Lords Chamber

House of Lords

Thursday, 2 April 2009.

11:00:00

Prayers—read by the Lord Bishop of Chelmsford

Health: Diabetes

Question

11:05:00

Lord Harrison
Tabled by To ask Her Majesty’s Government what is their response to the report in a recent edition of the Journal of Epidemiology and Community Health about the incidence of type 2 diabetes

Baroness Wilkins
My Lords, on behalf of my noble friend Lord Harrison and at his request, I beg leave to ask the Question originally standing in his name on the Order Paper.

Baroness Thornton
My Lords, we welcome the Journal of Epidemiology and Community Health report, which raises awareness of the close link between type 2 diabetes and obesity. We know that the number of people developing diabetes continues to increase and that is why we are working with the NHS to help prevent people from developing the condition. Initiatives such as Healthy Weight, Healthy Lives and the vascular checks programme will be key to achieving this.

Baroness Wilkins
My Lords, I thank my noble friend for that reply. In the light of these research findings, is she aware that the number of new cases of type 2 diabetes, which, as she said, is strongly linked to obesity, rose by 69 per cent in the six years between 1997 and 2003? It is vital that diabetes is identified early to prevent the onset of complications such as blindness and amputation. Does she agree that a wide range of measures needs to be taken to tackle this threatening time bomb? There are worrying reports that the diabetic specialist services are being cut back. What steps are the Government taking to ensure that these vital services are available to all people with diabetes in order to prevent the appalling complications that can ensue?

Baroness Thornton
My Lords, my noble friend is right: the number of people being diagnosed with diabetes is increasing. Consequently this has led, for example, to increased spending on the drugs being prescribed. We are not aware that there has been any reduction in expenditure or workforce at local level. We are investing heavily in prevention, particularly in the programmes I have already mentioned—Healthy Weight, Healthy Lives and the vascular checks programme—in self-medication and in self-management, and we are encouraging comprehensive services for diabetes at local level. Indeed, the NICE guidelines issued in 2008 recommended a comprehensive programme for people with type 2 diabetes, encouraging lifestyle changes, healthy eating and increased physical activity.

Baroness Morgan of Huyton
My Lords, are there any specific plans for dealing with diabetes in children, which is a growing problem and one that the health service at the moment sometimes overlooks?

Baroness Thornton
My Lords, managing diabetes in children and young people is different and is significantly more complex than it is for adults. We estimate that there are 20,000 children with type 1 diabetes in England and there may be up to 1,000 children with type 2 diabetes. The close link between diabetes and obesity means that it is vital that we reduce the number of children becoming overweight and obese and we are focusing on that. We recognise that there are particular issues about helping children and young people both to have access to the best quality care and to provide them and their families with the support and training to enable them, over a period of time, to become competent at managing their condition.

Lord Walton of Detchant
My Lords, does the noble Baroness accept that the serious cardiovascular, renal and ocular complications of diabetes, often thought to occur only in type 1 diabetes, occur with equally high incidence in type 2 diabetes? As she said, there is a positive correlation between the increasing incidence of type 2 diabetes on the one hand and the development of obesity on the other. What advice are the Government giving to the public at large about the risks of overeating?

Baroness Thornton
My Lords, I thank the noble Lord. He is, of course, quite correct in his diagnosis. In January 2008 we launched a £372 million cross-government strategy, Healthy Weight, Healthy Lives, which set out our ambition to enable people to achieve and maintain a healthy weight. We launched Change4Life, a national movement that brings together community groups, health professionals, teachers, government departments, supermarkets and the media to help people make positive changes to their diet, levels of activity and lifestyle, leading to better health. Indeed, yesterday the vascular checks programme kicked in as we announced our programme of vascular checks for everyone in England aged between 40 and 74. This has real potential to prevent many cases of diabetes and identify thousands more cases earlier.

Baroness Tonge
My Lords, does the noble Baroness agree that the increase in obesity among the population, which leads to diabetes and to type 2 diabetes in particular, is not so much to do with eating junk food and overeating generally, which human beings have always done given the chance, but to do with lack of exercise? What plans do the Government have to address this problem? In particular, could not this House set an example, perhaps by jogging on the spot during debates or having a morning exercise session after Prayers and before business starts?

Baroness Thornton
My Lords, I shall not comment on the noble Baroness’s suggestion about the amount of exercise that Members get. I agree that it is up to all of us to take responsibility for taking exercise. The noble Baroness is also correct about the link between type 2 diabetes and obesity being clear. It is, indeed, due to lifestyle; not only eating, but exercise. It is also due to such things as an ageing population. Because diabetes is a progressive condition, as you grow older, your risk of diabetes increases, particularly if you are not taking care of yourself and not taking exercise. If people have better access to support and can identify what they need to do to manage their condition and health day to day, we will prevent diabetes and help to keep it under control.

Earl Howe
My Lords, following the earlier question about the worrying rise in the number of children with diabetes, what particular strategies and training are being provided in schools to handle that increase and, I hope, contain it?

Baroness Thornton
My Lords, we recognise that, as the noble Earl said, diabetes care for children is very variable. As long ago as October 2005, we set up a working group to discuss that. Its recommendations are being taken forward by the clinical director for children at Diabetes UK, who is working with our educational specialists to make sure that teachers and nurses in schools have the right kind of briefing and know how to deal with young people who are striving to control their condition and lead as normal a life as possible, given their condition.

Finance: Equity Release

Question

11:13:00

Asked By

Baroness Hollis of Heigham
To ask Her Majesty’s Government whether they welcome and will consider promoting equity release schemes that are fully regulated, avoid negative equity and are underpinned by independent legal advice.

The Financial Services Secretary to the Treasury (Lord Myners)
My Lords, since 2004 the Financial Services Authority has regulated mortgages, including lifetime mortgages, which are one type of equity release product. In 2007, the Government extended the scope of FSA regulation to cover home reversion plans, which are the other main type of equity release product, to help to ensure a level regulatory playing field for the equity release market. Equity release is a complex financial product. Consumers considering equity release should seek independent financial advice.

Baroness Hollis of Heigham
My Lords, I thank my noble friend for that reply. Does he agree that well regulated equity release can help to fund the adaptions and social care that will give an older person the choice of staying in their own home, rather than going into residential care? Will the Treasury therefore encourage other departments to assist—for example, by developing partnerships with local authorities and kitemark schemes and by disregarding equity release for pension credit?

Lord Myners
My Lords, I certainly believe that equity release can play a valuable part in managing people’s financial affairs, but it is an inherently complex product. My noble friend is therefore right to emphasise the importance of advice. Equity release is a very small part of the housing finance market—less than 0.25 per cent of mortgage loans relate to it—but for those who perhaps find themselves in a position where they have high assets but low income, it can be a valuable and important part of their financial strategy. I would like to see the Government encourage that, as long as the mechanism was well regulated and people were aware of the risk. The trade association representing those active in this area has developed a highly commendable code of practice.

Baroness Gardner of Parkes
My Lords—

Lord Elton
My Lords, will the Minister answer the noble Baroness’s question about a disregard of equity release for pension credit purposes?

Lord Myners
My Lords, we would have to be very careful about encouraging a line of financial activity that may be driven by an outcome on pension credit rather than being in the best interests of the individual from a stand-alone financial point of view.

Baroness Scott of Needham Market
My Lords, is the Minister aware that many analysts are saying that one of the reasons for the low take-up is general discomfort about corporate safety, in terms of both the companies offering the products and the people doing the regulating? Does he not agree that the failure of the FSA in general to cover itself in glory is adding to people’s disquiet about taking up such products?

Lord Myners
My Lords, I am not aware of evidence that the FSA’s credibility as protector of consumers’ interest is a serious issue. It is clear that the FSA’s role in prudential supervision has come under challenge and the FSA acknowledges that it needs to do more to improve its standards. Today’s G20 meeting will probably set a framework within which some of that work will be taken forward. I am not aware that the FSA’s deficiencies in consumer protection are as grave as the noble Baroness’s question might suggest. As far as the credibility of those active in the market is concerned, it is clear that some quite major lenders do not want to be involved in this product because they see it as too fraught with hazard. However, the risk lies ultimately with the individual, which is why good regulation and transparency about risks and consequences are critical to the development of this interesting product area.

Baroness Greengross
My Lords, is it not important that the growing number of elderly people can remain in their own homes if those homes are properly adapted? Does the Minister therefore agree that safe schemes that enable them to purchase social care so that they can be with neighbours and friends are very important? Should not the Government try to promote the best of those schemes to enable that to happen, particularly while local authorities are so short of funds?

Lord Myners
My Lords, I think that I have already indicated that this financial product has considerable merit and I would like to see the Government take whatever action they can to encourage its growth, although I shall not be drawn further into pension credit at this point. However, if there are other things that the noble Baroness and others believe that the Government could do to encourage an outcome whereby people could remain in their homes, we would be pleased to hear them. I completely agree with the noble Baroness. I know that remaining in the community was important to my own mother in the final years of her life. Being forced to sell one’s home is a very unsatisfactory outcome, which the Government will take all reasonable efforts to avoid occurring.

Baroness Noakes
My Lords, the Minister wants to avoid talking about pension credit, but I would like to probe him a little further. Does pension credit act as a disincentive to elderly people utilising equity release, which may be a very valuable opportunity for them? Will he undertake to look at whether the pension credit rules can be relaxed so that equity release in appropriate circumstances—not all would be released as capital—would not be neutralised by the pension credit?

Lord Myners
My Lords, the noble Baroness and I seem to talk of nothing other than pensions at the moment. I am sure that Sir Fred Goodwin will not be looking at an equity release product at this stage, but I will certainly take it upon myself to look at this issue to become more familiar with the points that the noble Baroness is making and no doubt I will speak with my colleagues in the DWP. However, she will appreciate that I cannot make any commitments.

Lord Whitty
My Lords, the Minister implied earlier that the FSA was entirely clean in relation to its consumer protection. I declare an interest as chair of Consumer Focus and I commend to my noble friend a recent report on regulating regulators from a consumer point of view, in which the FSA did not come out as in the clear as he perhaps implied. I am sure that he is aware of this, but I thought that I should draw it to the attention of the House.

Lord Myners
My Lords, I am grateful to my noble friend for reminding me. I think that I was talking about relative concerns as opposed to absolute concerns.

Energy: Power Stations

Question

11:21:00

Asked By

Lord Tombs
To ask Her Majesty’s Government what capacity of coal, oil and nuclear power stations is expected to be withdrawn from service by 2025; and what plans have been made for their replacement.

The Minister of State, Department of Energy and Climate Change & Department for Environment, Food and Rural Affairs (Lord Hunt of Kings Heath)
My Lords, some 12 gigawatts of coal and oil capacity and 10 gigawatts of nuclear capacity are expected to be withdrawn by 2025. Industry is responding well, with nearly 10 gigawatts under construction and 10 gigawatts with consent to begin construction. Government policy, including recent legislation, aims to ensure the right framework is in place for industry to invest and we continue to review this.

Lord Tombs
My Lords, I thank the Minister for that reply but it does not actually address my Question, which is the capacity expected to be withdrawn by 2025. The reason for asking this Question is the age-related nature of the problem. The great bulk of our power stations are more than 40 years old now and will fail over the next few years due to age. Would the Minister agree that it seems inevitable that for the next 10 years or so we will build nothing but gas-fired power stations, so increasing our reliance on imported gas from sometimes dubious sources?

Lord Hunt of Kings Heath
My Lords, I thought I had answered the Question because I said that by 2025 we expected about 20 to 23 gigawatts of generation capacity to close. The noble Lord is absolutely right to point out the challenge to ensure that there is adequate replacement. Gas capacity, at 7 gigawatts, forms the majority of what is under construction. With the EDF takeover of British Energy, there are now strong proposals for new nuclear to be built, not just from EDF; other companies, too, are showing considerable interest. We also have the challenging drive for renewables, so we expect to see much more renewable energy being put in place over the next few years as well.

Lord Marlesford
My Lords, the Minister seems to have great difficulty answering questions clearly. I asked him a very simple question, to which he gave me a Written Answer, about when they expect to announce their choices for the location of the next generation of nuclear power stations. Instead of giving a date he said:

“We expect to include a list of suitable sites in the nuclear national policy statement”.—[Official Report, 30/3/09; col. WA182.]
 

He also said that the Government expect to consult on it by the autumn of 2009. When is the Minister going to announce the sites? When is the nuclear national policy statement going to be published? The Government look like leaving this country without any lights.

Lord Hunt of Kings Heath
My Lords, I really think that is complete nonsense. Of course I have answered the question, and there is nothing to add to the Written Answer.

Lord Teverson
My Lords, although clearly the energy capacity gap is important, one of the best ways to close that gap is by saving energy. One of President Obama’s first demands on the energy side was for smart grids to ensure major energy savings. Europe is also promoting such smart grids, yet I understand the British Government are not supporting that initiative. Is that wrong and can we make sure that the UK does support intelligent energy grids for the future?

Lord Hunt of Kings Heath
My Lords, of course the UK Government are interested in the discussions about the development of a smart grid. Our decision to support the whole concept of smart meters in this country shows that we see considerable potential in energy efficiency. The more that customers know, the more likely they are to understand the need for energy efficiency, and we have a number of consultations at the moment to encourage it. The noble Lord raises an extremely important point.

Lord Broers
My Lords, can the Minister reassure us that in choosing the location of nuclear power stations, the Government will take into account the fact that 40 per cent of the power generated by a nuclear power plant is in the form of heat? We do not want these power stations in remote locations, where that heat will be wasted. The French get this right; the Swedes do not.

Lord Hunt of Kings Heath
My Lords, I am sure we need to take that point into consideration. The noble Lord will know that the process of looking at potential sites is going on, but he will also understand that at many of the current sites that will shortly embark on decommissioning, or those that are currently doing so, there is great anxiety among the workforce that new nuclear should be developed on those sites. There are many factors to be taken into account.

Lord King of Bridgwater
My Lords, before the Minister dismisses my noble friend’s comment about the risk of blackouts coming, if he had listened more carefully to the question raised by the noble Lord, Lord Tombs, who knows rather more about this subject, I think, than anyone else in the Chamber, he would know that at present we risk having a very narrow safety margin. If there are problems and setbacks with power stations, as has happened in my constituency with nuclear power stations, the Government will be exposed as having left this country dangerously at risk of blackouts.

Lord Hunt of Kings Heath
My Lords, I do not believe that I have given any impression of complacency on this matter. We fully understand that many power stations are due for either closure or decommissioning over the next 10 to 15 years, but I have indicated that there is a considerable programme of investment in stations that are now under construction and those that have received consent, and we expect further investment decisions to be made. This is a critically important matter. We carefully monitor the whole situation to ensure that we will not have an energy gap. I still say to the House that the signals are positive with regard to investment decisions that have been made and will be made in future.

Earl Attlee
My Lords, what is the most cost-effective technology for CO2 abatement—new nuclear or new coal with carbon capture and storage?

Lord Hunt of Kings Heath
My Lords, nuclear has a very low CO2 impact, but the noble Earl is right to mention carbon capture and storage. That is why the Government have been actively working within Europe and internationally to encourage CCS demonstration projects. In this country we are in the middle of a competitive approach for a demonstration project. With regard to coal and low carbon, CCS offers great potential if it can be shown to work at scale. If it can be, and if this country is a leader in that regard, then it has huge potential for us in domestic terms and for our export capacity.

Constitution: Royal Marriage and Succession

Question

11:29:00

Asked By

Baroness Quin
To ask Her Majesty’s Government whether they plan to introduce legislation to remove the restrictions on heirs to the throne marrying Roman Catholics and to enable equal rights to succession to be enjoyed by daughters of the Sovereign.

The Parliamentary Under-Secretary of State, Ministry of Justice (Lord Bach)
My Lords, this is a complex issue. While there is no question of changing the constitutional role of the monarch or the Church of England as the established church, both my right honourable friends the Prime Minister and the Lord Chancellor have said that we have to deal with issues of discrimination here. The laws concerning marriage to Catholics and the primacy of male members of the Royal Family should change, but that can happen only with the agreement of all the Commonwealth countries of which Her Majesty the Queen is the Head of State. Given the need for consensus across all the Queen’s realms, this cannot happen overnight.

Baroness Quin
My Lords, I thank my noble friend but, given that the debate in the other place last Friday aroused much interest and showed strong levels of public support for ending these discriminations, I urge the Government to act more quickly and bring in a measure either to deal with both discriminations together or, if it is easier to get agreement, to deal with each of them in turn. Does my noble friend agree that it is wise to introduce these changes now when they can be considered on their own merits rather than being seen to favour one particular successor to the Crown over another?

Lord Bach
My Lords, on my noble friend’s second point, there is more than one view about whether this is the appropriate moment to take action. On her first point about whether we might remedy one of these issues and not the other, the problem is that the same difficulties apply when amending the law on succession to effect equal rights for females in the line of succession as to removing anti-Catholic provisions in the Act of Settlement. The Statute of Westminster 1931 requires the assent of the Parliaments of all those countries of which Her Majesty the Queen is Head of State.

Lord Forsyth of Drumlean
My Lords, does the Minister acknowledge that the ban on the heirs to the throne marrying Catholics is the constitution’s grubby little secret? Does he recall that the previous Prime Minister, Mr Blair, promised to tackle this and gave exactly the same line as we are hearing from the Dispatch Box today? Just how long will it take this Government to deal with this question?

Lord Bach
My Lords, I have already said that it is accepted by the Government that these are cases of discrimination and they need to be changed. However, this is a complex issue, as the noble Lord will understand; he was a member of a Government that I do not think sought to change the position as it was then and as it is now. He is right in the sense that this is discriminatory and that the Government have to do something about it. This is a complex issue which requires the agreement of those other countries in the Commonwealth which treat the Queen as their Head of State.

Lord Elystan-Morgan
My Lords—

Lord Maclennan of Rogart
My Lords—

The Minister of State, Department of Energy and Climate Change & Department for Environment, Food and Rural Affairs (Lord Hunt of Kings Heath)
My Lords, I think that the noble Lord, Lord Elystan-Morgan, was in first. Then perhaps we can go to the noble Lord, Lord Maclennan.

Lord Elystan-Morgan
My Lords, is it not the case that there is no specific statement in the Act of Settlement 1701 that prevents a person of the Roman Catholic faith becoming monarch? The words of the Act, if I remember rightly, are that the Crown shall devolve upon the Electress Sophia and the heirs of her body—followed by the words “being Protestant”. It is not a case of Roman Catholics being proscribed, but rather of Protestants being prescribed.

Lord Bach
My Lords, the noble Lord, as so often, is quite right.

Lord Maclennan of Rogart
My Lords, would it not be preferable for the Government to show that they prefer to anticipate problems? However, they have to face them.

Lord Bach
My Lords, we are anticipating this problem; we have anticipated it. Discussions are taking place and will continue to take place, because this is a matter which, at some stage, needs to be resolved.

The Lord Bishop of Chelmsford
My Lords, does the Minister accept that in recent times, Protestants and Catholics have developed increasing bonds of affection and friendship, and that we have made a little progress ourselves in these matters since the 16th and 17th centuries? Will he repeat the fact that complex issues lie behind these matters and that there is no immediate practical need for action? That gives time for the necessary consultation to take place and for these matters to be presented in a way which is rooted in a genuine consensus.

