Vol. 756 Wednesday No. 39 15 October 2014

PARLIAMENTARY DEBATES (HANSARD) HOUSE OF LORDS OFFICIAL REPORT

ORDER OF BUSINESS

Introduction: Lord Farmer...... 189 Questions Health: Ebola ...... 189 Schools: Class Sizes ...... 191 ISIS ...... 194 Palestine: Recognition ...... 196 Wales Bill Committee (2nd Day)...... 198 Energy: Onshore Wind Farming Question for Short Debate...... 252 Wales Bill Committee (2nd Day) (Continued) ...... 268

Grand Committee Consumer Rights Bill Committee (2nd Day) ...... GC 99

Written Statements...... WS 33 Written Answers ...... WA 41

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The first time a Member speaks to a new piece of parliamentary business, the following abbreviations are used to show their party affiliation: Abbreviation Party/Group CB Cross Bench Con Conservative Con Ind Conservative Independent DUP Democratic Unionist Party GP Green Party Ind Lab Independent Labour Ind LD Independent Liberal Democrat Ind SD Independent Social Democrat Lab Labour Lab Ind Labour Independent LD Liberal Democrat LD Ind Liberal Democrat Independent Non-afl Non-affiliated PC Plaid Cymru UKIP UK Independence Party UUP Ulster Unionist Party

No party affiliation is given for Members serving the House in a formal capacity, the Lords spiritual, Members on leave of absence or Members who are otherwise disqualified from sitting in the House. © Parliamentary Copyright House of Lords 2014, this publication may be reproduced under the terms of the Open Parliament licence, which is published at www.parliament.uk/site-information/copyright/. 189 Introduction: Lord Farmer[15 OCTOBER 2014] Health: Ebola 190

a lot more needs to be done internationally and the House of Lords UN is absolutely right about the need for unprecedented global action. The noble Lord is right about that. Wednesday, 15 October 2014.

3pm Lord Alton of Liverpool (CB): My Lords, has the Minister seen the comments of the director-general of Prayers—read by the Lord Bishop of Truro. the World Health Organisation, Dr Margaret Chan? She said that this is, “unquestionably the most severe acute public health emergency in Introduction: Lord Farmer modern times…Ihaveneverseen a health event threaten the very survival of societies and governments…Ihaveneverseen an 3.06 pm infectious disease contribute so strongly to potential state failure”, and that, Michael Stahel Farmer, Esquire, having been created Baron Farmer, of Bishopsgate in the City of London, “the whole world is put at risk”. was introduced and took the oath, supported by Baroness Will the Minister detail to the House the ways in O’Cathain and Lord Leigh of Hurley, and signed an which this country, admirable though our efforts in undertaking to abide by the Code of Conduct. Sierra Leone are with the provision of 700 beds, is bringing together the international community to fight a disease that is already predicted to take the lives of 1 Health: Ebola million people in west Africa? Question Baroness Northover: The noble Lord is right, and so 3.13 pm is Margaret Chan. The noble Lord will no doubt be Asked by Lord Giddens reassured to know that the Foreign Secretary is chairing To ask Her Majesty’s Government what is their a COBRA meeting on EU co-operation this assessment of the progress of international efforts afternoon—in fact, as we speak. It is extremely important to contain the spread of the Ebola virus. to get that international engagement. The Prime Minister will chair another meeting of COBRA tomorrow at 3 pm. We have sought to galvanise international reaction Baroness Northover (LD): My Lords, the UK is to this. As the noble Lord said, it is absolutely critical playing a leading role in response to the Ebola outbreak thatwedoso. in west Africa, having already committed £125 million to it. We are also mobilising our Armed Forces in the effort to defeat the disease, but the scale of the outbreak Viscount Ridley (Con): My Lords, will the Minister is unprecedented, and more needs to be done. We are congratulate those who are volunteering to go and very actively encouraging other countries to join the work on this problem in west Africa for their courage, international response. skill and generosity? Does she also agree that this will be defeated by on-the-ground, low-tech action but Lord Giddens (Lab): I thank the Minister for that that, if it does not happen that way, we have a really response. I put down this Starred Question a month serious problem because it will be a long time before ago. Since that time, the situation with Ebola in west vaccination and cure can help? Africa has deteriorated markedly to become a tragedy of horrible proportions whose tipping point could Baroness Northover: I am more than ready to endorse become a catastrophe. That catastrophe could have that view. It is astonishing to see the number of volunteers global implications far beyond those we have seen so who have decided that they wish to go out to this far. As Anthony Banbury, the head of the UN Mission extremely challenged region. We are humbled before for Ebola, said yesterday, major changes and major that effort. My noble friend is right that we have to transformational policy on a global level are necessary tackle this as a public health crisis but it is also by 1 December, encouraging to see the amount of effort now going “or we face an entirely unprecedented situation”. into developing potential treatments and vaccines. It How is it possible to make these changes in such a may come to nothing but I am extremely pleased that short period of time? There are only six weeks in the United Kingdom is again leading in terms of the which we have to get a radical uplift in global policy. trials of the vaccine at the Jenner Institute in Oxford. If that works out, those vaccines should be available Baroness Northover: The noble Lord is absolutely by the end of the year. right; he was absolutely right to put down this Question. The situation has indeed got a lot worse since he did Baroness Kinnock of Holyhead (Lab): My Lords, so. If this does not make the case for aid in terms of does the Minister agree with President Kim of the our own self-interest, as well as a moral case, I do not World Bank that the world community has “failed know what does. The epidemic is moving rapidly miserably” in its response to ebola? Dr Chan, head of ahead of us in west Africa, as he points out, and he the WHO, who was mentioned earlier, drew attention talks about a tipping point. The United Kingdom is to the appalling neglect of the pharmaceutical companies, leading a major effort to tackle the disease in Sierra saying that, after 40 years of ebola, there are still no Leone; the United States is doing that in Liberia and vaccines or medicines. She said: Guinea, and France is doing that in Guinea. However, “The rich get the best care. The poor are left to die”. 191 Health: Ebola[LORDS] Schools: Class Sizes 192

Baroness Northover: We can see how we are all The Parliamentary Under-Secretary of State for Schools interlinked—something that happens in one part of (Lord Nash) (Con): My Lords, we are making every the world may very well affect another. It is encouraging effort and are investing heavily to address the unprecedented to see that the pharmaceutical industry is now picking increase in pupil numbers. The average class size remains up speed. However, the noble Baroness is quite right: below the statutory limit, despite a massive population that has not been its history. increase. We are investing £5 billion of capital funding, which has already enabled local authorities to create Lord Steel of Aikwood (LD): Will my noble friend 260,000 additional pupil places between May 2010 and be kind enough to have a word with the Home Secretary May 2013. This includes 212,000 primary places. There because there is a problem that doctors from west are 300,000 more places in the pipeline for September Africa working in this country who go to help in this 2015. crisis might run foul of the visa restrictions? It is very important that that sort of bureaucracy does not get Baroness McIntosh of Hudnall (Lab): My Lords, I in the way of sending the most valuable doctors—those thank the Minister for that reply which, although who know the area and can speak the languages. welcome, strikes me as just a tiny bit complacent when we see that the figures for primary school children Baroness Northover: I am very happy to reassure being taught in classes of more than 30 have gone up my noble friend that the Home Secretary is looking at more than 200% between 2010 and 2014. Does he this at the moment. Tier 2 skilled workers can indeed agree that most educationalists and teachers consider return to their home country for short periods to that, generally speaking, children do better in small provide support and can take their annual leave to classes? Indeed, that is what people who can afford to volunteer. However, the Home Secretary is looking at pay for their education are generally looking for. Will this. he say what he and the Government regard as the optimum primary school class size and on what evidence Baroness Hayman (CB): My Lords, alongside the he bases his view? need for developing vaccines and cures for the diseases of the poor that the noble Baroness, Lady Kinnock, Lord Nash: I would be interested in the noble described, is there not also a tremendous need to Baroness’s definition of complacency because, despite develop public health and basic health systems in the the massive population increase, the previous Government developing world in the future? On the Ebola crisis, cut the number of primary school places by 200,000 does the Minister agree that, alongside our assistance and the money by 26%. We have more than doubled on medical treatment services, it is very important that the amount of money invested in class sizes. The we also help on the prevention side by stopping relevant figures are that the class size in key stage 1 is transmission, getting good public information and 27.4 this year as opposed to 27.3 last year, a tiny sensitising communities? In that respect, will she endorse increase. The pupil-teacher ratio is 21 in primary the work of the British NGO Restless Development—I schools. Of course we would all like smaller class sizes, declare a family interest—which has already sent although the OECD and the EEF toolkit tell us that a 200 young Sierra Leonean volunteers to work in their reduction in class size gives a very poor return on own communities? investment and that increasing teacher quality and training is much better. It is true that some private Baroness Northover: The noble Baroness is quite schools have very low class sizes, but generally they are right about the importance of public health in not as low as people think. strengthening health systems and changing various cultural practices. I again pay tribute to those who are working there at the moment. Lord Storey (LD): My Lords, my noble friend the Minister will be aware that the UK has bigger class Lord Collins of Highbury (Lab): Universal health sizes than most of its overseas competitors. He is also coverage is an essential element. Will the Minister right to point out that the £5 billion being spent to explain why the Government oppose that at the UN in reduce class sizes is more than the previous Government terms of post-2015 objectives? were able to provide. However, those resources take a long time to work through. Does he think that where class sizes exceed the so-called legal limit schools Baroness Northover: The United Kingdom supports should be allowed to put extra resources in, or perhaps the development of health systems in developing countries, be given extra resources in terms of an extra teacher or and health is part of the approach to the new MDGs. a classroom assistant, or perhaps be able use the pupil premium in such cases? Schools: Class Sizes Question Lord Nash: In fact, the OECD tells us that our secondary class sizes are quite a bit below the average 3.21 pm international size although our primaries are somewhat higher. However, we have no evidence for the high Asked by Baroness McIntosh of Hudnall numbers in class sizes that some people refer to—I saw To ask Her Majesty’s Government what action 70 in the paper the other day which is clearly misreporting. they are taking to reduce class sizes, particularly in The statistics I have given give us great comfort that primary schools. we have the right amount of investment in the sector. 193 Schools: Class Sizes[15 OCTOBER 2014] ISIS 194

Lord Lexden (Con): How does this Government’s ISIS record in building new schools compare with that of Question their predecessor? 3.29 pm Lord Nash: We are spending £18 billion on school buildings in this Parliament, which is more than the Asked by Baroness Falkner of Margravine previous Government spent in their first two terms combined. We are building or improving the condition To ask Her Majesty’s Government what is their of 900 schools—double the previous Government’s strategy for confronting ISIS. performance in 13 years. The Minister of State, Foreign and Commonwealth Baroness Massey of Darwen (Lab): Does the Minister Office (Baroness Anelay of St Johns) (Con): My Lords, agree that an absolute priority, as my noble friend we aim to degrade and defeat ISIL and reduce the said, should be reducing class sizes where possible and threat to the United Kingdom and our interests. At not spending money on new free schools set up in home, the focus is on preventing attacks and countering areas where excess places exist already? ISIL’s ideology; abroad, we work with coalition partners to support moderate forces fighting ISIL and tackle Lord Nash: I cannot agree that an absolute priority ISIL’s access to funds and fighters. We are pressing for should be reducing class sizes because I have already political reform in Iraq and for a political transition in said that all the evidence is that that was a very poor Syria to isolate ISIL politically; and we provide return on investment. In fact, Andreas Schleicher tells humanitarian aid to those most affected. us that there is no relation between class sizes and performance. I entirely agree that we should not be Baroness Falkner of Margravine (LD): My noble putting up schools in areas where there is no need and friend has mentioned co-operation with partners, so I can assure the noble Baroness that since I became a she will undoubtedly be aware that the United States is Minister, just over two years ago, virtually all the free moving to a strategy—if you can call it that—of using schools we have approved have been in places of need. more drones in armed warfare in Syria. Given the experience that it has had with Pakistan, Yemen and Lord Tebbit (Con): My Lords, can my noble friend several other countries, where more than 60,000 civilians tell me why it is that when I was at primary school a have accidentally been killed as collateral damage, can teacher could teach a class of 48 or 50 pupils to read she tell the House whether the United Kingdom is adequately and in fact rather better than is done in contemplating such a move? Can she also tell the classes of 30 these days? What has changed—the House whether the Government have had any teachers or the children? conversations with the United States about the pursuance of that strategy? Lord Nash: I suspect, sadly, the children. Certainly in primary schools in the early days I know that Baroness Anelay of St Johns: My Lords, I hope that teachers have to spend a great deal of time getting my noble friend will understand that I would not be in pupils as they come into primary schools ready to a position, and nor would the House expect me to be, learn. to comment on United States military operations. However, I understand my noble friend’s concern about Baroness Jones of Whitchurch (Lab): My Lords, drones and their use; Members of the House have does the noble Lord not accept that all the evidence expressed that concern in relation to other matters shows that smaller class sizes make a difference for previously. I can say that our military efforts are younger children—for infants in particular—and actually intended to help defeat ISIL on the battlefield. We are that is one of the key markers of going on to have going to use our military capabilities in Iraq to achieve educational achievement. Does the noble Lord not that objective while working to support political reform recognise that the Government have now been missing in Baghdad to ensure inclusive governance; while in their target for recruiting new teacher trainers for the Syria we are engaged in training and providing non-lethal last three sessions and that we are heading for the equipment. perfect storm where we do not have enough teachers and classes are getting bigger? That is inevitably going to damage children’s education. Lord Dannatt (CB): My Lords, having clarified that the objective of Her Majesty’s Government is to defeat Lord Nash: I am not rushing to take lessons from ISIL on the battlefield, can the Minister confirm that the party opposite on pupil place planning. The ONS they are ruling options neither in nor out, and that all data which came out at the beginning of the last options remain on the table for future engagement if decade made it clear that there was a pupil place crisis required? looming and it was not until 2008 that the previous Government even managed to produce predictions for Baroness Anelay of St Johns: My Lords, when we the size of the school population. As I say, they actually had the recall of Parliament, the Leader of this House cut the number of primary school places by 200,000 and my right honourable friend the Prime Minister and slashed the funding by 26%. We are the first made it clear that the security of this country is our Government for a long time actually to increase the first objective; that we had come to Parliament to seek amount of money available and we have also invested agreement that we should engage in airstrikes in Iraq; in new free schools in places where they are needed. and that if there were premeditated action which we 195 ISIS[LORDS] Palestine: Recognition 196

[BARONESS ANELAY OF ST JOHNS] region and through its support to the Syrian moderate needed to take elsewhere because of extreme danger to opposition. We welcome Turkey’s support for the air our humanitarian provision, we would return to seek strikes in Syria and Iraq and the President’s affirmation the approval of Parliament. that Turkey is willing to play its part in the military campaign. We are now continuing to discuss with Lord Sugar (Lab): My Lords, does the Minister them what form that contribution might take. agree with me that cutting off finance to these people will result in them being less of a danger? Would she Baroness Morgan of Ely (Lab): The Government care to go on the record in the House and disclose who have already spent around £25 billion training the the financiers of these evil people are? What have the Iraqi army. Many would question whether that money Government—or the American Government—done was well spent. Can the Government explain what to discourage those who are financing these people? further steps can be taken to develop the resilience of the Iraqi army and what the Iraqi army can do to Baroness Anelay of St Johns: My Lords, ISIL finance command support from the different communities comes from a variety of sources, as the noble Lord will within Iraq? be aware. There are allegations of funding from overseas countries. I do not have proof of that so I am not able Baroness Anelay of St Johns: The noble Baroness to reveal it to the House, because it would not be draws attention to an important fact—that in the early factual. What is a fact, of course, is that ISIL has been days of ISIL’s advance, the Iraqi security forces were engaged in taking oil production facilities and selling not able to withstand it. The noble Baroness is alluding that oil illegally on the black market, and wherever it to the fact that it was felt that the security forces did has rampaged with its evil regime it has seized banks not have the support of local communities, and they and Iraqi security forces materiel. It has significant then fell back. We are engaged—the Foreign Secretary amounts of money. has made it clear on his visit to Iraq this week—in providing support to the Iraqi security forces in the Lord Elystan-Morgan (CB): My Lords, does the form of training and guidance. I know that they value Minister recollect that, some time ago, Her Majesty’s the surveillance help that we give them; we can give Government gave blanket recognition to all the military them the confidence, and then the people whom they forces that were fighting President Assad in Syria? are trying to protect will have confidence in them. Although ISIS was not specifically mentioned, does it not seem clear that there were kindred military forces, which now form part of ISIS, that were operating at Palestine: Recognition the time? What have we done, if anything, to derecognise Question those forces? 3.37 pm Baroness Anelay of St Johns: My Lords, there is Asked by Baroness Warsi continuous evaluation of the variety of forces to which the noble Lord refers: how they operate and what they To ask Her Majesty’s Government what is their call themselves. The difficulty is that as soon as one position on the recognition of Palestine as a state. lists one, it changes its name and becomes something else. Noble Lords will have watched very carefully over The Minister of State, Foreign and Commonwealth the summer and seen that what can apparently be ISIL Office (Baroness Anelay of St Johns) (Con): My Lords, or ISIS, and the different ways of referring to that, can the UK is committed to seeing an independent Palestinian suddenly form a breakaway group. We therefore have state. We will recognise a Palestinian state at a time of to refer to all of these groups that are trying to create our choosing, when we think it can best bring about havoc as ISIL. peace. A negotiated end to the occupation is the best way to meet Palestinian aspirations on the ground. Baroness Nicholson of Winterbourne (LD): I welcome the Foreign Secretary’s recent visit to Baghdad, but Baroness Warsi (Con): I thank my noble friend for can the Minister disclose Her Majesty’s Government’s that Answer and I congratulate her on her new job. strategy towards the greater involvement of Turkey, Could the Minister detail the specific conditions or which is, after all, fundamental to the security architecture criteria that would need to be met for this Government of the region, of Europe and of the wider NATO to recognise the state of Palestine? What is the circuit? What is happening in our relationship with Government’s response to the overwhelming vote for Turkey? We are primus inter pares in our pressure for recognition that we saw in the House of Commons on Turkey to enter the European Union; surely we have a Monday? unique position. Baroness Anelay of St Johns: My Lords, first, it Baroness Anelay of St Johns: My noble friend is would look churlish of me to thank my noble friend right to draw attention to the important role played by for wishing me well, but we both know what we mean. Turkey. It is clearly ISIL’s ambition to grab enough I am delighted that she remains a colleague in this land so that it has an enormously long boundary with House and a good friend. Turkey. As an important player in the European and My noble friend referred to the debate on Monday east European field, Turkey has a vital role to play. It which caught the attention not only of this country does that. It plays its role in the coalition effort, but of the countries in the Middle East. The vote particularly through its humanitarian support in the showed that Parliament considers the resolution of 197 Palestine: Recognition[15 OCTOBER 2014] Wales Bill 198 the Israeli-Palestinian conflict urgent. We agree with Baroness Anelay of St Johns: My Lords, the noble that. The issue is and will remain a foreign policy Baroness makes an interesting point, but it would priority for the UK, but, as I said, we need to judge depend on the way in which the future state were when it is right to take that decision. What we need to created, so I think that there is more complexity to the do is to find a negotiated end to the occupation. That issue than she raised. is the most effective way of proceeding. My noble friend asked about criteria. Clearly, you judge criteria Lord Grocott: My Lords, several noble Lords have on a fluid system. You watch, you wait and you referred to the— encourage the Middle East process to continue—and one does not give up. Baroness Eaton (Con): My Lords—

Baroness Ramsay of Cartvale (Lab): Does the Minister The Lord Privy Seal (Baroness Stowell of Beeston) agree with me that a premature and unilateral declaration (Con): My Lords, I am sorry to interrupt from the of recognition would not only not aid the peace process Dispatch Box again. If noble Lords are very brief, we in the Middle East towards a two-state solution but can hear from the noble Lord on the Labour Benches would in fact appear to be rewarding Hamas, which is and then from my noble friend. a terrorist organisation that calls for the destruction of Israel and rains thousands of rockets down on her Lord Grocott: My Lords, various references to the civilian population? problem of recognising a Palestinian state indicated that it would somehow inhibit the peace process. I ask: what peace process? What achievements can be chalked Baroness Anelay of St Johns: My Lords, I entirely up to this alleged peace process? All we have seen from agree with the noble Baroness. the process over the past 50 years is a continued diminution of the prospect of a Palestinian state because Lord Alderdice (LD): Do Her Majesty’s Government of the constant settlement activity in violation of all understand that many people not just in the region but international law which the Israeli Government seem in this country and, increasingly, in Israel itself believe to be able to pursue with impunity. that the only way to save a two-state solution, if it is not already too late, is to recognise a Palestinian state Baroness Anelay of St Johns: My Lords, the immediately, and that without that Her Majesty’s developments with regard to settlements clearly have Government unintentionally may be contributing to lost Israel many of its friends and it has a duty to the intractability of the problem rather than its resolution rebuild trust by looking again at its policy on settlements. by giving a veto to one side through their policy on However, I do not agree with the noble Lord that we recognition? should give up hope on the Middle East peace process. As I said in answer to another noble Lord, the two Baroness Anelay of St Johns: My Lords, I understand main actors in this process wish to be engaged in it and my noble friend’s strength of feeling. I also understand will be engaged in it—and we will encourage them to that there is a lot of public concern and, indeed, more do that. than interest—rather, engagement—in all of this. However, one has to say that the Middle East process itself has Baroness Eaton: Given the fact that Arab citizens, not failed; it proceeds. Prime Minister Netanyahu and together with members of all religions, are free to live President Abbas continue to say that they are committed in the state of Israel, does the Minister agree that the to a two-state solution. That is the way forward, same must be the case in a Palestinian state in which whereas this country recognising Palestine now would all members of society, no matter what their race or not achieve anything. It would not remove the occupation religion, should be afforded absolutely equal rights in or give everyone the opportunity to do what we need order to practise their respective faiths without any to do now, which is to focus on the people of Gaza fear of persecution? and the rebuilding of it. Baroness Anelay of St Johns: My Lords, one of the Lord Grocott (Lab): My Lords— six priorities of the FCO is to have freedom of religion or belief, so I can say to my noble friend: yes. Baroness Deech (CB): My Lords— Wales Bill Lord Hylton (CB): My Lords— Committee (2nd Day) Relevant documents: 6th and 8th Reports from the Noble Lords: Cross-Bench! Delegated Powers Committee

Baroness Deech: My Lords, does the Minister 3.45 pm acknowledge that if a state of Palestine were to be recognised, the Palestinian residents within it would Amendment 19 cease to be refugees, that those Palestinians living in other countries would have a right of return and Moved by Lord Roberts of Llandudno would also cease to be refugees, and that there would 19: After Clause 5, insert the following new Clause— be no more call for UNRWA and the refugee problem “Part 1A would be ended? Voter registration 199 Wales Bill[LORDS] Wales Bill 200

[LORD ROBERTS OF LLANDUDNO] there will be many thousands of them who will not be Power of Secretary of State to make regulations for data on those registers. That means that their voices will sharing not be heard. That is why Amendments 19 and 20 are (1) The Secretary of State shall by regulations impose a duty so important. on government bodies requiring those bodies to provide specified information to registration officers in Wales for the purposes of The Electoral Commission found that only 44% of electoral registration. young people voted in the 2010 election, and only just (2) Regulations under subsection (1) must include as government over 50% were registered. That percentage of bodies the Driver and Vehicle Licensing Agency, the Department registration—just over half—shows that the present for Work and Pensions, HM Passport Office and the National registration system is not working and cannot be Health Service. defended. With an election on the horizon in a matter (3) Regulations made under subsection (1) shall include the of months, surely we should move speedily to ensure provision of data collected by specified government bodies by that as many youngsters as possible are able to vote virtue of specified applications, which must include applications for new or renewed driving licences, Disability Living Allowance, when that election comes. A maximum registration Jobseeker’s Allowance, Employment and Support Allowance, grant has been offered to some local authorities by the new or renewed passports, and to register with a GP (as applicable Cabinet Office. There are 22 local authorities in Wales, to the specified government body). but I have heard of only one—Ceredigion—that has (4) Registration officers shall use the specified information dealt with this particular grant and the amount was received in relation to a person— only £1,700. We must find out how it is possible to (a) if the specified information received contains all of the maximise the number of people on the register. information required, to register that person on the appropriate electoral register or registers; or I am proud to be honorary president of the Bite the Ballot organisation. It is travelling throughout the (b) if the specified information does not contain all of the information required, to make further enquiries of that country, trying to register as many young people as it person to receive the information required to register can. In February of this year, it registered more than that person on the appropriate electoral register or 35,000 young people in a matter of days. When they registers. reach the age of 18, they will take their places (5) For the avoidance of doubt, nothing in this section shall automatically on the register. We understand that in give any government body the power to share any information the Scottish referendum more than 100,000 young about a person without that person’s consent. people between the ages of 16 and 20 registered. Bite (6) In this section— the Ballot’s efforts cost, I am told, 25p per registration. “electoral register or registers” means the registers in section 9 The Electoral Commission’s charge is £25, not 25p, of the Representation of the People Act 1983; per registration. New ways have been found and trodden, “specified applications” means any applications made by a and now we must adopt them ourselves. person potentially eligible to be registered to vote as are specified in regulations made under section 1(1); and The United States enacted its national voter registration “specified government bodies” means any government bodies legislation in 1993—the “motor voter”initiative. Whenever specified in regulations made under section (1)(1).” a person, young or old, signed up for, say, a passport, a driving licence, national insurance or work and pensions, there would be on the form another box asking whether Lord Roberts of Llandudno (LD): My Lords, I will they wished to be included on the voter register. All also speak to Amendments 20 and 61. they had to do was put a tick in that box. It was the I begin by recalling some friends, who moved to live simplest thing possible to get them on the register and near Llanuwchllyn in Merionethshire, as it was. At the enable them to vote. We can do it. It can be done. bottom of a farm field was a swiftly running stream. When people sign to donate, say, a kidney, they could Glen, the wife, had six children. People said, “You place a tick on the forms. It is the easiest thing possible must fence off the stream to safeguard your children”. and would be without any great cost. People tell me She said, “No, I will not fence it, I will teach them to that it will cost a lot of money, but how much do swim; by teaching them to swim, they will be able to door-to-door canvassers cost? I suggest that we could survive whatever the circumstances”. So it is, I think, even make a profit from this new method of signing with young people today. We cannot safeguard them up people on the register. In the new Northern Ireland in every possible way, although we would like to. We schools initiative, 50% of young people signed up. would like to save them from every harm, but they If we value the vote, it is our obligation to ensure must go out into a world that is full of threats and that the utmost effort is made to make it possible for dangers. In this world they must survive—they must people to register. Schools and colleges could be visited swim in the tide of destruction and total despair. They and, with a person’s consent, the electoral registration need to feel part of society and committed to its officer could be provided with details of pupils to well-being. enable them to vote at 18. This would be a step in the Although it is not in this Bill, there was a suggestion right direction to enable a person’s voice to be heard as on the previous day of this debate that we should an elector. As I said earlier, they would be learning to think of reducing the voting age from 18 to 16. There swim and tackle the difficulties that they will face, was widespread agreement in the Committee that by especially in this world which, as we heard in Question reducing the age to 16, young people could become Time today, is causing so much heartache. We can help more a part of their communities and committed to our young people to face those problems. There is no the well-being of these communities. However, if they complication. The Chief Electoral Officer for Northern are to vote, they must first be registered to vote. Ireland says that thousands and thousands of youngsters Without the most accessible of methods being used, were able to be signed up without any problem. 201 Wales Bill[15 OCTOBER 2014] Wales Bill 202

A week or two ago, the National Assembly of vote even more daunting. We need to do more to turn our young Wales supported such initiatives and the four party people into habitual voters. Improving citizenship education and leaders—Carwyn Jones, the First Minister; Andrew getting them registered will be crucial”. RT Davies, who leads the Conservatives; Leanne Wood, Welsh EROs will be required by this amendment to leader of Plaid Cymru; and Kirsty Williams, the Liberal take active steps to increase the number of people Democrat leader—signed up to them. They were united registered from underrepresented groups, including in their support, as was the Presiding Officer. The the specific step of organising at least one voter Assembly overwhelmingly voted in favour of this engagement session per year, per school or further measure being introduced in this Wales Bill. What education college in their area of responsibility. If right have we, as a Parliament in Westminster, to action is taken as set out in Amendments 19 and 20, it refuse the request of the Assembly in Wales? It is would mean that young people, people with disabilities happy with this new registration initiative and asks for and ethnic minority groups—those who have been our support. I suggest that it would be very churlish consistently underrepresented in Wales’s democratic and unwise indeed, at a time when devolution is so processes and are least likely to be present on the much in the headlines, to say, “No, Westminster will electoral register—could take an active part in democratic not allow what Wales wants”. It therefore gives me the life. They could be registered to vote and, through greatest pleasure to propose these amendments. I beg voter engagement sessions, encouraged to use their to move. vote. I suggest that there is no time to lose in making Baroness Gale (Lab): My Lords, I support Wales’s voter registration processes as easy and Amendments 19 and 20. It is a great pleasure to follow straightforward as possible. Having just moved to a the noble Lord, Lord Roberts of Llandudno. As he system of online, individual electoral registration, it is said, in 2010, only 56% of 17 to 24 year-olds were even more important. Sixteen year-olds, depending on registered to vote, and only 44% of them voted at the when their birthday is, can be registered to vote, and if general election. In Wales in 2011, 35% of young we move to giving 16 year-olds the vote, it would mean people voted in the Assembly elections, an even lower that 14 year-olds would, depending on when their number than at the general election. So the current birthday is, be on the register. We are talking about low levels of voter registration in Wales, especially individual registration, so a lot of education will be among younger voters, combined with the lower turnout needed. in Welsh elections indicate that, with the general election As the noble Lord, Lord Roberts, said, the four in seven months’ time and the Assembly elections in Welsh party leaders signed a letter to the Prime Minister, 2016, this is the right time to be taking the actions set the Deputy Prime Minister, the Secretary of State for out in Amendments 19 and 20, which explore ways of Wales and the Welsh Office Ministers, expressing support developing a system in which government bodies provide for Amendments 19 and 20. In addition, the Presiding information directly to the EROs. The aim is to empower Officer of the Assembly, Dame Rosemary Butler, wishes citizens to register to vote when filling in, for example, to offer her full support for this approach. She recently applications for a new or renewed driving licence. announced her intention to start a national conversation People can apply for a provisional driving licence from with young people about voting rights, including votes the age of 15 years and nine months. Other methods at 16 and the voter registration process, before the end could be through passports and benefits, or when of this year. That is a strong endorsement. registering with a GP. The noble Lord, Lord Roberts, mentioned the American “motor voter” Act, which seems to have 4pm been very successful in 1993. He also mentioned the The four parties in Wales believe that this is the initiative taken in Northern Ireland, which has been right way in which to encourage people to register—so very successful in improving the rate of registration there is an all-party agreement in Wales. The four among young people. Virtually all the young people party leaders have signed this. It may have happened who remain at school or college to complete A-levels before, but it is not often you get the four party leaders or the equivalent are added to the register and this in Wales agreeing to such a great step forward. It was represents approximately 50% of the total eligible also the wish of elected Members of the Welsh Assembly population in that age group. The schools initiative is when they debated this matter on 24 September. If we the most productive aspect of the Chief Electoral could go ahead with this, we would go a long way to Officer’s community engagement programme, with 99% improve democracy in Wales. I ask the Minister to of targeted schools visited, and 11,000 16 to 17 year-olds. have talks with the Secretary of State for Wales, the Having just moved to a system of online, individual Deputy Prime Minister and the Minister for the electoral registration, which, according to the Cabinet Constitution so that, when we reach Report, the Minister Office, appears to be flourishing, we believe that Wales has some very good answers—unless, of course, she has the technological capacity to make this type of can do that today. It would certainly show that data-sharing system flourish. The Labour Party will Westminster is listening to Wales. make a manifesto commitment at the general election I trust that the Minister will agree that this is an to a policy of school and college registration, as my urgent matter, bearing in mind that the general election right honourable friend Sadiq Khan, the shadow Justice is only a few months away and the Welsh Assembly Minister, announced recently. He said: elections are in 2016. Time is of the essence to encourage “Too many young people don’t register to vote. If we can’t get all people to register to vote, especially young people. young people registered, then it makes the task of getting them to There is all-party support in Wales for these amendments 203 Wales Bill[LORDS] Wales Bill 204

