Wednesday, 27 April 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 is 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. I remind the Committee that if there is a Division in the House the Committee will adjourn for 10 minutes from the sound of the Division Bell.
Civil Contingencies Act 2004 (Amendment of List of Responders) Order 2011
Considered in Grand Committee
My Lords, I am pleased to introduce these new arrangements for civil contingency planning in Greater London. Perhaps it will assist the Grand Committee if I give it an overview of emergency and current planning in London and of where, why and how the Greater London Authority will fit into this.
The Civil Contingencies Act 2004 and its accompanying regulations and statutory guidance deliver a single framework for civil protection in the United Kingdom that is designed to provide a framework to meet the resilience challenges of the 21st century. The Act sets out clear responsibilities for front-line responders and other organisations that need to be involved in the preparation for, response to and recovery from serious emergencies. The Act divides England and Wales into local resilience areas, and each of these areas has a local resilience forum at which planning and preparation for emergencies is co-ordinated among emergency responders. Outside London, there are 37 local resilience areas in England and four in Wales based on police force boundaries.
Arrangements for emergency planning in London have, since the introduction of the Act in 2005, functioned slightly differently from those in place in the rest of the country, due mainly to London’s size and its unique position as a capital city. Rather than a single local resilience area based on police force boundaries, there have been six local resilience areas for London, each with a local resilience forum, based on multi-borough groupings. This reflected London’s particular patterns of public service provision and the different local planning needs of the London boroughs.
When the Civil Contingencies Act enhancement programme was established to review the Act and its accompanying regulations in the light of five years’ experience, it identified that while the Act was, on the whole, working well, it did not properly reflect how emergency planning was actually functioning in the capital and the level at which strategic decisions were being made. While the six multi-borough local resilience forums provided a useful tier of emergency planning, the strategic role which a local resilience forum should normally take was actually being performed at the pan-London level through the London regional resilience forum. This was a non-statutory body at which key responders, central government and the Mayor of London co-operated to give strategic direction to emergency planning in London.
Therefore, better to reflect actual emergency planning arrangements in London, the local resilience area has been redefined as a single pan-London local resilience area that is based on the Metropolitan Police and City of London Police areas rather than on the previous six multi-borough groupings. As a result, the former London regional resilience forum has been redefined as the London local resilience forum. This change came into force from 1 April and means that emergency planning in London now runs in much the same way as in the rest of the country.
The change that we now bring before the Committee is necessary following last year’s closure of the Government Office for London, which played an important role in emergency planning led by the London resilience team. Its duties, which included providing secretariat support for the former London regional resilience forum, taking the lead in non police-led emergencies and ensuring that resilience plans are in place for the Olympic Games, now need to be delivered elsewhere by other parties. It is a function that we cannot afford to lose and is a cornerstone of the structure of resilience in London.
The office of the Mayor of London has long been engaged in emergency planning; the Mayor was the deputy chair of the London regional resilience forum. He is a figurehead in the event of a major emergency in the capital. We have therefore agreed with the mayor that those local planning and response functions previously undertaken by the Government Office for London that no longer need to remain with central government should pass to the Greater London Authority as the strategic non-political authority that supports both the mayor and the Assembly, and that this should be properly reflected in legislation.
The GLA’s new role involves working closely with London’s emergency responders and being involved at the heart of strategic emergency planning for the capital. The GLA should therefore take on the same legal status and duties as other responders in London, including the duties to co-operate and to share information and helping to build a strong relationship through which the GLA can best carry out its new role. The GLA assumed many of its new responsibilities following the closure of the Government Office for London in December last year. We now have an opportunity to formalise its role in legislation. I beg to move.
My Lords, I welcome this measure and thank my noble friend Lord Taylor for his clear description of the purposes and the changes that are to take place under the Civil Contingencies Act to reflect the new structure of local government in London more appropriately by involving the Greater London Authority. The timeliness of the measure seems particularly clear in the light of the imminent international descent on London at the time of the Olympic Games. It is very much to be hoped that this structural change will give rise to discussions about potential risk and about the continuing responsibility for eliminating dangers.
I believe that the Government have also received a publication, in response to the consultation on the second phase, on 14 March. Although that response goes wider than this order, I hope that the Minister in replying to the debate might be able to say something about how that report reveals what has been considered and, in particular, the extent of the review of emergency preparedness.
This measure is entirely welcome. I hope that your Lordships’ Committee and the House will enact it as soon as possible.