Lord Bach
My Lords, I agree with the right reverend Prelate. However, we must keep moving on this; we cannot just use the excuse of discussions for not doing something about it. That does not detract from the fact—I repeat it—that this is a complex matter

Lord Kingsland
My Lords, bearing in mind that the Act of Settlement inextricably links so many crucial components of our constitution with the monarchy and accepting that constitutional change in the United Kingdom must, despite the recent record of the Government, be based on consensus—in these matters, that means agreement by the Houses of Parliament, by the Church of England, by the Roman Catholic Church and other denominations, by the monarchy and by public opinion—does the Minister then agree that a Private Member’s Bill is a wholly inappropriate way of promoting changes in this area?

Lord Bach
Yes, my Lords.

Lord Dubs
My Lords, my noble friend mentioned the difficulty of this complex issue and consulting the Commonwealth, but have the Government started that consultation? Also, could he mention one Commonwealth country that would be against these proposals?

Lord Bach
My Lords, I am certainly not going into the question of what Commonwealth countries may or may not have said on this issue; that would be quite inappropriate and wrong. As I understand it, discussions have started and are continuing.

Business of the House

Timing of Debates

11:36:00

Moved By

Baroness Royall of Blaisdon
That the debate on the Motion in the name of the Earl of Northesk set down for today shall be limited to three hours and that in the name of Lord Lloyd-Webber to two hours.

Motion agreed.

Refreshment Committee

Membership Motion

11:36:00

Moved By

The Chairman of Committees
That Lord Davies of Oldham be appointed a member of the Select Committee.

Motion agreed.

Data: Personal Information

Debate

11:37:00

Moved By

The Earl of Northesk
To call attention to the regulation, collection and retention of personal data and its impact on personal privacy, liberty and freedom; and to move for Papers.

The Earl of Northesk
My Lords, in recent times it has become customary at this point in our proceedings to offer up some sort of anecdote or witticism as a means of buying time before launching forth into the body of one’s text. My limited oratorical steers skills do not stretch that far, so I merely confine myself to the hope that it is neither the subject matter of today’s debate nor the fact that I have risen to my feet that has prompted the exodus of so many of your Lordships from the Chamber.

With that out of the way, and now that the general hubbub has abated somewhat, I begin, as I did last week, by declaring my various interests in this field: as an unpaid adviser to the Enterprise Privacy Group, Privacy International and 80/20 Thinking. I should perhaps also say that I have no wish to be unduly partisan in introducing the debate. This is far too important an issue for any of us to use it as an opportunity to indulge in party political grandstanding.

Against that background, I say again that I am fully cognisant of the potential utility of data and information across the whole panoply of public policy. I agree with the statement made by the Minister last week that,

“Information is fundamental to the delivery of modern public services and public protection because it helps citizens to receive the services to which they are entitled, front-line staff to have the information that they need to do their jobs effectively and public services to be accurate and efficient”.—[Official Report, 25/3/09; col. 658.]

I also accept that the imperatives driving policy in this field are, in the main, well-intentioned and worth while. Moreover, I acknowledge that where to strike the balance between data privacy and the legitimate right of the state to manage and process those data for the public good is an especially vexed issue.

Why, therefore, have I, and an ever increasing phalanx of like-minded citizens, been so persistent in expressing our concerns and anxieties about how our established right to privacy, via Article 8 of the ECHR, is under such insidious attack? At an aggregated level, the answer is pretty straightforward. The stark reality is that, over the past 10 years or so, the UK has earned an unenviable reputation for being a world leader in how to impose a whole raft of surveillance technologies upon its citizenry: the DNA database, CCTV cameras, the National Identity Register, the NHS National Plan for IT, and so on.

The Government may seek to pray in aid both the Data Protection Act and the Human Rights Act as the means whereby they have guaranteed that those technologies are subject to appropriate and adequate safeguards. However, as the Joseph Rowntree Reform Trust report, Database State, observes, the Data Protection Act is a “defective implementation” of the EU data protection directive in a number of respects. For example, how can an individual mitigate the harmful consequences of illegal data processing when he has no way of knowing that it has taken place? Quite apart from this, and because data protection and data security are two sides of the same coin, its manifest flaws have been brought into very much sharper focus in recent times after the HMRC data scandal and the relentless flood of breaches and losses both within government and the commercial sector that followed that debacle. In effect, the legitimate and reasonable expectation that the Data Protection Act, buttressed by the Human Rights Act, would embed and entrench the primacy of the data interest of the citizen, as codified by the data protection principles, has been just so much wishful thinking.

What has happened instead is that policy avenues have been pursued, particularly in the context of the public services reform and security agendas, which actively and explicitly seek to subordinate the citizen’s data interest to that of the state. This gives traction to a fundamental change of the relationship between the state and citizen whereby, as the Joseph Rowntree Reform Trust report maintains:

“Increasingly users who should feel like a citizen or customer—responsible and in control—feel instead like a suspect or recidivist”.
 

Nowhere is this process more apparent than in the strategy document, Transformational Government, published by the Cabinet Office in November 2005. On the face of it, its core presumption, that,

“Government must move to a shared services culture—in the front office, in the back office, in information and infrastructure, and thereby release efficiencies through standardisation, simplification and sharing”,

gives the impression of being eminently sensible and well intentioned, perhaps even innocuous. That may explain why it has received scant scrutiny by Parliament so far. However, its ongoing rollout appears to be aimed at a structural and cultural entrenchment across the whole of Government of the supremacy of the state’s data interest by means of reliance on a network of interconnected databases seeded with ever more information about us. Albeit that the Secretary of State for Justice has recently withdrawn them, the data-sharing proposals on the face of the Coroners and Justice Bill were just the latest manifestation of this trend. Moreover, there is a palpable sense in which this agenda is being almost exclusively driven by administrative convenience and political expediency rather than any innate respect for or understanding of the privacy rights of the individual citizen.

Here, I represent the words that I quoted earlier from the Minister in a rather more succinct way. Information and data, in their myriad forms, are the lifeblood of the exercise of power. Thus, in the context of developing policy, state control of statistics runs the risk of being, in the words of Sir Michael Scholar, “corrosive of public trust”. He adds that,

“having good statistics is like having clean water and clean air. It’s the fundamental material that we depend on for an honest political debate”.

Therefore, it is to the Government’s credit that they have legislated for the independence of statistics. Nevertheless, in much the same way that political control of statistical data can grant the holder control over the policy agenda, so control of an individual’s personal and sensitive information can grant dominance over the individual himself. It is precisely this that, in the information age, makes identity theft such a harrowing crime: the dual sensations of violation and helplessness arising from a realisation that one is no longer in control of one’s own life. The fact of the matter is that our personal and sensitive data are the core statistics of our own unique lives and, by extension, the wholesale collection, retention and sharing of our data by government is equivalent to a state-sponsored and thereby legitimised form of identity theft.

In this context, David Goodhart, the founder and editor of Prospect magazine, has recently suggested that:

“It might be useful if we started to see our data as similar to tax, something we willingly surrender to the authorities in return for various benefits”.
 

There is some credibility to this view. Personal data are imbued with considerable commercial and political value, the relinquishing of which can generate benefits and advantages for the ways in which we live our lives. To that extent and when aggregated, they can be perceived as part of the nation's stock of social capital. But, in much the same way that we would not tolerate a tax system that stripped us of all our earnings, so we should resist systems that increasingly look as if they are being designed to impoverish every one of us in data terms.

Implicit in David Goodhart's approach is a presumption that the anxieties that I have expressed are no more than a storm in a teacup; that the state has a legitimate right, if not responsibility, to deploy technological advancement to the benefit of the greater good. Indeed, it may very well be that, as a result of such influences as the internet itself and celebrity culture, society does not value the “complex bundle of issues” that constitute privacy as highly as perhaps it once did. Be that as it may and at risk of repeating myself, privacy is an established right, articulated in the ECHR. With that in mind, its protection should not, as it were, be reduced to the lowest common denominator. More importantly, as the Willcock v Muckle case in 1951 demonstrates, once sacrificed it is hugely difficult, if not impossible, to recover it.

Your Lordships will be well aware that the Database State report made a number of recommendations to address some of these problems. I am supportive of these although I fear that the Minister, on behalf of the Government, will approach them with too much of a closed mind. That said, a more fundamental issue is at work here. Because of the apparently irreconcilable conflict of interest between the data interests of the state and those of the citizen and because of an intrinsic and ingrained inability of government to guarantee adequate security of data, the appropriateness and legitimacy of the state as being the default administrator/processor/manager of our data is called into question. Quite apart from this, it has been the case for some time now that the imperatives that drive government policy in this field, essentially to use data management processes to improve public services and to enhance the fight against terrorism and serious crime, are deliverable in a much less invasive—and, it has to be said, less costly—way than the route chosen by the current Administration. As it happens, only last week I attended a seminar with Microsoft where the technological advances in this field, based on a citizen-centric data sharing platform with no diminution of the state's legitimate rights of access, were outlined.

To repeat, I am unconvinced that it is appropriate that the state should be both poacher and gamekeeper of our personal information. Rather, the tasks and functions of data management should be, at the very least, delegated to an authority that is wholly independent of government, perhaps even, if advances in technology permit, devolved to the level of the individual user, as a means of re-establishing the primacy of the data interests of our citizenry. Dare I say it, adhering to the current myopic obsession with data-sharing across ever larger databases that record each and every moment of our lives runs the risk of creating systems that are so bloated, if not obese, that they grind to a halt and collapse under their own weight. To give your Lordships some feel for the simple arithmetic here, I refer to a number of Questions for Written Answer tabled by my honourable friend, Eleanor Laing, in another place. For example, these have revealed that the customer information system of the DWP, the database that it is intended will be the principal source of information for the National Identity Register,

“holds 92 million person related records and 9,800 data fields”.—[Official Report, Commons, 26/3/09; col. 614W.]

That is to say 960 billion separate fields of data. That is just one database.

Perhaps more tellingly Stephen Timms, on behalf of the Treasury, makes this observation:

“There are many data categories of different kinds within each of the identified systems. A count of them all could be produced only at disproportionate cost”.—[Official Report, Commons, 25/3/09; col. 405W.]
 

As the Ideal Government blog puts it:

“It’s official. HMRC now collects so much personal data that they can’t afford or can’t be bothered to provide Parliament with the number of fields of data they collect”.
 

In effect we may already be at the point whereby, far from generating a utilitarian information-rich data management system, the Government are already experiencing data overload.

In conclusion I cannot improve upon the assessment in the Database State report, which says that the situation in which we find ourselves is one where:

“All aspects of our lives will be surrounded by masses of data collected without our consent, and shared well beyond the purposes for which they were originally collected. Citizens are starting to realise this, and are progressively losing trust in government”.
 

Bluntly, enough is enough. It remains only for me to say that I very much look forward to the contributions of other noble Lords in the debate and in due course the response of the Minister. I beg to move.

11:50:00

Lord Maclennan of Rogart
My Lords, the whole House will be indebted to the noble Earl, Lord Northesk, for having introduced this topic today. It is not by any means the first time that these issues have been raised, and indeed the Constitution Committee of this House has produced a most worthwhile report. I have not yet seen the Government’s response, but I do not doubt that the Minister will inform us about its detail.

More importantly, perhaps, is that the Government are not, I believe, an inflexibility on this issue. I agree with the noble Lord who has spoken that it is not sensible to have a partisan approach to these issues. They are of such a scale that it is more effective if we are of one mind about what needs to be done rather than simply to poke holes in each others’ cases.

I have to say that I was considerably impressed by the final report, produced last June by the Cabinet Secretary, Sir Gus O’Donnell, Data Handling Procedures in Government. There seemed to be little wrong with what was proposed in those procedures. What we have yet to know, and it is the most important question, is how they will be implemented in practice.

It was said at the time that the intention was to describe the implementation of the principles enunciated in that central report in an annual report by the Cabinet Office to Parliament. They included the use of encryption and penetration testing of systems, standardising and enhancing management of information risk, and identifying individuals in the departments and public agencies who would be personally responsible. They also promised quarterly risk assessments within the department, mandatory training for staff and, perhaps most importantly for this House and another place, privacy impact assessments when new policies or processes are being considered.

It was also generally concluded that greater scrutiny and monitoring, including of information risk, were required in statements on internal control which would be made available to the National Audit Office and the Information Commissioner. Furthermore, it was recognised that there needs to be very great transparency about these matters in annual reports to Parliament. A number of other things have happened since then, including the recognition that the Information Commissioner should have the power to carry out spot checks on public departments and agencies, but alas not in line with the recommendation of the Constitution Committee. Such powers have not been considered yet for extension to the private sector. In the light of the evidence that has been accumulating of such things as blacklisting of workers who are held by employers to be unsuitable for employment and the trading in such information, there is good reason to believe that, notwithstanding the cost of these inspections, it would be appropriate to give consideration to extending the right of intervention beyond the public sector.

As the noble Earl, Lord Northesk, made plain, everyone who reflects on these matters is aware of the value of information in policy making. It is certainly right that we should not bring that to a halt, but it is also right in parallel to consider on every occasion the implications for privacy of the extension of these developments. Since the development of technological capability is proceeding at such a pace, we have a duty to consider processes that enable a very full understanding to be enjoyed by the decision-makers and proper accountability for the amplification of this process, particularly the process of sharing information for purposes that were not intended when it was collected and which are not strictly the reason for the data being stored. It is right to ask what the Government’s thinking is about that cross-use of information and whether a system of opting in and opting out by the individuals affected might be both practical and desirable.

I recently heard the Minister dismiss the Joseph Rowntree report in an answer. I do not want to exaggerate, but his response suggested that he doubted the methodology. That being so, we have to ask him how he proposes to view the findings of the Joseph Rowntree Reform Trust, because it was a powerful report. Its findings indicated that a very large number of the systems that are in place would not pass muster if they were tested against the Data Protection Act, never mind the Human Rights Act. The trust said that 11 of 46 database projects examined almost certainly breached human rights legislation and 29 systems were considered problematic, including having legal problems. I imagine that very few of us will have done any serious trawling over the precise examples that the trust gave. I have not done so myself. None the less, that is a significant charge by a body that consisted of significant specialists in the area with strong not merely academic but commercial backgrounds in the field. The individual challenges that have been made by the trust need to be examined and answered, because I know that it is not the Government’s intention that their practices in this sphere should run counter to the legislation, which they themselves are responsible for enacting and, in some cases, modifying in the light of experience.

Speaking of the legislation which the Government have enacted, I very much hope that the Minister will take the opportunity of this debate to explain what the Government regard as necessary and proportionate in evaluating the “holding of data protection”, those being the words from the jurisprudence of the European Court of Human Rights. Another point made by the Constitution Committee of this House was that the Government should give a clear definition. That is right because what is necessary and proportionate can vary very much from one department to another. It is quite clear that, in seeking to prevent crime, the Home Office will have a very different view of information from that of the Department for Work and Pensions. Consequently, we need clarity about the criteria being applied across the board if data is to be shared across the board.

There are wider questions about whether data should be so shared. A number of bodies, including some in this House, have recommended that it is a mistake to seek to accumulate data right across government and to centralise it and that it is better for it to be held locally. Those arguments need to be addressed and consideration needs to be given to whether locally accumulated evidence cannot also be useful centrally, perhaps with some of the personal information extracted from it, so that the proper concerns of the public about invasion of privacy are addressed.

I wish to put a number of other questions to the Minister in this relatively brief intervention, considering the scale of the subject. I wonder whether the Government can give any information about their intention to put communication data, concerning e-mails, telephone communication and the internet, on a large, centralised database. The general expectation about an anticipated Bill has given rise to considerable concern because it is widely recognised that those who access these things can scan people’s life histories with very little advantage accruing to the individuals but much accruing to those who want to advertise.

I would like to ask the Minister whether the Government will think again about the response made some time ago to the recommendation of the Joint Committee on Human Rights and whether, when they propose to extend their data collection in a particular sphere, they should include that proposal in amendable primary legislation rather than in subordinate law. I have heard and read the arguments about the need for flexibility. The trouble with subordinate legislation is that you take it or you lose it and it is not really the best way of ventilating concerns on a complex issue of this kind. I know that things are moving rapidly, but that is part of the general public concern. There is a real need to reassure the public that these matters are taken seriously by all political parties and that we are anxious to build in procedures which enable us to anticipate the difficulties and the intrusions into privacy which may arise.

12:04:00

Lady Saltoun of Abernethy
My Lords, on Saturday 14 March there appeared on the front page of the Daily Telegraph as the principal news item the headline:

“Trips abroad to be logged”.
 

The report continued:

“Every holiday, Channel hop or sailing weekend must be registered in advance … The travel plans and personal details of every holidaymaker, business traveller and day-tripper who leaves Britain are to be tracked by the Government ... Anyone departing by land, sea or air will have the trip recorded and stored on a database for a decade. Those leaving from any international station, port or airport will have to supply detailed personal information as well as their travel plans. So-called ‘booze cruisers’ who cross the Channel for a couple of hours to stock up on wine, beer and cigarettes will be included. Weekend sailors and sea fishermen will have to comply if they plan to travel to another country, or face possible criminal prosecution. The owners of light aircraft will also be brought under the system, known as e-borders, which will eventually track 250 million journeys annually. Even swimmers attempting to cross the Channel and their support teams will be subject to the rules. Travellers will have to supply information such as passport and credit card details, home and email addresses and exact itineraries”.
 

The Government propose that these rules might apply to the Crown dependencies, such as the Isle of Man and the Channel Islands, as well as Northern Ireland, but after yesterday’s defeat of the Government in this House, I do not know how that stands, and I doubt whether they do.

There are no prizes for guessing what all this is supposedly in aid of. It is for catching terrorists—catching at the ports, or wherever, suspects whom the security services are supposed to be keeping an eye on, but have not kept a sharp enough eye on. Rather than focus on the people they need to catch, the Government propose a blanket screening of everyone. It is part of the e-borders programme. I can understand the usefulness of keeping tabs on people coming into this country, but to log every single inhabitant of Britain who goes on holiday seems to me to be a log too far. I, and I expect some of your Lordships, should like to know how much all this is going to cost.

I have a letter from the noble Lord, Lord Bach, in which he tells me that it is not the case that travellers will have to apply for permission to travel or to submit an itinerary, as reported by the Daily Telegraph, but that the information will be collected from booking agents, who will have to ask travellers for their passport details and to provide such other information as they may possess, like telephone numbers, e-mail addresses and credit card details. I am sure that your Lordships would be delighted for the Government to hold their credit card details, since their record of keeping personal data secure is nothing short of abysmal. As most people buy travel tickets with credit cards nowadays, the booking agents are very likely to have the details. Details of baggage are also requested, including the number and description of pieces. I wonder what that means—Vuitton or Marks & Spencer?

All this is in the Immigration and Police (Passenger, Crew and Service Information) Order 2008, which concerns information required about people coming into this country. Can the Minister kindly tell the House under what order these regulations are to apply to people leaving this country—that is, emigrants? The order that I have just referred to concerns immigrants.

Once upon a time, not so long ago, this was a wonderful country to live in. Our ancient freedoms, fought for for nearly 800 years, were the envy of the world. And what has happened to them? Habeas corpus, dating from 1215, has been severely curtailed. The presumption of innocence has been eroded. Freedom of speech and pen is only permissible as long as your views are politically correct. Our e-mails and the internet sites we visit on our computers are tracked by the security services. The police and certain petty officials may break into our houses. A lot of this appears to be cribbed from the German Reichstag Fire Decree of 1933. When thieves break into our homes, we are not allowed to hurt them, whatever they may do to us. We have to get permission to make comparatively minor alterations to our homes. Health and safety rules interfere with everything we do, even the temperature of our bathwater. I could go on.

