Lords Chamber

 House of Lords

Friday, 10 July 2009.

10:00:00

Prayers—read by the Lord Bishop of Exeter.

Arrangement of Business

Announcement

10:05:00

The Chancellor of the Duchy of Lancaster (Baroness Royall of Blaisdon)
My Lords, before we begin proceedings on the four Private Members’ Bills today it may be helpful if I say a few words about how we intend to proceed with the Committee stage of the Parliamentary Standards Bill.

During the Second Reading debate I received a very clear message about the concerns that many noble Lords hold about the Bill and about the timescale on which the Government intend to proceed. I have reflected on the debate and the strong views expressed about the Bill and it is my intention today to table amendments to the Bill which I hope will address those concerns. As soon as the amendments are tabled I will write to all noble Lords who took part in that debate explaining those amendments, and I will make copies of my letter available in the Library of the House and the Printed Paper Office.

On the timescale, I undertook to discuss the arrangements with the usual channels to see whether more time could be made available. If proceedings in Committee are not completed at the end of business on Tuesday 14 July, further time will be made available as first business after Oral Questions on Thursday 16 July. I take the views of this House very seriously and I have listened. I hope that the House will welcome what I propose.

Lord Shutt of Greetland
My Lords, I am very grateful for that statement which is helpful and useful for all Members of the House. Bearing in mind the difficulties that I understand are occurring with mail delivery, particularly this weekend, could electronic means be used to send the message to noble Lords?

Baroness Royall of Blaisdon
My Lords, that is an excellent idea. I will certainly do my utmost to ensure that all Members who have electronic facilities receive the letter and the attachments by electronic means.

Lord Lawson of Blaby
My Lords, I am most grateful to the noble Baroness the Leader of the House, but if she is doing that she could ensure, with an extra click of the button, that the message goes to all Members, not simply to those who took part in the Second Reading debate.

Baroness Royall of Blaisdon
My Lords, I have absolutely no problem with that, an extra click of the mouse is exactly what I will do. However, I know that some Members of the House are not electronically equipped. I am afraid that I cannot write to all Members but I will certainly e-mail all Members.

Lord Goodlad
My Lords, I think that I probably speak for all members of your Lordships’ Select Committee on the Constitution in thanking the noble Baroness the Leader of the House for what she has said and for her unvarying courtesy. I hope and believe that we will have adequate time to consider the matter.

Co-operative and Community Benefit Societies and Credit Unions Bill

Second Reading

10:08:00

Moved by

Lord Tomlinson
That the Bill be read a second time.

Lord Tomlinson
My Lords, I beg to move that this Bill be now read a second time.

This Bill arose as a Private Member’s Bill in another place introduced by my right honourable friend Mr Malcolm Wicks. Supporters of the Bill when it was published included honourable and right honourable Members from all the three main parties in the other place and the Bill passed through all its stages without amendment.

Following an extensive Treasury consultation entitled, Review of the GB Cooperative and Credit Union Legislation, a number of reforms were agreed which could be effected using a legislative reform order; for example, reforms regarding the minimum age for membership of and becoming an officer of an industrial and provident society; the modification of rules concerning share capital; the flexibility for such societies to choose their own year end; facilitating easier dissolution of societies and other such reforms. However, the legislative reform order can deal only with deregulatory issues. The Bill deals in legislative form with the issues arising from the consultation which could not be regarded as deregulatory and therefore could not be included in a legislative reform order. Thus the Bill completes the response to the public consultation.

I wish to set the subject matter of the legislation in a slightly broader context before I deal with its specific provision. The ideals and principles of co-operation and mutuality are well entrenched in our economic and social history. Very few people do not know something about Robert Owen and the New Lanark mill experiments, or the Rochdale pioneers, or are unaware of the writings of Sidney and Beatrice Webb. Those lessons of early co-operation and mutuality are well enshrined in our social and economic history and show the early significance of such co-operation and mutuality. Today we are at the end of a period of decline as regards the significance of co-operation. We are now in an era of resurgence—a renaissance—of co-operation and mutuality. Mutual building societies, bastions of financial stability, were demutualised, a handful of shares and a few hundred pounds being the bribe which people accepted to demutualise them. They gained an immediate small windfall in their pockets at the expense of generations of financial stability. We all know what happened to those who pursued the course of greed in order to demutualise those building societies. It was almost an act of financial vandalism. If anybody quarrels with that, I suggest that they would quarrel only with the word “almost”.

Today, the resurgence of co-operatives and mutuals reflects consumers who are looking for an ethical alternative to banks, which have significantly failed us, and the Co-operative Bank and the Britannia Building Society illustrate an admirable way forward when we see this planned merger creating a new £70 billion bank—a new super mutual.

Major developments are also to be found in the retail sector. The Co-operative Retail Society now has a unified management structure and more than 2,000 stores. The Co-operative Group has acquired Somerfield, and the combined operation has something approaching an 8 per cent share. I could go on, but I will not detain your Lordships’ House with a description of the virtues of co-operatives, credit unions and mutuals.

Lord Foulkes of Cumnock
My Lords, does my noble friend agree also that the co-operative retail sector has been leading the way in fair trade and setting a very good example, which has been followed by other large retailers?

Lord Tomlinson
My Lords, my noble friend anticipated what I was going to say in a few minutes’ time, when I would have referred not only to fair trade but to ethical trade and the sustainability of trade. Those are all virtues of the co-operative sector.

Suffice it to say that these co-operatives, mutuals and community benefit societies belong to their members; they are not assets to be bought and sold to satisfy the short-term interests or short-term gains of shareholders. Co-operatives and mutuals are large players in the economy, with assets of more than £400 billion and about half our population in membership in some way or other. They serve many of the wishes of our people, including fair trade, ethical trade and sustainable development—as I had intended to say.

I turn to the Bill, which is of importance to this important sector of the economy. The Bill refers to three categories of organisation: co-operatives which are run for the benefit of their members; co-operatives which are run for the benefit of their communities—the so-called community benefit schemes, including many housing associations, social clubs and sports supporters’ clubs; and credit unions, to which I shall return in a short while.

This short Bill of eight clauses has five main clauses, while Clauses 6 to 8 deal with mainly technical issues, such as consequential amendments and regulations, commencement orders, and territorial extent. The main part of the Bill is in Clauses 1 to 5. Clauses 1 and 2 reflect the fact that, following the Treasury consultation, there was an overwhelming desire to change the outdated name of, and rebrand, industrial and provident societies more appropriately for today’s world; the purpose is to introduce alternative names.

Clause 1, therefore, provides that societies registered under the Industrial and Provident Societies Act 1965 shall be registered as co-operative societies or community benefit societies.

Clause 2 changes the name of the Industrial and Provident Societies Act 1965 and goes a long way towards removing from the statute book the rather outdated term “industrial and provident societies”.

Clause 3 is somewhat more complicated, but is simple in its objective. It applies the Company Directors Disqualification Act 1986 to officers of industrial and provident societies, as it applies to officers of companies, building societies and friendly societies. Under the current law, officers of industrial and provident societies who have mismanaged their society cannot be disqualified. Clause 3 makes such disqualification possible.

Clause 4 gives the Treasury powers to apply to industrial and provident societies, with appropriate modification, company law on investigation of companies, company names, and dissolution and restoration to the register. There is a substantial amount of detail concerning giving the Treasury a power to apply company law on striking off and dissolution of defunct societies, investigation of companies and requisition of documents, and on company names.

Clause 5, dealing with credit unions, is the final substantive clause. Credit unions are a different form of mutuality. As financial co-operatives, they operate in communities and workplaces around Britain. There are 480 credit unions in the UK, with some 730,000 members, assets of £558 million and an income of £31 million a year. A recent report from the New Local Government Network suggests that up to 200,000 more people in Britain are at risk from illegal loan sharks because they cannot access credit from traditional lenders. The diminished availability of regulated sub-prime credit is creating conditions where a sizeable number of people have little option but to borrow from illegal sources. The report suggests that at least 165,000 people already use loan sharks in the United Kingdom and that we can expect that number to rise significantly.

Credit unions are an imperative way of helping poor people to control that limited part of their financial self-government in an ethical way. I believe that they are central to government plans for tackling financial exclusion. That has certainly been so in recent years and we look forward to the continued development of that activity. However, the credit union movement is relatively small and I shall be addressing that question in another debate that should take place fairly shortly. In relation to credit unions, Clause 5 enables, where appropriate, provisions corresponding to building society law to be made for credit unions so as to recognise their existing, increasing and significant role as deposit takers.

Co-operatives, credit unions and other mutual societies provide another dimension of choice and diversity in the economy as a whole and especially in financial services. The Bill, besides the rebranding element, will improve corporate governance, make disqualification of officers possible, and make co-operatives and community benefit societies open to closer scrutiny by the registrar and through the FSA being given new powers of investigation.

As the co-operative and mutual sector is enjoying a resurgence, the Bill, if passed, will help the modernisation and rebranding of such societies, while simultaneously making an improvement in corporate governance. I conclude by commending the Bill to the House in the words of my right honourable friend Malcolm Wicks, who initiated this Private Member’s Bill. He said,

“while those of us on the left in politics are proud of the origins of the co-operative movement as part of a wider labour movement, there is a sense in which many of the virtues of mutuality, thrift, self-help and responsibility strike chords on the other side of the Chamber”.—[Official Report, Commons, 24/4/09; col. 507.]

I beg to move.

10:22:00

Lord Newby
My Lords, it is a great pleasure to follow the noble Lord, Lord Tomlinson, in speaking on this useful Bill. He started his speech by talking about the history of the movement and said that everyone knew about Robert Owen and the Rochdale pioneers. The sad truth is that, although we all know about them, our children do not. When we talk about the resurgence of the co-operative movement, which many of us are keen to see, we have to accept that this is a novel concept to many people; it is not one with which they grew up. The demutualisation of the building societies means that, as young people, our children do not save with a mutual and do not, as I did, shop at the Co-op because there is not a Co-op within spitting, walking or driving distance of where we live. Therefore, there is a big job to be done in making the case for mutuality, which we hope in our small way to do.

The Bill is useful in that respect, particularly in consigning to history the phrase “industrial and provident society”. Whenever I heard it, a picture always came into my mind of Pennine towns and LS Lowry paintings. It has no relevance to the kind of institutions that we are all seeking to promote, so that is a useful change. It is also sensible to require all these bodies to register with the FSA in future. I hope that, in regulating them, the FSA does a better job than it did in regulating the Dunfermline Building Society, but one hopes that it has learnt its lesson in that respect.

The other detailed provisions of the Bill are all sensible pieces of tidying up. However, one thing that I never understand is why legislation relating to mutuals is always introduced via Private Members’ Bills. It is virtually the only bit of the legislative process that is always done by such Bills rather than by government Bills. We have banking Bills that no one would consider as being appropriate as Private Members’ Bills. The value presumably is that, paradoxically, it is easier to get a Private Member’s Bill through on something such as this, but it seems odd—almost unique in the way that we do business—that we have a dribble of Private Members’ Bills, however eloquently advocated, in respect of mutuals.

I am sure that, as the noble Lord, Lord Tomlinson, said, we will be debating credit unions again in future and we will undoubtedly debate building societies as we look to reform of the financial sector. I shall not weary the House with a discussion of those matters today but I have one question for the Minister. Yesterday’s banking White Paper says that the Government are already proposing to use a legislative reform order to enable members to invest more than £20,000 in transferable shares in industrial and provident societies. That seems a sensible change, but can the Minister tell us what the timetable for that order will be?

This is a tidying-up, modernising measure and it is eminently sensible. It does not grapple with the big issues around generating more resources for the sector, which I think are for another day, but I greatly welcome the Bill and the way in which it has been introduced by the noble Lord, Lord Tomlinson. We on these Benches strongly support it.

10:26:00

Baroness Noakes
My Lords, the noble Lord, Lord Tomlinson, has made a well argued case for the Bill. It is of course masquerading as a Private Member’s Bill but it is, in all but name, a government Bill. I say at the outset that we shall not oppose it. My honourable friend Mr Mark Hoban in another place spoke at length about the Bill. I do not intend to rival that performance this morning but I have one or two things that I should like to say about it.

Noble Lords may know that I have often expressed scepticism in your Lordships’ House about mutuality in general. I have concerns about a mutual model in which ownership pressures are not sharp-edged. I can see that mutuals are popular and that they reach parts of society that financial services organisations generally do not, but I have never found any evidence that they are the most efficient way to deliver financial, or indeed any other, services. They do not give any assurance that things cannot go badly wrong. The Presbyterian Mutual Society was driven into administration last year by a misguided commercial loan portfolio, which stands proof that things can and do go wrong with mutuals.

If we look at building societies, we see that there are two big stories from the last century. The first, to which the noble Lord, Lord Tomlinson, referred, is the demutualisation of the larger building societies, which was largely followed by their disappearance into larger banking groups. I do not regard that as an act of vandalism. I believe that there were sound economic reasons for what happened. However, the bigger story is of a massive decline in the movement. A hundred years ago, there were 1,700 building societies; now, there are barely more than 50. That has little to do with demutualisation, which affected only a relatively small number. It has much more to do with the underlying fragility of the business model, which generally cannot withstand the management mistakes that litter the history of the building society movement. Within management mistakes, I include one of the more common reasons for the disappearance of building societies—namely, operating at an uneconomic scale. Those mistakes, in my view, have their roots in the ineffectiveness of the “membership equals ownership” construct, which allows inefficient or incompetent management to go unchecked.

Therefore, I have a particular scepticism about Clause 5 of the Bill, which will allow the Treasury to apply building society provisions to credit unions. I think that this means that the financial freedoms that got building societies into trouble could be extended to credit unions. I name the Dunfermline and the West Bromwich as building societies that have hit the headlines for serious failings in the past few months alone. I could name even more that have been forced into mergers for lesser, although none the less important, mistakes.

