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Grand Committee

Volume 726: debated on Tuesday 29 March 2011

Grand Committee

Tuesday, 29 March 2011.

Arrangement of Business


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

Warm Home Discount Regulations 2011

Considered in Grand Committee

Moved by

That the Grand Committee do consider the Warm Home Discount Regulations 2011.

Relevant document: 17th Report from the Joint Committee on Statutory Instruments.

My Lords, I beg to move that the Committee has considered the draft Warm Home Discount Regulations 2011.

These regulations build on the voluntary agreement negotiated by the previous Government with energy suppliers. I applaud them for bringing forward the primary legislation in the Energy Act 2010, which has allowed us to make this scheme a reality.

For over five years, the numbers of households in fuel poverty has risen. It is estimated that in 2010, 4 million households were living in fuel poverty in England. The Government are committed to tackling fuel poverty and supporting low-income and vulnerable consumers to heat their homes affordably. The warm home discount scheme enabled by this instrument will help this to happen.

We are aware that fuel poverty is an issue that is best tackled via many angles, not just one. That is why there are four proposed elements to the warm home discount scheme. The first is the core group. A specified financial benefit of at least £120 per annum will be provided to households in receipt of certain elements of pension credit. Receipt of pension credit guarantee credit, which goes to some of the poorest pensioners, is one of the best ways to identify this group. We consider this group to be at high risk of fuel poverty. Over half of all fuel-poor households contain someone over 60, and over 80 per cent are in the lowest three income deciles.

The second group is the broader group. The same financial benefit specified for the core group will be provided to a broader group of households, who are fuel poor or vulnerable to fuel poverty. We have specified a number of state benefits that energy suppliers could choose from to identify those eligible for broader group support. Suppliers would also be able to propose additional criteria for approval by Ofgem, which would target support at those in or at risk of fuel poverty.

The third group involves the legacy spend. This will give a smooth transition from the voluntary agreement, which is an agreement that has been in place for the past three years between the Government and energy companies. It provides financial assistance to vulnerable consumers but the agreement ends this month. The amount of spending by suppliers on these legacy forms of support will decrease over the course of the scheme, as the amount of spending on rebates for the core and broader groups increases. The warm home discount scheme builds on the success of the voluntary agreement, and allows the Government to provide stronger support for the people who need it.

Lastly, there are the industry initiatives. Suppliers will be able to fund some activities in addition to the provision of direct financial support, which will benefit households in or at risk of fuel poverty. The scheme regulations detail which forms of support can be funded and include activities that improve targeting of the available support or those that provide energy advice to consumers. Through the scheme, those participating energy suppliers will provide support worth up to £1.1 billion over the next four years. But we must ensure that the resources we have are used effectively to tackle the problems underlying fuel poverty.

On 14 March, the Secretary of State launched an independent review of the fuel poverty target and its definition, led by Professor John Hills. Our intention is that suppliers’ contributions to the policy will be proportionate to their market share. Further regulations will be laid to allow a reconciliation mechanism to guarantee this, should the House support these scheme regulations. Subject to support from Parliament for the data-matching regulations due to be tabled later this year to help identify the core group, we estimate that around 2 million low-income and vulnerable households will be assisted by the scheme annually. On that basis, I commend this instrument to the Committee.

My Lords, I welcome what the Minister has said, and these regulations, but I have some questions that I hope he will be able to help me with. I should also declare an interest: I am a vice-president of National Energy Action, a charity which campaigns to help people in fuel poverty. I know that the Minister himself, through the passage of the Energy Bill, is very committed to trying to alleviate fuel poverty in this country, but I wonder if he can help me.

The Minister estimated that 2 million households a year will benefit from this scheme, and he also explained that there will be legacy households from the voluntary scheme. Can he tell us how much of an overlap there is between these two groups? Maybe this is in the documents that go with the order—I did have a look at them, but I was not able to find this myself.

Also, following the Budget there was a lot of peripheral discussion about the fact that the upgrade on the winter fuel allowance that had been in place temporarily for two years was not continuing. I appreciate that the Minister may not be able to do this today, but is it possible to say what percentage of pensioners who get the winter fuel allowance are likely to be helped by this scheme? It is fairly important that we get that message out, given that there has been publicity in local papers about how terrible it is that people are losing their extra £50, or, if they are over 80, £100. It seems that many of the people who will find it hardest should benefit from this scheme, and it would be helpful if we could get those figures out.

I turn to my other question. Other than the pensioner or elderly group, will the Minister tell us more about how he sees other vulnerable groups, and who are they? I understand that the main concern of this is to protect the health and welfare of elderly people, but there are of course other vulnerable households—as indeed the noble Lord mentioned. I am thinking particularly of low-income families with young children, or people who have long-term disabilities or illnesses which mean they need to be kept warm.

I welcome this, I hope that the regulations that go with it later on are fairly speedy in coming, and I look forward to the answers from my noble friend.

My Lords, like my noble friend I, too, welcome these regulations. They bring a little more certainty to what has hitherto been a rather uncertain variety of schemes.

My main concern has always been how the suppliers are intended to identify the householders that they are supposed to help. My noble friend will remember that we had some discussion about that on the question of the Green Deal. It is on these energy discounts and what have previously been called rebates on bills that the problem has been at its most acute. I do not need to go over the detail of this, but when we first debated the CERT scheme—it must be nearly four years ago—two things were evident. One was the considerable hostility of the industry—the suppliers—to becoming involved in this sort of activity. I think attitudes have dramatically changed, and I find in talking to industry representatives a clear recognition that helping those who are most likely to suffer fuel poverty is indeed very much part of their social obligation. I welcome this change of heart; a variety of factors have contributed to it and I do not necessarily need to go into them.

The second problem, as I said, has always been that of identifying the households. We pressed former Ministers very hard on this and eventually secured a clause in the Pension Bill which allowed Ministers in the Department of Work and Pensions to supply the names of pension credit pensioners, as households likely to be most in need. Given the problem that had been identified—I will forbear from giving a quotation in Latin, because that now is rather frowned upon in this House.

Right: Parturient montes, nascetur ridiculus mus. The mountains heaved in childbirth and what came out was a ridiculous mouse. We had asked for far more clarity on how these fuel poverty households were to be identified and my discussions with the industry then revealed that they were wasting a very great deal of time and money on going from house to house trying to find out who they were. Of course, they got much better at it; they began to recognise—as, indeed, most people’s common sense would say—that there are areas in which you will find a much higher concentration of fuel poverty houses, but they also found that quite a number were not eligible for help because they had already had Warm Front help and this added to the problem. This is nothing new; it has been going on for some time.

We have here, as my noble friend has described, two main groups; the core group and the broader group. I very much welcome, because it meets the demands that have been made over the years, Part 1 of Schedule 2 of the order, headed:

“Eligibility criteria: descriptions of persons satisfying Condition 1”

—that is, the core group. Instead of having what had hitherto been either a tiny pensioner group or a fairly indeterminate criterion, we have, in these four sub-paragraphs, descriptions of the kinds of households which should form part of the core group. I very much welcome that; some progress has been made. However, as I think my noble friend Lady Maddock said—we are promised further regulation on data sharing—it is all a question of data sharing and what is legitimate under the general law.

Paragraph 4.3 of the Explanatory Memorandum says:

“It is also intended to make further Regulations under section 142 of the Pensions Act 2008 to authorise, and prescribe safeguards in connection with, the sharing of data between electricity suppliers and the Secretary of State. The purpose of the data sharing will be to facilitate the exercise of the Secretary of State’s powers under Part 3 of this instrument”—

these orders, these regulations—

“by enabling the Secretary of State to identify which of a supplier’s customers are recipients of state pension credit”.

Is there any advance in this? Are we in any way going beyond the state pension credit households who are going to be identified so that suppliers can know precisely who they have to help? I had thought, to begin with, that this was going to be an extension of the defined criteria, but I think, if I can put it this way, that it is still the same ridiculous mouse, in which case, what is the purpose of the further regulations? What are we to expect from those?

I will not quote them but I have figures here of what the industry has been doing under the voluntary scheme introduced by the last Government, which clearly has been very helpful. However, I welcome this tighter scheme which is now coming into operation as a result of these regulations. My noble friend gave the figure of £1.1 million. I have the chart here of how that is going to be made up and how the amounts on the core group and the broader group are going to increase over the next four years. There are much smaller sums of money in the broader group, which is interesting. The legacy spending, as he said, is going down so that the figures broadly balance. Then there is evidence of the figures for the legacy spending cap and the industry initiatives cap, with the total for each year rising from £250 million in 2011-12 to £310 million in 2014-15. Those figures add up to the figure we gave of £1.1 million.

This is obviously very helpful but I would like to draw attention to one other thing. I attended the other night a reception to herald an agreement that had been made between EDF Energy and Citizens Advice. Both sides were very enthusiastic about this. The NACAB has a long record of being able to help families and people who are struggling with debt, much of which, particularly in recent years, has arisen as a result of a rise fuel prices. I commend EDF for that initiative of getting together with the NACAB in order to use its expertise. I was struck by the way in which this operation is going to be quite insulated from any marketing by EDF. It is not seeking to use this to benefit its marketing. It is entirely intended to help its poorer customers. I hope that other companies might follow the EDF example. There is no doubt that identifying those households which can benefit from the discount—previously the rebate as we said earlier—has always been one of the big hurdles in making this policy effective. I would welcome it if the Minister can say anything more in his reply as to what other measures the Government may have in mind to try to help companies save their customers money.

My Lords, in his introduction the Minister said how he applauded the last Government. He commented in your Lordships’ House during our debates on the last legislation that he looked forward to being held aloft as he left the Chamber. He may not quite have achieved that on this occasion but he has had a pretty good stab at it and we welcome these regulations. Given that it comes from legislation passed in the Energy Act 2010 by the last Government, it will come as no surprise that we agree with the broad thrust of the order because it builds on that voluntary agreement which has been so successful in supporting those who are fuel poor. The Minister will be aware of the commitments made by Ed Miliband, then Secretary of State of State for Energy and Climate Change and now Leader of the Opposition, when he said he would bring forward legislation to make such support compulsory and to target resources at the most vulnerable consumers. The legislation was brought forward, along with other measures to deal with fuel poverty such as Warm Front and winter fuel payments, for two reasons—to deal with the issues of those that are fuel poor and the issues of those who live in unhealthy and cold conditions. We have heard from our previous debates on the Energy Bill the impact that can have on homes and families. There is an individual cost but also an environmental cost. So for those reasons I welcome the regulations. However, I did not imagine when the legislation was brought forward that the regulations would be with us today against a backdrop of winter fuel payments having been cut in the Budget and of Warm Front being drastically cut by two-thirds and phased out completely after two years. Although we will see the introduction of the Green Deal and the energy efficiency measures, which we welcome, we do not know yet if and when those measures will apply to the public rented sector. That makes the responsibility of getting this right today all the more important.

We agree with much that is in the order, and certainly with the principles behind it. The Minister spoke of four key elements, including support measures and who might be eligible for a rebate as part of the core group. We, too, favour that support being extended to a wider group. I understood that the wider group comprised those who were at risk of fuel poverty, but the Minister in his opening speech said that it was those who were fuel poor and those who were at risk of becoming fuel poor. That seems to be an admission that the core group will not pick up everybody who is fuel poor. I would be grateful if he would say something more about that. The voluntary agreement ends in the next few days. The legacy spend is an appropriate way forward. The proposed model of industry initiatives allows some of those non-financial benefits such as energy advice to continue.