[BARONESS GALE] extend into a new area. They simply take advantage of and I trust that the Minister will listen to the voice of the practical experience we have had in other parts of Wales, as clearly expressed in the letter of 13 October. the United Kingdom. I look forward to what she has to say in her reply. Lord Howarth of Newport (Lab): My Lords, given Lord Elis-Thomas (PC): My Lords, I am very grateful the very disappointing levels of registration and turnout to my colleague in the adjacent barony of Llandudno, among young people to which both the noble Lord, along with my colleague in the barony of Llanrwst, for Lord Roberts, and my noble friend have referred, we introducing this topic. I speak of course, as the Lord clearly need to be a lot more energetic and imaginative of Nant Conwy—a fine historic barony in the history in the ways in which we seek to engage young people of Wales—but we will leave that for today. Before the in our democratic processes. I find the proposals in Minister responds to the debate, let me say that I these amendments very attractive, but I wonder whether would encourage her to respond positively. the Minister, or the noble Lord who moved these amendments, would offer any thoughts on two issues. As noble Lords will be aware today, for the feast of St Edward the Confessor holy communion in the The first is that it is going to cost money. The noble abbey close to us occurs at his shrine, which unfortunately Lord, Lord Roberts, suggested that these processes also includes the grave of Edward I—a place that I do could be carried out even, perhaps, at a profit. I would not normally visit. But having visited that place this be grateful if he could clarify how this might occur lunchtime has enabled me further to consider how because, if we ask electoral registration officers to take appropriate it is that, at this time of the feast of St on additional responsibilities and to become busier, it Edward the Confessor, we should continue our debate is likely to cost money. In this time of austerity, when on the future of the nations of these islands. Such a local authorities are operating within such extremely debate is stimulated by the whole question of participation. stringent financial limits, there are questions about priorities. When local authorities are finding it extremely The Minister will be aware, because she and the difficult to carry out the responsibilities that they wish noble Lord, Lord Bourne, were there at the time, that to do in relation to education, social services, housing the Assembly is already empowered to spend money and so forth, where would the pursuit of improved to promote its activities as a part of democratic levels of electoral registration best lie within their participation. We did that alongside the Electoral scale of priorities? Commission in the period before the last referendum. The other issue on which I would be interested to But these have been sporadic initiatives. What we want hear the views of the Minister and of the noble Lord is is a systemic way in which to ensure that there is whether we should move to giving the vote to young automatic participation by the potential electorate people at the age of 16. Of course we want to encourage before they get to voting age in democratic elections, young people to participate in our democracy. Many by being clearly included and prompted. There is no young people would wish to do so and feel ready to do coercion here; it should be seen as part of citizenship so at 16. When I was the Member of Parliament for that the opportunity to participate is presented to the Newport East and used to hold meetings with sixth- potential voter. formers in my constituency, I was quite surprised to I remember an occasion when I took part in one of find how many young people had their doubts as these promotion things when I visited my native county to whether it was appropriate to lower the voting age of Carmarthenshire and spoke to young people in to 16. I would be interested to hear the thoughts of primary school, whereupon we had a real vote in the noble Lords opposite as to whether that sentiment has classroom itself. At the end of the day, apparently, one changed in the 10 years since I ceased to be a Member of the young pupils went home and told her parents, of Parliament for a Welsh constituency and whether, if “A man from Cardiff whom I had seen on television we enfranchise people at 16, we will see them positively came to my school and told me to tell you that you engaging in democracy with that new opportunity. have to come out to vote”. So there are dangers in these things. The more we can make this acceptable as Lord Lexden (Con): My Lords, I am glad to follow a painless and democratic part of our electoral system, the noble Lord, Lord Howarth of Newport, whom I the better. This might be the first opportunity for the have known personally and respected for many years. I Minister to accept an amendment in principle and strongly support Amendment 20 which provides the bring back an even better one on Report. key to securing a marked and rapid increase in the number of young people registered to vote. Time and Lord Tyler (LD): My Lords, I am delighted to add again, the need for effective action to tackle the acute my signature to this group of amendments. Although problem of underrepresentation among the young has I am very proud of my Celtic ancestry in a different been highlighted, not least in the reports of the Hansard part of the United Kingdom, I am not Welsh, not a Society of which I have the privilege to be a trustee. lawyer and not even a Methodist local preacher. So I Across the House we support the marvellous can be incredibly succinct in saying that what is so organisation Bite the Ballot, which is bringing important about this group of amendments is that it is determination and dedication to the task of getting based not on any theory but on practical experience many more young people on to the register, as we have both in Northern Ireland and now in Scotland, as my heard. Surely we must give the organisers of Bite the noble friend Lord Roberts has said. I hope that, in Ballot the tools they need for this vital job. Nothing, it that spirit, the Minister will be able to accept these tells us, is more important than the creation of a amendments in toto because they do not in any way sustained and lasting partnership between electoral 205 Wales Bill[15 OCTOBER 2014] Wales Bill 206 registration officers and schools based on the model Baroness Randerson: I think that the noble Lord developed in Northern Ireland. We have heard today misunderstood what I was saying, which was that this from my noble friend Lord Roberts and others that is a very complex problem that goes well beyond these this is the wish of the Welsh Assembly, too. amendments, and is one of which the Government are The case for such a partnership is surely very well aware. overwhelming—it has been proved beyond all doubt My noble friend’s Amendment 19 would impose a in Northern Ireland. The Province has pointed the duty on the Secretary of State to make regulations way. As a staunch unionist, I say: let Wales, and indeed which require government bodies to provide registration the rest of the country, follow where Northern Ireland officers with personal data. Registration officers could has led. It would be a tragedy if the United Kingdom then use this information to add people to the electoral as a whole failed to reap the benefits of what has been register or make contact with them in order to obtain pioneered in Northern Ireland—a point that I hope the necessary information. Amendment 61 is consequential my noble friend on the Front Bench would be particularly on Amendment 19, and Amendment 20 inserts two sympathetic towards, given her dual responsibilities in new subsections into Section 9A of the Representation Wales and Northern Ireland, and I am quite convinced of the People Act 1983, in order to place duties on that St Edward the Confessor would be on our side. registration officers in Wales to ensure that they focus their registration efforts on specified groups, particularly Lord Richard (Lab): My Lords, perhaps I may say a young people, disabled people and people from certain brief word. Following the noble Lord, Lord Tyler, I ethnic groups. should perhaps declare an interest. First, I am Welsh; secondly, I am a lawyer; and, thirdly, I am not a Methodist minister but my grandfather was, so I suppose 4.15 pm that that qualifies me to speak on this amendment. I The Government are committed to increasing do so for one basic reason, which is to assure the democratic engagement and the levels of electoral Government that there is very warm cross-party support registration. I would like to take this opportunity to in the House for these amendments. When the Minister thank my noble friend and to congratulate him on his replies, I hope that we shall not hear, as we have on work in this area. While the Government strongly many occasions on the Bill so far, that this is not the support and share the noble Lord’s intentions, we right time to do it. It seems to me to be absolutely the cannot accept these amendments today for a number right time to do it. Indeed, if you are looking for a of reasons. However, that does not mean that we are better time to do it, it will be difficult to find one. With unaware of the need to take action to address these elections looming for the Assembly in 2016, it seems to issues, and I wish to explain the action that is being me absolutely right that we should go down this route taken by the Government at this time. now. The proposals in Amendment 19 do not differentiate The desirability of the amendments is perfectly between those who are already on the register and clear. What is proposed is not based upon anything those who are not, but simply require government fanciful; it is based upon practical experience of the bodies to send specified information to registration way that it has worked in Northern Ireland. There is officers. To set up this type of system and to introduce also some evidence in the United States that this type the infrastructure to allow different government bodies of approach is effective, and I cannot see for the life of to securely—please note that word—share information me any reason why it should not be introduced in with registration officers would be costly, as was made Wales in time for the next election. I hope that the clear today by the noble Lord, Lord Howarth. It Minister is not going to get up and say merely that it is would place a sizeable burden on those bodies. not the right time to do it; I believe that the House thinks that it is. It is important that we do not underestimate the issue of security. Having brought in the statutory The Parliamentary Under-Secretary of State, Wales instrument on these issues for Northern Ireland, I am Office (Baroness Randerson) (LD): My Lords, there very well aware that the issue of data security is at the must be, and clearly is, concern across the Chamber forefront of people’s minds. I will give just one example. about the low engagement of young people in particular There is a category of elector who is anonymously with our democracy and with civic life. However, I registered for very good reasons, because they fear for have to make the point to noble Lords that registration their safety. It is essential that any system that is set up in itself does not mean that young people vote. Experience recognises and deals with those people who wish to in Northern Ireland—and, as my noble friend Lord be—and who have a right to be—anonymously registered. Lexden made clear, I am very familiar with that The campaign for anonymous registration was led in experience—has shown that voting does not necessarily Great Britain by women’s organisations and women’s follow from registration. Therefore, I think that we refuges, because of concern about a whole group of have to work very hard at what is a complex issue women who feared for their security and safety. That which goes beyond simply having to ensure, quite is the kind of practical issue that needs to be dealt with rightly, that more people vote. in order to introduce the excellent principles which lie behind my noble friend’s amendment. Lord Richard: Before the noble Baroness leaves that There is a need to be able to distinguish between point, it is perfectly true that if you register, you do those who are and are not already on the register. not necessarily vote, but it is also true that if you do Under my noble friend’s proposal, it is probable that not register, you cannot vote. With great respect, we government bodies would devote significant resource are talking here about the qualifications for voting. to sending information to registration officers about 207 Wales Bill[LORDS] Wales Bill 208

[BARONESS RANDERSON] I recognise that there is considerable sympathy in people who are already on the register. Section 9A of this Chamber and beyond for the aims of Amendment 20. the Representation of the People Act 1983 already I assure noble Lords that I share them. However, the provides registration officers with powers to take all Government are already taking steps to increase the the steps that are necessary for the purpose of complying engagement and registration levels of traditionally with their duty to maintain registers. under-registered groups. Five national organisations I am committed to local decision-making, as are and every registration officer in Wales, as in England this Government, and we regard local registration and Scotland, have shared £4.2 million of funding officers as those who best know their local area. We aimed at maximising the rate of voter registration as believe that this would be carried out most efficiently part of the transition to IER. I draw my noble friend’s by registration officers, and that the solution should attention to the fact that every electoral registration not necessarily be on a centralised basis. officer in Wales has received that funding—not just one. Cardiff received almost £25,000 in order to The Government are already making far more effective engage more with under-registered groups and use of data to improve the completeness and accuracy Ceredigion received £4,290 in order to take that work of the electoral register. We have already run three on. The amounts given were based on a formula that pilot studies and a complete nationwide data-matching related to the level of under-registration in every local exercise. During the transition to individual electoral authority throughout Great Britain and the number registration, we expect that around 80% of those of 16 to 18 year-olds within that area specifically so already on the electoral register will automatically be that EROs could go into schools and do the transferred onto the new individual electoral register, engagement work that is encompassed in my noble after their name and address are matched against friend’s amendment. government records. Pilots have taken place, including at the Department Perhaps I may also respond to his comment that it for Education and of course the Welsh Department needs only a tick in a box—would that that were so. for Education and Skills, the DWP, Royal Mail, and Unfortunately, there is a complex legal basis for the Student Loans Company. Subject to parliamentary voting. The form has to be set out in a particular way approval we also intend to run pilots in late 2014 and and it has to be of some considerable length. The early 2015 that will test the usefulness of DVLA data tick-box would work in terms of expressing an interest matching with existing electors and also for identifying in voting, but, as the noble Lord, Lord Howarth, individuals who are known to the DVLA who are pointed out, it means that you have to follow up on the missing from the electoral register. person. It is to be hoped that if they have ticked a box, they would respond to a letter, but people often tick There are of course two issues here. There is data boxes and then do not respond to a letter, so they matching to check that you have accurate information could well require door-to-door canvassing. Ticking a about those who are on the register, and data mining box sounds good and it works up to a point, but in to spot people who are not on the register but who itself it does not actually get anyone on to the register. ought to be. The full evaluation of both these approaches Northern Ireland is indeed a case of best practice in will be available in the summer of 2015. our country. That effort was based on going into schools and getting young people to fill in paper Lord Tyler: As my noble friend will know, I have forms. The crucial difference between Northern Ireland been following the DVLA issue through the IER and the rest of the UK is that Northern Ireland has a process for a number of years and I welcome what she paper-based system and we now have online electoral has just said. But even more valuable than all these registration. pilot studies would be to look very carefully indeed at the very recent experience in Scotland. The levels of Perhaps I may return to the amendment. I know registration, particularly among young people, exceeded that the Electoral Commission sent a briefing to noble anything we have seen anywhere else in the United Lords setting out its view that while it strongly supports Kingdom. One of the differences between Scotland the principle of EROs working with local education and Northern Ireland on the one hand and England establishments to encourage registration, there is no and Wales on the other is that there is greater direction need for additional legislation to provide for this. I in Scotland to the local electoral registration process should point out that there is no obligation in Northern to make sure that there is an equal quality of service at Ireland on the electoral officer to engage with schools the lower level. and colleges. That work was done without any legal obligation or basis. However, in the light of concerns As I mentioned quickly in my previous remarks, I expressed by noble Lords and indeed in the letter encourage the Minister and her colleagues to look referred to from the four party leaders in the Assembly, very carefully indeed at the recent experience in Scotland. I will be happy to look at this issue again. However, I It is practical experience—it is not a pilot in a particular should say that registration officers already can and area. As the noble Lord, Lord Richard, said earlier, it do visit schools, colleges and other locations in Wales gives added impetus to the suggestion that now is the in order to target under-registered groups and fantastic right time to take a forward step in this area. work is being done up and down the country by civil society organisations to find new ways of reaching a Baroness Randerson: My noble friend makes a good range of under-registered groups and encouraging point. Of course, the Electoral Commission will be them to register to vote. The Government are proud to doing a report on the referendum in Scotland that will fund this type of activity and I congratulate the wide cover those issues. range of organisations engaged in this work. 209 Wales Bill[15 OCTOBER 2014] Wales Bill 210

I want to make a final point about Northern Ireland Report we will have a very different statement from in response to the comments made about the low her. Perhaps I may tackle one or two matters. First, levels of registration among young people there. Yes, over the next four or five years, we are going to face a the figures were woefully low in part because they had referendum on whether we remain in Europe. If that not been doing the annual canvass. That has proved to referendum takes place on the register as it is, then half be the crucial thing. The annual canvass must be our young people will not be eligible to take part. maintained alongside all the additional work. However, There will be a general election next May, and unless given that registration had fallen to very low levels in we move immediately—there is no time to lose—our Northern Ireland, considerable remedial work needed young people will not have a voice in that election. to be done. There is no time to waste. I know that there are “t”s to The noble Lord, Lord Elis-Thomas, referred to the cross and “i”s to dot, but there is certainly no time for National Assembly. The National Assembly has an anybody—including the Electoral Commission—just excellent record in terms of its outreach work with to hope that this will go away. It will not go away. young people. I think that at one point the Assembly Secondly—this is the most important point of all— was the major tourist attraction in Wales. A large what is the relationship between the Houses of Parliament number of young people come into the Assembly to here in London and the Assembly in Cardiff? Yesterday learn about politics and to hear excellent debates. That I asked the Electoral Commission itself who has the is the kind of thing I was referring to in the first last word: is it the civil servants or the Electoral sentence of my response. It is about more than Commission or is it the parliamentarians representing registration—you have to engage young people and us at every level? The answer, of course, is that it is the explain why it is relevant to them. parliamentarians. I say to my good friend here that I have already referred briefly to online registration. something must be done immediately to come to an It brings voter registration into the 21st century and it understanding. If the Assembly in Cardiff has voted is particularly attractive to young people because it is 41 to a handful in favour of this, if all four leaders of easier, simpler and faster. More than 410,000 applications the parties there have voted and written in favour of have been made online by people aged between 16 and this, then unless we do something, we could well create 24 since 1 July this year. More than 90% of the users of resentment in Wales that will cause us to have another the system have been either satisfied or very satisfied, referendum, this time not in Scotland but in Wales so it is obviously an easy system to use. The Electoral itself. Therefore, I urge the Minister—I know she will; Commission has further noted that a statutory change I know her well enough—to move in immediately and specifically relating to electoral registration officers in perhaps by Report give us a glimmer of light, if not a Wales would be complex to manage at a time when big flashlight, on this matter. I beg leave to withdraw they are dealing with things throughout the UK on the amendment. IER. However, in the light of the concerns and the consensus here today, I certainly undertake that, before Amendment 19 withdrawn. Report, I will discuss with the Minister for the Constitution all the issues that have been raised. I will also discuss Amendment 20 not moved. with the Electoral Commission the issues that it put forward in its circular to all of us saying that these Clause 6: Taxation: introductory amendments are not necessary.

4.30 pm Amendment 21 Lord Elis-Thomas: In the spirit in which the Minister Moved by Lord Wigley has spoken, and in the spirit already referred to by colleagues of the all-party consensus emerging very 21: Clause 6, page 6, line 15, at end insert “and associated tax strongly in the National Assembly—I draw the attention credits” of Members of this House to the Motion that has today appeared on the Order Paper signed by the four Lord Wigley (PC): My Lords, as well as party leaders, which will be debated in the Assembly Amendment 21, I will also speak to Amendments 22 on Tuesday—would it be possible for her to give an and 23, all standing in the name of my noble friend assurance that she will speak to the First Minister, the Lord Elis-Thomas and myself. Amendments 21 and appropriate representatives, the Presiding Officer and 22 are aimed at allowing the Welsh Government to so on in the National Assembly on this matter? introduce new tax credits as well as devolved taxes. That would mean that Wales was able to help target Baroness Randerson: The noble Lord has anticipated areas that require economic stimulation in one form my next sentence. In the light of the letter that has or another. been received, I will, of course, liaise with Members of Paragraph 4.6.8 of the Silk commission’s first report the National Assembly, because it is very important to stated: ensure that their views are taken into account. In the “In addition to the use of taxes to achieve policy outcomes in light of these points, I urge my noble friend to withdraw devolved areas, credits can also be applied so that activities are the amendment. effectively subsidised. While existing tax credits such as the working tax credits (and in future the Universal Tax Credit) should remain UK wide, the Welsh Government should be able to introduce its Lord Roberts of Llandudno: I am most grateful to own credits in relation to devolved taxes and through use of my noble friend for her full reply. I understand her devolved grants and subsidies to promote investment and getting reluctance, but I do not accept it and I hope that at people into work”. 211 Wales Bill[LORDS] Wales Bill 212

[LORD WIGLEY] that binds the people of Wales together with the rest I hope that the Government will therefore either accept of the United Kingdom through the welfare state and these amendments or bring forward their own associated principles of fiscal redistribution. amendments on Report to achieve that end—unless of course the Minister can persuade me that some other power exists or is in the pipeline that will achieve that. Lord Newby (LD): My Lords, Amendments 21 and 22 seek to include a reference to “associated tax credits” I turn to Amendment 23. At present, any devolved as part of the power to add further devolved taxes. I tax to be implemented in Wales must be agreed by thought that the noble Lord was going to discuss tax each House of Parliament as well as the National credits associated with devolved taxes. In respect of Assembly. We feel that it is wrong that a party in the landfill tax, at the moment, existing site operators can Welsh Government implementing a manifesto pledge contribute a percentage of their tax liability to should be prevented from doing so by Governments in environmental benefits and get a 90% tax credit. As far London. If the objective of this Government is to get as devolved taxes are concerned, that ability will still the devolved Government to accept full responsibility exist. For that type of tax credit, the power is there. for their actions then surely they should be given full and undivided authority in such matters. Manifestos I think that the noble Lord, Lord Howarth of and devolved taxes are matters for Wales, and the UK Newport, was talking about welfare benefit payments. Government should not interfere in them. This Welfare benefits are not covered by the Bill. There has amendment therefore removes the requirement for been no proposal to devolve power over welfare benefits each House of Parliament to agree to the devolved tax to the Welsh Assembly. I thought that the noble Lord so that it is in the hands of the National Assembly. It made strong arguments about why that might be opposed. would mean that the people of Wales were absolutely The Bill makes no provision for devolving discretion clear as to where responsibility lies. I beg to move. over welfare benefits to Wales for good reason, and the Government are not minded to change their view on that. Baroness Morgan of Ely (Lab): My Lords, the tax credits that currently exist are closely associated with Amendment 23 would remove the UK Parliament welfare payments. The whole issue is integrated into from the process of creating further devolved taxes. the wider debate about welfare support which provides The Bill enables the Government to devolve further a basic living standard for people who are working existing taxes as well as enabling the Welsh Government and yet need state help. Introducing any amendment to create new devolved taxes. Clause 6 requires that if that would erode the provision of welfare in Wales either of these powers is used the order would need to would be a mistake—in particular, without that very be approved by this House and the other place as well comprehensive and structured debate about the as by the Assembly. implications in Wales. The Minister suggested that the noble Lord is talking about a new kind of tax credit. Lord Wigley: Where powers to devise and implement Could the noble Lord elaborate on what kind of thing new taxes in Wales are devolved to the National he had in mind, beyond what currently exists? Assembly and those taxes have an appropriate dimension where tax credits could be introduced, would the Lord Wigley: If the noble Baroness refers to the powers allow that? Silk report, she will see the arguments made there. The whole point and ethos of the Silk report is to open out as much freedom as possible for the devolved authorities Lord Newby: Yes, they would, just as for existing to develop ideas and even experiment with this area to taxes. The same principle would apply to any further reach the objectives that both she and I would wish taxes that were devolved to the Welsh Assembly. they did. It is giving them more tools. I hope that those Clause 6 requires that if either of the powers devolving tools help them do the job. further existing taxes or enabling the Welsh Government to create new ones is used, the order would need to be Lord Howarth of Newport: My Lords, whatever the approved by this House and the other place as well as future structure of the United Kingdom, the union is by the Assembly. The amendment would remove the surely to be based upon twin principles of solidarity UK Parliament from this process so that the order and diversity. Tax credits are a principal structure of would need to be passed by the Assembly only. That the welfare state. As my noble friend just now suggested, would mean that the Assembly could pass an order the welfare state is a fundamental underpinning of under which existing tax powers would be transferred that solidarity. Given that in the last figures I saw only from the UK Parliament without this Parliament having about 2% of the people of Wales do not wish to any say. Clearly, that cannot be right. Surely it is maintain the union, I very strongly suspect that noble important that the process of tax devolution continues Lords are a little bit ahead of themselves—not for the to take place in the constructive and collaborative first time—and that the people of Wales would wish manner that has led to this Bill. As a mere Englishman nothing to be done that would weaken the welfare now grappling with what we do about devolution state and undermine that principle of social solidarity within England, I have found the Silk process extremely that ought to underpin the union. I make this point impressive and one that could possibly be successfully particularly because great figures in Welsh political emulated in England. The follow-up to the Silk process, history were among the leading architects of the welfare under which there have been discussions with the UK state. Whether by accident or design, we should not do Government and parliamentarians about how to take anything to undermine the welfare state and the solidarity that forward, has been extremely constructive. 213 Wales Bill[15 OCTOBER 2014] Wales Bill 214

As for how we manage the existing devolution of Amendment 21 withdrawn. tax proposals and take them forward, we have established the joint exchequer committee, based on a similar Amendments 22 and 23 not moved. body in Scotland, consisting of leading parliamentarians in Wales and the Treasury, specifically to look at how Clause 6 agreed. we implement the existing powers and at what further can be done. That would be one of the ways in which it Amendment 23A would be sensible to contemplate adding additional tax powers. If Members of the Welsh Assembly have Moved by Baroness Morgan of Ely strong views about additional tax powers—and first 23A: After Clause 6, insert the following new Clause— they would have to express those views—they will then “Review have a vehicle for discussing them. It seems to me that In the event that the power to add new devolved taxes that is a very sensible way forward. Any change or under section 116C of GOWA 2006 is exercised, the devolution of powers over tax from the UK to Wales Chancellor of the Exchequer shall undertake a review of has, at the very least, implications for tax legislation in the benefits of parity in the devolution of taxes between the rest of the UK, so it is only logical that the rest of Wales and Scotland, and shall review the existing the UK is involved in the discussions. It must be right principles of tax devolution.” that any future order-making process, whether initiated by the UK Government or the Welsh Government, Baroness Morgan of Ely: In this amendment we are should involve both the Assembly and Parliament. I looking at future-proofing the legislation. We are very hope that the noble Lord will withdraw his amendment aware that there is a fast-moving feast going on in on that basis. terms of constitutional changes in Scotland so we need to look at how we future-proof it. That is why we have suggested that if any new taxes are devolved to 4.45 pm Scotland—and I must say that we probably need to tighten up the amendment’s wording—we would Lord Wigley: My Lords, I listened with considerable like an opportunity to assess whether they could be interest to the responses I have had, and part of the offered to Wales as well. That is the idea behind the clarification has been helpful. Certainly with regards amendment. to the tax credit associated with any new taxes, that We are conscious that things are changing very may come along. However, may I just say to the quickly and we do not want to lock ourselves in Minister and to the House—without in any way wanting because of the timing of this Bill. Labour is very keen to cut across what has been largely a consensus approach to ensure through our suggestion, which we will come to this legislation—that the whole point of giving new to later, that Wales can vary income tax rates, for powers to the National Assembly for Wales or indeed example, to 15p in the pound rather than 10p, which is to the Scottish Parliament is to trust them and enable consistent with our position in Scotland. That is not them to go on with their business. We had for a period the position of the Tory party which has suggested after the 2006 Act powers to legislate in Wales but in that it wants to see 100% of income tax being devolved every instance we had to get orders passed through the to Scotland. The amendment looks at this consistency House of Commons and the House of Lords. In its in approach and would at least give us the opportunity wisdom, Parliament has seen that this is probably not to think about whether we might like to pick up other the right way to do it—if you have a dog you allow opportunities that may be offered to Scotland later; we him to get on with it and do not try barking yourself. have to understand that there will be an impact on In this regard as well, if the people of Scotland had other parts of the UK if income tax rates are varied. It been told that any powers that they will get over is correct to ensure that we take the temperature of taxation will be second-guessed at Westminster and how devolution has changed between now and the orders will need to be put through before they can be time when the powers to vary taxation at a Welsh level implemented there might have been some second thoughts are taken up. in Scotland as well on 18 September. It is interesting to look at the joint agreement that I believe that there is a strong opinion in Wales that, has been made by the parties and the Assembly. On while all the details of devolution for Scotland and for the proposal that if, for example, air passenger duty Wales may not be at the same place in their development for long-haul flights were to be devolved to Scotland and some details may not even be appropriate, the and Northern Ireland, we would want to look at that. principle is that the elected Assembly in Wales, the That is the spirit of the amendment: we need to National Assembly, and the elected Parliament in understand that if they are getting extra powers it will Scotland should have the clear-cut responsibility for have an impact on us. We need to think about how we what has been devolved and that people should be able would want to respond to that. to see that. Once you bring in mechanisms to second-guess and to veto you are cutting right across that approach. I realise the Minister will not be in a position to give Lord Newby: My Lords, Amendment 23A seeks to me any authoritative response with regard to the similarity place two statutory duties on the Chancellor of the or contrast between the powers for the National Assembly Exchequer when a new devolved tax is created in and those for the Scottish Parliament but it is undoubtedly Wales. The first would be to review the benefits of an issue that will raise its head again, and I invite the symmetry in the devolution of taxes between Scotland Government to give further thought to it. On that and Wales. This would effectively require the Government basis, I beg leave to withdraw the amendment. to assess whether a tax being devolved to Wales should 215 Wales Bill[LORDS] Wales Bill 216

[LORD NEWBY] Amendment 23A withdrawn. also be devolved to Scotland, although the way in which the noble Baroness moved the amendment inverted Clause 7 agreed. Scotland and Wales. The second duty would be to review the principles Clause 8: Welsh rate of income tax of tax devolution. These are three: it should have cross-party support; it should be evidence-based; and Lord Rowlands (Lab): My Lords, I wonder if I may any devolution of taxation should not be detrimental briefly intervene before the Minister moves her to the rest of the UK. These are good principles, and I amendments. I have a very modest amendment, am not sure that we want to have a root-and-branch Amendment 31, which has been included in this list. It discussion of them. What the noble Baroness was addresses a completely separate point from the whole talking about, however, were the circumstances in swathe of government amendments and I would suggest which Scotland gets more powers, and the formalisation that we take Amendment 31 separately. I hope that of a structure under which the Welsh Assembly not that would be possible. only thinks about them but has a process for discussing those matters with the UK Government. Baroness Randerson: I understand the noble Lord’s On the symmetry of devolution settlement, until point but I am intending to speak to my amendments now the Government have been clear that we consider and then give way to the noble Lord to make his devolution decisions for each country on their own points. I will then respond separately. Although it is in merits. The existing arrangements provide flexibility the same group, there will be plenty of time for us to for the Government to consider Wales and Scotland give separate attention to the noble Lord’s amendment. either separately or at the same time. However, the Scottish referendum result puts us in a new position in Lord Rowlands: I appreciate the Minister’s offer but discussing devolution. Nobody seriously believes that it is a very different point altogether. I think that it we are at the end point in terms of devolution anywhere would disrupt the flow of the debate on the Government’s in the United Kingdom. Over the next year or two, we amendments if Amendment 31 was included and involved are clearly going to see a debate of an intensity that we in it. have not seen in England at all, and have not seen in Wales since the Assembly was first established. We are Baroness Randerson: Following the points that the talking about considerable potential changes. In these noble Lord has made, we will uncouple his amendment circumstances, it seems that the Welsh Assembly will and have a separate debate at that point. be involved in those discussions, not least through the Joint Exchequer Committee if it has any specific proposals. Amendment 24 There will be also be almost ceaseless debate in any Moved by Baroness Randerson constitutional convention, if one is established, or 24: Clause 8, page 9, line 5, leave out “a rate” and insert more generally in Parliament about what the future “rates” structure should look like. I therefore think that the kind of formal review the Baroness Randerson: My Lords, I am delighted to noble Baroness proposes will be unnecessary. There be introducing this series of amendments. Concerns will be no lack of opportunity for these issues to be were raised across the Chamber at the previous stage debated. The challenge to the English regions and of the Bill. The Government have listened and, as a counties and to Wales is to produce a compelling result, have tabled the amendments that we have before argument for the kind of change that is required, and us. These amendments seek to remove the lock-step then to seek and obtain a political consensus for it. from the income tax provision in Clauses 8 and 9, Whoever is in government after the next election will which has been subject to a great deal of debate be faced with a situation in which there is a clear during the passage of the Bill thus far. appetite for devolution in various respects. That will The Bill would enable the National Assembly for only crystallise into action when there is real pressure Wales to set a single rate of income tax that would be and a consensus in the nations and regions of the UK applied to all three income tax bands if income tax as to what that future of greater devolution might devolution were approved in a referendum. These involve. With that in mind, I hope that the noble amendments would allow the Assembly to set separate Baroness will feel able to withdraw her amendment. Welsh rates for each band instead, as the Silk commission recommended. I said at Second Reading in July that Baroness Morgan of Ely: I thank the noble Lord. It the Government were prepared to revisit these is important to understand that, at the moment, we do arrangements, and that is what we have done. The not know what that process is. My concern is that if lock-step has been debated at some length in both we do not get this down somewhere, it is possible that Houses throughout the passage of this Bill and we Wales will be left out of that debate, until a mechanism have listened to and reflected on the arguments that is devised. Ministers have talked eloquently about the have been raised. Through these amendments, all three mechanism that may be put in place but, at the moment, income tax rates would still be reduced by 10p in there is no formal structure. At this point, we are Wales, with the Assembly taking control of nearly half trying to make sure that there is a proper mechanism of all income tax paid as a result. in place so that there is an opportunity for us to work It would then be for the Assembly to set a separate out whether anything that is offered in Scotland is Welsh rate for each band which would be added to the something we would want to take up in Wales. reduced UK rates. I believe that these amendments 217 Wales Bill[15 OCTOBER 2014] Wales Bill 218 remove a significant barrier to devolving an element of Amendment 37 to hear how the Government intend to income tax to Wales. Subject to their inclusion in the build on their intention to give maximum flexibility Bill, my hope is that the Welsh Government will now to the Welsh Government. feel that they can call a referendum on income tax devolution as soon as possible after the Bill receives Royal Assent. Baroness Morgan of Ely: My Lords, the Labour As a result of this Bill and the full devolution of Party understands the principle of the need for business rates which we will implement next April, the accountability and the need for the Welsh Assembly Welsh Assembly will become responsible for raising politicians to have responsibility not just for spending around a quarter of the money it spends. By removing money but also for raising it. Devolving an element of the lock-step, the Welsh Government now have no income tax will undoubtedly increase the financial reason to delay a referendum. It is high time that the accountability of the Assembly. It will enable the Assembly is given power and responsibility for raising Assembly to fund more of the spending for which it is significant amounts of its own revenue and thereby responsible and will allow the Welsh Government to becomes more accountable to the people of Wales. vary the levels of tax and spending in Wales and, crucially, it will allow Wales to borrow against tax. These amendments align the income tax provisions in the Bill with the Silk recommendations and show We focus in these amendments on issues of income that the Government are prepared to listen to the tax. However, it is worth pointing out that this is just arguments of those who disagree with us. The one tax. In context, in 2013 income tax was 26% of the amendments show that we are prepared to be bold in total tax take in the United Kingdom. It is significant, progressing devolution in Wales. I therefore urge noble visible and understandable, but it is worth remembering Lords to support them. I beg to move. that it is only one tax. Devolving income tax powers to Wales has never 5pm been a priority for the Labour Party and the Welsh Government. However, it is important in terms of Lord Wigley: My Lords, I am very glad to have the positioning the Assembly in the right place in the long opportunity to speak in this debate and to welcome term. We should remember that it was the Labour the step taken by the Government in moving their Party which devolved income tax powers to Scotland, ground with regard to lock-step. The noble Baroness, but only after asking the Scottish people in a referendum Lady Randerson, will well remember that I expressed whether they wanted that power. We would have to some fairly strong feelings at an earlier stage with undertake a similar referendum if Wales were to follow regard to lock-step. We felt that it was an inappropriate suit. I will elaborate on this further when we discuss restriction and I am delighted that the Government that group of amendments. have seen fit to move on it. We will not always be in this situation. We are Amendment 37, standing in my name and that of future-proofing here. I am confident that one day the my noble friend Lord Elis-Thomas, is included in this Welsh economy will grow. There are clear signs that bank of amendments. We had a very useful debate on the Welsh Government’s efforts in this area are already Monday in relation to constitutional principles on bearing fruit. However, we must be aware that the which there was a lot of consensus. Although the whole principle behind the concept of the UK as a Government could not necessarily immediately accept political entity is that we are supported by a social the points that we made, they undertook to look at system that is available to all. We must be careful not some of them. I hope that the same spirit will be to erode that basic philosophy and so provide fuel to adopted in their approach to other financial matters the nationalist fire. There is a £16 billion annual gap as has been shown with regard to the lock-step. between what Wales raises and what it spends. We Amendment 37 seeks to ensure that the Assembly must not lose focus on this issue. This is the economic will be able to levy the three Welsh rates of income foundation stone of the UK. tax as it sees fit. The amendment is drafted to ensure What drives us in the Labour Party is not some that the Assembly will get full responsibility for raising ideological zeal to create an independent utopia in and spending one of the three largest sources of Wales, but a practical, hard-headed approach to government income alongside national insurance and what is best, in particular for those who are VAT. If we give the Assembly the power to control struggling on low incomes, are desperate to make these rates, it will enable Welsh Ministers to create ends meet and are often dependent on the state to additional jobs, which we hope will lead to an increase keep them afloat. We must remember that Wales has in the Welsh tax base. That would be an incentive for a weaker tax base than the UK as a whole. We must investment in the Welsh economy—which it certainly be careful when devolving tax powers that we do needs. As I say, we welcome the fact that the lock-step not lose out. HMRC estimated that in 2010 there has been removed, which will give the Welsh Government were 89,000 higher rate taxpayers in Wales. They greater freedom. represented 7% of all taxpayers and were responsible Amendment 38 stands in the name of the noble for 33% of all the income tax revenues raised in Baroness, Lady Morgan, who will no doubt speak on Wales. There were only 4,000 additional rate it in a moment. I will listen carefully to the arguments taxpayers paying 45p in Wales. I could practically that she will put forward but I have some sympathy name them—they were mostly Tories, I will let you with what appears to be the intention of that amendment. know. On the whole, we must understand that our tax However, I will listen carefully to what she has to base is very weak and we must be careful when we go say, and will listen to the Minister’s response to down this route. 219 Wales Bill[LORDS] Wales Bill 220