The Building Societies (Funding) and Mutual Societies (Transfers) Act 2007 contains yet more powers for building societies to use wholesale funding. The Government are wisely refraining from activating those powers at present for building societies and I am not at all sure that we would ever want credit unions to have the freedoms that are contained in that building society legislation. I am not at all convinced of the merits of giving another sector of the mutual movement the freedoms that have allowed others to get into trouble in the past.

I also say to the noble Lord, Lord Tomlinson, that, although I concede that the term “industrial and provident” comes from an earlier era, I can see no reason to junk it. If it were necessary to trash every sign or symbol of the past, your Lordships’ House and indeed the whole of Parliament could well have been consigned to landfill some time ago. I am comfortable with tradition and it grieves me that the Benches opposite delight so much in what they call modernisation at the expense of a sense of history.

The new title of “co-operative” is hardly a modern one. Co-operatives were founded in the industrial era, so the term comes from precisely the same era as that which gave industrial and provident societies their name. Of course, I would have found the title a little easier to swallow had the co-operative movement not bequeathed its name to the Co-operative Party, which is a part of the Labour movement. I never quite understand precisely how the two fit together but I understand that there is a lot of intertwining between the Co-operative Party and the Labour Party. Using this Bill to immortalise a part of the Labour movement is not exactly to my taste.

Some bits of the Bill are positively worth while. I support compulsory registration of industrial and provident societies and their modernised successors. I also support the provisions about directors and officers in Clause 3 and, in broad terms, the other extensions of company law in Clause 4. However, I have some concerns about the regulation-making powers in Clauses 4 and 5. They both allow for the creation of criminal offences and I have never been a fan of creating criminal offences by secondary legislation. However, I accept that there are many precedents for that, so I shall not pursue the argument.

None the less, I wonder whether there should be some restriction on the power. Perhaps the noble Lord, Lord Tomlinson, or the Minister will tell me whether the power could be used to create a criminal offence where none exists under company or building society law. If so, I shall want to return to that at a later stage of the Bill. I note that the Delegated Powers Committee has suggested limiting this power so that it cannot be used to create a penalty in excess of the relevant one in company law or building society law. I was surprised that the noble Lord, Lord Tomlinson, did not refer to the 11th report from the Delegated Powers Committee, which contained a clear recommendation for a limitation on that power. I give notice that I shall want to return to that in Committee.

In addition, the Bill allows the regulations to confer power to make further orders, regulations and subordinate legislation. I am most concerned about the ability to make further legislation without reference to Parliament. The order-making powers in the Bill are subject to the affirmative procedure, which is right and proper, but those orders can make provision for further secondary legislation and, as far as I can tell, that does not require affirmative approval or, indeed, any parliamentary process. I shall want to revisit that issue, too.

I have one technical question in connection with Clause 5, which allows the Treasury to make provision for credit unions corresponding to any provision relating to building societies. Will the Minister, or the noble Lord, Lord Tomlinson, confirm that this power can bring credit unions within the special resolution regime provisions in the Banking Act 2009? It was set up for banks but has already been extended to building societies by a statutory instrument. Is it intended that a further extension could or should be made to credit unions and, if so, what will be the conditions for a credit union to fall within the special resolution regime powers?

Lastly, will the Minister update the House on the Government’s plans for the many regulations that will be necessary if this Bill, once an Act, is to be given effect?

10:35:00

The Financial Services Secretary to the Treasury (Lord Myners)
My Lords, I am very grateful to my noble friend Lord Tomlinson, of Walsall, for his support for the mutual sector and for the eloquent manner in which he has presented this Bill, and to other noble Lords for their participation in the debate. The Government are a strong supporter of the mutual sector. They welcome the important contribution that the sector makes in providing choice and diversity in financial services and fostering financial inclusion and social cohesion. This Bill is particularly relevant to industrial and provident societies, community benefit societies and credit unions.

It may be useful for me to explain why the Government believe that the Bill is both good and timely. The crisis in the international financial markets and its impact on the economies of every major nation has reinforced the need for countries to have diversified economies and financial systems with a variety of different types of economic models. In the UK, the proprietary company form is the predominant model of choice for many new enterprises, offering limited liability and the scope for involving external shareholders. However, an interesting and often overlooked fact is that the mutual structure, with more than 30 million members, is not only a significant provider of services and products to local communities but a most viable alternative to the proprietary company model. For example, in some communities, and for many who are excluded from mainstream financial services, credit unions continue to offer the only credible alternative to loan sharks and unscrupulous doorstep moneylenders.

Access to capital and funds, or rather, as we have seen in recent times, the lack of it, is crucial and can have very destabilising consequences for businesses, members and customers. The Government applaud the role that credit unions play in encouraging a savings ethos among their members, as well as providing them with necessary capital when needed. Co-operative enterprises in the UK, as the noble Lord, Lord Tomlinson, noted, have more than 300,000 employees and assets in excess of £10 billion, and are the lifeblood of many communities. The Government recognise the valuable contribution they make to people’s lives, their fair-minded values, community participation and engagement.

The Government have displayed their commitment to the sector and in recent years have undertaken various policy and legislative initiatives aimed at enhancing the operational efficiency of mutuals. Recent legislation, such as the Building Societies (Funding) and Mutual Societies (Transfers) Act 2007, which incidentally also started out as a Private Member’s Bill initiated in the other place by Sir John Butterfill, has demonstrated how the sector can seize the opportunities offered. This recent piece of legislation has been credited with having made possible the merger between the Britannia Building Society and Co-operative Financial Services, creating what my noble friend describes as a super mutual, to the benefit of many thousands of members.

The Government have also set up an £80 million growth fund for credit unions and community development finance institutions to lend on to their members. A further £18.75 million has been announced as additional funding in the 2009 Budget, bringing the total funding to almost £100 million. More than 160,000 credit union members have so far benefited from loans since the start of the growth fund in July 2006. The Government recognise that one way of helping the sector is by ensuring that it has an enabling legislative framework. The Government are taking forward legislative and policy reforms for credit unions and co-operatives under the legislative reform order, on which the Government will shortly be reporting as it begins its parliamentary process.

The Bill, which complements the work in the legislative reform order, focuses on the linked objectives of modernising the legislation and further increasing member confidence in societies by bringing their corporate governance standards up to “best in class”. It will give the Treasury power to make further changes to credit union law by importing building society law where appropriate. The sector has been seeking that to help it to move on to the next phase of development.

I shall address some questions that arose at Third Reading in the other place. The Bill gives the Treasury powers to apply to industrial and provident societies certain provisions of company law on investigation of company names and on dissolution and restoration to the register. In the other place, Mr Peter Bottomley sought an explanation of why that power had been conferred on the Treasury and not the Secretary of State. The simple explanation is that the Treasury does not have a Secretary of State. When power is conferred on the Treasury to make regulations by way of statutory instrument—as in the Bill—it is exercisable by the Treasury through the Commissioners of Her Majesty’s Treasury, as set out in Schedule 1 to the Interpretation Act 1978.

Mr Bottomley also inquired whether the powers granted in the Bill would apply retrospectively to allow the FSA to disapply a name if a company had already used the word “co-operative” in its title and that was challenged as being misleading. The powers granted in the Bill will enable the Treasury to give the FSA powers to order an industrial and provident society to change its name if its name is too similar to the name of another business or was obtained by providing misleading information. However, the Bill does not include powers for the Treasury to make retrospective legislation. Neither does it give the Treasury powers to deal with the use of the name “co-operative” by businesses that are not co-operatives, as the Bill concerns only co-operatives. General powers to regulate the use of business names by businesses remain with the Secretary of State for Business, Innovation and Skills.

I thank the Delegated Powers and Regulatory Reform Committee for its consideration of this Bill, published yesterday in its 11th report of this Session. The Committee commented on Clause 4, which enables the Treasury to apply to industrial and provident societies provisions of the Companies Acts relating to investigations, company names and dissolution, and Clause 5, which enables the Treasury to apply to credit unions provisions of building society law. The Committee expressed concern that the provisions which may be applied include many which contain criminal offences, some of which carry up to seven years’ imprisonment as a maximum penalty.

The Committee notes that your Lordships’ House will wish to consider whether the Bill should be amended on that point. An amendment, should your Lordships consider it necessary, would provide that the maximum penalty for an offence created by regulations under Clauses 4 and 5 may not exceed that for the corresponding offence under the legislation being applied. I can confirm that the Government do not intend to use regulations under Clauses 4 or 5 to impose an increased penalty for offences. I hope that my statement will persuade your Lordships that there is no need for an amendment of the type described by the Committee.

I am sure that your Lordships will agree that the proposed reforms in the Bill are both necessary and proportionate. They will help provide further confidence in this important sector and engender continuing improvement in governance standards.

The noble Lord, Lord Newby, asked about the timetable for the order. The Government intend to publish a draft legislative reform order by the end of July. We intend to lay the LRO before Parliament when the House returns from the Recess.

The noble Baroness, Lady Noakes, asked about the power to make further regulations in Clauses 4 and 5. Any further regulations—for example, prescribing fees—will use the same parliamentary procedure as the provision of company law to which they apply. The noble Baroness also asked whether the Bill will extend the SRR to credit unions. I am advised that it does not. One would need an order under the Banking Act 2009 to do that.

The noble Baroness also asked whether we could extend building society freedoms to credit unions. Clause 5 preserves key features of credit unions, as the key sections of the Credit Unions Act cannot be amended. The Building Societies Act does not contain restraints on what building societies can do. If I find that I can add helpfully to those answers, I will of course write to my noble friend Lord Tomlinson, the noble Baroness, Lady Noakes, and the noble Lord, Lord Newby, to expand on those points.

The noble Baroness said that things can and do go wrong with mutuals. We know that to be the case with all forms of business ownership—incorporated, mutual and non-incorporated—but this timely and good Bill strengthens the governance of mutuals and, as such, deserves to be welcomed. Before I was a Minister, I produced a report for the Treasury on the governance of mutuals in the light of the failure of the Equitable Insurance Society, a failure which, as noble Lords will need no reminding, was determined by the judge to be a consequence primarily of bad governance and management of the society. I believe that the steps taken here will address some of those supposed weaknesses of the mutual model. Noble Lords will also need no reminding that Sir David Walker, who will be producing a report on governance of financial institutions fairly soon, was, after we gave him the original terms of reference for that review, asked to extend it to include mutuals, so he will be addressing some of the points raised by the noble Baroness.

The noble Baroness closed her remarks by saying that she was not always at ease with those who were delighted with modernisation for modernisation’s ends in itself. I am sure that those comments will be noted by Mr David Cameron.

10:48:00

Lord Tomlinson
My Lords, I thank the three other participants in this short but very useful debate. I very much value the intervention of the noble Lord, Lord Newby, and I share his views. I also very much welcome the intervention of the noble Baroness, Lady Noakes, although with slightly less enthusiasm for parts of her speech; she will understand why if I mention a couple of them. She seemed to be unwilling to recognise that co-operatives can be efficient. I used to have my house insurance and car insurance with the Co-operative Insurance Society. I stopped for a number of years during a period of fairly substantial inefficiency. I market-tested both my car insurance and my house insurance last year, and I returned to the Co-operative because it was cost-efficient. I was very pleased last week, because not only had I taken out a cost-efficient form of insurance, I got my letter to tell me that for the past half-year, my dividend has been £88. That is a further cost reduction.

I understand the point that the noble Baroness made. She referred to the Dunfermline Building Society. We should look at the two different arms of the Dunfermline Building Society. I believe that I am correct to say—I tried to check this with the Treasury this morning—that the traditional mutuality role continues. The Dunfermline Building Society got itself into troubling by moving into non-traditional activity.

The noble Baroness clearly does not like the Co-operative having an association with the Co-operative Party any more than I like Marks & Spencer or any other company identifying with the Conservative Party when it makes a financial donation to it.

Lord Myners
My Lords, as a former chairman of Marks & Spencer, I assure my noble friend Lord Tomlinson that it has not made a donation to any political party for many, many years, which I welcome.

Lord Tomlinson
My Lords, I welcome that, too, but I can find many other companies that do make such donations. The Co-operative movement was not engaged in party politics at all until the outset of the First World War. When it found that the government distribution of groceries to members of Co-operative societies was discriminatory and that they could not get fair treatment, it decided that it had to engage in direct political activity; so it was an historical decision, taken nearly 100 years ago, to combat the discrimination of government in the distribution of scarce resources.

Finally, my noble friend the Minister replied every bit as efficiently as I would have done to the questions asked by the noble Baroness, Lady Noakes, and I agree with every word that he said. If anything leaves her unsatisfied, we will return to the matter in Committee.

Bill read a second time and committed to a Committee of the Whole House.

Autism Bill

Second Reading

10:52:00

Moved By

Baroness Pitkeathley
That the Bill be read a second time.

Baroness Pitkeathley
My Lords, it is an honour and a pleasure to bring this Bill to your Lordships’ House, and I know that the 500,000 people with autism in the UK and their families are watching its progress with great interest. I thank colleagues around the House for their support and interest. Although the number of noble Lords who will speak today is small, it is extremely select, and I am particularly pleased that the noble Lord, Lord Freud, has chosen this Bill on which to make his maiden speech. I know that we all look forward to that very much. I have been encouraged, too, by the good wishes of many Members of this House who have an interest in this issue and would have been here had their diaries permitted. The noble Earl, Lord Howe, and noble Lord, Lord Astor, for example, have a strong personal interest in the topic.

I also acknowledge the support of the National Autistic Society, which very much welcomes the Bill. This Bill is an excellent example of how relatively small changes in legislation can make huge changes in the lives of people with disabilities and their families—something that I have had the honour of doing before as a result of several Bills on carers. The Bill is also a marvellous example of cross-party working, and gives parliamentarians something to cheer about and be proud of: two things that may have been singularly lacking in our work in recent months.

