My Lords, I have to notify the House, in accordance with the Royal Assent Act 1967, that the Queen has signified her Royal Assent to the following Act:

Communications Act.

asked Her Majesty's Government:

My Lords, from the outset, the Government have urged the United States Government to resolve the position of the detainees. The Government are currently making vigorous representations to the United States Government about the future of the UK detainees at Guantanamo Bay. These representations cover a range of issues, including the need for any trials of UK detainees to be fair and to accord with international law, as well as the possible return of the detainees to the United Kingdom. My right honourable friend the Prime Minister will raise this matter with the President of the United States in the course of his imminent visit to Washington.

My Lords, does my noble friend agree that if the Prime Minister is resolute and unequivocal on this matter, he will certainly have the backing of the entire nation? Does she also agree that, important as the British subjects obviously are—still waiting, with their families, to learn the nature of the charges—the matter is much greater than those British subjects? It is the whole issue of human rights and the international rule of law. Does she agree that the whole purpose of the stand against global terrorism is to preserve human rights and the international rule of law? Does she further agree that that stand is certainly not so that the powerful can unilaterally rewrite international law and their interpretation of the applicability of human rights? Finally, does she agree that the danger in this situation is that it is proving to be a very effective recruiting agent, through disillusion, dismay and even anger, for the extremist terrorists?

My Lords, on the last occasion that we discussed this issue in your Lordships' House, when I repeated a Statement, very similar points were made about the wider implications of what is happening in relation to the detainees at Guantanamo Bay. I believe I said then that I felt that the issues did go wider, as did the one concerning the British nationals, and that it was in the United States Government's own interests to resolve them along the lines of the norms of international law. Were they not to do so, they would themselves find that there would be those who felt that the United States Government had not lived up to their own high standards.

However, I should say to my noble friend that our first issue must be that of our own nationals. The matter on which many people in the United Kingdom are focused concerns the two British individuals among the group of six originally designated by the United States. Of course my right honourable friend will be concentrating on those British nationals in the first instance. However, I take my noble friend's broader points, and I believe that they are widely recognised by Her Majesty's Government.

My Lords, does the Minister agree that it probably does not make much legal sense to think in terms of the repatriation of these two accused individuals, but that that makes it all the more important to insist, as has been emphasised by the noble Lord, Lord Judd, on due process, proper trial proceedings, proper representation and clear charges? Does she accept that while noble Lords on these Benches recognise all the legal problems of trying to bring the two individuals back to this country, we think that the principles of due process are absolutely essential and should be pressed with the utmost vigour?

My Lords, as I indicated in my original Answer, the issue of the possible return of the detainees to the United Kingdom is still a matter under discussion, although, as I am sure all noble Lords are aware, it is not possible for the United Kingdom Government to give any guarantees even about a trial taking place because of the separation of powers—rightly—between the Government in the form of Government Ministers and the Crown Prosecution Service as the body which would decide whether there is sufficient evidence to go to trial.

However, the noble Lord is quite right to remark that the issues adduced by him of due process and the right to a fair trial still arise. Further, there are widely recognised international norms covering the various elements that constitute a fair trial which my right honourable friend will be addressing with the President of the United States.

My Lords, in the course of his discussions on this topic, will the Prime Minister impress upon Mr Bush the point that if he thinks that the procedures of the military commissions are fair, then the presence of international observers at the hearings, in particular in relation to the British nationals, may promote confidence in the fairness and integrity of those proceedings? If they are not fair, the constructive criticism that would result may at the very least help the authorities to modify those procedures or, it is hoped, cause them to abandon such procedures altogether.

My Lords, the question raised by the noble Lord may be premature at this stage; we are still discussing what those procedures should be. If the trials as originally formulated by the United States authorities do go ahead, I think that there would be grave difficulties as regards any observers feeling that those trials would be fair on the basis that we have already discussed. There is no secret about this issue. The United Kingdom Government have very strong reservations about what is being proposed at the moment. However, to take the point that were some of those issues to be resolved and the trials to go ahead, I can agree with the noble Lord that the presence of international observers would provide something of a confidence boost to the international community. As my noble friend Lord Judd pointed out, this is a question not just for the United Kingdom but also for the international community.

However, we must recognise that some of the issues which may be brought up at those trials may have to be dealt with in camera, for very obvious security reasons.

My Lords, does my noble friend agree that the conditions under which these individuals are being held in Guantanamo Bay would be unacceptable within the British prison system or, indeed, within the prison system in the United States? Given that those conditions have been oppressive, many of us seek assurances that, if the individuals are brought to trial, it should not happen in circumstances where they have been, so to speak, coerced and oppressed into possibly pleading guilty and are not able to speak up for themselves after the period that they have been held in detention. Enormous concerns will be raised about the way in which such trials will be conducted, given the circumstances surrounding the detention of these people.

My Lords, the noble Lord raises two issues. We have made representations to the United States Government in regard to the physical conditions under which the individuals are held—for example, the inadequate facilities for exercise and the inadequate facilities for contact with their families. Representatives of the International Red Cross have visited Guantanamo Bay and are giving their advice to the United States Government.

The more difficult issue pinpointed by my noble friend concerns coercion. It might be argued that a system of plea-bargaining where the alternative to admitting to charges is to face the death penalty is a coercive and difficult line of pre-trial cross-examination.

My Lords, on the issue of coercion, is it correct that these men are denied access to an advocate of their own choice? If it could be agreed with America that the men could choose their own advocates—and there are some very fine ones in America—that would perhaps go some way.

My Lords, as I understand it, the United States proposes that individuals should be given an advocate chosen from a panel of military lawyers. If an individual does not want to go along with such an arrangement, there may be an opportunity for him to go to an alternative lawyer, but that lawyer will still be drawn from a panel of lawyers who have been vetted by the United States for security purposes. I understand that those are the proposals currently under discussion.

These matters are still under discussion with the United States. As I indicated when we last debated this issue, my right honourable friend the Foreign Secretary is dealing with these matters with his opposite number, Colin Powell. He has raised the serious concerns that we have over the kind of issues raised by the noble Lord and they have agreed that discussions on them will continue.

My Lords, does the Minister agree—

My Lords, I am sorry, we have already drifted well over time.

asked Her Majesty's Government:

My Lords, Barbara Cassani has been selected as the leader for the London bid and is actively recruiting a high quality team. Work is well advanced on the preparation of a development strategy for the Olympics zone in the Lower Lea Valley that will also meet local regeneration aspirations and be of lasting value to the community. Work is also under way on the development of a robust transport solution for the games. Government, the Mayor and the British Olympic Association are fully committed to supporting the London hid team in the preparation of a top-class winning bid.

My Lords, we warmly welcome the Government's strong support for the London bid, which we share. I was pleased to note that the Prime Minister is on record as saying that he will,

"back the bid to the hilt",

which of course means that it is inconceivable that we will lose. So why are the Government, alone among all the competing bids, to preside over cuts in the world-class performance programmes to support our young elite sportsmen and women on whom our hopes of medal success depend? And why, when the Government are introducing a welcome Olympics lottery game, are they considering taxing the proceeds and not reinvesting the tax take into the Olympics bid?

My Lords, as to the noble Lord's first point, there are two aspects to encouraging sport. First, there is the aspect of elite sport, which concerns those who will be competing soon. We have allocated £58 million to elite sport in the past financial year. Secondly, and perhaps more importantly in the longer term, there is the money spent on sport in schools and clubs and on coaching and so on. On this aspect we have allocated £1.2 billion for the period 2002–06.

As to funding and lottery money, it is estimated by Ove Arup that the total cost of holding the games would be £3.6 billion, of which £2.5 billion would be met from revenue, with the remainder coming from a funding package from the Government and the Mayor including £1.5 billion. As the funding package amounts to £2.4 billion, it can be seen that there is ample provision for any revenue shortfall.

My Lords, does my noble friend agree that the case for the bid would be immeasurably strengthened if Crossrail could be completed by 2012? This would undoubtedly represent an important part of the robust transport solution to which he referred in his Answer. Why is it not possible for the hybrid legislation to be brought forward and introduced in April so that the necessary planning can be undertaken for the line to be up and running by the time the games start?

My Lords, the bid is being prepared on the basis that Crossrail will not be available by 2012. Indeed, Transport for London, the Mayor's organisation, has stated that it does not expect it to be available until 2013–14. That is why the bid has to be prepared without Crossrail. However, the Olympics zone in the Lower Lea Valley is served by no fewer than six rail lines, in addition to the motorway-standard part of the A12.

My Lords, does the Minister agree that the development of grass roots sports will be of absolutely no use to the Olympics bid if those athletes are not prepared properly for international competition? We must make sure that the connection between the two is seamless. Can the Minister assure the House that the Paralympics are seen as a partner in the process and not simply as a tag-on? Even if they are a junior partner, they should be seen to be integrated from the very beginning.

My Lords, I entirely agree with the noble Lord as regards his first question. That is why, in my response to the noble Lord, Lord Moynihan, I referred to both elite sports and grass roots sports. As to the Paralympics, the International Olympic Committee sees the Olympics and the Paralympics together. No bid which devalues the Paralympics will have any hope of success, and we recognise that in the way in which we are preparing our bid.

My Lords, in declaring an interest as a resident in Greater London, may I ask the Minister how much of the cost of staging the Olympics here will fall on the council tax payers of London and how long it will take to be discharged?

My Lords, sharing that interest, I understand that the Mayor proposes that there should be an addition to the council tax, which would start only if and when the bid is successful, roughly for a period of 10 years. It would be approximately £20 on band D of the council tax for each of those years.

My Lords, if the bid were to be unsuccessful, what would he the cost?

My Lords, £17 million.

asked Her Majesty's Government:

My Lords, the Government are studying carefully all the recommendations made by the Chief Medical Officer. We shall consider how they can be taken forward with all government departments, including the health service. Smoking policies within the Parliamentary Estate are, of course, the responsibility of the parliamentary authorities.

My Lords, I thank my noble friend for his reply but, once again, I have to say how disappointed I am with his response. Does he agree that there is now overwhelming evidence to show that passive smoking causes ill health in adults, and especially in children, who suffer from asthma and other chest complaints? Does he further agree that the Chief Medical Officer's strong recommendation should not be ignored, and that every employee should have the right to work in a smoke-free environment, especially those who work on the Parliamentary Estate? May I say, in the nicest possible way, that I wish the Government would stop dragging their feet on this issue and implement these recommendations as soon as possible?

My Lords, let me reassure my noble friend that the last thing we are going to do is ignore the Chief Medical Officer's advice. We agree that there is overwhelming evidence of the damage to health caused by second-hand smoke to both adults and children. We agree that smoke-free places are the ideal, and good progress has been made in this area. We will be following a strategy to encourage this improvement.

The recent publication by the Office for National Statistics shows that, for the first time, 50 per cent of workplaces do not allow smoking at all. That is up from 40 per cent in 1996. It confirms that most people want restrictions on smoking in restaurants and pubs. I draw your Lordships' attention to the fact that the Department of Health has set a good example by making all its buildings smoke-free since April.

My Lords, I wonder whether the Minister does not detect some underlying frustration in the CMO's report at the failure of the Department of Health to come to an agreement with the DTI on the introduction of the code of practice on workplace smoking. Is it not high time that the Department of Health got the DTI to agree to the ACOP and introduced it?

My Lords, the Chief Medical Officer recommends that very serious consideration should be given to introducing a ban on smoking in public places. This issue is still being considered within government and I have nothing to add since earlier discussions.

My Lords, as always, I declare an interest, as a member of the Pipe and Cigar Smokers' Club. While acknowledging the perseverance of the noble Baroness, Lady Gale, on this subject, is it not getting rather close to an abuse of Question Time in that she asked a virtually identical question in this House on 1st July? Does the Minister agree with the wise words of the noble Lord, Lord Wallace of Saltaire—who is not in his place—when he said on that occasion,

"do the Government accept that it should be a principle of liberal democracy that government should interfere with people's lives as little as possible, and that further bans should be very carefully justified before the detail of government regulations extend into every aspect of our private lives?"?—[Official Report, 1/7/03; col. 721.]

My Lords, it is not for me to comment, other than to say that I am always pleased to answer Questions from my noble friend on this subject.

As regards the quote that the noble Lord read out, I do not think that we can duck out of the fact that smoking, as the Government's Chief Medical Officer has said, is a great danger to health. That is an inescapable fact and it would be an irresponsible government who were not taking forward a range of programmes to make the public aware of these dangers and to deal with issues around tobacco advertising. I do not think that the Government feel in any way repentant about that particular issue. We are aware of some of the issues surrounding a ban, but we think that increasing public awareness of the dangers of secondhand smoke exposure is a significant way forward.

My Lords, is my noble friend aware that the chemicals to which people are exposed through second-hand smoke include arsenic, DDT, formaldehyde—which they say is used as a preservative for dead bodies—hydrogen cyanide—which is referred to as a gas chamber poison—Polonium 210, which is a radioactive compound, and toluene, which is an industrial solvent? If these facts were more widely known, would people not give up of their own accord?

My Lords, I bow to my noble friend's knowledge in this area. He is of course right that cigarettes carry very dangerous compounds and we know that smoking kills over 120,000 people in the UK each year. The good news is that there has been a rise in the number of people quitting since 1999, and about 270,000 people have quit.

