My Lords, I thank my noble friend the Chairman of Committees for introducing this valuable report to your Lordships today and I declare my interest as a member of the Information Committee, chaired by my noble friend Lord Baker of Dorking, who regrets that he is unable to be in his place today, but has asked me to say a few words.

The committee looked at the proposal when a paper was presented to us earlier this year and I am pleased to say that the proposal received unanimous support from the committee. Not only will it enhance security to the Palace, it will also make life much more pleasant for our visitors, be they constituents or tourists, who come to see how Parliament works.

No longer will they have to queue outside in all types of weather, but they will be accommodated in Westminster Hall, which will provide far better access and welcome for them, and they will be able to get information and leaflets to explain how Parliament works. As the report says, there will be significant benefits to the House. To take one example, as my noble friend said, it will enable the unsightly X-ray machines and barriers to be removed from St Stephen's entrance, thus enhancing the view of Westminster Hall.

I warmly welcome this report. It is an essential project and I hope that it will be up and running very soon. After all, it is time that we treated our visitors as human and not animals.

My Lords1, paragraph 4 of the report, which I, too, welcome, says:

"Initial estimates for the costs of this project are in the region of £5 million",

of which we will pay 40 per cent. It then says:

"Subject to approval from the House in principle, more detailed designs and costings will be prepared which will be submitted to the appropriate domestic committees in this House and in the House of Commons".

With the example of Portcullis House in mind, should we not perhaps be slightly more precise regarding when the opinion of the House would again be sought, rather than giving an open-ended remit to the committee?

My Lords, perhaps I may ask the noble Lord the Chairman of Committees to say something about access for disabled people. It so happens that this evening I am hosting an organ recital in St Mary Undercroft, to which disabled access has very recently been installed. I have no doubt that others have used it, but I suspect that wheelchair users who will be coming down this evening may be among the first. I find this matter rather difficult, because wheelchair users are still required somehow to negotiate their way out of Westminster Hall, having gone very much further round than they could ever have gone previously in order to descend the ramp. Would the noble Lord the Chairman of Committees comment on that?

My Lords, perhaps I may ask one question. Will the new facility described in paragraph 4 provide for feeding visitors who come at a time when no restaurant or any other such facilities are available here—on, for example, Wednesday evenings? We very much lack something like that.

My Lords, perhaps I may add a word to the encomia that have already been given to the noble Lord the Chairman of Committees. I opened up the map and looked at the plan for Westminster Hall. I noted, and perhaps your Lordships will see, that a dotted line represents the Line of Route. Will there be a ramp, or how will disabled people ascend the stairs in Westminster Hall? It seems that there will be access for them to enter through the shaded areas, because this matter is of interest, not just to Members of the other place but, as my noble friend Lord Brougham said, to our own guests, if we do not make appointments for them or have special arrangements at the Peers' entrance.

Perhaps the noble Lord the Chairman of Committees could also enlighten me regarding the shaded area on the west side of Westminster Hall, which says, "Existing WCs enlarged". I was not aware that there were any there.

My Lords, perhaps I may ask one final question. Can we be assured that the design will be exhibited so that all Members of the House can see it before it is finally approved?

My Lords, first, I thank the noble Lord, Lord Brougham and Vaux, for his welcome for the proposals on behalf of the Information Committee. I can tell him that, as things are at present, and as I think the report states, it is hoped that all the proposals could be in operation by 2006—the year after next.

The noble Lord, Lord Elton, said that we did not want a repeat of Portcullis House. I can well understand that. Obviously, when the more detailed designs are drawn up and the costings made, they will be a matter for the House Committee of this House—the principal committee involved with authorising finance. The report of the House Committee will definitely be put before the House.

The noble Lords, Lord Jenkin and Lord Lyell, both asked about access for disabled people. That will be improved. I refer both noble Lords to page 9 of the House of Commons report, which is more voluminous than ours and deals with that point.

I am glad that the noble Lord, Lord Jenkin, approves of the new disabled-access lift to the Undercroft. It was opened literally only a few weeks ago and has greatly improved access to that area. At the moment, disabled people cannot enter through St Stephen's entrance at all. They have to make special arrangements to go up by lift. In future, wheelchair-bound people will be able to use the ramp into the Palace through the new security centre into Westminster Hall in the same way as everyone else. There is, of course, a lift from Westminster Hall to the Principal Floor. That is used now and will be the means of access for wheelchair-bound people.

In response to the noble Baroness, Lady David, the Jubilee Café on the corner of Westminster Hall will indeed be open, as it is now, for refreshment facilities.

I think that I answered the questions asked by the noble Lord, Lord Lyell. In response to the noble Lord, Lord Crickhowell, the detailed design will have to be looked at by both domestic committees of this House, to which I have already referred, and it will be reported to this House.

On Question, Motion agreed to.

My Lords, one of the many responsibilities of the new regulator, Ofcom, is to oversee standards in broadcast advertising. The Communications Act 2003 gives Ofcom the general duty to regulate the content of broadcasting services, including all advertisements.

Furthermore, both the Control of Misleading Advertisements Regulations 1988 and the Medicines (Monitoring of Advertising) Regulations 1994 make specific provision for complaints about broadcast advertising arising under those regulations to be referred to Ofcom. The Communications Act also makes specific provision to allow any of Ofcom's functions to be contracted out using the powers in the Deregulation and Contracting Out Act 1994. This is the first order to be laid before Parliament in connection with the contracting out of Ofcom's functions. It will permit Ofcom to contract out functions relating to the regulation of broadcast advertising. In developing these proposals, Ofcom undertook a consultation, which ran between October 2003 and February 2004.

The draft order is intended to be supplemented by an authorisation and memorandum of understanding between Ofcom and the newly established co-regulatory body. Taken together, those two documents will establish the detailed arrangements for day-to-day operations. Copies of both an indicative draft of the authorisation and the memorandum of understanding have already been placed in the Libraries of both Houses with the intention of assisting consideration of the draft order. I understand that they are available in the Printed Paper Office.

The arrangements for the new co-regulatory bodies will parallel those of the well established Advertising Standards Authority, but they will operate separately. The ASA is an effective self-regulatory body whose arrangements enjoy national and international respect. That was remarked upon during the passage of the Communications Act. Ofcom's responsibility for considering and responding to complaints about broadcast advertising will be considered by a new body—ASA (Broadcast)—paralleling the ASA arrangements and sitting under a joint chair.

Similarly, Ofcom's functions in respect of the setting, reviewing and revising of advertising standards codes will be undertaken by a Broadcasting Committee of Advertising Practice, which I guess will be known as BCAP.

The new co-regulatory system will provide the public with a "one-stop shop" for complaints about advertising content under the ASA umbrella. That will make it simpler and easier for the public to complain. Formally, the ASA and ASA(B) will be two distinct bodies, with the ASA(B) assuming sole responsibility for all complaints relating to broadcast advertising.

The system will be funded by a voluntary levy on the advertising industry administered by another new body, the Broadcast Advertising Standards Board of Finance Ltd (BASBOF), thus preserving the independence of the new co-regulatory bodies. There is also provision for an independent advisory panel to support development of the advertising code and an independent adjudicator to consider appeals from industry and the public. Arrangements for regular monitoring by, and reporting to, Ofcom will be established.

The ASA(B) will be able to require changes, restrictions or removal of advertisements. These are the day-to-day tools of broadcast advertising regulation. But it is not to be given wider enforcement powers beyond the regulation of advertising. If a code breach appears serious enough to merit further enforcement action, such as the imposition of a fine on the broadcaster concerned, that will revert to Ofcom. Broadcasters would still remain responsible to Ofcom for all broadcast content through their Ofcom licence conditions. Ofcom is proposing to make the contracting-out exercise subject to the condition that it would approve the standards code drawn up by the new body.

The new co-regulatory system will provide a number of benefits, including clearer arrangements for the public to make complaints about advertising. Many broadcasting complaints are submitted to the ASA in error. In the first half of 2004 alone, the ASA has had to refer to Ofcom 3,278 complaints about TV and radio advertisements. That is 64 per cent up on the same period last year.

Under the new system the public will now be able to submit a complaint about an advertisement to a single point. In addition, advertisers will be able to take advantage of greater consistency of regulation across all media. Advertisers have recognised the benefits that this new system will bring and are therefore committing to a voluntary levy on broadcast advertising to fund the new functions.

The Government have given careful consideration to the functions which Ofcom should be permitted to contract out through this order. There are some notable exceptions to the new co-regulatory body's responsibilities, especially where the current rules extend beyond the basic consideration of broadcast advertising content; for example, where there are strong links between editorial content and advertising, such as with the sponsorship of programmes; similarly, with the requirement under the Communications Act for Ofcom to ensure that the prohibition on political advertising is enforced-that involves particularly sensitive judgment and is best reserved to Ofcom because of the potential impact on our electoral and democratic system—or where rules are not about the content of advertisements, such as rules on the amount and scheduling of advertising, which derive largely from the Television Without Frontiers Directive.

In such cases it makes sense for Ofcom to retain responsibility for regulating these areas and the order therefore specifically identifies them as reserved to Ofcom. Of course, Ofcom does not have to contract out every function identified by this order. It simply gives it the option to do so.

Concerns were raised in another place about what can be done to ensure adequate controls in the code in relation to public policy concerns, such as the advertising of food to children and alcohol advertising. I should emphasise, first, that the ASA itself has rules regulating the advertising of these matters and we would expect both the ASA and the proposed ASA(B) to review their rules periodically in the light of public concern. But if that expectation were disappointed, action could still be taken. Under the terms of the Deregulation and Contracting Out Act, Ofcom can continue to exercise any function of theirs regardless of whether it has been contracted out. If necessary, therefore, they could ultimately make code changes themselves if they had to.

In addition, the Secretary of State will of course keep her existing power under the Communications Act to issue directions in relation to prohibited categories of advertising. However, in practice, she would do so only exceptionally and following consultation with Ofcom.

We believe that this new framework will prove highly successful but, if weaknesses emerge, Ofcom could ultimately take back direct control of this area of regulation if necessary. There are three other matters which I should place on the record.

In addition to its main purpose, the order also corrects a minor omission in the Communications Act by adding the functions under the Medicines (Monitoring of Advertising) Regulations 1994 to the range of "relevant functions" pursuant to which the disclosure of information may be permitted under Section 393 of the Communications Act 2003.

The overall effect of Section 393 of the Act is to place restrictions on Ofcom's disclosure of information to protect businesses with which it deals. But the Act also recognises that there are circumstances where limited disclosure might nevertheless be necessary for the proper discharge of Ofcom's functions or the functions of certain other persons who are carrying out "relevant functions". Advertising regulation is intended to be one such "relevant function", so we are taking this opportunity to correct the omission of the 1994 regulations from Section 393 of the Act.

Secondly, for the record, this order is made under the powers in Sections 69 and 77(1) of the Deregulation and Contracting Out Act 1994 (read with Section 1(7) of the Communications Act 2003) in relation to the new contracting out arrangements; and under Section 393(4) of the Communications Act 2003 in relation to the further provision for the disclosure of information. The order has been laid before Parliament for approval in accordance with Section 77(2) of the Deregulation and Contracting Out Act 1994 and Section 393(11) of the Communications Act 2003. Thirdly and finally, I am satisfied that this draft order before the House is compatible with the European Convention on Human Rights. I beg to move.

Moved, That the draft order laid before the House on 10 June be approved [22nd Report from the Joint Committee].—(Lord McIntosh of Haringey.)

My Lords, I begin by thanking the Minister for his inclusive and coherent explanation of the provisions of this draft order. This order relates to the functions conferred on Ofcom by the Communications Act concerning the regulation of broadcast advertising. The Act permits Ofcom to contract out these functions as exercised for the purpose of, or in connection with, regulating standards and practice in advertising as included in television and radio services.

Put simply, this instrument permits Ofcom to transfer the day-to-day responsibility for the regulation of broadcast advertising to a new, independent, self-regulatory regime under the umbrella of the Advertising Standards Authority. However, Ofcom will retain certain backstop powers relating to the broadcast advertising regulation, such as rules pertaining to political advertising, to which the Minister referred, television quota and sponsorship regulation. Therefore, this co-regulatory system will differ slightly from that of the current ASA structure as Ofcom will ultimately retain statutory responsibility for compliance with broadcasting standards as required by the Communications Act.

The Advertising Standards Authority, a self-regulatory body funded by the advertising industry, was established more than 40 years ago and retains responsibility for non-broadcast advertisements from newspapers, magazines and cinemas to new media including advertisements on the Internet. As the Minister explained, the new structure for broadcast advertising will comprise three main bodies: the Advertising Standards Authority (Broadcast), the complaints adjudication body; the Broadcast Committee of Advertising Practice, the code-making body and the Broadcast Advertising Standards Board of Finance, the funding body. Funding will be provided through the imposition of a voluntary levy on the advertising industry and administered by the ASBF to ensure independence and transparency.

The new system will be subject to a two-year probationary period following commencement on 1 November 2004. If the system is found to function effectively, this new regime will continue for a further eight years, then becoming subject to renewal by Ofcom on expiry of the 10-year period. Initially, Ofcom's current codes will remain operative. However, the BCAP may amend the codes, if appropriate, following formal public consultation.

We welcome Ofcom's move in relation to the public consultation on the future of broadcast advertising to establish an advertising advisory committee. This committee will provide lay and expert advice to the code -making body where necessary. Can the Minister confirm how this committee will be comprised in terms of lay and expert membership?

The Communications Act confers a duty on Ofcom to promote self-regulation where possible. Indeed, we on these Benches have repeatedly expressed our support for self-regulation. Throughout the passage of the Communications Act, we encouraged the Government to adopt a less fragmented regulatory model for the regulation of broadcast advertising for many reasons. First and foremost is uniformity. In this age of media convergence, it is simply not appropriate to have numerous bodies with parallel responsibilities. Indeed, I spent part of my career in the industry working for the trade body representing the advertising agencies, the IPA. I therefore know first hand that increasingly, the industry needs a joined-up approach to regulation and that the old approach of different regulators for different media will start to crack under the strain of technological change.

My time at the IPA also convinced me of the deep-seated belief within the advertising industry in the need for robust and effective self-regulation. The industry has funded the ASA via a levy on advertising space since its inception 40 years ago and yet it certainly does not demand that the ASA sings to the industry's tune; far from it. So, the ASA model, now being extended to broadcast advertising, has built-in safeguards to ensure a proper level of independence and effective funding.

In short, redress where appropriate, therefore, should be transparent, fast and effective and a convergent body, albeit with an alternative accountability structure, will ensure that complaints are dealt with consistently and fairly. Additionally, this new regime has the benefit of familiarity. It is important to stress the point that technological change means that it will become increasingly difficult to distinguish whether an advertisement is a broadcast advertisement falling within Ofcom's remit or a non-broadcast advertisement falling within the ASA's remit. Advertising campaigns are usually spread across different media and, therefore, a number of different regulators can be involved. Indeed, on some occasions, this has led to different decisions by different regulators about the same campaign. That of course is not helpful to either the industry or the consumer. So we welcome this instrument.

Research illustrates that many public complaints have been redirected from the ASA to Ofcom. The public know and trust the existing system. This transfer of responsibility can only help to reinforce the consumer's understanding of advertising regulations.

I recognise the concerns raised by the Consumers' Association regarding industry ownership of the advertising codes. However, I believe that the backstop powers retained by Ofcom and the creation of the advertising advisory committee, together with the experience to which I referred, should help to alleviate those fears. I think that the record of the advertising industry speaks for itself—a view that we stressed during the passage of the Communications Act. Indeed, under the chairmanship of the noble Lord, Lord Borrie, who I am pleased to see in his place, the Advertising Standards Authority should be commended on its commitment to ensuring that this policy has been thoroughly and expediently implemented.

My Lords, I should like to support the statutory instrument and to congratulate the Government, Ofcom and the ASA on putting together this ingenious new method of co-regulating broadcast advertising. It is now more than a year since we dealt with the Communications Bill in this House. During our long debates on that legislation I spoke in support of the duty placed on Ofcom to promote and encourage effective self-regulation and the fact that broadcast advertising could be a prime contender for a greater level of self-regulation.