There is considerable agreement in principle, but I will raise some questions that I hope the Minister can satisfy me on. They are not dissimilar to the questions raised by other noble Lords. I understand from the debate yesterday in the other place that there will be a further order concerned with data collection and protection issues that might arise from identification of the core group. This will concern sharing information with the DWP. One concern with the process of sharing information is whether it will fully identify everybody who will be eligible for support. What action will be taken to ensure that as many people as possible in that group are reached? Given that the information will be shared with energy companies, what restrictions will be placed on its use, and how will they be enforced or policed to ensure that they are abided by?

I am also interested—I know that we have a further order on this—in the reconciliation mechanism for energy suppliers in the core group. Further regulations have been published, but perhaps I have missed the Explanatory Notes to those regulations. I do not know whether they have been published yet. How will the reconciliation mechanism be funded, and what consultation has there been with energy companies prior to the order being published? The main concerns with the broader group arise out of the identification and funding of that group. The core group is specifically identified, but the broader group is not. That is appropriate, and I understand why the Government want to allow greater flexibility to suppliers to support a wider range of vulnerable households. I am aware that they understand that energy companies will need guidance on this. However, I am still not clear how the energy suppliers will identify those who need support. Will support be available to assist them? Will the Government enlist help from third-party organisations, and, if so, will they in turn have any support to help them work with energy supply companies to identify who is entitled to a rebate and support?

The Minister will be aware also of some of the concerns of those helped by organisations such as Macmillan Cancer Support. For those who are terminally ill, the additional cost of heating their homes is significant. It is a serious worry for people. Macmillan's research has identified that one in five people with cancer turns off the heating when they most need it because they are worried about, or cannot afford to pay, their bills. That causes concern both to the NHS and to your Lordships' House. Every health and social care professional is convinced that having an adequately heated home is crucial to a patient's recovery. Why was the decision taken to exclude people with terminal illnesses from the core group? I do not think that it is a matter of costs, because they are relatively small; perhaps there is another reason. It would be helpful to have further information on that.

Another area I would like to explore with the Minister is whether the Government have made any assessment of whether those who benefit under the current voluntary agreement could lose support under the new arrangements. It would be helpful if there was some kind of review of the scheme as it progresses to assess whether or not that is the case; and, if it is, what action can be taken to address the unintended consequence of losing support in moving to a statutory requirement.

I want to raise a couple of other issues, of which I have given the Minister notice, so it will be easier for him to address the points in Committee. On page 3, in the Interpretation, the Introduction there is a list of those who are eligible for a rebate. They are:

“a man and a woman who are married to each other … [or] not married to each other but are living together as husband and wife … two people of the same sex who are civil partners”,

and in the same household, or,

“two people of the same sex who are not civil partners of each other but are living together as if they were civil partners”.

These are couples who have a relationship. But what about other couples, siblings who may be living together, for example? Would they not be eligible for the same support as couples who have a civil partnership, or marriage, or are living as if they did? Two friends sharing a home in the same way as a married couple or civil partnership couple seem to be excluded under the interpretation. Any information or advice that the Minister can give me on that would be helpful.

Finally, it was helpful when the Minister spoke of the work of Professor Hill, which will be incredibly valuable to the work of the Government on energy efficiency and fuel poverty. I understand that there are discussions about him being asked to look at redefining fuel poverty. The only way we should take people out of fuel poverty is by addressing the core issues, not be redefining fuel poverty. Can the Minister can ask Professor Hill to look at this issue and come back to us on whether it can be done through this order or in some other way? I raised this during the Energy Bill as well. In terms of pre-payment meters, Save the Children has identified what it calls a poverty premium issue: those who earn the least, and have the greatest need, pay the most. If you are paying through a pre-payment meter you pay around 8 per cent to 10 per cent more in energy bills. Six per cent of households have pre-payment meters and 25 per cent of those households are fuel poor. That may not easily fit into the broader group, but it would be helpful if that could be looked at, as the broader group is being defined. One way out of fuel poverty is to stop charging those that have the greatest problem the most money for their fuel.

I assure the Minister that we welcome the proposals. I am not sure that they fully plug the gap that is needed to address the fuel poor, particularly the rise in energy prices. We are seeing the numbers of those who are fuel poor increasing. It will certainly help, however, and I entreat the Minister to keep the operation of this scheme open and under review, so that if we do find that there are gaps where we are not addressing the crucial issue, we can come back and ensure that this does fully undertake the role that the Government are seeking for it in these regulations.

My Lords, I am grateful as always to the input from my noble friend and those on the opposition Benches. Again, I would like to thank opposition Members for giving me some indication of the angle that they were coming from in terms of questions. It is extremely helpful. These are detailed questions which I will seek to address now, but clearly, for some points, it may be useful if we put something in writing at a later stage for clarification; as always, I am happy to make officials available for further clarification.

I shall deal first with my noble friend Lady Maddock, who has unrivalled knowledge in this field through her work in the charities sector. She quite rightly asked about the overlap between the groups. I can assure her that we put in place arrangements to allow suppliers to continue to provide benefits to customers, receiving help under the current voluntary agreement through the legacy spending section. The amount of funding available, which I think is the figure that she would like to know in relation to the first scheme, is about £140 million. This would allow that continuation and assistance.

What percentage of those pensioners who receive the existing winter fuel allowance will be helped by the scheme? The noble Lord, Lord Jenkin of Roding, was alluding to this question as well. There are 12 million such pensioners, and in the first year we anticipate that 800,000 people would benefit, which is roughly 6.5 per cent—I say despite my failure at the old-fashioned maths O-level—and 1.3 million towards the end of the scheme, which is just over 10 per cent. I hope that is a satisfactory figure.

My education continues with the noble Lord, Lord Jenkin of Roding, talking to us in Latin. I am very grateful in this particular instance that he did do a translation—I did Latin O-level, but it needs some brushing up. I notice the noble Baroness opposite did not need to have it translated for her.

You see, you learn so much in these debates, don’t you? I am so glad that the noble Baroness opposite showed me that she knew exactly what we were talking about, whereas on these Benches we have to be educated.

That takes me away from the thrust of his real question, which was how suppliers identify households in the criteria. As he rightly says, if you read the document, page 18, Part 1, Schedule 2 outlines how we have got to the criteria— I sound like the noble Lord, Lord Jenkin, now, because he normally quotes references from here. Are we going beyond the state pension households? Obviously, we would like to. It is very important to await the findings of Professor Hills to find out what the fuel poverty criteria is going to be, because that is where our focus and attack has got to be. I am grateful for the support from the Benches opposite, and I am delighted that we will listen to what Lord Hills—not Lord Hills, not yet—Professor Hills has to say before we really attack this subject.

Again, I am grateful to the noble Lord, Lord Jenkin, for pointing out the table— although I have lost it now among all this paper—which clearly shows the application of funds. I will be very happy to provide that to anybody who has not seen it because it shows quite clearly the distribution of funds to these groups.

The noble Baroness, Lady Smith of Basildon, asked four or five questions, but fundamentally whether this will this pick up the fuel poor. I refer to the remarks I have just made: clearly, the whole point is to take people out of fuel poverty, to stop this figure of 4 million, which is running slightly out of control at the moment, and grind it to a halt.

Her first question was about the identification of the core group in terms of the collection and protection of data. We have a data-matching organisation on hand to carry out a comparison of names and addresses, energy suppliers and customers. Names and addresses would be held by the DWP on pension credit recipients. Where the data matches, each energy supplier would be told which of their customers have matched and are therefore eligible for the rebate. The purposes for which this shared data may be used are set out in the scheme’s regulations. I hope that helps answer that question.

The core group is of course focused on pension recipients. These are some of the poorest pensioners. We know that over half the fuel poor are pensioners and over 89 per cent of the fuel poor are in the lowest three income deciles, which is very useful information to bear in mind.

The noble Baroness then asked for information about the reconciliation mechanism. The mechanism will be necessary only to share the costs of providing help to the core group. This is because each supplier will have to provide help to all its eligible customers identified by the Secretary of State thorough the data-match and suite processes, and the spread of customers is unlikely to be equal.

We then moved on to identification of the border group and why the terminally ill were excluded. The regulations are clear that the suppliers should target those in fuel poverty, as we have just said. That should include low-income families but we should also be very mindful of the terminally ill, the disabled or the long-term sick because they are the ones who find it most difficult to cope with this problem, and I can give the noble Baroness an assurance that that is very much in the forefront of our mind.

There was a very good question on voluntary agreements. We put voluntary agreements in place to allow suppliers to continue providing benefits to customers receiving help under the voluntary agreement through the legacy spending section of the scheme. However, we believe that the core and broader groups will take more people out of fuel poverty as well as providing clearer and more predictable benefits. We therefore propose that the legacy spending should be transitional and that suppliers should have to manage their spend over the scheme period.

The noble Baroness’s final point was about two people living together who were not married or in civil partnership being eligible. The rebate will be paid to either member of the couple where one of them satisfies the eligibility criteria and is also the electricity bill payer. The regulations set out the meaning of the word “couple”, which is well worth knowing. The definition is that generally used for benefit purposes: two people are treated as a couple if they are married, not married but living together as husband and wife, in a civil partnership or not in a civil partnership but living together as if they were. And if you can get to the bottom of that, you will be much the wiser.

The question of pre-payment meters is a valuable one. Over 80 per cent of the fuel-poor use the pre-payment method, so it is very important that we work with that. The pricing mechanism is a matter for Ofgem, which has recently produced a review that is available. I am happy for our department to put one in the post to the noble Baroness for some light bedside reading when she is enjoying a weekend off.

Sorry, did I say that the fuel-poor used pre-pay meters? Over 80 per cent of the fuel-poor do not use pre-payment meters.

I am grateful to noble Lords for their input, as always, and it is fundamental, as we have said on many occasions, as those who have listened to our energy debates in the past will know, that we should focus on getting people out of fuel poverty. This Government are determined to concentrate on that issue, as I know were the previous Government. That is where the warm homes discount can make a difference. I commend the order to the House.

Motion agreed.

Export Control (Amendment) (No. 2) Order 2011

Considered in Grand Committee

Moved by

That the Grand Committee do report to the House that it has considered the Export Control (Amendment) (No. 2) Order 2011.

Relevant documents: 18th Report from the Joint Committee on Statutory Instruments, 24th Report from the Merits Committee.

My Lords, the order was laid before Parliament and came into force on 2 March. It was made using powers under Section 6 of the Export Control Act 2002. It imposed export controls on unissued Libyan bank notes and unissued Libyan coins. As a result, the export to any destination of such notes and coins is prohibited unless a licence has first been obtained from the Secretary of State for Business, Innovation and Skills. The order revoked and replaced the Export Control (Amendment) Order 2011 which, for reasons of urgency, was made and came into force on Sunday 27 February and was laid before Parliament at the earliest opportunity on Monday 28 February. This order had imposed controls on the export of unissued Libyan bank notes.

I will explain the background to the orders. On Friday 25 February, the Government became aware that a commercial printer in the UK had a contract with the Central Bank of Libya to print Libyan bank notes. The Libyans had asked for urgent delivery of the entire stock of outstanding notes, valued at nearly £900 million. Given the worsening situation in Libya and the imminent imposition of United Nations sanctions against that country and its regime, the Government judged that there was a risk that regime members would attempt to move state assets with the intention of keeping them for their own benefit if the regime failed, against the interests of the Libyan people. There was also a risk that the assets might be misdirected through corruption. In both cases, we assessed that the movement of these funds would constitute money laundering.

There was an urgent need to prevent the supply of the bank notes in order, first, to mitigate the risk that the money would be used by Colonel Gadaffi and his associates to support further violent repression of the civilian population; secondly, to prevent Colonel Gadaffi and his associates misappropriating the money for personal use if and when forced from office; and thirdly, to ensure that the money was kept safe for future legitimate use by Libya when the risks I referred to no longer exist.