My Lords, I take the Minister back to the reply he gave when the noble Lord. Lord Clement-Jones, asked when the Government were going to give their official position on the ACOP. I remind the Minister that the Health and Safety Executive finished consultation in 1999 and we have still not had the Government's official position on the implementation or acceptance of the ACOP. When will he tell us?

My Lords, we are still carefully considering this report. As I have already said, work is in hand on a large number of other initiatives which are tackling the problems of smoking.

Will the Minister inform us whether the contractors working in government departments and on the Parliamentary Estate are being advised that smoking is not acceptable, given the dangers to themselves, quite apart from the dangers of passive smoking to other people working in government areas?

My Lords, as I recall, matters for the Parliamentary Estate are for the parliamentary authorities, not for the department. On the wider issue it is, of course, the responsibility of employers to make sure that their employees are not exposed to unnecessary dangers.

My Lords, is the Minister not surprised, following all the gloomy information which has been imparted to us, that there are so many old people still surviving in this Chamber?

My Lords, it has been suggested that the formaldehyde might play a part in this.

asked Her Majesty's Government:

My Lords, we move seamlessly from smoking to the Working Time Directive. The directive already applies to all NHS staff except doctors in training, to whom it will he extended from August 2004. The Department of Health is actively working with the NHS and the medical profession to implement this change in ways which will benefit both patients and staff. Solutions will vary from NHS trust to NHS trust, but will include using staff differently by, for example, creating night teams to staff hospitals out of hours.

My Lords, I am grateful for that Answer. If I were of a suspicious frame of mind, I would wonder whether I had left my prepared supplementary lying around in the Library. The Minister's honourable friend, Mr Hutton, stated in a press release today:

"Further measures were announced today by the Department of Health to ensure that the NHS complies with its obligations".

The directive goes on to say much of what the Minister has already said. This, very sensibly, involves talking to the strategic health authorities. Is the Minister aware that the department has only seven months before the eagle eye of the Commission will be directed at this country on that particular matter? At the end of that time, he will have run out of time to use the derogation for extending the time limit beyond August next year for another two years.

My Lords, I have not seen the noble Lord's prepared supplementary, but I reassure him that we have not been sitting idly by. He may not be aware that some time ago we set up a Working Time Directive expert group, which had on it people from the Royal Colleges, the JCCs, the NHS Confederation and other key stakeholders, who have been working together on the issue. There are 19 Working Time Directive pilots that have been going on for some time, which are working out new ways of working locally that will help to deal with the implementation. A great deal of action is taking place in that area, and we have been putting aside money for the pilot sites and to help trusts to implement the Working Time Directive when it comes into force.

My Lords, the Minister talks about actions being taken, pilots, discussions and so on and so forth. Is it not the fact that the NHS is not yet ready for the introduction of the Working Time Directive in the particular area identified? Why does he not accept the suggestion of the Royal College of Physicians that the introduction of the Working Time Directive be delayed?

My Lords, we are not convinced that the Working Time Directive does need to be delayed. I can certainly write to the noble Lord. I shall not bore noble Lords with all the details, but I can refer to the 19 pilot sites, where some very interesting work is going on about the way in which pressure can be taken off senior house officers, for example. We can reorganise the work so that out-of-hours services are producing benefits for patients as well as coping with the Working Time Directive.

My Lords, can the Minister tell us how he can reconcile his remarks that he is quite confident that everything will be all right in 2004 with the press reports which indicate that many accident and emergency wards might have to close because there will simply not be enough junior trainee doctors to handle the work?

My Lords, I wish the noble Baroness a happy birthday. As part of her birthday gift, I assure her that we do not accept that services will close as a result of implementing the Working Time Directive. I draw the House's attention to the fact that we have implemented the Working Time Directive for other NHS staff—for a much larger group of people. That came into force in 1998.

My Lords, will the Minister tell us what the cost of the introduction will be, and whether it is already included in the public expenditure forecasts in the Red Book?

My Lords, what I can say is that we know that the Government have committed themselves to increasing NHS funding by on average 7.4 per cent in real terms in England over the next five years. That includes provision for the impact of the Working Time Directive. We have also set aside £46 million over the next three years to help trusts to implement the directive. More than £5 million has already been dispersed so far this year to the 19 Working Time Directive pilot sites that are trialing new and better ways in which to work.

My Lords, will the Minister inform us what action the Government are taking to manage the tension between the local delivery of services and the need for a critical mass of specialists to manage very sick patients on a 24x7 basis?

My Lords, the Government have already put in place a large increase of well over 1,000 extra specialist registrars. They will be concentrating the allocation of those posts in the trusts that might have the greatest difficulty in tackling the problems around the Working Time Directive.

My Lords, my noble friend will be aware that the Working Time Directive also applies to railway workers. My noble friend Lord Sainsbury recently told the industry, through this House, that it had known about that since 1999 and should have been fully prepared. Presumably my noble friend the Minister has taken that advice himself, and will be fully prepared for the extra year that the medical workers have been given, beyond those on the railways, so that everything will be in order by next August.

My Lords, you will be astonished to know that I am not briefed on the question of railway workers. That subject is a little wide of the Question.

My Lords, in the matter of the long-term solution, surely we need to ensure that our medical students are being trained in sufficient numbers. Will the Minister give us information about that, and tell us whether in any way the changes will mean that we still have to recruit people from developing countries?

I assure the noble Lord that we have made significant investments in training postgraduate doctors. By 2005–06, we will be spending £1.4 billion on postgraduate medical and dental training. That is a 22 per cent increase over three years.

My Lords—

My Lords, I am afraid that we have run out of time.

My Lords, I beg to move the Motion standing in my name on the Order Paper.

My Lords, I beg to move that the Bill be now further considered on Report.

moved Amendment No. 71:

My Lords, the noble Lord identifies the problem but the solution is entirely wrong. Let us scrap council tax. That is all I need to say.

My Lords, I wish it were that simple. In essence property taxes ought to be simple to administer and collect. They certainly were when we had rates. We are trying to reach the happy position of transparency and clarity in the way in which the tax works.

Clause 78 inserts a new Section 22B into the Local Government Finance Act 1992 creating a statutory cycle for council tax revaluation in England and Wales. We think that is a wise course of action. We think that it is necessary and that is why we have the clauses in the Bill and why we intend to press ahead and seek parliamentary approval for the clauses.

We have not done this without giving the matter thought. Neither have we done it without talking to people. We have consulted extensively on the issue of revaluation. We have had a Green Paper, a White Paper and finally last summer a draft Bill and then a Bill brought before your Lordships' House after going through another place. Perhaps it would make sense if I quoted some of the reactions to the draft Bill to help focus minds.

The Society of County Treasurers said that it,

"generally welcomes the proposed changes to council tax, including the revaluation of property values every 10 years".

The Local Government Association, in which the noble Lord, Lord Hanningfield, is a major participant,

"welcomed the proposed changes to the council tax"

and went on to say that,

"we support the intention to hold a revaluation in 2005 … and regular revaluations at least every ten years thereafter".

The LGA has repeated its support for revaluation in its briefing on the Bill dated 4th July.

There were also responses from both the Conservative and Liberal Democrat Groups at the LGA. The Liberal Democrats, to their credit, said,

"fixed cycles for revaluation arc helpful",

while the Conservative Group leader, Councillor Gordon Keymer, wrote in June 2002 that:

"We support the intention to hold a new revaluation in 2005 and regular revaluations thereafter".

I wonder which Conservative Party I am talking to. Is it the one of which the noble Lord, Lord Hanningfield, is a member, or is it that of Councillor Gordon Keymer, a leading Conservative LGA spokesman so far as I can recall?

The Government have a clear position on statutory revaluation. Judging from the kind of reactions we have had from experts in local government, I find it rather surprising that noble Lords opposite want to remove the clause creating a statutory revaluation cycle. There will be some difficulties with it and no doubt there will have to be some very careful thought given to the way in which it works but it is clear and transparent and people understand the process. Property values shift over time and as we are in the business of having a property tax, there are swings and roundabouts in that process. However, we believe that this is the right course of action and that it is right to make it plain within the Bill. Having said all of that, I hope that the noble Lord will withdraw his amendment.

My Lords, before the Minister sits down, and with the leave of the House, I wish to draw his attention again to the survey that my noble friend Lord Hanningfield mentioned, which has been carried out for the Association of London Government. I declare an interest as a member of a London authority.

It is abundantly clear from the survey that what is important is how a revaluation is conducted—the amendment we are discussing ensures that we debate this matter—and what its effect is. The survey's findings are absolute dynamite with regard to London. Property values will inevitably go up substantially but the shift of resources in terms of the revenue support grant between London and the South East—

My Lords, perhaps I may ask the noble Baroness whether this is an intervention or a speech and remind her that this is Report stage?

My Lords, I am making a short intervention which I shall now finish. Does the Minister appreciate that there would be a vast shift of resources between the South East and the North West if the revaluation was carried out?

My Lords, I am grateful to the noble Baroness for that brief intervention which sounded more like a speech to me. Perhaps it was a brief intervention.

I believe that only this week we received the ALG survey. We recognise it simply as a useful contribution to the debate. Knowing the veracity with which the ALG approaches these matters, and knowing its chief official very well, as does the noble Baroness, I am sure that this is its opening shot in a campaign. One respects it for that. We shall obviously study the survey closely and reflect upon it. As I say, it is a useful contribution to the debate but it does not undermine the case for having revaluation and revaluation cycles.

My Lords, I thank the Minister for those comments. Before I was a member of this House—I am wearing my LGA hat—I remember meeting the then Minister of State for local government, Hilary Armstrong, and talking about revaluation. I agree that the LGA as a body has talked about revaluation. Hilary Armstrong said that no way would the Labour Government make the same mistake as the Conservative government and have a revaluation as that led to the community charge/poll tax as a result of the tremendous variation and changes after revaluation.

I also remember the noble Lord, Lord Rooker, saying in Grand Committee that he did not want to make the same mistakes as the Conservative government. Here the government are falling into the biggest trap of all with revaluation. Having begun to assess what a revaluation means, having seen Sir Robin Wales, the leader of the ALG, this week, and having done more work ourselves on the effects of revaluation on great chunks of the country, we feel that much more thought needs to go into this before we agree to a blanket revaluation. Therefore, we feel that we should test the opinion of the House.

moved Amendment No. 72:

My Lords, I shall return briefly to the survey. I know that the Minister has not seen it, but it is extremely important. One issue that it addresses is the impact of the introduction of more bands. It has been suggested in the debate that if there were higher bands that would be more helpful to those in lower bands. However, it has now been pointed out that that would not be helpful at all and would not soften the blow for anybody. In London the average council tax bill would go up and the potential loss of grant would be very substantial indeed. It is estimated that London could lose more than £400 million to the North and the North West and that the impact of the increase in council tax could be very serious. There needs to be a careful review of the number of bands and the ratio between them. One of the points that we have made is that the ratio should remain at the same level as it is now.

My Lords, it is like an all-us-southerners-stick-together day. It is an unfair way to introduce the Government's response to the amendment, but, first, I am not here to speak for London and, secondly, I know nothing about the survey. I have not seen any of its results. I am here to speak for fairness for council tax payers. The present system is not completely fair, as we all know. I agree with very much of what the noble Lord, Lord Hanningfield, said.

It would seem simple merely to change the ratio, but if that is predicated on the assumption that people who live in big houses have big incomes, that is wrong and it would blow up in one's face. The noble Lord is absolutely right. There is no correlation between disposable income and the size and value of one's property, for the very reason that he gave; namely, that elderly people have invested their life savings and income in property, knowing that they would live on a lower income. Making the changes can appear seductive, but one makes them at one's peril if one ignores those kind of circumstances.

However, the amendment would remove the powers to change the three-to-one ratio. Most council tax payers do not have a clue what we are on about. They may know what band they are in; they may see six or seven bands on their council tax bill and they may know they are in the lower band. However, by and large, they do not see anyone else's council tax bill and, in general, most of their neighbours will be paying the same kind of figure. Houses do vary in a street, but, by and large, the same kind of figure is being paid. It will never cross their minds that the person who is living in a property that is worth £300,000 will not ever pay more than three times the council tax that the person in the lowest property band—up to £40,000—is paying.

They will say, "Hang on a minute. There is a big difference between £300,000 and £40,000. It's rather more than three to one, for a start". The ratio is artificial.

It reminds me of the metaphorical ghost of the noble Lord, Lord Heseltine. He was quite unabashed when he introduced the council tax. It was the great fix, at the end of the poll tax under the noble Baroness, Lady Thatcher. He was charged with coming up with a solution to the poll tax. He came in waving his papers like "peace in our time". He was quite unabashed about the reason for the three-to-one ratio, and that was that he did not want the rich to pay too much. I paraphrase what he said, but he was quite open about the reason for the capping. It is not a capping to help poor people; it is a capping to help, by and large, those in bigger houses, notwithstanding the point that there is no direct correlation with disposable income.

We discussed the matter in Committee and I do not want to go into further details. However, there would he a problem if we were to accept the amendment. We would not be able to change the ratio to reflect more closely the relative values of bands and we will not know what they will be until a revaluation takes place.