During one debate on the Bill we were told, if I remember rightly by the noble Lord, Lord Borrie—whom I am glad to see in his place—the present distinguished chairman of the ASA, that an advertising association task force consisting of representatives of the broadcasting and advertising sectors had submitted a proposal to Ofcom that it should contract out advertising to the ASA, thus enabling a one-stop shop with a single letterbox for complaints to be established for all advertising regulation. I welcomed that at the time, as I do now. As I believe the noble Baroness has just said, this system will be simpler to understand and therefore much more effective.

One consequence of the ASA's record of success in the self-regulation of print advertising is that it has repeatedly received large numbers of complaints regarding broadcast advertising, which it has had simply to pass on elsewhere. Therefore, as I think the noble Baroness said, this will be a useful example of joined-up administration in this important field of regulating the public interest.

I had the privilege of being a chairman of the Advertising Standards Authority a very long time ago when it was a much more controversial organisation than it is today, thanks to the splendid work done by my successor chairmen. I followed that, curiously enough, in my odd public life, by becoming the chairman of the Independent Broadcasting Authority, and therefore the regulator of commercial television and radio broadcasting.

At that time there were deep suspicions-much deeper than exist today about this whole area of looking after the consumer and the public interest. I therefore set up an advertising liaison committee which I chaired myself. It was a sort of summit meeting of all the interested parties in this field, to try to ensure that properly considered and balanced conclusions were reached on the broadcast side of advertising regulation. I therefore note with great interest the proposal in the order for an advertising advisory committee on somewhat comparable lines. Its role will be very important.

A modification of the ASA's self-regulation, into co-regulation, is now proposed for commercial broadcasting. The ASA will be applying its great experience at operational level of self-regulation to commercial broadcasting. However, as the Minister said, Ofcom will still have strong and effective backstop powers. That is very important. It is not possible to have a pure self-regulatory system in the modern world for almost anything. There has to be some kind of mix of self-regulation with an ultimate backup of statutory regulation.

Where appropriate, self-regulation is infinitely to be preferred to statutory regulation as it has the advantages of flexibility and adaptability. However, if self-regulation is to work in the consumer field, it must enjoy several conditions that have been the background to the ASA's success. It is now proposed to replicate those in the structure which the Minister has just described.

First, there must be an adequate and independent source of finance. That is why the proposed levy system—not going round with a begging bowl, but a levy system; independent of the regulatory body called ASBOF which is being replicated for these new arrangements—will be set up. Secondly, the regulatory body should have effective enforcement sanctions. I think that the ASA system has proved that it has those.

Finally, through the quality of the ASA council, it must command credibility from both the public and the industry. The ASA council has always sought to provide that by ensuring that a majority of the council are independent members. I can only report that when I became ASA chairman—for which I thought my essential qualification was that I knew nothing at all about the advertising industry and was totally independent of it—I was struck by the fact that it was the advertising industry members of the council who—with their expert knowledge of what advertisers could get up to in stretching the code of standards to the limit—were most determined to maintain the industry's standards and reputation. That is why self-regulation, when you can make it work, as the ASA does, is so much better than the bureaucratic alternative.

I therefore very much hope that this new marriage between Ofcom and the ASA will prove a resounding success.

My Lords, I must first declare an interest as chairman of the Advertising Standards Authority for the past three and a half years and as chairman of Advertising Standards Authority (Broadcast), which it is proposed will handle complaints about television and radio ads under the new arrangements.

As the Minister has explained, a great deal of work and consultation has gone into this proposal before the House today. Contracting out by Ofcom was envisaged by several noble Lords during the debates on the Communications Bill, and emphasis was put on the convenience to consumers if we could create a one-stop shop for all advertising complaints. At present, considerable numbers of people already believe that the ASA handles complaints about radio and television ads. Some 5,000 people complained to us about that in the first half of last year.

The ASA has been handling non-broadcast advertising complaints for over 40 years. My predecessor as chairman, the noble Lord, Lord Rodgers of Quarry Bank, whom I am pleased to see in his place, may well wish to intervene in this debate. But whether or not he does, the many changes in procedure that have taken place under previous chairmen, including the noble Lord, Lord Thomson of Monifieth, have of course improved the system. It is not the same as it was 40 years ago. For example, the council very clearly has a majority of those who are independent of the industry, together with an independent chairman, and the financing of the organisation by a levy ensures adequate resources and of course safeguards the ASA's independence.

I am fairly sure that it was the noble Lord, Lord Rodgers, himself who was responsible for introducing transparent Nolan principles to the recruitment of council members and for introducing an appeal system, which remains. Enforcement of our rulings has been considerably improved. Last year, for example, we secured the withdrawal of more than 1,700 unacceptable advertisements. We sometimes have to require all future ads from a particular advertiser to be pre-vetted before publication—something that, in the non-broadcast field, would be impossible to inaugurate for every possible advertiser.

For broadcast ads, with which the present order deals, the proposal is one of co-regulation between the ASA and the statutory regulator, Ofcom. Day-to-day complaints about individual ads will be a matter primarily for the ASA, but all television and radio broadcasters will have to have a licence from Ofcom and licences will require compliance with the code of practice for advertising. Ofcom's powers over its licensees will be significant. The Minister has already mentioned the power to fine and, ultimately, in the most extreme cases—like the nuclear option, this is a deterrent more than anything else—to withdraw a licence from a broadcaster. That is the big stick in the cupboard to which my noble friend Lord Currie of Marylebone, chairman of Ofcom, likes to refer.

We at the ASA realise that the order will give us a major new responsibility. We are accountable to Ofcom for how we deal with broadcast ads, to perform our task effectively, efficiently and fairly. Those are our fundamental objectives for the future.

My Lords, 1, too, welcome the draft order and am glad to follow the remarks of my noble friend Lord Thomson of Monifieth and of the noble Lord, Lord Borrie. I was chairman of the ASA for six years but, beyond that, I now have no personal or professional interest in the matter, except in the continuing success of the ASA and the satisfactory outcome of the negotiation.

I was a witness to the origins of the order five or six years ago, but I cannot claim any personal merit. On the contrary, I was partly sceptical and then cautious when Andrew Brown of the Advertising Association, who deserves much credit for the outcome of these matters, began to put proposals together. I was sceptical about whether the government of the day would contract out the existing statutory safeguards. Parliament is always sensitive about the impact of broadcasting, including advertising, on the public.

When the Communications White Paper was published towards the end of 2000 only five short paragraphs out of 300 concerned advertising. Earlier, the advertising industry had been omitted by the DTI and the Department for Culture, Media and Sport from the consultation list when the White Paper was being prepared.

Quite separately, I was cautious about whether the reputation of the ASA would be prejudiced if broadcast advertising was brought within its scope. The White Paper praised the ASA for its strengths and effectiveness, as the noble Lord, Lord McIntosh, said, and is well regarded both at home and abroad. The White Paper said that that gave confidence that "a more co-regulatory approach" to broadcasting advertising would be more effective than the present arrangements. However, a co-regulatory approach is not the same as self-regulation. I did not want the independence of the ASA to be qualified or diminished. The ASA has been both rigorous in its standards and flexible in its methods. It has learnt from experience and has moved with the times. The role of the chairman and council is crucial in making decisions and it would be a disaster if broadcast advertisers, the Government or Ofcom were to interfere with the existing ASA procedures.

However, I think that my caution can now be set aside. At first sight, co-regulation seems clumsy and bureaucratic. The concordat—the memorandum of agreement—contains 25 detailed pages. However, the existing identity of the ASA is preserved, with ASA(B), as we shall now have to call it, functioning in parallel.

I have just a few questions. When the draft order was debated in the House of Commons last week, the Minister was asked in what way Parliament could have "an input politically" into Ofcom and the ASA. He replied that the Secretary of State might exceptionally issue directions, adding:

"If there are differences of opinion between the ASAB and Ofcom, Ofcom will have the power to intervene and will be able to direct and, if necessary, amend".—[Official Report, Commons Twelfth Standing Committee on Delegated Legislation, 8/7/04; col. 7.]

I think that I am reassured, but perhaps the Minister would make plain that in practice the ASA(B) will have the same character, integrity and independence as the existing Advertising Standards Authority.

Then there was the role of the advertising advisory committee. I am puzzled by its purpose. Ofcom states that it is to be,

"an essentially lay and expert body"

both lay and expert. It is intended to advise,

"on code and policy issues".

I am not aware of any equivalent in the ASA or CAP. That seems to be over-egging the pudding with yet another body. I would like to hear the justification for that committee. I am tempted to probe a little further about the,

"full-time Executive whose role will be to oversee and to liaise with the new system",

as Ofcom puts it; but instead, if I may, I shall ask one further question.

In paragraph 15 of the concordat there are references to the role of the chairman over the two parallel, half-integrated bodies. It states that the single chairman will be appointed by the two relevant advertising financial bodies, which I think is an excellent proposal. That builds on the existing, satisfactory arrangement of the ASA. I hope that the noble Lord, Lord Borrie, will hold that role in the immediate future. The concordat states:

"Ofcom will be consulted…but with no right of appointment or veto".

That relates to the appointment of the chairman. I welcome the latter references to no right and no veto, but that could leave room for a positive view of Ofcom's own. I will not labour the point, but the Department of Trade and Industry-and its predecessor departments—has always had a light touch concerning consultation about the appointment of the chairman. I hope that that spirit will be maintained.

For more than 40 years, particularly in the past half century, the ASA has been a great success. I hope that the new arrangements embodied in the order will give it further fresh life.

My Lords, I am grateful for the unanimous support expressed for the regulations; it has been so unanimous that I have been called upon to answer few specific questions.

I am grateful to the noble Baroness, Lady Buscombe, for her helpful exposition of some aspects of the order that I did not have time to refer to myself. It is good to have them on the record. I agree with her very strongly about the need for a joined-up approach, transparency and accessibility. I believe that it has been agreed that this approach, which makes a single point of contact for those who want to complain about advertising, whether in the press or the broadcast media, will be successful. I am grateful also for her support of self-regulation as a general principle and for co-regulation as it has been worked out here.

The noble Baroness asked about the composition of the committee and the balance of the role of lay and expert membership. The noble Lord, Lord Rodgers, made a similar point. The Advertising Advisory Committee will be a committee of BCAP and will act as an independent sounding board. All of that is set out in paragraphs 41 to 50 of the memorandum of understanding. It will be funded by BASBOF, the board of finance. As the noble Lord, Lord Rodgers, said, the two boards of finance will have responsibility for the appointment of the chairman of the Advertising Advisory Committee. He is right in saying that Ofcom will have no right of appointment and no veto. I am sure that he is right in thinking that it would be desirable for Ofcom to exercise a light touch in expressing views about the appointment of a chairman. Ofcom, during the six or seven months in which it has been constituted, has consistently declared its intention of exercising a light touch. I am sure that the noble Lord, Lord Rodgers, can be reassured on that point.

The committee will consist of the independent chairman, appointed by the chairman of the ASA with independent panel involvement and in consultation with Ofcom, the chairman of BCAP and four to six independent expert or lay individuals who can represent the interests of citizens and consumers in relation to the requirements of Section 3(1) of the Communications Act 2003. This is where I come back to the question of the noble Baroness, Lady Buscombe. The ordinary members will be appointed by the chairman of the Advertising Advisory Committee together with the chairman of ASA(B), the chairman of BCAP and an independent assessor from Ofcom, which will have observer status. It sounds a bit complicated, but given that the bodies will be in the same building and the chairmen will be the same person, I think that it will work OK. The noble Lord, Lord Thomson, gave a valuable historical summary of these matters, for which I am grateful. He will know, but perhaps the House needs to be reminded, that regulation of broadcast advertising has an even longer history than that of the Advertising Standards Authority, which was set up only in the 1960s, whereas self-regulation of broadcast advertising was set up when ITV started in 1955.

The noble Lord, Lord Borrie, helpfully drew attention to the fact that the ASA observes the Nolan principles and has the appeals procedure to which I referred in my opening remarks. He reminded the House, which was necessary, that Ofcom's ultimate sanction is ensuring that the obligations are placed on broadcasters in the licences that Ofcom issues.

I hope that I have given enough assurance to the noble Lord, Lord Rodgers, on his concern for the independence of the Advertising Standards Authority. I can certainly assure him that there are no grounds for any interference in the operations of the Advertising Standards Authority as constituted. As I said, Parliament has a form of input into Ofcom and the Advertising Standards Authority, in the sense that the Secretary of State, who is responsible to Parliament, has the power of direction, particularly in a case where Ofcom and the Advertising Standards Authority were to disagree. That is very much a backstop power, and it was agreed by Parliament at the time of the passage of the Communications Act.

I believe that I have responded to the other questions about the appointment of the chairman. Again, I am grateful for the support for the order.

On Question, Motion agreed to.

My Lords, community radio is a new tier of very local radio. We discussed it at considerable length during the passage of the Communications Act 2003. We believe that it will increase access by communities to broadcasting opportunities, increase education and life-long learning opportunities, increase training and work experience, and improve social inclusion. "Community" as defined here can mean geographical communities, communities of interest or a combination of both. Such services can be an invaluable addition to the radio ecology, supporting and complementing the commercial sector and the BBC.

It would be wrong to undervalue the role of local commercial radio, which provides an invaluable and popular service in the areas that it serves. It is more popular than BBC local radio and strongly contributes to an area's sense of identity. It gets involved in a wide range of socially worthwhile activities, on-air and off-air, whether it be large stations such as Capital supporting the very successful Help a London Child fund, or small stations, such as Lines FM becoming involved in the Lincolnshire road safety partnership.

So we do not underestimate or undervalue the important role of local commercial radio. But we believe that there is also room for an additional tier of very local radio services along the lines of community radio. Properly introduced and regulated, community radio will complement existing commercial radio stations rather than compete with them. Community radio can provide a pool of talent for the commercial sector and vice versa; encourage very local advertisers who may grow into the local commercial stations as their business expands; and serve audiences which are different to those served by the commercial sector. Above all, to have any real and lasting value, community radio must be distinctive from commercial radio.

It is clear from the pilot stations set up under the 28-day licences that community radio can, and does, provide a service which is, in the main, distinctive from existing commercial services. Desi Radio services the Punjabi community of west London; Resonance FM aims to engage people in culture, music and radio art; Bradford Community Broadcasting runs training courses and encourages local people to present their own programmes and become actively involved in all aspects of the station.

The Government have announced that they will provide £500,000 to support community radio in each of the next two years. The money will primarily be used to assist stations with their core start-up costs. Grants will be awarded by Ofcom, which will also be responsible for regulating the entire sector. The noble Lord, Lord Rodgers, is no longer in his place, so he cannot take the point that I hope that it will do so with its usual light touch.

The Communications Act 2003 allows the Government to make an order that modifies the radio provisions of the Broadcasting Act 1990, so that they apply differently in some respects to community radio services. That is what this order does. In effect it says, if you are dealing with community radio, you read the existing legislation with the modifications set out in this order. The order sets out what characteristics community stations must have. They must be primarily for the benefit of the community or communities they serve, and must deliver social gain, which is defined in the order. It means, for example, that stations must provide services to otherwise under-served groups; encourage discussion and expression of opinion; strengthen links within the community; and provide education and training opportunities. Community radio services must be not-for-profit, or non-profit distributing. Any profits must be ploughed back into the station or the local community that it serves. A community radio station must provide opportunities for the community to which it broadcasts to become involved in the running of the station and the production of programming. It must be properly accountable to the community it serves. Those characteristics will ensure that community radio stations are distinct from local commercial radio services. In addition, the order places certain restrictions on ownership. In particular, it ensures that community radio licences cannot be held by the commercial radio sector, to ensure that the two sectors remain distinct. The order also provides that no one can hold more than one licence, to prevent the development of chains. Licences for community radio services will be limited to five years, which should provide enough security for a licensee, while providing adequate opportunities for new entrants.

