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Grand Committee

Volume 728: debated on Tuesday 7 June 2011

Grand Committee

Tuesday, 7 June 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, the Committee will of course adjourn for 10 minutes.

Representation of the People (Electoral Registration Data Schemes) Regulations 2011

Considered in Grand Committee

Moved By

That the Grand Committee do report to the House that it has considered the Representation of the People (Electoral Registration Data Schemes) Regulations 2011.

Relevant document: 20th Report from the Joint Committee on Statutory Instruments.

My Lords, the order and regulations will together provide the legal basis for the electoral registration data-matching trial that my honourable friend the Minister for Political and Constitutional Reform announced in another place on 15 September 2010. These instruments will enable the sharing and matching of specified data between local authority electoral registration officers and public authorities that also hold certain kinds of specified data.

It might assist the Committee if, before going into greater depth about what the instruments will do, I were to supply some context and background to the order and regulations. The view that there is a need for change in our arrangements for electoral registration is, I know, widely shared. It is important that the register is as accurate and as complete as possible. We need to make sure that the system is not vulnerable to fraud, while ensuring at the same time that people are not prevented from registering to vote because the system is too difficult to use or because they are not aware of their rights.

In 2014, the Government plan to introduce individual electoral registration in place of the outdated system of household registration. Alongside that, however, we believe that there are other tools that we may be able to use to tackle under-registration and to ensure that people have every opportunity to register. Data matching is one of them.

Data matching involves comparing the electoral register against other public databases in order to identify people who are currently missing from the register. They can then be contacted by electoral registration officials and offered the opportunity to register if they are eligible to vote. We envisage that through data matching we will also be able to take steps to identify and remove any individuals who are on the register but are not entitled to be.

We believe that data matching has the potential to reduce the incidence of under-registration among specific groups in our society, but we do not yet know enough. We also believe that data matching has the potential to tackle inaccuracy in our electoral registers, but, again, we do not yet know enough. We need to test the effectiveness of data matching in this context and see what kinds of data are most useful in improving the accuracy and completeness of the register. We therefore plan to trial data matching over the next few months in a range of electoral registration areas in England, Wales and Scotland. The instruments before the Committee today will enable that to happen. The results of the trial will be evaluated with the assistance of the Electoral Commission and will help the Government to decide whether to seek to legislate to extend data matching permanently across all local authorities.

The order will enable specified data-holding public authorities, including the Department for Work and Pensions, HM Revenue and Customs and the Department for Education, to provide electoral registration officers with the data necessary for their planned data-matching schemes. The 22 local authorities planning to take part in the trial are listed in the schedule to the order and we are grateful to them and to the data-holding authorities that will be participating for the work that they are doing.

Members of the Committee may have noticed that there are in fact 23 local authorities in the schedule. This is because Cardiff has unfortunately had to withdraw since the order was laid. I am, however, very happy to confirm that Peterborough, which withdrew prior to the order being debated in another place, has since been able to resolve its problems and will after all be taking part. Cardiff’s withdrawal does not affect the validity of the order, because being included in the schedule does not compel an area to take part. Nor will it affect the validity of the eventual results of the pilot schemes. Even if another one or two of the pilot schemes were to run into unforeseen practical difficulties of the kind recently encountered by Peterborough and Cardiff, there will still be enough of them for the results to be useful.

The order stipulates that before any data can be transferred a written agreement must be in place between the electoral registration officer and the data-holding authority, setting out the requirements as to the processing, transfer, storage, destruction and security of the data concerned. It also sets 1 March 2012 as the date by which each of the schemes must have been evaluated.

For the information of the Committee, let me say that 1 March 2012—not the end of December 2011, as mentioned in the draft agreement attached to the Explanatory Memorandum—will now be the date by which all data created for the purposes of the pilot schemes must be destroyed, except of course where data have been added to the electoral register in the mean time. Since that version of the draft agreement was prepared, the Electoral Commission has told us that it would assist its evaluation of the pilot schemes if the data were still to be available, should the commission need to see it. We agree with the commission, so the final version of the agreement will reflect this change of date.

The regulations complement the order by enabling registration officers to supply a copy of their full register, or an extract from it, to another person for it to be compared with the information that is to be provided under a data-matching scheme. The regulations also provide that a person to whom the copy of the register is passed may not do anything with it for any other purpose or without the registration officer’s consent. This means that registration officers will not be given data relating to everyone in their area. They will receive only targeted information about particular individuals, thus ensuring that unnecessary personal data are not transferred to registration officers and that the data that they receive are provided to them for a reason.

Data-matching schemes may lead to greater accuracy and improved levels of registration in some electoral registration areas and among some groups within the next few months. If so, the schemes may be the key to greater accuracy and improved levels of registration on a much larger scale within the next few years. However, we need to know for certain and we need to be able to produce the evidence. That is why it is so important to put these trials in hand. The order and regulations will enable us to do that and I commend them to the Committee.

My Lords, I declare that I am an electoral commissioner, having joined the commission on 1 October last year. I fully support the thrust of the commission’s views on these important statutory instruments.

I am sure that all noble Lords want completeness and accuracy of electoral registers. We want confidence in our democracy and our electoral system. We want confidence that you will be able to vote if you want to and if you are eligible. We want confidence in those who have been elected to serve at all levels of government.

It is important that clear and reliable evidence on data matching is produced and that the evidence is robustly assessed. It is particularly important that this assessment is done carefully and represents fully what can be achieved, not least because data matching is envisaged as the primary method of ensuring the continued completeness of individual registration in 2014-15. I should welcome a response from the noble Lord, Lord McNally, on that specific point and on the commission’s concern that the timing of the schemes will coincide with the annual canvass of electors. It is important that there is clarity about the design of the data-matching schemes, so that the impact and any follow-up activity can be demonstrated beyond what the annual canvass activity would normally achieve.

Can the noble Lord give any further information on the agreement to process the data? It is particularly important that personal data are handled carefully and are protected. The commission has specifically recommended that the approach to the delivery of each pilot area should also form part of any written agreement, so that the commission can fully evaluate each scheme.

Finally, the noble Lord will be aware that the commission is required to produce an evaluation report on the operation of the scheme by 1 March 2012. To achieve this, it will be important that EROs are able to provide the commission at agreed intervals during the schemes’ operation with the information needed. Clarity about the design and delivery of each scheme will ensure that the commission is able to undertake its statutory evaluation effectively and that the results can inform future policy development on electoral registration. I am of course happy for the noble Lord to write to me to clarify a number of these points.

My Lords, I am glad to follow the noble Lord, Lord Kennedy, because I know that he shares the commitment that we have on all sides of the House to make the electoral register as comprehensive and accurate as we can.