My Lords, I too thank the Minister for his clear explanation. However, I wonder whether the order comes back to the much heralded bonfire of the quangos and the abolition of government offices throughout the UK. Thanks to the tremendous changes following the Minister’s work on the Public Bodies Bill, we know that the vast sums that the Government initially planned to secure as a result of a bonfire of the quangos that will get rid of government offices throughout the UK will not be realised. I make no criticism of that, as I believe that that is in many ways the difference between the rhetoric of opposition and the realism of government. However, it is clear that, even if a body such as the Government Office for London has been abolished, the functions still have to be maintained. That is why this order is so important, because it will ensure the continuity of these very important duties.
The order does not raise any problems as far as I can see. As the Minister said, it will bring London more into line with what is happening in the rest of the country, which is of course to be welcomed. I also note that the costs will all be for the GLA, so central government will not face any increased burden. The Explanatory Memorandum states:
“The impact on business, charities or voluntary bodies”,
“on the public sector is minimal”.
However, I would be grateful for one assurance from the Minister. As a consequence of these structural changes, can he assure us that all the services that are mentioned in paragraph 7.3 of the Explanatory Memorandum will be safeguarded? Of course, pandemics and severe weather are both of the utmost importance. As the noble Lord, Lord Maclennan, said, in these unstable times when we have the Olympics upon us in the very near future, I would be grateful for an assurance from the Minister that resistance plans for the Olympic Games will be safeguarded and enhanced by this legislation.
My Lords, I am very grateful to both noble Lords who have spoken for their welcoming of this draft order and for their support for what I think is widely seen as a logical development.
The noble Baroness, Lady Royall, sought perhaps to broaden the debate into the wider issue of public bodies. I will resist that temptation except to say that clearly there will be opportunities for a more streamlined management of London’s affairs through the Greater London Authority. That is one of the strategic advantages that this move will provide for. There will indeed be financial demands on the Greater London Authority, but the comprehensive spending review incorporated that responsibility in forward funding for the authority from central government—this process is being seen as driven not by economy but by efficiency and by the need for London to be properly co-ordinated. While the six key borough groupings provided the function, in the end the reality is that London is a whole and has to be dealt with as a whole. The support that can be given by the GLA and by its resilience team is of paramount importance.
I can say that the actual priorities in setting out a resilience plan are of course a matter for the local resilience authorities and, indeed, the forum that gives advice on such matters. These things are not immutable, but the risk assessment for the Olympics has been in place for a number of years and is regularly updated. I can assure the noble Baroness that there is no suggestion that the comprehensive focus of the London resilience forum and the resilience team in addressing the needs of London will in any way be compromised by this legislation.
I thank my noble friend Lord Maclennan of Rogart for his broad welcome, too. He made the powerful point that, with the Olympics being so imminent, we are very much focused on security. Indeed, we have events this week as well that show how important it is that all aspects of security are taken care of. He asked about the response to the report. I am not in a position to help him on that, but perhaps there might be an opportunity to write to him subsequent to our discussions today.
I hope that the Committee will be able to commend these draft proposals.
Charities (Pre-consolidation Amendments) Order 2011
Considered in Grand Committee
My Lords, the draft order before us today is a technical order that makes minor amendments to charity law. It will be made in preparation for the consolidation of charity legislation via the Charities Bill 2011, which was introduced to this House on 3 March.
The aim of this order is merely to tidy up some minor points in the existing legislation before charities legislation is consolidated. It might help if I first give a little background to the Charities Bill itself before explaining the purpose of this order. The purpose of the Charities Bill is: to bring together provisions of the main legislation on charities in England and Wales into a single piece of legislation; to simplify the structure of the existing legislation, making it more accessible to the lay person; and to replace provisions in the Recreational Charities Act 1958, the Charities Acts 1993 and relevant provisions of the Charities Act 2006.
Due to the fragmentation of charity legislation, it has become increasingly difficult to navigate the law in this area, not least as the Charities Act 2006 made extensive amendments to the Charities Act 1993. The Bill will fulfil a commitment given during the passage of the Charities Act 2006 in response to noble Lords who requested that charity legislation should be consolidated to make it easier to follow, particularly for non-expert charity trustees. The Law Commission, which is responsible for consolidation Bills, responded favourably to a request from the Cabinet Office, and the result is the Charities Bill, which was introduced last month.
Neither the order nor the Bill itself makes any substantive changes to charity law. The types of amendments that the order makes fall into the following categories: correcting minor mistakes in the existing legislation or remedying missed consequential amendments; removing inconsistencies in the existing legislation; modernising the language of the existing legislation; repealing provisions in the existing legislation that are now considered obsolete; clarifying the effect of the existing legislation; and consequential provisions relating to other provisions of this order.