We needed to act quickly. The printer had told us that contractually it had no grounds for delaying the shipment. We considered a number of ways in which we could prevent the supply of the notes. We were working hard at the UN for a Security Council resolution that would impose, among other things, an asset freeze. We did not know at the time whether this would include the Central Bank of Libya, or how long it would take. We also considered whether it would be possible to take action under the Proceeds of Crime Act 2002.

However, the Export Control Act 2002 allows the Secretary of State to make provision, by order, for or in connection with the imposition of export controls in relation to goods of any description. The Libyan Bank notes were not in circulation and therefore did not constitute legal tender, but because they were paper notes they were “goods” that could be controlled under the powers of the Export Control Act. We decided that the use of these powers offered the quickest and most robust method of preventing the supply of the notes. Officials in my department worked closely with HM Treasury and others to draft the legislation. Work continued on this on the Friday night and into the weekend. Because the notes could be shipped at any time, it was essential that the order came into force as soon as possible. This meant bringing it into force on Sunday 27 February, before it could be laid before Parliament.

In compliance with the requirements of Section 4 of the Statutory Instruments Act 1946, my department wrote to the Speakers of both Houses setting out the reasons. The Export Control (Amendment) Order 2011 was laid before Parliament at the earliest opportunity, on Monday 28 February. Soon after this, the Government became aware that a further contract existed with another supplier, in this case for the supply of unissued Libyan coins. Although the value of the coins was much lower, we judged that the same risks of money laundering and of the misappropriation of state assets existed. We therefore made the Export Control (Amendment) (No. 2) Order which imposed export controls on unissued Libyan coins as well as bank notes. This order was made, laid and came into force on 2 March. At the same time, the original order was replaced and revoked by the new order. The order was laid before Parliament pursuant to the procedure in Section 13 of the 2002 Act and, unless approved by a resolution of each House within 40 days, it will cease to have effect. Orders made under Section 6 last for a maximum of 12 months.

The situation in Libya and the international response to it is and has been changing rapidly. We are keeping the need for this order under review. If it becomes clear that it is no longer required, it will be withdrawn. On the basis of the facts that I have outlined, I commend the order.

My Lords, I start by welcoming the noble Lord, Lord Green of Hurstpierpoint, to these important but less dramatic moments. I understand that his debut was in Questions in the Chamber the other day and I am very sorry to have missed that. I also welcome him in his capacity to that very fine and sensitive line that exists between business, trade and foreign policy with its ethical umbrella that we attempt to live up to in our dealings with all of these matters.

This order has its origins in the United Nations Security Council Resolution 1970 and is subsequently reinforced through Resolution 1973 as well as EU directives to comply with the new sanctions regime in Libya. There was a time in the 1970s and 1980s when economic sanctions were seen as the poor cousins of military sanctions that were deemed to be the only thing that really worked. I am delighted to say that such is the power of capital and capital flows in a globalised world that they are now an essential element of what we see as specific and targeted mechanisms, designed not to impose real hardship on mass populations but rather to prevent specific named individuals, their friends and their businesses from carrying out illegal acts in support of reprehensible objectives.

In pledging our support for these measures, I have a few questions that I hope the Minister will be able to answer. Some might go slightly wider than his brief but I will put them on the record in any event. The first relates to the activities of the Libyan Investment Authority and its assets held by UK banks. Is the Minister confident that we now have clarity on the value of these and of our banks’ co-operation with the sanctions regime? On a related point, have the assets of those running the Libyan Investment Authority, such as Mr Mustafa Zarti, been frozen in the UK? We know that other countries such as Austria have moved to freeze them and we also know that the Sanctions Committee of the United Nations formed under Resolution 1970 is moving to publish a new and updated list. I hope that these named individuals who are extremely close to the Gaddafi family will find that they cannot usurp the assets of their fellow citizens in that manner. Are we also clear that Libya’s stakes in other UK companies are subject to being frozen, including the subsidiaries of those companies if the companies are designated for such purposes? Finally, Libya appears to hold the Middle East’s fourth largest gold reserves. Can the Minister tell us if HM Treasury is in discussion with its partners in other jurisdictions to ensure that Libyan gold cannot be sold on the international gold markets until such time as UNSCR 1970 and 1973 are complied with? Apart from those points, we are delighted to support these smart sanctions and hope that they will have the effect that they are intended to in the longer term.

My Lords, I also welcome the noble Lord, Lord Green. I was not there on the previous occasion. I must admit that I did not expect to be involved in the Libyan situation, but one never knows what happens in these circumstances. The noble Lord answered most of the questions I had. The question of why we did not include coins as well as notes in the first one was satisfactorily answered when he pointed out that there was a first contract for £900 million and then another in relation to the coin contract.

Can the noble Lord say whether he thinks there will be an impact on these businesses? I do not question the need to do this—I agree with the noble Baroness, Lady Falkner, that this is a smart sanction and, indeed, a necessary one, although I concur with the further points that she made. The noble Lord also gave a general indication which answered a question I wanted to pose as to what happens to the seized assets. I saw a figure of up to £2 billion worth of seized assets and he indicated generally that they would be kept until such time as they could be transferred. Will he expand a bit on that? Other than that, I also welcome this legislation.

My Lords, I would like to close this debate by thanking noble Lords for their attention and for the contributions of my noble friend Lady Falkner and the noble Lord, Lord Young. In response to my noble friend Lady Falkner’s questions, I can confirm that the Libyan Investment Authority is covered by the assets-freeze requirements of Resolution 1973. I cannot confirm whether we have clarity on the value of the assets held with the banks; I will have to look into that. I am pretty sure that I can confirm, or ought to be able to confirm, that the banks are co-operating, but I will look into the value of the assets held. As for specific individuals, we will, of course, apply sanctions to any named individual and, as the UN updates its lists, we will make sure that those are complied with. Again, I will have to look into the question of stakes in companies; it is clear to me that it ought to be covered, but I will confirm that to my noble friend.

We will certainly work with others to ensure that gold reserves do not get illegally sold in a way which creates a back-door access to assets that they should not be able to get hold of. On the question of the impact on businesses, I do not think that we have any clear information; it is one of those things that those businesses will have to reckon with. It is not yet clear what the ultimate outcome will be and therefore it is not possible at this stage to make any meaningful assessment of the implication for those businesses, but the Committee ought to know that it was those businesses that came to us and said, “We have this issue. We have no contractual right to refuse. We would like your help, please”. I am very pleased to report that this was a very responsible and swift action by the company concerned.

As for the eventual outcome, the money is being held securely by the Bank of England; it will be delivered at a time when there is an appropriate resolution of the Libyan situation and it becomes clear that there is a legitimate recipient of these banknotes, but at the moment, the situation is grave and unclear. I think that I have dealt with all the questions that were tabled. I commend this order.

Motion agreed.

Employment Equality (Repeal of Retirement Age Provisions) Regulations 2011

Considered in Grand Committee

Moved By

That the Grand Committee do report to the House that it has considered the Employment Equality (Repeal of Retirement Age Provisions) Regulations 2011.

Relevant document: 17th Report from the Joint Committee on Statutory Instruments.

My Lords, the regulations before the Committee today fulfil the Government’s pledge to quickly phase out the default retirement age. They repeal the legislation which currently allows an employer to dismiss an employee—provided that certain administrative procedures are followed—solely for the reason that they have reached the age of 65.

In order that employers who currently use the default retirement age have time to adjust, the repeals are subject to transitional arrangements. These arrangements allow retirements to proceed where individuals have been notified of retirement before 6 April and are 65 or above before 1 October this year.

The regulations also introduce a new exception to age discrimination legislation for group insurance benefits provided by employers for their employees. This includes, for example, income protection, health cover and life assurance. We have provided an exception because the consultation on removing the default retirement age identified a real risk that group insurance benefits might be reduced or removed. These benefits are greatly valued by many employers and employees and can provide important social benefits, for example enabling cover to be provided to people who would otherwise find it difficult to obtain individual cover. It is in everyone’s interest to ensure that these employer-provided benefits are not withdrawn. The exception therefore makes it lawful to withdraw such benefits only for employees at age 65 or over. This minimum age for withdrawing insured benefits will increase in line with increases to state pension age.

There is growing recognition that older people make an increasingly valuable contribution to the economy. This is without doubt a good thing. The over-50s currently make up just under a quarter of the workforce, but they will comprise nearly a third by 2020. Furthermore, latest figures from the Office for National Statistics show that the employment rate for over-65s has increased from 7.9 per cent to 9.1 per cent in the last year. Clearly, older workers will play a key part in the economic recovery and in the United Kingdom’s future economic growth. With increasing longevity, demographic change and skills shortages, it is crucial that we make full use of all available skills and experience, regardless of age, and we encourage older people to carry on working. It would be a shameful waste to ignore the contribution and potential of older workers.

I hope that what I have said so far has struck a chord with Members of this House. We all know that age is not an indication of whether someone is able to do their job well. Research shows that productivity does not decrease with age in the vast majority of jobs, and that older and younger workers complement each other. Furthermore, it is wrong to suggest that increased employment of older people means unemployment for younger people. International studies show that, if anything, a higher employment rate for older people tends to increase the rate for younger people.

Extending working life will also play an important part in reducing pensioner poverty and ensuring people are able to fulfil their expectations of retirement. A single man with a good employment history who decides to work one year beyond state pension age can increase his retirement income by up to 10 per cent.

Many employers, meanwhile, are recognising the importance of retaining the valuable skills and experience of older workers to help them through, and out of, the recession. Research shows that older workers can bring such qualities as commitment, punctuality and accuracy to their roles, as well as having a more responsible attitude to health and safety. These attributes are valued by employers across the board.

Some employers have asked how they might manage their workforce if they cannot retire people without inviting claims of unfair dismissal on age grounds. There is concern about long-serving but underperforming employees in their 60s; my response here is that employers should manage poor performance consistently across the workforce. To do otherwise is harmful to productivity and unfair on other employees.

Another area of concern surrounds retirement plans; with the default retirement age procedures no longer in place—so the argument runs—employers will be worried about raising the topic of an employee’s retirement plans. There have been calls for such conversations to be legally protected in some way. Again, this is not necessary. For those businesses that do not operate with set retirement ages, ACAS has published helpful guidance explaining how to handle the retirement of their staff. It is perfectly possible for employers to have open and honest discussions with staff, as we set out in the recently published employers’ charter, while avoiding claims of age discrimination.

Open dialogue can bring wider benefits, including discussing possible changes of role, work patterns or mentoring arrangements. A clear majority of businesses —two-thirds—already operate successfully without fixed retirement ages. Others will need to adapt. That is why we have provided guidance and best practice case studies on how businesses that currently use the default retirement age can manage without it.

In summary, abolishing the default retirement age will ensure that older people have greater choice and opportunity to work up to the age of 65 and beyond. In turn, this will boost the UK’s labour supply and contribute to economic growth. Older people bring a wealth of talent and experience to the United Kingdom’s labour market. For these reasons, I commend the regulations to the Committee. I beg to move.

I am glad to support this measure, which is certainly welcome. The Minister has been very clear in his remarks supporting this, as indeed was the case in the other place when it was discussed.

There is no question that many people when they reach the age of 65 will welcome the opportunity of being able to carry on working. As the Minister has said, the experience and talents they have gained over many years can often be a great loss to the business community, if they have to retire when they feel they can still contribute to the workplace.

I would like personally to attest to this particular measure. The Minister referred to this Chamber, this place where we work in Parliament. The Minister may perhaps have been looking at me, I hope, when he said that many people here operate quite effectively after retirement age. In my case, certainly, being just short of 10 years beyond the retirement age, I welcome it very much indeed as an opportunity to contribute with some of the experience that I have gained—for my own personal satisfaction and, I hope, for others.

