Following the delayed start and before the Minister moves that the first statutory instrument be considered, I remind noble Lords that in the case of each statutory instrument, the Motion before the Committee will be that it do consider the statutory instrument in question. I should make it clear that the Motion to approve the statutory instrument will be moved in the Chamber in the usual way.

rose to move, That the Grand Committee do report to the House that it has considered the Rail Vehicle Accessibility (Interoperable Rail System) Regulations 2008.

The noble Lord said: The provision of an accessible public transport system in which people with reduced mobility can have the same opportunities to travel as other members of society is a key driver in improving their life chances and promoting social inclusion. Without accessible transport, people with reduced mobility are limited in their ability to access work, visit friends and family, participate in leisure activities or access healthcare and education facilities. That is why we have taken strong and positive action to ensure that public transport services are more accessible to the growing number of people who have previously faced difficulties when trying to use them.

Regulations requiring all new rail vehicles, buses and coaches to be accessible have already been introduced. There are around 4,700 accessible rail vehicles already in service which are covered by the Rail Vehicle Accessibility Regulations, widely referred to as the RVAR. We should remember that many thousands of older rail vehicles have also been made more accessible by refurbishment.

The United Kingdom's leadership in this area has now been recognised at a European level and the European Commission has come forward with a new standard for the accessibility of trains. This is based largely on the RVAR. The introduction of the new standards is the reason why we are here today. The regulations before us are needed to prevent the application of dual regulatory regimes, European and domestic, in this area as the European standards will come into force automatically, through the Railways (Interoperability) Regulations 2006, while the domestic standards apply through the RVAR. It would not be desirable for a train to be subject to two different accessibility regimes. Therefore, since the new European standards will take precedence, the draft regulations before us contain provisions to disapply the RVAR from those trains to which the new standards will apply. The new European standard will apply to trains operated for passenger services on the UK mainline railway network, while the RVAR itself will remain as the accessibility standard for light rail, tram, metro and underground systems.

The Merits Committee has drawn the regulations to the special attention of the Committee because the exemptions under the new European regime that we are moving today are dealt with administratively—as they already are for other aspects of that regime, such as signalling and radio communications—rather than by statutory instrument. However, we are confident that consultation with the Disabled Persons Transport Advisory Committee and others will ensure that the needs of people with reduced mobility are not taken lightly. No adverse comments were received on this issue during the consultation process.

We must also understand that we are talking only about limited exemptions for the oldest vehicles, which were built before any access standards were in place at all. There are no grounds for new trains to be introduced into service without being fully accessible. Simply disapplying the RVAR would leave the trains that were previously subject to it completely unregulated until they triggered the European standards by being refurbished. As that is clearly unacceptable, the draft regulations also ensure that there is an obligation on train operating companies to continue to operate these trains in an accessible manner, as if they were still subject to the RVAR standards, unless and until they trigger the new standards.

In addition to facilitating the introduction of the new European standards, the draft regulations also deliver on our commitment to set an end date of 1 January 2020 by which time all trains must be accessible. This measure was originally included in the Disability Discrimination Act 2005 and enjoyed full cross-party support during its passage through the House of Lords.

Members of the House of Lords have consistently demonstrated both their interest in, and the strength of their support for, measures that improve the accessibility of our railways. That is the main reason why we are seeking approval for these regulations today. They will help secure significant improvements for all passengers, not just people with reduced mobility, and the rail industry has already been working to similar standards for approaching a decade. For those reasons I commend these draft regulations to the Committee. I beg to move.

Moved, That the Grand Committee do report to the House that it has considered the Rail Vehicle Accessibility (Interoperable Rail System) Regulations 2008. 21st report from the Merits Committee, 21st report from the Joint Committee on Statutory Instruments.—(Lord Bassam of Brighton.)

We are not against the introduction of these regulations. However, I have a few points to put to the Minister. I should also like to point out that there is a little concern, felt particularly by train operators and other interest groups, about the effect of having two sets of regulations.

Train operators have expressed particular concern about the regulations’ effect on refurbishments. Are the Government sure that the regulations will not prejudice the future refurbishment of existing trains? We have two sets of regulations but train operators are refurbishing their trains to the first set. Might there not now be a hiatus in the refurbishment of carriages and trains? Can the Government assure us that operators will not be discouraged from refurbishing trains?

Secondly, operators and interest groups have given mixed reviews regarding what form the regulation enforcement regime will take. Many operators feel that compliance should be enforced by existing safety management regulation. Some have suggested that it would be logical for the Office of Rail Regulation to take on a single enforcement role, whereas I gather that light railway operators have argued that Her Majesty’s Railway Inspectorate should be the enforcement body. What steps have the Government taken to ensure that operators’ concerns about how the regulations will be enforced have been addressed? Will they ensure that the Rail Regulator is properly resourced to ensure compliance with any regulations? Can the Minister answer the questions on the enforcement of the new regulations?

My next point is linked to my first point. The Minister said that there is an end date for compliance with the new European regulations. Might it not be better if new trains comply with regulations as they come on stream? What will happen to carriages that do not comply by 2020? Will they be taken out of the system? There might be a real problem about having sufficient stock at that time if some carriages are not compliant with the new regulations.

Whatever we do to provide accessibility for disabled people, sometimes the trains are so crowded—certainly the trains that I use—that people cannot get to the toilet if they want to because it is impossible to move. Would the Minister like to comment on that? How will disabled people get around on trains if they are so full most of the time?

I, too, have had representations from the railway passenger industry on these issues, and in many ways they reflect the comments made by the noble Lord, Lord Hanningfield. I shall start with his second point about enforcement. Can my noble friend explain whether the enforcement will be done by the Office of Rail Regulation rather than by the department? We now have an ORR that covers both safety and economic regulations. It seems to me that to comply with the principles of independent regulation that we have discussed so many times here in Grand Committee and in the Chamber, the enforcement of the various policies in the regulations should be done by the ORR. I shall be glad to hear the Minister’s comments on that.

The new TSI supersedes the Rail Vehicle Accessibility Regulations. There is a body of opinion in the Association of Train Operating Companies which thinks that the changes in the regulations are in conflict with the European directive they are meant to transpose. The problem is that they introduce retrospective application of a TSI, which is not the intention of the interoperability directive. The noble Lord, Lord Hanningfield, gave some examples. Many of us travel on mark 3 passenger coaches, which have been around for a long time and will probably, the way things are going at the moment, be around after 2020.

As the TSIs more or less forbid retrospective application, the Government have a few problems. For example, there is a proposal to amend the 2006 interoperability regulations which transposed into UK law the interoperability directive (2001/16) and superseded the Railway (Interoperability) (High-Speed) Regulations 2002. The latter is one of the instruments we are talking about. However, the amendment proposes the retrospective application of this TSI to rolling stock placed in service before 1 August 2006—and there is an awful lot of that around—which is not deemed to be authorised under Regulation 4 of the RVA (IRS). The effect is to enforce changes to all pre-1999 rolling stock that has not been subsequently modified to comply either with the RVAR or the PRM TSI. Such rolling stock will have to comply with the PRM TSI by 2020 regardless of whether it will be subject to a major upgrade. But these changes might conflict with Article 1 of the interoperability directive (2001/16) which states:

“These conditions concern the … placing in service … of the parts of the system placed in service after the date of entry into force of this Directive”.