[BARONESS MORGAN OF ELY] circumstances and priorities of Wales. This is the first It is also worth noting that a very small proportion Welsh tax legislation in modern times. It is both historic of revenues are raised by local taxation and the consequent and significant for Wales but we need to consider tendency of Whitehall to wish to dictate how funds border issues, and I therefore turn to our Amendment 36. from the centre are used has seriously eroded local We need to be aware of the complexity of border democracy and accountability. We must be very cautious issues in relation to Wales, compared to Scotland. The and note that local revenue-raising should not go too Scotland-England border is not nearly as densely far, since that tends to reinforce the regional disparities populated as the Wales-England border. Only 3.7% of of income and wealth. the population of Scotland and 0.5% of the population Tax differentiation can also lead to tax competition. of England live within 25 miles of the English-Scottish In principle, this is not something that we encourage. border. In Wales, the situation is totally different, with We must be clear that we do not want to embark on a 48% of the population of Wales and 10% of the race to the bottom in relation to taxation. We are population of England living within 25 miles of the fearful that there is a hidden agenda on the part of the Wales-England border. There are more than 130,000 Conservative Party, which is for ever anxious to reduce daily commuters. The fact is that introducing a variation the role of the state. The Conservative Party is committed in income tax could give rise to the possibility of to cutting taxes for the wealthiest people. Let us be higher taxpayers moving across the border in one clear: tax competition will lead to less money in the direction or another. My understanding is that no state pot, which means less money for our schools and Treasury impact assessment has been undertaken on hospitals. this matter, although I understand that the previous The Conservative Leader of the Assembly, Andrew Secretary of State said that a consultation has happened. RT Davies, has said that he would like to make Wales Can the Minister confirm whether that is the case and into a “low tax economy”. He has pronounced proudly will she commit to a Treasury impact assessment on that he wants to cut just the top rate of tax. We must that border issue? be aware that every time there is a tax cut, it is I turn now to the lock-step issue. The Government accompanied by a cut in services. It seems odd to have put down an amendment to remove the lock-step, consider this, at this moment in particular, in isolation thereby allowing the Welsh Government to vary increases from the discussions in the rest of the United Kingdom, or decreases to individual tax bands independently of and we need to consider what is happening in relation one another. Again we would argue that this discussion to the Smith commission in Scotland. That is why ideally needs to be set in the context of a UK debate Labour would like to see this discussion occurring in over the organisation of tax across the whole UK. To the context of a broader constitutional convention deal with this in isolation is inviting trouble, and that involving the public and representatives of civil society. is why we need urgently to establish the constitutional We must acknowledge that there is a disconnect between convention. The public should have a greater say on politicians and the public, and it is critical that we do where power should lie across the UK, including on not have a conversation about how money is collected the nature of tax devolution. Further devolution should and distributed from the distance of an ivory tower. not be piecemeal. The Minister referred to that in her However, the genie is out of the bottle and we need to comments on Monday. The notion of breaking lock-step respond. is something that needs to be discussed in that broader Let us be clear that devolving income tax powers context will not be a panacea for the economy of Wales. The chances are that income tax variations will not be 5.15 pm. significant. The previous Secretary of State suggested It is vital that any new tax reform delivers the that he would like to see a 1p cut in income tax rates clearly expressed desire for increased powers in Scotland across the board. Research has suggested that that and prevents an increasingly asymmetrical devolution would cost £200 million. That would mean £200 million settlement which denies the Welsh people the same in terms of cuts to services—the equivalent of 7,700 powers. We also need to acknowledge that the political nurses losing their jobs—in the hope that the economy weather has changed recently and there is an appetite would grow. That could happen but in the context of a for even further devolution within Wales. Labour is Welsh Government budget of £15 billion it is hardly not opposed outright to a discussion about the future going to make a massive impact. of lock-step, but we think that it has to be placed Of course, differential taxation of income would within that broader discussion. Labour said clearly involve the need for a separate Welsh revenue collection that we would like to see the option of tax systems in mechanism that must be neither inefficient nor costly. Wales and Scotland being looked at together. We have The Government do not seem to be clear about the tabled an amendment to that effect which would ensure costs involved in establishing this mechanism. In Scotland, that Wales, if it chooses, is not left behind as those new it is estimated that differential taxation would cost powers are debated for Scotland. That was the point between £40 million and £42 million to set up. Can the of the parity amendment. Minister give some indication of how much it would The Tory Minister in the House of Commons just a cost to set up in Wales? few months ago said: In anticipation of the Bill receiving Royal Assent, “Income tax devolution must work within the integrated UK-wide income tax system … the pooling and redistribution of the Welsh Government have already set out in a White tax revenues is a key feature of our fiscal model and ensures that Paper how that mechanism would work. The Welsh wealth is shared among the regions and countries of the UK. The Government and the National Assembly will have the income tax structure is a key mechanism for achieving wealth ability to develop certain taxes shaped to the needs, redistribution”.—[Official Report, 30 April 2014; col. 947.] 221 Wales Bill[15 OCTOBER 2014] Wales Bill 222

The Command Paper specifically says that the give Wales control of 75% of basic rate of income tax, Government are firm in their view that the income tax more than 60% of all income tax raised in Wales, and structure is a key mechanism to redistribute wealth more than one-third of the taxes that it spends. across the whole of the UK, which is why the progressivity We will later debate the metric used by the Government of the system is properly determined at the UK level. to determine the borrowing cap, which is currently So I ask the Minister, what has changed since that £500 million. The UK Government insist that that has debate in the House of Commons? What evidence has been predicated in reference to the level of income tax been received since that Second Reading debate to autonomy given to Wales. While we dispute this rationale, bring about such a stark change in opinion? The we nevertheless argue that, if they insist on this metric, Government have always said that tax devolution should extending the Welsh rate from 10p to 15p would allow not benefit one part of the UK to the detriment of the Welsh Government the potential for further borrowing another. What has caused this Damascene conversion? powers in future. That greater scope for borrowing We on the Labour Benches need to be sure that the powers is vital if Wales is to invest in our future answer is not in a hidden agenda to shrink the role of economy and mitigate against the lack of investment the state, with the introduction of tax competition from the UK Government. We could borrow in order which could lead to a race to the bottom, less money to fund key infrastructure projects such as the M4 for services and a further erosion of the progressive relief road, which need to be invested in. tax system which is respected and understood across The Conservatives have now suggested that 100% the whole country. of income tax should be devolved to Scotland. It The whole premise of the income tax reform debate would be interesting to understand the logic of why in Wales around the Wales Bill to date has been the Conservative Party wants that 100% of income tax predicated on that model, which includes lock-step. As devolved to Scotland and only 10p in the pound a result, the Government need to be very careful about devolved in Wales. What we will see is a further rushing into a new model for income tax devolution asymmetrical approach to devolution and, ironically, without proper analysis and consultation. It is important with the lock-step being removed, Wales will in this that these matters are scrutinised and I am sure that Bill move further ahead than Scotland, which still at the House of Commons will want to scrutinise this the moment has the lock-step in place. again in the Commons, rather than seeing a system Plaid suggested that the matter should be entirely that is announced from the stage at the Conservative determined by the Assembly, but we are still part of Party conference. We acknowledge that there are issues the UK and our tax powers will have an impact on the with the lock-step system. Gerry Holtham described UK. Therefore, it is correct that the UK has a say in to the income tax powers with the lock-step as, “virtually what extent income tax powers should be devolved. unusable”. He explained: Income tax and other direct taxes per head in Wales “The form of income tax devolution set out in the Bill is most raised £5,500, considerably less than the UK average unlikely ever to be used”. of £7,300, and nowhere near enough to cover our This raises important questions about the suitability public service expenditure. I warn the Government to of lock-step if these income tax powers were ever to be be very careful about how we proceed down the slippery enacted. slope on taxation. If we are going to go down this The Tories may be late converts to Labour’s arguments route, let us do it with our eyes wide open and be for devolution, but they should not jump the gun and aware of any unintended consequences of what may rush constitutional changes with these back-of-an-envelope happen if we devolve income tax powers to Wales. assessments. Labour is fully open to further discussions about income tax devolution. We made this clear in our submission to the Smith commission and have Lord Howarth of Newport: My Lords, it must be tabled amendments to the Bill calling for that symmetry right as a matter of equity that Wales should have the to be respected. same powers to alter tax rates as does Scotland, but my noble friend is right to remind the House that the I turn to our amendment, which proposes to extend exercise of those powers could be a poisoned chalice. the devolution of income tax, as set out in the Bill, In the extremely unfortunate situation in which we from 10p to 15p. It seems that setting any rate of find ourselves, in which the Government are pledged income tax devolution is difficult at this point in the to retain the Barnett formula, it is very hard to foresee discussion on constitutional reform, when we have circumstances in which it would be in the interests of that moving feast happening north of the border. By Wales to use such further devolved powers of taxation. Report, we may have a clearer picture of what is So long as Wales gets an unjust and inadequate funding emerging. settlement from the Exchequer, not based on needs This amendment is in the spirit of the new move but based on population, Wales will be at a loss, and it towards greater fiscal powers for Wales and Scotland. would be very dangerous for the Government of Wales In delivering the potential for more wide-ranging tax- to accept that it is their job to make up the shortfall by varying powers for Wales, this amendment would increase raising tax rates in Wales. I think that that would lead the financial accountability of the Welsh Assembly to extremely unhappy long-term consequences for the while facilitating greater borrowing powers than are economy and society of Wales. currently planned. The amendment will help to deliver So, although I support my noble friend in her that symmetry that we are talking about between the amendment to create powers that would be comparable devolution settlements in Wales and Scotland. Extending to the powers in Scotland, we should keep our eyes the devolution of income tax from 10p to 15p would wide open as to the realities of this. I cannot foresee 223 Wales Bill[LORDS] Wales Bill 224

[LORD HOWARTH OF NEWPORT] of local power and local discretion for local authorities that, in the absence of reform of Barnett, there is and councils in England. I agree with the noble Baroness going to be any possibility of a stable and acceptable that there has been a contrast between the two countries. new constitutional settlement for the United Kingdom. In Wales, there has been a process of centralisation; in However, these are larger issues that we shall debate England, there has been a process of decentralisation. another day. My noble friend is also right to remind the House 5.30 pm that the nature of the border between Wales and I regret to say that the views expressed by the noble England also imposes a very powerful, practical restraint Baroness and the noble Lord, Lord Howarth, indicate on the scope for differentiating tax rates. If people that Labour is still wedded to the idea of being a who are living in Wales near the border feel themselves high-tax party. It still does not take on board the basic to be so penalised, so disadvantaged by differential tax economic fact that if you cut taxes, you stimulate the rates in Wales as compared with England, a number of economy. I give the noble Baroness an example of them will move their residencies across the border and something that I am hugely proud of as a member of that would be very detrimental to Wales. As far as I the Government—the fact that we have raised the can foresee, the practicalities are pretty unattractive income tax threshold to £10,500. That means that the compared with the notional possibilities that we are lowest paid in society are keeping much more of what discussing in this legislation. they earn. It is an issue of social justice of which I am tremendously proud. The sooner the Labour Party accepts that that is of great benefit to the lowest paid, Baroness Randerson: Noble Lords will have noticed the better it will be for its stewardship of the Welsh that the pleasant agreement and consensus across the Government. I give way to the noble Lord. Chamber has disappeared in the last group of amendments. I thank the noble Lord, Lord Wigley, for his speech, bearing in mind that the transfer of powers Lord Howarth of Newport: I am grateful to the proposed in his amendments would mean Wales becoming Minister but does she recognise that, in the context of entirely separate in taxation terms. He will not be an unfair funding formula which simply fails to address surprised to hear me say that I am not going to accept the reality of the needs of Wales, Wales has less scope these amendments. to cut taxes than other parts of the United Kingdom? However, I wish to spend some time on the speech by the noble Baroness, Lady Morgan, and to express Baroness Randerson: I recognise that there is an some considerable surprise. I took the trouble to reread issue with the funding formula but I think it is also what she said at Second Reading. The Labour Party’s possible to overestimate the level of unfairness. I believe views appear—to use a colloquial phrase—to be all that this week the honourable Owen Smith suggested over the place because of the considerable gap between that the gap in funding for Wales was £150 million per what the noble Baroness said at Second Reading, what annum. That is a significant amount of money but in a she is saying now, what the First Minister of Wales has budget of more than £15 billion it would not offer a said and what the honourable Owen Smith said in the total revolution for Wales. Nevertheless, I recognise other place. Name a person, name a debate and you that it is an issue that needs to be looked at in the can have a slightly different view. In fact, there is a context of other devolution discussions at the moment. huge gap between one debate and another. I turn to the questions asked by the noble Baroness. The principle of accountability lies behind the proposal An impact assessment of the costs was published in the Bill to devolve an element of income tax to the alongside the Wales Bill. It indicated that the estimated Welsh Assembly. The noble Baroness asked me what cost of setting up the income tax changes in Scotland the reason was for the Government changing their was £40 million to £45 million. An updated estimate is mind on the lock-step. The reason was quite simple. now available of £35 million to £40 million, which is People such as the First Minister said that this power rather less than we initially thought. There has also was no use, therefore they could not use it. They said been an updated impact assessment. The estimate of that the lock-step was not a good idea. We listened to the annual running costs is £4.2 million, and that will people and it seems that, across parties and across the be updated in due course. country, there has been huge support for the removal The noble Baroness also asked whether we would of the lock-step except now, suddenly, in the Labour agree to a Treasury impact assessment of the taxes on Party, which had condemned the lock-step as being either side of the border. The key thing is that there fatally flawed. It therefore surprises me that, when the are provisions in the Bill on the transparency of the lock-step was proposed, the Labour Party did not whole thing and of the discussions between the parties. make clear that it was totally opposed to the devolution A joint Treasury committee has been established between of income tax, rather than simply opposed to the the Welsh Government and the UK Government, and lock-step. it is already in discussions. Welsh Ministers and UK I want to take up a few issues that the noble Ministers are discussing these matters. That is the kind Baroness, Lady Morgan, raised. She referred to the of detail that would flow from those discussions. serious erosion of local accountability. That may be I turn now to the Labour amendment. Forgive me, the case in Wales and, if so, it is down to the Welsh but I find it quite difficult to understand the intellectual Government, because they have devolved responsibility inconsistency of arguing against the removal of the for local government. However, looking at the pattern lock-step, while at the same time arguing for an increase in England, there has been a big increase in the amount in the amount of devolved income tax from 10p to 225 Wales Bill[15 OCTOBER 2014] Wales Bill 226

15p. I remind noble Lords that the First Minister said (a) the number of days in that year on which T is a member as on several occasions that the lock-step was an described in any of paragraphs (a) to (c) of section 116E(4), inappropriate method of dealing with income tax exceeds devolution, and that this was unusable and unworkable. (b) the number of days in that year on which T is a Scottish He did not say that he was opposed to income tax parliamentarian. (3) T meets the second condition if— devolution. Now, apparently, it is dangerous as a (a) the number of days in that year mentioned in paragraphs (a) mechanism to devolve income tax and, at the same and (b) of subsection (2) are the same, and time, it is also all right to devolve 15p but not 10p. (b) T meets condition A or B in section 116E for that year”. I believe that noble Lords will be surprised that the I am sure now that every Member of the Committee Labour Party is having so much difficulty in coming to who is here will know exactly who the Scottish a firm position on this. The noble Lord, Lord Howarth, parliamentarians are who are liable for tax. exposed one interesting piece of inside information I am quite good at the Times Codeword, but I have with his use of the phrase “poisoned chalice”. He said not decoded this particular new section at all. I that the devolution of income tax could be a poisoned immediately seized the opportunity to read the usually chalice for the Labour Party in Wales. It is called helpful Explanatory Note on this particular new section. “government”. I leave you with that thought. It should be illuminating and answer all my queries. It states: Amendment 24 agreed. “Section 116F(1) sets out that if an individual has been a Scottish parliamentarian in a tax year, they will be a Welsh Amendments 25 to 30 agreed. taxpayer if they are UK resident for the tax year, have also been a Welsh parliamentarian in that tax year and can meet one of the two conditions set out in the section. Taken with section 116E(5) Amendment 31 this means that, if an individual is a Scottish parliamentarian for part of the year, but not a Welsh parliamentarian in that tax year, Moved by Lord Rowlands they will be a Scottish (rather than Welsh) taxpayer, even if, for example, they also have a close connection with Wales”. 31: Clause 8, page 10, line 20, leave out from beginning to end Did I read that right? Are we talking about a Scottish of line 15 on page 11. parliamentarian who would be liable if he or she was also a Welsh parliamentarian in the same tax year? Lord Rowlands: My Lords, like many Members of Who is this amazing creature? Who has this amazing this House, for a number of years I have had to read electoral capacity to serve in one tax year both as a through Bills. In doing so, I eventually developed a Welsh parliamentarian and a Scottish parliamentarian habit that I cannot kick, namely that if I come to a so that he or she would then be liable to pay tax in clause or part of a clause that I cannot fully understand Wales? I find it difficult to envisage such a person ever or appreciate and translate into the language of a lay existing. Everyone talks about belt-and-braces man, I table amendments to delete those particular draftsmanship and this must surely be it. I would be elements in the clause. I do this in the hope and the grateful, when the Minister comes to reply, if he or she expectation that when Ministers reply they will tell me will tell me whether they know of anyone who is likely what it really means, and it will become crystal clear. I ever to be a Welsh parliamentarian and a Scottish have to say that there have been occasions in the past parliamentarian in the same tax year so that we might when that has not happened, but I am sure that it will then know which Scottish parliamentarian may be not happen tonight and that we will have a clear view liable for Welsh income tax. of what some parts of this clause are saying. I use this as an illustration because I sometimes find I must confess that I struggled with much of Clause 8. that in this House—and I was a strong campaigner in It is a very long clause; it rambles on for four and a the other House—I occasionally rebel against half pages of the Bill. However, I was okay and I was parliamentary draftsmanship of this kind. All these getting there, until I hit new Section 116F on page 10. cross-references make it almost impossible to read. I was particularly intrigued by its subtitle, “Welsh Even an intelligent person who is used to reading taxpayers: Scottish parliamentarians”. I was intrigued legislation should not be faced with drafting of this to find out how this clause—presumably—seeks to kind. It would be a good idea, once in a while, for the define those Scottish parliamentarians who may end House to say to the Government, “Take this back, not up paying Welsh income tax. I immediately seized the because we do not agree with the intent but because it text to find out who these unfortunate—or fortunate— is drafted in such a way that it is almost incomprehensible”. Scottish parliamentarians would be who could become If we started doing that, maybe we would have Bills liable to pay a Welsh income tax. I went through the better drafted than this one is. text of new Section 116F from line 20 on page 10. We find in this new section that the Scottish parliamentarian The Deputy Chairman of Committees (Lord Geddes) is: (Con): Having posed such a fascinating question, would “An individual (T) who is a Scottish parliamentarian for the the noble Lord like to move his amendment? whole or any part of a tax year is a Welsh taxpayer for that tax year if— Lord Rowlands: I beg to move. (a) T is resident in the UK for income tax purposes for that year (see Schedule 45 to the Finance Act 2013), 5.45 pm (b) T meets condition C in section 116E for that year, and Lord Richard: My Lords, I support my noble friend (c) T meets either of the following conditions for that year. on this. I am not a tax lawyer and I have given thanks (2) T meets the first condition if— for that ever since I was called to the Bar. I am bound 227 Wales Bill[LORDS] Wales Bill 228

[LORD RICHARD] Sections 116G and 116H. I spend around 140 days of to say that I read this new section with incredulity. It is the year here, about 60 days in my family home in designed to cover a Scottish parliamentarian as well as Scotland and the rest of the time in Wales. On these a Welsh parliamentarian—Mr Mac ap Jones, I suppose formulae, I am not liable to pay income tax in Wales, we can call him. That individual is covered here in certainly not in Scotland, and possibly not in England, such a way that it is a masterpiece of almost Proustian if we have similar provisions. Thank you very much. complexity. Even for one who is reasonably familiar Devolve away. with looking at legislation, I found it almost impossible to understand. I did what my noble friend did and Baroness Randerson: My Lords, I understand that went to the Explanatory Notes, but they are almost this new chapter is not the easiest read. In fact, I found impossible to understand, too. Why on earth are we it quite good for getting to sleep on one occasion. legislating in this way? Some 40 years ago, I was a However, it is important to recognise that this is a member of a committee presided over by the late Lord complex issue and has a direct relationship with things Renton on the drafting of legislation. It was an interesting such as tax law, and when you get an indirect relationship committee and we said that the practice of legislating with tax law. When you get into these things, the more by cross-reference meant that you had to have half a you think about it, the more exceptions that occur to dozen books open at the same time to get even a you to be considered. glimmer of understanding of the subject. We said that The clauses in this Bill are very closely based on that was bad and something should be done about it. those in the Scotland Act and have been subject to the Of course, successive Governments said, “Yes, we whole scrutiny process in that respect. I suggest that agree entirely that it should be changed”, but it never noble Lords think about how to deal with somebody is. It just seems to get worse as time goes on—until we who is a lorry driver or a shift worker. Every time you arrive at the nonsensical drafting that appears in this Bill. set a test, you can think of exceptions. Before the Perhaps I may make a simple suggestion to the noble Lord, Lord Rowlands, thinks that being a Scottish Minister. It is obviously designed to deal with a person parliamentarian and a Welsh parliamentarian in the who may be working in one jurisdiction and has same year is unusual, may I remind him that I call this residency in another. It is meant to make sure that the the “Keith Raffan clause”? Keith Raffan was an MP person does not pay two lots of tax in two different in north Wales and then almost immediately an MSP jurisdictions. Why can we not have a simple residence in Scotland. He moved from Wales to Scotland. test? I would suggest tentatively that the Minister should look at proposed new Section 116E, which Lord Anderson of Swansea (Lab): Did he hold both states at the end of page 9: positions in the same tax year? “For any year, a Welsh taxpayer is an individual”, and thereafter it sets out an enormously complicated Baroness Randerson: We are talking about the situation structure. Why can we not say that in any tax year, a in the past. Keith Raffan moved from Wales to Scotland; Welsh taxpayer is an individual who is resident in he also moved from the Conservative Party to the Wales? We could have similar rules for Scotland, England Liberal Democrats. The whole thing is a relevant and Northern Ireland. With any luck, Mr Mac ap example: the thing you would imagine would never Jones would be successively reinterred and we need happen has already happened. not bother about him again. Really, the way this has been drafted is too much. I agree totally with my noble Lord Rowlands: I am sorry; I do not know Mr Raffan’s friend that perhaps it is time for this Committee to say, parliamentary history? Was Mr Raffan both a European “We do not like this drafting. We don’t understand the Member and a Member of the Commons in the same purpose of it, and we think it could be simplified so tax year? that people can understand it. The Government should take it away and try again”. Baroness Randerson: He was an MP and an MSP in the same tax year. I am pretty certain I am right, but the principle is that he moved from Wales to Scotland, Lord Wigley: I want to join briefly with colleagues straight from one job to the other. who have raised these points. Over many years I have often heard the argument made that matters of substance are passed through Parliament by order—by secondary Lord Richard: Is it not absurd that we should be legislation and so on. Here we have the reverse position, legislating in this way for one person? Is it not absolutely where there are matters that should surely be set out in ludicrous? Has there been a flow of parliamentarians orders. Ministers should be empowered to introduce across the borders in this way, or is it just this one orders to deal with a variety of circumstances that individual? The Minister, with great respect, should certainly do not warrant taking up the face of the Bill. take these measures back and look at them again and, If that were the case, there would be flexibility within if she wants to, simplify them and bring them back. the orders to deal with other cases which possibly have not been thought of. Putting this in the Bill in this way Baroness Randerson: This has been through the is surely a nonsense. whole scrutiny process in relation to Scotland. If noble Lords wish to blame someone, I suggest they blame the Scots. They sat in here and in the other place and Lord Thomas of Gresford: My Lords, I am most thought up a lot of complexities that had to be answered grateful to the noble Lord, Lord Rowlands, for drawing in the case of both this Bill and the Scotland Act. Just my attention to these new sections, in particular new for the sake of clarification— 229 Wales Bill[15 OCTOBER 2014] Wales Bill 230

Lord Anderson of Swansea: What is the answer to take out other parts of the Bill that I would support. I the good point made by the noble Lord, Lord Wigley, hope that, if nothing else, when Ministers go away and that this is appropriate for an order, rather than for the talk to parliamentary draftsmen, they will say that face of the Bill? there is great and bitter agitation against this type of drafting and legislation. If nothing else, this debate Baroness Randerson: That is a perfectly valid point, would then have served a purpose. I beg leave to but we have it here in the Bill. I am also very conscious withdraw my amendment. of the fact that noble Lords constantly complain that Amendment 31 withdrawn. there is not enough in the Bill and that there should be more on its face and less in orders for the sake of transparency. On this occasion, you have total Amendments 32 to 35 transparency. There is also, of course, the argument Moved by Baroness Randerson that we are talking about tax rules for individuals. In 32: Clause 8, page 12, line 1, leave out first “the” and insert “a” fact, if you have more on the face of the Bill, that 33: Clause 8, page 12, line 1, after “year” insert “for the purpose could be said to be easier for individual taxpayers to of calculating the Welsh basic rate, Welsh higher rate or Welsh follow. additional rate” May I finally make it absolutely clear to noble 34: Clause 8, page 12, line 2, leave out second “the” and insert Lords that the noble Lord’s amendment would, in “a” fact, mean taking away the simple test—which is the 35: Clause 8, page 12, line 2, leave out “so set for a tax year” test, if you have only one home, of where your closest and insert “set by the Assembly for a tax year for any one or more connection is—and replacing it with everyone counting of those purposes” days? Counting days is one way of dealing with it but Amendments 32 to 35 agreed. not the simplest one. For most people, the simple thing is to ask, “Where is your home?” and, “Where do you Amendment 36 not moved. spend most of your time?”. Taking away that option and leaving everyone counting days would possibly Clause 8, as amended, agreed. make life much more complex. The noble Lord, Lord Richard, asked why not just Clause 9: Welsh basic, higher and additional rates of say “resident in Wales”? I think noble Lords are well income tax aware that the concept of where your residence is has Amendments 37 and 38 not moved. caused a number of people a lot of trouble over the years. It is really important that we have clarity and absolute rules. There should be no doubt in people’s Amendments 39 and 40 minds as to which rules they need apply. Moved by Baroness Randerson 39: Clause 9, page 13, line 36, at end insert “for the purpose of Lord Richard: With the greatest respect to the noble calculating the Welsh basic rate, the Welsh higher rate or the Baroness, residence is a very well known concept in Welsh additional rate (as the case may be)” tax law. If you talk to taxpayers, particularly in areas 40: Clause 9, page 13, line 37, leave out “rate” and insert such as the City of London, they know what their “rates” residence qualification is. They know that they have to Amendments 39 and 40 agreed. establish a certain residence and that it is on the basis of where that residence is that they pay their tax. That Clause 9, as amended, agreed. is a much simpler concept than this. Clauses 10 and 11 agreed. Baroness Randerson: These rules flesh out what the 6pm term “residence” means in tax rules in relation to Wales. I hope noble Lords will accept that although Clause 12: Referendum about commencement of the rules may not make pretty reading, they are income tax provisions workmanlike and, despite their complexity, they are clear, unambiguous and easy for people to follow. Amendment 41 Lord Rowlands: I find it difficult to believe that they Moved by Lord Wigley are very easy to follow. I also do not believe that there 41: Clause 12, page 18, line 5, at end insert— is clarity here: there is a lot of confusion. I am delighted “(3A) The Secretary of State must lay a draft statutory instrument that the noble Lord, Lord Thomas, will become completely containing an Order under subsection (1) before each House of tax-free as a result of the other provisions in the Bill. Parliament and the Assembly if— What we are trying to show and expose is that we are (a) the First Minister or a Welsh Minister appointed under getting fed up with the way in which Bills are drafted section 48 of GOWA 2006 moves a resolution in the Assembly that, in the Assembly’s opinion, a recommendation in this kind of way. The constant cross-referencing should be made to Her Majesty to make an Order under makes it almost impossible for a Member of Parliament section 12(1), and or Member of this House to follow the Bill as closely (b) the Assembly passes a resolution on a vote in which the as he or she would want. This amendment was tabled number of Assembly members voting in favour of it is to cause this debate and I have no intention of forcing not less than two-thirds of the total number of Assembly it to a vote because, of course, in the process I would seats. 231 Wales Bill[LORDS] Wales Bill 232

