documents: 3rd Report from the Joint Committee on Statutory Instruments, considered in Grand Committee on 8 November.

Motion agreed.

To move that the Bill be referred to the Examiners.

My Lords, I beg to move the Motion standing in my name on the Order Paper to refer this Bill to the Examiners to consider whether it is hybrid. This point arises before we move to Second Reading.

I should say that my noble friend Lady Royall, the shadow Leader of the House, gave notice of this point to the noble Lord, Lord McNally, last Monday, when she sent him the advice of leading counsel on which we rely. That advice has been placed in the Library since Friday of last week. My noble friend Lady Royall suggested that the noble Lord, Lord McNally, refer the matter to the Examiners straightaway. If the Examiners say no to hybridity, there will be no delay. If, however, they conclude that the Bill is hybrid, the consequences could be worked on as soon as possible to ensure a transparent process within the Lords’ Standing Order to select exemptions to this new Bill. The noble Lord, Lord McNally, did not reply but sent my noble friend Lady Royall by return a letter that he had received from the Clerk of Public and Private Bills in this House saying that he considered that the Bill was not prima facie hybrid on the basis that it engaged no private interests. It is our case that the Bill is hybrid.

Before I come to that argument, perhaps I may set out the consequences of such a reference today. Referring the Bill to the Examiners, which is what the Motion seeks, would result in the Examiners seeking argument from those who say the Bill is hybrid and those who say that it is not. As experts and without political bias, they would then determine whether it is hybrid. If they conclude that the Bill is hybrid, the Standing Orders of this House require that the procedures for private Bills have to be followed in part. Those include the setting up of a Select Committee of this House to hear argument and evidence called by those whom the Committee allow to petition it on the issue of whether there should be any other exceptions to the new rules apart from Shetland and Orkney and the Western Isles. The matter of exceptions would then be decided by a fair evidence-based process where the reasoning was transparent for all to see, not by what appears to be the fiat of the Government without explanation.

The Bill is divided into two main parts. Part 1 provides for a change to our electoral system from first past the post to an alternative vote system and it also provides for a referendum on whether to introduce such a system. If the vote is passed in the referendum, the Minister will be obliged by the terms of the Bill to introduce the alternative vote system. Part 2 introduces a whole new method for fixing the boundaries of constituencies. Instead of it being a matter of judgment for the Boundary Commission as to the most expedient place for the boundaries, taking into account geographical and other community factors, county and ward boundaries and the likely number of constituencies in a constituency, under the new Bill the role of the Boundary Commission will be primarily to ensure that every constituency under 13,000 square kilometres contains the same number of constituents plus or minus 5 per cent. Constituency boundaries will be allowed to pass through county and ward boundaries. Numbers will be all.

The consequence of such an approach is certain to be, for example, that the Isle of Wight will be divided into two and the constituency of one of the Isle of Wight’s MPs will be joined to the mainland. Constituencies will frequently cross county boundaries. There is bound to be at least one constituency that crosses the boundary between Devon and Cornwall. The two constituencies that are to be excluded from this approach are the Western Isles and Orkney and Shetland. The relevant provision reads:

“Preserved constituencies … There shall continue to be … a constituency named Orkney and Shetland, comprising the areas of the Orkney Islands Council and the Shetland Islands Council”,

and,

“a constituency named Na h-Eileanan an Iar, comprising the area of Comhairle nan Eilean Siar”.

The Explanatory Notes may be helpful to some Members of the House:

“Rule 6 provides for the two Scottish island constituencies of Na h-Eileanan an Iar (the Western Isles) and Orkney and Shetland to be preserved, and for the electorates of those two constituencies to be removed from the UK electorate and the Scottish electorate for the purposes of calculating the UK electoral quota”.

The Bill excludes those two constituencies from the effect of the new approach. Note that this is not an exception of the normal sort where, for example, no constituency can be above 13,000 square kilometres, which applies to the whole country; this is just two constituencies being taken out of the Bill. We support an approach that makes constituencies more equal in size, but we recognise that there should be a proper and transparent basis for determining which communities should be kept out of the Bill. The justification for the two exceptions was given by a Mr Harper, a junior Minister, who said:

“These constituencies have small populations and are not easily reached from the mainland. They have already been recognised either in legislation or in practice in previous boundary reviews as justifying particular treatment. We have concluded therefore that exceptions for these areas are justified by their particular geography”.—[Official Report, Commons, 27/7/10; col. 1071W.]

To that answer, I say the following: first, there are many other constituencies with just as small populations that are not being preserved and no explanation is given for their exclusion; secondly, the Western Isles have never been so recognised before in legislation; thirdly, remoteness applies just as much to the many isles of Argyllshire as it does to these two islands; fourthly, geography could be applied to justify communities such as Anglesey or the Isle of Wight being excluded. No consistent basis is being advanced.

Is the Bill hybrid? The House of Lords Companion to the Standing Orders defines hybrid Bills as:

“public bills which are considered to affect specific private or local interests, in a manner different from the private or local interests of other persons or bodies of the same class, thus attracting the provisions of the Standing Orders applicable to private business”.

Is the Bill hybrid? I submit that it is. The easiest definition of hybridity comes from the Speaker in another place in 1988 in rejecting a claim to hybridity in respect of the Education Reform Bill that was passed in 1988. He said:

“In considering the question of hybridity, I have to look at the terms of the Bill. Provided that the formula or description used in the Bill deals with a category or class which is relevant to the purposes of the Bill and the Bill does not expressly specify or single out an individual or corporation within the category for different treatment, the Bill is not hybrid”.—[Official Report, Commons, 1/12/87; col. 770.]

This Bill does precisely what the Speaker said in 1988; it singles out two constituencies that are not to be subject to a formula or description laid down in the Bill. Instead, they are singled out for special treatment.

Can the noble and learned Lord inform the House what exactly has changed since the Bill left the other place? The challenge of hybridity took place in another place and the Speaker was not called upon to rule. All that I can say to the noble and learned Lord is that, in the five years when I had the privilege of being Chairman of Ways and Means, there was never a single instance in which the upper House challenged the lower House on hybridity.

No ruling has been given on hybridity by the other place and I would strongly urge this House not to regard itself as bound by the other place, which looks at constitutional issues in an entirely different way from us. The matter was never considered by the House of Commons. If this House were to say, “Once the House of Commons has not considered it, we are not to consider it”, that would be a fundamental abdication of our position.

Will the noble and learned Lord tell us whether any other areas such as those that he mentioned, including the islands off Argyll, have requested that they should have the same privilege—if that is the right word—as Shetland and Orkney and the Western Isles? Has he received any such requests?

Mr Reid, who is the MP for the relevant area, has complained bitterly, as have the MPs for the Isle of Wight and for Anglesey. Far from flying off on my own on the issue, I am reflecting the views of many people who would argue that places such as Anglesey, the Isle of Wight, Devon and Cornwall should have special recognition for their community position. As I have said, the Bill does precisely what the Speaker referred to in 1987, in that it singles out two constituencies that are not to be subject to the formula or description laid down in the Bill but are instead to be given special treatment.

The Bill is public, but the relevant provision in the Bill will affect the specific local interests of the people who live there in a different way from those who live elsewhere in the country. Others in the country who say that they should have the same right should be entitled to argue for it. Their specific interests are also affected. I respectfully submit that the matter is pretty clear. I urge the House not to be motivated by political interests but to listen to the merits of the argument.

Why is the Bill not hybrid? Three arguments have been advanced. It is said, first, by the Clerk of the Public and Private Bills Office that there are no private or local interests engaged here. The relevant Clerk was kind enough to have a conversation with me this afternoon, when I put my arguments to him and he put his arguments to me. Unfortunately, we were not able to reach agreement. I submit that he is wrong. Hybridity does not apply only to cases where a person’s property rights are removed—as, for example, in the nationalisation Bills or the early 19th century railway Bills. Hybridity also applies where the powers, for example, of a local authority are treated differently in one part of the country from another or where the very issue is where local authority boundaries can be drawn.

Many in the House will remember the Charlwood and Horley Bill in 1973, which was a hybrid Bill concerned with whether two parishes should be in Surrey or in Sussex. No one for one minute considered that that was not a legitimate interest on which to found hybridity. The arguments in that Bill were around, “I would like to be in Surrey because Surrey is better than Sussex” or “I would like to be in Sussex because Sussex is better than Surrey”. Do not tell me that that is a property interest. That is an interest about where I want my politics to be conducted and who I want to be my representative. The important point is that that shows that the reference to local interests goes much wider than simply property interests.

Issues might arise about who should be entitled to petition the committee about the terms of the constituency boundary process. Should such an entitlement apply to individuals, or should it apply to, for example, the local authorities for the Isle of Wight, Cornwall and Devon, or to the local MPs? Those issues can be worked out and resolved by the committee adopting a workable procedure, but the key point is that the hybridity process recognises as a legitimate, specific local interest the geographical unit within which you elect your representatives.

The second argument—this is dealt with fully in Mr James Goudie’s advice—is that it is said that it is not the practice to treat as hybrid those Bills that deal with matters of public policy whereby private rights over large areas or over a whole class are affected. If one examines, as I have done, the Bills on which this principle is based, it is clear that the principle is that, if a Bill deals with the whole of a section or an industry, hybridity will not apply even if it deals with different parts in different ways. If, however, some people are left out of the new scheme, that is a classic case of hybridity.

I give two examples on either side of the line. On this side is the Railways Bill 1921, which nationalised all the railway companies but nationalised the Great Western Railway company in a different way from the others. That Bill was held not to be hybrid because it dealt with the whole of the railway industry. On the other side is the Aircraft and Shipbuilding Industries Act 1977, which left out one aircraft builder and was held to be hybrid because it left someone out. On which side of the line does this Bill fall? I have read out the relevant provisions and the Explanatory Notes, which state basically that the two constituencies are to be preserved and kept out of the whole process.

My Lords, can the noble and learned Lord help the House by explaining the difference between the Bill that we are due to consider today and, say, the Scotland Bill that was introduced in 1998? That Bill, which was brought in by the previous Government and provided for the creation of the Scottish Parliament, also contained measures to change the boundaries of constituencies in Scotland, and in particular to create separate constituencies for Orkney and the Shetland Islands. That Bill, introduced by a Labour Government, was never considered to be hybrid. Can he explain why this Bill should be?

My Lords, I have cited the example of the Railways Act, which was a piece of legislation that dealt with the whole issue, whereas this Bill does not. This Bill leaves two constituencies out.

Finally, as the noble Lord, Lord Naseby, has pointed out, it has been said that the Commons have not declared the Bill to be hybrid. That is true, but no vote was sought and no application pursued. It is for each House to make its own decision, and I strongly urge this House not to accept that, if the Commons reach such a conclusion, we are bound by it. That would diminish the importance and independence of this House on constitutional issues.

My Lords, I wonder whether the noble and learned Lord would correct a remark he made at the beginning of his speech. He said that the noble Baroness, Lady Royall, wrote to me and that I did not reply. In fact, I consulted the Clerk at the Table who is the expert on hybridity in this House. Prompted by the discussion, he wrote me a definitive letter on hybridity, a copy of which I sent to the noble Baroness, as well as placing a copy of the exchange in the Library of the House. I certainly did not ignore the noble Baroness’s letter.

I withdraw the point. The noble Lord did not write a letter to my noble friend, but it was a bad point for which I apologise. I certainly did not intend to suggest that the noble Lord had been in any way discourteous, and indeed the noble Baroness, Lady Royall, had not for one moment suggested that to me. I therefore apologise to the noble Lord.

The practice of this House is to refer a Bill to the Examiners if the House is satisfied that it is reasonably arguable that the Bill is hybrid. That happened recently in the case of the Bill that covered Exeter and Norfolk. Subsequently, the Examiners held that that legislation was not hybrid. No argument was in fact advanced to them that the legislation was hybrid because a court case after the vote in the House made the issue academic. I hope very much that the House will consider our arguments on their merits rather than on the basis of the previous occasion.

I respectfully submit that this Bill is hybrid. I have dealt with the arguments advanced against, but all that I need to do is to satisfy the House that the case is reasonably arguable. My argument also reflects the merits of ensuring that the process to determine what the exceptions are is transparent rather than just dealing with things by fiat. This Motion would allow a proper approach to be followed in selecting those constituencies that are to be exceptions to the Bill. I suggest that the House should be urging for a non-political basis to this.

Can the noble and learned Lord explain the substantive difference between the two constituencies preserved in the Bill and the other constituencies of the United Kingdom?