Much of that emanates from the boys in Brussels. Then very soon we are all to have identity cards and, while the information on them to start with will be fairly basic, the Government have not ruled out adding more personal details at a later date: see the answer of the noble Lord, Lord Brett, to the noble Baroness, Lady Hanham, last Thursday. The travel-based database, on top of all the rest, is too much. Britain is getting more and more like Soviet Russia before glasnost, and a totalitarian Government—which no country is completely safe from—will find everything already in place for total control. I think the terrorists have won.

12:10:00

The Lord Bishop of Chelmsford
My Lords, this is a welcome and timely debate and I join others in thanking the noble Earl for offering it to us. It is no good being luddite about modern communication systems. Government at all levels is not only bound to make full use of them but has a duty to do so because citizens have a right to the best possible service from public authorities. The benefits are multiple. Such systems help bodies such as the National Health Service to fulfil its primary purpose of care and are crucial to research in disease, the monitoring of public health and the protection of patients.

I suspect that the public widely accept the need for information collection—the collection of DNA or the use of cameras, for example—for law enforcement and for the safety and security of the citizen. However, we know that there are costs: the unnecessary gathering of personal information; overloaded and insecure systems; and data being inaccurate and out of date. There is also the persistent problem of security, as we have seen in recent times. That is why I believe that it would help us enormously if the Government would set out the principles and values that will always underpin their use of modern information systems and data gathering and continually affirm what is set out in the Data Protection Act and such places as Article 8 of the ECHR.

At the centre of this is a contract between the citizen and the public authorities. If I want the National Health Service to provide me with a service, I must accept that it will need information about me that helps it to provide what is needed. Matters concerning the life of each of us as individual citizens are of course the property and responsibility of the person concerned. We do not hand over those property rights to the state. The contract must be clear that the information held by the service will be used for the purposes for which it has been given and by persons with a direct interest in the service offered. If I am to have confidence in the service holding that information, I must be assured about its confidentiality and security. I have no difficulty in the information being widely used, provided that it stays within the broad framework of the service.

Inevitably with modern systems there will be a lot of data held without direct consent. Much of this, as with the 2009 data retention regulations, is concerned with security and tackling crime. However, we need publicly known, understood and accepted regulation of such systems, which needs to protect the privacy of the individual and to reassure the public that no abuse of power is either intended or possible. For example, I will be interested to know from the Minister the Government’s response to the July 2008 Data Sharing Review Report from the Information Commissioner and Dr Mark Walport, which I think proposed that the commissioner should be given a statutory duty to produce a code of practice on data sharing and to issue context-specific guidance on its consistent application. That is the sort of field that we need to be in.

That leads me to talk about transparency and accountability. These two are inextricably linked. If the authorities are clear about who and what is involved, where information is held and what the values and rules are under which all this happens, then real public accountability is possible. I assume that the Information Commissioner has a key role and needs the powers necessary in assuring us of that accountability.

My last point—my contribution is at a more general level in this debate—concerns what is manageable. The problem with modern communication systems is that we think that they will do it all for us, so increasingly vast sums of money are poured into them and there are growing levels of frustration as complex and massive systems do not work as well as had been hoped. We do not ask: what are the boundaries around what can be delivered through these systems? Therefore, not only must we be clear about the potential benefit that any new system will bring but we must also be clear that it can be managed and delivered and that it will be safe.

As all of us know in the organisations of which we are a part, it is all too easy in complex modern democracies for powerful state bodies, for perfectly good reasons, to launch new systems, only for us all to wake up and realise that questions about the rights and liberties of the citizen have not been addressed but are looming ever larger and undermining public confidence. That is why I believe that we need to affirm the contractual nature of this issue: the need for clear and publicly stated values and principles, for openness and effective accountability, and for systems that we can both manage and have real confidence in. In that way, we can make full use of the benefits of contemporary communications and information systems, thereby strengthening the capacity of public services to deliver good services to the people and strengthen our common life in our society.

12:16:00

Baroness Neville-Jones
My Lords, I join those who have already thanked my noble friend for securing this important and timely debate. I wish to say how much I agree with the powerful points that he made.

As the contributions to the debate have already shown, all sides of your Lordships’ House are well versed in and understand the argument that the collection and retention of personal data are necessary for the efficient running of public services, and to aid our security services and the police in the fight against terrorism and serious organised crime. However, as has also been said, unchecked this justification is leading to an exponential increase in the amount of personal information that is collected, retained and accessed by all manner of different bodies. The Information Commissioner has said that personal information has become the “lifeblood” of government and business, and that is certainly the case, but it is also true that this can be tolerable only if the information is used properly and intelligently.

My noble friend mentioned the report produced by the Joseph Rowntree Reform Trust called Database State. It assessed 46 of the UK’s national databases and found that fewer than 15 per cent of them were effective, proportionate and necessary with a proper legal basis for any privacy intrusions. That in itself seems to be quite a statement of the rocky basis on which a lot of present practice now sits. Tellingly, it also found a quarter to be,

“almost certainly illegal under human rights or data protection law”,

because of problems with privacy and effectiveness. These included the National DNA Database and the national identity register. The report recommended that many centralised databases be scrapped or substantially redesigned—again, another point about the basis on which we are operating being rocky.

The Rowntree report is rightly critical of the centralisation of data in the UK. I look forward to the Minister’s conclusions on the report. I agree that some data—I stress “some”—need to be retained and collected. As a shadow Security Minister, I could hardly think otherwise. However, the data have to be stored securely and—the important point—only accessed by legitimate persons for legitimate reasons, under suitable controls and safeguards.

The process must be regulated by law on a detailed basis, not left to the exercise of executive discretion within the far-too-loose regulatory framework of RIPA. In establishing regimes for data collection and retention, the Government have not given due regard to privacy or the need for public trust in three areas: the amount of data collected, how it is retained and how it is used. I fear that they are deservedly running into a high level of suspicion.

I will look at one matter with which the House dealt recently and on which further things should be said. I refer to the potential legislation on communications data. Last week, your Lordships’ House considered a statutory instrument that extended the range of communications data that must be retained by service providers, to include details of our internet access, internet e-mails and internet telephony. The Minister—the noble Lord, Lord West—was unable to tell us the meaning of the broad terms that the statutory instrument uses, such as “internet e-mail” and “communications data”, and the extent to which they would cover third-party applications. This is a technical point, but it is important and it affects our freedoms. We need to know the answer to this question and I beg the Minister to address the question of third-party applications.

It is also unclear whether it would be possible to distinguish between the content of a communication and the fact of its occurrence for internet protocols where these pieces of information are contained in the same data stream. This is a technical problem, because in practice, in this kind of data stream, the gap between the so-called envelope and the contents does not exist in the way that it does with other forms of telephony. There is a problem in distinguishing between these things, but it is a distinction on which the Government are relying for their reassurance that people’s rights to privacy over content will not be infringed without a properly processed warrant. If you cannot distinguish between these two things, you cannot protect content and may therefore be invading privacy without a warrant.

This means that we do not know how these regulations, which have now passed into law, will operate in practice. The Government have not been able to satisfy these Benches that last week’s statutory instrument did not create a vehicle through which the interception modernisation programme could be carried into practice without further primary legislation. The draft Queen’s Speech led us to believe that primary legislation would be forthcoming and that the powers contained in the SI would be transposed in a Bill of primary legislation. Instead, the SI has been transposed separately, and against the background of the Home Secretary having cast doubt in a recent speech on the need for primary legislation.

Are we going to get any primary legislation? The Government would do well to come clean on their intentions, since failure to do so obliges one to examine the scenarios that could develop without primary legislation. It is not hard to imagine a scenario—with or without primary legislation—in which, because of the vast quantities of information collected, and an inability to separate communications data from content, it would be argued that access must now be made more efficient by having a centralised database that holds the data in a standardised format. So, without Parliament ever having given its agreement, the Government could then come to hold a vast database of communications. In case the House thinks that I am engaging in a flight of fancy, can the Minister confirm the accuracy of reports that a prototype of a centralised database for communications data is under construction? It is vital that he answers this point in his response.

If such a central database were to come into existence, it could be interrogated using data-mining technologies, pattern recognition and deep packet inspection. I am aware of the arguments used in justification for this: for instance, that it would increase the chances of successful pre-emption of crime. That may be so, although we do not have proof of this thesis. However, it is clear that there is a counterpart downside: access so easy and so extensive would carry with it a loss of governance and system control. It could get us very near being treated as guilty unless and until proven innocent.

It is not just that legislation in the field of surveillance and data processing does not contain sufficient detail and specificity to allow Parliament to scrutinise the proposed measures effectively. Other noble Lords have made the point that we have seen over the years a constant creeping of surveillance powers. Your Lordships’ House will be familiar with the examples of local councils snooping on ordinary people for things such as dog fouling and putting rubbish in the wrong bins. That is why I am very unhappy that during our consideration of the statutory instrument last week the noble Lord, Lord West, said that the other place was “confused” in its consideration of the instrument because it debated access to communications data and not only the retention of those data. Frankly, it is putting it rather kindly to say that he cautioned your Lordships’ House against making a similar mistake of confusing data retention and access. It is not your Lordships’ House that is confused—you retain data so that you can have access to them. There is little useful distinction to be made between retention and access in practice—the two go hand in hand. Does the noble Lord accept that you cannot separate those two issues so cleanly? You cannot look at one-half of the legislative framework in isolation from the other. If you do, you get exactly what we have seen over past years: a constant creeping of powers of surveillance and a concomitant decline in public trust as legislation is misused against ordinary people.

This is a constant theme in this House. This House is not full of hysterics; it is full of sane, ordinary people of experience and it is concerned about the powers that are being used and developed by the state which can invade the privacy of ordinary individuals without good reason.

As many noble Lords know, the Regulation of Investigatory Powers Act 2000 stands out as an example of these creeping powers. When the Act was passed, local authorities were not included in the list of public authorities that could access communications data. During the passage of the Bill, the then Home Secretary and Minister of State responded to concerns expressed that it would extend the power to a range of public sector bodies, including local authorities, by giving assurances that such powers would not be made available to them. But lo and behold, in 2003 two orders were passed that gave a number of additional public authorities, including local authorities, access to communications data and the power to use directed surveillance and covert human intelligence sources.

The then Minister of State said about the previous assurances that had been given:

“Clearly, if an assurance has been given you like to try and ensure that that assurance is maintained, but … sometimes there are things that happen two, three, four, five, six years later … despite the assurance that was made there is a need to change”.
 

In its report, Surveillance: Citizens and the State, the Select Committee on the Constitution concluded,

“we are concerned lest this reversal set a precedent for future unforeseen policy changes in the field of surveillance”.

I have two comments. First, it is hard to see what has so changed in our national life that it is necessary and right to give all 474 local councils in England, every NHS trust and fire service, the Environment Agency, and even the Royal Mail and the Royal Pharmaceutical Society access to communications data or surveillance powers, or how that increases the security of the nation. Secondly, it would be a sad day when the House could no longer place reliance on assurances from Ministers.

It is not surprising that the Rowntree report found that over two-thirds of the population no longer trust the Government with their personal data. How will the Government address this huge deficit in trust? The issue has been accurately described by my noble friend as the creeping subordination of the individual to the state.

I suggest that we need five things. The first is an emphasis on having separate disaggregated databases rather than centralised databases. That is not to say that there should be no information-sharing between different systems and users but—this is the second thing that is needed—there certainly needs to be greater regulation and oversight of the transfer of data. Thirdly—this is related—I would like the role and office of the Information Commissioner greatly enhanced. I welcome the recommendations of the Select Committee on the Constitution that the Government should consult the commissioner at an early stage of policy and legislative development, that he should have a greater role in advising Parliament on surveillance and data issues and that he should help the Government undertake a review of the law governing citizens’ consent to the use of their personal data. I suggest that we need greater independence and much greater governance in this whole area.

Fourthly, I would like to see legislation in this field contain sufficient detail to allow Parliament to scrutinise proposed measures effectively. Explanatory Memorandums in this sort of legislation are very important, and they need to be much more helpful to legislators when they are trying to understand and grapple with some of the difficult technical issues which, as I say, have great import for our civil liberties. Here, again, I look to the Minister to confirm whether a prototype of a centralised database for communications data is under consideration. That is the point I referred to earlier, and it is relevant to whether in practice we are going down the road of a centralised database in the area of communications, even if we are not authorised to explicitly.

Finally, we need a review of RIPA as soon as possible, and the powers it hands out need to be substantially curtailed. I look forward to hearing the Minister’s response.

12:32:00

Baroness Byford
My Lords, I join other noble Lords in thanking my noble friend Lord Northesk for bringing this important debate to us today. He highlighted the importance of the difficulties of data sharing, the need for good management of those data and the balance between data held and the rights and privacy of information for people.

I shall speak mainly on the issue of data where it concerns our children and young people. The quantity of legislation concerning data collection, transfer and use is daunting. I shall start with SI 2006/2601, the Education (Information about Individual Pupils) (England) Regulations 2006. The instrument was made on 21 September 2006, was laid before Parliament on 3 October and came into force on 31 October. It laid a duty on school governing bodies to supply scheduled information within 14 days of a request from the local authority or the Secretary of State. The information for the local authority relates to each child in its schools and consists of their gender, date of birth, unique pupil number, surname, first name, ethnic group, date of admission to the school, first language, year group, usual mode of travel to school, address, details of special educational needs, whether in care, whether eligible for free school meals, education details, whether on the gifted and talented register and absence details. Details on pupils who have been excluded are also required. I wonder whether that is all really necessary.

Within days of these data being transmitted to the local authority, they are forwarded electronically to the Department for Children, Schools and Families. The governing body of a secondary school in Warwickshire wrote to the department expressing its concern about the dangers of holding information about young people on a single database and seeking the reasons for doing so. The department responded with three pages of text, in the course of which there was the following statement:

“Data is needed at the individual pupil level to ensure that funding is accurately allocated (for example, to ensure pupils are not double counted in instances where pupils are legitimately dually registered at two institutions; or where there are ‘duplicate pupils’, that is where a pupil has not deregistered from one school on moving to another)”.
 

The cost of compiling and holding records for 11 million youngsters is surely hundreds of times greater than the cost of any dual funding, even if it were not simpler to lay on the local authorities a duty to ensure that double counting did not happen within their jurisdiction.

On 1 September 2007, access to the database was extended to further education institutions, primary care trusts, work-based learning providers, researchers into educational achievement, learning providers registered with the UK register and institutions in higher education. In 2008, the Statistics Board was given access to most of the information on the database, including all personal identification. Have there been any other statutory instruments or manoeuvres used to widen access even further? Do the Government plan to use these data for any other purposes, such as allowing potential employers to access them, either to check on applicants or to hunt for possible future staff?

This database is not the only one that the Government have wasted our money on. A Written Answer in the other place on 22 April 2008, at col. 2028W of Hansard, showed that ContactPoint had so far cost £103 million, with a further £121 million to be spent by March 2010, at an annual running cost of £41 million. ContactPoint has been the subject of much questioning, particularly from Members in another place. It will be able to access national data sources from within the DWP, the DCSF, the Department of Health and the Office for National Statistics and compare fragments of data that are duplicated therein.

On 17 March 2008, the Member for Basingstoke pointed out, at col. 604 of Hansard, that nine other children’s databases feed into ContactPoint, which is maintained by the DCSF in addition to the national children’s database and the Connexions database, which supplies information about children’s choices beyond school. I was concerned about this when we took the Children Bill through in 2004, and my noble friend Lord Northesk spoke at great length about it. At Second Reading, I raised the whole question of data and data processes, saying:

“Indeed, it appears that we are not to have any influence over the four data processes: the creation, amendment, access and destruction of data held on children. Who will be responsible for setting up each of the databases and the rules governing their operation?”.
 

I asked whether that would be just one national database and, of course, we have found that it is not. I said:

“Who will be allowed to add, amend or delete information? Who will be able to access the information held on the databases and what rules will govern that access? Who will delete the completed records? What rules or anticipated rules will there be? Will they be mandatory or will exceptions be made? More importantly, will young people have access to their own information? What access will families have to the information held on the lists? Is it envisaged that each LEA will have a local data base containing information on each child at the authority’s schools? Will the name of a child coming to the attention of one of the other authorities for a serious reason ‘go forward’ to the national data base?”.
 

These questions have not been answered adequately. I went on:

“Finally, who will ultimately expunge the records, or will they carry on throughout a child’s life into adulthood? These are questions which are certainly not tackled within the Bill. I am not the only one who is frightened that these personal records may be held by the state for time immemorial. This could have real repercussions on jobs, insurance and many other aspects of daily living”.—[Official Report, 30/3/04; cols. 1299-1300.]
 

Will the Minister also tell us whether, following my comments on the Children Bill, any other statutory instruments have had the same effect? What is the Government’s thinking on that?

Many of these children need help and I am not belittling the need to hold data on children, but surely it has got to the stage of perhaps being disproportionate. I am sure that I am not the only person to criticise the Government for their data collection mania. Deloitte carried out a review of the security of ContactPoint. The Government decided on 13 February 2008 to publish only the executive summary of the Deloitte  report, as reported at col. 2635W of Hansard on 5 March 2008, and then decreed that the resultant risk assessment, to be completed by May 2008, would remain unpublished. Why? The Government exist for the defence of the realm. These records held centrally, when taken with the increasing statutory provision for interdepartmental data sharing, will mean that young people who will now be on the database will have every detail of their lives—including place of employment from HMRC, sickness records from their PCT, marriage, car ownership, court appearances, parenting and housing—recorded by the state. We have reached a frightening stage.

I turn to a more recent letter, which the noble Lord sent on 31 March to the noble Baroness, Lady Maddock, in response to the 27th report of the Select Committee on the Merits of Statutory Instruments from the 2006-07 Session. The report drew special attention to the draft Children Act 2004 Information Database (England) Regulations 2007. These are very important. Paragraph 8 of the report, which covers the 2006 regulations, says:

“We stressed the concern expressed by some commentators about whether a database covering all children in England was a justified and proportionate response to the need to improve communication among professionals in relation to the smaller (though significant) number of children in need of specialist help”.
 

In paragraph 11, the committee points out that the DCSF’s summary states that there were 256 responses to the consultation, and explains that,

“approximately one-third of the formal responses came directly from young people and parents. The majority of responses from this group expressed their opposition to the establishment of ContactPoint”.

I wonder how much bearing that had on the outcome.

Finally, I turn to comments in paragraph 23, which deal with and are equally clear about the desirability of improving communication between professionals involved in the provision of services for children. The committee was not persuaded that the scheme provided by the regulations was an entirely appropriate approach to that objective. The report says:

“We do not consider that the Government have demonstrated conclusively that a universal database is a proportionate response to the problem being addressed, or that the additional benefits of a universal approach justify the additional costs and risks, as compared with a selective approach which would not include a child in the database unless or until the child’s needs for specialist or targeted services became apparent”.
 

In the letter that the noble Lord sent to the noble Baroness, Lady Maddock, he said that access is restricted to those,

“who need it as part of their work”.

I picked up on this sentence. I asked the Minister to clarify who would need it as part of their work. It seems to be a very open door. The second comment that I want to pick up on is:

“Mechanisms will be in place to prevent trawling”.
 

Perhaps the Minister could tell us more about that. I picked up on two more comments in his response. One was:

“It is important and appropriate to cover every child in England because any child or young person could require the support of additional services at any time”.
 