My concern is with the exemptions. I would like an assurance from the Minister that any exemptions to these regulations will come back for consideration in this House and will not simply be pushed through unilaterally by the Department for Transport.

I have a couple of brief comments. My noble friend has drawn attention to how the exemptions were dealt with. I think that I am the only Member of the Committee who took part in the whole passage of the Disability Discrimination Act, during which we had long and sometimes bitter arguments, and long and bloody battles, about ensuring that we kept control of these exemptions and monitored them.

As luck would have it, I was also a member of the Merits of Statutory Instruments Committee when we first noticed the number of exemptions. The first exemption I saw was about a vintage railway system. I do not know whether the noble Lord, Lord Hanningfield, would agree on this, but my attitude to that exemption was: if you are a person in a wheelchair who wants a 1930s travel experience, by all means go in the guards van along with the mailbags, but if you are using a train as a commuter in the modern age, you require slightly better standards.

Let us not forget that improved accessibility in getting on and off trains also tends to help other people as well. It is almost a truism, but accessibility for those in wheelchairs tends also to help those pushing prams or carrying heavy bags. Such changes benefit the public as a whole. I am afraid that the rail industry has resisted these changes and commented that there should perhaps be other priorities. It is an ongoing discussion and there are merits on both sides. But I think that that aspect should bear some weight in the discussion.

As my noble friend pointed out, we have said that we want control over this because far too many exemptions have been granted in the past. If the department has a better lobby group than the disability lobby—and between the transport and disability lobbies there is an interesting tug of war—and the transport lobby gains access to the right ear, it is easy to see that exemptions may be passed rather too readily, as has happened. It would be a good step forward to ensure that Parliament is aware when these exemptions are passed. I look to the Minister for an assurance that we will have some way of checking this in future. We agree with the Merits Committee that the assurance we were given under the 2005 Act should still be valid. We should be able to see what is happening and check it. We do not have a good record here. In the past the transport lobby or the railways lobby seemed to get their way rather too readily.

I am grateful to all noble Lords for their well informed questions, which add to the debate’s value. We have had a useful brief discussion on these issues.

I will come back to the Merits Committee point and exemptions as I wish to deal first with the questions asked by the noble Lord, Lord Hanningfield, who, like me, is a fairly regular user of the rail network and enjoys its benefits and, no doubt, some of its discomforts, as we all do. He asked three questions which concerned primarily the refurbishment process and whether future refurbishments would be prejudiced in any way. I do not think that they will. The regulations certainly recognise previous RVAR compliance and I do not think that there will be a problem there. I understand why there might be concerns but I do not think that there will be any great difficulty in that regard. We have a good track record on this and we are ahead of the game. We are very familiar with the European standard. We are simply raising the bar a little but also taking careful account of compliance considerations.

I heard what the noble Lords, Lord Hanningfield and Lord Berkeley, said about enforcement. We think it is right that there should be enforcement through Her Majesty’s Railway Inspectorate, which has an enviable track record of enforcement on safety matters. That is entirely consistent with its safety role. It is respected in the industry here and abroad for the way in which it operates, for the standards it sets and the valuable advice and guidance that it gives. Over the long history of our railway network the inspectorate has been an important element in improving safety standards and ensuring that, by and large, we travel in safety and in comfort on the network.

Overcrowding was mentioned. We are now well into the procurement process for 1,300 additional carriages, which will be targeted on the busiest parts of the network. They will ease overcrowding and ensure that proper facilities are made available for people with particular needs. I do not know what the noble Lord, Lord Hanningfield, thinks but I consider that on my line from Brighton the rolling stock is of a very good standard and provides a good level of comfort. Those of us who have commuted for longer than we sometimes care to remember have certainly seen those standards improve. I think that there is very good space provision. It is obviously best to travel outside the rush hour, but the new trains and carriages have done a great deal to improve the quality of services. I do not think that we will have an issue there; and with the way in which the procurement process is working, being targeted at easing pinch points, there should ultimately be greater satisfaction with the service.

The noble Lord, Lord Berkeley, is, as ever, acute to the issues and well versed in European concerns. I am grateful to him for supplying us with advanced warning of his questions. His first point was to request assurances that changes to the regulations will not set a precedent for retrospective application. Since 2001 we have made it clear that we intend to apply the accessibility regulations to rail vehicles introduced before the RVAR came into force and to set an end date for the national rail fleet to be accessible. In our view, the forthcoming replacement of the RVAR by the PRM TSI does not affect that commitment.

The noble Lord also asked for confirmation about which trains will be required to be modified by the 2020 date and whether we will establish a programme for modification linked to other essential changes to rolling stock. Which trains operate past the end date is a commercial matter for vehicle owners. They have identified to the Department for Transport which fleets they believe may fall into that category, and officials are working with them and DPTAC to identify the work that needs to be put in place. This has largely been welcomed as allowing vehicle owners to plan and to include rectification work during other upgrades and in maintenance schedules, consequently reducing the impact on vehicle availability. With the concerns about overcrowding, that is very important.

The noble Lord also asked whether we have the necessary budget to achieve full compliance by the 2020 date. The additional cost of setting the end date will generally be met in the first instance by the train owners who will recover them through increased leasing charges. When bidding for franchises, potential operators will take account of them in their bid, which will inform the amount of subsidy required from or premium paid to the Government.

Finally, the noble Lord asked a question about the new conditions for the Southern franchise. He said that they make no mention of the need to take account of and to comply with the new regulations and asked whether it is the intention of the department to introduce these requirements for accessibility within the franchise and, for that matter, other franchises at the earliest possible date. The current consultation regarding the South Central franchise seeks stakeholders’ views on additional items to be included in the invitation to tender when it is issued later this year. As we stated during consultation on the draft regulations in front of us today, it is already the Government’s intention to specify accessibility works on a targeted basis for trains that bidders may be considering using in franchises in future. I do not think we should forget the significant improvements in accessibility that the rail industry has already delivered on older trains during the refurbishment process. We must not be complacent, but a pretty good job has been done, and that speaks volumes about the improvements that the rail service has enjoyed across the network and through the rail companies.

We have taken the comments and concerns of the Merits Committee very seriously. I am grateful to the noble Earl, Lord Glasgow, and the noble Lord, Lord Addington, for raising them today. In response to the Merits Committee, the department did not propose making amendments to the interoperability regulations of 2006 in order to introduce a statutory instrument for derogations under the PRM TSI; that is not our preferred policy. We wish to retain consistency in the manner of handling derogations against other TSIs, especially on regulation principles.

The real problem is how to report back. Parliament has taken an interest in this over the years. It has been an ongoing saga. The Government may well be doing it properly, but the reporting process to Parliament about what is happening—this was actually my child—concerns me. Something has been happening. Parliament has been doing it, but if at least some parliamentary attention could be brought to it in some way, I would be a lot happier.