In the debates earlier this year on the Parliamentary Voting System and Constituencies Bill, there was a great deal of discussion about under-registration. That was not the first time that the issue was raised. The noble Lord, Lord Wills, gave a great deal of attention to this in the previous Government. I recall that on a number of occasions in Grand Committee on the Political Parties and Elections Bill we had considerable discussions about the right momentum and the right progress needed to improve the level of registration. On a number of occasions, previous Administrations—like the present Government—have looked at ways in which data matching could assist this purpose.

It is important to note that there was an improvement during the calendar year 2010; in the last few days there have been some interesting improvements, too, which I notice that colleagues on the other side of the House have also seen. The context of that was a very exciting general election at which, for the first time in some people’s political memory, it looked as though the outcome was not certain. In those circumstances, there was an increase, particularly—and this is encouraging—among the younger age group, which notoriously in the recent past has not registered. We should take encouragement from the fact that, if we can make politics more interesting and outcomes more indeterminate, we can increase registration. It is not only a mechanical operation but a political one to get as many of our fellow citizens engaged as possible.

The integrity of the register is a question of making sure that those who should be on are on and that those who should not be on, or are there in duplicate, are not on. Therefore, accuracy and integrity are the same thing.

The PPE Act, as the Bill became, set fair and square registration objectives. They are,

“to secure, so far as reasonably practicable—(a) that persons who are entitled to be registered in a register are registered in it, (b) that persons who are not entitled to be registered in a register are not registered in it, and (c) that none of the information relating to a registered person that appears in a register or other record kept by the officer is false”.

Obviously, the instruments that are before the Committee today seek to build on that responsibility, which lies not only on the Government but on all of us. I appreciate the clarity with which my noble friend introduced the instruments, which I welcome.

Those objectives are clearly uncontroversial and it is a matter of some puzzlement to our fellow citizens that sometimes the electoral register seems to be totally unrelated to the other information that has been gathered on behalf of local or central government. They find it peculiar; they think that we are all the same thing. They think that Parliament and the Government are the same thing, let alone local authorities and other parts of the state system. They think that we are all part of the same bureaucracy. For example, those who are accused of filing a housing benefit form inaccurately will often cite the presence of all members of their household on the electoral register as a necessary and understandable defence. Who can blame them? They think that that is an official document and therefore can be quoted as such.

Those kinds of situations raise the question of whether the flow of information from government departments into councils will be a two-way process. Will it work in both directions? The Secretary of State for Work and Pensions—this is in the order—might give information on the DWP’s database to the electoral registration officer in Blackpool, but will the DWP then use the comparison data to identify potential fraud on its own books? I do not expect my noble friend to answer on behalf of the other department this afternoon, but I think that this is a subject where our fellow citizens would genuinely like to know whether there is an answer.

Such an exercise is obviously a double-edged sword. For some, it is joined-up government; for others, it is the surveillance state. Getting the balance right is something that we in this House and indeed the other place must constantly take into account. No doubt Members of the Committee will take their own view as to how the balance is being addressed with this issue, but it would be good to know the facts about how information will be shared on a two-way basis.

The other issue that puzzles me is how exactly the local authorities concerned were chosen. My noble friend referred to the fact that there has been one in and one out and I should be very interested to know just how this process has been undertaken. Why, for example, were Southwark and Newham chosen but not Lambeth and Lewisham? Why are Colchester and Camden going to be privy to the Student Loans Company database while the Forest of Dean and Forest Heath are not? Have councils with a particular concern about the level of registration come forward to ask for data? Was it on their initiative or on some analysis by the department that areas with a good cross-section of experience were chosen as being particularly valuable at this pilot stage? Indeed, have the authorities that have been selected been hand-picked by Whitehall or have they been volunteered by town halls? In that connection, I was interested to hear what my noble friend said just now about Peterborough coming in and Cambridge going out. I hope that I have that right. Given that information, will there be a further tranche at some stage? If so, when, or will it happen when there is a full assessment by the Electoral Commission?

Most important on these general issues, information shared is information risked. The more places to which information is forwarded, the more people can put it on a USB key or laptop and then leave it on a train, in a taxi or at a station. That has happened too often in recent years for us not to take account of that risk. I know that the public are rightly concerned about these breaches, as is, it appears from its briefing, the Electoral Commission.

I want to refer quickly to the Electoral Commission, as did the noble Lord, Lord Kennedy. I am obviously not a commissioner but I have been an informal adviser to the commission in a cross-party group in the past and I should declare that. Obviously it is not a pecuniary interest but it simply ensures that I try to keep an eye on what the commission has said. I echo what the noble Lord, Lord Kennedy, said about the rather tight timing that the commission has identified.

On the one hand, the commission is clearly concerned that the scheme should coincide with the annual canvass. That is entirely sensible and proper, but there is a need to move at some speed to do it this year. However, more substantially, making sure that the written agreement between the local authorities and the Cabinet Office is fully worked out in a speedy and well thought-through process so that the commission and the local authorities are all well briefed well in advance of the process seems absolutely critical if the evaluation programme is to be met on time. Going for 1 March 2012 is pretty tight timing. I recognise that the clarity with which my noble friend has presented the order this afternoon is encouraging, but there are so many other stages before we get to that that I hope that we can be reassured that the commission will get the full clarity that it requests in its briefing so that it, too, can make a speedy assessment of what is involved.

The safeguards that the Minister is putting in place to ensure not just that the timing problems are addressed effectively but also the other questions about sensitive data being properly treated, properly stored and properly destroyed when not required for further analysis are extremely important. Those safeguards will have to be secured not just by the government departments concerned but by the local authorities. I hope that my noble friend will be able to reassure us all that that will be very much the case.

Finally, Article 4(2) specifies that agreements between central and local government must make provision for the consequences of the failure to comply with requirements on transfer, storage, destruction and security of data. That will be incredibly important in assuring the public that we are not taking unnecessary risks with important and confidential information. What consequences does the Minister have in mind for future agreements made under this order?

My Lords, I thank the noble Lord, Lord Tyler, and my noble friend on the Electoral Commission. I also thank the Minister for the clarity of his introduction. It is clear how, over the years, the register has ceased to be the reference source—the local bible—that it once was. That may be the reason for these regulations and the order. I have also noticed how, in parallel, turnout at elections has plummeted and how the ugly head of fraud has recently been so frequently in the news. Therefore, perhaps necessarily, these proposals must be and are bureaucratic. We have commissioners, commissions, the Cabinet Office, Secretaries of State, the Lord President and local authorities—all evidence of complications.

