Vol. 741 Monday No. 77 3 December 2012

PARLIAMENTARY DEBATES (HANSARD) HOUSE OF LORDS OFFICIAL REPORT

ORDER OF BUSINESS

Questions Iran European Council: December Meeting British Transport Police Immigration: Home Office Meetings Medical Innovation Bill [HL] Mental Health (Discrimination) (No. 2) Bill Prisons (Property) Bill Marine Navigation (No. 2) Bill Presumption of Death Bill Mobile Homes Bill First Readings Six Statutory Instruments Motions to Approve Canterbury City Council Bill Leeds City Council Bill Nottingham City Council Bill Reading Borough Council Bill Third Readings Draft Cumbria (Electoral Changes) Order 2012 Motion of Regret Civil Legal Aid (Merits Criteria) Regulations 2012 Legal Aid, Sentencing and Punishment of Offenders Act 2012 (Amendment of Schedule 1) Order 2012 Motions to Approve Palestine: United Nations General Assembly Resolution Question for Short Debate Legal Profession: Regulation Question for Short Debate

Grand Committee Enterprise and Regulatory Reform Bill Committee (1st Day)

Written Statements Written Answers For column numbers see back page

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© Parliamentary Copyright House of Lords 2012, this publication may be reproduced under the terms of the Open Parliament licence, which is published at www.parliament.uk/site-information/copyright/. 431 Iran[3 DECEMBER 2012] Iran 432

table. We fundamentally believe that the best way to House of Lords deal with this matter is through pressure and engagement, and that is the process that we have adopted. Monday, 3 December 2012. 2.30 pm Baroness Deech: My Lords, does the noble Baroness agree that there is something that is perhaps slightly Prayers—read by the Lord Bishop of Guildford. upside down about this Question and that what we should be worrying about is the legality of the preparation of nuclear weapons by Iran? No country should have Iran to face the choice between obliteration and self-defence. Question Baroness Warsi: The noble Baroness raises an 2.36 pm important point. We have concerns and it is because of Asked By Lord Wood of Anfield those concerns that there have been successive United Nations resolutions on this matter over a number of To ask Her Majesty’s Government what legal years. It is why the international community wants advice they have received on whether a pre-emptive Iran to be much more transparent and why we continue military strike on Iran would violate international to engage and push for that transparency. We would law. all like to come to a negotiated solution.

The Senior Minister of State, Department for Lord Tomlinson: My Lords, is the Minister aware Communities and Local Government & Foreign and that, in her reply to my noble friend Lord Wood, she Commonwealth Office (Baroness Warsi): My Lords, said that a pre-emptive was not justified “at this the Government do not believe that military action time”? Can she tell us when she envisages that such a against Iran is the right course of action at this time, strike might be justified? although no option is off the table. We believe that the twin-track approach of engagement with Iran and Baroness Warsi: As I said at the outset, all options pressure through sanctions is the best way to resolve are on the table. It would be inappropriate for me to the nuclear issue. We do not comment on legal advice speculate on what scenarios may come forward in the and will not speculate about the legality of various future, and of course it would depend very much on scenarios. the scenario we faced at the time. However, I can be clear that the Government are certainly mindful of Lord Wood of Anfield: I thank the Minister for that their legal obligations within international law. Answer. I have asked this Question because of a report in the Guardian which suggests that the Attorney Lord Hannay of Chiswick: Does the Minister not General’s Office has argued internally in government agree that there would be no doubt whatever about the that providing assistance to forces that could be involved legal situation if Iran developed nuclear weapons? It in a pre-emptive strike would be a clear breach of would be illegal under the nuclear non-proliferation international law. Will the Minister clarify the treaty, which was signed and ratified. However, rather Government’s understanding of the principles that than having the argument this afternoon about the should inform any decision about assisting forces in a legalities, is not the top priority, with the new American pre-emptive strike on another country? Administration, to revive the second of the two tracks— not the sanctions track, which must be kept up, but the Baroness Warsi: I can inform your Lordships’ House track to talk to the Iranian regime? Would it not be that we are not advocating military action against worthwhile for the Government to take the view with Iran. We continue to believe that the twin-track process the United States Administration that they should of pressure and engagement offers the best hope of have some kind of bilateral contact with the Iranians resolving the Iranian nuclear issue. In relation to legal before matters get to the point where they cannot be advice, the noble Lord will be aware that it is not retrieved? practice to inform this House or notify parliamentarians of specific legal advice, if any, that we may be obtaining. Baroness Warsi: Discussions about these matters are ongoing in a number of different ways. The noble Lord Ashdown of Norton-sub-Hamdon: My Lords, Lord will be aware that the E3+3—Russia, China, the leaving aside the legal considerations, given that a US and ourselves, France and Germany—have had pre-emptive all-out strike on Iran would almost certainly four meetings since the beginning of this year; I think be militarily unsuccessful, unite Iranian opinion behind since February.Indeed, the noble Baroness, Lady Ashton, the leadership and scupper any diplomatic talks, would is in the process of taking forward a further meeting, not such a move be militarily inept, politically unsuccessful possibly before Christmas. We are absolutely committed and diplomatically disastrous? to negotiating our way out of this matter.

Baroness Warsi: My Lords, my noble friend comes Lord Anderson of Swansea: Does the noble Baroness to these matters with great experience and expertise, agree that, while the centuries-old legal principles in and it is important that voices such as his are heard. respect of pre-emptive strikes remain valid, they have However, I can assure him, as I can assure the House, been transformed in practice by the speed of warning that there is no plan whatever to take military action and response in the nuclear age? Although we, along against Iran, although of course all options are on the with much of the security establishment in Israel, may 433 Iran[LORDS] European Council: December Meeting 434

[LORD ANDERSON OF SWANSEA] European Council: December Meeting be highly critical of a possible strike, should we not at Question least acknowledge the dilemma of the Israeli Government, who are faced with President Ahmadinejad, who has 2.46 pm said he intends to destroy Israel and may very well Asked By Lord Liddle soon have the capability to do just that? To ask Her Majesty’s Government what are their Baroness Warsi: Iran’s development of military nuclear priorities for the December meeting of the European power is a matter of concern for many more countries Council. than just Israel. It is why we have United Nations Security Council resolutions in relation to this matter The Senior Minister of State, Department for and it is why we have tried to negotiate with Iran over Communities and Local Government & Foreign and a number of years. It is important to continue those Commonwealth Office (Baroness Warsi): My Lords, negotiations and discussions. These are concerns that the December European Council will cover economic we in this country have too. policy, including economic and monetary union and banking union, as well as defence enlargement and foreign policy. The UK will seek to ensure the integrity Baroness Williams of Crosby: Does the Minister of the single market in relation to banking union and agree that only a few weeks ago Mr Soltanieh, the economic and monetary union. We will press for further Iranian ambassador to the IAEA, specifically indicated progress on growth and work to ensure that the defence that Iran was now open to the possibility of bilateral strategy reflects UK priorities. Enlargement is dependent discussions with the United States, and that President on the December General Affairs Council. Obama has reflected this in his recent views expressed within the United States? Finally, according to recent Lord Liddle: I thank the noble Baroness for her polling by the Knowledge Forum, a clear majority in Answer. Why have the British Government adopted a the United States is now clearly in favour of discussions completely different approach to a banking union and diplomatic relations between the United States from that of a fellow euro-out, Sweden, which is run, and Iran, beginning as soon as possible. we are told, by David Cameron’s favourite conservative European Prime Minister? Sweden has engaged with Baroness Warsi: Of course, we raise this matter in the negotiations on a banking union, whereas Britain discussions with the United States but it has to be for appears to be trying to reintroduce, for the first time the United States to take these discussions forward since the introduction of the single market, some kind with Iran if it feels that that is the right way forward. of veto on financial services legislation. Does the As we do with a number of countries, we encourage it noble Baroness think that that strategy is likely to to take all opportunities to have these discussions. The meet with more success than it did in the negotiations findings of the poll that my noble friend refers to very on the fiscal treaty last December, or are the Government much reflect the opinion of all of us in this House, and once again shouting from the sidelines to try to appease indeed the public, that the better way to resolve this the unappeasable? matter is not through military action. Baroness Warsi: The Government’s strategy on this Lord Wigley: My Lords, are there any circumstances matter is one that reflects the best interests of Britain. whatever where a first strike with nuclear weapons I am sure that noble Lords on the other side of the could be morally justifiable? House agree that it is important that when the Prime Minister goes to Europe, he acts in the best interests of Baroness Warsi: I am not enough of a military this country and negotiates on the basis of that strategy. expert to start making these decisions. I do not think The UK does not use the euro, and we have been clear that this is a matter for moral judgment; it will be that the UK will not be part of any banking union or based on any scenario that presents itself at the time, fall under the jurisdiction of the ECB. However, that and it would be wrong for me or the Government to does not mean that we do not continue to push for speculate at this stage. further liberalisation of the single market. Lord Roper: Does my noble friend the Minister Baroness Afshar: My Lords, should there not be the agree that one of the priorities of our right honourable same kind of sanctions against all countries who have friend the Prime Minister should be to ensure that any nuclear weapons? Is it not the case that these sanctions discussions or negotiations about institutional changes hurt the poor in Iran while the elite are totally unaffected? should take place at the level of the 27, even if they concern the eurozone, in order to maintain the integrity Baroness Warsi: The noble Baroness raises a very of the single market? important point. When we look at sanctions, we are extremely aware of the need to have appropriate Baroness Warsi: My noble friend makes an extremely exemptions in place that cover humanitarian assistance, important point, and the Government are with him on including medicines. It is important to remember that this matter. We are not part of the euro, but it is what we are concerned about is the development of important that structures are not put in place that nuclear weapons. We have concerns about the regime allow the euro countries to effectively exercise a block but not about the Iranian people. They are not the vote and therefore make decisions that could impact people we want to suffer as a result of these sanctions. on us within the single market. 435 European Council: December Meeting[3 DECEMBER 2012] British Transport Police 436

Lord Soley: Although the economic issues just discussed Earl Attlee: My Lords, the Government recognise are probably the most important, can the Government the need to amend the Firearms Act 1968 to address also look at the way in which these international the anomalous position of the BTP in relation to companies use the different tax regimes within the firearms licensing. We are continuing to seek a suitable European Union to avoid their responsibilities in legislative vehicle to make the necessary amendment individual countries, and also perhaps at the semi- to the Firearms Act 1968. We hope that it will be monopolistic practices of such companies? It is fairly possible to do so during the third Session Bill programme. easy—indeed, one might say pleasant—to boycott Starbucks, but Google and Amazon are a lot more Lord Faulkner of Worcester: My Lords, there is difficult and are semi-monopolistic. It is something widespread admiration in your Lordships’ House and the EU should take a look at. elsewhere for the work that the British Transport Police do, particularly in tackling metal theft, as we Baroness Warsi: The question goes beyond the heard in the debate on Friday. In May last year, the immediate Question but I am sure the noble Lord will Secretary of State for Transport announced that the agree that the Government have been deeply committed British Transport Police could arm its officers. However, to making sure that those who should pay tax do pay for the reason the Minister mentioned—because the tax. We have invested more in HMRC to make sure definition of “police” in the Police Act 1996 does not that those who should pay tax in this country do pay include the BTP—its officers are not regarded as tax in this country. Crown servants under the Firearms Act 1968. Is he aware that, as a result, BTP officers do not enjoy the legal protection afforded to other police officers and Lord Stoddart of Swindon: Should the Government that they have to apply for firearms certificates individually not tell the European Union that they are in favour of as if they were members of the public? The Minister a much looser arrangement between the countries of referred to legislative opportunities— the European Union, and less centralisation? While the Prime Minister is over there, perhaps he could also have a word with the Prime Minister of Poland, who Noble Lords: Oh! seems to imagine that the average cost of the EU budget paid by British people is only £35 a year, Lord Faulkner of Worcester: I will finish very quickly. whereas it is actually £156. The Minister referred to legislative opportunities. Will he look at a late amendment to the Crime and Courts Bill or the introduction of a statutory instrument Baroness Warsi: I will certainly feed that fact back under the Railways and Transport Safety Act? in. I agree with the noble Lord about less centralisation. Of course we believe in power being nearest to those who are affected by those decisions. However, I think Earl Attlee: My Lords, the noble Lord is absolutely the noble Lord would agree with me that in relation to right in his analysis of the problem. Unfortunately, we the European Union, we want a trade area but it is cannot make any suitable amendment to current legislation also important to be part of the group that makes the going through your Lordships’ House. I am advised rules in relation to that trade area. that other routes, such as a regulatory reform order, are not suitable, so we will have to wait for a suitable slot in the primary legislation. However, the noble Lord Foulkes of Cumnock: My Lords, will the Minister Lord’s point about legal uncertainties is extremely take the opportunity to ask the Prime Minister to raise important. at the European Council the way in which three private companies—the credit rating agencies based in the Lord Berkeley: My Lords, how many BTP officers United States—have such an undue and malign influence carry firearms? As my noble friend said, it seems odd over the economy not just of the United Kingdom but that they do not have the same legal position as other the whole of Europe? I hope she will take some advice police officers around the country who are able to from her Treasury colleague on this. It is about time carry firearms. What is the legal position of BTP that we took collective action so that we in Europe are officers who carry firearms? Are they at risk on a not dominated by these American private companies. personal level in a way that the other police officers are not? Baroness Warsi: The EU is engaged in ongoing discussions on work in relation to better regulation of Earl Attlee: My Lords, in answer to the noble those very institutions. Lord’s first question, we are talking about only 53 police officers, so the bureaucracy load is manageable, although extremely inconvenient. The weakness in the legislation British Transport Police on the protection of officers who are involved in an Question incident, alluded to by the noble Lord, Lord Faulkner of Worcester, is an extremely important point. 2.51 pm Asked By Lord Faulkner of Worcester Lord West of Spithead: My Lords, does the Minister agree that although metal theft is a heinous crime and To ask Her Majesty’s Government whether they has caused damage to war memorials and danger to will recognise the British Transport Police for the hospitals and railway lines, shooting those involved purposes of the Firearms Act 1968. might be a little over the top? 437 British Transport Police[LORDS] Immigration: Home Office Meetings 438

Earl Attlee: My Lords, in the case of a war memorial, student numbers quite separate from other immigration I am sure that the noble Lord and I would have some statistics? Can my noble friend assure us that a firm doubt over whether that would be over the top. Police notice has gone out to all the many agencies scattered officers have a range of options. It is important to note around the world looking to bring students to the UK, that British Transport Police armed officers have not and through our embassies and consulates, that good, only a firearm but a Taser and other weapons, such as genuine students will always be welcome in United pepper sprays, so they do not need to resort to the Kingdom but that bogus ones will be sent home? firearm immediately. Lord Taylor of Holbeach: That is exactly the message Immigration: Home Office Meetings that the Government are sending. In fact, as has been Question shown in the most recent reports, university numbers are holding up very well. UCAS acceptances of 2.55 pm international students are up by 4%, showing that our Asked By Baroness Smith of Basildon policies are having the right effect. There was a 1% increase in visa applications for students attending universities. To ask Her Majesty’s Government when Home The university sector now accounts for three-quarters Office Ministers last met the Chief Inspector of of sponsored visa applications, up from about half in Borders and Immigration; and how often such meetings the equivalent period last year. are held. Lord Dholakia: My Lords, at my noble friend’s next The Parliamentary Under-Secretary of State, Home meeting with the Chief Inspector of Borders and Office (Lord Taylor of Holbeach): My Lords, Home Immigration, will he insist on records being kept of Office Ministers have regular meetings with officials cases of domestic violence where there is evidence that and others as part of the process of policy development judicial decisions on permanent settlement have been and delivery. As was the case under previous overridden by the Executive? Administrations, it is not the Government’s practice to provide details of all such meetings. Lord Taylor of Holbeach: I have recently written to Baroness Smith of Basildon: My Lords, I am none the noble Lord because he asked a similar question the wiser after that Answer than I was before I asked last week on this issue. Obviously, it is important that the Question. There was a serious reason for asking, we have a regime that is capable of ensuring that because it is clear that there are serious problems in people who come to this country are fit and proper the UK Border Agency. Even the recent fall in net persons to be here. migration is due to British citizens leaving the country and the fall in student numbers. Time and again, the Lord Hannay of Chiswick: My Lords, does the chief inspector has found problems but, despite Minister agree that the considerable number of students commitments to his recommendations to make the who were threatened with expulsion following the system more efficient and fairer, it just does not happen. action at London Metropolitan University were not We now even have the Mayor of London accusing the bogus at all? That presumably was why the Government Government of turning a blind eye to long-term illegal forked out £2 million to find them new places. We immigrants. should not shelter behind figures that do not really Is part of the problem cuts that have led to 5,000 prove what the Minister tries to make them prove. This fewer UK Border Agency staff? Can the Minister give sector is enormously competitive. We should be increasing a commitment to your Lordships’ House today that it by much more than the figures he gave and would be the Government will act, not just promise to act, on so without the chilling effect of the Government’s the chief inspector’s reports? Minister for immigration going out and beating his chest and saying how jolly well he had done to keep all Lord Taylor of Holbeach: The chief inspector has those students out. published two reports recently, and I thank John Vine, the chief inspector, for them. He will be appearing Lord Taylor of Holbeach: The noble Lord is perfectly before the Home Affairs Select Committee tomorrow. right. The university sector is very important, as is the I totally accept the view that the UK Border Agency contribution made by international students to this has not performed as strongly as this House would country and the economy. I reiterate to noble Lords expect, but it is improving, and that is the right direction that there is no limit to the number of students who of travel. The question we have to ask ourselves is: for can come to the UK. Put simply, if they can speak how long does this go back? I fear that it goes back to basic English and have sufficient funds and the necessary 2006, when there was a huge backlog of cases, and qualifications, they can come. that has taken an awful lot of clearing up. The current situation is greatly improved. Baroness Brinton: Does the Minister agree that it is Lord Naseby: Does not the number of bogus students extremely unfair to class the international students at mentioned in one of the reports indicate how right it London Metropolitan University as bogus simply because was that Her Majesty’s Government, first, allowed the of the mistakes made by the university? The vast London Metropolitan University students who were majority of errors were found to be in the registering bogus to be dealt with; and, secondly, decided to keep of students and in the systems to monitor them. It is 439 Immigration: Home Office Meetings[3 DECEMBER 2012] Medical Innovation Bill [HL] 440 appalling that we should even contemplate saying that Lord Taylor of Holbeach: There have been a couple the majority of international students there are bogus. of incidences where staff of the UKBA have indeed Does the Minister agree? apologised to the Home Affairs Select Committee for mistakes that they have made. That was done orally Lord Taylor of Holbeach: I do not think that I used last week and, indeed, before then in writing by the that word. In fact, I agree with the noble Lord, Lord head of the UKBA. Hannay. The Government made funds available to Baroness Tonge: My Lords, is the Minister aware ensure that students could continue their studies because that in this country the age of marriage is 16 if that we understand that the problem lay with the university, marriage takes place with parental consent? Is he also not with the students there. aware that this is used for some girls to be taken out of the country against their will to be married so that Lord Morgan: Is the Minister aware of the appalling they can then bring their husbands back here? What is damage done to graduate studies at our universities, his department doing to stop that practice, and when both academically and financially? The figures that we will we bring our age of marriage up to 18 in line with saw last week indicate very clearly that tens of thousands other countries? of graduate students have not come to this country, not because they are bogus but because of other Lord Taylor of Holbeach: This House has frequently qualifications—including financial—imposed by the debated forced marriages. The Government are bringing Border Agency, whose policies have proven to be crass forward legislation to criminalise them. and philistine. The Countess of Mar: My Lords, for 21 years I was a lay member of the Immigration Tribunal until I Lord Taylor of Holbeach: I do not agree with that resigned in 2007 because I thought my job was not description. The arrangements for graduate students worth while. I have heard noble Lords at that Dispatch are that they can come, but they have to show that they Box reiterating over and again what the Minister has have an appointment that is capable of earning £20,000 iterated today. What guarantees are there this time a year. That is a reasonable expectation that we should that the Government’s measures will work? have for people coming in as graduate students. Lord Taylor of Holbeach: The Government’s resolution Lord Avebury: My Lords, who is accountable for to deal with this problem is the one thing that I can the false statement made by the UKBA last spring assure the noble Countess of. that the legacy cases had all been resolved when it now Lord Winston: My Lords, is the Minister aware that emerges that there were still 147,000 in the queue? at a recent Select Committee when the UK Border Agency was giving evidence, the members of that Lord Taylor of Holbeach: As we know, there is a agency were completely incapable of giving accurate huge number of legacy cases. This was referred to in statistics on students, particularly regarding the courses the Question we tackled last week. It is a matter of and universities that they were attending? Do we not concern that these legacy cases were not cleared up think that, rather than a ball-park figure, it would be promptly; they are being cleared up now and are being appropriate to know exactly the quality of the students tackled so that those students who have been discovered and which universities they are going to? to be here improperly are being sought and obliged to leave. Lord Taylor of Holbeach: Indeed. I am sure that that information is available. The question is how it is collated. Lord Brooke of Alverthorpe: Do the legacy cases not cover other people as well as students? Is the Baroness Sherlock: My Lords, the Minister told the fundamental problem not the one which the Minister House that the Government’s resolution is all that spoke about last week: the inadequacy of our ability they need to solve the problem. Would a little humility to search and locate these individuals to try to get not be in order? Maybe if the Minister spent some them out of the country? Is it not true that the time looking at why previous solutions have failed, department is currently cutting the number of staff it there might be more chance that the Government will engages by around 5,000, yet claims that it is going to succeed. Does he agree with me? be able to perform better? Will the Minister please tell the House how it will do that? Lord Taylor of Holbeach: I am always prepared to learn. Indeed, I have asked for a meeting with John Vine as a result of the report that I received the other Lord Taylor of Holbeach: Identification of people day. who have overstayed is a clear technical problem which requires the application of all the resources of the Medical Innovation Bill [HL] UKBA. The UKBA is confident that it can achieve First Reading this and has given assurances that it will do so. 3.07 pm Lord Forsyth of Drumlean: My Lords, could the A Bill to make provision for innovation in medical Minister possibly answer the question of my noble treatment. friend Lord Avebury when he asked who is being held accountable for the fact that we were mislead about The Bill was introduced by Lord Saatchi, read a first these legacy cases? time and ordered to be printed. 441 Mental Health (No. 2) Bill[LORDS] Canterbury City Council Bill 442

Mental Health (Discrimination) (No. 2) Electoral Registration Data Schemes Bill (No. 2) Order 2012 First Reading Charitable Incorporated Organisations 3.07 pm (Insolvency and Dissolution) Regulations 2012 The Bill was brought from the Commons, read a first time and ordered to be printed. Charitable Incorporated Organisations (Consequential Amendments) Order 2012 Prisons (Property) Bill Motions to Approve First Reading 3.09 pm 3.07 pm Moved By Lord Wallace of Saltaire That the draft Orders and Regulations laid before The Bill was brought from the Commons, read a first the House on 30 October be approved. time and ordered to be printed. Relevant documents: 10th Report from the Joint Committee on Statutory Instruments, considered in Marine Navigation (No. 2) Bill Grand Committee on 27 November First Reading Motions agreed.

3.08 pm Green Deal Framework (Disclosure, Acknowledgment, Redress etc.) The Bill was brought from the Commons, read a first time and ordered to be printed. (Amendment) Regulations 2012 Electricity and Gas (Energy Companies Presumption of Death Bill Obligation) Order 2012 First Reading Motions to Approve

3.08 pm 3.09 pm Moved By Baroness Verma The Bill was brought from the Commons, read a first time and ordered to be printed. That the draft Order and Regulations laid before the House on 30 October be approved. Relevant documents:10th Report from the Joint Mobile Homes Bill Committee on Statutory Instruments, considered in First Reading Grand Committee on 27 November Motions agreed. 3.08 pm Canterbury City Council Bill The Bill was brought from the Commons, read a first time and ordered to be printed. Third Reading 3.10 pm Disabled People’s Right to Control (Pilot Moved By Lord Bilston Scheme) (England) (Amendment) That the Bill be now read a third time. Regulations 2012 Motion to Approve Lord Bilston: My Lords, I should first explain the three minor amendments to this Bill, which I shall move formally at a later point. All I can say about 3.09 pm these amendments is that they are in the nature of Moved By Baroness Stowell of Beeston tidying up. One of them alters an incorrect reference to the “Kent Valley Police Force”, which appears to be That the draft Regulations laid before the House something of a hybrid of Kent and Thames Valley, no on 24 October be approved. doubt caused by the fact that Reading Borough Council Relevant documents: 9th Report from the Joint is promoting one of the other Bills that we are discussing Committee on Statutory Instruments, considered in this afternoon. Grand Committee on 26 November I begin by paying tribute to those noble Lords who considered the Bill in Select Committee just over a Motion agreed. year ago. The noble Baroness, Lady Knight of Collingtree, 443 Canterbury City Council Bill[3 DECEMBER 2012] Canterbury City Council Bill 444 chaired the committee most ably, and was supported sometimes paid hundreds of pounds annually for their by the noble Lord, Lord Blair of Boughton, the noble licences, compared to the £12.50 paid by pedlars. They Viscount, Lord Eccles, my noble friend Lord Glasman also demonstrated that, in many cases, traders who and the noble Lord, Lord Strasburger. All the members were trading under the authority of a pedlar’s certificate of the committee took a very strong interest in the were often doing so from stalls that gave the impression Bills, and that is evidenced not only by their attendance of being permanent. I have some sympathy for those here today but by their detailed special report which I, street traders and, in that respect, I am glad to say and I am sure other noble Lords, have read with that, as I mentioned earlier, the committee amended interest. the Bill in such a way that the use of larger stalls will Over three days the committee heard evidence from be subject to control. all four councils, and from pedlars who had presented The next point that the committee dealt with was petitions against the Bills. I am told that the committee enforcement. All four Bills would have allowed the was not only fair and even-handed with all the parties, councils to seize items from unlawful street traders. as we would expect, but took a truly active and interested The committee thought that this was a step too far role in the proceedings, questioning the witnesses and removed the seizure provisions. The councils were forensically in some detail. The committee decided to naturally disappointed, but were pleased that the amend the Bills substantially, and highlighted a number committee was content leave in the fixed-penalty of points in its special report, which I will try to provisions. summarise now. First, there was a concern that the Bills were Finally, the committee was concerned to ensure disproportionate, in the way that they restricted people’s that the new restrictions on pedlars did not operate ability to exercise their rights legally to trade as pedlars. throughout the whole area of each council. It is fair to The committee was particularly concerned to protect say that a happy medium was reached in that regard, the rights of those pedlars—genuine pedlars, as they with the committee deciding that the new restrictions have become known—who play by the rules, who on the size of pedlars’ stalls should apply only in those move around when trading and who do not use oversized parts of the authorities’ areas which are designated by stores to display their wares. These mirrored concerns councils on the basis that the controls will be necessary raised by the noble Lord, Lord Lucas, at Second to ensure road safety or prevent obstruction of the Reading, and the committee addressed them by amending highway. the Bills in the way that it did. The Bills now contain Having mentioned the committee and its decisions, I provisions that restrict the size of stall that can be used turn briefly to the Government’s position. The Department by pedlars, but they are otherwise able to continue to for Business, Innovation and Skills has, while the Bills trade as they did before. have been progressing through Parliament, been Secondly, the committee was concerned about the developing its own policy on street trading, particularly use of piecemeal, incremental modification of national in the light of the European services directive which, law by private legislation. As I mentioned at Second since the introduction of the Bills, has been recognised Reading, pre-empting points that were made by the as applying to the retail sale of goods and, therefore, noble Lord, Lord Lucas, the Bill’s promoters have real to street trading. The department submitted the report sympathy with his concern. They would have preferred to the Select Committee and appeared before it, expressing not to promote these Bills to deal with these local some concerns about the compatibility of the Bills, as issues, but the problems that they were encountering they then were, with the directive. During proceedings, meant that they felt that they had to, particularly as the councils drafted amendments which satisfied the there was, at the time that the Bills were deposited, no department in that regard. As I have mentioned, the real appetite on the part of the Government to address committee went somewhat further with its amendments, the issues nationally. Things have changed on that noting importantly that it was satisfied that the Bills score, and in a somewhat timely manner. Only last before us now are compatible with the directive. Friday, the Department for Business, Innovation and Skills published a consultation paper on regulations to The Government have also recognised the need to amend street trading legislation on a national basis. I deal on a national basis with the issue of compatibility. will return to that topic a little later. After a long wait, they published a consultation and a draft regulation just 10 days ago. It would not be The committee also questioned the motivation of appropriate to dwell on that consultation for too long the councils in promoting the Bills. It accepted the today, but there is some similarity between what the councils’ primary concern, about the need to ensure Government are proposing on a national basis as safe passage on the highway and to prevent obstruction, regards the equipment that a pedlar may trade with but was unconvinced by the council’s evidence on the and what the Bills now provide. The councils will need need to protect the urban environment. Again, the to examine the consultation document carefully and committee’s views chimed with those of the noble will no doubt provide detailed responses in February Lord, Lord Lucas, at Second Reading, when he when the consultation closes. What seems clear, and expressed his views about some of our streets lacking will no doubt come as something of a relief to your character. Lordships, is that if the Government make their proposed The committee was also concerned about what it regulations there are very likely to be no more local saw as an attempt to protect licensed street traders pedlars’ Bills. We should all give three cheers for that; from unfair competition from pedlars. The councils we have been waiting for this consultation for a long presented evidence to show that licensed street traders time. 445 Canterbury City Council Bill[LORDS] Canterbury City Council Bill 446

[LORD BILSTON] in support of their contention. However, the pedlars I conclude by saying that, after their long gestation gave us acceptable and valid reasons to say that there in Parliament, these four Bills are now in a form that I was good evidence of public approval. hope your Lordships will find acceptable. The councils The members also reflected that pedlars had been will be able to exert much needed control over those on the streets of England prior to Shakespeare. Even who abuse the pedlars legislation and, as a result of Chaucer mentioned pedlars and we saw no reason to the committee’s amendments to the Bills, those who go to war with them or to change history. However, as are now commonly referred to as genuine pedlars will has been said, we felt that some changes should be be afforded protection. I therefore hope that your made in the way in which pedlars operate. Some of the Lordships will allow the Bills to pass today and agree pictures submitted by the promoters showed that the to the amendments that I shall propose to the Canterbury small trolleys that pedlars are allowed to use to carry City Council Bill. I beg to move. and display their wares were sometimes very much extended. The base was small with four little wheels, 3.22 pm rather like those that we all wheel about when we come to London for the week. But enormous adjuncts, Baroness Knight of Collingtree: My Lords, we are including poles, were put on and where the trolley all indebted to the masterly summary from my old started quite small, it finished up yards wide with, for friend and parliamentary neighbour for some years, example, pashminas and scarves hung all along it. We the noble Lord, Lord Bilston. We had another guardian felt that those were not acceptable and could cause angel, and that is the noble Lord, Lord Lucas; I am obstruction. delighted that we shall hear from him in a little while. When one is told one is to chair a Select Committee Therefore, the committee suggested amendments. set up to examine a case put forward by quadruplets— We have heard a little about the changes but I have the three cities and a borough—it sounds like rather a dull exact measurements. The trolley used to carry the old chore. That is wrong—in fact, it turned out to be a goods must not be more than 0.75 metres in width; fascinating, educative, challenging and rewarding 0.5 metres in depth; and 1.25 metres in height. The experience and I would not have missed it for the overall size of the trolley also is constrained. We world. gratefully accept the small amendments, which were I will put a slightly different complexion on what necessary, on different subjects, about which we have has been said by the noble Lord, Lord Bilston, from heard from the noble Lord, Lord Bilston. Clearly, the heart of the Select Committee, as it were. I would great care has been exercised on the whole of these like to make it clear to the House that the team of applications by the councils. colleagues I worked with could not possibly have been However, we had several other concerns. So great better. From all political corners of this House, we was the interest of the members of the committee that worked in happy unison. I begin with my heartfelt one brought a pedlar’s base to the Committee Room. thanks to every one of them for their expertise, wisdom, We had it on the desk where we gazed at it, walked patience, judgment and, may I also say, their friendship. around it and figured out how it would look when it Basically, as the noble Lord, Lord Bilston, has said, was dressed. We really concerned ourselves with how these local authority Bills were seeking the total eradication things were to work. of pedlars from their streets. The supporting counsel I am delighted to receive the news that other changes said that pedlars caused unacceptable congestion. The are to be made, because we felt that the four Bills members of the committee asked for evidence and presented would undoubtedly have given councils a they produced photographs of their streets, which of disproportionate power in relation to suspected street course were very crowded. We scrutinised them carefully trading offences. The pedlars were very worried about and asked questions. We concluded that nothing we that, particularly the suggestion that almost at the had been shown, or told, proved the case that the local drop of a hat all their goods could be confiscated for authorities were making. such a period of time that many would be useless We reached the conclusion, as the noble Lord, Lord when that time was up—they would have gone past Bilston, has touched on, that the local authorities were their sell-by date by a long way. We have reduced these at least partly motivated by a desire to protect licensed powers to the issuing of fixed penalty notices and we street traders who pay a lot more for their licences have made it a requirement that councils train all than the pedlars pay for their permits. We did not officials who exercise the remaining powers. We decided accept the claim that pedlars should be banished because it would be best to put in place a statutory duty on the quality of their goods might be inferior to that councils, rather than just relying on an undertaking being sold in the shops or on the fixed stalls. We felt given under private Bill procedures. rather outraged by this; it has never been the business The most important change of all is the piecemeal of local councils to set up as experts on what is unfair modification of national law by scores of individual or fair trading, as regards the quality of the goods. So little bits of private legislation that has gone on until that claim went by the wayside. now, but is now—thank heaven—to be changed. It The representatives of the councils then assured us really is extremely unsatisfactory. There are people that the public were much against pedlars, that they who very much support the right of local authorities could not stand having pedlars in their streets and that to put forward their own Bills—and long may that we really should listen to what the public said. The continue—but here we have a silly situation where the committee asked for evidence on that issue. They same objective has so far been put forward by 40 local could not produce a single letter or newspaper campaign authorities through their own legislation. There are 447 Canterbury City Council Bill[3 DECEMBER 2012] Canterbury City Council Bill 448 some 300 others waiting around the corner to see I shall speak extremely briefly. Having heard from when they are going to have their chance. These Bills the noble Lord, Lord Bilston, and the noble Baroness, would have come to this House, causing more time-wasting Lady Knight, I am not sure that there is much more to and money-wasting for the local councils, who have to say. The crucial issue is that we cannot go on having employ counsels to put forward their case. private Bills on the same subject for the next 300 councils. We heard a little about the arrests that this has led The intellectual experience of trying to combine the to, which are quite wrong and totally unfair. If a provisions of 19th century legislation with the EU pedlar gets his certificate to trade, say, in Newcastle, services directives of 2010 or 2012 should not be that gives him the right to trade just as legally in imposed on any other committee. Brighton, Bodmin, Birmingham or anywhere else; he I urge the Government, when the consultation is can use the one certificate. However, a certificate in over, to go back to the existing legislation and other one place gives powers that are quite different from councils. We are now in a position where the four those in another place which has brought in its own councils whose Bills we examined will have a regime rules. This is very confusing, and I am glad that we that is more restrictive of them than is the case, for now see a light at the end of that tunnel and that this, instance, in London, which is much harsher towards too, will be altered. Incidentally, we heard evidence pedlars. from a woman pedlar who had received her certificate Our real triumph was to look at the trolley, decide quite legally, but who was arrested by the police in a what size it was, look at the photographs of ones that town other than the one which had granted the licence looked like small cars being pushed round the streets and taken her money for it. She had no idea that she of Leeds and decide that enough was enough. was breaking the law. That really must stop, and I am delighted that it will not be long before we see the Finally, in a period when city centres are under such change that we have all asked for. pressure and there are too many closed shops, why would we wish to close down the seed corn of the It may be worth throwing in another point. We pedlars who bring some brightness to those streets? I understand that there have been at least four other commend the Bills. occasions when this House has held a Select Committee on very similar Bills. None of those committees came to the same conclusion that we did. They thought that 3.38 pm the local authorities were right. That will have to be Viscount Eccles: My Lords, I, too, will say a great sorted out: they came to totally different conclusions, thank you to my noble friend Lady Knight. The and those conclusions were wrong. Suffice to say that witnesses who came before the committee were very all the Bills were after the same thing: getting rid of varied. It was not particularly easy to give them the pedlars. opportunity to say what they wanted to say. Some of Only a few weeks ago the Government published a the representatives and the pedlars were quite overawed consultation paper on repealing the Pedlars Act 1871 by the Pugin experience. Of course, the evidence coming and the Pedlars Act 1881. The paper appeared after from the local authorities was very different. They our committee had sat, but during our deliberations were very well schooled, they knew what they were we warned that repealing the requirement on pedlars going to say, and they also knew what they were not to obtain a certificate to trade would take away the going to say. Our chairman did a brilliant job of exemption for certified pedlars from other street-trading bringing out the evidence that came out during our restrictions. To do this without putting in its place a inquiry. Certainly it was because of that that the clear national exemption allowing pedlars to exercise members of the committee became so intrigued by their right to trade would be wholly unacceptable. and involved in what was going on in front of us. For more years than anyone wants to count, Peers I want to talk briefly about fixed penalties. I think have paid their tributes and uttered their thanks to the that in principle fixed penalties are undesirable. They magnificent staff who serve us all in the Private Bill may be necessary but, when they are, they are a Office and the Public Bill Office. All of us on the necessary evil. The problem is that many people acquire committee wish to do so unreservedly. Nothing was the power to impose fixed penalties. We try to offset too much trouble for the staff who worked with us. that by training and I hope that that works, but I think The bounty and quality of their help was absolutely your Lordships will all recognise that power corrupts. endless. I will mention specifically the wonderful Kate One can go on to absolute power but power does Lawrence, whose expertise as clerk to the committee corrupt—there is absolutely no doubt about that. In we relied on completely and endlessly, and Chris Bolton, some fixed penalty regimes, there are people who take who bears the impressive title Examiner of Private advantage of the power that they have and they impose Acts. She, too, must be a very busy lady. Between the regime in a very unfriendly way. The necessity for them, these two ladies know absolutely everything and these regimes may arise from the courts being overloaded, are a huge asset to the House. but one has to ask why they are overloaded. The conclusion is that Parliament must have some 3.36 pm responsibility for that. Lord Blair of Boughton: MyLords,itgivesmegreat In the exercise of these powers, which are in some pleasure to speak after the noble Baroness, Lady Knight, of the Private Members’ Bills that have become Acts, and to thank the one person whom she did not thank— I think that my noble friend is entirely right that namely, her. I am sure that I speak for all my colleagues there is a culture of chasing pedlars about. I am not on the committee when I say how marvellously she sure about removing them altogether—it is more chaired it and how enjoyable the experience was. fun to chase people who are still there—but they do it 449 Canterbury City Council Bill[LORDS] Canterbury City Council Bill 450

[VISCOUNT ECCLES] One finds references to pedlars even before Chaucer, to make pedlars’ lives more difficult. I am very going back to accounts from Roman times. There have grateful that in the Bill the Secretary of State has the been pedlars taking their wares from town to town power to look at the penalties and, if necessary, to and from city to city for as long as there have been restrict them. records in the country, so it is a status that has existed As for the new regime which we have been told from time immemorial. There were references to pedlars about, I hope that it is a liberal one—that is, liberal before 1191. It is not customary practice; it is practice with a small “l”. I have always thought, and continue from time immemorial. It was recognised in the 1871 Act; to think, that one of the great advantages of democracy it was not created in the 1871 Act—that is a very is an acceptance of difference and diversity, and not a important distinction. In other words, it is not clear wish to make everybody look and behave the same that the status of the pedlar can be abolished. It seems while living by a great welter of rules. I very much to me that it is an ancient status in the realm and that hope that the 4,000 pedlars are not reduced in number there have been very ill thought out and incoherent under the new regime but are able to trade and to live attempts to limit that freedom of movement, as was their lives in the way that they want. manifest in the Bills that came before. I looked at the BIS consultation document. BIS’s 3.42 pm legal evidence seemed to suggest a lack of historical awareness about pedlars. It was taking EU directives Lord Glasman: My Lords, I also pay tribute to the and applying them in a very flat and straightforward committee, and particularly to the noble Baroness, way. I asked BIS how it could account for the fact that Lady Knight, who gave me incredible instruction on Germany has enormous differences in craft status that how to chair. It was a genuinely excellent experience. are still consistent with the EU. Its reply was, “We take There are two things I should like to share with the a different view of enforcement”. BIS is taking a very House. First, the balance between kindness and straightforward, unhistorical view that pedlars will severity was very well judged. The pedlars and their interfere with new services. We have to resist that, representatives were occasionally speechless and refute it and absolutely assert that pedlars have been sometimes cried in the committee. They were scared part of our kingdom and part of the realm for many and I thought that the noble Baroness dealt with them thousands of years. They play a role in taking things beautifully. Towards the legal counsel, the proposers from town to town and in bringing people together in and the pedlars’ legal representative, who tended to many ways, disrupting stable, corporate markets. We go on a little, I thought that she showed the really should defend them. I commend the report and appropriate degree of, let us say, sternness. Secondly, I I commend the committee. should like to share with the House what the noble Baroness said to me. When I asked her a question, she said, “Being in committee is as much about the work 3.46 pm you do between the meetings as the work you do in Lord Lucas: My Lords, I am absolutely delighted to them”. That was taken on board. It was a very good be able to praise my noble friend’s committee. It is an experience indeed and I think we came to the right extraordinary example of the Lords at its very best judgments. and I cheer to the echo what it says in its report. It is There are two concerns that I should like to share wonderful to see the Lords standing up for the unregarded, with the House. First, I asked the representative from which is something which, when we pay attention, we Leeds council whether she could name one world-class do very well. I echo my noble friend’s praise for Chris institution that came out of Leeds. It was obviously Bolton, who is one of the great anchors of this House. not the football club. She could not quite put her I am also going to praise the European Union, which I finger on it. I tried to prod her, telling her that Marks do not always do—it seems to me that it has got the & Spencer was the institution and that Simon Marks services directive right—and I am going to praise my started off as a pedlar. The idea that pedlars—poor noble friend on the Front Bench in his role with his people coming to this country, moving around and department, because the consultation that it has produced showing some enterprise—would be stamped on here is a very fine example of a consultation. It is clear was astonishing to me. I completely echo what the about what it sets out to do; it is clear about the noble Viscount, Lord Eccles, said about the desire to reasons that it is adducing for that; and it is open as homogenise the shopping experience and shopping regards the responses that it is looking for. It clearly centres. There was quite a whiff of local enforcement anticipates that people will disagree and it encourages going on against the pedlars that came through from disagreement. It is a very fine piece of work and I look the witnesses, and I found that quite unpleasant and forward to the legislation if it carries on in that spirit. disturbing. It would have been nice, too, to be able to praise the My second concern is a constitutional one. “Pedlar” Local Government Association, but its reaction to the is from the Latin for feet—as we said in the committee—as consultation was immediate, negative and silly. in pedalo. It is true that pedlars were pushing their As the noble Lord, Lord Sugar, often reminds us, bags rather than walking them in some cases, due the we are going through tough economic times. It looks size of the things that they had, and we originally as though those will be with us for some time to come. based it on Simon Marks’ bag, which we looked at in We really have to make it easy for people to start out in the Marks & Spencer museum. That was an appropriate business, whether they intend to found Marks & Spencer size for a pedlar’s bag, we thought. There has to be or whether they intend just to make a living. If that is enforcement in bringing that down to size and getting some minor inconvenience to us, we jolly well have to it correct. put with it. The high streets are difficult places to 451 Canterbury City Council Bill[3 DECEMBER 2012] Canterbury City Council Bill 452 break into now. It would be very difficult for the noble officials towards honest and hard-working pedlars. I Lord, Lord Sugar, to do what he did in founding a concluded that the real reason why these councils wish business because so many businesses are now chains. to exempt themselves from the 1871 Act is that they How can a little guy starting out get a chain store to are control freaks who resent the freedom that pedlars take up his product? It is very difficult. A lot of the enjoy. I also suspect that there is pressure from licensed empty premises in high streets are not for rent except street traders, who compete with the few pedlars in at very high figures because the landlords are desperate their area and who pay considerably more than a to keep up the fiction that they still have a high-value pedlar’s licence for their trading pitch. However, for property on their hands. That makes it very difficult the extra fees that licensed street traders pay, they get for people who are just starting out to obtain space on the benefit of a fixed pitch where they can trade all the high street. The attitude shown by the consultation day without having to move on. If they think that and by my noble friend’s committee seems to me pedlars get an unfair advantage, there is nothing to entirely praiseworthy. stop them applying for a pedlar’s licence themselves. When one walks around the streets of Westminster, The committee made several important amendments one sees that Westminster Council is very much in to the Bills. Pedlars will still be able to operate on the favour of sterility when it comes to its streetscape. I street in the designated areas provided that their trolleys feel ashamed because there is so much money in do not obstruct the highway. The amendments set Westminster and so many opportunities to start businesses. maximum dimensions for the trolleys to bring clarity I hope that the result of the determination of my to this issue. The amendments reduce the number of noble friend on the Front Bench’s department to open reasons that a local authority can use to designate an up the legislation on street trading and pedlary will be area. We deleted the seizure powers, which we thought that we start to see that, as a community in Westminster, could easily have been abused by council officials. We we give many more people the chance to start out in added a requirement for better training of council life. officials on trading laws and a requirement for local authorities to make their rules and designated areas 3.51 pm clear on their websites. We also constrained the value Lord Strasburger: My Lords, I, too, was a member of fixed penalties. Therefore, we have turned what I of the Select Committee that considered these Bills believe to have been four bad Bills into four not so bad and I will start by thanking the noble Baroness, Lady Bills. We have removed or neutered their most repressive Knight, who chaired the Select Committee with great aspects. patience and skill. I have to say that, if it had been down to me alone, I Most pedlars are itinerant and often go where the would have made only one amendment to each Bill, business takes them, selling hats, scarves, other items and I would have done that with the help of the of clothing, key rings and balloons. They are true nearest shredder. But in deference to my more experienced entrepreneurs, adapting their products and location to colleagues on the committee, I have agreed to a set of what their customers want and where the market is. amendments that reduce the detrimental impact of They add colour and diversity to our increasingly these Bills, and it is the amended Bill that is before the uniform shopping streets. The fact that they can make House today. a living as pedlars suggests that they provide a useful service and, so far as the committee could tell, they appear to do no one any harm at all. 3.55 pm The Bills as drafted sought to end the pedlars’ Lord Gardiner of Kimble: My Lords, perhaps I may exemption from street trading laws so that they would acknowledge at the outset the considerable efforts of not be able to operate on the street in areas designated the noble Lord, Lord Bilston, and pay tribute to his by the four local authorities that are pushing the Bills. determination to see these Bills make progress. The The Bills as presented to the Select Committee also noble Lord’s patience is remarkable. I should also say introduced fixed penalties and a power for officials to that your Lordships’ House is indebted to the committee seize pedlars’ goods. The committee spent a lot of time for its extremely thorough work, and it is very clear trying to discover why the four local authorities wanted that my noble friend Lady Knight of Collingtree has these powers. We were told that pedlars sell sub-standard been both kind and firm. The result of the committee’s goods, but no evidence whatever was offered to prove work is that the Bills are in better shape. this allegation, and we have no reason to believe that My understanding is that the Government do not their goods are any better or worse than those sold by normally seek to intervene in private legislation, but licensed street traders. It was alleged that pedlars on this occasion they have done so in order to take full create a situation that attracts pickpockets, but again, account of the impact of the European services directive. no evidence was offered. It was also said that pedlars As many of your Lordships will know, the services cause obstruction of the highway. Little evidence for directive aims to make it easier for services businesses this allegation was offered apart from a small number of all types, including retailers of goods such as street of cases where wide and expanding trolleys had been traders and pedlars, to set up and trade anywhere in used. the European Union. Restrictions on trading must be The witnesses who spoke for the local authorities the minimum necessary and can be allowed only where were somewhat unconvincing. We heard evidence from necessary to defend overarching public interest objectives pedlars that many council officers and the police are such as public safety and public order. This means ignorant about the 1871 Act, and we also heard much that licensing and registration systems must be justifiable evidence of a bullying culture on the part of council on the evidence and effective in securing the public 453 Canterbury City Council Bill[LORDS] Reading Borough Council Bill 454

[LORD GARDINER OF KIMBLE] that a great deal of the meat of this important question interest. Blanket bans will not be allowed if there are has been dealt with by the members of the committee. less restrictive ways of achieving the desired objective Every member of the committee made the point that I and there must be no discrimination in favour of made at the outset: that it is due to the able chairmanship UK-based or local traders. of the noble Baroness, Lady Knight, and the integrity The Government are currently consulting on changes and wisdom of the committee in bringing forward the to the national legislation on street trading and pedlary points and amendments that it made, that a fine and in order to take account of the directive. The same fair balance has been struck between the needs of constraints apply to local legislation. I should say at pedlars and those of legitimate market traders and this stage that this is not a case of the UK being local authorities. I entirely accept the stricture of the obliged to introduce onerous new regulations against noble Lord, Lord Blair, that there is a long way to go. its will. The services directive is fundamentally a pro- However, it is not for the want of people like myself enterprise measure designed to build the single market urging previous Governments to take hold of this and successive Governments have supported this kind issue and deal with it, as we did at Second Reading. of deregulation. We now understand consultation will take place in In October 2011, during the Committee stage of order to have a national solution which will be dealt these Bills in your Lordships’ House, the Government with in a national way, rather than with these private raised their concerns about the compatibility of the Bills. Bills with the services directive, in particular Clauses 4 As we have heard, anomalies will now arise, because and 5 of the Bills. As a result of the concerns raised Bills have been passed giving greater powers to local both by the committee and the Government, Clauses 4 authorities in this matter than are being given in the of the Bills were totally removed and Clauses 5 were four Bills we are debating today. The way that these adequately amended. As the Government’s concerns Bills have been dealt with creates anomalies and that is have been addressed, the Government have no objection why we always wanted a proper national solution from to the further progression of the Bills through this House. the Government of the day. I hope this will be If your Lordships will permit, I would like to say a forthcoming. I again thank the noble Baroness, Lady few words about the Government’s further plans in Knight, and all the members of the committee for this area, and I am reassured that noble Lords have working in B-flat harmony to bring about this happy already welcomed much of what has already been said conclusion for the four local authorities for whom we in this regard. As has been mentioned, the Government’s are moving these Bills and for the pedlars who will consultation on draft regulations to amend the national have a sense of fairness and justice awarded to them. I street trading regime and repeal the UK-wide Pedlars commend the Bill to the House and thank all noble Acts of 1871 and 1881 was published on 23 November Lords for their participation. and will run until 15 February next year. On conclusion of the consultation period, the Government will fully Amendments 1 to 3 consider the views of the respondents before a final set Moved by Lord Bilston of draft regulations is laid in Parliament. The Government are open to amending local legislation through these 1:Page 1, leave out “and touting” regulations at the same time, if the relevant local 2:Clause 2, page 2, line 13, leave out “Valley” authorities so wish. Referring to the point made by the 3:Page 2, line 22, leave out “street” has the same meaning as in noble Lord, Lord Blair, the Government have asked in Schedule 4 to the 1982 Act.” the consultation that local authorities ensure that they Amendments 1 to 3 agreed. screen their legislation. If they identify provisions which require amendment, they can use the Government’s Bill passed and returned to the Commons with amendments. regulations to make the changes. I will also refer to the point made in different ways by the noble Lord, Lord Glasman, and by my noble friends Lord Strasburger Leeds City Council Bill and Lord Lucas, about the historic—indeed ancient—role Third Reading of pedlars. In my view as a rural man, this relates to the analogy of acorns growing into oaks of commerce. 4.05 pm My noble friend Lord Lucas referred to founding Bill passed and returned to the Commons with amendments. businesses and we must surely encourage this. The Government will watch carefully to see if the new legislation creates particular problems for local Nottingham City Council Bill authorities and if they emerge, the Government are Third Reading open to considering further changes to national legislation, if appropriate. However, on this occasion I think the 4.05 pm balance has been struck correctly and I reiterate the Bill passed and returned to the Commons with amendments. Government’s continued thanks to the noble Lord, Lord Bilston, and to the committee for their work in getting this matter right. Reading Borough Council Bill Third Reading 4.01 pm 4.05 pm Lord Bilston: My Lords, I sense that the House wishes my reply to be brief. I can be brief, in the sense Bill passed and returned to the Commons with amendments. 455 Reading Borough Council Bill[3 DECEMBER 2012] Draft Cumbria Order 2012 456