I will give a couple of examples to assist the Committee. One example of correcting a minor mistake is in paragraph 4 of the schedule to the order relating to the Charities Act 1993, which provided that,
“In the exercise of its functions the commission shall not be subject to the direction or control of any Minister of the Crown or other government department”.
The use of the words “or other” in this context gives the impression that a Minister of the Crown is a government department. Clearly this is not the case, as while a Minister of the Crown may be in charge of a government department, he or she is not a department per se. The amendment in this order avoids this misinterpretation while retaining the allusion to the fact that the Charity Commission is a government department.
Paragraph 31 deals with various inconsistencies relating to rights of appeal to the Charity Tribunal. For example, a right of appeal exists where the Charity Commission requires a charity’s accounts to be audited, but does not currently exist for certain charity group accounts. The amendment in paragraph 31(g) removes that inconsistency.
An example of how the language used has been updated is in paragraph 7 of the schedule, which now uses the word “provide” instead of the original word “furnish”, as in providing documents instead of furnishing them. Paragraph 15 of the schedule removes an obsolete reference to the Incorporated Society of Valuers and Auctioneers, which merged with the Royal Institution of Chartered Surveyors in January 2000.
An example of how the order clarifies legislation is contained in paragraph 18 of the schedule. In the context of a section that refers to both the Audit Commission and the Charity Commission, the reference to “the Commission” is changed to the “Charity Commission” to avoid any potential confusion. The structure of the legislation has also been improved to make it easier to follow. However, this has led to the need for some pre-consolidation amendments. For example, paragraph 11 of the schedule facilitates the splitting of Section 18 of the 1993 Act into a number of separate sections in the consolidation Bill. Section 18, which provides the Charity Commission with various powers to act for the protection of charities, is long and complex, so splitting it up should make the text easier to navigate.
The order also makes consequential amendments, in particular changing various cross-references, that will result from splitting up Section 18. The draft order was consulted on in 2009 as part of the wider consultation on the draft Charities Bill, and we received positive responses. I hope noble Lords will agree that the order is a useful tool for clearing up some outstanding issues in charity law before the Charities Bill completes its passage through Parliament. There will be a review of the Charities Act 2006, starting later this year. This will provide an opportunity to look again at the legal framework for charities in England and Wales, and to consider whether the policies that lie behind the legislation are working in practice.
As a consolidation Bill, the Charities Bill represents a small but useful step forward in simplifying the legislative framework for charities and supports the Government’s aim of making it easier to set up and run a charity, as it will make charity law more accessible to the lay charity trustee. We have a window of opportunity to tidy up what has become a confusing and messy legislative landscape, and it would be a shame to lose this chance. This order will pave the way for the consolidation of charity law. I beg to move.
My Lords, I thank my noble friend the Minister for the way in which she gave a tour d’horizon of this statutory instrument. As she rightly says, this is a prelude to the consolidation Bill, which starts in this House next Thursday, although I do not think that anyone will be there—I notice that the Commons is not sitting on that day.
A very important aspect of the debates on the Charities Bill that led to the Charities Act 2006 was that we were to have a consolidation measure. I was, I think, foremost in urging that and in getting the Government to put it into the Bill so that we could be quite sure that it would happen. As my noble friend again so rightly says, the danger with our efforts here is that, while they might be just about comprehensible to the specialist lawyer, the Charity Commission, the parliamentary draftsmen and the civil servants involved, they are a closed book to everyone else. Given that 95 per cent of our charities have no paid staff, and that all trustees are volunteers, it is a very serious predicament. Although the consolidation measure is more than 300 pages, it will go some little way to making life a tad easier for those who are doing the job on the ground.
I should like to refer to two aspects of this statutory instrument. Noble Lords may agree that there can be few pieces of legislation more sleep inducing than the Charities (Pre-consolidation Amendments) Order 2011. Indeed, so arcane is most of the language that you have to be a bit of an egg-head to plunge into its depths.
I should like the Minister to give a little explanation of paragraph 10 of the schedule to the order, and I have given her notice of that. The paragraph goes to the heart of the relationship between this order, the consolidation Bill and the Houses of Parliament. To be frank, try as I did, I could not perfectly understand where things were left by paragraph 10. My understanding is that, if in Section 17(2) of the 2006 Act the Minister is given the power to make an order, it is superfluous then to go on to say,
“and a draft of the order shall be laid before Parliament”.
That follows. However, I became a little lost with the omissions and additions later in paragraph 10, and if the Minister is able to cast enlightenment on that I shall be most grateful.
