asked Her Majesty's Government: What is their view on the situation in Israel/Palestine.

My Lords, the Government are gravely concerned about the situation in the Middle East. The ongoing cycle of violence has led to the deaths and injuries of too many Israelis and Palestinians and to deeper and deeper mistrust between the two communities. The priority now is to create a safer environment for Israelis and Palestinians to live in and then to move quickly to political negotiations.

My Lords, while most of us feel automatic sympathy for a fellow democracy when her citizens are so torn apart by the terrible carnage of the suicide bombers, does the Minister agree that the most effective recruiting sergeant for those suicide bombers is the feeling of hopelessness among the Palestinian people? That has been brought about by the repressive policies of the Sharon government. Is that not likely to be exacerbated by yesterday's Likud executive vote against the very principle of a Palestinian state?

My Lords, there is a feeling of hopelessness and frustration on both sides. We have said a number of times in this House that there can be no military solution to the crisis. We continue to believe that and we will work with our partners to try to find the best possible solution.

With regard to the second question about the Likud executive put to me by the noble Lord, Lord Steel, obviously that decision was reached internally and related to Israeli politics. What it demonstrates is the complexity of the politics within Israel, but it is important for us to focus on the fact that solid international support has been expressed for a two-state solution in the form of the relevant UN Security Council resolutions.

My Lords, I am glad that the noble Baroness mentioned a two-state solution. Can she say whether her right honourable friend is considering recognising a Palestinian state now, rather than waiting for serious negotiations which do not look very much as though they are going to start?

My Lords, we continue to focus on achieving the UN Security Council resolutions. A number of those resolutions place responsibilities on both sides. We shall continue with political discussions and political dialogue, as well as working with our Arab colleagues—noble Lords will know that discussions have been held around the proposals which have been put forward by Crown Prince Abdullah. I believe that we are all agreed that what we have to do is to ensure that those discussions and the dialogue continue. That is because, as I said in my original Answer to the noble Lord, Lord Steel, we can see no military solution to this crisis.

My Lords, does the noble Baroness agree that, while the Likud vote against the idea of a Palestinian state is deplorable, inward-looking and utterly self-defeating, the best path to peace remains the idea of a regional conference put forward by Secretary of State Colin Powell? Can she assure us that, if we can reach the stage of that conference, Britain's experience, skills, strength and knowledge will have a proper voice in it? Our voice should not be lost in or submerged under a more general EU attitude which may not represent and reflect exactly what we have to contribute.

My Lords, we need to recognise the fact that a number of different discussions are ongoing and that a number of different proposals have been put forward with respect to next steps and a way forward. It is important to focus on the UN Security Council resolutions as well as to support the work being undertaken by our partners, including the proposal from the United States for an international conference. Noble Lords will also know that we continue to play an important role, both in terms of our role within the European Union—my right honourable friend the Foreign Secretary is today in Brussels for discussions with his European Union counterparts in the General Affairs Council—and in terms of our bilateral role, as it were. Noble Lords will be aware that we were instrumental in some of the events surrounding the situation in Bethlehem. We will play our role within the European Union, but we will also continue to play whatever role we can with the United States and others to try to ensure that a proper, negotiated political solution to this crisis is reached.

My Lords, I think that my noble friend is probably aware that last week, with the assistance of our consul-general in East Jerusalem, I was able to visit the West Bank with a small group of international MPs and journalists. In Ramala I visited the DfID-supported health and development institution devoted to strengthening civil society—the central aim of DfID. Apart from the disgusting vandalism that had taken place, all the computers had been systematically destroyed with the hard drives taken out. That means that years of meticulous work has been lost.

Question!

Can my noble friend assure me that those computers will be replaced and the bill preferably sent to Israel, without reducing subsequent DfID funding to this and other projects in the West Bank?

My Lords, I was aware of that visit. We have highlighted our concerns about Israeli attacks on Palestinian infrastructure and it is important that we continue to do all that we can to support the reconstruction of infrastructure in the Palestinian Authority.

My Lords, does the noble Baroness agree that it would be a mistake for the British Government to be deflected from their determined role to provide assistance in negotiations between the parties, which she has described, by the internal decisions of sometimes over-excitable political parties and organisations on both sides? Should we not just get on with the job of trying to achieve a settlement?

My Lords, I think I made it absolutely clear in my earlier answer that we shall focus on trying to find a political solution, working with our international partners. We should not get involved in internal Israeli politics.

My Lords—

My Lords—

My Lords, could we hear from the noble Lord, Lord Pilkington, first and then definitely from the noble Lord, Lord Janner?

My Lords, do the Government agree that the essence of a true settlement is that the Arab states recognise the right of Israel to exist? As long as people say that Israel ought to be driven into the sea, there is no possibility of a settlement.

My Lords, we have made it clear that we want a two-state solution based on UN Security Council resolutions.

My Lords, may I say to my noble friend—

Question!

My Lords, may I ask my noble friend whether she accepts how pleased I am that I gave way to the noble Lord who just spoke? I identify myself with almost everything that she said. Does she agree that the suicide bombing began before Sharon took office? Does she accept that if we are going to help towards making peace, as our Government are rightly doing, there have to be people with whom we can negotiate? Does she believe that Arafat's failure to curb the suicide bombing and the terrorism is because he cannot curb it or because he does not wish to do so? In either event, how can anyone negotiate with him?

My Lords, the UN Security Council resolutions have made it clear that there are responsibilities on both sides. We have to work with President Arafat, who has been legitimately elected by the Palestinians, and with Prime Minister Sharon. We shall continue to do that. A great responsibility lies on the shoulders of both men.

asked Her Majesty's Government:

What impact there has been on productivity in the Ministry of Defence, particularly in the department of Defence Logistics Organisation, following the ban on the use of external consultants required to achieve objectives.

My Lords, there is no ban on the use of external consultants either in the department as a whole or in the Defence Logistics Organisation. The MoD remains committed to achieving improvements in productivity through a variety of methods. This includes the use of consultants, where appropriate and cost-effective.

My Lords, is it not the case that there been some restriction in the use of consultants? Is not the use of consultants largely a method of transferring costs from one budget to another?

My Lords, there has been no ban. Some tighter controls are being introduced. The noble Lord may be referring to that. There are long-standing rules relating to the employment of external consultants by the MoD, which require the development of a robust business case that has been subject some sort of cost-benefit analysis. There should also be an evaluation after the event to learn lessons and ensure that the use of consultants represented value for money for the taxpayer. There are and always will be circumstances in which it is sensible to obtain external assistance.

My Lords, does the Minister accept that there can be considerable rationalisation savings in defence logistics by looking at European solutions? In the context of the European security and defence policy and the rapid reaction force, is the Ministry of Defence looking at ways in which those savings could be made?

Yes, my Lords, we are always looking at ways in which savings can be made in logistics, as in every other area covered by the MoD. The noble Lord will know that the Defence Logistics Organisation was set up in April 2000, two years ago, by combining the three service logistic arms with the Defence Communication Services Agency under a single organisation. The strategic goal is to reduce its cost of outputs by 20 per cent by 2005–06. There are already some good news stories on logistics savings. For example, the rationalisation of the supply of general stores, such as tools, has already generated savings in the region of £120 million.

My Lords, does my noble friend agree that, while consultants are sometimes very useful, their use can be self-perpetuating, as most reports seem to end with a recommendation that further work needs to be done?

My Lords, my noble friend is right. We try to use consultants—or external assistance, which covers much more than consultants—as seldom as possible. However, sometimes one does not have within the department people who are able to provide, for value, the information needed from external sources.

My Lords, what progress has been made in further integrating defence procurement and defence logistics? What progress has been made in developing a more cost-efficient repair and maintenance process within the DLO?

My Lords, we are constantly looking at the DPA and the DLO, both of which are recent inventions of the past three or four years, to see whether the relationship between them is satisfactory. We believe that on balance it is satisfactory at the moment. As I have said, the aim in setting up these organisations is to save on costs, to ensure that delays are as short as possible and to improve performance. Those are the basic tenets of smart acquisition. They refer to both the DPA and the DLO. We have no plans at present to bring those two organisations together. All our efforts are aimed at trying to reduce maintenance costs.

My Lords, perhaps I may press the Minister on the question of the international integration of logistics chains. In ISAF, for example, there are some 1,600 British troops, 1,000 Germans, 600 French and contingents from another nine EU member states. I was told recently by a Czech civil servant that the overwhelmingly largest cost of maintaining a Czech contingent in Kosovo was the separate logistics chain. What efforts are the British Government making to ensure that, in the vast majority of external operations in which we are now engaged and which are co-operative with other countries, we rationalise our logistics chain?

My Lords, I can only repeat that we make every effort to ensure that costs, whether at home or abroad, are met and that ISAF's are lowered. ISAF is a unique force. In the period in which it has been successfully in existence—as I am sure the noble Lord will agree—we have done our best to ensure that the costs in terms of logistics, which can be extremely high, are brought down and rationalised with our international partners.

asked Her Majesty's Government:

Whether the present arrangements for passing the results of government-sponsored scientific research to British industry are satisfactory.

My Lords, as well as increasing substantially the funds for basic research the Government have taken a number of major initiatives to encourage knowledge transfer. These include the University Challenge competition, Science Enterprise Challenge, the £140 million Higher Education Innovation Fund and a major extension of Faraday Partnerships.

These initiatives are beginning to produce an exciting cultural change in our universities. In 1999–2000 there were 199 spin-offs from our universities compared with an average annual rate of just under 70 in the previous five years. But, working with industry, there is much more that we can do.

My Lords, rather unusually, I thank the Minister very warmly indeed for that encouraging and useful Answer. Is he aware of the need to press his colleagues to understand the importance of scientific research, the speed at which it goes and the value of its results? Will he particularly keep a weather eye on the Treasury, which has never yet been persuaded that you cannot tell the value of scientific research until you know its results, and that you are unlikely to know its results until the work has been done?

My Lords, I thank the noble Lord for his supplementary question. To receive compliments from him in circumstances where I normally receive the odd criticism about holes in the road is very welcome indeed. I take his point. This is an extremely important area. We are doing work in this area and, as I said, we can do much more. We have introduced the two R&D tax credits for large and small companies and, as part of the DTI review, we have set up a new innovation group to work very closely with industry to try to raise R&D and the rate of innovation. I continue to press with colleagues the importance of this subject. I believe that even the Treasury is now persuaded of its importance.