These two constituencies will never have to be connected to the mainland. Unlike the Isle of Wight or Anglesey or the islands off Argyll, Orkney and Shetland and the Western Isles will not have to be treated with a constituency on the mainland because the Bill states that the numbers-driven approach will not be applied to them. They will for ever be kept separate. That is the difference. They are being treated in a completely different way from the rest of the country.

My Lords, I yield to no one in my affection for the noble and learned Lord, Lord Falconer of Thoroton—apart from Lady Falconer of Thoroton, I expect—but today he has disappointed me in his little piece of parliamentary mischief-making when most of us had expected to be here to discuss the important Second Reading of the Bill. However, late on Thursday, he raised a question not raised by the 650 Members of the other place affected by the Bill—namely, that it be referred to the Examiners on the grounds of hybridity.

The noble and learned Lord built up an unparalleled reputation in the long years of the previous Government: whenever there was a dud case to be put or a hopeless position to be defended, the cry went up from his old flatmate, then in No. 10, “Send for Charlie”. Whatever it was, up he popped at this Dispatch Box to put the case. His charms unfurled, his words dripped honey, but somehow we all knew that he knew what we knew—that the case he was arguing was built on straw. Your Lordships were never fooled then and will not be fooled today.

The noble and learned Lord comes armed with a 28-page legal opinion from the chambers founded by the noble and learned Lord, Lord Irvine of Lairg, and written by Mr James Goudie QC, no less—a close associate of the Labour Party, I understand. After 28 pages, it concludes that it is a fine line but it is arguable that the Bill may be hybrid.

The noble Lord has declared an impossible standard as far as James Goudie is concerned. He is a distinguished QC and I invite the noble Lord to withdraw what he said about him.

My Lords, if it is not distinguished to be a close associate of the Labour Party, I withdraw it. None of my other comments was meant to remark on Mr James Goudie’s professional capacity. I said that he was a QC; I stand by that and the House knows what that means.

On the question of whether it is arguable—

I declare an interest as a QC. Is the noble Lord, for whom I have great respect, suggesting that the opinion of Mr James Goudie QC, which we have seen, does not represent his genuine and honest opinion on the matter? If he is not suggesting that, then the remarks he has just made, with respect, are ill-timed and ill-placed.

My Lords, of course I do not say that; nor do I think my remarks were ill-timed or misjudged. I was going to precisely make the case that Mr Goudie QC said that it was arguable that the Bill may be hybrid. Did anyone in the House hear a lawyer say that a case like this was not arguable? And when did the noble and learned Lord, Lord Falconer of Thoroton, fight shy of arguing it?

As is well known and understood, I am not a Silk like the noble and learned Lord or his friend Mr Goudie, but I have spent enough time in the countryside to know a sow’s ear when I see it—and I see it in this Motion. On what do I rest my case? Your Lordships have the benefit of the crisp opinion of the Clerks of your Lordships’ House, who have confirmed the view—a view they had taken even before the Bill was introduced—that this Bill is not prima facie hybrid. Indeed, in the opinion of the Clerk of Public and Private Bills, the Bill, “cannot be hybrid”. Had it been, neither the Clerks of this House nor of the other place, having examined it for that specific purpose, would have let it pass. That letter is in the Library.

Furthermore, my noble and learned friend Lord Mackay of Clashfern wrote in a letter copied to me, the Leader of the Opposition and the Convenor of the Crossbench Peers:

“A hybrid Bill is a public Bill which affects a particular private interest in a manner different from the private interests of other persons or bodies of the same category”.

On that, I am sure that we all agree. He went on to write this short line:

“I can see no ground on which it could be argued that this is a hybrid Bill”.

So what are the facts of the matter? No one’s right to vote is affected. No one’s right to vote is withdrawn. No one’s right to representation is diminished. All that the Bill seeks to do is to ensure that constituency sizes are more equal and that each voter’s voice is more equal. Underneath all the legal argumentation, what shines out from the noble and learned Lord is that equalising constituency sizes upsets the Labour Party. We all know that Labour has long benefited from this system. No one talked about hybridity then and we all know why, don’t we? It seems that the Labour Party is upset that those unique communities in the Western Isles, Orkney and Shetland are protected under this Bill.

Can my noble friend confirm that, whenever any legislation has referred to the Orkney and Shetland constituency, although that constituency has never been considered to be part of the United Kingdom as a conventional constituency, the legislation has never been treated as hybrid?

My Lords, not only is my noble friend, like my noble friend Lord Rennard, right, but this relates to a Bill on which the former Lord Chancellor advised. The Scotland Act 1998—legislation of a Labour Government—made provision for Orkney and Shetland each to be a separate constituency in the Scottish Parliament and not to be part of any future Boundary Commission review. The noble and learned Lord raised no question of hybridity then. In addition, the same legislation—

Perhaps the noble Lord could move his guns towards the argument. The reason for that is that the Scotland Bill dealt with the whole of Scotland. This Bill excludes two bits from it. Answer that, please.

My Lords, there was no private interest affected in 1998 and there is no private interest affected today. If the noble and learned Lord really wants to remove the protection that we have put into the Bill, let him make Labour’s case in Stornoway, Lerwick and Kirkwall, but he should not waste the time of this House with these tactics.

We make it clear that we support those two being exceptions. The question is whether other people should be entitled to argue for being exceptions as well. That is the point that the noble Lord needs to deal with.

Not at all, my Lords. I have brought two qualitative arguments—those of the Clerks of the House of Lords and those of my noble and learned friend the former Lord Chancellor, who have said that there is absolutely no question to answer.

Why has this popped up now? No one raised hybridity in the other place—the place affected by the Bill. No one challenged the legal drafting of the Bill in the other place—the place affected by the Bill. The Motion is a political tactic designed to delay a Bill concerning elections to the House of Commons, which the Commons, after long and careful examination on the Floor of their House, have agreed.

Frankly, the Labour Party in this House has to decide what sort of Opposition it wants to be. Does it want to engage with the great issues that led to its ejection from power and the loss of 100 seats in the other place, or does it want to use the kinds of procedural ploys, wheezes and games that we see today? Does it want to engage in the proper work of this House in scrutinising and revising legislation line by line, or does it want to manufacture time-wasting debates?

More than 50 speakers are waiting to speak on the Second Reading. There is an important issue here. We saw it last week in the vote on the referral of the Public Bodies Bill and we see it today. This House can debate procedure or it can debate substance. There is a great liberty in our procedures and we all want that to be preserved, but I hope that the noble Baroness the Leader of the Opposition and the noble and learned Lord do not intend to try to take this House the way of the other place, where hours are spent debating procedure and many clauses of Bills are never discussed.

My Lords, in respect of the Second Reading of the Public Bodies Bill, the House as a whole was debating a matter of extremely important constitutional relevance. That is why my noble friend Lord Hunt of Kings Heath put down the Motion that he did. As with today, it was nothing to do with wasting this House’s time; we were trying to ensure that we acted properly in holding the Government to account.

My Lords, years have gone by when we have not discussed these issues, either of hybridity or special Select Committees. It seems extraordinary that within six months of the Labour Party going into opposition we have had to debate them on three separate occasions. I do not think that anyone in this place outside a few zealots in Labour’s back room wants to see the kind of opposition and government politics that we have seen develop over the course of the past few months.

I wonder whether the Leader of the House has made an assessment of how long the Examiners would take. Is it weeks or months or days?

My Lords, that would be up to the Examiners, but, based on the precedent set earlier this summer, it would be between a week and 10 days. Everybody knows that this Bill is on a tight timetable, which is precisely why we are discussing this Motion today. Six years ago, the noble and learned Lord, Lord Lloyd of Berwick, submitted from the Cross Benches that the Constitutional Reform Bill, a Bill profoundly affecting this House, which ended centuries of this House’s judicial role, be referred to a Select Committee. The noble and learned Lord, Lord Falconer of Thoroton, condemned that as political mischief-making and strongly urged the House to resist it. Now on a Bill that has nothing to do with this House at all and has been approved by another place—

The noble Lord is absolutely right, but he will also know that once the Bill was referred to a Select Committee by the noble and learned Lord’s Motion it was made so much better, and I publicly said that. I recanted, but what has happened to him? He supported that Motion.

But on that occasion, the noble and learned Lord did not have the support of the Clerks or my noble and learned friend Lord Mackay of Clashfern. The point is that today he comes forward as the political mischief-maker in chief, hoping to use the strength of his party’s vote as the biggest party in this House to delay your Lordships’ consideration of this important Bill.

The Clerks of this House are clear that this Bill is not prima facie hybrid and “cannot be hybrid”. I submit that if the noble and learned Lord and his friends do not have the good sense to stop this charade, withdraw this Motion and let us all get on with the Bill, your Lordships should put a stop to this outbreak of party-political mischief-making with our procedures and do so decisively.

Again, I point out to the House that yes, we are proud to be the biggest party at this moment in this House, but the coalition Benches have a greater majority than we have as a single party. I just wanted the House to be aware of that.

Is the noble Baroness aware that the Examiners to whom this Bill is to be sent are the Clerk of the Parliaments here and the Clerk of the other place?

Order!

My Lords, I wonder if I could take a little heat out of what has just been said. Will the noble Lord address the point raised by my noble and learned friend Lord Falconer of Thoroton and give his own reasoned argument why other constituencies should not be allowed to make the argument that would take them to the position of the Western Isles and Orkney and Shetland? I am not arguing about the two exclusions; I am asking why nobody else has the privilege of making that argument, as we have heard that the Isle of Wight would wish to make it. What is the reasoned argument against that form of hybridity?

My Lords, the question before us is whether there is a case for the Bill to be hybrid and whether it affects a particular private interest in a manner different—

Private or local.

Private or local; I am very happy with that as well. It is whether it affects it in a manner different from the private interest of other persons or bodies of the same category. In the opinion of the noble and learned Lord, Lord Mackay of Clashfern, and many others the right to vote is a public right and the manner and place in which it may be exercised are not private interests. It is on that basis that I agree with my noble and learned friend and with the Clerks of the House of Lords that there are no grounds on which it could be argued that this is a Private Bill.

My Lords, I listened to the Leader of the House many times when he was Leader of the Opposition and was often almost seduced by his oratory. However, that was not the case on this occasion and I do not think that it was a speech that he will be entirely thrilled about, because it was based almost entirely on suggesting that my noble and learned friend’s argument was spurious, shallow, pointless and simply and avowedly party-political. The noble Lord is nodding, so he is obviously confirming that. I want to comment initially on two points that he made, which are important considerations for the rest of us during this debate.

The noble Lord said that we know “that this Bill is on a tight timetable”. In other words, it has been guillotined quite severely in the Commons; that; of course, is what he hopes to be able to achieve in the Lords. I simply ask him: who is responsible for this Bill being on a tight timetable? The Government have made that decision in the full light of all the information. It is also, presumably, the reason why the Government say that it was not even possible to have pre-legislative scrutiny on this huge constitutional Bill—one which I think the party leader of the noble Lord, Lord McNally, has described as being part of the most important reforms since 1832, with characteristic understatement. Your Lordships need not worry; I am coming to hybridity. I am sure that the noble Lord will deal with that as seriously as I am dealing with the comments that he has been making.

The noble Lord enunciated what I thought a unique constitutional principle—at least as far as I have heard in this House; it was an astonishing one to come from the Leader of the House—in which it is not this House’s business to consider issues which have not been voted on or considered in the other place. He has commented on it enough times to make me realise that this means that large swathes of business under this coalition Government will not be possible for us to discuss, because he knows perfectly well that in the other place large sections of business are frequently not discussed and not voted upon. That is due to timetabling, which obviously took place under the previous Government as it does under this one. But please let us not pretend that he is making a serious constitutional argument that we must not consider it ourselves because it has not been considered by the other place.

I come to a severely practical point on the issue of hybridity, which was partly touched upon in an earlier exchange. No one could seriously argue that this particular clause of this particular schedule did not have characteristics of hybridity: “Preserved constituencies” is all it says. It then lists two constituencies with no explanation whatsoever of why they are preserved. I put this as a procedural point to the Leader of the House; I would have thought that there is clearly no reason on earth why any other constituency that wants to be added to the preserved list should not be able to make out a case for doing so. There are 648 parliamentary constituencies not covered in the preserved list. I shall certainly be trying to persuade this House that Telford is a constituency that should not be interfered with. It is a fast-growing town in the West Midlands, whose population changes much more rapidly than other constituencies. I put only that point to him. I will not develop the argument now—it would not be to the specific point of hybridity—other than to point out that these amendments, should they be tabled, could not possibly be grouped because the nature of the hybridity means that each case is individual and is unrelated to all the other constituencies. That is the basis on which these two constituencies are put down.