I do not belittle that; I agree with it. The letter goes on:

“It is not possible to predict accurately in advance which children will have additional needs— estimates show that 3-4 million children and young people will need additional targeted and specialist services at any one point in time”.
 

What about the others? Finally, I pick up on the comment at the end of the second page:

“The Department for Children, Schools and Families has consistently made it clear that it will not extend ContactPoint beyond its current phase”—
 

perhaps the noble Lord will tell us what that current phase is—

“until the Department is satisfied that all issues identified in the early stages of implementation are addressed”.

I shall listen with interest to the Minister’s response.

12:47:00

Lord Campbell of Alloway
My Lords, it is a sheer privilege to follow my noble friend Lady Byford, with the question “Who will expunge the records of these children?” ringing in my ears. The point was made that the Government should deal with this assault on the individual by primary legislation. I do not need to say why. My next point is that the Minister has been asked highly important, relevant and critical questions which need an answer. He cannot answer all of them orally today, but they have to be answered. Will he undertake today to send all who speak in this debate a letter answering every single question? I refer not only to the questions of my noble friend but those from the noble Lord, Lord Maclennan, and other noble Lords, particularly my noble friend Lady Neville-Jones. This is not a joke. I really mean what I am asking. We must have answers to those questions. We have to know where the Government stand on this. We have no idea at the moment, or, at least, I have no idea.

I should have opened by saying that it is a great privilege to support my noble friend Lord Northesk. As one of the originators in understanding the data protection system, he has studied this matter for years and has always put his knowledge and expertise at the House’s disposal. I am very grateful to him for having done so again today in opening this debate.

This is not a prepared speech; I came to listen. I agree with every word that the noble Lord, Lord Maclennan, said. We usually, but not always, agree. On this occasion, I compliment him on his speech. It was beautifully prepared; he asked some questions; and they have to be answered.

I agree also with every word of the Church’s appreciation of the legal aspect of this matter—I shall come to another legal aspect in a moment which has not been quite touched on. The same goes for the contribution of my noble friend Lady Neville-Jones, who as a former security officer speaks with considerable authority on this matter, certainly as regards primary legislation. I want to say a word of appreciation also for what the noble Lady, Lady Saltoun, said. She gave an example of hideous, ridiculous, unacceptable interference with humanity which went right beyond the realms of inconvenience. One owes her a word of gratitude for having brought it to our attention.

I do not want to take much time. I turn to the legal aspect and the need for primary legislation. We have no domestic privacy law, nor have we ever had. Whether you are for it or against it is quite irrelevant; it is a matter of fact. We accepted into our law the European Convention on Human Rights. I shall not deal with article this and article that, and one thing and another—this is not a legal speech. We accepted the principles of that convention, drafted largely by members of the English Bar, years ago, and they are now used as part of our privacy law.

One has to accept that judges, on the facts and circumstances of each particular case, have to try to interpret those articles as they relate to a case. The judgment in the case of Max Mosley is related only to the facts and circumstances of that case; it is not of general application to all cases. You will find in the context of the problems arising from this question that the courts here will do their best to interpret the impact of the law on the case. Whether and how that will work is at this stage wholly unpredictable. Given that serious point, the Government must now really get down to the business of introducing their own legislation in conformity with the Human Rights Act.

12:56:00

Lord Roberts of Llandudno
My Lords, many different approaches have been taken to this matter of security and freedom. I am sure that the Minister will answer the questions as they have been raised or, even, as the noble Lord, Lord Campbell, mentioned, write to us if there are any for which there is not time for an immediate answer today.

The crucial issue of freedom versus security has come up time and again. One extreme would be to tag us all so that exactly where we were and everything that we were doing could be known. I am told that mobile phones can nearly do that now: we can be located wherever we are. The other extreme, however, does not really exist, because we are all bound by law and to act within its framework. The problem always is where you draw the line between freedom and security. I shall raise just three concerns today.

Any scheme which limits freedom must be as fair and near-foolproof as possible. Plato spoke of the philosopher kings. Although they might succeed, our society is one of human beings, who make mistakes. We have all, therefore, to take extra special care. When we legislate, especially, we have a tremendous responsibility, because what we do here affects every person within the kingdom.

The Home Office needs to look closely at some of its recent projects, because they raise grave doubts as to its general approach. I have brought up in this House on a number of occasions the problem of the passport personal interview offices. The Home Office website says that 69 offices are up and running, so anybody going for a passport for the first time has now to have a personal interview. But it does not work like that, because there are supposed to be 22 remote-community personal video links, which I do not see as having been established. There are therefore some parts of the country, such as Anglesey and west Sutherland, which has a widely scattered population, that do not have that facility. The network is not complete. Is it fair for the system to be instated at all when it does not affect everybody in the same way? What are the Government doing to get the passport personal interview network really up and running so that 100 per cent of the people are dealt with in exactly the same way?

How realistic and effective is this project? I asked about three months ago how many applications there had been. If memory serves me right, about 246,000 personal passport interviews had taken place. That was good; they were going to sieve out those who were not worthy of a British passport. But not one applicant had been refused. I ask the Minister, very sincerely, how effectively the passport personal interview network is proceeding. First, I question whether the passport personal interview offices, as an example of what the Home Office is doing, are really effective. Secondly, any network of information needs to be secure. In March 2009, a memory stick containing information on hundreds of police investigations went missing in Edinburgh. It was not encrypted. In January 2009, a disk containing personal details about 2,000 staff of the British Council was lost. In December 2008, Leeds Council apologised for losing a memory stick containing unencrypted details of 5,000 nursery age children. In September 2008, Ministry of Defence computer files with records of thousands of serving and former RAF staff were stolen. And so it goes on: incidents in Surrey, Lancashire and Glasgow, all in the past six months. Altogether, in the 12 months ending in December 2008, 29 million personal records were lost. Surely the whole system is not fit for purpose.

Finally, I turn to the financial priorities. In a time of economic hardship, can we afford some of these new projects? The noble Baroness, Lady Neville-Jones, mentioned ID cards. In October 2006, the Home Office gave the cost of their introduction as £5.4 billion, but by May 2008 it had increased by 37 per cent. The total cost now must be in the region of £11 billion to £12 billion. Is this good money given the current economic climate? On 24 March, just a week ago, the Home Secretary said in another place that it would cost £40 million to scrap the scheme. Is £40 million ever well spent? In Wales, we used to say—I am sure that it is said everywhere—that a stitch in time saves nine. To save in this way would be a help in the present economic climate.

There are many other grounds for following on the remarks of other noble Lords this afternoon, but on these grounds alone Her Majesty’s Government should sit down and think again about their whole approach to these matters.

13:03:00

Baroness Hanham
My Lords, like other noble Lords who have spoken, I thank my noble friend Lord Northesk for opening this debate with such a thoughtful, informed and balanced speech. It has generated a fascinating debate. Many people have got a lot off their chests and I hope that both Ministers have been listening carefully. In common with other speakers, my noble friend acknowledged that there was a difficult line to be found between the need of the state to protect its citizens and an overenthusiastic embracement of technological developments to keep vast amounts of data on them. Each speaker has acknowledged that there is a role for some data collection but that it probably needs to be selective rather than generalised.

It is becoming an increasingly perplexed issue, and one which exercises anyone who has any role to play in ensuring that the state’s powers are not allowed, even with good intentions, to stray over the line of legitimate, but controlled, intervention in unbridled enthusiasm for keeping detailed information about all of us. The right reverend Prelate the Bishop of Chelmsford and my noble friend Lady Neville-Jones both raised the question of the need for the public to have confidence in the requirements for the collection of any data. I think we would all agree with that. If the public do not have confidence then the Government have no control at all of what is happening and there is a complete disbelief in the need for what is being done. That is an important issue.

We have had some startling examples recently about the use of information. I find it quite remarkable that the Government have so far been unable to give a solid reply to the European Court of Human Rights judgment that the retention of an innocent person’s DNA or fingerprints is an infringement of their privacy under Article 8 of the European Convention on Human Rights. This has more than called into question the current situation where DNA and fingerprints taken from people during criminal investigations is then held in perpetuity on the DNA base irrespective of whether they were found to be a continuing part of police inquiries.

The judgment of the European Court of Human Rights accords with the strictures of the Government’s own DNA ethics committee, the Home Affairs Committee of the other place and the Economic Affairs Committee of this House. We have had debates on all those reports. It is quite remarkable to me that the Government so far have refused to budge. Although the noble Lord, Lord West, told the House very recently in responding to a question from me that consideration was being given to the matter, there is apparently no timescale. It is hard to know what is delaying the Home Office’s response. I hope that the Minister will be able to tell us where the Government stand on this issue and what they are going to do about implementing the recommendation of all these bodies. All the committees have said that DNA and fingerprint samples of people found to be guilty may be retained, but for a short period; the others should all be destroyed—a short period, not a lifetime.

Unfortunately, there are now far too many examples of the Government finding good reasons for legislating for, or refusing to temper, the increasing propensity for retaining or collecting of data and information on this country’s citizens. We have had endless examples of those today. The shadow Minister for Security, my noble friend Lady Neville-Jones, repeated in her excellent speech her concerns about the latest EU directive, which this Government appear to have enthusiastically supported, that all e-mail and internet traffic should be kept indefinitely so such information can be interrogated at any time to check on the position and the activities of anyone suspected of crime or terrorism. She rightly exposed the enormity of this proposal when the statutory instrument was introduced last week and she has done so cogently again today. She has also raised the extremely important question as to why this very radical measure has been left to a statutory instrument and has not apparently been brought to Parliament in primary legislation. That may not be correct and primary legislation is to follow, but there is yet no evidence of it. The Minister may be able to reassure us today that this matter is not going to be left just on the basis of a statutory instrument on the EU directive.

We have also heard some discussion on the Government’s intention to introduce identity cards. They have already done so for those obtaining visas to come to this country and have introduced a database on all children born in this country. My noble friend Lady Byford has given very strong reasons for concern about this. The children’s database had its genesis in the report of the noble Lord, Lord Laming, on the tragic Victoria Climbié case. We understand the enormous concerns that there were about the lack of co-ordination and co-operation among the statutory agencies. Such concerns have, of course, raised their head again. There are, nevertheless, anxieties about the details of every child, whether vulnerable or not, being recorded in a way where state employees have access to them. My noble friend Lady Byford gave a far better exposition on that than I could.

There is an ability within that legislation for some anonymisation of information to be permitted, but it is extremely limited, so that information is available to a great many people and organisations. We all have to question whether it is desirable or necessary that every child in this country should be known or have its name on a database which can be accessed by a lot of people, who may or may not have good intentions.

We can also extend the question of information exchange to the Prüm framework which allows law enforcement information to be shared between some EU member states without similar or proper data protection. This country is not a signatory to the treaty, but the exchange of information has now been extended by the EU to cover all its states. Again, there are probably very good reasons why some information, particularly in the judicial and criminal fields, should be exchangeable, but to have swathes of data on people who have no possible likelihood of being implicated being transferred to other countries and their agencies is very dubious.

Other noble Lords have referred to the Joseph Rowntree report, which I hope all Home Office Ministers have read closely. The noble Lord, Lord Maclennan of Rogart, and my noble friend Lady Neville-Jones also drew attention to it. It has been published recently and is another example of a respected organisation raising great anxieties about how data are collected, managed and held by government bodies. The Minister shakes his head in disbelief; I hope that he has read the report, because that is precisely what it does. It has put the known databases into a traffic light system. Red is for those which it believes are likely to be illegal under human rights or data protection law and should be scrapped; amber is for those which it believes may be  completely unlawful; and there are very few green, which it believes may broadly be in line with the law. That is quite a devastating critique of the database situation.

The report is refreshingly frank about the current situation, but one statement stood out. Recommendation 5 says:

“Citizens should have the right to access most public services anonymously”.
 

That is a maxim with which many of us would agree. I suggest, again, that the report is required reading for everyone in government who is dreaming or thinking of producing yet another database. Is it not a shocking state of affairs that so many authoritative voices should be raised in alarm at the current situation, and still we are left with the Government’s main justification that every matter which has been raised is needed either in the name of security or in the rather amorphous interests of the people of this country?

It is not only the collection of data which is becoming increasingly offensive; it is also the increasing ability for organisations and IT systems to share that information across a wide front. Of course we are told that it is all sensitively held and subject to password access. However, no one has yet, I believe, done a systematic analysis of whether the holding of such comprehensive details is safe, which it clearly is not; whether it is secure, which it clearly is not; and whether it is justified, which it may not be, in terms of the amount of the useful effect it generates.

The Minister responsible for security has said on many occasions in this House that the DNA database and now the garnering of millions of details of passenger information under the e-borders system can be justified on the grounds of security and criminal investigation alone. That contention is well and truly open to question, particularly where that information is held in perpetuity.

The noble Lady, Lady Saltoun, spoke about the enormity of the requirements for anyone having to provide advance details of travel. The questions raised by the letter in the press were not totally addressed when I asked the Minister about what that information will be and why it will be needed. The question raised by the noble Lady about people providing information if they are going off for a booze cruise, for example, has not been laid to rest.

The questions that need to be asked have largely been asked this afternoon. They relate to the balance of rights between the state and the individual, the length of time for which any data should be held, the proper justification for it being held, the impossibility of an individual being able to have any information about themselves taken off—the expunging of the information about which my noble friends Lady Byford and Lord Campbell of Alloway asked—and any idea whether that individual’s knowledge of what is held on him is sufficient for him to decide to demand its removal. We recently discussed finding a way of getting information on your DNA off the DNA base. It is virtually impossible.

We have learnt recently that immensely powerful cyber systems can be used to hack into any computer program, however well protected, and access any data  on it. As my noble friend Lord Northesk said, we all know that the Government have a dismal record on holding data securely. The noble Lord, Lord Roberts, identified a considerable number of examples which have occurred in the very recent past. It is important that everything that is held is held securely, and that clearly is not being done.

There is a balance to be struck between making sufficient use of the technology involved for good and legitimate purposes and the impact on the preservation of privacy. The evidence gathered so far, and the appalled reaction of those who have reported on this country’s current position, should lead us to keep asking more and more questions about what is going on and to get sensible and responsive answers.

The right reverend Prelate the Bishop of Chelmsford rightly asked for proper guidance for the use and sharing of data. While he was largely in favour of the collection of some data, he quite rightly stressed the need for transparency and manageability and a recognition of the need for confidence in the system.

This country is now one of the most surveyed in the world. That in itself says something about our proud boast to be the most free. There is a very good maxim that the state should be ignorant of its citizens’ lives unless they are corrupt or criminal. That is certainly not happening at present.

A great many serious questions have been asked today. My noble friend Lord Campbell of Alloway has asked for written answers if the Minister is not able to answer the questions he raised today. I have some sympathy with the Minister if he cannot answer them now, but I hope that he will agree that some of them, at least, justify written responses and will see that that is done.

My noble friend Lord Campbell also drew attention to the fact that we have no privacy laws. Perhaps it is time we did to protect us from intrusive interference, however good the reasons.

We need a far more robust and honest debate between the Government and the citizens of this country about what is being done in their name. The subordination of the citizens of the state must not happen by default. Today’s debate is a mini-start in that direction. I hope that it will and can be extended before any further “good ideas” are invented to protect us from harm.

Lord Campbell of Alloway
My Lords, I want to make it plain that I was not suggesting that we should have a new privacy law by primary legislation at all. I was trying to explain that, as we do not have a privacy law, we can and have to implement the Human Rights Act. I do not want it put on record that I advocated a different approach by primary legislation; I have not done that.

Baroness Hanham
My Lords, if I misunderstood my noble friend, I apologise and am perfectly happy for that to be withdrawn from my remarks.

13:21:00

The Parliamentary Under-Secretary of State, Ministry of Justice (Lord Bach)
My Lords, I am grateful to all those who have spoken in this important debate and particularly to the noble Earl, Lord Northesk, for this Motion for Papers. It has been clear, from the serious way in which the debate has been conducted, that this is a very important subject. One of the most important points that the noble Earl made was in not wanting the debate to become party-political grandstanding. By and large, noble Lords have achieved that end; toward the end of the debate, great efforts were made by those who are normally used to such grandstanding to resist the temptation. Those attempts were not always successful, but the conduct of this debate has, by and large, been a credit to the House and I pay credit to the noble Earl for his interest and expertise in the subject. I hope to be able to provide the House with some reassurances on the Government’s position on, and action in, this area.

The Government believe—as does the House, from my general impression—that the use of personal data is essential to delivering efficient and effective joined-up public services: first, to tackle crime; secondly, to protect the public, and, thirdly and importantly, to help people get access to the benefits to which they are entitled, to new opportunities in their lives, and to developments and support. We want to create services that improve people’s lives and are simple and easy for them to use. Huge advances in technology make that more possible but, as the noble Baroness said when starting her speech, it is essential to balance the provision of better services with the proper respect for individual privacy in a free society. That balance is, we believe, maintained by a strong legislative framework that is already in place; namely, by the Data Protection Act and the Human Rights Act.

I shall set out the Government’s view in this area. We all have an interest in data being held securely and properly used. The shared interest is in delivering the improved public services that we want and the public are right to expect. The secure, co-ordinated and responsible use of personal data brings real advantages for individuals, public services and the UK economy as well as in crime prevention. Every crime prevented adds to the freedom of those who are not offended against. People want and expect efficient and joined-up services from Government; in order to deliver them effectively and efficiently, it is essential to share information between different parts of Government and with private organisations.

As my right honourable friend the Home Secretary commented in her recent speech on protecting rights and society:

“Do we, today, live in what critics call a surveillance society? I don’t believe so, not for one moment. But I welcome the debate … We are—all of us, as citizens, consumers, businesses and Government—now presented with a host of new ways to capture, analyse and use data. And there are clear benefits”.
 

I offer a few examples of those benefits to the House. The NHS national programme of IT is delivering front-line systems and services—to provide major benefits for patients, staff and NHS organisations—and system reform. It is providing essential services to support patient care and the smooth running of the NHS, which could not now properly function without it. There are also services such as: the NHS care records  service; a picture archiving and communications system, which makes X-ray accessible by computer; electronic transmission of prescriptions from GPs to pharmacies, and electronic booking of first outpatient appointments at the time of referral at GP surgeries, which incorporates patient choice.

I noticed that those programmes have not been mentioned or attacked today, but one that has, which surprised me, is ContactPoint. That is of considerable importance and interest. I ask the noble Baroness, Lady Hanham: what is her party’s real policy on it? The Department for Children, Schools and Families is rolling out ContactPoint, whose first phase of implementation to local authorities started on 26 January. It is one of those databases that the Rowntree trust report considered to be almost certainly illegal—an astonishing judgment in a supposedly respectable academic report. I shall say more on Rowntree in a bit.

The ContactPoint system helps to improve services to children with a strong emphasis on early intervention and prevention. Practitioners can spend days trying to find out who else is working with the same child, or unknowingly duplicating work that another service is already carrying out. There are 11 million children and young people in England; at any one time, around 30 per cent of children require specialist service of some sort while up to 50 per cent will have additional needs at some point during their childhood. We cannot predict which, or when. ContactPoint, which I do not know whether the party opposite supports, will enable the delivery of co-ordinated support for those children and young people. The schemes I have mentioned are delivering a service to the public.