My only other point is more substantial and concerns paragraph 24 of the schedule to the order, which relates to Section 79(2) of the 1993 Act. This is an important provision in the Act. At the start, paragraph 24 says that in Section 79(2) the word “ratepayers” is to be omitted. This provision is designed to ensure that parochial charities have a governing body or a group of trustees that is fit for purpose in the 21st century. Section 79(2) of the 1993 Act, as amended by the 2006 Act, says that the Charity Commission may allow the appointment of trustees to parochial charities in the circumstances described in Section 79(2). Paragraph 24(1) says that “ratepayers” shall be deleted from the description of those persons who shall have power in future to appoint trustees, or at least it does not eliminate their powers to appoint but it affects the right of the commission to make an order appointing additional charity trustees. My problem with paragraph 24—and I read it many times—is that sub-paragraph (2) seems to be wholly superfluous. It says:
“Nothing in sub-paragraph (1) affects any appointment of a charity trustee made before the commencement of that sub-paragraph”—
that is, before the consolidation Act comes into effect. As I said, that is wholly superfluous because one cannot make retrospective legislation other than in rare circumstances and with the greatest possible clarity and want of ambiguity. That is my first point.
More importantly, one can put up with superfluity but paragraph 24(3) seems to make substantive changes to the effect of Section 79(2), as amended, of the Charities Act 1993—substantive changes which can only be made in the manner plainly intended here if drafted differently from the way they have been drafted here. Their drafting here may appeal to the layman but if, as I contend, the change will substantively alter the effect of Section 79(2), it has to be couched in language which achieves that. That means saying that in Section 79(2) the words “whatever” shall be removed and the words “whatever” shall be introduced instead. In effect, one would be putting most of sub-paragraph (3) in inverted commas with words preceding the inverted commas making it clear just where those new provisions are to be inserted in Section 79(2).
I apologise for that explanation—if anyone has managed to follow me, I am both surprised and grateful—but for the sake of the record one has to explain what one is up to and I have done my best. Again, I have given notice, although not long notice, of this to the Minister. We will be able to do something about it because we can make an amendment to the consolidation Bill and, as that will be at the Committee stage, we shall have a bit of time to do so. I shall shut up at this point.
My Lords, I, too, thank the Minister for her explanation of the order and for the background information that she provided. She is of course correct when she says that the previous Government—my Government—made a commitment to seek a consolidation of the charities legislation subject to support from the Law Commission, which the commission has now given. I am very glad that we heeded the wise advice of the noble Lord, Lord Phillips of Sudbury. We look forward to discussing the consolidation Bill, although it will not be I who does that next week as I shall be otherwise engaged.
I note that the amendments made by the order are not considered to make substantive changes to the law or to introduce new policy, and I rely on the incisiveness and expertise of the noble Lord, Lord Phillips, because I do not have the talent of an egg-head. I further note that in a consultation about the consolidation, there were only two responses about the draft order, so clearly not a lot of people out there have deep, if any, concerns.
I have one rather simple question. The noble Baroness mentioned the review which will take place later this year. I wonder when we can expect the results of the review and also how the Government will act on those results. I realise that the report of the review will be debated in Parliament but I wonder whether this might lead to further legislation, further simplification or what. I do not know how these things work and I should be grateful for some clarification from the Minister.
My Lords, I am most grateful for the warm welcome for the order from my noble friend and the noble Baroness. This has been a very short debate but it has been very informed, and I am glad that I have an egg-head in my noble friend on my side. Although I tried very hard to follow and navigate my way through what he was saying, at times I got slightly lost and tried to refer back to the order. I am also grateful to my noble friend for giving me prior notice of the two questions which he has put. I will try my level best to respond. If I fail still to allay any of his concerns, I shall write to him and put a copy of the letter in the Library.
My noble friend asked, first, about the amendments made by paragraph 10 of the schedule, which gives effect to the recommendations of the Brooke committee of 1972-73 to rationalise statutory instrument procedure. The committee recommended that the procedure in the Statutory Instruments Act 1946, whereby a statutory instrument subject to the negative procedure had to be laid in draft before both Houses, should be avoided. The amendment removes that aspect of the statutory instrument process for orders made under Section 17 of the Charities Act 1993, which provides a mechanism for parliamentary scrutiny of a Charity Commission scheme that alters the constitution of a charity governed by statute. Such orders will still be laid before Parliament and can be prayed against.
My noble friend also asked a valid question about paragraph 24 of the schedule. It is not our intention to make a substantive change to Section 79. We shall look carefully at the point that my noble friend has raised and refer it to the drafters of the Bill. If necessary, we will confirm that the appropriate amendments will be made before the Bill goes to the Joint Committee for consideration. We will write with further details once the drafter has considered my noble friend’s question. I hope that my noble friend feels a little more satisfied by my responses.