Under Section 67B of the Disability Discrimination Act 1995, which was inserted as a result of the Disability Discrimination Act 2005, we are obliged to report to Parliament on the making of the RVAR exemption orders, so there is already a reporting obligation. Perhaps we could commit to reporting on the use of the exemption powers so far as they relate to rail vehicle accessibility on the interoperable rail system. There is a facility for us to do exactly that. I was going to make the point that the consultation processes that we go through alert stakeholders to these issues. There is also the obligation in terms of making the exemption order. I guess that we just have to get used to making that part of it work. I understand the point that people need to understand what we are trying to achieve.

That was the bit that I was thinking about. I think it was at my instigation that we actually got it. I simply want to be sure that we will ensure that this will still be reported on and debated in Parliament, and that all the new processes will be brought into the existing structure. If they are, some of my worries are removed because we still have a way of checking and holding someone to account if this goes wrong. That is really what I am after. If the Minister undertakes to ensure that everything will be done to ensure that this safeguard is there, I will feel better about this. It must be there because, despite the previous convictions of the Government—indeed, of all Governments—they stand accused of having been rather too blasé in the past. We need some safeguard in the future.

I am happy to give my personal assurance that we will do all that we can to ensure that the reporting process is properly workable. I will write to participants in this debate on how we might achieve that. What I like about this as a parliamentarian is that there is a degree of rigour to it, but there is also a degree of flexibility. I am sure that we are all trying to ensure that standards are raised appropriately so that we can make our public transport system the most accessible in the world. That is what we all want to achieve.

I listened very carefully to the Minister, and I am grateful for what he said, but I remain slightly worried. If there is a conflict between the two sets of regulations, which will run in parallel, it would be good to have his assurance that if someone developed a new train that could be operated in the UK, France and Germany—in other words, if it was interoperable, which is the whole purpose of the TSIs—it will not have a different set of regulations when it comes into the UK that will somehow be illegal in France. I became involved a long time ago with the development of a freight wagon, which had to have two separate sets of brakes, one of which operated in the UK, called a disc brake, and another one that operated on the Continent, which is a drum brake. You had to have two types of brakes in order to operate across one frontier. That is the whole point of a TSI; it should be Europe-wide. I hope that what my noble friend has said about the regulations will help to sort out the matter, but I am not entirely convinced that some train operators will not be upset and start taking legal action. I hope that that does not happen, because that would be very unfortunate.

It would be extremely unfortunate. I cannot believe that sensible train operators would want to do that. It would not enhance their reputation, and I do not believe that our train operators are in the business of doing that. They want a good reputation in this area. In any event, it is good for business because it widens the potential passenger base.

I commit to setting out in the same note that I will send to the noble Lord, Lord Addington, how we think this will work. I know that the noble Lord, Lord Berkeley, is a practical rail man, and that he will address the issue in practical terms and ensure that people can comprehend this. I hope that I have answered noble Lords’ questions.

On Question, Motion agreed to.

rose to move, That the Grand Committee do report to the House that it has considered the Proceeds of Crime Act 2002 (Disclosure of Information) Order 2008.

The noble Lord said: It will make sense to take the two orders together and for me to speak also to the Serious Organised Crime and Police Act 2005 (Disclosure of Information by SOCA) Order 2008. I hope that Members of the Committee have had the opportunity to read the Explanatory Memorandum that accompanies these two related orders. As I will explain, the policy behind these orders is straightforward and purely consequential due to amendments made by the recent Serious Crime Act 2007 to provisions relating to recovering the proceeds of crime. I hope, therefore, we can be brief, as I contend that the nature of these orders is not controversial. Perhaps the real aid I can provide to the Committee is in explaining the quite technical drafting in these orders which does nothing more than to achieve simple, consistent and continuing policy.

The recent Serious Crime Act 2007 has abolished the Assets Recovery Agency. Among other functions, the agency had been the sole body in England, Wales and Northern Ireland which could investigate and pursue the civil recovery of the proceeds of crime. Civil recovery provides for the recovery of property which has been obtained directly or indirectly through crime. These are civil proceedings before the High Court and therefore do not require a criminal conviction. Essentially, the recovery action is against the property rather than the person.

To support the agency in this work, Part 10 of the Proceeds of Crime Act provided for the disclosure of information to and by the director of the agency. Significantly, for the purposes of the matter before us, the persons who could disclose to the director of the agency and the purposes for which he could disclose information were added to by the Proceeds of Crime Act 2002 (Disclosure of Information) Order 2003. That order was subject to a debate in this House in 2003 before it came into force on 24 February 2003.

Following the abolition of the Assets Recovery Agency, its functions of investigating and pursuing civil recovery has in England and Wales effectively passed to the Serious Organised Crime Agency, the Crown Prosecution Service, the Serious Fraud Office and the Revenue and Customs Prosecutions Office. In Northern Ireland, the functions have effectively passed to the Serious Organised Crime Agency, the Serious Fraud Office and the Public Prosecution Service for Northern Ireland. That change came into effect on 1 April this year.

The provisions for the disclosure of information in Part 10 of the Proceeds of Crime Act 2002 were amended by the 2007 Act to refer to the Director of Public Prosecutions, the director of the Serious Fraud Office and the Director of Public Prosecutions for Northern Ireland. Equivalent amendments were also made to relevant provisions in the Commissioners for Revenue and Customs Act 2005 for the Revenue and Customs Prosecutions Office and the Serious Organised Crime and Police Act 2005 for SOCA. Importantly, the additions to the provisions for the disclosure of information made by the Proceeds of Crime 2002 (Disclosure of Information) Order 2003 were not transferred to the successor agencies by the Serious Crime Act. These are to be made by the orders before the Committee today.

The orders merely ensure that organisations which inherited the Assets Recovery Agency’s work and functions can access the same information sources that were available to the agency and can disclose the same information onwards. They also ensure that these organisations can use the information obtained to conduct investigations and proceedings under the Proceeds of Crime Act 2002 to enable the recovery of criminally obtained assets. There is no change in policy. The orders do not cover the Revenue and Customs Prosecutions Office, which also inherited functions from the Assets Recovery Agency. It is covered by other legislation, has been made aware of the issue and will take any remedial action, legislative or otherwise, as necessary. I beg to move.

Moved, That the Grand Committee do report to the House that it has considered the Proceeds Of Crime Act 2002 (Disclosure of Information) Order 2008. 21st report from the Joint Committee on Statutory Instruments.—(Lord West of Spithead.)

I thank the Minister for his introduction, although I am slightly confused. My understanding is that the orders would add to the functions of protecting public health and the Financial Services Authority. That is what the orders say, but the Minister did not give that addition. I assume that that addition under the orders is correct. If I am correct, room was left for that within the original proceeds of crime legislation and we have no objection to additions being made to it.

My first question relates to the functions being designated under the orders with regard to the protecting of public health and the functions of the Financial Services Authority under the Financial Services and Markets Act. With regard to the public health aspect, which is new to this legislation, will the Minister give examples of where public health might be compromised by the nature of the work or what is being carried out? I would like a snapshot of how public health could be involved. Under Schedule 2 to the Proceeds of Crime Act 2002, who is it intended would be permitted to make a disclosure to the director in relation to public health? I cannot see that in the schedule. If it is not included, I presume there will have to be a further order at some stage. On the extension to the function under the Financial Services Authority, a person appointed to conduct an investigation under that authority is included in the schedule, which leaves the previous omission looking rather strange.