On ContactPoint, there were many questions asked by the noble Baroness, Lady Byford, including: who will use it? Its use will be restricted, and strictly limited to those who need it as part of their work. Authorised users will include those working in health, education, youth justice, social care and voluntary organisations, to help ensure more co-ordinated service provision for children and young people. It will not be used by a hugely wide section of the population, but by those who need it in order to help children. Another question posed was: what happens to a record when a young person turns 18? The system’s supplier, known as Capgemini, has automated transfer of data beyond 18—the age when it ends—into the archive. We are told that is for six years, in line with the limitations act, and then destroyed. There is a facility for some young adults’ records to stay on ContactPoint until they are 25, but only for limited reasons and with explicit consent.

Baroness Byford
My Lords, I am grateful to the Minister for clarifying, but who will give that explicit consent?

Lord Bach
My Lords, the children themselves or their parents. I am going on to say—because the noble Baroness asked a very good question—what power the children themselves have in relation to seeing their records. They have the power to do that under the general power that there is for people to see how their records are accessed. So that is something that she need not worry about.

The criticism of ContactPoint, which will hold a very small amount of detail on individual children, is surprising. I can cite in aid of ContactPoint a whole number of organisations which this House respects hugely in the field of children, from Barnardo’s to the NSPCC and other organisations—including KIDS, which looks after disabled children particularly—which think that this is an excellent database and that it will help. Most particularly, our colleague the noble Lord, Lord Laming, in his recent report, said:

“There are definite advantages to electronic record keeping in place of the previous often inaccessible paper files. Technology offers the potential for professionals to share information more effectively, to make information more accessible, and to use systems to manage the workflow of children’s services. The new ContactPoint system will have particular advantages in reducing the possibility of children for whom there are concerns going unnoticed”.
 

If the noble Lord, Lord Laming, is speaking so highly of it, perhaps this House should speak more highly of it.

Baroness Hanham
My Lords, I do not think that anybody is objecting to children being on the database who need to be on the database. It is the universality that perhaps the Minister could address his remarks to, not the specific. That is where the whole of this debate seems to have gone—on the balance between the universality and the specific.

Lord Bach
My Lords, it is that, as I understand it, that the children’s organisations and the noble Lord, Lord Laming—although I cannot of course speak for him—are praising. It is the universality of it that is its virtue here. If it is not to be universal, how is it to be limited and restricted? Maybe we will hear in due course what proposals the Official Opposition have in regard to ContactPoint. Listening carefully to the noble Baroness, I got the impression that they were opposed to it; if they are not, perhaps she will be good enough to say so.

Having mentioned ContactPoint, I move on to DNA, which again was the subject—

Lord Maclennan of Rogart
My Lords, before the Minister moves on, just to try to introduce that element of balance into his description, I should say that he has no doubt recorded that the Government’s own, commissioned security report on ContactPoint from Deloitte said:

“It should be noted that risk can only be managed, not eliminated, and therefore there will always be a risk of data security incidents occurring”.
 

Naturally, with that advice from such a quarter, one is interested in knowing how the Government intend to minimise such incidents.

Lord Bach
My Lords, the Government are convinced that the security side of this database is good. Of course, we will be watching it with extreme care to ensure that when it is set up it is as secure as it possibly can be.

DNA was also mentioned in the speech of the noble Baroness, Lady Hanham. I hope that the House would agree that the use of DNA in investigations is  one of the breakthroughs for modern policing, and it is an area where Britain is leading the world. No one disputes that taking and using DNA to detect crime and help bring offenders to justice must remain a key tool available to the police. It is crucial to public protection. The application of DNA profiling to crime detection has shown enormous results. Between May 2001 and December 2005 there were approximately 200,000 DNA profiles on the National DNA Database which would previously have had to be removed before legislation was passed in 2001 because the person was acquitted or charges dropped. Of these 200,000 profiles, approximately 8,500 profiles from some 6,290 individuals have been linked with crime-scene profiles, involving nearly 14,000 offences. These include 114 murders, 55 attempted murders, 116 rapes, 68 sexual offences, 119 aggravated burglaries and 127 of the supply of controlled drugs.

Is anyone seriously suggesting that that information and any resulting arrests that there may be are not of benefit to the public in this country? Research carried out in 2005 estimated that sampling persons who were arrested but not charged between April 2004 and December 2005 yielded a match with a crime scene in more than 3,000 offences, including 37 murders, 16 attempted murders and 90 rapes. These are serious crimes which have a major impact on victims and their families and friends and on local neighbourhoods and communities where the crimes occur. It impacts on the wider public confidence, too. It is the Government’s job to do what we can to ensure that those criminals are brought to book.

The National DNA Database continues to contribute to public protection.

Lord Campbell-Savours
My Lords, those figures are really quite astonishing. They are the argument used by those people outside this House who believe that there should be a national DNA database for all individuals within the United Kingdom.

Lord Bach
My Lords, I have heard the arguments myself, and I could not possibly comment on them this afternoon.

Lord Roberts of Llandudno
My Lords, how many crimes have been solved that were not on a database? How many murderers—not the 114 whom the Minister mentioned—have been found, arrested and prosecuted who were not originally on a DNA database?

Lord Bach
My Lords, the noble Lord always poses interesting questions. I do not know the answer to his question, but I shall make sure that I write to him with that information, if it is available.

My argument is in favour of DNA. Now I have to face the fact that the current policy for retaining DNA of persons arrested but not convicted needs to be changed—the noble Baroness is right that it does—to comply with the European Court of Human Rights judgment. We have made it clear that we will implement the judgment of the court. The court found that our blanket policy of retaining the fingerprints and DNA of people who had been arrested and not convicted, but against whom no further action was  taken, was in breach of Article 8. However, the court did indicate—and it is important to point this out—that it agrees with us that the retention of fingerprint and DNA data,

“pursues the legitimate purpose of the detection and therefore prevention of crime”.

That is a key point in the judgment and reflects the recognition by the court of the importance of DNA in fingerprints and in helping to detect offenders and bring them to justice. However, the judgment recognises that other jurisdictions do not apply a blanket destruction order to biometric data of those arrested and not convicted, and recognises the need for an approach which discriminates between different categories of offending and defined periods of storage. That is why my right honourable friend the Home Secretary on 16 December said that she would be examining ways in which the retention of samples and fingerprints will be considered, taking into account factors such as age, risk and the nature of the offences involved. Those will be set out in a forensics White Paper to be published this year.

In the brief time I have left I shall deal first with Rowntree and then with some of noble Lords’ questions.

As far as Rowntree is concerned, the Government believe that the Data Protection Act 1998 is an effective and proper implementation of the relevant directive. It does not seem as though Rowntree thought so. We take our obligations under the Data Protection Act and the Human Rights Act very seriously and we agree that collection, use and sharing of personal information must be lawful and proportionate, but we do not accept that the databases are illegal as the report suggests. With great respect to its authors, I must say that the report appears to confuse political and legal issues. Privacy is important, but there is also a public interest in maintaining databases. They ensure, as I said, better delivery of public services and can be vital in detecting and preventing crime. Interestingly enough, the DNA database is one of those that have a red traffic light against them in this report.

I hope that I am not being unfair to its authors when I say that the report appears to be very much headline without any argument or analysis in each of the 46 cases that it looks at. It is not clear how the authors have made their assessments. How, for example, is the Office for National Statistics, which the noble Earl mentioned in his opening remarks, rated as amber? This is a non-ministerial department, not a database. The inclusion seems to be based on the fact that the ONS will run the forthcoming census in 2011. How are Directgov and the Government Gateway assessed as amber? The authors readily state that these are portals rather than databases and the report notes that they do not hold personal data. Local government’s use of CCTV is rated as amber. Again, there is no database, but the amber light is based on the fact that CCTV is an overinvestment. I am not sure that that view will be held widely by the general public, who regard CCTV as a protection for them rather than, as the authors of this report seem to suggest, something against their interests.

Of course reports like this make a useful contribution to the debate and scrutiny of the matter, and we are still looking carefully at it and will have something to say in due course. However, I ask noble Lords, if they have not already done so, to read the article by David Aaronovitch in the Times the day after the report came out. He made a very good point. He said that it was a pity that among the authors of the report there were no people who disagreed with the basic principle that databases were a bad thing. I have had my say on that now; I have been given the opportunity to do so twice. If the noble Baroness and others will pray this in aid every time we have a debate of this kind, I recommend that they consider whether it is really such a great work of academic brilliance that they can rely on its judgments in the arguments that they bring to the general public.

I have a host of questions to answer. I will have to adopt the advice given freely as always by the noble Lord, Lord Campbell of Alloway, which is that I will have to write to noble Lords with answers to their questions as best I can. I do not promise to be able to answer every one of them.

With the greatest respect, I have to say to the noble Lady, Lady Saltoun, that her analysis of the situation is completely over the top and does not represent the truth in any way. I wrote to her after her helpful question when I was answering an Oral Question last week. I wrote to her as quickly as I possibly could, as I did to the noble Baroness, Lady Maddock, who I see is in her place, on the matters that appeared in the Telegraph article to which she referred. I do not think that she acknowledged my letter in what she had to say today. If the noble Lady did, I apologise.

Lady Saltoun of Abernethy
My Lords, I did acknowledge the Minister’s letter. I also acknowledged the fact that the Telegraph got it a little wrong. People were not going to have to produce the information themselves; booking agents were going to have to produce it.

Lord Bach
My Lords, I am sorry but, with the greatest respect to the noble Lady, that is not a little wrong. The newspaper made a fundamental error on that occasion. There is no question of passengers having to apply for permission to travel, nor will they be required to submit an itinerary. If they had to do that, it would be a serious restriction on their freedom and liberty. I would then agree with the noble Lady, but that is not what they have to do even though that is what the newspaper suggested. I do not think that that is a little wrong; it is a fundamental point.

I make this point, too: e-Borders enables the UK Border Agency to check people before they reach the UK. Since the pilot started, e-Borders has screened over 82 million passenger movements in and out of the UK against immigration, customs and police watch lists. That has led to over 3,000 arrests for crimes, including serious offences such as murder, rape and assault. It has led to significant counterterrorist interventions as well, which we obviously cannot hear more about, and has resulted in fraudulently used British passports being impounded and the confiscation of drugs and tobacco. A considerable number of passengers have been identified and refused leave to enter. Is it seriously being suggested that, in the world in which we live, we should just forget all that and use the easy phrase “surveillance state”? I do not think so.

Lady Saltoun of Abernethy
My Lords, I agreed that it was perfectly reasonable to refuse people leave to enter the country. I questioned whether it was not particularly necessary in a great many cases to refuse them leave to leave the country—they were probably as well got rid of.

Lord Bach
My Lords, I am grateful to the noble Lady for reminding me of that.

The right reverend Prelate made a point about affirming our commitment to the Data Protection Act. I do that happily today. It also shows itself in the Cabinet Office review and our response to the Walport/Thomas review. He also asked whether we would implement the recommendation of the Data Sharing Review Report for a code of practice on data sharing. Yes, I can tell him that it is set out in Clause 157 of the Coroners and Justice Bill, which the House will enjoy debating, starting with Second Reading on 27 April. I look forward to his support in those debates.

The noble Lord, Lord Maclennan, as always, put some interesting questions about primary legislation, as did the noble Baroness, Lady Neville-Jones, who asked whether primary legislation should be used for data-sharing gateways in preference to secondary legislation. Already, a large number of data-sharing gateways are enacted in primary legislation. It is our policy that, for significant data-sharing powers, primary legislation remains appropriate. The noble Lord acknowledged that data-sharing powers cover a diverse spectrum. It is appropriate, provided that they are used properly, that a variety of legislative measures should be used to enact them. Not everything should be done by primary legislation.

The noble Baroness, Lady Neville-Jones, and the noble Lord, Lord Maclennan, asked about government databases removing personal data from their archives when the information is not necessary any more. I have been advised that the third data protection principle of the Data Protection Act 1998 already provides that data can be legitimately processed only where they are not excessive. Thus, there is an existing obligation on all data controllers, including the Government, not to process information that is unnecessary.

A number of noble Lords were interested in the important topic of why central databases are used instead of local ones. Neither the Data Protection Act nor the data protection directive before it explicitly makes any requirement in relation to local or central databases. The legislation requires that data processed must not be excessive. It is therefore the obligation on each data controller to consider what scale of data is necessary for the purposes of the database. National systems sometimes offer greater benefits in this age of greater mobility where citizens can access services across many boundaries and borders. Maybe there is not just one answer to that question.

The noble Baroness, Lady Neville-Jones, was concerned that I answer in particular her question whether there is a prototype for the central database. There has been, we believe, widespread misrepresentation of our plans for future communications data retention. We will set out the future plans in a consultation document to be published shortly. Since those plans have not been finalised, I cannot say that there will be a prototype, as plans will be confirmed only after the consultation. We have not commented on reports of a central database for communications data and, I repeat, our plans will be outlined shortly in the consultation.

I have spoken for half an hour now, as noble Lords were generous in not speaking for the fully allotted time. I thank noble Lords very much for what they said in this important debate. It is important that we should exchange these ideas across the Floor of the House, even if sometimes in quite a robust way.

The Government’s ability to deliver and improve the public service changes that we want—to fight crime and to protect citizens—relies on strong public confidence in the ability of public and private organisations to handle personal information securely and effectively. That point has been made by Members from around the House and it is obviously true. We have implemented a range a different measures to improve trust in the arrangements to protect personal data. I hope that I have begun to show, if not completely to the satisfaction of all Members, that both in our legislation and in our reviews of working practices we are committed to a legal framework and culture that instil confidence in every citizen in the protection of their personal data, a confidence to which they are entitled. I am grateful to the noble Earl for introducing this debate.

13:52:00

The Earl of Northesk
My Lords, this has been an excellent debate and I thank all noble Lords who participated. I genuinely enjoyed all the contributions, including that of the Minister, although I am perhaps a little disappointed that, in relation to the Joseph Rowntree Foundation report, he may have resorted to shooting the messenger because of dissatisfaction with the message.

As the debate has progressed, two specific themes seem to have emerged. First, the debate has articulated the deep anxiety and uncertainty that inform the perceptions of so many of your Lordships—and of the wider public—about the Government’s data management agenda. Secondly, other than with the Minister, it appears to have engendered a broad consensus on the proposition that, in this field, less is more. As the right reverend Prelate observed, there are good reasons why the Government may be well advised to be a little less ambitious and a little less grandiose with this database agenda.

For myself, I am none the wiser as to why the Government continue to favour the most invasive and expensive technological solutions when less invasive and less costly alternatives are readily available. I have no doubt that we will return to these matters in innumerable debates in the future and, no doubt to the Minister’s disappointment, the JRF report and, I suspect, other like-minded texts will be prayed in aid in those debates. In the mean time I beg leave to withdraw the Motion.

Motion withdrawn.

Internet: Online Piracy

Debate

13:54:00

Moved By

Lord Lloyd-Webber
To call attention to the growing impact of online piracy on the future of Britain’s creative talent; and to move for Papers.

Lord Lloyd-Webber
My Lords, I have tabled this Motion because I truly believe that this is a crucial moment in the history of Britain’s creative heritage. Areas of our cultural industries are under threat. It is imperative that we address these threats and bring all the creative industries’ future viability to the forefront of political debate.

You may be wondering why I, someone who makes a living from live theatre, would initiate such a debate. While I am incredibly lucky that my life, my passion and my main source of income—musical theatre—is not affected by the problems afflicting other creative businesses, I see those problems damaging the cultural and economic fabric of the nation, and it worries me.

I was further moved to initiate this debate after a conversation I had a few weeks ago with one of Britain’s leading orchestral players. He was agonising about whether to deter one of his children from following in his footsteps. His reason was that the backbone of the livelihood of many professional instrumentalists is film score work. He could foresee a situation in a decade’s time when there would be virtually no orchestral film work. Illegal downloading would so decimate the film industry that orchestral recording sessions would be a thing of the past. In this connection I was reminded that three of London’s main orchestral recording studios have closed since 2000.

I hope, therefore, that I am speaking here on behalf of my many colleagues whose livelihoods and their children’s future livelihoods are being compromised by inaction. I do not come equipped with the answers; frankly, they are way beyond my world of musical theatre. My sole objective is to draw noble Lords’ attention to the cataclysmic consequences for all the creative industries if this area remains unregulated.

The economic sustainability of Britain’s creative industries is hugely important to this country, culturally and commercially. It is estimated that our creative industries—film, music, literature, games, TV, software, books and printed media—have an economic output of at least £60 billion, equivalent to over 7 per cent of UK GDP.

It is also important—in terms of employment and the hope they give to aspiring, usually young, men and women—that there are businesses in this country that can employ artists and invest in developing their talents.

It is estimated that creative industries directly account for 1 million jobs, with a further 800,000 in related sectors. The interim Digital Britain report notes that,

“the digital economy underpins our whole economy and builds our national competitiveness”.

The question that occurs to me is whether, in 10 years’ time, Britain will be a place from which, say, the Beatles could have emerged. Will Britain be a fertile environment for all creative talent? Will Britain be a place where music, TV, film, games and publishing companies are sufficiently healthy to invest in British creative talent and take it to the rest of the world? No, not when there are no longer shops selling the physical products and when the internet has become a sort of Somalia of unregulated theft and piracy.

This is as much a battle against mindsets as against anything else. There are many people who like taking things for free from the internet, even though it is not legal. The fact that something is easy, and many people do it, has confused commentators and politicians alike. Content on the internet is a problematic issue for regulators because the matters are technologically and legally extremely complex, and also, in a period running up to an election, politically problematic. But, as we have seen throughout history, and recently in the financial markets, there are dire consequences when people drift down the path of unregulated behaviour.

With the exception of live entertainment, all our creative industries are suffering, but none more so than the music business. It is in the forefront of the battle and the first example of what can happen to an industry whose survival relies on the protection of its intellectual property rights.

The UK recorded music business is a major contributor to Britain’s creative economy. I would like to share with noble Lords some astonishing figures to illustrate this. In 2008 the UK recorded music market was valued at £900 million in trade terms. The UK music business punches well above its weight globally. It is a major exporter—four out of the top 10 global selling albums in 2008 were British. It is a major employer creating more than 100,000 jobs, but the market is being decimated by the impact of online copyright infringement. Recorded music revenue in the UK has fallen every year since 2003. In Europe as a whole the recorded music business is 60 per cent the size it was in 2001.

It is estimated that 7.3 million people in the United Kingdom—28 per cent of the online population—are now engaged in illegal peer-to-peer file-sharing, a figure which is projected to rise to 8.7 million by 2012 if action is not taken. This activity erodes the commercial value of the UK’s world-renowned music sector. It is calculated that £180 million of losses were directly attributable to online copyright infringement in 2008 alone. The losses for the six-year period from 2007 to 2012 are projected to exceed £1.2 billion. As I am sure noble Lords will appreciate, such levels of loss are unsustainable. It is estimated that online film and music piracy could cost 30,000 UK jobs, and that does not take into account the performers and composers who will lose their livelihood and stop creating as a result. The biggest single cause of the music business’s demise, and indeed that of all creative industries, is the carriage of file-sharing services by internet service providers.

Globally only one in 20 tracks which are downloaded from the internet are paid for—that is, a 95 per cent online piracy rate. Innovative business models, of which there are numerous examples which enable consumers to access legally any music they want, have to compete with the free providers, an unfair battle and an unwinnable one. The music business—because of the universal popularity of music, its ease of access and its relatively low bandwidth requirements—will be the first to fall, but other cultural industries will surely follow. Will it be film next?