The noble Baroness, Lady Royall, asked about the review. There is no firm timetable as yet, but the review must begin before 8 November and its report be laid before Parliament. We anticipate the review concluding some time in 2012, but it is too early to say how long it will take to take forward any recommendations.
I hope that I have answered the questions of my noble friend and the noble Baroness. It has been a very short debate, but I hope that I have been able to satisfy noble Lords. I hope that my noble friend will be in the Chamber next Thursday, or I shall feel very lonely debating the Charities Bill all on my own.
Companies Act 2006 (Consequential Amendments and Transitional Provisions) Order 201
Considered in Grand Committee
My Lords, perhaps I may explain by way of background to the order that the Companies Act 2006 provided for a single consolidated company law regime to apply across the whole of the United Kingdom. It repealed most of the Companies Act 1985, the Companies (Northern Ireland) Order 1986 and the Open-Ended Investment Companies Act (Northern Ireland) 2002.
Before I go into the details of this order, which makes various amendments that, as its name implies, are consequential on the commencement of the 2006 Act, I shall touch briefly on some of the background to that Act. It was commenced in stages between Royal Assent in November of that year and the final commencement order which came into force in October 2009. Indeed, there have already been eight orders commencing various provisions of the Act, and five orders making amendments required as a consequence of its passing. This order is designed to complete and consolidate that lengthy process. The legislation that is amended by this order comprises the Companies Act 2006 and various instruments that contain references to the Companies Act 1985 as well as other legislation that has been superseded, repealed or revoked by the 2006 Act.
I turn to the specifics of today’s order. Most of the articles make amendments to regulations in the area of financial services by updating them so as to refer to the relevant provisions of the 2006 Act rather than the old, superseded provisions of, for instance, the Companies Act 1985.
Among the pieces of legislation to which such amendments are made is the Open-Ended Investment Companies Regulations 2001, which are amended so that they apply to any open-ended investment companies incorporated in Northern Ireland. The order also contains transitional provisions to ensure a smooth changeover for such companies to the requirements of the 2001 regulations. The order also formally revokes two pieces of secondary legislation which were effectively superseded by the Companies Act 2006; namely, the Companies (Single Member Private Limited Companies) Regulations 1992 and the equivalent Northern Ireland regulations of that year.
The order also makes a small number of correcting measures to address some minor errors in certain companies-related legislation. The amendments will ensure that that legislation is clear and easily applied. With your Lordships’ permission, I do not propose to go through them in detail, although I should like to draw attention to two changes.
The first arises because the Companies Act 2006 allows a public limited company to have a single member whereas the Insolvency Act 1986 stipulates that having only one member is a ground for winding up a plc. For this reason, Article 6 of today’s order repeals this provision of the Insolvency Act to ensure consistency and avoid any confusion.
Secondly, the order amends the power in Section 766 of the 2006 Act which, among other things, enables regulations to be made for determining whether a public company which reduces its share capital and has shares denominated in more than one currency continues to satisfy the statutory requirement to have share capital at or above a minimum aggregate value in sterling or euros. The current drafting of Section 766 means that regulations cannot be made dealing with the situation where a public company reduces its share capital and is left with all its capital denominated in one currency other than sterling or euros, such as Swiss francs or US dollars. Article 28 of the order corrects Section 766 so that regulations can be made dealing with this situation. There will now be a mechanism for establishing clearly whether such a company continues to meet the minimum capital requirement.
The rationale behind all the amendments made by the order is to ensure that companies legislation is clear, consistent and coherent. I think that the order is uncontroversial. It is simple; it ensures greater consistency; and it removes contradiction. As such, it is good for business and I commend it to the Committee.
My Lords, before we approve the order, as we clearly should, we should look at what has happened since 2006. Noble Lords who lived through the various stages of the Companies Bill of that year, which was probably the longest Bill in the history of this House, will remember that we on these Benches argued from an early stage that it should be a consolidation Bill. Its first draft did not constitute a consolidation Bill but was a huge Bill with different clauses. The noble Lord, Lord Sainsbury of Turville, who was the relevant Labour Minister at the time, eventually came to us and said that he had won his argument internally and now thought that it should be a consolidation Bill. However, he asked whether, if he was prepared to concede that point to those of us who were arguing for it, we would agree that we would not go back for another 25 days in Committee going through, clause by clause, the consolidation procedures. I responded that I was certainly happy to give that undertaking provided there was not some obvious omission or howler in the process of consolidation. Looking at this order, I have to congratulate the drafters of that Bill because we require only these few, very minor, changes of things that were missed at the time of the Bill. I am glad that we had a consolidation Bill of that nature, although whether the Butterworths the publishers are so happy remains to be seen. I certainly support the order.