If, for the sake of argument, many amendments were tabled making the case for individual constituencies, it could not then be sustained, even if you concede that this clause is hybrid, that it was only a small part of the Bill, as some of the proponents of this not being a hybrid Bill are advancing. If, during the passage of the Bill through this House, other constituencies were added to the “exempt” clause, it would become a much bigger part of the Bill. I put it to the noble Lord the Leader of the House that these are serious questions; the case is certainly serious so far as I am advancing it. There is hardly a constituency in Britain that could not put its case on the basis of its boundaries, its communities and their relationship of the communities to each other.

In passing, we have to acknowledge that all local contribution to this by way of public inquiry, which has always been the case in the past, is being bypassed too; as the noble Lord the Leader of the House has told us, the Bill is under a very tight schedule. I acknowledge that there are different opinions on this, but it is not worthy simply to use the characteristics of normal parliamentary banter, which I enjoy as much as anyone else, in responding to a very serious Motion that my noble and learned friend has tabled which, on the noble Lord’s own admission, will delay the Bill, if that is what it does, by only a week and a half. On a matter of such constitutional importance—the Government’s words, not mine, although on this occasion I agree with them—should we really not be able to delay the Bill by that time in order to establish where there is clear and serious doubt, although the noble Lord will no doubt be able to persuade enough people to his point of view? We should at least have the opportunity of dealing with that question in the proper way by referring it in the way that my noble and learned friend Lord Falconer is suggesting.

In a brief intervention some months ago, I acquired an entirely undeserved and unsought reputation for being an expert on hybridity. On that occasion, though, I detected what I thought to be a serious issue that needed to be considered in the way described. On this occasion, I can detect no such issue. I have listened with great care to what the noble and learned Lord, Lord Falconer, has said. I accept that the threshold is a low one, a point that I made on the previous occasion, but an elector’s interest in voting is not a private interest in the sense described in the Standing Orders. There can therefore be no question of treating one private interest differently from another. I am saying, only in a roundabout way, exactly what I believe the Clerk of the Public Bill Office has himself said in the letter that has been mentioned.

Before I am asked, I shall say that I have not read—

My Lords—

I am about to be asked, I think.

I am grateful to the noble Lord for giving way. Is it not the case that the act of voting is an individual one, yes, but as an elector you want wherever possible to be with a community of others? Surely the point about constituencies is that they are about communities. If you break up communities that are naturally together, that has severe consequences for the interests of all the individuals who make up that electorate.

Of course communities matter. I yield to no one on that view but we are talking here about the specific question of whether the right to elect is itself a private interest, as described in the Standing Orders.

The argument I am making, which is based on the Charlwood and Horley Bill from 1973, is that the interest lies in the group with which you vote. The argument over the Charlwood and Horley Bill was about whether you should be in Surrey or Sussex. It was not about an individual right to vote; it was about who you were grouped with. I earnestly ask the noble and learned Lord to consider his view on the Charlwood and Horley Bill and why I am not right in what I am saying. He is putting the argument back to me in a way that is not how I am putting it to him.

Of course I am; that is my purpose. I am putting it in the way it should be put. To my mind, whatever group the individual may be in, it remains his individual right. That is not a private right as described in the Standing Orders.

Will the noble and learned Lord turn to the question of locality? What does “locality” mean if not what my noble and learned friend Lord Falconer of Thoroton and my noble friend Lord Harris referred to?

I am still on the question of whether the right to elect is a private right. That is the question. Unless it is, these so-called private rights are not private rights within the meaning of the Standing Orders.

Does the noble and learned Lord accept that the determination of the size of a constituency affects not only the right to vote but, subsequently, the nature of the relationship between constituents and their Member of Parliament? In the case of Orkney and Shetland, where there would be only 37,000, and that of the Western Isles, where there are only 22,000, would their local and private rights not be differently treated by a Bill which otherwise created constituencies of 76,000, plus or minus 5 per cent? Would it not mean that the relationship between the Member of Parliament and his or her constituents in these two constituencies was fundamentally different from that of the Member of Parliament to his constituents elsewhere? Does that not therefore indicate that local and private interests are differently treated by the Bill? In that case, have we not passed the low threshold? I remind the House of what the Speaker said in the 1962-63 Session:

“I accept the true position to be this, that if it be possible for the view to be taken that this Bill is a Hybrid Bill it ought to go to the examiners. There must not be a doubt about it”.—[Official Report, Commons, 10/12/62; col. 45.]

Have we not cleared the low threshold?

I have already dealt with the threshold point. I accept and have always accepted that the threshold is low, but in this instance I suggest respectfully to the House that the threshold has not been crossed. As to the rest of the noble and learned Lord’s argument, it seems to go much further than the simple point that I am trying to make, which has to do with the meaning of “private interest” in the relevant Standing Orders. On that, I find myself in complete agreement with the views expressed by the Clerk of Public and Private Bills. I expected to be asked whether I had read the opinion of the leading counsel, who appears to have expressed a different view. I have no doubt that if I had read that opinion I would be better informed than I am, but I am not altogether sure that I would necessarily be any wiser. Certainly, doing the best that I can, it seems that the Bill is not hybrid.

This matter turns on a very narrow and, indeed, very simple issue. I can put it in one sentence; it is a question of what is meant or not meant by “a local interest”—not a private interest but a local interest. As far as I know, this is not defined in any statute or authoritatively defined in relation to the definition of hybrid Bills.

There are two issues, both of which are very simple, and I do not believe that one of them really arises. The first issue is whether there is a body that has a distinctive reality in relation to the words of the Companion that have been taken from page 556 of Erskine May. The second question is whether, if it has that distinction, it is dealt with differently from all the others that belong to that body. I take the second question first. There clearly is a difference in approach here in that the Western Isles and the Islands of Orkney are inviolate from any prospect of change. Many of the 600 constituencies that will remain may well escape unscathed, but they have no guarantee of being inviolate. Therefore, it seems to me that, as far as the second limb is concerned, one has clearly shown that a distinction is clearly drawn. There are 600 constituencies—assuming that 50 are lopped off—598 of which are dealt with in one way and two in another.

The first question—what is a local interest?—is not a question of a private interest. Local interest is defined in the Companion and, as I say, is taken verbatim from page 556 of Erskine May. There is no definition. In my submission, a local interest—if I am wrong in this, I will gladly come to the stool of penitence—is not a proprietary interest; it is an interest involving persons living in a locality as persons living in that locality. If I am wrong, it means that even though people living in the Orkneys or in the Western Isles are in a locality, nevertheless their locality status does not count. I believe, with very great respect, that the matter is as simple, clear and narrow as that.

My Lords, I am not sure that it is necessary for your Lordships' House even to go as far as that. I invite your Lordships’ attention back to the Motion of the noble and learned Lord, Lord Falconer, on whether the Bill should be referred to the Examiners, not whether it is hybrid. It is a very long time since this House has sat as a court determining difficult questions. The whole point of referring a Bill to the Examiners is for them to decide independently whether it is hybrid.

I should declare an interest as a member of the Select Committee on the Constitution. I have my name down to speak in the main debate. Given that I am taking up some of your Lordships' time now, I withdraw my name from that debate, but I underline the importance of determining what test your Lordships' House should use to decide this Motion. It is exactly as the noble Lord, Lord Howarth of Newport, has said, and as stated by the Speaker in another place when he ruled on the Local Government Bill in the 1962-63 Session and commented that,

“if it be possible for the view to be taken that this Bill is a Hybrid Bill, it ought to go to the examiners. There must not be a doubt about it”.—[Official Report, Commons, 10/12/62; col. 45.]

In the light of the discussion that has taken place, I invite noble Lords to consider the views expressed by the noble and learned Lord, Lord Falconer, and the noble Lord, Lord Elystan-Morgan, on the one hand, and those of the noble and learned Lord, Lord Lloyd, on the other, on whether it can conceivably be said that there is no doubt about it. I am sorry that the noble Lord, Lord Strathclyde, spoke in the way that he did about Mr Goudie, but in answer to my intervention he accepted that he is not saying this does not represent the honest and genuine opinion of someone who is experienced and learned in these matters. His conclusion was that it certainly could be said that this Bill was hybrid. That is why, in his view and that of the noble and learned Lord, Lord Falconer, it should go to the Examiners.

I wish to underline two further points. First, a lot has been said about whether the Bill affects private interests. The noble Lord, Lord Elystan-Morgan, is absolutely right; that is not the question. The definition in the 23rd edition of Erskine May is that hybrid Bills are public Bills that are considered to affect specific private or local interests. One cannot ignore this question of locality.

Secondly and finally, I draw attention to what Mr Goudie said in his opinion at paragraph 17. That for me is the critical question which has been raised before. It is not a question of whether or not these two constituencies should be subject to special treatment—for myself, I can well see why that should be so—but a question of what the position is regarding other constituencies. Like other noble Lords, I have received communications from people in different parts of the country—from Cornwall and the Isle of Wight—asking and expressing their views about being treated in a different way. Mr Goudie says in paragraph 17,

“it is … reasonably and properly arguable that the justification (whatever precisely it may be) is capable of being urged as being applicable to other constituencies”.

My understanding of the process which is taking place is that if the examiners agree that the Bill is hybrid, it will provide an opportunity for those other constituencies to put forward their case as to why they, too, should be treated in a special and favoured way. Good luck to them if they succeed in that endeavour. For those reasons, I will support the Motion.

My Lords, perhaps I may make two brief points. I had not intended to speak. Currently, I support the noble and learned Lord, Lord Lloyd of Berwick, but that is not the point I really want to make. We are hearing passages from the written opinion of a distinguished member of the Bar, a Queen’s Counsel, and, like me, other Members must think that that is profoundly unsatisfactory. We ought not to be asked to vote—as we shall be—on hearing little snippets. If the QC’s opinion is to be used in this House, we should all have an opportunity to read it.

First of all, we gave a copy of the opinion to the noble Baroness, Lady D’Souza, and to the other side, and we placed it in the Library of the House on Friday. I apologise, but I did say that in my opening remarks. I completely agree with the noble and learned Baroness—she is obviously right. However, we have made the opinion available to everyone. If the noble and learned Baroness would like to go to the Library and read it, and quickly come back to vote in my favour, I would be very grateful.

My Lords, having had the privilege of being in this House for 13 years, I say that this debate is one in which this House, most unusually, should not feel one jot of pride. I have listened with great care to what has been said. I have to say to the Leader, who knows the affection in which I hold him, that this is not his finest hour. I say that because we are faced with a subject of some importance. I have listened to the laughter and watched Members with a deal of disappointment because this subject is not very funny. It is serious, it is important, and it needs and deserves your Lordships’ serious consideration.

I wish to take particular issue with the point raised by the Leader, who made reference to our debate last week on the Public Bodies Bill. That was not a party political debate. The noble Lord will remember that it was, in many ways, led by the former Lord Chief Justice, the noble and learned Lord, Lord Woolf, and every former law officer who spoke did so with one voice.

Let us be frank. This is a real issue that we are asking the House to consider, and it is easy to dismiss what lawyers say as “mere technicality” and say that people are trying to take advantage of points for political reasons. However, there is a reason why they say, “Shoot the lawyers first”; it is because they are the ones who tend to tell people what they do not want to hear. But if not them, who? And if not now, when should we have this debate on hybridity?

The House knows that hybridity can be raised at any stage in the other place and here. This House has rightly received a great deal of praise for the sobriety and the reasoned way in which we conduct ourselves; listening courteously to each other and responding in a way that is right. Is there a real issue of hybridity here? Yes, there is. What is hybridity? In essence, it is about fairness. Should different groups and different individuals be treated differently? That is what hybridity does. We are asking for the House to consider whether the low threshold that everyone has spoken about has been crossed.

When we talk about our constitution, speed may not work to our long-term advantage. Therefore, it is important for us to think soberly. Every Bill that we have spoken of in relation to constitutional importance has had a White Paper, and often a Green Paper, a draft Bill and consideration. This Bill comes to us fresh, new, young and unseasoned, without an opportunity for mature and quiet contemplation. We do have an opportunity to do that. It is a simple question: does the House think that this matter should be delayed by a few days to enable the Examiners to decide the matter one way or the other?

The noble and learned Baroness is the shadow Attorney-General. She cannot say that this is a fresh, new Bill. Her party and her shadow Cabinet have been studying it since June. Why have they taken until now to raise what she calls extremely important issues?