The ballot is a hard-won right. It is a secret ballot and it remains, I hope, a clean and fool-proof ballot. That is the bedrock of British liberty—the liberty of a free Parliament and of our perception of liberty, equality and justice. In that sense, what is before us is very important. It was right and proper that the Minister declared himself clearly in introducing the legislation and no doubt will do so in replying. We are all equal in the ballot and therefore I see these measures as an enhancement. They have to be good. I assume that every effort is being made by the coalition Government to protect the integrity of the ballot box. That signal needs to be sent out to the nation and to the whole electorate and I trust this Minister to do that. I appreciate the reference made by the deputy commissioner and director of data protection to inherent risks in security. David Smith makes a veiled promise of what seems to me a retribution. I do not cavil with his discretion there.

What of Wales in terms of a national ballot? The city of Cardiff and the county is a good place to go, as the schedule presages, but can the Minister indicate whether there were consultations and other bids? We have but one pilot in Wales. Why not in Northern Ireland? It may be that there is a simple answer that the Minister will give to your Lordships.

I have a question that arises from a recent contretemps. Are electoral registration officers subject to ministerial direction? I know that the Minister does not answer for Wales, but I put the question generally. I recently noticed that Wales Assembly Government Ministers were unable to persuade—I use the word advisedly— an electoral registration officer in the Wales Assembly election to do as they wished. I refer to the day and the time of a count. The Minister may say to me that that is way out, but I put the question to him also in a general sense across Britain—or perhaps it applies only to England. Can he give an answer now? If he cannot, will he please give me a detailed answer by letter? I wish the Minister well in attempting, on this important matter, to make this a better place.

My Lords, it is a pleasure to follow my noble friend and all noble Lords who have made important contributions to an important debate. I do not intend to delay the proceedings for long, not least because the Minister made such a compelling case for these statutory instruments that there is little to add. I agree with almost everything that I heard him say. However, I have a few questions. Of course, if he is unable to answer them directly today, I should be grateful if he would write to me in due course.

I agree with the noble Lord, Lord Tyler, that it is crucial with this sort of legislation to strike the balance correctly between the efficient discharge of achieving desirable public objectives and protecting the liberty of the individual. As far as I can see, the Government, in this careful approach, have struck that balance well. The House and Parliament owe the Minister and his colleagues a debt of gratitude on the way in which they have approached the matter.

These statutory instruments can play an important part, as we have heard, in tackling the continuing and serious problem of under-registration. Until now, there has been general agreement that the figure of between 3 million and 3.5 million, based on work by the Electoral Commission some years ago, represents the number of people who are eligible to vote but cannot do so because they are not on the register. First, is the Minister aware of the report in the Guardian today that is based on the work carried out by Chris Ruane MP and suggests that the figure may not be between 3 million and 3.5 million but closer to 6 million? Will he commission his officials to contact Mr Ruane to investigate the validity of that figure and report back to Parliament on the findings?

Secondly, the previous Government, as I am sure the Minister is aware, felt that the power in the Political Parties and Elections Act to make such statutory instruments was necessary but was not sufficient. Had we been re-elected, we would certainly have brought forward further measures to improve registration rates. I should therefore be grateful if the Minister could tell us what measures this Government have considered to improve the electoral register over and above those brought in or presaged by the previous Government. Which of those measures that this Government have so considered are they planning to bring forward and when will they do so? If the Minister is unable to answer now, I should be grateful if he could write to me.

Will the Minister also explain why it has taken more than a year to bring forward these statutory instruments? I concede straightaway that, as I am sure he will immediately point out, the PPE Act received Royal Assent in July 2009 and that the statutory instruments that were necessary suffered in what is always the inevitable traffic jam of statutory instruments at the end of a Parliament. The Minister does not need to dwell on that point in his reply. However, this Government do not have that excuse. Given that when they came to power the cupboard was almost inevitably pretty well bare of such a logjam of statutory instruments, and given the importance that everyone who has spoken attaches to improving the electoral register, especially in the context of all the other constitutional reforms that this Government are bringing forward—the noble Lord, Lord Tyler, referred to our extensive debate on these matters in which the question of electoral registration has come up time and again on all sides of the House— please can the Minister tell us why it has taken quite so long to bring forward these statutory instruments? I am quite sure that I will not be alone in hoping for some sort of explanation.

I note that these statutory instruments have been coupled elsewhere with the Government’s intention to rush forward with the introduction of individual registration. I should like to put on record and conclude with my strong objections to this attempt to justify the unjustifiable. The previous Government put in place measures for the implementation of individual registration. That is undoubtedly desirable; there is now agreement, certainly among everyone who has spoken, about that. However, the previous Government tied individual registration to the achievement as far as reasonably practicable—I am again grateful to the noble Lord, Lord Tyler, for quoting the exact words—of a comprehensive and accurate register. This is crucial. All the analyses agree—I do not think that there is any serious disagreement about this—that the introduction of individual registration runs a serious risk of damaging rates of registration. Desirable as it is, that is a perverse consequence of bringing it in.

To rush forward before the register is complete, comprehensive and accurate, as the Government are proposing, risks rendering an already flawed system deeply more flawed. That would be bad enough, but such damage would have a partisan effect. Although the Minister may try to deny this, most analysts agree that the voters most likely to fall off the register in these circumstances would be more disposed to vote Labour.

I thought that someone would challenge me on this and I am delighted to give way to the noble Lord, Lord Tyler.

I do not wish to challenge that. I want to draw the noble Lord’s attention to the fact—he is a very fair man—that what he has just said about individual registration and what he said previously about the fact that his Administration failed to bring forward these instruments after the PPE Act in 2009 are in direct contradiction. If it is so vital to improve data sharing so that the register can be more effective and more accurate and so that its integrity can be improved to enable us to move further and faster on individual registration, why did his Administration not bring forward these instruments immediately after the PPE Act?

I am grateful to the noble Lord, Lord Tyler. He is fully aware that we are talking about a matter of months. We considered all the advice that we received and we consulted widely. As the noble Lord has raised this point, it is worth reminding the Committee that, under the previous Government, the Front Benches of both the party of the noble Lord, Lord Tyler, including the Minister, and the Conservative Party agreed that the timeframe that was necessary to bring in individual registration could not be rushed. Therefore, we set a date of 2015. Everyone agreed with all the expert analysis that that time was needed to achieve a comprehensive and accurate register. That is the reason for the timeframe. There is no good reason for bringing this forward in the way that the Government propose—none.

We will return to these issues in due course, but I am sorry that the noble Lord, Lord Tyler, who is also a fair man, did not in his remarks pay credit to the Electoral Commission for the work that it did in improving registration rates in the run-up to the election. He may well be right that it was an interesting general election and that that motivated more people to register and, in some cases, even to vote. However, it was also the case that the Electoral Commission did first-rate work in targeting particularly hard-to-reach groups—groups that are traditionally under-registered—and achieved considerable success. This will give us all hope and the commission deserves credit for that.