The order also sets out a number of restrictions relating to the funding and location of community radio services. A community radio service must not take more than 50 per cent of its funding from any one source. That is based on the conclusions of the independent evaluation that a mixed funding model is best. It stops stations falling under the influence of a dominant funder, which should make them less vulnerable to changes in funding. The order sets out restrictions on the location of stations and the extent to which they can take advertising and sponsorship. They are as follows: no community radio stations are to be licensed where they would overlap with a commercial radio station with a potential audience—a "measured coverage area", to use the jargon—of up to 50,000 adults; a community radio station will not be allowed to take any advertising or sponsorship if it overlaps with a commercial station with a measured coverage area of between 50,000 and 150,000 adults; and where advertising and sponsorship is allowed, there will be an upper limit of 50 per cent of total income from these sources. The order also places a duty on Ofcom to "have regard to" the effect that the provision of a community radio service would be likely to have on the economic viability of any other local sound broadcasting service.

The measures strike the right balance between the interests of the community radio sector and the commercial radio sector. Taken together, the measures would affect only a relatively small percentage of the population, some 13.5 per cent. Only 0.9 per cent of the population would be prevented from having a community radio station in their area.

That is very much the opening position. We have formally asked Ofcom to conduct a review of the community radio sector two years after the first community station is licensed. If that review concludes that the restrictions are unnecessary or too burdensome, we will remove or modify them by bringing forward a further order for Parliament's approval. In short, this order is not necessarily the final word on the subject. Once we have better knowledge of how the two parts of the sector are developing, we will revisit the restrictions in this order to see if they are still necessary.

This is a historic day in the long journey of community radio. I pay tribute to the work of the Community Media Association, and in particular to Steve Buckley, who has been instrumental in getting us to this point. I hope that community radio will be an exciting and important development, not just in UK radio, but also in UK society more generally. Anthony Everitt, in his evaluation of the pilots, said that community radio,

"promises to be the most important new cultural development in the United Kingdom for many years".

I share his optimism, and I hope that the House will approve the draft order before it. Finally, I assure the House that I am satisfied that this draft order is compatible with convention rights. I beg to move.

Moved, That the order laid before the House on 15 June be approved [23rd Report from the Joint Committee].—(Lord McIntosh of Haringey.)

My Lords, I thank the Minister for his full explanation of the provisions of the draft order. The purpose of the order is to establish a licensing framework for the creation of a new form of local analogue radio.

Community radio, as the new regime is to be known, was first mooted in the communications White Paper in 2000. The aim of the initiative is to encourage local community participation and involvement through educational and social inclusion. That does not displace the importance of local commercial radio stations, and we want to be optimistic on these Benches, and we hope that the two regimes can work to complement each other and provide additional support and information for local communities. Local community radio stations will be run as not-for-profit organisations, and they aim to provide benefits including regeneration and community co-operation through local participation.

A pilot scheme was established in February 2002, and since its creation it has been subject to an independent evaluation to assess its effectiveness in supporting social cohesion in local communities. As a direct result of the pilot scheme's success, the policy was implemented by the Communications Act 2003. The order facilitates the creation of a new tier of local radio.

The debate on the merits of community radio is not new. During the passage of the Communications Act, your Lordships debated its significance on a number of occasions. There is no doubt that a need and wish exists for community radio in local areas, however, question marks remain over funding and competition. In Committee, I expressed a concern about the possible cost implications for Ofcom:

"We are, in principle, supportive of community media, particularly community radio. But I continue to question how Ofcom can carry out a duty to promote community media with regard to cost. Where will the money come from? That is a difficult question which may put Ofcom in an impossible position".—[Official Report, 23/6/03; col. 107.]

Furthermore, more general questions exist about how community radio should be funded. The Explanatory Memorandum states that the cost to the public or the Exchequer will be none, yet on 5 March the Secretary of State for Culture, Media and Sport announced that £500,000 had been made available for community radio stations. The Minister has begun to answer that question in his opening speech today. The amount of revenue raised by national advertising is likely to be minimal. The local market will be of central importance if a community radio station is to survive. Sponsorship can also provide an alternative funding mechanism by offering substantial and sustainable long-term revenue for these radio stations. However, we remain unsure whether those two revenue streams alone will provide a solution for the future. How does the Minister envisage that local community radio stations will fund themselves after the initial grant has been exhausted?

I echo the concern of my honourable friend the Member for Henley regarding competition for licences. When this draft order was debated by the Second Standing Committee on Delegated Legislation on 13 July, he expressed concern regarding competition for licences. In essence, we do not want community radio to be in a position where it can compete unfairly with local commercial stations. The example that he referred to was simply that state-funded radio stations would be in an extra-special position of having been subsidised by the listener through tax and then offered advantageous advertising rates. While we welcome the creation of community radio, any funding proposals and competition concerns require detailed evaluation to ensure that the objectives of this initiative are fully met.

Today, the Minister referred to balance. That is the key. We will need to see in the coming months and years whether the balance has been correctly achieved in the funding and financing of these community stations, and to see if they can thrive and develop.

The debate in another place was interesting and at times amusing. It considered the possible types of community stations that might be successful in obtaining a licence. Examples were given of "Hound FM" for those who are pro-hunting, which is one that I would probably listen to; and another suggestion for "Vardy FM" for the pro-creationists. While it was lighthearted on one level, an underlying serious concern was expressed among honourable Members regarding the kinds of community stations that might seek and be successful in obtaining a licence. We will want to watch carefully how Ofcom manages the often difficult process of deciding whether a licence should be granted. Indeed, the Minister in another place referred to Ofcom needing on occasion to make "very fine decisions".

The Minister in another place also referred to community radio being on an "open journey". I think that that is right. We welcome the order with these concerns attached with regard to funding, and we hope very much that community radio will be sustainable and will develop for all the very good reasons outlined by the Minister in his opening remarks. I am also grateful to him for referring to the need to revisit the workings of the order to ensure that the balance that has been struck within the order is right for the future benefit of community radio and, indeed, all local radio.

My Lords, I should like to associate myself with the Minister's congratulations to the Community Media Association and to Steve Buckley on his part in what is now a successful campaign with the bringing forward of this order. My remarks will balance those of the noble Baroness, Lady Buscombe, in that I too welcome the early review by Ofcom of the order, but perhaps for slightly different reasons.

In truth, much of the early hope and idealism of commercial radio—that we would have genuine locally owned and rooted stations has disappeared under the forces of the market which holds such sway within Ofcom. The reason that community radio has enjoyed so much support is that it has met a very real need by getting back to the grassroots participation that was there to a certain extent at the birth of commercial local radio, but which amalgamations, consolidations and takeovers have virtually removed. During the passage of the Communications Bill we forecast that eventually there would be only two or three large commercial owners of local radio stations.

However, that does not mean that local commercial radio stations do not fulfil a valuable local function. As the Minister said, many have identified that that makes good business sense. Nevertheless, something has been lost in all the hubbing and central scheduling of local commercial radio services. I know that the Commercial Radio Companies Association feels sensitive about this and produces statistics to show just how local commercial local radio still is, but the case for community radio has developed as commercial radio has taken on a new structure.

One of the central recommendations made by the Puttnam committee was the hope that the Government would take this matter forward. Moreover, the Government's own evidence to Puttnam was that they saw how the potential of such radio stations would help to increase active local community involvement and would,

"provide a nursery for future broadcasters and satisfy demand for access to broadcasting resources from specific communities, whether based on locality, ethnic or cultural background or other common interests".

We welcome the order as the fulfilment of a Puttnam recommendation and a promise made by the Government during the passage of the Communications Bill. 12.15 p.m.

My only worry concerns the response to this order by the Commercial Radio Companies Association, quoted by the Minister in another place, Estelle Morris. It stated that it welcomed the order because it,

"sets out an excellent framework for a new tier of radio, and CRCA looks forward to watching the new Community Radio sector flourish". [Official Report, Commons Second Standing Committee on Delegated Legislation, 13/7/04; col. 19.]

when a trade association issues that kind of welcome to a government measure, he should approach it with the same scepticism as when a civil servant says, "I think you're being awfully brave, Minister". The CRCA is very pleased and I congratulate the association on being one of the most effective trade bodies in the sector, but there are worries that the Government have bought too much of its case. As it stands, the order places far too many restrictions on community radio. Commercial radio is a big and robust industry comprised of some of the most powerful and wealthy media organisations in the world. There is grave doubt whether community radio needs the kind of over-protection given by the order. I hope that Ofcom will review realistically how much protection community radio needs

I regret the restrictions on coverage of 50,000 to 150,000. They affect me personally because in St Albans, Radio Verulam will be caught by them. There we have what I think is the perfect ecology for local broadcasting. We have Radio Verulam, a community station; Chiltern Radio, which is a commercial station; and Three Counties Radio from the BBC. Between the three stations a distinct and competitive service is provided, which is as it should be. I do not see why one should be restricted by an order of this kind.

I too question the money, but again for a quite different reason. I understand that the money was creatively recycled from the outgoing Broadcasting Standards Council, and well done for doing that, but if community radio is to be restricted on raising money in other ways, it is incumbent on the Government to put real funds into the development of those services beyond this commitment. Given its wide social remit, perhaps other departments could be equally creative in lending their support. I am thinking, for example, of the Office of the Deputy Prime Minister, which seems to have lots of budgets that could be used in this way.

So while I give a general welcome to the order, I urge Ofcom to question whether the extra protection is really necessary. I also urge the Minister to find some real money to act as a counterbalance to the restrictions being brought in. I welcome too the ban on chains because I feared that what has happened to commercial radio could also happen to community radio: the big boys would gobble up the stations one by one, bringing them into their consolidated groups. It is essential that community radio remains community-based, with the outlined restrictions placed on it with regard to ownership, profitability and so on. We welcome this fulfilment of a promise, but the potential of community radio will be much greater if we move ahead imaginatively.

in this age of rapid technology change, what about community television? Are the Government turning their mind to that issue?

My Lords, I welcome the order and the statement of my noble friend in support of it, particularly with regard to the revisiting of its development. I received a communication this morning, which I am sure many other noble Lords also received, from the Community Media Association, which welcomes the order. However, it has some small concerns which I should like to put to the Minister. The association believes that the conditions included in the new order will mean that a large number of communities will be severely restricted in their ability to achieve financial sustainability, and others will not be allowed to have community radio at all. It welcomes the existing small community radio fund of half a million pounds, to which the Minister referred, which may help to support some initial costs; however, it feels that a much larger fund is required to make community media truly viable.

I shall home in precisely on the areas of concern. The association feels that a substantial community media fund should be created and that the restrictions on programme sponsorship and advertising should be viewed as a temporary measure and the subject of serious review. I hope that the Minister will be able to answer those questions.

My Lords, I was not going to speak, but after what the noble Lord, Lord McNally, and my noble friend. Lord Davies have said, I wish to add a few words to the debate.

The noble Lord, Lord McNally, said that there was a market philosophy in Ofcom which caused commercial radio to be the way that it was. The philosophy of the market makes small commercial radio companies not viable, and that is why large companies take them over. There is nothing new in that.

If we believe in a free market philosophy, we should not put restrictions on community radio's power to seek advertisements. The big beasts of commercial radio should not support market distortions, and it seems to me that community radio is stuck with a market distortion. I join with the two noble Lords who have spoken before me and agree that, as soon as possible, the restrictions on community radio accepting commercials and the measured coverage area criteria should be removed. There should be a level playing field, and community radio should not be hobbled at its origin.

My Lords, in a sense, the debate reflects the one which took place during the preparation of the order. I do not think that it is any secret that the Commercial Radio Companies Association would have wished for there to be no government funding for community radio; and I do not think that it is any secret that the Community Media Association would have wished for there to be government funding but no restrictions on community radio. In the end, we have a deal, as the noble Lord. Lord McNally, said, which satisfies the Commercial Radio Companies Association and, to some extent but not completely, satisfies the Community Media Association. Let me read from the introduction of its memorandum on the subject:

"The CMA welcomes the draft community radio order as an important first step in introducing a vibrant community radio sector in the United Kingdom. The draft order is a long-awaited addition to the UK communications environment. It is a tribute to many years of hard work and the achievement of scores of community media organisations across the United Kingdom".

I endorse that; it is certainly the case. The noble Baroness, Lady Buscombe, came to the issue a little from the point of view of the Commercial Radio Companies Association, although she was fairly objective in her approach. She pointed out the difference between our first memorandum, in which we said there would be no government funding, and the subsequent announcement in March this year that there would be government funding of half a million pounds in each of two years. Yes, there is a difference: we changed our minds, and the thrust of the debate today has indicated that we were right to change our minds.

The noble Baroness asked about other sources of funding, particularly after the first years when the grant is exhausted. There will be, of course, charitable funding, local funding of various kinds and, in most cases, advertising funding. If I were a community radio station, I would look for funding from the Department for Education and Skills for my educational work; I would look for European Social Fund funding; I would look for local cultural funding; and I would look for urban regeneration funding. There are all kinds of creative things that one can do to secure the continuing viability of community radio stations, which is what we all want.

The noble Baroness asked about protection against unfair competition, and she acknowledged that we had achieved a balance. She is right, of course, and we shall watch the issue with care. I say that not only to the noble Baroness, Lady Buscombe, but to the noble Lord, Lord McNally, and to my noble friends Lord Davies and Lord Desai. Ofcom has powers to counter any unfair anti-competitive practice. However, we all hope that, with the powers we have put in place, community radio will expand and attract significantly more audiences than even the successful pilots.

I said in my opening remarks that a complete ban on community radio applies to less than 1 per cent of the population of this country, and even the partial restrictions apply to only 13.5 per cent. For the remaining more than 85 per cent of the population, there are no restrictions at all on community radio.

We have struck a balance; we have something which has been welcomed, with varying degrees of enthusiasm, by both sides. Let us get it started; let us see it work. That is my wish for community radio in this country because I believe, as do my noble friends, that it is enormously important.

The noble Lord, Lord McNally, said a final word in relation to television. We are engaged in spectrum planning for digital switch-over and we are looking for slots for local services, to make them as flexible as possible. There are existing analogue local commercial services but, if there is spectrum available, we shall have to make decisions about commercial services and community television services, if possible. It is a legitimate debate, but it is probably for another day.

On Question, Motion agreed to.

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

This short Bill seeks to reinforce the citizen's right to use public rights of way without obstruction. It refers to "highways" obstruction but. of course, as noble Lords are well aware, "highways" covers footpaths, bridleways, byways and so on as well as roads.

Under Section 137 of the Highways Act 1980 it was an offence wilfully to obstruct a highway without authorisation. If somebody was found so obstructing and did not remove the obstruction, a magistrate could issue an order under Section 137ZA(1). If they persisted, there could be a fine up to level 5.

A loophole has been exploited by some people. They set up corporations—paper companies with no assets—which then obstruct the highways. If the corporations are pursued in the courts, they cannot pay as they have no assets. Other paper corporations are then set up.

The Bill, which was introduced in another place by my honourable friend Michael Foster, MP for Hastings and Rye—I should declare that I also have a residence in Hastings—seeks to plug that loophole. It provides that if officers of a corporation which is so wilfully obstructing can be pursued in the courts, not just the corporation itself, Section 314 of the Highways Act will be applied to offences under Sections 137 and 137ZA.

Clause I makes it clear that Sections 137 and 137ZA will be inserted in Section 314 of the Highways Act. The effect, as subsection (2) provides, is that for any offence under Section 137ZA(3), not only the corporation but the officers of that corporate body will be pursued. That makes evasion of the law that much more difficult.

It is a simple law, which contains no retrospection. I hope that it will find favour with noble Lords.

Moved, That the Bill be now read a second time.—(Lord Desai.)

My Lords, when I was a county councillor, one of the most contentious items with which I had to deal was public rights of way and obstructions to them. This short Bill, as we have heard from the noble Lord, Lord Desai, closes the loophole in the law which unscrupulous people were able to exploit.

The Bill enables obstructions of a highway to be removed if they have been placed by a body corporate. I am very grateful for the Explanatory Notes which tell us exactly what a body corporate is. Paragraph 4 says:

"Section 314 of the 1980 Act provides that a director, manager, secretary or other similar officer of a body corporate that has committed particular offences under the 1980 Act will also be guilty of those offences if it can be proved that the offence was committed with the consent or connivance of that officer or is attributable to the neglect of the officer".