Draft Cumbria (Electoral Changes) Order council without at the same time revising boundaries 2012 for the district, you end up with different bases of representation. Motion of Regret This could have been done differently. The order we have before us also considers town council boundaries, 4.06 pm and there is absolutely no reason why the district and Moved By Lord Liddle the county could not have been considered together. That this House regrets that the draft Cumbria Instead, what appears to have happened was a mechanical, (Electoral Changes) Order 2012 has been produced computer-driven process of equalising the wards by with inadequate consultation with the County drawing lines on maps—which, incidentally, no local Council and other interested parties; without a people can actually read when they try to print off simultaneous review of the district council ward those maps—but also a process that was without boundaries with the consequence that the electorate regard for local community ties. will be confused as to their local representation; Again, I cite an example from the city that I know and with serious flaws in the process conducted by best. Ever since my childhood there has been a ward the Local Government Boundary Commission for on the west side of Carlisle round the area of the England (LGBCE) that specifically contravene the Brunton Park football ground, called St Aidans, and requirements of the Local Democracy, Economic this has completely disappeared. The area where my Development and Construction Act 2009 that the parents lived for most of their lives, which is called LGBCE base their recommendations on population Currock, is being split in two and half of it is being forecasts for five years after the Order comes into amalgamated with another part of town that is quite force, given that the LGBCE admit they do not distinct from this area. These are bureaucrats who have the legally required information for 2017. have applied computer principles; they are not people who have looked at local communities. Lord Liddle: My Lords, I beg to move the Motion It also seems strange to introduce a wholly new set of Regret in my name on the Order Paper. I apologise of boundaries within four or five months of the elections to the House for having to raise this matter on the for the county council next May. People will discover Floor, but it is an important one because the Local that councillors who have represented them for decades Government Boundary Commission for England has no longer represent them. This simply adds confusion behaved, I am afraid, in what I consider to be a for confusion’s sake. This was a rushed job, in my view, bureaucratic and insensitive way and has not obeyed and also did not comply with the legal requirements its own rules. On all sides of the House, there is that the Boundary Commission is supposed to take support for the principle that boundaries of constituencies, into account when it revises boundaries. county divisions and borough wards should be set by There is a requirement to take into account population a process that is independent of party politics and that forecasts for five years for each of the wards. The Local those boundaries should be reviewed periodically to Government Boundary Commission for England did ensure broad equality of representation. However, the not have that information available. It had information contention of this Motion of Regret, and my reason for the population forecasts for the districts only up to for moving it, is that there were very serious flaws in 2016, when the law requires it to have forecasts up the way that the Local Government Boundary to 2017. It used those population forecasts pro rata to Commission for England acted in relation to the each ward rather than looking at the circumstances on boundaries of Cumbria County Council. the ground in each ward. Of course, that information There are two points about Cumbria that need to would have been available to the Boundary Commission be stressed. First, you are dealing with a very sparsely if it had done the district boundaries at the same time populated county, with very stable communities with because the district councils, as the planning authorities, very strong local identities which need to be respected hold the detailed information about what developments in any review of local boundaries. In my own home are likely in the coming period. town, Carlisle, which particular part of it you were I am moving this Motion because I believe that the from—such as Denton Holme, where I was from, or Boundary Commission has behaved with a lack of Stanwix—defined what kind of person you were. These common sense. It has exceeded its authority and refused local identities are very important. to admit its error. While it is right that the Boundary Secondly, and this is a more important point about Commission should be independent in its judgments the process, it is a part of the country where there is of boundaries, it cannot be independent of the statutes two-tier local government. Personally, I regret that that govern its operation, nor can it be independent of and am in favour of a single-tier authority, but I know scrutiny if it behaves in an arbitrary and bureaucratic there is debate about that. If you have two tiers of way. I hope that this Motion will give the Boundary local government, it is important that they marry Commission an opportunity to think again. I beg to together. The problem that we have with two-tier local move. government is that for most of the public, the districts are the focus of local representation and democratic voice, but it is the county council that has the money Lord Campbell-Savours: My Lords, I only wish that and the powers and provides most of the services. the Government could have rejected the product of There is already confusion about who is responsible this review before bringing this before Parliament. The for what in this two-tier system and it greatly adds to truth is that no one anywhere in the county of Cumbria the confusion if, in revising boundaries for the county asked for this review at district, town or county level. 457 Draft Cumbria Order 2012[LORDS] Draft Cumbria Order 2012 458

[LORD CAMPBELL-SAVOURS] the Local Government Boundary Commission for Indeed, I quote the Conservative leader of Cumbria England somehow believes that it is meeting the County Council in his letter to the Commission on the requirements of the law. 8 September 2010: My next question is: is it actually meeting the “I am concerned that the review of Cumbria County Council’s requirements of the law? Does not its decision to divisional boundaries is to take place in the next few weeks. That proceed in that way in the county of Cumbria have there is a need for such a review…Idonotcontest”. implications for all future Local Government Boundary He goes on to express his “considerable reservations” Commission for England reviews in all other counties as to the limited nature of the review, the lack of a full nationally? I am sure that all county authorities will be consultation with the county council about the nature interested in the Minister’s response. Furthermore, I of any meaningful review that should take place. would like to know what constitutes an acceptable There was one small problem in the county, one range. That should be qualified for the benefit of ward—Dalston and Cummersdale, near Carlisle—which others in future. has led to all this public money being spent, and it I turn to the local responses to the review. Again, could have been resolved by some minor decisions they turn on the issue of public money. I have here an being taken in the structure of county council wards. e-mail from Egremont Town Council. Yes, these are The county has provoked an anomalous position with very parochial issues to be raising in the House of overlapping district boundaries, which will probably Lords, but the point about this debate is that what we provoke an equally unnecessary district boundary review, are doing in this order has implications for other which no one wants and on which no one wants to counties throughout the country. The concerns being spend public money, leading to the further use of expressed by the two local councils to which I intend district and county authority resources. to refer may well be mirrored in other authorities in the event that their reviews are carried out on a similar 4.15 pm basis. If the review were to take place—in my view, and “Egremont Town Council object to the proposed change in that of most people in the county, it should never have that it will result in the parish of Egremont being divided into taken place—it should have been done in conjunction 4 divisions, this, we feel will add an additional financial burden on the Parish as more polling stations will be needed at an average with the districts, following consultation. If that had cost of £1,000 per station”. been the case, it would probably have been many years before any review had been undertaken and a lot of We are talking here about a parish council with almost public money would have been saved. As Mr Eddie no money available to it having this additional expenditure Martin, the Conservative leader of the council, put it imposed upon it. The e-mail continues: in the same letter to the Local Government Boundary “The proposals create an Egremont East Ward that has approximately 5 houses which seems ludicrous. It is disjointed Commission for England, this review what we have and will create a polling day nightmare that will “is an unnecessary distraction which we could do well without”. prove very confusing for many when on one sheet they will be My contribution today is to ask a series of questions voting for a Parish Councillor for Egremont East, to which, if they cannot be answered at the Dispatch and then it refers to overlap with other wards in the Box now, I would like answers in writing so that they same area. can be circulated within the county. First, what has I have another letter here from Maryport Town been the cost to the Local Government Boundary Council, where it equally expresses its concerns. It is a Commission for England of this review, which everyone letter to Sir Tony Cunningham, the MP for Workington, believes was totally and utterly unnecessary? What expressing its concern to him: would have been the cost if, at some later stage, when it was finally necessary, the review had encompassed “The Council asked that I write to you expressing its dissatisfaction with the proposals for a north/south split of the Maryport area both district and county authorities? What would have wards rather than the current east/west split arrangements. The been the saving to the Cumbria council tax payer? Council considers that the current arrangements are perfectly My noble friend Lord Liddle raised the question of adequate and that the arguments for the proposed arrangement Schedule 2 and the projections for 2017, which were are not strong enough to merit a change from a division that is not taken into account because the data for 2017 were working perfectly well”. notavailabletotheLocalGovernmentBoundaryCommission There is no politics in this; there is no gain to any for England. It simply guessed. In an e-mail to the political party. It is all being done neutrally, but what Labour leader of Cumbria County Council, Mr Stuart is happening is that relationships built up between Young, on 31 July 2012, the commission stated: constituents and their council representatives, sometimes “As explained previously, the Commission has had to make a over decades, are being smashed to bits, ruined and number of assumptions to make good the lack of detailed forecasts destroyed because of the turn of a pen of a bureaucrat, at polling district level from your Council. Nevertheless, the probably sitting in an office in London, who has no Commission judged that the forecasts, such as they were, gave immediate knowledge of what is going on within sufficient basis to proceed with the review and settled its final particular wards in the county of Cumbria. recommendations in May. The final audit we chose to undertake since has not given any cause to alter the view that the figures are I only wish that it had been possible to stop this fit for purpose, within an acceptable range of inherent future process proceeding. I do not know what the legal uncertainties”. position is. I presume that now that this order is going That is not what the law requires. The law requires through it will all be implemented. However, the Local something far more accurate: a description of what the Government Boundary Commission for England should statistics would be in 2017, but with that reference to, realise that sometimes it should simply stop what it is “an acceptable range of inherent future uncertainties”, doing, because no one wants what it is doing. It is 459 Draft Cumbria Order 2012[3 DECEMBER 2012] Draft Cumbria Order 2012 460 forcing local authorities to incur public expenditure Lord Clark of Windermere: My Lords, I shall not which they can ill afford at this time. The reality is that detain the House for more than a couple of minutes; I the Local Government Boundary Commission for just want to participate in this debate that my noble England seems unstoppable; it seems just to keep on friend has initiated. I agree very much with him about going irrespective of pressures at a local level. I can the strength of community in the county—not only in only put it this way: if Carlisle were burning, the Local Cumbria, though, but in other countries as well— Government Boundary Commission for England would while starting from the opposite end: I am not in still be drawing up wards for that town. That shows favour of a unitary authority covering such a vast area the nature of the problem. as Cumbria. However, I am in favour of a two-tier system of local government. Because of that, I am concerned about this recommendation from the Local Lord Judd: I am glad to support my noble friend Government Boundary Commission for England, which Lord Liddle in bringing this Motion before the House. seeks to address only the issue of the county electoral It is difficult to think of a county in which there is a boundaries, not the local ones. We all know that one stronger sense of tradition and community than Cumbria. of the problems of democracy at the moment is the It is very deep indeed—partly, of course, because it is identification of individuals with their council. This right out there to the west of the country and not part, just adds another area of confusion where there are perhaps, of the mainstream of the United Kingdom, different boundaries for the two-tier system of government. but very much a county with its own sense of identity. That sense of community in the county is built on a I submit that these proposals were made too late for strong sense of community in the local communities the election beginning next May; they were laid on of which the general community of Cumbria is comprised. 31 July this year. There has been practically no publicity whatever in the county of Cumbria. I doubt whether When I look at what has happened and listen to my 1% of the electorate know anything about them, and noble friends, with all their experience—much longer they are going to get quite a shock when the election than mine—of the county of Cumbria, it is clear that, comes next May. if one had set out to try to disrupt something which is good, healthy and robust in the life of Cumbria, one could not have done much better than to introduce the Lord Harris of Haringey: My Lords, this is a living ill considered and insensitive proposal before us. Chamber and I believe that procedure evolves all the It is impossible to speak to this subject without time among your Lordships. I therefore find myself in making reference to what has been going on with a rather strange position—because the Local Government respect to constituency boundaries as well. People are Boundary Commission for England, set up under the in a real state of muddle about where they belong, 2009 Act, is independent of the Government—of having where their loyalty is, who is representing them and for drawn the short straw in responding both to my noble what. For democracy to succeed, it is essential that friend’s Motion of Regret and to the comments made people are absolutely clear about who they are holding by my noble friends Lord Campbell-Savours, Lord to account and who is representing them in the local Judd and Lord Clark. A quadrumvirate of people I authority, the county and nationally. respected more would be extremely difficult to find, but it is important for your Lordships to understand I believe that the Motion and the passion with the context in which these changes have been put which it has been introduced are related to the heart of forward by the Local Government Boundary Commission democracy. It is an illusion to think that one can have for England. a healthy democracy made up simply of individuals going to the polling station and voting. A healthy The commission was set up with the specific and democracy is made up of individuals finding their sole remit to review electoral arrangements of councils place in the community, discussing with fellow members against statutory criteria of electoral equality, giving of that community what the issues are, making fair weight to the votes of all electors in a council area; relationships and making strong representations together. community identity and interests; and effective and The heart of democracy lies in that community life convenient local government. It carries out its functions and, on the basis of that life, on then being able to by relying on a mixture of analysis and judgment. hold people meaningfully to account, not just on election day but throughout the periods between elections. 4.30 pm I am certain that we need to think very carefully What we have here, as has been outlined, is a about what is being done on boundaries in so many circumstance in which there has been considerable different contexts; the measures are destroying the conflict during the course of this review between sense of community that is an essential element in a Cumbria County Council and the commission. I find healthy, thriving democracy. These proposals certainly myself in the position I have often watched with do not put that right. amusement, when people at the government Dispatch I am glad to see that a Liberal Member of the Box defend material over which they have had no coalition is going to reply to this debate. If the Liberal influence whatever. Democrat party prides itself on anything, it is its However, that does not necessarily mean, as my history of involvement in the community and its activity noble friend Lord Campbell-Savours is inclined to in community politics and the rest. I am sure that the suggest from a sedentary position behind me, that the noble Baroness will have listened to every word that position is indefensible. My noble friend Lord Campbell- has been said and will cheerfully and willingly undertake Savours and others have said that the county council to ensure that this entire serious matter is reconsidered. has never wished for this review. The advice I have 461 Draft Cumbria Order 2012[LORDS] Draft Cumbria Order 2012 462

[LORD HARRIS OF HARINGEY] on population projections because it has the material received is that it is the council’s present leadership across the county area. When the districts were asked that has never wished for this review. At every stage whether they had comments, they were not able to the county council has challenged these boundary comment on this because, they said, all the information changes and sought to block their implementation. on the projections was held by the county council. So However, the commission has a statutory responsibility. we have this information, and we have to make the The Act gives the commission power to conduct a best of what we have before us. review where it judges it desirable, whether a council Of course, the commission would have been ready wishes it or not. The commission has intervened in to contemplate the much bigger and more complex Cumbria because its well established criteria of electoral review necessary to consider the district councils as fairness indicate that it should. well, but only if there had been a reasonable consensus The reason is that there is a significant level of on that being the way forward. Within the individual electoral inequality for local voters. My noble friend districts, there were not the same electoral disparities. Lord Campbell-Savours has specifically referred to There has never been that consensus. As I said, the the ward of Dalston and Cummersdale, which includes district councils do not present electoral inequalities 33% more electors than the average for the county—not to merit the review in their own right. the lowest, but the average. That is a degree of electoral A number of noble Lords have criticised the quality variance which, against the criteria applied universally of the consultation. As a matter of course, the commission by the commission, is unacceptable. It means that the proceeds carefully through public consultations on value of the vote in that area varies very considerably council size. The quality of the maps has been criticised. depending on whether you live in that division or one My understanding is that the council was given the of the neighbouring divisions. As the commission has full mapping in electronic form, which would have a duty to ensure fair votes at local elections, it needed enabled the council, had it so wished, to disseminate to carry out this review. and generate local maps in whatever form and as flexibly as it wished. Lord Campbell-Savours: Did it have an obligation My noble friend has suggested that the commission to carry out a review of the whole county on the basis was unstoppable in its approach. The reality is that, as of a single complaint about Dalston and Cummersdale? a result of the representations made by the county council, the commission extended its usual consultation Lord Harris of Haringey: My understanding is that periods, allowing in total 32 weeks, or eight months—a you cannot make a small change without there being very generous definition of consultation for those of repercussions elsewhere, but in any event the difficulty us who are used to systems of government consultation. arises because of the nature of the dialogue between It allowed six weeks’ consultation on the total number the council and the commission. of councils required; 12 weeks of inviting submissions As I said, the Act gives the commission the power on electoral division patterns, which would of course to conduct the review whether or not the council have been the point at which the county council could concerned wishes it to happen. One can understand have come forward with a proposal that would have the reasons behind that. Clearly, a council might want dealt with the single anomalies; and then a further 14 to maintain the status quo because it suited the members weeks on draft recommendations for new electoral of that council so to do. I accept the comments that boundaries. By most normal definitions, that is ample have been made that this is not the circumstance in opportunity for people to have their say. My advice— these areas. The Act lays down that the council “must” again, it may be challenged—is that the county council assist the commission by supplying necessary information. did not contribute. Its representations were directed only to challenging or delaying the review. However, I am informed that in resisting the review, the council has in practice failed to comply with its The council has also challenged the adequacy of duty to supply information. Clearly, one way in which the electoral projections used in the review, yet these the council could have moved forward is what happens were the projections that it supplied. It complained very frequently with reviews of local government divisions: that because electoral registration is a district council the county council or the council concerned puts responsibility, it could not be expected to do better. forward its own set of proposals, which the boundary The commission responded that in no previous case commission then measures against those criteria to see has a county council insisted, like Cumbria, that it whether or not it applies. cannot or will not supply the requested information. That said, I am advised that the commission recognised that questions might be raised on the council’s figures, Lord Campbell-Savours: I am sorry to correct my and took steps to mitigate any ill effects. It judged the noble friend, but I understand that the county council council’s overall growth projections reasonable, and was more than helpful. The problem was at district not indicative of unusual volatility in the number or level, so I think that he has been badly briefed by his distribution of electors over the coming years. It adjusted commission. for known developments. Above all, in drawing electoral divisions, it secured high levels of electoral equality on Lord Harris of Haringey: As I have said, I am in the current registration figures. That is important. If there position of so many Ministers before the Dispatch were subsequent variations, the fact that there was this Box in that I have not got access to the primary high level of accuracy at this stage would mean that it material. However, I am told that, universally in these would be very unlikely that, over time, the imbalance circumstances, the county council provides the information would become too great. 463 Draft Cumbria Order 2012[3 DECEMBER 2012] Civil Legal Aid Regulations 2012 464

The council says that the final recommendations this boundary review to proceed. They were not trying will be defective because it had no worked projections to stop it for reasons of party advantage but because for 2017. The commission has the council’s own they thought it was a completely unnecessary exercise projections for six years to 2016, which would normally at a time of great austerity when vital services are have covered the five years from the completion set in being cut. They did not want to have to waste their the Act. The only reason for the delay in completing time on it. Frankly, the boundary commission could the review was the extension of the consultation as a have dealt with the problem of the overexpansion of result of the county council’s own resistance—meaning the electorate in one ward by simply making some that, in this case, the commission had no specific marginal adjustments, such as putting the 1,500 voters projections for the final year. However, the Act says into adjacent wards, without having to go through the that the commission, whole process of a full-scale boundary review, which “must have regard to any” no one in the county really wants and which, on the likely changes, and the commission has explained how eve of an election, has had disruptive effects in terms it has done so. of local representation and community identity. I thank my noble friend Lord Harris very much for Projections are necessarily inexact and the commission making the case for the boundary commission; I only resists the council’s attempt to import into the Act the hope that the boundary commission listens to this specific requirement to project figures for each year. debate and will in future take note of what has been My understanding is that if the council had persisted said about how it should proceed. I hope it will accept and wished to challenge it, it could have made a legal that responsibility. On that basis I am prepared to challenge. Indeed that would be the only normal remaining withdraw my Motion of Regret. mechanism left to it. It chose not to, maybe because it could not afford to do so or maybe it received advice Motion withdrawn. that the case was not as strong as it should be. My noble friend Lord Campbell-Savours listed a Civil Legal Aid (Merits Criteria) series of questions, most of which, in terms of the Regulations 2012 specific costs, I am not in a position to answer. In his Motion to Approve powerful contribution about the nature of democracy, my noble friend Lord Judd made some very valid 4.44 pm points. Democracy is based on local representatives Moved By Lord McNally elected by local communities where there is an affinity between those communities and those who represent That the draft Regulations laid before the House them. However, to achieve that affinity and electoral on 29 October be approved. fairness requires a dialogue at local level and it is clear Relevant documents: 10th Report from the Joint from the discussion that we have had in your Lordships’ Committee on Statutory Instruments House this afternoon that in this instance that dialogue was not as successful as it normally is in other cases. The Minister of State, Ministry of Justice (Lord I hope that on the basis of what has been said with McNally): My Lords, in moving the draft Civil Legal regard to the commission’s rationale and the extensions Aid (Merits Criteria) Regulations 2012, I shall speak to the consultation it provided, my noble friend Lord also to the draft Legal Aid, Sentencing and Punishment Liddle will feel able to withdraw the Motion in his of Offenders Act 2012 (Amendment of Schedule 1) name. I also hope that the commission will read very Order 2012. The Civil Legal Aid (Merits Criteria) carefully the comments that have been made and Regulations 2012 set out the merits criteria both for reflect on their implications both for the way it conducted applications within the scope of the civil legal aid itself in this case but also in the way it conducts itself scheme, which are described in Part 1 of Schedule 1 to in future boundary reviews. the Legal Aid, Sentencing and Punishment of Offenders Act 2012, and for exceptional funding cases that fall outside that schedule. Baroness Garden of Frognal: I thank the noble The merits criteria are those that the director of Lord, Lord Harris, for his contribution, and clarify legal aid casework must apply in deciding whether an and confirm that these are matters for the Local individual qualifies for civil legal services. When the Government Boundary Commission for England. It is director delegates his functions under the regulations normal procedure in such cases that the Government to providers or his employees, they will also be required do not take a position. to apply these criteria. The criteria include both general merits criteria and specific merits criteria. Specific Lord Liddle: My Lords, I thank my noble friend merits criteria are applied for particular types of case Lord Harris of Haringey for his robust reply to our where the general criteria are considered to be too Motion of Regret. He has done the Local Government strict or where bespoke criteria are appropriate for Boundary Commission for England proud; I am only particular types of case. sorry that there does not appear to be anybody from Noble Lords may be aware of the funding code the commission here to have listened to it. Before I sit created under Section 8 of the Access to Justice Act 1999. down, there are a couple of points that I wish to These regulations replace that funding code. The funding correct. code criteria are based on a list of factors set out in There is nothing political about this. There was Section 8 of the Access to Justice Act 1999. These unanimity between the Conservative and Labour members include the importance of the case to the client, the on Cumbria County Council that they did not want prospects of success and the likely costs. The regulations 465 Civil Legal Aid Regulations 2012[LORDS] Civil Legal Aid Regulations 2012 466

[LORD MCNALLY] would need to interpret this in a realistic way. Where before us are based on a list of similar factors set out the director of legal aid casework found that alternative in Section 11(3) of the Legal Aid, Sentencing and proceedings could not provide the remedy that the Punishment of Offenders Act 2012. client needs, funding for a judicial review would not be The criteria must also reflect the principle that, in refused under this criterion. I stress that this point many disputes, mediation and other forms of dispute would be put beyond doubt in published guidance. resolution are more appropriate than legal proceedings. However, the noble Lord, Lord Pannick, and others I hope that this is a principle we all share. Our approach have expressed concerns about this matter, and others in making these regulations has been broadly to retain have expressed very strong anxieties about how we the existing merits criteria. In our consultation on have framed this provision. I am not convinced that legal aid reform we consulted on one significant change such anxieties are justified, but I will listen to what to the current funding code criteria; namely, that legal noble Lords have to say and see if, in my reply, I can aid will be refused for any individual case which is move further to meet those anxieties and concerns. suitable for a conditional fee agreement or CFA. That I turn now to the Legal Aid, Sentencing and is reflected in Regulation 39(b). Punishment of Offenders Act 2012 (Amendment of At present that funding code requirement is disapplied Schedule 1) Order 2012. The noble Lord, Lord Bach, for judicial review cases, claims against public authorities will speak to his Motion shortly, but I would like to and claims for clinical negligence. We have removed explain first what the order does. This order makes these exceptions. We believe that our limited resources legal aid available in relation to a review by the First-tier should not be focused on cases where alternative options Tribunal where it has identified an error of law in its for funding exist. The Legal Services Commission, or own decision on a welfare benefit appeal. It also the Legal Aid Agency as it soon will become, has brings into scope certain applications as required by significant experience in determining whether a CFA the 2007 Hague Convention on the International is likely to be a real alternative. If funding is refused on Recovery of Child Support and Other Forms of Family this basis, an applicant can ask for a review of that Maintenance. Finally, it addresses a technical issue in decision. If they still are not satisfied, they can seek an relation to legal aid for judicial review. independent appeal. The first aspect of the order makes available advice The noble Lord, Lord Pannick, has tabled a regret and assistance in relation to a review by the First-tier Motion regarding Regulation 53(b). This states that Tribunal where it has identified an error of law in its the regulation will substantially reduce the availability own decision on a welfare benefit appeal. This follows of legal aid in public law cases because the word a commitment made by the Government during “reasonable” has been omitted in relation to other Commons consideration of Lords amendments of the means of challenging the relevant decision. I am assuming then LASPO Bill to explore whether there was a way that this is in comparison to Regulation 39(d), which for independent verification to be used to identify any raised concern in the House of Commons. First-tier Tribunal welfare appeals which involved a point of law. Let me first explain what this regulation provides. Regulation 39(d) concerns alternative dispute resolution, Of course, appeals to the First-tier Tribunal on such as complaints systems which might allow the welfare benefits matters are appeals against an client to resolve the dispute without issuing proceedings. administrative decision of a public authority. This is The director has a wide discretion to decide whether quite different from an appeal to the Upper Tribunal, such alternatives are reasonable in the circumstances. where one must identify an error of law arising from This criterion applies to public law, as well as other the decision made by the First-tier Tribunal in order to claims. bring the appeal. To appeal to the First-tier Tribunal, the appellant need only set out their reasons for disagreeing By contrast, Regulation 53(b) is about alternative with the public authority’s decision in plain language. routes to address the problem predominantly through I understand that many appellants will wish to question proceedings. No concept of reasonableness is needed whether the public authority has applied the law correctly. here because if there is an alternative route to resolving But this is precisely the job of the tribunal: to decide the problem in proceedings, that should be taken. This what the correct facts are and how the law should be is because judicial review should be a tool of last correctly applied to them. resort. We recognise that the equivalent provision in The Motion of the noble Lord, Lord Bach, against the current funding code may on its face appear wider. this order suggests that the Government have not However, in accordance with its published guidance, fulfilled the undertaking given during the passage of the Legal Services Commission has in practice applied the then LASPO Bill in this area. The then Lord this provision so that if there is an alternative appeal Chancellor said at that time that he would “explore or procedure that addresses the problem, legal aid will the options” available for a system of independent not be granted for judicial review. Regulation 53(b) verification. I repeated the same assurances to this therefore reflects current working practice. House, stating that we were, The Government made clear in Committee in the “committed to doing further work to see how we might provide House of Commons that if pursuing an administrative funding for those appearing before the First-tier Tribunal whose appeal or other procedure meant that the individual case also turns on a point of law”.—[Official Report, 23/4/ 2012; could not obtain the remedy they needed, the director col. 1557.] of legal aid casework would have the flexibility to That is exactly what we have done. We have given very fund. This is because the regulation specifically refers serious consideration to the various options for to alternative routes that “are available”. The director independent verification. We have come to the conclusion 467 Civil Legal Aid Regulations 2012[3 DECEMBER 2012] Civil Legal Aid Regulations 2012 468 that imposing an additional task of verifying whether a case involved a point of law on either the judiciary of Amendment to the Motion the First-tier Tribunal, the successor to the Legal Services Commission or the Department for Work Moved by Lord Pannick and Pensions would be unworkable. This is because it As an amendment to the above Motion, at end to would have resulted in significant extra administrative insert “but that this House regrets that Regulation 53(b) and cost burdens. We do not consider it right to will substantially reduce the availability of legal aid impose these burdens in the current economic climate. in public law cases because the word ‘reasonable’ It is also important to remember that legal aid will has been omitted in relation to other means of not be limited to welfare benefit cases in this area only. challenging the relevant decision”. We have retained legal advice and assistance for appeals Lord Pannick: My Lords, I tabled a Motion of under the Equality Act 2010. We have retained legal Regret because the Civil Legal Aid (Merits Criteria) advice and assistance for reviews before the First-tier Regulations will very substantially restrict the availability Tribunal, as I indicated. We have retained legal advice of legal aid in public law cases, particularly judicial and assistance for applications for permission to appeal review. In his very helpful speech, the Minister indicated to the Upper Tribunal. We have retained legal advice that he would listen very carefully to this debate and and assistance for substantive appeals in the Upper that he might be able to move further in his reply. Tribunal. We have retained legal advice, assistance and Therefore, I will explain the problem in the hope that representation for onward appeals to the Court of he will be moved if not by me then by the many Appeal. We have retained legal advice, assistance and noble—and noble and learned—Lords who are limbering representation for onward appeals to the Supreme up to express their concerns on this issue. Court. We have retained legal advice, assistance and representation for welfare benefit judicial reviews. It is The problem is caused by Regulation 53(b), which important to stress that at no point in progressing our states that legal aid for a public law claim will be legal aid reforms did we say that it was our intention available only if the director of legal aid casework is for all welfare benefit First-tier Tribunal appeals to satisfied that the individual has exhausted all administrative receive legal aid. The Government’s position throughout appeals and other alternative procedures which are has been that in these economic times we need to available to challenge the decision before bringing a target legal aid at cases of the highest priority, where it public law claim. Therefore, the director will have no is needed most. That was what the LASPO Bill was discretion. Alternative procedures must be exhausted about. This is what we have done. before legal aid is available to bring the legal challenge. The problem is that in many of these cases—whether I turn briefly to the second aspect of the order, they are judicial reviews, housing appeals or habeas which brings into scope certain applications to meet corpus claims about people in detention—it is simply our international obligations under the Hague Convention not reasonable to expect the litigant to exhaust 2007. The convention sets out certain requirements for other procedures and appeal mechanisms before the provision of legal aid in relation to the recognition, going to court. The other procedures may take months enforcement or establishment of a decision in relation and sometimes years to arrive at a conclusion. They to maintenance, and there are reciprocal arrangements may involve no power to grant an interim remedy to for signatory countries. We expect it to come into force protect the position of the claimant—for example, if in April next year. The convention is broadly equivalent the claimant is challenging the removal of housing to the EU maintenance regulations for which services provision in the services provided or the removal of are already made available under Schedule 1 to the services which have been given to him or her to address LASPO Act. Most countries that have signed up to a mental health problem. The courts themselves recognise the convention will already be covered by the EU the force of this point. If you want to bring a judicial maintenance regulations—with a few exceptions, such review in the High Court, you must exhaust other as Norway. remedies except if the court is satisfied that the alternative procedures are less effective or less convenient. The third part of the order addresses a technical issue in relation to legal aid for judicial review. In our 5pm consultation response on legal aid reforms, we confirmed The vice of Regulation 53(b) is that it will prevent that legal aid would be available for judicial review the director granting legal aid if an alternative procedure subject to a few specific exclusions. That remains our is available, even if the director is satisfied that the position. It is reflected in paragraph 19 of Part 1 of alternative procedure is less effective than judicial Schedule 1 to the LASPO Act, which puts within review. Indeed, the bizarre effect of Regulation 53(b) scope legal aid for judicial review in almost any area will be that legal aid will be least available in the cases bar the exclusions debated and agreed by Parliament. where it is most needed because the potential litigant However, an arguable effect of how the LASPO Act is faces an urgent problem which requires an urgent drafted is that judicial review may be in scope for any court order and he or she cannot wait for the other area of law listed in Schedule 1, despite the exclusions procedure to be exhausted. in paragraph 19. This order simply makes a technical The previous rules set out in the Legal Services amendment to ensure that judicial review is governed Commission funding code, to which the Minister exclusively through paragraph 19, and that the specific referred, address the issue perfectly sensibly. They say exclusions have the intended effect. I hope that this that legal aid, explanation has been helpful and I commend the “may be refused if there are administrative appeals or other procedures orders to the House. I beg to move. which should be pursued before proceedings are considered”. 469 Civil Legal Aid Regulations 2012[LORDS] Civil Legal Aid Regulations 2012 470

[LORD PANNICK] he and his officials listened very carefully to the concerns So far as I am aware, that wording has caused no that I, together with other noble Lords, expressed. It difficulties because it confers a proper discretion that would be very surprising if there were any policy allows the funding body to require the use of alternative dispute here, because the regulations are designed to procedures only if they are equally effective or appropriate implement the Legal Aid, Sentencing and Punishment in the circumstances of the case. The Minister mentioned of Offenders Act 2012. The then Lord Chancellor, that there had been consultation on another aspect of Mr Kenneth Clarke, gave an assurance in the other the change in regulations, but as far as I am aware place during consideration of amendments to that there has been no consultation on the change indicated legislation made by this House. I remind your Lordships in Regulation 53(b). of what the assurance was. Mr Clarke said that, Nor can it be said that this problem can be remedied “we are continuing legal aid in all cases involving judicial review, by implying into Regulation 53(b) the word “reasonable”. so legal aid is available to someone who is trying to have a welfare The reason that is very difficult is that other provisions decision judicially reviewed. That applies to every kind of judicial review, because we do not think that the Government or a public of the regulations not dealing specifically with public body should be resisting a claim about abuse of their powers from law claims state that alternative remedies must first be a litigant who cannot get legal advice. This is not an easy exhausted but only where they are reasonable alternatives. concession to make, because quite a lot of people who seek That is what Regulation 39(d) says on the standard judicial review are not instantly popular with all sections of criteria for obtaining legal aid. I repeat that the difficulty society, but we still give them legal aid”.—[Official Report, Commons, with Regulation 53(b) is that it omits the word 17/4/12; col. 277.] “reasonable”, therefore suggesting that there is an I say to the Minister that the unhappy effect of obligation to exhaust all other procedures, however Regulation 53(b) will be that legal aid will become unreasonable it may be to require the person to use unavailable in practice for judicial review and other those other procedures, before legal aid is granted. public law cases where there are other less effective and slower procedures available. I therefore very much The Minister suggested that Regulation 53 was hope that in his reply the Minister will be able to move, concerned “predominantly” with alternative court and that he will be able to assure the House that proceedings. The problem with that approach is that amending regulations will be brought forward to cure Regulation 53(b) speaks of first exhausting, what is undoubtedly a serious defect in Regulation 53(b). “all administrative appeals and other alternative procedures”— Before I beg to move, I will say something about the all, not some. Indeed, “administrative” suggests a fatal Motion of the noble Lord, Lord Bach, because, process other than a judicial determination. The Minister as I understand it, it is being debated together with my in any event said that Regulation 53(b) is concerned regret Motion. The Motion tabled by the noble Lord, “predominantly” with cases where there is an alternative Lord Bach, concerns another set of legal aid regulations. court procedure, so he recognised that the regulation The issue here is distinct; it is access to legal aid for would also cover other cases. Even if the Minister is legal advice at First-tier Tribunal level. As the noble right that Regulation 53(b) is concerned predominantly Lord will explain, this was a very controversial matter with alternative court proceedings—and it is not— during the passage of the legislation earlier this year. sometimes a judicial review is more appropriate than Although most cases in the First-tier Tribunal concern an appeal to a tribunal because, for example, the the factual application of the law, some of them raise tribunal may lack the power to make an interim order important points of law. They are very often highly which the claimant urgently needs. complex points of law which the claimant cannot be The other point made by the Minister today was to expected to address without legal advice. Mr Clarke suggest that, under Regulation 53(b), the claimant has gave an undertaking, to which the noble Lord, Lord to exhaust other procedures only if they are “available”, Bach, will refer. which he said provides the necessary “flexibility”. I am very disappointed by the provision now made However, with great respect, that is no answer. The in those regulations. As I understand it—and it is a problem is not that the administrative and other complex matter—legal aid will be provided at first-tier procedures are not available; it is simply that they are level only where the tribunal has already decided the less speedy or less effective than going to court for an case and recognises that it has made an error of law or immediate legal remedy. The Minister’s final point was seeks representations on whether it has made an error that guidance will be issued on this matter, which will of law. If I may say so, that is a very odd way of of course be very welcome. The problem is that guidance addressing the issue because it opens the legal aid door simply cannot cure the enactment of a duty imposed only after the tribunal recognises that the legal horse on the director to refuse legal aid. has bolted, or may have bolted. I cannot understand The Minister will know that a large number of why those regulations do not adopt the much more expert organisations, including the Constitutional and sensible and practical course of conferring a power—a Administrative Law Bar Association, Mind and the discretion—on the chairman of the First-tier Tribunal Legal Aid Practitioners Group, have drawn attention to certify, on looking at the appeal, that it raises a to the defect in the drafting of Regulation 53(b). This point of law on which it would be appropriate for the restriction on legal aid in public law cases, about claimant to receive legal aid for advice purposes. which so many people are concerned, is not, as I I shall, of course, listen very carefully to the Minister’s understand it, designed to advance any deliberate answers to the Motion in the name of the noble Lord, policy of the Government. We are not concerned here Lord Bach, and I very much hope that the Minister with any policy dispute. I say that having had a very will be able to move on my regret Motion. I beg to helpful meeting with the Minister last week in which move. 471 Civil Legal Aid Regulations 2012[3 DECEMBER 2012] Civil Legal Aid Regulations 2012 472

Lord Bach: My Lords, I rise to support the noble moved an amendment that would have allowed legal Lord, Lord Pannick, in the amendment that he has aid for legal advice for welfare benefit preliminary just moved, and also to speak to my Motion which I reviews and hearings; in other words, the position that will move at the appropriate place. Before I speak to has prevailed for many years in this country and is my amendment, perhaps I may say that I support supported by a wide consensus from all political parties. unreservedly the amendment in the name of the noble She won her amendment by 39 votes. Her Majesty’s Lord, Lord Pannick, to the Civil Legal Aid (Merits Government wanted to overturn the Doocey amendment, Criteria) Regulations. All noble Lords who have had but faced a similar amendment from the honourable the benefit of listening to his speech will have seen the Tom Brake MP. It was a critical moment for this logic and force of what he had to say. I suspect that highly controversial legislation. The Brake amendment, there is no serious argument but that he is correct. I if pressed, could well have passed the House of Commons look forward, if it is necessary, to supporting him in and the Government would have lost a central plank the Lobby later on. of their Bill. What I am doing with my Motion is to ask the The Government needed to make a meaningful Minister to withdraw the order that I have prayed concession on First-tier Tribunals to avoid defeat. The against—namely the Legal Aid, Sentencing and then Lord Chancellor accepted the argument that if Punishment of Offenders Act 2012 (Amendment of Second-tier Tribunal, Court of Appeal and Supreme Schedule 1) Order 2012—so that it can be reconsidered Court appeals, all of which can be made only on as a fresh order when it is laid again. I am not seeking points of law, can attract legal aid, then it is logical to go behind the Act of Parliament. I still believe that that welfare benefit cases should attract legal aid at the many parts of it are entirely wrong and an enormous First-tier Tribunal as well, so that any point-of-law mistake, but whether I like it or not, Parliament has case in the First-tier Tribunal is legally aided. In such a passed it. It will come into force on 1 April 2013 and case it would be absurd not to allow the appellant at a we will have to see what the consequences are, but that First-tier Tribunal at least some legal help or advice to is not the point today. prepare for their point of law appeal. The then Lord Chancellor stated: 5.15 pm “just as we have accepted the argument about legal issues in the There are two main grounds for my request for the upper tribunal, we could of course do so if the same thing arises in the lower”—[Official Report, Commons, 17/4/12; col. 226.]— order to be withdrawn and they are linked together. If the order is not withdrawn, I will ask the House to meaning the lower tribunal. decline to support it. That is why my amendment can Anyone present at that debate in the House of be described as fatal, although in my view it is rather Commons that day—and I was sitting in the Peers’ too emotive a term and is a somewhat misleading Gallery myself—was in no doubt that there was an description because the Government can always come undertaking to find a way to give appellants in points back with something that is acceptable to the House. of law cases legal aid. The intention to do this was So-called fatal amendments may be rare, but they are understood by everyone on all sides present in the not that rare in this House. We have had 27 since 2000 Chamber. Certainly Tom Brake thought so. In agreeing instigated by Peers of all parties and of none. Indeed, to withdraw his amendment, he said: I am in good company today in moving a fatal Motion “I also welcome the Justice Secretary’s clarification that it is because no one less than the Minister himself moved the Government’s clear intention that, whether the points of law one—some time ago, let it be said—and pressed it to a are for the upper or lower tribunals, these cases should be funded vote. I also feel more content about moving a fatal by legal aid”.—[Official Report, Commons, 17/4/12; col. 243.] Motion as I happen to have discovered that the Leader There was a “clear intention”. What happened next of the House, who is not in his place at present, has was that the Lords amendment of the noble Baroness, also been known to support such Motions in the past. Lady Doocey, was overturned, and on 1 May the Bill My first ground, and one that I hope will appeal to became law. Many of us thought at the time that the all parliamentarians, is that Her Majesty’s Government concession did not go far enough, but whether it did undertook on 17 April this year in the House of or did not, none of us imagined what would follow. Commons to bring forward secondary legislation to On 18 September, the Parliamentary Under-Secretary allow eligible appellants to a First-tier Tribunal legal of State at the Ministry of Justice, Mr Jeremy Wright, aid if their appeal is based on a point of law, but made a Written Ministerial Statement to another place that in the event the Government have failed to in which he set out the Government’s solution to the honour this undertaking and are offering instead, as concession. This is what is in Article 3 of the order the noble Lord, Lord Pannick, has just said, a much before us this afternoon. The solution, I argue, is narrower and, in the words of Citizens Advice, a rather shocking. Instead of allowing legal aid in points “completely inadequate” alternative. Again, in the of law cases at First-tier Tribunal, the Government words of the Citizens Advice briefing: “It would appear will not allow any such thing. Instead, only in the the Government is not making any commitment at all extremely rare cases where, following the First-tier to provide legal aid for people to prepare appeals to Tribunal decision the tribunal itself says it has made the first-tier tribunal, even when that appeal is on a an error of law and sets up a review to decide what to point of law”. do about it, will legal aid be even possible. In order to Let me take your Lordships back to the other place get to this stage, an appellant who has lost at First-tier which, on 17 April, was involved in ping-pong, as it is Tribunal would have to draft his or her notice of described these days, with this House. Three weeks appeal. This is an appellant who has received no legal earlier, the noble Baroness, Lady Doocey, had successfully help. Remember: this is about points of law, not about 473 Civil Legal Aid Regulations 2012[LORDS] Civil Legal Aid Regulations 2012 474

[LORD BACH] That is not just judicial review; it is quite a wide area facts. So an appellant has received no legal help, no of law, including habeas corpus jurisdiction, as the legal advice prior to or during the First-tier Tribunal noble Lord, Lord Pannick, mentioned. However, this or worked with a notice of appeal after the First-tier is not the whole of this matter. It is interesting that it is Tribunal. If the solution applies to anyone, it will be to Regulation 53, because I think that the original rule of very few people for a year. the Supreme Court that brought in judicial review was Why have the Government given up and come up Order 53. It is a strange coincidence, but not particularly with something so different and so much less than important. What is important is that, apart from what they undertook? My guess is that the official asked to I have just read, the beginning of Regulation 53 requires come up with a solution was told that it should not that, cost anything, even though the cost of the concession “the Director must be satisfied that the criteria in regulation 39 would have been minimal—perhaps about £5 million (standard criteria for determinations for legal representation) are at £160 a case. I will remind the House that this is met”. approximately one-twentieth of what the police So Regulation 39 has to be met before you come to commissioner elections have cost this country. Whatever this regulation at all. the reason, my amendment is based on the belief that The noble Lord, Lord Pannick, briefly referred no Government—whatever their colour—should be to Regulation 39. It includes this provision at sub- allowed to get away with this. An undertaking to paragraph (d), requiring that, Parliament, even one made in extremis, must be kept. “the individual has exhausted all reasonable alternatives to bringing If it is not, then Parliament should insist. This is not a proceedings including any complaints system, ombudsman scheme party point. Yes, I am proud to sit on these Benches, or other form of alternative dispute resolution”. but it would not matter which Government of whatever I understood my noble friend Lord McNally to suggest colour were involved. Parliament should just not be that that only applied to a limited number of alternative treated like this. It is not common sense. procedures—but it says “all reasonable alternatives”. I Briefly, my second reason for this amendment is cannot see how it is possible to have Regulation 39, bound up with the first. A very large number of with that provision in it, and Regulation 53(b), which appellants at First-tier Tribunal are disabled people requires that that regulation is accepted, and also appealing against decisions by the Department for adds this. The two seem to be contradictory. It is not Work and Pensions, whether in relation to employment just the point that the word “reasonable” is used in and support allowance, disability living allowance or Regulation 39; it is incorporated into Regulation 53 at industrial injuries. Others appealing are often working the beginning. It simply does not make sense. That is men and working women who have been the object of the short and long of it. other wrong decisions about benefits which they are entitled to. All these appeals are vital to the citizens who bring them. That is why early, inexpensive legal 5.30 pm advice has been so important. It means that hopeless This matter was looked at by the Secondary Legislation cases do not clog up the tribunals and that appellants Scrutiny Committee in its 14th report. On page 15, can put their case better. paragraph 44, it says: I have to accept that in the vast majority of cases “The Committee noted some variations in the terminology legal aid will no longer be available after 1 April. used in the Regulations and expects the guidance to make absolutely However, many of the minority of cases that involve clear why these distinctions are made. For example, regulation 39(d)”— points of law are brought by disabled appellants and it the one I have just read— has got to be common sense, and just, that they should “includes a test of reasonableness requiring the individual to have receive some—some—legal advice. How can they be ‘exhausted all reasonable alternatives to bringing proceedings’ whereas regulation 53(b) does not include a similar test and expected to know or understand the legal points that requires the individual to have ‘exhausted all administrative appeals’, arise in their case? The Government agreed with that which would appear to be a higher threshold”. proposition in April; for some reason they do not now. Regulation 53(b) does not include a similar test, but Surely they should think again, and that is what I am Regulation 53 as a whole does because Regulation 39 asking them to do. In due course I will seek to move is incorporated at the beginning of Regulation 53. my amendment. Therefore the matter is quite clearly set out as a complete contradiction within Regulation 53 itself. Lord Mackay of Clashfern: My Lords, I will speak In my submission, Regulation 39(d) includes all in relation to both these matters; not in order of alternatives, as it says, and the same is true of importance but in the order in which they were taken, Regulation 53(b). The obvious solution is to delete so I will speak first to the amendment of the noble Regulation 53(b) altogether and leave Regulation 53(a) Lord, Lord Pannick. as the only additional requirement. I hope that my As I understand it, what the noble Lord, Lord noble friend will feel able to do that because I cannot Pannick, finds difficult is Regulation 53(b), which accept the view of the Secondary Legislation Scrutiny requires that the director whose job it is to decide such Committee that guidance can solve this matter, because matters has to be satisfied that, Regulation 53(b) is not alone as part of Regulation 53 “the individual has exhausted all administrative appeals and because Regulation 39(b) is in it as well. The guidance other alternative procedures”, cannot resolve a dispute—or at least a difference—on which are available to challenge the act, omission or the terms of the statutory regulations. That is not the other matter, function of guidance. The guidance is supposed to “before bringing a public law claim”. explain what the regulations mean. However, it is hard 475 Civil Legal Aid Regulations 2012[3 DECEMBER 2012] Civil Legal Aid Regulations 2012 476 to explain two different contradictory tests in the same Lord Bach: I am sorry to come back, but it is only if area. That is beyond the scope of any guidance that the tribunal finds an error of law. An error of law has could be offered. to be found by it first; then a review takes place. It is The amendment in the name of the noble Lord, only in those circumstances, which are very rare indeed, Lord Pannick, is well taken. Obviously, my noble that legal aid could be available at post First-tier Tribunal friend does not need to withdraw these regulations level. The other thing they might do is appeal to the because they deal with quite a lot of other things, but Second-tier Tribunal, when other considerations would a simple amending regulation would solve this problem. arise. However, it does not and cannot happen in every I rather got the impression from my noble friend that case. As I understand it, an error of law has to the intention was that reasonable alternatives would be found by the First-tier Tribunal after it has made its be taken into account in Regulation 53(b), although it decision. was not expressed. The difficulty is that when the contrary is expressed earlier on in the same regulation Baroness Doocey: My Lords, I support the amendment the difficulty is extreme. If a Minister has given an proposed by the noble Lord, Lord Bach, because I believe undertaking to Parliament, a regret Motion seems the that the Government’s present proposals will be right way to bring that to the attention of the House catastrophic for many thousands of people. During when the regulations are in question. the passage of the Bill, provision for legal aid funding I turn to the amendment in the name of the noble and advice for assistance in welfare benefit appeals made Lord, Lord Bach. If I have understood the situation, to the Upper Tribunal on a point of law was included and I am very capable of being corrected—very susceptible in the legislation. The Government also conceded that to being corrected is perhaps what I should say—on the same point of principle should apply to this matter, the regulation to which the noble Lord, the consideration of points of law by the First-tier Lord Bach, refers is complicated. It allows a person legal Tribunal. The Lord Chancellor said, in reference to aid under the regulation if he is invited to make a First-tier Tribunals: representation on requesting a review. My impression “We are quite open to the argument for ensuring that we have is that any appellant will be entitled to ask for a review. legal representation when there is a legal issue that we cannot If the appellant asks for a review and he is invited to expect a lay person ordinarily to argue”.—[Official Report, Commons, make representations, he will have legal aid to do that. 17/4/12; col. 226.] However, if he is not asked to make representations However, the Government have honoured neither the and the tribunal goes on to make a decision on the review spirit nor the letter of that commitment. The conditions without his representations, the second branch comes in they have laid down for legal aid to be available and he is entitled to legal aid. If I have understood the require so many planets to be in conjunction that, in set-up correctly, where there is a challenge to a decision practice, it is doubtful that the vast majority of claimants of the First-tier Tribunal, that is done by representations could ever meet them. to that tribunal, and in that situation the regulations My prime concern is the needs of disabled people, permit legal aid—as far as I understand them. who will be disproportionately affected by the removal of welfare benefits from the scope of legal aid. By not Lord Bach: With the greatest of diffidence, I rise to considering whether a point of law is involved other try to explain the situation as I see it. The respect I than when a further appeal is being pursued, the have for the noble and learned Lord is well known. My Government are effectively denying legal help to a understanding is that what the Government propose significant proportion of disabled people whose appeal comes at the end of the First-tier Tribunal hearing. cases could nonetheless be considered to raise a point Therefore, leading up to the First-tier Tribunal, whether of law. or not on a point of law, there would be no advice at According to the Government’s own impact assessment all to the appellant. During the tribunal hearing there figures, restricting legal aid to cases where the First-tier would be no advice to the appellant. Only if the Tribunal itself identified that it erred in law would appellant after the event decides to ask for facts and keep legal aid to just 696 welfare benefit cases in lower reasons and, after that, puts in a notice of appeal, will tribunals. That represents only a tiny proportion of there be the slightest chance that he might get legal aid the 135,000 welfare benefit cases each year. Of those at that stage. 135,000 cases, 78,000—nearly 60%—involve disabled Lord Mackay of Clashfern: With great respect, the people who currently rely on legal aid for welfare noble Lord’s own explanation shows that what happens benefit appeals. is that the First-tier Tribunal makes a decision and What makes the situation worse is that the Government that is one in a very large number of decisions. If are in the middle of a major overhaul of the welfare somebody wants to make a representation against that benefits system. Millions of claimants will be reassessed decision, asking for a review, the tribunal can invite and moved on to different benefits. During the transition representations at that stage; if it does, the applicant, period, disabled people will increasingly need expert as long as he was the original appellant, can get legal legal advice to challenge inaccurate decisions about aid. If, on the other hand, the tribunal decides, “We do their benefits. The lack of legal aid to pursue an not want representations, we know that we are right”, appeal in the first place will mean that disabled people it goes ahead with the review and comes back to the are unlikely to reach the stage where they can get legal same decision; because an application has not been aid, as the vast majority of claimants are unlikely to opened with right of representations at that stage, the recognise a point of law. second branch of the regulation gives legal aid. That is Legal aid for welfare benefit claimants costs an how I understood it but I may be wrong. average of £150 a case. There can be significant 477 Civil Legal Aid Regulations 2012[LORDS] Civil Legal Aid Regulations 2012 478