(3B) The Secretary of State must lay the draft statutory question to the electorate, it should have the power to instrument specified in subsection (3A) within the period of 30 commence that process itself. Similarly, if it agrees days beginning immediately after the day on which the resolution that a referendum on a technical issue such as this under that subsection is passed.” should not be necessary, it should be within its power to commence the provisions itself and, at election Lord Wigley: My Lords, this amendment stands in time, to be held accountable to the Welsh electorate on my name and that of my noble friend Lord Elis-Thomas. that basis. I beg to move. I will also speak to the associated group of amendments on the Marshalled List. In doing so, I suspect that there may be differences of opinion across the Chamber Lord Elis-Thomas: My Lords, this amendment follows on some of the matters involved in these amendments. the amendments to Part 1 that were debated on Monday. The intention is to establish the constitutional principle Amendments 41 to 48 are drafted to ensure that that it is by requiring a threshold of a two-thirds only the National Assembly can begin the process of majority of Members of the National Assembly present calling a referendum on the commencement of the and voting that we can maintain the checks and balances income tax provisions in the Bill. Amendment 41 brought about by the change in devolution. Since we would ensure that a referendum might be called if a debated these matters on Monday there has been two-thirds supermajority of Assembly Members approved rapid movement in the interparty discussions both it—and that, this being the case, the Secretary of State here in Westminster between the political leaders would be required to make the order within 30 days of and, equally importantly—I was about to say more it being approved. This is evidently a change from the importantly—in Cardiff. Those discussions have resulted 180 days in the Bill, which we believe to be an unnecessary in the Motion on the Assembly’s Order Paper which delay. will be debated on Tuesday. It will clearly set out the Amendments 42, 43 and 44 are consequential and view of the four party leaders in the Assembly in ensure that although an order would still need to be relation to negotiating with the United Kingdom laid before each House of Parliament, only the Assembly Government and to the interparliamentary negotiations would need to approve the referendum order. We on some aspects of the procedure that will be required believe that the responsibility should be fairly and to take these matters further. squarely on the shoulders of the Assembly in this The principle of interparty agreement in Cardiff matter, as in other matters which we debated earlier. leading to a request to the UK Government, and to Amendment 45 similarly ensures that there is no the UK Parliament where relevant, should generally unnecessary delay in the proceedings. As currently be welcome in this place and throughout the United drafted, Clause 12(6) allows the Secretary of State to Kingdom levels of government in response to the new consult on the draft order until whatever time he or times that we are in as regards devolution. she considers appropriate. Amendment 45 would remove Interparty agreement has been the route that we that provision. have taken for the development of devolution in Wales We have laid an amendment arguing that Clause 13 since the conversion of the Welsh Conservatives—I should not stand part of the Bill for the reason that, see my friend from the Assembly, the noble Lord, were our other amendments in this group carried, the Lord Bourne, sitting on the Front Bench—to a position provisions in this clause would no longer be necessary. of embracing devolution. My intention has always It should be for the Assembly to determine whether a been that, regardless of what happened in Scotland or referendum is needed. This decision should not be Northern Ireland, that should be the route followed in subject to the approval of the Secretary of State. Wales. Therefore, when there are contentious matters, it is the Assembly, on a supermajority, that should Amendments 47 and 48 allow for a supermajority decide these things. It does not need to have it imposed of the National Assembly to decide whether there on it by Parliament or, indeed, by political parties should be a referendum on transferring income tax outwith the Assembly. powers or whether—I emphasise this—simply to commence the provisions. We believe that if a cross-party I therefore ask the Minister to consider this amendment consensus were reached in the Assembly, which would in a spirit of agreeing to serious discussions. The be needed in order to achieve a supermajority of Prime Minister has said—we do not need to quote this Members, that institution should not be compelled to continually—that Wales should be at the heart of the put it out to a referendum. If all the parties agree on debate on devolution. If the Assembly’s making a these matters, why on earth go to the expense of request to the UK Government and Parliament is not holding a referendum? Scotland is apparently going to the people of Wales speaking through their elected be given far-reaching new taxation powers without representatives and asking to be part of the discussion such a referendum. Why should we in Wales have one on equal terms, what is? How are we to express that forced on us? will? The expression of that will is essential to the spirit of the new union, as the First Minister of Wales On Monday, I argued that the Assembly should called it today in this city. In that spirit, I ask the have the power to hold a binding referendum on Government seriously to consider the direction of our matters which are already within its competence. A amendment. referendum on tax matters should be an available option if the Assembly deems it necessary. That would be for the Assembly to determine. The principle contained Lord Elystan-Morgan (CB): I endorse with very in this group of amendments is the same: if the great enthusiasm everything that has been said by my Assembly should determine for itself whether to put a noble friends Lords Wigley and Lord Elis-Thomas, 233 Wales Bill[15 OCTOBER 2014] Wales Bill 234 particularly on the question of unity. We as a nation they will not touch Barnett at all. Barnett shall be have been blighted by disunity for so long. That refrain utterly inviolate. Having said that, it means that it is was taken up over the years by my old and very dear virtually impossible to contemplate a situation where friend Lord Elwyn-Jones: our predilection to fissiparous they will be willing to discuss Barnett in the context of division. He had a marvellous story, and I hope the Wales. It is one and indivisible—the bubble is either House will indulge me for a moment. A shipwrecked pricked or it is not. As far as the losses under Barnett sailor was cast on a desert island, the only survivor of are concerned, I know that various figures are mooted. the tragedy. He was there for years, but ultimately a The probability is that the annual loss at this stage is of ship drew into the bay. A boat came ashore, and there the order of £200 million to £300 million and will was great jollification all round. Before leaving the increase as prosperity increases. Be that as it may, I ask island, the sailor showed the boat’s crew where he had the Minister to give these undertakings. First, the been living: his living quarters, where he had kept the Government should appreciate that it is the legal right animals and a cave with a cross over it. He said, “That of the Welsh Assembly, and no other body, to decide is the church in which I worshipped on Sundays”. whether there should be a referendum and when there Somebody among the boat’s crew said, “But there’s should be one. Secondly, they should not contemplate another cave with a cross on it”, and he said, “I bringing any pressure to bear on the Welsh Assembly wouldn’t be seen dead in that place”. That is the sort in that regard—it should have a free, unfettered choice. of people that we have all too often been in Wales, and Thirdly, there should be no question of asking the unity is very greatly to be welcomed. I have already Welsh people to determine this momentous matter of paid tribute to the noble Lord, Lord Bourne. The Silk a referendum without the Barnett matter having being commission tried to find a reasonable, meaningful, settled fully, comprehensively and once and for all. least common multiple. The chairman, the assessors and the four representatives of the various parties Baroness Morgan of Ely: My Lords, the Labour succeeded in doing that, and long may that continue. Party in 1997 made a promise in that first referendum I turn to the question now of the amendment itself. which established the Assembly. In that promise we I accept the principle that it is healthy, proper and made it clear that we would not introduce income tax courageous for the Welsh people to take on themselves variations to Wales unless and until the people of these heavy fiscal responsibilities and that the decision Wales gave us permission to do so. Let us not forget should essentially be theirs alone. On the other hand, I that we won that referendum by a hair’s breadth. It would not wish the situation to develop other than would be a massive political mistake to go against through a referendum because I think that a referendum that. I honestly believe that had there been a question would clarify the mind—as Dr Johnson might have about tax in that referendum we would not have an said—and would allow these issues to be examined in Assembly today. We have to honour that promise we very great detail. I was disappointed in 1997 when the made to the Welsh electorate. The referendum promise Labour Government, having been elected, made it to the people of Wales is one of three locks we want to clear that they would proceed with the issue of some be sure are in place before tax raising or cutting form of Parliament for Wales and then said at the powers can be used in Wales. If we have learnt anything same time that there would be a referendum. I was from the Scottish experience it is that the public will disappointed but I was enthralled that we managed to get involved if it is something that impacts on them carry that referendum, albeit by a slim majority. It directly. There is nothing that impacts more directly gave us a sovereignty and a moral certainty in relation than income tax so they are sure to get involved in this to the matter and I think the same would be true in debate. We must do them the honour of respecting this connection. their views and we will not know what those views are I am sorry that I missed the beginning of this unless and until we hold that referendum. debate—I was upstairs in a sub-committee dealing with European matters and I apologise for that—but I 6.15 pm believe I heard the Minister say, with regard to a I think the Minister deliberately misunderstood referendum, that she wished that the matter would be part of my last intervention. Our interest in the Labour dealt with fairly quickly by the Welsh Assembly. I see Party is in doing what is the best for Wales. We are not that she nods. This is my plea. This is a crucial matter necessarily opposed to lock-step; we simply say that that deals with the very essence of whether a Welsh we have to proceed with extreme caution. We would Parliament can succeed in a credible way. Everything abstain, if pushed, as we did in the Commons. We are turns in the first place on the validity of that referendum simply saying be careful, this is a slippery slope and in so far as it reflects the wishes and understanding of you have to do this in the context of the broader UK the Welsh people. There can be no question of meandering discussion. The second lock we would want to look at into the dark in this matter, marching possibly to the is to allow for a system that would ensure that there beat of a distant drum while looking at some faint would be no change in terms of income tax powers point of light in the distance. It is the same as a jury unless and until we could be assured that Wales would contemplating a serious case. There has to be certitude not be worse off. We want to see a period of assignment over exactly what the issues are and what the main to carry out an assessment to see what the real costs relevant facts are in relation to them. and benefits are to Wales of the introduction of income Let me come to the point immediately. There are tax. The third lock, of course, is the one to which my many issues but the most important one is Barnett. noble friend referred just now—a fair funding mechanism The Government have said in relation to Scotland, for Wales. Until everybody understands that Wales is understandably and perhaps in a mode of panic, that being short-changed by Barnett and something is done 235 Wales Bill[LORDS] Wales Bill 236

[BARONESS MORGAN OF ELY] recalls that there was a tremendous scramble to make about it, it would be a very unpopular move in Wales that timetable of 246 days. Our 180 days is therefore in the long term—we would be locked into a system an amendment to take account of experience. I reassure where we were permanently disadvantaged. I am sure the noble Lord that it is a limit, not a target. that we will come on to this later in the debate. Lord Elystan-Morgan: With great respect, I Baroness Randerson: I thank noble Lords for their wholeheartedly agree with the noble Baroness that contributions to this debate. The Government have that is the only circumstance in which there could be been consistently clear that the decision on whether to any dubiety at all. My question is not irrelevant: who trigger a referendum on the devolution of income tax decides? Is it the Secretary of State who decides whether is a matter for the Assembly and the Welsh Government. there has been a valid two-thirds majority, or it is the I say that in response to the noble Lord, Lord Elystan- courts? Morgan. Clause 13 empowers the Assembly to trigger a referendum to ask the electorate in Wales whether Baroness Randerson: That would depend on the they want some of their income tax to be devolved. circumstances, would it not? Someone may wish to The Government agree with the Silk commission that test such a matter before the courts; I speculate here, the 2011 referendum on full law-making powers for but there might be objections lodged by certain Assembly the Assembly provides the best model for conducting Members. I emphasise to noble Lords that the driving such a referendum. Clause 13 replicates for the most seat is occupied by the Assembly in this process. part Section 104 of the Government of Wales Act. The clause provides for the Welsh Government to Lord Elis-Thomas: I will not pursue this matter, but move a resolution in the Assembly to trigger a referendum. I tell the Minister that if she has been given legal If the Assembly passes the resolution by a two-thirds advice that procedures of the Assembly are in doubt, majority, the First Minister must ensure that notice of she must know that those matters are for the Presiding the resolution is given in writing to the Secretary of Officer and the Assembly itself, and must be so. State. The Secretary of State or the Lord President must lay a draft order before Parliament within 180 days. Baroness Randerson: That is exactly the view of the I refer the noble Lords, Lord Wigley and Lord Elis- Government. The Assembly, as I have just said, is in Thomas, to Clause 13(3)(a) and (b) on page 18 of the the driving seat in this process. Bill: I resume my response to the initial speeches in “the Secretary of State or the Lord President of the Council must this debate. I point out that by opposing the question lay a draft of a statutory instrument … the Secretary of State must give notice in writing to the First Minister of the refusal to that the clause should stand part of the Bill and lay a draft”. through Amendments 41 to 45, 47 and 48, noble The first thing I asked when I read the Bill was, “In Lords are of course seeking to remove important what circumstances could the Secretary of State refuse?”. parts of a tried-and-tested mechanism which was I was advised that the only sorts of grounds on which recommended by the Silk commission. Silk is the basis a Secretary of State could refuse would be where there of consensus. The noble Lord, Lord Elis-Thomas, was genuine doubt about the procedures of the Assembly referred to the importance of agreement, and so on, that led to the two-thirds majority being obtained or and the characterisation of consensus as something whether it had been obtained. that the Assembly has sought on many occasions. Silk is the basis of the consensus behind the Bill. I ask noble Lords to recognise that we sometimes need a bit Lord Wigley: Where in the Bill does it say that those of choreography in order to maintain unity. That are the only circumstances in which the Secretary of means that there has to be agreement to work in State can refuse to do so? Why must it take up to unison, although it may not always be exactly what we 180 days for such a decision to be taken? would prefer at any one time. Amendments 41 to 45 would remove the need for Baroness Randerson: The Bill does not give those Parliament to approve the draft order that sets out reasons. The legal advice I was given related to tried- how a referendum is to be conducted, and the right of and-tested constitutional principles. Dare I say it, the the Secretary of State to consult before such an order noble Lord is now asking for more to go into the Bill is laid. I repeat that all this is based on the experience and in the previous debate he was asking for it to be of the 2011 referendum for law-making powers. It is reduced. the mechanism that has been agreed. Through Amendments 47 and 48, noble Lords are Lord Elystan-Morgan: My Lords— seeking to provide a mechanism by which the Assembly could resolve to commence income tax provisions in Baroness Randerson: I will just answer the noble this Bill without a referendum. I realise that there are Lord’s intervention and then I will certainly give way. those who do not believe that a referendum is necessary, The noble Lord, Lord Wigley, asked, both in his but I recognise entirely the arguments put forward by speech and just now, about the 180 days. I remind the noble Baroness, Lady Morgan, that the original noble Lords that the previous referendum in 2011 referendum did not include a tax question. It is therefore took 246 days, albeit with the intervention of a general important that people are engaged in this debate and election—but we have them quite regularly. It could be given the opportunity to make their voice heard. It is a that another referendum would be interrupted in such fundamental, far-reaching issue and therefore the people a way. I am sure that the noble Lord, Lord Elis-Thomas, of Wales need to be consulted. 237 Wales Bill[15 OCTOBER 2014] Wales Bill 238

The noble Baroness, Lady Morgan, was concerned Clause 12 agreed. that I had deliberately misunderstood her, which I find a distressing accusation. I invite the noble Baroness to Amendment 46 not moved. reread what she said earlier in the debate; she might then understand why it is possible to have misunderstood Schedule 1 agreed. her. Clause 13 agreed. I therefore ask the noble Lord, Lord Wigley, to withdraw the amendment, and not to oppose the 6.30 pm question that Clause 13 stand part of the Bill.

Lord Wigley: My Lords, I am grateful to every Clause 14: Commencement of the income tax noble Lord who has taken part in this debate and to provisions etc if majority in favour the Minister for her response. There has been clarification on some points, such as the 180 days and so on, which Amendments 47 and 48 not moved. is useful. Clause 14 agreed. There is, however, a central point here: whether or not this House trusts the National Assembly for Wales, the elected parliament of Wales, to take decisions such Clause 15: Welsh tax on transactions involving as this. I have every faith in its Members that, if there interests in land is doubt as to whether they can carry the people of Wales with them in their decision within the Assembly, Debate on whether Clause 15 should stand part of the they know that they may need to revert to a referendum. Bill. Of course, they have as much intelligence to provide Lord Rowlands: My Lords, there is a consensus that that as we do in this House. both stamp duty and landfill tax should be devolved. I have no intention of questioning that consensus. The Lord Elis-Thomas: More. purpose of my seeking a debate on these clauses is to ensure that we know the implications of devolving Lord Wigley: More, my noble friend says. In many these taxes, particularly on the block grant. To date, I ways, he is right: they are in Wales dealing with the do not think we have concentrated on that issue. circumstances of Wales. With all the good will in the I have some questions, first, about stamp duty. world, what is done here is done for Wales and what is Stamp duty revenues were £115 million in 2010-11, done in Cardiff is done by Wales. We want to ensure according to the Silk commission. This represents that they take that responsibility on their own shoulders. only 2% of the total. The Silk commission makes the That is one of the driving forces towards getting a obvious point that stamp duty is a very volatile tax. It consensus of approach. can vary from year to year depending on the state of The noble Baroness mentioned choreography in the housing market. No form of indexation such as getting agreement. There must have been a lot of has been developed to deal with income tax devolution choreography in getting all four party leaders to sign was recommended; in fact the recommendation was up to the Motion that is coming before the Assembly for a fixed reduction. How is the fixed deduction from next Tuesday. It is a substantial step in the right the block grant going to be determined? What will be direction. The way in which we are doing these things the arrangements and process, and how will it be in Wales is different to the way in which they are being assessed? What impact will the devolution of stamp done in other parts of these islands. I think that, in duty have on the block grant? many ways, we are doing them better and they will The second tax that we are devolving—the landfill stand the test of time. We have to trust the people in a tax—is very different. It is a tax that is not really referendum, yes, but also the representatives to come aimed at raising revenue. It is intended to encourage to a sensible decision in regard to such matters. waste saving and recycling. In fact, the success of this I accept what the noble Lord, Lord Elystan-Morgan, tax would be if the revenue declined. Indeed, the Silk said about the Barnett formula. We will be coming on commission points out that that is exactly what is to that in a later bank of amendments. Of course there happening: the taxable base—that is, the volume of has to be an acceptable basis before one moves into waste sent to landfill—is declining. Across the UK, the income tax provisions, but we are going to have to the taxable base for landfill has fallen by 33% in the go there. Otherwise we are not going to get the last five years, and so the value of the block grant answerability that we need. Any hurdle that we put offset would need to reflect a declining tax base. between the present position and getting those powers Again, there is a serious issue about what impact the means that we are imposing a delay, a built-in roadblock, devolution of this tax would have on the block grant: that stops the movement towards a more responsible how it will be assessed and how it will be decided what and transparent national parliament for Wales. That is the deduction will be. the background to the tabling of the amendment, and There are a couple of other complications with the the Government should take it on board not just in the landfill tax, as listed in paragraph 24 of the March context of this debate but in the generality of the Bill. 2014 White Paper. There is a UK Landfill Communities On that basis, I beg leave to withdraw the amendment. Fund attached to the landfill tax. This fund is financed Amendment 41 withdrawn. by contributions from the landfill site operators, who receive an LfT credit worth 90% of any contribution Amendments 42 to 45 not moved. they make. This is a UK fund and a UK landfill tax 239 Wales Bill[LORDS] Wales Bill 240

[LORD ROWLANDS] and we will be able to approve these clauses in the full credit arrangement. However, once devolved, the operators knowledge of the impact they will have on the block in Wales will no longer be eligible for UK tax credits. grant. I hope that the Minister will be able to reply. As I understand it—and it is clearly stated in paragraph 24 of the White Paper—once we devolve the landfill tax, Lord Anderson of Swansea: My noble friend as the eligibility for the UK-based landfill tax credits will usual asks some very probing and cogent questions. disappear. I am not quite sure but I thought that the On the face of it, these transfers of tax responsibility Minister implied in an earlier remark that in fact it are relatively symbolic because, on the “bucket and the would not, but according to paragraph 24, that is the well” principle, what is gained on the one hand is lost case. It says: on the other in terms of the block grant. It would be “Once LfT is devolved to Wales, operators of landfill sites in helpful if that could be elaborated on. Perhaps the Wales will no longer be eligible for a UK LfT credit”. best answer is that these transfers give a basis for the So that credit would fall. Are there powers in the Bill borrowing powers, which are very welcome, and which to allow a Welsh Government to create an equivalent are contained in the Bill. Just a word of caution, landfill tax credit scheme of this kind? however: the idea of a transfer of stamp duty has already been seized upon by other groups, notably by In Wales, there are 24 registered landfill site operators, the Mayor of London, Boris Johnson. London, of of which 15 were in receipt of tax credits during the course, has far greater resources and far more wealthy financial year 2013-14. HMRC will not disclose houses and land than Wales. If this were to move information relating to how much the individual operators along the spectrum in the UK, it could have substantial receive but the landfill communities contributed implications, not least for Wales. Therefore, I utter a £4.19 million in 2010-11, £4.3 million in 2011-12 and word of caution. However, on the other side of the £4.3 million in 2012-13 towards environmental projects coin, the borrowing powers, and the use to which they in Wales. will be put—pace the noble Lord, Lord Thomas of Paragraph 24 on page 11 of the White Paper explains Gresford, who feels that north Wales is likely to lose that there is going to be a transitional period. Will the out in terms of the borrowing powers—are indeed Welsh Government, if they wish to, be able to establish welcome in principle. an equivalent landfill tax scheme, of the kind that has been operating and which has successfully ensured Baroness Morgan of Ely: My Lords, Labour supports that in some areas—where these landfill sites are often the move to devolve stamp duty land tax to Wales as it very controversial and have impacts upon local would be an obvious candidate due to the highly communities—they are able to make contributions immobile nature of the tax base. The other issue to and maintain some kind of local community fund? consider is the fact that housing is already a devolved The second problem identified in paragraph 24 is issue. Devolving this tax would allow the Welsh that: Government to have a more comprehensive approach to housing needs in Wales. I echo the concerns of my “LfT is a key lever for the UK Government to achieve its 2020 landfill reduction target under the Landfill Directive (relating to noble friend Lord Rowlands about the impact on the the biodegradable municipal waste). Member states may be fined block grant. Obviously, there would be an impact. The if they fail to achieve their target. In the unlikely event that the Command Paper states that the Government continue UK fails to meet its landfill reduction target solely because of to discuss this proposal. However, the problem is that changes to landfill tax policy in Wales, the Government will seek we are back to a negotiated agreement based on to recover this cost from the Welsh Government”. subjective decisions, so it is not as clear as we would There is an uncertainty hanging over this issue and the likeittobe. impact that it will have. As my noble friend Lord Anderson said, we have to We are advised in paragraphs 31 and 32 of the be very careful about this issue. If Scotland and Wales Government’s White Paper on the question of how we opt for this measure, what will happen when London, are going to determine the reduction in the block with its £1.3 billion of stamp duty, starts to ask for it? grant. I would be grateful if the Minister could elaborate If we go down this route, we must be very careful and and explain paragraph 31 in more detail, as I have not do so with our eyes open. I am not saying that we fully understood it. It indicates some kind of proposition should not go down this route but we should be aware for the way they will handle the assessment of the of the floodgates that we might open in doing so. reduction in the block grant once these taxes are However, we support this tax. devolved. The most obvious problem with the landfill tax is that the more successful the policy of using the tax as Paragraph 32 says: a means of getting people not to use landfill is, the less “The Government continues to discuss this proposal, and income will be derived for the Welsh Government. The other options, with the Scottish Government and has now opened other problem is that the current system of landfill similar discussions with the Welsh Government”. does not identify the geographical location of the Could the Minister update us on these discussions? taxable activity, so we would have to bring in a whole How close are they to coming to some real understanding new administrative mechanism as it does not exist in and agreement on the basis for reductions in the block the UK at the moment. A danger could arise of the grant as a result of devolving these taxes? I hope that cross-border disposal of waste if there were a change the Minister will give an assurance that when we come in the rate of tax between one country and another. to Report, these two important implications of how We need to be aware that these things could cause the block grant will be reduced will be much clearer problems. However, as I said, the benefit is that this is 241 Wales Bill[15 OCTOBER 2014] Wales Bill 242 a relatively immobile tax and waste management is a The noble Lord, Lord Rowlands, asked what would devolved responsibility so there would be opportunities happen in respect of the existing Landfill Communities to co-ordinate policy, particularly in respect of the Fund and possible contributions to Wales. The fund is environmental aims of the Welsh Government. We are financed by contributions from landfill site operators. in favour of devolving these taxes given their importance Obviously, once the Welsh landfill tax is in operation, in providing an independent source of income to the eligibility under the UK fund will eventually dissipate. borrow against but we should be aware of the floodgates However, I understand that this will not happen that might open in the rest of the UK. immediately.I believe that the Joint Exchequer Committee will determine the exact mechanism for dealing with 6.45 pm that, bearing in mind that the Welsh tax is not envisaged to be operational until 2018, so there will be a transitional Lord Newby: My Lords, I am grateful to the noble period and projects that are already in the planning Lord, Lord Rowlands, for raising these questions, process, or where allocations have already been made, which are central to how these two devolved taxes are will go ahead. administered. As he said, stamp duty land tax is a Questions were asked about how you determine somewhat volatile tax and is not as steady as some whether somebody is an eligible landfill operator. My others. However, there is a borrowing power to deal understanding is that 13 landfill operators have all with any volatility. As with any other body, it will be their landfill sites in Wales and would need to register available to the Assembly to build up cash balances for the new Welsh tax and deregister from the UK which could be used should it find that in a particular landfill tax, and that another 11 have landfill sites in year stamp duty brings in less than it expected. However, both Wales and elsewhere in the UK and would need the volatility is not all one way. As with the UK to register for the new Welsh landfill tax in respect of Government more generally, in some years the Welsh their sites in Wales but would remain registered for the Assembly will do very well out of stamp duty land tax current UK landfill tax. and may choose in such a year to set aside a certain amount against any potential property downturn. The noble Lord, Lord Rowlands, asked what would happen if, as a result of Welsh decision-making, the The noble Lord’s most fundamental question UK failed to meet its landfill reduction targets under concerned how one decided what the block grant the landfill directive. He also asked about the meaning off-set should be for both these taxes. As he pointed of the statement, out, the Command Paper says that there is a two-part process. First, you make an initial reduction to the “the Government will seek to recover this cost from the Welsh block grant which is based on current takings from Government”— those two taxes. That is straightforward; it is just a that is, if the UK were fined. Obviously, if the Welsh mathematical calculation. Secondly, you have to decide Government were to say that they were setting the how you amend the block grant in every subsequent landfill tax rate at or near zero, and as a result all year. As we say in the Command Paper, a logical way English landfill operators were rushing to landfill in to do it is by having smaller Barnett consequentials Wales, and we therefore missed our target, it would be every year. However, that may be an unacceptable way reasonable for the UK Government to say, “We are of doing it from a Welsh perspective. There are other being fined only because of that decision and therefore ways of doing it. For example, it could in theory be it is reasonable that the Welsh pay any fine”. We are linked to overall changes in public expenditure. However, talking about a very remote possibility, not least because this is one of the key issues to be discussed by the Joint we are making reasonably good progress in reducing Exchequer Committee, which will have its first meeting landfill across the UK. We do not believe that we are next week. Therefore, I hope that by the time we reach in danger of being fined under that directive in the Report there will be something further to report on all foreseeable future. this. However, that is the mechanism for deciding The noble Lord, Lord Anderson, raised a word of exactly how the subsequent year adjustment is calculated. caution and talked about borrowing powers and their The key point is that it is something that will be agreed limits. All I will say is that the sooner the Welsh with the Welsh Assembly, rather than being imposed Assembly agrees to have a referendum, that referendum by the UK Government. is won and an element of income tax is devolved to The noble Lord, Lord Rowlands, asked about the Wales, the greater the borrowing powers for the Welsh eligibility for UK tax credits, or rather how tax credits Assembly will be. will be treated. It will be for the Welsh Assembly to The noble Baroness, Lady Morgan, raised a couple determine what sort of tax credits it wants. If it wants of problems. I am new to this debate, but I am slightly to set up the same operation as we have had with the surprised at the tone of the noble Baroness. She speaks Landfill Communities Fund, it has the power to do so. of problems, of everything being difficult and of unforeseen circumstances. It is quite depressing. She Lord Rowlands: Where is the power? Is it in the Bill? asked about what would happen if London asked for control of its own stamp duty land tax. The English regions—not just London but the Core Cities Group, Lord Newby: It is in the Bill. I will correct myself if which represents all the northern cities as well as I am wrong but I am sure that this flows from the London—have argued that all property taxes should point I made earlier about the ability for tax credits to be devolved to them in the same way that stamp duty be assigned to these taxes in the same way in Wales as land tax will be devolved to Wales. I cannot see it they are in the UK. being a problem for Wales as, in cash terms, stamp 243 Wales Bill[LORDS] Wales Bill 244

[LORD NEWBY] duty land tax is a very small proportion of the total Amendment 49 tax take. It will not have a significant impact on the overall level of public expenditure by the UK. Therefore Moved by Lord Wigley any Barnett consequentials, for example, of London 49: After Clause 19, insert the following new Clause— having control of its own stamp duty land tax, would “Responsibility over fuel duty be minimal. I would have thought—and I know that Her Majesty may by Order in Council provide for the this applies to my colleagues—that Wales would welcome transfer of responsibility for varying fuel duty to the the thought that England would benefit from a degree National Assembly for Wales.” of devolution in the same way that Wales expects to benefit. Lord Wigley: My Lords, I will also speak to Amendments 50 and 51, which each seek to transfer Baroness Morgan of Ely: If you just look at stamp financial powers and hence strengthen the Assembly’s duty in London, the estimate is that £1.3 billion is tax base. collected there. That is quite significant. It is worth Amendment 49 would transfer powers over fuel pointing out that that is a concern. We want to see this duty to the Welsh Government, so allowing that institution devolved, but I thought that the whole point of the to address the concerns of the electorate relating to House of Lords was that we look at something and fuel costs, a problem which is particularly stark in say that there may be a problem here—let us check it rural areas, where people are forced to spend significantly out. I thought that was the point of this place. more on fuel than in urban areas. The Office for National Statistics recognises that poorer families in rural areas spend more of their income on petrol than Lord Newby: We like to do it in a positive spirit. The richer families. Plaid Cymru has long pushed for a truth is that stamp duty land tax is a very small genuine fuel duty stabiliser to cap prices at the pump proportion of the overall UK tax take compared to when prices rise above expectations. income tax, national insurance and VAT. It is only a couple of per cent of that. It is a small tax. It is Amendment 50 provides the mechanism for a review important for local areas, and it will be interesting to of the tax receipts from Welsh natural resources. We see what Scotland proposes to do, now that it has believe that this should include the Crown Estate, powers over its stamp duty land tax, to shift the which we believe should be the responsibility of the balance of where that tax is borne. One of the advantages Assembly. Wales is an energy-rich nation, yet too of devolving the tax to Wales is that the Welsh Assembly many of its citizens live in fuel poverty. We believe that can choose to do something similar if it wishes Wales should be properly recompensed for its natural resources. Amendment 51 is aimed at transferring powers Lord Rowlands: I apologise for interrupting the over corporation tax to Wales, in the event of this Minister, but he has mentioned Scotland. Presumably power being transferred to Scotland or Northern Ireland. the discussions between the Government and Scotland I should point out that the draft Motion, standing in on how the reductions will take place in the block the name of all four party leaders in the National grant to Scotland are much further down the road. Assembly, supports the approach taken in Amendment 51 May we assume that our arrangements will be very in relation to corporation tax, stating: similar to, if not the same as, what will be agreed in “The National Assembly for Wales … calls for the UK Scotland? Government to ensure that the same powers are given to Wales regarding the devolution of corporation tax if they are provided Lord Newby: There is a Joint Exchequer Committee to Northern Ireland and Scotland”. in Scotland, as there is in Wales. It will be for the Those are the words that are supported by all four Welsh Assembly representatives to decide whether the party leaders in the National Assembly and that will approach that is eventually adopted in Scotland makes be discussed on Tuesday. sense for Wales. I think that there is a presumption We recognise that the Silk commission in its report that it probably will. The less complexity that there is did not support the transfer of corporation tax to in how we do these things, the better. Although there Wales due to its volatility, but said that it should be may be a presumption in that respect, there is no rule considered if corporation tax were devolved to Northern that requires it. It will be for that committee to look at Ireland, which was seen as most likely at that stage. We Scotland and other examples in making up their minds. believe that it would be wholly unacceptable if these I hope that I have answered the principal questions powers were granted to other countries and not to that were raised and, on that basis, that the noble Lord Wales. The amendment is drafted to ensure that, if will remove his objections to the clauses. these powers are given to those other countries, the same would happen for Wales to ensure that we are not left behind in this matter. I beg to move. Clause 15 agreed. 7pm Clause 16 agreed. Lord Rowe-Beddoe (CB): My Lords, I wish to speak to my Amendment 51A, which relates to air passenger Schedule 2 agreed. duty devolution. I draw the attention of the Committee to the register of interests, in particular the reference Clauses 17 to 19 agreed. to my chairmanship of Cardiff Wales Airport. 245 Wales Bill[15 OCTOBER 2014] Wales Bill 246