I beg your Lordships' pardon for reading that out, but I felt it would be useful to have it on the record.

This is a very clear, unambiguous Bill, with which these Benches wholeheartedly agree.

My Lords, I am grateful to my noble friend Lord Desai and to my honourable friend Michael Foster for bringing this Bill forward for consideration. I wholly endorse the comments made by my noble friend Lord Desai on the need for this Bill and the measures he has proposed to remedy this apparent loophole in the law. I am also grateful for the support of the noble Baroness, Lady Harris of Richmond.

There is clearly scope to frustrate the application of the relevant legislation by operating behind what amounts to a shell company. It is essential that local highway authorities should be able to initiate legal proceedings against an officer of a corporate body, as well as the corporate body itself, where the officer can be shown to be personally responsible for obstructing a right of way or other highway.

We should not lose sight of the fact that in the vast majority of cases in which obstructions on rights of way occur the obstructions will be removed through negotiation. Like the noble Baroness, Lady Harris of Richmond, I know that this can take time at local level on county councils. If necessary, the threat of action can cause results to be achieved through negotiation. This is, of course, the most common and preferable course of action for local highway authorities. However, as the Bill recognises, where, as a last resort, prosecution is necessary, local highway authorities need to be confident that they can act decisively to secure removal of the obstruction from the right of way.

I am able to give the Government's full support to this Bill.

My Lords, before the noble Baroness sits down, perhaps I may make it clear, as was made clear in another place, that my party thoroughly supports this measure. It is a short, modest, useful measure, reflecting its sponsor, and we welcome it.

My Lords, the noble Lord, in referring to shortness, is referring indirectly to other dimensions.

My Lords, I thank noble Lords for taking part in this short debate. I welcome what the noble Lord, Lord Cope, said about his party's support for the Bill. I hope that noble Lords will give the Bill a Second Reading.

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

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

Noble Lords may recall that I had the honour of promoting the Christmas Day (Trading) Bill in the 2001–02 Session. Your Lordships very kindly gave the Bill your full support at that time. It was efficiently dealt with in this House, but unfortunately it did not receive sufficient time to be debated in another place, and consequently fell.

I have the honour again to promote this Bill, and I hope that noble Lords will again give their support for this very important yet simple measure. The advantage I have this time is that the Bill has already been through another place, so its fate now lies fully in the hands of your Lordships.

The Bill has widespread support. It was sent to this House from another place unopposed. In a survey carried out by the Union of Shop Distributive and Allied Workers-USDAW—96 per cent of shop workers said that they wanted legislation to stop shops opening on Christmas Day.

The Department of Trade and Industry conducted a consultation on the measures proposed by the Bill. It contacted all the United Kingdom's major retailers, asking for their views. Not one of the retailers that responded said that that they opposed legislation to stop large stores opening on Christmas day. The experience of USDAW members involved confirms that the shopping public support the Bill. When collecting signatures on a petition asking for this Bill to be passed, they found it difficult to find people who would not sign; there was overwhelming support for the petition.

The Manchester Evening News ran a telephone poll on this issue. Some 95 per cent of those who phoned in said they wanted large stores to stay closed on Christmas Day. Even the Government, who were neutral last time we debated the Bill, now support it.

The Bill will correct an anomaly in the Sunday Trading Act 1994 and will help protect Britain's 2.7 million shop workers from being pressured to work on Christmas Day. As a former general secretary of the shop workers union, USDAW, I have spent many years seeking to protect shop workers from extended shop opening hours. The anomaly in the 1994 Act is that it does not allow trading by large shops on Christmas Day when it falls on a Sunday but allows trading when Christmas Day falls on any other day of the week. That is not only illogical, but goes against the spirit of the 1994 Act. Protection for Christmas Day was inserted into the 1994 Act along with Easter Sunday because both are recognised as very important days in the Christian calendar. However, unlike Easter Sunday, Christmas Day can fall on any day of the week. In 1994, no one thought that Christmas Day trading would become commonplace. However, considerable changes have occurred in the past few years. That is why it is now necessary to correct the anomaly. I do not believe that when this House passed the Sunday Trading Act, noble Lords thought of Christmas Day as a less significant event than any other Sunday or Easter Sunday, yet that is exactly the basis on which the current trading laws operate. That is why they need changing. They also need to take account of new developments. Shop workers have seen a continual drive towards longer trading hours over the past 20 years. The days of a five-day working week, with a half day on Wednesday and Saturday morning only, are now a distant memory. Since then, we have seen the introduction of all-day Saturday opening, Sunday trading, bank holiday shopping, late night or 24-hour supermarkets, and now even Christmas Day trading.

The Bill would go some way towards creating a level playing field in retailing. There is no doubt that the vast majority of retailers do not want to open on Christmas Day, but they would consider it if their competitors did. Such is the nature of harsh and sometimes cut-throat competition in retailing, especially among supermarkets. I do not think it fair that shop workers should suffer in what could become a phoney competition for the virtually non-existent custom of people who wish to shop on Christmas Day.

In USDAW's survey of shop workers, 94 per cent said that they felt that they would be forced to work on Christmas Day in the future if there were no legislation to stop stores from opening. I choose my words carefully because every store manager in the country would deny that they forced their employees to work on Christmas Day. However, there is no doubt that coercion takes place by many store managers who are under pressure themselves. The only way to prevent any form of coercion is to stop shops from opening on 25 December in the first place.

The Bill is not only for shop workers and their families, although, for me, that is of major importance. Christmas Day is a very special day for the vast majority of people a day when we can all take a collective breather from the usual stresses and strains of modern life. There is no doubt that if the opening of large stores were to become widespread, it would fundamentally change the special nature of Christmas Day. It would lead to more non-retail workers having to come to work—street cleaners, traffic wardens, delivery drivers, public transport workers, the list goes on. Even emergency service workers would be affected. Hospitals, police and fire services try to run a skeleton staff over the Christmas period, but that would not be possible if large stores opened. That is not because shopping is particularly dangerous, but because it leads to more traffic on the roads, which leads to more accidents, which require more attention from the emergency services.

I am asking noble Lords to consider whether they want Christmas Day to become the same as any other day or whether they want its special nature to be preserved. This Bill will help to preserve the special nature of Christmas.

The Bill is indeed modest and applies to large stores only. It does not affect small shops under 280 square metres, which means that small shops could be staffed by their owners and could open as and when they liked. If shopkeepers choose to open their own shop and staff it themselves, that is for them. The fact is that larger stores over 280 square metres need to have more than one member of staff working. That is when we end up in a situation in which shop workers are required or pressurised to work on a day that they would much rather spend at home with their families. They should have the right to do just that.

This is a simple measure that would make a real difference for hundreds and thousands of shop workers. It is a Bill that addresses an anomaly in existing legislation. It is a popular measure, not only with shop workers, but with the general public. It will ensure that Christmas Day, one of the most important days in the Christian calendar, will remain special. I commend this Bill to the House.

Moved, That the Bill be now read a second time.—(Lord Davies of Coity.)

My Lords, may I immediately express my sincere gratitude to noble Lords and new colleagues for the very warm welcome that I have received in, for me, a new environment, and particularly say how grateful I am to the officers and staff for being the epitome of efficiency and kindness?

In the list of priorities for my maiden speech I must first declare a strong personal interest in the Bill. As founder and now president of Dixons, we have several hundred large stores under the Currys and PC World brands which qualify for inclusion in the Bill, as well as several hundred high street stores trading as Dixons and The Link.

I was a front-line warrior in the original long battle for Sunday trading finalised in 1994—a campaign that resulted in a successful compromise solution which has been of important economic benefit to the country, without the social and theological problems predicted at the time. Indeed, Sunday is now the second most important trading day for many retailers, so the measure has clearly been warmly welcomed by the consumer—a "win-win" scenario.

This Bill is from the same family of regulation, albeit only a distant relative. Let me say from the outset that I totally agree with the purpose of the Bill, yet I find it somewhat perplexing. It is arguing a case that does not really exist. It is a sort of pre-emptive piece of legislation. I am no expert on legislation, but feel instinctively uncomfortable at trying to forecast and outguess that which may or may not happen and then try and use that assessment to introduce specific legislation. All the research indicates that there is no likelihood of any meaningful extension of large store Christmas Day trading. On this fact most of the large multiple traders are in agreement. It is not even on their radar screens; for good sensible reasons. Christmas Day trading fails several critical tests.

For the retailer, Christmas Day is likely to be very expensive in terms of extra payments for those who are willing to work in the store, which must also include the necessary infrastructure and back-up staff. Christmas Day would be for genuine volunteers only with no pressure applied. That management style disappeared decades ago; there is absolutely no ambivalence about free choice. Furthermore, for practical reasons, many retailers would find it difficult to convert their stores to sales mode after closing, often late, on Christmas Eve following one of the busiest days of the year.

Sales traditionally start immediately post-Christmas and they are now a critically important trading period, needing a great deal of store preparation—one of the details critical to good modern retailing. Even more relevant and decisive is that UK large-store retailers do not possess any appetite for Christmas Day trading. The decision makers also have the same desire to take the day off and enjoy turkey with their families. Despite some media portrayal of retail bosses with cash register eyes, I have not met one who does not share our family values. Today, large-store Christmas Day trading is negligible. A couple of small distant experiments have taken place, with virtually no indication of a widening franchise.

Against that background, the Bill goes ahead, and although I will not vote against its commendable purpose, I would have preferred first to find out what type of Christmas trading evolved and whom it would attract, and then to evaluate any benefits or abuses, bearing in mind that there are ethnic issues to consider. I accept that that is a hindsight observation; I just prefer facts to theory.

Indeed, that view was supported when the Secretary of State for Trade and Industry, Patricia Hewitt, who is usually most precise, was left to justify the Bill with a wonderful expression of piety. I quote, admittedly selectively, but without changing any meaning:

"Christmas Day remains a special day for most UK citizens, either for religious or family reasons".

I found it difficult to reconcile that user-friendly and genuine expression of a universal sentiment with feeling endangered by an unknown, and unquantifiable, Christmas Day trading threat.

One of the oddities of the Bill, which is a hybrid incorporating many of the regulations of the 1996 Act, is that it still permits shops under 3,000 square feet—or, if you must, 280 square metres—to trade on Christmas Day. I have the delightful image of all the shopkeepers of Walmington-on-Sea, under the leadership of their local bank manager Captain Mainwaring, opening for business and enjoying for a short time a monopoly of trade over the large stores. That is just a modest reflection on a potential inequity in the Bill.

If the danger of Christmas Day trading came from the high street, it would have a far more visual impact on the sanctity of Christmas Day. As we are in pre-emptive mode, it would have been worth considering going the extra step of banning all trading on Christmas Day, retaining only the essential generally agreed exclusions. I query the Bill only as a purist; as a pragmatist, these are not life-threatening issues. Finally, I would like the opportunity of referring to the employees of the retail industry, as one of the intentions of this Bill is to protect the exploitation of retail employees. That is a worthy purpose but, if I may suggest, the retail industry is no longer a career offered to the unskilled, drawn from the lower end of the social scale, who are unable to argue and protect their own interests. Today, the skills required in many forms of retailing are demanding and growing. Today, it is an attractive industry because it offers good salaries and career prospects, flexible working hours and seeks identifiable skills. Today, we demand serious product knowledge, good computer skills, interpersonal relationship skills and a myriad other skills to get through the entry barrier of the industry. Continuous and progressive training is now the norm.

In my industry, a sales adviser is expected to know the purpose and sequence of thousands of buttons, keyboards and switches fitted to his varied stock. I suspect that most of you, like me, have trouble with your remote controls. My sales advisers need to know how a hundred different remote controls work—and, because the market economy creates severe competition, each remote control has different functions, sequences and features and is usually accompanied by an unintelligible instruction book. They do require high skills. The single purpose of these comments is to emphasise that retailing is a major industry, a major contributor to the economy and is staffed by skilled and ambitious people who provide an excellent service to their customers. Their contribution to the economy is not always sufficiently recognised.

I have enjoyed talking about the Christmas Day (Trading) Bill because any mention of Christmas evokes happy thoughts off goodwill and fellowship. I admit that, at the back of my mind, I hope some of that sentiment might creep into your attitude towards my first intrusion into your Lordships' deliberations.

My Lords, one of the nice things about membership of this House is that from time to time the privilege falls on us to be able to welcome and congratulate a new Member on a maiden speech. I genuinely congratulate and thank the noble Lord, Lord Kalms, on his speech and the way in which he made it.

That is not really necessary, because the noble Lord's career speaks for itself, but we should remember the important contribution that he has made to British life. There are few of us, I suspect, who have not taken advantage of the trading opportunities which he provides, together with his staff across the country, and we should like to thank and congratulate him on that. But he has also used his own professional and business success as a background for making a very important contribution to British life, particularly in the relationship between industry and education. I refer, too, to his contribution as chairman of a National Health Service trust. Those are just examples of what he has contributed. When one is welcoming a new colleague in this Chamber, it is important to reflect on the nature of the Chamber. It seems to me that there is absolutely no point in having a second Chamber unless it is full of honest speaking, honest criticism, honest and direct calls for accountability and a forthright use of experience relevant to the issues before us. I believe that we have had indications in this maiden speech that we shall hear that kind of contribution from the noble Lord. Welcome! I hope that the noble Lord will be extremely happy among us, and I hope that we shall hear from him frequently.

I am glad to have this opportunity of supporting my noble friend Lord Davies of Coity in his Bill. He said, modestly, that it is a little Bill that is correcting an anomaly, but actually it has a much greater significance than simply the provisions that it contains within its text. My noble friend, too, represents a very real and important tradition in British political and social life. He has given his professional life to working for and looking to the interests of shopworkers throughout the country, who are frequently—although, I am sure, not in the case of the noble Lord, Lord Kalms—among the more exploited members of our community. We should be grateful to my noble friend for that, and for the dignity and self-respect which he has enabled shopworkers to gain in attaining the rights that should be theirs.

My noble friend will forgive me if I mention another important tradition that he brings to this House, which is very deep to the origins of those of us who sit on this side of the House. The trade unions have played a crucial part in the formation, the integrity and the meaning of our movement—and that remains true. But also non-conformism, not least in the Welsh valleys, has played a tremendously important part. Of course, my noble friend brings both those traditions together, which it is good to have on this side of the House. When I was a Member of the other place, I used sometimes to reflect that if one was not a Methodist lay preacher one was an outsider. It is a very important tradition, and we should welcome it.

Why do I say that my noble friend's Bill has a significance beyond simply the provisions in its text? I am one of those who believes in a mixed economy; I believe that we need a thriving private sector, and I have great respect for the better retailers, for what they do for our society, and for all who participate in that activity. But l believe that life is about more than the market, and when I say that I believe in the mixed economy, inherent in that mixed economy is the concept that life is about more than economic activity. In many ways, we must judge economic activity not simply by the profitability and the economic contribution that it makes to our national strength, although that is crucial, but by what it enables us to do qualitatively with our society.

One anxiety that I sometimes have is that in the drive for the indispensable vigour and rigour of the market, we sometimes lose sight of the pace, rhythm and romance which should be part of a decent civilised society—the magic, let us not be ashamed to say, which should be part of human existence. My noble friend made an important point. He drew attention to the indirect consequences of Christmas trading: more traffic on the roads and more police, ambulances and fire services to be available. That is a very important point. But there is something else that is a bit sad. When I think of the magic of my youth—in some ways enhanced by the difficult circumstances of the Second World War, which meant that all us youngsters were very actively looking for a bit of romance—and contrast it with what young people now face with, for example, all the television advertising about what will happen on Christmas Day, I begin to think that we are moving into an age where there is a bland, unrhythmic sameness about our existence. We are losing the contrasts, the magic and the concept that there are different values that matter and that there are different dimensions to our lives. For that reason alone, if no other, what is being proposed in the Bill is very important. It is trying to preserve some of the rhythm, contrast, magic and romance that is terribly important and not only for the young: I say unashamedly that I still enjoy that dimension of life. So, in that context, I congratulate my noble friend on bringing the Bill forward.