[BARONESS DOOCEY] In order to understand the context, it is necessary consequences if disabled people do not receive the to know that judicial review is, of course, subject to benefits to which they are entitled, causing considerable principles which have been judge-made. Judicial review, financial strain and pushing many of them into poverty. in the form that it is now, is a judicial invention of Their long-term costs in terms of demands on the which we are extremely proud. We are proud of it health and welfare system are likely to be an awful lot because the object of the exercise is to ensure, in higher than £150 per head. particular in relation to public law proceedings, that As I have argued on previous occasions, the removal the appropriate procedure is adopted, having regard of legal aid from welfare claimants is fundamentally to the issues raised. unjust. The paltry savings will prove to be a false At one time, it was thought—again, by decision economy. The Government’s latest proposal has made of the House of Lords in the well known case of a bad policy worse. I urge the Minister to reconsider. O’Reilly v Mackman, that it was always necessary to use judicial review in public law proceedings. It was Baroness Lister of Burtersett: My Lords, I am very then found in practice that that led to satellite litigation happy to follow the noble Baroness, Lady Doocey, over whether the right procedure had been used or the who has contributed so much to our discussion of wrong procedure. The courts sought to produce watertight previous legislation on this issue. I shall speak to the compartments. Fortunately, that was only a temporary amendment to the Schedule 1 order, but I also strongly stage in the development of judicial review. The next support what the noble Lord, Lord Pannick, said on step was to adopt a much more sensible and realistic the other amendment. approach, which involved proceedings being dealt with My noble friend Lord Bach made a powerful case. in the most sensible and reasonable way. Although the He speculated on why the Government have reneged phrase that judicial review should be used only where on their commitment. The only answer that we have there was no alternative remedy was retained as a received is that the Government say that it is not simple method to identify one of the principles, the feasible. I wonder why not. Today, the Minister has law had developed beyond that. It was made clear by argued that it is because of administrative costs, but in authority after authority that that was subject to the my book, administrative costs and feasibility are not requirement that it should always be reasonable to the same thing. adopt the procedure which was proposed: judicial Citizens Advice has proposed a number of options review. to make a reality of the Government’s commitments and made representations on them to the Government. Regulation 53(b) contains the statement that is in Are those options among those which the Government accord with the general principle of exhausting alternative have reviewed—the Minister referred to a review in procedures, but does not refer to the fact that that is passing? Were they considered not to be feasible? If so, not a rigid limitation, but reflects the nature of the why not? Was the suggestion made by the noble Lord, procedure, which requires the court to adopt a reasonable Lord Pannick, considered not to be feasible? If so, course in considering the matter. As has been pointed why not? Unfeasibility is a vague response. Citizens out by both my noble and learned friend, Lord Mackay, Advice referred to the Government’s proposal as and my noble friend Lord Pannick, that approach of “irrational”. It criticises the fact that there has been no the courts is almost impossible to adopt as a matter of consultation on it. Can the Minister explain why has interpretation because of the language of Regulation 39(d). there been no consultation? An additional reason to those which have been given I finish by referring to an e-mail that I received this for accepting my noble friend Lord Pannick’s Motion morning from a member of the public. She does not and amending Regulation 53(b) is that if that is not stand to be affected by the measures. She calls herself done, the procedures in the courts and the procedure an ordinary woman, “nothing special”, but she is for granting legal aid will be out of sync; they will be motivated by concern for her fellow citizens—in particular in conflict. That cannot be a sensible position. Litigants those who are sick or disabled. She refers to the fear will be forced not to do the reasonable thing, which is that many such people now feel. She writes: what the Civil Procedure Rules require, because they will not have legal aid if they do that, but to adopt an “I am pleading with you … to be fair and just when you ‘discuss’”, unreasonable course and bring proceedings by judicial the regulations. She finishes: review and then get legal aid. That cannot be a sensible course. “I have never felt so strongly about anything before so forgive me if I am departing from normal protocol. All I know and I hope the Minister, having heard the argument believe is that this is wrong and it needs to be stopped”. before the House, will accept the invitation which has How right she is. been made to consider the matter again. I would be very happy to adopt the amendment suggested by the 5.45 pm noble and learned Lord, Lord Mackay, but would, Lord Woolf: My Lords, I been trying to limber perhaps, suggest that if it is thought preferable to up, and I hope that I am now able to follow what amend Regulation 53(b), what was intended, I believe—or has been said by my noble friend Lord Pannick and what, at any rate, it should state—could be achieved my noble and learned friend Lord Mackay of by inserting into paragraph (b), “the individual exhausted Clashfern. I agree with every word that they said with all administrative appeals and other alternative procedures regard to the amendment to the Civil Legal Aid (Merits which it would be reasonable for him to adopt to Criteria) Regulations, which are the subject of the challenge the act, omission or other matter before regret Motion. bringing a public law claim”. 479 Civil Legal Aid Regulations 2012[3 DECEMBER 2012] Civil Legal Aid Regulations 2012 480

I should have said that my noble and learned friend There is one point which connects these two Lady Butler-Sloss intended to speak and asked me to amendments, and it is what drives me to want to indicate that she supports the arguments advanced by persuade the House to support them. In LASPO, we the noble Lord, Lord Pannick, and those which I have were faced with changes which, for many of us, were just advanced. very difficult to accept. The Government put them forward on the basis of economic necessity. However, there was a strong belief that there were cases where Lord Goldsmith: I want briefly to support both justice required that there should still be some opportunity amendments. So far as the amendment moved by the for legal advice to be taken and used. In these particular noble Lord, Lord Pannick, is concerned, it is not cases—public law and cases involving claimants with necessary to say very much after a former Lord Chancellor disabilities, for example—the Government are failing and a former Lord Chief Justice have both criticised to give effect even to that limited, modest exception the order as it stands because of the way it operates in that they were prepared to allow. I very much hope different ways. I can summarise my view in relation to that the Government will think again in the light of it very briefly. This order already recognises that there this debate. may be “reasonable” and “not reasonable” alternative procedures. It does that in Regulation 39. However, if one then reads Regulation 53(b), it is very clear that Lord Phillips of Sudbury: In the light of what I am the word “all” must be read as meaning “all”. Therefore, going on to say to my noble friend Lord McNally, I if one expands the meaning, what is being said as it would first like to say that the whole House well stands is that there will not be legal aid unless the understands the exigency that led to the LASPO Bill. individual has exhausted all reasonable and unreasonable However, as my noble friend Lady Doocey forcefully alternative procedures. As soon as one poses the question pointed out, and it cannot be repeated enough, in the that way, it becomes absolutely plain that it must be realm of social welfare law, there is a singular obligation wrong to impose that obligation. I do not think it is on us as parliamentarians to will the means of accessing necessary to say anything more than that to summarise those benefits. Unless we do that, everything that why the noble Lord, Lord Pannick, and the noble and Parliament does is a charade or a sham; because it is learned Lords, Lord Mackay of Clashfern and Lord cynical on our part not to give the people most in need Woolf, are absolutely right. in our blessed country—the poor, those lacking in Let me turn to my reasons for supporting my noble self-confidence, those without a scintilla of understanding friend Lord Bach in his amendment. I recall very well of the law and those who can scarcely read a Bill and the clear and powerful way in which the noble Baroness, understand it—the real opportunity to access the benefits Lady Doocey, moved the amendments which led to we are proud to bestow on them. It puts this realm of this particular issue. They were strong and supported public expenditure into a special bracket. There are by a majority of this House. I have read the debate— very few areas of expenditure, I suggest, that really though I did not listen, as my noble friend Lord Bach come within that narrow purview. did, to the debate itself—which took place in the other It was interesting to hear the noble and learned place. It seems clear to me that what was being said Lord, Lord Goldsmith, talking about lawyers looking was that a way would be found to enable legal aid to be forward to these rather nuggety issues in social welfare—it provided in the first tier where there were points of was a joke of course—but the reality is that no lawyer law. The concern expressed by the Government was goes into the realm of social welfare law to line his or that they did not want that to be a point of law just her pockets. I can tell the House that only the most because it was so stated by the claimant or the claimant’s socially minded lawyers subject themselves to practising lawyer. That is clear in column 266. However, the in this field. Government have not ended up with that at all. They I hope my noble friend Lord McNally will accept have ended up with something which appears—if my my next point. In all the fields of law, there is nowhere understanding of the way the procedure works is more complex than the forest of social welfare legislation. right, and it follows that of my noble friend Lord It runs to hundreds and thousands of pages. It is Bach—to mean that legal aid does not come into the utterly futile to pretend that the ordinary bloke can picture until after the event. That may be appropriate begin to put together the grounds for going to the in certain other circumstances, but not here. director to ask for support to launch an appeal if he or What one needs in these circumstances is the ability she has got to understand the legal background and to identify a point of law which will be relevant and legal prospects, because that is way beyond the capacity necessary for a particular applicant—particularly a of all but a very small number. claimant of the sort to which the noble Baroness, My final point is this. When the noble and learned Lady Doocey, referred—to be able to put that point of Lord, Lord Mackay of Clashfern, was five minutes law before the tribunal. I fully endorse her point that into his speech, I wondered whether he had, by most claimants do not recognise a point of law when mistake, picked up my notes. Every single word he said they see it. I suppose that as a practising and paid about the clash between Regulations 39(d) and 53(b) lawyer, I am quite pleased, on the whole, that that is was absolutely the same as what I was going to say. the case, although I do not actually practise in this The only thing I would add to it—and this is addressed area. The point is this, however, and I ask the Minister to my noble friend Lord McNally—is that, as the to answer this question: why could the way the noble and learned Lord, Lord Mackay, made clear, Government limit this not be by the chairman of Regulation 39(d) is expressly imported into Regulation 53, the tribunal identifying the point and certifying it at but the language in Regulation 39(d) and Regulation 53(b) the outset rather than waiting until after the event? is not consistent. 481 Civil Legal Aid Regulations 2012[LORDS] Civil Legal Aid Regulations 2012 482

[LORD PHILLIPS OF SUDBURY] goes somewhat beyond the matter identified by the That raises further problems. If things proceed as noble and learned Lord. In addition to the potential they are, for example, it is unclear what is meant by clash with Regulation 39(d), it strikes me that problems the word “unavailable” in Regulation 53(b). It is also arise in relation to two earlier parts of that regulation, not apparent to me how to construe the words in paragraphs (a) and (b). I remind noble Lords that all Regulation 53(a), these matters have to be borne in mind when dealing “appears to be susceptible to challenge”, with Regulation 53. Under Regulation 39(a) the director with the word in the following subsection (b), has to be, “procedures”, which are available to challenge. The “satisfied that the following criteria are met … the individual does refinements in the language and, I believe, the confusion not have access to other potential sources of funding (other than are such as to render this part of the regulations not fit a conditional fee agreement) from which it would be reasonable to fund the case”. for purpose. I very much hope that my noble friend will be able to give the House an assurance at the end That is a fairly open-ended requirement. Regulation 39(b) of this debate that there will be amendments to the says that the director has to be satisfied that, regulations hot on the heels of the passage of the “the case is unsuitable for a conditional fee agreement”. same. Suppose, though, that it was suitable for a conditional fee agreement; that of course does not necessarily mean that a conditional fee agreement is available. 6pm Suitability and availability are not the same thing. Lord Beecham: My noble friend is to be congratulated That reinforces the noble and learned Lord’s point not only on bringing this amendment to the House but that there is an inconsistency between Regulation 39 also on being elected Peer of the Year. At this rate he taken as a whole, not just in relation to Regulation 39(d), may turn into the Hilary Mantel of your Lordships’ and Regulation 53. I hope that noble Lords will be House; she of course has won her second Man Booker convinced by that element. prize, and it may be that next year my noble friend is There is a further matter that I need to touch on. awarded with his accolade again. I will speak briefly to The thrust of the Government’s proposals is to reduce his amendment before turning to that of the noble the reliance on judicial review. We have to be concerned Lord, Lord Pannick. about this in view of recent pronouncements about The Opposition entirely support the case made by the Government’s desire to reduce substantially the my noble friend, particularly because, embedded in number of cases that can be advanced by that method, the Government’s approach and reflected to some which is of course a principal method of holding the degree in today’s debate, there is some confusion between Executive to account. This is just one potential example, points of law and errors of law for the purpose of but I think that noble Lords will want to pay particular these regulations. The Citizens Advice briefing helpfully attention to it, having regard to the category of people makes this distinction clear. It says: who will be most affected by it. We should not lose “Furthermore in devising this whole policy Government appears sight of the fact that this may be part of a process of to be confusing ‘points of law’ with ‘errors of law’. Whilst the restricting access to judicial review that will go well majority of first tier welfare benefit appeals turn on ‘points of beyond this particular category. In my submission, fact’ such as financial and other circumstances … many cases do that is an additional reason for noble Lords to support raise significant legal issues over statutory interpretation (ie social the amendment moved by the noble Lord, Lord Pannick. security regulations), legal tests for disability”— as referred to by the noble Baroness, Lady Doocey— Lord Mackay of Clashfern: My Lords, am I right or “or disputed application of … precedents etc. The tribunal making an error of law which may be subject to a right of appeal is a wrong in thinking that any appellant who is unhappy much narrower concept”. with the decision of the First-tier Tribunal can ask it We have to bear that distinction in mind when weighing to review the decision? the strength of the case made by my noble friend. It will be the very exceptional case, as the noble Baroness Lord Beecham: Assuming that the appellant has the pointed out, that may qualify for that description of knowledge of that procedure, he might ask it to review an error in law, which of course has to be self-certified its decision, but the review will amount to nothing by the tribunal itself—a peculiar process, one might unless the tribunal convicts itself, as it were, of an think. We are certainly not in the position that the error in law. If it makes that mea culpa then under the Minister mentioned in the debate in the House of Government’s amendment there is a potential for legal Commons when he talked about 440,000 cases. That aid to be granted, but not otherwise. number is inconceivably large and, in my view, can be dismissed. Certainly, though, probably a good deal Lord Elystan-Morgan: My Lords, I support both more than 650 cases could potentially arise if the amendments. I am sure that it is not necessary for me definition were to deal with points of law. I hope that, to add my voice to the very distinguished contributions bearing in mind the assurances given on the earlier that have already been made in this regard. Both occasion by the former Lord Chancellor, the House amendments turn upon undertakings that have been will support my noble friend’s amendment. solemnly given—and, no doubt, in the best faith—by I also support the amendment moved by the noble the right honourable Kenneth Clarke. I accept that Lord, Lord Pannick, and supported by the noble and completely. If there has been mischief, it has probably learned Lord, Lord Mackay, as I understand him. been the mischief of mandarins thereafter in trying in Indeed, there is a peculiar relationship between some way to release him in some way from an undertaking Regulation 53 and Regulation 39, but in my view it that he solemnly and sincerely gave. 483 Civil Legal Aid Regulations 2012[3 DECEMBER 2012] Civil Legal Aid Regulations 2012 484

The other feature that is common to both amendments of this land, whatever politics or total lack of politics is that they deal with situations where preliminary he or she may have, “Do you believe in a miscarriage machinery is set up before a person can qualify for of justice?”, we all know what the answer would be. legal aid. In both cases, in my view, that machinery imposes such a burden upon the potential applicant to Lord Marks of Henley-on-Thames: My Lords— make his or her case virtually impossible—in other words, a total denial of what otherwise would be a fair Noble Lords: Minister! and just application by that person. In the circumstances, bearing in mind the weight of Lord McNally: I have never been so popular. authority that has been projected towards the Government in this case, it would be a very rash Minister who did A noble Lord: It won’t last. not concede the obvious points made in the amendment moved by the noble Lord, Lord Pannick. If the noble and learned Lord, Lord Mackay, is correct about the Lord McNally: I heard that as well. I am very interaction of Regulations 39 and 53, and if it be that grateful for the contributions to this debate and not Regulation 53 in this regard is totally and absolutely least for all the free legal advice I have been given. It governed by the relevant provision in Regulation 39, has been a useful debate and I have listened very then that is it—the Government do not lose one carefully to the points made. A number of noble, and millimetre advantage, because that situation has already indeed noble and learned, Lords have raised the issue been covered and fully determined. However, if that is of judicial review. The difference is in approach between not the case, then it seems that the argument put so Regulations 53(b) and 39(d). powerfully by the noble and learned Lord, Lord As I said earlier, the Government believe that the Goldsmith, must have come into play. That is that the current drafting of Regulation 53(b) meets the concerns director could come to the conclusion that indeed all raised both here and in another place. However, having reasonable avenues had been pursued but that there listened to the arguments that have been put forward were unreasonable avenues that had not been pursued. today, I recognise the strength of feeling that the That would be an absurdity and a miscarriage of regulation has provoked. I make it clear at the outset justice. It is either one or the other. that it has never been our intention to cut off legal aid for all judicial reviews. The noble Lord, Lord Beecham, As far as the amendment of the noble Lord, Lord was just setting a hare running about other plans for Bach, is concerned, it seems to me that there again is judicial review. In our view, this provision has been an irrefutable case. I am not at all clear what triggers misunderstood. the situation where there would be a review by the first tribunal. Would it be something entirely within the That said, I have heard the anxieties that have been discretion of that tribunal, or would it be on application? forcefully expressed about this provision. In the light If it is within the discretion of the tribunal, it is a very of that, I believe we should put the situation beyond strange situation that a tribunal is invited to consider doubt by setting it out in the regulation. Therefore, whether it is in error. having listened carefully and having consulted with colleagues, I can tell the House that, once these regulations Of course, I draw the distinction that has already are made, the Government will bring forward as soon been pointed out by the noble Lord, Lord Beecham. as practicable, and in any event well before April 2013, There is a world of difference between a point of law amending regulations to revise Regulation 53(b). These and an error of law. When a judge has adjudicated in a regulations will introduce discretion into Regulation civil case and is invited to grant leave to appeal, he is 53(b) so that the director of legal aid casework will not saying, “I am wrong”, or, “I am sure that I am have the express power to grant legal aid for public law wrong, please appeal”. What he is saying is that there claims, even if the alternative routes have not been is a point of law that is properly arguable. That is a exhausted, if he none the less considers that such an very different situation from a tribunal which says, appeal or procedure would not be effective in providing “We are wrong”. In fact, I do not know of any other the remedy that the individual requires. This would circumstance where such machinery exists in law, but I clearly address the situations that are causing noble am sure I will be corrected with regard to that. Lords concern. It would, for example, put beyond The basic principle that we are concerned with here doubt that legal aid for judicial review would be is that legal advice on a point of law should belong to available where the claimant required urgent interim the beginning of an action, not to the end of it. So relief and this could not be provided in any other way. much anguish will be saved by a very modest expenditure. I hope this will meet the concerns of the noble I believe that so much money from the public purse Lord, Lord Pannick, my noble and learned friend will be saved because there are undoubtedly downstream Lord Mackay of Clashfern, and others. Indeed, we costs which will be massive in scale in relation to this. will have the time to consult noble Lords about the However, above all it is a question of miscarriage of wording of the amending order that I will bring forward justice. in the new year. I hope that in the light of that the We think of miscarriage of justice as a situation noble Lord will not press his regret Motion. where a tribunal has come to an utterly wrong decision. It is not limited to that at all. A miscarriage of justice 6.15 pm occurs where a person has a just, meritorious case, and Lord Reid of Cardowan: My Lords, for those of us on account of lack of money is unable to have that who have experienced neither legal training nor legal case properly adjudicated. If you ask any decent citizen practice but who have listened to the very articulate 485 Civil Legal Aid Regulations 2012[LORDS] Civil Legal Aid Regulations 2012 486

[LORD REID OF CARDOWAN] That was our starting point. Since then, we have and understandable critique by many noble and learned moved considerably from that position in response to friends, can the Minister answer this question for me? arguments deployed in both Houses. During ping-pong I very much welcome what he has said. Is it implicit in on the LASPO Bill, having listened carefully to the what he says that, whatever discretion is given, it will arguments, we agreed to make available legal aid for not only come into effect if the First-tier Tribunal advice and assistance for welfare benefit appeals on a decides that it has made an error in law? That was point of law in the Upper Tribunal, including for explicit in many of the critiques which have come out. applications made to the Upper Tribunal for permission Is that conditionality now removed? to appeal. In addition, we agreed to make legal aid available for advice, assistance and representation for welfare benefit onward appeals in the Court of Appeal Lord McNally: My Lords, I, too, am not a lawyer. I and Supreme Court. The order before us today makes think that the noble Lord is asking what comes next, a further concession which is not insignificant. and that relates to the second order, not the first one, which the noble Lord, Lord Pannick, asked about. I It may be helpful if I illustrate how this will work. will try to cover the point which he has raised when I An individual will make an appeal to the First-tier get to that. Tribunal against an administrative decision of a public As I said, there was never any attempt on our part authority. If the appeal is unsuccessful, the claimant to change the rules as far as judicial review was can request a statement of reasons for the decision. concerned. However, when a former Lord Chancellor, The appellant can then apply to the First-tier Tribunal a former Lord Chief Justice and a former Attorney for permission to appeal to the Upper Tribunal. At General tell you that it needs clearing up, I think it is this point, the First-tier Tribunal must consider whether only wise to see whether it can be cleared up, and that to review its own decision if it considers that it has is what we will do. erred in law, and legal aid for advice and assistance Moving on, I have explained in detail how we have will now be available in relation to that review. If the listened to the concerns of this House—in particular, tribunal decides not to review, the next step is for the in extending legal aid in welfare areas. I have never First-tier Tribunal to decide whether to grant or refuse hidden the fact that the LASPO Bill was a very difficult permission to appeal to the Upper Tribunal. Where Bill involving some difficult choices. I can remember the tribunal refuses permission to appeal, the appellant answering questions at this Dispatch Box two years can then apply directly to the Upper Tribunal for ago, when we first launched the consultation. I said permission to appeal. Again, legal aid will be available then that, if you have a system which is targeted to for an application for this stage of the process. If help the poorest and most disadvantaged in your permission is granted by the Upper Tribunal, then society and you are forced to make cuts in that system, legal aid is again available for the substantive appeal you are going to affect the poorest and most disadvantaged before the Upper Tribunal. in your society. I have never hidden that fact. Therefore, it is wrong and misleading to suggest The idea that LASPO was nothing other than a that we are not making legal aid available in respect of very difficult Bill is again before this House. Many of points of law. As I mentioned in my opening remarks, the arguments that have been deployed tonight were we considered this matter in great detail following the deployed during the passage of that Bill. However, I debates during the passage of the Bill. We have explored remind this House that the LASPO Bill is now an Act every possible option to find a workable solution. Our that went through both Houses of Parliament and considered assessment is that other methods of carries with it financial implications that have to be independent verification would have proved unworkable. considered when discussing any changes to it. There is We did consider the CAB proposals but we felt that no infinite pot of money available and we have to they would create unreasonable cost and administrative think very carefully about how taxpayer-funded money burden. The cost is important. We have never tried to is spent. The Bill was therefore designed to ensure that hide the fact that part of the exercise was for legal aid public funding remains available for the most serious to make a contribution to the cuts in the spending cases and for those who need it most. In making hard review for the Ministry of Justice, a department which decisions and tough choices, we have listened to the spends money only on prisons, probation, court services concerns of some of the very same Peers who have and legal aid. The proposals would have placed burdens spoken today, and we made changes during the passage on the successor to the Legal Services Commission, of the LASPO Bill. the tribunal judiciary and the Department for Work Not for the first time, the noble Lord, Lord Bach, and Pensions. claims that the Government have not listened. I take In the Government’s impact assessment we identified this opportunity to set the record straight. I remind that, in 2009-10, we funded 135,000 instances of the House of the Government’s original proposal following welfare benefits legal advice. If the judiciary had to Proposals for the Reform of Legal the consultation on consider up to 135,000 interlocutory applications for Aid in England and Wales . Our response to the consultation legal aid, the impact on the tribunal service would stated that, be severe, and it could lead to serious delays in the “it remains the Government’s view that legal aid should be resolution of other cases. Similarly, if the Department removed for welfare benefits cases, as proposed in the consultation. However, it will be retained for judicial review of welfare benefit for Work and Pensions or the successor to the Legal decisions, and for claims about welfare benefits relating to a Services Commission had to consider that large contravention of the Equality Act 2010 that are currently funded, number of cases before they could be funded, it as proposed in the consultation”. would result in a significant extra administrative 487 Civil Legal Aid Regulations 2012[3 DECEMBER 2012] Civil Legal Aid Regulations 2012 488 and cost burden. We do not believe it right to impose What is the noble Lord’s assessment now of the net these additional burdens in the current economic contribution to reducing the deficit made by his policy climate. of removing access to justice for some of the neediest We have therefore decided on the approach set out people in our society? Does he still think that it is in the order. This would impose no additional burdens £25 million? Does he think it is less? Does he think on the tribunal judiciary because it must already consider that that is the crucial difference that is going to avert whether to conduct a review on receipt of an application fiscal disaster? for permission to appeal against a finding of the First-tier Tribunal. The tribunal can conduct a review Lord McNally: I do not believe that these matters only if it is satisfied that there has been an error of law remove access to justice. I notice that an organisation in the First-tier Tribunal’s decision. called MyLegal put out quite a long briefing, the interesting bit of which was on the last page, where Baroness Mallalieu: If the position is, as we have it said that Ken Clarke had said these measures heard during this debate, that the noble and learned would cost £25 million. The briefing said that that Lord, Lord Mackay, a former Lord Chancellor, and was wrong and that it was £14 million. The noble my noble friend Lord Bach, a Queen’s Counsel, cannot Lord, Lord Bach, said that it would cost only £5 million. agree on the interpretation of the wording of Article 3 What I do know is that it will have a cost. When I of this order, is it not clear that people who have no am carrying out my other responsibilities in the legal qualification and are going to have to look at it Ministry of Justice and I am suddenly told by this to see whether they can obtain legal aid are going to be House, which has no responsibilities in the Ministry of completely mystified? Whatever the merits or otherwise Justice, that I have to find £5 million, £15 million or of the order which the Minister is addressing now, this £25 million, there are decisions that must be made. is badly drafted, unclear and needs to be looked at I sit on boards where people lose their jobs and again. where the management of these changes is extremely difficult. I have never tried to hide that but I ask this Lord McNally: I do not accept that. I accept that House to have a sense of responsibility. We came up the lawyers may have glossed the patch a little, as with a concession after a lot of exploration and talks the noble Lord, Lord Reid, acknowledged. We are with departments and various boards. It is a narrow discussing various complex matters of its operation. I concession but it comes on top of a whole range of go back to the point that our initial intention was to other concessions which we believe retain legal aid in a take welfare out of legal aid—something that the vast swathe of the process of welfare and which we noble Lord, Lord Bach, has opposed from the very think is in keeping with the promises we made to beginning; I understand and appreciate that. That Parliament. does not take away the fact that we have argued our I ask this House not to go further in voting on this. case through both Houses of Parliament and put an I must make it clear that, if the amendment is carried Act on to the statute book. This is about implementing and this concession is lost, the Act is still an Act of that Act. Parliament and will still be implemented in April but It is clear that the Government have listened. We without this concession. I would consider that a rather have compromised. However, we can go no further pyrrhic victory. with concessions which impact the fundamental objectives of our reform: to focus legal aid on the Lord Pannick: My Lords, I am very pleased that highest-priority cases while delivering the essential the Minister has agreed to bring forward amending savings needed to address the deficit which is threatening regulations that will deal with Regulation 53(b) and I this country’s stability. thank him for considering the points that have been I was at a conference the other day where the made in the debate. He mentioned that the regulations noble Lord, Lord Bach, used a term which he may would focus on whether the alternative remedy is have been saving up for his final remarks. He said effective. I hope that when he and his officials read that next year we face a “perfect storm” in terms of the record of this debate, they will see that the concern welfare, in that we are indeed carrying through the is that the criterion should state that the issue is LASPO reforms and the welfare reforms at the whether the alternative remedy is a reasonable one same time. That is going to introduce strain. to use in all the circumstances. It is not just a However, the perfect storm would be if we lost control question of efficacy; it is also a question of speed and of our currency and economy, and if we lost convenience, for example. The Minister indicated that markets. That is when the people whom we have heard he would consult noble Lords who have expressed about today, whom people want to protect, would concern about this. I very much hope that he will take really feel the full blast of economic problems. We are further advantage of the free legal advice available trying to— from, in particular, the noble and learned Lords, Lord Mackay of Clashfern, Lord Woolf and Lord Goldsmith. Lord Howarth of Newport: I am grateful. The noble I would be very happy to act as their junior in this Lord used to tell the House that taking welfare benefits respect. On that basis, I beg leave to withdraw my out of the scope of legal aid would save £25 million, amendment. but we know also that his department is dumping all kinds of costs on other departments through the Amendment to the Motion withdrawn. health consequences and the damage to vulnerable children living in circumstances of great poverty. Motion agreed. 489 Legal Aid, Sentencing and Punishment[LORDS] Legal Aid, Sentencing and Punishment 490

Legal Aid, Sentencing and Punishment of should not have the ability to get legal aid in order to Offenders Act 2012 (Amendment of appeal to the first-tier tribunal even when the matter is a point of law which they cannot be expected to know Schedule 1) Order 2012 or understand. It defies logic and fairness to suggest Motion to Approve that kind of process should continue. All we are asking is that the Government withdraw 6.33 pm this Motion, which they are clearly not prepared to do Moved By Lord McNally tonight. If they will not withdraw it, I shall ask the House, in a completely non-partisan spirit, to decline That the draft order laid before the House on to give approval to this Motion tonight and invite the 29 October be approved. Government to come back with a slightly more generous Relevant document: 10th Report from the Joint order that looks after the type of person the noble Committee on Statutory Instruments Baroness, Lady Doocey, was telling us about earlier in our debate. Amendment to the Motion Lord McNally: My Lords, we are almost on the Moved by Lord Bach verge of another financial Statement by the Chancellor. I have made it clear that the noble Lord must not lure As an amendment to the above Motion, leave the House into an idea that following him into the out from “that” to the end and insert “this House Division Lobby will produce a better offer because it declines to approve the draft Order laid before the will not. House on 29 October as it does not fulfil the undertaking given by Her Majesty’s Government Lord Bach: Is the noble Lord saying that he will not on 17 April; and will mean claimants, including a come back with anything on this matter if this amendment disproportionate number of disabled people, will is carried? I think that that is a threat that the House not receive legal help on a point of law in first-tier should be very wary of accepting at such a late stage in tribunals relating to welfare benefits thus denying the debate. them a fair hearing on point of law cases”. Lord McNally: It is not a threat. I just do not want Lord Bach: My Lords, I spoke to my amendment the House to make a decision on such an idea. This is earlier in the debate and the House will be relieved to not the Committee stage of a Bill. The order relates to hear that I have very few words to say at this stage. My what is already an Act of Parliament. If we do not case is this: how can it be right that there is automatic bring forward another order in this area, the Act legal aid for any client who gets to the second-tier or simply will go through. I want the House to be aware upper tribunal—the Court of Appeal and the Supreme of that fact. Court—on a welfare law case but no automatic right to legal aid for first-tier tribunals? You can get to the Lord Bach: There is a framework Act of Parliament, second-tier tribunal or the Court of Appeal or passed by Parliament, which I have never sought to go the Supreme Court only on a point of law. If that is behind. These orders add flesh to those bones. This is the position, how can it be right that at a first-tier a very important order. In any event, the Government tribunal, when a client has a point of law, they should would have to have some kind of order on these not be allowed some legal advice before the first-tier matters. On this occasion, the Government have, in tribunal commences—in other words, before the first-tier effect, not kept with the intention that they certainly tribunal or during it? It is no use being able to get it at had in the House of Commons. By announcing what the very end of the first-tier tribunal in very remarkable they did in the Commons, they managed not to lose a and odd circumstances. vote and to get the Bill through. As a consequence, it is The Government seem to believe that was appropriate a serious matter. logic because that is the concession they were generous Lord Phillips of Sudbury: I am grateful to the noble enough to make in the House of Commons on 17 April Lord, Lord Bach—I almost said “my noble friend”, 2012. But they have not kept to that concession. They which he is. My noble friend Lord McNally has not have come up with something much more vague; commented on the noble Lord’s fundamental assertion something that will happen in very, very few cases. on which, for me, the strength of the case rests; I am very grateful to the Minister for the time he namely, that the former Lord Chancellor made a clear has taken with this and to all noble Lords who have undertaking which is now not being kept. Would it not spoken on my amendment. When the Minister answered be helpful to the House for the noble Lord, Lord a question from me the other day he said: Bach, to ask my noble friend Lord McNally for his “I want to make sure that we maintain a legal aid system that comment on that? will remain one of the most generous in the world and focus it on the most needy”.—[Official Report, 27/11/12; col. 90.] Lord Bach: That would be a fair question to the Can noble Lords think of anyone who is more needy noble Lord, Lord McNally, who has had every than the sort of person that the noble Baroness, Lady opportunity to answer it and has chosen not to. Doocey, was describing—a disabled person who has undergone some of these tests in order to get her or his Lord McNally: I will answer it—I answered it in my benefits, who is not happy with the result, thinks remarks. The Lord Chancellor said that he would take something has gone wrong and wants to appeal? What the matter away and use his best endeavours. I have the Government are intending is that that person seen the exchange of papers with the DWP, the Legal 491 Legal Aid, Sentencing and Punishment[3 DECEMBER 2012] Legal Aid, Sentencing and Punishment 492

Services Commission and the Administration on whether Hayter of Kentish Town, B. Peston, L. this could be done. We have come back with our best Healy of Primrose Hill, B. Pitkeathley, B. endeavours. This casual throwing around of betrayal Henig, B. Plant of Highfield, L. Hilton of Eggardon, B. Ponsonby of Shulbrede, L. fires the troops up for voting but it simply is not true. Hollick, L. Prashar, B. Hollis of Heigham, B. Prescott, L. Lord Bach: I would not dream of using the word Howarth of Newport, L. Prosser, B. Howells of St Davids, B. Quin, B. betrayal as regards this matter. The noble Lord Howie of Troon, L. Radice, L. misunderstands me completely. It is not a betrayal. Hoyle, L. Ramsay of Cartvale, B. The governing party in the House of Commons said Hughes of Stretford, B. Ramsbotham, L. that it intended to do something and, in that way, Hughes of Woodside, L. Rea, L. managed to get an adverse amendment withdrawn. It Hunt of Kings Heath, L. Reid of Cardowan, L. has come up with a solution but the solution is not the Irvine of Lairg, L. Rendell of Babergh, B. Janner of Braunstone, L. Robertson of Port Ellen, L. concession that it made in the House of Commons. Jay of Paddington, B. Rooker, L. That is the fact of the matter. It is a much narrower Jones, L. Rosser, L. solution and it is deeply unsatisfactory for those who Jones of Whitchurch, B. Rowlands, L. are interested in how the poor, the disabled and the Jordan, L. Royall of Blaisdon, B. vulnerable are looked after in our society and their Judd, L. St John of Bletso, L. Kennedy of Southwark, L. Sandwich, E. rights to access to justice. Kennedy of The Shaws, B. Sawyer, L. For that reason, I ask the House to decline to Kerr of Kinlochard, L. Scotland of Asthal, B. approve this order, so that the Government can think King of Bow, B. Sheldon, L. again and come back with an order which we can all King of West Bromwich, L. Sherlock, B. Kinnock, L. Simon, V. accept. I beg to move. Kinnock of Holyhead, B. Smith of Basildon, B. Kirkhill, L. Smith of Finsbury, L. 6.41 pm Knight of Weymouth, L. Smith of Gilmorehill, B. Layard, L. Snape, L. Lea of Crondall, L. Soley, L. Division on Lord Bach’s amendment. Liddle, L. Stern, B. Lipsey, L. Stevenson of Balmacara, L. Contents 201; Not-Contents 191. Lister of Burtersett, B. Stoddart of Swindon, L. McAvoy, L. Symons of Vernham Dean, B. Amendment agreed. McDonagh, B. Taylor of Blackburn, L. Macdonald of Tradeston, L. Taylor of Bolton, B. McIntosh of Hudnall, B. Temple-Morris, L. Division No. 1 MacKenzie of Culkein, L. Thornton, B. Mackenzie of Framwellgate, Tomlinson, L. CONTENTS L. Tonge, B. McKenzie of Luton, L. Triesman, L. Aberdare, L. Davidson of Glen Clova, L. Mallalieu, B. Tunnicliffe, L. [Teller] Adams of Craigielea, B. Davies of Coity, L. Mandelson, L. Turnberg, L. Ahmed, L. Davies of Oldham, L. Mar, C. Turner of Camden, B. Anderson of Swansea, L. Dean of Thornton-le-Fylde, Martin of Springburn, L. Uddin, B. Andrews, B. B. Masham of Ilton, B. Wall of New Barnet, B. Armstrong of Hill Top, B. Deech, B. Massey of Darwen, B. Warner, L. Bach, L. Desai, L. Maxton, L. Warnock, B. Bakewell, B. Donaghy, B. Meacher, B. Warwick of Undercliffe, B. Barnett, L. Donoughue, L. Mitchell, L. Watson of Invergowrie, L. Bassam of Brighton, L. Doocey, B. Moonie, L. West of Spithead, L. [Teller] Dubs, L. Morgan, L. Wheeler, B. Beecham, L. Elder, L. Morris of Aberavon, L. Whitaker, B. Berkeley, L. Elystan-Morgan, L. Morris of Handsworth, L. Whitty, L. Best, L. Evans of Temple Guiting, L. Morris of Yardley, B. Wigley, L. Bichard, L. Evans of Watford, L. Noon, L. Williams of Baglan, L. Bilimoria, L. Farrington of Ribbleton, B. Nye, B. Wills, L. Billingham, B. Faulkner of Worcester, L. O’Neill of Bengarve, B. Wilson of Tillyorn, L. Bilston, L. Filkin, L. O’Neill of Clackmannan, L. Winston, L. Blair of Boughton, L. Ford, B. Ouseley, L. Wood of Anfield, L. Borrie, L. Foster of Bishop Auckland, L. Palmer, L. Woolf, L. Bradley, L. Foulkes of Cumnock, L. Pannick, L. Woolmer of Leeds, L. Brooke of Alverthorpe, L. Gale, B. Patel of Blackburn, L. Worthington, B. Brookman, L. Gibson of Market Rasen, B. Patel of Bradford, L. Young of Hornsey, B. Browne of Belmont, L. Golding, B. Pendry, L. Young of Norwood Green, L. Browne of Ladyton, L. Goldsmith, L. Campbell-Savours, L. Gordon of Strathblane, L. NOT CONTENTS Carter of Coles, L. Gould of Potternewton, B. Chandos, V. Grey-Thompson, B. Addington, L. Baker of Dorking, L. Christopher, L. Grocott, L. Ahmad of Wimbledon, L. Bates, L. Clancarty, E. Guildford, Bp. Alderdice, L. Berridge, B. Clark of Windermere, L. Harries of Pentregarth, L. Allan of Hallam, L. Black of Brentwood, L. Clinton-Davis, L. Harris of Haringey, L. Anelay of St Johns, B. [Teller] Blackwell, L. Collins of Highbury, L. Harrison, L. Arran, E. Blencathra, L. Corston, B. Hart of Chilton, L. Ashton of Hyde, L. Bonham-Carter of Yarnbury, Coussins, B. Haskel, L. Astor of Hever, L. B. Crawley, B. Haworth, L. Attlee, E. Bowness, L. 493 Legal Aid, Sentencing and Punishment[LORDS] Palestine: UN General Assembly 494

Brabazon of Tara, L. Jolly, B. Taylor of Holbeach, L. Wakeham, L. Bridgeman, V. Jopling, L. Teverson, L. Wallace of Saltaire, L. Brinton, B. King of Bridgwater, L. Tope, L. Wallace of Tankerness, L. Brittan of Spennithorne, L. Kirkham, L. Tordoff, L. Walmsley, B. Trimble, L. Brooke of Sutton Mandeville, Knight of Collingtree, B. Warsi, B. True, L. L. Laming, L. Wasserman, L. Brookeborough, V. Lee of Trafford, L. Tugendhat, L. Tyler, L. Wei, L. Brougham and Vaux, L. Lexden, L. Wheatcroft, B. Browning, B. Lingfield, L. Tyler of Enfield, B. Wilcox, B. Burnett, L. Liverpool, E. Ullswater, V. Buscombe, B. Loomba, L. Verma, B. Younger of Leckie, V. Byford, B. Luce, L. Caithness, E. Luke, L. Motion, as amended, agreed. Cathcart, E. Lyell, L. Cavendish of Furness, L. McColl of Dulwich, L. Chalker of Wallasey, B. Mackay of Clashfern, L. Colwyn, L. MacLaurin of Knebworth, L. Palestine: United Nations General Condon, L. McNally, L. Cope of Berkeley, L. Maddock, B. Assembly Resolution Courtown, E. Maginnis of Drumglass, L. Question for Short Debate Craig of Radley, L. Marks of Henley-on-Thames, Craigavon, V. L. Crickhowell, L. Marland, L. 6.52 pm Cumberlege, B. Marlesford, L. Tabled By Baroness Royall of Blaisdon De Mauley, L. Mawhinney, L. Dear, L. Mawson, L. To ask Her Majesty’s Government what discussions Dholakia, L. Mayhew of Twysden, L. Dixon-Smith, L. Montrose, D. they have had with the Palestinian Leadership in Dobbs, L. Moore of Lower Marsh, L. the light of the outcome of the debate on the Eccles, V. Morris of Bolton, B. Resolution on the status of Palestine within the Eccles of Moulton, B. Moynihan, L. United Nations at the United Nations General Eden of Winton, L. Naseby, L. Assembly on 29 November. Edmiston, L. Neville-Jones, B. Elton, L. Newby, L. [Teller] Empey, L. Newlove, B. Baroness Royall of Blaisdon: My Lords, like all Erroll, E. Noakes, B. Faulks, L. Northover, B. Members of this House, I believe that the two-state Fearn, L. Norton of Louth, L. solution is and must be the solution to the Israeli- Feldman of Elstree, L. Oakeshott of Seagrove Bay, L. Palestinian conflict; that is, a safe and secure Israel Fink, L. Palmer of Childs Hill, L. living alongside a viable and sovereign Palestinian Fookes, B. Palumbo, L. state based on 1967 borders, with agreed land swaps, Forsyth of Drumlean, L. Parminter, B. with Jerusalem as the shared capital of both states and Fowler, L. Plumb, L. Framlingham, L. Popat, L. with a just, fair and agreed settlement for refugees. Fraser of Carmyllie, L. Randerson, B. However, as both the Foreign Secretary Mr William Freeman, L. Rawlings, B. Hague and my right honourable friend Mr Douglas Freud, L. Razzall, L. Garden of Frognal, B. Redesdale, L. Alexander have said countless times over the past few Gardiner of Kimble, L. Renfrew of Kaimsthorn, L. weeks: Gardner of Parkes, B. Ribeiro, L. “Time is running out for a two-state solution”. Geddes, L. Roberts of Conwy, L. German, L. Roberts of Llandudno, L. The news that Israel has seized more than $120 million Glasgow, E. Rodgers of Quarry Bank, L. of the tax revenues it collects on behalf of the Palestinian Gold, L. Rogan, L. Authority has made the situation much more dangerous, Goodlad, L. Ryder of Wensum, L. as has the announcement that Prime Minister Netanyahu Goschen, V. Sassoon, L. has authorised the construction of 3,000 new homes Grade of Yarmouth, L. Scott of Needham Market, B. and settlements and the speeding up of 1,000 existing Green of Hurstpierpoint, L. Seccombe, B. Hamilton of Epsom, L. Selborne, E. planning permissions. Indeed, the UN Secretary-General Hanham, B. Selkirk of Douglas, L. has said that this could be, Harris of Peckham, L. Selsdon, L. “an almost fatal blow to remaining chances of securing a two-state Henley, L. Shackleton of Belgravia, B. solution”. Heyhoe Flint, B. Sharkey, L. Hill of Oareford, L. Sharples, B. Last week, there was a massive vote at the UN Hodgson of Astley Abbotts, Shaw of Northstead, L. General Assembly in favour of Palestine moving from L. Sheikh, L. an observer entity to an observer state at the United Howard of Lympne, L. Shephard of Northwold, B. Nations. There were 138 nations in favour, including Howard of Rising, L. Shrewsbury, E. France and Spain; nine against; and 41 abstentions, Howe, E. Shutt of Greetland, L. Howell of Guildford, L. Smith of Clifton, L. including the United Kingdom. This was a strong Hunt of Wirral, L. Spicer, L. global signal in favour of an independent Palestinian Hurd of Westwell, L. Stedman-Scott, B. state. It also happened to reflect the views of the Hussain, L. Stephen, L. British people: 72% of respondents in a recent YouGov Hussein-Ece, B. Stewartby, L. poll said that they were in favour of recognising the Inglewood, L. Stoneham of Droxford, L. James of Blackheath, L. Stowell of Beeston, B. Palestinian state, and only 6% were against. Ephraim Jenkin of Kennington, B. Strathclyde, L. Sneh, a former Israeli Deputy Defence Minister, said Jenkin of Roding, L. Taylor of Goss Moor, L. before the vote that, 495 Palestine: UN General Assembly[3 DECEMBER 2012] Palestine: UN General Assembly 496

“Abbas’s statehood bid can be a game-changer if the American undo the damage done to Britain’s standing on this and Israeli governments respond prudently. Or it can be another issue as a consequence of its misguided abstention. missed opportunity—and a potentially disastrous one at that—if The Minister will know that there has been much press they respond punitively to a remarkable Palestinian achievement at the UN General Assembly”. speculation today that our ambassador in Tel Aviv could be withdrawn. I would be grateful for clarification. Sadly, prudence has been abandoned by the Israeli What discussions has the Foreign Secretary had on Government. this issue with the noble Baroness, Lady Ashton, the We strongly believe that the British Government EU’s High Representative? were wrong not to support the Palestinian resolution. It is said that Mr Netanyahu is taking these actions It is one of the steps to achieve and negotiate a with one eye on the elections in January. I suggest that two-state solution. The fact that we abstained was an the crisis in the Middle East is too important for the abdication of responsibilities to both the Israeli and area to be used as a political football. Indeed, it is Palestinian people, most of whom wish to live in terrifying. Then, of course, there are the tax revenues, peace. The vote was also an important means of collected by Israel on behalf of the Palestinian Authority, demonstrating support for President Abbas, crucial at which Israel has refused to hand over and which it will any time but especially in light of the most recent review on a monthly basis. This punitive action is conflict in Gaza, in which the power and influence of intolerable and again exacerbates tensions and frustrations Hamas were enhanced. The Palestinians not only wanted rather than enhancing the safety and security of Israel. Palestine to be recognised as a state—a prerequisite, I In the past, when Israel has frozen the monthly revenues suggest, for a two-state solution that is impossible of the Palestinians it has resulted in the late payment when only one side is recognised as a state—they also of salaries for thousands of public servants in the wanted a strong leader. They, like the world, wanted West Bank and Gaza. tangible proof that diplomacy works better than rockets. I wholeheartedly condemn violence but is it any In the House of Commons last week, Mr Hague wonder that the level of anger is heightened when men said that Government relations with President Abbas and women can no longer provide for their families? were excellent. Indeed, I hope that they are. However, These tax revenues are not gifts to buy treats; they are I wonder what the Palestinians think of our position moneys owed to the Palestinians on which they rely now that the feared retributions have begun. I have no for their day-to-day existence. I would be grateful if doubt that the Middle East will be a priority for the Minister would say what representations the President Obama in his second term of office. However, Government have made to the Israeli Government on the UK’s abstention will not have helped—quite the this critical matter, and what discussions they have contrary—and it will have diminished our position as had with Secretary of State Clinton. a global leader in the eyes of the world. I have no doubt that the Saudis and other friends of Before the vote, the Foreign Secretary said that the Palestinians in the Arab world will do what they recognition at the UN risked paralysing the peace can to assist financially.This would be an understandable process, but for far too long there has been only and welcome short-term solution for the Palestinians, paralysis and no process. There has been continued but it cannot be sustainable for any of the parties settlement building, and continued rocket attacks, but concerned, including Israel. I wonder what the British no process. I utterly condemn the rocket attacks from Government will do on the issue. For the past four Gaza. Like many parliamentarians, I have visited Sderot years there has been a near-total cessation of terrorist and spoken with the Israelis whose lives are blighted activity in the West Bank, partly as a result of co-operation by rocket attacks—and constant fear. However, I have between the Israel Defence Forces and the Palestinian also seen the settlements, which I utterly condemn and security forces, organised by Lieutenant General Keith which are against international law. Each house built Dayton’s team. However, if the Palestinian economy entrenches the Israeli occupation of Palestine and collapsed as a result of external economic pressures, makes Israel and its people less, rather than more, the situation could easily be reversed and Israel would secure. become even more vulnerable. Last week’s announcement that some of the new The vote in the UN last week demonstrated that the construction would be in E1 has alarmed the global world wants a solution to the Israeli-Palestinian conflict: community. E1 is a five-square mile controversial a two-state solution in which both states live in security development on the outskirts of Jerusalem that would and with dignity. Whereas recognition of Palestine as partly divide the West Bank and would hugely complicate a state by giving it observer status at the UN is a efforts to create a contiguous Palestinian state. Former positive step forward, the subsequent announcements Israeli Prime Minister Ehud Olmert has called it, by the Israeli Government are a deeply worrying “the worst slap in the face of a US President”. development that could jeopardise hopes for peace. I welcome Mr Hague’s comments that: The UK’s ill judged abstention at the UN was supposed “Israeli settlements are illegal under international law and to secure continuing influence with Israel, but there is undermine trust between the parties. If implemented, these plans little evidence of that strategy working. I now urge the would alter the situation on the ground on a scale that makes the Government to co-ordinate their actions with European two-state solution, with Jerusalem as a shared capital, increasingly partners so that further steps can be taken to help difficult to achieve”. ensure that Israel complies with international law and Mr Hague is absolutely right. I understand that Israel’s demonstrates a commitment to peace. Most urgently, I ambassador has been called to the Foreign Office for a trust that all efforts will be made to ensure that Prime meeting with Alistair Burt, the Minister for the Middle Minister Netanyahu hears this message loud and clear East. Clearly this is the right thing to do, but it will not when he meets Chancellor Merkel in Berlin on Wednesday. 497 Palestine: UN General Assembly[LORDS] Palestine: UN General Assembly 498

7.01 pm this kind, but it is so intent on focusing on its internal problems that it has not been able to provide any kind Lord Alderdice: My Lords, I commend the noble of useful contribution to the peace process. There is a Baroness for securing a debate at this time on an issue great urgency about the development of a regional that transcends all party differences. On 29 November process to save us from regional chaos and to give the 1947, the United Nations voted in Resolution 181—with possibility of the establishment of a Palestinian state 33 for, 13 against and 10 abstentions: in other words, living in peace and stability alongside the State of voted very powerfully—for the establishment of the Israel. State of Israel. It also wanted to see the establishment of a Palestinian state. On 29 November 2012, the In this regard, I say with great sadness that our United Nations voted again, and 138 out of the now country this time is on the wrong side of history. This 193 member states voted for the possibility of moving is a serious error of judgment. This was an opportunity towards a new member state. They did not declare that to rescue the reputation of this country in a region it was a state, only that it was moving towards being a that has not been impressed by the military adventures state. of the past 10 or 15 years. It was an opportunity for our country to say clearly that we support our friends Who voted against? Panama, Palau, Nauru, in the State of Israel but that we do not give them a Micronesia, the Marshall Islands, the Czech Republic, veto on our policy, or who we talk to, or who we are Israel, the United States and Canada. How is it possible prepared to engage with. I do not expect my friends to that the State of Israel, which was brought into being tell me who I can and cannot talk to; I expect them to by an overwhelming majority vote in the United Nations, come along with me to talk to people. If my friends has contrived over the subsequent years to so lose the say they want a partner, I try to establish a relationship confidence of other member states that it finds itself with that partner. Instead, we as a country find ourselves with so little support in its opposition to the perfectly closing in, in a way which—whatever our Israeli reasonable demand for a Palestinian state? Government colleagues say—is not good for Israel, The peace process has been paralysed for years. never mind for this country. There has been no peace process for years. I speak as I spent the past weekend organising two international someone who spends a considerable amount of time conferences in London. At the second was a very working on this issue and on events in the region. senior Israeli—a senior, very Jewish, very Israeli Israeli. Huge changes are taking place—and they are not for His commitment to his country, in diplomatic, political, the better. The world has changed. I do not think that academic and security terms, had been, he said, “my some of our colleagues in this country, in Israel and whole life”. I asked him what he thought of the vote. certainly in the United States realise that the world has He said: “Israel should have supported the vote. It already changed. It is the kind of change that took should have made it clear that it wants a partner for place in the run-up to, and after, the First World War. peace and wants to give Palestinians an opportunity The balance of power is different. Changes take place to get together as a state to be a partner for peace”. because of changes in technology. Having massive Recognition of a developing Palestinian state does not military power in the old sense no longer cuts it. It no define its boundaries; that is part of the problem. It longer stops or starts major political change. does not describe its population; that is part of the It is said by many in the Israeli establishment that problem. It does not tell us how we are going to relate there is no partner for peace. Therefore, what is the the various different Swiss-cheese parts of its territory; objection to recognising a nascent state that can become that is part of the problem. However, it does give a a partner for peace? If there is to be a partner for partner with whom to engage in a peace process. peace, and if the complaint is that Palestinians are It saddens me greatly, and frightens me greatly, that fragmented, surely this creates the opportunity for the we face such dangerous times in that region, from various elements in the Palestinian state to come which we will not escape. On this occasion our together—for Hamas, Fatah and others to become a Government did not do the right thing for the country. partner for peace. However, I think that we have gone I hope that they can review their approach, not in beyond all of that. It is no longer clear that a two-state terms of the vote, as the vote is past, but in terms of solution is possible. If it is not, there are only two how we engage to ensure a regional process towards other obvious possibilities that I can see. One is a stability. Otherwise we will, I fear, observe a regional single state, which manifestly cannot be a Jewish state descent into chaos. if it is democratic. The other is some form of chaos and war in the region. It is wholly possible that that is 7.10 pm what we are looking at: we are sliding into a regional The Lord Bishop of Guildford: My Lords, I am very war. grateful to the noble Baroness, Lady Royall, for raising What is the alternative? It is that we look to a this urgent, peace-threatening question. YourLordships regional process to create stability in the region. Noble may be aware that the right reverend Prelate the Bishop Lords will not be at all surprised that I speak about of Exeter, together with the Roman Catholic bishop, such a process because I have been banging on about it Bishop Declan Lang of Clifton, had written to the for years. I have not for years seen the possibility of Foreign Secretary in some regret at the UK’s abstention Israel and the Palestinians negotiating an outcome, from the UN vote on Palestine’s non-member observer and I do not any more see the United States status. They—and all of us on these Benches, irrespective providing a particularly useful role in achieving it. of our views on voting or abstention—urge Her Majesty’s There was a time when it could have. There was a time Government to do everything possible to revitalise the when the European Union could have played a role of stalled peace process in the Middle East. 499 Palestine: UN General Assembly[3 DECEMBER 2012] Palestine: UN General Assembly 500