The Shadow Secretary of State for Wales, Cheryl Gillan MP, introduced the Autism Bill to the House of Commons in January this year. The original Bill required local authorities and their partners to take a strategic approach to meeting the current and future needs of children and adults with autism in their area. However, following strong commitments from Sarah McCarthy-Fry, Parliamentary Under-Secretary of State for Schools and Learners, on data collection and provision for children with autism, the clauses on children have been removed, and the Government are committed to amending the children and young people’s plans—the so-called CYPPs: the key strategic planning tool for local authorities—through another Bill, the Apprenticeships, Skills, Children and Learning Bill, to place a new legal duty on local authorities to ensure that local areas collate and share data on disabled children as part of the needs assessment and include children with autism in their plans for children’s services. The Minister also made a commitment that the statutory guidance that accompanies the regulations will state that autism must be specified as a specific category on these registers. The Bill is therefore a very good example not only of cross-party working but of cross-departmental working.

Even the clauses relating to adults have gone through quite a metamorphosis since their original drafting. The new Bill puts a duty on the Secretary of State to introduce an adult autism strategy for improving outcomes for adults with autism, accompanied by statutory guidance for local authorities and NHS bodies. The statutory guidance covers all the crucial parts, including access to diagnosis, needs assessments, transition planning, the strategic planning of support services for adults with autism, and local partnership and co-operation. That strategy is currently being consulted on. Everyone who works with those with autism and their families knows that that range of guidance is necessary to help them.

The Bill has six clauses. Clause 1 contains provisions on the duty to prepare and publish an autism strategy. Clause 2 covers the duty to issue guidance on implementing the strategy, while Clause 3 deals with the duty on local authorities and NHS bodies to act under the guidance. Clauses 4, 5 and 6 cover other aspects. The Bill, as amended in Committee in the other place, places a duty on the Secretary of State to prepare and publish, not later than April 2010, a strategy for the improvement of health and social care services for adults in England with autistic spectrum conditions. The Secretary of State is required to keep the autism strategy under review. He or she will be able to revise it, and has a duty to consult when doing so.

In addition, the Bill requires the Secretary of State to prepare and issue, not later than 31 December 2010, guidance to the NHS and local authorities on implementing the strategy, to keep the guidance under review, and to consult the NHS and local authorities in preparing it, particularly if he or she proposes to revise it substantially. The Bill also contains provisions that will create a requirement on NHS bodies and local authorities to act in accordance with the guidance issued by the Secretary of State.

The Government have made welcome public commitments to publishing an autism strategy by the end of 2009 and to issuing subsequent guidance with real power to local authorities and the NHS on how to implement that strategy. A full public consultation on the strategy was launched in April this year and is ongoing. Fundamentally, the Bill places the Government’s existing commitments on to a statutory footing so that the Government can be held to account. Although the Bill extends to England and Wales, it will apply only to England.

I want to draw a few things to your Lordships’ attention. Clause 1 imposes a deadline for publishing the autism strategy of not later than 1 April 2010. Clause 2 imposes a deadline for issuing guidance on the implementation of the strategy of not later than 31 December 2010. It is quite unusual for deadlines as specific as these to be included in a Bill, but it responds to the need of Ms Gillan and the National Autistic Society to have concrete guarantees of action within a reasonable timescale. Commitments have been made to publish the strategy by the end of this year. I know that the intention is to stick to that timetable—I am sure that the Minister will confirm that—so the deadline in the Bill is a belt-and-braces one that gives additional leeway.

On the timing of the consultation on and publication of the strategy, Clause 1 provides for consultation on the autism strategy before the Bill comes into force to fulfil the Secretary of State’s duty to consult on it. In the same vein, Clause 2 provides for consultation on the guidance on implementing the strategy before the Bill comes into force to fulfil the Secretary of State’s duty to consult on it and to deal with what might seem to be a mismatch in timing between the implementation of the Bill and the ongoing consultation to which I have already referred. The consultation began in April and is expected to run until mid-September but it is unlikely that this Bill will complete all its stages before then. It may be that the strategy is published before the Bill comes into effect. It was therefore important to ensure that all the work being undertaken would count for the purposes of the Bill. Hence, the inclusion of these provisions.

I want now to draw your Lordships’ attention to the mechanism by which the Bill will impose a duty on local authorities and NHS bodies to act under the guidance of the implementation of the strategy. This is rather an innovative procedure, which may not have been done before. For local authorities, specifying that the guidance is to be treated as Section 7 guidance under the Local Authority Social Services Act 1970—some of us may be old enough to remember the so-called LASS Act; I certainly am—means that they would be required to exercise their social services function in accordance with the guidance. A local authority which did not would be acting unlawfully. But for NHS bodies, there is no existing provision equivalent to Section 7 of that Act. Of course, it is very important for those with autism and their families to have equal attention from local authorities and NHS services. Most people are involved with both, but they do not know the difference between them—indeed, why should they?

The guidance will have the same force for NHS bodies as it will for local authorities. The Bill creates the same obligation on NHS bodies, which will be treated as local authorities, and their functions in relation to the relevant services will be under the provisions of the LASS Act. That was a key concern for the sponsors of the Bill and for the National Autistic Society. It of course breaks new ground and arguably creates a precedent for the NHS, of which the chief executive is aware, and may be important in future years for other people with disabilities. The autonomy of NHS foundation trusts has been preserved by not including them in the definition of “NHS body” in the Bill. They will not be under the same duty to act under the guidance of other NHS bodies, although their general duty to take into account any guidance issued by the Secretary of State will apply.

Finally, Clause 4 lists those bodies and agencies to which the Bill applies and for whose staff suitable training on the Bill and guidance should be provided. However, we should remember that other staff, with whom those with autism and their families may be in contact, can also play a significant role in their lives. I am thinking, for example, around such things as employment, the staff at Jobcentre Plus, the DWP and those who may act as gatekeepers to other services. It will be important to ensure that their input and training is kept under review. In fact, it is a very welcome provision that the Bill states that the Secretary of State must keep the autism strategy under review and revise it as necessary. The effectiveness of the strategy and the statutory guidance will ultimately depend not on their content, which we are debating today, but on how well they are implemented. I am sure that with the support that the Bill has received from several government departments, with the commitment of Ministers, the vigilance of the National Autistic Society and all those who have been involved, we can ensure that implementation goes ahead satisfactorily.

Like all Private Members’ Bills, this Bill is modest in its aspirations, but it will certainly not be modest in the effect it has on the lives of those with whom it is concerned. I commend it to the House and I beg to move.

11:03:00

Lord Freud
My Lords, I am delighted to rise for the first time in your Lordships’ House in support of this Bill. First, perhaps I may place on record my appreciation to the staff of this House for their helpfulness towards me and my family. I am particularly impressed by the way in which the Doorkeepers thrust notes into my hand as I wander through the corridors. They clearly have a much better idea of where I am than I do.

Let me turn to the Autism Bill. I congratulate my honourable friend in another place, Cheryl Gillan, on championing this Bill and the noble Baroness, Lady Pitkeathley, on so ably introducing it in this House. I should like to take the opportunity to draw your Lordships’ attention to the close connection with another Bill before this House, the Welfare Reform Bill. The underlying concept in that Bill is that, if we invest in a disciplined fashion in people who need help in making their way in the labour market, we all win—that is, the individuals concerned, society and the taxpayer. The autistic fit exactly into this paradigm. Indeed, when I was compiling my independent report on this matter two and a half years ago, autistic people were one group that I had explicitly in mind. With the right support, autistic adults can make an incredible contribution in the workplace. Many have an attention, a focus on detail and a sheer perseverance that can be invaluable attributes in particular jobs.

Two forward-looking employers—BT and Goldman Sachs—have programmes that allow people with autism to make this kind of contribution. BT has told me that autistic people are highly prized for their extraordinary facility with numbers. The tragedy is that, according to estimates provided to me by the National Autistic Society, only some 50,000 adults with autism, or 15 per cent, have regular work. The approach presaged in the Welfare Reform Bill would allow us to find the very considerable resources necessary to transform the lives of those adults with autism. It would do so despite the very difficult times that we are facing, when the economic pressures on spending will inevitably be severe. Properly organised programmes, managed with financial rigour, should allow the 15 per cent figure to improve dramatically.

With your Lordships’ indulgence, I should like to take advantage of this unique opportunity to place some more personal remarks on the record. My family arrived here 71 years ago at a very difficult time for this country and the world. They escaped only because Sigmund Freud, my great-grandfather, was a well known figure. My father and grandfather were both desperately proud to join the Armed Forces of their newly adopted home. Indeed, my father parachuted back into Austria in 1945 as an officer of the SOE and single-handedly captured the enemy aerodrome of Zeltweg.

The descendants of Sigmund Freud have been accepted and have thrived in this country. I cannot remember a single occasion—not one—when I have been made to feel an outsider or that I did not belong here. That is a remarkable testimony to the tolerance and generosity of this country. I firmly believe that—perhaps with one or two exceptions—I would not have been able to make that statement of any other country in the world. While I would not presume to speak for all Freuds, who are a fiercely individualist group, many of them will, I know, join me when I place on record in this place and at this very difficult time my gratitude to this great country for all that it has done to nurture the Freud family and other families who have come here for freedom and to achieve their potential. I thank the House for its indulgence.

11:10:00

Baroness Tonge
My Lords, I congratulate the noble Lord, Lord Freud, on his fascinating maiden speech and I welcome him to the House. His remarks about people with autistic spectrum disorder in the workplace were extremely useful and we look forward to hearing more about that. He made several interesting references to his family. I was wondering what Sigmund Freud said about autism, but I do not think that the word existed in his day. I will have to look through my psychiatric text books, if I still have them, to find out what was the nearest word. I also loved the noble Lord’s comment about not knowing where he is. I remind him that we are given a life sentence to this place, so before we die many of us will probably get to the stage of not knowing where we are. We must all look forward to it. I thank the noble Lord for his contribution.

Over a year ago, on 19 March 2008 to be precise, the noble Lord, Lord Maginnis of Drumglass, led a debate on this subject. I spoke in the debate and, in a very full and informative reply, the noble Baroness, Lady Thornton, gave us reassurances that an enormous amount of work was going on and that various initiatives were already in place. She mentioned the Early Support programme, extra funds for the National Autistic Society and for the further involvement of TreeHouse—both of these are wonderful charities—programmes to improve training for teachers, and funding for the Autism Education Trust to improve teaching and social work. All this is making a difference. While nothing is ever enough, of course, tremendous progress is being made for children with autism. However, as the noble Lord, Lord Astor of Hever, said in that debate, enough attention is still not being paid to the transition years and adults with autistic spectrum disorder. This was the subject of a recent report from the All-Party Parliamentary Group on Autism.

I thank the noble Baroness, Lady Pitkeathley, for introducing the Bill so ably into this House after its passage through the House of Commons. It concentrates on the transition phase from school years to adulthood and the management of adults with autistic spectrum disorder. As someone who years ago as a local councillor and doctor and then as an MP battled to help individuals with autism and their families, I want to emphasise yet again the need for co-operation between health services, social services and education. I see that the noble Baroness is nodding in agreement. Co-operation is still a headache, but it was a nightmare in my day. I understand that the joint needs assessment that each primary care trust and local authority are supposed to have undertaken to assess the needs of people with autistic spectrum disorder in their area has not really produced much in the way of results. Only 21 per cent of PCTs have actually done these assessments and I hope that the Minister can explain to us why that is and how they are to be implemented.

I apologise because I must rattle through a series of questions, to which I know that the Minister will write with her responses if she cannot answer now. I want to put on the record during this debate how much I appreciate the efficiency, pleasantness and extreme speed with which the noble Baroness always responds to queries and other points raised in debates. I turn now to my questions.

Do we know whether each area has a lead person responsible for the joint strategic needs assessments to be made by PCTs and local authorities? Who is that lead person? We know that the planning of support and care for adults with autistic spectrum disorder needs to start well before the age of 18 when they leave formal schooling. Are we sure that each individual has a key worker in the run-up to reaching 18, someone with the right training to be able to identify individual needs and plan for the future? I am sure that this will be developed in the strategy, but how many offices of the Department for Work and Pensions up and down the country have in them professionals trained to recognise autistic spectrum disorder and able to advise people accordingly?

A huge problem faced by adults with autistic spectrum disorder was mentioned by my noble friend Lord Addington in last year’s debate. Some people do not have the condition recognised when they are children. As they move into adulthood, sadly, some end up in the criminal justice system and, even worse, can often go to prison. What are we doing to identify these people before they get into trouble? What happened to the national prevalence study that was announced two years ago? So far as I know, it has not yet seen the light of day. It would be useful to have the answer to that.

I think that two weeks must pass between the Second Reading and the Third Reading of a Bill, which means that there is little time for this Bill before the Summer Recess. I urge the Minister to try to persuade the authorities to ensure that it gets through before the Recess, or three months will be lost. Only a nod is required from the Front Bench. It does not take long and there must be a way in which we can do this so that we are able to take advantage of the Summer Recess to get going on the work. Perhaps I am asking for a miracle, but I am sure that the Minister will work on it. We need the publication of both the strategy and the guidance as soon as possible.

There is increasing interest in the diagnosis and treatment of individuals with autistic spectrum disorder. It presents a huge problem when it occurs and, without proper provision and support, it can create enormous stress in a family, sometimes leading to relationship break-up, which I have seen on several occasions.

On a very pragmatic level, the National Audit Office has found that simple interventions that occur early, whether for children or adults, can save huge amounts of money later on, so they are extremely cost-effective. People with autistic spectrum disorder deserve society’s support, which must be properly planned through a strategy and with no more delays.