My Lords, I declare an interest as chief executive of Universities UK. Tomorrow, at the headquarters of HSBC, Universities UK launches a report which shows how much knowledge transfer takes place between universities and industry. Does my noble friend agree that the performance of UK universities in knowledge transfer compares well with that of their international competitors, particularly the United States? Does he further agree that, as helpful as recent investments of £100 million are in building up these links, more investment is needed through SR 2002 if that growth is to continue?

My Lords, I agree with my noble friend that, interestingly, our record on spinoff companies stands up very well in comparison with the situation in America. I produce these figures only because people are constantly saying that compared to America and MIT we do not have a good performance. If one compares the size of the two countries, UK universities do very well. We have one spin-off firm for every —8.6 million of research expenditure; Canadian universities in 1999 spun-off one firm from every £13.9 million of research expenditure; and in the US the ratio was one for every £53.1 million. So the story that British universities are not entrepreneurial is no longer true. In America, universities such as MIT have magnificent records, but that is not true of all universities. We shall continue to push for extra funds for both basic research and knowledge transfer as part of SR 2002. Whether or not we have persuaded the Treasury will become clear at that point.

My Lords, as the Minister and other noble Lords have indicated, the record of universities in this country has been extremely good. As much as 12.9 per cent of their research funding now comes from business as compared to 10.1 per cent in the US. This is a figure that many people do not know. However, in many countries universities have been at the core of highly dynamic regional clusters of development. One sees it in countries such as Spain, the United States with MIT, and in our country at Cambridge, which has spun-off a large number of small companies. Does the Minister believe that the initiatives taken by the Government are too top-down in that they come from the DTI? Is enough being done to link up with regional development agencies and to get the core support networks developing out of the universities to the local regions?

My Lords, on the contrary, all our action now is mainly to support clusters through the RDAs, which have been working very closely with clusters of hi-tech businesses, not only in Cambridge but in Oxford, Bristol, York and Manchester. This is not only about Cambridge. We operate mainly through the RDAs because this is a local activity. Over the past three years, £150 million has been given specifically to the RDAs to support incubators and working clusters.

My Lords, is the Minister happy with the percentage spent in R&D on hydrogen-based fuels to replace carbon-based fuels, particularly in the automotive industry?

My Lords, this is a very important question. The Chief Scientific Adviser has recently made a study of the energy research carried out across government. This has disclosed some areas where more research should be done, including the area of hydrogen research. That is one of the areas which I believe will receive more support in the future.

My Lords, is the money spent on transferring the results of government-sponsored research to business and industry in addition to the budget for basic science, or has it been at the expense of that budget?

My Lords, the money spent on knowledge transfer is in addition to the expenditure on basic science. We have increased enormously the budget for basic science in this country. It is now in the region of 10 per cent up in real terms on what it was when the Government came to power. If we are to have knowledge transfer it must be on the basis of a strong basic research base. It is interesting that a recent survey of universities revealed that most spin-off companies and knowledge transfer come from the world-class research universities. One would expect that kind of indication.

My Lords, as the chairman of a Faraday initiative I can testify to the increased efforts now being made to stimulate knowledge transfer from universities to industry. In terms of the amount of money put into civil research, has the gap which used to exist between this country and other major developed countries now been closed?

My Lords, there is a considerable way to go in terms of the amount of money—not only government research money but, more importantly, business research money—that is put into research. As I said, since coming to government, we have increased the basic science budget by 10 per cent in real terms, and that should be seen in relation to the 17 per cent real terms net decrease which occurred in the previous decade. Consequently, we still have a long way to go to catch up. As regards total expenditure, we are behind France and Germany, the two countries whose performance we would most like to be comparable with. Germany is ahead of us because German industry does much more R&D than we do, and France is ahead because the French Government do much more research than the British Government do. Either way, in making comparisons with those countries, we have to make certain that we treat each country's R&D expenditure as a percentage of GDP.

My Lords, can the Minister continue the attempts, in which I believe him to be already engaged, to explain to Her Majesty's Treasury the distinction between government-sponsored research and government-controlled research? Is he aware of a report in the Independent on Sunday, on 5th May, that the Treasury is now attempting to approve the science councils' research budgets on a line-by-line basis? Does he agree that that is the ultimate proof that the Treasury regards public money as a form of barium meal? Does he agree that the results are about as appropriate as if we should transfer our economic forecasting to a committee of microbiologists?

My Lords, I think that one should always be rather careful about making statements based entirely on newspaper articles. In this case, however, I was concerned by the report. I therefore spoke to people at the Office of Science and Technology, who, in these circumstances, might be expected to be deeply concerned. They have had no discussions with the Treasury whatever, let alone on a line-by-line basis; they have simply submitted their application for funds under SR 2002. I think that, in this case if no other, the Treasury is utterly blameless.

asked Her Majesty's Government:

Within what time frame they expect the Independent Television Commission to make a decision on the future of the digital terrestrial television platform vacated by ITV Digital; and what opportunity there will be for parliamentary scrutiny of that decision.

My Lords, the Independent Television Commission is responsible for the award of the licences, under accelerated procedure. Potential applicants must submit to the ITC a confidential expression of interest by this Thursday, 16th May 2002, and their full applications by 30th May. The ITC will then publish the programme proposals of the applications and invite representations, which should be received by 6th June. The commission expects to announce the award of the licences on 13th June. The issue of parliamentary scrutiny will, of course, be a matter for the usual channels.

My Lords, does the Minister agree that it is more important to get this decision right than to get it done quickly? Does he agree that, as sad as the demise of ITV Digital is, it offers us a wonderful opportunity to provide a free-to-air platform for the 40 per cent of viewers 'who have expressed no wish to purchase subscription digital television?

My Lords, the noble Lord is quite correct that it is important to get this decision right. However, we see no difficulties with regard to the procedure. We anticipate that interested parties—who have been aware of the difficulties of ITV Digital for some time—will get their applications in and that the ITC will be able to make the appropriate decision. As for the future, although we all recognise the importance of extending the opportunities for digital television, we see no reason why this present difficulty should last into the long term.

My Lords, does my noble friend agree that the chances of any commercial television company taking over digital terrestrial are rather slim, and that the only companies that would take it over are companies that we would not want to get their hands on it? Will he therefore encourage the public service broadcasters—not only the BBC, but Channel 4, Channel 5 and ITV—to take it over themselves, in order to use it as a platform to provide digital television services that nearly everyone can afford?

My Lords, although my noble friend is very knowledgeable, on this occasion, I shall have to say to him, "Wait and see". The deadline for the submission of applications is in the very near future, and it is anticipated that appropriate bids for the licence will be submitted.

My Lords, does the Minister accept that the Government's policy of wanting analogue switch-off by 2010 is now in disarray? Does he accept that there is no possibility of that happening by 2010 unless the Government are prepared to dole out free set-top boxes to the 40 per cent of the population who do not want to purchase Mr Murdoch's service? If that is the case, has he persuaded the Treasury to release those amounts of resources?

My Lords, on the noble Lord's final point, I can assure him that I have not persuaded the Treasury to do that. Moreover, my efforts to that effect have not been extensive thus far. The obvious point is that the noble Lord is perhaps being overly pessimistic—2010 is still some years away. We should take joy from the fact that digital television has already been extended to a substantial proportion of the population. There would be no question of switching off the analogue signal until a vast majority of the population were able to receive digital.

My Lords, will the Minister respond to the question that was asked? Is the Government's analogue switch-off target of 2010 still firm policy or not?

My Lords, I thought that I had answered the question in a suitably positive manner, despite the fact that there has been a dismal representation from each of the two Benches opposite. The fact is that progress has been made on digital television. Given that the new licence will be awarded in the very near future, there is no reason at all why the Government should not continue to be optimistic about the rate at which people engage in digital television.

My Lords, in view of the problems faced by independent digital television and the fact that the quality of terrestrial digital television programmes is improving, and given that we are all aiming to reach the appropriate moment for switch-off, does the Minister agree that a relatively cheap set-top box which allowed access only to terrestrial digital television is one way of reaching that goal? People would see the improved quality and that might encourage a wider take-up of the service.

My Lords, I am grateful for the noble Baroness's constructive suggestion, and I know that she takes a very keen interest in these matters. However, I must insist on our present position. First, we must see the award of the new licence, and, secondly, we must see the rate at which the British public decide to take up digital television. As I said, the take-up rate has been very encouraging in the first three years in which the service has been available. A very substantial proportion of our population have taken up digital television. Although no one would deny that the current situation is a setback, that does not mean that we cannot recover from the setback to hit the timetable outlined earlier.

With permission, my Lords, I should like to make a Statement on the Government's proposals for taking forward reform of the House of Lords.

The Government began the process of Lords reform with the removal of the great majority of the hereditary Peers, in 1999. We are committed to further reform of the House of Lords, to remove the remaining hereditary Peers and to provide Parliament with a modern, effective second Chamber.

We have listened carefully to the wide range of views expressed in the recent debates on Lords reform in both Houses of Parliament and to the responses to the White Paper. We have taken account of the report of the Public Administration Select Committee. We have also considered statements from all parties that this issue should be considered further by a Joint Committee of both Houses. I hope therefore that the way forward I am announcing today will be welcomed and supported on all sides of the House.

We have decided that, on this vital constitutional issue, which concerns not only the composition of the House of Lords but also the role of Parliament as a whole and the relations between the two Houses, it would be right to invite the two Houses to establish a Joint Committee, in the hope that we can forge the broadest possible parliamentary consensus on the way forward. We hope that the Houses will be able to proceed with the establishment of the Joint Committee as soon as possible. We have noted the recent joint statement of the two main opposition parties that such a Joint Committee would help reconcile differences and seek a principled consensus on the way forward. I therefore hope that we can look forward to their cooperation in setting up the Joint Committee as soon as possible and making a success of its work.

Reform of the second Chamber has implications for the future of Parliament as a whole, and in particular for the relations between the two Chambers. It is right that Parliament itself should record its views on the composition of the second Chamber. For this we believe that a Joint Committee alone is insufficient. We therefore intend to ask the Joint Committee, as the first phase of its work, to report on options for the composition and powers of the House of Lords once reform has been completed. This will define options for composition, to include a fully nominated and fully elected House, and intermediate options. Both Houses will then be asked to record their views on those options in free votes.