No one questions that improving the capability and quality of the UK's digital networks is an essential task. The improvement of fixed, cable, mobile and broadcast transmission mechanisms is crucial if the provision of digital services is to keep pace with what users, be they individual consumers or businesses, expect and demand. Our broadband industry is hugely important to Britain and will be the backbone to society as well as to commerce, but what will it deliver?

Given that consumer demand for faster digital networks is largely driven by demand for quality content, in particular creative content—music, films, games, television, journalism, books—I believe that it would be a serious mistake to invest billions of pounds in faster networks without ensuring that there is a sustainable commercial arrangement for those creative works on which these new networks depend. At the moment, no such sustainable commercial arrangements exist. As their businesses increasingly move to digital consumption, the ability of UK creative businesses to continue to invest billions of pounds every year in creating and marketing new high quality content is constantly being eroded.

The railway and roads opened up the first Industrial Revolution. Broadband and the internet are opening up the next one. Our internet service providers deliver excellent facilities that help so many people in so many ways. But we need to remember that one of the principal reasons for their popularity is that they search out information and creative content that people want. If internet service providers continually attract people to illegal sites, as they do now, and not to legitimate sources of content, then they are part of the problem, not part of the solution. These companies make billions in profits. In 2007, just one internet service provider made profits of £5.78 billion. That compares with the recorded music business's turnover in the UK which, as I mentioned, was £900 million. And yet these companies contribute nothing to the creative economies that they feed off and undermine. Forty per cent of their sales come from broadband and IT services, and P2P traffic is believed to account for an astonishing 60 per cent of all traffic on online networks.

Internet service providers can help themselves: they are able to control bandwidth traffic when it suits them. They are not going to change without regulation, otherwise the good players could lose customers to the bad players; but I wonder how long this can be tolerated.

People have got into the habit of talking glibly about “content providers” as if they are some sort of optional part of the process. The great wines of France are not content providers to the glass manufacturing business, and Britain's creative industries are not content providers for broadband. They are the experiences that bring consumers to the internet in the first place and they can only survive in a safe internet world. Lawlessness is not a model for any society and it cannot be a model for our digital future.

The cultural “free lunch” is not free because film, music, printed media and so on cannot be produced, marketed and distributed for nothing. Investment must be rewarded and performers, composers and authors must be paid. Otherwise how can they survive?

It is important to remember as well that pirates are bandwidth hogs who reduce the quality of service and raise costs to legal users. Illegal file-sharing spreads viruses and inappropriate, and unexpected, content for minors. There are even dire predictions that the internet will grind to a halt over the next few years. Dealing with piracy removes that threat.

Through various reviews, notably the Gowers review in December 2006, Creative Britain in February 2008 and the July 2008 consultation on file-sharing, I have been very encouraged by the Government's stated determination to act. The interim Digital Britain report gives life to that commitment and to the prospect of legislative action. However, I wish to raise the question of whether we are giving this crucial issue enough prominence and whether we are creating an outcome that is in the interests of a section of the economy where Britain leads the world and has the precious chance to create new jobs and new world-beating content for the future.

As I said, I do not have the answers. But I do have serious concerns as to whether the actions proposed to date will achieve the Government's aim, stated in July 2008, of reducing unlawful file-sharing by 70 to 80 per cent over two to three years. The Government would appear to be willing the ends but not the means. Proposing to legislate to require ISPs merely to write to infringers and leave rights-holders with the near impossible, deeply expensive and hugely unpopular task of suing those who persist is simply not going to produce the required deterrent effect. Internet service providers need to be made to do more to play their part in tackling infringement taking place on their networks.

It should also concern government because fairly monetising the demand for creative works in digital form represents a key opportunity to generate revenue that can help to repay substantial investment in new digital infrastructure. If the regulatory response is right then massive value can be derived by internet service providers from legal services and there will be an incentive to invest. Notwithstanding government's repeated calls to industry to adopt new business models, government must accept that taking valuable content for free is not a business model. It creates no value. Only if illegal downloading is properly addressed can new business models have the room to breathe and succeed.

As I said, I do not in any way oppose the laudable aim of improving networks. But next-generation networks need to be not just faster but smarter and safer, and they must work better as an ecosystem that allows  information and creative businesses to prosper. I thought it crucial that we raise this issue in this House because we are at a point in history when our future will be set, and the world will look carefully at the direction that the UK takes. I look forward to hearing the contributions of noble Lords who follow me in this debate. I beg to move for Papers.

14:07:00

Lord Birt
My Lords, I applaud the initiative of the noble Lord, Lord Lloyd-Webber, in prompting this debate, and I observe that the House is lucky to have one of the world's great composers in our midst. He made his case powerfully and I shall echo many of his concerns. I declare two relevant interests. I am chairman of EMI's holding company and a director of PayPal (Europe).

The new digital technologies have had a radical and transformational impact on almost every individual organisation and sector, from newspapers to retailers, from the betting industry to finance. The music industry in particular has been profoundly affected. Music can be more easily recorded, distributed, discovered and consumed. As a result, more music is listened to than ever before, but less is paid for.

We must be honest: the music industry has been slower than most to reinvent itself, both to take advantage of new opportunities for discovering talent and for better serving consumers and businesses, and to adjust and respond to unavoidable new realities. Piracy is certainly, therefore, not the only reason for the music industry's travails over the past decade, but it certainly does matter and it certainly should not be tolerated, for, quite simply, it is theft.

Intellectual or creative products available digitally have to be invented, designed, conformed and invested in, just like physical products. Individuals and companies involved in making music are entitled to a fair return for their risk and for their labour. Stealing music in digital form is just as immoral as stealing a CD from Tesco. When high-speed broadband becomes the norm, as the noble Lord, Lord Lloyd-Webber, suggested, it will also be easier and easier to steal high-quality video and film, with potentially severe consequences for the film and television industries more widely.

Crime of all kinds in the online world—not just copyright theft—is burgeoning. Child pornography is multiplying; phishing trickery is rife; sophisticated high-tech online fraud is growing; personal computers are infiltrated remotely to steal personal data; and mass attacks are organised on major online entities and governmental bodies. Governments need to bring order to this lawless environment rapidly if serious damage to society and to the economy is to be avoided and if a moral relativism is not to become entrenched.

Internet service providers—ISPs—control access to the digital highway for content providers and for consumers alike. ISPs have the technical capability of blocking access to unlawful sites and of detecting illegal activity by consumers and by organised criminal networks. ISPs should be regulated and licensed. I can see why, at the moment, any individual ISP is not volunteering to police the internet. It would be costly, it would deter customers, and there would be few rewards for going first. However, if helping to counter every kind of online crime were an obligation on all ISPs, the cost of compliance would become a price of doing business for all providers and no single ISP would be at a competitive disadvantage. I accept that it would be disproportionate as well as expensive to criminalise all copyright theft by individuals, but we have introduced perfectly effective mechanisms for pursuing people who do not pay their TV licences or who park illegally. An internet regulator could enforce an appropriate regime for tackling online crime and place obligations on ISPs to assist it.

Those issues are global but the creative industries in the UK are not just a jewel in our cultural crown but, as the noble Lord, Lord Lloyd-Webber, suggested, a high-performing part of our economy, particularly in London and the south-east, where it is the second sector, after business services, and a vital part of our national wealth-creating capacity and of the tax base for the whole of the UK. It is now time for the Government to be bold and to offer full and proper protection for the music and other content-producing industries in the UK.

14:13:00

Lord Luke
My Lords, I thank my noble friend Lord Lloyd-Webber for giving us this opportunity to debate this important issue. As he has so clearly highlighted, Britain's creative industry contributes a remarkable amount to our culture and our economy. To sit back and do nothing while online piracy sucks the profitability out of such a productive sector at any time would clearly be irresponsible, even more so during the current disastrous economic situation. However, I am optimistic that there is an answer, and it lies in empowering the private sector to do what it does best, innovate.

Recent months have seen a new provider burst on to the scene, offering a novel, perfectly legitimate way for people to listen to music that they do not want to buy. I am talking, of course, about Spotify, where in exchange for listening to the occasional advertisement interspersed through the playlist, users have access to an enormous library for free. As networks become faster and more reliable, as portable devices capable of maintaining a cheap and constant link to the internet become more common, services such as this can only become more popular.

Those creating the music have also found ways to reduce their losses. In October 2007, Radiohead released the album “In Rainbows” online, asking only for whatever those downloading it chose to pay. A third of those taking advantage of this offer paid nothing at all but, importantly, two-thirds paid and the average was about £4, chosen, it appears, partly because that is what the public believe an artist generally receives from the sale of a CD through more traditional channels. It clearly is possible to charge for music despite the availability of a free illegal version.

So perhaps we are not looking at an outbreak of criminality among the online population; perhaps it is merely that the internet has given them the opportunity to move on from an out-of-date system, where large companies take the huge majority of the revenue leaving the creative talent with pennies. People who are not willing to pay £15 to a high-street chain for a CD are apparently willing to pay a proportion of that directly to the artist.

Of course, Radiohead is an established band, with a brand and a fan base of sufficient size to dispense with the support of a record label which a marketing department can provide. But online-only production is not confined to the big names. There is a rash of small independent websites offering online-only music sales from little known bands. The internet represents an enormous opportunity for creative types who are unable to find a record label willing to give them a contract to reach out and find a market for themselves. It is not just music. There are websites available for people to invest in independent films. People can pay to receive blog updates, software improvements, games, anything that anyone with a creative bent is able to develop and put up on the internet.

The interim Digital Britain report correctly identified the danger that oppressive regulation could prevent the development of new business models. A dynamic investment climate must, of course, seek to protect the intellectual property of those who have spent their time and money on their creations but, above all, it must provide a clear base for the industry to innovate. The Government must take the greatest care that their concern for the lost revenue from illegal file-sharing does not cause them to suffocate the solution. The answer is surely not stringent penalties and regulation, as the public will always be one step ahead of those; it is allowing and supporting the development of a better alternative.

14:19:00

Lord Clement-Jones
My Lords, I congratulate the noble Lord, Lord Lloyd-Webber, on initiating today’s debate and on making such a powerful introductory speech. This debate is much more about means than ends. In the context of online copyright piracy or infringement, I am sure that there is general agreement in the House today about our objectives.

As the Gowers report, referred to by a number of noble Lords, which reported in 2006, and the interim Digital Britain report acknowledged, knowledge or creative capital in this country is increasingly important. The creative industries in the UK form a higher proportion of GDP than in the US, Canada, France or Australia. Of course, the creative industries have been growing significantly faster than other sectors in this country.

One of the biggest threats to that growth and, indeed, further investment in creative industries is copyright infringement. All the evidence, referred to by the noble Lord, Lord Lloyd-Webber, is that with higher speeds and greater penetration of broadband, piracy is growing. The loss to rights owners could represent at least half a billion pounds a year in royalties, if the Ipsos figures are correct—they have been referred to in a number of subsequent reports—and the loss is probably split at present between audio-visual and music rights holders. Many people say that that figure is an underestimate.

The Gowers report made a number of recommendations. Even though the monsters of Napster, Grokster and Kazam may have been slain, Napster as long ago as 2001, new threats constantly emerge. Just this week I was reading about the Scribd website, which allows copyright books to be downloaded. On these Benches, we are very strong defenders of intellectual property rights. We have strongly supported the proposition that good copyright protection is vital for the encouragement of creativity. My honourable friend Vince Cable promoted a Private Member’s Bill in 2001, which became the Copyright, etc. and Trade Marks (Offences and Enforcement) Act 2002. It increased the maximum penalty for copyright theft to 10 years’ imprisonment.

The Gowers report pointed out in 2006, however, that there can be a tension between the data protection obligations of the ISPs and the desirability of protecting the copyright of rights holders. The problem is whether or not we expect ISPs to be policemen. The Gowers report recognised the problem of piracy and suggested matching penalties for digital infringement to those for physical infringement, raising the maximum penalties and enabling fast-track litigation. None of those suggestions has yet been implemented. Subsequently there has been consultation by the Department for Business, Enterprise and Regulatory Reform on tackling illicit file sharing and the recent government response to that consultation. The Creative Britain report was published in February last year. Last July, the memorandum of understanding between the major ISP and rights holders was designed to lead to agreed codes of practice in this area.

More recently, the Digital Britain interim report and the consultation over proposals for a rights agency have seen the light of day. In all of this, although the Government have tried to steer an even course, there is no doubt that views have become very polarised, which makes going forward by consensus extremely difficult. ISPs believe that rights holders are asking them to be copyright policemen, a role which they do not want.

One of the most crucial areas of contention is whether ISPs, once they have given notice to persistent infringers, should be obliged to throttle their broadband service or cut them off. This approach was originally suggested by the Government and is still favoured by President Sarkozy as part of his “three strikes and you’re out” policy, involving setting up a new body in France called Hadopi, and by a number of UK rights holders. The French Government are pressing for amendments to the EU telecoms package as a result. I am as sympathetic as anyone to rights holders, but I do not believe that this is the right approach.

I take some comfort from some very prescient words of the noble Lord, Lord Puttnam, in a speech some three years ago. He said:

“In fact some of the anti-piracy policies pursued by different sectoral interests can look remarkably like a continuation of war by other means—hardly an effective strategy for winning the hearts and minds of consumers and citizens”.
 

We should be mindful of that. The BPI and others say that few people believe that the answer lies in suing individual consumers. I agree with that, but a court order should be required to terminate services when inevitably evidence will be somewhat contested in those circumstances.

We broadly agree, therefore, with the Government’s stated approach in the rights agency paper and the response to consultation that a voluntary approach through codes of practice would be preferable. In terms of the first compulsory step of notification by the ISP, all the evidence is that a significant number of infringers, some two-thirds, would change their behaviour once they had been written to by their ISP. As an alternative to penalising individuals and legal enforcement against non-persistent infringers, as Gowers and subsequent reports have said, it is clear that investment in education of the public is vital, together with creating alternative lawful distribution channels. The Culture Media and Sport Select Committee report in 2007 on the new media and the creative industries emphatically agreed with that proposition.

At the weekend I saw a superb example at the Science Museum of what is possible. The Intellectual Property Office and Aardman Animations are collaborating on the mounting of an exhibition, A World of Cracking Ideas. This exhibition, to which I took my 11 year-old son, is inspiring, shows some of the great inventions of our time and stimulates children’s enthusiasm for innovation and creativity; but it also gets the message across about the need to protect intellectual property. It was interesting to see how the exhibition explained the world of music copyright, including VPL, PPL, PRS, MCPS and so on; it was a noble attempt.

We need to combat the idea that copyright infringement is socially acceptable. Having said that, and that I agree with the overall approach of the Government, we have considerable doubts on these Benches about the rights agency proposed in the recent paper. It proposed that the agency should be industry-run, not run by the Government, and that the basis for funding should be a levy on broadband ISPs and users. But the basis for the operation seems to be somewhat flawed. It will not have statutory powers, even if it is responsible for dispute resolution and developments of the codes of practice. It is meant to have a role in standardisation of practice, but again on a non-statutory basis. Bringing together rights holders and others clearly has a role, but why not simply call it a forum? The notion of a rights agency seems somewhat mistaken. The question is rightly raised in the consultation paper: how will a rights agency achieve sufficient authority? It will be with difficulty. The appeal procedures envisaged in the paper are intended to be non-binding, which again is a problem.

There is also the question of how representative of all the different interests the agency would be. Rightly, consumer groups believe that they should be included; but so, too, should others such as visual artists who have important interests to represent and are often ignored in these debates. Is it not essential if the DRA is to be credible that it is properly representative? Ministers rather grandly claim in the proposals that the DRA will,

“facilitate a change of approach across the whole value chain”.

But the bottom line is whether it will reduce infringement and unlawful activity. The proposal is somewhat paradoxical, and I cannot see how the agency could operate without statutory powers.

The educational role of the DRA is valuable, and I am sure that its representative nature will be useful, but at the end of the day, Ofcom will have and retain the power of regulation. A number of noble Lords mentioned the need for new models and innovative ways of exploiting copyright. I take on board the comments of the noble Lord, Lord Lloyd-Webber, in that context, but there need to be alternative distribution channels alongside better enforcement and education. We have heard a few examples. For instance, Nokia’s “Comes With Music” service was launched in 2008, followed closely by Sony Ericsson’s Play Now service and, as the noble Lord, Lord Luke, mentioned, Spotify, all of which are examples of how a new music service can happen when it is wholly legal and is provided in co-operation with the rights holders.

The different perspectives on online copyright piracy are difficult to reconcile, but generally we believe that the Government are getting the balance right. It is internationally where we think that greater effort should be made. Many rights are infringed by dedicated sites that move into another jurisdiction when challenged, and there are a number of countries that are seen as safe havens for that kind of activity. Such co-operation is needed not just between ISPs, rights holders, consumers and others but between countries. There is little point in having very effective systems here and finding that rights can be infringed at will by downloading from foreign sites. The Government need to engage in international discussion, debate and co-operation on that subject. I look forward to hearing the Minister’s reply.

14:30:00

Lord De Mauley
My Lords, this is an important subject and I thank my noble friend Lord Lloyd-Webber warmly for raising an issue that he clearly, and rightly, feels strongly about. He spoke so compellingly about it and it needs to be dealt with. Before I speak further, I should disclose an interest as a substantial shareholder in an information technology support company.

I am sure that the Minister will say how much he too is in agreement with my noble friend. After all, there has been a succession of government announcements over the past few years assuring us how seriously they take illegal file sharing. Unfortunately, none of the announcements, reviews, consultations, issue papers or discussion papers appears as yet to have made a great deal of difference, which is particularly why I sympathise so much with my noble friend.

The statistic he gave us that over a quarter of online users illegally share files is startling and disturbing. That the number is growing shows clearly that the Government’s approach is just not working, which is not hugely surprising, since the Government’s approach has been, as my noble friend said, to avoid doing anything—if one does not count the endless consultations, reviews and papers as activity. That the lack of punitive levels of civil damages means that there is no real deterrent to, for example, online piracy was raised in the Gowers review in November 2006. That was consulted on throughout 2007 and then it dropped into oblivion, never to be heard of again.

The Government’s failure to act is worrying in itself but, even worse, their constant talk of soon-to-be-announced decisions on regulatory change and their endless consultations of new legislation have unsurprisingly meant a corresponding lack of movement from the industry, a point made by the noble Lord, Lord Birt.

My noble friend Lord Luke is quite right to look for the most innovative and effective business models in the private sector, a subject of which he showed extensive knowledge. In such a fast-changing environment, everything, from users’ habits to technology and the source of desired content, changes at a bewildering speed. It is perhaps asking too much to expect the Government or the regulator to keep up, but the Government must not hold out the hope that a new round of EU legislation or a new initiative to re-train police officers will make a significant difference on the ground. They cannot—and since 100 per cent enforcement would mean the criminalisation of nearly a quarter of our population, we should not pretend that that is what we are looking for.

Instead, we must look to the industry to tempt users away from illegal options and to identify and shut down the worst abusers. Of course, none of that is new. Ministers have said much the same thing in various ministerial statements and press releases. But why is it not happening?

According to the Government, there is already a groundbreaking memorandum of understanding between ISPs and rights holders to address the question of unlawful file sharing. Despite that, the Government are consulting on setting up another quango, the rights agency, to which the noble Lord, Lord Clement-Jones, referred, to see what else can be done.

What will the rights agency do that Ofcom cannot already try? What new powers will it have to knock heads together within the industry and enforce any agreement that is made? Even worse, the Government are rumoured to be contemplating imposing a tax—yet another tax—on all internet users. What will the new money be spent on? What initiative is poised, ready to make all the difference, if only the funding can be found? The Government always seem to ask us to judge them by the amount of taxpayers’ money they have thrown at a perceived problem. The websites of the government bodies involved all have proud statements about the increased government funding that has been spent over the years on combating online piracy. Is it really a lack of funds that is the problem?