My Lords, I am grateful that I waited for the contribution of the noble Lord, Lord Razzall, because as a veteran of the discussions on that very long Bill—while I was idly occupied, or underoccupied, elsewhere—he is to be congratulated on the work that he did on it. Of course, that Bill was such a massive measure that it led to anxieties about whether it was sufficiently comprehensive in ironing out aspects that affected previous legislation. That was a cause of concern, which he expressed at the time and which I recall my noble friend Lord Sainsbury of Turville being concerned to respond to. I agree with him that it hurts a little bit for the Official Opposition to congratulate the Government even in minor ways, but we are relieved to see that there are only minor emendations in the draft order. We also note that the Merits of Statutory Instruments Committee found no reason to express anxiety about it.
I am extremely grateful to the Minister for clearly and accurately expressing the salient aspects of this really rather complex issue while sparing us the considerable detail with which he could have belaboured the Committee if he had cared to do so. However, one aspect on which I had a little anxiety, although this is probably more concerned with language than with substance, is that the Explanatory Memorandum from the Treasury—I am sure that the noble Lord, Lord Razzall, was half-reflecting this—uses that wonderful word “impliedly”. As I have never used that word nor heard it used on any occasion, although I could not doubt that the Treasury had used the term accurately, I looked it up. Indeed, the Treasury has used the term accurately, as there is such an adverb, used somewhat infrequently in this context, which means,
“hinted at or suggested; not directly expressed”.
Well, I understand the point that is being made, as we are clarifying the issue and making explicit what is in the legislation. However, I would just say that the word has a slightly weasel quality, as if it is covering certain anxieties about the past. Therefore, I will say that I am grateful that it is now being made clear that what was impliedly in the legislation is now there explicitly and properly as a result of this instrument. For that reason, we welcome the order.
My Lords, I am grateful to both noble Lords for their comments and to the Committee for considering this draft order. As I said earlier, the draft order is uncontroversial. Most of its articles make amendments to regulations by updating them so as to refer to the relevant provisions of the Companies Act 2006 rather than, for instance, to the superseded provisions of the 1985 Act.
My noble friend Lord Razzall referred to the lengthy process of the 2006 Act. I congratulate him and those other stalwart noble Lords who had the stamina to sustain them through that process. I thank him for his support today. I also thank the noble Lord, Lord Davies, for his helpful comments. I commend the order to the Committee.
Pensions Appeal Tribunals Act 1943 (Time Limit for Appeals) (Amendment) Regulations 2011
Considered in Grand Committee
My Lords, I start by paying tribute to the brave men and women of our Armed Forces. They deserve our admiration but, more than that, they deserve to be treated with respect, and they rightly expect the nation to honour their commitment. We have a duty to those injured due to service to provide a just and fair compensation scheme for them.
The Armed Forces Compensation Scheme came into force on 6 April 2005 to pay compensation for injury, illness or death caused by service. This provides lump-sum payments and, for the more seriously injured, a guaranteed income for life. It replaced the previous compensation arrangements provided by the War Pensions Scheme and the attributable elements of the Armed Forces Pension Scheme.
The new scheme is a significant improvement on the previous arrangements. Injured service men and women are now able to claim compensation while they are still in service. The previous Government should be commended for introducing the scheme in 2005, as well as for initiating a review of the Armed Forces Compensation Scheme in 2009 to ensure that it continues to support the needs of the Armed Forces.
On 10 February 2010, the then Secretary of State announced the outcome of the review conducted under the independent chairmanship of the noble and gallant Lord, Lord Boyce. I am very grateful to him for the thorough way in which he conducted the review and for producing such a meticulous report. The Ministry of Defence committed to implementing all his recommendations within a year. The more straightforward changes were put in revised legislation in July 2010. The more detailed recommendations were laid in new legislation on 28 February 2011. The two affirmative instruments for debate today complete the legislative changes required to implement the full package of changes.
The first statutory instrument relates to time limits for appeals if an individual is not happy with the decision made on a compensation claim. The intent is to extend the time limit for appealing decisions made under the AFCS from six to 12 months. This recognises that the nature of service life may prevent claimants picking up their mail and making an appeal within the current time limit of six months. For appeals heard in Scotland and Northern Ireland, this requires Section 8 of the Pensions Appeal Tribunal Act 1943 to be amended. The first affirmative statutory instrument that we are discussing today makes the required amendments to this Act. The time limits governing appeals about AFCS awards heard in England and Wales are provided in the Tribunal Procedure Rules. These rules have been amended to increase the time limit for appealing to 12 months, with the changes coming into force from 9 May. To ensure consistency and fairness, this affirmative instrument also increases the time limit for bringing appeals in respect of all other types of decisions capable of appeal under the Pensions Appeal Tribunal Act 1943, including decisions made in relation to the War Pensions Scheme.