We have not yet decided whether we will change the ratio, but it does not make sense to limit our powers in this area, especially as we know that the existing ratio does not reflect the relative spread of values. Obviously, when a revaluation takes place, the differential changes that have occurred in the country will result in different figures.

Amendments Nos. 72 and 74 would mean that the Government could not make significant reforms to the banding scheme. They would limit the way in which we could operate the bands to prevent the creation of new bands at the top end. I understand that noble Lords are concerned about the exercise of these powers, but constraining them in this way is not a sensible way to proceed.

Any change to the banding schemes, whether this be in revaluing the bands, adding new bands or changing the ratio to the bands, must be made by an order that is subject to the affirmative resolution in the House of Commons. That will provide the proper parliamentary scrutiny for a change in the local taxation system.

Amendment No. 73 seeks to give the Secretary of State the power to introduce sub-national differences in council tax bands. As we have said on a number of occasions in this House and in another place, we already have sufficient powers in the existing Local Government Finance Act 1992 to introduce regional banding if we choose. The powers to change council tax bands, or the proportions between them, are exercised by an order under Section 5 of that Act.

Section 113(1) of that Act makes it clear that powers to make orders under the provisions of that Act, including Section 5, may be so exercised as to make different provision for different cases, or different descriptions of case, including different provisions to different areas or for different authorities. Therefore, potentially massive change could take place under the legislation and I presume that the provisions in the 1992 Act were originally made in that Act and have not arrived as a result of later amendments.

The facility to make changes was therefore built into that Act, but the changes were not made because it was early days. I fully accept that the council tax was new. It was a quick-fix solution for disposing of the poll tax without returning to the rating system. There would be considerable difficulties and restrictions if we were to accept the amendments, but we have no plans to change the ratio of 3:1 and any such changes would be contemplated only after examining the relative changes following revaluation and the necessary research. In that I include social research, economic research and, I suspect, political research.

My Lords, I thank the Minister for that reply. His final comment about political research was a wise one. I remember as a young councillor going to a meeting addressed by Margaret Thatcher and attended by about 1,000 people. People were virtually screaming against the rates because they had become such an unpopular tax. We talk now about the unpopularity of the poll tax/community charge, but we forget that the rates were extremely unpopular with a great bulk of the population. That is why the Government came up with that idea.

I believe that we are coming to the end of the council tax. There is a growing group of retired people—it is called "Support the Retired"—which is spreading like wildfire across the South and the East. I have been summoned to a large meeting in eastern England in two or three weeks' time to defend the outrageous levels of council tax. Perhaps the noble Lord, Lord Rooker, might like to come with me.

We are moving this series of amendments because careful thought must be given to an alternative to the council tax. Nick Raynsford, the Minister for local government, has instituted work on the different systems of revenue for councils, but that is not for today. We shall return to the subject on Third Reading, but I beg leave to withdraw the amendment today.

moved Amendment No. 76:

After Clause 80, insert the following new clause—

My Lords, Amendment No. 76 seeks to provide an appeal route for decisions that have been made by a valuation tribunal in respect of council tax. This matter was expertly raised by the noble Earl, Lord Caithness. He kindly wrote to my noble friend Lord Rooker about it and we give notice that following today's considerations we will be replying in full to that correspondence.

There is a difference between council tax and non-domestic rates when it comes to appeals on decision by valuation tribunals. I appreciate that this lacks symmetry, but that was a conscious decision on the part of the previous administration at the time the council tax was introduced. We consider that the distinction is still valid.

It might aid our debate if I quote what the noble Lord, Lord Strathclyde, said on the matter on 27th January 1992, when the Bill, which became the Local Government Finance Act 1992 was then in Committee. While discussing the equivalent provisions for Scotland, he said that,

"valuation appeals under the council tax will essentially be very simple, relating as they will only to questions of capital value. That is a very different matter from some of the arcane and complex rating issues which are the special responsibility of the Lands Valuation Appeal Court. We do not, in other words, envisage that the specialist knowledge and experience of the Lands Valuation Appeal Court will be required in order to determine council tax valuation appeals".—[Official Report, 27/1/92; col. 1154.]

That was how the previous administration saw the position.

While Amendment No. 76 does not seek to provide for an appeal to the Lands Valuation Appeal Court, which is a Scottish court, similar principles apply. The Lands Tribunal in England, like the Land Valuation Appeal Court in Scotland, has specialist expertise in matters of land valuation.

The key point here is that council tax does not require the detailed specialist valuation expertise of the Lands Tribunal. Council tax valuations are to bands of valuations and are capital values, not rental values. There is a big difference. We agree that there needs to be a mechanism for appeals on points of law, hut this is properly to the High Court, and we have that mechanism. We are not convinced that there need to be any other grounds for appeal of a valuation tribunal decision to another body.

Perhaps in taking on board those comments, the noble Baroness will feel happy to withdraw her amendment.

My Lords, I thank the Minister for his reply. It dealt with the kernel of the problem but still leaves a question. The kernel of the problem is that the only appeal that a council tax payer who has a problem with the valuation tribunal decision can make is to the High Court on a matter of law. That seems to be eminently inequitable. A person will probably find it enormously difficult to find a position of law in relation to capital value. Therefore, I do not agree with the Minister that there is no need to find a better appeals system. However, for today's purposes, I beg leave to withdraw the amendment.

moved Amendment No. 76A:

After Clause 84, insert the following new clause—

My Lords, again, I declare my interests as a member of the Greater London Assembly and also as the current chair of the budget committee, which today is having to meet without me, although I am sure that it is scrutinising thoroughly what the mayor has been doing.

I am aware that the Conservative Party's candidate for the mayoral election next year announced that he would end the proportional voting system for members of the assembly. However, it seems to me that having that system in place provides a very good check and balance and a good mix, as it were, for the job that members of the assembly must do.

However—I may surprise the noble Baroness here—I agree that with regard to the budget it would be better to have the proportion that she proposes rather than the two-thirds/one-third mix, which is in place at present. The mayor's budget is the only matter on which the assembly has, in effect, a veto, and I believe that it would be preferable for the mayor to have to persuade rather more than one-third of the members of the assembly of the rightness of his proposals for each budget. Therefore, I support the noble Baroness on that issue.

However, I do not support the manner in which the noble Baroness presented the personalisation of the issue. Perhaps that is not really part of the argument; I do not know. She talked about the current mayor as though he will always be mayor. I ask the noble Baroness, Lady Hanham, not to encourage him—he will not be mayor for ever! However, as I said in debate on an earlier amendment, the solutions of the Conservatives, the Liberal Democrats and, indeed, the Labour Party are not the same. But on the issue of a 51 per cent vote, I support the amendment.

My Lords, perhaps I should first say a few words about the Greater London Assembly's budget-setting process so that we can better understand the amendment and put it in context.

Section 87 of, and Schedule 6, to the Greater London Authority Act establish the roles of the mayor and assembly in deciding budget requirements for the GLA and all its functional bodies. The GLA's budget must be finalised by the end of February each year. The first stage is for the mayor, having consulted the assembly and the functional bodies about their relevant component budgets, to draw up a draft consolidated budget. The mayor then consults the assembly about the draft budget before presenting it to the assembly at a public meeting on or before 1st February. The assembly may approve the draft, or amend it, by simple majority vote before returning it to the mayor.

The mayor then prepares a final draft budget and presents it to the assembly at a public meeting before the end of February. If the final draft does not include amendments that the assembly made to the first draft, the mayor must give reasons. The assembly will then either approve the final draft by simple majority, or amend it by a two-thirds majority. The budget, as amended, will then be the authority's budget for the coming year.

The separation of powers between mayor and assembly is central to the GLA's budget-setting process. The budget-setting procedures are intended to be sufficiently flexible to accommodate the assembly's need to play a part in the formulation of policy and the determination of the mayor's priorities. They also allow the assembly to influence the levels of expenditure on the different functions and, hence, to influence the level of the council tax precept. But, because the budget is the principal tool for delivering the mayor's strategies, it is important that the procedures do not provide the assembly with unreasonable powers to amend the progress of the budget.

It is clear that the amendment would fundamentally alter the balance of power between mayor and assembly envisaged in the GLA Act, making it much easier for the assembly to override the mayor's budget. In practice, the existing arrangements have allowed the assembly to exert effective influence by causing the mayor to reduce his initial budget proposals. In any case, the Government's view is that, only three years into the GLA's existence and before the first mayoral term is complete, it is much too early to consider making fundamental changes to the new governance arrangements in London. Moreover, I believe that it could be argued that it would be wrong to make piecemeal changes to the statutory arrangements without considering the bigger picture.

The balance of power between mayor and assembly was proposed after much careful research into the working of mayoral systems in other countries. In particular, because the mayor is elected as the executive by the people of London, it is right that he or she should be in the driving seat. However, the mayor should not have the ultimate power to determine the budget against a two-thirds majority. That is the balance under the Act, and we believe that it remains a sensible one.

I appreciate that we are probably moving into a period of campaigning on these issues. I can see the value, particularly for noble Lords opposite, in bringing this amendment as part of their campaign for a change next year. However, we need to look longer term and think about the structures and how they work. My simple appeal today is to give this longer. Let us see how it works over time and learn from the experience of it. We should also benefit and reflect on the experience that this structure has brought, having learned from other mayoral systems in other countries.

We are happy with the current position. We appreciate that this causes difficulties for some. The balance of power has to be right—and it is right at the moment—to enable the mayor to drive through his strategies. It may change in future years. But, in electing the mayor, these strategies have been by and large endorsed by the people of London.

My Lords, I thank the Minister for his reply. I do not think that the Local Government Bill was brought forward at this stage as part of a campaign. But it is the only measure where one can raise the question of the tensions against the mayor's overweening control. It was certainly not as part of a campaign that this amendment was tabled. It was an opportune moment to re-examine what is in the Greater London Act and the powers associated with the mayor.

One of the difficulties has always been—I believe that the noble Baroness, Lady Hamwee, has to some extent agreed—that the Assembly's scrutiny position over the mayor is not as strong as perhaps other people would wish it was. One thing that has become apparent over the years since this new system was introduced is that there probably is not enough tension against the mayor by those who are providing a scrutiny role. It is very difficult for the London boroughs to affect what the mayor does. The mayor's budget is imposed on London boroughs. Therefore, it would seem to be far more sensible to have more tension against the mayor's budget proposals which are, after all, probably the only proposals over which anyone can hold him to account.

I want to reiterate my point that this was not a campaigning point. It has nothing to do with that; the Bill was a vehicle to move the amendment. If the Local Government Bill had not been here, there would be no question of this amendment or this matter being raised. But it has been for the purposes today. I beg leave to withdraw the amendment.

moved Amendment No. 79:

My Lords, I shall make a brief response to an important issue. I make it absolutely clear that we have some sympathy with Amendment No. 79. However, we believe that we have already taken account of what it seeks to achieve.

The amendment, as the noble Baroness said, would impose an additional duty on the Secretary of State and the National Assembly for Wales, when exercising their powers under Clause 88, to require local authorities to have housing strategies. The amendment would require us and authorities to have particular regard to authorities' strategic homelessness functions.

It is of vital importance that housing and homelessness strategies support and reinforce one another. The existing guidance stresses the need for robust links between housing and homelessness strategies. We believe that the importance of this approach can be emphasised through further guidance. Therefore, there is no need to include this level of detail in statutory legislation on the face of the Bill.

I hope the noble Baroness will welcome our proposals set out in the Explanatory Notes to the Bill to give local authorities the option of rationalising their housing strategy, homelessness strategy and home energy conservation reports into one document. We envisage that this would improve the necessary links between the documents by reducing the overlap. It would also reduce the burden on local authorities.

However, we continue to believe that a strategic response to homelessness remains a key priority for local authorities. Clause 88 does not change the provisions in the Homelessness Act 2002. Therefore, if an authority chooses to incorporate the homelessness strategy in the broader housing strategy, the duties under the Homelessness Act still apply.

The noble Baroness is quite right: it is new legislation. It is being embraced by local authorities. We are doing everything we can within the homelessness directorates of the department to assist local authorities. We have targets for local authorities on some aspects, about which it is important that people understand—particularly in terms of those in bed and breakfasts and rough sleepers. We have an active involvement in those areas through the government offices of the regions.

Even in recent times—not in any way that is negative or chastising—I have met local authorities either at my office or when I have gone on visits and my ministerial colleague, Yvette Cooper, has done the same with about a dozen authorities where we needed to be reassured that action is in hand with a hands-on approach now to ensure that targets that are important to us, especially that for families with children in bed-and-breakfasts, are achieved next March. We are not waiting until February to find out whether we are on course for that. So we are taking the matter extremely seriously—we know that local authorities are as well; there is no division between us on that.

As I said, if we need extra provision, we can provide it through guidance; we are absolutely confident of that. I am grateful to the noble Baroness for tabling the amendment. I would say through her to Shelter that although everything in the garden is not rosy, we are on the case and do not see the need to write the provision into the Bill. I hope that, with those reassurances, the noble Baroness will withdraw the amendment.

Of course, my Lords. I hope that the Minister will take further opportunities to stress the joint working that is needed between different parts of local authorities. That is never that easy—that is in no way inconsistent with what I have been saying about centralisation in debates on earlier parts of the Bill—hut further ministerial comment about the value of that would be helpful. I am grateful for the Minister's remarks and I beg leave to withdraw the amendment.

moved Amendment No. 80:

My Lords, I certainly do not intend to send a letter. I have here a statement on which is printed in bold at the top of the page, "Read in full". So there will be no deviation. I apologise to the House for taking the few minutes necessary to put this on the record. It is a small amendment but a rather large statement so, as I have been warned by my advisers, I shall stick to the text.