The noble Lord, Lord Tyler, should have given the previous Government some credit for the measures that they put in place and implemented to drive up rates of registration. The encouraging figures that we have seen recently owe at least something to the work that we did in government. I hope that he is nodding in agreement with this. I am happy to give way to him so that he can put it on the record.

I give credit to all who can improve registration, but the noble Lord is again undermining his own case. If registration has improved over the past 12 or 24 months, the circumstances that he described of moving towards individual registration could also be accelerated.

I am delighted that the noble Lord has made that point. We set up a process under which there would be an independent assessment of whether the register was comprehensive and accurate—not a guess by Ministers or politicians but an accurate independent assessment. As the noble Lord is aware, under the legislation the Electoral Commission has to report annually to Parliament on progress. Let us see what it says and not rush ahead before we have received such assessments, which are unlikely to show that. I do not say that they will not show it and, if they do, obviously this can be revisited. We put in the requirement for those annual reports to Parliament so that it could make that judgment on the basis of independent evidence and not on the basis of a ministerial whim. When the noble Lord’s party was in opposition, it was very much against that kind of executive whim. I hope that we will see that antagonism to arbitrary action by the state exemplified in its opposition to this legislation.

I am sorry, but we did not support the timescale that the noble Lord is now describing. In this very Room in Committee, my noble friend Lord Rennard and I argued that we surely could be in a position to accelerate the process in time for an expected election at some point in 2014-15.

With all due respect to the noble Lord, we have to make that judgment on the basis of evidence, but the evidence is not there at the moment. I tried hard in government to put in further measures to improve registration, but for various reasons I was not able to get them all through. I want to know what this Government are doing to bring in new measures over and above what we brought in. That was my first question to the Minister. I have not seen any evidence that this Government are doing any more than the previous Government did, although I am happy to be proved wrong. The improvement of registration rates is vital for the health of our democracy.

The point that I was making, which the noble Lord overlooked, was that Parliament will have an opportunity annually to assess progress towards a comprehensive and accurate register. My concern is not about the speed of individual registration but that it should happen only when the register is comprehensive and accurate. The noble Lord seems to be saying that it should just be done whenever Ministers feel like it. That is the point of disagreement between us. If a comprehensive and accurate register, assessed independently by the Electoral Commission, can be achieved earlier than 2015, that is fine, but all the evidence is that it will not be. If it can be done, then I agree with the noble Lord that we can bring in individual registration sooner, but to rush ahead before the register is comprehensive and accurate will be very damaging. It will be damaging to the register and to the health of our democracy, because it is so transparently partisan to so many of us.

We do not see this as a benign oversight by the Government; we see it as another example of a Government trying to fix the system in their own electoral interest. I know that many people will just shrug their shoulders and say, “Well, that’s what politicians always do. What do you expect?”, but we and this Government really should not behave like that. That is why this matter is so important. It may sound like a technical issue to many people out there but it is not; it is about the integrity of the whole system. I hope that when we get to debate these measures we will hear the noble Lord, Lord Tyler, engage with these issues with his customary rigour, fairness and belief in the integrity of the system. He may come to the point where he is persuaded to vote against his Government on this measure because, in my view, that is what he should do.

The noble Lord is eloquent, but perhaps I may ask him to confirm one thing before he completely rewrites the history of the previous Administration. Am I right in thinking that the Electoral Commission recommended a staged move towards individual registration in 2003? Why did it take so long for him and his colleagues to get round to doing anything about it if it is as important as he says that it is?

I agree. This was a particularly intractable problem, which Governments have looked at and tried to solve over a very long period. We were not in power for the whole of the past 50 years. Other Governments were in power and they, too, did nothing about moving towards individual registration. We tried to move towards it. The problem was that, every time we looked at achieving the desirable good of individual registration, we saw the problems with the register. We took necessary and important steps to improve the register, but I admit that they were not sufficient. I accept that and the noble Lord is right to criticise us for it. However, you cannot try to achieve one desirable good at the risk of creating what I would see as a greater ill, which is damaging a flawed register even more than it is already damaged.

It was not an easy process, but we found a way to do that. It took a huge amount of effort and negotiation with all sides, including the Electoral Commission, which had to be satisfied that it was proper. We found a balance by coupling the two processes. We coupled the improvement of the register so that it became comprehensive and accurate with individual registration. That, we hoped, would put pressure on everyone to drive up registration rates and move within a reasonable timeframe—and 2015 really is a reasonable timeframe; this is not long-grass territory. Therefore, we moved towards individual registration within a reasonable timeframe and, at the same time, tried to ensure that the register was not damaged, or, to be precise, damaged more than it was already.

I hope that the noble Lord will accept that that is a reasonable point of view. We have to be careful with this. I know that the Minister has not tried to do so, but it is wrong to claim—I am hearing this among the background noises—that these desirable and worthwhile measures that he has brought before us today, for which we are all grateful, on their own justify the partisan rush to individual registration. For all their merits, they do not.

My Lords, I am grateful to the Minister for his clear explanation of the instruments and I look forward to our future debates on the speeding up of the implementation of individual electoral registration by July 2014. Obviously, this is a hugely important issue and there is much more to be debated—I associate myself with everything that my noble friend said.

I believe that it is a citizen’s duty to vote and I welcome all efforts to maximise the number of people who are registered to vote. It is deeply depressing that there are 3.5 million people and perhaps closer to 6 million people—I, too, read the article in today’s Guardian—who are eligible to vote but who do not because they are not registered. This disempowers the individual and is damaging to democracy. The fact that a huge proportion of those unregistered are probably young and on lower incomes means that those who are perhaps most in need of a voice do not have one. Therefore, I welcome all measures to improve voter registration.

Effective mechanisms must be established to ensure that the maximum number of people are on the register, so I welcome the instruments that are before us today. I welcome the pilot data-matching schemes, especially the one in the Forest of Dean, which I shall watch with special interest. However, the pilots will be useful only if there is proper evaluation.

Like other noble Lords, I am somewhat concerned about the speed of this. Article 5 of the order specifies the date by which the Electoral Commission must produce a report on the operation of each scheme as 1 March 2012. The Electoral Commission tells us that its agreement to this date is on the basis that the pilot schemes will have been concluded by December 2011— I am not sure whether the noble Lord suggested that that had been put back—and that EROs will be able to provide it with information throughout that process. December is a mere five and a half months away and I hope that many of those employees will get some summer holidays, so will the Minister confirm whether he thinks that this timescale is practical? If the time does not prove to be adequate, will it be extended? I should also be grateful for some further information about the evaluation of the projects and for his assurance that he will report back to Parliament on the process. I will be interested to hear the answers to the questions posed by the noble Lord, Lord Tyler, about the way in which these specific projects were chosen.