My Lords, the reason I described the Bill as fresh and new is that with every other constitutional Bill that we have had—the noble Lord knows this—we have had the advantage of a White Paper. We have talked about draft Bills. Pre-legislative scrutiny is something that many noble Lords who sit opposite have spoken about. I do not want to go on any further—the short issue for us is this—

My Lords—

I will finish and give way in a moment, if I may. The short issue for the House is whether or not we think enough has been raised for this matter to be put to the Examiners.

My Lords, the noble and learned Baroness will recall that she was a member of the Government who brought before your Lordships' House the Constitutional Reform and Governance Bill, which included provisions for the alternative vote but was not given any pre-legislative scrutiny and was not the subject of anything like the discussion that has taken place recently in the other place.

My Lords, noble Lords will also know what happened to that Bill. There is still time for discussion: we will be discussing the new Bill now. I say very clearly that this is not merely a political instrument being used for pernicious purposes, which is what has been suggested and what has made me feel very disappointed in noble Lords opposite.

My Lords, does my noble and learned friend agree that the Bill comes to us not only fresh but substantially unexamined in the other place? Very important elements—Clauses 3 to 6 and Clause 11—were entirely unexamined in Committee and on Report. Is it not incumbent on this House to make absolutely certain that we follow the correct procedure to ensure that this extremely important constitutional legislation is examined in the appropriate manner?

My Lords, of course I agree.

My Lords, perhaps I may speak briefly. The reason that this Bill should go to the Examiners is that we have heard one former Lord Chancellor say one thing and another former Lord Chancellor say another. We have heard advice from eminent QCs. When I was Speaker, I got advice from eminent QCs and sometimes it was not too good. Quotations have been made about previous Speakers giving rulings on hybridity. However, a Speaker would most certainly have taken advice from his Clerks, and Speaker’s counsel would also have been present. Therefore, a procedural expert and legal expert would have been present before the Speaker went to the House.

I do not really want to get into arguments about special cases around the country, although I support the case for the Orkneys, the Shetlands and the Western Isles being special. Anyone who knows Members of Parliament who have represented those constituencies—as some here previously did, the law officer being one of them—will know that sometimes the distance that MPs have to travel in doing their duty is such that they have to stay overnight in Glasgow before going on to their constituencies. This is not just an argument about people being allowed to vote; we are going beyond that—the electorate should also have access to their Members of Parliament. There are other constituencies with difficulties similar to those of the Western Isles and the Orkneys. I know the geography of Scotland but this is not just about Scotland. I also understand the argument that has been put forward about the Isle of Wight and I sympathise with that case. However, it is also true that, on leaving Glasgow airport, I could be in my constituency within half an hour, whereas the MP for Argyll and Bute would take a two-hour journey to get to his constituency. Getting to the famous island of Islay would involve taking a ferry, which would also take hours, and two ferries are required to get to Mull and Iona.

Although I did not intend to do so, I am beginning to put cases for special consideration because there are very difficult circumstances in which MPs have to operate because of the location of their constituencies. It would do no harm for the Examiners to look at the matter. I remember that when I was a lay magistrate, I was told not to worry about an appeal because it was a safety net. We could get the Examiners to look at this matter and it would be clear for everyone to understand.

My Lords—

My Lords, I think that it is our turn. I wonder whether the Front Benches consider that we have now heard as much as we are likely to take in that is relevant and that we should now divide.

My Lords, I do not know whether many of the questions were put to me or to the noble and learned Lord, but I shall be extremely brief. A number of issues have been raised this afternoon. They are important issues that will be raised and dealt with, quite rightly, in Committee—in particular, the questions of the noble Lord, Lord Grocott, concerning Telford—but they have nothing to do with the question of hybridity. I make two very brief points. First, the Bill is not hybrid and, secondly, the motivation behind the Labour Party’s anger is one of delay on this all-important coalition Bill.

Will the noble Lord give way for a moment? As I understand it, it is only a matter of timing. The Bill is important and the timing is tight. He told us that it would take 10 days if it went to an independent examiner. How long does he think it would take if 400 constituency amendments were tabled in Committee?

My Lords, if the Examiners decided that the Bill was not hybrid, that still could not stop 400 constituency amendments being tabled.

My Lords, it seems to me—

Order!

I think that the mood of the House is that we should move to a vote on this matter, but perhaps I may deal with two points. It was disappointing that the Minister did not choose to answer them. I know that if I had been a Minister, I would have been provided with material that would have answered the points, and it was disappointing that what he sought to do was political burlesque.

I am grateful to the noble and learned Lord, Lord Lloyd of Berwick, for being the only person who gave a reasoned argument about why I was wrong. With the greatest respect to the noble and learned Lord, I submit that he is wrong because he has failed to deal with the Charlwood case, in which the issue which contributed to making it hybrid was two parishes saying, “We want to be in this county, governed by them and not in that county”. That was accepting the principle that localities are really interested and that it is a local issue as to which group they elect to local authorities and local councils. That was important in relation to it. I respectfully say to the noble and learned Lord, whom I respect greatly in every single respect, that he has had no opportunity to read either the opinion or what was said in relation to the Bill that I refer to, which is my fault rather than his. The threshold is whether or not there is an argument about it. No one other than the noble and learned Lord said that it was not arguable. I had the support of the former Attorney-General—

My Lords, the noble and learned Lord must understand that many of us did not choose to make the argument, not because we do not feel strongly about it or do not have a very clear and argued case in our minds, but because we did not want to disadvantage the House in moving on to the Second Reading debate.

The noble and learned Lord must not mislead the House on this point, particularly when he talks about locality. The reality is that locality applies to every single constituency throughout the land. The point made by the noble Lord, Lord Grocott, is that if the Examiners start to meet, there is no reason why every single constituency might not come forward. It is not necessarily a matter of a week or 10 days at all. The question of locality is properly considered by the Boundary Commission when every constituency can look at local interest; it is not on a political motion about hybridity.

I apologise to the noble Lord, Lord Alderdice, for not knowing what his arguments were, but as he did not express them and I am not able to mind read, I could not deal with them. The Boundary Commission will not deal with the Western Isles and Orkney and Shetland because the effect of the Bill—this is my point—has been kept completely separate and out of the arrangements; therefore, their locality has been protected and no one else's has. I ask noble Lords to consider whether there is an argument about hybridity in this case. I say to those behind me as well as those in front of me, please address this as an issue on which this House has a good reputation. I beg leave to seek the opinion of the House.

My Lords, with the leave of the House I would like to make a brief business statement. All those present will be aware that earlier on there was an exchange of views about proceedings today. I made it clear that my first duty, as with all other usual channels, is to take into consideration the needs of all Back-Benchers. Even though those outside this House, who know less about our proceedings, might point out that the vast majority of speakers today are from the opposition Benches, my duty is, and always will be, to treat all Back-Benchers equally.

Following further constructive discussions between the usual channels, we have come to the view that it may be for the convenience of the House if we proceed with the two Oral Statements today before starting the Second Reading of the Parliamentary Voting System and Constituencies Bill. The Second Reading will then be adjourned tonight after the contribution by my noble friend Lord Teverson and will be resumed tomorrow after the debate on the interim report from the Leader’s Group on Members leaving the House. That means that we will recommence tomorrow’s debate with the contribution from the noble Baroness, Lady Henig. This approach has the agreement of the usual channels, and I hope that the whole House will support it.

My Lords, perhaps this would be a convenient moment to repeat a Statement made in another place by my right honourable friend the Prime Minister earlier today. The Statement is as follows:

“With permission, Mr Speaker, I would like to make a Statement on my visit to China and the G20 summit in Korea. First, I am sure that the whole House would want to join with me in welcoming the liberation, at last, of Aung San Suu Kyi. Her tenacity and courage in the face of injustice has been truly inspiring. I spoke to her this morning to pass on the congratulations of everyone in this country on her release and on her remarkable stand on democracy and human rights. We must now work to ensure that her release is followed by freedom for more than 2,000 other political prisoners and that this becomes the first step towards the people in Burma being able to choose the person they want to run their country.

In China and Korea, my main focus was on jobs and growth. In China, I led one of the biggest and most high-powered British delegations ever. This helped to win new business for Britain worth billions of pounds, involving businesses all over the UK and cities across China. We strengthened our ties on trade, education and culture, all the while raising our concerns with China on issues like human rights where we have differences of view.

In Seoul, Britain had four priorities: first, to continue to win recognition for the importance of fiscal consolidation, with those countries with the greatest deficits taking the fastest action; secondly, to get a clear commitment from all countries to fight protectionism and take the steps necessary to boost global trade; thirdly, to help move development issues up the G20 agenda; and, fourthly, to address the global imbalances which were at the root of the global financial crisis and which still hold back growth in the world economy. We made important progress on all four.

Let me take each in turn. First, on fiscal consolidation, it is now perfectly clear what the consequences are if you ignore the dangers of deficits. You see markets questioning your economy, interest rates rising, confidence falling and the economy back in the danger zone. That is where Britain was only a few months ago, but because of the measures we have taken that is no longer the case. Countries with larger deficits need to act on them and to do so now. This is absolutely vital for the confidence and stability we need for businesses to invest once again.

That was exactly the view of the G20. In Seoul, we agreed that,

‘the failure to implement consolidation … would undermine confidence and growth’,

and we agreed to,

‘formulate and implement clear, credible, ambitious and growth-friendly fiscal consolidation plans’.

There can be no clearer statement of our collective intent than this. Big deficits are dangerous. We simply have to deal with them.

Secondly, on trade, as the world comes out of recession with some countries moving more slowly and others, including the new emerging powers, forging ahead, there are inevitable pressures in some quarters for protectionism. The G20 has been a vital forum in fighting to keep markets open. Increasing trade is the biggest boost and the biggest stimulus we could give to the world economy. It does not cost any money. It is not a zero-sum game. It creates wealth and jobs. So, against a background of rising protectionist pressures, the G20 reaffirmed its determination to learn the lessons of the past and avoid the trade barriers and beggar-my-neighbour policies that wrecked the economy in the 1930s. It refreshed its commitment,

‘to keeping markets open and liberalizing trade and investment as a means to promote economic progress for all’,

and it pledged to,

‘roll back any new protectionist measures that may have arisen’.

On the Doha round let me say this: it is incredibly frustrating that this trade round is almost 10 years old and that world leaders say again and again that it is going to be completed. Yet the situation still remains stalled. The longer it has gone on, the more difficult it has got, because the world economy has changed so fast that the deal has become outdated. Both developed and developing countries are looking for more from the round.

I do not want to raise hopes artificially but I do think that some real progress has been made. Vitally, the language of the communiqué says:

‘2011 is a critical window of opportunity’;

that our engagement to secure a deal,

‘must intensify and expand … to complete the end game’,

of the negotiations; and that, as I proposed at the Toronto summit, we have to make the deal bigger by having a wide ‘across the board’ negotiation. What changed at this summit was that the US said that if a good and fair deal comes forward, it will take it to Congress. All of us instructed our trade negotiators to put more on the table so a deal can be done. I am determined that Britain should do everything it can to push this forwards. That is why I have asked Leon Brittan to continue helping to co-ordinate our trade policies, an effort in which he will be joined by our new Trade Minister, Stephen Green, from January.

Thirdly, on development, it is right that the G20 is now playing a bigger role on this issue. As well as the richest nations, the new emerging powers have a great role to play in helping some of the poorest. There is a real recognition about the importance of trade, infrastructure and finance in the Seoul agreement, and I also raised the importance of continuing our aid programmes. Britain is keeping its promises on aid, and I pressed others to do the same.

On the trade agenda, together with South Africa, Ethiopia and Malawi, who were there to represent Africa, Britain mobilised the G20 behind,

‘the vision of a free trade area’,

for Africa. This was a fundamental pillar of a new approach to supporting economic growth and development in Africa set out in the Seoul consensus. Only 10 per cent of Africa’s trade is within the continent of Africa, so knocking down the trade walls between African countries will help to unleash economic growth. It is not just that we want Africa to be less dependent on aid; we want Africa to be a source of growth and new jobs for the world, including for Britain.

Fourthly, uneven growth and widening imbalances are fuelling the temptation to diverge from global solutions into unco-ordinated actions and, according to the IMF, those balances are forecast to get worse, not better. Alongside protectionist pressures, we have seen the signs of so-called ‘currency wars’. The G20 agreed the Seoul action plan. This includes agreeing to move,

‘towards more market determined exchange rate systems’,

and to refrain from the ‘competitive devaluation of currencies’. But the issue of trade imbalances goes beyond currencies. Just as countries with big budget deficits must cut public spending, which is right for them and right for the world economy, so countries with big trade deficits need to save more, consume less and export more. If that is not accompanied by higher consumption by surplus countries, world growth will be lower and protectionist pressures higher, and we will repeat the mistakes of the past. It is as simple as that.