11:18:00

Baroness Verma
My Lords, I, too, join noble Lords in congratulating my noble friend Lord Freud on his very eloquent maiden speech. It is obvious that my noble friend will be an exceptional addition to your Lordships’ House, to which no doubt he will bring great experience and wisdom. I thank the noble Baroness, Lady Pitkeathley, for introducing this important Bill. It is heartening to witness the high level of cross-party support that the Bill has received. The National Autistic Society has called the response by Members of Parliament “unprecedented”. My honourable friend Cheryl Gillan is to be congratulated on her central role in bringing this Bill forward, and I am pleased to see her here today. I also thank the noble Baroness, Lady Pitkeathley, for setting out so clearly and eloquently its provisions in this House. I will of course have to repeat a number of points that have already been raised by noble Lords, but it is important to do so.

We all recognise the importance of supporting those suffering from autism in our society and the need to ensure that they can enjoy a quality of life that we would wish for ourselves. At Second Reading, my honourable friend Cheryl Gillan described some of the shocking detail of the lives of more than 500,000 children and adults with autism. It is worth repeating some of those statistics today. Some 42 per cent of children with autism have no friends, and the proportion rises to 75 per cent for adults, while 40 per cent of children with autism have been bullied or harassed. The number rises to 50 per cent among adults. This suggests that not only is there a failure to support and understand children with autism, but that this gets progressively worse as they grow up This is a story of exclusion and alienation that leads to unacceptable outcomes for people suffering from autism. Evidence shows that 27 per cent of children with autism have been excluded from school and that only 15 per cent of autistic adults are employed. We must engage with all the related partners to ensure that appropriate information and support is available to children right through to adulthood.

For a great many of us, it is self-evident that the Bill should enforce statutory requirements on the National Health Service and local authorities to look after people with autism, rather than only guidance. I celebrate the consensus that has been developed as the Bill has progressed. Earlier, in debates in another place, Phil Hope suggested that a Bill was not needed. Mr Hope’s statement that,

“legislation can be a very blunt and crude instrument for driving through change”,—[Official Report, Commons, 27/2/09; col. 545.]

seemed almost unbelievable coming from a Government characterised by a 12-year long addiction to legislation. It is therefore gratifying to see that this is no longer the Government’s position and that the Bill has been approached in a real, meaningful fashion.

A good example of where specific guidance is necessary is in the statutory guidance for joint strategic needs assessments. Currently, only 21 per cent of all JSNAs include any mention of the needs of people with ASD. Thus the vast majority of local authority and PCT partnerships are failing to consider the needs of people with ASD. The Government have confirmed that good practice guidance will be published this year to help assessors identify the needs of people with autism in their areas. I do not think it is enough to produce only good practice guidance. Can the Minister confirm that statutory guidance will specify that JSNAs must take into consideration the needs of people with ASD? Can I press her for a further assurance that community assessments will be carried out by professionals who have received appropriate levels of autism-specific training? Can the Minister also assure the House that this will be part of the strategy and statutory guidance?

The timing of the publication of statutory guidance, set currently at no later than 31 December 2010, means however that there could be a possible nine-month time lag between that and the publication of the autism strategy. Would it not be better for them to be published together as this would aid local authorities and PCTs in working out which elements of the strategy will be in statutory requirements? Can the Minister say why there is this delay?

The statistics regarding the lack of local information about both children and adults with autism make for chastening reading. According to the National Autistic Society, two-thirds of local authorities do not know how many children with autism live in their areas. This in itself is worrying, but, sadly, it rates better than the fact that, in comparison, only two local authorities in the country know how many adults with autism live in their areas. This chronic lack of information makes any coherent approach to tackling the difficulties faced by those with autism quite impossible. If these numbers are not known, local authorities can, quite simply, not address the needs of people with autism in their areas as they plan their commissioning of services.

I am certain that we are all aware that such a situation is unacceptable. We on these Benches wholeheartedly support the Bill’s aim to improve this information. On a more specific note, while I acknowledge the view in another place of Phil Hope that the details of improving the identification of adults with autism spectrum disorders will be determined during the consultation period, can the Minister inform the House of the steps that the Government will take to ensure that taking such measures will be proactive and focus particularly on those adults who are currently unknown to the services?

It is important that co-ordination between children and adult services offers a seamless transition for children with autism as they reach adulthood. If children with autism are to reach their full potential, there must be improvement in the support they are offered by local authorities and in the information that they and their parents are given. As the NAS has stated, 40 per cent of adults with autism live with their parents, relying on them for much of their support. This is a pernicious situation for these people and their families which can be alleviated with the proper support from their local authorities. A seamless transition requires a holistic strategy for people with ASD. How can the Government ensure that all relevant departments will participate? Will the support demonstrated by the DCSF for children with autism be built on by working effectively with the Department of Health and the Department for Work and Pensions?

We agree that this joint approach is vital for the success of the autism strategy. For better employment opportunities, it must be a key priority for this process. What measures do the Government intend to take to ensure that the DWP plays a central role?

It is reassuring that the Government have already begun work on the adult autism strategy in line with the duty the Bill will place upon the Secretary of State to introduce such a strategy. The Bill offers us a huge opportunity to positively affect the experiences of adults with autism. In its current form the statutory guidance provides for access to diagnosis, needs assessments, strategic planning of services and transition planning, and for local partnerships to meet the needs of adults with autism. The success of this guidance and of the strategy will surely depend upon the quality of their implementation. The implementation plan proposed by the Department of Health will be central to this. Can the Minister tell us whether the implementation plan is being consulted on as part of the strategy consultation? If this is not the case, what action is the Department of Health taking to develop a robust and practical implementation plan?

It is an indictment of the approach that has pertained in this country towards autism that over three-quarters of local authorities do not currently have an autism training strategy. Will the Minister assure the House that there will be appropriate guidance and training in local authorities?

It is encouraging that the Bill has provisions to ensure that statutory guidance includes the training of staff who provide the relevant services to adults with such conditions. “Relevant services” do not include such professionals as disability employment advisers. Can the Minister give assurances that these DWP professionals will have the training to enable them to support adults with ASD in finding employment, and how this will work in practice? Can she also confirm that the Government intend to provide appropriate training for all professionals with a significant role to play in supporting adults with autism? How will this be supplied? Is she able to outline whether any measures are to be put into place to ensure that appropriate housing, such as warden-controlled accommodation, will be available for adults with autism to encourage independent living?

It can make the difference between people with autism fulfilling their potential or remaining excluded from mainstream society. The National Autistic Society makes a valid point when it argues in its press release that,

“exclusion from support increases isolation and can escalate to mental health problems and other serious difficulties”.

The commitment from the Government to placing a legal duty on local authorities to collate and share data on disabled children, with autism as a specific category, is to be applauded.

Clause 1(4) requires the Secretary of State to keep the autism strategy under review and to revise it if necessary. This will require monitoring at local, regional and national levels. It will also require effective frameworks for evaluation and guidance. For this to be implemented successfully, it is important that there will be a designated person. Can the Minister say how the Department of Health intends to monitor the process of the strategy and what indicators will trigger a review? Will she commit to having a named individual within the health service who has a responsibility for successful implementation?

It is particularly pleasing that the interpretation clause of the Bill gives responsibility for both diagnosis and provision of support to local authorities and the National Health Service. It is crucial that there is no fudging of responsibilities or a lack of clarity. I am sure that noble Lords will offer the benefit of their great expertise to ensure that no opportunity to strengthen, clarify or improve the Bill is missed. I look forward to the Minister’s response.

11:29:00

Baroness Thornton
My Lords, I welcome the opening remarks by my noble friend. I am extremely pleased that she is taking the Bill through the House, and I am delighted to be speaking to it today.

I add my voice to those welcoming the noble Lord, Lord Freud, in his place in the House. His fame—possibly notoriety—goes before him, and his maiden speech did not disappoint. I am sure that we will find him moving forward with great rapidity on his own Benches, and we can all look forward to that.

I think the fact that many noble Lords stayed in their places to support my noble friend’s opening remarks tells us how important the issue of autism is in your Lordships’ House, and I am pleased to say that the Government have made clear their commitment to taking action to improve services for people with autism. Our means for achieving that is through the development and publication of the Adult Autism strategy, and most of my remarks will be addressed to adult autism. I shall make a few remarks about children and transition, as the noble Baroness, Lady Tonge, mentioned, but this is a most important discussion about adult autism. I pay tribute to Cheryl Gillan for bringing this forward in another place.

The full public consultation on the content of the strategy began on 29 April. I am pleased to say from the outset that the fact that the Bill will not reach the statute book until after the break, due to the procedures of the House, does not mean that work on the strategy and the work contained within the Bill will not begin. We are determined to do what we can, within the confines of what we can do, before the Bill reaches the statute book.

When the Bill was introduced in another place, the Minister for Care Services made it clear that, while the Government share the principles which underlined the Bill, we could not support it in the form in which it stood. That is why the Government brought forward the amendments that have made the Bill as it stands today.

Through the Bill, the Government are making clear that we will deliver what we have promised. The duty on the Secretary of State to prepare and publish a document setting out a strategy for meeting the needs of adults with autism in England by April 2010 is unavoidable. It is a mark of our commitment that we not only accept that duty but, indeed, that we proposed it.

We cannot pre-empt the consultation on the strategy, which will end in September, but with our external reference group we have identified the priority themes for an adult autism strategy. These are health, social inclusion, employment, choice and control, and training.

On health, we will identify the barriers to accessing specialist health interventions and mainstream healthcare services and propose action in the strategy to address this. On social inclusion, the strategy will address issues of employment for people with autism, as mentioned by the noble Lord, Lord Freud. That includes building on work to address the commitments in Public Service Agreement 16 to support more of the most socially excluded groups of people into employment.

We are commissioning work from the Social Care Institute for Excellence to publish evidence-based good practice guidance in September 2010 on enabling people with autism to have greater choice and control over the types of support they receive, and we will be working with professional bodies to take action on addressing the training issues. Skills for Care is carrying out a national consultation to create new knowledge sets, with the aim of publishing the basic competencies needed for workers who support people with autism. We have already made clear our intention to publish the final strategy by the end of 2009. We are happy to underline our commitment by setting ourselves a statutory timescale for this, with, of course, a sensible margin for flexibility.

In developing the strategy we are working closely with a very wide range of stakeholders—a term I hate, but I could not think of another one that encompassed the range of bodies with which we are working in terms of the voluntary sector and right across the spectrum. We want to hear from as many people as possible whose lives have been touched by autism, whether personally or professionally.

We have an external reference group comprising people with autism, family, carers and health and social care professionals involved in the front-line delivery of services. We will work closely with the group over the next few months as we develop firm proposals for the final strategy, and we are running a series of consultation events and opportunities so that we can involve many more people, especially those whose voices are less often heard.

The publication of the strategy will be only the first step. We will not simply put it into the public domain and then leave local authorities and the NHS to get on with it. I am pleased to tell the noble Baroness, Lady Verma, that the strategy will be supported by a delivery plan. We will establish clear leadership for delivery of the strategy at national, regional and local level, learning from the model set out in the Valuing People Now strategy for people with learning disabilities, which has proved to be successful in delivering and implementing that strategy.

To give teeth to delivery, we will consult on and produce detailed guidance to set out what the NHS and local authorities need to do to achieve the changes that we expect to see described in the strategy. This guidance will be put on a statutory footing for both local authorities and NHS bodies. Again, we are happy to be tied to a clear date by which that guidance will be published. Some might feel that nine months between the final publication deadlines for the strategy and the supporting guidance is rather a long time, but until we have completed the consultation on the strategy and are more certain about what the priorities for action are going to be, we cannot start working up meaningful guidance in detail.

As we are going to place an obligation on the NHS and local authorities to act in accordance with the guidance, we must allow time to consult them so that we do not set requirements that it is impossible for them to meet in practice. We may well be able to issue the guidance considerably earlier than the end of 2010, but we have taken the prudent step of ensuring that we have sufficient time to do the job properly.

With the Bill we have made a firm commitment on the key issues that the guidance will need to cover: the provision of diagnostic services, information-gathering, needs assessment, the strategic planning of services, transition planning, workforce training and local leadership.

We have already moved forward significantly on our commitment to deliver improvements for adults with autism. On 2 April the Government published guidance for commissioners aimed at the NHS and local authorities. This sets out good practice for the strategic planning of health and care services to meet the needs of adults with autism.

We are commissioning a study on the prevalence of autism in adults—I will come back to that issue in a moment—and a Public Health Observatory to further improve the data and knowledge in this area. We acknowledge that data are a major issue. We will address issues relating to the collection of data on adults with autism by engaging with local communities, voluntary sector experts and carers to work out how to overcome problems with collecting information locally.

Joint strategic needs assessments are a key mechanism for commissioners to understand the needs of local people. Information included in JSNAs about people with autism is critical to ensuring that better services are planned and commissioned locally. The work we are taking forward, including publishing guidance and sharing good practice, will help to improve the information that local services can access to inform commissioning decisions.

My noble friend has explained the Government’s proposals for children. I add that supporting children and young people with autism is an important part of the work we are engaged in through the Aiming High for Disabled Children programme. Supporting young people as they move into adulthood is perhaps the area of greatest interest and concern. That is why we established the £19 million Transition Support programme and why we have listed transition as one of the issues that guidance to support the autism strategy must cover.

The All-Party Parliamentary Group on Autism’s latest report, published last week, fits well with the existing research on young people with autism and with the larger body of research on disabled young people and transition. It highlights some key features of what should be available in good transition support, and I can confirm that these are the issues that our forthcoming research study on autism and transitions will explore. I expect that the study will begin in November this year and end in January 2012. I am sorry that, due to procurement rules around confidentiality, I am unable to give further details now; as soon as it is possible to give further information, I will certainly do so.

I shall respond to some of the points made by noble Lords, particularly the noble Baronesses, Lady Tonge and Lady Verma. I thank the noble Baroness, Lady Tonge, for her remarks and compliments. I always do my best to respond to the issues raised in your Lordships’ House, and I will continue to do so.

Both noble Baronesses asked why so few JSNAs cover autism. We accept that this is a problem, which is why we are publishing the good practice guidance. It will set out what a good JSNA looks like so that people do not fall through the net. We have not to date collected the data on the numbers of leads and named leads for autism, but I think I shall take that point back to the department and ask why that is not possible, as it seems to be a suggestion that we should pursue.