I say as an aside that last week I had a meeting with one of the deputy election commissioners in India, a vast country where elections are organised for 750 million participants. I was interested to learn and see that the electoral registers there carry photographs of each person who is eligible to vote. I am not proposing that we should adopt that practice but, like my noble friend Lord Wills, I wonder what other ways the Government are exploring of increasing voter registration. Have they considered introducing a system whereby everybody is registered as of right and then opts out of the register should they wish to, so that the system is an opt-out one rather than an opt-in one?

I welcome the fact that no one who is on the register will be removed if they have not signed as an individual elector for the 2015 register, but I note that that will not be the case after the next general election. That could be a matter of concern if it leads to a greatly reduced number of people on the register and therefore weakens our democratic system, which I think is best nurtured by participation. I look forward to hearing the responses from the Minister and to our future debates on this issue.

My Lords, in discussions on electoral registration, nothing causes the heart to sink so much as the sight in the Room of the previous Minister, a member of the Electoral Commission and the guru in my own party on these matters. That will in part explain why, in making this response, I now have enough notes to take us safely to six o’clock. I hope that the officials will take careful note if I manage to miss a number of the questions that were asked; I will ensure that I follow them up in writing.

Perhaps the innocent observer will have missed the fact that all contributions welcomed these statutory instruments. I am extremely grateful for the agreement. I share with the noble Baroness, Lady Royall, a lifelong belief that using your vote as a citizen is one of your most important duties and responsibilities. It is perhaps a sad fact that I was brought up in a household in a constituency that had a 15,000 Conservative majority, yet at every election my mother and father would go out resolutely to vote Labour. Indeed, in those days when having a car to deliver you to the polling station was something of a luxury, my mother used to take special pride in going there in a Conservative car to vote Labour.

I am grateful for the contribution of the noble Lord, Lord Kennedy. I am pleased to see him on the Electoral Commission. When it was first established, the noble Baroness, Lady Gould, I and others who had worked for political parties on all Benches argued strongly that in order to make it effective the Electoral Commission should contain people with direct experience of party-political organisation. His service on the commission, given his experience, is a plus, the change being carried through by the previous Government.

The exercise of the pilot and the annual register will be kept separate, so that it will be possible to make a comparison. It is our aim that electoral registration officers should provide information at intervals, so that pilots, and the format and frequency of the reports to the Cabinet Office and the Electoral Commission, will be agreed. There will therefore be regular reports. We have asked each pilot to pay particular attention to that point. Since development work began, we have emphasised the importance of the pilots doing everything that they can to distinguish the impact of data matching and related follow-up activities from the usual impact of the annual canvass. I doubt whether that will be perfect, but it will certainly be attempted.

The Cabinet Office and the electoral administrators already have well developed proposals to evaluate the impact of the pilots and we will continue to work together on them as they develop. With the assistance of the Electoral Commission, we will continue to offer help and guidance on appropriate approaches that we consider will be most likely to produce useful evidence. Therefore, I hope that we are keeping in close contact with the Electoral Commission and the electoral registration officers.

It is always difficult to respond to complaints about either speed or slowness, both of which the noble Lord, Lord Wills, managed to make in a speech that he said was intended to be supportive. We will do our best to make these things work effectively and, as I said, most of the participating organisations will do likewise.

The noble Lord, Lord Tyler, asked how the participating authorities were selected. All local authorities across England and Wales were invited to apply to take part in the data-matching pilots. There will be no data-matching pilots in Northern Ireland, which already has individual registration. The individual electoral registration system was introduced in Northern Ireland under the provisions of the Electoral Fraud (Northern Ireland) Act 2002. The Act replaced household registration with individual registration, whereby each eligible elector is required to complete their own electoral registration form.

The noble Lord, Lord Tyler, and others made a point with which I sympathise. I am, as I think was the noble Lord, Lord Wills, the Minister responsible for data protection and, when these proposals first landed on my desk from the Cabinet Office, alarm bells rang. I do not feel comfortable about government departments sharing data in a way that could have an impact on civil liberties unless provisions are put in place and I am happy to assure the Committee that we have taken the necessary steps to make sure that those protections are in place. We will follow the Government’s Information Assurance Standard 6 produced by the Communications-Electronics Security Group, the Government’s central information assurance experts. This standard governs the use, storage, transfer and destruction of data. We have consulted over our specific plans with the CESG and those responsible in the Cabinet Office for information security, as well as participating departments. Under Article 4 of the statutory instrument, all participants, including electoral registration officers, must sign agreements to comply with the standards. The Cabinet Office is also providing information assurance training.

The noble Lord, Lord Tyler, asked whether there will be a two-way flow of information. The answer is no. Departments will not receive information. This will be a one-way process. However, as I said, I think that when government departments, for the most honourable and meritorious reasons, start sharing information, there is a need for those concerned with data protection to be on their guard. I see in his place my noble friend Lord Thomas of Gresford. I usually refer to him by saying, “An old Liberal once told me”, but I think that in this case I can identify him—to be distinguished, of course, from the young Liberals. My noble friend once memorably said to me that there should be a limit on how much information the state holds on an individual in a free society. I think that that is true and I constantly worry about the capacity of new technologies to cross-reference information in a way that could undermine civil liberties. In this case, I can say that we are taking the necessary steps to ensure that this information is used specifically, in a one-way direction and with the necessary protections in place.

The noble Lord, Lord Jones, properly reminded us that, as in Northern Ireland, much of the exercise was to ensure that the system was fraud-free, secret and clean, and that the integrity of the ballot box was protected. I hope that successive Governments will make clear their intention in that respect. Indeed, people have recently been sent to prison for electoral fraud, and rightly so. Anyone contemplating electoral fraud should be well aware that we would use all possible means to ensure that they were prosecuted for it. Cardiff pulled out too late for us to make changes to the order and to find another Welsh example. As a strong supporter of devolution, I am always grateful that the specific matters concerning the responsibilities of Welsh Ministers are nothing to do with me.

Not surprisingly, today’s Guardian article was drawn to my attention. It is not possible to indicate with precision the registration rate in the UK because the size of the eligible population is not known, but the Electoral Commission will soon be conducting research into electoral registration levels in a project funded by the Cabinet Office. The study will check a statistically significant sample of electoral registers at local authority level against the people actually living at these addresses. The work will involve some 5,000 interviews in some 50 local authority areas across Britain.