By acting together we can maximise world growth and cut world unemployment. This is not some obscure economic issue; it is about jobs. Trade imbalances have led to an imbalance of funds: a wall of money in the east and a wall of debt in the West. This was part of the problem that helped pump up some of the bubbles which led to the crash that affected us all. As part of the Seoul action plan, we agreed that we would,

‘pursue the full range of policies to reduce excessive external imbalances and maintain current account imbalances at sustainable levels’.

We also agreed that this should include assessing imbalances,

‘against indicative guidelines to be agreed by our finance Ministers and central bank governors’.

The issue of imbalances is never going to be solved overnight, but the key thing is this: it is being discussed in a proper, multilateral way, with some progress being made.

The summit also delivered important progress on deepening co-operation on financial regulation and the reform of global institutions. We agreed the core elements of a new financial regulatory framework, including bank capital and liquidity standards, and more effective oversight and supervision of globally important institutions. The last Basel accord on capital ratios, Basel II, took nine years. With the G20 behind it, Basel III has been done in 18 months.

Reform of the IMF to make it more representative of the global economy has been discussed for years. The G20 has finally got the deal done. On climate change, President Calderon briefed the G20 on the plans for Cancun, and we received a report from the UN Secretary-General’s High-level Advisory Group on Climate Change Financing. We reaffirmed our resolute commitment to fight climate change and agreed that we would,

‘spare no effort to reach a balanced and successful outcome in Cancun’.

This summit delivered important progress in managing the tensions that are present in the global economy. In my visits to China and the G20 summit we protected and promoted our national interests. We have taken vital steps towards the strong, balanced and sustainable global growth we need. We secured recognition for acting on the deficit, support for more action on trade and development, and agreement on working to rectify the imbalances that threaten global economic stability. Ultimately, this will win more jobs and growth for Britain. I commend the Statement to the House”.

My Lords, that concludes the Statement.

My Lords, I thank the Leader of the House for repeating the Statement on the G20 made by the Prime Minister. We endorse wholeheartedly the congratulations that the Prime Minister has passed to the remarkable lady, Aung San Suu Kyi. However, we also agree that as we celebrate her freedom, there is still a long journey before there will be a free and democratic Burma. I also welcome the release of Paul and Rachel Chandler.

On the G20, I welcome the South Korean Government’s success in keeping development on the G20 agenda. Development aid is not only important for the lives it saves; it also makes an important contribution to global growth. I also welcome the fact that the Prime Minister pressed the G8 countries that were there in Seoul to keep their promises on aid.

On climate change, can the Leader of the House tell us how the promises made at Seoul will be turned into action at Cancun?

On banks, we welcome the continuation of work to reform the financial regulatory framework set in motion at previous G20 meetings. The increased stringency of the Basel Committee’s capital requirements is a welcome step in making banks across the world more stable. However, further work is needed to implement these reforms. We recognise that this is difficult. Can the Leader of the House tell us what he believes is the way to balance the need for financial stability with the economic recovery?

On growth, we all know that for the UK global growth is always important—we are a trading nation. Jobs in this country depend on strong exports, which in turn depend on a growing global economy. Does the Leader of the House acknowledge that dependence is even greater because of the decisions that his Government have taken on the economy here at home? Cutting public spending and increasing VAT will dampen domestic demands and hit jobs. The Office for Budget Responsibility has shown that because of the cuts he is making, Britain must increase exports by more than £100 billion to sustain jobs and growth. How can that happen if our export markets are failing to grow? Do the Government recognise that the global economy on which we are now even more reliant is fragile?

That is why this G20 was so important. The most recent figures show that growth in our largest export market—Europe—has halved and that the US is still facing high unemployment and slow growth. Does the Leader of the House acknowledge that with growing disagreements between major economies about currencies and trade restrictions, co-ordinated action through the G20 is more important than ever?

I suggest, therefore, that the G20 was a missed opportunity. No one expected the problems to be solved overnight, but there was no co-ordinated action to support jobs and growth worldwide; little progress on reaching agreement on currencies, particularly between China and the US; little assurance by way of anything practical to prevent a resurgence of protectionism over the next few years, but I hear what the noble Lord said on that issue; and no action to restart the Doha round of trade negotiations, however difficult that may have been.

This was the fifth G20 summit since the global financial crisis hit in 2008. During that time the UK provided leadership for co-ordinated global action. Can the Leader of the House tell us why the Prime Minister failed to offer that leadership in the run-up to Seoul, and at Seoul itself, at such a crucial time for jobs in this country and for the global economy?

Now that the summit is over, the questions that remain are: what was the Prime Minister’ strategy; what was he aiming to achieve; did he have any proposals for jobs and growth, and if so what were they? We are told in the media that tonight, in a speech at the Lord Mayor’s banquet, the Prime Minister will talk about,

“a Britain at the centre of all the big discussions. Producing the ideas”.

What were the Prime Minister’s ideas for the G20 and what did he say in those discussions? Is it not the case that, because the Prime Minister has refused to take action on jobs and growth in Britain, he would find it difficult to lead in the debate about jobs and growth internationally? Is it not true that, because the Government refuse to recognise that the economic crisis was global, they find it difficult to engage with international efforts to tackle it?

No one expected the summit to be straightforward and it was not. It saddens me, however, to think that rather than showing strong global leadership—strong leadership in the search for global solutions to global problems—we in Britain looked as though we were on the sidelines.

My Lords, not surprisingly, I cannot agree with everything that the noble Baroness the Leader of the Opposition said, but I certainly welcome her remarks about Aung San Suu Kyi and about development at the summit, which is to the advantage of us all, including those countries that are most affected.

I particularly cannot agree that the Prime Minister showed no leadership. Of course he showed leadership. On many of the achievements, which were common to many of those who attended the summit, we should all be extremely glad that they were agreed. There is a pledge to continue co-ordinated efforts to generate strong, sustainable and balanced growth, with an action plan setting out the policy actions that are needed to move closer to this objective. There are comprehensive quota and governance reforms to the IMF, instruments to strengthen global financial safety nets and so on. My right honourable friend the Prime Minister said that the meeting would not be an heroic summit, and it was not. The summit was meeting not against a background of crisis but against the background that the world needs to unite over growth, which is what I believe it did.

The noble Baroness asked about climate change. The summit reaffirmed the commitment to negotiations under the UNFCCC and to a successful and balanced result in Cancun. We very much welcome the work of the UN Secretary-General’s High-level Advisory Group on Climate Change Financing, whose report was published at the beginning of November. We agree that its recommendations should now be considered by Finance Ministers. In the summit, we also recognised the ongoing importance of green recovery and green growth. Leaders committed themselves to stimulating investment in clean energy technology, to energy and resource efficiency and to developing long-term energy strands.

Of course the key to all this is growth. The noble Baroness and I will, I suspect, have to agree to disagree about the medicine that this economy has had to take and the reasons for taking it. She prayed in aid the Office for Budget Responsibility, yet it says that unemployment in this country will fall next year and every year after that and that employment will increase by around 1.4 million over the next five years. The OBR forecasts that public sector employment will fall, as it would have done under the previous Government, but by less than if we had not frozen pay and stopped the jobs tax. We will strengthen the economy by stimulating enterprise and jobs, by taking 880,000 people out of tax altogether, by having a £1 billion regional growth fund and the green investment bank, by cutting corporation tax and the small profits rate, by reducing new businesses’ national insurance in certain areas and by cutting red tape. We believe that this is the right policy to provide for the long-term growth, prosperity and employment prospects that this country needs.

My Lords, we very much welcome the Prime Minister’s statement about the release of Aung San Suu Kyi, the lone figure who suffered so much at the hands of the military rulers in Burma. We are thankful for her release, but we must ensure that the ASEAN countries do not recognise the recent elections in that country, which were a sham. Until such time as democracy and human rights prevail in Burma, we should take a tough stand against that political regime.

I have two questions for the Minister. First, before the visit to Korea, the Prime Minister visited China. On matters of human rights, different opinions are being expressed, but—although this was very much a trade visit—was the question of the award of the Nobel Peace Prize to a person now languishing in prison discussed, and what was the outcome of that particular discussion? Secondly, China is constantly undervaluing its currency while competing so heavily with the rest of the world. Is there any solution to that matter to ensure that the rest of the world does not suffer because of how China behaves with its currency?

My Lords, I thank my noble friend for what he has just said. Of course, I echo his words on Suu Kyi and democracy. Aung San Suu Kyi’s detention has always been arbitrary and outrageous, with its sole purpose being to exclude her from political life. Now that the military leadership has released her, we urge it to continue to release other political prisoners immediately and unconditionally.

As to the China summit, my noble friend is right in saying that this was a dual visit—first, to China on a trade mission and then to the G20. Of course, the issues of human rights and trade are entwined. My right honourable friend the Prime Minister said that he was committed to engaging with China on human rights and that he was convinced that the free circulation of ideas, the development of independent civil society and the objective application of the rule of law are critical to China’s long-term prosperity and social stability, which is equally vital to the global economy and therefore to the United Kingdom’s interests. As for a discussion of the Nobel Peace Prize winner Liu Xiaobo, such issues are raised in the sense that no subjects between our countries are off limits as part of the mutual understanding and respect that exists between our respective leaders.

My Lords, the Prime Minister and his team are to be congratulated on their work in Seoul with President Zuma of South Africa on promoting the initiative on intra-African trade, but will Her Majesty's Government continue to press the case for a rethink of the economic partnership agreements currently being promoted by the European Union in Africa, whose contents militate against further integration among the regional economic groups in Africa and in many ways make that integration more difficult? Will Her Majesty's Government also raise with the European Trade Commissioner the issue of the negotiation currently taking place with a number of African countries that seeks to persuade those countries to cease to protect indigenous industries such as the leather industry? Without that protection for that industry and a number of growing industries in Africa, there is no way that indigenous African producers will be able to develop their industries as we have developed ours. I offer congratulations on the initiative, but will the noble Lord accept that there is yet more to be done if Africa is to fulfil its potential?

The noble Lord, Lord Boateng, brings to our debates a very particular interest and expertise, which are very greatly valued by this House. I know that we will hear a great deal more from him on this subject. He is right to say that a great deal more needs to be done; he is equally right that we have taken another step forward in the process of providing for the long-term prosperity of the continent of Africa. Our view, which is well known and is a collective view across the parties, is that trade is the greatest wealth creator ever known and it is right that we should press hard to secure a strong, comprehensive and balanced trade pillar within the development working group’s multi-year action plan, including action on duty-free, quota-free access. For Africa’s small economies to achieve faster and sustained growth, they need to be able to trade better with each other and with global markets. African political leaders are increasingly recognising the importance of regional integration as a key objective of the African Union, with a view to the eventual creation of an African economic community. I agree with the noble Lord that there is still a great deal more to be done, but things are considerably better than where we were 10 or 20 years ago.

My Lords, it is very good to know that the Prime Minister raised appropriately the question of human rights on his visit to China, but could the noble Lord the Leader of the House give us some indication of what response the Prime Minister received?

My Lords, I cannot say what the answer was because a wide range of issues was covered in the discussion between my right honourable friend and the leadership in China, but that included an in-depth discussion on human rights. As I said earlier, no subjects were off limits. My right honourable friend the Foreign Secretary said at the time of the announcement of the Nobel Peace Prize that the decision to award the prize to Liu Xiaobo,

“shines a spotlight on the situation of human rights defenders worldwide”.—[Official Report, 20/10/10, Commons, col. 727W.]

My Lords, can I ask the noble Lord two questions? In the first place, I applaud the Prime Minister for taking a large delegation to China and for his dealing with the wider aspects of our relationship with China. After all, China is an emerging superpower and we should look after it. In regard to trade with China, and indeed with the rest of the world, our manufacturing industry has fallen as a proportion of GDP, from 32 per cent in 1973 to 10 per cent in 2008. Are the Government going to do anything to resuscitate and revive our manufacturing industry, especially in the north-west and north-east of this country?

My second question is about the discussions at Seoul on trade, particularly with emerging countries. Is the noble Lord aware that the greatest barrier to trade with those countries is the CAP? Will the Government do something about that? Unless it is reformed, people in Africa will find it particularly difficult to export their goods to Europe.