Both noble Baronesses asked about jobcentres and trained staff. The DWP is committed to ensuring proper training, but I will again pass that question to my noble friend there to see if I can put on the record specific details about how that is achieved, and I will write to noble Lords with the answers.

The noble Baroness, Lady Tonge, asked about the delays in announcing the prevalence research. In May 2008, we announced prevalence study as a key element in developing our autism strategy but, having initially pursued a single tender for this research, our procurement rules meant that that option could not be pursued. So that has led to a delay, for which I apologise. However, we remain committed to ensuring that the study starts this year and once it reports, we will have a better picture of the numbers of adults with autism. This research will aim to inform strategic planning at central and local level.

The noble Baroness asked what we are doing to ensure that health and social services share resources to support people with autism. Many people with autism who use learning disability services already benefit from pooled budget arrangements. Some 83 per cent of local authorities have a formal arrangement for a pooled budget with the NHS for services for learning-disabled people aged 18 to 64. I do not pretend that these always work perfectly, but the existing legislation makes provision for local authorities and the NHS to make use of pooled budgets, and we certainly encourage them to do so.

As usual, the noble Baroness, Lady Verma, set me many exam questions. I will endeavour to answer some, but if I cannot answer them all, I will write with the answers. The noble Baroness asked whether statutory guidance will specify that JSNAs must cover autism and that assessments should be done only by properly trained staff. We cannot pre-empt the consultation on guidance but we would expect it to address this area.

I think that I have already addressed the noble Baroness’s question about how we expect JSNAs to function. I also think that I have addressed the issue of the National Autistic Society’s briefing, how we are working with it, and the fact that it is an integral part of the consultation process.

I can confirm that we are very keen to get the views of people who are less often heard. We are using targeted discussions and e-forum one-to-one questionnaires. We are using voluntary organisations, the health service at local level and are carrying out written and e-mail approaches in groups and workshops.

I think that I have addressed the question of getting Royal Assent before the Summer Recess. The recommended minimum intervals between stages of the Bill mean that this cannot be done, but that does not mean that work is not moving forward.

The noble Baroness asked why the strategy and the guidance could not be published at the same time. I have already explained that we cannot begin to develop the guidance before the strategy is written. Until we know what the autism strategy will say, we should not publish the guidance. This is a no-win situation: of course we want to implement this but we need to make sure that we get it right.

We have made it very clear that training is a key area for public service professionals in our autism strategy. On monitoring progress, it is too early to say what indicators would trigger a review when we have not actually written the strategy yet, but once we have finalised it and highlighted the outcomes of key actions at national, local and regional level that we want to see delivered, then we will set in place arrangements for reporting and evaluation, which will be part of the strategy.

The noble Baroness asked about named individuals in the Department of Health who have responsibility for successful implementation. We agree that leadership at all levels is very important for the delivery of this strategy. We have a specialist adviser on autism, and have had since 2007. Our current adviser, Elaine Hill, leads on developing the cross-government strategy and is working to ensure that the strategy consultation reflects the views of stakeholders not only in the wider world but also across government.

I am pleased to give the Government’s support for the Bill. I hope that the House will agree that, along with the action that is now under way, it will deliver real improvements to the lives of people with autism and their families.

11:45:00

Baroness Pitkeathley
My Lords, I thank all noble Lords who have spoken. Their wisdom, experience and commitment have been apparent in their contributions. I particularly thank the noble Lord, Lord Freud, whose maiden speech managed to be moving, elegant and robust. We look forward to many more contributions from him.

I thank my noble friend the Minister as well. Her efficiency and caring have been acknowledged here today, and that has been more than apparent in her reply and the impressive way in which she has dealt with all the questions. I, too, am disappointed that there will be a delay in getting this Bill on to the statute book. I wish we could get Royal Assent today. None the less, I am reassured that work will continue apace, even though, for us, there will be a certain amount of delay.

In Herefordshire, where I live, I have been helping a family with an adult autistic son and watching the struggle that they have had to understand a system which may be more familiar to many of us but is not to them, all the time coping with their son’s behaviour, his distress, and the distress it causes them. When I see them tomorrow, I shall be a little more hopeful about his future. I thank all noble Lords.

Bill read a second time and committed to a Committee of the whole House.

Holocaust (Return of Cultural Objects) Bill

Second Reading

11:47:00

Moved By

Lord Janner of Braunstone
That the Bill be read a second time.

Lord Janner of Braunstone
My Lords, I am delighted to introduce this Bill. I declare an interest: my entire family, alas, in Latvia and Lithuania—every one of them—was murdered by the Nazis and had all their possessions stolen by their killers. So, sadly, I understand very well the need for survivors and their descendants to be able to reclaim at least some of what they lost and had stolen.

Last month, as chairman of the Holocaust Educational Trust, I joined our Government’s delegation at the Holocaust Era Assets Conference in Prague. It underlined the urgent need for restitution of a range of assets for families of the victims of the Holocaust, a process which began with the Nazi Gold Conference here in London in 1997. Our excellent head of delegation in Prague, Susan Hyland, referred in her statement to the conference to the passage of this Bill and to the Government’s support for it, support which is hugely appreciated. Indeed, the need to ensure that this kind of legislation is passed across Europe is the key reason why we were in Prague.

The Bill provides a mechanism for the return to their rightful owners of cultural objects held in national collections, objects which were looted during the Nazi period from 1933 to 1945. It gives trustees of national museums the same power to return an object as that held by governing bodies of other public museums, so will correct an anomaly in relation to national collections, which are currently prevented by law from deaccessioning.

I both commend and am grateful to my friend Andrew Dismore, Member of Parliament, for his hard work in introducing this Private Member’s Bill in the House of Commons and getting it through. He has campaigned on this issue for many years; indeed, we worked with others back in 2000 to set up the Spoliation Advisory Panel. I remember arguing the case for settling the very first claim, for a painting now in the possession of the Tate Gallery, “A View of Hampton Court Palace” by Jan Griffier the Elder. I helped those who set the panel’s terms of reference and remain entirely supportive of its continuingly important work.

As I have said, the Government’s support for the Bill is welcome and much appreciated. I especially thank the Under-Secretary of State for Culture, Media and Sport, Barbara Follett, and her officials for their commitment to the legislation. I know that the Government have long made clear their agreement in principle to legislate and that they had hoped to change the law with a heritage protection Bill, which unfortunately was not in the Queen’s Speech. I thank also the Under-Secretary of State’s predecessor, Margaret Hodge, for her efforts when we met and corresponded about this, and I thank all our political parties for their support for the legislation. Anne Webber, from the Commission for Looted Art in Europe, and Jon Benjamin, from the Board of Deputies of British Jews, deserve special praise for lending their considerable expertise, and for working so hard over so many years to help us to pass the Bill.

Two conditions must be satisfied for there to be deaccession. First, the spoliation panel must recommend that the object be returned and, secondly, the Secretary of State, and Scottish Ministers in the case of Scottish museums, must approve the recommendations. In the event that these conditions are met, the national museums’ trustees then have a discretionary power whether to return the object. So it is clear that there must be consensus for there to be restitution; the Bill cannot operate where there is any disagreement.

The Bill applies only to a finite list of institutions, outlined in Clause 1, and is applicable only to the Nazi era. As Andrew Dismore said:

“It is not a Trojan horse for any other art works or cultural items”.—[Official Report, Commons, 26/6/09; col. 1043.]
 

Clause 4 ensures that the legislation ceases to have effect after 10 years, to give sufficient time for claimants to come forward while giving the necessary long-term certainty to our national collections. It is estimated that there may be anything up to 20 looted items in our museums.

It is clear that the law as it stands is leading to unjust and unfair outcomes, and two cases, both heard by the spoliation panel in 2008, demonstrate why. A claim was made for two pieces of porcelain from a Viennese collection, one in the Fitzwilliam Museum and the other in the British Museum. The former was restituted, but the panel believed that it could not recommend restitution of the second piece, because it was said that there was no sign that the Government were going to change the law. It therefore awarded—happily—an ex gratia payment.

This vital and, I hope and believe, uncontroversial Bill prevents similar inconsistencies and allows at least some survivors and their families finally to recover what they have lost. I was delighted that the Bill received all-party support in the House of Commons; I hope that it will receive the same united support in this House. It provides a clear, narrowly defined and consensus-oriented proposition, with appropriate safeguards, for deaccession from national collections. I wholeheartedly commend it to the House. I beg to move.

11:55:00

Lord Haskel
My Lords, I am delighted to speak in support of this Bill and I congratulate my noble friend on bringing it before us today—the day of his birthday lunch. As he has said, this is a simple Bill to enable trustees to return cultural objects looted by the Nazis to their rightful owners. Quite rightly, safeguards are built in and it still leaves intact the rights and responsibilities of trustees and directors to look after the cultural objects under their supervision and control.

It would have been quite easy to do nothing. After all, these events occurred some 70 years ago and the objects are few in number. It says something about the values of our Government and our country that we are taking action to right a wrong and to correct an injustice that occurred some time ago. However, the need for the Bill has been apparent for some time. Had it appeared earlier, other countries could not have used our delay as an excuse for their inaction. But it is now on its way in a dignified and trusting manner, which does not involve lawyers and all their costly and lengthy adversarial arguments but relies on the good sense and discretion of those who make up the spoliation panel. As my noble friend said, they have worked hard and conscientiously for some years. I, too, would like to place on record my thanks for, and congratulations on, their work.

My noble friend will remember that this was the way in which the Government righted another wrong 10 years ago. He will remember that, 10 years ago, I announced from that Dispatch Box the enemy property payment scheme, which appointed a similar independent panel under the chairmanship of my noble and learned friend Lord Archer of Sandwell to adjudicate on claims for compensation to victims of Nazi persecution whose property was confiscated by the British Government during the Second World War under the trading with the enemy legislation. Many of the claimants were of course Jews fleeing persecution.

My noble friend has indicated that there are few objects relating to the Bill; the number 20 has been mentioned in another place. When the enemy property payment scheme was announced, there appeared to be few possible claimants then, but the existence of the scheme and the attendant publicity stimulated and encouraged others to come forward, many with modest but justified claims, and not only for money—one was for a gold cigarette case, another for small items of jewellery sent through the post. I hope that the same will happen again and that this Bill will encourage more people with justified claims to come forward. Perhaps they have not come forward earlier because the objects are modest, but those objects may well have family or sentimental value to them and their descendants.

I say now as I said 10 years ago how much I welcome the low-key and dignified manner in which these wrongs are being put right. Some of the objects were taken because the owners were Jewish. Dealing with the return of these cultural objects in a high-profile manner would only add to the feeling that all Jews are victims. That is why I approve not only of the Bill but also of the manner in which it will work. Perhaps I should declare that I myself am an immigrant. One thing that immigrants do not want to pass on to their children is the feeling that we are victims owed something by society. On the contrary, we want them to feel fortunate that they have an opportunity to contribute to life and society in this country. The Chief Rabbi made exactly the same point in his latest book. So we must make certain that the return of these objects does not further the victim culture.

The Nazis took many objects of Jewish culture and banned works of Jewish composers and writers. They even banned the music of Mendelssohn. The intention was to erase the Jewish cultural presence. In this intention, they did not succeed. The rich heritage of Jewish culture and the effect of the Jewish presence on European culture continue. For the past 10 years, the European Association for Jewish Culture has awarded over 100 grants to European artists, writers and composers, both Jewish and non-Jewish, who have created new works based on the European Jewish cultural experience. The association is to be congratulated on its work in adding new works to a rich heritage. This has always seemed to me a more positive response to attacks on Jewish culture.

As my noble friend said, there is still lots to do, but this is a welcome step in the right direction. I thank all those who have worked on this Bill for their hard work and endeavour and I wish it a quick passage through your Lordships’ House. I support the Bill.

12:01:00

Baroness Warnock
My Lords, I very much welcome this Bill and congratulate the noble Lord, Lord Janner, on bringing it forward. I declare an interest as a member of the Spoliation Advisory Panel, since it was first set up by the Secretary of State for Culture, Media and Sport, under the extremely able chairmanship of Sir David Hirst, to whom I pay warm tribute. He has worked extraordinarily hard with the other members of the panel, but the burden of the work has largely fallen on him.

The terms of reference of the panel are as narrow as the terms of reference of the Bill. The concern of the panel has been extremely limited; it has been to recommend a fair solution to cases in which cultural objects were looted, stolen or disposed of by forced sale in the Nazi era—that is, between the beginning of 1933 and the end of 1945. The panel has examined nine cases that have been referred to it voluntarily since it was set up. In three of these, the preferred solution would have been restoration of the objects to their rightful owners, but in two cases out of the three this was not possible because of the law against deacquisitioning that governed the national museums of England and Scotland. The law does not cover any museums in Wales or Northern Ireland.

In 2000, the Select Committee on Culture, Media and Sport recommended that legislative barriers that prevented morally proper restoration should be removed. In the same year, the advisory panel recommended that permissive legislation should be introduced. The panel’s recommendation in 2000 followed a particularly tricky and fascinating case, in which not an individual but a library was claiming restoration of a rare Beneventan missal, apparently looted after the destruction of Monte Cassino, sold to Sotheby’s by a returning British officer, now deceased, bought by the British Museum from Sotheby’s and then in due course passed on to the British Library, where it now is. The missal was extremely valuable as a beautiful example of a kind of local script that gave, along with the words of the Mass, a kind of indication of how these words should be sung. It was a kind of early attempt at written musical notation. The view of the panel was that this priceless object belonged in the place where scholars were most likely to benefit from and enjoy it. There are other examples in the same area of Italy of this kind of script, although not exactly the same. The case did not seem to fall exactly under the terms of reference, because there is no particular evidence that the missal was looted by the Nazis, nor was it a Jewish family who was claiming restoration. Nevertheless, it fell squarely within the time of our remit, and the looting would not have happened if it had not been for the war. Unfortunately, the present Bill, if it becomes law, will not be retrospective, but the principle that informs the Bill is absolutely right, as exemplified in this particular case.