Under Section 47 of the Proceeds of Crime Act, disclosure on matters relating to individual tax matters is confined to the commissioner of the Inland Revenue or Customs and Excise. Would the same caveats apply to those authorities as apply to the Financial Services Authority? If so, who would be in the position of the commissioner? At present, in legislation, the “permitted person” is the person appointed to conduct an investigation.

Turning to the schedule, why is it that the Secretary of State should be involved in an issue relating, for example, to the prevention, detection, investigation or prosecution of offences relating to a social security matter or to checking the accuracy of any benefit payment? These would seem to be relatively trivial matters for the involvement of the Secretary of State, so what would dictate the level at which that holder of the office would become involved in disclosure? Are we to understand that we should read for “Secretary of State” anyone authorised by him or her to undertake investigations on their behalf? If so, should that not be the wording in the order?

On the designation of those who are authorised to act on behalf of the Employment Agencies Act, the Companies Act, the Financial Services and Markets Act and the Proceeds of Crime (Northern Ireland) Order 1996, I note that these are termed as “authorised persons”. Can the Minister give us an indication of the likely seniority of that person in the organisation? I ask that because from a list of those currently designated under the Proceeds of Crime Act, it is clear that only commissioners are permitted to make disclosures to the director. It is of some concern that it does not seem to be the same situation in those that I have mentioned. Can the Minister reassure us about this because disclosure under this Act is a serious matter? I would be very uncomfortable if it were not done by the most senior officer in one of the listed organisations. If the Minister can answer those questions, I am happy with the order.

By and large, we support these orders as we supported the efforts to deal with the proceeds of crime when the Act went through originally. We have recently discovered—it was widely stated in the press—that the Serious Organised Crime Agency has been suffering from a serious lack of efficiency. Can the Minister make a brief comment on that? At a time when we are delegating more powers to it, its capability and efficiency are relevant.

Were the recent, widely reported raids on safety deposit boxes, which yielded amazing and wide-ranging contents, conducted under this legislation? I presume that they were and that the fact that these orders have come in now will not have any effect on the prosecutions which will result from what was discovered in those raids. Like the noble Baroness, Lady Hanham, I am interested in examples of the protection of pubic health under the second order. I presume that they concern deliberate threats of contamination, blackmail and so on.

On the overall issue of the performance of the Serious Organised Crime Agency, the Minister can expect that we will be asking serious questions about it over coming months. However, I am happy to say just that about these orders this afternoon.

I thank noble Lords for their typically piercing questions on some of the detail of the Serious Organised Crime and Police Act 2005 (Disclosure of Information by SOCA) Order 2008 and the Proceeds of Crime Act 2002 (Disclosure of Information) Order 2008. The noble Baroness, Lady Hanham, asked about the public health issue. The order does not add to the functions of SOCA and the directors but to the purposes for which information can be disclosed. Those purposes are the exercise of any functions of protecting public health and the function of the Financial Services Authority under the Financial Services and Markets Act 2000. These functions were included in the 2003 order and are not new. An example in relation to public health would be that it might be used to protect health in relation to disclosing information that might come to SOCA or the directors about the illicit supply of medicinal products or that type of question.

On permitted persons, the functions of the directors and the Secretary of State can be delegated, so that a person within the department or organisation can act as, say, the Secretary of State. The question was about the level to which that will occur. I am not sure, so I shall come back in writing if there is a limit on the level. I am not sure whether that answers all the questions the noble Baroness raised. If not, I shall write to her.

The noble Baroness, Lady Miller, asked about SOCA’s lack of efficiency. I think that is probably a little unfair on Sir Stephen Lander, who is running it. The last report identified areas where there could be improvements. SOCA is delivering well in some areas, but there are some gaps. They will be picked up and run with. It is important that we make it run properly because it is crucial that it achieves what it was set out to achieve. It is unfair to say that it lacks efficiency; it is just that there were shortfalls in certain areas, as one could see from its report.

On investigations that have been taking place for three or four months, no information is currently being disclosed or obtained under the powers given by the orders. Clearly, there is no power to do so. I can reassure the noble Baroness on that: as no information is being disclosed or obtained, it clearly cannot be questioned by the courts. We are safe on that point.

I am not sure that I have answered a couple of the precise questions, but I will do so in writing. Apart from those, I commend this instrument to the Committee.

On Question, Motion agreed to.

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

Moved, That the Grand Committee do report to the House that it has considered the Serious Organised Crime and Police Act 2005 (Disclosure of Information by SOCA) Order 2008. 21st report from the Joint Committee on Statutory Instruments.—(Lord West of Spithead.)

On Question, Motion agreed to.

rose to move, That the Grand Committee do report to the House that it has considered the Immigration and Nationality (Fees) (Amendment No. 2) Regulations 2008.

The noble Lord said: In February 2008, we began the rollout of the points-based system. At that time, we also announced our proposals for all the immigration and nationality fees we intended to charge during 2008-09. These regulations specify the fees for the next part of the points-based system to be implemented.

The Government are determined to continue to drive through the real improvements to the immigration system that we have said that we will deliver. We will protect our border and our national interests, tackle immigration crime and implement fast and fair decisions. These fees will help contribute to us delivering the biggest shake-up to our border protection and immigration system for over 45 years.

We have made substantial progress and are seeing the results. Stronger border controls are delivering falls in annual asylum claims, which are now the lowest for 14 years. Anyone applying for a visa now has his fingerprints checked against UK databases. So far, we have enrolled 1.7 million sets of fingerprints—that is, people—detecting 1,600 cases of identity swaps. In 2007, we removed an immigration offender from this country every eight minutes. Britain is the richer for migration, culturally, socially and economically. However, if migration is to continue to bring benefits to this country, it must be carefully controlled, and we are delivering that through the continued roll-out of the points-based system.

It is right and fair to the users of the immigration system and to the general public in the UK that those who benefit most from the immigration system contribute proportionately more to the true end-to-end costs of that system. In setting current fee levels, we established the important principle of setting the fees for our applications and services on the basis of the value to the applicant. We are continuing to apply this principle in setting fees for the next parts of the points-based system to be implemented. In order to do this, we are using the powers under Section 42 of the Asylum and Immigration (Treatment of Claimants, etc.) Act 2004, which have been amended by Section 20 of the UK Borders Act 2007.

We have kept migrant fees for the next part of the points-based system to be implemented at broadly the same level as existing comparable current applications. Where we are introducing new fees for new services, we have proposed fees that reflect the benefits and entitlements of the application to the migrant or employer.