The noble Lord, Lord Stoddart of Swindon, raises two good questions. On the question of China and trade, he is right that the main purpose behind the visit was to demonstrate the degree of commitment that exists not only on a Government-to-Government basis but on a business-to-business basis, which is why so many people from business were pleased to join the Prime Minister as well as a substantial number of Ministers. That has shown our national commitment to developing our relationship with China, to pursuing our commercial interests and to co-operating more closely on global issues, as well as to raising the role of human rights in China’s development, in which this country has a vital interest.

The visit added momentum to our trade and investment relationship with China, with the agreement of a new trade target of $100 billion by 2015. The visit itself delivered over 40 agreements across the whole range of the bilateral relationship, from trade to low-carbon growth and cultural and education initiatives. The largest contract was Rolls-Royce’s contract of $1.2 billion, but others included an agreement on China’s first securities joint venture with the Royal Bank of Scotland, the geographical identification and registration of Scotch whisky and an education agreement to train 1,000 new teachers of Mandarin. All those were substantial achievements, but they are just building blocks in developing the relationship.

The noble Lord made a second point about trade with emerging countries and the effect of the CAP. I am not surprised that he should raise that question, which goes to the heart of the agreement that we are seeking on the completion of the Doha trade round. One of the best pieces of news to come out of the summit was that there was an international agreement that all countries should take the final step towards reaching agreement on Doha, and that may well include the European Union taking a fresh look at the role of the CAP.

My Lords, will my noble friend confirm that our fiscal deficit is actually the largest in the G20 and that the fact that the G20 is endorsing the action now taking place to tackle that deficit is very welcome? Does he also agree that the fact that we are reducing the corporation tax level to the most competitive level within the G20 is another reason why we ought to be encouraged about the direction going forward? Following the huge success of the trade missions to China and India, what plans do the Government have to send similar high-profile trade missions to Brazil and Russia?

My Lords, my noble friend’s last question is a good one, which I wish I had thought of myself when I was discussing such matters with those who know the answers. It is right that we should set up visits to other countries. I do not know where next in the world the Prime Minister’s eye will fall upon, but I am sure that he will be as gratefully received as he has been in China and India.

My noble friend is also right about the case that we have made for reducing the deficit—consolidation, as it was called at the G20—and that there was universal agreement that this was entirely the right direction to take. Equally, the reduction of corporation tax will make us more internationally competitive, will help our businesses to export and will also increase jobs in the United Kingdom.

My Lords, given that the Statement today was about the Prime Minister’s visit to China as well as to the G20, it is a little disappointing that it says so little about climate change. I welcome the Statement where it says that the Government’s intention is to fight climate change and that they will,

“spare no effort to reach a balanced and successful outcome in Cancun”.

That is precisely what was said at the Copenhagen summit, which failed largely because people attempted to enforce a legal agreement. That is the difficulty that we face at the moment. Having visited China and Japan in the past two weeks, I can tell the Minister that a legal agreement does not have a chance of being agreed at Cancun. Will the Government perhaps consider changing their policy and supporting the voluntary system embodied in the Copenhagen accord, under which nations commit themselves to cutting greenhouse gases and providing action plans? That would mean that we were likely to get some agreement at Cancun—perhaps a small step for mankind—whereas failure would be a disaster.

My Lords, I welcome the noble Lord’s words and his reporting back of his own visit to China. He is right that there are elements of the protocols on climate change on which we have to go a great deal further. As the premier economic forum, the G20 is right in recognising the importance of low-carbon growth in preventing climate change and creating a sustainable global economy and in sending positive signals ahead of Cancun, but the meeting at Cancun is the key forum for negotiation on climate change. None of us should have false hopes about what is going to happen at Cancun. Immensely difficult decisions need to be taken. It is only a few weeks away now, and we shall have to wait for the results of that to see whether we have succeeded in our objectives.

I welcome many of the Prime Minister’s comments, in particular those about protectionism and rolling back those areas where protectionist measures have already been taken. I take great encouragement from the Prime Minister’s positive statements about the Doha round and the need to address imbalances. On both sides of the House we accept the need for growth in global economic activity, although on this side we believe that the policies the Government are currently pursuing are alien to good growth outcomes.

However, the Prime Minister overstates the achievement in the banking industry. I express my grave concern at the lack of real progress. The Prime Minister referred to Basel III being completed within 18 months. With all respect to the Minister, nothing has been achieved under Basel III, which is not due to be implemented until 2018 and, in some respects, 2023. Not a single bank has had to increase its capital as a result of Basel III. We have seen no material progress on the identification and agreement of process for globally systemically important financial institutions. We have seen no progress on the agreement of a net stable funding ratio. These are all critical to creating a more stable banking system. Is the noble Lord pleased with the progress that has been made under Basel III? If so, could he identify the tangible things that have happened as a result of it?

My Lords, I very much welcome the early remarks of the noble Lord, Lord Myners. He was agreeing with me so, naturally, I agree with him. The right approach is about growth, getting the deficit under control, international trade and fighting the battle against protectionism—a path other countries would like us to head down. The noble Lord can easily make the case that it is still too early to decide whether Basel III has been a success. It is true that there is a long transition period between 2013 and 2019, when it needs to be put in place.

Having said that, a significant strengthening of capital and liquidity requirements and a binding constraint on leverage are essential to strengthening financial stability. Therefore, we welcome the G20’s endorsement of the Basel reforms to global capital and liquidity standards. Full, consistent and non-discriminatory implementation of these new international standards is now crucial to minimise the risks of regulatory arbitrage and the fragmentation of international financial markets. The UK, as the noble Lord well knows, has consistently argued for strengthened international financial regulation to address the failings that were laid bare by the crisis. The G20 has agreed major reforms to international financial regulations and we aim to move these forward. The key to this is to maintain the momentum that has come from Basel and the G20.

It is impossible at the moment to persuade China to be more flexible over its currency. What is the Prime Minister doing to develop a powerful consensus that surplus countries have a responsibility equal to that of deficit countries in dealing with global crises?

My Lords, the noble Lord is right to say that one of the key issues has been the global imbalances. Part of what was discussed at the G20, and much of what was agreed on, was a protocol to reduce these global imbalances. The Prime Minister, in a speech at Peking University, said:

“We need a more balanced pattern of global demand and supply, a more balanced pattern of global saving and investment … We all share an interest and a responsibility to co-operate to secure strong and balanced global growth … just as China played a leading role at the G20 in helping to avert a global depression so it can lead now”.

That was the clearest signal to policy-makers in China that they need to play a full part in sorting out global imbalances. The recognition that we need to move towards more market-determined exchange rate systems was a vital ingredient of that and was agreed by all parties in the G20. I contend that that is a positive step forward.

My Lords, I wish to repeat a Statement made earlier today by my right honourable friend the Lord Chancellor and Secretary of State for Justice:

“With permission, Mr Speaker, I wish to announce today proposals for the reform of legal aid in England and Wales and proposals for the reform of civil litigation funding and costs in England and Wales. I have today laid before Parliament two documents, Proposals for the Reform of Legal Aid in England and Wales and Proposals for the Reform of Civil Litigation Funding and Costs in England and Wales, which consult on these issues and copies of which will be available in the Vote Office and on the Ministry of Justice website. The changes will require primary legislation and, subject to consultation, I hope to include proposals in a Bill as soon as parliamentary time allows.

Legal aid forms a vital part of a system of justice of which we are rightly proud. The Government strongly believe that access to justice is a hallmark of a civilised society. However, I believe that there is a compelling case for going back to first principles in reforming legal aid. The current system bears very little resemblance to the one that was introduced in 1949. Legal aid has expanded—so much so that it is now one of the most expensive systems in the world, costing the public purse more than £2 billion a year. It is now available for a very wide range of issues, including some which do not require any legal expertise to resolve. It cannot be right that the taxpayer is footing the bill for unnecessary court cases, which would never have reached the courtroom door were it not for the fact that somebody else was paying.

The previous Government made many attempts to reform legal aid, conducting more than 30 consultations since 2006. However, successive changes have been of a piecemeal nature and have failed to address the underlying problems. I have gone back to basic principles to make choices about which issues are of sufficient priority to justify the use of public funds, subject to people’s means and the merits of the case. I have taken into account the importance of the issue at stake, the litigant’s ability to present their own case, and the availability of alternative sources of funding and of alternative routes to resolving the issue, as well as our domestic and international legal obligations.

My proposals have also been designed with the aim of achieving significant savings. No other Government in the world believe that the taxpayer should pay for as much legal aid and litigation as we do in the United Kingdom. We have made clear our commitment to reducing the fiscal deficit and encouraging economic recovery. Last month’s spending review set out the scale of the challenge. My department’s budget will be reduced by 23 per cent over four years. Legal aid needs to make a substantial contribution to that reduction. I estimate that the proposals in the consultation paper, if implemented, will achieve savings in the region of £350 million in 2014-15.

I do not propose any changes to the scope of criminal legal aid. However, I propose to introduce a more targeted civil and family scheme, which will discourage people from resorting to lawyers whenever they face a problem, and instead encourage them to consider more suitable methods of dispute resolution. Legal aid will still routinely be available in civil and family cases where people’s life or liberty is at stake, or where they are at risk of serious physical harm or immediate loss of their home. For example, I plan to retain legal aid for asylum cases, for debt and for housing matters where someone’s home is at immediate risk, and for mental health cases. It will still be provided where people face intervention from the state in their family affairs which may result in their children being taken into care, and for cases involving domestic violence or forced marriage. I also propose that legal aid should remain available for cases where people seek to hold the state to account by judicial review and for some cases involving discrimination which are currently in scope. Legal assistance to bereaved families in inquests, including deaths of active service personnel, will also remain in scope. However, prioritising these areas requires that we make clear choices about the availability of legal aid in other areas. Therefore, we propose to remove from the scope of the scheme issues which are not, generally speaking, of sufficient priority to justify funding at the taxpayer’s expense. I therefore propose to remove private family law cases, unless there is domestic violence, forced marriage or child abduction involved. I will continue to provide funding for mediation which can benefit those involved in family disputes by avoiding long drawn-out and acrimonious court proceedings.

Other cases which I am proposing to remove from the scope of the civil legal aid scheme include clinical negligence, where in many cases alternative sources of funding are available such as no-win no-fee arrangements. They also include education, employment, immigration, some debt and housing issues and welfare benefits, except where there is a risk to anyone’s safety or liberty or a risk of homelessness. In many of these the issues are not necessarily of a legal nature but require other forms of expert advice to resolve.

I recognise that there will be some cases within those areas of law which I propose to remove from scope which international or domestic law will require to be funded by the taxpayer. I therefore propose a new exceptional funding scheme for excluded cases. I want to ensure that those who can either pay for, or contribute to, their legal costs do so, so that we ensure continued access to public funding in those cases that really require it for those who have little or no funds of their own. I therefore propose that all clients with £1,000 or more disposable capital should make a minimum £100 contribution to their legal costs and that the capital of any prospective legal aid clients is taken into account when considering eligibility.

I have also looked at how best to reform the way in which we pay lawyers who provide legal aid services. I want to ensure that criminal cases are resolved quickly and cost-effectively and that legal aid fee structures support that aim. In the long term, I propose to fulfil the recommendation of the noble Lord, Lord Carter of Coles, to the previous Administration to move towards a competitive market to replace the current system of administratively set fee rates. However, it will not be possible to fulfil that aim in the short term. Therefore, I propose some more immediate changes to the current fee structure. I propose to ensure that in Crown Court cases that could realistically have been dealt with in the magistrates’ court, a single fixed fee for a guilty plea will be paid based on fee rates in the magistrates’ court. I also propose that the same fee should be paid in respect of a guilty plea in the Crown Court regardless of the stage at which the plea is entered, and to do more to contain the costs of very high-cost criminal cases.

These proposals complement other reforms to the justice system which I will be bringing forward, designed to encourage cases to be brought quickly and efficiently to justice, so sparing the victim the ordeal of giving evidence in court unnecessarily and the justice system significant but avoidable costs. It is important to strike a balance between the need to ensure that legal aid provision is innovative, efficient and good value for taxpayers’ money on the one hand; and ensuring that people can continue to access legally aided services where necessary on the other. I believe that there is more that can be done to strike that balance. I propose to reduce fees paid in civil and family cases by 10 per cent across the board and make similar levels of reductions in rising experts’ fees. I also propose to extend telephone access to advice through the Community Legal Advice telephone helpline, which has a high rate of public satisfaction, to help people find the easiest and most effective ways to resolve their problems. I am also consulting on proposals to make much better use of alternative sources of funding for legal aid. In particular, I would welcome views on making use of the higher rates of interest generated on money invested in a pooled account used by solicitors to hold their clients’ money, and on making use of a supplementary legal aid scheme. Lastly, I seek views on how to make the administration of legal aid less bureaucratic for solicitors and barristers doing legal aid work. I recognise that processes have become overly complex and want to do what I can to simplify these while remaining consistent with the highest standards of accounting practice.