I have noticed in debating previous Bills that a kind of victim culture has been growing up in the Labour Party that somehow the Government are wickedly keeping 3.5 million—“implied Labour”—voters off the register. No one is being kept off the electoral register. I have always been slightly suspicious of these figures and doubt whether at any time in human history there has been a 100 per cent completed electoral register. Indeed, I am old enough to remember when the register used to be updated twice a year and Harold Wilson used carefully to calculate the dates of elections so that the new register could be used, as the old ones became quickly out of date. Trying to put an electoral register together—

I am grateful to the Minister for giving way. As he seemed to miss my comment, I want to stress that I am very supportive of him and these measures. However, is he aware that for all practical purposes, large parts of the country achieve 100 per cent registration and that their registers are comprehensive and accurate? It is not therefore some distant objective that we will never achieve, because some parts of the country are already achieving it. I accept that the Government are trying to reach that objective and I do not think that there is anything wilful about this. However, does the Minister accept that the task is to get all parts of the country up to that standard?

Yes. However, I refer to one of the points that my noble friend Lord Tyler made in the most enjoyable exchange that he had with the noble Lord, Lord Wills. The trouble with my noble friend Lord Tyler is that not only does he know the facts but he knows the dates as well; he is a difficult man to grapple with. He made the point that voter registration is not only a mechanical issue but a political one. We all have to get out and knock on doors and convince people. I freely accept that in some areas it is more difficult to obtain registration.

I make no apologies for pushing ahead with individual registration because, although there may be problems initially in the transition—and we are trying to put in place measures that will mitigate some of the problems—we are convinced that individual registration is a way to both avoid fraud and encourage individual participation in our democratic process.

I am grateful that the Minister is grappling. First, can a Minister direct the electoral registration officer? Secondly, was he confirming that the city of Cardiff has pulled out of the pilot? If he was, I should tell him that I did not know and that I have relied on the documents that he presented to your Lordships saying that it was part of the scheme. He may wish to answer those two questions.

I shall write to the noble Lord on his first question. As I understand it, Cardiff withdrew but, again, I shall write to clarify the situation.

The Minister will concede that we needed to be told in proceedings that the schedule was inaccurate.

This has been a useful and question-filled debate, although we will have to wait for Hansard to find out whether it has been fact-filled. It is important that we have respect for the electoral register and for our democratic process. On balance, I have always been in favour of the stubby pencil inside a voting booth as a sign of the citizen’s commitment to making democracy work. These days, if you ever go checking numbers outside a polling station, it is sad to see elderly people struggling to make it to exercise that right and young people walking past. It is part of our task as politicians to reverse that process. We have to make democracy work and I hope that these instruments will make some contribution towards that. I sincerely thank all those who have contributed to a very well informed debate.

Motion agreed.

Electoral Registration Data Schemes Order 2011

Considered in Grand Committee

Moved By

That the Grand Committee do report to the House that it has considered the Electoral Registration Data Schemes Order 2011.

Relevant document: 20th Report from the Joint Committee on Statutory Instruments.

Motion agreed.

Export Control (Amendment) (No. 3) 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. 3) Order 2011.

Relevant document: 21st Report from the Joint Committee on Statutory Instruments.

My Lords, the order is being introduced under Section 6 of the Export Control Act 2002. Its effect is to control the export to the United States of America of the drugs sodium thiopental, potassium chloride, pancuronium bromide and sodium pentobarbital, when in a form suitable for injection. It prohibits the export of these drugs to the US unless the exporter has first obtained a licence from my right honourable friend the Secretary of State for Business, Innovation and Skills. To ensure consistency, this new order revokes the Export Control (Amendment) (No.3) Order 2010, which controlled the export of sodium thiopental to the US and which was approved by this Committee on 20 December 2010. I would like to start by reiterating some of the background to the 2010 order, as this provides the key context for the extension of export controls to these other drugs.

On 28 October 2010, Leigh Day & Co, the solicitors acting on behalf of a prisoner on death row in Tennessee, wrote to my right honourable friend the Secretary of State requesting that he place controls on the export to the United States of the drug sodium thiopental. Sodium thiopental—also known as thiopental sodium, as the noble Lord, Lord Young, noted previously—is an anaesthetic which is widely used in medicine throughout the world, but it is also used by some states in the US to anaesthetise prisoners prior to execution. There has been a shortage of this drug in the US for some months, which has led at least some states to seek supplies of sodium thiopental elsewhere.

While affirming the Government’s opposition to the death penalty, my right honourable friend declined to impose export controls on the drug immediately. His primary concern was that he should not take action which might cause delays in the export of a medicine which could be needed by patients. Leigh Day & Co was granted permission by the High Court to judicially review his decision and the first hearing of the case took place on 17 November 2010. The court adjourned the claimants’ public law challenge, which was due to be heard on 29 November. In the course of the legal proceedings, it emerged that, under applicable federal law, it was not currently lawful to import sodium thiopental into the United States for medical purposes. Moreover, it was established that at present sodium thiopental is virtually unused for legitimate medical purposes in the US.

On 29 November, my right honourable friend decided that these new developments significantly strengthened the arguments in favour of a control order. Such an order would serve to underline the UK’s moral opposition to the death penalty without impacting on legitimate trade and without adversely affecting the health of patients in the US. He therefore decided to make an order under Section 6 of the Export Control Act 2002, controlling the export of sodium thiopental from the UK to the US. The order came into force on 30 November 2010. Since that date, any person seeking to export sodium thiopental from the United Kingdom to the United States has required a licence issued by the Export Control Organisation within BIS.

Following that decision, the charity Reprieve formally asked the Government to extend the controls to cover the other drugs that are currently legally defined in the execution protocols of relevant US states. Most states use three drugs—sodium thiopental as an anaesthetic, pancuronium bromide as a muscle relaxant, and potassium chloride to stop the heart. At least one state, Oklahoma, has substituted the anaesthetic sodium pentobarbital because of the shortage of sodium thiopental.

While these drugs are currently used by some US states for the purposes of lethal injection in this way, potassium chloride and pancuronium bromide are both ordinarily used in human medicine, whereas sodium pentobarbital primarily applies to veterinary medicine. Officials within BIS consulted relevant UK marketing authorisation holders, trade associations and wholesalers to determine the potential impacts of extending controls on the export to the United States of these drugs. This suggested that currently there are no exports of these substances from the United Kingdom to the United States for medical or veterinary purposes, nor did there appear to be any prospect of such exports. In addition, unlike sodium thiopental, there has not been a comparable suggestion of a shortage of these drugs in the US. It follows that export controls on these drugs would be unlikely to impact either on medical exports by UK companies or on medical or veterinary practice in the US.

The Government’s conclusion, therefore, is that an extended control is justified. It will guard against future exports from the United Kingdom of drugs for the purpose of executions, and it will do so without harming legitimate trade. I should stress that the order reflects the particular circumstances of the United States and applies only to that country. An order that controlled the export of these drugs more widely might have affected legitimate medical trade in a way that this proposed order would not.