Amendment No. 80 is in our view unnecessary. Clause 122, to which the amendment refers, sets out a number of general provisions in relation to orders and regulations made under the Bill. Subsection (1) provides that any power to make orders or regulations under the Act includes power, first, to make different provision for different cases or areas, and, secondly, to make incidental, supplementary, consequential or transitional provision or savings, including amending or repealing any enactment or instrument made under any enactment.

Amendment No. 80 seeks to add to that a requirement that such power to make transitional provision shall he applied to ensure that any arrangements previously lawfully made under the provisions in Clause 101(2), which is entitled.

"Exercise of powers by reference to authorities' performance categories",

shall not be made unlawful. Clause 101 covers the exercise of various powers that allow the Secretary of State to remove regulatory controls on authorities or to grant additional powers to them. The powers mentioned include the power to modify legislation that prevents or obstructs compliance with best value or the promotion of well-being and the power to remove requirements to produce plans or strategies. They also include powers to specify: performance indicators and standards; frequency and content of best value reviews and performance plans; and non-commercial considerations for local authorities entering into contracts.

The amendment relates to Clause 122. That means that it would cover only those transitional provisions where the power to make them is in the Bill rather than another Act. The provision would affect only orders made under Clauses 96 to 98, affecting trading, and Clause 119, affecting the use of penalties front dog fouling. It would not attach to orders made under Section 70 of the Local Government and Housing Act 1989, the Local Government Act 1999, the Local Government Act 2000 or the Regulatory Reform Act 2001, as the powers allowing transitional provisions in such orders are in the Acts, not in the Bill. Transitional powers may be attached to these provisions—for example, Section 16(3)(c) of the Local Government Act 1999 already makes provision for any order under the section to include,

"consequential, incidental and transitional provision".

During Grand Committee, the noble Baroness asked questions about the trading provisions in the Bill. My understanding was that the particular issue with which she was concerned related to transitional arrangements following reassessment under the comprehensive performance assessment—in particular, that arrangements entered into lawfully should not be made unlawful. The concern was about an authority slipping down a category and thereby losing a freedom—particularly one that involved an agreement with a third party—and the effect that the re-categorisation would have on that authority in relation to that freedom.

The amendment addresses the question of what happens to existing freedoms and flexibilities—for example, trading powers—if an English local authority undergoes re-categorisation and is no longer able to exercise the power to trade by virtue of falling into a lower performance category. As I said in the debate, we agree with the thrust of the concern but that issue can be dealt with through secondary legislation.

It may be helpful if I take a few more minutes to explain how we believe that that issue can be adequately covered by the transitional provisions in the Bill and those already in the enabling powers that will be used to grant freedoms and flexibilities. I have already written to the noble Baroness about that, but this will allow me to place our view on the record.

Clause 101 covers the exercise of various powers that allow the Secretary of State to remove regulatory controls on authorities or to grant additional powers to them. In particular, subsection (1) makes it clear that the powers mentioned in subsection (2) may be exercised for the purpose of making provision that relates to authorities that are for the time being in a particular performance category under Clause 100. Where provision of that kind is made and an authority undergoes re-categorisation, the result will be that the provision relating to the authority's old category will no longer apply to it and, instead, the authority will be subject to the provision that applies to its new category. The powers mentioned in subsection (2) include the powers to make orders under Clauses 96 to 98—those affect the power to trade and the power to modify enactments in connection with charging or trading.

Clause 122(1)(b) in particular makes provision for transitional arrangements to form part of any orders made under the Bill. An order made under the trading powers in Clause 96 will be framed by reference to descriptions of authority which by virtue of an order under Clause 100(4) are of a particular category. I can confirm that Clause 122 enables provision to be made in any Clause 96 order for transitional arrangements, where an authority undergoes performance re-categorisation and is no longer able to exercise the power to trade by virtue of falling into a lower performance category—that is, under a comprehensive performance assessment of being weak or poor. It is intended that the transitional provisions would be drafted so as to ensure that trading arrangements already entered into by an authority while it was exercising those powers could continue subject to certain time limitations, which we are to consider further.

Existing powers therefore enable us to make provision for transitional arrangements following re-categorisation. The amendment is in effect attempting to limit the Secretary of State's discretion. The Secretary of State could decide that, in exercising the power to make transitional provisions, an authority should—for good reason—lose the trading power. He will exercise the power reasonably and is able to preserve a freedom, but we do not want him to have to preserve a freedom once it is granted. It will be for the authorities to ensure that their arrangements are consistent with that. The transitional provisions are likely to ensure continuity but there may be circumstances where that is inappropriate and, therefore, the Secretary of State's discretion should not be limited in the way suggested.

In view of those reassurances, I hope that the noble Baroness will withdraw her amendment. God bless us all.

And all who sail in her, my Lords. I apologise for suggesting that the noble Lord has not written the promised letter. I am not aware that I have received it. I certainly would not have suggested that he had not written the letter had I received it. Clearly, that is another answer that will repay re-reading. I would not fancy trying to explain to colleagues why I was calling a Division if I did so—it would take more than eight minutes.

Although I understand the Minister's point about the Secretary of State's discretion, I note that the department is still considering how long it should last and for how long decisions and actions taken under it should be valid if an authority drops a category. In practical terms, that is a very important issue. I am grateful to the Minister for that detail and to his officials for spelling it out so carefully. I beg leave to withdraw the amendment.

moved Amendment No. 81:

My Lords, I support my noble friend. I was very pleased to substitute—rather inadequately—for my noble friend in Committee. I was disappointed by the answer given by the noble Lord, Lord Bassam, but I promised to reflect on it. As my noble friend pointed out, there was a query about definition, but it was more a case of government opposition to the substance of what my noble friend was projecting. My noble friend has worked very hard and sought help to address the points about which the Government were concerned. I believe that this time she has got it right.

The measure is already enjoyed by a local authority. It seems entirely harmless to give all other local authorities the opportunity to have some control over a form of entertainment that now appears to be getting out of control in some areas. It would protect the community. The particular example given by my noble friend Lady O'Cathain was Southwark. The amendment would give the local authorities the opportunity to respond to concerns in their own communities and to do something to about cleaning up the neighbourhood if what is going on in these places is offensive. It is widely known that the parameters of what is going on in these clubs are becoming wider and wider, and there appears to be no effective control in law. This is a modest, enabling amendment, which, for the sake of decency in our communities, should be supported.

My Lords, we on these Benches support the comments made by the noble Baronesses, Lady O'Cathain and Lady Blatch. I give my full support to this amendment.

My Lords, I congratulate the noble Baroness, Lady O'Cathain, on bringing back what she described as a simple amendment. I do not think that it is simple—I was impressed by the complexity and the coverage that the amendment attempts to secure. There is little doubt that it addresses a matter of very considerable concern to people in many areas where lap dancing clubs and other similar clubs have opened in recent years.

My first experience of this matter as a politician was when, as leader of a council, I was appalled by the proposition of having a lap dancing club in Hove, which seemed an altogether inappropriate place. Many people in that part of the city were deeply offended by the suggestion that such a club should be located there.

The noble Baroness, Lady O'Cathain, put her finger on the point, as it were, when she said that the planning criteria that were available to consider the application were not fit for the purpose, which made it difficult for decency to prevail.

We accept that the matter is important—all our political experience tells us that local authorities should have adequate powers to regulate such establishments. However, as I said earlier, the amendment demonstrates the complexity of drafting to cover the types of dancing and performance that may take place in such clubs. I have heard of many of the types of dancing described in the amendment, but I have not come across taxi dancing before. I am looking forward to somebody telling me exactly what that is.

I can see that much thought has gone into the drafting of this amendment. The problem with it. however, is that it would catch a far broader range of clubs than those at which it is aimed—by reason of including dancing in clothing that reveals a portion of the buttocks, for example. That is not only a matter of drafting; it raises very significant questions about the extent to which entertainment should be controlled.

I am concerned that this is a matter on which there is a need for wider consultation than is possible within the time scale of the Bill. I appreciate that that is similar to the response given in Committee, and I anticipate the disappointment of the noble Baroness in hearing those words. However, the proposal has implications for local government and they and other interested parties would need to be consulted extensively. It is a regulatory matter on which there would need to be a regulatory impact assessment. There are enforcement issues that would need to be taken very carefully into account. There is a need for more generalised consultation within local government and other interested groups and I am sure that the police, who would get involved in some aspects of enforcement, would also need to be consulted.

The Government are more than happy to pursue the issue and undertake consultation. However, given the time frame of this legislation—the new financial regime must be ready to kick in by a certain time next year—we cannot proceed on the basis of this amendment, crafted cannily and extensively as it undoubtedly is. We cannot support this amendment for this Bill. For those reasons, I hope that the noble Baroness will take up our offer of further discussions so that we can try to perfect something for a later time and another government Bill that covers local government matters. As my noble friend Lord Rooker said yesterday, "There's always another one coming along shortly afterwards".

My Lords, before my noble friend Lady O'Cathain decides what to do about her amendment, the Minister talked about complexity, but all legalese is complex: that is a given. We know that lay readers find such matters difficult to work their way through. However, the Minister has enormous back-up from parliamentary counsel and officials in the department. Is he really saying that he admits that there is a problem and that local authorities have inadequate measures to deal with it and that some of these clubs are offensive to the communities, but is not taking a heaven-sent opportunity to do something about the problem? He has not explained why my noble friend's amendment is unacceptable.

The amendment would be widely welcomed. If, over time, it is seen not to be suitable for the purpose, it is within the Government's powers, with our support, to perfect it at a later date. I see nothing wrong with my noble friend's amendment and nothing that the Minister has said tells us why the amendment is defective.

My Lords, I need not tell you how very disappointed I am about this. It is quite unfair because we will not now protect the people who live around the areas and those who are seduced into going into these clubs. There is a chipping away at the moral fabric of this country that is going on relentlessly. We have an ideal opportunity—and I thank my noble friend Lady Blatch most sincerely for her support.

Somebody in this country has to stand up to stop these clubs. It is not good enough to say—and I use the Minister's words back at him—that it is "a matter of very considerable concern". If that is the case, why can we not do something about it? There is no earthly reason why not. The Minister said that we need a full regulatory impact assessment and that the police must be consulted. Those are fine words, but that is all that they are. The Minister has not said when the consultation would take place, what sort of time scale would be involved, or how long these adult entertainment or lap dancing clubs will be permitted to rampage throughout the country. That is what they are doing.

There are people who are caught by such clubs on the basis of corporate entertainment, as I explained. One place is even next door to a Christian cathedral. It is not good enough. On the basis of the Minister's reply, I am not satisfied and I wish to test the opinion of the House.

moved Amendments Nos. 82 to 84:

moved Amendment No. 84A:

moved Amendment No. 85:

moved Amendment No. 86:

Page 76, line 22, leave out "120,"

My Lords, I referred back to see what the Minister said in Grand Committee on the Fire Services Bill on this issue. I shall quote one sentence only.

"One is almost in parallel worlds".—[Official Report, 7/7/03; col. GC 49.]

Indeed, it is that sense of being in a parallel universe which has prompted the noble Baroness.

However, we do not think that it would be right to support these amendments. The provisions in this Bill are very desirable. Those are the ones that we want to see in effect. It is the Fire Services Bill which is, to us, so offensive. That is the one we want to see the back of, not the ending of the Secretary of State's powers as provided by Clause 120. The noble Baroness is right to try to obtain clarity on the issue, but I hope that she will not pursue the matter to its logical conclusion—which to us would be illogical.

My Lords, I remember using the term "parallel worlds" in response to a particular amendment, but I think that the 11 hours in Grand Committee on the Fire Services Bill was actually a parallel world. It was certainly another world to that which I have been used to since I have been in this House. I think that I can satisfy the noble Baroness about the apparent conflict. I have been giving the matter more thought anyway.

Clause 120 removes the requirement for fire authorities to seek the Secretary of State's approval before making a reduction, no matter how minor, in the number of fire-fighting posts or before the closure of a fire station or, indeed, the withdrawal of a fire appliance. The Bain review recommended that Section 19 of the Fire Services Act 1947 be amended or repealed as soon as possible to remove obstacles to introduce new and more flexible fire cover arrangements. The Government fully support this view and I believe there is a degree of political consensus that, in a modern fire service, operational decisions of this kind should be taken locally.

Noble Lords have expressed concern at a perceived conflict between the greater operational flexibility that the repeal of Section 19 will give fire brigades and the powers of direction on the use or disposal of property contained in the Fire Services Bill. We do not believe that there will be any such conflict. As I said during our debate in Grand Committee on the Fire Services Bill, the Government consider it prudent to take these powers to deal with particular circumstances if they arise, but we hope that they will never need to be used. It is our avowed desire that the Fire Services Bill is never operated during the two years that it will lie on the statute book.