In the second phase of its work, on which the committee will report, it will define in greater detail the proposed composition, role and powers of the reformed second Chamber, taking account of the opinions expressed by the two Houses. It should also recommend the transitional strategy for transforming the existing House of Lords into its fully reformed state. This will be particularly important if the recommendation were to be for a significantly smaller House. The Government's intention would then be to bring forward legislation in the light of the report of the Joint Committee and the opinions of both Houses expressed in those free votes.

As both the Royal Commission chaired by the noble Lord. Lord Wakeham, and the Government's White Paper made clear, any proposals on the powers and composition of the House of Lords must flow from a clear understanding of its role and functions. The issues to be considered by the Joint Committee therefore will include: first, the role and authority intended for the second Chamber within the context of Parliament as a whole—there is, we believe, a consensus that its main role should continue to be as a revising, scrutinising and deliberative assembly with the power to delay but not to seek to veto legislation; secondly, the impact of that role and authority on the existing supremacy of the House of Commons and relations with the executive—there is, we believe, broad agreement that the Commons should retain its role as the pre-eminent Chamber and that the test for any government should continue to be whether it can command a majority in the House of Commons; thirdly, the composition and powers of the second Chamber best suited to give effect to the role and authority intended for that House. This consideration should include the implications of a House composed of more than one "class" of Member and also the experience and expertise which the House of Lords in its present form brings to its function as the revising Chamber.

It will also be necessary to consider the most appropriate and effective legal and constitutional means to give effect to any new parliamentary settlement, including any mechanisms required for resolving conflicts between the two Houses. In order to inform the Joint Committee's deliberations, the Government are today publishing the full results of the consultation on their White Paper. We received over 1,000 responses. The full analysis is now available in the Printed Paper Office and on the Lord Chancellor's Department website.

The Government have a major record of constitutional reform. Since 1997 we have created a Scottish Parliament and Assemblies for Wales and Northern Ireland. We have enacted the first House of Lords Act, the Human Rights Act and the Freedom of Information Act. We have given the Bank of England independence in the setting of interest rates. Last week the Deputy Prime Minister set out our plans to allow the creation of regional assemblies in those regions of England that vote for them. We have enhanced the role of the Select Committees, including my right honourable friend's announcement that he will be the first Prime Minister ever to appear before the Liaison Committee. In addition, we are modernising the working practices of both Chambers. Taken together, this is the most substantial programme of constitutional reform for over a century and will stand as one of this Government's historic achievements.

Today's announcement is another important step towards ensuring that reform of the House of Lords ranks alongside those achievements. We must not allow a repeat of past history in which reform has been delayed because those who wanted it could not agree and therefore left the field to those who opposed it.

Our objective is to secure a second Chamber that is broadly representative of the Britain of today, a Chamber which will complement the Commons by reinforcing Parliament's ability to conduct scrutiny and hold the executive to account and which will increase the respect of the public for Parliament. The way forward I have outlined puts responsibility in the hands of Parliament itself in free votes. I urge Members of all sides of the House to respond not as party politicians but as parliamentarians committed to a strong Parliament within a modern democracy.

My Lords, that concludes the Statement.

My Lords, I begin by thanking the noble and learned Lord the Lord Chancellor for the Statement he has made.

The word "historic" is a much overused cliché in this House but on this occasion I can say that it was an historic Statement as it concerns the future of Parliament as a whole and it shows that the Government accept that reform of Parliament does not belong to one party alone. The Statement trusts Parliament and parliamentarians with the responsibility of finding the best way forward to strengthen this House and Parliament itself for the benefit of the country as a whole. That is something we on this side have long argued for and which we now clearly welcome.

No doubt some may be tempted to say, "If only the Government had taken this course before" as, indeed, the noble and learned Lord the Lord Chancellor wisely promised as long ago as 1997. But I think that 'we must now look to the future. It is not the time to dwell on the past or what was done in the past. Instead, I say to my noble friends that we should welcome the fact that today the Government have held out a constructive hand. On behalf of my party I assure the noble and learned Lord that we shall respond in the same constructive spirit to that gesture.

As the noble and learned Lord said, less than a fortnight ago the noble Baroness, Lady Williams of Crosby, and I made a joint appeal to the Government to abandon a single party approach and establish a Joint Committee. The fact that the Government have now agreed to do what we asked is a statesmanlike and sensible step and I am grateful for that. It would, I believe, have been a disaster to plough on into bitter parliamentary warfare over the reform scheme that was put forward at the end of last year. It would not have served the Government's objectives; it would not have served Parliament and it would not have served the country or the voters' priorities.

In welcoming the Joint Committee, which I hope will be established soon, I make it clear that my party's basic position is unchanged. To us it seems obvious and urgent that the authority of this House—for all its successes since 1999—and the authority of the other place both need to be strengthened in the face of the executive. We have put forward proposals that we believe would strengthen both Houses and we still hope that progress will be made towards them.

However, the purpose of the Joint Committee is to build consensus and reconcile differences, so far as is possible, and to open the way to lasting reform; it is not to enable sensible aspirations for reform to be sidelined or smothered.

Will the noble and learned Lord confirm that the committee will be large enough to include shades of opinion within parties and across parties? In the context of this House, will he assure us that there will be places for Cross-Bench Peers on that committee?

We look forward to early discussions on the composition and remit of the committee. However, will the noble and learned Lord also confirm that the Government's proposals, which we bitterly opposed when they were announced, to reduce the powers of this House have been shelved—and, I trust, shelved permanently?

If the Joint Committee has authority, vision and independence, today could be a very good day for this House and Parliament. The threat of legislation that would have weakened this House and Parliament has been lifted. The Government have shown themselves ready to listen to Parliament—they would gain infinitely from that, if only they were ready to do it more. As a result, we now have a once-and-for-all opportunity to grasp something that eluded us in 1911, 1968 and 1999—a chance to set this House on a secure and lasting footing, as a full partner with another place in upholding the ancient liberties of the British people. All of us on all sides have a high and solemn duty to participate with a will in that work. On this side of the House, we will assuredly do so.

I end by thanking the noble and learned Lord for turning the Government away from the sterile conflict that we were threatened with in December last year. The Statement, if it means anything, could mark an historic moment at which the steady diminution of Parliament at last began to be reversed. Let us hope that it will; if it does not, a rare and remarkable opportunity will have been squandered to the lasting detriment of us all.

My Lords, I, too, thank the noble and learned Lord the Lord Chancellor for his Statement. Moreover, I thank him and the Leader of the House of Commons for having piloted through the proposal in what we recognise were controversial and difficult times. We are very grateful for what we believe to be a very exciting and promising way forward.

We appreciate in particular the proposal for a Joint Committee. I am sure that the noble Lord, Lord Strathclyde, who has much to do with this matter, will not object if I mention the name of my predecessor, my noble friend Lord Rodgers of Quarry Bank, who persistently pressed in that direction as a way forward for reform of your Lordships' House. Many noble Lords will, on this occasion, wish to appreciate his major contribution.

We on these Benches particularly welcome the use in the Statement of the phrase,

"the role of Parliament as a whole".

We have never sought in any way to compete with the pre-eminence of another place. We recognise that the considerable loss of respect for Parliament since the Second World War must be reversed. One way to do so is to consider the role of Parliament—the role of the House of Commons and the ways in which this House can complement the work of the House of Commons in the most constructive way.

It is incumbent on all of us in this House—on every single Member, not simply those in a particular party—to seize the opportunity that has been granted to us and to approach it as constructively as we can. We believe that the people of this country are looking to both Houses of Parliament to rise to the occasion and to come forward with constructive proposals for reform in a way that will make Parliament once again central to the whole constitutional structure of this country.

I have two questions for the noble and learned Lord the Lord Chancellor. The first concerns whether the composition and powers of the House and of another place will be taken side by side during the first stage, on strategy, and during the second stage, on tactics. There are innovative and exciting proposals concerning ways in which the powers of this House could be extended into areas that are not currently scrutinised by Parliament in any way. Will that be taken into account by the Joint Committee?

Secondly, will the Lord Chancellor bear in mind the need for at least a reasonable sense of the importance of moving ahead with this reform—if not urgency—when considering the size and balance of the proposed Joint Committee?

I do not wish to detain the House. In conclusion, the position of Parliament is the keystone of the constitutional arch in this country, and has been for centuries. We believe that it is time that that keystone was refurbished and brought up to date. We thank the Lord Chancellor and the Leader of the House of Commons for giving all of us the opportunity to create out of Parliament the institution that all of us would like it to be. For many parts of the world, it has become, over the years, a model of how democracy should be carried out.

My Lords—

My Lords, I am grateful to the—

Cross Bench!

My Lords, I believe that the procedure of this House is invariable and that when the leaders of both parties respond to a Statement, the maker of the Statement responds at the same time to those responses; thereafter, there is—noble Lords may correct me if I am wrong— minutes for questions from elsewhere in the House.

I am grateful to the noble Lord, Lord Strathclyde, and the noble Baroness, Lady Williams of Crosby, for their welcome to the Government's announcement. The noble Lord's comments were sweeter than those associated with bitter parliamentary warfare, which the noble Lord, in his most menacing—as well as his most engaging—manner announced is now happily avoided.

I accept that the noble Lord has been calling for a Joint Committee for some time. I also accept that the noble Baroness has often said in her speeches on this subject that reform of the House of Lords should not be considered separately from reform of Parliament as a whole, and that she, too, has called for a Joint Committee. It was right in this context that she should have mentioned the name of the noble Lord, Lord Rodgers of Quarry Bank.

The Government accept that neither the Wakeham commission nor our White Paper, which was based on it, produced consensus. Now, as part of our continuing effort to achieve consensus, the Government propose a Joint Committee in which parliamentarians of great experience will consider these hugely difficult issues with the benefit of all of the opinion and discussion that has gone before, and will fashion composition options on which free votes will be taken in both Houses.

I assure the noble Lord that the usual channels will discuss the size and balance of the Joint Committee. I agree with him that it must be large enough to include a broad range of opinion, that the Cross-Benchers should certainly be involved and that there should be early discussions between the usual channels on composition. There is no merit, as the noble Lord was good enough to say, in political point-scoring over what has gone before; nor, I hasten to say, has there been any from the noble Baroness or the noble Lord.