The order came into force on 16 April. From that date, any person seeking to export from the United Kingdom to the United States any of these drugs that are in a form suitable for injection requires a licence issued by the Export Control Organisation, which will refuse a licence if the stated end use is execution or if it considers there to be an unacceptable risk that the drug will be diverted for use in execution. In the latter case, the organisation would assess the risks case by case in the light of all relevant factors. A breach of the order is a criminal offence. The control order covers both the direct and indirect export of sodium thiopental from the United Kingdom to the United States. The indirect control applies when the destination is not the United States but the exporter knows that the goods will be re-exported and that the ultimate destination is indeed the United States.

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, will cease to have effect. Orders made under Section 6 last for a maximum of 12 months. On the basis of the facts that I have outlined, I commend this order to the Committee. The operation and effect of the order will be kept under review in the light of future developments. I beg to move.

My Lords, nothing can be quite as stomach-churning as hearing one’s client being sentenced to death—as I have—and to know that the system of appeals will then follow. I was discussing only at lunchtime today one case where my client was condemned to death in Hong Kong. He won his appeal. There was a second trial and he was acquitted, but he ended up being executed in China by having a bullet put in the back of his neck. It is something which—old Liberal or new Liberal Democrat—I and my party have opposed for a very long time and I am delighted that this order has been brought forward.

I hope that I shall not again have the experience that happened not so very long ago when I received a phone call from someone on death row in a Caribbean country telling me that they were building gallows outside his cell and that he was due to be executed on the following Monday—this being a Friday afternoon. Fortunately, on that occasion we were able to save him.

The death penalty is a disgusting punishment. It is contrary to Article 2 of the European convention and contrary to all human rights conventions throughout the world, and I am pleased that this order takes it further.

My Lords, we have been round this statutory instrument track before but I congratulate the Minister on a comprehensive report. I am now a lot more knowledgeable about sodium thiopental and pancuronium bromide—clearly a word with which the Minister had trouble. It was a comprehensive report. I was not aware of the precise usage of these particular drugs and we welcome the fact that there is both a direct and indirect control. That is important.

I have one question before I conclude. In paragraph 8—the consultation outcome—it rather strangely says:

“Following a short general industry consultation, the trade between the UK and the US on these products appears to be negligible”.

Does “appears to be negligible” mean that they were not satisfied with the process of validation? If the Minister cannot answer today, I would welcome a response in writing.

We on this side share the abhorrence of the noble Lord, Lord Thomas, of the death penalty. He reminded us in graphic terms what it is like for individuals facing that fate, which is unfortunately still too common in many countries around the world. The fact that we can play a small but important role in ensuring that we do not contribute towards a practice that all of us in the House abhor is important. Apart from my one minor question, we, too, welcome this statutory instrument.

My Lords, I am grateful to my noble friend Lord Thomas of Gresford for recounting his personal experiences as a distinguished lawyer on the subject of execution and I thank him for his support for the order. Yes, the noble Lord, Lord Young, and I have been round these statutory instruments before, but I am grateful to have his immediate support for this one. I apologise for my pronunciation of some of the drugs. I am not up on it—and I am very happy not to have been up on the names of those particular drugs.

As to the question of the noble Lord, Lord Young, about the words “appears to be negligible”, I have it here that there should be minimal if not zero legitimate trade in these drugs. Our consultation has shown that there is no trade. I am sorry, but my official could not understand what was written and I cannot read the reply, which is very embarrassing. I shall try again. It should be “minimal if not zero”; there is no trade.

I am sorry that I made such a fist of that when all I had to do was say that I hope I have dealt with the key points made by the noble Lord and that I commend the order to the Committee.

Motion agreed.

Taxation of Equitable Life (Payments) Order 2011

Considered in Grand Committee

Moved By

That the Grand Committee do report to the House that it has considered the Taxation of Equitable Life (Payments) Order 2011.

Relevant document: 19th Report from the Joint Committee on Statutory Instruments.

My Lords, to set this order in context, it may be helpful if I provided a little background on the development of the Equitable Life payment scheme. The Government have pledged to implement the Parliamentary and Health Service Ombudsman’s recommendation to make fair and transparent payments to Equitable Life policyholders for their relative loss as a consequence of regulatory failure. We have made considerable progress towards fulfilling that pledge.

We introduced the Equitable Life (Payments) Bill in July 2010, giving HM Treasury authority to incur expenditure when making these payments. We published Sir John Chadwick’s advice on the financial losses sustained by Equitable Life policyholders, invited representations on this advice, and carefully considered them in our deliberations in advance of the spending review. Following that consideration, and refinements to the calculations of Sir John’s actuaries, we quantified the relative loss at £4.1 billion, based on a full acceptance of the Parliamentary Ombudsman’s findings of maladministration. In determining the level of payments through the scheme, it was important, as the Parliamentary Ombudsman herself acknowledged, to take into account the impact on the public purse. Therefore, at the spending review we announced that approximately £1.5 billion would be paid out through the payment scheme.

It is also important to note that even in the context of a very tight spending review, we still found a way to cover all the losses of the with-profits or trapped annuitants. This is possible because we will be paying their losses through annual payments that reflect the structure of their policies. These policyholders were particularly vulnerable to their losses because they were unable to move their funds elsewhere or mitigate the impact of their losses through employment. They are also generally the oldest policyholders.

We also established the Independent Commission on Equitable Life Payments, chaired by Brian Pomeroy, to advise on the distribution of the remaining funding among other policyholders. The commission reported in January, and its recommendations formed the basis of the Equitable Life payment scheme design document that was published on 16 May. The document sets out the detail of how the scheme will work, including who will receive payments, how they will be calculated, and how they will be made. In that document, we set out our intention to make first payments through the scheme by the end of this month, and we are on track to meet this target.

Noble Lords may be pleased to hear that that this brings me to the order itself. When we introduced the Equitable Life (Payments) Bill last year, we took a power to provide for authorised payments made by the scheme to be free of tax, and to enable them to be disregarded for the purposes of assessing eligibility for certain means-tested state-funded support. At the spending review, the Financial Secretary to the Treasury announced that the payments would be tax free. There are strong reasons for this, which were raised in the representations following the publication of Sir John’s advice. One key issue is simplicity. It would be an extremely difficult task to decide the appropriate tax treatment of a payment that represents loss suffered on an investment over the past 10 years, during which many policyholders’ circumstances may have changed. It would also be very challenging to explain any such treatment and associated reporting requirements to those in receipt of payments. This approach would also be extremely time-consuming. In light of our commitment to bringing the Equitable Life issue to a conclusion as quickly as possible, it is just not tenable.