Also, Mr Speaker, on 26 July this year, the Government announced their intention to consult on implementing Lord Justice Jackson’s recommendations on the reform of civil litigation costs and funding arrangements. Sir Rupert Jackson’s independent and comprehensive report published in January 2010 makes a clear case that the costs in civil cases in England and Wales have become too high, and he makes a broad range of recommendations for reducing those costs. I am convinced by Sir Rupert’s argument that achieving proportionate costs and promoting access to justice go hand in hand. I believe that the consultation proposals for the reform of civil litigation funding and costs presented today will help rebalance access to justice with proportionate costs in civil cases.

In particular, Sir Rupert’s proposals would reform the operation of no-win no-fee conditional fee agreements or CFAs. CFAs are funding agreements under which lawyers are not paid if they lose but may charge an uplift or a success fee of up to 100 per cent on their base costs if they win. CFAs as they currently operate allow claims to be brought at no financial risk to individual claimants, but the other side of the coin is that CFAs impose substantial additional costs on defendants. The Government have already accepted the recommendations of my right honourable and noble friend Lord Young of Graffham’s recent report on health and safety and the compensation culture, Common Sense, Common Safety. My noble friend’s typically cogent report endorses Sir Rupert’s proposals. The key proposal is to abolish recoverability of success fees and the associated after-the-event insurance premiums in CFA cases. Under the current regime, defendants must pay these additional costs if they lose. These additional costs can be substantial, as the success fee can be double the base legal costs. In addition, significant costs can arise from claimants’ purchase of after-the-event insurance. After-the-event insurance can be taken out by parties in a CFA-funded case to insure against the risk of having to pay their opponent’s costs and their own disbursements if they lose. We are proposing that claimants should have to pay their lawyers’ success fee and will therefore take an interest in controlling the costs being incurred on their behalf. This will also reduce the disproportionate costs burden on defendants.

We are also seeking views on implementing other recommendations which are designed to balance the impact of these major changes, in particular to assist claimants. These recommendations include a 10 per cent increase in general damages to help pay the success fee and introducing a mechanism of qualified one-way costs shifting. This would protect the vast majority of personal injury claimants from paying a winning defendant’s costs and will therefore reduce the need for after-the-event insurance. We also propose to allow damages-based agreements or contingency fees in litigation before the courts. These are another form of no-win-no-fee agreement under which lawyers can take a proportion of the claimants’ damages in fees. This would increase the funding options available to claimants.

Other proposals would further encourage parties to make and accept reasonable offers, as well as introduce a new test to ensure that overall costs are proportionate. We also propose to increase the modest costs which can be recovered by people who win their cases where they represent themselves without lawyers.

Taken together, my reform proposals complement the wider programme of reform which I will be bringing forward to move towards a simpler justice system: one which is more responsive to public needs, which allows people to resolve their issues out of court, using simpler, more informal remedies where they are appropriate, and which encourages more efficient resolution of contested cases where necessary.

I commend this statement to the House”.

My Lords, that concludes the Statement.

My Lords, I thank the Minister for repeating the Statement made in another place by the right honourable and learned gentleman, the Lord Chancellor, and for allowing me an advance sight of the Statement; but I have to say, thanks to the very comprehensive briefing that has clearly been given to two newspapers over the past 24 hours, we have had the chance of looking at the Statement more than in just the past few minutes.

The Green Papers on cutting legal aid and reducing civil costs are among the most important published by the Government to date. Legal aid, as the Minister said, is one of the pillars of the welfare state that were set up by the post-war Labour Government. It plays a crucial role in tackling social exclusion, especially in difficult and hard times such as these, and ensures, or does its best to ensure, that everyone can obtain access to justice in both the criminal and civil fields, regardless of their means.

Under successive Governments, the legal aid budget has grown to the point where it now stands at more than £2 billion per year. That is not sustainable, especially in the current economic context. Indeed, the previous Labour Government had moved to cap the legal aid budget and to reduce it. We also planned to turn the Legal Services Commission into an executive agency, and the then Opposition—both parties that now make up the Government—supported us. Why have the Government not introduced legislation to achieve that aim? It was quite clear that that was a necessary step to take as quickly as possible. They have not done so, thus far; when are they planning to do so?

In recent years, we brought the principle of fixed fees into civil and family legal aid cases. That principle has applied to criminal cases for some time past. We introduced means-testing into the magistrates’ courts and this year into the Crown Court. Indeed, on the very day that the general election was called, we signed off cuts to advocates’ fees in higher courts without any support from the parties opposite; so much for the accusation that the then Government were somehow economically irresponsible.

We took those decisions because we recognised the need to reduce the legal aid budget, and it should be said that many of our actions were taken in the teeth of opposition from the legal profession, as one would of course expect, and from the parties that then made up the Opposition—by that I do not mean just the Liberal Democrat party. Let me make it absolutely clear to the House that had we been in government today, we would have announced, perhaps not today but earlier, further cuts to legal aid. That is a reality that we have to acknowledge.

The crucial question, however, is where those cuts are to be made and how the money that is left—still a large sum—will be spent. Our policy was, and is, to control the legal aid budget and to get value for money for the taxpayer while optimising services for people who need support the most. That is why we concentrated so much of our investment on what is described, perhaps a little uncomfortably but accurately, as social welfare law legal aid, by increasing it over the years and—even towards the end, when we were cutting back other parts of the legal aid budget—making sure that we protected it at all costs. That is because we argue that legal aid, delivered in the form of legal advice and delivered early, has the power to change lives and, of course, save huge amounts of public money further down the line.

The housing possession court duty scheme, for example, still saves thousands of people from repossession. It delivered a social and financial good. Are the Government committed to preserving that and similar schemes? What balance do the Government intend to strike between the needs of criminal legal aid and civil legal aid? Everyone knows that, over the years, criminal legal aid has had the majority of the spend. Do the Government believe that that should continue?

The Minister said that the Government propose in the Green Paper to reduce fees paid in civil and family cases by 10 per cent across the board. That proposal is, on the face of it, disturbing. Does it mean, for example, that when a fixed fee is paid for advice from solicitors who practise social welfare law, or from the not-for-profit sector—whether it be the CAB or law centres—solicitors in that field will lose 10 per cent on each piece of new advice that they give? This will make life very difficult indeed for those lawyers, who by no stretch of the imagination can be described as rich. I ask the noble Lord to answer that question, if he would be so kind.

I turn to another serious point that I should like to ask the Minister about: the proposal that all clients with £1,000 or more disposable capital should make a minimum contribution of £100 to their legal costs. Full ineligibility is extremely worrying. We as a Government increased civil legal aid eligibility rates by 5 per cent last year to deal with the unfairnesses that the recession had meant for those who needed that vital piece of advice. However, the Government’s proposal in the Green Paper reduces eligibility a great deal more than that, and we are concerned that it will take many people who cannot afford the private insurance that the Green Paper talks of away from getting the legal advice that they need and deserve. Does the Minister agree that that is likely to happen if civil legal aid eligibility is reduced by so much? Will that not harm what we all want: access to justice?

One other disturbing part of the Statement talks about some housing, social welfare and debt cases being taken out of the scope of legal aid, although some will be left in, apparently. Can the Minister help by telling us which cases in those categories will be taken out of scope and which will be left in?

I turn briefly to the important and massive report of Lord Justice Jackson on civil legal aid costs. Before we respond in detail, we will consider that report carefully, as we will consider the Green Paper on legal aid. I remind the Minister and ask a question about what Lord Justice Jackson said at paragraph 4.2 of chapter 7 of his final report, on page 70. He stated:

“I … stress the vital necessity of making no further cutbacks in legal aid availability or eligibility”.

He is talking about civil legal aid and continues:

“The legal aid system plays a crucial role in promoting access to justice at proportionate costs in key areas”.

Do the Government agree with what Lord Justice Jackson wrote in chapter 7 of his report?

The basic test that we will apply to both Green Papers is whether the proposals will deliver a saving to the public purse while ensuring that no one is denied access to justice simply because of their means.

My Lords, first, I agree with the noble Lord about the press coverage over the weekend. I wonder what advantage it gives, with something that is going to be the subject of a three-month consultation, if somebody leaks to or briefs the press. I will say that neither report is entirely accurate, but this is the world that we live in. I would much prefer that Statements were made to the House of Commons and to the House of Lords and then reporters could do their job.

I welcome the noble Lord’s assertion that we are talking about one of the most fundamental parts of our society: namely, access to justice. I also welcome his recognition that a £2 billion legal aid fund is not sustainable in present circumstances. The Statement, all the comments that the Lord Chancellor and other Ministers have made and we in the Ministry of Justice all recognise that these decisions are influenced in part by our having to cut £2 billion from our budget over the next five years of the spending regime, and that legal aid is one of two or three big-ticket items in the MoJ budget.

I hear what the noble Lord says about social welfare law. In reviewing this, we are trying to focus legal aid on the most serious cases. We are looking at where other sources of funding may be available and where advice can be given to take some of these matters out of the legal system to tribunals and other instruments of resolution. However, we are not trying to pretend anything other than that we are taking hard but necessary decisions to move some cases out of scope and out of legal aid.

The noble Lord asked about the Legal Services Commission. We will take action on that as soon as parliamentary time is available. We are battling for that time at the moment. The 10 per cent across-the-board cuts will apply to the assistance that the noble Lord referred to, and to social welfare work. The noble Lord asked in particular about housing cases. We made it clear that in cases where there is the threat of absolute homelessness, assistance will be retained. We propose that legal aid will be retained for both housing and debt cases where there is the risk of homelessness, and for housing cases where there is a serious problem to be addressed. We propose that legal aid ceases to be available for employment and welfare benefit matters, because the vast majority of these are heard before tribunals. We propose no changes for community care. On the question of contributions, it is critical that those who have the resources to pay for or contribute towards their legal costs should do so, and that the public purse must be the fund of last resort where people own substantial assets.

I hope that I have covered most of the specific points. I understand that the noble Lord will want to study carefully what Lord Justice Jackson said. Like the previous Government, we are trying to take away the inflation pressures caused by the way in which no-win no-fee operated and by the way in which costs, damages and add-ons were calculated. Our old system was inflationary in costs, and encouraged litigation. We hope that what we have extracted from Lord Justice Jackson's recommendations will address problems that were recognised by all parts of the legal profession.

My Lords, I cannot welcome the Statement, but I welcome the fact that the Minister has said that not principle but finance has caused the reductions that we have seen. When I read the Statement, I thought that the noble Lord, Lord Bach, could easily have issued a similar Statement in the previous Government. No doubt that is why his criticisms were so muted.

This is a considerable challenge to the legal world. Here I declare an interest as a practising criminal Silk, paid very often by legal aid. The suggested reforms set out in the Green Papers require very considerable attention from both the criminal Bar and the family Bar. It is the latter that will really suffer under the provisions that are being put forward.

I ask the Minister about the suggestion that there will be a new exceptional funding scheme for excluded cases. I had a number of discussions with the noble Lord, Lord Bach, when he was in the previous Government, on that very issue. Its importance is that it is wrong for an individual to be in a court, tribunal or inquest and to find himself facing a state-funded organisation such as the Army or the Air Force, or a well funded public company, when an allegation of negligence has arisen. The previous provisions for an exceptional funding scheme were largely concerned with inquests. The noble Lord, Lord Bach, will recall that it was not easy through that mechanism to obtain proper funding for families in distress who faced paid advocates at a very high level who were trying to make sure that their clients were not accused of any negligence. What is the new exceptional funding scheme? Will the mechanisms be improved? Will they be more apparent so that people understand how to obtain exceptional funding in the future? That is a very important issue and I hope that the Minister will be able to respond.

I thank my noble friend. His question gives me the opportunity to mention a point raised by the noble Lord, Lord Bach, to which I did not respond. If not exactly ring-fenced, criminal legal aid is more protected because we take the view that when people are on trial for a criminal offence, it is important that they have access to justice and legal aid. However, that does not mean making a choice between criminal and civil cases, other than that, in terms of access to justice, a criminal charge is more serious.

The exceptional funding scheme will go wider than assistance for inquests, and it will indeed be available for those who may find themselves out of scope in these decisions but who have an exceptional case to make. I note what my noble friend says. We are well aware that we are making tough decisions that are needed to ensure access to public funding in cases that really require it and in protecting the most vulnerable in our society, as well as encouraging the efficient performance of our justice system. As we have made absolutely clear, those decisions are motivated partly by economic circumstances but also by a view that the legal aid system, as the noble Lord, Lord Bach, acknowledges, needs to be recalibrated and rebalanced, and that is what we have tried to do.