The fees for new products that are covered in the regulations being discussed today are as follows. An application under tier 1 of the points-based system for a visa as an investor or an entrepreneur will be £600. An application under tier 1 of the points-based system for leave to remain as an investor or an entrepreneur will be £750. An application under tier 1 of the points-based system for a visa in the post-study category will be £205. An application under tier 1 of the points-based system for leave to remain in the post-study category will be £400. An application under tier 2 of the points-based system for a visa will be £205. An application under tier 2 of the points-based system for leave to remain will be £400. An application for a tier 2 certificate of sponsorship will be £170. An application for a multiple tier sponsorship licence where the sponsor is not a small sponsor will be £1,000. An application for registration as a British citizen under the British Nationality (Hong Kong) Act 1997 will be £400.

The purpose of tier 1 of the points-based system is to attract the most talented migrants who have the most to contribute economically to the United Kingdom. The skilled migrant tier—tier 2—is aimed at enabling UK employers to recruit individuals from outside the European economic area to fill a job that cannot be filled by a British or European economic area worker. In common with other parts of the points-based system, on introduction tier 2 will require migrants to have a sponsor licensed by the UK Border Agency. The fee to register on the sponsor register was set in the regulations debated on 25 February. These regulations bring in fees for the different types of sponsor licences that businesses will be able to apply for.

We welcome the contribution that legal migrants make to the economy and cultural life of the United Kingdom, and we have ensured that the proposed fees are at levels that will not damage the UK’s international competitiveness. We believe these fees for the next part of the points-based system to be implemented are fair and proportionate, and are set at levels that recognise the value and benefits of a successful application to both the migrant and the employer. The fees have been set to ensure the UK maintains its position as an attractive destination for work and to do business.

We have consulted key stakeholders on our proposals, including the business community, and the majority of responses to our consultation document and at the consultation events agreed with our current policy of setting fees for tier 1 and tier 2 above cost recovery while setting fees for tiers 4 and 5 at or below cost recovery. The fees proposed here are fair and proportionate. They recover the costs of considering the application and help contribute to the true aim to end the costs of the system. I commend this instrument to the Committee. I beg to move.

Moved, That the Grand Committee do report to the House that it has considered the Immigration and Nationality (Fees) (Amendment No. 2) Regulations 2008. 20th report from the Joint Committee on Statutory Instruments.—(Lord West of Spithead.)

Once again I thank the Minister for introducing the regulations. I say from the outset that we support the principle behind making reasonable charges for people who wish to come to this country and for those firms that want to employ migrants, and that they should be licensed to do so. Therefore, we have no difficulty with the regulations. However, I have one or two questions.

In general, the level of fees is intended to exceed the cost of administration, but I think it is acknowledged that there will be an element of subsidy for applications that will be charged at below the administrative cost. Could the Minister tell us which applications will not have their administrative costs covered? I think he said that it applied to tiers 3 and 4, but I should like that to be confirmed. Is it anticipated that these fees will generate the £100 million suggested in the accompanying notes, and will that be total income or profit? What are the administrative costs alone likely to be? How long will the costs be set for? Are they annual costs or will they apply for longer that that? If they are to be increased, will that matter come back to the House? Have the Government any estimate of the number of applications that it is anticipated will be made under tiers 1 and 2? Is the Minister confident that the UK Border Agency has the expertise and resources, both human and financial, to deal with these expeditiously so that people will not be kept waiting? As I say, I have no objection to the regulations.

The regulations follow the statutory instrument that your Lordships debated at the end of February, when the Minister explained how current fee levels were being determined on the basis of the value of the services provided to the applicants. The noble Baroness has asked certain questions about these calculations, which I would like to follow up.

The intention is to make the aggregate total of fees charged for services connected with immigration and citizenship correspond with the money spent on securing our borders. The Minister gave the figure of £2 billion this year, and he expected £630 million to be generated from the fees. It would be useful to know whether that includes the amounts that are being generated by the applications under the regulations. If there has been any change in the arithmetic in the past four months, no doubt the Minister will let us know.

The Minister also reeled off the various fees that are to be charged under the regulations, but he did not explain how the UK Border Agency calculates the individual fees. He explained that some fees are above cost recovery and some fees are below it, but not the total arithmetic, which it would be useful to know more about in the interests of transparency. I agree with the principle that certain fees should be charged more heavily than others because of the value of the services that are provided. That is particularly the case in tier 1 and to a lesser extent in tier 2, but we would like to know the extent to which some people are being made to pay over the odds for the services that are provided for others.

The fees in table A are for tier 1 and for sponsorship licences where the sponsor is not a small sponsor for all tiers, which were already discussed on the previous occasion. The Explanatory Memorandum to the regulations says that in tier 2, for skilled migrants, the certificate of sponsorship will cost £170. That certificate has to be issued by the sponsor to a person so that he can present it with his application for entry clearance or for leave to remain in the UK. In the UKBA statement of intent on skilled workers under the points-based system, the calculation of points is given, and it is clear that an applicant who does not fall into one of the categories in the list of shortage occupations defined by the Migration Advisory Committee will stand very little chance of getting in. A person belonging to one of those categories gets 50 points towards the required 70, while a job that satisfies only the resident labour market test of being advertised for two weeks without attracting an applicant gets only 35.

I am sorry not to have given the Minister prior notice of the point that I am now going to make. I tried to phone the Whips’ Office but no-one was there by the time I got around to it. My point concerns ministers of religion, who are included in tier 2. On 10 March, I asked a Question about the fees to be charged to unpaid Buddhist monks who enter the UK on short assignments, and asked what consultations the Government had undertaken with the Sangha on these matters. The noble Lord, Lord Malloch-Brown, the Minister who replied on that occasion, said that the entry clearance fee would be £200 under tier 2, but I do not see how a monk who is unpaid could possibly be dealt with under a scheme that is clearly designed only for employees. The Minister said that a monk could also apply under tier 5 as a temporary religious worker, but he did not respond to my question about the Sangha.

I wrote to Mr Liam Byrne, the Minister for Immigration, on 3 April. I got a reply from the deputy chief executive of the UKBA a month later saying it had consulted widely, including representatives of the Buddhist community, without mentioning with whom it had consulted. In a subsequent telephone call, I discovered that the two persons who were approached were both laypersons. If the Government are genuinely interested in consulting the Buddhist community, they should include the Sangha, which means the order of monks, just as in their consultations with Christians they would include ordained priests in the Catholic or Anglican Churches, and not just a couple of laymen picked at random.

To ensure that there is no misunderstanding about this, a Buddhist monk is not paid anything and is not an employee. In the past, it has always been the practice for monasteries to bring in monks for short periods from their parent tradition in Sri Lanka or Thailand and I certainly hope that there will be some way of continuing that tradition under the points-based system. The chair of the Theravada Buddhist Sangha in the UK, the venerable Chao Khun Bhavanaviteht, whose letter I have passed to the officials, has written to confirm that there was no consultation with them and he fears that some temples may be forced to close.

I ask the Minister to ensure that any future consultation on matters affecting religion and immigration, whether by the Home Office, the UK Border Agency or any other public authority, includes the Sangha. If the only way for a monk from abroad to enter the United Kingdom is under TFI, the language of the UKBA statement of intent for TFI should be amended in so far as it deals with religious workers to cover the occupation of a monk, who is not employed and who is not filling a vacancy and does not have dependants.