It is also very much a pleasure for me to support this measure, having been in the small business sector. There is no question that when I ran my small business, I was more than happy for people to work—sometimes it turned out to be part-time—beyond retirement age. The statistics that back this measure indicate that so many people feel that they have something of value to offer and so many people are appreciated for those reasons. I am glad to support the measure wholeheartedly. I thank the Minister for a clear explanation of what we are discussing today.

My Lords, I, too, support this legislation. It is safe to say that it is an idea whose time has come. Some would say that it is not before time. As a member of the previous Government, I can say that we had planned a review, but this Government have anticipated that process, and probably rightly so. All the evidence of increased longevity, the contribution to the labour market, productivity and performance that the Minister drew to our attention are valid points.

I have one or two questions and comments. I understand the need to introduce the exception to make the group insurance benefits legal, but I wondered whether someone at some point might attempt to say that there is nevertheless discrimination by not allowing those benefits to include them. Have the Government looked at that aspect?

I must admit that I fell into the group of people who felt that doing away with this would have an impact on youth employment, until I looked at the impact assessment. In some ways I would describe it as counterintuitive, but it is hard to argue with what seems to be an overwhelming weight of evidence. I say only that I still feel that it would be valuable to monitor the situation, but one cannot quarrel with the evidence of the impact assessment.

I have a comment about flexibility. In this country we still have what I call “cliff-edge retirement”: for the most part, you are fully employed and then you are retired. This is something that the noble Lord, Lord Cotter, referred to in passing when he talked about people becoming part-time. There is not a lot of evidence of that. The situation tends to be what I have just described. Once upon a time we in the trade union labour movement thought about the idea of a flexible decade of retirement where we did not fix on a particular age. We ought to be thinking about which legislation would enable employers to be more flexible in employment prior to retirement because of the impact of pensions and so on.

I agree with the points that the Minister made about performance management, appraisal procedures and the need for open dialogue. There has been a lot of talk in the press recently about the number of employment tribunals. If you examine how many times the tribunals succeed, you will find that it is mainly because employers do not operate procedures and do not practise open dialogue. If there were more of that going on instead, that would be good. Looking at things like raising the amount of time relating to unfair dismissal from one year to two will not solve the problem. The Minister is much more on the right lines when she talks about the importance of having the right personnel procedures.

I looked at the reasoning behind introducing the regulations with guidance rather than a code of practice. Again, I understand why the Government have decided that, but I ask that we keep that one under review to see whether in fact guidance is sufficient in these circumstances. Those comments and questions aside, though, I enthusiastically welcome the Government’s approach.

My Lords, I am grateful to my noble friend Lord Cotter for his words of support and his welcome to all parts of this piece of work. I was particularly pleased to see the satisfaction and pleasure that he is getting out of the period—it can be only one or two years—since he passed the age that we have been referring to. Now that we are working as a coalition, I hope that we will see many more years of work out of him.

The noble Lord, Lord Young, said that his party had anticipated this progress. That is true and we expected him to say that. I am delighted that in broad terms he, too, is welcoming of these words today.

In response to the question on exception for employer-provided insured benefits, we are introducing the insured-benefits exemption in recognition that the default retirement age of 65 is currently used by insurers as a trigger point at which they can legitimately cease to provide insured benefits. The exception will allow them to continue to operate in this way once the default retirement age has gone because otherwise there is a risk that premiums will become too high and employers will cease to provide those benefits. I am sure the noble Lord would agree that is in no one’s interest. The exception will apply initially to employees aged 65 and above and will rise in line with the state pension age. I hope the noble Lord finds that answer helpful.

Monitoring the impact is good advice. We will monitor the impact through available resources such as the Labour Force Survey. We are committed to a review after five years. I enjoyed the noble Lord’s description of cliff-edge retirement. I had not thought of that phrase but it aptly describes what happens when we do not think through how things can work as people go forward in their working life. The Japanese or the Chinese have a system whereby they bring in a younger worker alongside an older worker and gradually the job changes in time and expression as between them they use a mentoring system. I am not sure we are that sophisticated yet.

I am grateful to both noble Lords who participated in the debate. Your Lordships’ House has, as always, displayed a keen interest in the default retirement age since its inception under the previous Administration in 2006. The Government are moving swiftly and decisively to fulfil the commitment to abolish it while providing new guidance and transitional arrangements to help businesses adjust. We are giving greater freedom to older people who want to remain economically active to contribute to the UK’s future growth. I commend the regulations to the Committee.

Motion agreed.

Patents County Court (Financial Limits) Order 2011

Considered in Grand Committee

Moved By

That the Grand Committee do report to the House that it has considered the Patents County Court (Financial Limits) Order 2011.

Relevant document: 17th Report from the Joint Committee on Statutory Instruments.

I beg to move that the Grand Committee has considered the draft Patents County Court (Financial Limits) Order 2011.

This order is part of a package of measures to improve the Patents County Court. The Government’s purpose is to make it easier for small firms and entrepreneurs to navigate legal processes, giving them more time to concentrate on business activities. We often hear that intellectual property litigation is expensive and time-consuming. For many small businesses this can be a barrier to justice. Indeed, a 2006 study for the European Patent Office found that the cost of intellectual property litigation for United Kingdom small and medium-sized enterprises was roughly three times higher than elsewhere on the continent. If it costs too much for small businesses to litigate, they will be unable to defend their rights. We cannot have a legal system with such barriers. A reliable intellectual property enforcement regime must be accessible in the truest sense, not in the terms of access to finance. Lord Justice Jackson recognised as much in his comprehensive and independent review of civil litigation costs last year, which was of course commissioned by the previous Government. His recommendations were that we should improve access to justice, reduce the costs of civil litigation, and ensure costs and remedies are proportionate.

Now, the Patents County Court was established in 1990 to provide a cost-effective forum for intellectual property cases. It has jurisdiction over disputes in relation to intellectual property rights, and it should hear less complex and lower value cases and offer an alternative to the High Court. Until recently though, procedures and costs have been the same as in the High Court. The damages it awards remain the same as in the High Court, and it is this that we wish to change.

The order intends to set a maximum limit of £500,000 that could be awarded in the Patents County Court. Without this limit, a small or medium-sized enterprise with a legal case worth less than £500,000 may face litigation in either the Patents County Court or the High Court, and not know the level of financial risk it faces. With this order, however, the same business will have certainty that the Patents County Court is the appropriate forum and that there is a limit to its financial risk.

The principle of a damages limit has been examined through numerous consultations, including Lord Justice Jackson’s review. The Patents County Court judges and senior judiciary are eager to see this limit introduced. Legal practitioners and court users recognise its usefulness, too. A host of businesses and associations support the move, and a recent Intellectual Property Office consultation found 77 per cent of respondents supported the £500,000 limit. We will monitor the effectiveness of the damages cap, with a formal review in 2014.

The order addresses the need for a damages limit for patents and design cases, within the jurisdiction of the Patents County Court. Similar work is in hand to take forward comparable changes to other intellectual property rights, such as trade marks and copyright. This measure is consistent with our broader reform effort. For example, we have already simplified procedures for cases heard in the Patents County Court, and introduced a recoverable costs cap of £50,000. In a court where litigants can represent themselves, these changes have been warmly welcomed.

A further possible consequence of these reforms, as Lord Justice Jackson recognised, is that they may increase the availability of intellectual property insurances to small and medium-sized enterprises. At present, they are not widely available at affordable prices.

We all recognise that litigation around intellectual property is complex. These changes, on their own, are no panacea, but they will help small businesses and entrepreneurs seeking to innovate, providing clarity about legal processes, certainty over risks and giving them confidence they stand on an equal footing with financially stronger companies. The bigger picture, of course, is that innovation is essential to economic growth, and that is the abiding goal of this Government. I beg to move.

My Lords, I am glad that the issue of patents is being addressed today. There is no question that SMEs in particular have disadvantages when it comes to patenting products, particularly worldwide, so anything that can happen to encourage SMEs to embark on the patenting route is to be welcomed. At another occasion, another time, I may emphasise that point.

As the Minister said, the Patents County Court was created to help SMEs by providing an affordable forum for litigation, but it has been found that improvements are necessary, and today we start on that process. In saying that, though, I welcome the fact that within the regulation there is a requirement to review within three years how this process has progressed. Obviously, at the end of it, if any further measures are required, I would certainly support the Minister from these Benches.

SMEs will need to be told about this measure and many similar ones. I see that the benefits will be publicised through the e-mail notification system, which communicates with more than 400 stakeholders. Can we be sure that this means of communicating information will effectively reach SMEs throughout the country? If the Minister cannot provide a detailed answer today, perhaps the matter might be taken away to ensure that SMEs hear effectively and clearly about the measure. On that basis, I am happy to support it and will be glad to hear the Minister's response in due course.

My Lords, we, too, welcome the proposed legislation. I reflected as the noble Baroness moved the legislation that—if I may paraphrase—justice overpriced is justice denied. The report of Lord Justice Jackson provides welcome assistance to SMEs by reducing the cost of protecting patents and designs in disputes and by allowing claims of up to £500,000, excluding interest, to be heard in patent courts.

It is a pity that we will need further secondary legislation to include IP rights such as copyrights and trademarks. It is a shame that this could not be done in parallel legislation. Perhaps that would not have been possible, but I would welcome an explanation of why there has been a delay and why we could not do both at the same time, given the importance of these areas. I, too, welcome the Minister’s comments on intellectual property insurances. Again, if that helps SMEs and entrepreneurs, it will be valuable.

I have a concern about the post-implementation review. Three years is a long time. Perhaps some consideration could be given to shortening that period. After two years a fair body of evidence should be available. Again, I do not know how practical that is. I concur with the noble Lord, Lord Cotter, on the importance of communicating these important changes to SMEs. With those comments and questions, I, too, welcome the proposed legislation.

My Lords I am grateful to all noble Lords who have taken part in our discussions today. My noble friend Lord Cotter welcomed a review after three years and felt that further measures might be required, which he would support at the time if he thought that they were right. My noble friend Lord Cotter and the noble Lord, Lord Young, asked how we would communicate with people and whether we would use means other than the internet. E-mail will reach all SMEs. The e-mail notification system includes a large number of representative bodies—we knew that. We will also hold seminars in which Judge Arnold will cover the changes to practices. This is news to me; I thank noble Lords for asking the question because I now know the answer.

As a past chairman of the National Consumer Council, I am very keen to make sure that people get the information that they want in the way they want it. If there is any question that we need to communicate in another way, we will certainly look at it.

The noble Lord, Lord Young, asked why we do not have parallel legislation on copyright and trademarks. Lord Justice Jackson included recommendations to reduce the cost of intellectual property litigation in his review of civil litigation costs. His recommendations included implementing the package of proposals made by the Intellectual Property Court users’ committee. These were intended to reform the Patents County Court. We were able to expedite the completion of stage one of this process through amendments to the civil procedure rules. These introduced simpler procedures and fixed the scale of recoverable costs. Stage two of the package could only be achieved through the lengthier process of this Privy Council order and this will introduce a damage limit of £500,000, which will ensure that lower-value complex cases are automatically heard in the cheaper patents county courts and not the High Court. I hope that that is some form of clarification. If it is not, we will certainly write to make sure that I have expressed it clearly.

The noble Lords, Lord Young and Lord Cotter, asked about waiting for the three-year review. The Intellectual Property Office is working regularly with the judiciary to see how these changes will progress. I do not know whether that answers the question on the second and third years.