I am very sorry that the noble Lord just brushes aside the leaks in this case—

Cross Benches.

My Lords, following on from what the noble Lord said just now, I should like to thank the noble Lord, Lord Bach, for the sensitive way in which, during the previous Government, he dealt with many issues relating to the military and, in particular, veterans and war widows. He would always listen and I know that he then went off and did his best. I did not like the phrase “out of scope” and I am not sure about “eligibility”, but there are many veterans and military widows who, the moment they leave the protection of the services, are on the streets and very vulnerable. I feel that somewhere in the Minister’s and the Ministry of Justice’s plans there should be special provision to see that these very fine people are not left out in the cold.

My Lords, I associate myself with the comment of the noble Viscount, Lord Slim, about the noble Lord, Lord Bach, and his record in this area. Within the constraints in which we find ourselves, we certainly intend to make sure that our responsibility to service personnel and their families remains. Exceptional funding will remain available where there is a significant wider public interest in the applicant being represented at an inquest. Therefore, the families of service personnel will still be able to access legal aid funding for representation at inquests into their loved ones’ deaths. Rebuilding the military covenant is one of the top objectives of this Government, and the Ministry of Defence is currently considering how best to fulfil that covenant.

My Lords, I am very sorry that the Minister just brushed aside the leaks in this case, as the Government always seem to do, by saying that it is just a matter of the world that we live in. It is a matter of the world that we live in only because it is tolerated. It is about time the Government adopted a slightly more rigorous approach to investigating and pursuing these things, as the Ministry of Defence did in the previous Parliament. I very much welcome the Government’s decision to propose that success fees should no longer be chargeable to defendants. It seems quite wrong to penalise defendants because of the funding structure that plaintiffs agree with their lawyers. Does the noble Lord agree that one of the great anomalies and problems of legal aid is that the costs incurred by a successful defendant cannot be claimed against the plaintiff? That is not only unfair, unjust and unbalanced between plaintiffs and defendants and legally aided plaintiffs and non-legally aided plaintiffs; it clearly reduces the financial disincentive to litigate marginal cases. Do the Government have any plans to deal with that anomaly?

I think that I had better duck for cover in this case. I hear the point that the noble Lord makes. If we already have specific plans in this area, I shall write to him; if not, I shall make sure that that point is fed into the discussions that will be part of the review, which will go on for the next three months.

On investigating leaks, at the very beginning of my career I recall the Labour Party, under Harold Wilson, setting up a leaks inquiry and the first meeting of that inquiry being leaked to the Guardian. I was not dismissing the issue; I deplore it and, as I said at the beginning, I wish that we could get back to the rather old-fashioned idea that statements are made to Parliament and then the newspapers report them.

My Lords, can my noble friend clarify the response that he gave the noble Lord, Lord Bach, just a few moments ago, when I believe I heard him say that welfare cases are to remain the same? The House will be aware that, with all-party support in both Houses during the previous Parliament, the Autism Act is now on the statute book. One thing that triggered the need for that Act was the fact that many adults and adolescents with autism find themselves in dispute with their local authority over not being able to access appropriate packages of support. That applies not just to those with autism but to people with a great many lifelong disabilities. One of the difficulties in challenging a local social services department is that often the key person who knows most about you is the social worker, who is an employee of the very department with which you have to negotiate. These disputes often become legal cases, although those in social services departments to whom I have spoken about this openly put up their hands and say that, once a legal challenge is made, they very often settle out of court before the case reaches that stage. However, I should be very concerned if vulnerable adults—and they are vulnerable—across the disability spectrum were denied the support of the courts.

My noble friend’s question points to many of the problems that we face. If legal aid is automatically given in many of the areas that we are removing from scope, it becomes almost a first stop. We are actively trying to promote a different, cheaper and quicker mechanism for settling disputes. A dispute between someone suffering from autism and the local social services department almost automatically ends up as a battle between lawyers in court. We have got something wrong somewhere. We have taken tough decisions; we have taken people out of scope; and we shall look at different ways of getting advice. We propose that legal aid be retained for community care cases and for judicial review in community care cases. As I said before, we are not hiding the fact that this is a removal of legal aid from areas and cases that have previously been covered. We seek to encourage the alternative resolution of disputes, partly because, as the noble Lord, Lord Bach, said, successive Governments have found that the creep of legal aid makes it very difficult to keep overall control of it.

My Lords, no one would seriously suggest that we should not reform the legal aid and civil costs regime. However, citizens advice bureaux and the law centre movement have long played a distinguished part all over our country in providing access, not just for the most vulnerable but for the middle classes, to the law and to legal advice. It is cost effective and involves paid volunteers, lawyers, mediators and experts from a whole variety of sources who are needed to ensure that people get justice. The Minister’s right honourable friend has been silent in his Statement about the role of citizens advice bureaux and the law centre movement. Can he give some words of encouragement and support for the contribution that they currently make? Can he indicate whether they will have an opportunity to play an enhanced role in the future and perhaps do something about the crisis in funding that CAB centres face up and down the country, even as we speak?

My Lords, I can give some limited encouragement. It is true that the law centre movement and other such bodies, which rely on certain cases of legal aid, will have difficulties with this Statement. I also think that there are likely to be difficulties for the CABs which, as the noble Lord indicates, face the problem of the impact of cuts in local authority funding and the likely loss of legal-aid work in the legal advice that they cover. My right honourable friend the Lord Chancellor is fully seized of these problems and is very willing, during the period of consultation, to talk to those bodies and to explore alternative assistance and funding. The noble Lord points to the real impact made by the decisions that we have taken.

My Lords—

My Lords, I welcome the reference to promoting alternative dispute resolution to accelerate and simplify the resolution of disputes. Can my noble friend indicate what the criteria are to be where exceptional funding for excluded cases is awarded? In particular, will he recognise that it is an issue not just for the excluded individual but for the courts, because if a case is of a particular complexity it can clog up the courts: a point that was made by a former Lord Chief Justice and a former Master of the Rolls when a previous Conservative Government cut legal aid?

My Lords, if we are going to recalibrate legal aid, we shall have to explore the alternative resolution of disputes through mediation and other means. On the exceptional cases fund, part of the consultation will be about the criteria and the range of that fund. The recommendations of the Legal Services commission to the Secretary of State will determine how the fund is used, but the opportunity to consult will be taken to ensure that the fund is flexible to the needs of those who really need access to justice.

My Lords, does the Minister agree that the conflation of the costs of civil and criminal legal aid in the sum of £2 billion, to which my noble friend Lord Bach referred, disguises the greater proportion devoted to criminal legal aid? What will the percentage cut on the civil legal aid budget be? Can he also indicate where he expects alternative provision to be made and at what cost, and who will fund that cost? Perhaps he could also identify an estimate of the number of cases currently in receipt of legal aid in the categories that will no longer receive legal aid: that is, as the Statement made clear, education, employment, immigration, debt, housing and welfare benefits.

On a slightly tangential matter, will the Minister ask his right honourable and learned friend the Secretary of State for Justice and Lord Chancellor to look again at the court fees that local authorities are required to pay in child protection cases and which are widely thought to inhibit the necessary promotion of those cases? I declare an interest as an unpaid consultant in my former practice as a senior partner in a Newcastle firm of solicitors.

My Lords, I shall write to the noble Lord on the specific numbers that are being dealt with in areas that are now going out of scope. I shall raise the issue of court fees with the Lord Chancellor. The target saving is £350 million, and I made it clear that that would come mainly from the civil side.

My Lords—

My Lords, first, are the Government aware that the greatest advances in the development of law happen in legal aid cases? By diminishing legal aid, you end up undermining law as a whole. Secondly, family law has already suffered cuts, and we are seeing legal aid deserts in certain parts of the country. Women, for example, are not getting the kind of expert help that they need in cases of domestic violence. Thirdly, if the Ministry of Justice is concerned to look at spending on legal matters, has consideration been given to the money paid to lawyers by government, not as legal aid money but money paid by government departments to lawyers at the market rate, which is often excessive? Perhaps we should do something to drive those costs down instead of limiting access to the law by the poor.

My Lords, my noble friend Lord Strathclyde is encouraging me to cheap populism by agreeing that we should drive down the cost of legal advice to government. Legal costs in general are certainly being looked at. I can reassure the noble Baroness that in the key areas of family law, which I referred to as domestic violence and child protection, legal aid will be retained.

On the breakdown of the savings, I have a slip of paper that says that the aim is roughly to try to find £100 million savings on criminal aid and £250 million on the civil side.

On the Statement’s intention, I can say to the noble Baroness only that, against the financial constraints that we face and a general agreement that legal aid needed recalibrating, we have tried to take some tough decisions in a way that protects the vulnerable and retains the core sense of our system: that all have a right to access to justice.

That the Bill be read a second time.

My Lords, it is considerably later than we had intended to start the main business of the day, but I now beg to move that the Bill be read a second time. This Bill is a core part of the coalition Government’s programme. It is a simple measure that provides for three things: a referendum on the voting system for the other place; a modest reduction in the number of MPs; and fairer, more equal constituencies. It would not have existed in its present form without the creation of the coalition. Speaking for my party as well as for the Government, I say clearly that we are completely committed to honour the coalition agreement. That is why, as Leader of this House, I open for the Government on the Bill.

Of course, I would have liked 20 more Conservative seats at the general election, but that was not the people’s choice. They did not deliver a majority for a single-party Government. They asked us to work together —and that, I believe, is our duty.

This Government have started on the giant task of restoring this country from the economic, diplomatic and social wreckage of the past 13 years.

Shame on you!

It would be madness to risk that coalition to stop the British people having a say in how they choose their Members of Parliament.

I know that many of my noble friends do not like or want the alternative vote system. Frankly, I am inclined to agree. As this Bill allows your Lordships to vote in the proposed referendum, I can let you into a secret: I will vote no.

You will not have a vote.

I will have a vote in the referendum.

I can let your Lordships into another secret: my noble friend Lord McNally will vote yes. Some might think, as our votes will cancel each other out, we should just stay at home and have a quiet dinner together, but we will not, because both of us are agreed that the British people should have this choice, and we will each campaign for the answer we seek.

How odd it would be if this unelected House, which lately voted overwhelmingly against the very idea that your Lordships should be elected, should have the temerity to tell the elected House how to proceed on its own election or to deny its wish to give the people their say.

The Lords Constitution Committee has now published its report on the Bill. It states that there has not been enough consultation on it. Respectfully, I disagree. The proposals in this Bill apply entirely to the other place. It has been rigorously examined there over eight days on the Floor of the House and through 35 Divisions. It reflects the settled will of the elected House.

On the referendum, the Government have worked closely with the Electoral Commission and administrators, and the commission has declared itself broadly satisfied that sufficient progress has been made to enable the local returning and counting officers to run the polls well and that voters will be able to participate in them.

The provisions in the Bill are sound, and Members of this House should consider carefully the clear signal from the elected House before making major changes in it.

There has been speculation about the last possible date for Royal Assent to allow the referendum to happen on 5 May. I believe there is more than adequate time. It is certainly important that, commensurate withfull scrutiny in this House, we give participants and campaigners in the referendum as much time as possible to prepare for a full and informed campaign. We owe that to the electorate, but it is possible to do that and allow enough time to examine the Bill, which I hope will complete its passage as soon as possible in January 2011.

I do not want to make unnecessary political points, but I remind noble Lords opposite of a forgotten document: A Future Fair for All, the manifesto of the party opposite only this spring, written by their current leader. On page 62, it talks of, “A New Politics”. It continues:

“To ensure that every MP is supported by a majority of their constituents voting at each election, we will hold a referendum on introducing the Alternative Vote for elections to the House of Commons”.

That was what Mr Miliband thought then, so I take it that we will have full support from the party opposite for the part of the Bill that provides for what it itself promised at the general election.

There is a small quibble: the party opposite promised a referendum by October 2011. The Bill proposes it in May 2011—one year into this Parliament, but that is a far slower timetable than the six-month one used by the party opposite for the referendums on Scottish and Welsh devolution in 1997.

Is not there a big distinction, in that what the Opposition, then in government, were proposing was a pre-legislative referendum, not a post-legislative referendum, which is an important constitutional distinction?

Yes, my Lords, but on the whole I think it is better for people to know what it is they are voting on, which is what is envisaged in the Bill.