The intractability of House of Lords reform has been proved by failure, during virtually a whole century, to achieve progress until the 1999 Act removed about nine-tenths of the hereditary Peers. The noble Lord asked whether the White Paper was shelved. That is a reasonable question and is not point-scoring. The White Paper is not shelved; nor is the report of the Wakeham commission. Neither succeeded in achieving consensus on its own. Plainly, the Joint Committee will wish to consider both with great care. It is a matter for the Joint Committee whether it brings forward options for both Houses to consider that are based on, or which closely resemble, any of the Wakeham or White Paper proposals. We simply have to wait and see, and await the outcome of the free votes.

Finally, I mention that the noble Baroness has said many times that reform of the House of Lords should be seen in the context of wider issues relating to Parliament as a whole. She will therefore have welcomed the sections in the Statement that said that reform of the second Chamber has implications for the future of Parliament as a whole and, in particular, for the relations between the two Chambers.

How fast it will be possible to proceed and how quickly the Joint Committee will proceed is of course a matter for it. But certainly it is the wish of the Government for the momentum to be maintained.

The noble Baroness asked very detailed questions about what the committee may consider in the context of specific powers of this House. She referred, in particular, to areas where there is currently no scrutiny on the part of this House. Although the committee will itself determine the issues which it wishes to consider within its remit, I believe that for the present it is sufficient to say that the passage in the Statement which says that the Joint Committee will be asked, as the first phase of its work, to report on options for the composition and powers of the House of Lords indicates that those issues will be very wide.

I hope that that covers all the major points raised by the noble Baroness and the noble Lord. I appreciate the general welcome that they have offered and the description of "statesmanlike" which they applied to this new way forward.

My Lords, I thank the noble and learned Lord the Lord Chancellor and apologise if I in any way got the arrangements wrong. On behalf of all Cross-Benchers, I welcome very much his indication that the Cross-Benchers will be represented on the Joint Committee. In that representation, I hope that it will be possible to take account of the numerical strength of the Cross-Benchers in your Lordships' House and the fact that the 2:2:1:1 formula does not necessarily guide us as well as it normally does when we come to a reform of this nature. I should also be grateful if the noble and learned Lord the Lord Chancellor could give some indication as to when terms of reference for the Joint Committee will be available.

As I have already indicated, the Government are sensitive to the interests of the Cross-Benchers, who are numerous. There is no doubt but that the usual channels will heed with care the representations from the Cross-Benchers about their inclusion in the Joint Committee. I anticipate that the usual channels will now proceed at a considerable pace to settle terms of reference. It will have been obvious to your Lordships that the Statement which I made was intended to, and did, herald the broad outlines of what the terms of reference should be. I do not doubt that they will be settled in that sense and, so far as concerns the Government, as soon as reasonably possible.

My Lords, I believe that the noble and learned Lord the the Lord Chancellor is well aware that a Joint Select Committee would not have been my first choice in these matters. But I think that he is right to propose one in the circumstances in which we find ourselves. I shall be happy if the noble and learned Lord takes that as a welcome.

When the Joint Committee has considered matters and reported, I am afraid that ultimately we shall return to the question of the composition of this House. That is the only really difficult issue. I very much hope that that committee will take heed of three things that we said in our Royal Commission report. The first was that this House functions better if it is relatively free of political patronage. Secondly, the Members who serve here serve for a relatively long time. To us, that almost certainly meant that there should be no re-election. But, thirdly, that does not mean that the percentage that get here in that way need necessarily be the percentage that we recommended—indeed, in our report we recommended three percentages. Thus we had a degree of flexibility in relation to that matter. I hope that the Select Committee recognises the real value to the House of those principles.

My Lords, I have no doubt that the Select Committee will consider with care both the report of the commission led by the noble Lord, Lord Wakeham, and what is said in these exchanges this afternoon. As to any point of detail about what the future may hold and about what the Joint Committee may consider it right to recommend, I do not believe that I should express any specific views myself. The Government should not now be seen to be giving any particular steers to the Joint Committee, given that it is charged to define options for both Houses to vote on in free votes. In fact, I go further. I consider that for me to do so would be misinterpreted at a time when the Joint Committee and its membership are about to be determined.

My Lords, like everyone else, I welcome the proposal for a Joint Committee to carry forward the reform of this House. Do the Government accept that, if a Joint Committee is to do justice to the complexity of the challenges ahead, it will be best equipped to do so if it draws its membership from a broad spectrum within this House and that that should include, among others, someone from these Benches?

My Lords, I agree entirely with what has been said by the right reverend Prelate and by others. The Joint Committee should reflect a very broad spectrum. However, I shall not trespass into matters which are for the usual channels.

My Lords, perhaps I may say how much I welcome the fact that the Government now seem to have—I use a neutral phrase—moved away from the proposals in the White Paper. Whether it is still alive and has any breath left in it is perhaps a matter for intricate discussion. But, first, so far as concerns these proposals, I believe that one should broadly give them a welcome.

Secondly, is my noble and learned friend aware that I also welcome the fact that he sees this next procedure as keeping up the momentum for reform? There are two ways in which it could be presented: either as keeping up the momentum for reform or as kicking the proposals into the long grass. I have to say to my noble and learned friend—I am sure he is not aware of it—that, indeed, there has already been some briefing to the effect that this is designed to kick the matter into touch, or whatever other sporting metaphor one wishes to employ. I am very grateful for my noble and learned friend's confirmation that that is not the Government's intention.

Thirdly, if one is going to keep up the momentum, then these matters have to take place within a reasonably brisk measure of time. Is it the Government's intention that the options vote, if I may call it that, should take place before the Summer Recess, if at all possible, or do they intend that it should take a little longer? To me, as a naive and mere Back-Bench Member of this House, the analogy with the hunting Bill does not seem to be all that pleasant. But, broadly, I believe that the House should welcome these proposals as a firm step in the direction that most of us wish to go.

My Lords, I am delighted that my noble friend abandoned the cynicism with which he began and that he ended on a note of optimism, which was well judged. This is not kicking the matter into the long grass; the momentum will be maintained. However, I am not willing to be drawn into saying anything which trespasses either on the functions of the usual channels or, more importantly, on those of the Joint Committee. It is inconsistent to praise the width of the remit proposed to the Joint Committee and, at the same time, imply that it must report the day before yesterday. That is certainly an issue for the Joint Committee. The speed with which it comes forward with its proposals will be a matter for the Joint Committee, but I am sure that it will do so with all deliberate speed commensurate with the huge importance of the subject matter for the future of Parliament as a whole.

My Lords, when the Lord Chancellor uses the phrase "the Britain of today", is he excluding Northern Ireland and therefore the United Kingdom? Is he also saying that the Joint Committee will consider the composition of the other place in addition to the composition of your Lordships' House?

My Lords, I do not exclude Northern Ireland and the Joint Committee will not consider the composition of the other place.

My Lords, I give a warm welcome to the Lord Chancellor's Statement. I shall resist asking a number of detailed questions, which would not be appropriate at this time. However, the Lord Chancellor said that the Government do not intend to give a particular steer to the committee. Do I take it that the committee will be allowed to determine its chairman and that the chairman will not come from government sources?

My Lords, that is not a matter upon which any decisions have, as yet, been reached. There will be discussions between the usual channels with a view to agreeing a chairman. I am not sure whether the noble Baroness was making a job application!

My Lords, can I tempt the Lord Chancellor to be a little more specific about what he expects to be the remit of the Joint Committee? The effective legislative powers of this House depend upon the effectiveness of the legislative arrangements of the House of Commons. Does he expect the committee to be able to examine the legislative arrangements in the House of Commons and make reform of this House conditional upon improvement to those arrangements?

My Lords, that is a matter on which I shall not be drawn. The terms of reference of the committee have yet to be settled. Their broad outlines have been heralded by the Statement. Thereafter, it will be for the Joint Committee to interpret its remit.

My Lords, I welcome the Statement as it lays out a method of taking forward the whole process of reform, which all noble Lords want. Does my noble and learned friend agree that the resolution of differences and conflict between the two Houses is as important an issue to be addressed and resolved as the discussion of the composition of the reformed House?

My Lords, that is certainly so. The Statement itself in terms said that the Joint Committee would have to consider the most effective mechanisms—I paraphrase—for resolving conflicts between both Houses. I believe that the noble Baroness makes an important point. The Government have always stated that no single party should have an overall majority in the reformed House. That means that the government of the day will always be in the minority in this House and, therefore, liable to be defeated at any time. So mechanisms for resolving conflicts between the Houses are critical and that is why the Statement highlighted that the Joint Committee should give express consideration to that issue.

My Lords, following the point made by the noble Baroness, Lady Ramsay of Cartvale, is the noble and learned Lord aware that the device of a Joint Committee, to which he has had such fruitful recourse, has been used in past centuries for resolving deadlock on the content of Bills? Is that a precedent worthy of re-examination?

My Lords, in my view a Joint Committee on the subject of House of Lords reform is a sufficient precedent in itself.

My Lords, does the noble and learned Lord recognise that when his noble friend Lord Richard and I talk about momentum, we may have slightly different views about pace and direction? I endorse the wisdom of his choice of words from the United States Supreme Court that the process of examination should be undertaken with all deliberate speed. But does he consider that change should occur at a pace that does not put at risk the qualities that this House values so highly?

My Lords, although this is essentially a matter for the Joint Committee, I agree that it must proceed with all deliberate speed, but commensurate with the gravity of the subject matter that it addresses. As to the second point raised by the noble and learned Lord, I believe that he lures me into the merits much further down the line.

My Lords, I welcome my noble and learned friend's Statement, which has been greeted with universal enthusiasm. While I fully understand why he does not believe that it is proper for the Government to seek to influence the detailed deliberations of the Joint Committee, does he agree that the first task for the Select Committee, of preparing a list of options—something that most noble Lords could accomplish by this evening—is one that could be achieved fairly quickly? Will he therefore use his influence to suggest that that stage of the committee's work could be carried out expeditiously so that a vote of both Houses could take place before the Summer Recess?

My Lords, I am reminded of what the noble Lord, Lord McNally, said on the final Question at Question Time, that it is more important to get things right than to proceed too quickly. With respect to my noble friend, when one considers the history of this House and the colossal difficulty of securing consensus, it is somewhat unrealistic to agree on a Joint Committee and then to crack the whip, to be prescriptive and to say that it is very easy. I prefer to trust the Joint Committee.