I am very glad that we are all agreed that this is a good package of measures. Not only is the introduction of the damages limit a positive move to reduce the uncertainty of civil litigation for smaller businesses, but the collective packages of changes being undertaken satisfies several of the recommendations made by Lord Justice Jackson and his independent review of civil litigation costs. We need to help small businesses protect and profit from their innovation and creativity. By allowing this measure to complement the wider package being developed, we will be providing small businesses with clarity, with certainty and with confidence. I commend the order to the Committee.

Motion agreed.

Immigration and Nationality (Fees) Regulations 2011

Considered in Grand Committee

Moved By

That the Grand Committee do report to the House that it has considered the Immigration and Nationality (Fees) Regulations 2011.

Relevant document: 18th Report from the Joint Committee on Statutory Instruments.

My Lords, I beg to move that the Committee has considered the draft Immigration and Nationality (Fees) Regulations 2011.

As your Lordships will recall, I came to the Committee on 7 February and subsequently obtained approval to charge for visa, immigration and nationality services under the Immigration and Nationality (Fees) Order 2011. At that time I said that specific fee levels would be set in separate legislation using the affirmative procedure. That is the purpose of today’s debate.

The fees paid by those making visa, nationality and immigration applications are set out in regulations made under Section 51 of the Immigration, Asylum and Nationality Act 2006 and in accordance with the powers granted in Section 42 of the Asylum and Immigration (Treatment of Claimants etc) Act 2004 as amended by Section 20 of the UK Borders Act 2007. Under Section 42, the Secretary of State can set a fee for an application that exceeds the administrative cost of determining the application. The way our legal powers are defined means that we must also specify fees in separate regulations under the powers in Section 51 of the Immigration, Asylum and Nationality Act 2006.

These regulations are to set the fee for applications, processes and services that are provided at or below the administrative cost of determining the application. These regulations were laid before Parliament on 16 March 2011, are subject to the negative procedure and are not debated at all in this House. I recognise that having fees in two sets of regulations makes things a little complicated, but I am happy to take points on any of the fees proposals here today.

In general, we are proposing to limit the majority of increases to less than 10 per cent. For example, we propose to increase the sponsorship application fees by 3 per cent and will maintain our concessions for small businesses and charities who want to sponsor migrants. The increases in these fees will be the first since the points-based system was introduced in 2008.

Increases to fees that do not follow this approach are fees for dependants applying to extend their leave in the UK at the same time as the main applicant. Currently these fees are set between one-quarter and one-third of the corresponding main applicant’s fees. We propose increasing this ratio to half of the main applicant fee. This continues our agreed policy to better align our fees in and out of the UK, where all dependants already pay the full fee. This will better reflect the processing cost to us for each individual within any given application, as well as sometimes an independent set of entitlements.

Also, the fees paid overseas for those seeking entry through tier one post-study work will increase by more than 30 per cent. This will bring the fee paid by migrants overseas closer to that paid by those who applied for this route in the UK. The vast majority of applications made under the post-study work route are made in the UK.

Also, there will be further increases to fees for visa applications under tiers four and five of the points-based system; these routes continue to be charged below the administrative costs of processing the applications.

New fees being introduced include fees for amending a previously issued nationality certificate, other than when this amendment is being made to correct an error made by the UKBA, for providing certain stateless persons with the ability to acquire the status of a British protected person, and for the registration as a British citizen for the children of foreign national soldiers serving in the UK armed forces. This would align our fees legislation to reflect the rule changes that have simplified such registrations.

New fees are also being introduced for tier two intra-company transfers coming to the UK for less than 12 months, where the applicants pay a lower fee than those coming for more than 12 months.

We welcome the economic, cultural and social contribution made by legal migrants to the UK. We continue to ensure that the fees for immigration and nationality demonstrate that the UK is open for business and retains its position as an attractive destination. We also continue to monitor the economic, equality and diversity impacts of our changes and to ensure that our fees continue to be priced at levels which make them competitive when compared with those in other key countries.

I believe these regulations provide a basis for a sustainable immigration system, which all noble Lords will want. I commend them to the House.

My Lords, I am most grateful to the noble Earl, Lord Attlee, for his careful explanation of the order that is in front of us.

This order is drawn to the special attention of the House by the Merits Committee, but it does not say what is unusual about the order or what distinguishes it from other orders covered by the same report; particularly the three orders dealing with amendments of fees for other services. According to its terms of reference, there are four grounds on which the Merits Committee may draw the attention of the House to an instrument, draft or proposal, and in this case your Lordships may think that the only ones that might apply—or should apply—are,

“that it is politically or legally important or gives rise to issues of public policy likely to be of interest to the House”.

Assuming that is the case, the only matters of substance raised in the delegated legislation Committee of another place were the effect of the order on Bangladeshi and Chinese restaurants, and the question of whether UKBA would be able to cope with the workload of dealing with applications.

Since the Government have taken steps to reduce the number of immigrants the burden will be eased, but the 5,200 cut in UKBA staff is more than proportional to the reduction in the number of cases that they are expected to process.

The predicted effect of the fee increases on applications varies between zero and 2.5 per cent in the case of an application by a tier four student to change his course, which has been free in the past but is now to cost £386. On top of that, the requirements for tier four applicants have been tightened up further. Applicants from outside a university, for example, will have to present a test certificate from an independent test provider of their competence in English to level B2. It would be surprising if these new requirements did not have a larger deterrent effect, and I would be grateful if my noble friend could give us his estimate of the drop in the number of tier four applicants expected from the Home Secretary’s announcement last month. We need this to be able to assess the expected increase in the average productivity of immigration officers dealing with tier 4 cases, and hence to get a feeling of whether the reduction in UKBA staff numbers can be managed without damaging the quality of their decisions.

The rationale of the order is that fees should be set at the correct level to ensure that the income generated contributes adequately towards the costs of running the immigration system. The impact assessment estimates that UKBA income will rise by £65 million as a result of the fee changes proposed, but what will the total income be, and how close will the UKBA be to balancing income with expenditure after the cuts have taken place? I apologise to my noble friend for not having given notice of the questions that I am asking as I would normally do; I just did not have the time.

I understand that the Government have decided to defer implementing the proposed cuts in the UKBA until they have disposed of the remaining legacy cases. Will my noble friend confirm that? How many of those cases were still on the books at the latest convenient date, and what has been the average rate of completion of those cases since the start of 2011? They have always been pretty vague about when the legacy cases are going to be completed. I should have thought, as we were approaching the end of the process, that it ought to be possible to be a bit more precise now.

Under what conditions may the fees themselves be waived? For example, the fees for the registration of a minor as a British citizen are rising significantly. This is money that is intended not just to cover the administrative cost of the application but to make a profit for the UK Border Agency. If a child is prevented from registering as a British citizen for no other reason than a fee, designed to make profits for the UKBA, how does that meet the “child’s best interests” principle under the convention on the rights of the child, to which the Government are a signatory?

I have had a letter just now from Cambridge Assessment, which I think is a firm that is well known to the UKBA for supplying services in English-language skills. It expresses concern that those who cannot pay fees may not be able to learn crucial skills that they need to find work and play a positive role in their communities, as we would all wish. I have not had a chance to discuss this in detail with Cambridge Assessment, but the firm has asked me for a discussion and I am intending to meet it and go into these points in more detail. Has the Minister considered the effects on people who do not contribute to society because they are unable to find the fee for the English-language test?

Another important question relates to the ministerial authorisation on race discrimination, which was covered by a letter on 21 March from the Immigration Law Practitioners Association to the Minister, Damian Green, of which I have seen a copy. This permits the refusal of applications on grounds of specified nationality and the making of additional requirements or examinations that would not be required of another nationality and that may lead to refusal. The applicant will not know, because the specified nationalities will not be made public. He or she will have paid the fee —which is much higher than in previous years and is increasing again—but may be refused by reason of his or her nationality and not on the strength of his or her application. Perhaps the noble Earl would comment on that.

The ILPA letter also makes the general point that if the UKBA is to make a profit from charging fees, it should deliver a commensurate service. For instance, its service standards include timeframes within which applications should be dealt with, but it constantly fails to meet them. There is also the grossly unfair practice of refusing an application that would have been approved under the rules in operation at the time it was made because the rules changed some time later. The least that should happen in those circumstances is that the fee should be refunded.

My Lords, I, too, am grateful to the noble Earl for his introduction and detailed and helpful explanation, and for agreeing to answer questions not necessarily confined to this order. As he said, the fees contained in the order are set in the context of the Immigration and Nationality (Fees) Order 2011, which we debated some weeks ago.

I was interested by the remarks of the noble Lord, Lord Avebury. I have not taken it that this has been drawn to the special attention of the House. There are three categories in the report: instruments drawn to the special attention of the House, other instruments of interest and instruments that are not drawn to the special attention of the House and which presumably are not thought to be of interest either. That probably explains why the Merits Committee has not given any further explanation of its consideration of this. I suspect that it has an intrinsic interest in the fees structure arising from the decision of the Government to move to a flexible charging model aimed at allowing the UKBA to generate sufficient revenue.

The noble Lord raised very apposite questions. The noble Earl, Lord Attlee, will not be surprised if I mention the context in which we debate this, and the responsibilities of the UKBA. The agency is expecting a reduction of 5,000 staff. Almost every day, Ministers talk about the new responsibilities of the UKBA. I have raised this matter on a number of occasions but have yet to receive a response to my concern about whether the UKBA is in a position to take a massive reduction in the number of its staff when it is having new responsibilities constantly placed on it. Perhaps the noble Earl will comment on that.

We have already discussed the principle of the fees increase. This is our opportunity to look at some of the detail, and I will ask the noble Earl a few questions. Annexe 5 contains an interesting estimate of the decrease in annual applications. The estimate appears to be related in part to elasticity assumptions contained in Annexe 4. I note that on page 12 of the impact assessment there is some discussion of the methodology of estimating the decrease in applications. I will not tempt fate or put the noble Earl through agony by asking for an explanation of the methodology, but perhaps he would comment on how robust the methodology is, and how accurate are the estimates in Annexe 5. As the noble Lord, Lord Avebury, suggested, they will have a knock-on impact on the resources that will be made available to the UKBA.

I also refer the noble Earl to page 13 of the impact assessment, where the consequence of the fees increase is expected to cost the UK economy £24.4 million in 2011-12, and £89.4 million over the next four years. My reckoning from the tables contained there is that the net result, taking account of the extra income through the fee charges, is a very small benefit of around £4 million per year. Can the noble Earl confirm that? To me, this means that the benefits are therefore extremely marginal. They might be advantageous in relation to Home Office funding and the funding of the UKBA, but because of the consequences to the UK economy, the overall profit and loss account seems to come out even. On that basis, can the noble Earl comment on whether this is really an appropriate way forward?

I would be grateful if he would clarify the figures in the table on page 13 of the impact assessment, which I was confused by. These show revenue expected to be raised from fee changes in 2011-12 to be £24.1 million, yet in the first paragraph on page 14 of the impact assessment it is stated that the UKBA’s annual income is estimated to rise by £65.4 million as a result of the fee changes. I am sure I am being dense here—there must be a relationship between those two figures, but I could not see what it was. It may be that one of those figures is a netted figure, but rather like the noble Lord, Lord Avebury, I would be grateful for some clarification of those figures.

Also, I would like to ask the noble Earl about the implication of the fee rises on fees charged by other countries to British citizens going out to those countries. I raise this because I was at an occasion organised by the Birmingham Chamber of Commerce last Friday, when someone in the discussion raised a question about reciprocal arrangements. A company sending a large number of employees to work in China, I believe, raised the point that it will now have to pay higher fees because the Chinese will put the fees up to reciprocate those charged by the UK. Is this an accurate assessment of the position, and has the additional cost to UK businesses operating abroad been factored into the Home Office calculations of the net cost and gain to this country, particularly when it comes to the economic assessment?