The current difficulties the industry appears to be having in enforcing the memorandum of understanding should not cause us to dismiss self-regulation out of hand as a viable approach. The internet has meant the sudden appearance of many similar and related concerns, all of which are as difficult to solve as each other. We had a debate in this House only a few weeks ago on the dangers facing children using social networking sites, which is another very significant problem and one to which the noble Lord, Lord Birt, referred today.

The impossibility of regulating all content available to minors on sites such as YouTube is similar in many respects to that of identifying and removing all the illegal material available for download. In both situations, the criminals and the victims are frequently based in different countries and under different legal regimes. There is a similarly large grey area where it is difficult to identify the targeted material and to separate legitimate and illegitimate behaviour. There is constant rapid change in both the technology used and the methods of using that technology.

In the debate I have just referred to, attention was drawn to the recent establishment of an agreement between 17 social networking firms to improve voluntarily the protection of minors using their sites. It was made easier to report abuse, allowing legitimate users—still the substantial majority of those online—to help enforcement authorities find those who insist on transgressing. Can the Minister assure us that the tools that have been found effective against one crime are being carried over to others?

Of course, self-regulation can go only so far. Eventually, those seeking to protect their copyright need to rely on clear penalties enforced consistently. There are still many inconsistencies remaining among offences in this country. I know that the Minister is aware of them: there have been, after all, several reviews and consultations on them. Yet, in the past few years, when a criminal justice Bill has passed through this House in every Session, when there have been numerous serious regulatory developments in all sorts of sectors, we have seen nothing to address these inconsistencies.

I urge the Government to concentrate their efforts where they can make a difference. The Government have a wealth of material to work from and must not dither any longer. There are clear and achievable recommendations in the Gowers review, and the later publications, that need to be put into effect.

14:38:00

The Parliamentary Under-Secretary of State, Department for Innovation, Universities and Skills (Lord Young of Norwood Green)
My Lords, I thank the noble Lord, Lord Lloyd-Webber, for allowing us to have the debate. I think that the speeches have been of quality rather than quantity. There have been very informed contributions, and I mean that as a sincere compliment. The noble Lord, Lord Lloyd-Webber, spoke with great insight on the issues relating to digital piracy and its potential impact on creative talent in the UK. The House is very grateful to him for giving us the chance to talk about this important issue this afternoon.

Let me begin by saying that we regard this as an important topic. It is important to me and it is an issue that David Lammy, as Minister for Intellectual Property and Higher Education, holds close to his heart, partly because it is part of his current ministerial brief, but also because he once worked as an intellectual property lawyer, so he brings some expertise to the matter.

I fully share the noble Lord’s appreciation of just how important it is to safeguard the creative industries’ contribution to this country’s well-being. The creative sector accounts for 8.2 per cent of UK GDP. In London alone, one in five jobs is in the creative industries. It is important that we offer all the support that we can, given the thousands of jobs that the industry supports, especially in difficult times such as ours, as the noble Lord, Lord Lloyd-Webber, said.

While figures suggest that sales of music and film are continuing to grow despite the current economic difficulties, we cannot be complacent about problems such as digital piracy. It is estimated that the total loss to the film industry in 2007 was in the region of £486 million. The music industry estimates that its own lost sales were probably around the £165 million mark, and that figure may well be conservative. That is why the problem of digital piracy should matter to all of us.

Clearly, today’s debate focuses on the impact of piracy on creative talent within the UK, but it would be remiss of me not to highlight that in some cases piracy is a crime that damages more than our economic or creative capabilities. My fellow Minister, David Lammy, told me how that was particularly brought home to him by a raid that he attended in north-west London in November. In that raid alone, 60,000 counterfeit DVDs were seized, among which were a significant number of obscene, pornographic titles that would not have been granted a certification in the UK in the first place.

I was interested in the range of contributions made by noble Lords. There was recognition, above all, of the complexity of the issue with which we are dealing. That reinforces our approach: good law is good, but proportionate, enforced laws are better. Noble Lords explored the question of achieving both proportion and the ability to enforce legislation. I know that we are not introducing jail terms for online infringement, as some in the industry have called for. However, I think that the measures that we propose will offer an effective deterrent to fraud that stops short of putting even more pressure on already crowded prisons.

Whether we are talking about new or existing law, effective enforcement is clearly the key. We need to be in a position where all government departments and key individuals within the police, trading standards and local authority structures tackle these issues together. That is why we have set up an interministerial group on enforcement. With ministerial and other colleagues, we need to look at how we can effectively raise public awareness and understanding of these issues and at how to remove some of the practical barriers to more effective on-the-ground enforcement.

The best approach is to combine enforcement within the resources available with other types of measures that we have been talking about, as well as public education on the consequences of copyright crime. I was interested in the visit made by the noble Lord, Lord Clement-Jones, to the Science Museum, which is taking a very innovative approach to showing young people that this is not a crime that has no victims.

We are currently exploring the options for establishing a rights agency. It is likely that part of its remit will be to focus on encouraging respect for the creative industries and increasing public awareness of the easiest ways to access legal content. I assure the noble Lord, Lord De Mauley, that we have not made up our minds on this; we are still out to consultation. It is not that we are dithering. This debate has reflected that, first, there is a range of views on how to deal with the problem and, secondly, not only does a complexity currently exist but it is an increasing complexity; it is not something that we can solve nationally. As the noble Lord, Lord Clement-Jones, pointed out, there is a need for international action as well. I do not plead that as an excuse; I just make these points because I think that they are relevant to this debate.

Therefore, the Government have been meeting the industry to discuss the most effective way in which to tackle internet piracy crime—not just piracy but all forms of internet piracy crime. I know that partnership working between organisations such as the Federation Against Copyright Theft, the BPI and the IPO’s enforcement unit has been invaluable, and I encourage all other industries to develop the levels of intelligence gathering that these bodies have.

We are also doing our best to support our creative talent, as I am sure the noble Lord, Lord Lloyd-Webber, appreciates. The very nature of the creative arts means that they are dynamic and always changing, developing and innovating. As well as bringing challenges, the digital age has brought tremendous creative potential. I was fascinated by the up-to-date knowledge of the noble Lord, Lord Luke, who mentioned the various services being offered. He identified things such as Spotify and referred to other independents offering online-only music and film. He also gave the interesting and fascinating example of the Radiohead offering, which, in a way, seems to be counterintuitive. However, I think that he demonstrated that, when talking about supporting young people with talent, we have to look at how the things that they do creatively are offered online in a way that perhaps a few years ago we would never have imagined.

We have already made progress. In Creative Britain, we set out a three-year strategy for the creative economy in the UK, backed up by more than £70 million of government funding. We committed to establishing, by 2013, 5,000 creative apprenticeships annually and we funded 10 pilot programmes designed to provide greater access for young people to a range of cultural and creative opportunities through the flagship Find Your Talent programme. Again, we are trying to involve young people in these programmes and are making them aware of the importance of intellectual property rights and content.

In 2008-09, the Technology Strategy Board ran a £10 million R&D programme for the creative industries, investing in more than 90 creative industry SMEs and major innovative collaborative R&D projects. In all, almost 300 UK-based companies and academic institutions will have benefited from this investment. We are also developing a project with the Local Government Association to research and deliver a menu for local infrastructure.

There was much reference in the debate to the memorandum of understanding and the question of how to tackle peer-to-peer file sharing. The Government have worked with both rights holders and ISPs to find an industry-led solution to the problem. We may not all agree on exactly how we should do it but I think that there is some consensus that that route probably gives us the best chance of success. A memorandum of  understanding was signed by the six major ISPs and rights holders to get an industry-led solution. We remain committed to the principles set out in the MoU and are working hard to achieve, as agreed, a substantial reduction in illicit peer-to-peer file sharing. Recent legislative proposals on peer-to-peer file sharing will go a long way towards achieving that reduction, with some evidence suggesting that up to 70 per cent of infringing users will desist on receipt of a warning letter. We are looking into options such as the rights agency as one way of continuing the valuable work arising from the memorandum of understanding in a form suitable for today’s environment.

I believe that we have provided enough of an outline of how we are tackling digital piracy and other forms of internet piracy crime. Everything that I have covered so far offers better safeguards for nurturing our creative talent and for the profitability of our creative industries and those who work in it. However, the work that we are doing to improve internet piracy enforcement goes much wider than one industry or sector. Our key priorities here must remain to educate consumers on these issues and to work with government departments and front-line enforcement agencies to ensure that they understand how IP issues fit into the wider civil and criminal enforcement landscape.

I have tried to cover most of the points raised. If I have missed any, we will write to noble Lords. Today there has rightly been a rehearsal of the issues surrounding internet service providers. It is a critical area. The debate has highlighted polarised opinion, which the consultation on peer-to-peer file sharing clearly demonstrated. I think that we all agree that there will be no easy answer to this problem. In a way, the noble Lord, Lord Luke, summed it up when he said that we have to be careful that we do not produce oppressive legislation that acts as the enemy of innovation. That would not serve any real purpose or benefit for the creative industry and we do not believe that it would serve the country. We have to proceed cautiously. The answer must surely be to find a course that works, is proportionate and involves rights holders and ISPs. As I have indicated, discussions are under way and experience shows us that joint agreement must be the way. ISPs and industry have a key role in finding a solution to this problem. I thank the noble Lord again for initiating the debate. This is probably the end of the beginning—certainly it will run and run, as they say sometimes of West End shows.

14:50:00

Lord Lloyd-Webber
My Lords, I thank all noble Lords for speaking. I came here grateful that I work in theatre, which cannot be pirated, and freely admitting that I had no real answers; I just wished to highlight the situation. My noble friend Lord Luke mentioned the interesting case of Radiohead. Many bands now are using recorded music as a means to attract people to their live concerts. Years ago, it was the other way round. I was pleased to hear the noble Lord, Lord Clement-Jones, reaffirming that the House supports intellectual copyright. I looked up the word “copyright” in the Oxford English Dictionary today. The first mention of the word was on 6 May 1735 in your Lordships’ House. I was terrified that I was going to read of a noble Lord saying that copyright means that you have a right to copy. On that note, I beg leave to withdraw the Motion.

Motion withdrawn.

Ecclesiastical Offices (Terms of Service) Measure

Motion

14:51:00

Moved By

The Lord Bishop of Chelmsford
That this House do direct that, in accordance with the Church of England Assembly (Powers) Act 1919, the Ecclesiastical Offices (Terms of Service) Measure be presented to Her Majesty for the Royal Assent.

The Lord Bishop of Chelmsford
My Lords, the measure before you represents a very significant development in the life of the Church of England. It puts in place a legislative framework to enable the introduction of new terms and conditions of service for clergy and stipendiary lay ministers. Its object is to equip and support those who are called to the ministry, and the people whom they serve, by establishing fair and clearly stated terms of service that will deliver the security that is needed for the ministry to flourish, while also providing a proper measure of accountability.

The measure has been six years in preparation. It was begun in response to the Government’s consultation on the rights and employment status of atypical workers. The proposals have been through the synodical process and have been found expedient by the Ecclesiastical Committee.

Why is this legislation needed? The church recognises that the evolution of patterns of ministry over many centuries has created the potential for inequitable differences of treatment. Clergy in the Church of England are officeholders, not employees. In the past, the great majority of clergy held freehold office as incumbents of a benefice that gave them tenure for life, ownership of the church building and parsonage house, and an income from tithes, glebe land and parish endowments. Although the freehold has been greatly modified over the years, those who hold it still enjoy very high security. However, times have changed. Clergy with a freehold are now in the minority. Other clergy, including many with full responsibility for parishes, are licensed to their offices by the bishop, and their security of tenure is very limited, since the bishop has the power to revoke their licences, either summarily or on reasonable notice.

Extending the freehold tool, even if that were practical, is not the answer. The church needs common terms of service that will give clergy a fair measure of security while ensuring a proper balance of rights and responsibilities. This measure addresses the need for change by making provision for new conditions of service that will be known as “common tenure”. The intention is that these conditions should apply eventually to clergy and stipendiary lay ministers across the board, from the Archbishop of Canterbury to the person just starting out in ministry.

Common tenure seeks above all to promote justice and fairness. For the first time, it gives clergy the great majority of rights enjoyed by employees, including the right to a stipend and to annual leave. At the same time, it preserves and protects their status as officeholders, which reflects the way in which their ministry is best exercised. Clergy enjoy a large measure of autonomy in the way they work, which gives them the freedom to respond flexibly to the various demands of daily ministry. The church recognises that as a good thing, as do the clergy. When they were consulted, the great majority wished to retain their officeholder status rather than become employees.

With a view to enhancing the security of clergy who do not enjoy the freehold, the measure removes the bishop’s power to terminate a licence summarily, and closely defines the circumstances in which an office can be terminated. There is provision for limited-term appointments only in a few cases, such as training posts and appointments subject to sponsoring funding. Furthermore, the right to compensation where an office is abolished through pastoral reorganisation, which presently applies to certain freeholders, will be extended under common tenure to all officeholders.

These changes are all directed at providing a proper and common level of security for the clergy. Provision is also made under the measure to ensure that clergy are properly accountable both to their congregations and to the wider church. To that end, it provides for regular development reviews and continuing education to ensure that clergy are effectively supported and equipped in their ministry. At the same time, accountability will be strengthened through the introduction of a capability procedure, which enables bishops to address, through a fair and transparent process, the problems that arise when clergy fail, for whatever reason, to perform their duties to an acceptable standard. This procedure is designed to be supportive, and to give clergy the time, training and resources that they need to improve. If in the last resort an officeholder is removed under this procedure, he or she will have the right to bring a claim of unfair dismissal to an employment tribunal.

That is what the measure seeks to achieve, by laying down basic principles and providing for the making of regulations to set out the detail of common tenure. The regulations will make provisions for matters such as written particulars of office, and entitlement to stipend and leave, including time off for public duties and sickness. Draft regulations have already been considered by the General Synod and, should the measure find approval in this House, they will be further debated in the synod later this year. In their final form, they will be subject to parliamentary scrutiny as a statutory instrument.

Before I close, I should mention briefly some things that the measure does not do. First, it is not intended to, and will not, undermine the historic independence of the clergy. That is why the church has not sought to make clergy employees. Secondly, the measure does not compel existing freeholders to change their conditions of service—with the exception of the two archbishops, who have already agreed to transfer to common tenure. All other freeholders will be able to choose not to opt in to the new system until such time as they take up a new post.

Thirdly, the measure does not materially affect the position of patrons, who retain all their current rights in the appointment process. Nor does it make any change to the ownership of property. The original proposals stipulated that parsonage houses should be transferred to diocesan parsonage boards, but the synod resisted that. The measure does strengthen the position of other clergy who are provided with housing, apart from those with the freehold, giving them for the first time both the right to a reasonable standard of accommodation and the right to object to any proposal that the house that they occupy should be sold.

Finally, the measure will not impose an excessive financial burden on the church. Noble Lords will be glad to hear that the infrastructure for its implementation is already in place, and that most dioceses are already running ministerial development review schemes. Many have also appointed human resources advisers, and those that have not yet done so are co-operating to provide the most effective and efficient way of providing these services.

This measure is vital to the future health of the church. It is an opportunity to make a new covenant between people and their clergy that is fit for the 21st century and enshrines essential principles of fairness, clarity and collaboration.

I can be brief on the second measure because it is probably the shortest measure ever sent here by the General Synod. But it is important legislation even if it is extremely straightforward. Again, the measure has the overwhelming support of the church, and has been found expedient by the Ecclesiastical Committee and approved in the other place.

The measure seeks the renewal for a further seven years of the Church Commissioners’ existing power to spend their capital for pension purposes. This power was conferred by Parliament on the Church Commissioners by the passing of the Church of England (Pensions) Measure in 1997. Parliament also supported the renewal of the power when it passed a similar measure in 2003. The existing power expires at the end of 2011 and the church seeks its further renewal until 2018.

The church proposed in 2003 that future renewals of the power might be achieved under the negative resolution procedure for statutory instruments. The Ecclesiastical Committee was not convinced by that proposal and the church quickly withdrew from the territory. We welcome the fact that Parliament continues to take an interest in the safeguarding of the church’s historic assets and it has not sought to widen the scope of this measure. So the measure before the House today seeks nothing more and nothing less than a straight seven-year renewal of an existing power.

Perhaps I may now sketch in the background. In the mid-1990s, the church began to realise that the commissioners’ asset base could not sustain their  expenditure commitments. In order to bridge the gap between income and expenditure, they could have cut their expenditure or they could have adopted a different investment strategy which focused on generating short-term income. Neither option was particularly attractive. There had already been deep cuts in their ministry support in the early 1990s and the church was reluctant to see any further cuts. Chasing short-term income, on the other hand, would have come at the expense of long-term returns, ultimately reducing the commissioners’ ministry support. That, too, was unattractive.

But there was a third way. The church and Parliament agreed that allowing the commissioners to spend capital for pension purposes would allow them to meet their pension liabilities and to sustain their other significant non-pension financial support for the church’s ministry. This move has been absolutely crucial to the commissioners’ investment performance. It has enabled them to rebalance their portfolio and has given them the flexibility to make the best long-term investment decisions.

The argument for renewing the power today is exactly the same as the argument for conferring the power in 1997. The commissioners’ actuary suggests that if they are to meet their pension liabilities and achieve their objectives of increasing their various other forms of ministry support, their expenditure commitments will continue to exceed income for some time. So, unless they are to resort to one of the two options which church and Parliament were determined to avoid in the late 1990s—that is, cutting discretionary support or skewing their investment strategy—they will clearly need this power for a further seven years.

We should keep in mind at all times the very far horizon to which a body such as the commissioners must look. The commissioners’ fund is not accruing any fresh pension liabilities and the time will come when their existing pension liabilities will cease and all pensions will be met from the newer funded scheme. Actively planning this transition is simply good financial management. Similarly, investing in assets which promise to produce a good return decades later is a sound strategy, but one which requires patience. This measure will help the commissioners to wait for such opportunities to come through. The legislation does not involve any compulsion to spend capital; we should see it as a vehicle for flexibility. As I said, in recent times the commissioners used that flexibility to invest more heavily in real assets rather than high-income-yielding assets but, equally, if they believe there are good reasons for investing more heavily in bonds and cash, the commissioners can do so.

Between 1 January 1998, when the power came into effect, and the end of 2007, the commissioners spent £405 million of capital but the value of their fund actually increased by £2.2 billion. The outperformance of their investments against the independent benchmark during this period meant £37 million per annum more for the church than average performance would have allowed. I offer that analysis to demonstrate the capital growth at which the commissioners’ investment policy is aimed, not as a cunning way of ignoring the circumstances of 2008. The commissioners’ audited 2008 figures are not yet available but it is true to say that, like any other fund at this moment, they have been affected by the market downturn. But this does not alter the argument for this measure.

Nothing in this measure can alter the fact that the value of the Church Commissioners’ fund will go up and down with the markets but, crucially, it enables them to adopt a long-term investment and distribution policy which, in turn, gives them the best chance of maintaining their support for the church even during difficult economic times.