The powers in the Fire Services Bill are concerned only with the recent dispute and its immediate aftermath. They would allow the Secretary of State to ensure that fire authority assets—paid for by the public—are available to those providing emergency fire cover in the event of further strikes. The powers would also allow the Secretary of State to ensure that some limited modernisation of the service could take place if it was being blocked, but I repeat that it is our strong preference for us not to have to use these powers. Noble Lords will of course be aware that the powers will lapse after two years after enactment of the Fire Services Bill; the sunset clause is quite unambiguous. By contrast, the introduction of integrated risk management planning, the repeal of Section 19 of the 1947 Act and the proposals set out in the White Paper are all measures for the longer term.

The move to integrated risk management in the UK fire service is a very positive step forward. It puts the emphasis firmly on outputs and outcomes in terms of lives saved and injuries prevented, accelerates the move from intervention to prevention and is more responsive to locally identified risks and needs. By delaying the repeal of Section 19, a repeal which enjoyed cross-party support in the other place, this amendment would deny fire authorities the flexibility they need to introduce a risk-based approach to the provision of fire cover. I cannot see the reason for that. The potential consequences of doing so and thus continuing with the existing inflexible and overly centralised fire cover arrangements are, I believe, self-evident. It is ludicrous beyond belief that at present the moving of appliances between fire stations has to be agreed by the Secretary of State. The current operating system is incredibly detailed and anachronistic.

The guidance on the introduction of integrated risk management planning, which I hope noble Lords have had an opportunity to consider since Committee, makes clear our continuing expectation that it is essential for local communities to be consulted about significant changes in fire cover. Fire authorities also have a general duty under best value legislation to consult about the way in which they exercise their functions.

There are a number of safeguards in place to ensure consistency of approach without inhibiting local flexibility and decision making. Integrated risk management plans will be drawn up within a framework of national guidance and fire authorities will be expected to maintain current fire cover arrangements until they have produced an integrated risk management plan and consulted local communities on any changes proposed. The performance of fire brigades in providing effective and efficient fire cover will continue to be monitored.

I hope that those explanations set the context. However, we have three elements to consider here. We have, first, the Fire Services Bill, a measure directly related to the dispute which has just ended but which has not been finally and completely settled because of all the dates that have to be met under the agreement. To that extent we now enjoy peace and tranquillity, but there is still work to be done as a direct result of the signed agreement. So the Fire Services Bill has been designed to cover that.

Secondly, we have a clause in the Bill before the House which seeks to abolish Section 19, as recommended by the Bain review and which we want to implement straightaway. Thirdly, in the meantime, the Government have produced their long-term considered response to Bain in the form of the White Paper, which obviously indicates that in the future there will be a major piece of legislation. All three elements can be taken together or separately.

In September we shall consider on Report the Fire Services Bill. I understand that tickets are being offered at a hot rate based on the performance of the parallel universe in the Grand Committee proceedings. However, noble Lords need to bear in mind the crucial point that the Government hope that the Bill will never be operated. It is our hope that it will lie on the statute book and never actually be used. Given that, it is easy to contemplate the abolition of Section 19, the introduction of integrated risk management plans and, it is hoped, a better life for fire service personnel and better performance for the public.

With those explanations, I hope that the noble Baroness will be content to withdraw her amendment. Bearing in mind that this is the last occasion on which I shall speak at this stage of the Bill, I want to put on the record a different but related matter. If I did not do so, I would be rightly chastised.

Before we conclude our proceedings on Report, it is right to tell noble Lords that the Statement on education funding to be made in the next hour or two will include a proposal relevant to this Bill, involving a minor amendment to education legislation. Obviously I cannot pre-empt the Statement being made now in the other place, but it is only right to alert noble Lords to the amendment. I shall write to noble Lords on both Front Benches shortly—or, it is hoped, immediately—to explain the proposals in detail. A government amendment to this Bill will be brought forward at Third Reading in September. However, it is only right that I mention this now because reference will be made to this Bill in the forthcoming education Statement to be made shortly.

My Lords, I thank the Minister on three counts. First, for giving us the information that we should hang around during the afternoon to make sure that we hear the education Statement; secondly, that we should hang around during the late evening of Wednesday, 10th September, to ensure that we can take up our hot tickets for the front seats in the show for the Fire Services Bill, which I note will begin only after the conclusion of all other business on that day, so we may be in for a long night; and, thirdly, for his explanation in response to my amendment. However, I am bound to say that I still have some difficulty with it.

The Minister knows that the only reason I tabled the amendment was to seek some clarity about the overlap between the Bills. I was not particularly interested in the integrated risk management planning process. We are all agreed on that and it forms a part of this Bill. However, if the Fire Services Bill ever had to be deployed—I understand all the "ifs" and "buts"—then some of the provisions in that Bill would relate to the reorganisation of fire services within local authority areas. I do not refer to the moving of equipment and so forth, rather to the reorganisational aspects.

If that were to happen then one Bill is going to have to be superior to the other. I understand that, in those circumstances, the Secretary of State or the Deputy Prime Minister would be able to impose a solution. but under the terms of the Local Government Bill he would already have passed that responsibility over to the local authorities. I do not think that the Minister has yet resolved the conflict about which of the two Bills would be paramount.

My Lords, there is no doubt about that. The Bill which would be paramount would be the Fire Services Act, as it will become. If the forthcoming Fire Services Act had to be operated, that would take place only under the circumstances of an emergency and the failure of the parties—the employers, the Fire Brigades Union and everyone else—to agree. We would have a disaster on our hands. The two-clause Fire Services Act would give the Deputy Prime Minister the power to impose solutions, settlements, changes to contracts of employment and the moving or using of equipment. A dispute which the parties had failed to resolve themselves through their own procedures and their own arbitration, so that it was then necessary to operate the Fire Services Act, would amount to an emergency and the Fire Services Act would take precedence. That would be necessary in those circumstances in order to protect the public.

I do not need to take advice; in my mind I am absolutely clear on the point. The Fire Services Act would be paramount at such a time, but obviously for the shortest period possible because the circumstances would be those of a breakdown in negotiations and the need to impose a settlement so as to draw a line under the dispute. We have learnt the lessons of the past 12 months and that is why the Fire Services Bill has been brought before your Lordships' House.

My Lords, I shall not rehearse the problems that we have with the Fire Services Bill, one of which is whether the Deputy Prime Minister will be able to do anything that he wants to under the Bill because there are no parameters in it. But that is not a matter for today. I thank the Minister for his robust reply and I beg leave to withdraw the amendment.

moved Amendment No. 87:

moved Amendment No. 89:

moved Amendment Nos. 92 and 93:

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

moved Amendment No. 132J:

Perhaps I may deal first with the amendment and then take the opportunity to deal more generally with this part of the Bill. As the noble Lord, Lord Thomas of Gresford, said, it is the first time that we have touched on it.

The purpose of Amendment No. 132J is to delete subsection (8) consequential upon the deletion of Part 7 of the Bill. The noble Lord used the word "disappearance" in relation to that part of the Bill; the Government's view is that that disappearance is temporary. We oppose the removal of Part 7 and will restore it in another place. Having said that, as matters stand at the moment it would not be reasonable for me to resist the amendment. That could possibly delay the Committee's consideration of other important parts of the Bill. The fact that I do so obviously does not imply any acceptance of the removal of Part 7, to which we remain firmly opposed.

If Part 7 is restored to the Bill, it will be necessary to bring forward consequential amendments. I give notice of that now because it will necessarily add to any amendments that may come back from another place.

There are a number of other consequential provisions in the Bill which may not be as straightforward as this one and which may require different handling. We will give further consideration to those but, on this occasion, I can accept the noble Lord's amendment.

Let me take a moment to say something further about this part of the Bill in order to avoid saying it at a later stage in Committee. This part of the Bill creates a new right of appeal for the prosecutor against any ruling made by a Crown Court judge, either at a pre-trial hearing or during a trial, that terminates the trial early before the jury has been asked to consider the evidence.

At present, the defence has a right of appeal against conviction and sentence at the end of a trial but the prosecution has no equivalent right to challenge judges' rulings that bring cases to an end prematurely before the jury has been asked to consider the evidence. The purpose of these appeal provisions is to remedy that imbalance. This will assist in improving the consistency of judicial decision-taking. Where the Court of Appeal disagrees with a judge's ruling it will enable cases that otherwise would have been lost to be determined by the jury.

The provisions will enable the prosecution to appeal two kinds of rulings. The first category concerns rulings that are terminating in themselves, such as a stay of proceedings or a ruling of no case to answer. The second category concerns rulings that are so damaging to the prosecution case that at present the prosecutor is forced to offer no evidence, or no further evidence, such as a ruling to exclude a key piece of prosecution evidence or an order to disclose sensitive material to the defence.

In a letter I have sent to the noble Lord, Lord Kingsland, and copied to other noble Lords—including the noble Lord, Lord Thomas of Gresford—I have attached examples of the kinds of cases to which this can apply. I have also placed a copy in the Library. Should any Members of the Committee wish to refer to the letter but do not have it with them, I have copies available in the Chamber. I see that the noble Lord, Lord Thomas, is asking for a copy and one will he provided to him.

As the letter indicates, the Government hope to bring forward a series of amendments at Report stage. There will be two kinds of significant changes to the structure of the existing clauses. The first change will refine and clarify the existing provisions. This will include provision for essentially two matters. First, it will extend the time during which a prosecution appeal may be made to include the whole trial up to the start of the summing up. This is because a judge may withdraw a case from the jury at any time during the trial and, although there are likely to be very few such rulings after the close of the prosecution case, it is more rational to provide for a right of appeal against any terminating ruling regardless of when it is made. Secondly, there will be an amalgamation of the terminating and other rulings to clarify the provisions in Clauses 58 and 59. So those are the first kind of amendments that we intend to bring forward.

The second kind of amendment will introduce a right of appeal against certain non-terminating evidential rulings. The purpose of this will be to deal with evidential rulings or a series of rulings that significantly weaken the prosecution case but fall short of being fatal to it and therefore qualifying as terminating rulings. The difference between this right of appeal and the right of appeal against other rulings in the Bill in Clause 59 is that the trial will continue regardless of the outcome of the appeal. The Court of Appeal will not be required to acquit if the appeal is unsuccessful and the prosecution will not be required to accept that if leave to appeal is not obtained or the appeal is abandoned the defendant should be acquitted.

In Committee in another place, my right honourable friend the Solicitor-General, in response to a point raised by Mr Humfrey Malins, indicated that the Government were considering extending the right of appeal to such rulings, which she described as rulings that were very damaging but could not be predicted to be fatal. I mention that now simply to give added notice that that is there; plainly it is not for debate in this Committee, but I was anxious that noble Lords and others who read these debates would know what we intend. That is an extremely long response, given that I am accepting the amendment.

moved Amendment No. 132K:

We have amendments in groups 3 and 4 which would have the same effect as those of the noble Lord, Lord Thomas. For reasons of economy of time, I would like, respectfully, to adopt the arguments that the noble Lord has deployed in support of his own amendments in support of ours.

I was most grateful to the Attorney-General for his opening remarks, putting Part 9 in the context of the whole Bill. Will he indulge me by allowing me, in turn, to ask him some general questions about the philosophy that lies behind Part 9? I assure him that I shall be extremely brief in my observations and questions.

My first question is, what is the mischief that the Government are aiming at in Part 9? Is there a suspicion in their mind that judges on the criminal circuit are, in some way or other, pro-defendant? Or is there some other reason for wanting to introduce these proposals? I ask that question not only on its own merits but because the proposals in Part 9 have significant implications for the resources of the Court of Criminal Appeal. If there is no real mischief, what on earth is the point of making it even more difficult to get a case in front of the Court of Criminal Appeal than it is already? I understand that the delays in court for normal appeals run to about 15 to 18 months.

It is also quite clear that these new provisions will not only involve delay in themselves but will imply delay in the hearing of other totally unrelated criminal appeals. My supplementary question, in essence, is: if the Government really think there is a mischief, is solving it worth the cost that the criminal appeal system will have to bear?

My next question arises out of the remarks the noble and learned Lord made to your Lordships' House a little earlier about prosecution appeals against non-terminating decisions by judges. I am most grateful to the noble and learned Lord for writing to me in the way that he did; it was enormously useful in helping me to prepare for today's proceedings. But one issue that continues to lie fallow, following his letter, is whether or not there should be reciprocal rights for the defendant. If the prosecution can appeal against a non-terminating decision by a criminal judge, why cannot the defendant have the same rights of appeal? That, surely, is the principle that lies behind the notion of equality of arms, about which so much is spoken these days by human rights lawyers.

It also seems to me to be an issue of fundamental fairness in the conduct of criminal trials. If the prosecution can appeal, why cannot the defendant? I know the noble and learned Lord is still considering these matters, as he prepares his amendments for Report. He may already have this issue well in mind. But I thought it only fair that I should draw his attention to the point at this juncture so that he can reflect on the matter, if he feels it is worth while, over the summer adjournment.

I, too, am very interested in what the noble and learned Lord had to say in respect of his proposed amendments to Part 9, which seem to raise all sorts of rather different questions from those that I thought would be raised. I hoped that I might be, as it were, cut in on anything going on these amendments, along with all those who took part in the Second Reading debate—even those who would have taken part if they had not happened to lose their voice on the occasion in question.

I paused before rising simply because I see the noble and learned Lord, Lord .Ackner, in his place. Amendment No. 133, which is in this grouping, is in his name, and I did not know whether the noble and learned Lord planned to speak to it. If he did, this might be an appropriate moment for him to do so, before I respond.