I am particularly grateful that the last speech The shadow Foreign Minister, Douglas Alexander, highlighted the importance of a regional peace discussion. spoke in the other place in a debate last Wednesday We understand the desire to urge all parties to desist before the UN vote. He said: from actions—such as a Palestinian appeal to the “what I believe will be an overwhelming majority of the 193 International Criminal Court—which would make a members of the UN General Assembly in voting for enhanced restart of discussions, whether completely international observer status for the Palestinians. That vote can, and must, send or more regional, more difficult. Yet is there not a a powerful signal to the Palestinians that diplomatic efforts and desperate need to signal that there must be a way the path of politics, not the path of rockets and violence, offer the route to a negotiated two-state solution”.—[Official Report, Commons, forward through international law, which the new 28/11/12; col. 230.] Palestinian status surely indicates, lest despair of a two-state solution, or any other solution, lead to the That is what we must all hope will occur. resumption of violence such as the firing of rockets As this House knows, only a week before this vote, from Gaza, which has already been alluded to? That Gaza and Israel were in conflict with rockets flying could slide into the regional war to which the noble from both sides, and, sadly, there were casualties on Lord, Lord Alderdice, has just alerted us. both sides. Since Israel left Gaza in 2005 countless My stress on a solution grounded in international rockets have been fired from Hamas-run Gaza, and law is a point which the right reverend Prelate the Hamas uses innocent citizens to hide behind. We must Bishop of Exeter would have made had he been in his all acknowledge Israel’s right to defend its own country. place. He is in fact visiting some of his flooded churches We cannot ignore that Israel, like Palestine, has a right today. This stress enables me warmly to welcome to exist. Hamas saw the results on 29 November as a today’s news from the Foreign Office of the summoning victory. It is important for the Palestinian people but of the Israeli ambassador to meet the Minister with Hamas is not there to benefit its people. It is not the responsibility for Middle East affairs. Afterwards a Government; it is a terrorist group that uses it own spokesman mentioned the Government’s potential “strong citizens as shields to hide its operations. It is a group reaction”to Saturday’s announcement of Israel’s building which publicly announces the annihilation—the plans between east Jerusalem and the West Bank. annihilation—of the State of Israel. These plans seem, to my judgment, an absolute roadblock Whether you say shalom or salaam, it is this word— to the resumption of any progress and any new which means peace—to which we must always return. negotiations. There are many things on either side We must all work together for peace in that area. How which could threaten the only real option for peace—the do the Government consider the UN results on the resumption of discussions, which is the only real option status of Palestine will encourage them to go back to for security for Israel, as has already been mentioned. the negotiations when they have refused to take part in Continued building on the wrong side—the wrong the past two years? side in international law; the wrong side of the green Before I finish, I would like to tell a fable of a line—is, in my view, the most serious threat of all. London man who once went to a law society and asked to be recommended to a one-armed solicitor. “Why one-armed?”, asked the official. “Because,” the 7.13 pm man replied, “I am sick to death of lawyers saying, on Lord Janner of Braunstone: First, my Lords, I apologise: the one hand this, and on the other hand that”. That I did not realise that the debate was going to start so was a perfectly good reason for wanting somebody very early. However, I am honoured and delighted to with one hand. On the one hand, if you do not be here. recognise that others have a case, you will lose yours. During my career and personal life I am proud to On the other hand, if you do not put your case firmly, have worked, and continue to work, for both Jews and then you will not be an advocate for long. And without Arabs who are in Israel and the neighbouring countries. any hands, you certainly cannot clap. One Hand Alone I have spent much of my time building bridges between Cannot Clap is the name of a book that I wrote some their communities—working together on our similarities years ago about Israel and the Middle East. It is and differences, discussing how we live, and, more important that we acknowledge that you cannot base importantly, discussing how they can live happily together. arguments or work for peace with only one side. No That is why I believe it is essential that we work to one would argue against the rights for the Palestinian support both Israel and Palestine to reach a two-state people to have their own home, and this is also so true solution where the Jewish have their state—Israel—and for Israel. We must all learn to clap together and to the Arabs have their own state: Palestine. The Palestinians’ live happily and peacefully side by side. win at the United Nations General Assembly shows how many countries also agree that they deserve to 7.18 pm have their own state. However, the remaining number Lord Palmer of Childs Hill: My Lords, the noble of noes and abstentions demonstrates how the resolution Baroness, Lady Royall, asked a very important and still needs to be both discussed and developed. interesting Question. My noble friend Lord Alderdice Our Government did not vote yes. Last Thursday referred to the United Nations vote in 1947. Many in the United Nations they abstained, showing how we people seem surprised that the UK abstained in the in Britain do not completely dismiss the Palestinians’ vote to upgrade the status of Palestine at the UN. rights but acknowledge that there are a number of However, students of history will appreciate—this has issues that must be spoken about in order for our not yet been pointed out—that this abstention follows Government to agree wholly to the increase in Palestine’s the precedent of Britain abstaining in the 1947 vote on status at the United Nations. the UN partition plan leading to the creation of the 501 Palestine: UN General Assembly[LORDS] Palestine: UN General Assembly 502

[LORD PALMER OF CHILDS HILL] It must be noted that, in the past, the quiet co-operation State of Israel. Some things do not change. It has between Israel and the Palestinian Authority has led always been a foregone conclusion at this time of the to some genuine progress—not enough by a long way United Nations that a large majority of nations, including but some at least. What is needed is a de-escalation of the Islamic and non-aligned states, would vote in tensions and a period in which each side commits, favour of the UN’s de facto recognition of Palestinian publicly or privately, not to take steps which antagonise statehood. Some things have changed since 1947. the other, whether it is expanding settlements, which I We can achieve the desirable result of a Palestinian disagree with absolutely, on the Israeli side, or unilateral state alongside a secure Israel only by joint negotiations moves in international organisations or legal bodies between the two parties. I quote from a newspaper this on the Palestinian side—and of course a cessation of weekend, which stated: hostilities from either side of the border. “Mr Abbas has said he will not return to talks, which were If I was a public adviser to the Israelis, I certainly broken off in 2010, without a freeze in settlement building, would not have advised them to announce the building ignoring Israeli calls for a resumption of negotiations without of more settlements and a holding-back of taxation preconditions”. revenues. Perhaps I would have advised them to I am against the expansion of settlements. However, concentrate on what Israel does internationally in even an amateur prophet could have predicted that the helping with world relief. When a massive earthquake Israeli reaction to the UN vote would be to announce struck Haiti, Israel was one of the first and most the approval of construction of new settler homes. effective responders, using its undoubted technological The E1 proposed area which the noble Baroness, Lady know-how and experience for the benefit of others. Royall, referred to only has preliminary zoning and Perhaps noble Lords have forgotten that, during Israel’s planning. Although that is bad enough, it is not actually stay in Haiti, the medical delegation treated more than in the building stage. 1,110 patients, conducted 319 successful surgeries and delivered 16 births including three in Caesarean section. I hope that Her Majesty’s Government will stress The IDF search and rescue force also performed very to the Palestinian leadership—which is the point of well. On irrigation projects around the world—the the noble Baroness’s Question—that if it wants to stop noble Lord, Lord Alderdice, spoke about the conference the building, it had better get to the negotiating table that he organised the other day—Israel is a world as quickly as possible. Surely Mr Abbas does not want leader in water technology to develop new water sources, the same said about him as was said about Mr Arafat: use the water that we have most efficiently and recycle that he lost no opportunity to lose an opportunity. waste water. We need more desalination plants around The man who said that, Abba Eban, an Israeli Foreign the Middle East and not just in Israel. On aid or Secretary, also once said that if Algeria introduced a advice to other regimes, according to MASHAV, an General Assembly resolution that the world was flat Israeli organisation, Israel has used its expertise to and Israel had flattened it, it would pass 100 to 10 with transform agriculture from traditional subsistence to about 50 abstentions. sophisticated market-oriented production. It is for this President Abbas is requesting recognition for a reason that many countries in the developing world state half of which he does not even control. Since have sought partnership with Israel in addressing their Hamas took power in Gaza in 2006, Mr Abbas, as far agricultural challenges. Since 1958, MASHAV has as I know, has not visited there even once. The resolution trained in Israel and abroad almost 200,000 course pushes further away the prospects for peace. The only participants from approximately 140 countries and way to achieve peace is through direct negotiations, has developed dozens of demonstration projects worldwide and I hope that my noble friend the Minister will in fields of expertise. stress this to both sides. Unfortunately for ordinary If I were one of those mythical public relations Palestinians, they will see little gain from the UN consultants, perhaps I would also talk about the life-saving achievement. The Gaza Strip will remain under the technology which has emanated from Israel. It is hard rule of Hamas. The move seems more likely to undermine to know where to start. Hadassah University and the prospects for reviving the peace process, as described Weizmann Institute have produced scientists and Nobel eloquently by my noble friend Lord Alderdice, except laureates responsible for the research and development for one redeeming feature; namely, improving President of important medical advances and life-saving techniques. Abbas’s reputation on the Arab street. Not negotiating Israel leads the world in stem cell research, with important with Israel has been Mr Abbas’s choice in recent years, breakthroughs in repairing tissues and organs damaged whether due to his distrust of Israel or due to his own by Parkinson’s disease. Teva Pharmaceutical Industries, unwillingness to make compromises. The move to the headquartered in Israel, is the largest generic drug UN looks more like a continuing strategy to avoid manufacturer in the world and has made an incredible negotiations and not a way to revive them. effort in helping to combat diseases such as multiple When Mr Abbas first laid out his ambitions 18 months sclerosis and Parkinson’s disease. Israel has broken agointheNew York Times, he made it clear that he ground in fertility treatment. There is the neuromedical would use Palestine’s new status to try to confront electrical stimulation system, a glove-like device that Israel in international legal forums. That is not exactly can help paralysed people; there is imaging technology; conducive to peace. More than ever, Mr Abbas needed and there is help for cancer patients and nanotechnology. a domestic political win. This has only been heightened The responses from Israel on settlement expansion since the recent conflict between Israel and Hamas. and tax revenues do not help, but they must be seen in The Palestinian Authority had become largely irrelevant a context where the Palestinians refuse to sit and in the international theatre until the UN vote. negotiate and have taken a unilateral step which aggravates 503 Palestine: UN General Assembly[3 DECEMBER 2012] Palestine: UN General Assembly 504 the situation. Israel has said time and again that it the country in the excitement of everything that was wants a two-state solution, as referred to by the noble going on, “It’s all right for these people, but we’ve got Lord, Lord Janner. I ask Her Majesty’s Government to make a future with our neighbours and all the and all parties to do as my noble friend Lord Alderdice people in the region”. Israelis said that to me. Since said and work to a regional solution where all parties then Israelis have refused to serve in the armed services, get people to the negotiating table. It is not too late to because they will not be part of what is going on, and do so. There is a chance for a two-state solution, but it other Israelis have made brave stands against these is up to us, Her Majesty’s Government and other policies. Our absence of even-handedness has let down Governments to help by getting the two sides to that those brave and courageous Israeli people who have table to negotiate before it is too late. tried to advocate an alternative policy for their country. We have to look to the future. We must not suddenly 7.27 pm switch from our responsibilities. History will not allow us to do that. But it is because we have special Lord Judd: My Lords, it is obviously a time when responsibility for the creation of the State of Israel we should all turn our minds to how we take things that we must always speak honestly and bluntly about forward. However, in our concern about how we take what really matters for Israel’s survival. The truth of things forward, it is also important to have some the matter is that the present policies of Israel—and historical context for what has happened, and it is a we all know this—could not be better designed to long story. undermine the future prospects of the people of Israel. We have special responsibility in this country towards They prolong the danger and the threats that will Israel because we were one of the principal powers accumulate. that played a key part in bringing Israel into existence How will we approach the future? Reference has and we must therefore not betray our responsibility in been made to the need for a regional approach, which that context. It is also important to remember that, I am sure is right. We must have a regional approach historically and objectively, no people paid a higher to secure the future. However, a regional approach price for the creation of the State of Israel than the cannot impose a solution. No one can impose a solution. Palestinian people. It is important therefore to see The solution will have to be generated by the Palestinian both sides of the argument in history, because it is not and Israeli people. That is where it will come from. We just a current crisis that we face but a deeply rooted have an example in our own history, that of Northern history. Ireland. If it is to work, it must have the commitment I do not happen to believe that the West and our of the key parties, which will mean a readiness to talk own country under successive Governments have been to people with whom it may not be very easy to talk, even-handed in their approach to this situation, when, just as we learnt that we had to talk to the political if any issue in the world demanded even-handedness, wing of the IRA if we were to make progress. That it was this one. We have been pro-Israeli, and history was critical. will read the message very clearly. We may try to However, we also learnt something else in that persuade ourselves that we were not letting down the process in Northern Ireland: that we must keep any Palestinians but we were, repeatedly. Where has our preconditions to an absolute minimum because they voice been on the blockade, on the screwing of the will only distort everything, and they will not be economy of Gaza? In two or three years’ time, the one owned by the participants. Some of the things that as remaining aquifer in Gaza will collapse, because spare outsiders we see as obviously essential must come parts have not been allowed in through the blockade from the participants in the negotiations, who have to to maintain it. Ninety per cent of the water in Gaza is come to those conclusions themselves. They must go not fit for human consumption. The schools, the health, through a process of learning in the negotiations that and the economy of Gaza have been screwed. go on. I am sure that the noble Lord, Lord Alderdice, Almost exactly a year ago I was in the West Bank would agree with me that that is exactly what happened and Jordan, and up until then I had not realised quite in Northern Ireland. what the settlements meant. They are not just a few We should also be encouraging and supporting nice settlements—Israeli suburbs in the West Bank them in practical co-operation. The conference on and Gaza—but fortified encampments with security water organised by the noble Lord, Lord Alderdice, gates. Palestinian life is absolutely distorted. People which I was so glad to be able to attend, was a very are humiliated day after day as they pass through the interesting example of this. It demonstrated how we security gates, where they are treated rather brusquely, can help them to get into practical situations in which to say the least. Farmers are able to get to their land they see their mutual interdependence. and back again only at certain specified hours. I asked The most important point of all is that a negotiated, what would happen if a farmer had a heart attack. lasting, enduring solution will have to be inclusive. It The UNRWA people told me, “Well, somebody would will have to draw in the widest possible cross-section have to get on to us, and we’d have to try to negotiate of people. It is nonsense, and stupidity, to refuse to see an arrangement with the Israelis so that the gates were that Hamas has to be part of the solution. This can no opened to allow the people back”. We have not faced longer be tolerated, because of course it becomes a up to the realities of what is going on. self-fulfilling prophecy. It undermines any chance of Another issue worries me very deeply. I recall how emerging moderate or more enlightened leadership in in 1967 I was in Israel for the duration of the war. I Hamas, and plays right into the hands of the extremists, talked to Israelis then, who said to me, as they listened who are there, and who will use Hamas for their own to militant, pro-Israeli language being broadcast into irreconcilable ideological religious—or other—objectives. 505 Palestine: UN General Assembly[LORDS] Palestine: UN General Assembly 506

[LORD JUDD] worrying. The Israelis are losing the support of countries This will take a lot of imagination. What is tragic—and that would have supported them strongly in the past. I I use the word in the real Greek sense—about the vote had these thoughts even before the announcement of last week is that we marginalised ourselves. I hope that the disastrous reaction to the vote in the United Nations. my noble friend, who introduced the debate with a Although the noble Lord, Lord Palmer, rather glossed particularly good speech, will not mind my saying that over the decision to go ahead with preparations for E1 the Question refers to talks with the Palestinian leaders and the impact these have had on East Jerusalem, since the vote. I cannot imagine that we are very high along with tax withholding and going ahead with on the Palestinians’ list of priorities for talks at this more settlements, I certainly understood why Ban juncture. Ki-Moon said that it would be an “almost fatal blow” to hopes of peace. I am not sure that the present 7.36 pm Israeli leadership under Mr Netanyahu actually has Lord King of Bridgwater: My Lords, I have not any intention of ever going forward with a two-state previously been involved in the debates on Israel and solution. I am afraid that that is the impression he Palestine and the issues arising from them. I am extremely gives outside the country. Everyone goes along with it, grateful to the noble Baroness for introducing this saying “That’s our policy”, but I am not sure whether debate, because I wanted to express simply, as somebody he is ever going to move on it. who is much more of an observer than many of the I much appreciated the speech of my noble friend experts who have spoken already, the great concern Lord Alderdice. He and I know very well the old cry, that I have about the situation. “Not an inch and no surrender”, which I had shouted I am progressively more alarmed about this region, at me often enough in Northern Ireland, along with which has already been referred to being in turmoil at people trying to hit me over the head, but we knew the present time. This situation does not threaten that it was not the way out of the problem. Progress merely continuing bitterness and violence between had to be made on both sides and, as the noble Lord, Israel and the Palestinians but threatens the region, Lord Judd, said, it had to involve the people on both and may threaten ourselves, in terms of world peace sides. They have to understand their best interests. No and stability, the possible involvement of the United sensible Israeli wants to be in a state of perpetual war. States, and the consequences of events in Iran. A The Israelis cannot want to be in that continuing number of developments here pose the greatest danger situation, and no Palestinians want to find themselves to us. I have always supported the State of Israel and in the present miserable situation. its existence. However, the current actions of the Israeli Against that background, the scale of change that Government imperil the State of Israel itself. Voices of is taking place in the world and in that region cannot concern and friendship have a duty to speak out at this be overstated. I have seen, and no doubt so has Israel, time. the visits that are now being paid to Gaza. The Prime The New Statesman had a headline this week, that Minister of Egypt has been to Gaza, as has a senior Mr Netanyahu risked condemning Israel to perpetual representative or perhaps the Emir of Qatar. Senior war. The awful thought, in such a dangerous world, of representatives from Bahrain have been there, and the risk of continuing and escalating conflict of this now I see that Mr Erdogan of Turkey is talking about kind, must concern us all. This is a time when Israel going as well. These developments are profoundly needs support. The noble Baroness referred to the significant. Whether these decisions and the reactions vote in the United Nations, which was 138 to nine. Of to them are to help the election campaign of the nine, as the noble Lord, Lord Alderdice, quoted, I Mr Netanyahu in January—we are promised the election had to look up who two of them were. One of them of an even more hawkish coalition—is not known, but was Palau, which has a population of 20,000; another one does weep very seriously, not least because we still was Nauru, which has a population of 10,000; and the have the elephant in the room in the shape of Iran and Marshall Islands came swinging in with a majority its nuclear weapons. One wonders what kind of approach vote of 68,000. That is three votes in the United a more hawkish coalition might take to that. Nations with a smaller vote than the Isle of Wight in a I will just add this. I used to visit America on behalf constituency election. France, Italy and Spain came of Northern Ireland, and I found that many of the out against Israel, supporting the adoption of observer expat Irish—the Irish lobby—were much more inclined status for the Palestinians, while Germany, Holland, to scream “No surrender” or “A united Ireland at all Australia and the United Kingdom abstained. I must costs”, and then I would talk to the Irish-American say to my noble friend that I was disappointed that we politicians like Ted Kennedy, Daniel Moynihan or Tip abstained. I understand why the Foreign Secretary O’Neill, and they were the sensible ones. Charlie Haughey made that decision, but the Israeli reaction since has used to be picketed when he went over because the been a real slap in the face for him and others who had Irish lobby there thought he had sold out on Irish hoped for a more moderate response. independence. The British ambassador to the United I say to the many noble Lords who express strong States would say to me, “The green lobby, the united support for the State of Israel: does anyone in Israel Ireland lobby, is jolly strong over here, but it is not a still care about what the rest of the world actually patch on the Jewish lobby”. The truth is that the thinks? It is deeply depressing at the present time. We Jewish lobby in the United States has done no service have seen Mr Netanyahu going to America, snubbing to Israel and it has done no service to the standing of the American President and marching straight off into the United States in the region. Let us think back to a meeting of AIPAC, where he got a heroic reception, when President Clinton could stand between Mr Rabin as he would. Against that background, it is deeply and Mr Arafat. He was seen as an impartial assister 507 Palestine: UN General Assembly[3 DECEMBER 2012] Palestine: UN General Assembly 508 towards peace. America is now seen to be one-sided, I turn to the circumstances prevailing in Gaza. We voting against the Palestinian resolution and no longer hear a lot about Israel getting out of Gaza and the commanding confidence. A nation of the power and Gazans messing up their opportunities. Well, for the scale of the United States could easily be a tremendous majority of those concerned, getting out of Gaza was force for good in the region. very much a utilitarian decision. Maintaining 8,000-plus I believe that we are in a serious and rapidly developing settlers in Gaza was simply beyond the scope of the situation, one that makes the world more dangerous. state of Israel and was counterproductive. Today, the For all who care about the future of Israel and its situation is appalling. I will read out some statistics continuing existence, and not least providing a civilised that I have dug out. According to UNWRA, 38% of life for all those in the region, it is desperately important Gazans are poor, 44% are food insecure, and 80% that they realise that a change of course must be depend upon food aid. Gazan poverty is the world’s undertaken. They must get rid of all the conditions, worst, but the only one created deliberately.The blockade sit down and try to find a genuine approach towards has caused 17% more Gazans to be in the poorest a two-state solution, or I fear for where the future category since 2005. More than a third of them—and may go. more than half the young people—are unemployed. Hundreds of factories stand idle and they produce exports only at the rate of 3% of the level before the 7.45 pm trouble. Eighty-five per cent of their fishing grounds Lord Phillips of Sudbury: My Lords, I had something and 35% of their agricultural land cannot be accessed of a conversion experience, I suppose it might be because of restrictions. Eighty-five per cent of schools called when, like many, I went to Israel, the West Bank are run on double shifts, because others have been and Gaza for the first time in 2001. Up to that point I bombed. Ninety per cent of the water is contaminated. had read of the declining circumstances in Palestine, It is rather ironic that my noble friend talked about the but I was and remain inexorably concerned about the prowess of Israel in water production when it has security of Israel. For my whole adult life I have been decimated the water supply in Gaza. As a result, over an inveterate supporter of that country. I am a huge 50% of children have chronic diahorrea. Gideon Levy, admirer of Israel in all sorts of ways, just as I am of in an article in Haaretz in July, told of the way water is the Jewish community in this country. It was not used in the West Bank as a tool of colonisation. He necessary for my noble friend Lord Palmer of Childs wrote this dreadful account: Hill to remind us of the philanthropic tendencies of “The Civil Administration is supposed to take care of the Jews. In this country they have an unrivalled record of people’s needs. But it does not stop at the most despicable philanthropy. The tragedy is that a great country and a measure—depriving people and livestock of water in the scathing great people have so demeaned themselves and behaved summer heat—to implement Israel’s strategic goal: to drive them in a manner that is not just contrary to international from their lands and purge the valley of its non-Jewish residents”. law but contrary to simple morality and decency that I One needs at this point to repeat—and go on genuinely believe that they are now on a suicide path. repeating—that Israel is split from top to bottom. One They are losing former friends and, I suspect, ordinary quarter to one-third of Israelis, by other people’s citizens across the world in droves. That is a tragedy. calculations, are totally opposed to what is going on in I was so committed to the survival of Israel that the Palestine. Would that they were sitting here and speaking only time I have ever offered to fight for anyone was in on the side of all, or most, of the speakers tonight. I 1973. I wrote to the Israeli embassy here, but fortunately have met some of these people, and they are brave, for me the state of Israel was rather effective at rebutting because they are subject to huge pressure. They are the attack and I was not called up. When I first went to called self-hating Jews, I believe. the region I could not believe my eyes. Anyone in the House who has not been there and who doubts the The noble Lord, Lord Judd, said—absolutely rightly— horrors of both the West Bank and Gaza should go. I that our Government have employed double standards am always surprised at how many of my Jewish friends towards Israel for decades, and it has got worse, not have not been to either of those places, but in a sense I better. Thank goodness that after this latest scandal do not blame them because I think they realise how of, I think, 3,000 new colonists in East Jerusalem unhappy it would make them to do so. I have been cutting East Jerusalem off from the West Bank by the four or five times over the past decade, and I always E1 block, the Foreign Secretary has at last come out work with Jewish charities and marvel at how brave with a firm statement. I have been in this House since and brilliant they are. I would mention Ir Amin, 2008, and I cannot tell you the number of times that B’Tselem, Machsom Watch and a number of others. we have had statements from spokesmen from Machsom Watch is comprised of 500 middle-class Governments of all persuasions which add up to Jewish women who go out on rota every day to stand nothing. There is never any action. My feeling is that at the checkpoints and observe the conduct towards action is not just in the interests of the Palestinians or the humiliated and harassed Palestinians, and at night of peace in the Middle East, let alone in the wider they put what they have seen on the web. What a world, it is in the interests of Israel itself. That is what restraint that is. A woman who took me to a checkpoint drives me on this issue and makes me unwilling to said that she was called in by one of the commanding hedge about and avoid the charges of anti-Semitism officers. He said, “We are both Jews and we should not which always follow plain speaking on this subject, I be arguing about this”, but then she noticed on the am afraid to say. wall behind his head a sign that read, “Our task is to I feel passionately that our Government, having make life as impossible for the Palestinians as we can”. made a start at what I call plain speaking in relation to That about says it all. plain facts, should pursue that path and if necessary 509 Palestine: UN General Assembly[LORDS] Palestine: UN General Assembly 510

[LORD PHILLIPS OF SUDBURY] We have heard much about Gaza. Where have be independent of the United States, which is in a Israeli policies led there? I will tell you: next week, particular relationship with the huge and powerful Khaled Meshaal, the leader of Hamas, will enter Jewish community there, as the noble Lord, Lord Gaza, and he will enter as a victor in the eyes of King, vividly explained. We must be independent and Palestinians. I do not think Abba Eban would recognise do what we think is right for Israel, the Palestinians, Israeli diplomacy today. Israel must rescind the actions the Middle East and the peace of the world. If we do announced by its Government in the last 48 hours: that, a lot of people in Palestine will listen to us. namely the declaration of more and more settlements— In 2006, I had a meeting with Dr Ismail Haniyeh, another 3,000 dwellings—and that planning will begin one of the hate figures, who is the leader of Hamas in for settlement in E1, the land block between East Gaza. I have to say I was immensely impressed by the Jerusalem and the heart of the West Bank. Everybody man. Unless I have lost all my touch for understanding knows what that means. It is meant to be the end of the reactions of people, I was impressed. I spent an the possibility of a Palestinian state. If that were not hour with him man to man. He is dying for an opening enough, $120 million—£75 million—of taxes owed to and for some encouragement because he never gets a the Palestinian Authority have been seized by the dividend for anything Hamas does, except more Israeli Government in the past few days. Prime Minister colonisation and more repression. There is hope to be Erdogan—a strong critic of Israel—will also visit Gaza had if we as a country can be brave with our policy, soon. This is not diplomacy, and it is not diplomacy and I hope that the Government will carry on from that is serving the state of Israel. Time, in my experience, where they now are. is running out for a two-state settlement. We would all bitterly regret that and, most of all, it would cause 7.55 pm great pain for the state of Israel. Lord Williams of Baglan: My Lords, I welcome the 8pm opportunity to speak in this debate. I declare an interest as a former British official in the Middle East The Senior Minister of State, Department for and as a UN Under-Secretary-General in that region. Communities and Local Government & Foreign and The noble Lord, Lord Palmer, referred earlier to the Commonwealth Office (Baroness Warsi): My Lords, I great Israeli diplomat Abba Eban, who once noted am grateful for the opportunity to respond for the that the Palestinians never missed an opportunity to Government to this debate, brought by the noble miss an opportunity. Now the boot is on the other Baroness, Lady Royall, about the discussions that we foot. The Israeli Government have elevated a significant have had with the Palestinian leadership in light of the diplomatic setback in the UN—one in which it was Palestinian resolution at the UN General Assembly supported by only one out of the 27 members of the last week. It is an important and timely debate and I EU—into a significant regional and international crisis. welcome it. I know the Israeli-Palestinian conflict is a I fear that the hard-line stance of the current Government matter of great interest to the House and, as always, is resulting in a haemorrhaging of support for Israel involves great emotion and sincerity of views on all itself. The noble Lord, Lord Palmer, referred to support sides. Achieving a two-state solution to the Israeli- for the resolution from Islamist and third world countries. Palestinian conflict is one of this Government’s top The fact is that all the democracies of the world, with international priorities. three exceptions—the United States, Canada and the The UK has long been clear that we support a Czech Republic—voted against Israel or abstained. negotiated settlement, leading to a safe and secure That in itself is a stunning development in the history Israel living alongside a viable and sovereign Palestinian of diplomacy in the Middle East, and one that Israel state, based on the 1967 borders with agreed land needs to take careful note of. Never has its isolation swaps, with Jerusalem as a shared capital of both been so marked. states and with a just, fair and agreed settlement for It says a lot of Israel and of the Israeli press that refugees. That is the only way to secure a sustainable these developments are followed closely and in a critical end to the conflict, and it has wide support in this way. The newspaper Haaretz this morning is more House and across the world. scathing of the Israeli Government than many of the However, there has been a dangerous impasse in the remarks made by noble Lords. Even the centrist peace process over the past two years, as referred to by newspaper, the Yedioth Ahronoth, is critical of Prime my noble friend Lord Alderdice. The pace of settlement Minister Netanyahu’s policies and where they are building has increased, and we have seen new and leading Israel. Many noble Lords, including the noble concerning reports of this in recent days. Continued Lord, Lord Alderdice, have referred to the regional rocket attacks on Israel and continued settlement building element of peace. Where do we stand on that? Israel have resulted in frustration and insecurity deepening has peace treaties, of course, with two Arab countries: on both sides and the parties have not been able to Egypt and Jordan. Those peace treaties are being agree a return to talks. sorely tested these days. It is very difficult for a We are grateful to Egypt, the United States and democratically elected President of Egypt, Mohammed the UN Secretary-General for their role in bringing Morsi, to stand up and argue to his people that this about a ceasefire in Gaza last month. We now need peace treaty is right and must be adhered to. Jordan, to build on this to bring about a lasting peace, wisely guided by King Abdullah, is also suffering great including, as my noble friend Lord Phillips of Sudbury strains, and I fear there is no doubt that the majority said, the opening up of the blockade in Gaza for trade of Jordanian public opinion is quite critical of those as well as for aid; and, of course, also an end to the peace treaties. smuggling of weapons. The crisis in Gaza and tragic 511 Palestine: UN General Assembly[3 DECEMBER 2012] Palestine: UN General Assembly 512 loss of Palestinian and Israeli life show why the region doubts about its stated commitment to achieving peace and the world cannot afford a vacuum in the peace with the Palestinians. We need urgent efforts by the process. parties and by the international community to achieve a return to negotiations, not actions that will make The frustration felt by many ordinary Palestinians that harder. about the lack of progress in the peace process is wholly understandable. We condemn illegal settlement In all the conversations that the UK has had with activity in the West Bank and East Jerusalem, because Palestinian negotiators, and those that the Deputy it threatens the very viability of the peace process and Prime Minister and the Foreign Secretary have had a two-state solution that we all support. After many with President Abbas in the past week, relations have decades, the Palestinians still do not have the state been excellent. That deep friendship will continue. The they aspire to. That is why we have consistently asked financial and political support that the UK gives, with Israel to make a more decisive offer to Palestinians very strong cross-party support, to the Palestinian than in the recent past, and have also called on Palestinians Authority, which is among the foremost in the world, not to set preconditions for negotiations. is understood well by the Palestinian Authority and will, of course, continue. We want the Palestinian We agree with my noble friend Lord Palmer that Authority to succeed and we believe that President the parties must get back to the negotiating table. Only Abbas is the best interlocutor that Israel will have to today, our consul-general in Jerusalem conveyed this bring about peace. We continue to be in regular contact view to the chief Palestinian negotiator. The only way with the Palestinian Authority, and officials in our to resolve the dangerous impasse in the peace process consulate-general in Jerusalem had meetings in Ramallah is a rapid return to credible talks. This is the Government’s today to reinforce the UK’s firm commitment to and guiding principle, and it was this concern that determined support for the Palestinian Authority.My right honourable the Government’s approach to the Palestinian resolution friend Mr Burt is planning, possibly this evening or at the UN General Assembly last Thursday.Nevertheless, tomorrow, to speak to the Palestinian chief negotiator. we respect the course of action chosen by President We have been clear that we deplore the recent Abbas. There is no doubt that he is a courageous man decision of the Israeli Government to build 3,000 new of peace. Let me be clear: we want to see a Palestinian housing units and to unfreeze development in the E1 state and look forward to the day when its people can block, and the confiscation of this month’s clearance enjoy the same rights and dignity as those of any other revenues. This threatens the viability of the two-state nation. That is why we stress the urgency of negotiations solution. On Saturday, the Foreign Secretary publicly leading to a two-state solution. called on the Israeli Government to reverse this decision. Noble Lords, including my noble friend Lord King In common with steps taken by other European partners, of Bridgwater, raised questions and concerns about including France, the Israeli ambassador to London the assurances that the Government sought from President was formally summoned to the Foreign Office this Abbas and the position we took in relation to the vote. morning by my right honourable friend the Minister The Government, I suppose, judged that these assurances for the Middle East, who set out the depth of the UK’s would help facilitate a return to negotiations. However, concerns about the recent Israeli decision. our priority now is to try to restart those negotiations. The noble Baroness, Lady Royall, asked what We call on all parties to show the political will necessary representations had been made to Israel on the to achieve this. We will redouble our efforts to restart confiscation of customs revenues. The Minister for the the peace process and continue our strong support for Middle East conveyed our serious concerns about this the two-state solution. As I have said to this House on decision to the Israeli ambassador this morning. The many occasions, and indeed only recently, 2013 will be national security adviser, Sir Kim Darroch, reinforced a crucial year for the Middle East peace process. We this concern to his Israeli counterpart when they spoke have urged Israel to avoid reacting to the resolution in this afternoon. The noble Baroness, Lady Royall, also a way that undermines the peace process and a return raised the question of what consultations we have had to negotiations. The Foreign Secretary spoke to the with the noble Baroness, Lady Ashton. We have had a Israeli Foreign Minister on Friday and the Israeli number of consultations with key international partners Defence Minister on Saturday. He made clear that we since Friday, including with the office of the noble would not support a reaction that sidelined President Baroness, Lady Ashton, and with the US Administration. Abbas or risked the collapse of the Palestinian Authority. We note the strong statements of the noble Baroness, We are therefore extremely concerned by the decision Lady Ashton, and Secretary of State Clinton on these of the Israeli Cabinet to approve the building of 3,000 issues. new housing units in illegal settlements in the West My noble friend Lord Alderdice raised important Bank and East Jerusalem. This Government, along points based on greater experience. I am grateful for with our European partners, have consistently made his contribution and also for the tone of his contribution. clear that settlements are illegal under international It is of course right that a regional initiative is important. law and undermine trust between the parties. If Egypt’s success in relation to the Gaza ceasefire is just implemented, these plans would alter the situation on one great example of this, but I am sure my noble the ground on such a scale that it would make the friend will agree with me that the US must now step up two-state solution, with Jerusalem as a shared capital, to the mark, as real progress will be made only with its increasingly difficult to achieve, if not impossible. The positive involvement. right reverend Prelate the Bishop of Guildford was The noble Lord, Lord Janner, is right when he says right to raise settlements as a pivotal issue. Such plans that the future has to be agreed through diplomacy, undermine Israel’s international reputation and create not rockets. The recent conflict in Gaza left 160 513 Palestine: UN General Assembly[LORDS] Legal Profession: Regulation 514

[BARONESS WARSI] the very large numbers of the Bar who do, arguably, Palestinians and six Israelis dead. That is not the way the most socially valuable work, in criminal and family forward. The noble Lord, Lord Judd, raised important law, are seriously affected, because payment for regulation issues, noting that in order to lay the foundations for has to come out of their own pockets. This works future agreement, we must understand history. I agree against mobility and diversity, for the altruistic young that an even-handedness in this matter is as much in people who qualify and want to come to the Bar the interests of Israel as of the Palestinian people. The cannot earn the modest living they once relied on noble Lord, Lord Williams of Baglan, also raised the without the legally aided work, at the very time when issue of settlements. I hope he feels that I have dealt their higher education debts have peaked. with that already. The Legal Services Act, which governs my work, is Palestine is now a non-member observer state at the grounded in the 2004 report by Sir David Clementi on United Nations but, sadly, the situation on the ground the regulatory framework of legal services. He was remains the same. The only way to give the Palestinian concerned with the then over-complex existing regulatory people the state they deserve, and the Israeli people frameworks and with complaints handling, although, the security they are entitled to, is through a negotiated to be fair, that was more relevant to the solicitors’ two-state solution. That requires both parties to return branch than the Bar. He was trying to reconcile to negotiations, Israel to stop illegal settlement building liberalisation, allowing competition and access to flourish, and Palestinian factions to reconcile with each other. with protecting the public, with special focus on complaints The past month has highlighted the fragility of the handling. His report led to the Legal Services Act 2007. situation in the Middle East and the coming year will prove crucial if peace is to be achieved. Urgency is Consumerism was the other motivating factor behind required to ensure that we grasp the opportunities that the Act, but that policy was formulated in 2000, in an will be presented. We encourage the US, with the entirely different economic climate, following the Office strong and active support of the UK, the EU and the of Fair Trading report about competition in the international community, to show decisive leadership professions. This was all before the crash of 2007-08 in and do all it can in the coming weeks and months to the financial world and its dreadful results. That drive the process forward. demonstrated the failure of financial regulation, which, with hindsight, might have affected the principles behind If progress on negotiations is not made next year, the Legal Services Act. It was once thought that the the two-state solution could become impossible to division between clearing banks and merchant banks achieve. That is why the Foreign Secretary has said to should go, and that there should be a free market of the US Secretary of State, Hillary Clinton, that such unfettered competition and deregulation. I am no an effort would need to be more intense than anything economist but I would not be alone in pointing out seen since the Oslo peace accords. We are ready to that the meltdown and bank collapses resulted, and throw our support behind this to find a solution to the the Financial Services Authority seemed to have no conflict before it is too late. power to prevent any of this or stop any innocents from losing. Indeed, that super-regulator is about to Legal Profession: Regulation be dismantled. Legal regulation was developed without Question for Short Debate regard to this history and its risks have yet to play out. 8.10 pm Under the 2007 Act, the profession is overseen by the Legal Services Board. Its powers are devolved to Tabled By Baroness Deech some extent to the front-line regulators—for these To ask Her Majesty’s Government what assessment purposes, the Bar Council and the Law Society, which they have made of the efficacy of the regulation of have separated out their regulatory and representative the legal profession. functions. Therefore, the Bar Council represents barristers and the Bar Standards Board regulates them; the Law Baroness Deech: My Lords, I declare an interest as Society represents solicitors and the Solicitors Regulation the chairman of the Bar Standards Board and as a Authority regulates them—not to mention six other non-practising barrister. I have regulated several enterprises regulators. For the purposes of this debate, I will in my time, but I have been fortunate in only ever concentrate on the Bar and the solicitors, of whom regulating those which I am convinced do good and there are 10 times as many, and I am married to one of with which I am familiar and well briefed. This House them. spent many hours last year debating the merits of and Proper regulation, in the public interest, is absolutely need for public bodies, and the principles aired then vital but it needs to be balanced against cost and are ones that we need to be reminded of tonight. existing resources, and performed efficiently. It does The background to regulation of the legal profession not take much to see that, rather than sorting out the is simple to grasp, and it is quite different today from maze of regulation, the statute adds to it; there may be the situation that prevailed when the governing statute, over-regulation, duplication of regulation and competitive the Legal Services Act 2007, was conceived and passed. regulation, none of it cost-capped. The cost of the Simply, it is the lack of legal aid and affordability. Legal Services Board and its demands are serious That is no problem for those who go to the thriving issues, for the practitioners have to fund it, as well as commercial side of the Bar, but the average wage the other projects it has required—quality assessment earner often finds the expense of legal advice beyond of advocacy, an education review, diversity data collection his means, in part because of the built-in cost of and the Office for Legal Complaints. More than that, regulation. The effect on the profession is dire too, for it is arguable that the Bar was caught up in the 515 Legal Profession: Regulation[3 DECEMBER 2012] Legal Profession: Regulation 516 slipstream of the criticisms that were levelled at the Another example is that the members of the Bar handling of complaints by solicitors, and the heavy have been told that, when they first meet a criminal structure of the 2007 Act is not suited to as small a client in the cell, they must give that client on a piece profession as the Bar. of paper directions as to how to complain. There When the Legal Services Bill was introduced in could not be a worse moment at which to do it. Now 2006, the regulatory impact assessment calculated the there is required detailed collection of barristers’ equality annual running costs of the Legal Services Board, and diversity data, which go beyond the Government’s which is the super-regulator overseeing the specialised recommended approach, in that they require data on ones, at £3.6 million. However, the total borne by the sexual orientation and socio-economic status. They entire legal profession up to now is £19.5 million, with are to be collected chambers by chambers, yet many another £50 million for the Office for Legal Complaints. chambers have fewer than 10 members, which makes The cost falls on clients and, in the case of legally collection of such data very sensitive, because anonymity aided clients, on practitioners. That is due to duplication may easily be breached. The Bar’s preference for aggregate of work through micro-management of regulators collection of such data across the profession was and the pursuit of objectives more akin to a market rejected. regulator than an oversight public interest regulator, The Bar Standards Board does not dispute the need as was mandated by Parliament. for proper regulation, but it should be proportionate, I echo the fears of Sir Sydney Kentridge when affordable and effective. We were disappointed that regulation of the legal profession was first advanced a the Ministry of Justice’s triennial review of the Legal few years ago. He feared an increase of power of the Services Board did not address those concerns directly. Government to control the legal profession through a The opportunity will present itself again in the government-appointed body, but he was confident quinquennial review of the 2007 Act. that the Lord Chancellor would ensure that the Bar The noble Lord, Lord Carlile, who cannot be in his was protected. Sadly, as I have learnt at international place this evening, has said, in support of what I am conferences, the outside world sees the independence saying, that the regulation of the legal profession is of our legal profession as diminished by regulation. cluttered and bureaucratic. It may not have gained the The 2007 Act laid down eight regulatory objectives confidence of the profession or the public. in no particular order. Some conflict with others in At this stage in the implementation of the Act and practice. Therefore, a margin of appreciation clearly the introduction of alternative business structures, must be left to front-line regulators to decide what there remains a role for the Legal Services Board, but steps to take. It is not clear from the statute whose not many more years should pass without an overhaul view would prevail in case of disagreement between of the complications introduced by the Act in establishing the Legal Services Board and the front-line regulators. a super-regulator. I hope that the Lord Chancellor Nevertheless, history has shown that one objective— and the Ministry of Justice will start a discussion with promoting the interests of consumers—has been elevated the profession and identify a simpler, cheaper and above the others by the super-regulator, and in so doing more balanced future. it sees it as its task to “direct” rather than “assist”—the word chosen by Parliament—the front-line regulators. 8.21 pm Excessive focus on the consumer interest may be to the detriment of the professional interests and standards Lord Faulks: My Lords, I begin by declaring an upheld by the lawyers. Commercialism is not everything, interest. I am a practising barrister. I was a head of although one wants legal advice to be available and chambers for nearly a decade until relatively recently affordable. Certain services, such as education, health and I am a former chairman of the Professional and the law, are beyond market value. The public Negligence Bar Association. interest must prevail. It does not seem to me that the I shall make a few observations about the position public will be well served if there is authorisation for a of the Bar. My noble friends Lord Gold and Lord new category of partly qualified or underqualified Phillips of Sudbury will no doubt speak about the providers of legal services who offer only one service—for solicitors’ profession. When I started to practise, the example, will writing, which cannot really be confined Bar was lightly regulated, the profession was much to a small area. smaller, chambers were much smaller, circuits had Too many new projects are being imposed by the more power and influence, and most senior barristers super-regulator on the front-line regulators without proceeded to some form of judicial post. The standard due regard to cost, need and effort. For example, of ethics was extremely high, but there were undoubtedly outcomes-focused regulation does not work well for some restrictive practices which needed to change. the rules of conduct of the Bar, because court litigation Those practices, together with the considerable increase is a process-driven system, where the rules are not in the size of the profession and the way it functioned, merely means to an end but an end in themselves and called for examination. intrinsic to the rule of law itself. Following the report of Sir David Clementi, the Let us take referral fees. They are seen by the entire Bar Council carried out his central recommendation: Bar as unethical, restricting competition between lawyers that there should be a split between the regulatory and and denying the client freedom of choice. They are the representative elements of the Bar Council’s work. likely to be illegal under the Bribery Act 2010, but the It therefore established the Bar Standards Board. The front-line regulators are being told to retain them members had extensive experience of regulation and except where specifically banned by law, in the face of corporate governance and were appointed on Nolan evidence that they are a bad thing. principles. 517 Legal Profession: Regulation[LORDS] Legal Profession: Regulation 518

[LORD FAULKS] observed in his Lord Upjohn Lecture in 2010 that the It would be inaccurate to say that the Bar, a still current framework for legal education and training small and independent profession, universally welcomed was, the arrival of the board but, since it has been set up, “simply not fit for purpose”. there has been a growing respect for what it does. In his own 2012 Lord Upjohn Lecture, Lord Neuberger, There have inevitably been increasing demands on the president of the Supreme Court, made this observation chambers in terms of record-keeping, compliance with about David Edmonds, the chairman of the LSB, and regulation and a variety of measures that the board the Legal Education and Training Review: has imposed on the profession to secure high standards and ensure that the Bar functions in a way that reflects “I cannot share the view which David Edmonds was reported in the Guardian as expressing in March this year, namely that he the public interest. would be ‘extremely disappointed’ if the LETR only made minor The key to the respect that the BSB commands is recommendations. That suggests a conclusion that major reform the evidence-based approach adopted by the board is both necessary and proportionate, reached in the absence of and the sense among barristers that it has taken the any evidence and analysis. But surely we should wait for the evidence, the analysis of that evidence, and the conclusions drawn time and trouble to understand the Bar and the way it from that analysis before we start talking of disappointment or practises, both its weaknesses and its strengths. The the nature of the appropriate recommendations. We should all be need for a super-regulator, or oversight regulator, to surely approaching the Review and its outcome with an open oversee the approved regulators like the BSB has not mind”. been seen by the profession to have any obvious No doubt the observations of the chairman would be justification—to put it mildly—particularly when it said to be consistent with one of his goals in the LSB’s seems to involve sets of chambers duplicating many of draft strategic plan for 2012 to 2015, which was, the obligations placed on them by the BSB and increasing “to reform and modernise the legal services market-place in the still further the cost of compliance. interests of consumers, enhancing quality, ensuring value for What is the proper role of the Legal Services Board? money and improving access to justice across England and Wales”. As the Legal Services Bill was going through Parliament, The LSB clearly has very significant regulatory ambitions. a number of parliamentarians expressed the fear that Who pays for the increasing regulation? The cost the LSB might be heavy-handed and would not allow falls on practitioners and very harshly on those who approved bodies such as the BSB, once they were are starting and who depend on the publicly funded operating effectively, to get on with the job. Reassurance fees which are steadily reducing in their true value. was provided by the then Government. For example, Smallish sets of chambers with a high BME quotient on 13 June 2007, Bridget Prentice MP, the Parliamentary are particularly hard hit. For those not dependent on Under-Secretary of State in the Department for publicly funded work, the cost of regulation—much Constitutional Affairs, said: of which, in my view, is unnecessary—will ultimately “It is important that the oversight regulator does not micro-manage fall upon the consumer of legal services, who will have and second guess the actions of the approved regulators, as to pay more for the increasing infrastructure that is Members on both sides of the Committee will agree”.—[Official necessary in chambers in order to comply with the Report, Commons, Legal Services Bill (Lords) Committee, 13/06/07; burden of regulation. col. 95.] Barristers are, frankly, bewildered by some of the This is a reference to the work of the Joint Committee requirements imposed by the LSB. The inept requirement on the Draft Legal Services Bill, to which Sir David by the LSB that barristers should inform their lay Clementi had said in evidence that there should be clients at the point of first instruction of their right to “minimal interference” by the LSB in the work of the make a complaint to the chambers and, as necessary, approved regulators. to the legal ombudsman, shows very little understanding I have had the opportunity of reading the Bar of the way barristers actually practise and an insensitivity Council’s response to the triennial review of the LSB of the circumstances in which a client sees a barrister. by the Ministry of Justice, together with the LSB’s Similarly, the requirement by the LSB that quality and response. To the disinterested observer, I recommend assurance should extend to practitioners’ advisory reading these two documents. The arguments of the work reveals a complete ignorance of the way in which Bar Standards Board are compelling. Those of the the profession works—not to say a failure to grasp LSB are rich with regulatory language, not easily fundamental principles of law in relation to the privilege understood by the general reader, and include a great which attaches to instructions given to barristers. These deal of self-justification. They also indicate a desire to examples and many more illustrate the perils of having play an increasing role in the regulation of the legal a non-expert lay regulator attempting to devise rules profession. The response concludes with an observation of conduct for practice by members of the legal profession. about a review of the 2007 Act: Barristers understand the need for regulation and “Any significant change to the current settlement in advance for public confidence in the legal system. However, it of such a review will divert effort unnecessarily from the current should not be forgotten that the legal profession is challenging delivery agenda”. held in high regard throughout the world, as is our This does not sound very much like what Parliament system of justice, and results in considerable benefit to had in mind for the Legal Services Board. the economy of this country.We should take considerable I will give the House an example of where the care before ripping up the model. LSB clearly wishes to have a significant involvement in I am sure that the Minister will accept, as do the the way the legal profession functions, which is in Government, that regulation needs justification and relation to legal education. The chair of the LSB that our economy generally has been overburdened by 519 Legal Profession: Regulation[3 DECEMBER 2012] Legal Profession: Regulation 520 unnecessary and inappropriately onerous regulation. I firms can maintain those essential elements without urge the Minister to support post-legislative scrutiny which there can be nothing. of the effectiveness of the Legal Services Act, particularly I look to the regulatory objectives of the 2007 Act. the scope of the LSB’s activity. I may say that I was one of the very few Members of I congratulate the noble Baroness, Lady Deech, for the House of Lords—in fact, I may have been the only bringing forward this important question to your one—who was flat-out opposed to the part of the Lordships’ House. I applaud her contribution to the 2007 Act that set up the alternative business structure. raising of standards at the Bar and endorse all that she But as has already been remarked, the eight regulatory has said so ably in today’s debate. objectives are not entirely internally consistent. When you think that the eighth of them is, “promoting and maintaining adherence to the professional principles”, 8.30 pm of which there are five, it all adds up to a not entirely Lord Phillips of Sudbury: My Lords, I, too, thank clear set of guidelines for the young person entering the noble Baroness, Lady Deech, for bringing this the profession. Above all, integrity should surely trump subject before the House. I confess that I received her everything. I do not think the word appears in the e-mail warning us of all this only this morning, so my eight regulatory objectives. contribution may be lacking in coherence, but I will I leave my few remarks at that. I warn against the make a few points if I may. I started full-time in a bureaucratisation that attempts to set the values for solicitors’ office—admittedly, as an office boy—55 years the practitioners. Up to a point, of course you have to ago, and have seen an astonishing transformation over have a complaints mechanism; of course you have to that time in the regulation and, I believe, the ethos of have somebody who can strike down the few bad what is still called a profession. When I started there apples and maintain that integrity. But I believe, as was a maximum of 20 partners; you could have only had been said by the two previous speakers, that we partnerships, not limited liability; there was no advertising are not at the point where we are doing the regulatory and no conditional fee arrangements; referral fees process the best we can. In fact, going back to the were not permitted; and, above all, there were no such drawing board—as I think was the phrase of the noble things as “alternative business structures”, that charmingly Lord, Lord Faulks—might well be what is needed. denominated abortion that we now have among us. I have not embarked on the alternative business Sadly, I must be honest and say that I do not structure, except to say that if anybody thinks that you actually think that solicitors are any longer members can have a law firm 70% or 80% owned by whoever the of a profession. I think that we are just another hell you like and that that is not going to impact business. Thank the Lord, integrity is still largely to be directly on the ethos of that enterprise, they are living found within the solicitors’ branch of the profession, in cloud-cuckoo-land. There are 120-plus applications but I do not see it long maintaining itself because now for ABS status and it is already observable that the structures within which we now function have these big combines are going to be driven first, secondly, become so commercialised and driven by bottom-line and thirdly by profit, profit, profit. It is all about the considerations that it is unreasonable to expect integrity bottom line, just as in the City. Everything else can go to survive organically—in rather the same way, I am hang. The notion of informal pro bono work is, I am afraid, as the City, little by little, has lost its values afraid, inconsistent with the values that will bring into base. I agree with what the noble Baroness said about existence the vast majority of these alternative business the big bang and its consequences structures. I would like a re-examination of them as I feel that we are going down a blind alley in soon as is feasibly possible, because they are a real nail thinking that more and better regulation can maintain in the coffin of professionalism. the essential integrity without which we are no longer officers of the Supreme Court and handmaids to 8.37 pm justice but something a great deal less and, in some Lord Gold: My Lords, I start by thanking the noble ways, quite threatening. I say that with great reluctance Baroness, Lady Deech, for bringing this debate forward but cannot avoid it. I was the only solicitor member of this evening. Perhaps like the noble Lord, Lord Phillips, the committee set up under Sir Sydney Kentridge, and I was somewhat sceptical of the Legal Services Act he had a very lively belief in the ethos of the profession—a and what was intended by it, but I was not here then. set of values, if you like, autonomous to each practitioner, Maybe I would have joined in voting against it. But we without which the whole structure could not survive. are where we are, and we must have a properly regulated The truth now is that we are deep in regulation—I legal profession that ensures that all providers of legal would say, as have others, overregulation or inappropriate services meet high standards of competence and behaviour. regulation. I looked at Halsbury’s Laws of England This is even more important now as the first alternative this morning and found to my amazement that there business structures start providing legal services. I are two volumes on the professional regulation of share the concerns of the noble Lord, Lord Phillips, lawyers—1,196 pages of stuff about it. When I started, about where that takes us, but we will see. I doubt that there were 60 such pages. The life of the The present system reflects the proposals in Sir David lawyer today—I can speak only of the solicitors’ Clementi’s 2004 report, as we have heard from earlier profession—is unbelievably bureaucratic. There is speakers, for which there was general parliamentary somehow a belief that if you are forced to write a support on all Benches as well as support from both six-page letter to a client before you start work, that the Law Society and the Bar. High on Clementi’s will somehow improve the work, or that some of the recommendations was the separation of representative forest of internal bureaucracy that now prevails in big and regulatory functions. 521 Legal Profession: Regulation[LORDS] Legal Profession: Regulation 522