The UK Government’s stance on APD remains airport of our capital city in Wales, and has to be bafflingly inconsistent with the devo-zeitgeist, if I provided for and helped. That is the point of my may call it that, that has so enraptured everyone amendment and I ask the Government to consider it. over recent months. The decision to cherry pick parts of the Silk recommendations is a sad example of Lord Anderson of Swansea: My Lords, I have two the short-sightedness that seems continually to put brief comments—one on the varying of fuel duty and Wales behind. The Bill provides an opportunity to the other on air passenger duty. redress this state of affairs. I shall quote the relevant passage from Silk 1, so that I can put it on record. It I hear what the noble Lord, Lord Wigley, says and states: the assumption is that we as a people are relatively poor in Wales in terms of prosperity when compared “We have also recommended the devolution of long haul rates with much of the rest of the UK. That is certainly true of Air Passenger Duty, and consideration of full devolution in the future. We do this in the context of the wider consideration of and, therefore, the assumption is that he would wish to regional airport developments across the United Kingdom associated reduce fuel duty rather than increase it. If that duty with the independent commission on airport capacity, chaired by were to decrease, I can imagine the Luxembourg precedent Sir Howard Davies”. happening. Those of your Lordships who know that The UK Government position currently is that: country will know that fuel duty is lower there than in “APD devolution will distort competition”, the adjoining countries, so there are large queues at all the filling stations in Luxembourg of people who when applied to Cardiff and Bristol. This is unsound come across the border. One can imagine similar and I put it to your Lordships that that position is not occurrences over the border in Cheshire, Herefordshire supported by the European Commission guidance and elsewhere, the sorts of problems that would arise that defines the laws on support of regional airports. as a result, and the complaints that would be made if The European Commission in its latest guidelines on there were to be a reduction in fuel duty. state aid to airports and airlines made it clear that I hear what the noble Lord, Lord Rowe-Beddoe, airports with more than 5 million passengers per said about air passenger duty and different core catchment annum can and should run on their own steam, without areas. I come from Swansea and I should have thought any government support. Bristol has more than 6 million that Bristol and Cardiff are, frankly, within the core passengers. The Commission recognises that there is catchment areas. I can see nodding from the direction a case for government state aid being offered to of Newport. This is not like the precedent in Northern smaller regional airports, and defines them as those Ireland, where there is no immediate competitor. Bristol that have between 1 million and 3 million passengers and Cardiff are very close and, in my judgment, the per annum. Cardiff currently handles just over 1 million. passenger catchment areas are similar. There is therefore The Commission also states that if airports are more a substantial difference in this situation and there than 100 kilometres apart, then they have, by definition, could be real problems in seeking to provide greater different core catchments, and aid to one will not competitiveness for Cardiff, which could only be at the affect aid to the other. I can assure noble Lords that expense of Bristol. Cardiff Airport is more than 100 kilometres from Bristol Airport—I have actually used my tape Lord Rowe-Beddoe: It is not my idea of a catchment measure—and each certainly has different core catchments. area but the European Commission’s, and the figure of It is my contention that aid to one will not affect the 100 kilometres between two regional airports is in the other. It is therefore my contention that the UK Commission’s guidance. I again submit that Cardiff Government’s current position is flawed because they and certainly Swansea are not within the Bristol catchment could not make a legitimate case, underpinned by EC area, as defined by the European Commission. guidance, that aid to Cardiff distorted competition with Bristol. Lord Anderson of Swansea: That may be the definition The Welsh Government have a long-standing policy of the European Commission but I speak on a matter of lobbying for full devolution of air passenger duty, of reality and look at it from the perspective of those with a view to abolishing it. I was informed this who travel from those airports. afternoon that all four party leaders have agreed to Lord Rowe-Beddoe: With respect, the journey from propose again the abolition of long-haul air passenger Swansea to Bristol is considerably longer than the duty. The Commission on Devolution in Wales, Silk 1, journey from Swansea to Cardiff. recommended that long-haul air passenger duty should be fully devolved. So where are we? This is a very Lord Thomas of Gresford: Surely the distance between important factor regarding competition. Belfast was Bristol and Cardiff and the services provided from given such devolution on the basis that it is near to Bristol are such that Bristol sucks people out of south Dublin. I do not think that it is 100 kilometres distant Wales to use the additional services that fly there. That but Belfast was given it anyway by the UK Government. is why it seems to be in competition. What we are after I bet my bottom dollar, if I may use such vulgarity in is the development, the building-up, of Cardiff. If it your Lordships’ House, that Edinburgh will be after comes within the European definition, that must be this in a flash when it gets whatever it is going to get in good enough. the future. On the issue of fuel duty, I understand that provisions I put it to noble Lords and the Government Front have been made in Scotland to reduce fuel duty—I Bench that this situation is very serious for us in stand to be corrected—if you are more than 100 miles Wales. The Howard commission recognised the away from an oil refinery. In Wales, we have rural areas importance of regional airports. This is the one regional and people who are very much dependent on the use of 247 Wales Bill[LORDS] Wales Bill 248

[LORD THOMAS OF GRESFORD] Lord Thomas of Gresford: Does the noble Baroness motor vehicles—almost exclusively so in parts of Wales. agree that all the things we have been discussing tonight However, Milford Haven, which is not built to supply are levers—things such as airport taxes—that we can Wales, happens to be within that 100-mile area in the use to increase prosperity in Wales to an equality with south; and, of course, we have Ellesmere Port in the the rest of the United Kingdom? These are levers that north. Consequently, the reduction of fuel duty, as would achieve a balance between the various nations happens in Scotland, does not happen in Wales. However, in the United Kingdom. That is what it is all about. If that ignores reality. It ignores the fact that the needs of you have a power to vary corporation tax, for example, the rural population of Wales are just as great as those it may be something that you exercise for a certain in the highlands of Scotland. They suffer the same period in order to pull in industry, and then you may impoverishment as they do in the highlands of Scotland, feel that you face competition from elsewhere and you perhaps even more, and accordingly there is a case for should drop it. These things are all economic levers to taking fuel duty under the wing of the Welsh Assembly. achieve equality of prosperity in the United Kingdom. That does not necessarily mean applying it to the whole of Wales, so that we have queues of English Baroness Morgan of Ely: I understand that, but I people in Gresford from across the border, which is not also think that we should be aware of the dangers of a something that I would wish to see. That is not the idea race to the bottom. That is my real concern. We have at all. It would enable the Welsh Assembly to vary fuel already seen that it is hard enough to get many of duty with regard to the needs of the people of Wales, these corporations to pay their taxes at all, so for us to which I think is very sensible. encourage corporation tax competition within the UK would be very problematic. The problem is that if you Baroness Morgan of Ely: It is worth putting on reduce the tax take, you start to have to cut services, record the Labour position on some of these points. and that becomes a problem. It means that our schools First, in relation to fuel duty, we think it will be and hospitals have to be reduced. impossible to organise separate fuel duties within the On the issue of air passenger duty, it is worth United Kingdom and probably very difficult to comply noting that this is another issue where there has been with European Union rules within countries. Those cross-party agreement on devolution, on the basis that cross-border issues we have just heard about could be if this is provided to Scotland and Northern Ireland in quite complex and difficult to police. That would be a the same way as corporation tax is, then we should be problem for us. Of course we have genuine sympathy allowed to review it in Wales as well. The point is that for the problems relating to the cost of fuel in rural if they are going to do it, of course we want to be part areas, but we do not think that this is the mechanism of that game. What we cannot have is them going off by which we should be addressing it. by themselves. That would be problematic. It is why On natural resources tax-sharing arrangements, we Scottish independence was a problem for us. do not agree that this is a good idea. Wales is not sitting on vast quantities of oil like Scotland’s and a key point to remember is that we do not tax energy Lord Wigley: I am grateful to the noble Baroness production from wind, wave and water in the same for giving way. She has warned about a race to the way as we do barrels of oil, so there would probably bottom as a reason to avoid this, but she then says that not be much in terms of tax return anyway—we would Scotland might do it, that that is the first step in a race probably have to invent new taxes. On the issue of to the bottom and that we should then do it. Is she not corporation tax, one of the most disappointing aspects embarrassed by the fact that her party leader signed of the Scottish referendum campaign was to see Plaid up to this in the Assembly and she has difficulty in Cymru members actively supporting independence selling it to her group here? for Scotland. It was not surprising but was a little disappointing, because we know that one key thing 7.15 pm Alex Salmond wanted to do was to reduce corporation Baroness Morgan of Ely: Not at all. Let me be clear: tax 3% below that of the rest of the UK. That would we in the Labour Party are not encouraging this; we have done untold damage to Welsh companies. It do not want it to happen. At the moment we are not in would have adversely affected Welsh companies, so we charge of the government of this country. If it is did not understand why Plaid Cymru was quite so introduced by the Government, then, of course, we enthusiastically supporting independence. want to make sure that we have a fair crack of the whip, so that Wales can compete as well. We are not Lord Elis-Thomas: I spoke on this matter in this encouraging this, though. House during a debate in June. Let me make it clear that my support was for the right of the Scottish Lord Newby: I shall take the amendments in turn. people to express their own self-determination. They Amendments 49 and 51A seek to include explicit have done so, with marvellous consequences for the provision in the Bill for fuel duty and air passenger rest of us. We would not be debating in the way we are duty to be devolved to the Welsh Assembly. First, I tonight if they had not done that. remind noble Lords that Clause 6 of the Bill already contains the power for further taxes to be devolved to Baroness Morgan of Ely: That is great to hear, but the Assembly by Order in Council and therefore the there are some aspects of Salmond’s policy commitments Bill does not rule out in perpetuity any tax being that I think would have been problematic for Wales devolved at a future point if there is agreement to do and it is worth noting those. so. I shall explain why we are not devolving these 249 Wales Bill[15 OCTOBER 2014] Wales Bill 250 powers in the Bill, starting with air passenger duty. As equalising the airport tax again, if the economics are has been pointed out, the Silk commission recommended correct. I am sorry to repeat myself, but we are talking that long-haul rates should initially be devolved with about putting levers into the hands of the Welsh devolution of all rates considered subsequently. In the Government. I should have thought that the Government Government’s response to the Silk commission we of the noble Baroness, Lady Morgan, in Wales would highlighted HMRC research which suggested that welcome levers of that sort to try to do something differential rates of APD could end up redistributing about the Welsh economy—otherwise we are just stuck passengers rather than creating additional growth. with what we have got. This potential distortion, despite what the noble Lord has said, is particularly acute in relation to Wales, given the short distance between Cardiff and Bristol Lord Newby: Noble Lords are, as ever, extremely airports. As the noble Lord, Lord Anderson, pointed eloquently making a case for preferential treatment out, for many people who fly from south Wales and for Wales, which would benefit Wales. I am just making just across the Severn there is a real and immediate the point that it might well benefit Cardiff Airport but choice between those airports, which they see as close that would be to the detriment of Bristol Airport. competitors. That only stands to reason. There is not going to be a sudden explosion of long-haul traffic because of a tax Lord Rowe-Beddoe: Let me just point out that change. Cardiff—perhaps noble Lords do not know—has lost more than 1 million passengers to Bristol in the past Lord Rowe-Beddoe: In my definition of a regional five years. This happened because of the management airport, I made it very clear that it had between 1 of the airport at the time and the company that owned million and 3 million passengers. We want to develop it, but there was a bleeding of that number of people. regional airports. Howard Davies’s commission refers We have got to get the passengers back. It is not a to this. That is what we are talking about. Of course it distortion of competition; it is to restore the services. would benefit Wales, if it were ever to happen. Cardiff You require two things for an airport: good customer Airport falls exactly within the categorisation made by experience and a plane that goes where the passenger Howard Davies and the EU. wants to go. We are desperately trying to bring people back; this is a levelling to help that situation. It is not a question of distortion. We have heard about Lord Newby: My Lords, I am sure that the Welsh the 100 kilometres, or whatever. Forgive me—go around Assembly, which I believe—including the Labour element the Midlands and see where the airports are. It is not a of it—is in favour of devolution of air passenger duty question of distortion in that sense. to Wales, will continue to make the case. However, I am afraid that the Government are not at this point Lord Newby: The noble Lord has just made my persuaded of it. The situation in Northern Ireland is point that they are part of a single market for passengers completely different, in that it shares a land border in south Wales, or there would not have been that with the Republic, which has a significantly lower rate bleeding away. Passengers are not bleeding away from of air passenger duty. That is its competitor. south Wales to Manchester airport because it is just The Silk commission recommended against devolution too far. The point is that Bristol is within a relatively of fuel duty largely on the basis that member states easy ambit and people are going there. The noble Lord must set a single rate for each fuel under the EU discussed the question of distortion in respect of strict energy products directive. It also highlighted that fuel EU law, but the kind of competition we have been duty is a highly mobile tax base—no pun intended. As debating—and, indeed, his description of what has noble Lords have made clear, we could very easily see happened and how he wishes to reverse it—suggests queues of motorists across the border if there was a that if we were to devolve this power and APD was significant disparity, which in itself makes it an unlikely reduced it could and probably would contravene the candidate for devolution. So the Government accepted third principle of devolution, which we discussed earlier, the Silk commission conclusion on that. that any change in one part of the UK should not be to the detriment of another part of the UK. The noble The noble Lord, Lord Thomas of Gresford, referred Lord wants it to be to the detriment of Bristol, so that to the issue of whether the rural fuel scheme in Scotland there will be a balancing away from Bristol towards might be extended to Wales. The Silk commission Cardiff. recommended that the Government assess whether the rural fuels scheme should be extended to remote Lord Thomas of Gresford: If I may interrupt, the and rural areas of Wales. It now operates in the noble Lord, Lord Rowe-Beddoe, does not want to do Scottish islands and the Isles of Scilly. The Government something to the detriment of Bristol—he wants to do have applied to the European Commission to extend something for the people of south Wales so that they the current scheme to areas on the UK mainland that have easy access to an airport and do not have to go meet strict criteria around pump price, population more than 60 miles down the road to Bristol. I really density and cost of fuel transportation. However, no do not see why it is not possible for the Assembly to areas in Wales were included, because they were not have this power of setting a lower airport tax so that it felt to meet the objective criteria. The Government attracts people in. It might then be possible to balance, believe that areas should experience similar characteristics with the use of that lever, the number of passengers to the islands in the current scheme to make the going to Bristol or Cardiff; those coming from Swansea strongest possible case to the European Commission. or further west may think, “Well, I’d rather go to The Government have yet to receive a response from Cardiff than to Bristol”. Eventually, you could start the Commission to its existing proposal. 251 Wales Bill[LORDS] Energy: Onshore Wind Farming 252

[LORD NEWBY] On the other amendments and the reasons given Amendment 51 would devolve corporation tax to against them, with regard to petrol charges we already the Welsh Assembly if it is devolved to either Scotland have a massive differential. We do not see people or Northern Ireland. The Government have been queuing from north Wales to Chester to find cheaper consistently clear that the devolved countries are different fuel because there is a cost involved in travelling. The and that it is therefore right that decisions on devolution need to get fair play in rural areas should be recognised are treated on their own merits. In relation to corporation by the Government. Goodness only knows that life is tax, the Government are committed to making a decision difficult enough as it is without the very high petrol on devolving rate-setting powers to Northern Ireland taxes that we have. by the time of the Autumn Statement. However, similar On the natural resources of Wales, we hear so much to the position on long-haul rates of air passenger about fracking coming along, and we know it is a duty, the potential devolution of corporation tax to matter of considerable concern. That is a new source Northern Ireland is being considered in the light of of energy, and it may be something that comes into the two unique features. First, Northern Ireland is competing purview of government in those terms. We need those against the Republic, which has a much lower headline powers to be there. rate of corporation tax. Secondly, the stated purpose On corporation tax, I again underline that there is of tax devolution in Northern Ireland is to help to unanimity within the Assembly to have those powers, rebalance the Northern Ireland economy. In Wales, as if they are going to Scotland and Northern Ireland, noble Lords will be aware, the principal aim of devolution and the Government in fairness should allow it for is to increase the accountability of the Welsh Assembly Wales, which is in competition for inward investment and Welsh Government. Different objectives potentially against the Irish Republic. The Irish Republic has this require different decisions on devolution; it is therefore advantage, so why do we not? We need that in order to right that the UK Government retain the flexibility to rebuild our economy. It is something that the First take the right decisions for each part of the UK. Minister of Wales has very reasonably asked for and I Finally, I turn to Amendment 50, which would hope that the Opposition Front Bench will support require the publication of an independent report on the First Minister in those representations. options for the UK and Welsh Governments to share I was heartened by the comments made by the tax revenues from natural resources in Wales. The Minister that there are provisions for other taxes to be noble Lord in moving the amendment spoke about the devolved by order. We shall have to look to the order- resources available potentially to the Crown Estate making system to try to ensure that we have the tools and referred to energy. With regard to the Crown necessary to do the job. Estate, there are no provisions in the Bill to change its status, and I find it difficult to envisage circumstances Lord Thomas of Gresford: Does the noble Lord not in which that would happen. Therefore, I am not sure agree that, if the Welsh Labour Government are not how relevant that is. On energy, I can only agree with prepared to use the tools, there is no points in having the comments of the noble Baroness, Lady Morgan, these powers? about the fact that one does not tax wind power in the same way as one taxes a barrel of oil, and it is very Lord Wigley: That is true of all the powers, and we difficult to envisage that we ever would do so. So I do have to look to the Assembly to take a responsible not think that an independent report as proposed by attitude. Obviously there are questions to consider— the noble Lord would be of any real value. cross-border questions and all the rest—and the Assembly In the light of my remarks, I hope that all noble needs to make these powers work, so it is not going to Lords who have proposed amendments in this group do stupid things. It will take up the powers and use will feel able not to press them. them in a way that moves our economy forward. I am Lord Wigley: I am grateful to noble Lords who have quite happy to trust that people who give priority to taken part in this short debate. On the amendment the needs of Wales will do this, from whichever party proposed by the noble Lord, Lord Rowe-Beddoe, on they come. All I want them to have is the tools to do Cardiff Airport, of course we need intervention—that the job. I beg leave to withdraw the amendment. is the whole point of government. If we just leave it to free market forces, those areas that have difficulties Amendment 49 withdrawn. with the economy will get worse and worse. I am amazed that the Government look at devolution and Amendments 50 to 51A not moved. powers of the Assembly only in terms of answerability House resumed. Committee to begin again not before and do not see the central need to have intervention in 8.31 pm. the economy to build it up. In Wales, the GDP per head is 25% below the UK average, so something is going wrong. If London is not capable of sorting that Energy: Onshore Wind Farming out, and Westminster is not capable of sorting it out, Question for Short Debate we have to do the job ourselves. But we need the tools to do that job and to intervene, as the noble Lord, 7.31 pm Lord Thomas of Gresford, said. Some tools may be more appropriate than others, but in the case of Cardiff Asked by Baroness Quin Airport, when all the effort that is being made to rebuild To ask Her Majesty’s Government what is their it at the moment is in question, I find it staggering that assessment of the extent of onshore wind farming they want just to turn it down on that basis. in the county of Northumberland. 253 Energy: Onshore Wind Farming[15 OCTOBER 2014] Energy: Onshore Wind Farming 254

Lord Gardiner of Kimble (Con): My Lords, perhaps manufacturing and maintenance. Indeed, the four north- I may respectfully remind noble Lords that we are very tight eastern ports of Sunderland, Seaham, Blyth and Tyne for time in this forthcoming debate. When the clock are all well placed to support offshore projects of this says four, noble Lords will have had their time. kind. No, my Lords, this debate is essentially about onshore wind farms which are in the wrong places and which we feel should not have been given planning permission. Baroness Quin (Lab): My Lords, I am delighted to It is also about expressing concern over the introduce this debate about onshore wind farming in disproportionate amount of onshore wind in the county of Northumberland. I should say from the Northumberland and the fears of many of us that outset that the idea of having such a debate was not more and more developments are going ahead, mine alone but that of a group of Members of the despite the near unanimous objections to them from House who live in Northumberland or who are very the county council and from local communities. I look familiar with it and who care passionately about forward to the Minister’s reply in due course, but she its landscape and its communities. I am pleased will appreciate that some of the issues raised in this that members of that informal group are in the House debate also relate to the work of her colleagues in the today and plan to take part in the debate. The noble Department for Communities and Local Government. Lord, Lord Walton of Detchant, the noble Viscount, I ask her to commit herself to discussing our debate Lord Ridley, the right reverend Prelate the Bishop of and the contributions made with her colleagues in the Newcastle and the noble Lord, Lord Wrigglesworth, other department so that our concerns can be fully have all been part of a combined effort to express considered. concern about some of the negative effects the proliferation of wind turbines in Northumberland A lot of statistics have been produced by the Minister’s and the number of applications for further schemes department and by interested organisations which, I which are in the pipeline have caused. I know, too, believe, show how much wind farming there is in how concerned about these issues are the noble Lord, Northumberland compared to other counties of Lord Vinson, the noble Lord, Lord Shipley, and other England. I shall refer to some of these. However, it is Members of this House. not just a question of numbers because, in a county such as Northumberland, with its distinctive In bringing forward this debate, I should like to landscape of sweeping views to distant hills and to its stress that we have had strong support from the magnificent coastline, even just one wind farm Northumberland section of the Campaign to Protect inappropriately placed can have a damaging effect Rural England and the Northumberland and Newcastle over a wide area. Society—an organisation now in its 90th year and which has, throughout its proud history, promoted the Indeed, I first became involved in this issue when I historic buildings and the special and beautiful landscapes took a friend up to the ancient hill fort, Ros Castle, to of our part of the world. I know that the views of admire the outstanding view of coast and countryside these organisations are shared by many local communities from the top. It was a clear day and I promised my and by people in Northumberland who have been friend a superb view of Dunstanburgh Castle. I was affected by inappropriate onshore wind farm utterly dismayed to find that the view of Dustanburgh’s developments. I also recognise the role of the local and very distinctive silhouette was totally obscured by regional media in highlighting these issues. The Newcastle phalanxes of turbines. Journal and the Northumberland Gazette have supported Another striking example concerns the ancient many local communities in their efforts to get a fair monument which we, rightly in my view, refer to as hearing for their views. Northumberland’s Stonehenge—the Duddo stone circle Let me say from the outset that, in my view, this in its tranquil and timeless setting. I was delighted debate is not about energy policy generally or about when the Government decided not to defend the legal the role that renewables can and could play in our challenge in that case earlier this year, but the threat to energy mix. Among the members of our informal this very special monument has not gone away as a group, we have not discussed these matters and further appeal to install a tall turbine has been lodged. probably have different views about them—certainly Obviously I hope that this will be unsuccessful. I ask about the energy priorities that the UK Government noble Lords not from the north-east to imagine what should have. Speaking for myself, I see an important the national outcry would be if a similar proposal role for renewables. By coincidence, in the week that I were being envisaged for Avebury, or indeed for was involved in lobbying a Minister in opposition to a Stonehenge itself. particular wind farm scheme in Northumberland, I Northumberland’s contribution to onshore wind was also having solar panels installed on the roof of capacity in our country is already very considerable my home in that county. and we produce far more than we consume. I am also proud to be one of the city of Sunderland’s Northumberland’s consumption of electrical energy is ambassadors. I applaud the efforts of that city in just over 0.5% of total consumption, yet it accounts seeking to establish itself as a low carbon hub—indeed for 10% of all consented onshore wind power. From the Government have recognised it as one of the low the department’s own figures, we see that our county carbon economic areas. I applaud its efforts in offshore has virtually twice as much onshore wind consented in wind development and its commitment to the Dogger our one county as in all seven Home Counties—Berkshire, Bank project which could be important both to our Buckinghamshire, Essex, Hertfordshire, Kent, Surrey renewables commitments and also in terms of jobs in and Sussex combined. 255 Energy: Onshore Wind Farming[LORDS] Energy: Onshore Wind Farming 256

[BARONESS QUIN] created and act to prevent further damaging schemes The Northumberland and Newcastle Society points going ahead. I look forward to hearing what other out that over half of the counties of England have contributors have to say in this debate. approved less wind than a tenth of that approved in Northumberland. In a perhaps entertaining statistic, Northumberland has apparently over 100 times as 7.41 pm much wind capacity as that permitted in the home Viscount Ridley (Con): My Lords, I congratulate counties of Ministers of the Department of Energy the noble Baroness, Lady Quin, on securing this debate and Climate Change. Yet, despite such figures, there and on her eloquent introduction to it. She is truly a is an argument for saying that the terrain of great champion of Northumberland and the north-east. Northumberland—due to the Pennine hills and the Cheviots—is not ideal for onshore wind because the I declare my interests in the energy industries as fundamental wind resource is not strong. So why is listed in the register, and that includes an interest in there such huge pressure on this unspoilt county to opencast coal, so I am not against development in the accept more and more unwelcome developments? countryside per se. As long as it provides good jobs, supplies affordable energy, does not stick up above the Particularly worrying are the figures which seem to horizon and does not last for very long, I think it is an show that there are more examples in Northumberland excellent idea. of schemes which have been opposed both by local people and the county council and then subsequently Northumberland, as the noble Baroness, Lady Quin, overturned and allowed by national inspectors and said, is an incomparable county. It is the county of therefore by national government. My understanding Cuthbert and Hotspur, of Cheviot and Bloodybush is that Northumberland has been overruled at a rate Edge, and of Delaval and Dunstanburgh. The battles twice that of the next county in that particular league of Otterburn and Flodden, which are redolent of our table. history, have now been joined by less bloody but still very contentious battles, such as Fenrother, Wandylaw We have also seen that the level of subsidies for and Middlemoor. These are names of wind turbines such onshore wind schemes have proved particularly that have been bitterly opposed by local communities. attractive to outside investors, but these same investors Virtually no community in Northumberland has been often have little or no loyalty to the local communities unaffected by these battles, and often it has split them, who have to live daily with the effects of the investment. and families, right down the middle. It is true that such subsidies can be accompanied by Yet Northumberland is, on the whole, bearing this pledges on the part of the investor to give a financial pain on behalf of others, because there is no great net donation to some local amenity. However, this is little benefit to the county itself. These wind farms do not consolation to those communities where over 90% of create great numbers of jobs, most of the profits do the people objected to the scheme in the first place, not stay in the region or even in the country, and they and indeed such promises of local financial aid are leave a legacy of high electricity bills, which go to often viewed as little more than a bribe. Sometimes subsidise the rich and are mostly paid disproportionately these investors are seen as the new generation of by the poor. Therefore, I challenge the party opposite Border Reivers—making a quick raid, for huge profit, to follow the courage of the noble Baroness, Lady and then disappearing without suffering the consequences. Quin, in questioning whether it really is such a good Consumers ultimately have to pay for such generous idea to champion this regressive policy. subsidies, and this does look like an example of the Meanwhile, I would say that this form of energy is poor subsidising the already well off. I should, however, having very little measurable effect on the climate and like to pay tribute to those landowners in Northumberland is unlikely to do so. It produces very little measurable who have resisted the temptation and refused the benefit for the bird life—in fact, on the contrary, birds sizeable carrots dangled in front of them, and who such as eagles are often killed by these turbines—and have shown their concern for our landscapes, for our there is no benefit for the landscape. Indeed, in particular communities and for the future of tourism, which in it is blighting tourism in many parts of the world. recent years has become such an increasingly important Many people believe that Northumberland’s potential part of our economy. for tourism is being seriously affected by wind turbines. There is one other point which I have become aware And all this to provide electricity for others, because of in the battles that have taken place on this subject. the juice goes south from Northumberland to provide It is difficult in a county of low density and low other people with light. We are delighted that people income such as Northumberland to mount expensive in the south want to turn their lights on but, as the legal challenges to the planning process. Therefore, I noble Baroness said, Northumberland consumes just believe that those of us who are aware of these problems 0.6% of England’s electricity but produces 10% of need to take every opportunity to highlight them. England’s wind energy. It is doing far, far more than I realise that time is short, so I say in conclusion its share. From wind electricity it produces 172% of its that I hope that the Minister will be able to respond total electricity needs—in terms of ratio, double that positively not only to the points raised by speakers of Scotland. today but to the concerns of the people of the affected This issue is of course for the planners but the communities. Indeed, I hope that the Minister and her county council is often overwhelmed by applications. colleagues will visit the county, see the actual and There are many of them. The council finds it very planned projects that I have mentioned, engage fully hard to get the resources together to deal with them, in tackling the problems which have already been and it is in a very difficult position. It needs support 257 Energy: Onshore Wind Farming[15 OCTOBER 2014] Energy: Onshore Wind Farming 258 and guidance from a national level on how to cope initial start-up costs as compared with onshore wind with this flood of applications. As the noble Baroness, power. What is important in Northumberland, as it is Lady Quin, said, the county has a relatively small throughout the country, is to get an appropriate mix population to support battles of this kind. of all these elements. I hope that the Minister will agree to look at this To conclude on a comparative note, however, I iniquitous imbalance, which was never envisaged when suppose that I feel more favourable towards wind we embarked upon the dash for wind. We never envisaged power than the noble Viscount, Lord Ridley. There that the weight of this industry would fall so heavily are some days, famously, in which Portugal has supplied on one county rather than be distributed equally across more than 90% of its electricity from wind power the country. I hope that she will agree to look at the alone, and that shows what can be achieved. However, planning system to see whether there is some way of I fully support the sentiments that have been echoed equalising the balance. Why must the people of by the first two speakers. Northumberland bear the brunt of this often bonkers policy? Why must we spoil our landscape so that rich 7.49 pm landowners can grow richer and rich Greens can look more smug? As the noble Baroness, Lady Quin, said, Lord Wrigglesworth (LD): My Lords, I strongly here is the final irony: Northumberland is not even endorse the remarks made by the noble Baroness, that windy a county. Lady Quin, by my noble friend Lord Ridley and just now by the noble Lord, Lord Giddens. In case people think that we are protesting as nimbys who do not 7.45 pm want these in our back yards, we are not. We do Lord Giddens (Lab): My Lords, I, too, congratulate not mind having some in our back yards, but we do my noble friend Lady Quin on having initiated this not want them stacked full of these wind farms. We debate so ably. I want to take an unusual and, one are perfectly happy to have some, but we want a fair might think, improbable tack in this debate. share rather than the massive numbers which have Everything today is simultaneously local and global, already been mentioned by the noble Baroness, Lady so I am going to look at the case of Northumberland Quin, and others. in relation to countries that have a lot of experience of I want to dwell for a moment on the impact which wind power: Denmark, Portugal, Germany and Japan. this is having and will continue to have upon the very There is a remarkable similarity across the world in important tourist industry in the north-east and in terms of the dilemmas and struggles that arise. I shall Northumberland. I have been quite heavily involved in mention three here. The first is “Not in my back the tourism industry over recent years. I was chairman yard”, which is more or less universal. Most people in of the NewcastleGateshead Initiative, the destination most countries are in favour of wind power but much marketing agency for Newcastle and Gateshead. I was less so if it is very close to them. The second, which is chairman of the BALTIC Centre for Contemporary the opposite to that and has just been referred to by Art in Gateshead, the second largest arts space in the the noble Viscount, Lord Ridley, is also found almost United Kingdom after the Tate Modern, and I was everywhere. It does not have an acronym, so I invented chairman of the Port of Tyne until 2012. All of those one. I call it GMPML, which stands for “Get maximum organisations had a direct interest in tourism in the profit from my land”. It pits landowners against local north-east. It is tremendously important, accounting communities everywhere. Thirdly, there are real and for more than £1 billion coming into the north-east. In justifiable concerns in many cases about the harm a region suffering from deep economic problems which done by wind farms to areas of natural beauty and is trying to move rapidly into the 21st century with wildlife. All three are visible in Northumberland. modern industries, the tourist industry is tremendously We can and should learn a lot from other countries important to us. that have a longer experience of these problems than Independent research by VisitScotland showed that we do. Against this backdrop, it is not surprising that wind farms are very unattractive to visitors, and indeed there has been so much turmoil in Northumberland, that they avoid staying in areas with wind farms. given the haphazard and erratic relation between the However, you do not need independent research to wind farm companies, local communities, local councils demonstrate the damage which these things are causing and national government. In my view, it is right that to the county. Some of the sites which have been an increasing number of projects have been blocked. affected by turbines have been mentioned, such as the Radical localism, suggested by some, is not the answer. site of the Battle of Flodden, Dunstanburgh Castle. I agree with the recent report produced by the Campaign Holy Island, of all places, cannot be seen from some to Protect Rural England, which calls for: sides without seeing a wind farm. Frankly, this is “A strategic, plan-led approach to developing renewable energy outrageous; we are seeking to attract many people to infrastructure, locally and across planning boundaries”. come to a region which is known for its outstanding We should note that there have been very rapid natural beauty and its wonderful environment but developments in offshore wind power—these are not which has been badly damaged by the turbines that remote; they are here—such as those involving floating have been erected. platforms. Investing in developing or appropriating I hope that the Government will respond positively such innovations should be a key part of national to the plea we are making on behalf of Northumberland. energy strategy.Problems of corrosion are being resolved. We think we have our fair share, and are making an Moreover, out at sea there can be far higher continuity adequate contribution. I am in favour of the renewable of operation, compensating in some part for the higher energy sector, but I can tell you that in the Port of 259 Energy: Onshore Wind Farming[LORDS] Energy: Onshore Wind Farming 260

[LORD WRIGGLESWORTH] application may be subject to appeal. One of the Tyne the interest is in offshore wind farms. As was said problems in Northumberland is that more appeals on by the noble Lord, Lord Giddens, this is a rather applications for wind farm development have been better form of renewable energy than those turbines allowed than in any other county in England. which are on land. The Dogger Bank is just off the I invite the Minister to draw to the attention of the mouth of the Port of Tyne. If substantial wind farms inspectors the clear recommendation made last year are built there, which I hope will happen—it is a pity by the Government that, when considering planning that it has not started happening already—it will applications, more account must be taken of the views ensure a tremendous number of jobs and a tremendous of the local community. The local community in industry based on the Tyne, which has strong engineering Northumberland is implacably opposed, not to wind traditions. I hope that that will happen, but I hope that farms on brownfield sites or where they do no great the Minister will give us some reassurances that this damage to the environment, but to those which damage unfair and damaging incursion into Northumberland the untold beauty of a wonderful piece of scenery. will be restrained in the future.