I hope I shall be forgiven for giving one anecdotal example of something that can happen that improves the quality of life beyond all expectation. I am fortunate to have my home in a very beautiful and remote valley in north-west Cumbria. There are certain hazards of having a home in a rural area like that. One of them is the absence of absolute certainty about power supplies, particularly in stormy and wild weather. A few Christmases ago, the power in our valley went. I think that it was on Christmas Eve. People were totally without power over Christmas and Boxing Day. What was remarkable was that people were coming together afterwards and saying that they had had the best Christmas they had had for years because they had rediscovered family. They had been thrown together and they had rediscovered the magic. They could not have television and they had a completely different experience in that situation.

That made a powerful impression on me and brought home the point that I am making. I want my grandchildren to grow up in a culture that has contrasts and rhythm, romance and magic. This modest little Bill is about all that. I congratulate my noble friend and hope he will get unanimous support.

My Lords, I hope that I can be as romantic and imaginative as the noble Lord has suggested in making my maiden speech. I would first like to take the opportunity to thank everyone for their kindness and support since I entered this House four weeks ago. I also express my gratitude to the staff, who have been professional to the extreme. They are efficient and are kindness itself to a new girl.

When my appointment was announced on 1 May this year, I felt so proud and privileged to receive such an honour that I could not wait to ring my family to tell them the exciting news. When I spoke to my youngest grandson, Joshua, I explained that I was to become a Baroness and a Member of the House of Lords. There was a pause and then the reply came, "Grandma, what's the House of Lords?". Trust a child to bring one down to earth.

As many noble Lords are aware, I have the honour of joining this House from the trade union movement, namely from Amicus and its predecessors. I take immense pleasure in following in the footsteps of current noted Members of this House, including my noble friends Lord Hoyle, Lady Turner and Lady Gibson. It is more than 30 years since I became active in ASTMS and little did I realise then that I would one day be so privileged as to join this House. I hope that I will be able to contribute in some way to its immense knowledge base.

In his maiden speech a week or so ago, my noble friend Lord Truscott mentioned the gang of five Labour MEPs who are now in this House. I crave your Lordships' indulgence to introduce my own gang of four: the four Margarets. In 2000, at the dawn of the new millennium, a notable coincidence occurred in the Labour Party: the general secretary, chair, vice-chair and treasurer were all women. This was unique in the history of the Labour Party, but it was more notable and remarkable that they were all named Margaret. I have had the pleasure and joy of working with these strong and able women for the last decade and I am happy to note that this working relationship is likely to continue. In the past month, three of the four Margarets—my noble friends Lady Prosser, Lady McDonagh and I—have been introduced to this House. We hope that the fourth Margaret, Maggie Jones, will join the other place in the not too distant future.

I now turn to the issue in hand. My trade union, Amicus, has been at the forefront of campaigns on the issue of the work life balance for more than 10 years, and therefore this is an issue close to my heart. I am pleased to discuss it with noble Lords, but not, the House will be pleased to hear, at too much length. As a trade unionist, a socialist and a working mother, I can only commend the Bill that is before the House this afternoon.

At its heart, the Bill is about families. What day is more important to the majority of families in this country than Christmas Day? Regardless of religious belief, we must all recognise that Christmas is a day for families to escape the stresses and worries of modern life, and we must remember that that applies to everyone, including retail workers and shop staff. Indeed, the shopping culture that has built up around Christmas means that, more than most, retail workers deserve at least one special day to spend with their children, parents and family. As a working mother, I was fortunate that I never had that specific pressure. I always ensured that when my son Christopher was growing up we had a complete family Christmas. Why should that vital family experience not be had by everyone?

I have recent personal experience of the effects of Christmas Day working. My husband worked in the chemical industry and always worked on Christmas Day. Eddie would work until 7.30 in the evening, before he could join us and we could start our Christmas Day. We would be desperately waiting to open our presents.

My noble friend Lord Davies of Coity—as he mentioned, an ex-general secretary of USDAW, the union for shop workers—has campaigned long and hard on this subject and with good reason. The Government have a strong record of delivering positive, practical changes for working families, helping them to balance their work and family life by introducing legislation on paid holiday, paid paternity leave and the right to flexible working. But there is still a danger that in a few short years we could see more and more shops opening on Christmas Day, as market pressures on retailers become so intense that they feel obliged to open.

There are already enough people working on Christmas Day by necessity: the people who supply us with power—although they evidently do not work where my noble friend Lord Judd lives—and those who supply us with water or run our hospitals and care homes. We should not add to that list those who work in shops merely for the convenience of having somewhere to pop out to buy that forgotten jar of cranberry sauce to go with the turkey of the noble Lord, Lord Kalms.

As has already been suggested, it must be noted that retailers are also reluctant to enter this marketplace. The House will be aware that previous Private Members' Bills have tried to end the anomaly of the Sunday Trading Act 1994. Government research at the time, as the noble Lord said, showed that the vast majority of supermarkets that would be affected by the provisions did not oppose them. The noble Lord, Lord Kalms, also illustrated that.

The consultation showed that 97 per cent of respondents, of whom 15 per cent were major retailers, said that they favoured the introduction of restrictions on Christmas Day trading. Support for this legislation also comes from across the retail sector. Their only concerns linked to the needs of the smaller retailer, the needs of whom I believe are answered admirably by the clauses of this Bill. That is confirmed by the recent DTI regulatory impact assessment on the effects of introducing restrictions on Christmas Day trading.

It is not for government to dictate to people how to live their lives but we should be there to support them in the choices they make. Moreover, we should also recognise that workers should not feel pressured into working at times that they feel may have an adverse effect on their family. I wish this Bill well and look forward to contributing to the very important work of the House.

My Lords, it is my privilege on behalf of the whole House to congratulate the noble Baroness, Lady Wall of New Barnet, on her maiden speech. She brings with her a wealth of knowledge about union matters. That includes being the national secretary and head of policy of Amicus, the trade union of manufacturing, technical and skilled persons. I very much enjoyed the noble Baroness's sense of humour. It was a delight to hear her contribution, particularly on a subject that requires dispassionate analysis. Her background of service and experience based on first-hand knowledge has enriched our debate. She need not worry about her grandchildren asking her about the House of Lords. I still meet many adults who ask me what the House of Lords is and where it is.

I also add my congratulations to the noble Lord, Lord Kalms. His contribution in retail trade is invaluable. Whenever I click my remote control for the television I shall certainly think of him. We look forward to many more contributions from the noble Lord and the noble Baroness.

It is not often that we have two maiden speeches on one Bill on a Friday. Even more important is the fact that there is no party political line—at least in my party—which makes our debate even more interesting. I congratulate the noble Lord, Lord Davies of Coity, on bringing the Bill before your Lordships' House.

When my honourable friend, Lembit èpik, the Member for Montgomeryshire, spoke in the other place, he rightly stated that this is a free vote issue for Liberal Democrats because it is a question of moral judgment. In doing so, I do not question views that may be contrary to mine. In fact, I respect such views. In a healthy democratic society, moral values must often supersede strongly held political beliefs. It is for that reason that I have genuinely enjoyed the contributions of almost all noble Lords in this debate. The Bill enjoyed cross-party support in the other place and also from members of trade unions and the retail trade. Let me also add to that the support of our faith communities.

It would not be out of place if I were to mention that in our diverse society we value the religious events celebrated by our various communities. For example, Diwali, the Indian festival of light, Eid, Islam's most important festival, and Guru Nanak Jayanti, the celebration of the birth of Guru Nanak, are commemorated each year by the significant Hindu, Muslim and Sikh communities respectively across the length and breadth of the United Kingdom. In the fast-moving world of today, where we are so firmly entrenched in the rigours of our daily routines, such occasions allow people to spend time with the family, to create new relationships and to renew stale ones. These celebrations undoubtedly have a positive effect on society as a whole. I am positive that people greatly appreciate these occasions as moments to engage with others and indeed to transcend racial and religious barriers. Such festivals evidently cut across cultural boundaries; Christmas is probably the most important one. We see little boys and girls from all faiths and backgrounds making Christmas trees, mince pies, Christmas cards, Santa Claus outfits and the like. Moreover, the traditions of all these festivals espouse many virtues, especially generosity, through giving and sharing, which is particularly important in our society—it is becoming increasingly driven by commercial self-interest and monetary gain. We must make sure that we do not dilute the occasion. There are 364 other shopping days in the year and people should not be forced to trade on Christmas Day.

My argument for supporting the Bill is therefore based on two main points. First, Christmas Day should be one day on which the family should get together. It involves more than exchanging gifts and sharing a festive meal together. It is about renewed friendships and relationships with those who are close to us. The prevailing inclination towards economic profit at all costs should be eschewed, at least for one day, in favour of regenerating the community, family and the religious values that Christmas represents. Secondly, we must protect the rights of people in the retail trade, including their right to enjoy the day with their families without pressure from employers to report to work.

I do not have to rehearse the arguments that have already been advanced. I support the Bill. When it becomes an Act of Parliament, my pleasure will far exceed the results of the Birmingham Hodge Hill and Leicester South by-elections.

My Lords, I must apologise on behalf of these Benches for the fact that my name was not on the speakers' list. I thought that one of my colleagues would have been here but he has been called away on one of those pastoral emergencies.

I have three comments to make on behalf of the Church of England Community and Public Affairs Unit. I shall be as brief as I can be. My first comment involves the special nature of Christmas Day. Our shared Christian heritage means that a large proportion of British people have special reasons for wanting to uphold the distinctively religious importance of the day in order to celebrate the birth of Christ. That was reflected in the census of 2001, in which most people in England and Wales described themselves as Christian—just over 71 per cent did so. However, as was eloquently alluded to by the noble Lord, Lord Dholakia, we also found that many people of other faiths and those of no faith at all—I do not mean that critically—also wished to make Christmas Day different from other days, recognising the need for everyone to have space and rhythm built into their lives. We need to protect that.

Secondly, the special nature of the day would be undermined by large stores opening. Changes in retail practice alter the nature of the day, particularly for those who work in the retail industry, as we have heard. One way to make it special is to ensure that all those who do not have to work do not need to. If more shops were open, that would have a knock-on effect on transport services, emergency services and other activities, making it more necessary for others to work as well.

Larger stores should be prohibited by law from opening on Christmas Day; that is fundamental. Experience has shown that while the majority of large stores do not wish to open on Christmas Day—particularly in view of their employees, who have worked so hard in the run-up to Christmas—there are a few that break voluntary regulations. Once a few stores start opening, even the stores that do not wish to will be forced to open to keep up their market share. There could be a Gresham's law effect whereby the breaking of any voluntary agreement by some companies will inevitably drive out the good intentions of others. We need to prevent competitive pressures causing widespread opening by large stores.

More generally, we do not consider that there are any good financial or economic reasons for allowing large stores to open on Christmas Day. The costs associated with opening on Christmas Day would far outweigh any potential profits. We agree that Christmas, while being a time of celebration for some, can be particularly difficult for some families, or those without families or friends, and that some might argue that large stores might provide a social benefit. However, we do not believe that shopping alleviates this problem—far from it. As part of the basic Christian principles of helping one's neighbours, we wish to support community responses to those in need such as providing meals, places to meet and other Church activities over the Christmas period, as happens in many of our communities, including Portsmouth.

We are therefore very pleased that the Government intend to recommend legislation to safeguard the special nature of Christmas Day. The right reverend Prelate the Bishop of Oxford as the then chair of the Board of Social Responsibility of the Church of England, now the Community and Public Affairs Unit, asked a Question on Christmas Day trading in the House in December 1999 and followed this up with a letter to the Prime Minister in May 2001. He stressed the importance of legislation, arguing that a positive stand needed to be taken if we are to give real support to families, particularly those whose members include workers in the retail sector.

I regret that time does not allow me to pay specific tribute to the two fine and wonderful maiden speeches in this debate. I hope that these remarks will not be taken as one of those caricature "end of civilisation as we know it" little numbers. The Christian Churches would be quite capable of celebrating the birth of Christ were December 25 to be like every other day, as was the case, for example, through the fourth century when the festival first began to emerge. But the day has, whether we like it or not—I actually quite like it—gathered other associations and burdens since those times which I am not for a moment decrying but they affect wide sections of our communities who are rightly resisting the pressure to live in an airport culture on this day as well as all others, with all its attendant consequences. This Bill addresses them wisely and thoroughly and I warmly congratulate the noble Lord on bringing it before this House.

My Lords, I congratulate my noble friend Lord Kalms on an excellent maiden speech. High street trading is currently a major engine of our whole economy and the noble Lord will bring to our future debates unrivalled knowledge of this topic.

I should also very much like to congratulate the noble Baroness, Lady Wall of New Barnet, who also speaks with enormous knowledge and expertise gathered from over 30 years in her trade union. I was most interested to hear about the five women who got the top jobs. I am equally delighted that the noble Baroness has New Barnet in her title because if noble Lords ever look me up in Dod's they will find that my name is a right mouthful—Baroness Miller of Hendon, of Gore in the London Borough of Barnet. I, too, have enormous interest in the right of women to get on in their lives. When another noble Baroness who comes from the same part of London feels exactly the same as I do I am delighted. I congratulate the noble Baroness on her maiden speech.

I approach this debate with a sense of déj7#x00E0;-vu as we had the same debate on an identically named Bill on 7 November 2001, which was also introduced in this House by the noble Lord, Lord Davies of Coity. I wonder whether the noble Lord would agree with me that the other debate was also very good. The excellence of all the speeches today has been remarkable. It has been one of the most interesting debates. The tributes that both noble Lords paid to the maiden speakers were among the best that I have ever heard in this House and it was a pleasure to listen to them.

Then, as I do now, I congratulated noble Lords on their excellent contributions to the debate. I congratulate especially the noble Lord, Lord Davies of Coity. His very full, clear exposition of the Bill removes the need for us to go through it section by section and allows us to speak in much more general terms.

Then, as I do now, I pointed out that the Conservative Party was treating this topic as a matter for the individual conscience of all its Members in both Houses. Indeed, I was interested to hear the noble Lord, Lord Dholakia, tell the House that exactly the same situation applied vis-à-vis his party. Noble Lords will therefore understand that I am speaking in a personal capacity, as did my honourable friend the Member for Canterbury in the other place.

Then, as I do now, I said that I was participating in the debate with some diffidence because noble Lords will know that I am Jewish and that the religious implications of Christmas do not apply to me personally. It is true, of course, that we have our eight-day Festival of Lights that usually coincides with Christmas, and the peculiarly secular aspects of that—parties and the giving of presents—are similar. However, the religious implications of Christmas Day are of great importance to active members of the Christian faith, as, indeed, the right reverend Prelate told the House. It is absolutely right that Parliament should give due consideration to their concerns. This is despite the fact that, regrettably, a very large part, indeed, possibly, it could be said, the majority of the population, although nominally Christian, do not always go to church or participate in its activities. However, for all Christians, practising or not, and, indeed, other members of all the multiplicity of faiths, and those of no faith, the Christmas holiday is something that they all enjoy. In many cases it extends all the way through to 2 January. This seems to be the completion of a full circle because Christmas Day was arbitrarily fixed as 25 December by the Church in 440 AD—that being the date of the winter solstice, which itself was a pagan festival.

However, whatever the origin of the date, Christmas Day itself is now regarded as special as a family day which families want to spend together, and as many people as possible should be able to do so. I was most interested to hear the noble Lord, Lord Judd, recall what happened when the power failed in his village and what an excellent Christmas Day that was for everyone.

The opening of stores on Sunday disclosed that there was, indeed, a very wide demand for that facility but I am by no means convinced that people want to go out for serious shopping on Christmas Day. I am not simply talking about the rather idealistic, Dickensian picture of Christmas with families sitting round a fireplace roasting chestnuts, listening to sleigh bells in the snow and so on. Indeed, the current tradition for a large part of the population after lunch, apart from those who fall asleep, is not to join in singing carols and playing charades—wish that it were—but rather to watch reruns of Morecambe and Wise shows on television. I noted that the right reverend Prelate said that watching television did not interfere with Christmas Day for many people.