As your Lordships see, the amendment, on the face of it, would merely change "must" to "may". That sounds an innocent amendment and, indeed, coming from me, it is, as your Lordships would expect, an innocent amendment. But for once, I do not have to ask your Lordships to rely on what I say because this is what is to be found in the memorandum deposited by the Lord Chief Justice which has the imprimatur of not only the Lord Chief Justice but all the other senior Lords Justices who deal with crime. Their point is: why should the judiciary not have discretion? All this vaunted underlining of the independence of the judiciary looks a little odd when you suddenly find "must" where, clearly, there should be judicial discretion. That is the limited and simple nature of my amendment, and I hope it will commend itself to the Attorney-General.

I plan to respond briefly first to the general questions asked by the noble Lord, Lord Kingsland. That may assist in understanding the nature of the provision we are discussing. The noble Lord asked what was the mischief at which the Government aim. Is there a suspicion that Crown Court judges are pro defendant? I unhesitatingly answer that latter question by saying, "Certainly not". But that does not mean that on occasion they may not make an error in the judgments that they reach, particularly errors of law in certain circumstances.

I sent a letter to the noble Lord, and I believe that a copy has now been received in the Chamber at least by the noble Lord, Lord Thomas. I hope that the other copy will be discovered in his Chambers or at some other address. A copy is in any event in the Library but I shall also ensure that copies are sent individually to all Members of the Committee who participate in today's debate. That identifies by way of examples the kind of case where the measure we are discussing may apply. I wish to take a few moments to identify one or two of them without going through the detail just to give an idea of the circumstances in which the matter can arise.

There will be cases where a judge will make a ruling that there must be an acquittal and so directs the jury, or he grants a stay of the proceedings which is in effect final, or where the ruling is so damaging to the prosecution's case that they cannot continue. That case will come to an end at that stage without the matter ever going, as it were, on its merits to the jury to decide. If he makes an error in his ruling against the defendant, the defendant will have the opportunity to appeal, should the jury convict him, after the trial. But the prosecution has no such right. There is no way of testing whether or not that ruling was correct.

I give an example, referring to Case 2 in the list. Several defendants were acquitted on charges of conspiracy to defraud on a large scale. There was then a further prosecution of a further conspiracy to defraud. That had been severed from the original conspiracy quite deliberately by the court because it thought that dealing with all of the cases together would be too much for the jury. As I say, the further prosecution was deliberately severed so that it could be tried later. When it came to be tried, the trial judge ruled that it should not be allowed to go ahead on the grounds that it was an abuse of the process. Therefore, the defendant was acquitted on those counts. There was no possibility for the prosecution to test that ruling by the learned judge in another court.

I give another example, Case 9, where a man charged with attempted murder of an hotelier was found with the victim's blood on his boots and trousers. He admitted being at the scene. But at the close of the prosecution case the trial judge invited the defence to make a submission of no case to answer and then upheld it.

Some of these cases are cases where there has been what is known as an Attorney-General's reference; that is, a reference by the Attorney-General on a point of law to the Court of Appeal where the Court of Appeal has actually said that the judge below was wrong. But as it stands at the moment, such a ruling has no effect upon the acquittal that has taken place. One such case—Case 11—was a detailed case of a man charged with attempted rape. The evidence was that householders were disturbed by noises. The complainant was found with her underwear round her ankles and, indeed, the defendant was found with his trousers round his ankles. He was kneeling near her. When asked what he was doing. he replied, "What do you think?" He was asked whether the girl had agreed to have sex with him. He replied, "I do not know; I did not ask her". There was bruising on his and her genitals. The trial judge stopped the case and acquitted the defendant on the basis that the prosecution had to prove that the defendant had physically attempted penetration, and it had not done so. The Court of Appeal said on a reference that the trial judge was wrong and there was plainly evidence from which the jury could infer what had taken place. But notwithstanding that ruling, there was no possibility of the case being restored.

I refer to another example which concerns the other category of case; that is, the ruling where the prosecution has to stop the case. Case 13 is also an Attorney-General's reference case. The Committee will recall the circumstances. A DNA match was made in relation to DNA taken from a rape victim with a DNA sample that had been taken from someone previously acquitted of burglary. The police had not destroyed that DNA sample. The Committee will know of the circumstances because we have considered the consequences of the ruling that subsequently emerged from the House of Lords that notwithstanding that the sample should not have been retained, it was admissible in evidence. The trial judge had ruled that it was not admissible in evidence. The result was that there was not evidence upon which the prosecution could proceed. The man was acquitted although the House of Lords subsequently said as a matter of law, on the law as it stood, the evidence was admissible and the prosecution could have gone ahead.

I hope that those examples indicate that this has absolutely nothing at all to do with any suggestion or belief that trial judges are anything other than objective and even-handed as between prosecution and defence, but occasionally they may make errors. One circuit judge, when told that the Court of Appeal had reversed his judgment, said, "That is what they are for". It is what the Court of Appeal is for and occasionally it reaches a different view. We seek to give the prosecution the ability in a limited number of cases to test the correctness of such an important ruling before the Court of Appeal.

Secondly, the noble Lord asked me whether the measure would have enormous resource implications. The proposals have been developed in consultation with the senior judiciary. The Explanatory Notes at paragraph 785 give details of the resource implications which we believe will arise on the basis of best estimates. For the Crown Prosecution Service training and expenditure costs are estimated at £1.5 million over two financial years and about £1.3 million annually thereafter. Costs to the Department for Constitutional Affairs relating to the provision of additional Appeal Court capacity are estimated at about £0.8 million per year. Of course, there are resource implications but they are relatively modest and certainly justified in the Government's view by the importance of being able to test such rulings.

I hope that I may intervene on that point. Are the resource implications extended to assisting the Court of Appeal, or are they purely in relation to training the prosecution and other such matters?

They cover the costs of what is described as,

"the provision of additional Appeal Court capacity".

That is the estimate of the Department for Constitutional Affairs. There is also an estimate for legal aid costs of about £0.1 million annually from the financial year 2005–06. Of course I recognise that those are estimates based upon what has to be an estimate of the number of cases that may arise, but I hope that they are of help.

Thirdly, the noble Lord asked about provisions which do not at the moment appear in the Bill. I am grateful to him for giving me the opportunity to consider the matter. Of course, the question of whether there should be reciprocal rights for the defence has been considered. When we come to Report, I shall want to deal with that in more detail. However, I shall indicate in the broadest terms what the response will be. The defence has the ability to appeal. If a ruling is made by a trial judge in the course of the trial to the effect that certain evidence is admissible, and if the defendant is convicted, at the end of the day the defendant can include in his appeal a complaint that the conviction was wrong because it admitted evidence that was not admissible.

Will the noble and learned Lord give way?

If I may, I shall continue for a moment. On this occasion, when we are talking about a provision not in the Bill—we have amendments in relation to the part on provisions that are, and to another part to which I know that Members of the Committee are anxious that we should get—I would really rather not develop it further. Of course. if Members of the Committee want to intervene I could not and would not prevent them.

I am most grateful to the noble and learned Lord for giving way. I have been away from the House so long that I had quite forgotten the tranquillising effect that his words had on it. That makes me almost reluctant to intervene—it seems a kind of impertinence. Nevertheless, perhaps I might be permitted to reflect on what I think was the last substantive observation that he made.

The noble and learned Lord seems to suggest that the right of the accused to appeal against conviction after the jury's decision is in some way equivalent to any right that he might have to appeal against a non-terminating decision by a criminal judge made against him in the course of the trial. In my submission that view, if not naive, is certainly inaccurate.

As the noble and learned Lord well knows, the test for the Court of Criminal Appeal is whether a conviction is unsafe or not. It is perfectly possible for the Court of Criminal Appeal to decide that the judge's finding in relation to the accused's submissions on a point, say, of inadmissibility was incorrect, but at the same time to uphold his conviction. If I may respectfully submit it, the idea that the defendant has the same rights as a result of an appeal against conviction as he would have on an appeal against a non-terminating decision by a judge against him is a chimera.

The noble Lord's absence from the Chamber certainly has not in any way dimmed the clarity or pointedness of his contributions. I am really not going to be tempted to debate a provision that is presently not in the Bill. The noble Lord's point is one that has, of course. been considered. It will be necessary on a future occasion to talk a little more about the current practice of the Court of Appeal in relation to appeals, but I do not want to go further into that. I offered the noble Lord a meeting with me—indeed, we had arranged it, and I do not for a moment complain that he was not able to make it—to discuss the provisions and the intended provisions, an offer that I am very happy to make available to any other noble Lord who would also like to discuss them. We could certainly discuss the topic on that occasion and come back to it on Report.

I shall turn specifically to Amendment No. 132K, which would insert,

"for no more than seven days",

into the provision relating to the adjournment that the prosecution may seek if it wishes to consider whether to appeal against a particular ruling. Part 9 sets out a broad statutory framework for prosecution appeals, but the intention is that the detail of the procedures to be followed will be set out elsewhere, especially in rules of court and practice directions. We are anxious that those should be prepared after discussion and consultation with all interested parties, principally the judiciary. However, the provisions have been subject to consultation with the judiciary and, in the light of its concerns, we want to get the rules right and ensure that it is content with them. Of course we want to minimise delays to trials, while ensuring that trial judges have flexibility to deal with the variety of situations that may arise during a trial and which cannot be anticipated.

Clauses 58 and 59 set out the procedure to be followed where the prosecutor may wish to lodge an appeal against a judge's ruling. They allow the prosecutor to indicate an intention of appealing immediately, or to request an adjournment in order to consider whether to do so. The judge is required to grant the adjournment. The requirement is the subject of the amendment tabled by the noble and learned Lord, Lord Ackner, to which I shall come in a moment. As said by the noble Lord, Lord Kingsland, other amendments that we shall discuss separately suggested other time limits—for example, no more than 48 hours. In another place, the suggestion was no more than one day. We agree with the thinking that underlies the amendments—that the decisions need to be taken quickly so that there is not delay—but we do not agree that it is desirable to put such time limits in statute.

The current expectation that we have in mind is that the likely time limit will be in most cases even shorter than that proposed by the noble Lord, Lord Thomas of Gresford. In another place, 24 hours was referred to. In many cases, that will be absolutely adequate, but there may be cases in which it is not. There is something to consider that is important and cuts the other way: the power should be used sparingly and judiciously. Therefore, it is intended, as I said in the letter to the noble Lord, Lord Kingsland, that the Director of Public Prosecutions will give guidance to prosecutors as to when they should use the power.

In certain cases, the power may require consultation with a more senior prosecutor. In those circumstances, I can certainly envisage that there may be cases in which, with the best will in the world, it is not possible to get that approval within, for example, 24 hours. Therefore, it may be sensible for the period to be a little longer in the interests, while keeping the delay down, of getting a sound decision that does not lead to too many appeals.

Fundamentally, we believe it better to go to rules for setting down time limits. Rules will be able to allow for exceptional circumstances—no doubt within the judge's discretion—better than placing something in statute. What is more, experience may tell that a time limit on which we originally fix is not the right time limit. In those circumstances, if it is in rules it is easy to take account of experience. If it is in statute it is much more difficult to do. Although agreeing with the underlying intention of the provisions, that is why we think it better to leave the matter to rules and practice directions rather than putting it in statute.

I shall move on to Amendment No. 133, tabled by the noble and learned Lord, Lord Ackner. Of course I recognise that it echoes concerns expressed by the noble and learned Lord, Lord Woolf, in the paper deposited after Second Reading. Mandatory procedural requirements are nothing new, and there is good reason in the Government's view for including this one in this instance. It is vital that the prosecutor is given sufficient time to consider lodging an appeal and, in appropriate cases, to take advice and consult senior colleagues. Indeed, he may have to get consent from a senior colleague.

The Government believe it better to provide a necessary protection for both prosecutors and defendants, to provide that there really has to be an adjournment for that consultation to take place if the prosecutor is not in a position to say there and then that an appeal should be brought. If not, there is a risk that an overly hasty decision will be taken. If a judge declines even the sort of short adjournment that I have in mind for the prosecutor to consider the position, there is every risk that the prosecutor will then say, "I must go ahead and appeal it", which would not be in anyone's interests if there had not been real consideration.

I can assure the noble and learned Lord, Lord Ackner, that I am a strong supporter both of the independence of judges and of having confidence in their abilities. I would want always to uphold them. However, it is a modest requirement in the interests of both prosecutors and defendants that a short adjournment takes place if the prosecutor feels that an appeal is required.

If the judge forms a view that there is absolutely no merit in what the prosecutor argues, why should he not have that discretion? It is very sensible.

Those of us who have sat as judges have had the experience of believing that there was absolutely no merit in what someone was saying, only to find that, on appeal, not only was there merit, but also that he was right and we were wrong. If the judge believes that it was wholly inappropriate even to have thought about the appeal, I have no doubt that he will make very clear his views when the prosecutor comes back and says, "No, after all, we are not going to appeal". And it frequently does happen in criminal courts, as in other courts, that, for all kinds of reasons, both prosecutors and defence ask for short adjournments to consider matters. While I am the last person to want to see delay in the courts, the kind of period that we are talking about—one designed to allow for a sensible decision to be made—is entirely justified.