[LORD GOLD] some of them, is not a bad thing—it might keep both The Legal Services Board was created to provide sides on their toes—the extent of the serious criticisms oversight of a variety of different regulators to ensure that are being made suggests to me that we really need that the right regulatory objectives are achieved and to to look again at the balance. secure some independence from the Government. The I have spent the past two years immersed in the current regulatory framework has been in place only world of corporate governance. This has demonstrated since 1 January 2010, when the Legal Services Board to me that finding the right balance is key. While took on the majority of its powers under the Legal businesses must adopt a proper governance regime, it Services Act. In a review published in July this year, is essential that governance does not take over and the Ministry of Justice was supportive. It concluded damage the very business that the organisation is that the LSB should continue to deliver its functions in promoting. So those responsible for regulation must its present form. Recommendations for some improvement be practical and sensible in their outlook. Regulation to its corporate governance were made but, by and for regulation’s sake cannot be right. Any regulation large, it was to carry on operating as before. that is put in place must be appropriate and proportionate Despite the endorsement from the Ministry of Justice, to achieve the required result. Its purpose must be there has been some criticism of the LSB. We heard understood and supported by those being regulated. some this evening. The noble Baroness, Lady Deech, I am also sure that, if at all possible, finding the indentifies criticisms made by the Bar Standards Board, right balance should be achieved through greater dialogue notably that there is overregulation and duplication, and perhaps compromise between the relevant parties. leading, among other things, to unnecessary cost which Those concerned may need to demonstrate that they inevitably is being picked up by the consumer. While understand the issues raised by the other parties and generally supportive, the Law Society, representing are willing to be flexible. In the perfect world, by 120,000 solicitors in the UK, is also critical. It believes working in partnership and accepting that each side that the LSB has not got the balance right and that the may be making valid points, the LSB and the regulators objective to promote competition in the provision of will be better able to deliver excellence in the regulation services is given greater emphasis than improving access of legal services. This is far better than seeking to to justice, encouraging an independent, strong, diverse impose a solution on the regulators or the LSB. However, and effective legal profession and promoting and I understand there has been considerable dialogue maintaining adherence to the professional principles. between the LSB and the regulators and that little The regulatory arm of the Law Society, the Solicitors progress has been achieved. That is unfortunate and Regulation Authority is a bit more supportive, but harmful to the legal profession and the administration also believes that the balance is not quite right at the of justice. moment. The SRA approves of the LSB’s emphasis on Under the circumstances something more is needed; putting the consumer and public interest at the heart it has been suggested that even late on there should be of regulation and its role in the appropriate co-ordination post-legislative scrutiny of the effectiveness of the of standard setting across the various front-line regulators. Legal Services Act in order to test whether the original The SRA also considers that the Legal Services Board objectives have been achieved. I suggest to the Minister has made significant progress in achieving its objectives, that this is something that should now be looked at including making the market more diverse, as seen in seriously. The Bar Council wants such a review, and I the licensing of ABSs, and developing a regulatory do not think that the solicitors’ profession would have regime that is both independent and transparent. However, much difficulty in supporting it. Despite this, I think the SRA believes that the LSB now needs to work that the LSB has a continuing role, particularly as we closely with regulators to develop a common have alternative business structures coming into place. understanding of its role. It considers that the LSB Until we see where that actually takes us and how must focus on properly developing its oversight role these new bodies operate, the LSB should remain, but and, in doing so, reduce its approval, enforcement and I think the sort of review I have mentioned is necessary. investigatory functions. However, the SRB acknowledges that there have been improvements. 8.46 pm The main thrust of the complaint against the LSB is whether it is truly performing the role of oversight Lord Mackay of Clashfern: My Lords, it seems a regulator, which was what was intended, or whether, in long time since Burns Night 1989 when I introduced the words of the Bar Council, there has been “mission Green Papers about the reform or control of the legal creep”, with the LSB now duplicating and overlapping profession. Your Lordships who are old enough will the work of the front-line regulator, micro-managing remember that these Green Papers provoked a certain the activities of those regulators it is meant to oversee. ripple of interest from the judiciary and others. There Front-line regulators, such as the SRA, are much more have been great changes since then. In formulating the in touch with the profession, so why should we defer Green Papers we were principally, although not entirely, to something much more remote, where I do not dealing with what looked like anticompetitive practices believe that there are any legal practitioners involved? in the legal profession. To what extent a particular Critics claim that this duplication and the LSB’s micro- practice is anticompetitive is quite a difficult question. management have greatly increased the cost burden. It For example, it was thought that preventing the legal seems, from other speeches this evening, that that is profession advertising was anticompetitive; I am not indeed supported. Although it might be said that the sure that the legal profession is better today with the fact that there is some tension between the LSB and kinds of advertisements you see on the television and the regulators over which it has oversight, or at least in the newspapers. What one characterises as 523 Legal Profession: Regulation[3 DECEMBER 2012] Legal Profession: Regulation 524 anticompetitive may, in fact, be something to do with Lord Phillips of Sudbury: Is it not also true that the the quality, independence and integrity of practitioners. university which emerged from the College of Law is a If I am a reasonable member of a legal profession, I profit-making entity? I rather think that it is. surely do not need to make my way forward by criticising my fellow practitioners. Relationships created in the Lord Mackay of Clashfern: I am just about to come course of professional work should, in my view, be the to that point. I understood that the something or principal recommendation for a professional person. other—I am not sure exactly what—of the College of Matters have since moved quite a distance. In my Law has been sold to a commercial organisation, final proposals, which went through as an Act of which I assume has a profit motive in it. I do not think Parliament, judges were given an important role in the that it is a charity. However, the university would be a control of the legal profession, which worked pretty charity, at least under the ordinary definition of charity well for a time. Gradually, the influence of judges was which prevails as an institution for the advancement reduced until it disappeared altogether from the formal of education. I would be glad to know a little about aspects of the regulation and eventually new standards the Government’s policy in relation to having the legal were set up. I believe that the late Lord Nolan was the profession taught, and a university financed, by a first to point out the need for a division in the Bar profit-making organisation. I am not against profit for between its regulatory and representative functions, profit’s sake at all but, hitherto, universities have not particularly in relation to the charges levied by the Bar been regarded primarily as institutions set up for Council for being a member of the Bar. If it was profit, except for the profit of those who profit from them. regulatory, it could be compulsory, whereas if it was The noble Baroness, Lady Deech, has led the Bar representative, it should be voluntary. “No taxation Standards Board with tremendous distinction. I sensed without representation” might be an adapted expression a certain amount of frustration in her remarks this for what he said. evening about the way in which really efficient standard- It is also important to remember education in this setting for the Bar can be damaged by unnecessary connection. It was important in my judgment, and I and sometimes overcomplicated interventions by those remain of the view that it was probably correct, that a who do not quite share the same objectives as the Bar reasonably efficient system of education was required Standards Board. I feel that the same may be somewhat to maintain the professional quality of the Bar and of true in the solicitors’ branch of the profession. the solicitors’ profession. I hope that the Government will take very seriously It seemed to me, and I still take this view, that the the suggestion that this whole area should be subject different branches of the legal profession have different to post-legislative scrutiny. The Joint Committees of challenges to face. Therefore, I am glad that the Bar this House and the other place have shown themselves Standards Board, the Solicitors Regulation Authority to be very valuable in scrutiny of legislation. Post-legislative and the other regulators which exist now in the legal scrutiny of this legislation, which is so fundamental to profession have independent existence. I remember the success of our free legal profession, is now due. discussing the need for differences with Sir David Clementi. I think he did not fully agree with my point 8.55 pm of view, which was why he suggested this overarching supervisory body for the legal profession as a whole. Lord Goldsmith: My Lords, I shall speak briefly in He thought that the legal profession should be regarded the gap and have alerted both Front Benches to this. It as a whole, and I could see the force of that. I also is a pleasure to speak after the noble and learned think that overspecialisation in the legal profession is Lord, Lord Mackay of Clashfern, because it was detrimental to its success as a proper organ in the probably as a result of the innovations and reforms general affairs of our country. that he has referred to that I first became involved in questions relating to the regulation of the legal profession. We must recognise that it is important that the legal I have now been involved in this for more than 20 years, profession should be independent. In recent days, we both nationally and internationally. I was chairman of have heard a little about regulation in relation to the Bar during the first year that it faced competition another independent part of our economy with a from solicitors in terms of rights of audience and fairly heated argument on one side and on the other. when it for the first time had to succeed on the basis of That was part of the burden of the debate that we had its merits and not on the basis of restrictive practices. on the Green Papers on that marvellous Friday, which I want to spend two minutes underlining a very I certainly remember with great—what should I say?— important point raised by the noble Baroness, Lady anxiety as to whether I was doing the right thing. Deech. It is not the question of whether there should As I have said, education is important. In this be regulation for the legal professions; of course there connection, I would be glad if the Minister would should. It is not the question of whether the regulation comment on a report that I have recently read that the should be for the public interest; yes, it should. It is not College of Law has been transformed, no doubt with the question of whether regulation should be carried the authority of the Privy Council, into the University out purely by lawyers—the body which the noble of Law. I always thought that a university was supposed Baroness, Lady Deech, heads has a majority of non- to be an institution which had perhaps not absolute lawyers on it. Those are not the issues. Rather, the universality but at least covered a few disciplines, issue is: what is it that the Legal Services Board is including medicine and the like. But the University of doing? This came about when I was fulfilling a different Law seems to have only one discipline as its subject role as a member of the Government who introduced matter. the Legal Services Act. I did not have direct responsibility 525 Legal Profession: Regulation[LORDS] Legal Profession: Regulation 526

[LORD GOLDSMITH] she pointed to some of the experiences of regulators in for that; that was the Lord Chancellor. However, other sectors. She mentioned financial services. I will obviously I knew well what was going on and expressed mention the health service sector, where the existence my views at the time. We tried to make clear to both of the long-standing—almost long-running—inquiry sides of the legal profession, and indeed to the other into Mid-Staffordshire has moved on from what happened legal bodies, that the Legal Services Board was not in the hospital to look at the role of the various going to be an alternative regulator. It was to be an regulatory bodies, and at whether collectively they did oversight regulator which had to be there as a backstop the right thing or whether there were gaps, shortcomings in case the regulators themselves—the Law Society, or tensions between them. the Bar Council and the two bodies that they set It is absolutely right for us to have this debate and up—were not doing their job. to discuss regulation within the legal profession. I am I am still involved in the regulation of the legal sure that the Government will welcome the opportunity profession as a bencher at Gray’s Inn and a member of to state their views and perhaps to reflect on some of its management committee—a constituent part of the the comments that have been made about the need for way in which the profession operates. I have a growing them to think in the next two or three years about how concern about whether the Legal Services Board is to take their views forward. I listened with great micromanaging and suffering from mission creep, which interest to the comments of the noble Lord, Lord is almost inevitable whenever a body is set up. I know, Phillips, on ownership structure in the profession. I because I have seen the operation, that the noble readily recognise that there have been huge changes Baroness is not a pushover as far as the Bar is concerned; over the past decade. However, in my experience of the absolutely not. I have seen her berate—very nicely but National Health Service, doctors in particular as well still enormously effectively—Lord Justices of Appeal as other parts of the profession are able to maintain who were quivering, not realising what they had done professional standards within a large organisation. I wrong. When she does that it is very good for the am not persuaded that it is impossible within new profession and for the public. What is not needed ownership structures for there none the less to be a alongside that is a body which thinks that it has the strong ethos that will be very much underpinned by same responsibility—it is not there in the background the principles set out in the 2007 Act, and by the but is forward. The Bar Council said in a briefing that regulatory framework that comes from it. on the important public issue of the extension of direct access the Legal Services Board sent 14 points Lord Phillips of Sudbury: Does the noble Lord not that it wanted to see addressed in any submission on have concerns that an organisation that buys lots of this question. If that was the case, it was over egging law firms is likely to be interested only in what it can the role. screw out of them? That is not consistent with any view of professionalism. I have a single question and a single proposition for the Minister. Will he say, having heard from the noble Lord Hunt of Kings Heath: Of course, in the Baroness, that the Government will take on the question development of the kind of organisations to which the of having a proper review of what the Legal Services noble Lord refers, profit will be a core concern. However, Board is doing? Many people with experience, from one could look to other sectors where people are inside and outside the profession, will be able to assist involved in seeking profit and point to professionals in relation to that. It is important. As the noble and who practise to the highest quality, usually underpinned learned Lord, Lord Mackay, said, what matters at the by regulatory functions. I do not subscribe to the end of the day is the independence of the legal profession. noble Lord’s view that ownership structure per se will That needs to be safeguarded as well as the public change the professional ethos of people working in interest, efficiency and the other things that noble the sector. I understand his concerns on the matter, Lords have referred to. but surely he will recognise that even if you are working in a sector where the objective clearly is profit, it is still 8.59 pm perfectly possible to act in a responsible and ethical Lord Hunt of Kings Heath: My Lords, this has been way. Even before the ownership structure changes, it a very interesting, although short, debate. At the moment was my understanding—although I am a novice in we are thinking very much about regulation of the these matters—that barristers none the less would media. Whatever the outcome of the current debate, in seek to earn good income if they could. most sectors of the economy it is generally accepted Lord Phillips of Sudbury: I am most grateful to the that there should be statutory regulation of the affairs noble Lord for seeing that I was hovering. Lawyering being conducted within them—and, where the professions is a very particular business. It is not like manufacturing are concerned, by the individuals who practise in that tins of beans. It has all sorts of social and ethical sector. However, there is much less consensus about issues at the heart of it. Unless you can allow a lawyer the right regulatory approach. to give full vent to his or her social purpose, the The noble Baroness, Lady Deech, said that position of the lawyer as the gatekeeper to justice is circumstances had changed considerably in the past impeded. decade since the architecture of the 2007 Act was formed—and, indeed, many years after the noble and Lord Hunt of Kings Heath: Having been a Member learned Lord, Lord Mackay, first put his mind to these of your Lordships’ House for 15 years, I now recognise rather difficult subjects. She was right to say that the the special characteristic of lawyers, and I rejoice in it. economic climate is different, both in the country and I have only five minutes left and perhaps I ought to for the profession; and she was surely right, too, when press on. 527 Legal Profession: Regulation[3 DECEMBER 2012] Legal Profession: Regulation 528

Clearly it is important to ensure that professional were simply rejected, with the outcome, I believe, that regulation works effectively. It should not be overly rather fewer data are collected than might have been bureaucratic and it should uphold the independence the case if we had been able to organise it ourselves. and integrity of the profession. We should be very proud of the whole legal services profession in this Lord Hunt of Kings Heath: My Lords, I am sure country, the fact that it is recognised globally and that that the House is very grateful to the noble Baroness legal services are a huge export for this country. Clearly for that explanation. As I said, I do not seek to argue we should do nothing that undermines the strength of one way or the other. However, I suggest that in any the legal services industry in that regard. debate on these matters, it is important that the views I supported the passage of the Legal Services Bill of both bodies are heard by your Lordships’ House. in 2007. Although the Legal Services Board has come in for some criticism in your Lordships’ House Lord Goldsmith: My Lords, in those circumstances, tonight, we should recognise the progress made by the I wonder why my noble friend does not agree that board under the chairmanship of David Edmonds. when you have the sort of comment that has come We should also recognise that the board will be from a regulator—from the noble Baroness, Lady publishing its inaugural assessment of the effectiveness Deech—saying there is a problem, he does not now of each of the approved regulators, including the support a review to see whether there is a problem or Solicitors Regulation Authority and the Bar Standards not. Board. It might have been better if this debate had been timed after we had seen the outcome of these Lord Hunt of Kings Heath: I am most grateful to arrangements. my noble and learned friend for that remarkably helpful The triennial review to which the noble Lord, Lord intervention. We have just had the triennial review by Gold, referred has suggested that there is a continuing the Ministry of Justice. Another one will take place in role for both the Legal Services Board and the Office three years’ time. The Bar Council has put forward the for Legal Complaints. The next review will take place proposal that there should be post-legislative scrutiny, in 2015. The suggestion by the Bar Council and a and again, I have no doubt that your Lordships’ number of noble Lords for post-legislative scrutiny, House will want to give that every consideration, which I would always support as a matter of principle, because most noble Lords strongly support the concept might be better timed to coincide with the next triennial of post-legislative scrutiny. The question is when it review around the 2015 mark so the two might run would be best done. I suggest that it might be best concurrently. done in parallel with the 2015 triennial review, which I have noted noble Lords’ concerns, and particularly would allow a little more time for both these bodies to the Bar Council’s concern and criticism of what they see if they can meet together and work out a more describe as mission creep by the Legal Services Board, constructive relationship. That ought to be the outcome citing micromanagement, duplication and overlap of of both tonight’s debate and discussions between the regulatory activities and unnecessary cost. These have two bodies. to be guarded against. I understand the total cost of the LSB start-up and first three years’ running costs of 9.12 pm just under £20 million is not insubstantial, although it Lord Ahmad of Wimbledon: My Lords, I begin by is modest compared to many other regulatory bodies. thanking the noble Baroness, Lady Deech, for securing The noble Baroness, Lady Deech, commented on this debate. The excellence of the UK’s legal profession examples of where the LSB is considered to have gone is well recognised worldwide, and rightly so. The regulatory overboard, and mentioned equality and diversity data framework is a key factor in ensuring that these high collection. My understanding is that the LSB—as it standards are maintained. I would add—looking towards saw it—gave best practice advice on how that collection the noble and learned Lord, Lord Goldsmith—that could be done anonymously and made it clear that we meet once again at a late hour. However, the there should be no compulsion on individuals to take quality rather than the quantity of speakers is an part. The consultation was explicit that the reason for important issue when it comes to the legal profession. going beyond the blanket survey was so that clients Before addressing many of the interesting points and potential employees could see the diversity make-up made by the noble Baroness and other noble Lords, I of individual firms and chambers. I am not going to would like to talk briefly about the regulatory framework argue one way or the other, but it is important that we for lawyers in England and Wales and the reforms also hear the viewpoint of the Legal Services Board. introduced in the Legal Services Act 2007. I would We have tended to hear from one side. simply highlight, as the noble Lord, Lord Hunt, so rightly said, some of the positive elements that we Baroness Deech: My Lords, perhaps I might explain have seen, accepting the challenges that we have faced in response to the noble Lord. There is obviously no since the introduction of the Legal Services Act. When objection to collecting diversity data across the entire we talk about regulation, let me assure you that, as profession of 15,000; the Bar has done it for a while. It someone who spent 20 years in the City of London was difficult to collect data from chambers where and in financial services, the word “regulation”resonates there were perhaps only 10 people. Even if it is anonymous, quite loudly in my ears. identifying someone by ethnicity or sexual orientation The Legal Services Act 2007 had three key aims: a would of course be very easy. Because a unit is so more effective and simplified regulatory framework; a small, that encourages people not to participate. I am more effective and independent complaints-handling afraid that our practical arguments in that respect system; and more effective competition within legal 529 Legal Profession: Regulation[LORDS] Legal Profession: Regulation 530

[LORD AHMAD OF WIMBLEDON] My noble friend Lord Phillips talked about the services. I turn to the first of those. In January 2010 we eight objectives and said that he was not sure whether saw the new regulatory framework become operational, his contribution was going to be coherent and clear. I with the Legal Services Board—which several noble can assure my noble friend that he certainly was both Lords have mentioned this evening—getting up and coherent and clear. Perhaps I may draw his attention running. The role of the Legal Services Board is set to one of the objectives, which is, out in statute. It is an independent body providing—this “to promote and maintain adherence to professional principles”, is the crucial word—oversight regulation of the frontline which are defined in subsection (3)(a) as, approved regulators. The approved regulators remain “that authorised persons should act with independence and integrity”. responsible for the day-to-day regulation of their members The complexity of regulation is always an issue, unless, of course, they are found to be failing in their and a key part of the new framework has been the regulatory duties, in which case the Legal Services separation of representative and regulatory functions Board has a number of powers to intervene to ensure as required by the Act. This led to the introduction of that effective regulation is maintained. new bodies in addition to the Legal Services Board, The second key reform is the creation of the Office the Solicitors Regulation Authority and the Bar Standards for Legal Complaints which administers the Legal Board, which in turn has led to a comment made by Ombudsman scheme. Last year it dealt with over several noble Lords that the new framework, rather 80,000 inquiries, and of those some 7,455, close to than simplifying things, has actually added to the 10%, were directly resolved. It acts as the single point complexity. It is vital that consumers have confidence of contact for consumers unhappy with the service in the legal profession. To that end, regulation of the they have been provided by a lawyer. I would add that profession should be effective and not unduly influenced there is an informal resolution procedure which sees by its representative role. Without that, there is the around 35% of cases handled in this way. risk of accusations of lawyers protecting their own. So The third and final key reform is the new alternative while we have seen new regulatory arms emerging, business structures regime which allows different types that has been an important step in maintaining—that of lawyers to work together with other professionals word again—the integrity of the profession. Also, and to accept external investment and ownership. This before the new regime was established, a number of should allow them to explore new ways of structuring different organisations were involved in the regulation their businesses to be more cost-effective, efficient and of the profession. While I take the point made by the innovative. We hope that it will lead to more choice, noble Baroness, Lady Deech, about self-regulation, improved standards and more competitive costs for there was still some oversight. My noble friend Lord consumers. While we are happy to see a diverse range Phillips of Sudbury also mentioned this point. The of alternative business structures emerging, we are not Lord Chancellor used to approve rule changes, and in saying that you need to be an alternative business some cases rule changes had to be approved not only structure; we are saying that we have given you the by the Lord Chancellor, but by other bodies, leading flexibility to practise as a sole practitioner, traditional to the criticism that the length of time taken to process law firm or alternative business structure. So far, over such changes was unduly long. 40 firms have taken the opportunity to become alternative The new regime streamlines this system by making business structures, and it is particularly encouraging all rule changes the responsibility of the Legal Services to see the diversity of firms involved, ranging from a Board. Rule change applications must be dealt with in simple husband and wife partnership to the Co-op. a timely manner and the Legal Services Board has the So much change in such a short space of time power to exempt certain rule changes, fast track rule means that this has been a steep learning curve for all changes and in more complex changes seek additional involved, and this has inevitably led to challenges views. The latter is not aimed at redoing the work of which several noble Lords have talked about in the the approved regulator, but rather at looking at the debate. Let me address first the issue of proportionate changes objectively and providing helpful and constructive regulation. My noble friends Lord Gold, Lord Faulks feedback. and Lord Phillips all alluded to it in their contributions. What is important is that the Legal Services Board Baroness Deech: I appreciate what the Minister and the approved regulators work together constructively says, but he must accept that there is need to investigate to ensure that regulation is proportionate, ensures that this. Rule changes now go through an even more consumers receive excellent standards of service, and tortuous process than was the case before. If the that the opportunities provided by the Act in terms of front-line regulators have responsibility, then their competition and innovation are realised. Indeed, the rule changes ought to be accepted without the imposition issue of being proportionate to the role of the Legal of ideology and various approaches which are not Services Board was a point well made by the noble necessarily seen as the right way forward for a branch Baroness, Lady Deech. The Legal Services Board has of the profession. Examining the way that rule changes been one of the key drivers of the reforms, partly are approved or held up is really important and I am driven by its statutory duties. I appreciate that the not sure we can wait three years for that. pace over the past two years has meant that, as with most new frameworks, there has been a lot of consultation Lord Ahmad of Wimbledon: I thank the noble Baroness and change, and while the benefits of all of these for her question and I agree with her. It is important changes have yet to be realised, we are well on our way that those in the profession contribute to the effectiveness to seeing the more competitive and innovative sector of how these rule changes are implemented. I take on that the Legal Services Act first envisaged. board what she says and I hope that some of the 531 Legal Profession: Regulation[3 DECEMBER 2012] Legal Profession: Regulation 532 proposals we are putting forward will address the regulatory framework was implemented only in 2010, issues. I note the concerns expressed by my noble we still believe that it is in its infancy. The next friend Lord Faulks and the noble Lord, Lord Hunt, triennial review is due in 2015 and will provide another about mission creep on the part of the Legal Services opportunity to assess how the regulatory framework is Board. As I said at the outset, the important issue is performing and whether the LSB’s functions are still about the terms of reference: what was the Legal needed in an evolved legal services market. Services Board set up to do? Earlier this year, the In conclusion, it is important to remember that the Ministry of Justice conducted a triennial review of the new regulatory regime and governance arrangements Legal Services Board and the Office for Legal Complaints. are still in their early stages, a point acknowledged by Based on this, let me assure your Lordships that, on respondents to the triennial review. I assure the noble the responses received—including those from the approved Baroness, Lady Deech, my noble friend Lord Faulks regulators—the review concluded that, while it is still and other noble Lords that the Government are fully relatively early to assess the full impact of the Legal engaged with the legal profession and other interested Services Board, its functions are still needed and should parties in carrying out that triennial review. During continue to be delivered in their current form. that process, we not only conducted a call for evidence This was a view supported by the Bar Standards but held round-table events and one-to-one meetings. Board and the Bar Council. We must remember that We will continue to engage openly with interested the Legal Services Board is independent of government parties as part of that. I also assure noble Lords, and it is not for us to dictate how it operates. Its including my noble and learned friend Lord Mackay, functions are clearly set out in the 2007 Act. However, the noble and learned Lord, Lord Goldsmith, and my it is clear that there has been a real need for an noble friend Lord Faulks, as well as the noble Baroness, oversight regulator to drive the reforms set out in the that we will carry out post-legislative assessment of Act. In doing so, it has fulfilled the important role that the Legal Services Act. That will look at the original only an oversight regulator could have. Those who aims of the reforms and how far we have come in responded to the triennial review recognised the value implementing them, and we will be seeking further it has brought. Following the feedback we have received, stakeholder views. Finally— the chairman of the Legal Services Board wrote to the Ministry of Justice confirming that his board is also Lord Faulks: Before the noble Lord concludes his considering the responses made so far. remarks, can he help the House by saying whether one I am conscious of time, but turning to specific possible outcome of the review will be that the Ministry questions, my noble friend Lord Gold raised the issue recommends that the LSB does not have any further of micromanagement and corporate governance. The function at all? Legal Services Board recognises that important challenges are emerging from the triennial review and accepts Lord Ahmad of Wimbledon: I thank my noble friend that there are things it needs to address. These will for the question. That is a matter that will come up. As include more detail on its draft business plan for I have already alluded to, this organisation is in its 2013-14, and proposals will include reviewing the approach infancy and came about only in 2010. It is right that to requests for changes to regulatory arrangements we look at this again at the time of the review in 2015. and designation processing, and refining the approach Finally, I also assure my noble and learned friend to research funding. Priorities will be included in the Lord Mackay, who talked of his Green Papers—and draft business plan. Increased understanding of the being green in your Lordships’ House, he was my very cost of regulation, not just the cost of the LSB but the own personal parliamentary Companion—that I heard full cost of practitioners, will also be looked at. A what he said about the importance of education and further issue was raised regarding the value for money his particular question about universities and the College of the Legal Services Board. Since the board became of Law. I shall certainly refer that to my right honourable operational, it has recognised the need to keep its costs friend the Universities Minister. proportionate, and we have seen its running costs The reforms enabled by the Legal Services Act have reduced year on year, from just over £5 million in provided a proportionate and effective regulatory regime 2009-10 to £4.5 million in 2011-12. The combined that remains, currently, fit for purpose. All those with running costs of the Legal Services Board and the an interest in the legal services market have an interest Office for Legal Complaints were approximately in ensuring that this continues. I thank the noble £22 million, somewhat less than the cost of the complaint Baroness—and indeed all noble Lords—for their handling regime that was previously in place. contributions this evening, with the assurance that we Various issues and questions have been raised in will continue to look at this particular function and its terms of accountability and the post-legislative review. effective regulation, with all interested parties contributing We are confident that for the here and now, the regulation to future reviews. of legal services is appropriate, but that does not mean it will remain so indefinitely. Given that the new House adjourned at 9.27 pm.

GC 125 Enterprise and Regulatory Reform Bill[3 DECEMBER 2012] Enterprise and Regulatory Reform Bill GC 126

climate change and emissions reduction, things can Grand Committee get a bit illogical. It is important that a lot of attention is paid to these definitions and that we get them right. Monday, 3 December 2012. The second change proposed in the amendment is to add a specific reference to energy savings. A very Enterprise and Regulatory Reform Bill strict interpretation of natural resource efficiency might Committee (1st Day) preclude energy efficiency from electricity. Electricity is not a natural resource, it is manmade. Again, we want to make sure, for the avoidance of doubt, that 3.30 pm the bank is set up to focus on electricity and energy The Deputy Chairman of Committees (Lord Bichard): saving. We know that this is true because, of the five My Lords, welcome to the Grand Committee on the areas identified in the bank’s objects, two are about Enterprise and Regulatory Reform Bill. If there is a energy efficiency—one for commercial entities and Division in the House, the Committee will adjourn for one to support the Green Deal. They are very important 10 minutes. for electricity efficiency, and we are not convinced that the provision fits well with this definition. So we encourage the Government to reconsider the wording Clause1:Thegreenpurposes of subsection (1)(b) on natural resource efficiency, because we do not think that it does what the Government Amendment 1 want it to do. Moved by Baroness Worthington Finally, I have two questions for the Minister: what is his definition of, 1: Clause 1, page 1, line 6, leave out paragraph (b) and insert— “efficiency in the use of natural resources”? “(b) the advancement of initiatives with the purpose of Secondly, will he undertake to amend the wording to facilitating significant improvements in natural resource efficiency and energy savings;” make sure that energy saving, in particular electricity savings, are included under these purposes? Baroness Worthington: My Lords, we should remind ourselves why these green purposes are so important. The Parliamentary Under-Secretary of State, Department This bank has been set up in order to facilitate investment for Business, Innovation and Skills (Lord Marland): My into green projects and to help the UK to move to a Lords, here we go. We have nine days in Committee— low carbon economy. The definitions set out in the Bill I work it out at 36 hours—and what a way to start. will be the guiding principles by which the bank operates. What a pleasant surprise it is for me that the noble The bank could definitely be sold off in the future; Baroness, Lady Worthington, is dealing with this there are provisions in the Bill to enable this to happen, amendment. I moved department to get away from her so these governing principles are very important and incisive grilling, but it has come back to haunt me. must pass the test of time. Nevertheless, I welcome very much seeing her opposite The amendment would introduce two changes to me as she is much better looking than the noble Lord, the Government’s proposed wording in Clause 1(1)(b). Lord Adonis. First, a test of significance would ensure that projects As always, this Bill will leave this House much showed a significant advancement in resource efficiency better for the great interrogation that this House will or energy saving. We believe that this is important not give it, and I want to say in advance how grateful I am because we do not trust the bank but, as I say, because to all noble Lords for the time that they are about to of how it may change and develop in the future. The dedicate to this. I also thank the Opposition for their test of significance would prevent projects qualifying co-operation throughout this process, the officials who legally for support from the bank which deliver only a are in serried ranks behind me and of course my noble very marginal improvement in any project. It is not friend Lord Attlee and others who will be in his place beyond the imagination to see that under these definitions and will have to listen to this response. of purpose you could secure support and funding for a The noble Baroness poses an extremely reasonable very marginal improvement in the efficiency of a question and I compliment her on her great knowledge coal-fired boiler, for example. That is not the sort of in this field, almost unrivalled in many ways. We have investment I think the Government are seeking; therefore, obviously had discussions on this issue with the chairman, this part of the Bill needs tightening for the avoidance the noble Lord, Lord Smith of Kelvin, and I would of doubt. like to read out his views on it from the Second It might be argued that this is illogical and that we Reading debate because I think that it sets a framework will not see a bank that is called the Green Investment for what we are going to talk about today. He said: Bank investing in coal-fired projects. I have an example “We know that we are going to be held to very high standards of how things can go quite illogically wrong when on green issues in both the investments and our own operations. dealing with climate change and greenhouse gases. We welcome the requirement to report on carbon emissions and The global carbon market has an investment facility the positive impact that our investments should have on reducing called the clean development mechanism, under which UK emissions. We will go further than the requirements of quoted companies by reporting in detail on our portfolio. We will it is perfectly legal and possible to invest in slightly also take the long-term view and have regard to the work of the more efficient coal-fired power stations in India to Committee on Climate Change. I ask noble Lords for support for allow for European coal-fired power stations to carry the Government’s broad definition of ‘green purposes’. Waste on emitting. When we get into the world of sustainability, and recycling—for example, anaerobic digestion—can have a GC 127 Enterprise and Regulatory Reform Bill[LORDS] Enterprise and Regulatory Reform Bill GC 128

[LORD MARLAND] will rightly be spent talking about the policy and the positive impact, and it would make the Green Investment Bank’s fact that large companies need to make investments in task more difficult if there were changes in our mandate by a our transition to a large green economy. narrowing of the green definition”.—[Official Report, 14/11/12; cols. 1528-29.] That was evidenced by the letter from seven of the I think that I could stand here all night and make a world’s largest energy and engineering firms to the case for this, but I could not do it better than the Prime Minister, the Chancellor and the Secretary of chairman himself, who has been appointed to run this State for Energy and Climate Change, a couple of independent bank. On that basis, I ask the noble months ago—companies such as Siemens, Alstom UK, Baroness to withdraw her amendment because I think Mitsubishi Power Systems, Areva, Doosan, Gamesa the noble Lord has said everything that needs to be and Vestas. However, the importance of SMEs to said. economic growth cannot be underestimated. According to the European Commission, 85% of net new jobs in Baroness Worthington: I thank the Minister for his the EU, for example, between 2002 and 2010, were response. I am slightly perplexed as I do not think that created by SMEs, with 23 million SMEs accounting the quote from the noble Lord, Lord Smith, really for 75 million jobs in the EU. The Bank of England address the questions that I have raised. We would has recently released figures on funding for lending agree with his point about not wanting to narrow the and today there are a few quotes in the Financial definition. It is important that we give ourselves flexibility, Times, one of which came from Mark Swift who is a not least because we hope that this bank will be spokesman for EEF, the manufacturer’s trade body. around for a long time. Things will change during the He said, time that it is around and we do not want to overly “The challenge remains for UK lenders to re-engage with constrain it. We are suggesting not to narrow the SMEs and support them with their investment plans in challenging definition but to make it slightly more specific in its economic times”. wording. I hope that that can be taken on board. If it is narrowing, it is only to add a test of significance, John Walker, chairman of the Federation of Small which, I think, is a legally important word that we Businesses has said, should not dismiss lightly. So I am happy to withdraw “What is needed is more competition and choice for small the amendment, but on the basis that perhaps we businesses to access finance”. could think about these two questions a bit more carefully. I beg leave to withdraw the amendment. Time and time again, it is made clear that support for SMEs is key. We would like to see the Green Investment Bank have SMEs in forefront all the way through. Amendment 1 withdrawn. More investment in SMEs could lead to a significant saving in capital investment costs. In the case of offshore Amendment 2 wind, recent research suggests that capital expenditure Moved by Lord Mitchell costs could fall by more than a third during the course 2: Clause 1, page 1, line 11, at end insert— of the next decade if more of the components were made in the UK. SMEs face considerable start-up “(3) In undertaking investments in accordance with the green purposes outlined in subsection (1), the UK Green Investment costs, but an active Government, working with the Bank will identify opportunities in which small and medium-sized private sector, could remedy that. The Green Investment enterprises may be awarded contracts.” Bank has the potential to enhance green supply chain possibilities, opportunities and capabilities. As we have Lord Mitchell: My Lords, I stand here in some discussed many times, SMEs are struggling for investment trepidation, having heard the comments that the noble in the current climate, with negative net lending to Lord, Lord Marland, made to my noble friend. I such companies since the second quarter of 2011. dread to think what he will say about me. Even before While demand is down due to the depressed economy, I had the position of shadow Business Minister, I have there is clearly a problem with SMEs not getting spoken consistently on the subject of SMEs, on how access to credit. A particular bugbear of mine is that important they are to this country and on how they perhaps the Green Investment Bank could insist that require certainty, clarity and consistency. That is very everyone it deals with and everyone it invests with has important as regards their ability, in the future, to a clear mandate for prompt payment of invoices. make a contribution to the growth of this country. Nothing is better for an SME than knowing that it will get its money. By way of a statistic, the UK has slipped from third position to seventh in world green technologies and I Last year’s Lords Science and Technology Committee hope, with the introduction of the Green Investment report on public procurement as a tool to stimulate Bank, if it is properly constructed, that we will be able innovation also made it clear that SMEs still face to do better in this vital industry. The Green Investment difficulties when government contracts are put out to Bank should be an opportunity to help SMEs explicitly. tender. We should ensure from the outset that the GIB I shall come back to that a little later but it is really has a responsibility to help SMEs be part of the new important that SMEs—not just large companies—are green economy. This amendment encourages the Green helped in this. In addition to its green obligations, it is Investment Bank to support investments that offer important that there are investment obligations that clear opportunities for British SMEs to be awarded are vital to its work. A key part of its remit is boosting contracts. Does the Minister share our support for the growth and creating jobs in the UK economy. Time promotion of SMEs? I beg to move. GC 129 Enterprise and Regulatory Reform Bill[3 DECEMBER 2012] Enterprise and Regulatory Reform Bill GC 130

3.45 pm announced just a couple of weeks ago, the project will go ahead and there will be many jobs for micro-enterprises Baroness Turner of Camden: My Lords, I support and SMEs in the supply chain, particularly in the what my noble friend has just said in relation to construction and operation of that plant. Amendment 2. It is often contended that I do not care about SMEs and that I care only about employment Those are two questions that I hope that the noble rights. That is not true. From the standpoint of the Lord will take as being not at all critical of his amendment, provision of employment, it is important that SMEs which seeks to help SMEs and is correct in asking for are protected. The Government ought to support this a definition of who it is that we want to help. amendment as it offers SMEs protection and support. One of the reasons why they are not always able to Lord Marland: My Lords, of course the Government offer employment is because they do not get the money— are very committed to SMEs, and I know that the they do not get the contracts. This provision seeks to noble Lord, Lord Mitchell, who I can say lots of nice ensure that everything possible is done to make sure things about, is a committed and good advocate for that SMEs get the money and the opportunity to play their cause. The noble Lord, Lord Bates, put his finger the part that many of them want to play in the on the pulse—it is about definition. However, I do not provision of employment. They can do that only if want to get too deep into definition, thereby tying the they have the necessary contracts and support indicated hands of the bank too early on in its endeavours. in Amendment 2. I hope that the Government will It is clear that the great challenge for any Government accept the amendment. at the moment is to get the SMEs going. I know this first hand, given that I am not only the Prime Minister’s Lord Cotter: My Lords, I also support the thrust of trade envoy but chairman of UKTI’s Business the amendment of the noble Lord, Lord Mitchell, Ambassadors Group. This is our challenge—the beating particularly as regards SMEs. I welcome his comments heart of Britain and getting the SMEs going. Therefore, regarding SMEs’ concerns around the payment of in the context of SMEs, we have to look at what the debts. The Minister will know that I and others have Government are doing as a wider initiative, rather often raised this issue. It is important for SMEs to be than be tied down. That is why we have established the directly involved but, where contracts are awarded to Funding for Lending scheme, Capital for Enterprise, large contractors, small businesses have an important the Business Growth Fund, the Regional Growth Fund, role in supplying those large contractors. To follow on and the Enterprise Finance Guarantee fund, which from the point the noble Lord made about late payment, has already helped 18,000 SMEs. To a certain extent, it will the Minister once again renew efforts to ensure is working, because we have had the highest amount that main contractors pay their bills to SMEs on time of new businesses established since records began. and in due order? Some 460,000 start-up businesses have registered at Companies House in the past 12 months. Lord Bates: I, too, welcome this amendment but I However, I completely agree that this issue is an have some questions about it on which I would like to enormous challenge. In fact, my noble friend, is committed put down some markers to which I hope the noble to this cause, as he is on late payments—an issue that Lord, Lord Mitchell, and the Minister will respond. is fundamental to SMEs. He tells me that his maiden My questions concern the use of the term “SME” and speech was about late payments and commercial debt. how we define a small and medium-sized enterprise. He has a record of support for that case. That definition differs in different parts of the world. The noble Lord, Lord Cotter, has raised this subject For example, the European definition of a small enterprise a number of times in the Chamber. Therefore, do not is one comprising between10 and 50 employees and a get me wrong. The Government are completely committed medium enterprise is one comprising between 50 and to helping SMEs. That is why, for example, in 250 employees. It would be useful to know what procurement—one of the issues that I am involved definition the noble Lord is using to define small and with in government—we have insisted that 25% of medium-sized enterprises, particularly when we discuss government contracts should go to SMEs. An awful clauses further down the track. The businesses that I lot of work is going on. I do not want to be too call micro-enterprises, which are defined in European prescriptive in this area of the Green Investment Bank, terms as having below 10 employees, are the ones that but it is totally focused on this issue and looks at each really need help in accessing finance and are struggling opportunity on its merits. Already, the bank’s smaller-scale at present. Therefore, it would be helpful if the noble funds for waste and non-domestic energy efficiency Lord told us the parameters and the definition of are already delivering investment for SMEs, such as enterprise that he is using when he is talking about the £8 million announced last week alongside a Teeside- SMEs. based SME. Work is already going on to support SMEs. Secondly, I wonder whether the amendment achieves With that in mind, I hope that the noble Lord will the ends that the noble Lord, Lord Mitchell, seeks. We agree to withdraw his amendment. are talking here about incredibly capital-intensive investments. I know from one of the first of these businesses that was established in my home area in the Lord Mitchell: I thank the noble Lord for his statement north-east of England—an anaerobic digestion plant— and, indeed, I thank all noble Lords for their contributions that you are talking about a capital investment of to this debate. I take it as being broadly supportive of £100 million. These are huge sums which would be what we are trying to do. That will come out in further outside the reach of most businesses. Yet, as a result of stages of the Bill, but I take great heart from what is the investment through the Green Investment Bank being said. GC 131 Enterprise and Regulatory Reform Bill[LORDS] Enterprise and Regulatory Reform Bill GC 132

[LORD MITCHELL] time. Making this link with the bank helps fully to I want to make two quick points. First, I cannot align the bank’s purposes with the meeting of those emphasise enough the importance of certainty, not legal objectives. just for SMEs but in the whole business environment. The specific reference in the amendments requires a Certainty must be there. People are making decisions link to be taken into account of the advice from the and, in the green area, these decisions are for longer Committee on Climate Change. This is important. periods than normal, particularly as regards the payback Greenhouse gas reduction is a complicated business. It period and the intensity of those decisions. We must is very technical and we do not want the bank to have be clear on this, and I will address that issue later when to reinvent wheels. There is a body of experts there I talk about borrowing powers for the bank. Secondly, and it would be wise to create a link between the two. of course we cannot tie the Government’s hands too For example, the bank may be thinking of setting itself much, but a definitive statement in the Bill on the need greenhouse gas reduction targets, as was mentioned in to invest in SMEs is important. I beg leave to withdraw a Guardian article recently. The CEO of the bank, the amendment. Shaun Kingsbury, was quoted as saying he was going to introduce “transparent” measures for measuring Amendment 2 withdrawn. CO2 and the impact that the bank is having on CEO Shaun Kingsbury was quoted as saying he was going Amendment 3 to introduce transparent measures for measuring CO2 Moved by Baroness Worthington and the impact that the bank is having on CO2. This is an area which will require quite a lot of technical 3: Clause 1, page 1, line 11, at end insert— understanding of various aspects of how you account “(3) The Bank shall set out annual targets for the reduction in for greenhouse gas emissions. The Committee on Climate greenhouse gas emissions achieved by its investments.” Change is the leading source of advice on this and it would strengthen the bank’s position if it had an Baroness Worthington: My Lords, I am afraid that I explicit link to that committee and had a duty to am going to continue the theme that I started with the consider the advice created by the committee. first amendment. These amendments are designed to A specific example might be where we are trying to make the purpose of the bank unequivocal. The untangle whether investments are generating emission amendments create a duty to assess the impact of the reductions that are additional or not under the terms Green Investment Bank’s decisions on the Climate of how you account for greenhouse gas reductions. Change Act 2008. Many of our sectors in the UK are covered by existing The rationale for this is that, as we just discussed, caps and existing regulations. Counting of those is not the stated purposes under Clause 1 can be widely straightforward and we believe that there would be a interpreted. That is not to say that they will be, but great deal of merit in the advice that the Committee they can be. We are writing law and we ought to try to on Climate Change provides to the Government on make it as future-proof as possible. We believe that, these technical and quite complicated issues being given that at the moment the scope includes a provision made available to the Green Investment Bank and its that the bank can fund increased efficiency of natural board. I know that one of the concerns that the resources, we need something that is much more specific Government may have in accepting these amendments about the impact of the bank as a whole on our is that it might increase the likelihood of judicial climate change targets. It would still be possible for the review, but we do not believe that it is a genuine bank to go down an investment path, which would be concern. Obviously, judicial review on procedural issues taking us out of line with the trajectory of emissions can be taken irrespective of these links here, and reductions required under the Climate Change Act. introducing the requirement for the bank to co-ordinate That is the purpose for tabling the amendments. itself with the Climate Change Act would reduce the Specifically, Amendment 4 makes an explicit link risk of JR. It would give the bank a clear procedure between the bank and provisions under the Climate that it can follow and should give it good comfort that Change Act. It sets out the context within which the it is on the right track if it follows this procedure. So bank operates. Yes, the Bill already states that one of we hope that the risk of JR will not be the primary the purposes is to reduce emissions, but it then goes on reason why the Government might seek to oppose the to water that down by talking about investment in amendment. If the Minister does not believe that the natural resource efficiency. So for the avoidance of any amendments are needed, would it not be good to align doubt, we want a link created that makes it absolutely the Green Investment Bank with the Climate Change clear that the bank and our climate budgets are linked. Act? Perhaps he could say a bit more about that, It is very important that we have that wider context because it is at the heart of the matter to align our because, if you look at this very narrowly, emissions legislation so that ultimately we achieve our objectives. reductions at the scale of a project or single investment are one thing, but then when you look at the totality of what the bank is doing, there ought to be an explicit 4pm link to the broader context. That broader context is Lord Teverson: My Lords, before I speak to the need to reduce our emissions; our legally binding Amendment 4, I should say that it is a great pleasure targets and carbon budgets. to deal with a Minister who understands the area of These are challenging targets and they require energy and climate change, which part of this Bill government as a whole and all government deals with. He knows the area well, so I am sure that instruments to work in tandem to deliver them on our debates this afternoon will be extremely productive. GC 133 Enterprise and Regulatory Reform Bill[3 DECEMBER 2012] Enterprise and Regulatory Reform Bill GC 134

I also welcome the fact that the Green Investment I am sure that the noble Lord, Lord Smith of Kelvin, Bank comes at the beginning of the Bill, because it is is right in the vast majority of his remarks, but I think an important part of making growth really happen in that here there is a need for a little more future-proofing this country. of how operations might work, as I am sure that at some point in the long and glorious career of this I also commend the list of green purposes; individually, bank there will be chairmen other than the noble they are excellent in terms of greenhouse gas emission Lord. reductions, natural resources and natural environment, biodiversity and environmental stability. I could not write a better list myself. However, what we are trying Lord Marland: My Lords, I have a sense of deja vu, to do here is to get absolute clarity over whether this is thinking that I am still in the Department for Energy a list that includes them all or whether you can pick and Climate Change—where, of course, the Green one off for investment, and ignore the rest. I very Investment Bank was largely initiated, so I am extremely much interpret this—and I presume that this is how keen that it gets off on the right footing for that reason the Bill was drafted by the Government—as a way of alone. I believe that my noble friend Lord Teverson, ensuring that at least one is met, but not necessarily all who always speaks so eloquently on the subject, actually the others. To have the whole list as obligatory would answered the question that he posed himself. We could be unrealistic. not have written a better list if we had tried. My What I and the other co-sponsors of the amendment concern is that we would get into definition overkill as are trying to do is to tie it into the climate change we take this Bill through the House. elements—the carbon and other greenhouse gas My noble friend mentioned that the reduction of reductions—as being a necessary part of the investment carbon is not relevant on the individual investments, programme. I refer not to individual investments, but but it is at the top line. I would respectfully—I emphasise to the investment strategy and programme of the bank that word for the noble Lord—point out that it is the as a whole. That is why the amendment places a legal fundamental investments that will reduce carbon duty on the board to assess the impact of the bank’s emissions. It is only at the top level—I see the noble investment strategy on the Climate Change Act, which Lord, Lord Oxburgh, sagely nodding his head—that is an absolute anchor point for all this work, and a you will achieve the carbon reduction. The Government mission of this Government and the previous Government are very heavily committed to this. It is no accident in terms of that global challenge. It is also to ensure that the noble Lord, Lord Stern, was on the advisory that there is a duty on the board to have regard to the board that set up the bank and that was advising at all advice and reports of the Committee on Climate levels. As a result of that, the noble Lord, Lord Smith, Change. My noble friend Lord Deben is not here has made it clear that the bank will have a very high today, but I am sure that he would like the fact that we regard—as it should—for the Energy and Climate wish to pay particular attention to this independent Change Committee because it is fundamental for the body that was set up specifically to advise government Government and for the future of the business. However, in this key area. Furthermore, it is to prevent the I exercise a word of caution, because there are important board from adopting or amending an investment strategy activities that are clearly green but do not necessarily unless it is satisfied that the implementation of the reduce greenhouse gas emissions—for example, recycling proposed investment portfolio will increase the likelihood and improvements in water quality. We would want of UK carbon budgets and targets being met. this bank to invest in such activities, I am sure, but that would not necessarily reduce carbon emissions. I apologise to the Minister for the fact that the proposed new clause has so many subsections and is I have not mentioned a judicial review in my line of so long, but it anchors the bank and legislation not inquiry because I think it is far more important that just to the advice of the Committee on Climate Change this Committee gets this into the right shape rather and its work but to the real area of greenhouse gas than for it to be directed by a judicial review. However, emissions and the Climate Change Act, which has the bank’s board has agreed—across the board—that broad consensus of all parties—as it did in the last the bank will voluntarily report on greenhouse gas Parliament and does in this one. I hope that in that impacts on its investments. This is in addition to the way we can ensure that this legislation is absolutely fit requirement for the bank to report on the greenhouse for purpose. gas emissions associated with its own activities. So it comes as no surprise to all of us, after discussions with My noble friend the Minister mentioned the remarks the noble Lords, Lord Adonis and Lord Smith of made by the noble Lord, Lord Smith of Kelvin, at Kelvin, that it is absolutely at the heart of what the Second Reading. I have huge respect for the noble bank is doing. I hope that that gives confidence to Lord, Lord Smith, and I commend and congratulate noble Lords and I therefore respectfully ask them to the Government on his appointment; he is exactly the withdraw their amendment. right person to do this. I would just suggest that perhaps post-appointment he might be rather keener to make sure that his board is not inhibited in any way Baroness Worthington: My Lords, I thank the Minister in the decisions that it would like to make. I think that for his response. We do not doubt that many parts of one looks at this in a slightly different way post- government are fully on board with the need for appointment, as chair of an organisation, from pre- investments to deliver low carbon economy to meet appointment and as a member of the legislature. It is our Climate Change Act 2008 targets. However, it will beholden on us to look independently, from a bird’s-eye not have gone unnoticed that this certainty is not view, to make sure that we have our purpose right. shared by everyone in the Government. Unfortunately, GC 135 Enterprise and Regulatory Reform Bill[LORDS] Enterprise and Regulatory Reform Bill GC 136