There has been a rapidly expanding change in the situation of Christmas Day trading since the similar Bill was before Parliament in 2001, and especially since the original Sunday Trading Act was passed in 1994. I talk about the proliferation of small convenience stores open for 24 hours, 365 days a year, that are usually attached to petrol stations. I noted what my noble friend said about the Bill perhaps not going far enough. However, I did not want to tell him that he could table amendments as we want the Bill to get through quickly, as it deserves to do. These small convenience stores are largely in the form of concessions granted to retailers such as Sainsbury's, Tesco, Safeway and Waitrose so that anyone who is absolutely desperate for another pot of cream, a loaf of sliced bread or, more likely, batteries for toys which arrive in a box marked, "batteries not included", can find what they need. Children who receive toys on Christmas Day that do not work without batteries are very upset indeed.

In 1999, we saw the first large chains with bigger stores, such as Sainsbury's and Budgens, opening on Christmas Day. Inevitably, other chains may in the end feel constrained to follow suit, in the interest of defending that all-important retail icon, the market share. The honourable Member for Durham North, who introduced the Bill in the other place, has said:

"The position of most major retailers is that they do not want to open on Christmas Day, unless their competitors do so".

Not only my noble friend Lord Kalms but other noble Lords made the same point. The promoter of the Bill told the other place that his objective was,

"to stop large-scale trading before it happens".

The lack of enthusiasm for Christmas Day trading among large chains is illustrated by the fact that, after the failure of the former Bill, the Government went out to public consultation, as many noble Lords have mentioned. Some 97 per cent of respondents, of whom 15 per cent were major retailers, favoured the introduction of restrictions on Christmas Day trading.

I have been very impressed by the fact that most supporters of the 1994 Act have said that it was an error to omit Christmas Day from its operation when that day does not occur on a Sunday. Paragraph 2(4) of Schedule 1 to the 1994 Act excluded Easter Day, which is of course always a Sunday, and Christmas Day only when it is a Sunday. It is illogical for Christmas Day, when it occurs on Monday to Saturday, not to have the same exclusion for the same reason as Easter Day.

This Private Member's Bill received widespread support in the other place, including from the Government. I hope that there will be consistency with what happened when a similar measure was introduced in your Lordships' House in 2001, and that the Bill now has a very easy passage, which it certainly deserves.

My Lords, I add my congratulations to those of other noble Lords on two excellent maiden speeches, those of the noble Lord, Lord Kalms, a truly great retailer, and my noble friend Lady Wall. Her published biography has one wonderful line, which states that she has always been involved in the management of change as a woman in traditionally male-dominated industries. I shall watch with interest how she exercises that magic in your Lordships' House. I give a great welcome to both of them.

As the noble Lord, Lord Davies of Coity, indicated, the Bill is as desirable as it is simple. Indeed, its desirability is reflected by the support and enthusiasm that it received in the other place, irrespective of party or ideological differences. Its simplicity lies not only in its relative shortness, but in its principal aim, which is to prohibit large shops those measuring more than 3,000 square feet—from opening on Christmas Day, so that the special nature of the day is in some measure preserved. That definition is the same as that used in the Sunday Trading Act 1994, and noble Lords may be interested to know that the floor area of this Chamber is more or less the size of a large shop as defined in the Bill.

Christmas Day marks the highlight of what is otherwise a busy and chaotic period—not only for shoppers, but particularly for employees of large stores. It is their job to satisfy our increasingly insatiable demand to shop, encapsulated in that iconic statement, "I shop, therefore I am". A break on Christmas Day, which is what so many employees in large shops currently enjoy, provides the opportunity not only to pause for breath, but to spend time with family and friends before returning to work for the start of the busy sales period that often begins on Boxing Day.

As we have heard, the Government carried out a public consultation in the summer of 2003 on the proposals to keep large shops closed on Christmas Day. Well over 90 per cent of the responses received were supportive of the measures. Some critics of the Bill have suggested that singling out Christmas Day for special protection in our multicultural society is inappropriate. During the consultation, members of other faiths raised no objections. Indeed, Christmas Day is seen as a special occasion by many who would not consider themselves of the Christian faith. I suggest—it would seem to be confirmed by the consultation that the Government conducted—that, irrespective of the diversity of society, we all agree that Christmas is good for children, whatever community they come from, as well as bridging the generation gap between parents and children.

Not only do a considerable number of people work in large stores—of which many, it is important to say, are parents—but there are those whose times of work depend on those large stores, such as transporters and those who work in waste disposal. Were the Bill to become law, it is likely that a prohibition on opening would indirectly protect those workers, therefore further protecting that one special day of the year for those beyond the Bill's scope.

The 1994 Act prohibits large shops from opening on Christmas Day when that day falls on a Sunday. Despite the desire to apply that to all Christmas Days, the limited scope of the Act—that is, limited to Sunday trading—precluded that possibility. The Bill seeks to remedy that inconsistency by applying the restriction to all Christmas Days. The enforcement of the prohibition will be carried out by local authority inspectors at the unitary and district level. Like the 1994 Act, the Bill applies only to England and Wales. I understand that a consultation on Christmas Day trading will shortly begin in Scotland. The Scottish Executive will be considering the position in the light of the consultation responses.

As for the Sunday Trading Act, there are a number of exemptions proposed in this Bill. Among those are farm shops, off-licences, pharmacies, and shops at petrol filling stations and motorway service stations. It could be argued that some of those shops are considered to fulfil an essential public need, although it should be noted that discussion in the other place led to the conclusion that the list was fairly arbitrary. However, for the purposes of consistency and to avoid confusion among enforcement bodies, the exemptions are taken from the 1994 Act and apply to the Bill.

In the other place, most of the amendments tabled in fact related to that list of exemptions—not with a view to removing what is already there, but rather in adding to it. In particular, there was a debate about the coverage of the pharmacy exemption, which presently covers registered pharmacies that are not open for the retail sale of any goods other than medicinal products and medical and surgical appliances. The amendment tabled was intended to allow large stores, which sell a wider range than simply medicinal products, to also be exempt. We have considered that proposal carefully in the interests of ensuring provision of pharmacy services on Christmas Day. Having consulted major retailers in the sector, we are content that the status quo allows such stores to open their pharmacy counter for the essential provision of services, and we do not intend to proceed with an amendment of such a nature in this House.

The other issue to which I would like to turn is the provision in the 1994 Act to enable local authorities to prohibit loading and unloading of large stores before 9 a.m. in designated areas. That is not included in the Bill. In the 1994 Act, that is intended to restrict disturbance to local residents living in the locality of a large store. The issue was debated at very considerable length in the other place, where the Minister made a commitment to make appropriate amendments to extend the power to Christmas Day so long as that did not jeopardise the success of the Bill. We are presently talking to the parties opposite and if the timetable can accommodate, we propose to introduce government amendments in Committee to honour this commitment.

In conclusion, in some minds there is a question of whether this Bill is really necessary, as few large shops open anyway. That point was made by the noble Lord, Lord Kalms. From our consultations with major retailers, it would appear that there is such a need, for despite the majority of large shops expressing their intention not to open on Christmas Day, a significant number confirmed that their existing plans would be reviewed if competitors were to break with tradition.

In the absence of specific intervention, this would seem to be an inevitable outcome and, indeed, this is confirmed by market testing over recent years by large stores such as Woolworth and Sainsbury, which, in certain areas, have opened on Christmas Day. In light of this, I believe that there is good reason to intervene to ensure that Christmas Day does not become just another shopping day—and thus a work day for so many people. By acting now, we are not only preserving a valuable tradition, but also avoiding a regulatory burden on the retail sector by simply enshrining what most currently do on this day.

I believe that this Bill is both timely and necessary to preserve the special nature of Christmas Day and I commend it to the House.

My Lords, I thank all noble Lords for contributing to the debate, especially the right reverend Prelate who spoke in the gap. More importantly, I want to express my thanks for the widespread and unanimous support that the Bill has received.

Secondly, I want to congratulate the noble Lord, Lord Kalms, and my noble friend Lady Wall on their excellent maiden speeches. I have no doubt that the House will benefit very considerably from their future contributions to our deliberations. In that regard, I want to express thanks to my noble friend Lord Judd for his kind and generous words not only to me but also to those who made their maiden speeches

I note the point made by my noble friend the Minister regarding a commitment made by the Government in another place to consider tabling an amendment regarding disturbance made by loading and unloading that is contained in the Sunday Trading Act 1994. I have no objection whatever in principle to such an amendment. However, I am pleased to note that the commitment was qualified by the Government on the basis that such a measure would not frustrate the passage of the Bill and result in it running out of parliamentary time. I think it will do just that and I sincerely hope that no such amendment will be tabled.

In any event, I must inform your Lordships that when I heard of the possibility of such an amendment, I made some inquiries—limited inquiries, I admit. I have been unable to find any case in the past 10 years in which local authorities have been called on to take action in respect of that provision contained in the Sunday Trading Act 1994. Therefore, it seems to me to be somewhat academic. It also seems to me to be quite unnecessary to risk frustrating the passage of this Bill in order to include a measure that is not even operating. I commend the Bill to the House.

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

My Lords, I understand that no amendments have been set down to this Bill and that no noble Lord has indicated a wish to move a manuscript amendment or to speak in Committee. Therefore, unless any noble Lord objects, I beg to move that the order of commitment be discharged.

Moved, That the order of commitment be discharged.—(Lord Dholakia.)

On Question, Motion agreed to.

My Lords, I can be brief, as I believe that these orders do not contain anything difficult or contentious. The Extradition Act 2003 received Royal Assent on 20 November last year. It underwent pretty intense scrutiny in your Lordships' House and in another place, so I sincerely hope that we can avoid going over arguments of principle again today. We are concerned with the further secondary legislation required, now that the Extradition Act 1989 is no longer in force and to amend the Extradition Act 2003 (Designation of Part 1 Territories) Order 2003 and Extradition Act 2003 (Designation of Part 2 Territories) Order 2003 to include the member states who have now implemented the framework decision on the European arrest warrant.

The first of these orders is concerned with repealing provisions that are contained within the Crime (International Co-operation) Act 2003 and the Criminal Justice Act 2003 that refer to the old legislation, the Extradition Act 1989. Those provisions are no longer required, as the Extradition Act 1989 was repealed by Schedule 4 to the Extradition Act 2003.

As your Lordships will see, the order cannot be considered to be contentious, and the repeals have been agreed with the Parliamentary Counsel Office. I therefore hope that we do not need to take up too much time discussing this order.

The second order amends the previous designation orders so that the member states that have now implemented the framework decision on the European arrest warrant can be redesignated as category 1 countries. Only then can we act upon the European arrest warrants received from those countries.

As your Lordships can see, it contains only 11 names, rather than the 17 that might be expected. These are the 11 countries that have recently confirmed that they have implemented the necessary legislation to allow them to operate the EAW. Germany, Greece, Estonia and Slovakia have very recently confirmed that the necessary domestic legislation is in place. Unfortunately, they were too late to be included in the order, but will be the subject of a further order in the following months. The only remaining member states will then be the Czech Republic, which hopes to complete its implementation soon, and Italy. The latter is not able to confirm when it may be ready to implement the framework decision.

The United Kingdom has operated the EAW since 1 January with the seven other member states which had also implemented the Council framework decision on the European arrest warrant. The new procedure has worked very well. The first EAW was received from the Republic of Ireland on 16 January and led to the arrest of the person on 22 January. He consented to his extradition and was surrendered to the Irish authorities on 30 January. The entire process was completed in a record 14 days.

There is another encouraging example. A person was arrested in Belgravia for shoplifting and, following PNC checks, it was discovered that he was wanted in Portugal for murder and robbery. He was extradited to Portugal for those offences only one month later.

The order also amends the time limit regarding Chile to 95 days. This relates to the time limit in which relevant documents have to be received by the judge when a person is arrested under a provisional warrant, and was erroneously listed as 90 days in the original order. These time limits are derived from the old 19th-century treaties. In view of what I have said and the clear indication that the process is now working well, I invite your Lordships to approve the orders. I beg to move.

Moved, That the draft order laid before the House on 17 June be approved [23rd Report from the Joint Committee].—(Lord Bassam of Brighton.)

My Lords, as the House will be aware, we opposed the passage of the extradition warrant during the passage of the Bill. However, it has become law, and the provisions of the two orders make logical sense in implementing the Bill. We are grateful to the Minister for giving the two examples, which are important. We do not object to the order.

My Lords, I, too, am grateful to the Minister for giving the examples, and we approve the draft orders.

My Lords, it remains only for me to thank both opposition Benches for their constructive approach.

On Question, Motion agreed to.

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

Moved, That the draft order laid before the House on 17 June be approved [23rd Report from the Joint Committee].—(Lord Bassam of Brighton.)

On Question, Motion agreed to.

My Lords, perhaps I may say first what a personal pleasure it is that my speech will be followed by that of the noble Lord, Lord Dykes, who I very much welcome to the House and to this debate. We have been friends for many years and his contribution in another place and in European politics has been considerable. I am delighted that he has decided to take part in this debate.

Corruption has for a long time been regarded as a criminal offence. The common law offence of bribery goes back for centuries and Parliament has added statutory crimes in the Public Bodies (Corrupt Practices) Act 1889 and the Prevention of Corruption Acts of 1906 and 1916. The latter dealt with not only the public but the private sector. But our domestic law has for many years been regarded as unsatisfactory and the Law Commission decided to look at it. The commission concluded in its report, delivered in 1998, that the current law was obscure, complex, inconsistent and insufficiently comprehensive. That is a good start for a review of the law.

However, the law not only needed to be clarified; it needed to take into account the huge increases in trade and the technological changes in business practice. Moreover, it needed to take into account the international conventions relating to the developed and the developing world which sought to eradicate corruption.

In its report the Law Commission suggested new legislation. After much consultation and discussion, the Government published a Draft Corruption Bill five years later, on 24 March 2003, and appointed a Joint Committee of the two Houses to consider it and to report within four months. In its main provisions the Government's draft Bill closely followed the recommendations of the Law Commission. In the course of our inquiry it became clear that there was general agreement that new legislation was needed and there was some support for the approach adopted in the new draft Bill.

In the course of our inquiry, however, there was considerable and strong criticism of the approach adopted in the Bill and its drafting, which was said by many to be on the wrong lines. Moreover, it is too complex and not sufficiently clear and comprehensible. The importance of the subject is underlined by what the noble and learned Lord, Lord Falconer of Thoroton, then the Minister promoting the Bill, wrote in the introduction. He said:

"Corruption is potentially devastating. If it is not kept in check, it has the potential to cause serious damage to government and business—indeed to every aspect of economic and social life. We need to be constantly on our guard against corruption—it is a complex crime, by its nature very insidious and its effects stretch across international borders. Corruption world-wide weakens democracy, harms economies, impedes sustainable development and can undermine respect for human rights by supporting corrupt governments, with widespread destabilising consequences".

That stresses not only the importance but the width of this particular crime.

The committee took the view that it was first necessary to consider whether the law was so deficient that it was necessary to consider legislation. On the evidence that we received that was not really an issue. More significant, therefore, were the next two questions that we asked ourselves. Does the draft Bill sufficiently criminalise conduct that is corrupt without criminalising any conduct which is not? Secondly, does the Bill clearly state what types of conduct are punishable as corrupt, in language that can be understood readily by the police, prosecutors and the public, especially including the business and public sector communities and their advisers, both here and abroad?

Those questions are at the heart of the matter, but there are other important questions. Should parliamentary privilege, as contained in Article IX of the Bill of Rights of 1689, be waived or removed in corruption cases? Should the intelligence services be exempt from prosecution for corruption? Should the Attorney-General's consent be required for the prosecution of corruption offences?