Secondly, we have taken serious consideration of fairness. Of a total loss of £4.1 billion, £1.5 billion will be made available to the scheme, based on our careful assessment of what funding would strike a fair balance between fairness to policyholders and fairness to the taxpayer. Adding a tax liability to payments on top of this discount would disrupt this balance.

Let me take the Committee through the order. Articles 2 to 4 provide for authorised payments to be disregarded for the purposes of capital gains tax, corporation tax and income tax. All direct payments from the scheme to identified payees, as set out in the Equitable Life Payments Scheme design document, are authorised payments under the scheme. Where Equitable Life has only one set of data and no records of the individual members of a group pension scheme, the scheme will use the trustee of the group pension scheme as a paying agent. Onward payments from these trustees to their pension scheme members are also authorised payments.

Article 5 provides for inheritance tax. It ensures that a person’s right to, or interest in, an authorised payment will be disregarded in calculating the value of that person’s estate on death for the purposes of inheritance tax; and that such rights or interests are similarly disregarded in calculating the value of relevant property subject to a 10-year anniversary charge for inheritance tax, where an authorised payment is made on or after such anniversary. This means that no estate will have to be reopened in order for inheritance tax to be charged on payments received after death. But payments received before death will not be ring-fenced to give them ongoing relief from inheritance tax. Such ring-fencing is not practicable.

Article 6 provides that in calculating investment income for the purposes of entitlement to tax credits an authorised payment shall be disregarded. Section 9 of the scheme design document that we published last month sets out in detail how the tax relief set out in the order will work in relation to the scheme.

I hope that all present will support the making of this order today. Following today’s debate, the order is scheduled for debate in the other place tomorrow. This should ensure that the order is made before the end of the month, giving certainty and reassurance to those who will receive the first payments. The order reflects the Government’s principles of fairness, transparency and simplicity in our response to the Equitable Life saga, and I beg to move.

My Lords, I thank the Minister for that clear description of the background and of the order. The whole Equitable Life saga is one of the least-savoury examples of public policymaking in recent years, and it was a great relief that the Government were able to grasp the nettle and reach a settlement so quickly last year. Therefore speed, which was so lacking for so long, needs now to be of the essence in getting payments made. The Minister explained that the payments will be exempt of tax because to have made them liable to tax could have been time consuming. One can think of other cases in which the payment of compensation has taken years because of the time-consuming procedures that were put in place. The pneumoconiosis saga among the miners is a classic example of necessary detailed calculations and assessment taking years, during which time inevitably a significant number of those eligible for the payments died. Given that we are talking here about pensioners, time is of the essence.

I have one question for the Minister. Once the order is passed, the Government hope to begin making payments by the end of this month. Do they have any assessment of how long it is likely to take for the whole process to be completed? That is of huge importance to the individual policyholders. It is great knowing that you are going to get some compensation, but you need certainty. It would therefore be very good if the Government could give some certainty in the timetable so that even those who will not receive payment in the first tranche will have some broad idea of when they will receive it.

My Lords, I, too, thank the Minister for his concise overview of the position and for introducing the order. We support the action that the Government have taken on this whole issue, and we accept that, although we may have different views about the approaches taken, speed is of the essence and the order should go through. We know that during the passage of the primary legislation there was some debate on the quantum, but ultimately Governments are in the business of making decisions and we recognise the decision to set the payment scheme at £1.5 billion.

In the original debate there was some concern about the allocation to the group of with-profits annuitants. The general principle that they should be protected against the comparison at 100 per cent was consensual. However, as my noble friend Lord McKenzie said in the debate:

“If relative loss is calculated on a gross-of-tax basis and the post-1992 with-profit annuitants are kept whole on this basis, will not the tax exemption go further than full reimbursement?”.—[Official Report, 24/11/10; col. 1152.]

I accept the case that has been made for simplicity but, in terms of the balance between the two pots, are the Government comfortable that this has not created an anomaly between the with-profits group and the non-with-profits group?

I join the noble Lord in seeking further information on the progress of payments but, aside from that question and perhaps the matter of an enhanced progress report, we support the order.

My Lords, first, I thank my noble friend Lord Newby and the noble Lord, Lord Tunnicliffe, for their helpful contributions to this short debate and for supporting the order. The making of the order is a crucial step towards making the first payments at the end of the month.

I shall address the questions that have been raised by my noble friend Lord Newby, followed up by the noble Lord, Lord Tunnicliffe, about how the timetable will unfold. As I said, the first payments will commence by the end of this month. It is then expected that payments to all traceable accumulating with-profits groups and conventional with-profits policyholders will be made over the first three years of the scheme. Payments to with-profits annuity policyholders for past losses will be spread over the first five years of the scheme, while annual payments for future losses will commence in year one and continue for the lifetime of the policyholders. All individual policyholders can expect to hear from the scheme in the first year—that is, by June 2012. As I think I said, for certain classes of policyholder closure of the process will be within three years; for others, five years; and for one class, as I identified, over their lifetime. I hope that that makes the position clear in respect of the several different classes of policyholder.

In response to the question of the noble Lord, Lord Tunnicliffe, on why tax relief is being granted on payments to with-profit annuitants who will have received 100 per cent of their losses covered by the scheme, losses for with-profit annuitants have been calculated on a gross basis. As I have just said, unlike other policyholders, those annuitants will receive their payments over time and we will not be paying any interest on those payments between the date of the calculation—December 2009—and the date of receipt. Disregarding the payments for tax will offset the effect of that payment schedule and the absence of any interest. It is important to note that these payments are in respect of losses that go back over nearly two decades and it would be an incredibly complex and burdensome task to work out what the tax positions for individuals would have been at the relevant time. As has been recognised, the scheme needs to be simple and not unduly complex. In recognition of that, we have decided to make the payments tax free. In the round, we do not believe that this will result in overpayment for with-profits annuitants, given the offset that I have identified.

Briefly, as regards reporting on the progress of the scheme—an issue that was briefly touched on by the noble Lord, Lord Tunnicliffe—progress will be tracked and evaluated throughout the lifetime of the scheme, and I envisage that a number of reports will be produced, including in relation to the management of contracts, operations and risks. I am happy to give reassurance that the Government will give Parliament regular updates on the progress of the scheme.

We have come a long way in the past year to redressing the losses that Equitable Life policyholders have suffered over the past decade. Following the coming into effect of the order, a communications strategy is in place so that all recipients will be informed that their payments are to be tax free, and that they do not have to report them for tax purposes. In addition, HMRC helplines, and the staff at payment scheme call centres will be provided with lines to take so as to answer any questions on the tax treatment of these payments. I am grateful for the Committee’s support.

Motion agreed.

Committee adjourned at 5.08 pm.