My Lords, in considering the future composition of this House, will it be within the terms of reference of a Joint Committee to look at the three years' experience of the Scottish Parliament and the Welsh and Northern Ireland Assemblies? Will it also be able to consider whether there should be more formal links between those assemblies and this House, given that, by pure coincidence, the Presiding Officers of the three assemblies are Members of this place? There is no guarantee that our successors will be likewise beneficially endowed.

My Lords, the thrust of that question is in sharp contrast to the thrust of the previous question, which was to get on with it the day before yesterday. The thrust of this question is that it would be of advantage to the Joint Committee to consider the practices of the Scottish Parliament and the other Assemblies. That is a matter for the Joint Committee within its terms of reference.

My Lords, I congratulate the Government on taking a statesmanlike and welcome decision to set up the Joint Committee. I have two questions. First, does the view that the House of Commons should be pre-eminent put a constraint on the Joint Committee in considering powers, particularly if the Joint Committee wishes to recommend that this House should be wholly elected? Secondly, will the terms of reference be wide enough—I do not imagine that this point will be popular with the House—to enable the Joint Committee to consider whether there is a case for a unicameral system?

My Lords, the Statement said that it is generally accepted, and I believe it to be so, that the House of Commons is the pre-eminent Chamber which should always ultimately have its way. However, I repeat that the Joint Committee is inhibited in its consideration only by its terms of reference, which will be settled by the usual channels in the light of the Statement I have made

My Lords, is my noble and learned friend aware that I welcome a free vote on the composition of both Houses? Does he agree that the view of both Houses on the composition of a reformed House, as expressed in a vote, would have to carry a lot more weight than the responses to the consultation to the White Paper?

My Lords, that is a nice question! In one sense, yes. However, proper weight must be given to the responses to the consultation. Obviously the Joint Committee will wish to do that, though it must be said—the question may have implied this—that those who responded to the consultation were self-selecting. It is also the fact that they are fewer in number than the total membership of both Houses. I imagine that Members of both Houses will not only be entitled but will also be interested to vote in free votes on issues critical to the nature and future of Parliament. It is for that reason that we have put responsibility in the hands of Parliament on free votes.

My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.

Moved, That the House do now again resolve itself into Committee.—(Lord Rooker.)

On Question, Motion agreed to.

House in Committee accordingly.

moved Amendment No. 76:

Page 45, line 32, leave out "serious" and insert "negligent"

The noble Lord said: Under Clause 72 of the Bill compensation is payable to the defendant who has suffered loss in consequence of a confiscation order, a restraint order, the appointment of a receiver or other orders under Part 2 of the Bill. However, before a defendant is entitled to compensation, he or she must show that proceedings were never brought, or he was not convicted of an offence, or his conviction was quashed, or that he was pardoned.

In all those circumstances any confiscation or other order made will be discharged. The defendant's loss may be modest or substantial. It could be that, as a result of the restraint order, he was unable to continue his lawful business; indeed, he may have lost that business as a result, and that loss could have been substantial.

It is right and proper, therefore, that any person suffering such loss, in such circumstances, should be entitled to compensation. However, before being entitled to compensation, that innocent defendant must prove that there has been a serious default by a member of the police force, the CPS, the Serious Fraud Office, a customs officer or an officer of the Commission of the Inland Revenue. A mere mistake is not sufficient. A careless mistake is not sufficient. Only a serious default gives rise to compensation, however disastrous the consequences for the innocent party.

That cannot be right. The powers given to the police force, the CPS, the Serious Fraud Office, a customs officer or an officer of the Commission of the Inland Revenue can ruin people. Those powers can be exercised even when no proceedings are ever brought. The courts are given little discretion in the matter and in some circumstances must make the order where the prosecutor requests.

We believe that, where there are such powers, there must also be accountability on behalf of the public authority; the two go hand in glove. If a member of the prosecution team makes a careless mistake, we do not believe that the innocent defendant should bear any loss as a consequence.

In short, it is important that those who have those powers exercise them as carefully as they can, and that those who supervise them ensure that they do so. If they fail then compensation should be payable. We suggest therefore that compensation should be payable in cases of negligent default and not just serious default. I beg to move.

I speak to Clause 72 stand part, Amendment No. 77, Clause 142 stand part, Amendment No. 134, Clause 226 stand part and Amendment No. 193. Those are all in the same form respectively as regards England and Wales, Scotland and Northern Ireland.

We support Amendment No. 76, but we go somewhat further. We suggest that where property is subject to a restraint order then compensation should be paid, whether or not there is negligence, if the order is ultimately refused. The position in ordinary civil proceedings is that, where one party is entitled to or obtains an order from the court to freeze the property of another—normally known as a Mareva injunction—the making of the injunction is conditional upon the party who seeks the injunction giving a cross-undertaking in damages; that is, an undertaking to compensate any other party for any loss suffered as a result of the making of the order.

We believe that that is the right principle and that there is no justification for the Government observing a lower standard of compensation than would be the case in ordinary civil proceedings between private parties. We believe therefore that the appropriate course, where the restraint order is made but is discharged and not replaced by a confiscation order, is for compensation to be paid for the loss which is suffered.

The Government are exercising considerable powers. The power to freeze somebody's property, as the noble Lord, Lord Kingsland, said, is one that may cause serious loss. It should therefore be the automatic result that if the order is discharged, compensation is paid. I accept, as would be the case in civil proceedings, that compensation may not be ordered in the exceptional case where the party against whom the order is made has in some way acted so as to cause suspicion and in effect to bring the order on himself. Subject to that there should be an automatic right to compensation.

The two groups of amendments spoken to by the noble Lords, Lord Kingsland and Lord Goodhart, essentially deal with the same part of the Bill but would have a considerably different effect. That is probably recognised in the brief speeches that we have just heard.

The effect of the first group of amendments—Amendments Nos. 76, 132, 133, 191 and 192—would be to make compensation payable where there was negligent default on the part of the enforcement authorities in the investigation or prosecution of an offence, and a loss had been occasioned. The effect of the second group, spoken to by the noble Lord, Lord Goodhart, would he to make compensation whenever a restraint order is discharged without a confiscation order being made, no matter why the confiscation order was not subsequently made. It may be useful for the Committee to appreciate that the provisions were debated substantively in the other place, as recorded in Hansard of 29th November at columns 411 to 426.

I turn to the first set of amendments. The Bill as drafted provides that compensation is payable where there is a serious default. The provision is settled and the Bill reflects existing legislation in that respect. There is nothing new about it. The word "negligent" is broader than the word "serious". The amendments would extend the conditions in which compensation was payable from those where one of the enforcement authorities committed a serious default to those in which the authorities committed any negligent act. Clause 72 uses the word "serious" rather than the word "negligent" because the enforcement authorities must not feel unnecessarily inhibited in the exercise of their duties.

As the Explanatory Notes point out. the restriction to serious default cases is based on the principle that the restraint and realisation of the property is ancillary to a criminal trial—in the same way as is the detention of a person pending trial. In neither case is compensation paid on acquittal as a matter of course. Many years ago, I remember raising the case of one of my constituents who served his term of imprisonment and had been released before he got his conviction and sentence quashed. He was a former police officer, so it was a highly contentious case, but he could not get a penny from the Home Office. I fear that that is the way of the world.

It is reasonable to make statutory provision for compensation where there is a serious matter, such as the fabrication of evidence, but it would be wrong to hang a compensation scheme around the necks of enforcement authorities for genuine mistakes made in the exercise of their duties. Where the investigating and prosecuting authorities have made mistakes leading to the making of a restraint order, it will be open to those affected to sue them for negligence in the civil courts. In deciding whether or not those authorities owe a duty of care, the courts will take into account the relevant public interest in ensuring that crime is investigated and prosecuted. That is our starting point.

The amendments would discourage the investigation and prosecution of crime and ultimately ensure that more criminals were left to hold onto their assets. We therefore find their wording unsatisfactory and I hope that Members of the Committee will not press them.

As I explained, the second set of amendments would give the courts power to award compensation in any circumstances where property is restrained but no confiscation order subsequently made. They would not provide the courts with any criteria as to how they should apply their power to award compensation. That would be completely unacceptable. I remind the Committee that the serious default test recognises the fact that the restraint is an aspect of criminal proceedings where a similar test applies in general before ex gratia payments are made.

The practical effects of the amendments could be enormous. For example, every defendant acquitted on a technicality could lodge a claim for compensation in respect of alleged loss while his property was under restraint. As I explained in relation to the first set of amendments, enforcement authorities must not be inhibited from performing their duties. The amendments would have precisely that effect. Indeed, they would make the whole Bill unworkable.

Obviously, these matters have been considered since they were debated in the other place, but we are less persuaded of the merits of the second set of amendments than we are of the first, because they would make the Bill entirely unworkable.

We do not think that the comparison with the Mareva injunction made by the noble Lord, Lord Goodhart, applies. We are talking about the possibility of criminal proceedings against a defendant. Restraint will be applied only where there is reasonable cause to believe that a defendant has benefited from criminal conduct. Let me make it abundantly clear that we are not discussing fishing expeditions. We do not have criminal prosecution on the basis of fishing expeditions in this country—and quite right too. The same test for compensation applies as under current legislation. There is nothing new about the principle of the Bill's provisions; it has already stood the test of time in existing procedure.

I hope that, having aired this important issue, Members of the Committee will not press their amendments.

I thank the Minister for his response. There is a curious inequality of approach by the Government between what the Minister said about this part of the Bill and what the Government provide in Part 7. Under Part 7, covering money laundering, which the Committee has yet to discuss, an individual who negligently fails to report a particular transaction will be subject to criminal proceedings. Yet in this part of the Bill, a member of the executive arm in one form or another will not be liable, even in negligence, for failing to observe a duty of care in relation to the particular defendant to which his or her attention is directed.

I submit that that is unacceptable. It is wholly appropriate for public officials exercising their powers under this part of the Bill to be subject to the law of negligence. Clearly, a duty of care must be owed, but once it is established that that duty of care is owed, an appropriate standard of conduct should apply.

I appreciate the careful attention that the Minister paid to the amendment. I shall not press it now, but I shall almost certainly return to it on Report. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Before calling Amendment No. 81, I must inform the Committee that if it is agreed to, I cannot call Amendment No. 82.

moved Amendment No. 81:

Page 47, line 34, leave out paragraphs (a) to (c) and insert—

"(a) it is specified in Schedule (Lifestyle offences);"

On Question, amendment agreed to.

moved Amendment No. 86:

Page 48, line 4, at end insert—

"(4) The Secretary of State may by order amend Schedule (Lifestyle offences)."