7.57 pm 7.53 pm The Lord Bishop of Newcastle: My Lords, last Friday Lord Walton of Detchant (CB): My Lords, I, too, I took a relatively short train journey from Waterloo am most grateful to the noble Baroness, Lady Quin, to Winchester, in the heart of the Hampshire countryside. for enabling us to have this debate. I am a proud The journey took little more than an hour, about the Northumbrian. I live in Belford, at the heart of some same time as it takes me to travel through my diocese of the lovely Northumbrian countryside. I am also a from Newcastle to the Scottish border. There was a past captain and chairman, and now president, of striking difference between those two train journeys. Bamburgh Castle Golf Club, which was described by Obviously, there was no beautiful coast or even the a national newspaper some years ago as arguably the odd castle on my trip to Hampshire, and yet to me the most scenically beautiful golf club in the United Kingdom. most striking difference was that there was not a wind Looking down from the top of that course, one can turbine—let alone a wind farm—in sight at all. This is see the grandeur of Bamburgh Castle and out to sea hardly surprising when you consider that Northumberland the wonderful bird sanctuary of the Farne Islands, now has more wind power capacity installed than where St Aidan spent some time as a hermit, and even 16 counties in the south of England put together. It is beyond that to Longstone Lighthouse, made famous then hardly surprising that a recent survey claimed by the exploits of Grace Darling. To the left of that that 70% of the British public support onshore wind. are Holy Island and Lindisfarne, with the priory that The truth is that 70% of the British public live in was one of the cradles of the development of Christianity places where they will never have to put up with the in northern England. There is also a lovely castle sight or the sound of a wind turbine, unlike the people designed and built by the Lutyens family, and a wonderful who happen to live in the beautiful county of walled garden designed by Gertrude Jekyll. If one Northumberland. During my time as bishop, wind then turns to the west, one can look at St Cuthbert’s farms have proliferated across the countryside to an Way and St Cuthbert’s Cave, where the monks carried alarming degree. Cuthbert’s body from Holy Island on its way to Durham The level of Northumberland’s contribution to Cathedral. Beyond that is Ros Hill, where Earl Grey the Government’s onshore wind targets has been sat when he was Foreign Secretary and looked at his disproportionately high, as we have heard. We contribute land that lay all around him and at the timeless beauty more than 10% of all England’s wind energy but of Northumbria, which he adored. consume just over 0.5% of England’s electricity. Nobody However, if one now looks down to the south, there should accuse us of nimbyism. It is hardly surprising are 24 rotating monsters at Wandylaw and Middlemoor. then that the message from this short debate is simply: Their approval by the planning authority as the result enough is enough. The good people of Northumberland of an appeal strikes me as amounting to arrant have had enough of onshore wind farms. That point environmental vandalism. They have destroyed the has finally, if belatedly, been recognised by DCLG in views of some of the loveliest countryside in Britain. recent guidance, which states that it does not mean As others have said, this is crucial because that, Northumberland has borne more than its fair share of “the need for renewable energy … overrides environmental protection these developments. I admit that the past captain of and the planning concerns of local communities”. Bamburgh golf club once said that it is not windy at Of course, we all recognise the need for a greater Bamburgh when the ball will stay on the peg on the reliance on renewable forms of energy. Our countryside 15th tee. We have some wind, but that does not justify needs to be protected, which is why the recent refusal the desecration of these views and of these important of two more wind farm developments in Northumberland cradles of Christianity, which have been damaged by was so welcome, despite in one case more than £3 million this development. being offered by developers to a small village community. There was recently a proposal to put up a whole Thankfully, the huge financial inducement—I will not series more of these wind farms at Belford Burn. call it a bribe—did not sway the local people. Money Happily, the county council planning committee rejected cannot buy what the residents are being asked to give this application. There were 500 letters of opposition up. That was the message of the local people. The from people in the local community, and five letters in trouble is that so many of the most beautiful parts of support. However, it is probable that, again, this particular the Northumberland landscapes have already been 261 Energy: Onshore Wind Farming[15 OCTOBER 2014] Energy: Onshore Wind Farming 262 scarred and disfigured, despite the fact that, as we within our county.The Government’s pledges on localism have heard, the wind does not blow as well as in other and respect for the regional view have been overridden, areas of the country, and there being no evidence that and with them our custodianship of our wonderful I have seen that wind will ever provide the reliable, historic landscape. controllable energy that we need. The inappropriateness of the wind turbine programme We all have a duty and responsibility to care for our should be at the back of every inspector’s mind when environment and to exercise wise stewardship over weighing priorities, as there are alternatives. In God’s creation. We are custodians of the future for Northumberland, we have lived for 40 years within a our children and our children’s children. That is why I few miles of massive nuclear power stations, which urge the Minister to take back to DECC the case for have quietly and safely produced some 7% of the ending any further subsidies for onshore wind, especially country’s need for electricity throughout that period. in Northumberland, and for deploying those funds New forms of nuclear power—small modular reactors, more sensibly and more wisely on other forms of factory-built and inherently safe—are on their way. renewable energy. America and other countries are pouring billions into their development, seeing this as a long-term solution 8.02 pm to producing abundant energy that is relatively cheap and CO2-free. We can do the same in the north-east Lord Vinson (Con): My Lords, this debate is on a and create many jobs. serious matter because, bluntly, government-subsidised There are better, longer-term and more effective foreign companies are destroying Northumberland’s ways of reducing the world’s CO2 output. For that heritage. This must be prevented. We are grateful to reason, we do not want to see the heritage of our the noble Baroness, Lady Quin, for raising the matter beautiful county destroyed wholly and unnecessarily. so eloquently. The Duddo Stones are the north of England’s Stonehenge Like so many things in life, it is the unintended and just as old. We have had our fair share of wind consequence of a poorly thought out government turbines. As the right reverend Prelate said, enough is programme being rushed through to try to save the enough on all counts. Finally, this debate will have globe from overheating through excessive CO2 emissions been worth while only if the Minister undertakes to caused not just by fossil fuels but by the consequences make certain that any new briefing given to the planning of the huge growth in world population—an aspect inspectors draws their attention to the balanced arguments that is seldom mentioned. It is quite proper in this have been put forward today in the Chamber and debate to ask whether it is sensible for taxpayers and suggests that they well regard them. Will the Minister all users of electricity to continue massively to subsidise assure us that that will happen? the erection of wind turbines, which can produce only sporadic energy and need coal-fired polluting back-up 8.06 pm to support them, when there are alternatives. If the wind programme were going to save the globe, many Lord Shipley (LD): My Lords, I thank the noble of us might accept its harmful consequences, but the Baroness, Lady Quin, for initiating this debate. whole exercise serves no good purpose. It is estimated I received a few days ago a copy of the National that it will cost some £4,000 per family over the life of Trust members’ magazine. In it was an article entitled the turbines. Consequently, many now doubt the wisdom Powering the Future. It talked of the role of that great of this regressive programme. That is the background industrialist and inventor Lord Armstrong, who to our county’s problems. introduced renewable energy to his home at Cragside From the turbine developers’ point of view, in Northumberland, which is now owned by the trust. Northumberland is a sitting duck because it has fewer It was encouraging to read of the National Trust’s people to complain and who can afford to challenge pledge to generate 50% of its energy use from renewable their subsidised ambitions. That may explain why sources by 2020. I was also pleased to read the comment Northumberland is chosen, but why do so many of its against a photograph of wind turbines on the Cumbrian appeals against development fail when examined by coast near Whitehaven which said that, departmental inspectors? These inspectors may be “the trust supports the sensitive use of renewables such as wind ex-lawyers or judges but they are human beings. They turbines”. are encouraged by their departmental brief to help the I agree with the National Trust. The crucial word Government meet their targets. Many cases that come here is “sensitive”, which is at the heart of the debate. before them are obviously borderline. They obviously We should not allow visually intrusive development in regard the development near our historic Duddo Stones areas of outstanding natural beauty. We should not as a borderline case. lose the tranquillity that Northumberland is renowned Like our local planners, they are wrestling with the for, and we should not damage tourism, which is such two-way pull of government advice on the one hand a fundamental part of Northumberland’s economy. I and citizens’ objections on the other. So I hope this am pleased that Northumberland County Council is debate will be brought before them and will help them doing an impact study of wind farms on tourism to to take a more considered view of the two-way pull assess the perceptions of visitors. now that the Government’s targets have been met and The north-east like all regions needs to play its part Northumberland has had more than its fair share of in energy generation. However, I am grateful to the development—a point so well raised hitherto in this Campaign to Protect Rural England and to the debate. To date, they have taken insufficient account Northumberland and Newcastle Society for pointing and failed to recognise adequately the seething anger out in a letter earlier this year that while they are 263 Energy: Onshore Wind Farming[LORDS] Energy: Onshore Wind Farming 264

[LORD SHIPLEY] money people raise from their own pockets to fight supportive of the development of renewable energy these schemes. It really is a David and Goliath situation. they feel that too many wind farms are being built in I feel that one thing the Government could do is try to Northumberland, which has twice the megawatt consents encourage inspectors to up the power they apportion for onshore wind generation of the nine home counties to local opinion and beautiful landscapes. Trying to put together. They have a point; the wind does blow in encourage further investment in wave power would the home counties. immediately take a lot of pressure off the desire for We have to think very carefully, however, about onshore wind farms. energy security. I do not want the lights to go out and Like in Northumberland, there are a lot of wind so I believe that we need to promote every form of farms in Wales and therefore in sensitive areas. I have sustainable energy that we can. We should note that to admit that the wind farms on old coalfields and in last year, onshore wind turbines produced 5% of our mining areas look beautiful and do not destroy the electricity. They help to keep the lights on, supplying landscape, so I am certainly not against them per se. I 3 million homes. A recent poll I saw showed that just want us to look at those wind farms that are in two-thirds of people support onshore wind energy sensitive areas that may not have been declared to be production. However, as has been pointed out this areas of outstanding natural beauty. That is a very evening, local people quite rightly want a bigger say important point. At the moment it is a loophole by over where onshore wind installations are permitted, which inspectors tend to find against objectors. and I am pleased that the Government have responded, I was shocked to hear people who have been objecting delivering a fivefold increase in the benefits that in my area say that the only party that is representing communities in England can receive worth up to little groups is UKIP. The Government should take £100,000 per year for a medium-sized development. note of that because it is a rather shocking thought. The crude block on onshore wind energy that some The noble Lord, Lord Gardiner, sitting opposite has are calling for would seriously risk investment in the said in the past that we must be sensitive about landscape UK’s renewable energy market, which has the potential and local opinion. My plea to the Government echoes to create 200,000 new green jobs by 2020. the words used by the most reverend Primate the There are very few sources of energy that do not Archbishop of Canterbury at the finish of last night’s arouse strong opposition. Nuclear, wind and shale all debate on bringing in women bishops. He simply said, have active opposition, but banning wind farms would “Listen, listen”. drive up consumers’ energy bills because onshore wind is the cheapest type of renewable energy. At the same 8.14 pm time, we have to protect our natural environment, so Lord Grantchester (Lab): My Lords, the decarbonised we need a balance between keeping the lights on and power sector is a prerequisite to tackling climate change protecting areas of natural beauty. and to achieving domestic and international commitments In conclusion, I hope that the Minister will think to reduce the UK’s carbon emissions. There is a place carefully about what has been said this evening and I for all forms of renewable power in the UK’s energy hope that it will be possible to have the discussion that mix, but they should be in the right place. Onshore the noble Baroness, Lady Quin, asked for. I find it wind is the cheapest form of generating low-carbon hard to understand why Northumberland is producing electricity and therefore must continue to be an essential 10% of onshore power while consuming well under part of the UK energy mix in order to limit the impact 1% of the electricity generated by onshore wind. We on consumer bills. Within this overall policy statement, have heard very clearly what the impact has been in however, there must be a balance between the various some areas of outstanding natural beauty in interests to establish the best solution in each individual Northumberland, and I hope that the Minister will development and locality. The planning system is meant take note. to enable these contrasting interests to be taken into account. Guidance makes it clear that the need for renewable energy does not automatically override 8.10 pm environmental protections. Lord Berkeley of Knighton (CB): My Lords, I know However, something is clearly going wrong in and love the Belford area and I objected to the wind Northumberland, and I am grateful to my noble friend farm there, just as I did to one in mid-Wales which is Lady Quin for drawing attention to this problem in close to Offa’s Dyke and the grade 1 Repton-designed her much-loved county. While it may be the opinion of gardens at Stanage Park. Everyone has made the point a Conservative former Minister in this House that that this is not about denying the need for renewables, renewable energies can be hosted in the north-east—or but about trying to look at their value, particularly was that the north-west?—because not many people when we do have offshore as another possibility and, live there, my noble friend has drawn attention to the in the not too distant future, I am sure, wave power. overwhelming concern of local communities that a Nothing is more certain in life than that while we are disproportionate number of wind farms are in the here, the waves will continue to come in. We need to area, to the detriment of many amenities that are vital look at these things because I feel that the dice are to the visitor economy and tourism, even when cities loaded against local people who try to object to a wind such as Sunderland plan their future as a low-carbon farm. hub. We have just heard an example of the kind of Other contributors to this debate have drawn attention money people turn down in order to protect their local to the lack of strategic planning that would give countryside. That should be combined with how much balance to Northumberland and wind power more 265 Energy: Onshore Wind Farming[15 OCTOBER 2014] Energy: Onshore Wind Farming 266 generally. In this it is instructive to look more critically said, it is the cheapest large-scale renewable energy at the guidance provided on renewables. Only last source. Onshore wind plays a vital role in its contribution week, on 7 October, the Minister’s department published to the balanced energy mix that we need. Renewables new guidance on community benefits and community provided around 17% of our electricity in quarter 2 of engagement for onshore wind. It certainly recognises 2014, with almost a quarter of this generated by the wind industry’s commitment to local communities onshore wind. and it will encourage communities by providing a Of course, I will resist the comments of the noble framework for communities, local authorities and Lord, Lord Grantchester, referring to my colleague, developers to work together from the initial conception because those comments were not helpful. We are to of a scheme. But what if there is widespread local look at how we can improve the powers that local opposition to schemes, as my noble friend has pointed communities have and I think that was what the noble out? Community engagement must work both ways, Baroness was asking me to take away from this debate and the process needs to be seen to be accessible in today. Of course, wherever turbines are going to be order to give voice in areas where local residents lack located, the communities concerned must have a greater the funds and expertise to mount a serious challenge say on whether they want them there. We must be clear to development. The guidance will go a long way that it has been this Government who have taken those towards reducing resentment and animosity, but it concerns very seriously, listened hard to what communities may miss the point if it is regarded only as an inducement have said and taken action to respond to those to overcome serious local objections. Can the Minister communities, given that a lot of the planning for those clarify whether the guidance can provide a dialogue turbines was already in the system when we came into whereby the answer may be that the community would Government. rather forgo the development altogether and that this will be noted in addition in the planning process? We estimate that we need 11 gigawatts to 13 gigawatts of onshore wind within the energy mix to meet our While Northumberland can be congratulated on its goals by 2020. The UK pipeline of projects in planning embrace of new technologies, can the Minister confirm and awaiting construction gives us confidence that any evidence that Northumberland is being unfairly onshore wind will be able to make the contribution we targeted from a desire to meet our national targets by need. In Northumberland, I am told that there are a disproportionate predominance of refusals to four onshore wind farms awaiting construction and developments in other, more Conservative-dominated eight in planning. However, we should be clear that we counties? What is the Minister doing to encourage cannot know that all of these specific turbines will be other areas to host their fair share of renewable onshore built. We know that not everything in planning will get wind? The case stated tonight has come across very planning consent and not everything that receives strongly and it needs an answer. consent will be built. The planning system ensures that only well sited proposals are developed. Moreover, in 8.18 pm addition to the planning system, through careful The Parliamentary Under-Secretary of State, Department management of the levy control framework, we can of Energy and Climate Change (Baroness Verma) (Con): ensure that only the most cost-effective developments My Lords, I start by congratulating the noble Baroness, are built, ensuring that we meet our deployment ambitions Lady Quin, on introducing this debate. All noble Lords while delivering value for money to consumers. Ultimately, have provided measured opinion and well-informed we have to look at that part of this very complex views of wind farms, and I think that there is general debate: what is the cost to the consumer in the round agreement around the House that wind has to be seen of energy? as part of the diverse energy mix that this country Furthermore, we understand that some people have needs. But I listened carefully to everyone who spoke concerns about developments. Every noble Lord who in the debate and of course there are concerns about spoke today has raised those concerns. We have been where wind farms are located. clear that onshore wind planning applications will be I know that the noble Baroness does not want to accepted only where the impacts are, or can, be made refer to the energy policy, but part of the debate has to acceptable. The right reverend Prelate the Bishop of refer back to why wind farms are part of the diverse Newcastle rightly referred to the new planning guidance mix. As the noble Lord, Lord Grantchester, said, we for renewable energy that was published last year. must have an energy policy that provides us with That will help to deliver the balance required by the security of supply and ensures that we meet our national National Planning Policy Framework, making it clear and international targets to reduce carbon emissions. that the need for renewable energy does not automatically The requirement for increasing renewable energy supplies override environmental protections and the planning is clear. Wind power provides clean energy and reduces concerns of local communities. Indeed, properly involving our dependence on finite fossil fuel supplies. Also, as I local communities in proposals that will affect them is have said, wind increases our energy security by reducing a critical step in improving the quality of proposed the need to import energy supplies from abroad. It onshore wind development. That is why we have made also creates jobs and investment in the economy, with it compulsory for developers to have pre-application an estimated £29 billion invested in the economy since consultations with local communities for any onshore 2010. We need to increase the amount of energy wind development of more than two turbines or where produced by renewables to meet our legally binding the hub height of any turbine exceeds 15 metres. This targets by 2020 and the decarbonisation targets set for means that developers will need to engage very seriously 2050 in the Climate Change Act 2008 by the previous with communities before even submitting a planning Government. As the noble Lord, Lord Grantchester, application. 267 Energy: Onshore Wind Farming[LORDS] Wales Bill 268

[BARONESS VERMA] Baroness, Lady Quin, asked for that too. This has Communities hosting renewable energy installations been an informed debate and it had a lot of personal are playing a vital part in meeting a national need for ownership behind it. It is only right, therefore, that it is secure, clean energy, including those in Northumberland. seen by my right honourable friend Eric Pickles and It is right, therefore, that local people should be recognised his colleagues in the Department for Communities and and rewarded for this contribution. That is why we Local Government, so I will ensure that it reaches them. worked with industry to secure a voluntary agreement Last year, we published new planning guidance for that developers will contribute a minimum of £5,000 per renewable energy to help deliver the balance expected megawatt per year to local communities hosting wind by the National Planning Policy Framework by making farms. it clear that the need for renewable energy does not The tangible benefits from community benefits funds automatically override environmental protections and are clear to see. Some examples were quoted by my the planning concerns of local people. The new planning noble friend Lord Ridley and others of where they felt guidance has been published to assist local councils that turbines have been a blight, but Middlemoor and, on my noble friend’s point, planning inspectors wind farm in Northumberland has provided funding in their consideration of local plans and individual for roof repairs in the Eglingham village hall and planning applications. learning resources, equipment and outdoor protective The noble Lord, Lord Walton, asked whether there clothing for Little Acorns pre-school. There are other was a way to check decisions after they had been made examples across the north-east and indeed the whole in line with new planning guidance. On 10 October of the country where communities are seeing real last year, my right honourable friend the Secretary of benefits from hosting onshore wind farms. To improve State for Communities and Local Government announced the standards of engagement between developers, a temporary change to appeals recovery criteria for a communities and local authorities for these developments, period of six months. On 9 April this year, he announced we published best practice guidance on 7 October. an extension to that temporary change—and that will These documents will provide communities with continue. It allows him to consider recovery appeals information as to what to expect, in terms of both for new energy developments for a further 12 months. engagement and community benefits, and when to There are processes in place that have been much expect them. better firmed up because we have taken the time to There were a number of questions raised to which I listen to those local community concerns raised by would like to respond before closing my remarks. My noble Lords here today. noble friend Lord Ridley seemed to be a little pessimistic In closing, the Government have three objectives about the creation of jobs, but according to industry for energy policy: to keep the lights on, keep energy estimates, onshore wind has supported around 17,000 bills affordable and deliver on climate change goals. jobs in 2012-13 in the UK. We in the department Onshore wind will play a part in meeting those three estimate that about £7.6 billion has been invested in objectives. To achieve the necessary change, we passed the UK in onshore wind between 2010 and 2013, in the Energy Act 2013 to provide the legal and financial 2012 prices. Since 2010, we have recorded announcements mechanisms necessary to attract the investment we of £1.9 billion worth of private sector investment in need. At the same time, we simplified and strengthened renewable electricity in the north-east. This has the the planning process by creating the National Planning potential to support an area where we need to see job Policy Framework to ensure that only appropriately creation and around 2,190 jobs will be supported. sited projects receive consent, taking into account the My noble friend also raised a question on the needs and concerns of local communities—I re-emphasise impact of these turbines on birds. The Royal Society that: the needs and concerns of local communities. for the Protection of Birds has noted in its own reports Taken together, this Act and our reforms will enable us that the majority of studies indicate that bird collision to deliver the energy infrastructure we need to secure mortality rates per turbine in the UK are incredibly our future at the right price and in the right place. I low. thank all noble Lords for an excellent debate and will ensure that what has been said is taken back to the My noble friend Lord Vinson talked about planning department. practice guidance. Protecting the local environment is just as much a concern for the Government as protecting the global environment, but we are bound by targets Wales Bill that have been set within the Climate Change Act Committee (2nd Day) (Continued) 2008. 8.32 pm Lord Vinson: Will the Minister assure the House that this debate is brought to the attention of the planning departments, and in particular, the planning Clause 20: Borrowing by the Welsh Ministers inspectors? Unless they read this debate, it simply will not have the effect that we all think it should have. Amendment 52 Moved by Lord Wigley Baroness Verma: My noble friend is absolutely right, 52: Clause 20, page 23, line 19, at end insert— and I have made a note to ensure that the Department “(5A) The Secretary of State shall make arrangements for an for Communities and Local Government has sight of independent report to be compiled on the issuance of bonds by this debate, because it is really important. The noble Welsh Ministers. 269 Wales Bill[15 OCTOBER 2014] Wales Bill 270

(5B) The Secretary of State shall lay a copy of the report Baroness Morgan of Ely (Lab): I will speak to specified in subsection (5A) before each House of Parliament Amendments 53 to 55, which are about increasing the within three months of this Act being passed.” amount that the Welsh Government should be allowed to borrow. One of the key reasons why the Assembly is Lord Wigley (PC): My Lords, I will also speak to so enthused about this Bill is that, for the first time, the Amendments 53 to 55. This group seeks to bolster the Welsh Government will be able to access those borrowing Assembly’s economic accountability and resources. powers. This is particularly important at the present We in Plaid Cymru believe that the Welsh Government time as £1.7 billion has been cut from the Welsh should be able to issue bonds, just as the Scottish budget and the capital budget has been slashed by Government can. Amendment 52 would hence provide 33%. If the Welsh economy is to grow, it needs to for a review into whether this could in fact take place. invest in essential infrastructure. That ability to invest It is a very modest amendment giving the opportunity has been choked off by government cuts. It seems for this to be further investigated. I should point out unfair that the Government connected the amount that this was a recommendation of the Silk commission that the Welsh Government are able to borrow to the and is supported by the Welsh Government as well as taxation revenue stream of the Welsh Government. by my own party. Revenue streams in relation to stamp duty and landfill— Having this power would allow the Welsh Government two taxes that are, it is proposed, to be devolved to use innovative, less volatile ways of borrowing such initially—have proved to be extremely volatile in the as the Build for Wales scheme that we have championed. past. Such a project would create a new entity to invest in How was it determined how much the Welsh public infrastructure. At present, if the Welsh Government Government are allowed to borrow? It strikes me that want to undertake large amounts of capital expenditure the approach to Wales is very different from the approach to invest in building schools, hospitals, roads and so adopted for the borrowing powers in Scotland, where on, they are unable to borrow and cannot raise enough a connection was not drawn to the funding stream but by way of tax to provide the necessary resources. If to the capital budget. The Scotland Act allows the they save the funds, the Treasury may claw the money Government to borrow 10% of the Scottish capital back if it is not spent within a certain period—as was budget in any year to fund additional capital projects. so disgracefully done in 2011 when savings prudently That would be around £230 million in 2014, up to accumulated by the Welsh Government were ruthlessly £2.2 billion in total. Scotland seems able to borrow purloined by Her Majesty’s Treasury. It is surely against proportionately considerably more, despite the fact common sense that the Welsh Government are unable that it has considerable PFI commitments—unlike the to borrow funds long term to fund capital assets. Welsh Government. This is not the case for Northern Amendments 53 to 55 would ensure that the threshold Ireland, where no revenue stream exists apart from the for the Assembly’s capital borrowing powers is raised block grant. Yet, it is allowed to borrow. from the £500 million in the Bill to £1,500 million—that This Bill allows the Welsh Government to borrow is, £1.5 billion—which would make the Welsh Assembly up to £125 million per year, up to a limit of £500 million. more closely aligned to the £2.2 billion threshold However, if the same rationale were used in Wales as afforded to the Scottish Parliament. We would feel in Scotland, so that borrowing was based on capital very unhappy if the Scottish Parliament were able to budget not tax revenue stream, Wales would be allowed borrow four times the sum that we can in Wales. We to borrow up to £1.3 billion—or £130 million per arrived at our figure by taking into consideration year—reflecting that £1.3 billion capital budget in Wales’s population base as well as the fact that we Wales. Ideally, we would like the Government to allow have fewer PFI commitments than Scotland, hence flexibility so that the Welsh Government can increase giving us greater flexibility over repayments. I beg to their borrowing powers at a time when the economy move. looks like it is much more on its feet. Could the Minister outline whether there is any mechanism through Lord Howarth of Newport (Lab): My Lords, it is which that would be possible? absurd that there should be a need for a review of such a matter. It is absurd that there should be limits on the ability of the Welsh Government to borrow. We all Lord Newby (LD): My Lords, in this group of remember—I think we are all old enough—that in the amendments on borrowing powers, I begin with 1960s and 1970s local authorities issued bonds, as did Amendment 52, which would require the Secretary of utilities. Much more recently, universities have issued State to lay an independent report on Welsh bonds bonds, notwithstanding that to a significant extent before both Houses. As the Government have previously they are publicly funded. This is an elementary tool of made clear, the subject of bond issuance by Welsh financial management which, if the Assembly is to Ministers is something that the UK Government are take serious responsibility for its own affairs, of course willing to consider. Moreover, initial discussions have it ought to have. now taken place between the two Governments on the My only complaint about Amendment 55, proposed form that those considerations should take and we are by the noble Lord, Lord Wigley, is that he has been so keen to progress this work quickly and bring it to a modest. He wants to limit the amount that the Assembly conclusion. is permitted to borrow to £1,500 million. There is a The Government have previously committed to constraint on the amount of borrowing that rests in consider Scottish bonds and have agreed to make this the ability of the Welsh Government to service the source of borrowing available to the Scottish Government. interest. That should be a sufficient discipline. Our record therefore demonstrates that we are able to 271 Wales Bill[LORDS] Wales Bill 272