[BARONESS WORTHINGTON] trigger the application of Clauses 3 to 6, including the there is an atmosphere of uncertainty about policy power in Clause 4, for the Government to then fund and direction of travel. There is a great deal of difference the bank over the long term. between taking strategy A or strategy B to meet our The first condition required for designation is that targets. We could go through a whole host of investments the Secretary of State should be satisfied that the and incremental technologies or incremental shifts in bank’s statement of objects in its articles of association fuels that we use, or we could go down a different path is drafted in terms that will ensure that the bank and take a far more innovative and cleaner route. The engages only in activities that contribute to the statutory trajectory of emissions would be very different as a green purposes that we examined when debating Clause 1. result. As is usually the case with a Companies Act company, Choices are available and the body that we have the bank’s statement of objects frames the duties of created to advise us on that is the Committee on the bank’s directors. The specific issue raised in this Climate Change. We believe that there will be a great amendment is that as well as making a statement that deal of benefit in having closer ties between the Green the Secretary of State is content that the bank’s green Investment Bank, which I hope will be a delivery agent objectives are being met in full, the articles themselves and will start to get pounds spent and concrete poured, are laid so that Parliament can see them and discuss and the legal structures that we have in place that help them. us to determine the path that we shall take. That is I accept that the Companies Act structure is flexible the purpose of the amendment and I am happy to and indeed it has allowed the Bank to be established withdraw it. even though the enabling legislation is far from complete. The chair, the noble Lord, Lord Smith, spoke about Amendment 3 withdrawn. the bank and his role during the Second Reading debate in your Lordships’ House so we are aware that Clause 1 agreed. he is in place, and the bank was launched recently in Edinburgh. Amendment 4 not moved. So we have a rather complicated piece of constitutional positioning to get right. On the one hand, the operations Clause 2 : Designation of the UK Green of the bank have to be done under the Companies Investment Bank Act, and the institution will have a well understood operational framework to guide it. On the other hand, the body could not exist without government support Amendment 5 and government funding, and with that surely comes Moved by Lord Stevenson of Balmacara accountability to Parliament. In effect, our amendment provides a constitutional limitation on the purposes 5: Clause 2, page 2, line 1, after “State” insert “has laid before and the range of the company’s activities, which allows Parliament a copy of the Bank’s articles of association and a Parliament its say, so that directors are directly aware statement confirming that she” of what the shareholders think. However, I have a few questions for the Minister on the implications that this Lord Stevenson of Balmacara: My Lords, Amendment 5 amendment has for the rest of this clause. stands in the name of my noble friend Lord Adonis who is unable to be present this afternoon for personal reasons. He will return for later stages of the Bill. This is a probing amendment and it is one of a 4.15pm number of amendments in which we seek to engage Subsection (2) requires that the Secretary of State, the Committee in thoughts about how the public-facing and we think Parliament, must be satisfied that the aspects of the new bank can be best discharged, Green Investment Bank’s articles of association will particularly in relation to Parliament. The aim of this ensure that it engages only in activities that achieve amendment is to argue that, prior to designation, one or more of the green purposes set out in Clause 1. Parliament should have an appropriate opportunity to Subsection (3) sets out the important second condition scrutinise the articles of association of the bank. It that the Secretary of State must give the Green Investment further makes the point that the scrutiny that needs to Bank an undertaking that it will operate independently— be done should be done by Parliament, and not simply the so-called “operational independence undertaking”—to by the Secretary of State, who is identified in the Bill allow the directors to carry out work and make as having responsibility. After all, we are talking about investments without interference from the Government. the document which sets out the various contentious Subsection (4) states that such an order may not be issues in the management of the company, vis-à-vis made unless the Green Investment Bank is wholly the interests of the shareholders. owned by the Crown. The main purpose of the clause that we seek to The Government’s helpful document, Update on amend is to ensure that two key governance constraints the Design of the Green Investment Bank, states: are imposed on the bank in a way that is consistent “The Department for Business, Innovation and Skills, via the with its status, which, as we know is that of a Companies Shareholder Executive (ShEx) will be the GIB’s sole shareholder”. Act 2006 company, albeit one whose shareholding is On page 21, the Government state: currently owned 100% by the Government. Once those “The GIB will initially be owned by the Government and will two conditions have been met, the Secretary of State operate as a separate institutional unit at arm’s length and with may designate the bank by order. Designation will full operational independence”. GC 137 Enterprise and Regulatory Reform Bill[3 DECEMBER 2012] Enterprise and Regulatory Reform Bill GC 138

I want to focus on the word “initially”. In the arrangement or whether there is a convention contained context of that document, and given subsection (4), is in the use of the words “Secretary of State” that it the Government’s express intention to sell shares in allows the gender to be circumscribed in that way. the Green Investment Bank, at any time? Can the Minister give us an idea about the sort of circumstances Lord Marland: I thank noble Lords, especially the under which Crown ownership of the bank could be noble Lord, Lord Stevenson of Balmacara, for their diluted? How does Clause 2(4) reconcile with Clause 4(1)? words. The Government agree that there must be It might be helpful to the Committee if I explain that parliamentary scrutiny of the bank’s statement of this latter provision states: objects and particularly in terms of its green purposes “the Secretary of State may, with the consent of the Treasury, give as part of the process of designation of the bank. That the UK Green Investment Bank financial assistance at any time when the Crown’s shareholding in it is more than half of its issued is why in another place we tabled an amendment to share capital”. that effect. However, we do not believe that there is a need to separate out the statement by the Secretary of In addition Clause 4(3)(d) states that financial assistance State. I will try to respond to the question asked by my is possible for, noble friend Lord Brooke on the Secretary of State in “the purchase of share capital of the Bank”. a minute because with his years of experience in Will the Minister, therefore, say a little more about government—I am playing for time now—he knows that, and explain the circumstances under which the far more about this particular thing than I would ever Government would want to purchase shares in a bank dream of knowing, but I will come to that in a minute. which, according to legislation, they already own? The Secretary of State is satisfied that the bank’s It may well be that the Government have no plans objectives are consistent with the green purposes because to sell the Green Investment Bank, but as was accepted Clause 2(2) already provides that he cannot lay a draft in the other place, this Government cannot tie the order before Parliament unless he is so satisfied. I am hands of future Governments or Parliaments. So, also happy to give noble Lords the commitment that again, it would be helpful if the Minister would confirm Government will make available to Peers and to Members that there are, as far as he is concerned, no circumstances of the other House a copy of the bank’s articles of in which the Government would envisage such a sale. association when the draft order is laid so that all can Finally, I wonder if we can just get some words of be made transparent. comfort from the Minister on the question of getting The noble Lord, Lord Stevenson, asked about the long-term private investment into the green sector. It sale of shares. This Government are committed to not was openly admitted in the other place that enabling selling the relevant shares but, unfortunately, this private capital to acquire shareholdings of the company Government cannot legislate for a Labour Government, would be a measure of the success of the bank. I for example, if they wished to sell the shares. I am sure assume, therefore, that that is why the legislation contains the noble Lord knows that better than I do. It would powers to enable the opportunity for the injection of therefore be wrong to try to impose things on future private capital directly into the bank. But how does Governments. We will be in power for a very long that give the market the confidence that the UK Green time, but just in case we are not, the Opposition may Investment Bank, currently “wholly owned by the choose to change the law if they come to power. Crown” will be an enduring institution? It was clear As a general point on outside investment, one of that one of the main determinants of success in this the things I have noticed as I have travelled the world area will be convincing people in the financial and is the clear desire of international companies to come environment markets about the sincerity of the in alongside the Green Investment Bank as co-investors Government’s intention that the Green Investment because the integrity of the board that has been set up, Bank is here for the long term. its skills and knowledge and the leadership Britain has In trying both to eliminate the possibility that private shown under this Government and the previous one in sector organisations could by taking a stake jeopardise terms of green credentials and green expertise has the designation of the bank, while leaving themselves meant that we are seen as a centre of excellence. If the some wriggle room so that some time down the track noble Lord, Lord Smith of Kelvin, were standing part-ownership of the bank could be sold, the Government here, I know he would say that there is huge scope for may inadvertently have given the impression that the involving international companies to invest in the bank is not there for the long term. It would be helpful bank. I really do not think that that is a problem. if the Minister could reaffirm the position as he sees it. I have no idea what the response to the noble Lord, I beg to move. Lord Brooke, is, so, if I may, for once, I shall request the pleasure of writing to him about something which is not to do with cricket. I hope that with that Lord Brooke of Sutton Mandeville: My Lords, I explanation— have a short technical question for the Minister and, conceivably, for the noble Lord, Lord Stevenson. It is concerned with the final word in Amendment 5: “she”. Lord Stevenson of Balmacara: Before the noble My recollection is that when we moved to having Lord sits down, I should make it clear that I was Secretaries of State as the title of those people who agreeing with him, as he has played it back to us, that headed departments, it was so that “Secretary of State” the present Government cannot tie the hands of future in legislation could be interchangeable between Governments. However, my question was deeper than departments. My interest is whether if you use the that. It was: why is there so much in this designation word “she” you run the risk of fracturing that particular clause about the way in which the shareholding is to be GC 139 Enterprise and Regulatory Reform Bill[LORDS] Enterprise and Regulatory Reform Bill GC 140

[LORD STEVENSON OF BALMACARA] affirming it. There are two issues, of course. First, our managed going forward? The noble Lord has not dealt current Secretary of State is a he, and, secondly, we with that particular point. That was the purpose of my refer to each other as, “My Lords”. I hope that that remarks on this section. We have a situation where means I do not have to write to the noble Lord, Lord currently this is a 100% owned company.The Government Brooke, on the subject—although I am always delighted have made a great virtue of the fact that that is the to do so. case and, indeed, we welcome that. In his latest remarks, the Minister has alluded to the fact that the reason Lord Brooke of Sutton Mandeville: My Lords, I am that investment may flow into the bank is precisely most grateful to my noble friend Lord Jenkin of because it is owned by the Government and the investor Roding. I was, in fact, previously aware of that. I was community, for whatever reasons, is supportive of the raising the question of why the word “she”had suddenly view that it is the Government leading this that gives appeared. I did not wish to embarrass the Official them the security and the risk reduction that they are Opposition by directing the question at them, so I looking for. We may come back to this on a later directed it at my noble friend. amendment. So why all this stuff about what happens below a shareholding of 50%? We are told in a later clause that the Government are not able to fund the Lord Stevenson of Balmacara: My Lords, I agree bank if their own shareholding drops below 50%. that this is now a score draw. With that, I beg leave to Does that imply that there is a plan that we have not withdraw the amendment. been told about, or is it just a precautionary measure in the event that terrible things might happen and Amendment 5 withdrawn. other decisions are taken? Clause 2 agreed.

Lord Marland: I can deal with that immediately. It Clause 3 agreed. is a very good point. We have no current intentions to sell this—I absolutely underline that fact. We have no current intentions to do so during this Parliament as Clause4:TheUKGreenInvestment Bank: long as we are in power. I hope that that very clear financial assistance statement satisfies the noble Lord. I readily understand that that has to be clear. Amendment 6 Lord Stevenson of Balmacara: I thank the noble Moved by Lord Teverson Lord for those additional remarks and for saying 6: Clause 4, page 3, line 10, at end insert— earlier in his response that he would lay copies of the “(f) a proportion of proceeds due to the UK Government as articles of association in both Houses when it comes a result of the auctioning of emission permits under the to reviewing the designation process. We look forward European Union Emissions Trading Scheme.” to seeing them because they will help considerably. I am afraid that I cannot respond very positively to Lord Teverson: My Lords, I shall speak also to the former Secretary of State, the noble Lord, Lord Amendment 11. Here, I am trying to be as helpful as I Brooke. I did not pick up this point when I was can be to the Minister in trying to find ways in which reading, but I am so completely gender-blind in these we can make this investment bank even more effective matters that I simply read the word as one that described, in finding ways of providing finance. We will come in a personal way, the Secretary of State for the time later to the arguments about lending. being. However, he will have noticed, as we all did, There are two obvious areas where we could assist that throughout his response the Minister referred to the Government and the board of the Green Investment the Secretary of State as “he”. Perhaps we have a Bank, when appropriate. I absolutely agree that the problem that we should all reflect on. worst thing that we could do is try to shovel out through this bank too much money too quickly and Lord Jenkin of Roding: Perhaps I can help with this allow it to lose its reputation in terms of investment question. Since the 1880s, it has been a matter of appraisal and doing the right thing. It should build up interpretation of statutes, and I was certainly taught at that reputation over a sensible period. However, given law school that the male embraces the female. It has the need in the United Kingdom for investment in therefore always been said that you used the term green matters and energy, we know that £3 billion, “he”, which meant, in the appropriate context, “he or although it is a lot of money to all of us, will not last she”. The result is that statutes and, presumably, indefinitely. We therefore need to start thinking ahead amendments do not need to use the words “he or she” now. Two areas should be considered. each time. My noble friend will find when he takes My first amendment refers to the European Emissions advice on this later that it is a well established principle Trading Scheme. I remind the Grand Committee that of statutory interpretation, if I may repeat it, that the there is a list in subsection (3), which states: male embraces the female. “It may in particular be given by way of …”. We are not therefore talking about hypothecation of Lord Marland: I am grateful to my noble friend the ETS revenues. We are saying that this is one of the Lord Jenkin of Roding for explaining that. In fact, it areas where the bank and the Government may look coincides with a note that has just been passed to me to facilitate funding of this bank. It is an extra piece of GC 141 Enterprise and Regulatory Reform Bill[3 DECEMBER 2012] Enterprise and Regulatory Reform Bill GC 142 the armoury for the bank and the Government that invested in the National Loans Fund for a very low could be, but not necessarily has to be, used—although return. I would be interested to learn from the Minister I think it would be a very good idea. I remind noble whether he or his officials know what that current rate Lords that the EU-ETS is coming to the end of its of interest is. Professor MacKerron was clearly particularly second phase. In fact, at the end of this month that concerned at the low rate of return. On understanding phase will end and we will move into phase three. the net present value of the fund’s existing liabilities, In phase two, the Government have already raised he said, some £1.3 billion-worth in sales of so-called EUAs, or “though its current rate of accumulation is significantly less than units of European Union—forgive me, I have forgotten the discount rate applied”, what the A stands for. which was 3% . He went on: “Whether the fund will be able to meet all the … liabilities will Baroness Worthington: Allowances. depend on a range of factors (in addition to whether the current approach to its investment regime are maintained)”. 4.30 pm He questioned whether putting that cash into the National Loans Fund would maintain a sufficient Lord Teverson: Thank you very much indeed. In value for the decommissioning costs of the existing fact, last month the Government already had their nuclear fleet. There is a simple solution to that as well: first auction of phase three allowances. They made the purpose of the Green Investment Bank is not only £34 million and sold 6.5 million EUAs at ¤6.62 per to invest in green infrastructure but to create a proper unit—a terrible price in terms of carbon pricing but commercial return from its investments, so we have a not a bad price, given some of the other prices that double-win situation here. We increase the firepower have been found. Unfortunately and regrettably, since of the Green Investment Bank quite substantially and then the price has fallen below ¤6. The German also make it far more certain that the NLF will be able Government have sold some as well more recently and to meet its liabilities and not put the liability back on that price fell. There is an intention to auction in taxpayers, as would happen otherwise in future. So we excess of 50 per cent of these allowances in phase have a double success. I beg to move. three and once auctioning starts, it seems that will be one of the ways in which the price will go up because Lord Jenkin of Roding: My Lords, I have some the free issue has ended. doubt about the proposed new clause of which my I would also hope that the Government’s intention noble friend has just spoken. The Nuclear Liabilities to raise the bar on 2020 carbon reductions to 30 per Fund very properly seeks to avoid the situation that cent will be successful. That would also mean that the the country got into over many years when large number of these allowances would decrease in the numbers of nuclear installations of one sort of another market. This seems to be an obvious revenue stream, were left to be decommissioned and their radioactive some of which could be used towards reinvestment— materials dealt with, and there were no funds available. I am not saying that it must be—of those carbon One is always astonished at the huge amounts of reduction revenues into green growth and into making money that have to be set aside to satisfy the obligations sure that that whole process is reinforced. that are now being discharged to decommission these I must apologise to the Grand Committee in that nuclear plants safely and effectively. My noble friend Amendment 11, on a second area, has a mistake in it. Lord Teverson may contradict me on this, but I believe In subsection (3), at the very end, it should say Clause 1 that it is intended entirely to be confined to that instead of “section 1” and I apologise to noble Lords purpose; it is intended to be there when it is needed for that. I have been looking for a way in which, when and nuclear establishments come to be decommissioned. the time is right, we could lever extra money into the When my noble friend says that this increases the Green Investment Bank without having all the effects firepower of the Green Investment Bank, what does of increased public debt, which is why the current he mean? Is it intended that the fund should be invested £3 billion comes from asset sales. It means that there in other green projects, which may or may not achieve have to be other ways of finding that money, with all the return expected when the fund was invested? I the borrowings, but the debt is not changed. As I would have thought that that would risk defeating the understand it, it would be absolutely the same as for purpose of the Nuclear Liabilities Fund. the Nuclear Liabilities Fund, which is currently worth The question of the rate of interest that should be some £8.6 billion. Again, this is a way in which the earned on that fund is something that the Minister firepower of this bank could be increased quite may wish to look at. I had not refreshed my memory substantially without the effect on public debt that of Professor MacKerron’s report, and I was grateful other forms of fundraising might have. It would not to my noble friend for reminding me what was in it. Of require outside borrowing by the bank and would take course, it is a very low rate of interest, as he has rightly over the trustees’ functions. said. But the fact of the matter is that this is a I do not know how many of your Lordships have hypothecated fund; it is there for a particular purpose, read the excellent report by Professor Gordon MacKerron, and the idea that it could be used by the Green Evaluation of Nuclear Decommissioning and Waste Investment Bank to invest in something else that might Management, which came out earlier in the year. I am produce a higher return risks prejudicing the absolute sure that my noble friend the Minister was closely and essential purpose for which it has been set up—namely, associated with it, given his responsibilities in that to meet the costs of decommissioning nuclear plants area. Very importantly, it makes the point that at the when they are available. I hope that the Minister will moment the vast majority of that £8.6 billion has to be give some indication that he will look at this proposal GC 143 Enterprise and Regulatory Reform Bill[LORDS] Enterprise and Regulatory Reform Bill GC 144

[LORD JENKIN OF RODING] have set out on this path with at least one arm tied in the proposed new clause with some suspicion, because behind their back by preventing borrowing. We will I believe that it might be misconceived. I apologise to come on to talk about that as we move through the my noble friend Lord Teverson for putting it in that amendments. form, but I feel very strongly about this. In the context of having set up a bank and putting a One of the best things that the previous Government relatively low amount of money in to start, then and this Government have done is to make sure that putting in a hurdle against borrowing further, it is future nuclear liabilities will not fall on the taxpayer important for us to think creatively. In fact, it forces us but are regarded as a proper cost of those who invest to think creatively so I very much welcome the in nuclear installations, power plants and so on. That amendments of the noble Lord, Lord Teverson, which is what it is intended to do. It is a very wise thing to do, raise two very interesting ideas. and I hope that it will not be prejudiced by diverting it The EU ETS is a complex piece of legislation, but it to some of the other purposes of the Green Investment creates a new asset class in that it creates allowances Bank that noble Lords have talked about this afternoon. that have a financial value. I am not sure how they are managed because maybe that falls between DECC Lord Wigley: My Lords, I apologise for coming in and the Treasury, but I suspect that we are not managing rather late, but I am in good time for the amendment it as well as we could be. In addition to thinking about that I wanted to catch up with, Amendment 11, and to the revenues that we have gained directly from the follow on from the question regarding nuclear auctions, how about thinking about the allowances decommissioning. I live in a part of north-west Wales themselves as assets that can be used to secure loans? where there are two nuclear power stations. Trawsfynydd They clearly have a financial value but as the noble nuclear power station stopped generating two decades ago. Lord, Lord Teverson, suggested, sadly their value at It now employs some 600 people on decommissioning, the moment is low because we simply have an more than it ever employed when it was generating overabundance of these allowances. electricity. The message that comes home from that is I welcome the creation of the Green Investment the uncertainty with regard to the cost of decommissioning Back if for no other reason than it now means that we and the length of time, and the need, therefore, to have have a smart set of individuals drawn largely from the financial cover for that. private sector—from banks and financial institutions— This becomes particularly relevant with regard to who I am sure can, if they put their minds to it, come be new reactor that is likely to be forthcoming with up with various clever mechanisms for raising finance. Hitachi at Wylfa in Anglesey. There is considerable I urge the Minister and his department to say to the support in Anglesey for the renewal of the nuclear noble Lord, Lord Smith, and his board, “Let’s think power station. But the one reservation that people creatively and open up this debate. We have an emissions would have is if there were uncertainty as to the trading scheme that creates this asset class. How could eventual decommissioning and the resultant costs arising we use it to increase the level of investment into the from that station, particularly if in the private sector things that we want to see built?”. the company running it were to go out of existence. On the second suggestion regarding the Nuclear There needs to be a cast-iron guarantee with regard to Liabilities Fund, I share some of the concerns of the funding for that purpose in order to maintain the noble Lords, Lord Jenkin of Roding and Lord Wigley. good will towards the building of that new reactor at But again, it shows we are thinking creatively.I understand Wylfa. It is needed in energy terms and in terms of that a financial fund needs to be available for the time investment in the local economy in north-west Wales. of decommissioning, but the nuclear profile of our Therefore, the amendment goes to the heart of stations is fairly clear. We may have life extensions and some very important aspects of nuclear power. Whereas we all know in advance when that money is needed. I have a considerable amount of sympathy with the I do not see any danger therefore in using some of that amendment in terms of the green bank and developing to raise more finance and create wealth in the interim green alternative sources of electricity, that has to go as long as we are managing it correctly. So I welcome on side by side with the nuclear dimension. Whatever the amendment; it opens up an interesting debate settlement is finally reached it has to encompass both about how we currently manage money in government. sides of that equation. Now that we have created essentially a Government-owned bank, I hope that over time and, as the noble Lord, Lord Teverson, was very keen to stress, when the right Baroness Worthington: My Lords, I welcome the moment occurs, we will see this bank stepping into amendments tabled by the noble Lord, Lord Teverson, much more interesting territory. We look forward to if for no other reason than that they encourage us to the Minister’s comments on that point. have a wider debate about how this bank can operate and gain access to finance. This is important in the 4.45 pm context that we need to see a huge upscaling of investment into the UK’s low carbon infrastructure. It is estimated Lord Teverson: My Lords, as we are in Committee, that around £220 billion and £330 billion is needed perhaps I could come back on my noble friend Lord over the next decade, and historic levels of investment Jenkin’s important areas. I can reassure him on both have been very low at only £6 billion to £8 billion. We those items that we would be better off if this amendment need to be thinking creatively about how we can was passed. First, the MacKerron report is quite clear massively increase the available revenues for the bank. that the current rate of investment going into the It is unfortunate in that context that the Government National Loans Fund almost certainly will mean that GC 145 Enterprise and Regulatory Reform Bill[3 DECEMBER 2012] Enterprise and Regulatory Reform Bill GC 146 its liabilities cannot be met, so we have to find another My noble friend shakes his head, but if they are going way to do this. The Green Investment Bank is not a to start investing in green industrial ventures and so fund to give away money; it is there to commercially on, it seems to me that that would be a breach of trust invest, alongside other commercial investors. It could to those who have built up the fund. It may be that be perceived as being a greater risk perhaps—I will they can hold it and, as it were, guarantee the payment, come on to why it is also a lesser risk—but also as but the minute that they start investing it themselves, it providing a sensible return with a very sound government- seems to me that that is risking the whole purpose for backed institution to do the investment, and I think which the fund has been set up. that is good. Furthermore, this fund has to invest its A separate issue is whether there is an alternative money in the National Loans Fund. That is a euphemism; method of investing in the Nuclear Liabilities Fund what it actually means is that it has to give it all to the that might get a slightly more realistic rate of interest. Treasury. So the Nuclear Liabilities Fund at the moment That is a separate matter, but it seems to me that to is similar to unfunded state pensions. It goes in there, make it part of the loan capital of the UK Green but to take the money out will have the same impact as Investment Bank would be a breach of trust, as I paying pensions into the future. While it is a discrete suggested, against the firms that are building this up amount that is accounted for, it just reduces the national perfectly properly. They agree, they recognise it, and debt. That is all that it does on the current terms. they know that they do not want to go back to the In fact, how secure is that? Yes, there is an accounting previous position, but they want the fund to be available mechanism, and my noble friend is absolutely right to finance the decommissioning of the plants when that the sins of the past are huge in terms of those the time comes. funds having been lost during the process of changes in the nuclear industry and its ownership over the past couple of decades. First, this amendment would make Lord Marland: My Lords, perhaps I can deal with it far more certain that this fund will be able to meet its this quite swiftly. Both the ETS and the NLF, the liabilities in the future. Secondly, we, as taxpayers and Nuclear Liabilities Fund, reported to me in my previous as citizens, would know that that money is in a place department so I have a rough idea of what is going on. where we can actually see it, see its value, see that it is Let us deal with the EUAs and the ETSs first. I also sit different and separate out of the Treasury from the on the government assets committee and we looked at national debt and, as the noble Baroness, Lady selling some of our EUAs. We drew the conclusion Worthington, said, we can predict decommissioning that the price was not right, the market was not big of nuclear plants far enough in advance to craft the enough and we would not be able to get a substantial investment and our exit strategies around those financial figure into the market. However, as the noble Lord, needs. Lord Teverson, rightly says, an opportunity may come along later. Clause 4 permits financial assistance to be provided Lord Jenkin of Roding: As we are in Committee, I in any form, hope that I can say a couple of words about this. The “as the Secretary of State, with the consent of the Treasury, nuclear industry is, of course, building up this fund as considers appropriate”. part of the Government’s policy to make sure that the If we were able to do it and if—that is a big “if”—the liability for decommissioning does not again fall on Treasury agrees, the Secretary of State could divert the taxpayer. It has recognised this, and it follows the funds into it. Amendment 6 permits the Government same pattern as one has seen increasingly in the offshore to use a proportion of revenues from auctioning emission oil and gas industry, where funds now have to be put permits to fund the bank. There is already provision aside so that when the oil rigs are decommissioned, within that. again that does not fall on the taxpayer but is part of the cost that has to be built into the supply of the oil This is creative thinking and I am very grateful to or gas and therefore met by the investor. I think that my noble friend for that because he is a great creative my noble friend Lord Teverson may be confusing two thinker. I turn to the Nuclear Liabilities Fund. Clearly, matters. I use the phrase again: this is a hypothecated as the noble Lord, Lord Jenkin, quite rightly said, two fund. It is not like the pension fund. There never was a things are going on here. One is that this is a fund that separate fund for that. It is simply that the pension is committed to nuclear liabilities; it is committed to contributions from, for instance, the teachers’ pension the nuclear industry and, therefore, it has a range of fund have simply been paid to the Government, and opportunities in the nuclear industry in which it could the obligations are met, of course, by the taxpayer out invest. The noble Lord, Lord Wigley, referred to Wylfa of the fund. There has never been any question of and other investments in new nuclear. I had discussions trying to balance the one against the other. This is with the chairman of the NLF about developing the quite different. This is a fund that is being set up and fund into nuclear investments, including, for example, funded by the industry. It has to be built up while a MOX plant, which is something that we were committed plants are operating—not just when they are to when I was in the department and, indeed, new commissioned—so that, at the end, when they come to nuclear. That is entirely for the NLF to decide for be decommissioned, which may be 50 or 60 years itself. ahead, the fund is there. They have invested in it so the The problem I have with the NLF diverting funds cost will not fall on the taxpayers. It is a separate, here is that this is an investment bank and it is what it hypothecated fund. It may make the green bank look says. There is no such thing as a guaranteed investment. bigger because it will have more money but it cannot Some investments go up and some investments go do anything with it other than get a rate of interest. down and if the NLF lost money, co-venturing with GC 147 Enterprise and Regulatory Reform Bill[LORDS] Enterprise and Regulatory Reform Bill GC 148

[LORD MARLAND] the pensions funds in itself, or whatever it did. The the Green Investment Bank on things that it did not area needs looking at, and a broader investment strategy understand, of course the liabilities would not be met. for the NLF that included a sensible investment in a Despite the fact that we may consider it a very boring bank like this, would be a good way forward. return on the investment at the moment, it is planned I will continue to look for opportunities to help the to match some of the liabilities. But I do not want the Government and hope that we can have further noble Lord, Lord Teverson, to go away thinking that conversations about this—but I beg leave to withdraw actually the NLF is enhancing its investments, but the amendment. think that it has enough on its plate with the nuclear industry. Amendment 6 withdrawn. Therefore, given the commitments that I have made on Clauses 4 and 6, I hope that, despite the fact that 5pm two very important points have been raised—and I am grateful to my noble friend Lord Jenkin of Roding, who has expertise in this field—the noble Lord will Amendment 7 withdraw the amendment. Moved by Baroness Worthington Lord Teverson: I thank my noble friend the Minister 7: Clause 4, page 3, line 10, at end insert— for his response. I fully accept that the EU ETS money “(3A) The Secretary of State shall consult on additional route is not precluded by the Bill as it is, and I suppose forms in which the Bank may raise investment funding, including that it would be nice to have it on the list as a nudge or the issuance of bonds. a reminder to the Treasury that it was a possible flow. (3B) The Secretary of State shall consult the Bank of That was all that the amendment did, but it would tie England granting the Bank access to the Quantitative Easing in well with the philosophy of the carbon market and programme. trying to recycle money into helping the greening of (3C) The Secretary of State shall report to Parliament on the the European economy and the UK even more. results of a consultation under subsections (3A) and (3B) no later than 12 months following enactment.” Baroness Worthington: It struck me that the revenues from the EU ETS auctions would be considerable, Baroness Worthington: This, as noble Lords can see, even at this depressed carbon price. How much money is a probing amendment but continues on the theme. will the auctions raise in the next few years, and how We are trying to address a market failure in the creation does that compare to the £3 billion that has been put of this bank. There has been a financial crisis and, as up as a stake for the bank? we emerge from it, it is clear that commercial bank lending is going to be further constrained. The Basel Lord Teverson: I read an estimate somewhere of III requirements will mean that the recapitalisation of about £1.3 billion a year. But it all depends on the banks will discourage them from holding longer-term carbon price. That is the key thing, and we do not loans on their balance sheets, which will potentially know that. increase costs. That means a reduction in loans, just at the time when we need to see more money flowing into Lord Marland: Perhaps I can help. It depends on these solutions. Things are getting much more difficult. the market, which is not there at the moment to buy it. We investigated and got a lot lower offer than £6.62 for In that context, it is important that we have a bank the price. That is six months ago, and I cannot remember that can help to compensate for the increased constraints what figures were involved. I am sure that we could coming in the private sector. Yet, as I have mentioned, invite the Department of Energy and Climate Change we have created a bank that, sadly, is constrained to provide some information in the normal course. It because it has a relatively small amount of starting depends on a willing buyer and the price at which they capital. I am not saying that it is easy to spend money, are sold. and we should not just be seeking to spend it rapidly and not wisely. However, we must weigh up the scale Baroness Worthington: I have done some back of of the challenge with what we are creating. It also the envelope calculations, and at about 100 million forces us to think about how we are going to increase tonnes it will be in the region of £1 billion or £1.5 billion. the leverage of that finance and ensure that it is seen to That is not an insubstantial amount of money, and it grow to the kind of levels that we need. will rise in time, which would mean that the bank’s Our amendment is along similar lines to the initial deposit was paid back by those auctions in less amendment of the noble Lord, Lord Teverson, and than three years. That is an important context for the talks about two other ways in which finance could discussion. potentially be raised. We would encourage the Government to consult on these. We are not saying Lord Teverson: I thank the noble Baroness for her that we have a final, detailed position on this, but these comments. It is certainly an area that I would like to are fertile areas for exploration. The bond market is come back to. I agree with my noble friend that huge, as I am sure that noble Lords are aware. As yet, putting all the Nuclear Liabilities Fund into the Green the bond market is largely untapped for low carbon Investment Bank might not be the best way in which investment because, by its nature, it is fairly conservative to spread the portfolio, although it would be even and seeks out asset classes with a long track record of worse to put it back into the nuclear industry itself. delivery. Time is needed to develop new assets, and That would be a bit like the Mirror Group reinvesting that requires expertise. GC 149 Enterprise and Regulatory Reform Bill[3 DECEMBER 2012] Enterprise and Regulatory Reform Bill GC 150

This is exactly what we hope is being created in the I would like to ask the Minister whether the Green Investment Bank—a new set of experts who Government have thought further about the area of could help to create the sorts of asset classes that green ISAs and about involving not just fund managers enable private-sector bond market participants to come and corporates, as one would do with bonds, but in behind and start to invest in them. That is why we ordinary people to support the purposes of this bank. have tabled the amendment. There is no shortage of I note that some 18 million people have ISAs at the private sector investment looking for safe and credible moment. That is one in three adults. Some £220 billion investment vehicles. The fact that the bank is, under is invested by individuals in ISAs, which clearly have this legislation, a wholly owned non-departmental all sorts of tax breaks that are attractive to individual body is attractive, so this is an important area for it. savers. Both these financial instruments could really There is a good fit here as regards bond issues; they make a difference in terms of the Green Investment tend to have a long lifespan, which is exactly what Bank and green ISAs. You could get a public and some of these infrastructure projects will have. By personal commitment to this cause and create extra their very nature, it is infrastructure that will be here employment and growth in the UK. for a long time. We therefore encourage the Minister to think about Lord Brooke of Sutton Mandeville: My Lords, I bonds as a mechanism for raising finance. In particular, have a small technical question. The official Opposition I have learnt a reasonable amount today about covered indicated, in the noble Baroness, Lady Worthington, a bonds. This is an interesting mechanism that could clear understanding that it was the Bank of England help to raise finance without adding to the public that was consulted on quantitative easing, but I have a debt. In effect, we would create a new class of covered question for my noble friend. If he were so minded as bond, which would give comfort to investors by providing to grant this amendment, would we need a consequential a double security on the loans. The UK’s covered amendment in the context of the reference to the bond legislation could be examined to see how it could consent of the Treasury in subsection (4)? be adapted to encourage investment in green and low carbon technologies. Lord Marland: I am very grateful for this probing The other matter on which we would like to consult amendment, which goes back to the creative thinking is quantitative easing. That is also an obvious way in on how we can get more money into the Green Investment which we potentially could create mechanisms for a Bank. The point is that we have committed to invest greater flow of finance into this bank. We understand £3 billion up to 2015. That is a set figure and we have that it is not the Government but the Bank of England set out our stall. It has been agreed by the Commission that controls it, but we also know that there are close and any change would require state aid, which is a ties between them, and this area could also be very pretty significant process and which would take time. fertile and is definitely worthy of consultation. This is So the allowance of bonds or ISAs, which are incredibly why we have tabled amendments on these important valuable things, will not, I am afraid, be achievable issues. I beg to move. within the timetable up to 2015. For the purposes of clarity, however, we are interested in exploring this—and The Deputy Chairman of Committees (Baroness why would we not be? We will be looking at this and Pitkeathley): Amendment proposed: debating it further. Clearly, we are not going to get “Page 3, line 10, at end insert”, investment into this bank unless it starts to get a track the words as printed—but not quite as printed, because record, which most bond and ISA investors would there is a typo in the fourth line. After: want to see. When the bank has its track record up and “The Secretary of State shall consult the Bank of England”, running, we will carry on with this. we need to insert the word “on” before, Of course, we would need another amendment in “granting the Bank access to the Quantitative Easing programme”. terms of Bank of England quantitative easing and so Lord Teverson: I had not noted that. Perhaps I forth. We would need an awful lot more than that, let should change my whole speech because of it. us be fair, because it is way beyond my pay grade to The whole area of bonds issuance is important. In start discussing such figures and such immense subjects fact, it was looked at in some depth by the Environmental of finance. I am grateful for the suggestions. We Audit Committee in the other place, together with recognise that they are constructive and we would like green ISAs. It is a method, which I know the Government to carry on the dialogue over time. With that, I hope and the Treasury are very keen on, to use money from that the noble Baroness will withdraw her amendment. pension schemes in particular to invest in the UK and in areas of quick growth. Although I am sure that my Baroness Worthington: I thank the Minister for his noble friend the Minister will go through the whole response. A consultation would certainly help to flesh question of whether these would be government- out some of these ideas and may bring forward even guaranteed bonds and the effect that would have on more. I would encourage the department to really the public accounts, I believe that this is an important think about how we can start a creative dialogue about area of fundraising. It is one that could, with the such mechanisms. We have had four in front of us length of investment in these sorts of projects, appeal today, which are worthy of discussion. They are big very much to the pension industry and pension funds, topics in themselves, so a formal process would help us which have large amounts of money, as we know, to to understand some of the issues. invest successfully. This would be a good way of moving It slightly worries me when I hear that quantitative forward and I am sure that the Government have easing is above the Minister’s pay grade. We are not considered it a great deal. doing a marginal thing here; we are talking about GC 151 Enterprise and Regulatory Reform Bill[LORDS] Enterprise and Regulatory Reform Bill GC 152

[BARONESS WORTHINGTON] take on extra firepower—I apologise to my noble investment in UK infrastructure. We have seen government friend Lord Jenkin if he does not like my using that announcements about a £40 billion stimulus of investment word. into infrastructure. If it is £40 billion, why can only £3 billion of that be put into the Green Investment This is about the bank’s ability to invest and to Bank? We should not treat this as marginal. It should change the economy; to get this green growth that we be centre stage in our stimulus package and in getting want and know to be available; and to deliver jobs, our economy back on track. That is why £3 billion is growth and carbon reductions. It will be able to do this not enough and why we need to think about ways of only by being able to leverage extra investment, apart getting it to be a much larger sum. A consultation from the investment it will have from its co-investors would be very welcome, thank you. I beg leave to of £3 billion in the first three years. I do not see how it withdraw. will be able to fulfil its mission and proper function without being able to increase its ability to lend beyond Amendment 7 withdrawn. the likely Treasury resources. I realise and understand entirely the Government’s concern about the public balance sheet and public Amendment 8 debt. The Chancellor has said that this borrowing Moved by Lord Teverson cannot take place until the proportion of debt to GDP has started to decline. It is a fundamental mission of 8: Clause 4, page 3, line 21, at end insert— the coalition to do that. However, getting to the “(7) It is the duty of the Secretary of State to provide the fundamental question, I would ask this particularly. European Commission with State aid notification concerning the intention to allow the Bank to borrow, including borrowing from When the Green Investment Bank was launched on the capital markets. 28 November, which was last week, I received a statement (8) The duty in subsection (7) must be fulfilled no later than saying that it will make £3 billion available for green 31 December 2013. technology and become a valued and integral part of (9) In the event the European Commission approves the State the UK’s financial infrastructure—absolutely. It goes aid notification concerning borrowing, it is the duty of the on to say that it is similar to Germany’s own development Treasury and of the Secretary of State to permit the Green KfW Bank. We hope so, although the KfW Bank has Investment Bank to begin borrowing from the capital markets no a ¤400 billion asset value. The big difference between later than 30 June 2015, or, if State aid approval has not been the two is that the borrowing of the KfW does not received by that date, no later than one month from the date of appear on the public balance sheets, whereas it is approval.” envisaged that the borrowing of the Green Investment Bank, as it is currently structured, will. Lord Teverson: My Lords, now we get on to one of the core issues around the Green Investment Bank, which is its ability not just to lend its own capital or 5.15 pm funds but to be able to multiply them up, perhaps in different ways, and to use that as leverage to enable it It is important that we explore how we might find to be a bigger investor than it would be from its own our way around this public expenditure constraint and resources. Of course, this rather comes back to that manage it, so that we can move ahead despite that cliché of whether the Green Investment Bank is actually constraint. I would ask my noble friend the Minister a bank or a fund. We know that any corporate plc can what the current advice of the Office for National borrow money—that is its function—but what it cannot Statistics is in this area as to whether the activities of do without going through a further procedure is to the Green Investment Bank will be part of the public borrow it and then lend it out as well, because that gets balance sheet and what conversations have taken place it into the area of financial services and the Financial there. All similar banks and institutions have to perform Services Authority’s authorisation there. to European accounting standards—rule 95, I think it is. That is true of KfW and other investment banks, as This amendment seeks to recognise that there is a well as the Green Investment Bank, so I do not understand period during which this bank has £3 billion and has why we are so constrained in the UK whereas with to earn respect through having a track record and other European investment banks that is not the case. credibility in its functions. My noble friend the Minister Why can we not apply standards that others do to that was absolutely correct on this. That is enough for it to accounting standard? I am not asking for regulatory get on with in the first couple of years. Yet we know, evasion but for regulatory avoidance in this area as it through the amount of time that it has taken to get to seems to be completely in the national interest, which where we are on the Green Investment Bank, that is something that we like to defend, particularly within decisions take a long time. To get state aid takes a long the European Union. time. To get authorisation under the Financial Services Authority and its successors as they will then be—that The fundamental part of this amendment asks how may be the Prudential Regulation Authority for a we can increase this bank’s investment ability for it to bank—takes a number of years, so we have to prepare be successful and get the sort of growth that the CBI by thinking about those issues now. We cannot do that says is available through the green sector. A key way in once we get to 2015. In this amendment, we are saying which to do that is by borrowing on markets. We that by 2015 we need to start going through those cannot wait beyond 2015 to do that. Unless we have procedures, many of which will not be in the Bill. Lots an immovable public expenditure constraint—although of other preparations will need doing as well, apart I would argue that there might be another way of from state aid, to make sure that by 2015 the bank can balancing that in other areas, and we have talked GC 153 Enterprise and Regulatory Reform Bill[3 DECEMBER 2012] Enterprise and Regulatory Reform Bill GC 154 about some alternatives—surely we can find a way to better capitalised than the Government are proposing. get this bank correctly off the balance sheet as our However, allowing the bank to borrow is one thing, European competitors are doing. I beg to move. but you have to ask, who would lend to it? Before I came into your Lordships’ House, I spent Lord Skidelsky: I support the amendment proposed many years in the capital markets. The capital markets by the noble Lord, Lord Teverson. I would have put will not lend to this bank unless one of two things my name down on it if I had had the upfront certainty happen: either it is guaranteed by government—plainly, that I would be able to be here. The noble Lord has hit that is behind the Government saying that they have to the nail on the head; the bank will not be allowed to wait for a certain period—or it has a strong balance borrow until the national debt is a declining proportion sheet of its own. No one will lend to it just on the basis of national income. The Government’s debt reduction of thinking that it is a great idea in the same way that target is already three years off, so on current plans the no one will buy a bond unless it is backed by a cash earliest date at which the bank would be allowed to flow. That is what the bond market buys; it buys cash borrow would be not 2015 but 2018—and it may not flows. It does not invest in speculative infrastructure, be 2018 either. We are faced with the prospect of a however worthy. Therefore, it is really important that bank that will not be allowed to borrow in any foreseeable we do not get carried away by just wishing that things future, and that borrowing restriction will undermine were different, and that we push the Government to the bank’s ability to support the targets for reducing come forward with practical propositions about increasing greenhouse emissions as stated in the Climate Change the funding available to this bank. Until there is a Act 2008. track record there and until there are infrastructure projects that are capable of securing a rating from the We are setting up a public bank uniquely without rating agencies, there will be no bond issuance, and the ability to borrow, and the noble Lord, Lord Teverson, until it has a very strong balance sheet or the Government is right in saying that that is not the model for KfW. give a guarantee to underpin that balance sheet, there According to the Deputy Prime Minister, it should be will be no lending from the capital markets either. able to attract about £15 billion of co-investment. In I hate to pour cold water on this but we have to other words, the bank would pay 20% of a project and connect with reality here. the co-investors stake the remainder without the bank itself having to borrow. That would be a way round the borrowing restriction. Lord Teverson: I thank the noble Baroness very much for that contribution. I should point out that the If the Green Investment Bank were allowed to borrowings of KfW, which is owned by the German borrow now at a conservative leverage, it would be länder and the federal Government, are guaranteed by able to leverage its £3 billion up to £18 billion. If the that Government and still manage to escape public Deputy Prime Minister is right, that £18 billion would sector classification. I thank the noble Baroness very in turn be able to attract up to £90 billion in private much for bringing up that point, which I forgot to sector co-investment, so these are the possibilities that mention. would be opened up by easing that borrowing requirement. There is a huge difference between an investment of £18 billion over five years and an investment of £90 billion. Baroness Ford: KfW is covered by the covered bond regime, which we do not have in the United Kingdom. The problem this amendment is designed to address is that the debt may not fall for a long time, so the Green Investment Bank may not be allowed to borrow. Lord Oxburgh: My Lords, I, too, support the It is not just a question of the problems of start-up, to amendment. I shall not detain the Committee by which the noble Lord, Lord Teverson, rightly alluded; repeating the points that have been excellently made the problem is that the Government’s policy is not well by previous speakers. It is simply worth pointing out designed to reduce the national debt. I have argued that, because we are signatories to a variety of European this point for a number of years because a policy of constraints on emissions reduction and because we deficit reduction is not the same as a policy of debt have our own Climate Change Act, inevitably there reduction. has to be massive investment in green infrastructure in this country over the coming decade. We managed to To conclude, the amendment would enable the Green lose out almost completely, if you like, in the previous Investment Bank to borrow by 2015, irrespective of phase, when we saw significant investment in, for what is happening to the national debt, and potentially example, onshore wind in this country, where virtually earlier if there were a need to boost growth. This all the high-end technology came from abroad. We means starting the EU state approval process as soon really have to be ready to cope with this requirement as possible. For that reason I give my enthusiastic for capital internally and in time. support to the approach of the noble Lord, Lord I am sure that by the Minister’s bed he has a copy of Teverson. the current, recently introduced Chinese five-year plan, in which he will remember that no less than a third of Baroness Ford: This is a really interesting amendment, the objectives relate to energy management, energy which also touches on the previous amendment. I am efficiency, investment in renewables and low emissions not sure that I support the amendment of the noble technology. There will be a massive world market here, Lord, Lord Teverson, but not because I do not support and we can drag our feet again or we can participate in its intent. I think it is hugely important that the Green it. I see this amendment, taking on board entirely the Investment Bank, if it is to have any attraction, is point made by the noble Baroness, Lady Ford, as GC 155 Enterprise and Regulatory Reform Bill[LORDS] Enterprise and Regulatory Reform Bill GC 156