Finally, I refer the noble Earl to paragraph 12.1 of the Explanatory Memorandum and the proposal to monitor the impact of fees. I welcomed the comments in his opening speech when he emphasised that his department would be monitoring the fees. Yesterday he said that everything is kept under review by the Government, as indeed it is—many a time have I told the House that a matter is under review—but I got the impression that this was a rather more active review. Can the noble Earl give a little more information about that, and say whether it would be possible to make some reports to Parliament on the progress of that review from time to time? I think Noble Lords would find that helpful: in terms of the impact and whether the assessment has been right regarding the reduction in the number of people coming here as a result of the fees increase; with some wider issues such as some of the points raised by the noble Lord, Lord Avebury; and with the issue of whether the calculations relating to resources to UKBA have proved to be reasonably accurate.

My Lords, I thank all noble Lords for the considered debate given to these regulations. I am grateful to the noble Lord, Lord Hunt, for his comments about the Merits Committee reports. I am sure he is right. I will write on any vital points I do not cover in my response.

The noble Lord, Lord Avebury, asked a number of very good questions. He asked about students switching courses. Tier four migrants who applied for leave from 5 October 2009 have to apply and pay a fee to the UK Border Agency to change sponsor as part of a new leave application. Students who applied for leave under tier four of the points-based system between 31 March 2009 and 4 October 2009 would now have to pay the UK Border Agency when they want to change their educational establishment. Currently the UK Border Agency considers the requests from these students when they wish to change their educational establishment and approves or refuses them accordingly. There is a cost to the UK Border Agency for undertaking this work but no fee is charged. In the current economic climate we think it is right that these costs are met by the applicant. It is right that applicants pay this fee as there is a cost to the UK Border Agency of assuring that this switch of establishment does not infringe on the students’ immigration status. Last year we received about 18,000 such applications, although we anticipate a much lower level this year. The proposed fee of £160 will be lower than the £386 that those who were granted leave based on applications dated from 5 October 2009 are required to pay. Changes to the immigration rules will be announced before this fee is introduced. This is part of our process of making sure that those who come here to study are not coming here to work.

The noble Lords, Lord Avebury and Lord Hunt of Kings Heath, talked about some of the reductions in the UK Border Agency. We are aiming to maintain service standards in terms of time and quality as we reduce costs but improve productivity. We are achieving this through investment in technology, moving to electronic rather than paper applications and case files, improved workflow management, and more efficient security-checking arrangements. These fee proposals will ensure that, while we are reducing costs, we are increasing income levels as we shift the contribution for the migration system from the UK taxpayer to the migrants who benefit.

The noble Lord, Lord Avebury, also made the point about balancing income and expenditure. In 2011-12 the UK immigration system is expected to cost over £2 billion. Our proposals will ensure that we recover approximately 36 per cent through fees from applicants and the services. These additional fee increases are expected to raise approximately an extra £90 million. Of this figure we expect to generate around £65 million from income fees set at levels where they exceed the administrative cost of processing an application. The rest of this figure will come from fees set at or below costs. The remaining costs are met by the UK taxpayer. The Committee should not forget that.

The noble Lord, Lord Avebury, talked about children born to foreign members of the UK Armed Forces. We believe that all those individuals who are required to register for British nationality should pay a fee to reflect the value of the entitlement that citizenship bestows. We only need to think of current events where Her Majesty’s Armed Forces are repatriating people stuck in difficult situations all around the globe. We already offer significant concessions to those family members by enabling their children to bypass the requirements placed on children of other migrants to obtain settlement in the UK before an application for citizenship can be made. This offers a more accelerated and hence cheaper route to citizenship than that available to family members of other migrants. An application to register for British citizenship is the free choice of the individual, or their parent in the case of children, and is not a requirement placed by the UK Government on a migrant asking to stay. It is charged at £540. By contrast, the fees required to reach a point where a child born overseas to a migrant worker could claim citizenship would be at least £2,322.

The noble Lord, Lord Avebury, asked about legacy cases. We estimate that we will have completed these by July 2011. He also asked about refunds for refused applications. The fees are set for the work involved in considering the application, not according to its outcome. He also asked about refusal of nationality. He will understand that this is a debate about fees, so I will write to him on that point.

The noble Lord, Lord Hunt, made an extremely important point about international comparisons. He suggested that perhaps the Chinese would start charging us higher fees. We regularly review the fees charged by the UK against those charged by comparator economies across the globe, and I imagine that the Chinese do the same. However, migration systems and fees are complex. Direct comparisons of price can be difficult because we cannot always compare like with like. Visa fees vary considerably between comparable economies and depend usually on the particular circumstances of the applicant, such as their current location, their category of stay and their relationship to the settled person. Visas can be issued for different lengths of time, can allow more than one visit and can confer particular entitlements to work or bring in dependants. Some countries charge an additional fee for dependant applications.

My Lords, that point was very helpful. Does the noble Earl accept that if costs go up—and the general trend is that UK fees are going up—although it is difficult to equate like for like exactly, there might be a knock-on impact on British businesses trading abroad because if fees go up here, they will go up there?

My Lords, there might be a small effect, but when one considers how much people will pay—thousands—to gain illegal entry to this country, the cost of a legal visa is relatively small.

We believe that our fees compare favourably with those of key competitor countries and offer good value, particularly when one considers the benefits and entitlements of a successful application. Where visa fees charged by the UK are more expensive than those of other countries—for example, fees for visit visas—we tend to offer better entitlements to applicants. For example, the Schengen visa is a three-month, single-visit visa, whereas the UK short-term visit visa is multiple-entry and valid for six months.

I will make some international price comparisons. For a short-term visit visa for up to six months, the UK charges £76, Australia £65, Canada £66, New Zealand £67 and the USA £96. The Schengen visa is cheaper, but it is single-entry and valid only for three months. For tier 1 exceptional talent, the UK charges £800, Australia £1,080 and Canada £662. For a tier 1 investor, the UK charges £800 and Australia £2,132. I could go on, but I would weary the Committee.

The noble Lord, Lord Hunt, asked about the robust methodology of the impact assessment. The methodology that we applied for estimating the impact of elasticity of demand was agreed by cross-government economists and by the independent Regulatory Policy Committee. We do not believe that fee increases at the level we propose will have a significant impact on the volume of demand.

The noble Lord, Lord Avebury, asked about the fee for the English language test, which is not included in the powers being debated here. He asked for an explanation of the income figures in the impact assessment. The additional fees increases are expected to raise approximately £90 million. Of this, we expect to generate around £65 million in income from setting fees at a level that exceeds the administrative cost of processing applications. I apologise for repeating the figures.

I apologise for asking the noble Lord, but my confusion is that in the table at the bottom of page 13 under the cost benefit analysis it says that:

“Benefits … Revenue raised from fee changes for those who continue to apply (PV)”

is £24.1 million. However, over the page on page 14 it says:

“UKBA’s annual income is estimated to rise by £65.4 million as a result of fee changes”.

Are those two different definitions?

My Lords, I am confident that the analysis is robust. I think it best that I write to the noble Lord with the exact situation, but it is quite a complicated analysis. The Committee should be assured that the brightest and the best will continue to be welcomed to the UK as will those who seek to come here to visit or to invest. We will also continue to monitor the impacts of our proposed changes. I believe that these regulations provide a basis for the sustainable immigration system that noble Lords want and I commend them to the Committee.

Motion agreed.

Licensing Act 2003 (Royal Wedding Licensing Hours) Order 2011

Considered in Grand Committee

Moved By

That the Grand Committee do report to the House that it has considered the Licensing Act 2003 (Royal Wedding Licensing Hours) Order 2011

Relevant document: 16th Report from the Joint Committee on Statutory Instruments.

My Lords, the licensing hours order before you today was laid in Parliament on 9 February. The order proposes the relaxation of licensing hours to celebrate the wedding of His Royal Highness Prince William and Miss Catherine Middleton. If made, it will allow licensed premises to stay open from 11 pm on Friday 29 April, the day of the wedding, to 1 am on Saturday 30 April, and from 11 pm on Saturday 30 April to 1 am on Sunday 1 May to sell alcohol for consumption on the premises; to put on regulated entertainment; and to sell hot food and drink in venues where alcohol is also sold for consumption on the premises.

Section 172 of the Licensing Act 2003 gives the Secretary of State the power to make an order relaxing opening hours for licensed premises to mark occasions of,

“exceptional international, national or local significance”.

A licensing hours order overrides existing opening hours in licensed premises and can be used for a period of up to four days. An order may be applied to all licensed premises in England and Wales, or restricted to one or more specific areas. Scotland and Northern Ireland are subject to different legislation. The wedding of His Royal Highness Prince William and Miss Catherine Middleton is a day of national celebration and, as such, the Government believe that a small relaxation of licensing hours in England and Wales is appropriate.

It is likely that many premises will wish to open later over the royal wedding weekend to take advantage of the celebrations and the long weekend. The Government do not have detailed statistics on closing times in pubs and other licensed premises—apart from 24-hour licences—but understand that around 67 per cent are currently shut by midnight on a Saturday. Licensed premises may currently use a temporary event notice to extend their opening hours for a limited period at a cost of £21. However, TENs are subject to certain annual limits—for example, only 12 may be given for a single premises each calendar year—and they may be refused by the licensing authority if the police object on crime and disorder grounds. A small relaxation of licensing hours will benefit premises that would otherwise have used a TEN to open late and will allow people to celebrate the royal wedding in pubs, clubs and other licensed venues, such as community halls.

In January this year the Government consulted on a proposal to relax licensing hours until 1am on Saturday 30 April and Sunday 1 May for the sale of alcohol for consumption on the premises and for regulated entertainment, which includes live and recorded music and dancing. The off trade was excluded from the proposal on the basis that anyone wishing to celebrate at home could buy alcohol in advance or at any time during normal opening hours. It was estimated that this small extension of licensing hours would save businesses in England and Wales between £240,000 and £280,000.

The consultation period was limited to two weeks but this was necessary to ensure that the order was made in good time for the wedding and businesses had sufficient time to plan. There were 712 responses to the consultation from a variety of interest groups and trade associations. A summary of the consultation can be found on the Home Office website. Although there was some support for an order, many of those who responded were concerned about a possible increase in crime and disorder and therefore in policing costs.

The Government take very seriously the concerns expressed by respondents to the consultation, but it was clear from the press response to the consultation that many people in this country want to celebrate the royal wedding and will welcome these proposals. The order will have no permanent effect on licensing hours and will mean that venues will open for just one or two hours later on the specified days. We anticipate that any additional policing costs will be very limited because the majority of licensed premises that will take advantage of the order would have opened late anyway using a TEN. We would expect any small extra costs to be met from existing police budgets.

Some respondents to the consultation suggested that the order should also include late-night refreshment —the sale of hot food and drink after 11pm—so that restaurants, pubs and other venues could continue to serve food until 1am. The Government accepted that suggestion but did not believe that the order should apply to takeaway establishments, which in most cases already have authorisation to stay open late.

I hope that noble Lords will agree with the Government that that this minor extension of licensing hours to celebrate the wedding of His Royal Highness Prince William and Miss Catherine Middleton is an appropriate use of the powers conferred on the Home Secretary by Section 172 of the Licensing Act.

My Lords, I thank the Minister for this draft order. It has my full support. It has been an interesting exercise to go through the consultation; the majority of people who responded to it are against the measure, which shows us that it is not always the case that those who respond to consultations reflect the majority view. I am sure that when she made her decision the Secretary of State took account of the majority view in the population as a whole that it is right to extend the licensing hours as is proposed.