[LORD NEWBY] increased funding stream could allow Welsh Ministers consider such matters without legislation, and I therefore to borrow around £1 billion. Our message to all parties ask the noble Lord to withdraw his amendment on in Wales is that it is time to get cracking, once we get that basis. this Bill through, and get that referendum held and the I turn to the proposed amendments to the borrowing income tax powers devolved. limits. The Government have consistently been clear Finally, in order to manage forecast error, the that capital borrowing must be commensurate with Government have provided the Welsh Government the level of independent revenue available to support with exactly the same £500 million of current borrowing the costs of borrowing. This is an important principle as in the Scotland Act, despite the more limited tax that ensures borrowing remains affordable in much powers initially being devolved to Wales. The Welsh the same way as mortgage lending must reflect the Government’s current and capital borrowing limits capacity to service borrowing. It is also worth repeating are therefore relatively generous compared with that the £500 million capital borrowing limit is already Scotland, and I ask the noble Lord not to move his substantial relative to the level of independent revenues amendments. that will be available to Welsh Ministers when stamp duty and landfill tax are devolved. In particular, the 8.45 pm limit is far higher than it would have been had we simply applied the tax and borrowing ratios implemented Lord Wigley: I am very grateful to the Minister. I by the Scotland Act. Such an approach would have certainly welcome his announcement that progress has given the Welsh Government capital borrowing of been made with the bonds issue, and I hope that the only £100 million rather than £500 million. Although National Assembly can move forward rapidly to take the noble Baroness talks about the relationship between advantage of that opportunity. capital expenditure and borrowing powers as the With regard to borrowing, the capital budget of the consideration that she wants to underlie the amount National Assembly was reduced by just over 40% that the Welsh Government can borrow, it has to be when the changes introduced by the Government were related to the Welsh Government’s management of brought in. That put an immense squeeze on, among their taxes; otherwise, by the same logic—perhaps she other things, the capital requirements of Governments, supports this—large cities and the English regions such as the Government in Wales, with responsibility could also have large borrowing powers if they were for roads, schools, hospitals and all the rest. To get the simply related to the fact that they are already spending economy moving, we have to get the capital injection, money on capital. The link between borrowing powers particularly into the economic infrastructure. I entirely and the Assembly is secured by the fact that the accept that there has to be a cash stream to service Assembly has its own sources of revenue. this, and the Minister once again mentioned the income tax proposals. As he knows, I welcome those and want Baroness Morgan of Ely: Will the Minister explain to see them used. Are the Welsh Government constrained how Northern Ireland is allowed to borrow when it to income tax? There are other sources of taxation does not have this income stream? revenue, and there may be other sources of revenue as well. For example, in the next four or five years, the Lord Newby: My Lords, as we have discussed in M4 tolls will be reconsidered and renewed. Is it not respect of virtually every tax we have talked about possible for the Welsh Government to use sources today, the considerations in Northern Ireland, and the other than income tax to service the capital borrowing situation in Northern Ireland, are very different from that they need? Can the Minister give any indication those in all other parts of the United Kingdom. The on that? noble Baroness is aware of the history of Northern Ireland and why we do things differently there. Noble Lords have made good points about read-across from Lord Newby: As the noble Lord knows, the Bill is Scotland to Wales, but it is a lot less easy to do the permissive in terms of additional taxes being established same with Northern Ireland. Very different considerations in Wales. My working assumption would be that if apply, and the nature of the economic challenges such new taxes were devolved or established, there facing Northern Ireland is rather different. would be a commensurate rise in borrowing powers. I fully understand the desire to see as much investment However, many of the taxes that people sometimes as possible in Wales, but we must ensure that it is talk about do not necessarily raise a huge amount of manageable for the Welsh Government. Not only must money. Therefore even if you got a commensurate the Welsh Government repay borrowing, they must increase in borrowing it would not necessarily be a fund the associated interest payments. That is why we transformative amount on its own. However, I think need to ensure appropriate independent funding streams that the principle is very clear. The Bill is permissive in are in place. I remind noble Lords that for every terms of additional tax powers for the Assembly and, 1% that the Welsh Government have to pay in interest as it were, borrowing follows income. on their £500 million borrowing—if they reach that level—they will have to take £5 million from their Lord Wigley: I am glad that the Minister has overall budget. The maths is clear. It is a very significant emphasised that there is a basket of possible sources amount that the Welsh Government will have to provide of revenue which would justify the capital that is from their overall budget in any event. needed. No doubt the Welsh Government will need to We should be encouraging the Welsh Government use the capital responsibly as it is for capital investment to hold a referendum on income tax powers. If an projects and not just to subsidise revenue budgets that element of income tax is devolved to Wales, that are running at a loss. As far as that is concerned we are 273 Wales Bill[15 OCTOBER 2014] Wales Bill 274 making progress. Can I just pick him up on the comments and £400 million every year. We believed at that time that he made about Northern Ireland when he said that it was probably an underestimate. Since 1999 the that the situation there is different. Of course the aggregate shortfall in Wales arising from the Barnett situation is different from Wales. I understand the underfunding of the necessary services amounts to historic difference and all the rest but in economic more than £5 billion. That is why our NHS, education terms the challenges in Wales are just as great as those system and local government have been inadequately in Northern Ireland—they are in terms of the income financed. Services vital to the people of Wales are per head, the GDA. Is the Minister aware that the being squeezed because successive Governments at GDA per head in areas such as Kensington and Chelsea Westminster have not got to grips with this problem. is 10 times the GDA per head in the Gwent valleys and The Holtham commission argued that the formula Anglesey? That is the scale of the discrepancy. We should be replaced with a mechanism based on needs need to regenerate the economy, otherwise we are as opposed to the per head of population as is currently always going to be going down this spiral. We need the the case. This would allow for the fact that Wales has tools to do the job and quite clearly this will be a more vulnerable and disadvantaged people, including responsibility of the Welsh Government. All I would older people—many people retire to Wales—disabled press for is for him to be as sympathetic to the economic people and those on benefits. The level per head of needs of Wales as he clearly is to the economic needs population is higher than the UK average. Even the of Northern Ireland. I beg leave to withdraw the noble Lord, Lord Barnett, has openly argued that the amendment. formula to which he gave his name should be replaced. A committee of this House came to the same conclusion. Amendment 52 withdrawn. Our amendment calls for a review of the options for replacing this formula. In the Motion to which I Amendments 53 to 55 not moved. referred in earlier debates in the Chamber today there has been agreement between the four party leaders. Clause 20 agreed. There is a Motion coming up for debate on Tuesday in the name of the four party leaders, including the First Clauses 21 to 23 agreed. Minister, Carwyn Jones. It states in the context of Barnett that the National Assembly for Wales, Amendment 56 “calls for bilateral talks that are informed by the Holtham and Silk 1 Commissions’ findings, including an updated assessment of Moved by Lord Wigley the current level and likely future direction of Welsh relative funding”, 56: After Clause 23, insert the following new Clause— “Review of Barnett Formula and, (1) The Secretary of State shall make arrangements for an “calls for those talks, which should begin immediately and be independent review of options for reforming the Barnett Formula completed by January 2015, to have a particular focus on fair in order to meet the objective of calculating the block grant funding, with the goal of securing rapid implementation of a funding for Wales on the basis of need. funding floor which both addresses underfunding in a way that is (2) The Secretary of State shall lay a copy of the report of the consistent with Welsh needs and halts future convergence”. review specified in subsection (1) before each House of Parliament There are three steps that can be taken to sort this within 3 months of the passing of this Act.” out and I put to the Minister that they are within the Government’s easy competence and can be achieved. Lord Wigley: This amendment stands in my name The first is to determine the extent of the shortfall at and that of my noble friend Lord Elis-Thomas. Noble present. I accept that it has come down because of the Lords will be glad to know that this is the final economic patterns and it may now be at £150 million amendment tabled in our names for today’s debate. It to £200 million rather than the £400 million back in deals with perhaps one of the most central questions 2010, but it is almost certainly still there. If the of all. We are coming to it last: the much-beleaguered Government were also to commit to a one-off adjustment Barnett formula which every party in Wales accepts to sort that out and bring in a floor so that as the must be replaced. Unfortunately, for what appear to economy picks up again we do not get the Barnett be narrow political reasons the parties up here do not squeeze hitting us in the way that it has, and if the agree on that point. Those of us in Wales who know Barnett formula is adjusted to a percentage basis how much Wales misses out on funding due to this rather than an absolute one so that we do not lose out formula were horrified to hear the government parties every time the absolute figure in Wales gives a lower giving pledges to the Scottish electorate that they percentage of benefit than happens elsewhere, it would would keep the discredited system in place in the event be possible to live with the Barnett formula although of a no vote. If it is to stay in place without amendment it still does not give us a needs-based formula. it will have very dire consequences for Wales. Ideally, however, what Wales needs—and what all As the Minister will know, in Wales an independent the parties in Wales have been calling for—is a needs-based commission, the Holtham commission, has shown formula. At some point we are going to get some how we are disadvantaged by the implementation of daylight on this. We cannot go on from year to year the Barnett formula which, as noble Lords will be with this underfunding. I press the Government very aware, calculates how much consequential funding the strongly indeed, even if they cannot accept these devolved nations get based on the spending levels in amendments, to please give us some ray of hope that England. The Holtham commission argued in 2010 we might find our way out of the hole in which we find that we in Wales are underfunded by between £300 million ourselves in Wales. I beg to move. 275 Wales Bill[LORDS] Wales Bill 276

Lord Anderson of Swansea (Lab): My Lords, my Well, there may be argument about the exact amounts, Amendment 59 has the same target as that of the but I cite what she says: Wales has been the orphan amendment of the noble Lord, Lord Wigley, but within the United Kingdom. She says: approaches it in a different way. I ask that the tax “Wales is now barely acknowledged by politicians in Westminster reforms shall not come into force until a Welsh … When I asked one English minister what the future held for Government Minister has laid a report before the Wales, he said: ‘Sheep and singing’”. National Assembly containing a statement that the I hope that is not the attitude of other Ministers in this Welsh Government, with regard to the statement of Government. I would ask noble Lords to read that funding policy, are content with the fairness of the article, which is very important. allocation of funding arrangements from the UK It may well be that the shortfall could be remedied Government to Wales. So this is effectively about fair in other ways. I think it was the noble Lord, Lord funding, also known as the Barnett formula. I follow Wigley, who mentioned a review of Severn Bridge the noble Lord, Lord Wigley, in saying that in the funding. What is clear is that the Severn Bridge, with current, somewhat depressed, economy, the gap has its substantial and increasing toll, is a major tax on been narrowed. If there is positive economic development, Wales. There would be a big boost to the economy that gap will be widened again. of Wales if that toll were to be removed. I would The noble Lord, Lord Newby, asked us to be positive commend that to the Government. There may be and not to be “moaning minnies”. I therefore turn to other ways of making up that shortfall, but fair funding the front page of yesterday’s Western Mail, which there should be. quotes Shadow Welsh Secretary Owen Smith as saying I will end again on a positive note. I am encouraged after the discussions yesterday afternoon: by the way in which Owen Smith emerged from that “I impressed on the Secretary of State the need for his Government conclave and said that he thought the Secretary of to deliver fair funding for Wales”— State was listening. Not just listening I hope, but ready and here it is— to act. “and am pleased that he seemed prepared to address this issue”. Well, if he is prepared to address it satisfactorily, I 9pm could sit down, I suppose. However, it is clearly a major issue in Wales. Lord Richard (Lab): My Lords, I start by declaring an interest. Some years ago, I had the privilege and Many years ago I sat at the feet of the noble Lord, honour of chairing the committee of your Lordships’ Lord Morgan, who went on to become the vice-chancellor House that looked into the operation of the Barnett of Aberystwyth. He had come “al hoot” from Oxford formula. It was an extraordinary committee. On it, and taught us poor undergraduates in Swansea new among other people, we had a former Chancellor of words such as “marginal”. He taught me about the the Exchequer, two former Secretaries of State for great American labour leader Samuel Gompers, who Scotland, assorted junior Ministers, and other was once asked, “What does American labour want?”. Members ofusb your Lordships’ House. The committee Some people expected him to suggest revolution or came to the unanimous conclusion, set out in a radical change. Samuel Gompers answered: “More”. report, that the Barnett formula was out of date, If the grand public in north, south or mid-Wales were inefficient, basically unfair and ought to be replaced. asked what they wanted, they would not enthuse about One of the most substantial parts of evidence we had the proposed changes to landfill tax or income tax, or was from my noble friend Lord Barnett himself. He modified powers. They would say, “We want more”— said that he thought it was out of date and inefficient because we are currently underfunded; the extent is and was never intended to last this long—that it was uncertain, but we are certainly underfunded. introduced as a temporary measure in about 1977 or That was the position taken by the First Minister. I 1978 and not designed to be semi-permanent. It was recall that immediately after the Scottish referendum meant to last a year or so and then expire. I put it to he said something to the effect that Scotland has put him whether it was fair to say that it ought to be the United Kingdom “through the grinder”—I think replaced. He said, “Yes, perfectly fair.” He has persisted those were his words—and that the funding issue in that view. should now reappear: we should effectively shout more Where are we on this issue? Here we have a formula, loudly. Scotland has been rewarded for it. Are we in introduced nigh on 40 years ago, which still determines Wales to continue to be taken for granted? We have the basis of the block grants for Scotland, Wales and played Mr Nice Guy and been ignored. Objectively, Northern Ireland. It is based on evidence garnered in we have lost out financially. the 1970s, and is not based on needs but rather on Time is such that I will not detain the Committee, population. You hear the argument frequently that but I was impressed by an article by Alice Thomson in you cannot have a formula based on needs because it the Times of 24 September which—unusually, coming is too imprecise and difficult to do. I would commend from a non-Welsh person—stated: that the people who veer in that direction of the “While Scotland is being showered with largesse, Wales—failing argument read the evidence that we produced in that and underfunded—has been pointedly ignored”. report about six years ago. There was a detailed She went on to give examples from Holtham: examination of a needs-based formula and the evidence “Last year under the Barnett formula, Scotland received then seemed quite conclusive, as it does now. The £10,152 per head, while Wales, despite being much poorer, got Barnett formula is unjust and unfair. Wales is unfairly £9,709. If Wales received the same levels of public spending per discriminated against as a result of the operation of capita as Scotland, its public services would be boosted by £1.4 billion”. the Barnett formula. 277 Wales Bill[15 OCTOBER 2014] Wales Bill 278

No Government in recent years have been prepared fundamental inequity in public financing. I cannot see to take this issue on. In terms of the Labour Government how there can be a fair and acceptable new set of which left office in 2010, the then Chief Secretary to arrangements while the Barnett formula is retained. the Treasury appeared before our committee and said The noble Lord, Lord Wigley, spoke extremely well that he thought the operation of the Barnett formula and constructively with his practical suggestions as to was broadly sort of fair. Indeed, the then Secretary of how we might try to develop a sort of fallback position. State for Wales even came in front of the committee My noble friend Lord Richard suggested that if the and said he thought it was sort of fair. Of course, the Scots are to retain their advantage, it may none the less Secretary of State for Scotland thought it was extremely be possible to find ways at least to reduce the inequity fair. The Secretary of State for Northern Ireland also for Wales. However, it seems to me that that path also did not dissent from that general proposition. I was bristles with political difficulties because, if public appalled, frankly, at the evidence that we got from the spending is a zero-sum game, if there is to be more for Chief Secretary to the Treasury and the Secretary of Wales, then it has to come from somewhere and if the State for Wales. Nothing has changed. Things have Scots are allowed to retain their present advantages, not got better as far as the Barnett formula in Wales is then it will come from Northern Ireland or, more concerned: on the contrary, they have got worse. likely, from England. However, there is, rather belatedly, Something has to be done about it. We really cannot a growing recognition in the regions of England that go on with this. the Barnett formula is a lousy deal for the English. I Although I have held the view for some time that cannot see that there is a path towards remedying at the formula’s time has come and that it should be least a part of the injustice from which the people of quietly expunged from the public record, I was surprised Wales suffer if it is to be done directly at the expense of and, indeed, somewhat appalled to see the three party the people of England. Hasty pledges have placed us leaders re-emphasise in the Scottish referendum campaign all in immense difficulty but I look forward to hearing that it should continue to apply to Scotland. If it is from the Minister or the noble Lord, Lord Bourne, said that it should continue to apply to Scotland, on who may be able to pluck a solution out of the hat, what basis should it do so? Does that mean that it although I somehow doubt it. should continue to apply to Wales? If so, will Wales be asked to put up with what is, by almost everybody’s Baroness Morgan of Ely: Today, the First Minister admission now, a basically unfair system of allocation called again for a new funding system that meets the of resources from central Government to Cardiff? Are public service requirements in Wales. He likened we really going to be asked to put up with this because the Barnett formula to, the party leaders went up to Scotland at the end of the “fixing a hole in the roof with Blu Tack and cardboard”. referendum campaign and made what is, on the face of It is no secret that Wales does not do well out of the it, an extraordinary offer to the Scots? If the party Barnett formula. However, we know, following the leaders want to keep the Barnett formula for Scotland, Scottish referendum, that that formula is not in danger so be it, but they should not be prepared to inflict it of dying any time soon. Indeed, the Prime Minister upon the Principality in perpetuity. It is basically made his sentiments on the issue quite clear last week, unfair, unjust and out of date, and something should when he reiterated that he had no intention of reopening be done about it. the debate on providing a fair funding mechanism for Wales. That seems very different from the position of Lord Howarth of Newport: My Lords, it is enough the Secretary of State for Wales, who said yesterday to make one weep that, in the run-up to the Scottish that he is prepared to address the issue. It would be referendum, political leaders felt themselves driven by nice to hear which one of those statements is correct. expediency to pledge to retain the Barnett formula. As At present, the block grant provides 113% of the my noble friend Lord Richard explained to the Committee, English level of spending on devolved services, while it is one of the great injustices and malfunctions of the Holtham report found that Wales’s relative needs government in this country over the past 40 years and were between 114% and 117%. The noble Lord, Lord a lamentable lack of statesmanship has prevented it Newby, has asked me to be more positive, so I will give being reformed. There was a great opportunity in it a good go. The good news is that an arrangement 2010. The Conservatives had nothing to lose in Scotland. was put in place in October 2012 that established a With universal recognition of the need for austerity, process to review the relative funding of Wales to there was a political opportunity to deal with it then. England in advance of every spending review. If it That has been made infinitely harder now by the rash looked like convergence were happening—for example, and unprincipled pledges that have recently been made. if the level of funding between England and Wales The report of the committee of my noble friend looked like it was becoming more equal, despite Wales’s Lord Richard is unanswerable. We debated it in your needs being greater, due to things such as ageing Lordships’ House and there was not a scintilla of a population and rurality—then the Government would persuasive argument to defend the status quo. Indeed, discuss options to address the issue in a fair and I do not recollect anybody even trying to defend it. affordable manner. That is the good news. The pledges that have been made will come back to The problem is that there is no guarantee. It is bite their authors because I cannot foresee how we can purely up to the good will and subjective decision-making make progress towards new constitutional arrangements of the respective Ministers in Cardiff Bay and Westminster. in this country following the referendum in Scotland The Labour Party has acknowledged that there is a and following the pledges that have been made in specific funding problem in Wales and that we will respect of devolution so long as there is such a address the issue when we are in office. 279 Wales Bill[LORDS] Wales Bill 280

[BARONESS MORGAN OF ELY] House should have an ad hoc committee. That is how I am sorry, but I am afraid that I must return to my the committee came into existence and I was then negatives. One of the problems with the income tax asked to chair it. recommendations is that this issue is compounded by the problem of the devolution of income tax in Wales. It is clear from David Cameron’s insistence that Wales Lord Thomas of Gresford: I had misunderstood the should just pick up that offer of income tax powers basis of that committee, so I withdraw what I said first that he has not understood the link between underfunding of all—that the last Labour Government addressed in Wales and the method through which the block the Barnett formula. They clearly did not and it was a grant will be reduced in future, should Wales pick up committee of this House, chaired by the noble Lord, the option of introducing the Welsh income tax. While Lord Richard, which did address it. The Government it is worth re-emphasising that we agree with the then ignored its findings. That is what I am told. I am principle of income tax devolution, it is also worth told that there was a second committee but I am not underlining the risks that Wales would be undertaking particularly aware of it. if we were to devolve income tax powers without Where the problem really arises is that the Barnett changing the Barnett formula. formula is used as an excuse for the failures of the The idea is that, if the Government suggest that in Welsh Labour Government in the fields of education the first year of operation 10 points of personal income and other devolved areas. They say, “We don’t get tax receipts are yielded to Wales, then the equivalent enough money”. As soon as I read of the vows given amount will be deducted from the Welsh block grant. to the Scottish people by the three leaders, it seemed to That cut is then adjusted proportionately in subsequent me that at that moment the concept of having a years. The Government have suggested that the indexed formula that could apply equally in Scotland and deduction method, as recommended by Gerry Holtham, Wales was dead because one surely has to decouple is used as a method to determine what that proportional whatever funding formula eventually applies in Scotland cut would be. The problem is that if the block grant when it exercises its powers from whatever formula fails to produce a fair level of funding relative to need happens in Wales when it exercises different and more at the outset, as every subsequent change will be based limited powers. Accordingly, we need something specific on that initial level of funding, any cut in grant in to Wales through looking at the needs of its people as future, however it will be adjusted, will probably make opposed simply to dividing money on a population matters worse as convergence happens. basis. On the one hand, we are saying that we need fiscal The whole point of the social contract is that taxes accountability in Wales. On the other hand, we need to are paid—not to be divided equally per head of population ensure that before we set out on this path we start from but so that services according to need can be paid for a fair position. It is critical that a fair funding mechanism by the government of the day. That is the principle is established from the outset, otherwise that unfairness that must be the basis of the way in which Wales is will be locked into the system for the long term. funded in the future. I know that the Minister is intensely aware of this issue. She has her fingers all over it and has been The Parliamentary Under-Secretary of State, Wales discussing it for years. However, I ask her to reiterate Office (Baroness Randerson) (LD): My Lords, as ever, what the Secretary of State said this week: that he is a debate on the Barnett formula is interesting but I am prepared to look at this issue. afraid that from my perspective it is rather too well worn territory. 9.15 pm I start by responding to the comments of the noble Lord, Lord Wigley, in relation to the £300 million to Lord Thomas of Gresford (LD): The noble Baroness which he referred as the funding gap identified in the said that a future Labour Government would address Holtham report. The gap has indeed come down in the Barnett formula. Well, they addressed it in the last size and it would be very useful to determine the Labour Government; they appointed the noble Lord, current shortfall. It is particularly important to point Lord Richard, and his commission to produce a report out that when the agreement was made between Jane and then ignored his findings. Hutt and the Chief Secretary to the Treasury in an exchange of letters in October 2012, it acknowledged Lord Richard: That is not right. I was appointed by that convergence had ceased to take place, that there this House, in accordance with the usual rules for the was, in fact, divergence and that Welsh funding was appointment of chairmen of committees. within the region of what the Holtham report regarded as fair funding. Therefore, at the moment, there is not a major issue of unfair funding. There may be issues at Lord Thomas of Gresford: I withdraw the term the edge, but it is not a big problem at the moment, as “appointed” but I am sure that the idea was generated was acknowledged by the Welsh Government. Of course, by the Labour Government of the day. It was not that does not solve the problem, because convergence something that this House thought up of its own is predicted to start again around 2018. That issue has accord. to be addressed if the gap is not going to widen again. I agree that there is a need to deal with this in the Lord Richard: I am sorry but it was an ad hoc scope of the devolution discussions because it distorts committee, which was set up after the Liaison Committee the political debate in Wales. Funding is quite simply decided that that was one of the subjects on which the blamed for every policy failure. Even if we take the 281 Wales Bill[15 OCTOBER 2014] Wales Bill 282 figure of £300 million, in a budget of £15 billion, confirm that they are content with how funds are £300 million is a significant amount of money, but it is allocated. The progress that this Government have not something that could possibly be blamed for every made on working towards fair funding, with the significant health failure, every education failure and every social exchange of letters in 2012 between the Ministers in problem within Wales. It is not so massive that it is the two Governments, can be built on. I urge the noble fundamental to the problems that we all acknowledge Lord to withdraw his amendment. are faced in Welsh society. The noble Lord, Lord Anderson, is absolutely right Lord Richard: Can I be perfectly clear as to what in saying that it is the funding issue that the public are the Minister has just said? As I understand it, she is interested in. They do not worry too much in general saying that the fact that a vow has been given to about devolution, but they are interested in fair funding. Scotland that the Barnett formula should continue The noble Lord, Lord Anderson, referred to the Severn to apply there is no bar to the funding arrangements tolls. I look forward to our debates on that in the next for Wales being reconsidered, and that it is Government. Whoever wins the election, there will be the Government’s position that those funding debates on the Severn tolls because, of course, the end arrangements for Wales will be reconsidered. of that franchise is due in the mid-years of the next Government. Baroness Randerson: I am saying that I do not believe that it is impossible to overcome the issue of I strongly welcome the acknowledgment by the the commitments made to Scotland and that you can noble Lord, Lord Richard, that the Labour Party did honour those commitments and look separately and not deal with the problems of Barnett. Indeed, the independently at the funding for Wales. Northern Labour Party refused for 13 years to agree publicly Ireland is also funded via the Barnett formula but that there was any problem with the Barnett formula from time to time gets additional funding for specific and it was in those years that convergence was taking things. I cannot see why Wales cannot be treated, as place and the funding gap was really growing. It would Northern Ireland is, as a separate thing, as a matter of certainly be the case that Wales would have fewer principle. Having said that, I am simply arguing the problems now if that had not been neglected. It is my case—it is not government policy to do that. I am view, and the Secretary of State certainly agrees, that it firmly saying that the Secretary of State for Wales has is time to look at the funding formula for Wales, and it made it absolutely clear that it is his view that fair is my view that one could do this even with the funding needs to be looked at in the context of the constraints of the agreement that Scotland will retain devolution settlement and the discussions that are its current funding. One can look at Wales on a going on about it. In that case, I am confident that unilateral basis. those discussions will encompass the issue of funding, The noble Baroness, Lady Morgan, asked me to although I cannot predict the outcome. clarify the Prime Minister’s statement. He simply restated the oft-stated government position on funding in Wales, Lord Richard: So that is government policy—what which is that because the problem of the deficit is our the Secretary of State said? priority, no additional funding can be provided within this Government. That is in no way at odds with the Baroness Randerson: Yes, that is policy, announced Secretary of State saying that the long-term funding by the Secretary of State for Wales. position of Wales needs to be looked at. There is an immediate situation and a long-term situation. The Lord Wigley: And of course, every word uttered noble Baroness also asked for clarification on the from the Dispatch Box is government policy, as well. impact of having income tax powers on the block What I am trying to reconcile from the Minister’s grant and so on and referred to the index deduction response are the comments that things are more or less method. The purpose of the index deduction method right now and that there is a need to look at fair was to protect Wales from big swings in the economy funding. There is something a little bit contradictory as a whole and the sort of big swings that are due to about that. They are not absolutely right now, or at UK government policy. However, I point out yet again least we do not know that they are. That is the argument that the Welsh Government have acknowledged that in favour of having more investigation. funding is fair at this point, within the region of The Holtham methodology may or may not have fairness. Given that the Welsh Government acknowledged been right, though it has generally been accepted that that we were in that sort of territory two years ago, it it was. That indicates there has been a closure of the would be a good idea to go for a referendum on gap, though there probably is still a gap, of maybe income tax powers as soon as possible to give the £200 million rather than £300 million to £400 million. Welsh Government the maximum opportunities to use We do not know. Taking the comments that the Minister the taxation system to increase prosperity in Wales. made a moment ago in response to the noble Lord, I shall very briefly look at the technical details of Lord Richard, if there is a gap of £200 million which the amendments. Amendment 56 would require the could be put right, it would bring us on to roughly Secretary of State to lay an independent report on what a needs-based formula would generate. options to replace the Barnett formula. Amendments 59 The assumption is that Holtham was looking for a and 60 would seek to make the devolution of an communality of standards in public services in Wales, element of income tax conditional on dealing with the as might be expected in England. Whether it be funding formula. They specifically says that income £300 million or £400 million as it was, or £200 million tax can devolve only when the Welsh Government as it is now, if that could happen with a one-off 283 Wales Bill[LORDS] Wales Bill 284

[LORD WIGLEY] of the Minister would be: if you are so keen on your adjustment and by bringing in a floor and making constitutional convention, why not put it in the manifesto sure that the changes—convergence or divergence—were for the next election when it can be debated? But that on percentage rather than absolute terms, so that we was Monday’s argument—since when, as we say, an are not missing out, we would at least have a system amendment has been moved. that would be sort of needs-based. It is not the radical As an assiduous reader of the Western Mail I notice needs-based formula that a lot of us are looking for, that, on the front page of yesterday’s paper, the Secretary where you have determinants that generate entitlement of State, no less, is quoted as saying: to certain funding, but at least it would meet the Holtham assessment of the needs as he saw them at “Up to now, we’ve been saying, ‘Well, these are just matters for the individual parties and their manifestos at the next election’, that point in time. but actually I think we can do better than that”. Clearly, the noble Baroness appeared not to be on 9.30 pm message on Monday; perhaps she will be a bit more on If it were possible for the Secretary of State, between message today when she comes to respond. now and Report, to come forward with some statement— not necessarily to this House, but to find a platform So there is an increasing consensus. I hear the where this could be spelled out—at least we could then argument from time to time that to suggest a constitutional come to some consensus on whether that would do the convention is no more than a device for delay and for job and, if it does, move on. The last thing I like doing kicking the matter into the long grass. The answer is is coming to this or any other Chamber, perpetually that promises were made to Scotland—and some might moaning and groaning that we in Wales are being argue that never has so much response been made by short-changed. I do not want that argument. I want to parties in the United Kingdom to one maverick opinion have the resources to do the job and get on with it. So poll. When the Sunday Times YouGov poll suggested we need to put this one to bed. I am grateful to the that there was a majority for independence, there was Minister for her response. I hope she will take back the a certain panic among all parties, resulting in a response message, which came through fairly loud and clear that may now be regretted at leisure. both in this debate and in the debate earlier. I beg leave The promises made to Scotland are clear and should to withdraw the amendment. be honoured, but they can be implemented on their own grounds. However, there are implications for the Amendment 56 withdrawn. rest of the United Kingdom and, in my judgment, for the constitution—and I think that the Liberal Democrats Clauses 24 to 28 agreed. have broadly been the leaders in this field. Clearly, the quasi-federal constitution needs to be viewed with all the difficulties that may arise. We need to have concern Clause 29: Commencement across the board, including in relation to your Lordships’ House. If there is to be a new regionalism, it should be reflected in the way that this House is elected, directly Amendment 57 or indirectly—possibly, as in France, using the notables Moved by Lord Anderson of Swansea from local authorities. I think that the electorate of the French Senate is roughly 80,000. These are the 57: Clause 29, page 31, line 18, leave out from end to “is” in people who are in the localities, the regional assemblies line 25 and insert— and the local authorities, and they come together “(1A) Subject to the other provision made by this section, having been elected indirectly to work together in the Parts 1, 2 and 3 come into force on such day as the National Assembly for Wales shall determine. Senate. YourLordships’ House should not be excluded from this consideration. (1B) Parts 1, 2 and 3 may not come into force until the recommendations of a constitutional convention examining the I think it was Alastair Campbell who said, “We distribution of power between Wales and the rest of the United don’t do religion”. That may or may not be the case Kingdom have been considered and voted upon by each House of but in the United Kingdom we don’t do constitutions— Parliament. except for other people. We are pretty keen on delivering ( ) Subsection (1A)” constitutions to colonial powers from high to low but we are not so good at doing it for ourselves. I have Lord Anderson of Swansea: My Lords, the last two spoken to many groups from the Commonwealth amendments—and I hope I will not detain your Lordships Parliamentary Association and have been tempted to too long—are in my name. They refer to the constitutional use the phrase “the Mother of Parliaments”, but convention and the relevance of the Williams report: a clearly things are creaking in our own constitutional report which is not mainly about the structure of local structures at the moment. Perhaps the 45% vote for government but which contains important clauses on independence in Scotland is a means of alerting us to that. My contention would be that, just as we have the fact that the status quo cannot continue. looked at the relationship between the component I recall Lord Weatherill, who was both a distinguished parts of the United Kingdom, we should look also at Speaker of the other place and the Convenor of the the relationship between the Welsh Government and Cross-Bench Peers in this House, telling me a little local government in Wales. story. He worked in the family firm of tailors and on On the constitutional convention, there seems to be his first day there was an old Jewish tailor to monitor an increasing consensus that we need to look at the him. One of the senior people came to the old Jewish British constitution in the round. I fear that the response tailor and said they wanted a suit made. He said, “Do 285 Wales Bill[15 OCTOBER 2014] Wales Bill 286 you want it quick or do you want it good?”. There is I will not labour the point that there is no ideal an element of that in terms of constitutions. After all, local government structure in Wales. I recall that many we have agonised over changes for so long, going from years ago when I was the Member for Monmouth precedent to precedent with a little tweak here and a there were certainly at least a dozen local authorities: little tweak there. rural district councils, urban district councils and town Now there must surely be a case for a group to councils. That was done away with in the Walker make an initial analysis by looking at foreign examples reforms, with counties and districts. Clearly, it was and then for the elected representatives, so far as they right that the counties had responsibility for education able, to take a considered view. It may be a federal and social services, but the divisions were not easily system. Even within a federal system or a quasi-federal made. system one can have a range of very different powers. We have now had further elements of reform. City We know that in the different autonomía of Spain, for regions are being considered. However, perhaps the example, it is federalism à la carte. An autonomía such failures over food safety are very good examples of the as Valencia has relatively limited powers, whereas Galicia fact that, for certain areas of expertise, local authorities and Catalonia have far more extensive powers—all need to be able to employ experts in the field. I end on within the same system. There is no reason why, the plea that we do not forget local government. There according to demand, there should not be asymmetric appears to be a consensus within the assembly on devolution. implementing the recommendations of the Williams commission, and the timetable is such that these could The key question is: are we happy to continue with well be implemented before the provisions of the constitutional tinkering or do we feel that we have Wales Bill become law. I beg to move. reached the point where we need to look at the whole constitution from this place and the other place. I recall that one of the major cogent arguments used Lord Thomas of Gresford (LD): My Lords, it is such when we were discussing the future of this House was a delight to hear from the noble Lord, Lord Anderson, that there was no attempt to place it in the context of who had a somewhat feckless youth when he was the relationship between this House and the House of passionately anti-devolution. Clearly, somewhere between Commons. We need to look at the devolved assemblies, Monmouth and Swansea he was struck with the true and we also need to look at local authorities. light of liberal principle. As I understand his speech, he now supports not merely Liberal Democrat policy If we are not happy to continue tinkering, it is but also what was, in his feckless youth, Liberal policy. clearly right that we should now recognise that after the Scottish referendum we are in a new context, and 9.45 pm that the status quo has proved insufficient. I recall that when the three party leaders made a vow, they came Lord Anderson of Swansea: My position then was together quite properly. If they accept the case for a as it is now. Devolution within a unitary system is constitutional convention that is good although perhaps flawed in many respects, including the fact that there is not quick, what is now stopping them? Is there not a no end position, whereas a federal or quasi-federal reason for them to now make a similar vow on a system with a constitutional court to adjudicate on the consensual basis that this country deserves a constitutional differences between the component parts is logical. We convention? were embarking in the 1970s on a strange new journey I turn now to my second point, on which I shall be and perhaps it was Mrs Thatcher, with her own form quite brief, which is the question of the Williams of centralisation, who was the major recruiting sergeant report. I submit that it would be wrong to ignore the formeonthat. position within Wales: that is, the relationship between the Assembly and the local authority. I recall that Lord Thomas of Gresford: The noble Lord, Lord during the initial debates on devolution in the 1970s Anderson, has disappointed me slightly with this the Welsh Office, as it was then called, totally ignored recantation of what he said earlier, but never mind. I local government. It was only at a fairly late stage of am entirely with him that we need a constitutional the debate that it was recognised and brought within convention and that we should be looking for the the discussion that there were substantial implications abolition of the House of Lords and some form of for local government. federal, directly elected or proportionately elected chamber There is clearly a temptation for Cardiff Bay to that could consider the situation as a whole, perhaps hold on to what it has. However, I am encouraged by with a Supreme Court charged with the sort of duties the response of the leader and, indeed, all the parties that attach to the Supreme Court in the United States. in the Assembly. Although the Williams commission That is not, however, any reason for holding up the hoped that there would be action by Easter of this provisions of this Bill, which are urgent. The Bill year, we know that on 1 July the overview on broad needs to go through because Wales cannot wait for a public service recommendations was addressed, and future nirvana when we have got it all together, it is all on 8 July the local government reorganisation was very logical and all the problems are at an end. We addressed with a general White Paper. Now we are cannot keep the Bill waiting for that moment. promised that on 28 November there will be a voluntary merger of local authorities. On 28 February there will Lord Howarth of Newport: If my noble friend Lord be a White Paper setting out the process for merging Anderson’s Amendment 57 is passed it will be a very councils that do not want to merge. There is already a long time before the provisions of this Bill are brought timetable in process. into force. I am against that delay because I want the 287 Wales Bill[LORDS] Wales Bill 288