[LORD OXBURGH] 5.30 pm simply facilitating and making sure that we are there The Bill has no provision for borrowing powers to in time. Brussels has many virtues, but speedy reaction be introduced and the Government have failed to is not one of them. Getting on with this now will not provide the certainty that is required to encourage only begin to manage that problem but will indicate private investment. I return to the letter sent to the again to the capital markets that the Government are Government by Southern Energy and engineering firms, serious. to which I referred earlier. They said that this matter is, Lord Skidelsky: Perhaps I could reply to the noble “critically dependent on a long-term stable policy framework”. Baroness, Lady Ford. Her point is absolutely right, The managing director of General Electric has said: but it is irrelevant. The purpose of the amendment is “Our investment is on hold until we have certainty and clarity to allow the bank to borrow; it does not guarantee regarding the policy environment that we are in. One of the most that the bank will be able to raise the money. important things for us is political certainty, so we can justify the business and investment case for a facility in the UK. But we think there are some [political] headwinds which do not help, Lord Bates: Can I dissent from the amendment? I especially in terms of … subsidies”. think that it goes against the whole point of the I have already mentioned how important certainty is legislation. Indeed, it goes against the whole point of to investment. the Green Investment Bank, which is to stand in the gap of market failure within the capital markets in The chief executive officer of Vestas, which is the order to get projects up and running and off the world’s largest maker of wind turbines said: ground. Where that is not possible, it provides a bridge “The most important issue that our customers have is a or an intervention, but only so that private sector long-term policy framework—that is required to put in these investments, which are huge … [But] we have not had reassurance capital can come in. As an example of that, I mentioned from the government”. earlier the first investment that had come in to Earthly A firm commitment to borrowing powers is lacking Energy, the anaerobic digestion plant in Teesside. As I and without it private investors will not be convinced recall, the Green Investment Bank invested £8 million by the Government’s rhetoric. This will remain the there. Immediately that attracted matched private sector case, especially as the Government’s commitment to investment of £8 million. The total value of the project the green economy appears to be diminishing as this is £100 million. That seems to be a classic example. To Parliament progresses. Seven energy firms have said go from zero to £100 million, clearly they would not that recent noises coming from the Government have have been able to get the project off the ground, but caused them to reassess the level of political risk in the that measured intervention of £8 million unlocked a UK. Borrowing powers are therefore essential. Other project worth £100 million, which is exactly what the amendments, such as that of the noble Lord, Lord amendment proposed by the noble Lord, Lord Teverson, Teverson, also recognise this. is trying to achieve. I am simply saying that it is already happening under the present regime. It is worth emphasising why we are offering an alternative. The Minister in the other place has made Lord Mitchell: My Lords, we have had some very it clear that the borrowing will be scored against good contributions. In fact, my Amendment 9 just national debt totals, and it is therefore reasonable to leads on from what the noble Lord, Lord Teverson, take this into account, although the aim is, of course, said, and we have a few additional points to make to get the bank borrowing as soon as possible. Should about it. First, I refer to what my noble friend Lady the bank feel that the state of public finances in April Ford has said on this subject; she has a lot of experience 2015 is likely to be such that it would not be suitable in this area and we should listen to her. We should also for the bank to begin borrowing, it could present listen to the noble Lord, Lord Oxburgh. He has shown Parliament with a report containing alternative dates a lot of passion for green technology in this country he and its reasoning behind it. has said how important it is that we stop sitting I think that this is a sensible compromise that will around and get on with it. I hope that that is taken on reassure investors, which is what we all want to do, board by this Government. and reassure the private sector, while recognising the I suppose that what we are saying more particularly need for fiscal prudence. is that this Green Investment Bank has to be a real bank and not a sham. I do not think that it is going to Lord Marland: My Lords, I say to the noble Lord, be a sham, but it has to be a real bank with all the Lord Mitchell, that handwritten notes such as those attributes of a real bank. Probably the most important that we old fogies use would be useful instead of issue before this Committee today is its borrowing modern technology. I am grateful to noble Lords for powers. Without the capacity to borrow from the exploring this area. Clearly, those who have been in capital markets for investment, the bank is no more government and those who have read the papers know than a government fund. In fact, Transform UK has that we are in very deep financial straits. This Government said: have decided to start a bank against all odds, investing “A bank that is not allowed to borrow cannot be described as £3 billion in it in the next period, which is a tremendous a Bank, and investors will notice this”. achievement. We have been told to get on with it. We However, the amendment represents a compromise have done so and it is here before you now, with a and takes into account the strain on public sector chairman and chief executive in place who are getting funding, and we would not therefore support reckless on with it. On that point, I would like to quote what and irresponsible levels of borrowing. the noble Lord, Lord Smith of Kelvin, has said about GC 157 Enterprise and Regulatory Reform Bill[3 DECEMBER 2012] Enterprise and Regulatory Reform Bill GC 158 the state of affairs. I am very grateful to the noble Lord Marland: I do not think that it is a question of Baroness, Lady Ford, for her very constructive and being supine. This is a government decision that has practical comments. The noble Lord said: been made by the coalition of which the noble Lord is “We need to show government and private capital markets a member. There are many things that people do not that we are a well run organisation with a good track record understand. The noble Lord, Lord Skidelsky, does not worthy of the injection of more capital or, indeed, borrowing understand or agree with some of the policies of this money in capital markets”.—[Official Report, 14/11/12; col. 1529.]. Government, but that is government policy. That is absolutely fundamental. No one is going to lend to this bank or provide borrowing unless it can Lord Skidelsky: I understand it but do not agree show a track record of prosperity. I can promise noble with it. Lords that if we feel the need to borrow, we will approach the stakeholder well before 2015. Lord Marland: I apologise. It is good that my noble On that point, the Government have given a friend understands it, because then he will not disagree commitment that we will seek state aid approval from with it. That is the way that the Government have set the European Commission in respect of borrowing out their stall. We have inherited a very substantial before the end of this Parliament. The noble Lord, national debt, but not in the same way in which the Lord Skidelsky, very appropriately raised this. We Germans have inherited the same problems. We have have only just got this thing going but already we are inherited a grave financial situation and, quite rightly, starting to move forward. As the noble Lord, Lord the Treasury decided that it will not enhance that by Oxburgh, rightly says, it takes a long time to achieve further borrowing against our balance sheet. The evidence these things in Europe but we are playing that game; produced by the noble Lord, Lord Smith of Kelvin, indeed, we are ahead of it. would suggest that he does not feel under any pressure However, I mention a word of caution, as, indeed, in terms of funds at this point. Of course, we must set did the noble Lord, Lord Smith. I think that the out our stall, as I have said. We intend to seek European original budget of investing the first £775 million over Commission approval for borrowing and we intend to the next five months will be difficult to achieve. However, follow that process as soon as possible. I think that is a I am confident that we can do it. It is not as if there is very good sign and I am delighted that there is some a whole load of stuff piling up to be invested in at the agreement in the room that we are doing that. I invite moment. Of course, we know there are investments the noble Lord to withdraw his amendment. out there, but the budget will be difficult to achieve in the first period. That shows that these things take Lord Mitchell: Does the Minister have any thoughts time; it takes time to build up a track record; it takes about when this borrowing will come to pass? time to build up confidence in the markets; and it takes time to build up co-investors, which will be the initial endeavour of the bank. Lord Marland: We have made it very clear that it will not come to pass before the end of this Parliament. The noble Lord, Lord Teverson, asked about KfW. That is what prudent people do. They say, “I am going Rules are rules and the noble Baroness, Lady Ford, to buy something and I am going to spend this amount mentioned that we cannot do it in this country. I thank of money”. We have said that we will spend only that her for that. The UK’s boundary for public finance amount of money, but we have said that we will spend covers the whole of the public sector, including central $3 billion on this project, which three years ago did and local government and public corporations. That not exist. reflects the approach of this Government and that of previous Governments. It is not something that we can Lord Teverson: Three billion pounds. suddenly do and in this piece of legislation we are not going to change the rules of engagement. Lord Marland: Pounds, dollars, whatever you like. [Laughter] Lord Teverson: This is covered in European accounting standard 95. I do not see why we should put ourselves at a disadvantage in that interpretation compared with Lord Teverson: My Lords, I thank my noble friend other nations within the European Union who are for going through this. Can I just say what I am not competing for the same capital. That seems to me to saying? I am not for a minute saying that we should be tying our hands behind our back. We could use the immediately rush into this. I said in my opening address example of changing the rules in terms of Lloyds and that the bank needed to have a track record and RBS as regards public balance sheets and how, with credibility. It needed to prove that it was good at what those banks, we made exceptions. I accept that this is it does. However, one thing that we all know, whether rather different, but we have a track record that says you have been in business or, as the noble Lord, Lord that we can change things. I do not understand why it Oxburgh, said, you are involved in the EU, you have to is possible for our competitors to be unchallenged by plan well ahead and start making provisions for the the European Court of Justice or the Commission in longer term. There is no better time to do that than terms of state aid where we risk being seen as being when you lay down legislation. subservient rather than proactive. I would not I was being very understanding in terms of the debt accuse the Minister of this—quite the opposite—but problem. I am not talking about changing policy: I am we do ourselves down by appearing to be supine in talking about testing rules. All Governments try to get this area. around rules, whether you call it PFI, PPP or whatever GC 159 Enterprise and Regulatory Reform Bill[LORDS] Enterprise and Regulatory Reform Bill GC 160

[LORD TEVERSON] So the aspirations are certainly there for this to be a to get round public sector borrowing ceilings. I accept very successful operation. that. That is one of the reasons that we went into the In the wake of the global financial crisis, it is coalition and I am delighted to have done so. However, obviously right that any financial institution now has that does not mean that we then accept everything that the highest possible levels of transparency, accountability, we are told to accept, although I know that that is not scrutiny and banking ethics, so this amendment also in my noble friend’s nature either. aims to encourage the bank to publish a strategy in This is fundamental to making this bank work. My this area and hence to encourage others to add their noble friend mentioned matched funding. Yes it is true investments with the bank. that there is already a considerable leverage, but that is a fund; the Regional Growth Fund does exactly that. 5.45 pm That is why this would then be a green growth fund. However, it is not that: it is a Green Investment Bank. I shall draw on a recently issued report by the IPPR That is why, to get to our goal, we all need to find a on the Green Investment Bank, Do It Now, Make It way around this. This will be a really important area to Big. The authors argue: explore constructively between now and Report. In “We are leaving a period of market fundamentalism during which the mean time, I beg leave to withdraw the amendment. it was assumed that markets would always work to allocate resources in the best way possible. There was no case for collective action … unless a specific market failure could be identified. Such Amendment 8 withdrawn. failures were supposed to be exceptional … Even if a market failure was identified, it was best handled by attempting minimal Amendment 9 not moved. interventions to regulate prices. Government failure was assumed to be more pervasive and deadly than market failure, so setting-up state institutions was”, Amendment 10 a definite no-no. However, we are where we are and clearly the Government see no problem in setting up Moved by Lord Stevenson of Balmacara an independent institution in this case, which must 10: Clause 4, page 3, line 21, at end insert— mean that they believe that the Green Investment “(7) The Bank shall set out as part of its investment strategy a Bank can achieve more than the Government themselves target for the leveraging of additional private sector investment could do. by 31 March 2015 and annually thereafter.” The case for green investment rests on the assumption that unless there is a collective decision to reduce Lord Stevenson of Balmacara: My Lords, we have national dependence on imported and increasingly just heard an interesting discussion about what the expensive energy sources and to develop alternatives overall financing arrangements for the bank will be. that emit less carbon, it is more than probable that I was struck by the comments made by the noble investment on the requisite scale will simply not occur. Lord, Lord Skidelsky, who is not in his place, that Certainly, it is not occurring at present. Yet forecasting effectively the leverage on acquiring some form of technologies and prices far into the future is extremely loan finance will be about six times and the subsequent hazardous and so, in the current climate, private companies leverage by bringing in third-party investment would will hesitate unless there is clear policy leadership that be a further five times. We are talking about a gap is backed up by the commitment of state funds. between the funds available within the bank of £3 billion, Policies that are not supported by cash and contracts which is a huge sum, and we are grateful to the are all too susceptible to change, leaving investors high Government for finding that cash, but at a cost of and dry, so there is a bit of a quandary. It may well be £90 billion in terms of growth, jobs and SME support, true that there is no better time to undertake such which one has to bear in mind. So the amendment investment than at a time of idle manpower when focuses on what seems to be the only possible way that companies want to invest rather than to produce, we will fund support for the bank in terms of its because demand is so low, and when the cost of investment by getting co-investment from third parties borrowing is very low by historic standards. Yetwithout who might wish to join the bank, having signalled that government taking the lead, where is the policy certainty these were investments that they wished to make. and the risk reduction that can come from such direct Our attention was drawn to comments that were action? These are the points that I think my noble made when the bank was opened in Edinburgh the friend Lady Ford was alluding to. other day, which has also been referred to by other On the plus side, the green bank is at arm’s length speakers in this debate. Speaking at the opening of the from the Government, which is essential if the bank is bank’s headquarters in Edinburgh, the Business Secretary to take technical and commercial risks, something that said that the Green Investment Bank, is hard for the Civil Service to do. It can foster a “will leverage private sector capital to fund projects in priority necessary degree of pluralism in tackling the issues, as sectors from offshore wind to waste and non domestic energy efficiency, helping to deliver our commitment to create jobs and it can be agnostic on whether there is a right approach growth right across the UK”. and it can support any well thought-out and prepared The Secretary of State for Energy and Climate Change, subproject that meets its investment criteria. It can Edward Davey said that: thereby catalyse and harness the variety and ingenuity “The Green Investment Bank will help attract the capital of the private sector. Yet on the negative side, the UK required to allow the green economy to blossom, encouraging Government are committing only a small proportion investors to market and kick-starting low-carbon and energy of the estimated £200 billion needed in this sector— efficiency projects”. I think that is the largest figure I have heard—and GC 161 Enterprise and Regulatory Reform Bill[3 DECEMBER 2012] Enterprise and Regulatory Reform Bill GC 162 have said that the bank cannot borrow for several Lord Stevenson of Balmacara: I thank the Minister years because they are giving top priority to reducing for his comments and I share the support shown for the deficit. As it affects co-investors, the risk reduction the success of the bank. However, I remain puzzled as strategy cannot then be effective so will the private to how it will make the transformation from the little sector come in to fill the gap? If it does not, what is the duckling that is alone to the wonderful swan that I am Government’s plan B for this bank? sure the Minister has in his mind as sailing calmly across the seas of international finance, sucking up Clearly, the question of who will invest with the investment from wherever it goes, flying off into the bank and how much is crucial. In the absence of sunset with a raft of projects carefully tucked under its government permission to borrow, this form of private wings, and therefore being successful. I do not see sector investment in projects will be the only source of that, and we will return to this matter. leveraged funding for the green bank going forward, so it is absolutely vital to know what is happening. Lord Teverson: Perhaps I may ask the noble Baroness Hence the need for the bank to, about one matter. One of the things that I understand “set out as part of its investment strategy a target for the leveraging investment banks often do is raise bonds against projects. of additional private sector investment by 31 March 2015 and It is not a question of the recourse of liabilities to annually thereafter”. them; they raise bonds on the asset value of the I beg to move. project. There are ways of doing it in that way.

Baroness Ford: There are ways of doing it. I do not Lord Marland: I am grateful for that landscape of wish to detain the Committee and perhaps I should the new bank and the large elements of agreement have a cup of coffee with the noble Lord to explain; I from the noble Lord in drawing his conclusion. To cut mean that in a helpful way. Bonds are raised against to the quick, this is obviously about how we are going the cash flows from projects. They are raised against to attract co-investment. In meetings with the noble an infrastructure project only if the Government underpin Lord, Lord Smith—and with the noble Lord, Lord it—hence, PFI. Adonis, who sadly is not with us but we have discussed this—he was very clear that this will not be a problem, Lord Brooke of Sutton Mandeville: I encourage the as indeed I am because of a number of countries that I Minister to try to turn not a duckling, but a cygnet, visited. There is a huge market out there. We had the into a swan. A cygnet, in banking and legal terms, Kuwait Investment Authority over last week, which would have a greater significance than a ducking. was celebrating being in the UK for 60 years. It readily indicated that it would like to invest alongside us in the future. Lord Stevenson of Balmacara: Perhaps I may respond. Since I joined your Lordships’ House, I have always On the timetable, I refer to the noble Baroness, been impressed with the noble Lord’s grasp on literature. Lady Ford, who indicated that she would agree that I am a little surprised that he did not pick up my this is very much a matter of track record. No fund allusion to the Ugly Duckling. can set up shop and on day one expect to be deluged with investment, even if the board and chief executive Lord Bates: Perhaps the noble Lord, Lord Stevenson, are very well recognised. would agree with me that given that this is one of the last chances we will have to discuss Clause 4, in the Baroness Ford: There are two concepts here and it is range of investment criteria or investment classes that important to get clarity. Track record is important for can be made through the bank, whether they be grants co-investing. The noble Lord, Lord Teverson, is absolutely or loans, if the objective is to achieve leverage, it would right. At the moment, we have a green investment seem sensible for more emphasis to be placed on fund. The way to get additional leverage from that lending money at a given rate, rather than giving it fund is by co-investing, and there have been lots of away in the form of grants. Again, a preference should good examples in the past 25 years of different types be given to equity finance because it would also be of of bodies doing that in the United Kingdom. However, potential benefit to funds in the long run as those track record is important for co-investing. However investments come to fruition. good your track record, unless you have established cash flows to sell in terms of a bond or balance sheet Lord Stevenson of Balmacara: My Lords, the noble with government underpinning, you will not get Lord makes a very good point and, in an early start-up borrowing. There are two slightly different concepts. arrangement, the last thing you want to be doing is dissipating your hard-earned capital. You should be using it to recycle. However, that relates to the point Lord Marland: I could not have put it better myself. we have been making, which is that leverage of about In fact, I could not have attempted to put it as well as 30 times the investment is achievable, but we do not the noble Baroness did. It is absolutely clear, and it seem to have the support of the Government in that. sets a clear mandate. We have already discussed this However, I beg leave to withdraw the amendment. issue, and it will come up again, but I am confident that there will be co-investment. At this point, I see Amendment 10 withdrawn. this as an enabler for co-investment. There are plenty of opportunities for green investment. I therefore invite Clause 4 agreed. the noble Lord, Lord Stevenson, to withdraw the amendment. Amendment 11 not moved. GC 163 Enterprise and Regulatory Reform Bill[LORDS] Enterprise and Regulatory Reform Bill GC 164

Clause5:TheUKGreenInvestment Bank: we can have meaningful debate; assessment and scrutiny accounts and reports as to how the bank is being managed; its success in achieving its green purposes; the manner in which it Amendment 12 arrives at investment decisions—and all subject to the important point of commercial sensitivities and Moved by Lord Stevenson of Balmacara considerations. 12: Clause 5, page 3, line 27, at end insert— “(2) The UK Green Investment Bank must ensure that— The amendment would ensure that all working papers and studies undertaken in the preparation of (a) all studies or assessments conducted in the preparation of a business plan, and their accompanying terms of the bank’s business plan, as well as all written reference, correspondence exchanged between the Government (b) all written correspondence exchanged between the and the board, were made available on a website that Government Shareholder and the Board, and was freely accessible by the public. We do not want to (c) all key operational documents, including internal do anything that compromises the bank’s ability to working documents of the Bank relating to investment make investments and consider matters of a sensitive decisions, and commercial nature; that is why the amendment is are made available on a website maintained in accordance couched in those terms, to make sure that a full and with the requirements of this section, subject to the frank discussion of views can still take place between exemptions specified in subsection (3). the Government and the board, and that the bank can (3) Information contained in documents required to be disclosed fully undertake its activities. I stress that we want the by subsection (2) may be withheld or redacted by the Bank where Green Investment Bank to have the highest possible in the reasonable opinion of a qualified person— standards of transparency, accountability and scrutiny (a) its disclosure would prejudice the commercial interests to the public and other stakeholders. of any person (including the Bank), (b) its disclosure would, or would be likely to, inhibit— It is true that the bank falls under the Companies (i) the free and frank provision of advice to or within Act 2006, and is registered at Companies House as a the Bank, company with proper articles of association and so (ii) the free and frank exchange of views within the on, but our concern is not so much with historic Bank for the purposes of deliberation, reporting, because often these reports can be delayed (c) its disclosure would otherwise prejudice, or would be for six to nine months, but with allowing debate and likely otherwise to prejudice, the effective conduct of the discussion. A good example of this would be the rules Bank’s business, that the Government are putting in place to ensure (d) a claim to legal professional privilege or, in Scotland, to that inappropriate bonuses and executive pay will be confidentiality of communications could be maintained restricted. As the Committee will be aware, this Bill in relation to it in legal proceedings, or will change the powers of shareholders in deliberations (e) its disclosure— on executive remuneration, although we do not think (i) is prohibited by or under any enactment, or that it goes far enough, as we will come to later. This (ii) would constitute or be punishable as a contempt of amendment will ensure that the bank will be different court, and in all the circumstances of the case, the from other Companies Act companies in the sense public interest in maintaining the exemption that debate about appropriate pay and the Government’s outweighs the public interest in disclosing the role in that would be flagged up on the website, and information. there permit a wider debate before the mechanisms (4) The documents specified in subsection (2) must be made proposed in this Bill kick in. I beg to move. available on the Bank’s website or a website that is maintained by or on behalf of the Bank. (5) Access to the documents specified in subsection (2) on the Lord Marland: My Lords, this is an interesting website must not be— amendment, but of course it goes way beyond the (a) conditional on the payment of a fee, or Freedom of Information Act 2000, which permits a (b) otherwise restricted, except so far as necessary to comply great level of self-disclosure and obligations that the with any enactment or regulatory requirement (in the bank must apply to because it is wholly owned by the United Kingdom or elsewhere).” Government. So the information will be readily accessible as to bonuses and all the other things that the noble Lord Stevenson of Balmacara: My Lords, the purpose Lord reasonably requests. It is important that there is of the amendment is quite straightforward. I spoke transparency in our current world of bonuses and under the last amendment about the need for transparency, directors’ pay, but we do not want to put an extra accountability, scrutiny and banking ethics, and the burden on an organisation that is already within the importance that these now have, particularly after Freedom of Information Act. I hope that the noble the last crisis. This is something that should apply to Lord understands that and will perhaps withdraw his the green bank. It is the first public bank to be created amendment. in modern times, but it may not be alone, because we are aware that a British Investment Bank, or whatever it is to be called, is starting up. Therefore, we should be Lord Stevenson of Balmacara: My Lords, I do setting precedents for how it should operate as we go understand that and thank the Minister for pointing forward. out how the Government are approaching this issue. We suggest that the Green Investment Bank has the I still regret that in some senses we are not taking highest standards of transparency both for the advantage of how one could use a more engaged shareholders and the general public, which means that discussion with those who have responsibilities in this GC 165 Enterprise and Regulatory Reform Bill[3 DECEMBER 2012] Enterprise and Regulatory Reform Bill GC 166 area, notably Parliament. Having said that, I will read the UK could have a great potential to lead globally. carefully what the Minister has said. I beg leave to We have exactly the right geography for these very withdraw the amendment. important technologies, which are not yet commercially viable. We know that the policy is coming and we look Amendment 12 withdrawn. forward to contracts for different mechanisms that might bring these technologies on. It would seem a Amendment 13 had been withdrawn from the Marshalled shame to preclude those sorts of technologies from List. the list that the bank is looking at. The amendment is asking for further clarity about 6pm where the bank will position itself compared with tried and tested technologies and more innovative Amendment 13A aspects, which might play more to the UK’s strengths. We would welcome the Minister saying a few words Moved by Baroness Worthington about the bank’s attitude to that. Perhaps he could 13A: Clause 5, page 3, line 27, at end insert— also talk about wave and tidal technologies as I think “( ) The Bank shall publish in its annual report what proportion those are hugely important for the UK. I beg to move. of investments made in accordance with the green purposes outlined in section 1(1) shall be allocated to proven technologies, and what proportion shall be allocated to innovative technologies; Lord Brooke of Sutton Mandeville: I assume that and shall make a proposal for these proportions over its forward the noble Baroness’s proposal is born of previous plan for the next three years.” literature. Could she tell the Grand Committee what proportion has been given to innovative technologies Baroness Worthington: My Lords, this amendment as against existing ones? We are an inventive nation. In is designed to try to elicit a few more comments from other words, what kind of percentage does she envisage the Government on where this investment will be will emerge out of this plan? targeted—perhaps on the spectrum of entirely safe commercially proven technologies towards the more Baroness Worthington: I do not have a number in innovative end of the spectrum. It is prompted by a mind. This is a newly created facility, which we have to report about the launch of the bank from the CEO, explore. As there has not been a previous example of a Shaun Kingsbury, who, I suspect, in an effort to try to bank like this being created in the UK, there is no begin the process of creating a track record for being a precedent on which to draw. Perhaps we could look sensible investor, said that only safe and proven overseas. We have had examples cited from Germany; technologies would be invested in. there are similar banks in Portugal, Spain and Holland; We are not critical of that as it makes sense, but in and the Australians are in the process of setting up much of the literature about the setting up of the bank their own investment vehicle. I do not have an answer, there is a discussion of the desirability of investing in but I am sure that, with some study, the department late-stage innovation. We think that is important because could provide us with some guidelines or some examples it is about ensuring that this bank is doing something from overseas. that is not currently done in the market: it is addressing a market failure. The balance between investing in already proven technologies and more innovative solutions Lord Marland: I am sure that the noble Baroness is crucial to the bank’s identity and to its success. would agree that 20% would be a reasonable part of Obviously it should not operate in the realms of risky the bank’s investment. That is the right number because, investment and venture capital investment but it ought as part of this agreement, the bank is permitted to to operate in a space that has perhaps been overlooked make 20% of its investment in other sectors, a key one by traditional investors. In that way, it would be adding being marine energy, which I know is of great interest value to the existing market. to the chairman. It was also of great interest to me in my previous department and is of great interest to the We have tabled an amendment which is designed to noble Baroness. It uses our great attributes of tides try to tease out this area of the bank’s operations to and waves. There is a lot of activity going on there. We make the policy much clearer so that there is more have created marine parks, and I see this as a key transparency. It is worth saying a few words about future. As I said, the bank has 20% of its funds where late-stage innovation might occur. It is clear allocated to this area. that the Government are seeking to create a crowding-in effect rather than a crowding out effect. That is an This is an interesting probing amendment. But interesting phrase and one that we should definitely where I would resist movement in this direction, other seek to achieve. We do not want to be competing with than giving confidence to the noble Baroness, is that if existing private investments, but beating a path down we start using words like proven technologies, I am not which other investors can follow. That crowding in is sure that we can create the right definition. We all linked with the concept of what is a late-stage innovation. understand what the noble Baroness means. Going The current list of technologies that the bank will be back to the core of what the bank is set up to do, it is investing in is broad. There will be room for innovation to demonstrate the ability to make both a positive among those categories that have already been selected, return and a green impact. All those areas that the but there are other technologies that are perhaps not noble Baroness and I know well would certainly fit on the list, which is slightly regrettable. I mention wave into this exciting new development. With that, I hope and tidal technologies because that is an area where that she will withdraw her amendment. GC 167 Enterprise and Regulatory Reform Bill[LORDS] Enterprise and Regulatory Reform Bill GC 168

Baroness Worthington: I thank the Minister for his public interest represented by Parliament. It is therefore comments, which were reassuring. I think that 20% sensible to recognise that, although initially the Crown sounds about right, but who knows? The most important interest will be the only shareholding interest, that will factor, which should not be overlooked in our desire to not be identical with the public interest, and different create this pedigree and track record is that there will reporting might therefore be required. be times when we need to cut a path through otherwise Proposed new paragraphs (a) and (b) in the amendment unexplored territory. There is a market failure out would give Parliament a feel for the activity that the there that this bank can address. By having a targeted, bank has been undertaking on the ground, and bring focused remit, I hope that it will find investment the reality of the bank’s operations to life. It would be opportunities that others have overlooked. I welcome unusual for Companies Act reports to deal with specific the comments from the Minister and I beg leave to investments in this way. withdraw the amendment. Paragraph (c) would assess the way in which the bank is achieving value for money for its investments, Amendment 13A withdrawn. and draw parliamentary attention to value for money and efficiency—again an approach that would not Clause 5 agreed. commonly be found in company reports. Unusually for institutions in the public sector, the Clause6:TheUKGreenInvestment Bank: documents bank will have to be familiar with risk in all its forms to be laid before Parliament and across its investments, and the wider economic climate will also need to be referred to as well as the appetite that individual investors will have for risk. Amendment 14 This is an important area that we think the report should deal with. Moved by Lord Stevenson of Balmacara It would be of considerable concern if the Green 14: Clause 6, page 3, line 35, leave out subsection (2) and Investment Bank were to displace investment already insert— available in the market, which we have already touched “(2) The Secretary of State must prepare and lay before both on in our debate this afternoon. So a specific report in Houses of Parliament a report on the activities and investments that area would be helpful in understanding how the of the UK Green Investment Bank. bank was progressing, and in assessing how successful (2A) The Secretary of State must lay a report before Parliament as provided for under subsection (2) within 12 months of the it was in the marketplace. coming into force of this Act, and annually thereafter. The final point brings us back to corporate behaviours, (2B) The report under subsection (2) must, in particular, and assisting Parliament to judge whether the bank include or contain information about— was addressing concerns on such matters as pay and (a) the investments undertaken by the UK Green bonuses and ethical behaviours more generally. Investment Bank during this period, I hope that the Minister will accept that with this (b) how the UK Green Investment Bank is achieving its amendment we are trying to be helpful. We have some green purposes as set out in section 1, common ground in assisting Parliament in getting (c) a value-for-money and efficiency statement, material which is better suited to its particular role. I (d) the identification and management of risk in respect of do not think that that will necessarily come out of the UK Green Investment Bank objects and investments, companies’ reports and I hope that the amendment (e) how the UK Green Investment Bank is not duplicating will stimulate those who have to prepare them to come investments made in the markets, and up with more appropriate solutions for the reporting (f) how the UK Green Investment Bank has applied the that is necessary. I beg to move. Main Principles as set out in the UK Corporate Governance Code.” Lord Marland: The noble Lord, Lord Stevenson, probes again—quite reasonably, if I may say so. I just Lord Stevenson of Balmacara: My Lords, the main want to make it clear that the Government, as the aim of this amendment is to firm up how and in what main shareholder—indeed, the only shareholder—will form the Secretary of State must prepare and lay be holding it to account at every angle. Also, Clause 5 before both Houses of Parliament a report on the treats the bank as if it were a quoted company. Therefore activities and investments of the UK Green Investment it is subject to the Companies Act, which imposes Bank. The amendment is largely self-explanatory, but three quite important criteria. First it will be required it may be for the benefit of the Committee if I raise to produce a directors’ remuneration report, about one general and a couple of specific points. which there will be more later in this Bill. It will be As I mentioned before, relying on the reports generated required to publish its annual accounts and reports on under the Companies Act 2006 introduces significant a website. It will be required to produce an enhanced timing problems, as these reports will be generally business review, under which the directors must report arranged for an AGM often some months after the on matters such as main trends and factors likely to year end. A report for Parliament, if it were different, affect the company’s business and environmental matters. can be much more up to date and therefore more We believe that that has enhanced transparency, public relevant to those who have to discuss it. The focus of transparency, in addition to the watchful eye of Companies Act reports are the stakeholders, mainly in government in terms of getting return on our investment. conventional companies. These would be the dispersed I hope that satisfies the noble Lord on what I consider institutional and private shareholders and not the a very important probing amendment. GC 169 Enterprise and Regulatory Reform Bill[3 DECEMBER 2012] Enterprise and Regulatory Reform Bill GC 170

Lord Stevenson of Balmacara: I thank the Minister Freedom of Information Act, there is already a sufficiency for his comments. It is nice to see that my rating has of reporting requirements for the bank. He may argue risen from being interesting to being quite reasonable that requiring any more might be regarded as otiose, in what I am suggesting. I will look for an A probably but there are some reasons why I think the export in sitting seven or eight, and perhaps even get an A+ at report would be of value. the end. I look forward to that. In the interim, I The rationale for setting up the bank is to bridge a withdraw this amendment. gap in understanding between the investor community and those who wish to manufacture, develop and Amendment 14 withdrawn. trade in the green technologies. Surely a periodic report of what the bank has been doing and how successful it Amendment 15 has been in fulfilling its purposes, a check on its competitiveness and a review of the main trends and Moved by Lord Stevenson of Balmacara factors likely to affect its future performance would 15: Clause 6, page 4, line 9, at end insert— help bridge that gap and help improve the sector as a “(5) The Secretary of State must make provision for an whole, leading to greater investment. independent expert review of the performance of the UK Green In a similar way the preparation of an external Investment Bank. expert report would surely help the bank sharpen its (6) A review under subsection (5) must be prepared every five performance and help improve its knowledge and years following the commencement of this Act. understanding of the sector. It may well be that it has (7) An interim review shall be prepared no less frequently than collected the best and the brightest to work within the every two and a half years. bank, but, even so, whenever there is an external (8) A review under subsection (5) must, in particular, include report, there always is more that is achieved because of or contain information relating to— the preparation for that reporting requirement than (a) an assessment of the UK Green Investment Bank’s there is perhaps by actually going through the process. environmental performance in fulfilling the green purposes as set out in section 1, So in that sense it would be an assistance to the company itself. (b) an analysis of the main trends and factors likely to affect the future development, performance and investments of Thirdly, the existence of such a report would surely the UK Green Investment Bank, assist those who would otherwise only be able to rely (c) macro-economic analysis, including assessments of on the standard output of the bank under the Companies demand in the UK economy and international factors Act. With that, I beg to move. likely to affect green investment and skills within the relevant industries, (d) assessment of the competitiveness of the UK Green Lord Marland: My Lords, this is an A+ amendment, Investment Bank in securing competitive advantage for without any doubt at all, something that I have never the UK in green and low carbon economies relative to achieved myself. So much was I taken with this other countries, and amendment that I invited my officials to contact the (e) recommendations to improve the UK Green Investment noble Lord, Lord Smith of Kelvin, as chairman, to Bank’s impact in fulfilling its green purposes in section 1. consider this because I felt that it was such an A+ (9) A review conducted under subsection (5) must consult— amendment, from an A+ man and an A+ male, that it (a) The Secretary of State for Energy and Climate Change, was worthy of consideration. I hope it will satisfy the (b) The Secretary of State for Environment, Food and Rural noble Lord that the noble Lord, Lord Smith of Kelvin, Affairs, has made it clear that the board will undertake an (c) The Committee on Climate Change, independent review of its own performance each year (d) Ministers from the devolved administrations, from the end of its first full financial year in 2014. I hope that that satisfies what I thought was an (e) investors and interested parties, and excellent amendment, and I encourage the noble Lord (f) members of the public. to withdraw it. (10) The Secretary of State, in the capacity of shareholder, must provide such information as they consider reasonable to enable the person or body undertaking the review to fulfil the Lord Stevenson of Balmacara: It is embarrassing to requirements of this subsection. be praised so quickly, and so young. Of course, to be (11) A review under subsection (5) must be published and laid the very best of our universe you now have to go above before both Houses of Parliament.” A+ to A*+, at the risk of suggesting that there might be a further grade to which I might aspire. Lord Stevenson of Balmacara: My Lords, Amendment 15 brings to the attention of the Committee the suggestion that if the reports that are being received by Parliament Lord Marland: If the noble Lord is not satisfied, I are those which are mainly being generated within the can big it up even more. Companies Act register of reporting requirements, there may be some gaps in terms of independent Lord Stevenson of Balmacara: I shall play my cards review. So the main purpose is to require such a review slowly and see how we get on. The simple point that I every five years following enactment, and also to have was going to make was that the answer is exactly as I an interim report. would like, and this will satisfy us in that respect. It is I am sure that the Minister will again argue that the just a question of what will happen to the report in bank will have sufficient to do under the Companies terms of public arrangements. Perhaps the Minister Act, and that, as a public company falling within the could reflect on having a further exchange with the GC 171 Enterprise and Regulatory Reform Bill[LORDS] Enterprise and Regulatory Reform Bill GC 172

[LORD STEVENSON OF BALMACARA] for which there is a particular responsibility. At the chair of the bank to see whether it would be something moment, it is going to be wholly owned by the Crown, that could be laid before Parliament. I do not think and the sole shareholder is the Government, so it is that it would need a formal discussion or debate, but it appropriate that the questions that may be put in would be useful to have it in the Library at least, so terms of FOI will be answered. that it is available. If he could confirm that at some This bank is being set up in the wake of the biggest point, we would be grateful. I beg leave to withdraw financial crisis the world has seen in modern times. the amendment. That should, even if for no other reason, mean that we should try to ensure that the new bank should have the Amendment 15 withdrawn. highest possible standards of accountability and reporting. I remind the Committee that the Secretary of State, in Clause 6 agreed. his examination before the Environmental Audit Committee on 2 February 2011, said: 6.15 pm “As Secretary of State in BIS, my ambition is to … develop and deliver a GIB that is effective and transparent and affordable— those are our key criteria”. Amendment 16 Love or hate the FOI Act, it is here to stay, and is Moved by Lord Stevenson of Balmacara proving very effective in ensuring that the Government respond to legitimate requests for information from 16: After Clause 6, insert the following new Clause— citizens of the UK. We should do what we can to “General disclosure requirements promote that view, and we should do nothing which (1) The Freedom of Information Act 2000 is amended as sets up barriers or creates uncertainty about whether follows. information is retrievable or not. In our view, therefore, (2) In Part VI of Schedule 1, after “The Great Britain China there should be no objection to recording in the primary Centre”, insert “The UK Green Investment Bank”.” legislation that it is quite clear that, as well as the class of institution it is, the bank itself, as long as it is Lord Stevenson of Balmacara: This is my last retained, will be subject to FOI. I beg to move. appearance in the Committee on this occasion. I have risked the Minister’s wrath by suggesting that we need Lord Marland: My Lords, we have trodden this to think further about reporting, but I do not think ground quite a lot so far. I think that the FOI is a very that this one will be as well received—but I will have significant and far-reaching incumbence on a company, another go. and on individuals in a country, as we have found out. The Green Investment Bank is already covered by There will be more later, but as I have said in the past the Freedom of Information Act, and I accept that. It under previous amendments the FOI Act is a very was discussed in another place, and I have read that strong regulatory thing. I am not going to play “what discussion. But it stuck in my mind that there were two if” scenarios, such as what if the bank is sold by a reasons why we need to revisit it. In the discussion in Labour Government in 10 years’ time, or another the other place, the Government said that they believed coalition time in five years’ time, because it is our task that the Freedom of Information Act, together with to operate within the current government schemes and Clauses 5 and 6, ensure that the bank will be subject to not to tie the hands of future Governments if they appropriate, extensive obligations to disclose information wish to carry on with other things. But I totally accept and to report on its activities, which will ensure full the sentiment and look forward to further debates on transparency and accountability. I accept that, because the subject. In the light of that, I hope that the noble the bank already qualifies as a publicly owned company Lord will withdraw his amendment. under Section 6 of the Freedom of Information Act, which means that it is subject to the disclosure obligations Lord Stevenson of Balmacara: My Lords, I simply that apply to public authorities. We also accept that, note that perhaps in 10 years’ time, when we are on the unlike most public authorities, not only is the bank other side and are debating similar issues, I will remind subject to the Freedom of Information Act but it has the noble Lord of those points. However, I beg leave to additional, proactive reporting obligations under the withdraw the amendment. Companies Act 2006, which will be enhanced by Clause 5. However, things may change. We had a discussion Amendment 16 withdrawn. earlier on in Committee today at which the remote prospect of changes of ownership in the bank were Lord Gardiner of Kimble: My Lords, this may be a raised. If those changes of ownership were such that convenient moment for the Committee to adjourn the proportion of the bank owned by a future Government until Wednesday at 3.45 pm. dropped below 50%, I doubt that FOI legislation would still apply. So this is to future-proof something Committee adjourned at 6.20 pm. WS 41 Written Statements[3 DECEMBER 2012] Written Statements WS 42

that threaten our national security. We have invested in Written Statements new and unique capabilities for GCHQ to identify and Monday 3 December 2012 analyse hostile cyber attacks in order to protect our core networks and services and support the UK’s wider cyber security mission. I cannot reveal details of Cybercrime this work, but it has broadened and deepened our Statement understanding of the threat, helping us prioritise and direct defensive efforts. Lord Wallace of Saltaire: My right honourable As part of this work, the MoD has established a friend the Minister for the Cabinet Office (Francis tri-service unit, hosted by GCHQ in Cheltenham. The Maude) has made the following Written Ministerial Joint Cyber Unit training and skills requirements have Statement. been established and it is currently developing new On 25 November 2011, I published the UK Cyber tactics, techniques and plans to deliver military capabilities Security Strategy. In the strategy I committed to report to confront high-end threats. back on progress after one year, in particular on the The Security Service has developed and enhanced achievements of the National Cyber Security Programme its cyber structures, focusing on investigating cyber for which my department has oversight. I am pleased threats from hostile foreign intelligence agencies and to present this report to both Houses today. terrorists, and working with UK victims. This informs The strategy outlined how the internet has changed the work of the Centre for the Protection of National and shaped our lives. A year on from its publication, Infrastructure (CPNI) which is helping organisations this transformation continues at pace. to improve their cyber security measures. The UK has been proclaimed as the most internet- CPNI is actively influencing standards, researching based major economy, with one recent study stating vulnerabilities and focusing on the key technologies that the UK’s internet-related market is now worth * and systems of cyber infrastructure. As part of this £82 billion a year and rising . The internet provides a work it has commissioned a major research programme rich and fertile basis for industry, and small businesses from the University of Oxford with the aim of delivering in particular, to expand and grow. advice, guidance and products to help reduce the risk Industry suffers at the hands of such threats. The of cyber attacks mounted or facilitated with the help 2012 PwC Information Security Breaches Survey found of company insiders. that 93% of large corporations and 76% of small businesses had a cyber security breach in the past year. In terms of protecting core government systems, With the cost for a security breach estimated between work is being done across the public sector network to £110,000 to £250,000 for large businesses and £15,000 create a new security model for the sharing of services. to £30,000 for smaller ones, these are losses which UK This includes: a common and standardised approach businesses can ill afford. to assurance—single sign-on—through an employee And we are not immune in Government. Attacks authentication hub; security monitoring; more effective on government departments continue to increase. policing of compliance; and greater network resilience. The UK Cyber Security Strategy sets out our approach 2012 saw the UK hosting one of one the greatest to tackling the threat. It clearly states four objectives sporting events of our time. The London Olympics for the UK: was the first truly digital Games and, as such, we to tackle cyber crime and to be one of the most recognised the need to address potential cyber threats. secure places in the world to do business in cyber We established unprecedented mechanisms for working space; hand in hand with sponsors and suppliers to the to be more resilient to cyber attacks and better able Games in combating and managing incidents. The to protect our interests in cyberspace; lessons learnt from the event are informing our cyber to have helped shape an open, stable and vibrant security national incident management plans as we go cyberspace which the UK public can use safely and forward. that supports open societies; and Tackling cyber crime to have the cross-cutting knowledge, skills and capabilities the UK needs to underpin these other The Government have invested in strengthening objectives. law enforcement and prosecutors’ capabilities to prevent, disrupt and investigate cyber crimes and bring those These objectives are delivered through the National responsible to justice. The Police Central e-Crime Unit Cyber Security Programme which prioritises and has trebled in size, three regional cyber policing teams co-ordinates work across Government and provides have been established, and training on cyber crime for £650 million of new funding to improve the UK’s mainstream police officers has been designed. This is cyber security capability. increasing the capacity of the police to tackle cyber We are making good progress against these objectives crime in line with the strategic policing requirement and I am pleased to be able to report on some notable which was issued by the Home Secretary in July 2012. achievements. The Serious Organised Crime Agency (SOCA) has Combating the threats increased its cyber capability including the introduction First, I would like to point to the work of GCHQ in of cyber overseas liaison officers and a number of addressing cyber threats. Its work underpins our ability posts dedicated to mainstreaming cyber and digital to contend with the many challenges of the cyber age investigations across the organisation. WS 43 Written Statements[LORDS] Written Statements WS 44

The Police Central e-Crime Unit has reported that worked well, most value was gained through the industry it has exceeded its four-year operations performance to industry engagement and this is informing how we target of averting £504 million of harm within the first take this work forward. year of the National Cyber Security Programme alone— preventing £538 million of harm at a return on investment Education, skills and awareness of £72 harm averted for every pound invested. In We have been actively raising awareness among addition and in conjunction with partners, SOCA has industry and the public about the problem so that repatriated over 2.3 million items of compromised people take the simple steps to protect themselves and data to the financial sector in the UK and internationally demand better cyber security in products and services. since November 2011 with an estimated prevention of Working with industry, we have been raising awareness potential economic loss of over £500 million. In addition, of cyber security threats among the general public The Crown Prosecution Service in turn is devoting through initiatives such as the recent Get Safe Online more resources to prosecuting cyber crime. As at the Week, which for the first time ran in conjunction with end of September 2012, the department was prosecuting the EU and US and Canadian partners, as part of a 29 live cyber crime cases. drive to establish a global cyber security month in October each year. The National Fraud Authority has Joint operations between the two units have now also delivered targeted campaigns on online fraud, been initiated as a first step towards their coming reminding people of the increasing threat of cyber together in 2013 to form the National Cyber Crime crime. Over 4 million individuals were reached by the Unit of the new National Crime Agency. This will Devils in Your Details campaign in spring 2012. In deliver the next step in transforming law enforcement evaluation afterwards, two-thirds of those surveyed capability to tackle cyber and cyber-enabled crimes. said they would change their behaviour as a consequence. National Cyber Security Programme funding has We are investing in skills and research so that we enhanced Action Fraud to be the UK’s national reporting have the capability to keep pace with this problem in centre for fraud and financial internet crime, operating the future. The first eight UK universities conducting on a 24/7 basis. This enables reported incidents of world class research in the field of cyber security have crime to be developed into intelligence packages that been awarded Academic Centre of Excellence in Cyber national and local agencies can use for targeted Security Research through the Engineering and Physical enforcement activity. Over 12 months, Action Fraud Sciences Research Council. In addition, a new virtual received 46,000 reports from the public of cyber-enabled research institute has been launched as a government/ crimes amounting to attempted levels of fraud of academia partnership. Its aim is to improve understanding £292 million. of the science behind the growing cyber security threat. To further assist in tackling online fraud, HMRC These initiatives help keep the UK at the forefront of has established a new cyber crime team to enhance the international research in this field. department’s capability to tackle tax fraud by organised Meanwhile we have taken steps to improve cyber criminals. HMRC’s enhanced anti-phishing capabilities security skills among young people and to widen the are now leading to the interception of five major pipeline of talent coming into this field. BIS has threats a day and have helped the department to shut commissioned e-Skills UK to develop interactive learning down almost 1,000 fraudulent web sites in the past materials on cyber security for GCSE students. One 12 months. hundred and twenty schools have already signed up to Partnership with industry use the materials as part of the Behind the Screen initiative. In November, GCHQ and the other intelligence Government cannot do this alone. We know that agencies launched a new technical apprenticeship scheme industry is the biggest victim of cyber crime and which aims to identify and develop talent in school intellectual property theft through cyber crime is and university age students. They aim to recruit up to happening on an industrial scale. In the past year we 100 apprentices who will be enrolled on a tailored have cast our net wide to work with industry, academia two-year foundation degree course. We have also and ever wider across the public sector to promote sponsored the Cyber Security Challenge UK in its awareness of the need to address cyber threats. We work providing advice, support and guidance for anyone have produced and promoted a “Cyber Security Guidance interested in a career in cyber security, and to create for Business” document for industry chief executives, opportunities for employers and previously unidentified which sets out how board members and senior executives talent to come together. Since its launch in 2010, over should adopt a holistic risk management approach to 10,000 people have registered with the initiative. cyber security in order to safeguard their most valuable assets, such as personal data, online services and Ensuring that those in the field of cyber security get intellectual property. the right training and education, GCHQ has established and is building on a set of certification schemes to We have successfully completed a pilot government improve the skills and availability of cyber security and industry information sharing initiative to provide professionals. The Certification for Information Assurance a trusted environment for organisations to share Professionals scheme will help Government and industry information on current threats and managing incidents. to recruit cyber security professionals with the right This included around 160 companies across five skills at the right level to the right jobs. It will also sectors: defence, finance, pharmaceuticals, energy and assist participants to build a career path and to have telecommunications. Although industry to government the opportunity to progress through re-assessment as and government to industry information exchange skills and experience grow. WS 45 Written Statements[3 DECEMBER 2012] Written Statements WS 46

International efforts Working with the private sector to improve awareness The nature of the internet means that we cannot of the need for better cyber security continues to be a focus our efforts on the UK alone. International priority. We are now focusing our efforts on making co-operation is crucial. We have continued to promote sure that the right incentives and structures are in the UK’s vision of an open, vibrant and secure cyberspace place to change behaviour in a sustainable way. internationally, for instance through our active Government departments and agencies are working contribution to the Budapest cyber conference, and to with professional and representative bodies to ensure build up a wide network of international partnerships. the consideration of cyber security becomes an integral We have strengthened relationships with traditional part of corporate governance and risk management allies and have initiated discussions with a broad range processes. We are supporting the development of of countries. We are also working with international organisational standards for cyber security so consumers partners to improve co-operation to tackle cyber crime can identify those businesses with good cyber security through legislation and operational work, and have practices. played a prominent role in international discussions Building on the successful Auburn pilot project on norms of behaviour and confidence building between Government and businesses, we are developing measures in cyberspace. In October, the Foreign a permanent information sharing environment called Secretary announced the establishment of a Cyber CISP (Cyber-security Information Sharing Partnership) Capacity Building Fund for supporting cyber security to be launched in January 2013. This has been a joint internationally, part of which will create a new Global industry/government design. Initially, this will be open Centre for Cyber Security Capacity Building. This to companies within critical national infrastructure centre will help to make UK expertise and technology sectors, but we intend to make membership available in this field available to international partners. more broadly, including to SMEs, in a second phase. Reflecting the global nature of the cyber crime threat, UK law enforcement agencies continue to work We are constantly examining new ways to harness closely with their international partners, through and attract the talents of the cyber security specialists partnership building and joint operations. SOCA continues that are needed for critical areas of work. To this end, to lead, with international partners, on the global the MoD is taking forward the development of a representation of law enforcement interests to ICANN, cyber reserve, allowing the services to draw on the the internet domain name organisation. Collaboration wider talent and skills of the nation in the cyber field. with ICANN to amend the registrar’s accreditation The exact composition is currently in development agreement has assisted law enforcement in crime and a detailed announcement will follow in 2013. prevention and detection. In April 2012, SOCA led a On cyber crime, the Government will continue to global day of action to tackle automated vending cart work with the law enforcement community to enhance websites selling compromised financial data. Two arrests their capabilities, particularly through the creation of were made in the UK and 70 websites taken down the National Cyber Crime Unit (NCCU), an integral world-wide, resulting in major disruption to organised part of the National Crime Agency which, subject to crime groups’ activities. parliamentary approval, will be established in October A fuller list of achievements from the first year of 2013. The NCCU will bring together the capabilities the Cyber Security Strategy and work on the National of the Police Central e-Crime Unit and SOCA’s cyber Cyber Security Programme can be found at www. team to create an even more effective response to the cabinetoffice.gov.uk. most serious cyber criminals. Future plans Alongside tackling the threat, the Government are Looking forward, we are clear that there is still determined to help seize the business opportunity in much work to do. We will continue the work that is cyber, promoting the UK cyber security industry both underway, while regularly assessing it against priorities, domestically and across the globe. To support this, we and taking into account new and emerging threats. are today forging a new joint Cyber Growth Partnership We are reviewing our national approach to cyber with Intellect, the organisation which represents the incident management, particularly in the light of the UK technology industry. Central to this will be a high successful Olympics response outlined above. Our level group which will identify how to support the intention is to move towards the establishment of a growth of the UK cyber security industry, with an UK National CERT (Computer Emergency Response emphasis on increasing exports. Team). This will build on and complement our existing To ensure the UK can continue to call on cutting-edge CERT structures, improve national co-ordination of skills and research, BIS and the Engineering and cyber incidents and act as a focus point for international Physical Sciences Research Council (EPSRC) will fund sharing of technical information on cyber security. two centres of doctoral training (CDT). The centres In addition, a new Cyber Incident Response scheme, will call on a wide range of expertise to deliver recently launched by CESG and CPNI in pilot form, multidisciplinary research and so help to provide the will move to become fully operational in 2013. It is an breadth of skills needed to underpin the work of the HMG quality-assured service, provided by industry, UK’s next generation of doctoral-level cyber security that organisations can turn to for assistance when they experts. The two CDTs will deliver, in total, a minimum have suffered a cyber security incident. The scheme of 48 PhDs over their lifetime with the first cohort of will enable the UK’s emerging cyber response industry students starting in October 2013. These are in addition to grow, bringing further benefit to the UK in terms of to 30 GCHQ PhD studentships also sponsored by the skills and business opportunities. National Cyber Security Programme. WS 47 Written Statements[LORDS] Written Statements WS 48

We are also building cyber security into undergraduate ECOFIN university degrees. We have partnered with the Institution of Engineering and Technology (IET) to support and Statement fund the Trustworthy Software Initiative which aims to improve cyber security by making software more secure, dependable and reliable. As part of the initiative The Commercial Secretary to the Treasury (Lord a module has been developed to educate students on Sassoon): My right honourable friend the Financial technical degree courses on why trustworthy software Secretary to the Treasury (Greg Clark) has today is important. This material is currently being piloted made the following Written Ministerial Statement. at De Montfort University, the University of Worcester A meeting of the Economic and Financial Affairs and Queens University Belfast. The IET plans to Council will be held in Brussels on 4 December 2012. expand the pilot next spring. From 2015 education in We expect the following items to be on the agenda and cyber security will be a mandatory component of discussed. software engineering degrees accredited by the Institution. Banking supervision mechanism On the international front, we will continue to Council will seek to agree a general approach for expand and strengthen the UK’s bilateral and multilateral the Commission’s proposal for a single supervisory networks. Key opportunities to shape the future of mechanism (SSM). cyberspace in the year ahead will include the Seoul cyber conference, the report of the UN Group of Revised capital requirements rules (CRD IV) Government Experts on international security norms, Council will receive a progress report on the proposals OSCE (Organisation for Security and Co-operation in for revised capital requirements rules (CRD IV). Europe) work on confidence building measures and Economic governance—two pack discussions on internet governance in the lead-up to Ministers will seek to agree a general approach on the World Summit on the Information Society (WSIS). two regulations, which are intended to strengthen We will also play an active role in discussions on the fiscal discipline and financial stability in the euro area. new EU cyber strategy. Public awareness will be a priority: we need to warn Credit rating agencies people of the risks and what they can do to protect The presidency will update Ministers on the political themselves while ensuring that confidence in the internet agreement reached on the credit rating agencies 3 is maintained. From spring 2013 we will be rolling out (CRA3) dossier. a programme of public awareness drives, building on Macroeconomic imbalance procedure—Commission the work of GetSafeOnline.org and the National Fraud annual report Authority.This programme will be delivered in partnership Ministers will hold an initial exchange of views on with the private sector and will aim at increasing cyber the alert mechanism report, the first stage in the confidence and measurably improving the online safety macroeconomic imbalance procedure. of consumers and SMEs. We are working now to understand the online behaviour of different segments Annual Growth Survey 2013 of consumers in order to prepare the ground for these Council will hold an initial exchange of views on campaigns and to ensure what we do is based on the Annual Growth Survey 2013. evidence on what works. Issues related to the Economic and Monetary Union Meanwhile Government will be mainstreaming cyber Council will hold an exchange of views on issues security messages across the breadth of their related to the economic and monetary union. communication with the citizen. For example, HMRC will be automatically alerting customers using out of Implementation of the Stability and Growth Pact date browsers and directing them to advice on the ECOFIN will seek to adopt council decisions relating threat this might pose to their online security. to Greece’s excessive deficit procedure. Conclusion Financial transaction tax (FTT) Further details on forward plans are available at The presidency will brief Ministers on the state of www.cabinetoffice.gov.uk. play as regards a proposal for a council decision One year after the strategy’s publication a great authorising enhanced co-operation in the area of FTT deal has already been accomplished in our aim of by some member states. The UK will not participate in protecting UK interests in cyberspace and making the an enhanced co-operation FTT. UK one of the safest places to do business online. This VAT Quick reaction mechanism is not an issue for Government alone. Industry has the potential to lose the most by not rising to these challenges Ministers will hold an orientation debate on a so together we must work to address cyber threats proposal for amending a directive on the common which could undermine our economic growth and system of value added tax as regards a quick reaction prosperity. mechanism against VAT fraud. The past year has created an increasing momentum Annual report of the Court of Auditors on the across the UK at varying levels and across all sectors implementation of the budget for the financial year in addressing a wide range of cyber security threats. 2011 We look forward to maintaining this pace, continually The President of the European Court of Auditors, assessing our progress as we go forward. I will report Mr Vítor Caldeira, will present to Ministers the annual back on progress again a year from now. report of the Court of Auditors on the implementation * AT Kearney: The internet Economy in the United Kingdom of the budget for the financial year 2011. WS 49 Written Statements[3 DECEMBER 2012] Written Statements WS 50