On Question, amendment agreed to.

moved Amendment No. 90:

Page 51, line 22, at end insert—

"() interests in property"

The noble Lord said: The definition of property in Clause 84 is too wide. Under Clause 42, the Crown Court may make a restraint order prohibiting any person from dealing with what is described as "realisable property" held by him. Under Clause 83, "realisable property" means,

"any free property held by the defendant".

Clause 84(2)(a) states that,

"property is held by a person if he holds an interest in it".

Under Clause 84(2)(f), an "interest" means,

"any legal estate or equitable interest".

Under ordinary property rules, an interest in property can be owned, but ownership of a particular interest in property does not mean that the owner of that interest necessarily owns the other interests in the same property. The definition in the clause radically extends the ordinary meaning of property. It means that the mere holding of an interest in that property may be interpreted, for the purposes of a restraint order, as including the property itself and all other interests in it. For example, if a defendant rents a house, he has a legal estate in that house: that is an interest. Under the terms of Clause 84(2)(a), the defendant would be treated as holding not only his tenancy of the house but the entire interest in the house itself. If the tenancy is of a flat that is part of a block of flats, it is at least arguable that the defendant is to be treated as holding the entire block.

That would mean that property outside the defendant's ownership or control would be treated by the Bill as being held by him and could be subject to a restraint order. It is not good enough to say that the court would not make a restraint order extending to such property or that the court would not, for instance, make a restraint order preventing dealings with a house in which all that the defendant owns is a tenancy. However, even the theoretical possibility that such a restraint order could be made makes it difficult, for example, for the landlord of a property that has been rented by the defendant to dispose of the property itself.

We should make it clear that an interest in property is itself a form of property. That is recognised in Amendment No. 90. Of course, there is nothing in the least unusual about that. In any ordinary definition of property, an interest in a property is a form of property. An interest in a house—whether it be a tenancy, a right of occupation by virtue of a trust or licence or some form of right of way over the land owned with the house—is, in itself, a separate form of property. However, we propose also to remove paragraphs (a) and (b) of Clause 84(2), so that only the interest itself can be subject to a restraint order. Thus, a restraint order would be limited to the extent of a defendant's interest in the property and would not extend to other interests in the same property.

The amendment is sensible, realistic and fair. As the Bill stands, the Government's proposals go well beyond anything that is needed or justified. To make property that does not belong to the defendant and is not, therefore, tainted property potentially subject to a restraint order is seriously wrong and could cause serious hardship. I beg to move.

The noble Lord has set his case out well. Amendments Nos. 90, 142, 202 and 265H would define property as including an interest in property. Amendments Nos. 91, 143, 203 and 265J would delete the gloss on the words "held" and "obtained".

The amendments would re-draft the definitions of property in Clauses 84, 153, 238 and 335. Amendments Nos. 90, 142 and 202 expand the definition of property to include interests. However, we consider that interests are already covered by the wide definition of property, particularly that given in paragraphs (b) and (c) of Clause 84(1).

Amendments Nos. 91, 143 and 203 would delete the gloss on the words "held" and "obtained" in relation to property. As the noble Lord explained, he does not see why that gloss is necessary if the Bill has already provided that property includes an interest. However, the terms "held" and "obtained" appear regularly in the Bill. If the paragraphs were removed, it might cause doubt about what is meant when the Bill states that a person holds or obtains property.

The gloss on the words "held" and "obtained" appears in current legislation at Section 102 of the Criminal Justice Act 1988 and Section 62 of the Drug Trafficking Act 1994. If it were not included in this Bill, it might give rise to the inference that we intended the words "held" and "obtained" to have a meaning that differed from that in existing legislation. That is not the case, and it would be unfortunate if the Bill were to be interpreted in that way.

The amendments to Clause 335, Amendments Nos. 26511 and 265J, seem to be unnecessary. They raise concerns similar to those that we have expressed in respect of Clause 84.

For those reasons, we cannot accept the amendment, and we hope that the noble Lord will be able to withdraw it.

The Minister has not really dealt with my arguments on this point. I do not blame him for that; they are, in a sense, highly technical issues of property law. No doubt, the Minister's brief has come from somewhere else. However, there is no doubt about what holding or obtaining property means, in ordinary language. Someone who holds an interest in property holds a form of property. He does not, however, hold a block of flats, simply because he holds a tenancy in the block: he holds the tenancy.

I see no need to resist the amendments on the basis that they would cause any doubt about references elsewhere in this Bill or in other legislation to the holding or obtaining of property. The real problem is that the definition of property in the clause would extend a restraint order beyond the property actually held by the defendant himself and impose a restraint order on any other interest in property in which the defendant held an interest. That goes well beyond anything that can be justified. It is clear that property should be defined in such a way as to mean that all that can be subjected to a restraint order is property held by the defendant himself or tainted property, which can be made subject to a confiscation order. Therefore, I hope that the Government will consider that matter in the interval between now and the Report stage.

I have listened carefully to what the noble Lord has said and I agree that there is an argument upon which we may need to reflect further. I am prepared to give an undertaking to write to the noble Lord so that we can attempt to reach a common understanding and to answer his point. I can see that this is a useful issue on which we should reach a settled view.

Will the Minister also consider the Scottish position because the same point arises in the amendment to Clauses 152 and 153? I mention the point only because the law of property in Scotland differs in some respects from the law of property in England and Wales and if the matter is being considered in relation to the English property provisions to which the noble Lord referred, it would be right also to consider the Scottish position in order to ensure that the point applies equally.

It would be right to reflect on that point in order to cover both positions.

I am grateful for the Minister's comments. I shall wait to see what arrives in correspondence, but if a satisfactory arrangement cannot be reached I shall wish to bring the matter back on Report. In the meanwhile, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

I rise to ask the Committee to delete Clause 88 from the Bill. I beg to move.

I rise to ask the Committee to delete Clause 89 from the Bill. I beg to move.

Clause 89 negatived.

Clauses 90 to 93 agreed to.

moved Amendment No. 92:

Page 55, line 30, leave out "three" and insert "four"

The noble Baroness said: In rising to speak to Amendment No. 92, I shall speak also to Amendments Nos. 94, 112 and 116 to 118. Amendment No. 92 is a paving amendment for Amendment No. 94, which returns in principle to one of the most important issues of the Bill; that is, judicial discretion.

Members of the Committee will remember that during the course of the first day in Committee, our Amendments Nos. 11, 13, 93, 97, 98 and 144 proposed that the court should have a discretion as to whether an investigation should take place. That proposal was rejected by the noble and learned Lord the Attorney-General on a number of grounds. First, he explained that it was a mandatory process that was not new. Secondly, he said that the provision was the only way to make legislation workable and effective. Thirdly, he said that it was unlikely in the extreme that prosecutors would consider it appropriate to spend the time or resources on pursuing confiscation orders where that was "plainly inappropriate".

The noble and learned Lord the Attorney-General went on to refer to Clause 11 relating to criminal lifestyle, whereby once an investigation has already begun safeguards exist to minimise incorrect assumptions and instances under which the court may consider that there would be a serious risk of injustice if the case were to continue. Those safeguards could be triggered only after an investigation has begun. That said, the discretion of the courts could not be exercised.

Our Amendments Nos. 15, 97, 98 and 146 proposed an alternative which could give the judge a discretion whether to make a confiscation order once the court had had the opportunity to decide whether the defendant had a criminal lifestyle; in other words, the court could exercise discretion once the judge had before him the information which underlay the reason for the prosecutor's request for an investigation. We believed that that was a sensible compromise which would retain some expressed modicum of trust in our judges and would undoubtedly save time and money. The Minister rejected that alternative on the ground that if the defendant had a criminal lifestyle, that was that. The defendant should pass over his money and then seek to persuade the court why he should have it returned.

Turning to the clauses in the Bill relating to Scotland, we are proposing in the amendment another possibility to exercise discretion at an early stage. The effect of the amendment inserts a fourth condition which must be taken into account before the court acts. Clause 94 is central to the confiscation procedure in Part 3 and lists three conditions which must be fulfilled before the court will make a confiscation order. First, the accused must have been convicted of an offence either in solemn or summary proceedings. Secondly, the prosecutor must ask the court to act under that section. Thirdly, the court must decide to order a disposal in respect of the accused. If all three conditions are fulfilled, the court will act under that clause.

The difficulty with that procedure is that no evidence will have been laid before the court at that stage to establish the prosecutor's grounds for asking the court to act under the clause. Clause 104 makes provisions regarding the statement of information which is to be given to the courts by the prosecutor. As currently drafted, however, information under Clause 104 will be provided to the court only after a decision to proceed under Clause 94 has been made.

Our view is that the statement of information should form an integral part of the initial assessment of the case and we therefore suggest that a fourth condition is added to Clause 94 stating that the court will act only after considering a statement of information.

Adoption of that procedure will ensure that the conditions specified in Clause 94 will mirror the procedure detailed in Clauses 107, 108 and 109. In those clauses, the court will not proceed unless it has considered the evidence presented to it by the prosecutor. The inclusion of that fourth condition in Clause 94 would therefore ensure consistency of confiscation procedure throughout this part of the Bill.

As regards Amendment No. 112 and consequential amendments, if it is accepted that the court should receive a statement of information from the prosecutor before acting under Clause 94, the prosecutor will be required to provide a statement at the stage when the confiscation is sought. This amendment and those related seek to reflect the proposed altered procedure. I beg to move.

I support this amendment since it has the support of the Law Society of Scotland. One bears in mind that the second condition is that the prosecutor must ask the court to act under the clause. I believe that in practice a prosecutor would not think it right to take that step unless he was in possession of information which would justify proceeding beyond the opening of the procedure in Clause 94 and carrying it through to the end. Therefore, in practice I suspect that the prosecutor would be in possession of the information called for in the additional condition mentioned in the amendment.

If there were practical reasons why the prosecutor could not at the initial stage provide the information then the position would be rather different. My own experience suggests that in practice the prosecutor would be in a position to do this at the outset. There is much to be said for the point made that it would be better to have the position clarified at the outset so it is established before the procedure gets under way.