Finally, all the recommendations that the spoliation panel has made and all those that will be made by the new advisory panel are based on moral considerations. Legally, the statutory time for complaints of wrongful acquisition or failure to take proper account of provenance has long been passed, in all these cases. Our task on the panel was to ask whether, nevertheless, there were moral reasons for recommending restitution or compensation. There is no danger of a slippery slope argument being deployed here—and your Lordships will know that I am not a friend of that type of argument in any circumstances. Each case will be examined separately by the advisory panel and its advice passed on; each will be examined with extreme care on an individual basis, so there is no danger of any extension of this kind of order for deacquisition. This has happened in the past and will happen in the future; each case will be examined separately. Moreover, there is a sunset clause, which ensures that there will be re-examination of the case. Sadly, the number of cases is likely to fall—indeed, the number of cases coming before the panel has fallen and is now a trickle, because the families, sadly, die out.

I recommend the Bill to the House as absolutely timely, if not belated, and an extremely good example of just and fair legislation.

12:09:00

Lord Strabolgi
My Lords, I am very glad to follow the noble Baroness, Lady Warnock. I am sure that we are all grateful to my noble friend Lord Janner for introducing this Bill, which, as he said, has already been passed by another place.

The power that the Bill gives to national museums and galleries to return a cultural object taken by the Nazi regime from mainly Jewish collections in the occupied countries is long overdue. The confiscation of so many cultural treasures from private collectors by the Nazi leaders in order to line their own pockets was big business. During the Nazi occupation of Paris, so many paintings were taken that the authorities had to take over the Jeu de Paume in the Tuileries to house them. These were then sold through intermediaries, mainly to art dealers in Switzerland, which was a neutral country. The Swiss dealers would sell on the works of art either to other dealers or to private collectors in Switzerland and the United States, who bought them in good faith. Many, of course, must have changed hands several times during the past 60 years, when the original provenance was not known. Some must have arrived at our national museums and galleries through gifts and in lieu of inheritance tax.

Most of the original owners died in the horrors of the Holocaust, when whole families were murdered in the extermination camps of Auschwitz and Treblinka. There are no heirs in many cases. But there are heirs in some cases, who are entitled to claim. The Bill allows the item to be returned if the advisory panel recommends it and this is approved by the Secretary of State. This is surely the least that we can do. I support the Bill wholeheartedly and hope that your Lordships will give it a Second Reading.

12:11:00

Baroness Deech
My Lords, this is no ordinary Bill before your Lordships’ House. It is a short one but a complex one. Art is an ethical issue. Displaying looted art, once it is known to be such, is not just an invasion of privacy and a demonstration that wrongdoers may indeed profit from their crimes; it is also putting on show something that the owners never meant to be seen in such circumstances. It has ceased to be an object of beauty and one that museums can be proud of or use for educational and aesthetic aims. The spectator cannot look at it without seeing the pain and betrayal that led it to be situated there in a national museum. It taints the spectators who knowingly take advantage of the presence of the picture there and it speaks to them of loss and war, not creativity and insight. It is a well known principle in physics that the act of observation changes the object observed and there is something of that principle in our viewing of looted art.

The Bill has an exemplary background of preparation. The UK set up the Spoliation Advisory Panel in 2000 consequent on the Washington principles of the 1998 conference on Holocaust assets, agreed by all the then EU states, and a total of 44 states in all. The panel provides mediation and takes moral issues into account, as stressed by the noble Baroness, Lady Warnock. Its existence recognises that the people who lost property in the Nazi era face many obstacles in proving legal ownership in the civil courts, though they may also choose that route. The museum directors set up a working group in 1998 to establish principles governing provenance and spoliation; the Select Committee on Culture, Media and Sport supported this approach in its seventh report and the advisory panel recommended this legislation. The Bill fills a gap because other museums already have a power to return or to offer compensation. The museum may, however, still refuse to carry out the recommendation of the panel and the Secretary of State. The Bill passed through the Commons swiftly.

This is not the Elgin Marbles situation, because in the circumstances covered by the Bill there is a known victim of a strictly defined period. The victims were ideological targets of the destruction of a people along with their goods; indeed, the looting possibilities may have provided an extra inducement to carry on to mass extermination. This form of looting was recognised as early as 1943 by the Inter-Allied Declaration.

The recent Terezin Declaration of the June Prague Holocaust-era assets conference called on nations to do exactly what is being done in the Bill, and the UK, which had a delegation to the conference, was praised for its initiative. I echo the sentiments of the noble Lord, Lord Freud, in his brilliant and moving maiden speech earlier today, and of the noble Lord, Lord Haskel, in expressing gratitude to this country for its movement towards the correct principles in this situation and for its tolerance and nurturing of those who came here in 1939 and earlier, deprived of all their worldly goods, and who had to rebuild their careers.

The declaration of the June Prague conference together with the joint declaration by the European Commission at the same conference reminded nations that they should support intensified systematic provenance research in archives, make the results known on the internet and establish mechanisms to assist claimants.

The Bill’s provisions are a model for what should happen in relation to real property looted during the Nazi era, all of which is situated in the European Union countries—not here, of course—where the conflict and the seizures took place. The Terezin Declaration likewise called on those countries that have not yet made restitution—the most egregious of them is Poland, and here I declare a possible interest—to do so along these lines, and Her Majesty’s Government by signature have aligned themselves with this. I commend the Bill to your Lordships and look for ultimate justice and peace of mind for those who lost their lives in the war and whose well chosen artefacts are the living and permanent reminder of their lost existence.

12:17:00

Lord Clinton-Davis
My Lords, I speak in the gap because I did not know that I could be here today. However, I am very glad to follow the noble Baroness, Lady Deech, who has made a powerful speech—indeed everyone who has participated in the debate has done so. I congratulate my noble friend, whom I have known for many, many years, on promoting this overdue Bill. He has done a service to Parliament and to many people who have suffered, as the noble Baroness said, at the hands of the Nazis. They are a depleting band of people but it is nevertheless important that both Houses—the Bill has excited no opposition in either—should support what my noble friend is trying to do. The Bill is designed to ensure that an equitable solution can be available to those who have suffered so much. They deserve no less.

Perhaps I may also pay a tribute to the father of my noble friend Lord Strabolgi. He did so much to excite my interest and awaken my concern about so many issues which this Bill represents. He spoke when I was a child and I listened assiduously to him. I am glad to say that my noble friend has very worthily followed in his footsteps. He spoke brilliantly today and I wish only that we could hear him more often.

The Bill is thoroughly welcome. As my noble friend Lord Janner said, it is belated, but it is very important because it gives hope to so many people who would otherwise feel forgotten.

12:20:00

Baroness Uddin
My Lords, I hesitantly rise to pay my tribute to my noble friend Lord Janner and all noble Lords who have spoken. Given their prolific knowledge and understanding of this matter, I am extremely hesitant, but I was emotionally pushed by what I have heard to support this Second Reading. It is a great tribute to my noble friend’s work. I congratulate him and salute all noble Lords who have spoken in the debate, although I missed some of it. It gives great hope to the relatives of those who lost their lives in the Holocaust and brings back a sense of honour and pride. I hope that the Bill is supported by all sides of the House.

12:21:00

Lord Maclennan of Rogart
My Lords, I begin by expressing gratitude to the noble Lord who introduced the Bill and appreciation to Andrew Dismore in another place for so persistently pursuing these objects. All that needs to be said about the purposes of the Bill has been said with great eloquence during the debate, notably by the noble Lord, Lord Haskel, and the historical background was further expanded by the noble Baroness, Lady Deech. I was particularly happy to hear from the noble Lord, Lord Strabolgi, whose words of wisdom will no doubt have struck a chord across the House.

If I appear to be focusing on matters that might be thought to be Committee points, I do not necessarily expect them to be dealt with today, but I hope that when the Minister replies, he may bear them in mind and, if they can easily be dismissed, he will do so today, or will otherwise reflect upon them.

I first came to grips with the problem that we are grappling with here as long ago as 1964 when I worked in a distinguished law firm on Wall Street. Our clients were a family of Czech refugees who had suffered despoliation of their inheritance at the hands of the Nazis. It is with some wry wonder that I think that it happened so long ago, yet there are still evidences of the injustice that have not been put right.

That brings me to the duration of the Bill and its scope. It appears that it is perfectly possible that works that were looted during the period that the Bill covers may emerge and even come into the hands of institutions within the United Kingdom other than those listed in the Bill. I know that the auction houses Sotheby’s and Christie’s do good research into the provenance of works of art in many public collections and further afield. It is conceivable that there could be other discoveries in the years ahead. I have heard, and I have no reason to doubt it, that the number of cultural objects that has been mentioned is what is known now. I wonder whether it might be worth while adding to the Bill, perhaps at a later stage, a power by order to add to the list of national museums any other recognised national museum that comes into possession of such a work of art at a later date. It is intended that the Bill will expire after 10 years. The sunset clause is an indication that this is not a matter that will go on indefinitely. However, there is still considerable movement of art around Europe and the wider world, and there are those with a commercial interest in discovering where it is moving to who may, in the course of time, come up with information that would be relevant but not covered.

The Bill, perfectly properly, does not deal with the tax issues that may be incidental to its effectiveness. Although some reference was made to this in another place, it would be of interest to know the Government’s thinking about this. I understand that any proposals to change our tax law to take account of those issues would be handled in a finance Bill, but it is important that the concerns of this House are taken into consideration in drafting such legislation in future. As a result of its almost de minimis nature, it would seem sensible to give some thought to these matters during the passage of this legislation. For example, what would be the appropriate level of capital gains tax to be paid if an object is sold after being returned to its initial owner? If an ex gratia payment is made, should it be free of tax? Should there be exemption from inheritance tax? If someone donates an item to a museum that is subsequently proven to be of doubtful provenance or to belong to someone else, should the tax advantage gained by donating the item be lost? It seems to me that it should not. These are all matters of substance that are worthy of consideration before they are confined to the footnotes of some future finance Act.

I understand that the Bill has been helped by the support of the Government, and a very useful Explanatory Memorandum was prepared by the Government in consultation with the noble Lord. For that, we are very grateful. I am not entirely sure whether the language of the Bill was similarly subject to a dialogue with the Government to the extent that the Bill reflects the Government’s thinking in its detail. I shall mention a couple of points that might be of slight help.

There is a reference to Scottish Ministers having to be consulted in the event of objects being in the listed cultural institutions in Scotland. It is not entirely clear whether those Scottish Ministers are Ministers of the United Kingdom Government, Ministers of the Scottish Executive or both. I think this may be a matter of standard statutory interpretation, but I am not entirely sure that it is. I should therefore be grateful for elucidation because there is a Scottish dimension to this. I understand that the Scottish Parliament has already been consulted about the purposes of the Bill and that a reply is awaited. It would be inconceivable if approval were not to be forthcoming from that quarter.

I hope that these remarks are constructive. They reflect my strong support and that of my noble friends for the purposes of the Bill. Some concerns have been expressed externally about the possibility of it being widened to cover bigger and broader issues, but the Bill has been cleverly drafted to deal with specific issues, which it does very well. I hope that it will pass.

12:30:00

Earl Attlee
My Lords, I, too, am grateful to the noble Lord, Lord Janner of Braunstone, for introducing the Bill, and for the careful way in which he has explained how it will work. We should all pass our congratulations to Mr Andrew Dismore in another place on piloting it through that House.

I have heard nothing today with which I disagree. The one certain way of finding ourselves in another holocaust is either to forget about the events of the Nazi era or to deny them—simply to airbrush them from history. We must never, ever do that. I have personally seen, both in Bosnia and Rwanda, how difficult reconstruction can be post-genocide or ethnic cleansing. Some believe that installing democratic processes must be the highest priority in these situations, but security, justice and the rule of law can be more important. Property rights are an important component of this, but are clearly very difficult to provide for.

The Bill marks a positive step forward in the moral and legal task of redressing some of the wrongs committed in the Nazi era in regard to the looting of cultural objects. The Holocaust Educational Trust and other bodies have done a good job, along with the Government, in helping Holocaust survivors and their relatives trace and recover lost works of art and in keeping up the profile of the cause. A legal solution to this problem need be delayed no longer. While some Holocaust survivors are still alive we must concentrate our efforts to honour them and the members of their families who perished, and to pursue the course of justice and restitution as soon as possible.

The Holocaust was a horrendous and shameful period and its legacy weighs on us all. The noble Lord, Lord Janner, was right when he noted that history will judge the nations who participated by their conduct today. Immediately after the war, restitution of property was not a major priority for the allies, leading to many objects being scattered around Europe and lost to their owners. As time progresses and these owners become fewer, the Bill is one of the last chances to ensure that justice prevails and a right which has been denied for decades is recognised.

There are some tax implications that I am aware of, and the noble Lord, Lord Maclennan of Rogart, touched on them. To me they sounded frighteningly complex and I do not pretend to understand them. I will certainly not articulate them, lest any noble Lord challenge me on the details. Is the Minister confident that these issues have properly been thought through? We need to be aware of the law of unintended consequences. For instance, it would indeed be a harsh result if a work restored to a claimant shortly before his or her death had to be sold or returned to a public collection to pay or minimise the liability of the claimant’s estate for inheritance tax—a point well made by the noble Lord, Lord Maclennan of Rogart.