The second statutory instrument is on the subject of rights of appeal. The intent is to make it clear that two types of new decision under the scheme do not carry appeal rights. The first relates to claims for a fast payment. This is a new provision introduced to enable those who have a serious injury due to service to receive an early payment before going through the full compensation claim process. This helps to provide them and their families with some early financial support and reassurance during what can be a very difficult time. If the final award is less than the value of the fast payment, no money will be recovered. Where additional money is payable, the balance is transferred to the claimant. The decision on the final award carries appeal rights. As the fast payment decision is not a final decision, the instrument being debated today excludes fast payment decisions from the list of decisions capable of being appealed. Not to make this change would result in a rather confusing system for claimants.
The second new type of payment is for medical expenses incurred abroad by seriously injured personnel who decide to live permanently outside the UK within a year of leaving the Armed Forces. This power broadens the scope of the scheme. As the noble and gallant Lord, Lord Boyce, recognised in his report, this new power is discretionary, so it would not be appropriate for it to have external appeal rights but rather an individual would be able to request the MoD to reconsider its decision. This remains open to individuals if they are not content with the decision made on their behalf.
These two statutory instruments are the next step in ensuring that the AFCS remains fit for purpose for our service personnel. I beg to move.
I join the Minister in paying tribute to all the brave men and women who serve in our Armed Forces. They deserve our respect and admiration and rightly expect society, through government, to honour commitments to them, especially to those injured in service.
I thank the Minister for his explanation of these regulations. These Benches endorse his remarks and support enactment. We agree that the new scheme is a significant improvement on previous arrangements. As the Minister explained, the two instruments complete the legislative changes required to implement the full package following the review undertaken by the noble and gallant Lord, Lord Boyce. I understand that the review team spoke to and received comments from over 200 individuals and groups, including serving members of the Armed Forces, their families, reservists, veterans and the general public. The noble and gallant Lord, Lord Boyce, and his team visited serving Royal Navy, Army and RAF personnel in their bases as well as at Headley Court. The noble and gallant Lord also spoke to Ministers, the Chief of the Defence Staff, the heads of the three services and the judiciary. The review concluded that the basic principles of the Armed Forces Compensation Scheme were correct. However, it found areas where further improvements needed to be made. The review findings have been well received. Ministers have agreed to implement all the recommendations. The Minister has today outlined the key areas regarding compensation and appeals.
However, there are other key recommendations that were also agreed to be taken forward, and I shall ask the Minister about two of them. First, there was a recommendation to set up a new expert medical body to advise on compensation for particular illnesses and injuries, such as hearing loss and mental illness. Will the Minister update us on the latest position regarding this new body? How many people will sit on it? Who will lead it? How will it operate and how extensive will its role be?
Secondly, the review recommended that there should be improvements in communication to service personnel and their families to promote a better understanding of how the scheme works, including entitlements, and how the calculations behind those entitlements are made. This should not only increase awareness but raise confidence among our armed service personnel that their welfare is important. I ask the noble Lord to assure us that this matter is also being attended to.
The Armed Forces Compensation Scheme, introduced by the previous Labour Administration and subsequently reviewed and improved here today, is agreed to be fit for purpose and is not in dispute. However, I ask for the noble Lord’s assessment of how it compares with other compensation schemes in the UK and overseas.
Although I recognise that the AFCS goes some way to compensate the injured and the families of those who have died, there are one or two discrepancies that can occur around the fringes of the scheme—often with regard to dates. Our Armed Forces have served in operations in Afghanistan since 2001, as well as in Iraq in 2003. Is the Minister content that those injured after 6 April 2005 receive awards under the AFCS scheme, whereas those who were injured merely one day before do not? Perhaps he can explain. A fair and respected compensation scheme must be a given for our Armed Forces, and I am content to endorse these provisions today.
I am sorry to delay the Committee but I wish to say only a couple of things. This scheme—as the previous Government brought it in, I think we can pass on our congratulations to them—seems to be an improvement on what went before it, and it certainly seems to be much more fit for purpose than what it replaced. When you are dealing with the Armed Forces and anyone who has been injured, there is always a part of you that wants to say, “Give them more”. However, I appreciate that there are limits.