I also suggest that the Theravada Buddhist Sangha be treated as a single sponsor for the purposes of issuing a certificate of sponsorship, notwithstanding the fact that Theravada temples and monasteries are autonomous, as it would otherwise be an expensive and burdensome task for individual monasteries or temples to obtain a separate licence. That is the kind of issue that could have been settled if the Home Office and UKBA had had proper consultations before the statement of intent had been issued.

At the foot of table A, we find that the fee for registration as a British citizen under the British Nationality (Hong Kong) Act 1997 increases from £120 or £200 to £400. I wonder how the Government can justify that enormous increase. The person concerned is already a British overseas citizen, a British national overseas, a British subject or a British protected person. He has to satisfy the consul in Hong Kong that he is ordinarily resident in Hong Kong now and was so before 4 February 1997 and that he would have been stateless if he had not had one of these inferior forms of British citizenship. He has to produce documentary evidence proving each one of those requirements.

The only problem that arises occasionally is where persons of Nepali ethnic origin have been issued with Nepali passports, notwithstanding their continued possession of BNO passports as adults and the provision in Nepalese law that a person cannot simultaneously hold Nepalese and any other citizenship. The British Consul in Hong Kong and the FCO demand the production of a certificate saying that the Nepalese document was issued in error. Their refusal to acknowledge the plain meaning of a Nepali statute in these cases has led to unnecessary correspondence and, previously, when they were equally pigheaded in the case of BNOs of Indian ethnic origin, they even went to the extent of sending a joint team of the Foreign Office and the Home Office to New Delhi to verify the interpretation of Indian law. No doubt, if the costs of trying to prevent anyone from entering the United Kingdom from Hong Kong who is entitled to British citizenship are loaded onto genuine applicants, they can double the fee. I would be grateful if the Minister could explain how the calculation was done.

My concern about the points-based scheme, now that we see how it works, is its total lack of flexibility. Mr Jonathan Sedgwick, deputy chief executive of the UKBA, writes to me as follows:

“Requiring an application to be accompanied by the full fee before it is considered valid proves a more cost effective system to administer, and ensures a more robust application process. Waiving the fee for some applicants on the basis of their ability to pay would lead to an increase in the amount of administrative work to means test an applicant and chase any outstanding payments. If we apply the current principle of not considering an application until it has been paid, or a decision has been made on the applicant's ability to pay this could lead to long delays in our decision making process. Waiving the fee for some applicants would also lead to an increase in fees for other applicants to ensure that the costs of the Border and Immigration Agency are recovered”.

Precisely the same argument could be applied to many other services provided by public agencies of one kind or another. For instance, if we did not waive the prescription charge fee for the elderly, children or pregnant women, no doubt a considerable amount of administrative work would be saved. I expect it costs the Mayor of London a lot of money to give the elderly free underground and bus travel, so charges to other users of London transport must be higher to cover the loss of revenue.

The argument is spurious. As the noble Lord will be aware if he has seen some of my correspondence with the UKBA, serious hardship is caused to people upon whom these fees are imposed when they do not have the means to pay them. The scheme ought to have been made more flexible so that those who are not in employment or receiving income of any sort, such as many wives who come here to join their husbands, should be given some sort of concession so that they are not faced with the problem of borrowing money or getting it from a charity.

I thank Members of the Committee for the considered debate and the various points raised. I will try to answer the specific points put to me.

The noble Baroness, Lady Hanham, asked whether tiers 4 and 5 would not recover costs while tiers 1 and 2 could. The answer is yes. It breaks down that the net benefit in the tier 1 area is about £561 million to the Exchequer; in tier 2 it is about £237 million; whereas in tier 5 we lose £31 million. We are not recouping all our costs on tiers 4 and 5. The noble Baroness is absolutely right that they are set annually. Of course, we will come back to the House each time we wish to change them.

The UK Border Agency is confident that it has the resources to deal with all these measures expeditiously. The fees secure the necessary financial resources to allow that expeditious delivery. In totality, we expect to generate in the region of £685 million in 2008-09, contributing significantly to the £2 billion we will spend on securing our border and managing the immigration system.

The noble Lord, Lord Avebury, asked why we had set the fees at this level. We aim to keep the fees for the PBS route similar to the level of the pre-existing comparable route. We have increased several of the fees by approximately 3 per cent. Fees for new services or applications reflect the true operational costs of the system, while taking into account the value of a successful application in terms of entitlements and benefits to the migrant. Indeed, the British public at large feel that that is appropriate, as they get benefits from doing this. I have already mentioned that tiers 1 and 2 are higher than tiers 4 and 5. The majority of people we consulted supported our proposals. Some people felt that the fees could have been higher than they are, so we came to a sensible balance on that. We justify these fees by having debated with and talked to all the people involved—I hate the word “stakeholders”. We set higher fees in those areas where we have in accordance with comprehensive research, looking at those thresholds.

I thank the noble Lord, Lord Avebury, for telling me about his questions on Buddhist monks just before the debate, but I had no time to get a response. I will confront my noble friend Lord Malloch-Brown and ask him why he did not tell me that this had been asked; it has slightly caught me out. I think that tier 2 deals with religion but I take the point about people not being paid and whether one should look at tier 5 if they are coming to undertake non-graduate teaching. I am pretty certain that we have held discussions with the Buddhist community, but I hope that I may come back to the noble Lord in writing on that specific point.

My point was that the Government consulted two laypersons in the Buddhist community; they did not consult the ordained body of monks, the Sangha. As I said, that is like saying that you have consulted with the Church of England when you have ignored the whole of the Synod and just picked a couple of laymen at random.

I take that point. I shall get back to the noble Lord in writing on who we have talked to and what the position is, as I am not clear on that. He also asked whether consideration of applications should not be delayed pending payment of the fee. It is fair that users of the system rather than the UK taxpayer should contribute to this operation; that is the general consensus. If we considered applications before a fee was paid there would be no incentive for the applicant to pay. We must be a little wary of that. The costs for Hong Kong reflect the costs for citizenship and are in line with the 3 per cent increase. I shall come back to him in writing as regards Nepalese citizenship, as it is a detailed point and I am not absolutely clear about it. I do not want to mislead the Committee.

I hope that I have answered the key points. If I have missed any, I shall be happy to answer them in writing. However, most people accept that those who benefit from the immigration system should contribute most. As I say, that was very much reflected in our discussions with all the various interested groups. It is appropriate to charge users of the new service for the applications and processes rather than rely on the public purse. I am sure that we all agree with that. I commend the regulations to the Committee.

On Question, Motion agreed to.

rose to move, That the Grand Committee do report to the House that it has considered the Climate Change and Sustainable Energy Act 2006 (Sources of Energy and Technologies) Order 2008.

The noble Baroness said: Within their wider energy policy context, the Government are firmly committed to a major expansion of renewables and low-carbon technologies as part of a diverse energy mix. Generating low-carbon and renewable energy depends on developing reliable technologies, particularly appropriately installed microgeneration. Through this statutory instrument, the Government are seeking to define more precisely those sources of energy that they have already recognised as microgeneration and create a legal framework within which developing and possible future technologies can be encouraged.