My understanding is that the issue was fairly debated in another place and given quite a lot of consideration. As the noble Baroness said, subsections (2) to (4) of Clause 94 set out three conditions which must be satisfied if the court is to act. As the noble Baroness said, these amendments insert a fourth condition, that the court must first consider the evidence contained in the prosecutor's statement of information.

Our argument is that Amendments Nos. 92 and 94 are unnecessary. The prosecutor's statement, which sets out the Crown's calculation of an accused's proceeds of crime and assets, will in practice always be served on a convicted person and also lodged with the court. Accordingly, the court will always have before it a prosecutor's statement, so that point is satisfied.

If the convicted person has neither a proceeds of crime figure nor assets, then the Crown would not pursue confiscation. Amendments Nos. 92 and 94 would therefore not provide any further safeguard because the protection is already in place. The remaining Amendments Nos. 112, 116 and 118 are consequential on Amendments Nos. 92 and 94.

I am not an expert on the Scottish situation. It is only the prosecutor who can make such a Motion. The court itself cannot instigate confiscation proceedings of its own volition. In addition, confiscation proceedings are only alive and running when the prosecutor makes a Motion and pursues that course. Therefore, the amendment is unnecessary in any event. We see the point which the noble Baroness makes, but we believe that the situation is already covered. I hope that those assurances are sufficient and that the noble Baroness is encouraged to withdraw her amendment.

I thank the Minister for his response. I accept entirely what he has said, which has given me food for thought. I shall consider it with care and at Report stage we shall consider the contrasting position for England and Wales, which may be very helpful to us. On that basis I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

moved Amendment No. 99:

Page 56, line 23, at end insert—

"() In making representations to the court under subsection (8), any person whom the court thinks is likely to be affected by the order shall he entitled to appear before the court."

The noble Baroness said: This amendment seeks to ensure that those persons who are likely to be affected by the making of a confiscation order will have an opportunity to appear before the court to make representations. In essence, it is a probing amendment. While we welcome the expressed position in the Bill, supported by the Law Society of Scotland, to enable third parties who are likely to be affected by a confiscation order to make representations to the court, we believe that it should also be clear from the Bill that such parties can appear before the court to make representations. That should ensure that any confiscation order made will be for the correct amount and that delays in the realisation of the proceeds will be kept to a minimum. Perhaps the Minister can clarify why the reference to representations does not expressly allow for it to be in person. I beg to move.

I hope that I shall be able to satisfy the noble Baroness. The amendment seeks to expand on Clause 94(8) but it does not add anything to it. Subsection (8) provides that, before making the confiscation order, the court must take into account any representations made to it by any person who the court believes is likely to be affected by it. In practice, any person who may be affected by such an order is entitled to appear before the court and make out a case. That is a well-established procedure in Scotland and it is endorsed by the courts.

The proposed amendment does not afford third parties any greater rights than are already afforded to them under subsection (8). I realise that the wording might not give that impression, but in practice it is exactly the same. We are like minds on this matter. The amendment is unnecessary to achieve the purpose to which the noble Baroness referred. I have put it on record that it has no effect and that no one will be denied the opportunity to put their case.

I thank the Minister for his response which I accept with pleasure. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Later, I shall ask the House to delete this clause. Before doing so, I shall speak to Amendment No. 110A. This amendment and others mirror amendments already agreed to by your Lordships' House when we discussed Part 2 of the Bill. The equivalent of Clause 7 in Part 2 of the Bill has already been deleted and the related amendments arise out of concerns expressed in the other place about the drafting of the postponement provisions.

As presently drafted', Clause 95 states that a confiscation order must be made before sentence. However, that is subject to Clause 103, which makes it clear that if confiscation proceedings are postponed under Clause 102, a confiscation order may be made after sentence. In practice, confiscation proceedings are usually postponed and the sentence will normally be passed before a confiscation order is made. That implies that a confiscation order will normally be made before sentence and that confiscation proceedings will be postponed only exceptionally. The terms of Clause 95, as drafted, are extremely confusing.

The amendments are designed to improve the practical and flexible operation of the Bill and mirror the changes already made in Part 2 of the Bill.

Clause 95 negatived.

moved Amendment No. 106:

Page 60, line 3, at end insert—

"(ba) the needs and financial resources of a person of the same sex as the person concerned, who is and has been for a period of not less than six months living with the person concerned in a relationship which has the characteristics, other than that the persons are of the same sex, of the relationship between husband and wife, or if the person concerned is in custody, had so lived with the person concerned until the person was so remanded;

(bb) the needs and financial resources of any member of the person concerned's family who is, and has been, for a period of not less than six months, living with the person concerned in the family home, or if the person concerned is in custody, has so lived with the person concerned was so remanded;"

The noble Earl said: This group of amendments apply the admired provisions for the treatment of the family home in Scotland. Amendments Nos. 106 and 108 are the substantive amendments; the remainder are consequential.

Amendment No. 106 seeks to extend the protection currently afforded to spouses, former spouses, children and grandchildren, to other members of the accused's family—for example, siblings—and also to same sex partners of at least six months' standing. Anyone for whom the dwelling is home ought to have such protection and a right of representation. Why should there not be equal treatment? All those who live in the dwelling should have their needs and financial resources considered before the decision to dispose of the home is taken. On the subject of same sex partners, I should point out that their relationship has been recognised in the Scottish Parliament's legislation under Section 87(2) of the Adults with Incapacity (Scotland) Act 2000.

Amendment No. 108 would require the court to take into account any representation made to it by anyone for whom the dwelling in question is home. It would do so by widening the list of such people under subjection (3) of Clause 101. Elsewhere in the Bill, interested parties are expressly given the opportunity of representation—for example, under Clause 94, which deals with the making of a confiscation order, and under Clause 126, which relates to the protection of persons affected by any action taken by the administrator.

Given the consequences of the sale of a family home for anyone, it is only reasonable that all those involved should be treated equally. I beg to move.

I support the amendment moved by the noble Earl, Lord Mar and Kellie, to which I have attached my name. The amendment would extend the protections currently available to the spouse and children of the accused's family under Clause 101 to same sex partners of the accused who have been living with the latter for no fewer than six months; and to those members of the accused's family who have been residing with him or her for a similar period.

In expressing my support for the noble Earl, I must reiterate his reference to situations where it is most important to consider both the needs and financial resources of other members of the family who have been residing with the accused in the family home. Let us take, as an example, siblings who could have been residing together for a period of time in a house that is registered in joint names.

In some ways, we return to some of the points made in a previous debate on this complicated area of the Bill dealing with rights to the family home. As the noble Earl said, Amendment No. 106 seeks to extend the protections available to the spouse, the former spouse, and the children and grandchildren of the accused's family under Clause 101 to same sex partners of the accused who have been living with the latter for no fewer than six months; and, indeed, to any member of the accused's family who has been residing with him or her for a similar period. As the noble Earl pointed out, some amendments in this group are consequential.

I took advice on this amendment, because my original notes did not indicate whether the matter had been raised in the other place. We are dealing with an important area of the legislation, and I make no complaints about the issue being raised again. However, Clause 101 provides a degree of protection to the accused's spouse, or former spouse, and to any child or grandchild of the accused against the disposal of the family home. That replicates the existing provisions in the Proceeds of Crime (Scotland) Act 1995, which, in turn, mirrors the provisions of Section 40 of the Bankruptcy (Scotland) Act 1985.

The Government and the Scottish Executive believe that any changes in this area of law should not be made in a piecemeal way—I do not mean that in a pejorative sense —but rather as part of a coherent consideration of all the issues involved. To that end, the Scottish Executive intends to issue a draft family law Bill, based on the 1992 report on family law of the Scottish Law Commission. I understand that the intention is to try to produce that draft around the end of this year.

For the convenience of the Committee, I should point out that the matter was raised on Report in another place on 26th February, at cols. 609 to 624 of the Official Report, when exactly the same point was made. We believe that this area of law should be considered in the round rather than in a piecemeal way by tagging it on to this Bill. We need to await a full and proper deliberation and consultation, based upon some draft legislation issued by the Scottish Executive. Given my explanation of the position, I hope that the noble Earl will feel able to withdraw his amendment.

I am grateful to the Minister for his response, which I shall certainly want to consider. My instincts are that the Bill is too narrowly drawn, although I take the point that other legislation is similarly narrow. However, if the report of the Scottish Law Commission recommends changes`, we need to know whether that would automatically change this Bill. Indeed, when this Bill is enacted, can the Minister say how it can be subsequently changed?

For the avoidance of doubt, I should emphasise the fact that the Scottish Law Commission produced a report in 1992 on family law. The Scottish Executive intends to issue a draft family law Bill based upon that 1992 report. Legislation may, or may not, flow from that process. Obviously I cannot pre-empt a draft Bill to which I am not party and which has not yet been produced—and which, of course, would require consultation and parliamentary approval in Scotland. However, that would be the vehicle for change because it is primary legislation. That is the role of the Scottish Executive in relation to Scottish matters.

Before the Minister concludes, am I right in thinking that there would perhaps be a problem with amending the legislation that will result from this Bill because we are dealing with a United Kingdom Act to which the Scottish Parliament would not be able to make consequential changes? Is there perhaps a case for introducing a power to amend this clause by way of secondary legislation to coincide with Scottish legislation?

I do not know the answer to the noble Lord's question. We are legislating here in respect of areas of Scottish law under the agreed devolution settlement proposals. The Scottish Executive agreed that we could deal with this legislation; in other words, we, the Westminster Parliament, are dealing with Scottish arrangements on behalf of the Scottish Executive. I do not know whether it is a two-way process, but, from a practical point of view, I suspect that is must be so. However, that is not a definitive answer.

We have had a brief but interesting debate. Clearly, we need further to consider the matter. At this point in the proceedings, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

moved Amendment No. 110A:

Page 60, line 44, leave out subsection (1) and insert—

"(1) The court may—

(a) proceed under section 94 before it sentences the accused for the offence (or any of the offences concerned), or

(b) postpone proceedings under section 94 for a specified period.

(1A) A period of postponement may be extended "

On Question, amendment agreed to.

moved Amendment No. 111 A:

Page 62, line 1, leave out subsection (6).

On Question, amendment agreed to.

moved Amendment No. 119A:

Page 64, line 38, leave out "sections 94(4) and 95 do" and insert "section 94(4) does"

On Question, amendment agreed to.