Those of us who have sat as trial judges have always been brought up to believe that the question of whether or not to grant an adjournment is essentially a question for the trial judge, who has the feeling of the whole case. Those of us who have had the advantage of sitting in the Court of Appeal have always taken the view that to interfere with the judge's discretion in such cases is something that we will not do.

I speak as one who did a lot of work as a recorder and, who, for two years, was an occasional relief judge at the Old Bailey. Circumstances can vary so much that it seems to be wrong to deprive the judge of the opportunity to refuse to grant the adjournment.

It is not a question of requiring the judge to allow the appeal to take place. That will be a matter for leave. It is our intention that important safeguards and guidance will be given to prosecutors so the adjournment is used judiciously.

It is important that an opportunity is provided to a prosecutor to consider properly whether that new procedure should be implemented in a given case. It is much better that there is an adjournment to allow that to take place than that people, as a result of a refusal of an adjournment, are simply driven into saying, "Well, then, I do wish to appeal". That will set in train the need to consult the Court of Appeal about whether an expedited hearing is possible.

Someone may reach the point of asking, for example, "I think that I may well want to seek leave to appeal. May I have a short adjournment until tomorrow morning in order to consider that and to consult?" If the trial judge says, "No, I do not think there is any merit in that", I respectfully suggest that in nine cases out of 10 the prosecutor will say, "Well, in those circumstances, I must now stand by my initial reaction, which is to seek leave to appeal and that is what I will do". That does not seem to be sensible at all. As far as the short adjournment is concerned, without in any way undermining our belief in the importance of judicial independence and the confidence in judges, we believe that it is appropriate to leave the word "must" rather than insert "may" in the provision.

I am grateful to the noble and learned Lord the Attorney-General for his reply. The noble Lord, Lord Kingsland, beat me to the gun on the question of equating the prosecution's right of appeal in an interlocutory matter with the defendant's right of appeal at the end of a case. As he said, it is frequently the case that one succeeds in the Court of Appeal and establishes that a ruling made by the judge during the trial to allow evidence was wrong. The court then says, "But we think that the conviction was entirely safe". That has to be pure guess work. Let us take, for example, an "introducing evidence" point. On the one hand, the prosecution will perhaps have the right to introduce evidence before the jury following an appeal, but, on the other hand, the Court of Appeal may say to a defendant, "Well, that evidence was included and you were right to object to it, but you would have been convicted anyway". That is just a guess. One cannot equate one with the other.

I am impressed by the assurance of the noble and learned Lord that rules will be promulgated to deal with matters such as time limits. I inserted "seven days" in the amendment because it is essential that the prosecutor takes advice. I hope that any guidance from the DPP will make it clear that in the heat of the moment—and matters do become heated—it is not the prosecutor who will quickly take that decision to appeal. There should be time for reflection and consultation; that should be a matter of procedure. I see that the noble and learned Lord agrees with me on that point. I would be grateful if he would say so.

I was nodding in assent to the general point that the noble Lord was making. It is important that decisions are not made just in the heat of the moment. It is likely that, in those circumstances, advice will need to be sought. I rise because I would not want to give the impression of having agreed with every aspect of what the noble Lord said about what the guidance should be. The invitation that I made to the noble Lord, Lord Kingsland, to discuss these matters, including the issues touched on by subsequent amendments—which I will not be drawn into today—is of course extended to the noble Lord, Lord Thomas. I am sure that we would benefit if he were able to take up that offer.

I have a feeling that the noble and learned Lord has already made that offer to me in the course of earlier proceedings. For the reasons that I have given, I beg leave to withdraw the amendment.

moved Amendment No. 132P:

I support the speech of the noble Lord, Lord Thomas of Gresford. In doing so, I want to ask the noble and learned Lord the Attorney-General what I hope he will not think a naive question.

Am I right in thinking that the effect of Clause 58(6) is that, if there is an application for leave to appeal against a terminating ruling by the judge, the judge must continue with the trial? Is that the effect of that provision? Or is there an obligation once leave is granted, to adjourn and either expedite or not expedite the appeal?

Before I deal with this series of amendments, I want to comment on the difference between expedited and non-expedited appeals. As yet, it has not been mentioned. When the prosecution informs the court of its wish to appeal, it is necessary under Clause 60 for the judge to decide whether it should be an expedited appeal or a non-expedited appeal. It is easy to see in what circumstances the judge might think it right for there to be an expedited appeal and in what circumstances it would not be necessary.

The main purpose of the clause is to allow prosecutors' appeals against rulings made in the course of the trial to be heard quickly, particularly if a jury has already been empanelled. It is less important that an appeal be expedited if the ruling is made before the trial has begun or if no jury is yet in place. In this respect, the prosecutor's appeal against a ruling tinder Part 9 at a pre-trial hearing will be like an appeal against a ruling made at a statutory preparatory hearing where there is a right to appeal.

Inevitably, there will be some cases in which an appeal is lodged during the trial. It will immediately be apparent that it cannot be expedited. The intention is that inquiries will be made of the Court of Appeal as to whether, for example, it is able to accommodate such an appeal. It may be that the arguments are complex. Where it appears that the appeal cannot he determined quickly, the Bill would allow the non-expedited route to be taken in that case also.

What then will happen? If the judge decides that the appeal should be expedited, he may order an adjournment and the length of that will depend on a consideration of how long it may be for the Court of Appeal to deal with the issue. In the case of an expedited case, that may happen on the Tuesday when it is indicated that the Court of Appeal will be able to deal with the matter on the Thursday, so the trial might be adjourned until the Friday. That will be for the trial judge to determine, with the ability for both the trial judge and the Court of Appeal to reverse that decision once it has been made, if it turns out to be unsatisfactory.

If the judge decides not to expedite the case, a different process will be followed. If it is being expedited, he would not discharge the jury because the jury would then be ready to deal with the case when it returned. Let us suppose that the Court of Appeal said that the ruling was wrong and that the case should proceed. Let us further suppose that, typically, the jury has heard all the evidence during three or four weeks, a submission has been made on behalf of the defence and the judge has ruled that the prosecution case has to stop. In such a case, it makes sense to get that ruling tested quickly in the Court of Appeal if it can accommodate it. If it upholds the judge's ruling, the case will come to an end. If it does not, the case will continue with the same jury in place. This provision has been built up in consultation with the senior judiciary who have been consulted about it.

That is the background. I turn now specifically to the amendment. Amendment No. 132P would require the court to expedite all prosecution appeals under Clause 58 against terminating rulings as defined by the Bill. Then the court would have to discharge the jury and bail the defendant. The amendment is highly inappropriate for several reasons. Imagine that we are dealing with a trial for murder. The accused is thought likely to abscond and has not received bail at any time since his arrest. The judge makes a terminating ruling which the prosecutor is firmly convinced is wrong and the prosecutor decides to appeal.

First, there is no reason why a terminating ruling should always follow the expedited route. Most pre-trial appeals will not be expedited, but those lodged after the jury has been empanelled generally will be. It will be for the trial judge to determine that, having regard to all the circumstances. However, if it is clear that an appeal is not capable of being expedited, the court ought to be able to determine which route is followed and the Bill to allow flexibility to decide that. If the court decides that a non-expedited appeal is necessary, a non-expedited appeal should be the outcome.

The second effect of the amendment would also be highly undesirable. Assuming that an appeal is expedited, what possible reason could there be for always requiring the jury to be discharged? The whole point of providing for an interlocutory appeal is so that the trial can continue if the Court of Appeal considers that the trial judge was wrong. Therefore, on the recommendation of the senior judiciary, we have provided for an expedited appeal so as to enable the same jury to remain in place, with less interruption to the trial.

The third effect of the amendment would, frankly, be disastrous. The amendment would require the accused—I speculated that it might be someone charged with murder who was likely to abscond or perhaps someone who was thought capable of interfering with the witnesses—to be freed on bail in all cases, even where those risks existed. That cannot possibly be right.

No doubt the trial judge and the Court of Appeal will have in mind all those considerations—how long the defendant will remain in custody, how quickly the appeal can be dealt with, and the effect on the jurors of keeping them away from the trial for a period of time—when deciding whether it is a proper case to expedite. Therefore, we cannot accept the amendment.

The effect of the related amendments—Amendments Nos. 133E, 133F, 133H and 133J to Clause 60—would be similar. Curiously, their first effect would be to leave untouched the power of the court either to expedite or not to expedite a prosecution appeal under Clause 59 against a ruling which is not a terminating ruling as defined in Clause 56 but which is a ruling that the prosecutor regards as terminating. However, there is no reason why an appeal under Clause 58 against a formally terminating ruling should always be expedited but an appeal against a ruling which is, de facto, terminating should not. Both types of ruling lead inevitably to the conclusion of the proceedings for the offence in question.

At all events, the next effect of Amendments Nos. 133E, 133F, 133H and 133J would be to require the court to discharge the jury and bail the defendant where the appeal was not expedited. The court may well want to discharge the jury in a non-expedited case hut, for the reasons I have given, an obligation to grant bail would be highly undesirable.

The effect of Amendment No. 133EA would be to require the court, where an appeal was expedited, to grant an adjournment in all cases. The effect of Amendment No. 133G would be to require the court, where an appeal was not expedited, either to grant an adjournment or to discharge the jury.

When similar amendments were debated in another place, I believe it became clear that the judge should not be obliged to grant an adjournment in the first situation or to discharge the jury or grant an adjournment in the second, but that he should have a discretion to do so. The reason for that is that the Bill allows proceedings for offences to which the appeal does not relate to continue at the court's discretion. The appeal is against the judge's ruling; it is not against an acquittal because no acquittal is ordered at that stage. The appeal is interlocutory and thus the acquittal is suspended.

At this point, I shall answer the question put by the noble Lord, Lord Kingsland. Clause 58(6) simply provides for the appeal ruling to be suspended while the appeal is in progress. It does not mean that the trial must continue. It is possible that in certain cases the trial judge will say that certain aspects of the case can continue, even while awaiting the ruling from the Court of Appeal. Then the trial would be able to continue in relation to those defendants or in relation to that matter, but that is to be determined at the discretion of the trial judge.

Therefore, the Bill provides the judge with a necessary flexibility. I am sure that at least on that point the noble and learned Lord, Lord Ackner, will agree that, if these procedures are to be in place at all, it is desirable that that should happen. For those reasons, I invite the noble Lord to withdraw his amendment, and I shall oppose the others if they are moved.

The noble and learned Lord makes a very persuasive case, which I shall read with great interest. My concern is that, where there is a terminating ruling, the defendant should be acquitted. As the noble and learned Lord was addressing your Lordships, I was considering whether it was envisaged that, although the judge has made a terminating ruling, he will not discharge the defendant—that is, whether there will be some kind of limbo position until the prosecution have made up their mind whether to appeal that ruling. In the ordinary case, if the judge were to find no case to answer, he would direct the jury to order an acquittal. But is there to be a period of days while the jury are left to wonder what will happen? What is the position then?

With respect, I should have thought that that was clear from the preceding debate and from what I said. The whole purpose of providing the appeal is that, in certain circumstances, there can be an interlocutory appeal against a ruling which would otherwise be terminating. It would be disingenuous and misleading for the defendant to pretend that, while that was taking place, he had been acquitted. That is why Clause 58(6)—the provision to which the noble Lord, Lord Kingsland, drew attention—states that, while consideration is being given to whether there should be an appeal, perhaps overnight or a little longer, the ruling would have no effect in relation to the offence. If that were not right, we would need to add an additional category of cases where there could be a second trial to those already envisaged in Part 10, which we shall reach later today.

As, in any event, these clauses will not remain as they are and as there is to be a rehash before Report by the Government, for the moment I beg leave to withdraw the amendment.

I beg to move that the House do now resume.

My Lords, with the leave of the House, I shall now repeat a Statement made in another place by my right honourable friend the Secretary of State for Education and Skills. The Statement is as follows:

"Mr Speaker, with permission, I would like to make a Statement about the funding of schools in the years 2004–05 and 2005–06. It is important to begin with an assessment of the changes which have taken place in the last six years. Our country now has the best results at ages 11, 14, 16 and 18. We have tackled the shameful neglect of our school buildings and, by 2005–06, we will be investing over £5 billion in repairs and new buildings.

"We have delivered major increases in school spending. Schools funding is up by more than 25 per cent, in real terms, per pupil. There is no secret where the money has gone. We now have 25,000 more teachers and 80,000 more support staff than in 1997.

"Moreover, teachers' pay has improved significantly; for example, in 1997, a teacher with six years' experience would have been receiving £20,040, while his counterpart today will, from September, receive £26,460. This is a real terms increase of 13 per cent. And we have started down the road to a fundamental improvement in teachers' workload and working arrangements. Those are all achievements of which teachers, heads, governors, and local and central government can be proud.

"However, there is no doubt that these changes have led, for very many schools, to real difficulties with this year's budget allocations. As I set out in my oral evidence to the Education Select Committee earlier this week, a wide range of factors contributed to this situation. I will not repeat them here. but I wish to put on record my appreciation of the hard work of head teachers and local education authorities across the country to manage through these difficulties and to continue to improve the quality of education provided by their schools.