To begin at the beginning, what should be the scope—the ambit—of corruption for the purposes of the criminal law? There is no universally agreed definition. We looked, inter alia, at the South African. the Australian, the Canadian, the OECD's and the Council of Europe's definitions. Some are wider than others. Some are limited to public officials. Some have one general offence. Others consist of a number of specific offences, as is now contemplated in South African legislation and is supported by Transparency International UK, which gave us valuable assistance. We took the view that it was better to have one overarching broad offence, as the Government have done, even if subsidiary or specific offences may deal with specific matters. So, we return to the question: was the draft Bill with its specific offence on the right lines?

The draft Bill adopts, and the Government in their evidence resolutely stuck to, the principle that corruption is at base, and is only, a breach of loyalty. Accordingly, they looked for the relationship of principal and agent, and regard the relevant question in substance as being whether the agent has cheated on the principal. If that relationship does not exist, there can be no offence. Moreover, if the principal consents to what the agent does, there is no offence. They provide for that in a way which I should very much like to read to your Lordships in full. If one reads through the clauses of the draft legislation your Lordships will see why we conclude that this matter is complex and not easily understandable.

However, in view of the hour on a Friday afternoon, I shall resist the temptation to read those very complex clauses. However, I particularly commend to your Lordships' attention Clauses 5, 6, 7 and 11 to see how the Government trace through the meaning of "advantage", the meaning of "corruption" and what it means to "confer" and to "receive". So, sadly, I shall leave out those definitions.

The approach adopted by the Government, which your Lordships will have read in detail in due course, is one way of dealing with the matter. But is that right and is the language clear enough? There was a conflict regarding the latter. In relation to the question of whether there should be one offence or a list, the noble and learned Lord, Lord Falconer, said,

"we have gone for a middle course which we think embraces both simplicity but also clarity and codification".

On the other hand Mr George Staple, who has had considerable experience of the administration of fraud law, thought that the proposed definitions would not be readily understood by police, prosecutors, jurors and the public without considerable study. The CBI and the Director of Public Prosecutions expressed concern about the lack of clarity. The committee concluded that the language was complex and that Mr Staple's view was correct.

As to whether the approach was right, we considered whether the Bill, with its insistence on the principal/agent relationship, could be improved by the concept of dishonesty, which is not expressly in the Bill, on the basis that it should be made clear that the definition of "corruption" should incorporate some element of immoral or improper behaviour or whether the Bill should state that the advantage should be "improper" or "undue" or an advantage to which a person is not entitled.

We came to the conclusion that to tinker in that way with the Bill was not sufficient to deal with the problem. Nor did we think it right to define "corruption" on the basis of the harm done to society or to business in a way that was suggested to us. In addition, we did not accept that it was sufficient to rely on the anti-trust law or the competition law in this country in order to deal with certain aspects of the matter.

The committee, which included lawyers of considerable criminal law experience from both Houses, was unanimous that the agent/principal approach left out conduct which should plainly be regarded as corrupt and conduct which should not simply be left to be dealt with by other statutory provisions. We suggested a possible test on page 35 of our report. We said that,

"we consider that (leaving aside related offences) the essence of corruption could be expressed in the following terms:

A person acts corruptly if he gives, offers or agrees to give an improper advantage with the intention of influencing the recipient in the performance of his duties or functions;

A person acts corruptly"—

this is the converse—

"if he receives, asks for or agrees to receive an improper advantage with the intention that it will influence him in the performance of his duties or functions".

We said that a possible alternative would be to substitute for the phrase "improper advantage" the words "advantage to which a person is not legally entitled".

We do not for a moment suggest that that is the only possible definition which could be given. We fully accepted that parliamentary counsel could improve on our drafting. But we think that the essence of "corruption" is set out there and that that approach is better, as well as clearer and simpler, than that contained in the draft Bill.

It may be that our present draft leaves out some acts which should be considered offences, as the Government, in their reply, suggest. However, it is notable that, in their reply, the Government accept that redrafting could "iron out these lacunae".

It is also possible that the draft which we have adopted would, on its face, include certain matters which arguably should not merit prosecution or punishment. We heard much about retaining facilitation payments, hospitality, tips and commission in the provision of financial services. We came to the conclusion that the Bill should not exclude those matters from the definition.

We recognise that there is a wide range in what is given or offered with a corrupt purpose. But it does not seem desirable to seek to define a priori where the line is to be drawn between the trivial gift (a drink in the bar), the medium-sized gift (a round of golf) and the expensive present. As the Serious Fraud Office told us:

"The proper use of prosecutorial discretion is one important way of ensuring that the line is correctly drawn between morally questionable behaviour and criminal conduct".

We stress that the use of the word "improper" in our draft would enable a jury to decide that, in particular circumstances, trivial hospitality would not be improper. That would be no more difficult—perhaps less difficult—than asking the jury to decide, as the Government ask the jury to decide, whether the advantage given was intended to be the primary motivator. In any case, it is difficult to see why tipping may be unlawful if the principal does not give his consent but lawful if he does.

As has been seen, we preferred to refer to the giving of an "improper advantage". But we suggested an alternative: "an advantage to which a person is not legally entitled". That is not the same as, but is directly comparable with, what is contained in the Australian legislation, which states that a benefit is not legitimately due.

The Government say that if that alternative—it is only an alternative—means that so long as there is some legal basis for the advantage, there is no corruption, that is "a charter for corruption". I hope that the Minister will allow me to say that, if this approach is adopted, the phrase "a charter for corruption" is a bit rich coming from a department which would make it lawful for a benefit to be accepted by the agent if the principal consented. I must confess that I found the suggestion that what we were proposing was a charter for corruption a somewhat pejorative way of expressing a criticism of a possibility suggested by a committee which had given considerable attention to this difficult question on the basis of legislation elsewhere.

The Government recognise that their Bill is visually fairly complex. On that point, I regret that I could not read to your Lordships Clauses 5, 6, 7, 9 and so on. The Government concede that their Bill may well not be immediately understood by laymen. But they say that once you can make your way through this thicket, you will in the end achieve uniformity and that is more important, apparently, than clarity. Primarily, say the Government, it gives an adequate steer which jurors will understand. I suggest that "improper" is even more intelligible.

I repeat, we do not say that our draft is the only one but it does express, however inadequately, that what the committee says unanimously is the right approach. We consider a number of other possibilities that your Lordships will find in the report.

We do not claim infallibility. The committee states, with conviction, that the agent/principal test is not the appropriate one. We invite the Home Secretary perhaps to step back from the Bill and to reconsider how a criminal offence can be defined which is wide enough, meeting the essentials of corruption and in language which is intelligible rather than to hold on so resolutely to the agent/principal test. That was the main point of the debate. The other matters I can deal with more shortly. There are three points which I need to mention. First, should the Attorney-General's consent be required for a prosecution? Someone's consent is required. People should not be allowed to make wild allegations of corruption without some form of filter. The committee conceded, and I understand that the Government accept, that the Attorney-General's consent is not necessary. We thought that in addition to not needing to involve the Attorney-General, it was undesirable that he as a member of the Government should control the right of people to bring corruption cases. We have proposed that the Director of Public Prosecutions, with the power to delegate to a named specific deputy, would be suitable.

The second question, which I mentioned earlier, is what is the position of the intelligence agencies. They have the most difficult task. Should they be liable to prosecution for corruption or should they be exempted? Clause 15 of the Bill deals with that. We heard a great deal of evidence on that. We had no doubt that in matters of national security and the prosecution and detection of serious crime, the exemption was justified. Some of their functions cover the safeguarding of the economic well-being of the country. It seemed to the committee that it was right that these should not be protected by an exemption. To include the economic activities went too far and was clearly in breach of our international obligations, which we set out in the report.

More difficult is the question of parliamentary privilege. Your Lordships are familiar with Article IX of the Bill of Rights, which provides that proceedings in Parliament shall not be impeached or questioned in any court or place out of Parliament. The question is, as the Bill proposes in Clause 12, should that be removed altogether.

Two very important principles come into conflict here: the desirability, the need, for free speech in Parliament and, on the other hand, the need to prosecute for serious offences. So the question is, first, should Clause 12 of the proposed Bill be left as it is so that no one is protected under Article 9. Secondly, should we leave the law as it is so that freedom of speech is fully preserved; or thirdly, should we adopt a midway course?

We heard very strong evidence in favour of the two extremes. We came to the view in the end that the provision was justified in relation to witnesses in parliamentary proceedings before Select Committees and so forth, but should not be retained in respect of prosecutions against Members of Parliament and against others where the evidence alleged was the same.

In our report—this is my final major point we said very clearly that the position should be that to the extent that the words or actions of an MP or a Peer are admissible for or against him, they should also be admissible for or against all co-defendants in respect of corruption offences based on the same facts. So, the protection of witnesses, those not Members of either House, would be retained.

The Government recognised in their reply that this was a delicate and complex constitutional question, on which they wished to seek the opinion of both Houses. I understand that there may have been a development in the Government's thinking and perhaps that is no longer an issue between the Government and the committee. The Minister will no doubt tell us.

Finally, the committee recommended that, contrary to many representations, we should not include an offence of trading in influence and the offence of misconduct in any public office. We also recommended that United Kingdom companies should not be made liable for the actions of their non-resident subsidiaries and agents. That matter caused great debate in our inquiry. There is an argument both ways. We came to the clear conclusion that there should not be liability for the actions of nonresident subsidiaries and that the individuals concerned would be liable to prosecution. As I understand it, the Government also accept that.

This is a complex Bill, and the issues to which I have adverted briefly are not entirely easy. I hope the House will consider that the report of the committee has dealt with the really important matters. The committee wishes to record its considerable appreciation of the great assistance given by Professor Alldridge, our specialist adviser, and other members of the committee staff, led by Andrew Kennon and Mary Robertson. Mr Kennon devoted great time in giving us the benefit of his experience and advice, and we pay particular tribute to him.

As someone who has not previously taken part in a Joint Committee of both Houses, may I say what a highly educative and agreeable experience it was? I am particularly happy that we were able to reach a unanimous conclusion. I express my appreciation for the co-operation of all members of the committee, who often had to meet at highly inconvenient times.

Moved, That this House takes note of the Report of the Joint Committee on the Draft Corruption Bill (HL Paper 157).

My Lords, the stunning and magisterial speech we have just heard from the noble and learned Lord, Lord Slynn of Hadley, indicates two things for a newcomer like myself making a maiden speech today. The first is the high quality of contributions in the House of Lords. During 27 years of hard grinding in the House of Commons, I was often told that the quality of speeches was much higher. That has been shown amply not only in the speech made by the noble and learned Lord, Lord Slynn, but in other contributions today in other debates.

Also there is the noble Lord's distinction-something that pleases me, as an enthusiastic European—as first of all advocate-general in the European Court of Justice and afterwards president, working with great distinction there for a number of years and contributing greatly to the development of the corpus juris in Europe. I add my pleasure at seeing the president and chairman of the Luxembourg Society in the United Kingdom, representing a country so successful that the unofficial definition of poverty there is owning two small Mercedes.

It is a great honour for me to be in the House making this speech and referring to the Bill, albeit after a few words, if I may crave the House's indulgence. I am wearing a yellow badge saying, "I was in Leicester South". Of course, we Liberal Democrats are extremely pleased with last night's events and results, and frustrated, but none the less also enthusiastic, about the near win we had in Birmingham Hodge Hill.

One of the greatest pleasures of coming to this House has been the extraordinary kindness of all the staff, the Doorkeepers, the officials, the high officials of the House—Black Rod and his office—and everybody concerned. If I leave out anybody it is only for reasons of time. As a newcomer, one feels quite overwhelmed, and I am sure other new Peers would agree. The welcome is overwhelming in an institutional and a personal sense. I thank my Liberal Democrat colleagues, and colleagues and former colleagues in other parties whom I have known over the years, for their equally warm welcome.

The addition of eight Liberal Democrat Peers adds to our total. I suppose that if one said—I hope that I am not being controversial in any way—that there was roughly a sort of "Cook-Maclennan Mark II" ruling in current political conditions in the Upper House, then we would be getting closer to that target figure of 92 or 93, which the noble Baroness, Lady Scotland, may recall from the old days when such things were first promulgated after the 1997 Labour victory.

Be that as it may, I suppose that there will be fierce tussles even in this place, which is much gentler—quite rightly—and more civilized than the other place, in the run-up to the general election, with all the party tussles and battles. It remains my conviction—I hope I will not annoy any noble Lords by being too controversial in a maiden speech—that this House's role will become even more important in the future in those general and specific political matters as well and also of course in connection with the European Union and its future development. Equally, I say with some sombreness that the public dismay about Iraq will not go away completely. I am sure that that is recognised in all parts of the House.

I thank the noble and learned Lord, Lord Slynn, for his sagacious guidance on such a complicated matter. As a non-lawyer my heart sinks because the huge complexity of getting a modern definition of corruption and corrupt acts—mainly in business, but also, I imagine, in other human and social contacts, if money is to change hands—must be seen to be believed. The Government should be commended for launching the exercise in a very careful way, after responding to the Law Commission's own investigations, which took a considerable amount of time and were part of their general work in modernising various statutes and laws related to such matters over the years.

I was very struck by the comments of the noble and learned Lord the Lord Chancellor in the introduction to the draft legislation, included in the Explanatory Notes of 24 March, to which the noble and learned Lord, Lord Slynn, referred. He said at paragraph 3 of the foreword:

"In the international sphere, the UK is at the forefront of efforts to tackle corruption. We are active members of the Organisation for Economic Co-operation and Development (OECD), the Working Group on Bribery and of GRECO, the Council of Europe anti-corruption body. We support the development of EU wide minimum standards on corruption, and are currently negotiating along with our UN partners a UN Convention against Corruption".

With that huge background and its complexities, one hesitates as a non-lawyer—I am sure that many lawyers do as well—even to enter this territory. It is so difficult to build a coherent, modern and generally acceptable definition of such a corrupt act and acting corruptly. As a very inexpert contributor to this complicated debate, I agree with the assertion of the noble and learned Lord, Lord Slynn, that Clause 5 in the draft Bill is not satisfactory, with its extraordinary adherence, virtually to the exclusion of all other constructs, to the concept of the agent/principal test as the only basis. That surprised me as a layman, although, in many years of City experience, sadly one witnessed occasionally what such corruption could bring.

I understand the Government's difficulties and admire how they and the officials concerned have gone as painstakingly carefully and methodically as they can to accommodate different comments and suggestions.

I was puzzled by the following provision in Clause 9, on page 11 that,

"the person obtaining the advantage must give his expressed or implied consent to obtaining it".

So if another person transfers a large sum to an agent's bank account when the agent expressly requested him not to, the agent does not commit an offence although he knows that the person transferring the money is doing so for the purpose of influencing his functions as an agent.

There are many other such aspects in the highly competent Joint Committee's report on the Draft Corruption Bill. I do not have time to refer to it other than to say that the committee's definition of a person acting corruptly seems to be somewhat of an improvement. I say hesitantly as a very inexpert contributor and not a lawyer that that might be better. But if it is considered too broad by the Government, presumably it is their job in due course to submit an alternative recommendation.

I wish to refer to question 72 by the noble Lord, Lord Campbell-Savours, on page 22 of the minutes of evidence of the Joint Committee's report on 14 March 2003. This creates huge difficulties for anyone considering how to proceed in these matters in practical terms when cases come to court. He asked:

"Can I take you back to what is a fairly elementary question really: how important is it, in your view, sitting there in the role you have, that a jury does fully and completely understand the nature of an offence that they are trying?".

Sir David Calvert-Smith answered:

"It is absolutely essential".

The noble Lord continued in question 73:

"So if it could be shown that they would not understand it, then the law, as far as you are concerned, is an ass. Is that correct?"

The answer was:

"That may be. It is undesirable".

So, the more you read all the inserts in the questions and minutes of evidence, the more difficult the matter seems to be. I wonder whether it is right to assume that the old common law bribery legislation should lapse completely. There may be other matters that need to be looked at carefully again.

I refer to the Government's response. Everyone appreciated that they accepted two of the main suggestions of the Joint Committee, while having hesitations about one other and objecting to the definition of "corruption" as already discussed. Paragraph (5) on page 3 of the Government's response says:

"The enormous difficulty in defining corruption is how to differentiate an offence of corruption from all kinds of legitimate giving and receiving of advantages that make up ordinary transactions of business and social life".