This statutory instrument is also influenced by the development and marketing of air source heat pumps since the list was originally drawn up in 2006. Accordingly, it expands the major statutory definition of “microgeneration” to include technologies which wholly or mainly rely on,

“heat from air, water or the ground”.

The Committee will be familiar with the term “microgeneration” which is widely used to define either low-carbon or renewable energy technologies that produce under 45 kilowatts for heat and 50 kilowatts for electricity. Roof-mounted photovoltaic panels and small and micro wind turbines are increasingly common but there are also micro combined heat and power units, micro hydro technologies, domestic biomass generators, fuel cells and various kinds of heat pump.

The Climate Change and Sustainable Energy Act 2006 defines “microgeneration” for the purposes of that Act and is relied upon in the Electricity Act 1989, the Gas Act 1986 and the Electricity and Gas (Carbon Emissions Reduction) Order 2008. The legal definition of “microgeneration” is set out in Section 26(1) of the Climate Change and Sustainable Energy Act 2006, and provides that,

“microgeneration” means the use for the generation of electricity or the production of heat of any plant (which, for this purpose, includes any equipment, apparatus or appliance)—

(a) which, in generating electricity or (as the case may be) producing heat, relies wholly or mainly on a source of energy or a technology mentioned in subsection (2), and

(b) the capacity of which to generate electricity or (as the case may be) to produce heat does not exceed the capacity mentioned in subsection (3)”.

The capacity mentioned in subsection (3) is 45 kilowatts for the production of heat and 50 kilowatts for the generation of electricity. The list of sources and technologies is set out in Section 26(2) of the Climate Change and Sustainable Energy Act, which can be expanded or amended.

Section 26(4) provides that Section 26(2) may be amended by adding to the list of sources of energy and technologies when the Secretary of State considers that the use of that source of energy or technology would cut emissions of greenhouse gases in Great Britain. The Secretary of State considers that the use of heat from air, water or the ground would cut emissions of greenhouse gases in Great Britain.

The Energy Act 2004 also provides a statutory definition of microgeneration for the purposes of that Act and is relied on in the Income Tax (Trading and Other Income) Act 2005, the Taxation of Chargeable Gains Act 1992, the Town and Country Planning (General Permitted Development) Order 1995 and some sections of the Climate Change and Sustainable Energy Act 2006. That definition is found at Section 82(6) and (7) and is framed in the same manner as the definition in the Climate Change and Sustainable Energy Act 2006. Section 82(7) includes the same sources or technologies as are currently in Section 26(2) of the Climate Change and Sustainable Energy Act 2006, but with an additional category:

“other sources of energy and technologies for the generation of electricity or the production of heat, the use of which would, in the opinion of the secretary of state, cut emissions of greenhouse gases in Great Britain”.

This statutory instrument will not affect the definition of microgeneration in the Energy Act 2004. In accordance with Section 82(7)(j), however, since the Secretary of State is of the opinion that the use of heat from the air, water or the ground would cut emissions of greenhouse gases in Great Britain, the definition of microgeneration in that Act must be read as including heat from the air, water or the ground.

Noble lords will be aware that the heat pump is a technology that transfers low-grade heat energy from a medium such as the ground, the air and water to another location such as a building. Air-source heat pumps work on similar principles to ground-source pumps, but they are generally regarded as less efficient since the ratio of heat energy outputs to energy inputs is less. Instead of using coils in the earth, a fan is exposed to air. The pump can be attached to the exterior wall of a building such as a ventilation unit. Interior air-source heat pump units can be fitted in kitchens and may resemble a domestic fridge freezer.

At the time of the passing of the Act, it was the intention that the definition of microgeneration included ground-source heat pumps. The Government wish to put the issue beyond doubt. “Geothermal” generally refers to heat from geothermal heat. While that can be found near the surface, for example in Iceland, in the UK it would require deep boreholes, such as the one in Southampton which is 1,800 metres deep. Ground-source heat pumps that do not use boreholes draw on solar energy stored in the ground. Although solar energy is in the current list, that generally refers to photovoltaic panels that absorb energy directly from the sun’s light, rather than to solar heat energy stored in the ground. Water-source heat pumps work on similar principles to other heat pumps but use coils submerged in water. The Government are seeking to put these issues relating to heat pumps beyond doubt.

Consultations on this proposed amendment have taken place with Defra, Ofgem and the microgeneration industry. They fully support the inclusion of the proposed amendment to the list. I commend this draft order to the Committee and I beg to move.

Moved, That the Grand Committee do report to the House that it has considered the Climate Change and Sustainable Energy Act 2006 (Sources of Energy and Technologies) Order 2008. 21st report from the Joint Committee on Statutory Instruments.—(Baroness Vadera.)

I thank the noble Baroness, Lady Vadera, for introducing this order, which amends Section 26(2) of the Climate Change and Sustainable Energy Act 2006. My noble friend Lord Dixon-Smith welcomed that Bill in its original from. He said that it achieved a wide measure of all-party support. I see no reason to stand in the way of this order. Just as we believe in the benefits of decentralising political power and devolving decision-making to local councils, neighbourhoods and individuals, so we are committed to decentralising power in the literal sense—the generation of electricity.

I am particularly pleased to speak to this order because its genesis was from the House of Lords and a Bill that I drafted. I am happy to welcome it back and to look at the orders. I just have a couple of questions for the Minister. She mentioned the 50 kilowatts for electricity and the 45 kilowatts for heat. In the Energy Bill, there is a question mark over the transition of technologies and whether that limit of 50 kilowatts is acceptable, especially if you are dealing with anaerobic digester technology which could lead to a great deal more generation of power. That limit was set only in the technical notes and was not in the Bill. Can it be changed easily or will it take an amendment to the Energy Bill? If that is the case, I had better start drafting a revision to the Bill before Thursday morning.

This order is most welcome. Heat from air, water or the ground was on the cusp of fruition when we looked at this during the passage of this legislation. However, I have since been to the Mitsubishi factory to look at its air heat pumps, the possibilities for which are incredibly helpful, especially at the top of a tower block where a unit could be stuck on the side. Of course, the limiting factor for ground source heat pumps is the need for an open area of grassland which will not be built on because it would stop any solar radiation coming through. Is there a provision in this order, or will we have to come back each time new technologies are to be added? Is there an assumption that it could include the advent of new technologies?

I am very grateful to the noble Lord for his questions. Currently, there is no provision—certainly, not by secondary legislation—to change the limits of 50 kilowatts and 45 kilowatts. However, I will undertake to ask my noble friend the Minister with responsibility for energy. Given the pressures of time, perhaps I may leave a message with the noble Lord’s office on that issue. As regards further technologies, it is assumed that for the present the list as drafted in the Bill will be adequate for purpose. Of course, one can never legislate entirely for technology. If there is a necessity to come back to it, I am sure that the department would be very willing to do so. Right now, we believe that this constitutes the totality of what is conceivable out there—but technology is not always conceivable.

I am very grateful to the noble Baroness, Lady Wilcox, for her support, for the cross-party support and for the drafting of the original Bill.

On Question, Motion agreed to.

rose to move, That the Grand Committee do report to the House that it has considered the Ministerial and other Salaries Order 2008.