The Bill also makes it clear that it is in no way extendable to the problems of regions and times outside the Nazi era, even though claimants might argue that the circumstances in which cultural and religious objects were removed from their original societies were of a comparable severity. However, the nature and extent of the Nazi atrocities were quite exceptional—orders of magnitude greater than the disasters of Bosnia and Rwanda. There should be no implication of an argument, by extension, that if claims for cultural objects wrongfully taken by the Nazis can be accepted, so too should claims for deaccession arising from other circumstances in other eras. The Museums Association’s code of ethics for museums, which was updated in 2007, already covers claims regarding objects from other periods, and sets out agreed ethical codes and standards that allow museums to deaccession items from their collections, subject—in the case of national museums—to statutory limitations. The museums and libraries authority has ensured that its accreditation scheme has incorporated this code of ethics.

Finally, although the existing Spoliation Advisory Panel is able to offer a swift, independent and transparent assessment of claims in a way that is cost-effective for all parties, its recommendations are rightly only advisory. The power of independent decision-making remains with the museums. This will maintain the arm’s-length principle on which our national museums, galleries and libraries are governed. Can the Minister confirm that the existing Spoliation Advisory Panel will be the advisory panel mentioned in the Bill?

In conclusion, we on these Benches support the Bill and look forward to it receiving Royal Assent in due course.

12:36:00

The Minister for Communications, Technology and Broadcasting (Lord Carter of Barnes)
My Lords, I am pleased, if somewhat humbled, to represent the Government on this Private Member’s Bill, and to follow what has been an august range of speakers, all of whom have demonstrated their personal interest in many instances. Speaking personally, listening to some of the personal passion and commitment has been an experience in understanding the reality of the work of the Spoliation Advisory Panel, and the case and need for permissive legislation. I echo the earlier comments of another noble Lord about the power of the particular points made by my noble friend Lord Strabolgi. There were some powerful reminders, particularly from the noble Baroness, Lady Deech, that an essential element of the enjoyment of art is informed by the knowledge of its provenance involved in the act of observation. That should be borne in mind by the institution as well as the participants.

This whole debate has reminded me of the importance of restitution, of perseverance on issues that people care about, and the mechanisms that acknowledge the morality, as well as the legality, of claims. As an aside, it is also, in procedural terms, a shining example of the power of a Private Member’s Bill to make a real difference. Andrew Dismore deserves both thanks and admiration for what my honourable friend in another place described as his “sleepover technique” in securing a Private Member’s Bill. The Government have offered our strong support to the Bill in the other place, and have worked closely with the honourable Member for Hendon, who introduced it, to ensure that it both matched the Government’s own policy objectives in this area and was in good shape for debate and consideration by this House.

I am doubly pleased and personally honoured that the Bill has been taken up by my noble friend Lord Janner, who is so knowledgeable on these issues and who has campaigned for so many years for the restitution of property belonging to Holocaust victims. Indeed, he was instrumental in arranging the Nazi-looted gold conference that took place in London in 1997. As the noble Lord mentioned in his opening speech, he has only recently returned from the Conference on Holocaust Era Assets in the Czech Republic, where he delivered a powerful statement on his personal involvement in this work and the efforts that have been made internationally to address the restitution of Holocaust-era assets. The outcome of the conference was the Terezin declaration, supported by 46 countries, which seeks, among other things, to further efforts to bring about the restitution of Jewish cultural property lost during the Nazi era. That is, of course, highly relevant to our debate today.

If any further evidence of the commitment of the noble Lord, Lord Janner, were needed, I am aware that he has regrettably had to cancel an important birthday celebration—I am not sure which number it is, or that he would thank me for mentioning it even if I was—in order to be here today. I hope the House will take note of that and join me in wishing him many happy returns for tomorrow.

Setting to rights the terrible crimes committed during the Second World War is just as important for us today—perhaps even more so—as it was following the defeat of the Axis powers in the 1940s. The widespread and systematic seizure of cultural property in territories occupied by or under the control of the Nazis and their allies has been recognised in international declarations—the latest as recently as last week, as I have just said—as warranting particular recognition and deserving of special treatment for more than half a century. The 1943 Inter-allied Declaration, for example, signed by 16 countries, including the United Kingdom, resulted in a commitment by those states to do all in their power to defeat the methods of dispossession in territory under enemy occupation or control. At the 1998 Washington conference on Holocaust-era assets, 44 states, including all EU member states, adopted non-binding principles to assist in resolving issues relating to Nazi confiscated art, and the Vilnius Forum Declaration in 2000 asked all Governments to undertake every reasonable effort to achieve restitution of cultural assets looted during the Holocaust era to their original owners.

Compared with many other European countries, the recovery of looted art has not been a major problem in numerical terms in the United Kingdom. Unlike the Netherlands or France, for example, where many hundreds of works of art have been returned to claimants over the years, very few looted paintings and other cultural objects have been uncovered in UK museums. Indeed, the Spoliation Advisory Panel, established in 2000 to provide advice to claimants and institutions on what might be appropriate solutions, has considered only nine cases in the nine years it has been operational. The honourable Member for Hendon said in the other place that there were a possible further 20 cases in the pipeline. Indeed, this was referred to by two noble Lords today. I do not know what knowledge the noble Lord, Lord Janner, has of these but the Government—and I think that I can speak for the Spoliation Advisory Panel on this point—would certainly find it helpful to know more about these potential claims, if for no other reason than to be able to plan and prepare for the work.

However, this debate and this legislation are not determined by the scale of the problem or the number of applications. As several noble Lords have said, it is about recognising an overwhelming moral imperative to ensure that, where the Spoliation Advisory Panel finds that it would be appropriate for a museum to return a lost item, it is able to do so. That can only be right and I am sure nobody would argue against that.

As regards what the Bill seeks to do, there are currently inconsistencies in how claims made to the panel are resolved. In the case of the national museums listed in the Bill, primary legislation prevents the trustees removing an item from the permanent collection in this way and, when the panel recommends the return of an item, claimants are offered an ex gratia payment instead. However, university museums and those run by local authorities are not prevented by similar express statutory restrictions from so returning an item. As the noble Lord, Lord Janner, highlighted, a good example of how this inconsistency can arise was demonstrated recently in the Spoliation Advisory Panel’s eighth report on a claim presented by the same claimant for two pieces of porcelain, one in the British Museum and the other in the Fitzwilliam Museum in Cambridge. The panel found in favour of the claimant and recommended that the item in the Fitzwilliam, which is not subject to a statutory restriction on the disposal of objects in the collection, be returned to them and that they receive an ex gratia payment for the item in the British Museum, which is currently prohibited by statute from returning such an object.

While, throughout the history of the panel, claimants have generally been content to receive an ex gratia payment, the Government believe that museums should not be prevented by statute from deciding to return an object following the recommendation of the panel. In its seventh report in 2000, the Select Committee for Culture, Media and Sport, stated:

“We consider that the case for special treatment of alleged wrongful taking during the period 1933 to 1945 has been convincingly established”—
 

I believe that point was echoed by the noble Earl, Lord Attlee—

“It is appropriate that the Spoliation Advisory Panel has been created to ascertain the facts of individual cases and to recommend an outcome for claims which are upheld. While there are merits to a solution which secures continuing public access to an object in a museum, that interest must be seen as subordinate to the interests and wishes of a rightful owner. Where a claim has been upheld and restitution is seen as appropriate by all parties, it is essential that legislative barriers to such restitution be removed”.

As the noble Baroness, Lady Warnock, recalled from first-hand experience, in its second report on the Beneventan Missal in 2005, the panel, guided by the advice of the Select Committee, recommended that legislation be introduced to amend the British Museum Act 1963, the British Library Act 1972 and the Museums and Galleries Act 1992 so as to permit restitution of objects in this category.

In 2006, the Department for Culture, Media and Sport conducted a public consultation on the issue of Nazi era restitution.

Lord Maclennan of Rogart
My Lords, I am most grateful to the Minister for giving way. Before he leaves the point that the noble Baroness made, she said that the Bill was not retroactive. Consequently, I am uncertain whether, following the passage of the Bill, it will be possible to deal with the Beneventan Missal case. Could the Minister help us on that?

Lord Carter of Barnes
My Lords, I will seek an answer and return to that, along with the noble Lord’s other searching Committee-like questions, in a second.

The conclusion was that removing the statutory restrictions that stop museums deaccessioning works of art lost during the Nazi era would be beneficial to all. It was also felt that legislation should include a sunset clause. I think that point was raised earlier by the noble Lord.

In 2008, the Government planned to include clauses in the Heritage Protection Bill to allow national museums to return works of art lost during the Nazi era but it was not possible for the Bill to be included in the congested legislative programme. The Government were therefore understandably keen to support this Private Member’s Bill which, I am glad to say, following a number of amendments made in the other place, now closely resembles the policy proposals we had intended to take forward in 2008.

The Bill will give the 17 national museums in England and Scotland named in the Bill a power to transfer an object in their collection, where it is found to have been lost between 1933 and 1945 by an advisory panel designated by the Secretary of State. In answer to the question of the noble Earl, Lord Attlee, that will be the Spoliation Advisory Panel. This is also the case where the Secretary of State, with the consent of Scottish Ministers—in answer to the noble Lord, Lord Maclennan, devolved Scottish Ministers—has approved the advisory panel’s recommendation in respect of a Scottish museum. The intention is to designate the Spoliation Advisory Panel, whose authority and advice is widely acknowledged and respected in this field. Thus, the power to return an object would apply only to those cases where two conditions were satisfied. First, the advisory panel must uphold the claim and recommend the return of the object and, secondly, Ministers must approve that recommendation.

The power in the Bill will not override the conditions attaching to objects held in trust. The requirement that the Secretary of State must approve the panel’s recommendation reflects current practice and provides a safeguard in the unlikely event of an irrational recommendation by the panel.

The Bill includes a sunset clause, which will ensure that the power in the Bill ceases to have effect 10 years from the date of Royal Assent. The noble Lord, Lord Maclennan, asked whether the duration of the sunset clause was appropriate. I will clarify that in an answer to him, but my understanding is that there was a significant degree of due diligence before that term was specified in the Bill. It was judged that that period would balance the interests of providing access to restitution with some planning certainty for the institutions. As I recall, it also reflected the majority of the views expressed in the consultation.

The Bill consists of four clauses. The bodies to which the Bill applies are listed in Clause 1. The power to return victims’ property is set out in Clause 2. This clause sets out the two conditions that need to be met to trigger the power for the trustees of one of the institutions named in the Bill to transfer an object from its collections. Clause 3 defines the advisory panel for the purposes of the Act, as has been discussed. The panel is to be designated by the Secretary of State and he or she may designate only a panel whose functions consist of considering claims in respect of objects relating to events during the Nazi era—1933 to 1945. Clause 4 deals with the Short Title, extent, commencement and the sunset clause.

We have had discussions with the devolved Administrations on the Bill. There is no need for these powers to apply to institutions in Wales or Northern Ireland, because the principal museums there are not subject to the same sort of statutory restrictions on the return of an object to a claimant. On the other hand, Scottish national museums are subject to the same sort of statutory restrictions and are included in the Bill, following the passing of a legislative consent motion in the Scottish Parliament.

I shall conclude by providing the House with some reassurances and by clarifying two or three specific points that have been raised in the debate. On a point raised by the noble Lord, Lord Janner, I should make it absolutely clear that the principle and practice of consent applies here. This is a power of permission, not compulsion. Museum trustees will continue to take the final decision on whether to return an object that has been recommended for return by the panel. This is in keeping with the long-established arm’s-length principle, which recognises that trustees are responsible for the items vested in their care, and that it is not for Governments to tell the trustees what to do with them.

The power in the Bill has been narrowly defined, and linking it to a recommendation by the designated advisory panel will ensure that museums can transfer only items lost during the Nazi era. Those issues were raised by the noble Earl, Lord Attlee, and the noble Baroness, Lady Warnock. The Government consider that, as in the case of human remains on which we legislated in 2005, it is right to allow museums to remove items from the national collections where there are overwhelming moral grounds to do so. The Holocaust era was unique in that it represented a systematic campaign of evil by the Nazis to eliminate whole races of people and their cultures. The widespread and systematic deprivation of property in the Nazi era and the problems faced by individuals seeking to recover their property has also been widely recognised in international declarations as requiring particular measures to remedy these terrible wrongs.

The Government are committed to maintaining our national collections and support the role of museum trustees as the guardians of these collections. The Government will resist other measures that would break up and disperse our national collections.

The Terezin declaration of 30 June 2009, to which I referred at the beginning of my comments, encourages countries to invest more into carrying out provenance research on items in national collections. UK museums have a very good record on carrying out provenance research into the objects in their collections, and it is commonly recognised that the years 1933 to 1945 require special attention where there are gaps in the provenance during those years. The Government have issued guidance on collecting and borrowing art, which also includes advice on these specific issues. Museums publish information about works in their collections where there are gaps in provenance during that period on a searchable spoliation database located on the cultural property website, www.culturalproperty advice.gov.uk.

In response to a specific question, the power in the Bill will not be retrospective. If, after the legislation comes into force, a further claim is made for an item that the Spoliation Advisory Panel has already considered, such as the Beneventan Missal, it will be up to the trustees of the institution concerned to decide whether once again to refer the claim to the panel. I hope that that provides clarity.

There was a whole range of taxation questions, not least on how capital gains tax applies to an institution, what obligation there is on the individual, what the inheritance tax threshold obligations are, and the potentially invidious situation raised by the noble Earl, Lord Attlee, of individuals being forced into sale in order to deal with the beneficial consequences of restitution. There is a series of detailed answers to those questions but, in the interests of time, I shall not go through each of them. Our judgment is that it does not make sense to put them in the Bill, as the noble Lord, Lord Maclennan, asked, but I will provide both noble Lords with a detailed exposition of the responses that I have had from HMRC and the Treasury on both those questions, because they are clearly important.

In summary, the Bill is a simple, four-clause measure designed, as a number of noble Lords have highlighted, to correct an anomaly in the way that national museums are able to deal with requests for the return of items in their collections that were lost during the Nazi era, and it seeks simply to place all museums on a level footing. I commend it to the House.