"In my Statement on 15th May, I said that I would keep the House informed of my thinking and give head teachers and LEAs early indications of our approach to help them to begin planning for next year. My purpose today is to outline the first steps we are taking to respond to the practical concerns raised by schools about the present system. Following continuing consultation with representatives of local authorities, chief education officers and head teachers, I will make a further report to the House in the autumn.

"My guiding principles for the changes needed to the schools funding system for the next two years in order to deliver that are: that every school should receive at least a guaranteed per pupil increase in its funding for each year; that central and local government should achieve earlier announcements of the financial allocations to schools so that heads have greater certainty and time to plan; that we should provide greater stability through a two-year settlement on teachers' pay, ring-fenced grants and the guaranteed per pupil increase in schools funding; that there should be greater transparency in the overall system of funding for schools; and that the reforms agreed with the key workforce partners, as reflected in the national agreement on raising standards and tackling workload, should be sustained.

"The Government have been working intensively to identity a package of measures that will deliver these aims. This year my department provided a guaranteed minimum increase in education formula allocations for each local education authority. In 2004–05 and 2005–06, I intend to go a stage further. My central proposal for each of these two years is to provide a guarantee at the level of the individual school. So every school will receive at least a minimum increase in its funding per pupil. Of course, many schools will receive more than this minimum. We intend to implement this through fair funding regulations, placing each local education authority under a direct obligation to provide for such a minimum guarantee. I will confirm the minimum percentage increases for 2004–05 and, provisionally, for 2005–06, by the time of the provisional local government finance settlement in November, when we have completed our analysis of costs in the system, in particular, on teachers' pay. We will share that analysis, and the rationale for the level of the minimum percentage increase, with our education partners.

"This guarantee will provide for a minimum funding increase in every school. That minimum will be based upon the average cost pressures for 2004–05 and 2005–06. Obviously, it cannot match the precise composition of each school's current spending profile. For example, it cannot insulate schools from the effects of changes in their pupil numbers, nor reflect their wide range of different staffing arrangements. Heads and governors will continue to need to plan ahead, with their local education authorities, to take account of those features which are specific to every school. But I believe that our average per pupil guarantee will give schools a far more stable foundation.

"We are already discussing with our education partners how the guarantee will work in detail, and we will consult further. We will seek to agree guidelines to underpin the operation of these new arrangements, in order, for instance, to take proper account of the extra protection that local education authorities already provide to very small schools. Within this framework, local education authorities, heads and governors will work together through their schools forums to agree the funding baseline to which the guaranteed per pupil increase will be applied.

"For sixth forms, the Learning and Skills Council will, in both the 2004–05 and 2005–06 school years, provide each school with guaranteed minimum increases in funding equivalent to the per pupil guarantee for schools. The LSC will consult all heads of maintained schools with sixth forms in the autumn on its plans for improving the operation of sixth-form funding for 2004–05.

"Some schools have found it necessary this year to spend from their reserves or devolved formula capital allocations. Others have set deficit budgets by agreement with their local education authorities. Of course, schools and LEAs have the primary responsibility to manage the ongoing consequences of such decisions, including maintaining sound financial management and balancing budgets. The changes I am introducing for 2004–05 and 2005–06 will help them to do so. However, I recognise that there may be some cases where doing so could be beyond the capacity of individual schools and local education authorities. In those few cases, I will be prepared to consider limited, transitional support to avoid damage to children's education, where that is part of a locally agreed recovery plan between the local education authority, the school and the department. I shall discuss with head teachers and local authority representatives how best to provide such support.

"Of course, the minimum guarantee which I am offering today to schools can only be fulfilled by ensuring that each local education authority has the necessary resources within its schools budget. There are two key elements. First, in both 2004–05 and 2005–06, I will set the minimum increase for schools formula spending share (SFSS) in each authority at a level which will cover the school level guarantee and provide the headroom necessary to enable the local fair funding formula to work; and to help provide transitional support to individual schools, where necessary. Secondly, we will ensure that the local authority receives sufficient central Government grant to 'passport' in full the increase in SFSS into its schools budget.

"The Government will also provide additional resources for other local services, including children's social services, which are now my responsibility, over and above those announced for them in the last spending review. This will help to ensure that the arrangements I am announcing today do not create difficulties for other local services. The details will be announced in the autumn. Having provided these resources, the Government are determined that each and every school should benefit in the way intended. My right honourable friend the Deputy Prime Minister and I will be writing to every local education authority setting out the Government's clear expectation that, barring wholly exceptional circumstances, each and every local education authority should 'passport' the full increase in its SFSS into a matching increase in the schools budget. This is essential if heads, governors, teachers and parents are to have full confidence that the resources intended for schools will get through to schools. I have statutory powers to require local education authorities to set a minimum schools budget and I will be prepared to use those powers where it is necessary to do so.

"This year most local education authorities' spending on centrally funded pupil services, such as special educational needs and excluded pupils, has increased significantly faster than their spending on budgets delegated to individual schools. It is essential that in future the individual schools budget receives its fair share of any increase. So my intention is that in 2004–05 and 2005–06 spending on such central items should rise no faster than spending on the individual schools budget. I will consult on how fair funding regulations can ensure that this is delivered. In doing so, I will take account of the need for local flexibility on items such as the expansion of nursery provision to meet the Government's commitments.

"It is clear that a significant source of problems for some schools this year has been the change in the Standards Fund. I will help provide stability and security by maintaining, and inflation proofing, the support the Standards Fund provides to schools at its 2003–04 levels. This means that I am reversing the reductions previously announced for Standards Fund support to schools in 2004–05 and 2005–06. This will provide more than £400 million in each of the next two years, over and above existing plans. I will also be making earlier announcements on Standards Fund distribution, before the announcement of the provisional local government finance settlement.

"I am able to make this additional funding available from my end year flexibility, and other redirection of existing resources. I have previously set out for the House in my department's annual report the planned and prudent use of accumulated end year flexibility over the next three years to supplement resources secured through the spending review. This additional commitment means that my accumulated end year flexibility is now fully committed to support children, young people and adults achieve their full potential.

"Head teachers should know their budgets in good time for the beginning of the financial year. I am taking a number of steps to provide earlier notification of their funding. As well as earlier notification on the Standards Fund, the Government will bring forward the date of the provisional local government settlement to the middle of November. We also intend to bring forward the date by which local authorities are obliged to notify me of their `passporting' intentions by one month to the end of December, and the Government will propose an appropriate amendment to the Local Government Bill at Third Reading in another place.

"It is vital that the reforms we agreed with key workforce partners, as reflected in our national agreement on raising standards and tackling workload, are sustainable. That remains a key priority for my department. By maintaining the Standards Fund at its current level, we will help to ensure that schools receive the core funding they need to make progress on implementing the workforce agreement.

"On 11th July, I submitted my evidence to the School Teachers' Review Body. The evidence makes the case for a two-and-a-half-year settlement on the basis of current targets for inflation. I have set out a clear strategy to enable sensible progression along the upper pay scale while controlling costs and I have asked the STRB to report on all the major issues in early November, so that local education authorities and schools will have much earlier certainty about the level of pay cost pressures for the next two years.

"This year's problems have underlined the need to provide more and better support for schools and education authorities in planning and managing resources, and for schools forums, which have a key role to play in helping to secure local consensus on distribution. We will be discussing with education partners, the National College for School Leadership and others how best we can make rapid progress.

"Finally, I want to make clear that this package is designed to secure stability, and to restore confidence in our funding arrangements for schools. We need to ensure that the schools funding system commands broad support; works to promote our overall objectives for raising standards in education; and ensures that resources are used in the most effective way to secure higher quality and better levels of achievement in schools. I will of course be monitoring the impact of the changes that I am announcing today, with a view to considering whether further changes are needed for 2005–06. It is critical to ensure that funding arrangements for schools are sustainable in the long term.

"I recognise that this has been a difficult year. However, I believe that the steps that I have outlined today provide a realistic framework of stability and certainty for the next two years. We will now work with education authorities and schools within the framework that I have set out today to deliver the further improvements that our children deserve"

My Lords, I am grateful to the noble Baroness for repeating the Statement. There will be a bemused sigh of resignation throughout the ranks of head teachers, teachers and governors about it. We have the familiar format: fine words and laudable sentiments; but where is the key information that will deliver the declared aims of the Statement?

Nothing was said in the Statement about the department's own spending or possible economies. Unless schools know with some assurance the quantum of funding to be made available during the next two years, what is to be taken into account and the system of distribution, simply claiming that the settlement will represent an increase in real terms is not good enough. That is what happened this year, and witness the chaos that followed. The crisis that has precipitated the Statement is of Ministers own making. To date, there has been no apology.

What is baffling is the way in which the policy paper, Fair Funding, was hailed as the answer to the problems of funding in our schools. It promised transparency and simplicity; neither aim was delivered—so much so that Mr Charles Clarke and Mr Miliband appeared not even to understand what has happened to their so-called generous settlement.

This year's settlement was made in triumphant mode. Within days, it was clear that it had been ill-thought through, was misleading and, frankly, in presentational terms had been completely bungled. Local government, officials in the department and even heads and governors have been made scapegoats throughout this ·ébâcle. They have been made to answer for the sheer ineptness of Ministers in the department. No, the buck stops on the desk of the Secretary of State.

At the same time as all the confusion surrounding this year's settlement, when schools were making teachers redundant, spending precious capital on revenue, running deficit budgets, and when enormous sacrifices were being made by other teaching staff to avoid their colleagues being made redundant, the department underspent by almost £1 billion.

Reading the Statement today, it would appear that the Government are behaving true to form. They have resorted to departmental control of the whole funding system. On the face of it, the Statement is well intentioned but incomplete. The promise of two-year stability and a real terms increase in funding per school and on a school-by-school basis is of course welcome. Schools will welcome that. But a real terms increase was promised to schools this year on a school-by-school basis. Witness the chaos that followed.

The Statement reads:

"my department provided a guaranteed minimum increase in education formula allocations for each local education authority"—

and,

"I intend to go … further".

The central proposal is for each and every school to receive at least the minimum increase in its funding per pupil. Will that be through the FSS? As the noble Baroness will know, that is no guarantee of actual funding. The FSS is not necessarily backed up by real funding; that depends on what happens via the LEA. If that is at the expense of funding on other services, such as social services, special educational needs or youth services, is it a matter of, "So be it"?

What about LEAs that are already spending well above what the Government deem appropriate for their schools? Will schools that are already on a high level of expenditure and allocation of grants from their LEAs receive the same increase as those that are not? Is it to be allocated on the basis of the funding in each school at the time, or will a more sophisticated judgment be taken of what has been the allocation?

In the Statement, the Government refer to average cost pressures. As the noble Baroness will know, if there is to be a uniform increase school by school, average cost pressures fall differently on different schools. How will that be taken into account? Let us remember that the promise in the Statement is that we shall receive the detail in September, October or November—if it is genuinely to be earlier than we normally expect information to be available to local authorities.

What about those schools that have gone into deficit this year? What about those schools that are spending precious capital on revenue spending? What about those schools that have deferred spending? Will they receive some compensation to get them up to the level at which they can properly enjoy the increase?

The Statement says that schools forums will agree the funding baseline. That goes well beyond what the Act of Parliament states. If schools forums have the power to agree, are we now to understand that they will determine the funding baseline for schools? What percentage increase on what they provided last year, or on what schools are spending on sixth forms, will learning and skills councils provide? Again, with her experience, the noble Baroness will know that schools do not separately fund their sixth forms. Schools are funded on the basis of the whole school. Once they receive the money, they regard that as for the whole school. So what assessment will be made of sixth form funding?

The Government say that they will,

"ensure that the local authority receives sufficient central Government grant to 'passport' in full the increase".

I want the noble Baroness to give us an absolute assurance that all the caveats that I have listed will be taken into account. That is essential.

The statements to be made to schools this year were made before this year's settlement. Schools believe the Government. The Government should be warned that they are raising huge expectations in our schools. If they do not deliver, surely judgment will follow.

Extraordinarily, the Statement continues:

"This year … local education authorities' spending on centrally funded pupil services, such as special educational needs … has increased significantly faster than their spending on budgets delegated to individual schools".

Is it the Secretary of State's judgment that they are spending too much on SEN—that that spending is excessive or unnecessary? The Statement then says that the Government will ensure that that increase in spending on special educational needs does not run ahead of normal expenditure. We all know that the Special Educational Needs and Disability Act 2001 required spending on special educational needs over and above the normal allocations, but from reading the Statement, it appears that schools and LEAs that will be mightily handicapped in delivering that.

On the Standards Fund, the Government used fine words in the Statement but, frankly, they are admitting to an error that has caused enormous pain in our schools this year. Further to the reference to the STRB, can we have an assurance that if it reports in early November, as we hope it will, the Government's response will be made known to LEAs and schools before November is out?

The Government are promising greater predictability, which is welcome, and greater accurate and transparent information which, if it is true, is also welcome. Local authorities' priorities must not be subject to second-guessing, if that means other pressing and sometimes obligatory duties to address the requirements of special educational needs children or social services for children, especially following the Climbié report.

Central control is now the order of the day, so now we know clearly who to hold responsible should anything go wrong in next year's settlement. The Government are in no doubt—it is now on notice—that they are raising expectations with fine words. They have not been forgiven for this year's debacle and they will be judged very harshly if they create a repeat of this year's chaos next year.