The noble Lord said: The order gives effect to the government policy set out in the Written Ministerial Statement of 16 January this year, following the publication of the report of the Senior Salaries Review Body on parliamentary pay and allowances. The policy as expressed in that Statement is that ministerial salaries should increase at the same rate as for Members of Parliament. The order will therefore increase the annual amount of the salaries of ministerial and other office holders under the Ministerial and other Salaries Act 1975.

The increases are 0.84 per cent of the amount of salary on 31 March 2007 from 1 April 2007; and a further 1.06 per cent, again of the amount of salary on 31 March 2007, from 1 November 2007. As with MPs’ pay, increases have been staged to deliver an increase for the year of 1.9 per cent, which included the 0.66 per cent automatic increase under the uprating formula in the 1975 Act.

We have noted the conclusions of the Joint Committee on Statutory Instruments on retrospectivity. As highlighted in that Committee’s report, the Government accept that the order is retrospective. Nevertheless, the Government believe that the general presumption that powers delegated in enactments are not capable of being exercised retrospectively is outweighed by other factors in this case. In particular, some backdating of salaries is now common practice, especially in the public sector, due to the timings of negotiated pay settlements. The practice of backdating ministerial salaries to a limited extent has also been reflected in previous orders relating to ministerial salaries, such as the Ministerial and other Salaries Order 2001 and the Attorney-General’s Salary Order 2000. Both orders were approved by the House of Lords.

As the Joint Committee points out at paragraph 1.12 of its report, the order applies only to those Ministers and other office-holders who are still in post when the order comes into force. The committee recognises that, while the order could have been framed prospectively, so as to confer equivalent increases on these Ministers and other office-holders—characterised, for example, as lump-sum payments—such provision would have been more complicated and less transparent. Accordingly, I commend the order to the Committee. I beg to move.

Moved, That the Grand Committee do report to the House that it has considered the Ministerial and other Salaries Order 2008. 21st report from the Joint Committee on Statutory Instruments.—(Lord Davies of Oldham.)

There are no objections to the order from this side of the Committee. However, on a purely personal note, the size of the increase in no way reflects the adeptness and adroitness with which the Minister answers Questions and debates. Looking forward, I have no doubt that the Minister’s friends will be extremely pleased to see that these increases apply to the Opposition as well as to the Government.

I cannot quite fathom this; perhaps the Minister can help me a little. The Explanatory Note talks about these somewhat modest percentages being over and above the increases payable by virtue of an uprating formula. Then, today, there is an announcement that Cabinet Ministers will give up their pay rise for this financial year, and above-inflation rises for MPs and so on have been rejected. I do not understand how these things fit together; something is “over and above”, followed by announcement about holding it down. They do not seem to match.

I am always a little unhappy when I see this sort of restraint subsequently followed by, “Ah, well, we need to catch up”. That is when you really get bother, because catching up means bigger increases later, which is often unwise and unpopular. The numbers are very small, but I would welcome further explanation.

I am grateful to the noble Lord, Lord Shutt, for asking me questions on which I am able to earn my pay. I was nearly covered with embarrassment by the noble Lord who spoke from the Conservative Front Bench. I suppose that I should have declared an interest; like other Ministers, I will benefit significantly from this increase, which has been identified as modest. The answers to the questions asked by the noble Lord, Lord Shutt, are quite straightforward.

This order relates to 2007-08. It is governed, like any order that provides for increases, by the Ministerial and other Salaries Act 1975, which contains a formula that places MPs—ministerial salaries are linked to MPs—at the midpoint of a Civil Service grade. That produced an automatic uprating for 2007-08 of 0.66 of a per cent, or two-thirds of one per cent. The other increases increase the uprating from two-third of one per cent to 1.99 per cent, which is the pay rise for that year. As the noble Lord said, we are talking about modest amounts.

The pay freeze applies to this year, 2008-09. The Cabinet agreed this morning that Ministers will not take a pay increase this year, irrespective of the decisions of Members of Parliament when they consider their position in a month or so’s time. The Government have enjoined Members of Parliament to have regard to the general expectation of settlements in the public sector of between 2 per cent and 2.5 per cent. That is what we confidently predict that Members of Parliament will pursue with enormous enthusiasm and great glee when the opportunity arises. Ministers will not be the beneficiaries of any increase that Members of Parliament vote themselves on such an occasion because of this self-denying ordinance for this year to illustrate the determination of the Government to control public sector pay in the battle against inflation that we all recognise is significant after today’s announcement by the Bank of England on the increase in the rate of inflation.

We are talking about two different years. The Joint Committee was critical of the fact that, by definition, if I am talking on this order about 2007-08, there is a retrospective quality that we do not like in legalisation and eschew on every conceivable occasion that we can. The noble Lord will appreciate that the problem with regard to salaries is that a retrospective element is often part of the discussion framework where public pay is settled and in the private sector as well. In this case, it is clear that Members of Parliament are lagging behind in the decisions to be taken, and this order is considerably behind, applying, as it does, to last year. That is the retrospective element. We will seek to avoid it, but the Committee will appreciate that there is something unique about pay negotiations and, I hate to say it, Parliament has an interesting concept of pay negotiations.

As the Committee will know, Members of Parliament have striven might and main. I can remember the Ministerial and other Salaries Act 1975 and the basis on which that has obtained for Members of Parliament ever since. I recall the desperate tribulation that occasioned the Act simply because there was no linkage to anyone prior to that. Members of Parliament decided the rate. That is a pretty hazardous thing for Members of Parliament to attempt, but it has one great virtue, critical though members of the public doubtless are of Members of Parliament deciding their own pay.

I listened to the Lloyd George serialisation of Ffion Hague’s book on the radio this morning. Lloyd George entered Parliament in 1890—the noble Lord, Lord Shutt, will probably remember him. He gave up his earning power and had no salary at all. It is inconceivable that we would ever be able to run Parliament in a democratic age on the basis of the 19th-century concept that gentlemen of leisure served in Parliament and everyone else received their wise decisions.

That is the background to all this. I have never known any debate, even this very small one, to contain anything but embarrassment for those at the Dispatch Box who are trying to reply to it. I apologise for being in that position, but I hope that I have answered the questions sufficiently satisfactorily to commend the order to the Committee.

I am grateful for the Minister’s explanation. I do not think that Lloyd George knew my father or my grandfather, but the history is useful. The main thing was the disposition between the two financial years. The Minister’s explanation was good, and I thank him for it.

What effect, if any, will the order have on pension arrangements?

The pension arrangements are attached to the salary, so they follow the salary for that year. The problem that the noble Baroness might have identified is that the retrospective element applies to Ministers in office but not to those who have left office. They will be paid according to the salary that they received when they left office. Retrospective pay does not affect pensions one way or the other in the obvious sense that what are calculated are the years against the credited years of service. MPs’ pensions fit within this pattern and are often criticised outside as being more generous than some pension schemes outside, but very few Members of Parliament can forge a career that remotely provides the pensionable years that people in other walks of life can enjoy.

On Question, Motion agreed to.

That completes the business before the Grand Committee. The Committee stands adjourned.

The Committee adjourned at 5.33 pm.