However, I ask for one piece of clarification. In the consultation, a specific request was made that we should be absolutely clear what “regulated entertainment” meant and that a lot of publicity should be given to the fact that live music and dancing would be part and parcel of this order, to avoid any confusion. In the draft order as published, it is not clear to someone who is not familiar with the law whether live music and dancing are part of that or not. I think that it is clear that they are, but I hope that the Minister will explain that that is the case and the general public will have the right, in the extended licensing hours, to have live music and dancing.

My Lords, I, too, am grateful to the noble Baroness for her helpful explanation. We welcome and support this order. I accept that the royal wedding is an exceptional occasion and merits a small relaxation of licensing hours. Like the noble Lord, Lord Shipley, I note that the majority of respondents to the consultation seem to be opposed to it. I agree with him that people who consult do not always reflect the views of the general public or of Parliament. I am glad the Government have decided to press ahead with these proposals.

A couple of points were raised when this was debated in the other place. Perhaps the Minister could reflect on those. First, I understand that the order only applies to 29 and 30 April. Was consideration given to extending the order over the bank holiday weekend for a three-day period? Secondly, has any thought been given to the provision in the Licensing Act 2003 that allows certain areas to apply different hours on different days during the period covered? In other words, could local authorities be given further discretion at a local level? Finally, in the Explanatory Memorandum it is estimated that the additional policing of the order will cost between £45,000 and £170,000. Presumably there will be additional costs to local authorities. Has her department considered those costs? These are points of detail on which I would welcome a response, but overall we welcome this order.

My Lords, I thank my noble friend and the noble Lord, Lord Hunt, for this short debate. I am pleased that it has been received with such enthusiasm as we will all merrily enjoy this wonderful event. In response to my noble friend, if premises normally have dancing or serve food, this order will apply to those activities and those premises will have no difficulty in extending them.

The noble Lord, Lord Hunt, asked about a three-day period. We were mindful that we could have extended it but there were concerns during the consultation that there may be raised levels of crime and disorder. The key days are 29 April and 30 April. Two days was considered an appropriate period of time for a celebration. In response to his question about additional costs, had we not extended the licensing period, those premises would have extended it so the costs would have been there anyway. I am sure that licensed premises wishing to use this order will have taken that into account and will be responsible. This is one of those events where the country will rise to the occasion and join in the celebration and I am sure that most will be mindful that we do not end up with disorder and increased levels of crime. We have saved licensees the cost of this extension so there is an overall saving for those wishing to use it. All noble Lords have joined in with great enthusiasm and I am hoping that the country will do the same. On that note, I commend this order to the House.

Motion agreed.

Equality Act 2010 (Public Authorities and Consequential and Supplementary Amendments) Order 2011

Considered in Grand Committee

Moved By

That the Grand Committee do report to the House that it has considered the Equality Act 2010 (Public Authorities and Consequential and Supplementary Amendments) Order 2011.

Relevant document: Report from the Joint Committee on Statutory Instruments.

My Lords, I am delighted to be leading this debate, and to have this opportunity to explain the Government’s approach to this legislation.

The main purpose of this order is to add a number of additional public bodies to the lists in Schedule 19 to the Equality Act 2010, so as to make those bodies subject to the public sector equality duty. Schedule 1 to the order sets out those public bodies we propose to add to Part 1 of Schedule 19, covering general public authorities; Schedule 2 adds a new Part 4 to Schedule 19, relating to cross-border Welsh authorities.

Any organisation performing a public function is subject to the equality duty in respect of that function, but listing bodies in Schedule 19 serves two useful purposes. First, it makes absolutely clear that the body named is subject to the general equality duty, and in regard to which of its functions—in some cases this will not be all of them. Secondly, it enables the Secretary of State to impose specific duties on those bodies, to enable the better performance of the general duty. Only bodies listed in Schedule 19 can be made subject to the specific duties.

Schedule 19 to the Act, as it currently stands, lists broad categories of public bodies which are subject to the equality duty, including central government departments, local authorities, the Armed Forces, and the key health, education, policing and transport bodies. In total, around 27,000 public bodies are covered by these categories. This order adds a number of additional bodies to that schedule. I would like to explain briefly how we arrived at this final list.

The Government’s broad criteria for listing bodies for the equality duty were set out in our consultation document in August 2010. Our intention is to list public bodies which deliver public services, are responsible for regulating or inspecting the delivery of those services, or otherwise influence the way in which those services are delivered. The consultation included a draft list for comments. The Government’s broad criteria met with general approval. However, a number of respondees, and particularly the Equality and Human Rights Commission, suggested additions to that draft list.

My officials and lawyers have considered every one of those suggestions, and met with the EHRC to discuss them in detail. As a result of those discussions, a number of bodies have been added to the final list. I will quickly run through those bodies: the General Medical Council; the General Dental Council; the General Chiropractic Council; the Nursing and Midwifery Council; the Children and Family Court Advisory and Support Service; the Homes and Communities Agency; the Higher Education Funding Council for England; the Student Loans Company; the Legal Services Board; the Judicial Appointments Commission; and the NHS Business Services Authority.

Where we did not accept the recommendations of the EHRC or other respondees to our consultation, one of a number of reasons applied. First, in some cases they suggested bodies which are in fact already covered by the broad criteria in Schedule 19. For example, Ofsted and the Charity Commission for England and Wales were suggested, but these are technically non-ministerial government departments, and so fall under the listing for all government departments. Secondly, some bodies were suggested whose influence on equality outcomes we doubted—for example, the Inland Waterways Association. Thirdly, and most importantly, some bodies were suggested which we could not say with confidence perform public functions as defined in the Human Rights Act 1998. This is a necessary criterion for bodies to be listed. While there is no absolute definition as to what constitutes a public function for the purposes of the Human Rights Act, in the case of YL v Birmingham City Council in 2007 the House of Lords adopted a narrow approach when addressing this question.

On this basis, my legal advice was that I could not confidently say that certain bodies met the necessary criteria. These include some museums and heritage organisations; some research and advisory organisations, particularly ones where Ministers make the final decisions; and some trade promotion organisations, such as the British Wool Marketing Board. These types of organisation have therefore not been listed. My officials explained to the EHRC which of these reasons applied to which organisations, and I would be happy to discuss individual cases, although I am obviously keen that we do not get bogged down in lengthy debate about each and every organisation this evening.

I must stress that we will keep the list under review. We plan to add certain additional bodies to it through primary legislation, such as we are doing with GP consortia in the Health and Social Care Bill, and it would be possible to make another order such as this at some point in the future. If there are convincing legal arguments that a particular body not listed exercises public functions and has a significant impact on equality issues, I would be happy to consider them.

Moving on, the order also makes a small number of consequential and supplementary amendments to the Equality Act 2010 and other legislation. The purpose and effect of these amendments are explained in detail in the Explanatory Memorandum for the Joint Committee on Statutory Instruments. In summary, though, the overall purpose of the consequential amendments is to ensure that the amended legislation is up to date and works correctly in relation to the Act. There are four such amendments in Articles 3 to 5 of the order. The first is to Schedule 26 to the Act itself, which deals with amendments to other legislation. This amendment simply ensures that the definition of “disabled person” in the Housing (Scotland) Act 2006 refers to the Act instead of the Disability Discrimination Act 1995, which has been repealed.

The second amendment is to Schedule 27 to the Act, which sets out repeals and revocations of other legislation. This amendment adds two new Parts to the legislation, reflecting repeals and revocations of other legislation that are consequential on the repeal of the race duty under the Race Relations Act 1976, which will happen when the new equality duty comes into force.

The third amendment is to the Nationality, Immigration and Asylum Act 2002. This amendment removes redundant cross-references. The fourth is to the School Standards and Framework Act 1998. This amendment requires school adjudicators, when taking decisions, to have regard to the obligations owed by local authorities and school governing bodies under Section 149 of the Act in relation to all the protected characteristics under the Act—not just race, as is the present position.

The overall purpose of the three supplementary amendments in Articles 6 and 7 of the order is to correct inadvertent omissions or drafting errors and ensure that the Act’s provisions work as intended. The first amendment is to paragraph 20(1)(b) of Schedule 8 to the Act. This amendment puts right an incorrect technical reference relating to cases where a reasonable lack of knowledge of a person’s disability would mean that the duty to make reasonable adjustments did not apply.

The second amendment is to paragraph 14(4) of Schedule 17 to the Act. The Act misdescribes the arrangements for appeals to be made in respect of exclusions of disabled schoolchildren. This amendment corrects the wording in relation to appeal arrangements for exclusions to reflect the actual arrangements in England and Wales respectively where the pupil, the parent or both may bring an appeal, depending on the pupil’s age.

The third amendment is to Section 27(1) of the Equality Act 2006. This provides that the Equality and Human Rights Commission can make arrangements for the provision of conciliation services in respect of proceedings under Section 116 of the Act about disabled pupils in schools. This was the previous position, which was intended to be carried over into the Act. I commend the draft order to the Committee.

My Lords, I welcome the order introduced by my noble friend. It clarifies the responsibilities of public bodies in successfully delivering the equality duty. It may well be that more will need to be added to the 27,000 now listed, but that can be done with new orders.

I have a general query about the distinction now being drawn between the general duty and the specific duties. The general duty will come into effect very shortly, on 5 April. In terms of the specific duties, though, a second consultation has been undertaken with a closing date of 21 April.

The specific duty relates to what information public bodies are required to gather and to publish. We do not want to over-bureaucratise public bodies, but some of the changes that are being proposed need to be looked at very closely because, as I understand it, the key differences in the new draft regulations from those published following the previous consultation are the removal of the requirements on public bodies to publish the details of the engagement that they have undertaken when determining their policies and equality objectives; the equality analysis that they have undertaken in reaching their policy decisions, and the information they have considered when undertaking such analysis.

As I understand it, it is expected that there will be challenge from the public to public bodies and that that challenge will be the key means of holding public bodies to account for their performance on equality, and that mechanisms are being developed to support organisations and individuals to effectively challenge public bodies to ensure that they publish the right information and deliver the right results.

I do not understand how the public will be enabled to challenge unless the public are clear what engagement a public body has undertaken when determining policies and equality objectives; what equality analysis it has undertaken in reaching its policy decisions; and what information it has considered when undertaking such analysis. In other words, will the public have the information they need to be able to challenge public bodies effectively?

I hope in the course of the consultation that is now being undertaken and in the next stages of the specific duties being finalised, that there will be greater clarity produced as to what it is the public will have a right to expect to enable them to challenge the equality duty being delivered by those public bodies.

My Lords, I rise not to oppose these regulations, but to put down a few markers and raise one or two questions. I am glad that my noble friend is at the Dispatch Box, not only because I have a great admiration for her, but because I can be sure that she will pass on my concerns. There may not be many to hear them today, but I can rely on her to see that others hear about them.

The point about these regulations, so far as I am concerned, is that they herald very much more significant regulations and developments which are in the offing, namely, the commencement of Section 149 of the Equality Act and the implementation of the Equality Act draft specific duties regulations. In my view the coalition should be congratulated on scrapping the provisions in the Equality Act, which placed a duty on all public bodies at all times to take account of the inequalities of outcome that result from socioeconomic disadvantage. In promoting equality of opportunity, one is trying to extend the freedom of people to make the most of their talents: promoting equality of outcome means allowing the state to try by rules, regulations and bureaucratic means to iron out differences in performance so that endeavour and achievement are not rewarded. I would have thought that that is the last thing that one could possibly want in a free society. The Home Secretary was entirely right to point out in a speech that while people expect fairness, there should be no seeking a world where everyone gets the same out of life regardless of what they put in. Most people were really pleased to hear her say that the Government are moving away from equality of outcome to equality of opportunity.