That last point is important: we should not get so preoccupied with investment strategy that we forget the beneficiary. Generating superior returns matters only because it means increased proceeds for the church. So, despite the title of the measure, it is not the payment of clergy pensions that is at stake. Clergy pensions for which the commissioners are responsible—that is, those earned on service before 1997—will always be a first call on their fund. Clergy pensions will be paid regardless of our decision today. The point is that this legislation gives the commissioners the best chance of sustaining their other forms of support for the church in addition to the payment of clergy pensions. That means supporting bishops’ and cathedrals’ ministries, augmenting stipends, funding innovative parish projects which are targeted at the poorest areas of our country—I stand in a diocese which benefits hugely from this support—or exploiting new opportunities such as the creation of a Christian presence in new housing areas or employment areas. It may be a short measure, but it is important to our financial strategy.

Lord Lloyd of Berwick
My Lords, I will say nothing on the second measure, important though I believe it to be. On the first measure, I will add only a few words because the right reverend Prelate has said everything that needs to be said in explaining the measure and why it is expedient.

In the past five years, many measures have come before us from the synod, but three have been of particular importance—the Clergy Discipline Measure in 2003, the Pastoral (Amendment) Measure in 2006 and now this measure in 2008-09. Of the three, this measure is the most important for the future of the Church of England. Therefore it needs our support for the reasons given by the right reverend Prelate.

On each of the occasions we have considered these reports, I have been extremely impressed by the thoroughness with which the synod does its business and with the great care it takes to reach unanimity where it can. Very often it achieves either unanimity or something very near it, and I sometimes think that Parliament might take a lesson from that book.

On this measure there is a feeling, which I share, in favour of retaining the clergy freehold. The Ecclesiastical Committee was well aware of that feeling, took it fully into account and, for the reasons which were given in the report, took the view that nevertheless this measure is the right way ahead for the Church of England. I think I need refer only to paragraph 13 of the report, in which we say it will,

“establish a clear, consistent and transparent framework for the terms of service of the clergy as a whole and will give many clergy, for the first time, substantial employment-type rights”.

Finally, I apologise that the time chosen for the consideration of the synod turned out to be very inconvenient to certain Members of the House of Commons. I apologise for that. The timing was chosen after soundings had been taken; we tried to get a time that would suit everyone, but that proved not to be possible. I hope that that will not happen again. I support both Motions.

Lord Wallace of Saltaire
My Lords, in welcoming this measure I shall say a little about the pensions measure. The clergy, like the university profession and, I suspect, like lawyers and judges, tend to live a long time. They have satisfying retirements, they still have interesting things to do and they survive. As a very occasional guide around Westminster Abbey I have had occasion to remark to visitors on the diet of the monks in the 15th century; they had a regime that did not leave a pensions problem, and perhaps part of the answer to the current one is to encourage more gluttony among the senior clergy.

The serious measure—the more serious of the two—is the important one on the freehold. On the Ecclesiastical Committee we had a long and, in many ways, rather nostalgic debate, which reminded me strongly on occasion of the Barchester novels, where abolishing the parson’s freehold was felt to be a step towards the 20th century, clearly a step too far for some people.

I certainly felt that these measures were highly desirable. They improve the conditions under which clergy work, they make them more properly accountable, they give them more active support in difficult circumstances and they make it easier for the Church as a whole to deal considerately and effectively with those few difficult cases where relations break down among office-holders whose job it is to work together, and are thus a useful and helpful step forward. This is not of course a party measure but, as a member of the Ecclesiastical Committee, I welcome these measures.

Lord Judd
My Lords, it is always good to follow the noble Lord, Lord Wallace of Saltaire. As I have already told him today, I often find myself in agreement with what he is saying. All I can say is that if my enthusiasm for his thoughts in this Chamber can be excelled, it is only by my enthusiasm for his singing, which was excellent in last night’s Haydn Mass. I wish more of my noble friends could have been there to hear such a wonderful concert, but such is the business of the state that we must push things like Haydn to one side in order that votes can take place, and all the rest of it. I must plead guilty, with my good colleagues and Whips present, and say that I made the right choice last night; I could not make any other, since my wife was singing in the concert.

The case has been put in exemplary fashion by the right reverend Prelate the Bishop of Chelmsford. Having known him for many years, I am not surprised that he emphasised social justice; that has always been a central preoccupation of his ministry.

It is a privilege to serve on the Ecclesiastical Committee under the chairmanship of the noble and learned Lord, Lord Lloyd of Berwick, because he chairs it so well. His ability speaks for itself, but he brings such good humour, patience and irresistible firmness to our proceedings that we always reach good conclusions under his guidance. I am sure that this is the right step; it makes a great deal of sense.

In our deliberations in the committee I observed that, of late, while we spend a good deal of our time discussing, as our chair has said in this debate, extremely well prepared considerations coming from committed members of the Synod, more and more we hear the language of running the Church as a business and the business disciplines and professional skills that are required. We need effectiveness in the life of the Church but it is not a business, and I wish that these analogies were not made. Even this debate itself and the scope of it are hard to reconcile with the life of the founders of our Church; I cannot really imagine them sitting around discussing pension arrangements or freeholds. We have moved a long way, and we have to be careful that in our business preoccupations we do not throw out the baby with the bathwater.

With regard to pensions, at a time when there is a great deal of anxiety in our society about principle, about ethics and the absence of such considerations, which has led us into the plight that we now face, if we have an established Church then it has a responsibility to be a leader in the whole concept of ethical and principled investment. It is not just that it matters for members of the Church; it should, by the very nature of an established Church, be an example to the nation as a whole. The commissioners, therefore, have a tremendous task in reconciling good management procedures with a commitment to principle.

On the question of tenure, I hold firmly to the view that while this is clearly the right and sensible step to take, whatever arrangements we have in this and other respects with the Church, we must retain the principle—I hope the right reverend Prelate will forgive my saying this as a mere layman—that the hierarchy is there as a service structure, not as a power structure. They are not directors of a company; they are there to serve the Church, society and the clergy. The arrangements that we have in place should be there to enable them to carry out that service, to which I believe the present Archbishop of Canterbury is deeply committed.

Baroness Wilcox
My Lords, I shall speak for these Benches on these two measures. I am a member of the Ecclesiastical Committee, and as such I have before me the two papers presented to the House so that noble Lords, too, may be aware of what was said in those deliberations. I am always sorry at times such as this that there are not more people here to debate and comment on these issues, because they are so important to the established Church of this country. We are fortunate that the Synod takes such time and trouble to make sure that, by the time these measures appear before us under the able chairmanship of the noble and learned Lord, Lord Lloyd of Berwick, they have discussed and voted on them over a long period. By the time we get them they are well and truly measures.

We have two measures to discuss today, the terms of service measure and the pensions measure. We had a long and difficult discussion because people wanted to listen to Prime Minister’s Question Time, rather than decide on this. They thought that it was more important; I did not think so. I am very happy that those of us who were there took time to discuss it and that we found out, as we are bidden to do, whether the measure was expedient. That is all that we are bidden to do. We have already heard the right reverend Prelate the Bishop of Chelmsford describe exactly what this first measure is about. The noble and learned Lord, Lord Lloyd of Berwick, has spoken, as have others. Noble Lords do not need me to speak any more, but I will add that we on these Benches find this measure expedient.

I turn to the Church of England pensions measure. I chair three different pension schemes in three very different areas of work. I know how worrying all talk of pensions is at this time, particularly in the Church of England, where we do not exactly pay our clergy an enormous amount of money. The pension is so very important to them. We found the measure to be expedient in our committee. We have heard it described and it has been amended so that there is just to be a seven-year review. There is no point in my saying more, other than that it is a great privilege to serve in Parliament on this particular committee with my friend—as I think I may call him at this time—who is opposite. We take these matters very seriously. It is an enormous privilege to have an established Church of England. I am very proud to be here today, on behalf of these Benches, to say that we find this measure expedient.

The Lord Bishop of Chelmsford
My Lords, I am grateful for all contributions. We on these Benches and in the Church of England are very grateful for the work that is done in the Ecclesiastical Committee and the careful attention that it pays to our measures as they come to Parliament. I agree with the noble and learned Lord, Lord Lloyd, about the significance of the first of these measures. I am reminded that in the 1840s serious legislative reforms of the Church took place, leading to clergy having to reside in their parishes and to other reforms of that sort. The Ecclesiastical Commission’s aim in the Industrial Revolution was to fund new parishes as the population grew. The consequence of those measures was that between 1851 and 1908 the Church of England grew as a proportion of the population that worshipped. These measures are important for the capacity of the Church to fulfil its duty. I sense that the measures that the noble and learned Lord, Lord Lloyd, has mentioned this afternoon are of similar importance for the future life of the Church.

I assure my good friend, the noble Lord, Lord Judd, that I do not consider myself to be in the position of a managing director of a business. If I did, I would fail hopelessly. Micromanaging the clergy and parishes of the Diocese of Chelmsford would be an unwise thing even to countenance. Our task is to enable people to do what they are equipped and skilled to do. These measures, in different ways, will help us to do that slightly better. I ask the House to approve the Motions.

Motion agreed.

Church of England Pensions (Amendment) Measure

Motion

15:23:00

Moved By

The Lord Bishop of Chelmsford
That this House do direct that, in accordance with the Church of England Assembly (Powers) Act 1919, the Church of England Pensions (Amendment) Measure be presented to Her Majesty for the Royal Assent.

Motion agreed.

Legislative Reform (Insolvency) (Advertising Requirements) Order 2009

Motion to Approve

15:24:00

Moved By

Lord Brett
That the draft legislative reform order laid before the House on 4 December 2008 be approved.

Relevant Document: First report from the Regulatory Reform Committee.

Lord Brett
My Lords, the order will amend the advertising requirements in the Insolvency Act 1986 in relation to voluntary liquidations. This House will already be aware of the real help that we are offering businesses and those struggling to make ends meet during this time of economic difficulty. The order will provide further help to business by reducing some of the costs associated with insolvency.

Before I set out what the order will do, I shall set out a brief history of it. The draft order was laid on 4 December 2008 using the affirmative resolution procedure. It was considered by the House of Lords Delegated Powers and Regulatory Reform Committee, which confirmed that it was content that the order should be allowed to progress as an affirmative instrument. The order was approved in the other place on 24 March.

I move on to the detail. When a company finds itself unable to pay its debts, a liquidator is appointed to find and distribute the company assets. Today’s order will deal specifically with voluntary liquidations. In a voluntary liquidation, a meeting of the company’s creditors must be called under Sections 95 and 98 of the Insolvency Act 1986. Notice of the time and venue of this meeting must be sent directly to all known creditors and advertised in the London Gazette and two local newspapers that are circulated in the area where the company has its principal place of business.

The order removes the obligation to advertise in two local newspapers and means that it will be up to the liquidator, under Section 95, or the company, under Section 98, to decide whether advertising is needed and, if it is, to choose the most appropriate method. It makes no change to the requirements to advertise in the London Gazette and for notices to be sent to all known creditors.

These amendments to the Act are expected to deliver some £3 million a year in savings to business. Associated changes are being made to the Insolvency Rules 1986. These will come into force on 6 April this year and are expected to deliver further savings to business of some £14 million a year.

Delivery of the advertising changes is the first step in a process to consolidate and modernise our insolvency legislation. That will be achieved by another legislative reform order, which we aim to lay soon, and further rules amendments. We brought this advertising order forward in advance of the wider reforms as we did not want to delay this useful measure. The savings to business expected from the remainder of the project are around £25 million per year.

The savings from this order arise in respect of the £600 per case that will no longer be spent in an estimated 80 per cent of voluntary liquidations. This will increase the pot of money available to the creditors, because there is no reason why the change should result in any increase in the costs of conducting the liquidation, including the fees of the liquidator.

Costs are not the only reason, however, for introducing the order. We also want to make sure that, where creditors’ money is spent, it is spent usefully. That could mean an advertisement in a local paper if the creditors are local. It could equally mean an announcement on a professional website or even a small slot on radio, if they are trying to reach a rural community.

The requirement to use local newspapers goes right back to the beginning of the last century, when those who dealt with a company usually came from the same part of the country, but we do not think that such assumptions still hold good. The chances of local newspapers reaching unknown creditors who are not, as is perfectly possible, based in the same part of the country as the company are very limited. We should not be surprised that the Insolvency Service’s consultation about this proposal found that, in around 98 per cent of cases, no unknown creditors came forward as a result of the advertisements. So, in the vast majority of cases, these advertisements served no useful purpose.

We have considered carefully whether this measure could be open to abuse. It could be argued that companies might wish to conceal their insolvency from their creditors and might be aided if there was no local newspaper advertisement. But adequate measures are already in place to guard against concealment of creditors and those safeguards will not be undermined by the changes that we propose.

The order will make a modest but useful difference to creditors who will have already suffered losses as a result of having dealt with the failed company. It will also give liquidators and companies greater freedom to target their advertising more effectively. During an economic downturn, we should do all we can to help business. It is for these reasons that I commend the order to the House.

15:30:00

Lord De Mauley
My Lords, I thank the Minister for introducing this draft order. I am sure that many of your Lordships approve of measures to reduce red tape, so the Government are to be congratulated on at least trying. However, needless to say, there are one or two matters that I should like to raise. Before doing so, I ought perhaps to disclose that, at an earlier stage in my career when working in a major firm of chartered accountants, I worked in the insolvency field.

The House of Commons Regulatory Reform Committee expressed its surprise that the order was not more ambitious—even the Minister called it modest. The committee said:

“Given the widespread concerns about insolvency procedures … we believe that it would be more appropriate for the proposal to be considered together with the other proposals expected from the Department as part of the overall project to modernise insolvency legislation”.
 

Will the Minister provide an update on the status of these other proposals? The Minister in the other place mentioned—I think, in this context—what he called the “April-May timetable”. It is April, so why the rush with this subject in isolation?

According to the Department for Business, Enterprise and Regulatory Reform,

“LROs form a key part of the Government’s better regulation agenda”.

Yet while more than 1,300 statutory instruments are passed each year, just 20 LROs are scheduled to come into force in 2009. The Minister will accept, therefore, that we are more than a little sceptical of the Government’s robustness in this area.

The Regulatory Reform Committee’s concern at the narrow focus of the order might be said to corroborate a scepticism that this order is being introduced to make it look as though the Department for Business, Enterprise and Regulatory Reform is trying to be seen as fulfilling the mandate in the second half of its name, without adequate underpinning substance. Would the Minister care to comment on that? Does it not worry him that, if LROs are such a central plank of this important policy area, this particular LRO has been labelled by the Regulatory Reform Committee—a committee on which the Labour Party has an absolute majority of eight to six—as,

“so minor as to cause doubt as to its usefulness”?

In response to the government consultation document on the draft order, the Newspaper Society raised concerns that the proposals would discourage liquidators from using local newspapers. Have the Government considered this point and are they concerned by it?

The Department for Business, Enterprise and Regulatory Reform states that this order will result in annual savings of about £3.4 million. This figure is based on an estimate that 80 per cent of voluntary insolvencies will not need additional advertising beyond the London Gazette entry, because directors will hand over the books of account, which will contain a full list of creditors. The Regulatory Reform Committee labelled this argument “unconvincing”. Is there not a danger that, given that the firm is facing insolvency, the books will not have been as diligently maintained as they should have been?

Finally, the Legislative and Regulatory Reform Act 2006 holds that, among other conditions, a proposed change to the law must not deprive anyone of necessary protection. The Regulatory Reform Committee argues:

“We are not satisfied that the retention of requirements to advertise in the Gazette, even when taken with the availability of information from other sources including the internet, will necessarily protect”,
 

creditors. In the Minister’s view, is this order compatible with the 2006 Act?

Lord Addington
My Lords, when I first looked at this comparatively modest and small document I was filled with that dread that usually comes across you when you think “It can’t be this straightforward, can it?” The Commons debates on the subject were prolonged and about procedural purposes, and I concluded that procedure was much more important than the Motion itself. The debate we had earlier about piracy and modern media suggests that the necessary duty to advertise an insolvency in two local papers may belong to another era. Advertising in other areas could be the way forward. However, as the noble Lord, Lord De Mauley, has suggested, it really does seem to be a small part of a package.

It would be interesting to know the timetable that the Minister envisages, and whether there are any other issues. What would be the duty to advertise and to take reasonable steps? Do the Government have any idea what that really means? How far are we going to go? What is envisaged beyond this? Just to reassure people—if you are ordering something online, are you going to be advertising online? The answer might come out. At the moment it could be read as simply taking away one thing that may not have hit many other people and giving a possible excuse for doing absolutely nothing.

Lord Brett
My Lords, I thank noble Lords for their contributions to the debate. I sense some cynicism; perhaps we all become infected by it in the daily grind of politics, but I think that on this occasion it is misplaced.

On the question of this measure coming before other instruments, the next order is expected to be laid by the end of this month or the beginning of the next. A point was raised about the effect on newspapers. Clearly the order will have cost implications for the newspaper industry in terms of lost revenue. These will vary according to the number of insolvent companies in a local newspaper’s locality. However, it is important to note that the measure does nothing to stop companies and liquidators continuing to advertise in local newspapers. That, in the view of the liquidator, is the most sensible thing to do. We are giving the insolvency practitioner—the liquidator—the freedom to decide what is in the best interest of the liquidation, the companies and the creditors. Companies in liquidation can therefore choose to advertise in a local newspaper if they consider it appropriate, using the new technologies and websites that are available. We think that the new regime is preferable to retaining a legislative provision which means that local newspaper adverts must be placed in every single voluntary liquidation without consideration of their actual effectiveness. In the consultation, we found that in 80 per cent of the cases, no creditors came forward, suggesting that there would be some value in a change of regime.

I agree that this is a modest measure; the money amounts to only £3.4 million, but that sum will go to increasing the size of the pot of money available to creditors. The remuneration of insolvency practitioners, for example, has to be proved by the creditors; in that case, one can see no reason why costs should increase as a result of the change.

Insolvency practitioners are ultimately answerable to the court for the conduct of the case. They are experienced members of a regulated profession. A licensing body can, in appropriate cases, investigate concerns about their professional conduct. Unsecured creditors, which would include many small businesses, are treated equally among themselves. By changing the insolvency rules, the order seeks to improve the transparency for creditors and provide additional information.

If I have missed any points raised by noble Lords, I will happily write to them. There is some cynicism about this, but we have not taken the long-grass approach. We have promised—a promise we will fulfil—that further orders will be laid in a very short time.

This is a modest proposal; it could have been allowed to wait for several months more, but it will make a useful difference to creditors who have already suffered losses. Why should we not bring in a measure, however modest, which will save money and assist in very difficult times? It also gives liquidators and companies a greater freedom to target their advertising effectively; it could be argued that that is one area where business is increasing, unfortunately, as companies go into liquidation. Therefore, there is no argument for delaying something we can do now. For those reasons, I believe  that the order can be helpful to the business community and to creditors. I commend the order to the House.

Motion agreed.

Royal Assent

15:38:00

The following Measures were given Royal Assent:

Ecclesiastical Offices (Terms of Service) Measure,

Church of England Pensions (Amendment) Measure.

Motion to adjourn

Moved by

Baroness Farrington of Ribbleton
That the House do now adjourn.

15:39:00

Baroness Farrington of Ribbleton
My Lords, in moving that the House do now adjourn, I wish all our staff all the best for the Easter break. They serve us well, both front of house and behind the scenes.

Motion agreed.

London Local Authorities and Transport for London (No. 2) Bill [HL]

Reported from Committee

The Bill was reported from the Select Committee with amendments. A Special Report was made and ordered to be printed (HL Paper 75).

House adjourned at 3.39 pm