12:55:00

Lord Janner of Braunstone
My Lords, I thank all speakers, and especially the Minister, for what they have said, and of course I am very grateful for the kind birthday wishes that I received. I especially greatly appreciate the unanimous support for the Bill from all sides of the Chamber, and I now ask the House to give it a Second Reading.

Bill read a second time and committed to a Committee of the Whole House.

Driving Instruction (Suspension and Exemption Powers) Bill

Second Reading

12:56:00

Moved by

Lord Tyler
That the Bill be read a second time.

Lord Tyler
My Lords, this is a modest but potentially very important Bill. Unusually, perhaps, it received extremely thorough scrutiny and examination before and during its progress through the other place, where there has been complete unanimity in support of it across all parties—Front Benches and Back Benches. Its introduction and process through the Commons was led by my honourable friend Willie Rennie, but it had generous and very enthusiastic support from Ministers and shadow Ministers on all Benches. It has also had substantial and thorough preparation, and a complete absence of any opposition. There were only a small number of simple, technical amendments during its Committee stage. It has also had the benefit of very comprehensive and supportive briefings from all the outside interests concerned with the problems with which the Bill deals. Therefore, exactly what are the problems that have been identified—actual as well as potential—with which the Bill is concerned?

Although there has for some time been some recognition of a loophole in the law relating to the regulation of driving instructors, the matter only really came to a head in 2005 and, sadly, missed an opportunity in that year to be incorporated in legislation. However, in that year, Ms Lesley Anne Steele, living in the constituency of my honourable friend, suffered the traumatic experience of a serious sexual assault by the instructor who had been teaching her to drive. During the Third Reading debate in the other place, Mr Rennie repeated the account of what happened next, as subsequently given by Ms Steele, who very courageously waived any anonymity. I do not intend to repeat it in detail but I can give a short résumé of what happened.

The instructor who made the assault was charged, found guilty and placed on the sex offenders register but continued to teach vulnerable learner drivers, even in the immediate vicinity of Ms Steele’s house. Therefore, her dreadful experience appeared to have had no proper remedy. Members of your Lordships’ House will not be surprised to know that she was amazed, horrified and angry. Having no recourse or hope of remedy under the existing law, she eventually sought the assistance of her constituency Member of Parliament. This Bill closes the alarming loophole which she, and then he, discovered.

The background is that paid instruction on how to drive has been a regulated activity for some 40 years. It is now covered by the Road Traffic Act 1988, the RTA, and the Road Safety Act 2006, the RSA. Approved driving instructors, ADIs, are registered by the Driving Standards Agency, the DSA. To gain entry to the register, instructors must pass a series of examinations and, most importantly, they must be demonstrably fit and proper persons. Under the RTA, the registrar has power to remove a person from the register if satisfied that they have ceased to meet those various conditions. However, there is a long, potentially cumbersome process of notification, response, review and even appeal before that actually takes place. I am advised that the minimum delay during that process is 45 days from the date on which the instructor is notified. Obviously in a serious case such as I have described, a delay in deregistration of several months is totally unacceptable and hence this Bill.

The Bill's main purpose is to provide that the registrar can suspend an ADI at exactly the same time as notification is given that his or her name can be removed from the register. It does not weaken or undermine the due process of deregistration. However, it means that the registrar can prevent continued instruction where there is a significant threat to the safety of members of the public. To avoid unreasonable bureaucratic procrastination, there is a time limit of 75 days during which a determination must be reached. This specific power to suspend will, therefore, be available only in the most serious cases where an ADI has already been convicted of a serious criminal offence, such as a sexual or a violent attack or when an ADI has repeatedly failed the qualifying test.

The structure of this simple and modest Bill is very straightforward. Clause 1 inserts a new section in the RTA to provide the new suspension powers for the registrar. Clause 2 inserts a further new section to provide for a compensation scheme to cover the possibility of a suspension and potential deregistration being overturned on appeal. Clauses 3 to 7 provide for exemptions, transitional arrangements, consequential amendments, the commencement date and so on. Schedule 1 simply completes the necessary arrangements.

The co-operation of the Government has been very much of assistance to those promoting the Bill in both Houses. There are some very modest financial implications anticipated by Ministers: perhaps something in the region of £50,000 to £55,000 a year. I think Members of your Lordships’ House will agree that that is a modest total to deal with this important and potentially very damaging loophole.

Similarly, there is a very good assessment in the Explanatory Notes—I pay tribute to those who have given me assistance in preparing them—of the implications for the European Convention on Human Rights. Those implications have been examined most carefully. Given that, in a similar case, a nine months' suspension was judged not to be an arbitrary or unjustified process and that the maximum in this Bill is 75 days, there is no obvious problem here.

It is obviously a strange and disturbing anomaly that when any other professional or regulated person—for example, a doctor or a dentist—commits a serious offence, there is an immediate procedure to prevent even the remotest possibility of repetition, even a suggestion of a threat to the safety of the public. But that is not so in the case of driving instructors, as we have discovered.

The Bill is urgent and necessary, even if its provisions are required very rarely. In recognition of the courage of Lesley Anne Steele, who could have simply put this awful incident behind her, but was determined to ensure that no one else had that experience, I hope very much that your Lordships' House will give the Bill a fair wind and speedy passage. I beg to move.

13:05:00

Lord Bradshaw
My Lords, I shall not detain your Lordships very long. My noble friend has made his case absolutely. As someone a little more familiar with the Road Traffic Act 1988, it seems to me to be a bit like the proverbial cricket bat that has had seven new blades and eight new handles, it is so hung around with anomalies. This attempt to correct an anomaly deserves the support of the House.

13:06:00

Earl Attlee
My Lords, I, too, am grateful to the noble Lord, Lord Tyler, for introducing his Bill and for the careful way in which he explained its purpose and background. Although I shall not repeat his points, I agree with them all.

I have an interest to declare as an out-of-date qualified Army driving instructor. I have taught both civilian and military personnel to drive both cars and heavy goods vehicles. I know from my experience that a driving instructor temporarily has considerable power over a pupil. Pupils need to be confident that their instructor is a competent and fit person. The noble Lord, Lord Tyler, explained the welcome compensation provisions in Clause 2, which inserts new Section 128ZB into RTA 1988. As an aside, and following from what the noble Lord, Lord Bradshaw, said, perhaps that Act would benefit from consolidation, as it has been amended several times.

However, new subsection (1) covers “income losses” and “non-income losses”. Subsection (9) defined income losses as “losses of income”, and non-income losses as “losses other than income”. I am not quite sure what other interpretation could be attached to those terms. Nevertheless, the compensation scheme will protect the instructor from the financial consequences of a malicious allegation. At the same time, it will remove from the registrar the need to be overly concerned about the hardship of a temporarily suspended instructor. The provisions of the Bill may need only rarely to be invoked. Perhaps that is why they were overlooked in the RSA, but they are worthwhile and we on these Benches welcome them.

13:08:00

Lord Faulkner of Worcester
My Lords, this is in danger of setting a record for being the shortest Second Reading debate in this House’s history. In Report and Third Reading in the other place, Mr Rennie concluded by saying:

“If the House gives its support this morning, I shall entrust the Bill to my old boss, Lord Tyler ... in another place. I am sure that Members there will see the merits of the Bill, but if they do not I am sure that they will succumb to Lord Tyler’s charm”.—[Official Report, Commons, 26/6/09; col.1068.].
 

We have had the charm of the noble Lord, Lord Tyler, but we did not need it to support the Bill.

The Government are very sympathetic to the purpose of the Bill, because it addresses an issue of genuine public concern, principally about the safety of young people who are learning to drive. It will amend the legislation that provides for the registration of driving instructors, as the noble Lord, Lord Tyler, described. If it becomes law, the registrar of approved driving instructors will in appropriate circumstances be able to suspend an instructor immediately where they present an unacceptable risk to the safety of members of the public—in particular, their pupils.

As the noble Lord, Lord Tyler, has explained, the impetus for the Bill came from a constituent of Willie Rennie, the Member of Parliament for Dunfermline and West Fife. Lesley Anne Steele approached Mr Rennie because of the anxiety and anger she felt when she saw her driving instructor collecting another female pupil for a driving lesson the very next day after he had been convicted of sexually assaulting her. Together, Ms Steele and Mr Rennie approached the Driving Standards Agency—which, through the registrar, regulates approved driving instructors—to try to establish how this could happen. They discovered that it takes around 45 days for the registrar to remove an instructor’s name from the register of ADIs, and during that period the instructor can continue providing paid driving instruction.

The tenacity of both Mr Rennie and his constituent, to which the noble Lord, Lord Tyler, has rightly paid tribute this morning, in seeking to address this legal loophole is evidenced by the Bill. We have an opportunity to ensure that others who put their trust in a driving instructor do not experience the anguish and pain felt by Lesley Anne Steele. I hope that we will seize that opportunity.

The overwhelming majority of instructors, having satisfied the registrar that they are fit and proper persons when they are accepted on to the register of approved driving instructors, remain so throughout their career in that profession. We are concerned here with the very small percentage of instructors who fail to maintain the high standards of conduct expected of them by their fellow professionals, their customers and the general public.

The Road Traffic Act 1988 provides the registrar with powers to remove instructors from the register where they cease to be fit and proper persons. The Act also provides for instructors to make representations to the registrar before he finally decides whether their name should be removed from the register, and gives them the opportunity to make an appeal to the transport tribunal should the registrar decide in favour of removal. It is entirely right that instructors should be able to make representations, particularly where removal from the register would prevent them following their chosen way of earning a living. However, it takes a minimum of 45 days for the registrar to complete the process of removing an instructor’s name from the register. During that period, the instructor can continue giving paid driving instruction. We need to ensure that, in the most serious cases, the public are protected during the removal process.

The Government are concerned not only about instructors who have committed serious violent or other offences but about those whose standard of instruction is identified, by means of periodic quality assurance checks, as being so poor that it puts at risk the safety of their pupils and other road users. The Government therefore propose to support the introduction of a power whereby the registrar may temporarily suspend the registration of an instructor in these exceptional circumstances.

However, there is quite rightly a concern that adequate safeguards are in place where persons are prevented from following their profession and thereby deprived of their livelihood. To that end, I should explain the measures that we are supporting. First, a registered instructor can be suspended only where the registrar advises him, in writing, that he is minded to remove his permission to give paid instruction permanently and is following the statutory procedure to do that. It is not a stand-alone measure. Secondly, the suspension will lapse after 75 days if the registrar has still not decided whether to remove the suspended instructor’s permission to give paid instruction. Thirdly, a statutory compensation scheme will provide for the reimbursement of income and non-income losses incurred by the suspended instructor where the latter is suspended but not subsequently removed from the register, or where the registrar’s decision to remove is overturned on appeal. The non-income losses to which the noble Earl, Lord Attlee, referred relate to the damage of a person’s reputation and the value of their business that is likely to follow from this sort of action. Many approved driving instructors are self-employed, so the non-monetary damage as a result of the loss of reputation could be very serious.

The final point on that is that there will be an entitlement for the instructor to lodge an appeal with the first-tier tribunal in respect of whether compensation should be awarded or the amount granted. But let me restate that the arrangements that we put in place are intended to deal with a very small number of cases, probably no more than five each year: that is, five out of around 45,000 registered instructors.

While the arrangements that I have described will address the risk posed by a few qualified instructors, a similar risk applies in respect of some partially qualified instructors, around 2,500 of whom are licensed per annum. These people have passed the theory and practical driving parts of the registered instructor qualifying examination and are permitted, under a licensing scheme, to give paid driving instruction while preparing for the final part, the practical instruction test.

This group of apprentice instructors presents an even smaller risk than that posed by qualified instructors, as they are fewer in number. However, it would be absurd if the registrar was unable to suspend the licence of an apprentice instructor in circumstances similar to those resulting in the suspension of a qualified instructor. We propose, therefore, to support the introduction of a provision that would allow the registrar to suspend the licence or exemption from registration that permits a trainee instructor to give paid instruction. Suspension could be imposed only alongside action intended to lead to the revocation of the licence or exemption and could be used only where the trainee instructor posed a significant threat to safety of members of the public. As with registered instructors, the counterbalance to the trainee licence or exemption suspension power would be the compensation scheme. The scheme would cover the suspension of trainee licences or exemptions in much the same way as it covers the suspension of qualified driving instructors.

On 26 June, speaking at the end of the Bill’s Third Reading in another place, my honourable friend the Parliamentary Under-Secretary, Paul Clark, said:

“The Bill strikes the right balance between the need to protect the public and the rights of individuals to go about their business and earn a living”.—[Official Report, Commons, 26/6/09; col. 1067.]
 

I agree. It offers protection to learner drivers in particular and the public more generally while safeguarding the interests of fit and proper driving instructors. The Bill deals with a real public concern in a reasonable and proportionate way. I wish the Bill well and I look forward to seeing it on the statute book.

13:17:00

Lord Tyler
My Lords, I am extremely grateful to all Members of the House not only for giving their warm support to the Bill but for doing so expeditiously. I do not know whether I should be grateful to my honourable friend Willie Rennie for describing my charm as being a necessary component of my speech today because I had hoped that it would be my eloquence and persuasive powers. Nevertheless, I am grateful to my noble friend Lord Bradshaw and to the noble Earl, Lord Attlee, who in his usual assiduous way has looked even to the detail of the Bill. I hope that the response of the Minister on the exact definition of compensation has satisfied him.

I want to underline the point made by the Minister that the emphasis has to be that the vast majority of approved driving instructors are not going to be affected by the Bill. Only a tiny minority will be, and perhaps even fewer now that this Bill deals with those who can be considered not to be fit and proper persons. There will be exceptional safeguards to make sure that the new regime works well. I am grateful to the Minister for emphasising that trainee instructors, who are not so numerous, will also be covered. Again, I thank all noble Lords who have taken part in the debate and I ask that the Bill be given a Second Reading.

Bill read a second time and committed to a Committee of the Whole House.

House adjourned at 1.19 pm.