The question is: how does what the Home Secretary has said fit in with what is in store for us? And, how much mischief by local authorities and public authorities will be encouraged by the implementation of Section 149 and the Equality Act’s specific duties regulations?

I accept that much has been done in the most recent version of the specific duties regulations to reduce bureaucracy, but the regulations will still require public authorities to publish equality objectives which are specific and measurable—and that means, in plain English, targets. They will require them to gather information to show that they are complying with those targets. That sounds to me very much more like equality of outcome as an approach than the one that the Secretary of State says that she now espouses.

What is clear, though, is that Section 149 and the regulations place extra burdens on local authorities and other bodies, and present local authorities in particular with new distractions when they should be concentrating on providing basic services. I should like to know how local authorities are going to meet the cost of the new duties. Is it not a pound to a penny that some authorities will continue cutting important services and then blame the Government for having placed new burdens on them?

Of course there are far wider issues than cost involved, and we can explore those in detail when the regulations on the specific duties are debated. Once again, however, the emphasis is being put on equality when public authorities have already behaved in the most monstrous way in the name of equality, putting the most bizarre limits on the freedom of citizens of this country. I need only cite the preposterous case of the council trying to strip a care home of council funding because the people running it did not want to keep asking their elderly residents about their sexual orientation, and the scandalous case of the nurse suspended for offering to pray for a patient. I fear that all this setting of equality objectives threatens to accelerate the marginalisation that Christians are already experiencing. We can be sure of one thing: Christians and their treatment will not be monitored to see that they are getting a fair deal.

I would have thought that we could all agree that we should be tolerant of the views of others. In recent years, though, we as a society seem to have passed through the stage of tolerance, giving it but a casual nod, and instead rights are everything. Rights must be enforced, however trivial has been the breach of a right, and however easy and painless it would have been to have left the right unenforced out of respect for the views of others. There are many here who know the sort of case that I am referring to. In short, this obsession with rights and equality has driven tolerance out of the door and bred in its place intolerance, injustice and unfairness. Now, with the report to the Equalities and Human Rights Commission recommending that children of 11 should be asked if they are gay, it threatens the very rights of both parents and children. Surely it is time that we stepped back and asked ourselves some very serious questions about where we are going. It is certainly time that we made sure that in legislation there is protection for those with deeply held religious beliefs and who want no more than to be able to continue to follow tenets of their religion that only a very few years ago virtually all of us accepted as wholly unexceptionable. I therefore ask my noble friend to recognise that there is great concern about all these regulations. She must expect a few fireworks when the more fundamental regulations come before the House.

My Lords, I thank the Minister for her detailed explanation of the draft order, which applies to a number of public bodies in the list in Schedule 19 to the Equality Act 2010. We will be happy to support the order.

I was interested in the remarks of the noble Lord, Lord Waddington. He has certainly livened up what is sometimes a rather dull affair in Grand Committee. He will not be surprised to hear that I do not really agree with the general thrust of his arguments; in general, I am proud of what we achieved in equality legislation. I agree that one would like to enhance people’s minds; that is a preferable approach. However, legislation sometimes needs to underpin desirable changes, and this legislation is very important.

Sometimes, of course, there is excessive zeal, sometimes there are instances where people have made mistaken judgments and it is fair to raise those issues, but overall this legislation has proved to be effective, though I look forward to a comprehensive response by the noble Baroness to her noble friend’s questions on this point. I, too, have one or two questions about the order. First, where is the Office for Budget Responsibility? Why is that not listed? I understand that it is considered to be a legal entity and since it seems to have unparalleled influence, it would be useful to know whether her department intends to put it on the list. Will she also say something about the Criminal Cases Review Commission?

I want to come on to discuss the Public Bodies Bill because I am very puzzled about some of the organisations listed in the schedule. We have spent hours and days debating the Public Bodies Bill, sponsored by the Cabinet Office, which gives Ministers the power to abolish or change the function, governance and finance of organisations. It is a remarkable Bill, which is now smaller than when it started, which is very unusual for your Lordships’ House. I see the Youth Justice Board listed in Schedule 1. It is true that last night we voted to retain the Youth Justice Board, but my understanding is that it was the Government’s intention to abolish it, so why is it in Schedule 1? Where I agree with the noble Lord, Lord Waddington, is that, if it is listed, presumably its duty is to go through the responsibilities contained in the Act.

I am hopeful that the Government will accept your Lordships’ view on the Youth Justice Board, but let us say that they do not, that they reverse it on ping-pong and that eventually that is accepted. The Youth Justice Board is going out of business, but in this order, we are placing responsibilities on it. That seems to me to be a bit of a puzzle. I then come to “A Primary Care Trust ...” In the other place there is NHS legislation abolishing primary care trusts. These bodies which face going out of business are none the less having duties placed upon them as a result of the order.

The Audit Commission is going to be abolished, not in the Public Bodies Bill, but by separate legislation: again, it is listed in this order. On page 7, police authorities are listed. Shortly, after the Easter break, we will be having Second Reading of the Police Reform and Social Responsibility Bill, abolishing police authorities. I thought that the Government were trying to reduce regulation. Why are these bodies listed? As I see it, if we are going ahead with this appalling decision to have elected police commissioners, politicising the police force and abolishing police authorities, why are they listed in the order?

I come to the bodies that are listed in the Public Bodies Bill whose functions are to be transferred to charities or trusts. The noble Baroness mentioned the Inland Waterways Association. I can see why she says that that should not be covered, but what about the British Waterways Board? That will, as I understand it, cease to be a public body and become a trust. The question is whether the equality duty ought to transfer to the trust. I think it ought to do so and I would be grateful for her views on that.

The noble Baroness mentioned GP consortia. As this is part of the NHS Bill, I ought to declare an interest as chair of Heart of England foundation trust and as a policy consultant and trainer to Cumberlege Connections in relation to the health service. I know the Government have now said—the noble Baroness has now repeated the comments of her honourable friend in another place—that in the event of the Health and Social Care Bill becoming law GP consortia will be added. That of course is very welcome, but shadow consortia are in fact being set up at the moment, and, as I understand it, starting to make decisions in relation to commissioning. Could she consider adding consortia as soon as possible, assuming the legislation goes through?

Finally, I come back to the issue of police reform. My understanding is that if the Police Reform and Social Responsibility Bill is passed in its current shape, the responsibilities which apply to the police authorities listed here will transfer to chief constables and the Commissioner of the Metropolitan Police, including the employment of police staff. Can the noble Baroness give me some assurance, assuming that this Bill becomes an Act, that this responsibility would be transferred to police commissioners and the Commissioner of the Police of the Metropolis?

I thank noble Lords for their warm welcome to the order and for a very good and reasoned debate. As noble Lords will know, when the Equality Bill was going through your Lordships’ House, it really did generate common consensus across the House. It was something that we all signed up to.

The first point that my noble friend Lord Shipley raised was about the opportunity for the public to challenge if they feel they are not able to get a positive response. We have to make sure that there are enough processes and systems in place, and we are working on that at the moment through making sure that local authorities will be able to give advice to individuals on how to get information if they feel they are not being heard. There will be much broader consultation on that, and I hope that in that process the noble Lord will allow me to write to him and other noble Lords about the way we are taking this forward so that we know that individual citizens are empowered. That, basically, is what the Government are trying to do: to draw back from a process-driven way of working to a point where the ordinary citizen feels that he or she is able to go and question what is being applied in their name.

The noble Lord, Lord Hunt, referred to the new police and crime commissioners. They will be listed through the Police Reform and Social Responsibility Bill. The reference is currently in paragraph 135 of Schedule 16 to that Bill, so it will follow through. The Office for Budget Responsibility has been listed through the Act that created it, so that is already there as well. The Criminal Cases Review Commission is not listed for the existing race or gender duties; we considered it but we were not convinced that it had sufficient impact on the equality list that we have at the moment. Police authorities are listed, and will remain so until the new police and crime commissioners are established.

To answer my noble friend Lord Shipley, public bodies will need to give reasons under their decisions, and guidance will come from the EHRC on how individuals will be able to utilise their powers to challenge local authorities. A body of case law has developed under the existing duties, and the EHRC’s guidance and copy of this practice will be able to reflect that.

I say to my noble friend Lord Waddington that the equality duty applies to protecting the characteristics of religion and/or belief. I agree with the noble Lord that we must not get to a place where some citizens feel that they are not part and parcel of the society that we live in and that they cannot freely practise their form of belief or religion, as long as it does not have a negative impact on those around them. I will take back the points that he raised; he is not the only one who has raised them, and they are real concerns. It is important that we take away differing views—some of us may not agree with all of them—so that we can ensure that everyone is signed in to the equal opportunities agenda, which is very much what my right honourable friend the Home Secretary is trying to do. We must move away from the process-driven place that we have developed.

I for one have seen legislation that has responded to the needs of people like me who had to fight very hard to ensure that discrimination was a thing of the past. However, I do not want to be part of a process that adds bureaucracy and adds to the burdens of local authorities and organisations so that, instead of them developing and being responsible for what they are delivering, we add to a process that often segregates and creates divisions. That is something that all of us here would sign up to.

In answer to the noble Lord, Lord Shipley—my answers are random because I am receiving briefing notes from the Box—the Government’s Equalities Office is currently developing a toolkit to help citizens, volunteers and third sector bodies and to hold public bodies to account. I am sure that we will still have a part to play in the process of developing those tools. Debate is incredibly important for this issue, because it is something that everyone has to be fully committed and signed up to.

The noble Lord raised the issue of the relationship of the general equalities duty to the specific equalities duty. We must make sure that the support of the specific duties over the general duties is there through the specific duties. That is the only way that we are going to be able to measure whether public bodies are responding. We want them to be able to respond to their own local community needs rather than for us to superimpose from the centre what we think local communities actually need. I am sure that the socioeconomic duty would have placed a great burden on local authorities. This way, we are tying to make them responsive to the local communities that they are servicing. Hopefully, when they take that responsibility, they will see the challenge and be able to respond accordingly without having to think that there are boxes to be ticked, which often reflect only parts of an individual’s needs, in contrast to the holistic approach that local authorities and local public organisations should be taking on board.

The noble Lord, Lord Hunt, talked about some of the bodies on the list. While they are in the transitional period, they need to be able to respond and to be certain that they are adhering to the equality duties that are set out in the Act.

Let us take primary care trusts as an example, which face abolition. Already clusters are being created. Staff are haemorrhaging; one can understand that. Unless I have misread the order and the listing in Schedule 1—some of those bodies are not new and have already been listed, but some are being listed for the first time—it seems to be extraordinary that poor PCTs are presumably going to get a guidance from the Department of Health saying, “You are now listed. Your job is to implement the equality requirements”, at the same time as they are going out of business. I do not know why they are being asked to do this.

My Lords, while inspiration flies in from behind me, I assure the noble Lord, Lord Hunt, that there will still be a transitional period during which PCTs cannot abdicate their duty to meet those requirements. The noble Lord will take on board that there are always transitional bodies.

I am sorry to belabour this point. PCTs are being merged into clusters. They have virtually gone as entities so the morale among people working in them is very low. To have a note from the Department of Health saying, “Despite all that, you now have to implement this”, does not seem to be sensible or consistent with what the Government are saying about regulation. I simply do not understand it.

My Lords, since inspiration has just arrived, my note tells me clearly that PCTs are already listed for the existing duties, so this is no great extra burden while they are still in existence. In fact the burden will be reduced because we are taking it away from being a process-driven requirement to being one where PCTs, like all other listed bodies, will be responding to the specific and general duties within the Equality Act 2010. I feel that the noble Lord is not overly satisfied but I commend this order to the Committee.

Motion agreed.

Committee adjourned at 6.21 pm.