The noble Lord, Lord Grantchester, has already touched on the specifics of the ongoing process of reviewing the scheme. Is there an inbuilt structure which means that we will constantly keep an eye on it as changes take place? If there is, I think that many people will be reassured. We will never get it right for all time with changes in medical technology, survival rates and so on, but if we were to have a look at the thinking here, that would help those of us who take an interest in this matter.
Perhaps we could also have a little more information on the body that has been set up. Knowing where it started from would be a help. As I said, the scheme may not be the most generous in the world but it seems to be a vast improvement on what preceded it and it provides a point from which to develop. An understanding of the logical basis and development of the process will help those outside and in the forces to have an idea of how they are viewed and how development will occur. That is something that we could usefully do today: we could put down a basis for future developments for as long as we will unfortunately need a scheme such as this.
I support the Motion to implement the two instruments, which very much fall within the recommendations from the AFCS review report. I think that some of the questions that noble Lords have asked were addressed in the report, and I am sure that the Minister will have adequate answers for them.
My Lords, I start by thanking all noble Lords for their support for the regulations. As I said in my opening remarks, the previous Government should be commended for introducing the scheme, as well as for initiating a review of the AFCS.
I shall try to answer the questions asked by the noble Lord, Lord Grantchester. First, he asked how the scheme compares with other schemes in the UK and internationally. The noble and gallant Lord, Lord Boyce, and his independent scrutiny group undertook comparisons with other schemes and compensation arrangements, and acknowledged that some adverse comparisons had been made in the media. The guaranteed income payment of an award can be the most financially beneficial part of a compensation package. This tax repayment over a lifetime is worth many hundreds of thousands of pounds and is not capped, whereas other compensation schemes may be subject to limits.
The noble Lord’s last question related to Afghanistan and Iraq and to compensation payments.
The noble and gallant Lord, Lord Boyce, considered carefully whether improvements should be made available to those who were injured before the start of the scheme in April 2005. The conclusion was that the improvements should not be backdated before that date. Those injured due to service prior to 6 April 2005 qualify for compensation from the War Pensions Scheme. Although the War Pensions Scheme was first designed over 90 years ago, it still provides valuable benefits for those who rely on it for compensation for their service-related injuries. Backdating improvements for a particular group would create new distinctions between that group and others who had suffered injury due to service all the way back to when the War Pensions Scheme was introduced in 1917. That would be a significant financial undertaking.
My noble friend Lord Addington asked about the new financial group, the Independent Medical Expert Group, and in answering I hope that I will address all his questions. The Independent Medical Expert Group of leading medical experts is undertaking its work on behalf of the MoD. It is chaired by Professor Sir Anthony Newman Taylor of Imperial College London’s faculty of medicine, and it comprises six medical experts, two service representatives and Colonel Jerome Church, who is the chief executive of BLESMA. They are appointed by Ministers.
This group was set up in March 2010 on the recommendations made by the review of the AFCS, led by the noble and gallant Lord, Lord Boyce, to advise Ministers on certain complex injuries that had been raised during the review as requiring further detailed medical consideration. These were, specifically, injury to genitalia, non-freezing cold injury, paired injuries, brain injury, spinal cord injury, loss of the use of a limb, mental illness and hearing loss. The group has examined each of these types of injury and has formulated recommendations to ensure that the AFCS appropriately compensates for them. IMEG’s initial recommendations will be published in the next few weeks, and the group will continue its work through to 2012 in order to consider fully the issues raised by the noble and gallant Lord.
My noble friend asked who will provide a constant eye on the progress of the AFCS. The Central Advisory Committee on Pensions and Compensation will continue to provide an ongoing overview of the AFCS post the implementation of the noble and gallant Lord’s recommendations.
I think that I have covered all noble Lords’ questions, although there was also a question about how we communicate with service personnel. The Independent Medical Expert Group is about to publish a report that identifies its initial findings and recommendations and that will address the very important issue raised by my noble friend about how service personnel will be communicated with.
I thank noble Lords and the noble and gallant Lord for their support. Our Armed Forces are indeed a special group of people and should be properly compensated for injury or illness arising from what we ask them to do on our behalf. I commend both sets of regulations to the Committee.
Pensions Appeal Tribunals Act 1943 (Armed Forces and Reserve Forces Compensation Scheme) (Rights of Appeal) Regulations 2011
Considered in Grand Committee
That the Grand Committee do report to the House that it has considered the Pensions Appeal Tribunals Act 1943 (Armed Forces and Reserve Forces Compensation Scheme) (Rights of Appeal) Regulations 2011.
Relevant document: 19th Report from the Joint Committee on Statutory Instruments.
Committee adjourned at 4.55 pm.