With all those difficulties, it is not surprising that much further thought will presumably be given to the legislation. I thank the House for giving me the opportunity to make a few humble contributions today.

My Lords, it is a great privilege to offer congratulations on behalf of the whole House to my noble friend Lord Dykes on the occasion of his maiden speech, in what has been a busy week for him. As we have heard today, my noble friend Lord Dykes is not only fluent and easy to listen to, but he has demonstrated diligence in his research and thoughtfulness. I know that we will be able to look forward to many interesting contributions from him in the future.

As I looked at his biography, I noted that he can just claim to be pre-war. He was educated in Weston-super-Mare and at Pembroke College, Cambridge. He has a professional background as a stockbroker and a financial consultant, but it is as the Conservative Member of Parliament for Harrow East for something like 27 years that he is best known to your Lordships and beyond this House. He joined the Liberal Democrats in 1997, and since then has been an active campaigner and a tireless worker for the causes in which we on these Benches believe.

It is as a passionate and committed pro-European that my noble friend is best known. He has the admiration and respect of many noble Lords who do not necessarily agree with his views. His experience in Europe is formidable. He was a Member of the European Parliament before direct elections to Strasbourg; he has been a European parliamentary candidate for the Liberal Democrat party; and he is an active member of our defence, foreign affairs and European team. He is a vice-president of the British-German Association, and he speaks several European languages fluently. It is also good news that only recently my noble friend has been awarded the Légion d'Honneur, to add to the Medal of the Order of Merit of the Federal Republic of Germany, which he already holds. 1 know that the whole House will join me in looking forward to his future contributions.

Hear, hear!

My Lords, noble Lords will be relieved to hear that I will be fairly brief, partly due to the lateness of the hour, but also because the noble and learned Lord, Lord Slynn, who so ably chaired our committee, has covered the ground so comprehensively. It gives me an opportunity to confirm that despite the wide variation in backgrounds and experience of the members of the committee, we nevertheless came to complete agreement on all the major issues. Therefore, it is not necessary for me as a member of that committee to say a lot about it.

Like the noble and learned Lord, this was my first experience of pre-legislative scrutiny, and it demonstrated all the good points that this approach has to offer to our parliamentary system. The experience of the members taking part in the committee, having the time to interview the expert witnesses, having extremely good advisers to the committee and first-rate committee staff, give an opportunity to look at these complicated issues in some depth.

However, there are disadvantages. The committee was under time pressure to report quickly. We often met several times a week, which made the management of diaries rather difficult. It also meant that witnesses who were giving up their time were often subject to long delays while Members from both Houses rushed off to vote. That must have been irritating, although they were all incredibly patient. It is a little annoying, therefore, that after all the rush we have now had to wait a very long time to find a slot in which to debate this important topic.

There is widespread agreement that we need to update the legislation in this area. The most recent statute governing corruption is the Prevention of Corruption Act 1916, so clearly it is time that we looked at it again. However, it is important to emphasise that, despite the broad agreement that the issue needs to be looked at again, in no way does that imply that corruption is widespread in this country. Compared with fraud, for example, where the problem is more serious, corruption is not a major issue here. But we must comply with international obligations and ensure that our approach is compatible with those. That is particularly important given the standing this country enjoys around the world as regards dealing with corruption and associated offences.

As a non-lawyer, I have to confess to noble Lords that I often found the proceedings quite perplexing. However, one of the remits of the Select Committee was to consider whether the draft Bill used language that could be readily understood by those who would be required to implement it; that is, the business community and so forth. In my capacity as a layman, I felt that if at times I did not understand something, clearly others would struggle with it as well. Indeed, the issue of clarity was raised by the CBI, the OECD, Transparency International and our experts, Bob McKittrick, George Staple and Professor Pieth, so I was in good company.

The key here is how exactly one defines "corruption". At the start I found myself struggling with what felt like an "Alice in Wonderland" situation. Corruption appeared to be defined as something being done corruptly, or the other way around. I was glad to see that my difficulty was confirmed by Transparency International, which described it as a "circuitous definition", and perhaps explains why I found it so hard. Mr Justice Silber described the definition as "ambiguous" and pointed out that over time it has been the subject of six conflicting judicial interpretations.

Like the noble and learned Lord, Lord Slynn, I am still concerned about the Government's strong adherence to the agent/principal approach. That fails to cover cases where employers could be said to have consented to the bribery of their agents or cases where the heads of companies are themselves in some sort of collusion. Also, it would not apply to the public sector. Nowadays it is not easy to define public and private activity. I cite, for example, local government-my own background—where the culture of contracting out has blurred the lines. The CBI mentioned situations where private companies offer what are clearly public services, such as the utilities, television companies and so forth.

I am still very much of the view I formed a year ago, that the term "improper advantage" or the Council of Europe definition, "undue advantage", is an approach I should like the Government to look at. Certainly the CBI supports that view. Moreover, those terms cover the crucial issue and support the Government's own view of corruption as something which,

"weakens democracy and can undermine respect for human rights".

I shall not speak on the issue of parliamentary privilege save to say that it took up a good deal of the time of the committee. I would be delighted if the Minister takes the opportunity today to update noble Lords on the Government's thinking. Certainly, given current public opinion and the low standing of politicians, it is important that something as central as parliamentary privilege is seen to be used properly.

My Lords, I add my congratulations to the noble Lord, Lord Dykes, on his thoughtful and informed maiden speech. The noble Lord has, if he will permit me to say so, wide political experience. I hope that we can look forward to many contributions from the noble Lord in the future, albeit from Benches not my own.

I shall be brief because time presses. I echo the thanks of the House to the noble and learned Lord, Lord Slynn of Hadley, for introducing this important and worthwhile debate. The Draft Corruption Bill is of great interest to noble Lords on all sides of the House, and I add my voice to those of others who have commended the excellent work of the noble and learned Lord and his committee. I particularly welcome the presence of the noble Baroness, Lady Scott, who is taking part in the debate and was a member of the committee.

We on these Benches, in essence, welcome the findings of the committee as laid out in its report. We are particularly reassured that in many cases it supports the conclusions of the Law Commission's report of 1998, particularly on issues such as the need for reform of the current law.

A number of specific areas have been fully covered in the debate, the first being the thorny subject of the presumption of corruption. The report echoes that of the Law Commission when it asserts that public bodies are, in effect, subject to a "presumption of corruption"; and a benefit conferred on an employee of a public body by someone who holds or is seeking a contract with any such body is deemed to be corrupt unless it proves to be innocent. This is clearly out of line with other offences, where prosecuting authorities are required to prove guilt beyond reasonable doubt. However, I shall not trespass on the noble and learned Lord's explanation of the subject.

We therefore welcome the proposal for there to be one new single offence for corruption which does not focus on the relationship between the agent and the principal and would thus abolish the presumption of corruption for public bodies.

This brings me to the relationship between the agent and the principal, which has been well covered, particularly by the noble and learned Lord. It is an issue which the committee clearly considered with great care. In fact, the report states that one of the central problems with the present Bill appears to be the agent/principal relationship.

One of the main problems with the current legislation is that there is an obvious need for clarity, and the reliance on the agent/principal relationship as a means to defining the meaning of acting corruptly seems to undermine this. The committee's suggestion that the Bill should rely on a clearer and simpler definition of corruption that makes obsolete the need for the agent/principal relationship and the obscurity and complexity inherent within it, should be acknowledged and included in the revised Bill. This issue is clearly a part of the major point of contention with the Government.

As well as explaining corruption along simpler terms, this definition would also apply equally to the public and private sectors and would leave open the question of whether further specific offences could be created at a later date.

Another essential point referred to in the report is that of parliamentary privilege. Again, this has been well covered. Although we on these Benches recognise the good intentions behind Clause 12 of the draft Bill—that is, to remove any evidential difficulty in prosecuting MPs and Peers—we also acknowledge that it is a complicated matter. Of course, we too believe that Members of Parliament and Peers should be subject to the same corruption laws as everyone else; but, at the same time, there is a conflict between convicting the corrupt and protecting the freedom of speech in Parliament, something which we all value highly.

As a result, we support the committee's view that a more appropriate course of action would be to introduce a parliamentary privilege Bill to deal with this difficult question. We have had the corner of an exciting curtain lifted by the noble and learned Lord; perhaps we shall hear further from the Minister.

Clauses 15 and 16 of the draft Bill deal with another contentious issue, that of the Secret Service, the Secret Intelligence Service and the Government Communications Headquarters. As many noble Lords have pointed out, we in this country are rightly proud of the quality and integrity of the intelligence services, and any attempts to limit their capabilities, particularly in the climate of fear and threat in which we now sadly live, must be carefully scrutinised. So, while we welcome the exemptions made by the draft Bill, we also acknowledge the concerns voiced by the committee that the scope of Clause 14 would lead the UK to fail to comply with its obligations under the OECD convention and the Council of Europe's criminal law convention.

During the passage of the International Development Bill 2000 in another place we consistently urged the Government to ratify the OECD convention. I understand that the new legislation provides for this. I should be very grateful for the Minister's confirmation that the OECD convention ratification is, in this case, superseded.

As the committee listened to evidence from a number of witnesses from both sides of the argument, we believe that its recommendation to the Government to reconsider the scope of Clause 14 and, in particular, the suggestion that it is revised so that exemption covers only interests of national security and serious crime detection and prevention, should be welcomed and adhered to.

On a more general note, we welcome the fact that any future corruption Bill will complement the Proceeds of Crime Act 2002. Although this Act was quite specific in its remit in that it covered only the law against money laundering and the profits of organised crime, making the Corruption Bill compatible with it would be a step towards making our laws more workable as a whole.

To conclude, we on the opposition Benches applaud the work of the committee and the excellent report it has produced. Its recommendations go a long way to resolving some of the key concerns with the Draft Corruption Bill; namely, the agent-principal relationship and the meaning and scope of the corruption charge. The noble and learned Lord, Lord Slynn, has, in his comments, reflected in his own polished style on the draft Bill's provisions, which are somewhat obscure and not easy to understand. I am sure that the Plain English Campaign would echo those sentiments.

We note with satisfaction that in their reply to the committee's recommendations, the Government have undertaken to produce a revised Bill. This is clearly germane to the whole issue. The House will be grateful for the Government's thoughtful, informative and, I dare say, constructive response.

We are indeed fortunate that we have the noble Baroness, Lady Scotland, to continue the dialogue on the proposed draft Bill, the committee's report and the revised Bill which will, I hope, flow from it. It is to be hoped that the Home Office's hierarchy will permit the noble Baroness to play a continuing leading part in that. We look forward to her opening salvo in that dialogue.

My Lords, I join with those who have said it has been a privilege to hear one of the most elegant and, if I may say so, neatly expressed expositions of the competing arguments which have arisen as a result of the challenge which faces us in contemplating a change to the law of corruption, and all in one beautifully expressed speech by the noble and learned Lord, Lord Slynn of Hadley. No one could have opened this debate better. Indeed, the noble and learned Lord has put the competing arguments so well, including covering the Government's case, that at one point during his exposition, I rather wondered whether I could relieve your Lordships of the burden of being wearied by my reply at all. But if I had done that, I would have taken a course that would have deprived me of the opportunity of welcoming and congratulating the noble Lord, Lord Dykes, on his maiden speech and his fine contribution to this debate. That is a privilege that even I could not deny myself.

We have considered very carefully the recommendations of the Joint Committee in detail and at some length. There are some aspects that we have been able to take into account, such as the changes to the consent regime, the modifications as concerns the authorisation procedure for security agencies and the extent of the derogation from parliamentary privilege. These are important and significant changes. We have also made a number of technical modifications to the Bill in the light of issues raised during the pre-legislative scrutiny. I join the noble Baroness, Lady Scott, in saying that this shows just how useful and constructive the process of pre-legislative scrutiny has been.

We are very grateful—I say without reservation—to the Joint Committee and all those who gave evidence to it. I endorse all the compliments paid to the committee by the noble Viscount, Lord Bridgeman. However, on the central issue of the definition of corruption, as your Lordships know, we cannot agree with the Joint Committee's approach. We have set out our arguments in the Government's reply to the Joint Committee, published on 18 December 2003, which has already been broadly summarised. I can reassure the noble Viscount, Lord Bridgeman, that the provisions are already ratified. They comply with the OECD convention, which was ratified in 1999, so we are secure in relation to those matters.

We see no advantage in moving away from the agent/principal approach which has existed in law since 1906. It is not unique to the UK and is conceptually close to, although broader than, the breach of duty approach used by several countries and present within all international instruments that address private sector corruption. We are not convinced that there is behaviour that would fall outwith the agent/principal construct that should be criminalised as corruption. We believe that the essence of corruption is the suborning of an agent against his principal, whether the "principal" is a person or persons or the public in general. As the noble and learned Lord, Lord Slynn, said, this point has been made. As the noble and learned Lord, Lord Falconer, put it, the essence of the matter is that it would be cheating on the person you are supposed to be looking after.

Other activities, such as connivance between principals are more properly dealt with in other fields of the law. We have the new cartel offence in the Enterprise Act 2003, which is a significant step forward in this respect. With regard to the principal's consent in the private sector, because the law exists to prevent a specific principal being cheated on, it is difficult to argue why an agent who accepts an advantage with the full knowledge of his principal should be liable to sanction by the criminal law on corruption. The principal's consent is no defence in the public sector. We are dealing with two slightly different areas.

We also accept that the definition of corruption within our Bill is at first sight intricate. However, in that respect one is faced with a choice that is broadly twofold—either to define what is meant by acting corruptly, as we have done through a series of tests that translate into concrete questions to a jury, or to leave the concept open to interpretation. The latter approach would be acceptable if there were a consistent understanding among the public about what constitutes a corrupt act, but we would argue strongly that that is not the case at present. The word "bribe" is used to describe all manner of advantages intended to influence, from those that the public would rightly condemn to the entirely innocent—such as cakes to encourage employees to work harder. Likewise, there is a need to draw a line between legitimate levels of corporate hospitality such as product launches and those that should be outlawed. Without drawing these lines in statute we cannot expect uniformity of prosecution or conviction. An offence that draws the lines clearly will be of help to the business community in drawing up internal guidance. We do not believe that the Joint Committee's definition,

"advantage to which a person is not legally entitled"

is useful because if "legally entitled" encompasses any legal basis, such as any form of agreement, then all sorts of corrupt activities would thereby be legalised.

Finally, the Joint Committee's definition allows for a number of lacunae, such as a bribe given to a third party, acting corruptly in anticipation of a bribe and a recipient of a bribe who has no intention of allowing it to influence him. While some modification of the definition might iron out those lacunae, such an approach would detract from the simplicity of the definition, which is its most attractive selling point. Once that goes, we believe that the course adopted by the Law Commission is the better one.

There is a rightful place for the robust discussion that there has been with the Joint Committee. We have learnt quite a lot from it, because we have had to interrogate and tease out those differences. I believe that we have come to a better place than the one we would have come to had we not had this debate.

As we noted in our reply to the Joint Committee in December, our aim remains to introduce a Bill to Parliament in due course. I very much look forward to the debates that we shall have across the Dispatch Box. As the noble Viscount, Lord Bridgeman, said, whether I can throw any salvoes I do not know. But I am sure that we shall have some very interesting times.

My Lords, I thank the Minister for her very generous remarks and for her clear and detailed answer to the essential points of this case. I am glad that we have been able to come to agreement on at least a number of important aspects, even if the remaining one will have to be fought out by others on another day.

I also thank all Members of the House present during the debate, especially those who have spoken. I am very glad that the noble Baroness, Lady Scott of Needham Market, was here because she as a member of the committee took a very active part in our discussions.

I, too, congratulate the noble Lord, Lord Dykes, on his maiden speech and on his homework, too. As the noble Viscount, Lord Bridgeman, said, he has clearly done a great deal of work on this matter. I have no doubt that we shall see evidence not only of his oratory and experience but of his hard work on many future occasions, to which we all look forward.