Employee Ownership The vast majority of people and businesses pay Statement their fair share of tax. However, the Government are fully committed to clamping down on those who avoid or evade paying their tax. The Government are today The Parliamentary Under-Secretary of State, Department announcing a series of actions that are being taken to for Business, Innovation and Skills (Lord Marland): My tackle tax avoidance and evasion through domestic honourable friend the Minister of State for Employment and international action: new investment in HM Revenue Relations and Consumer Affairs (Jo Swinson) has and Customs (HMRC), further developments on progress today made the following Statement. internationally and more powers that will underpin the Following the Chancellor’s announcement on Government’s commitment to tackle avoidance and 8 October that the Government would create a new evasion.Theseannouncementscomeaheadof theChancellor’s employment status called employee owner, the Autumn Statement on Wednesday, 5 December. Government have sought views on the practicalities of New funding for HMRC its implementation. This measure is part of the Growth The Government are already investing over £900 million and Infrastructure Bill which is currently before the in HMRC to secure an additional £7 billion of revenue House of Commons. a year, taking HMRC’s total compliance revenues to The Government will publish their response to the £20 billion in 2014-15. A further £77 million will be consultation shortly and copies will be placed in the provided to HMRC in this spending review period Libraries of both Houses. further to expand its anti-avoidance and evasion activity focused on offshore evasion and avoidance by wealthy individuals and by multinationals. This investment EU: Single Market will secure a further £2 billion in 2014-15, £22 billion Statement in total. This is 70% higher than in 2010-11. As a result of this new funding, HMRC will: accelerate work to identify and challenge multinationals’ The Minister of State, Department for Business, transfer pricing arrangements and further strengthen Innovation and Skills & Foreign and Commonwealth its risk assessment capability across the large business Office (Lord Green of Hurstpierpoint): I wish to inform sector. That will help to ensure that multinationals the House that the Department for Business, Innovation do not shift profits out of the UK and therefore pay and Skills has established the UK Single Market Centre, the tax due in accordance with UK tax law; a national co-ordinating team responsible for monitoring the functioning of the European Single Market. expand its Affluent Unit with 100 extra investigators and additional risk and intelligence staff to target The Single Market Centre will bring together our avoidance and evasion by the wealthy. Increasing work on all the existing tools that support the functioning the number of specialist personal tax inspectors to of the single market, including the internal market tackle offshore evasion and avoidance of inheritance scoreboard, SOLVIT (the problem solving mechanism tax using offshore trusts, bank accounts and other that seeks to resolve the misapplication of rules by entities, focusing in particular on the agents and tax public authorities), the internal market information intermediaries involved; system, and policy responsibility for the point of single contact (the online licensing service for services directive increase capacity to tackle aggressive avoidance implementation). schemes, including long-running cases involving partnership losses by creating a settlement opportunity The objectives of establishing such a centre are to that offers a good deal to the Exchequer and accelerating give greater visibility, and therefore focus, within litigation against those that fail to take up the Government on improving the UK’s performance in settlement opportunity; implementing internal market measures and to build stronger links between single market policy and operations create a new centre of excellence to develop a to support our European policy through specific examples comprehensive approach to tackling offshore evasion. of market barriers. Over time, I hope that the work of The team will be made up of HMRC staff and the Single Market Centre will increase awareness among external experts who will look at how HMRC can UK businesses and consumers of the support available best use data to identify offshore tax evasion, review to them to trade and shop in the internal market. HMRC’s legal powers and work with other tax administrations to close the net on offshore evasion. The Single Market Centre will report annually on A comprehensive strategy on offshore tax evasion the performance of the single market in the UK, and will be published in spring 2013; and copies of this report will be placed in the Library of improve its risking technology, including increased the House. use of third party data. HMRC has today published Closing in on tax evasion: HMRC’s approach which sets out how HMRC is using technology to tackle Taxation: Avoidance those who break the law through tax evasion. Statement Agreement with US A groundbreaking agreement with the US—the UK-US The Commercial Secretary to the Treasury (Lord agreement to improve international tax compliance Sassoon): My honourable friend the Exchequer Secretary and to implement FATCA—will significantly increase to the Treasury (David Gauke) has today made the the amount of information automatically exchanged following Written Ministerial Statement. between the two countries. The agreement sets a new WS 51 Written Statements[LORDS] Written Statements WS 52 standard in international tax transparency and will and consumer protection. The new powers will allow further enhance HMRC’s ability to tackle offshore HMRC better to target the marketing of tax avoidance evasion. The Government will look to conclude similar schemes that pose a high risk to users and the Exchequer. agreements with other jurisdictions. The Government will also strengthen the existing Action to tackle the promoters of tax avoidance disclosure of tax avoidance schemes regime through schemes legislation in 2013 that will extend the range of information that must be disclosed to HMRC and impose additional Over the summer the Government published a sanctions for non-compliance. consultation document, Lifting the Lid on Tax Avoidance The introduction of a General Anti-Abuse Rule (GAAR) Schemes, on a wide range of proposals to increase In December 2010, the Government asked Graham information about tax avoidance. Aaronson QC to lead a study that would consider The consultation involved constructive engagement whether a GAAR could deter and counter abusive tax with a large number of representative bodies and avoidance, while providing certainty, retaining a tax businesses. It also demonstrated very strong support regime that is attractive to businesses, and minimising from mainstream tax advisers for new measures to costs for taxpayers and HMRC. The GAAR the crack down on those who market tax avoidance schemes. Government are now introducing will provide a significant In response, the Government will bring forward proposals new deterrent to abusive avoidance schemes and strengthen to introduce significant new information disclosure HMRC’s means of tackling them where they persist. and penalty powers that will go further than existing, Guidance and draft legislation on the GAAR will be general rules on the marketing of financial products published in December. WA 97 Written Answers[3 DECEMBER 2012] Written Answers WA 98

In addition, advice for beekeepers is published on Written Answers BeeBase in response to topical issues, such as information on the importance of maintaining colony food levels Monday 3 December 2012 to avoid starvation, which was published twice during the poor summer. Bees Asked by Lord Moynihan Questions To ask Her Majesty’s Government what assessment Asked by Lord Hoyle they have made of the role played in the die-off of honey bees in 2012 of pesticides, parasites, disease To ask Her Majesty’s Government, in the light and poor nutrition; and whether they will increase of the decline in bee numbers, what assessment the research budget directed at combating disease they have made of the future costs to farmers of and rejuvenating bee hives. [HL3644] the loss of pollination by bees. [HL3636]

The Parliamentary Under-Secretary of State, Department Lord De Mauley: The Food and Environment Research for Environment, Food and Rural Affairs (Lord De Agency’s National Bee Unit monitors colony losses as Mauley): HM Government recognise the importance part of its Bee Health Programme. The main factor of all pollinators, including bees, and their value to affecting honey bee health this year has been the both food security and sustaining the natural environment. exceptionally poor weather conditions. However, in We are currently considering a range of evidence on season colony losses were 5% of colonies inspected, the state of bees and other pollinators in order to which is similar to last year. determine what action is required. Defra is currently providing £2.5 million over five Many of our agricultural crops and wild flowers years (from 2010-11) towards the £10 million Insect rely on visits by insect pollinators (bumble bees, honey Pollinators Initiative which is being jointly funded bees, solitary bees, butterflies, moths, flies, beetles, with the Scottish Government, the Biotechnology and hoverflies) to produce seeds and fruits. Given their Biological Sciences Research Council (BBSRC), the important role as pollinators, the health, population Natural Environment Research Council (NERC) and size and diversity of these insect species are essential. the Wellcome Trust. The initiative’s projects are looking for UK agriculture and for our natural ecosystems. at different aspects of the decline of insect pollinators. It is estimated that insect pollinators contribute Of the nine projects being funded, two specifically £500 million per year to UK agriculture. The relative focus on honey bees and six will benefit both honey contributions of the various species to this total value bees and bumblebees. is not known, although the UK’s National Ecosystem Assessment (2011) suggested (based on numerical rather Asked by Lord Moynihan than field-based observations) that wild pollinators To ask Her Majesty’s Government whether they contribute a significant proportion of this total. will take steps to address the findings of the British Asked by Lord Moynihan Beekeepers Association 2012 Honey Survey which highlighted a 72% drop in average yields. [HL3645] To ask Her Majesty’s Government whether they will introduce measures to support bee keeping, in the light of the experience of damage to the bee population and its effects in 2012. [HL3643] Lord De Mauley: The British Beekeepers Association’s (BBKA’s) 2012 Honey Survey acknowledges that rain and cold weather this summer were the major factors Lord De Mauley: Defra recognises that this has been affecting honey supplies. The BBKA also recognised a difficult year for beekeeping due to the poor summer that training and education of beekeepers is important weather. However, a number of measures are already to enable them to deal effectively with adverse in place to support beekeeping. Since the Healthy weather conditions such as have been experienced Bees Plan was launched in April 2009, the Food and this year. A key objective of the Healthy Bees Plan, Environment Research Agency (Fera), on behalf of which was launched in April 2009 by Defra and the Defra and the Welsh Government, has been working Welsh Government, is the improvement of beekeepers’ in partnership with beekeeping stakeholders on a number husbandry skills to enable them to become more self of initiatives to deliver the plan’s objectives to improve reliant. The Food and Environment Research Agency honey bee health. has been working in partnership with beekeeping Beekeepers also benefit from Defra’s bee health stakeholders on a number of initiatives to deliver this programme under which Fera’s National Bee Unit objective. (NBU) delivers a free inspection and comprehensive Asked by Lord Moynihan education programme on a wide range of beekeeping issues. The aim of the programme is to control the To ask Her Majesty’s Government whether the spread of statutory pests and diseases and improve National Bee Unit will publish an assessment of the beekeepers’ disease recognition and husbandry skills. 2012 honey production levels, the extent of notifiable Details of the implementation of the Healthy Bees diseases in United Kingdom honey bees during the Plan and the Bee Health Programme are available on year, and new measures to address the management the NBU’s BeeBase website. of disease and varroa mite in bee colonies.[HL3646] WA 99 Written Answers[LORDS] Written Answers WA 100

Lord De Mauley: The Food and Environment Research to the authorities in the Republic of Ireland for further Agency’s (Fera) National Bee Unit (NBU) has not investigation in line with the exchange of information made an assessment of the 2012 honey production provisions in the EC regulations. levels but recognises that that this has been a difficult year for beekeeping due to the poor summer weather. Burma Details of the incidence of the notifiable diseases Questions (European Foul Brood (EFB) and American Foul Brood (AFB)) in England, Wales and Scotland are Asked by Baroness Goudie available on the NBU’s BeeBase website. To ask Her Majesty’s Government which Fera is currently reviewing the policies in place to organisations and individuals have been approached address key pests and disease risks of honey bees and by the Foreign and Commonwealth Office with the associated surveillance and implementation regard to meeting President Thein Sein of Burma programme. This includes the management of the when he visits the United Kingdom. [HL3575] notifiable pests and diseases and also endemic pests, such as the Varroa mite. The Senior Minister of State, Department for Communities and Local Government & Foreign and Commonwealth Office (Baroness Warsi): The Prime Minister, my right Benefits honourable friend the Member for Witney (Mr Cameron), Questions issued an invitation to the Burmese President, Thein Asked by Lord Laird Sein in June and this invitation remains outstanding. Therefore there have been no approaches as yet to To ask Her Majesty’s Government, in cases organisations or individuals with regards to any meetings. where they take responsibility for paying child We believe such a visit would be a valuable opportunity benefit to parents from Poland and the Republic of to continue the Prime Minister’s dialogue with the Ireland working in the United Kingdom having president and to stress the need to resolve the many left children in their home country, whether the issues outstanding as Burma continues on its path to full amount of child benefit or the difference democracy. between the United Kingdom and home country rates is paid; and whether the benefit is linked to Asked by Baroness Goudie continuing payment of employee national insurance To ask Her Majesty’s Government which Burmese contributions. [HL3504] Government officials have visited the United Kingdom To ask Her Majesty’s Government whether they in the past six months; and what were the reasons have conducted random checks on the existence of for their visits. [HL3576] children in the Republic of Ireland on behalf of whom child benefit is paid in the United Kingdom; Baroness Warsi: U Soe Thane, Minister to the Burmese if so, what percentage of claims were found to be President’s Office, visited the UK from 7-9 November false; and whether they share details of fraudulent to attend a Wilton Park conference hosted by the claimants with their Irish counterparts. [HL3505] Institute of Business and Human Rights and focused on encouraging responsible investment in Burma. The Commercial Secretary to the Treasury (Lord Sassoon): UK child benefit, in respect of children resident in Climate Change Poland and the Republic of Ireland by virtue of EC Question Regulation 883/2004, will be paid at the relevant rate, Asked by Lord Donoughue whether at the UK rate or as a supplement and in accordance with the priority rules set out in that regulation. To ask Her Majesty’s Government, further to Where such a claim is made by a person who is employed the Written Answer by Baroness Verma on 8 November in the UK, EC Regulation 883/2004 requires that the (WA 224) stating that Arctic temperatures have claimant is subject to UK national insurance contributions. increased by almost twice the global average rate, All child benefit claimants are required to provide how much have Antarctic temperatures changed documentary evidence of the child or children mentioned since (1) 1880, and (2) 1998. [HL3706] in their claim, such as an original birth or adoption certificate. In addition, in all UK child benefit claims The Parliamentary Under-Secretary of State, Department made by virtue of EC Regulation 883/2004, HM Revenue of Energy and Climate Change (Baroness Verma): There and Customs will check the composition of the family is limited observational coverage of the Antarctic continent with the social security authorities in the EEA member and surrounding ocean. There are no observations state in which the family resides, including the Republic available from before 1903, with reliable records only of Ireland. UK child benefit is not paid until the from 1957, the International Geophysical Year. Thus, authorities in the other member state have confirmed it is not possible to answer (1). the composition of that family. Member states have Based on analysis of the HadCRUT4 land only well established procedures in place to ensure that temperature dataset which contains observations mostly family benefits only go to those entitled. around the edges of the continent, from a minimum of Information about the percentage of claims in respect 12 sites in 1957 to a maximum of 20 sites in the 1970s, of children resident in the Republic of Ireland which the regional temperature trends are as follows: are rejected as fraudulent is not available. However, 1957 to 2011: 0.18 ± 0.06°C / decade; and when necessary, details of such claims would be passed 1998 to 2011: 0.29 ± 0.21°C/ decade. WA 101 Written Answers[3 DECEMBER 2012] Written Answers WA 102

Linear trends above are based on year-to-year Workforce jobs (000’s) – seasonally adjusted variability around trends described as auto regressive Net (AR1) processes. 2010 Q2 2012 Q2 Change You will note that over a short time period of 14 years, the year-to-year variability of climate dominates North East 1,170 1,146 -24 the trend and leads to a comparatively large mean error. Yorkshire and The Humber 2,525 2,516 -9 North West 3,388 3,378 -10

Columbia EU: Turkey Question Question Asked by Lord Ashcroft Asked by Lord Dykes To ask Her Majesty’s Government what is their To ask Her Majesty’s Government whether they assessment of the statement of 15 November from the will seek an acceleration of possible European Union InternationalYoungDemocratUnion(IYDU)welcoming membership for Turkey; and, if so, how. [HL3490] a new effort for peace in Columbia. [HL3541] The Senior Minister of State, Department for Communities and Local Government & Foreign and Commonwealth The Senior Minister of State, Department for Communities Office (Baroness Warsi): Accession to the EU is a and Local Government & Foreign and Commonwealth condition-based not a time-based process. Turkey has Office (Baroness Warsi): We agree with the statement made clear its firm strategic commitment to accession, by the International YoungDemocrat Union and strongly and successive EU councils have made clear that Turkey welcome President Santos’s announcement of peace is a candidate for full membership of the EU. negotiations with the Revolutionary Armed Forces of The UK remains Turkey’s strongest supporter in Colombia. The launch of peace talks is a courageous Europe. It is our ambition that progress will be made on step to bring the hope of peace for all Colombians the accession process in coming months. We are working after decades of conflict. The UK stands ready to draw with partners to secure, for example, deeper foreign on its experience in support of the Colombian peace policy co-operation, expansion of the Commission’s process as it progresses. positive agenda, and, ideally, opening of chapters. We are also encouraging Turkey to accelerate planned human rights reforms. Employment Question Gaza Questions Asked by Lord Bates Asked by Lord Hylton To ask Her Majesty’s Government what was the net number of jobs created since 2010 in (1) North To ask Her Majesty’s Government what discussions East England, (2) Yorkshire and the Humber, and they are having with the Governments of Israel, (3) North West England. [HL3729] Egypt, Turkey and Jordan about the prevention of further violence in the Gaza Strip. [HL3501] The Senior Minister of State, Department for Communities Lord Wallace of Saltaire: The information requested and Local Government & Foreign and Commonwealth falls within the responsibility of the UK Statistics Office (Baroness Warsi): Prior to the ceasefire announcement Authority. I have asked the authority to reply. on 21 November, the UK was in contact with those Letter from Glen Watson, Director General for ONS, involved in brokering an end to the violence, alongside to Lord Bates, dated November 2012. the EU, US and other partners. The Prime Minister, As Director General for the Office for National my right honourable friend the Member for Witney Statistics (ONS), I have been asked to reply to your (Mr Cameron), spoke to the Israeli Prime Minister recent Parliamentary Question concerning the net number and Egyptian President and the Secretary of State for of jobs created since 2010 in (1) North East England, Foreign and Commonwealth Affairs, my right honourable (2) Yorkshire and the Humber, and (3) North West friend the Member for Richmond (Yorks) (Mr Hague), England (HL3729). has spoken to the Israeli, Egyptian, Turkish and Jordanian The ONS does not directly provide estimates for the Foreign Ministers. We urged all parties to use their number of jobs created, only the net change in total influence to help avoid any further escalation. jobs. These figures are produced from the ONS’Workforce We welcome the agreement reached on 21 November jobs series. to end hostilities. We have urged all sides to uphold The table below contains seasonally adjusted estimates their commitments, and paid tribute to President Mursi for the number of workforce jobs for the requested and the Egyptian Government for their intensive efforts regions at 2010Q2 (June 2010) and 2012Q2 (June and the leadership they have shown, as well as to US 2012) and the net change between these two periods. Secretary of State Clinton and UN Secretary General Quarter 2 is used as it is regarded as the best annual Ban Ki-moon for the role they have played. The indicator for workforce jobs. This measure includes Foreign Secretary spoke to Egyptian Foreign Minister employee jobs, self-employed jobs, HM Forces and Amr on 22 November to express appreciation for government-supported trainees. Egypt’s efforts. WA 103 Written Answers[LORDS] Written Answers WA 104

Asked by Lord Hylton Baroness Northover: As the Foreign Secretary said on 21 November, we welcome the agreement reached To ask Her Majesty’s Government whether they to end the hostilities in Gaza and southern Israel and will seek to work jointly with the Government of urge all sides to uphold their commitments. The UK is the United States to ensure a reduction of casualties following the humanitarian situation closely and in the current conflict in Gaza. [HL3502] monitoring the situation in terms of access of essential humanitarian supplies to the civilian population in Baroness Warsi: The British Government are gravely Gaza. concerned by the recent violence in Gaza and southern A shortage in medical supplies predates the current Israel and deeply regret the loss of civilian life. We crisis and remains a source of concern. However, even consistently called on those involved to avoid any with the increased caseload of war wounded, our action which risked civilian casualties and to abide by current assessment is that the health services in Gaza international humanitarian law. We conveyed these are providing a reasonable quality of care. The UK messages in public, and directly to those involved in supports the United Nation’s Office for the Co-ordination brokering an end to the violence, alongside our EU, of Humanitarian Affairs’ Access Co-ordination Unit, United States of America (US), and other international which works proactively with all partners to help partners. facilitate the access of humanitarian staff and supplies We welcome the agreement reached on 21 November into Gaza. The UK stands ready to respond should to end hostilities. We have urged all sides to uphold the situation deteriorate. their commitments, and paid tribute to President Mursi and the Egyptian Government for their intensive efforts and the leadership they have shown, as well as to US Gibraltar Secretary of State Clinton and UN Secretary General Ban Ki-moon for the roles they have played. Question This ceasefire is an important step towards a lasting Asked by Lord Pendry peace. The priority now must be to build on the ceasefire and to address the underlying causes of To ask Her Majesty’s Government what measures the conflict, including more open access to and from they are pursuing with the Government of Spain Gaza for trade as well as humanitarian assistance, and following the incursions by a Spanish warship into an end to the smuggling of weapons. Above all, the Gibraltar’s territorial waters on 13 November 2012. loss of life over the past week has shown the urgent [HL3474] need for a return to negotiations on a two-state solution to resolve the Israeli-Palestinian conflict. The UK The Senior Minister of State, Department for Communities will work urgently with the USA, the EU, our other and Local Government & Foreign and Commonwealth international partners and with Israel and the Palestinian Office (Baroness Warsi): There were two serious incursions Authority, calling for a new initiative to restart the into British Gibraltar territorial waters (BGTW) on peace process before the window for a two state solution 13 November 2012. closes. In the first incursion a Spanish naval ship conducted Asked by Baroness Tonge a prominent patrol through British Gibraltar territorial waters lasting over two hours. Later on the same day, To ask Her Majesty’s Government what assessment a Spanish customs vessel sought to apprehend a they have made of the current state of the provision Gibraltarian civilian boat in BGTW, forcing the Royal of food supplies to Gaza. [HL3594] Gibraltar Police to intervene in order to safeguard the welfare of the four occupants. Baroness Northover: As the Foreign Secretary said On 15 November the Permanent Under-Secretary on 21 November, we welcome the agreement reached of the Foreign and Commonwealth Office summoned to end the hostilities in Gaza and southern Israel and the Spanish ambassador to the UK, in order to underline urge all sides to uphold their commitments. Our current the Government’s concerns regarding these and other assessment is that the provision of food supplies to recent incursions into BGTW. As the Minister for Gaza is not at crisis point but remains fragile. Europe, my right honourable friend the Member for Pre-positioning of stocks has meant that there is Aylesbury (Mr Lidington), has stated publicly, we currently sufficient food, shelter items and medical condemn these provocative incursions and urge the supplies. The World Food Programme and UN Relief Spanish Government to ensure that they are not repeated. and Works Agency, which are the two main organisations We believe that it is in the interests of Spain, as well as conducting food distributions, each have approximately Gibraltar and the UK, to avoid any incident that may 30 days of food pre-positioned in Gaza and distributions damage the prospects of developing a harmonious are continuing normally. The UK is following the and collaborative relationship between Gibraltar and humanitarian situation closely and stands ready to Spain. It is also in all parties interests to avoid incidents respond should the situation deteriorate. which could put at risk the safety of those operating in BGTW. Asked by Baroness Tonge We remain confident of UK sovereignty over BGTW To ask Her Majesty’s Government what action and fully committed to protecting the interests of the they intend to take to help ensure that medical people of Gibraltar and their wish to remain under supplies are available in Gaza’s hospitals. [HL3595] British sovereignty. WA 105 Written Answers[3 DECEMBER 2012] Written Answers WA 106

Government Departments: Records and pledged “to restore the rights of individuals in the and Security face of encroaching state power, in keeping with Britain’s tradition of freedom and fairness”. The right to property Question is a fundamental British liberty. Asked by Lord Laird Under the coalition Government, such orders will be limited to empty properties that have become magnets To ask Her Majesty’s Government, further to for vandalism and other forms of anti-social behaviour the Written Answer by Lord Taylor of Holbeach on and generally fallen into a state of disrepair. A property 23 July (WA 104), what estimate they have made of will have to stand empty for at least two years before the cost of answering the question in full. [HL3506] an empty dwelling management order can be obtained; property owners will have to be given at least three The Parliamentary Under-Secretary of State, Department months’ notice before the order can be issued, and for Environment, Food and Rural Affairs (Lord De there should be community support for the proposed Mauley): There are two Written Answers in the Official order. This more liberal approach is a far more sensible Report to which the Question might be referring. In balance between civil liberties, private property rights both cases, initial estimates of the cost of collecting and state intervention. historic information that had not been collected at the More broadly, this Government have initiated a time showed that it would exceed the disproportionate range of practical policies and incentives to work with cost threshold. local communities to get empty homes back into use, Regarding security costs, such records are not held as outlined in our housing strategy issued in November centrally. To bring the information together for core 2011, a copy of which is in the Library of the House. Defra and its predecessor bodies for the period concerned would be a major exercise and would exceed the disproportionate cost threshold. Tracking the various organisational changes since 2000 and identifying the India necessary records would take considerable time and Question effort. The process would be further complicated because Asked by Baroness Kinnock of Holyhead security costs are often incorporated as elements within other administrative costs such as facilities management. To ask Her Majesty’s Government what is their Regarding the cost and purpose of temporary staff, assessment of the current epidemic of dengue fever in data are held over various account codes including India; and whether they have made representations salary, pensions and expenses and multiple cost centres. to the Government of that country about its response. These data would require substantial analysis to provide [HL3525] the answer to this element of the Question. Therefore the cost of conducting this analysis would exceed the disproportionate cost limit. Baroness Northover: The World Health Organisation in India says that despite the large number of cases of dengue fever in the country, this is a seasonal upsurge Housing rather than an outbreak situation. We are in constant Question dialogue with the Indian Government. Asked by Lord Greaves To ask Her Majesty’s Government, further to Iraq: Chilcot Inquiry the Written Answer by Baroness Hanham on 23 June Question 2010 (WA 190), what conclusions they have reached on the effectiveness of current enforcement powers Asked by Lord Lester of Herne Hill available to local authorities in relation to empty housing, including empty dwelling management orders To ask Her Majesty’s Government when the Chilcot (EDMOs) and other measures, and on the civil inquiry is expected to report; and how much public liberties implications of EDMOs; and what advice expenditure has so far been incurred by the inquiry. they have given to local authorities on the use of [HL3672] EDMOs. [HL3516] The Chancellor of the Duchy of Lancaster (Lord The Parliamentary Under-Secretary of State, Department Strathclyde): I refer the noble Lord to my answer to for Communities and Local Government (Baroness Hanham): the oral question asked by the noble Lord, Lord Local authorities have a range of powers to protect Dykes, on 29 October 2012 (Official Report, col. 407) local amenity and tackle danger or nuisance from for information on the timing of the report. empty properties. The total expenditure incurred by the Iraq inquiry, Notwithstanding, it is the view of Ministers that from its establishment on 15 June 2009 to 31 March the last Administration’s empty dwelling management 2012, is £6.1 million. The inquiry will publish its orders were a disproportionate infringement of civil expenditure for 2012-13 in due course—the inquiry’s liberties. The coalition agreement makes a clear statement practice is to publish its expenditure after the end of that the British state had “become too authoritarian” the financial year. WA 107 Written Answers[LORDS] Written Answers WA 108

Israel and Palestine: West Bank No Questions Applications Granted S133 Ex-Gratia Paid £M Asked by Lord Hylton 2001-02 27 17 10 6.2 To ask Her Majesty’s Government whether they 2002-03 36 25 11 8.2 will make representations to the Government of 2003-04 - 31 23 - 8 6.3 Israel against the transfer of existing residents 2004-05 47 39 8 6.5 of Area C of the West Bank to Areas A and B. 2005-06 27 21 6 8.3 [HL3463] 2006-07 28 23 5 12.3 2007-08 9 7 2 8.2 The Senior Minister of State, Department for Communities 2008-09 7 7 0 12.6 and Local Government & Foreign and Commonwealth 2009-10 1 1 0 11.5 Office (Baroness Warsi): The UK has encouraged the 2010-11 1 0 1 11.3 Israeli Government to comply fully with their obligations 2011-12 3 3 N-A 13.2 under international law with regard to their actions in the Occupied Palestinian Territories, including Area C This information covers awards of Miscarriages of Justice of the West Bank. compensation made under either section 133 of the Criminal This is an issue of concern shared by our European Justice Act 1988 or the ex gratia scheme (abolished by the Home partners. The European Union’s Foreign Affairs Council, Secretary in 2008). These figures do not include compensation in conclusions agreed on 14 May, called on Israel to paid by prosecuting authorities (i.e. the police) for wrongful arrest meet its obligations regarding the living conditions of or unlawful imprisonment. the Palestinian population in Area C, including by The award of compensation for a Miscarriage of Justice does not depend on the applicant having spent time in prison, although halting forced transfer of population. Together with most applicants will have done so. our EU partners, we will continue to make this case to There is no correlation between the numbers of people who have the Israeli Government. been granted eligibility to the two schemes in any one year by the Asked by Lord Hylton Secretary of State and the amount of compensation paid by the Government in that year. The amount of compensation payable is To ask Her Majesty’s Government whether they will decided, by the independent assessor, on the basis of information make representations to the Government of Israel not supplied by the applicant. This process can take some time. to proceed with the eviction of Bedouin communities The table above shows that one applicant was found eligible for in order to complete proposed developments in compensation under the ex gratia scheme in 2010-11, two years Area E1 of the West Bank. [HL3467] after the scheme was abolished. This application had initially been refused, but the decision was reversed following Judicial Baroness Warsi: The UK has encouraged the Israeli Review proceedings. Government to comply fully with their obligations under international law and to ensure that any decision reached on the movement of Bedouin communities Libya should be made with their full consent and not result Question in a forcible transfer. The UK position on Israeli settlements in the Occupied Asked by Lord Empey Palestinian Territories is clear: they are illegal under To ask Her Majesty’s Government on what dates international law and undermine the possibility of a in 2012 they have discussed with the Government of two-state solution to the Israeli-Palestinian conflict Libya the issue of compensation for United Kingdom and those working for a sustainable peace. We look to victims of terrorist attacks committed with weapons the Government of Israel to take all necessary steps to supplied by the Gaddafi regime. [HL3523] prevent settlement construction. We, together with our European partners, will continue to follow the situation in Area C of the West Bank, The Senior Minister of State, Department for Communities including El, closely. and Local Government & Foreign and Commonwealth Office (Baroness Warsi): Individual compensation claims are being pursued on a private basis and the Government Justice: Compensation are not involved in negotiations with the Libyan authorities Question on securing compensation payments. However, the Asked by Lord Wigley Foreign and Commonwealth Office provides facilitation To ask Her Majesty’s Government how many support to a number of such private campaigns. The people have received compensation for wrongful Government have raised Gaddafi’s support of Irish imprisonment over the past 10 years; and how Republican Army (IRA) terrorism with the Libyan much money was paid in total. [HL3436] authorities on numerous occasions, including this year on 16 January, 16 February, 22 February, 6 July, 16 July, The Minister of State, Ministry of Justice (Lord 24 September, 3 October, 4 October, 10 October, and McNally): The table below shows the number of applications 11 October. We also continue to encourage the Libyan for compensation that have been accepted since 2001-02 authorities to engage with representatives of UK victims. and the amount of compensation that has been paid The Libyan authorities are in no doubt of the out in the corresponding period. There is no correlation importance the UK attaches to resolving this and other between the amount paid out in a particular year and outstanding bilateral issues arising from the actions of the number of applications accepted in that year. the Gaddafi regime. WA 109 Written Answers[3 DECEMBER 2012] Written Answers WA 110

Pakistan Baroness Northover: 1,204 cases of acute jaundice Questions syndrome have been reported in the refugee camps in Upper Nile State so far this year as a result of an Asked by Lord Ahmed outbreak of hepatitis E. A total of 31 people died. A smaller outbreak which began in Yida camp, Unity To ask Her Majesty’s Government what is the state, has resulted in 47 recorded cases and two deaths total budget of the Department for International in September. Active community awareness campaigns Development education awareness programme in and hygiene promotion activities are being implemented Pakistan. [HL3632] to help reduce further transmission of the virus. In July 2012, rapid diagnostic test (RDT) results for Baroness Northover: The Transforming Education people with severe acute watery diarrhoea indicated in Pakistan programme has a budget of £20 million the possible presence of the bacterium responsible for for 2012-15, equivalent to just around 3% of our total cholera. However, after further laboratory testing in education budget for Pakistan. Nairobi, cholera infection was discounted. Asked by Lord Ahmed There have been no significant food shortages within the refugee camps. However, new arrivals to the camps To ask Her Majesty’s Government, further to have shown heightened malnutrition rates as a result the Written Answer by Baroness Northover on of food insecurity in Southern Kordofan and Blue 20 November (WA 357), what assessment they have Nile states and the physical stress of walking long made of the connection between the Mir Khalil-ur- distances to cross the border into South Sudan. Rahman Foundation and the Geo/Jang group in Malnutrition rates in the camps have gradually fallen Pakistan. [HL3633] over the period July to October, as these new arrivals have benefited from access to food and nutritional Baroness Northover: An assessment of the Mir Khalil programmes. ur Rahman Foundation (MKRF) and its links with GEO TV/The Jang Group was undertaken prior to awarding an accountable grant. MKRF is an independent Sport: Disabled People not-for-profit organisation with its own bank account, Question independent processes and a separate board of directors. Asked by Lord Moynihan As stipulated in our accountable grant, MKRF is partnering with a wide range of media outlets to To ask Her Majesty’s Government whether, ensure optimal national reach, including Pakistan TV, following the London 2012 Paralympic Games, they Apna TV and Waseb TV. intend to introduce a comprehensive set of initiatives Asked by Lord Ahmed to promote and protect the interests of those with disabilities. [HL3707] To ask Her Majesty’s Government, further to the Written Answer by Baroness Northover on The Parliamentary Under-Secretary of State, Department 20 November (WA 357), how the contract to engage for Work and Pensions (Lord Freud): London 2012 the Mir Khalil-ur-Rahman Foundation was awarded; delivered a hugely successful Paralympic Games. We and whether it was subject to competition. [HL3634] must now ensure that we convert this success into an enduring legacy. The Government are committed to Baroness Northover: The Mir Khalil ur Rahman delivering the full legacy benefits of the Olympic and Foundation (MKRF) was awarded an accountable Paralympic Games. A Cabinet Olympic and Paralympic grant to implement the media campaign of the Legacy Committee, including Lord Coe in his role as Transforming Education in Pakistan programme in legacyambassadorandtheMayorof London,isco-ordinating response to a proposal it submitted. Accountable grants our programme and ensure that it delivers real and are used by DfID to fund project activities with tangible benefits. Delivering a Paralympic legacy that organisations identified as non-commercial or not-for- helps enable all disabled people to fulfil their potential profit organisations. They therefore do not require a and to have opportunities to participate fully in society competitive tendering process. is embedded in this work. This includes broadening All DfID’s programmes are subject to independent access to disabled sport, rolling out the Access for All evaluation and rigorous monitoring to ensure UK programme, using role models to inspire young disabled taxpayers’ money reaches poor people, secures value people to fulfil their potential, and engaging with the for money and delivers real results. media to help change attitudes and behaviours towards disabled people. South Sudan Question Sudan Questions Asked by Lord Alton of Liverpool Asked by Lord Alton of Liverpool To ask Her Majesty’s Government what reports they have received of cases of hepatitis E, jaundice, To ask Her Majesty’s Government how much cholera and malnutrition arising from food shortages they will contribute to the 2012–13 budget of the in the South Sudan refugee camps. [HL3601] United Nations Mission in Darfur. [HL3480] WA 111 Written Answers[LORDS] Written Answers WA 112

The Senior Minister of State, Department for Communities and the vaccination campaign started on 20 November and Local Government & Foreign and Commonwealth 2012. The UK has contributed to the vaccination Office (Baroness Warsi): As set out in Article 17 of the campaign through its support to the Central Emergency United Nations (UN) charter, UN member states are Response Fund. We will continue to monitor the legally obliged to pay their respective share towards situation closely. peacekeeping operations. As a permanent member, the UKexpectstopay,throughUNassessedcosts,approximately Syria $82 million towards the total running cost of the Question United Nations Mission in Darfur (UNAMID) in UN financial year 2012-13. Asked by Baroness Uddin To ask Her Majesty’s Government what steps Asked by Lord Alton of Liverpool they are taking to ensure women who have been raped To ask Her Majesty’s Government, following the in Syria and other zones of conflict have access to use of United Nations Mission in Darfur (UNAMID) all necessary advice, counselling and medical assistance, helicopters to evacuate Sudanese armed forces, whether including termination, if it is their choice. [HL3581] UNAMID will offer medical evacuation services to Baroness Northover: In the past year the UK has all wounded combatants. [HL3481] significantly stepped-up efforts to tackle the problem of violence against women and girls, and we now have Baroness Warsi: As the United Nations Mission in 20 country programmes in place that directly tackle Darfur (UNAMID) spokesperson made clear at the the problem. These interventions will help 10 million time of the evacuation, providing medical assistance women access justice by 2015. For Syrian refugees in forms part of the UNAMID mandate. UNAMID has Jordan, UK funding is providing clinical care and also in the past provided medical evacuation services counselling for 12,000 people who have survived sexual for both the Sudanese army and rebel forces. Provision assault and trauma, including women, men and children. of these services is made on a case by case basis, 1,800 particularly vulnerable Syrian women, perceived decided by UNAMID, and could also be provided for to be at risk of coerced marriage, will also receive wounded civilians and combatants in the future. However, financial support to help mitigate the potential risk of given logistical constraints, it would be unrealistic for this exploitation. the mission to be able to do so for all wounded In addition, the Foreign Secretary’s preventing sexual combatants and civilians. violence initiative aims to replace the culture of impunity Asked by Lord Alton of Liverpool with one of deterrence by increasing the number of perpetrators brought to justice both internationally To ask Her Majesty’s Government, following the and nationally. use of United Nations Mission in Darfur (UNAMID) helicopters to evacuate Sudanese armed forces, whether Thames Tideway Tunnel UNAMID will offer medical evacuation to wounded Question civilians in Darfur. [HL3482] Asked by Lord Berkeley Baroness Warsi: As the United Nations Mission in To ask Her Majesty’s Government how much Darfur (UNAMID) spokesperson made clear at the has been spent each year since 2005 by (1) the time of the evacuation, providing medical assistance Department for the Environment, Food and Rural forms part of the UNAMID mandate. UNAMID has Affairs, (2) OFWAT, and (3) the Consumer Council also in the past provided medical evacuation services for Water, on (a) the Thames Tideway Tunnel, and for both the Sudanese army and rebel forces. Provision (b) alternatives to the Thames Tideway Tunnel. of these services is made on a case by case basis, [HL3475] decided by UNAMID, and could also be provided for The Parliamentary Under-Secretary of State, Department wounded civilians and combatants in the future. However, for Environment, Food and Rural Affairs (Lord De Mauley): given logistical constraints, it would be unrealistic for Thames Water Utilities Ltd is the sewerage undertaker the mission to be able to do so for all wounded in London and responsible for ensuring a solution to combatants and civilians. ongoing sewage discharges into the Thames. It is expected Asked by Lord Alton of Liverpool to make an application to the Planning Inspectorate for a development consent order for the Thames tideway To ask Her Majesty’s Government what information tunnel in early 2013. The environmental statement they have about reports concerning the spread of which forms part of its application will need to outline yellow fever in Darfur; what is their assessment of the main alternatives considered by Thames Water. the risk this poses to human life; and what resources We are unable to provide cost figures split along the are available to combat it. [HL3483] lines requested. Resources have been allocated to working with Thames Water in finding a solution to sewage Baroness Northover: We are deeply concerned about discharges into the Thames rather than split into the outbreak of yellow fever in Darfur. The latest enabling a tunnel solution and into alternatives. report from the World Health Organisation suggests For Defra, the annual staff costs allocated to preventing that 497 people have been infected, with 124 deaths. sewage pollution into the Thames in 2012-13 are estimated Sudan has been allocated 2.4 million vaccines from at approximately £360,000. The costs in 2011-12 were the International Co-ordinating Group on Vaccine similar; in previous years they were significantly less. WA 113 Written Answers[3 DECEMBER 2012] Written Answers WA 114

With regard to other costs since 2005, none were and optimism bias. The Statement also said that the allocated from 2005 to 2009. From 2009 onwards, estimated average maximum annual sewerage bill impact estimated approximate figures are as follows: was £70 to £80 at 2011 prices, and this included an estimate of the cost of finance. 2009-10 Waste Water National Policy Statement - £44,000 Thames Water, as part of normal project development, 2010-11 Waste Water National Policy Statement - £94,000 has since revised the estimated project costs. These 2011-12 Waste Water National Policy Statement - £13,000 latest estimates suggest that the average peak annual Project Financing Advisers - £150,000 bill impact of £70 to £80 in 2011 prices has not Legal Advisers - £200,000 changed from November 2011. This range continues 2012-present: Project Financing Advisers - £239,000 to reflect the impact that financing costs will have on Legal Advisers - £246,000 bills and the difficulty in estimating these for a project Project Insurance Advisers - (figures not yet of this nature and duration. Relatively small changes available) in the cost of capital for the project could have a significant impact on bills. The latest cost estimate produced by Thames Water in August 2012 showed the project cost has For Ofwat, it estimates its costs allocated to preventing slightly increased, but remains between £4.1 billion sewage pollution into the Thames as approximately: and £4.2 billion, again at 2011 prices and excluding financing costs. The makeup of this cost figure including 2005-06 Consultancy costs - £34,000 the contingency element is commercially sensitive as 2006-07 Consultancy costs - £33,000 negotiations on the financial and delivery structure for 2007-08 Consultancy costs - £177,000 the tunnel are still ongoing. 2008-09 Staff costs, expenses and consultancy costs - £148,000 2009-10 Staff costs, expenses and consultancy costs - £152,000 The approach used by Thames Water to develop 2010-11 Staff costs, expenses and consultancy costs - £206,000 these cost estimates has been reviewed by independent 2011-12 Staff costs, expenses and consultancy costs - £731,000 advisers on behalf of Ofwat and confirmed to be in Apr 2012- Staff costs, expenses and consultancy costs - £584,000 accordance with best industry practice. Sep 2012 The current working assumption is that the Thames tideway tunnel will be delivered by an independently regulated infrastructure provider and the capital cost and the cost of finance for this will be competitively Ofwat is unable to provide estimated staff costs and tendered. expenses from 2005-08 as they were not identified Thames Water estimates the operating cost of the separately during that period. tunnel (Lee and Thames Tunnels combined) will vary The Consumer Council for Water is unable to provide with actual rainfall in any particular year. A typical accurate staff and expenses costs related to its involvement design year would mean that the operating costs for in the Thames tideway tunnel discussions; it has not direct staff and power to operate the pump station incurred any consultancy costs relating to the Thames would be £11 million pa (2011 price base). This estimate tideway tunnel. excludes the operating costs of treating the material at The Consumer Council for Water estimates its costs the sewage treatment works, the management, financing allocated to helping water companies ensure the successful and funding of the tunnel and long-term replacement delivery of a sustainable wastewater service with minimal of assets. Every 10 years there would be a major sewer flooding throughout England and Wales as inspection period for the tunnel, and this is estimated approximately: to cost about £20 million. It is not expected to have any significant maintenance or repair capital costs 2010-11 £491,000 during the first 10 years. 2011-12 £438,000 2012-13 £271,500 Asked by Lord Berkeley To ask Her Majesty’s Government what limit to Asked by Lord Berkeley taxpayer liability is established by the Water Industry (Financial Assistance) Act 2012 in respect of the To ask Her Majesty’s Government what are their Thames Tideway Tunnel before, during and after current estimates in respect of the Thames Tideway its construction. [HL3477] Tunnel of (1) its capital cost, (2) the cost of finance, (3) the operation and maintenance costs for the first 10 years of operation, and (4) any additional or contingency costs. [HL3476] Lord De Mauley: The Water Industry (Financial Assistance) Act 2012 does not set any taxpayer liability limit in respect of Government contingent financial support for exceptionally large or complex water or Lord De Mauley: The Written Ministerial Statement sewerage construction or improvement works. With in November 2011 gave a cost estimate for the Thames respect to the Thames tideway tunnel, the Government tideway tunnel of £4.1 billion, based on 2011 prices have stated that they are willing in principle to provide and excluding financing costs. This included a significant such support for exceptional project risks, and are £0.9 billion contingency element for risk allowance working closely with Ofwat and Thames Water Utilities WA 115 Written Answers[LORDS] Written Answers WA 116

Ltd to ensure that the likelihood and impact of these aid to the Government of Uganda has always been risks are minimised and taxpayers’ interests are protected predicated on fundamental commitments and agreed throughout. principles which include poverty reduction, respect for human rights, improved public financial management, Town and Village Greens and promoting good governance. Where we think that Question some of these principles are not being met, we would consider the best way to respond, ensuring there is no Asked by Lord Greaves disproportionate effect on the poorest people. To ask Her Majesty’s Government how many applications there have been for the registration of town and village greens in each year since the World Trade Organisation: Customs coming into force of the Commons Act 2006; and Tariffs how many (1) were successful, (2) failed, and (3) are Question still pending. [HL3456] Asked by Lord Pearson of Rannoch The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord De Mauley): To ask Her Majesty’s Government, further to Section 15 of the Commons Act 2006, under which the Written Answer by Lord Gardiner of Kimble new town or village greens are registered, was brought on 7 November (WA218), whether United Kingdom into force on 6 April 2007 by virtue of the Commons and German bound custom tariff rates are the rates Act 2006 (Commencement No. 2) (Transitional Provisions actually charged. [HL3758] and Savings) (England) Order 2007. The data given below include only applications The Minister of State, Department for Business, made under Section 15(1) and not any applications Innovation and Skills & Foreign and Commonwealth made by the owner of the land under Section 15(8). Office (Lord Green of Hurstpierpoint): Bound tariffs The data are estimates based on actual figures are not necessarily the rate that a WTO member provided by commons registration authorities during applies to other WTO members’ products. Members biennial surveys undertaken by Defra in the years have the flexibility to increase or decrease their tariffs 2007, 2009 and 2011. The data themselves had to be (on a non-discriminatory basis) so long as they do not extrapolated due to the fact that no survey received a raise them above their bound levels. In current usage, 100% return rate. The last survey was conducted in most favoured nation (MFN) tariffs are the maximum September 2011 so full-year data are not available for countries promise to impose on imports from other 2011. In the case of 2007, it is only possible to give full members of the WTO, unless the country is part of a year data, rather than from April when Section 15 was preferential trade agreement. brought into force. The common customs tariff (CCT) applies to the Applications submitted under the predecessor import of goods across the external borders of the EU legislation (Commons Registration Act 1965) have and is common to all EU members including the UK been factored into the data presented below. and Germany, but the rates of duty differ between trade partners depending on whether the EU has a Applications 2007 2008 2009 2010 2011 preferential trade agreement with that country. Hence No. submitted 143 196 194 134 137 in many cases the tariffs actually charged by both the No. successful 18 26 25 38 27 UK and Germany are lower than the bound tariff. No. failed 35 52 79 45 57 No. still pending 90 118 90 51 53 Zimbabwe Question Uganda Asked by Lord Avebury Question Asked by Lord Lester of Herne Hill To ask Her Majesty’s Government what assessment they have made of the report by Partnerships Africa To ask Her Majesty’s Government whether the Canada, Reap What You Sow: Greed and Corruption Anti-Homosexuality Bill introduced in the Ugandan in Zimbabwe’s Marange Diamond Fields; and what Parliament is being taken into account in their role they propose the international community should review of aid granted to Uganda. [HL3675] play in enabling Zimbabwe to recover stolen diamonds. Baroness Northover: Her Majesty’s Government [HL3509] are committed to ensuring that lesbian, gay, bisexual, and transgender people around the world are free to The Senior Minister of State, Department for Communities live their lives in a safe and just environment. We and Local Government & Foreign and Commonwealth are therefore concerned about the proposed Anti- Office (Baroness Warsi): Wewelcome the recommendations Homosexuality Bill being considered by the Ugandan made in the Partnership Africa Canada report, which Parliament. We have raised our concerns regularly at raises important questions and issues around the potential the most senior levels of the Ugandan Government. misuse of diamond revenues in Zimbabwe. The misuse The current decision to freeze aid to the Ugandan of Zimbabwe’s mineral wealth not only deprives the people Government was over concerns about allegations of of Zimbabwe of the benefits that they should receive corruption in the Office of the Prime Minister. However, from their natural resource but is likely to damage the WA 117 Written Answers[3 DECEMBER 2012] Written Answers WA 118 prospects of free and fair elections. The Zimbabwe reliance on unanimity for decision-making make further budget statement released on 15 November reported progress difficult. The UK is therefore focusing its that from estimated diamond exports of US$563 million, efforts on supporting solutions from within Zimbabwe. US$43 million in diamond dividend revenue has been Although it is clear that more needs to be done, we remitted to Zimbabwe’s Treasury this year. welcome the efforts of the Government of Zimbabwe The statements made at this month’s Victoria Falls in developing the Diamond Act, which includes legislation diamond conference in Zimbabwe underscore the lack aimed to regulate the industry more effectively. The of international unity on questions of transparency in UK will continue to work with international organisations, Zimbabwe’s diamond sector. Although the Kimberley such as the World Bank and International Monetary Process (KP) has helped improve internal controls Fund, to achieve transparency of diamond revenue over diamonds and shone a spotlight on production, flows and to do what we can to support the transparency export and revenue data, the KP’s narrow remit and agenda within Zimbabwe and elsewhere.

Monday 3 December 2012

ALPHABETICAL INDEX TO WRITTEN STATEMENTS

Col. No. Col. No. Cybercrime ...... 41 EU: Single Market...... 49 ECOFIN ...... 48 Employee Ownership...... 49 Taxation: Avoidance ...... 49

Monday 3 December 2012

ALPHABETICAL INDEX TO WRITTEN ANSWERS

Col. No. Col. No. Bees ...... 97 Israel and Palestine: West Bank ...... 107

Benefits...... 99 Justice: Compensation ...... 107

Burma...... 100 Libya ...... 108

Climate Change ...... 100 Pakistan...... 109

Columbia...... 101 South Sudan ...... 109

Employment ...... 101 Sport: Disabled People...... 110

EU: Turkey ...... 102 Sudan...... 110 Gaza ...... 102 Syria ...... 112 Gibraltar...... 104 Thames Tideway Tunnel ...... 112 Government Departments: Records and Security...... 105 Town and Village Greens ...... 115

Housing ...... 105 Uganda...... 115

India ...... 106 World Trade Organisation: Customs Tariffs...... 116

Iraq: Chilcot Inquiry...... 106 Zimbabwe ...... 116 NUMERICAL INDEX TO WRITTEN ANSWERS

Col. No. Col. No. [HL3436] ...... 107 [HL3482] ...... 111

[HL3456] ...... 115 [HL3483] ...... 111

[HL3463] ...... 107 [HL3490] ...... 102

[HL3467] ...... 107 [HL3501] ...... 102

[HL3474] ...... 104 [HL3502] ...... 103

[HL3475] ...... 112 [HL3504] ...... 99

[HL3476] ...... 113 [HL3505] ...... 99

[HL3477] ...... 114 [HL3506] ...... 105

[HL3480] ...... 110 [HL3509] ...... 116

[HL3481] ...... 111 [HL3516] ...... 105 Col. No. Col. No. [HL3523] ...... 108 [HL3634] ...... 109

[HL3525] ...... 106 [HL3636] ...... 97

[HL3541] ...... 101 [HL3643] ...... 97

[HL3575] ...... 100 [HL3644] ...... 98 [HL3645] ...... 98 [HL3576] ...... 100 [HL3646] ...... 98 [HL3581] ...... 112 [HL3672] ...... 106 [HL3594] ...... 103 [HL3675] ...... 115 [HL3595] ...... 103 [HL3706] ...... 100 [HL3601] ...... 109 [HL3707] ...... 110

[HL3632] ...... 109 [HL3729] ...... 101

[HL3633] ...... 109 [HL3758] ...... 116 Volume 741 Monday No. 77 3 December 2012

CONTENTS

Monday 3 December 2012 Questions Iran...... 431 European Council: December Meeting ...... 434 British Transport Police ...... 435 Immigration: Home Office Meetings...... 437 Medical Innovation Bill [HL]...... 440 Mental Health (Discrimination) (No. 2) Bill Prisons (Property) Bill Marine Navigation (No. 2) Bill Presumption of Death Bill Mobile Homes Bill First Readings...... 441 Six Statutory Instruments Motions to Approve...... 441 Canterbury City Council Bill...... 442 Leeds City Council Bill Nottingham City Council Bill Reading Borough Council Bill Third Readings ...... 454 Draft Cumbria (Electoral Changes) Order 2012 Motion of Regret...... 455 Civil Legal Aid (Merits Criteria) Regulations 2012 ...... 464 Legal Aid, Sentencing and Punishment of Offenders Act 2012 (Amendment of Schedule 1) Order 2012 Motions to Approve...... 489 Palestine: United Nations General Assembly Resolution Question for Short Debate ...... 494 Legal Profession: Regulation Question for Short Debate ...... 513 Grand Committee Enterprise and Regulatory Reform Bill Committee (1st Day) ...... GC 125 Written Statements...... WS 41 Written Answers...... WA 9 7