Clause 107, as amended, agreed to.

moved Amendment No. 120A:

Page 66, line 20, leave out "sections 94(4) and 95 do" and insert "section 94(4) does"

On Question, amendment agreed to.

Clause 108, as amended, agreed to.

moved Amendment No. 120B:

Page 67, line 12, at end insert—

"(aa) there is evidence which was not available to the prosecutor at the relevant time,"

The noble Lord said: This group of government amendments deals with the ability of the prosecutor to return to court within six years of the accused's conviction for an increase in the confiscation order or a new confiscation order where none was made at time of the original trial. They mirror the amendments that we have already made to Part 2 of the Bill.

The amendments have three purposes. First, under Clauses 107 and 108, the prosecutor is allowed to apply to the court for a revaluation of the accused's benefit from crime only if he has new evidence. There is currently no requirement of this kind in Clause 109. In theory, an application could be made to the court on the basis of evidence held back in previous proceedings. The first purpose of the amendments is, therefore, to bring Clause 109 into line, so that the prosecutor will be able to apply only if there is new evidence.

Secondly, our intention has always been that more than one revaluation should be possible under Clause 109. In looking again at the reconsideration clauses, we doubt whether the wording of the clause currently achieves that intention. It appears to allow for only one application. We have accordingly taken the opportunity to make it quite clear that there may be more than one revaluation under Clause 109. We have also made changes to Clause 110 making it clear that more than one application can be made under Clause 110.

Finally, Clause 110 permits the prosecutor to apply to the court for an increase in the confiscation order where more realisable property comes to light.

Arguably, the clause does not allow such an application to be made where a confiscation order has been varied under Clause 109. We have taken the opportunity to put it beyond doubt that such applications are permissible.

These are fine-tuning amendments. However, I hope that they will send the same message to the criminal fraternity; namely, that we are coming after them for the proceeds of crime. They will certainly help to ensure that the Bill will operate in Scotland exactly as we would wish. I beg to move.

Has thought been given to the inclusion of the words, "even if he had made reasonable inquiries"? In other words, the prosecutor could not have known about the evidence in the first instance even if he had made reasonable inquiries. It seems that at present one can have a second bite of the cherry without having to demonstrate that one made an effort in the first place to discover whatever the evidence might be. Surely that cannot be the case unless an effort was made in the first instance.

Perhaps I may intervene in that connection. The noble Baroness's point matches a provision that allows an accused person to appeal on the ground of fresh evidence. That right to appeal is qualified by a provision which disables him from doing so if the evidence on which he seeks to rely was not available to him or was not reasonably available to him. That qualification has often proved to be valuable in doing justice. So there is some force in the noble Baroness's point—namely, in achieving some kind of symmetry between the various provisions that operate in the various branches of the criminal law.

Before replying to those points, perhaps I may repeat the point I made earlier. Under Clauses 107 and 108, the prosecutor is allowed to apply to the court for a revaluation of the accused's benefit only if he, the prosecutor, has new evidence. As I said, in theory, he could apply to the court on the basis of evidence that had been held back in previous proceedings. I cannot envisage such circumstances, although I suppose that they must arise. The idea of holding evidence back in earlier proceedings in order to have a go at someone later sounds slightly weird.

The provision is subject to the court's discretion. So the court will not grant an application where it deems it to be inappropriate. It will be for the prosecutor to make the case to the court. It is not as though the prosecutor has carte blanche in this situation.

I re-emphasise the fact that the court will have the discretion. If it thinks it inappropriate for the prosecutor to return to make the case on the basis of new evidence, it will be up to the court to determine that, not the prosecutor.

On Question, amendment agreed to

moved Amendment 120C:

Page 67, leave out line 15 and insert "relevant amount"

On Question, amendment agreed to.

moved Amendment No. 121A:

Page 67, line 18, leave out "on which his belief is based"

On Question, amendment agreed to.

moved Amendment No. 122A:

Page 67, line 40, leave out from first "the" to fourth "the" and insert "relevant amount"

On Question, amendment agreed to.

moved Amendment No. 122B:

Page 68, line 20, at end insert—

"(10A) The relevant time is—

(a) when the court calculated the accused's benefit for the purposes of the confiscation order, if this section has not applied previously;

(b) when the court last calculated the accused's benefit in pursuance of this section, if this section has applied previously.

(10B) The relevant amount is—

(a) the amount found as the accused's benefit for the purposes of the confiscation order, if this section has not applied previously;

(b) the amount last found as the accused's benefit in pursuance of this section, if this section has applied previously."

On Question, amendment agreed to.

moved Amendment No. 122C:

Page 68, line 34, leave out from third "the" to fourth "the" on line 35 and insert "relevant amount"

On Question, amendment agreed to.

moved Amendments Nos. 122D and 122E:

Page 68, line 39, leave out "(when the confiscation order was made)"

Page 69, line 8, at end insert—

"(7) The relevant amount is—

(a) the amount found as the available amount for the purposes of the confiscation order, if this section has not applied previously;

(b) the amount last found as the available amount in pursuance of this section, if this section has applied previously.

(8) The amount found as the accused's benefit from the conduct concerned is—

(a) the amount so found when the confiscation order was made, or

(b) if one or more new calculations of the accused's benefit have been made under section 109 the amount found on the occasion of the last such calculation."

On Question, amendments agreed to.

moved Amendment No. 126A:

Page 76, line 23, leave out from first "the" to end of line 24 and insert "relevant amount (as defined in that section)"

On Question, amendment agreed to.

moved Amendment No. 126B:

Page 76, line 31, leave out from first "the" to end of line 32 and insert "relevant amount (as defined in that section)"

On Question, amendment agreed to.

moved Amendment No. 127:

Page 77, line 15, at end insert—

"() to specified parts of the realisable property held by the specified person"

The noble Lord said: I beg to move Amendment No. 127, which I can do telegraphically. In considering what property would be affected by a restraint order, in our view due regard must be given to the principle of proportionality. In that respect, consideration should be given as to whether it is necessary to restrain all realisable property or only specified parts. This amendment seeks to ensure that any action taken is compatible with the European Convention on Human Rights. I beg to move.

In response to the noble Lord's final point, I have every reason to believe that this provision is compatible with the European Convention on Human Rights. The certificate on the front of the Bill is not in any way qualified and thus makes a fairly hold statement. I received good advice that I could sign the paper which declared the Bill compatible and I am satisfied that that advice was sound.

The noble Lord has raised an important point. However, Clause 123(2)(a) provides that a restraint order can apply to all realisable property held by a specified person. This amendment seeks to provide that a restraint order need only apply to specified parts of the realisable property. We believe the amendment to be unnecessary. Clause 123(1) already makes it clear that not all the realisable property need be restrained. In other words, the court in exercising its discretion already has the power to order restraint against only specified parts of the realisable property. Given that, I invite the noble Lord to withdraw his amendment.

So far as concerns opinions about compatibility with the European Convention on Human Rights, there are those that are certified and there are those that are certifiable. I cannot accept the view expressed by the noble Lord in the context of this amendment. I wish to test the opinion of the Committee.

moved Amendment No. 131:

Page 82, line 6, at end insert "and in so doing, to appear before it"

The noble Baroness said: I shall be brief. This amendment is similar in principle to previous amendments. It would ensure that those persons likely to be affected by an enforcement order under Clause 131 would have an opportunity to appear before the court to make representations.

We have been in consultation with the Law Society of Scotland, which welcomes, as we do, the express provision in the Bill to enable third parties who are likely to be affected by orders of the court to make representations to the court. We feel that it should be clear from the Bill that such parties can appear before the court to make those representations. The aim of the amendment is to ensure that those who will be affected by the actions of an administrator under Clause 131 will have such a right. I beg to move.

I can be equally brief, because the answer is virtually the same as on the previous amendment. The amendment would not add anything to the clause. Subsection (11) provides that before giving an enforcement administrator the power to manage or realise any realisable property, or before ordering a person to make payments to the administrator, the court must give persons who have an interest in the property an opportunity to make representations to it. The aim of the amendment is to give such persons a right to appear before the court.

However, in practice, any person who may be affected by an action of the court in that regard is entitled to appear before the court and make out their case. This is a well-established procedure in Scotland and is endorsed by the courts. The amendment would not afford third parties any greater rights than are already afforded to them under subsection (11). The question is the same, legitimately asked, and the answer is the same. I therefore hope that the noble Baroness will withdraw the amendment.

I thank the Minister for his full reply, which I accept entirely. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

moved Amendment No. 135A:

Page 89, line 9, leave out paragraphs (a) to (c) and insert—

"(a) it is specified in Schedule (Lifestyle offences: Scotland);"

The noble Lord said: In moving Amendment No. 135A, I shall speak also to the other amendments in the group.

These amendments mirror similar amendments that have already been discussed in relation to Part 2 of the Bill. The new Scottish and Northern Ireland schedules determine which single offences will attract a criminal lifestyle and, as a consequence, the application of the assumptions in Clauses 99 or 166 of the Bill. The various offences set out in the Scottish and Northern Ireland schedules correspond to those set out for England and Wales in the schedule we have already debated.

I am quite happy to give a more detailed explanation of the individual amendments but, given my brief explanation of what these amendments seek to do and bearing in mind what has already been done in other parts of the Bill, I hope that they will meet with the Committee's approval.

We certainly approve of the schedule proposed in Amendment No. 140A because of the clarity it will bring to the legislation in describing "criminal lifestyle".

On Question, amendment agreed to.

moved Amendment No. 139A:

Page 89, line 23, at end insert—

"(3) The Scottish Ministers may by order amend Schedule (Lifestyle offences: Scotland)."

On Question, amendment agreed to.

moved Amendment No. 140A:

Before Schedule 3, insert the following new schedule—

moved Amendment No. 154:

Page 100, line 29, leave out subsection (1) and insert—

"(1) The court may—

(a) proceed under section 161 before it sentences the defendant for the offence (or any of the offences) concerned, or

(b) postpone proceedings under section 161 for a specified period.

(1A) A period of postponement may be extended."

moved Amendment No. 156:

Page 102, line 3, leave out paragraph (b).

On Question, amendment agreed to.

moved Amendment No. 161:

Page 104, line 21, leave out paragraph (b).

On Question, amendment agreed to.

moved Amendment No. 164:

Page 106, line 18, leave out paragraph (b).

On Question, amendment agreed to.