[LORD HOWARTH OF NEWPORT] Those commitments on Barnett are already having an Welsh Government and the people of Wales represented impact in Wales and there is a problem if they continue by them to have the new borrowing powers that are to do so. We need to get the balance right and we need built into the Bill. However, if there is to be a constitutional to have a broader discussion. convention, I am in favour of it taking its time. In the For two years the First Minister of Wales has been field of constitutional reform, more haste means less calling for a constitutional convention to be established speed, as we saw rather painfully in the attempt at where a discussion about the power relationship between reform of your Lordships’ House in this Parliament. Wales and the rest of the United Kingdom would be I also think that the constitutional commission, if undertaken. Who would be on such a constitutional there is to be one, should be very much at arm’s length convention? Obviously there would have to be from the political parties and the Westminster and representatives from the devolved Administrations and Whitehall establishment. It will be important that the local government representatives from England. But, public should not suppose that this is any kind of crucially, we would also want to see representatives of stitch-up or a device for the existing establishment to civil society and the general public. The disconnection protect its own interests. The public would want to between politicians and the public absolutely has to be see that members of the commission were deeply halted. We would need to work to a clear timetable. versed in constitutional theory and constitutional law, The last thing we want is a discussion that goes on for and that while they may have close affiliations and years and years without end. We would also need to loyalties to the different nations and regions of this think clearly about what the convention would do. We country, they were prepared to take, as far as they would have to define the core elements of a new could, an objective view of the long-term interests of constitution that would enshrine a programme of the United Kingdom. fundamental reform for the UK. The new settlement, It would also be essential that they should receive while recognising the different circumstances of the submissions from the public. Those submissions would four nations, must be based on common principles be numerous and would take a very long time to that reflect the multinational and multi-union character consider. I am sure that if a committee of wise people of our United Kingdom. formed on these principles were to set to work, they The referendum in Scotland was a wake-up call for would perform a valuable task in clarifying the issues, all members of the political class. We must acknowledge educating us all and pointing the way forward. They the depth of disillusionment in this country and the would probably succeed in coming up with a blueprint distance that people feel from the political process. for a new federal model of the United Kingdom. Through establishing a convention, we would have a However, it is one thing to come up with a blueprint; it one-off opportunity fundamentally to reform the system is quite another to implement it, and then politics of governance of this country.A constitutional convention would re-enter. I anticipate that the processes of is needed and it is well overdue. We recognise, however, constitutional change would then be, as has always that the Wales Bill is not the ideal mechanism for been the case in this country, incremental, and they introducing the idea of a constitutional convention, would be the better for that. but it seems rather odd for us to be ploughing on with I cannot support my noble friend’s amendment, but constitutional changes as if nothing has happened. As as we reflect on what we might be seeking in a Carwyn Jones, the First Minister of Wales, has said, constitutional commission we should disentangle it the current constitutional settlement is dead. We recognise from our continuing day-to-day requirements of legislation the need and the demand for more devolution in and politics. We should get on with enacting this Bill. Wales, but we need to set the whole within the broader We should get on with implementing it and think UK framework. To proceed in isolation from the generously, spaciously and patiently about how to wider discussion would be to miss the opportunity to develop a future framework for the government of the elaborate on a new vision and a constitution for this United Kingdom. country, a constitution that would involve, include and invigorate the population so that people would Baroness Morgan of Ely: MyLords,wehaveto feel as if they had ownership of their own country. understand what the Scotland referendum was really about. It was a cry from the people of Scotland who Baroness Randerson: My Lords, the noble Lord, feel cut out of the political process. Of course, that has Lord Anderson, has pointed out the flaws in the had an impact not just in Scotland because of the devolution settlement for Wales. I say to him that I commitments that were made in the last days of the have campaigned for devolution for virtually the whole referendum, but it is having and will have an impact of my adult life. I have faced downright nasty opposition across the whole of the United Kingdom. It makes at worst and a lack of enthusiasm and total sense for us to place the discussion within a broader incomprehension at best. Long ago, I came to the context. conclusion that the overwhelming majority of people We are not in favour of stopping this Bill in its simply were not interested. It is a really exciting time tracks. A lot is in the Bill and there is a lot more to for me because devolution is suddenly fashionable and come with Silk 2. It is important that the Welsh a lot more people understand what it is about. Noble devolution process does not stop because of a huge Lords will not be surprised, therefore, that I am keen transformation in Scotland. However, it is worth saying to seize the moment; I am keen to get this Bill through that we have to think in a broader way about the as a basis on which we can take the next step. The Bill constitutional arrangements of our country. What is a very important step forward in devolution in its happens in Scotland is having an impact in Wales. own right. 289 Wales Bill[15 OCTOBER 2014] Wales Bill 290

Yes, there is a great deal to be said for a constitutional The Bill is about creating truly accountable devolved convention. The noble Baroness, Lady Morgan, said government for Wales. It is about providing the Welsh that the First Minister has been calling for one for two Government with the levers to grow the economy in years. My party has been calling for one for 40 years. Wales and ensuring clarity for Welsh voters when they On that basis, I would argue that one should not place go to vote in 2016. All these things would be prevented too much faith in the immediate production of an if commencement of the Bill was delayed in any way, outcome of the concept. I agree with the noble Lord, including through the amendments put forward by the Lord Howarth, when he says that this is something noble Lord. I therefore respectfully ask him to withdraw that we need to think about widely and in the long his amendment. term. The message from my noble friend Lord Thomas and the noble Lord, Lord Howarth, is that, despite the 10 pm great advantages of a constitutional convention, we Lord Anderson of Swansea: My Lords, the Minister have to get on with it now. vastly overstates her case by claiming that this Bill To the noble Lord, Lord Anderson, I say that if I would lead to a truly accountable Welsh Government. accepted his amendments, it would ensure that Parts 1 If we look at this objectively, it is pretty small beer. It to 3 of the Wales Act could be commenced only by the is a Wales (Miscellaneous Provisions) Bill. It was Assembly on a day of its choosing, but the Assembly framed in a very different context from that which we could not decide to commence the provisions until the have now, after the Scottish referendum. I assure her recommendations of a constitutional convention had that the purpose of these two amendments— been voted on by both Houses of Parliament or until the Welsh Government had implemented the Williams Baroness Randerson: Is the noble Lord saying that a report. I would say that would mean a minimum of Bill that provides fiscal accountability for the very first five years. My noble friend Lord Bourne, being a time for the Welsh Assembly and Welsh Government member of the Williams commission, assures me that is not a big step forward? Is he saying that the provision that should be implemented a lot sooner, but we all of borrowing powers for the first time for them is not know that local government reform in Wales does not also a big step forward? Does he not accept that the prove easy. Therefore, I am not betting my political devolution settlement has been sadly lacking up to reputation on the timescale for either of those events. now because there has not been that proper accountability and that this is a vital development? The last few months have been momentous for our United Kingdom. It is now time for us to come together and move forward, but we also accept that it Lord Anderson of Swansea: I hear what the Minister is not “business as usual”. The referendum in Scotland says about accountability but given the relatively small has led to a demand for reform across the UK. We changes and the small amount of money involved in now have a chance—a great opportunity—to change these taxes which are to be transferred, I doubt that the way we are governed, and change it for the better. one can properly say that there is real accountability. The Government have made it clear that we want a There is considerable scepticism in the Assembly in debate on how to make the United Kingdom work for relation to the tax powers, which may be stillborn in all its nations. We have introduced a new devolution any event. Yes, I accept that borrowing powers are a committee, chaired by the Leader of the Commons, to major innovation in the Bill but these borrowing powers, consider how we can best do this. The Wales Office is albeit in diluted form, are available to local authorities fully represented on that committee and my right in Wales in any event so why not to the National honourable friend the Secretary of State for Wales is Assembly? also having meetings across the parties to pursue this On the general point she made, my purpose in agenda. having this formula of, “may not come into force until”, We have as a Government already committed to was clearly only to provoke a debate. It was not devolving further powers to Scotland as a result of the intended as a freeze or delaying device. I accept that referendum, and we will deliver on that commitment. after the result of the Scottish referendum we cannot England, Wales and Northern Ireland are now on the return to business as usual. Finally, I also accept the agenda. This is the time to put our foot on the pedal of point made by my noble friend Lord Howarth that devolution. I regret that the noble Lord’s amendments there are great problems in the concept of a constitutional would apply the handbrake. Wales needs the powers convention. Even if we have the so-called constitutional this Bill provides now, not in several years’ time, which experts, no doubt there will be minority opinions—as would be the case if the noble Lord’s amendments there have been on similar issues. It may be extremely were accepted. difficult to find—as we saw in respect of reform of The noble Lord’s amendments would also enable your Lordships’ House—any reasonable consensus the Assembly to decide the commencement of the following that. provisions in the Bill, subject to his other conditions Having provoked the debate that I set out to provoke being met. I regret to say that they are very imprecise by using the formula that, I say again, was not intended conditions and it would be difficult to know when they to freeze in any way the progress of the Wales are satisfied. We will of course—this is a commitment— (Miscellaneous Provisions) Bill, I will withdraw the work with the Welsh Government and the Assembly amendment. on the commencement and implementation of the provisions in a Wales Act. Amendment 57 withdrawn. 291 Wales Bill[LORDS] Wales Bill 292

Amendments 58 to 60 not moved. Amendment 62 Moved by Baroness Randerson Clause 29 agreed. 62: In the Title, line 3, leave out “a rate” and insert “rates” Amendment 62 agreed. Clause 30 agreed. Amendment 63 not moved. Title, as amended, agreed. In the Title House resumed. Bill reported with amendments. Amendment 61 not moved. House adjourned at 10.06 pm. GC 99 Consumer Rights Bill[15 OCTOBER 2014] Consumer Rights Bill GC 100

The Bill, like the Sale of Goods Act, explains the Grand Committee position for contracts where the parties agree to deliver and pay for goods in instalments. A contract, including Wednesday, 15 October 2014. a mixed contract, such as one where goods are supplied alongside services, may be considered to be severable in other situations. For example, goods may be delivered Consumer Rights Bill in instalments but paid for monthly rather than per Committee (2nd Day) instalment. I gave some other examples earlier. Under the Sale of Goods Act, much of the detail of 3.45 pm how the right to reject operates is dealt with by common Relevant documents: 3rd and 8th Reports from the law, whereas in the Bill we have greater clarity about Delegated Powers Committee the right to reject. To provide that greater clarity without cutting across the existing concept of severability, The Deputy Chairman of Committees (Baroness Harris we consider that it would be helpful to include some of Richmond) (LD): My Lords, if there is a Division in clarification about how the right to reject operates for the Chamber while we are sitting, the Committee will severable contracts, other than those for delivery and adjourn as soon as the Division Bells are rung and payment in instalments. resume after 10 minutes. Under current law, if a consumer and a trader make a contract which is severable and an item supplied Clause 20: Right to reject under the contract is faulty, the consumer may be entitled to compensation in relation to the faulty item, or may be able to terminate the whole contract—it will Amendment 14 depend on the nature of the goods, the fault, and the Moved by Baroness Jolly detail of the contract. The amendments are intended to set out the position in the Bill. 14: Clause 20, page 11, line 11, at end insert “, subject to subsections (19) and (20)” If the contract is not severable—for example, if the consumer is required to pay only once and the trader Baroness Jolly (LD): My Lords, I appreciate that the has carried out all of the work—the amendments do government amendments are technical in nature, so I not bite. The consumer could terminate the whole of would like to take some time to explain what they do. the contract if there is a fault in one of the goods. The Bill sets out key statutory remedies, such as the I turn to the amendments. First, Amendments 14 right to reject substandard goods, which entitle the and 17 are to clarify that the rights to reject goods take consumer to reject goods, treat the contract as terminated account of this common-law distinction between severable and get a refund, but there is also court-developed and entire contracts. The Bill provides that a consumer common law regarding contracts for goods, and the should be able to reject goods, including those supplied Bill is intended to work alongside much of that. as part of a mixed contract, where the goods breach Amendments 14, 17 and 18 are to explain how the one of the statutory rights in the Bill. However, where rights to reject goods under the Bill work, where the contract is severable, in some cases the faulty contracts are severable under contract law. By severable, goods supplied might represent only a small part of I mean contracts where parts are intended to be the whole contract. These goods or the fault with independent of each other, so different parts of the them may have little impact on other things which the payment can be assigned to different parts of the trader must do or supply under the contract. Of course, trader’s performance. For example, it could be a contract in other cases the faulty goods may represent most of for numerous goods where payment is due per item or what the consumer is paying for under the contract, or for building work where payment is due pro rata for the fault in the goods may be representative of an work done, regardless of whether all of the work has inherent fault in other goods which are to be supplied. been done. That is distinct from obligations which are That is why the amendments provide that the consumer’s entire, when the consumer has to pay only when all the right to reject may apply to a severable part of the trader’s obligations have been fulfilled—for example, a contract or that the consumer may also have a right to building contract under which the trader must carry terminate the wider contract. out all the work before the consumer has to pay a Whether the consumer can treat the whole contract lump sum. It is that existing common-law distinction “as at an end” may depend on the circumstances and and principle to which the amendments refer. the contract. Under common law, the main tests for Let me state from the outset what the amendments deciding whether a consumer may treat the whole are not about. They are absolutely not about preventing contract as being at an end in such cases are the extent consumers from rejecting faulty goods. Where goods of the breach compared to the whole contract and the are faulty, the consumer has the right to reject them likelihood of the breach being repeated in the other under the amendments. The amendments clarify that things that the trader is to supply. Imagine, for instance, where the contract is severable, the consumer has the that a trader has renovated a bathroom and billed the right to reject the faulty goods and may also have the consumer separately for the different items. There is right to terminate the whole of the contract. Above no issue with the trader’s work or most of the items all, the amendments provide clarity that the Bill would but there is a fault with the sink. Amendment 17 is to not override the distinction between severable and make clear that the consumer’s right to reject would entire contract, which currently exists in common law. apply to the severable part of the contract and not to GC 101 Consumer Rights Bill[LORDS] Consumer Rights Bill GC 102

[BARONESS JOLLY] the householder thinks that they are buying a complete the whole contract, unless the circumstances justified look. Rather like the Minister, I have focused on this. In my example, therefore, a consumer could reject kitchen equipment and those sorts of things. However, the part of the trader’s performance which did not telecoms and media bundles, which can include phone, meet the consumer’s rights—here, it is the sink—but broadband and television, are increasingly purchased not necessarily the whole bathroom. by consumers. Such purchases raise the same issues as Amendment 18 ensures that the distinction between to whether they are a single contract or severable. entire and severable contracts is also reflected in Clause 21, I should like to lay two further issues on the table which enables a consumer who has the right to reject because we will, with the Minister’s generous offer, goods under a contract to choose to reject only some come back to this. Thinking of the whole area, it will of the faulty goods. Where a contract is severable, the at least be possible for the installer or the retailer to consumer might have the right to reject goods supplied take out insurance against the whole or the parts, under part of the contract but not all the goods under whereas an individual consumer cannot at the point of it. The amendment therefore makes it clear that in this installation. The Minister has kindly offered further situation, too, the consumer may choose to reject only discussions on the point at which one pays and whether some of the faulty goods which they are entitled one simply pays at the end of a contract. If it is for to reject. something fairly small, that may be simple, but when I As I said at the start, I appreciate that these are have had building work done, money quite rightly has technical amendments and if the noble Baroness, Lady been wanted up front to buy components. We have Hayter, would like additional time to consider them tended to pay in bits, which makes it sound as if each more fully, the Government are willing to withdraw bit is separate, although it was really just to help a and not move them at this time and reintroduce them small trader. Again, we would like the time to look at on Report. that. If this amendment really is to clarify current law, we would have fewer worries. For the moment, we are grateful for the time and hope that we will be able to Lord Hodgson of Astley Abbotts (Con): My Lords, I sort this out. do not want to run before my horse by talking about an amendment which I shall bring up later but I was Baroness Jolly: I thank the noble Baroness for her listening carefully to what my noble friend was saying comments and appreciate that she needs more time to about the ability to reject part of a contract. In the consider the amendments more fully in the light of case that I shall come to in a minute, which will be remarks on this issue. I am happy therefore to withdraw about custom-made double-glazed units, will that mean the amendment with a view to revisiting it on Report. that one window only could be rejected? Amendment 14 withdrawn. Baroness Jolly: My noble friend makes a very good point. I have extensive speaking notes on that part and Amendment 15 we will come to it later in the afternoon. Moved by Lord Stevenson of Balmacara Baroness Hayter of Kentish Town (Lab): I thank the 15: Clause 20, page 11, line 24, at end insert— Minister for that. Perhaps it would be helpful if I put “( ) A consumer shall not be obliged to incur any costs when on the record what our questions are. I take very much returning rejected goods except those incurred in returning the goods to the place where they acquired physical possession of the offer that she has made to withdraw and not move those goods.” these amendments so that we can come back to them; with them being tabled at this stage, we obviously have Lord Stevenson of Balmacara (Lab): My Lords, not had all the time that we need. Neither have they Amendment 15 would ensure that a consumer would been scrutinised by the BIS Select Committee or in the not have pay to return faulty goods other than any Public Bill Committee in the other place. That would costs incurred in returning them to the place where give us a little more time and we are grateful for that. they originally acquired physical possession of them. The real question, which the Minister helpfully set It is intended to stop traders charging additional costs, out, is whether it is reasonable for a consumer to reject such as large postage costs or costs for delivery of every part of what they think was bought under a large items. I understand the Government’s view and I single sales contract or only the faulty parts. With the expect the response to be along the lines of that raised example given, it may be that an entire bathroom suite in the other place when this issue was raised; namely, has been ordered—all in the same pale blue or whatever that the present arrangements under the Sales of Goods one wants for a bathroom suite—but if the sink is faulty, Act 1979 should be continued. Basically, what is being that may have implications on the bundle and on whether said here is that when a consumer exercises a right to the quality of the whole is affected by one part. reject faulty goods, they are not obliged to return the Although, hearing and understanding the intention, goods unless they have agreed to. All the consumer we are worried that this proposal could have consequences needs to do is to make the goods available to the trader. for big, very expensive items, particularly whether the The consumer and trader can arrange for the consumer amendments would create an incentive for traders to to return the goods but it would be the consumer’s supply related goods under separate orders or contracts choice. to try to make the contract more severable. That could Of course, it does not exactly make it the trader’s apply to a whole furniture suite, a music centre, a responsibility in that circumstance to do that. The whole matching table, chairs and cupboards, and so on where of this appears to be on an edifice of good will and GC 103 Consumer Rights Bill[15 OCTOBER 2014] Consumer Rights Bill GC 104 sound trading, which often does occur but, in reality, has to rely on the good will of the trader to send a sometimes does not. Good traders are not the ones we courier van, as she has described it, or even to send a have to worry about: it is the unhelpful, nitpicking, sticky label—though I do not think that that would be take-it-or-leave-it traders who we have all come across much use—in order to send the sofa back to the and who may say, “Oh yes, we will give you a refund on warehouse. What happens if the trader does not do your sofa but you have to bring it back to the depot”. that? Are we really saying that everyone in the country You then work out how on earth you are going to do has to become expert in raising small claims charges in that and probably give up in despair. small claims courts to try to persuade recalcitrant traders It has already come up in our Committee that there to do what is obviously the expected thing? I do not is clearly an invisible but rather firm line on the part of think so. I hear what the Minister says and I understand the Government regarding where they want to go on where she is coming from, but we might wish to return some of these issues where they feel that the evidence to this. I beg leave to withdraw the amendment. that comes from the earlier legislation is sufficient. Amendment 15 withdrawn. However, times are changing, and the sharp practices and issues that have been raised with us as we have approached the Bill need to be addressed. This very Amendment 16 simple amendment would put into the Bill something Moved by Lord Hodgson of Astley Abbotts that we think would be good practice. It would help 16: Clause 20, page 11, line 37, at end insert— consumers, particularly vulnerable ones, to deal with “( ) The entitlement to reject shall not apply, notwithstanding poor traders, and would level the playing field between the right to repair set out in section 23 and the right to a price the good and the bad retailers. I beg to move. reduction under section 24, if the contract is for goods that---— (a) are made to the consumer’s specifications or are clearly 4pm personalised, or Baroness Jolly: The noble Lord has eloquently (b) have been installed following significant alterations to the existing fabric of a building so as to render return of described how unfair it would be for a consumer the product impractical.” to have to pay the cost of returning substandard goods. I have a lot of sympathy for the sentiments that Lord Hodgson of Astley Abbotts: My Lords, this he conveys; to receive substandard goods is disappointing amendment appears to be sticking one’s head in the and frustrating in itself, but to have to pay the cost of lion’s mouth, in that it appears at first sight to be an returning them really would heap insult upon injury. amendment in favour of double-glazing salesmen. Like Where I think we differ is that I am not convinced that many Members of the Committee, I have seen examples further protection is required. This is because of the on various consumer protection programmes where protections already in the Bill and in common law. the behaviour has been completely unacceptable. Before Moreover, there seems to be little evidence of bad Members switch off completely, though, I wonder practice from traders insisting that consumers fund the whether they will bear with me while I drill down a bit return of shoddy goods. Some large online retailers already into the issue. There have been egregious examples of cover the cost of returning goods, either by arranging fly-by-night double-glazing operators but equally there for a courier or by providing a freepost sticky label. are many reputable firms, some of which offer guarantees The Bill already provides protection by stating in as long as 10 years for the performance of their Clause 27 that there is no need for the consumer to products. It is of course also worth being aware that return the goods unless they have specifically agreed double-glazing plays an important part in improving to do so. The consumer need only make the goods the insulation of people’s homes and in the fight available to the trader—for example, to facilitate their against global warming. Therefore this industry has collection. Furthermore, if the consumer rejects the an important commercial role to play in our society. goods and terminates the contract, he or she can also However, the nature of its bespoke—I use the word pursue a damages claim against the trader in order to carefully—way of working can make it the victim of recover further costs that they have incurred, and the unscrupulous customer. I will explain briefly what these damages could include the cost of returning the I mean. goods to the trader if they had been required so to do. New double-glazed windows have to be custom-made. So although I am with the noble Lord opposite on the They have to be measured individually, and the new spirit and intention behind the amendment, I question window is thereafter made appropriately. Under present the need for it. I therefore ask him to withdraw the regulations—the consumer contracts regulations; I am amendment. sure that the Minister will correct me if I have this wrong—if the windows are wrongly installed, the customer Lord Stevenson of Balmacara: My Lords, that was has, quite appropriately, the right to repair. If the not unexpected, although I noticed, as the Minister was repairs are unsatisfactory, the customer is entitled in framed by the TV behind her, that Christmas bells were the end to a discount on the price. Those remedies are ringing, and I thought my time had come and this was of course reinforced in Clause 23: the “Right to repair going to be the first crack in the edifice that has been or replacement”, or in Clause 24: the “Right to price erected between us in this debate, but sadly not. reduction or final right to reject”. I think the industry, We are so close on this that I do not understand and others, would say that in so far as the new provisions why the Minister cannot accept the argument. I find it do not repeal the existing consumer contracts regulations, very strange that the Government would be happy to we need to make sure that they mesh up and match rest on a situation where a poor, vulnerable consumer, precisely. The industry supports the provisions of with a sofa that is bulky, difficult and unfit for purpose, Clauses 23 and 24, as my amendment makes clear. GC 105 Consumer Rights Bill[LORDS] Consumer Rights Bill GC 106

[LORD HODGSON OF ASTLEY ABBOTTS] Baroness Hayter of Kentish Town: For readers of The challenge to the industry comes from the provisions Hansard, you would love my crimson chiffon, off-the- of Clause 20 and the apparent lack—I hope that the shoulder, diamante-encrusted gown. However, at that Minister will be able to reassure me on this—of any level, yes, I have made-to-measure clothes, but my test of proportionality. If I may take an example, a grandchildren, called Poppy and Isaac, have “Poppy” customer might order a dozen windows to double-glaze and “Isaac” embroidered all over their swimming towels his or her house. The windows are measured, and things like that. I had a very nice hand-painted manufactured, and fitted. At that point, the provisions plate made for my godchild’s wedding. What I would of Clause 20 appear to give the customer almost any not like to see is that, as a consumer of those made-to- grounds for rejecting the goods and treating the contract measure or personalised goods, I would lose my rights as being at an end. There is no requirement, as I read to reject if they were faulty. If they are for a wedding I it, to seek any remedial work before ending the contract. am afraid that a replacement probably would not At this point, the supplier is of course in a very weak arrive in time. I am not convinced that personalised, position. The fitted windows have no alternative use, as made-to-measure things should lose their rights. If it they have been specifically measured and made. Moreover, is bespoke it is probably something that has been they now form part of the structure of the building, made fairly specifically. which makes their removal even more legally complex. I understand that the wording used has probably Amendment 16 merely seeks to achieve some equality been carried across from the distance contracts rules, of arms, that this absolute unproportional right of where if one orders a personalised product then one rejection as in Clause 20 is limited where goods are obviously cannot reject it simply because one has personalised and have been installed in a building. changed one’s mind, because there is nothing else the To conclude, this Bill is entitled “Consumer Rights supplier can do. We understand that completely, but Bill”, and I support its principles. However, not all that is obviously not the same as where a personalised consumers are angels; therefore there is a concern that product is faulty. Our worry is that the amendment without some protection of proportionality these firms from the noble Lord, Lord Hodgson, as worded would may find themselves taken advantage of by the undermine the rights that a personalised order should unscrupulous. In addition, of course, the better the have. firm, the greater the risk, because the fly-by-night If we have read this correctly, the amendment would operators who should be the focus of our regulatory be not a clarification, but a change in the current law. efforts will by then be over the hills and far away. I beg Our understanding is that the current law has not to move. produced any problems in the past. We have certainly heard a catalogue of complaints, although the Minister Lord Clement-Jones (LD): My Lords, I will briefly might know more than we do about that. Our worry support the amendment in the name of the noble therefore is, whether it is simply my dress or a tailor-made Lord, Lord Hodgson. He has made an even better kitchen, that we would want consumers to retain their case than the one that was presented to him in the first rights if such a kitchen was full of faults or badly case. It struck me that in principle, if we set our minds installed. It is a bit like what my noble friend Lord to it, we could probably find quite a number of other Stevenson said on the previous amendment: I do not areas apart from double-glazing, which was the example think good traders have anything to worry about, but that the noble Lord gave, where goods are manufactured, it is the others that we are worried about, who would bespoke, to a customer’s requirements. This particular be the ones most likely to misuse something such as case is very strong because of the construction work this. Many personalised goods are expensive and very that is required to be done, which you cannot undo much thought about. If they are in one’s own house it without serious damage to a property. I therefore hope is not that easy to keep having them changed: one has that the Minister can give either clarification or assurance to take more days off work to have that done. This is that something in the Bill deals with these kinds of one’s home we are talking about. made-to-measure products. A very valid point has We hope that the Government are not going to been raised, and the noble Lord, Lord Hodgson, has accept this amendment, which I am sure is well intentioned put the case extremely well. but perhaps unnecessary. Baroness Hayter of Kentish Town: My Lords, the amendment as it is written, not necessarily as it is intended, is what concerns us. As written, it would Baroness Jolly: I thank my noble friend Lord Hodgson undermine the right to reject. We do not see why a of Astley Abbotts for the reasoning behind his consumer should have any less of a remedy when amendment. I also welcome his general support for something has been made to their specification than the principle of the Bill. My noble friend Lord Clement- anything else. In fact, very often if it is made to their Jones is absolutely correct in pointing out that the specification it may be particularly valuable, desired amendment’s application would be wider than double- and even expensive. They certainly should not lose glazing: spectacles are another really good example of their rights just because of that. To some extent their something that is personalised. I am grateful to have rights should be stronger. because they have negotiated the support of the noble Baroness opposite. and explained exactly what it is that they want. As I The Government disagree with the approach that was saying to the Minister earlier, I am wearing a the amendment takes. The rights to reject in the Bill—both made-to-measure garment. the short-term and final right to reject—represent fundamental protections for consumers where goods Noble Lords: Very nice. do not meet the consumer’s rights under the Bill. GC 107 Consumer Rights Bill[15 OCTOBER 2014] Consumer Rights Bill GC 108

4.15 pm Bill already includes protections that are more proportionate. I therefore ask the noble Lord to withdraw The removal of these rights to reject for particular the amendment. types of goods would risk leaving the consumer in the position of either having to live with the faults, albeit Lord Hodgson of Astley Abbotts: I am grateful to with some compensation, or being trapped in a cycle of the Minister and particularly to my noble friend Lord repairs or replacements. They would have more limited Clement-Jones for his support. This is a probing protection than if they had purchased something mass- amendment and, quite rightly, some of its defects have produced, for example. These are not acceptable as a been pointed out. However, my noble friend did not consumer’s only options. answer on whether partial rejection could take place. A key tenet of the Bill is that there should be If I may use the example given by the noble Baroness, consistency and simplicity in how the remedies apply. Lady Hayter, let us suppose that she bought not just A consumer should not generally face reduced an aquamarine off-the-peg but a crushed raspberry protection simply because of the type of goods or the and a shocking pink as well, and let us say it turned way in which they were provided. For example, a out that the garment in crushed raspberry was poorly consumer who buys a washing machine as part of a manufactured. Was she entitled to return them all? Is fitted kitchen should have the same rights as another that part of the same contract? The issue for my noble consumer who bought the same washing machine as a friend is this: if in the example that I have given there free-standing unit. are 12 windows and one is faulty, does the right to reject extend to all 12 windows, or is it limited to the Whether the goods were bespoke or have become specific article about which problems have been found? part of the fabric of a building, the consumer paid for In the example given by the noble Baroness, of course goods meeting the key rights under the Bill, such as she can return the one dress, but can she return all the being of satisfactory quality and as described. The dresses that formed part of a single order? That is trader has failed to provide them. The consumer has what I am not clear about. I do not know whether my done nothing wrong and should not be penalised by noble friend can illuminate me any further now. being trapped in the contract. It is particularly unclear why the consumer should Baroness Jolly: Indeed, my Lords. I will try to keep lose the protection of the right to reject if they have bought out of people’s wardrobes. Of course we are keen to bespoke goods. If anything, the consumer is even more ensure that rejection is a proportionate remedy. reliant on the skill and judgment of the trader for the Amendments 14, 17 and 18 on severable contracts, production of the goods to the consumer’s specification. which we have already discussed, were intended to give If the trader failed to produce the desired goods to the clarity here. As was explained in that debate, if the required quality, why should the consumer lose out? contract is severable, the consumer would have the right to reject the affected part, and the circumstances I appreciate that, for the types of goods that this of the case would determine if they could reject the amendment covers, rejection could be problematic to other parts of the contract. the trader. This could be either in practical terms—for example, in removing a window that has become part Lord Hodgson of Astley Abbotts: My Lords, we of the property—or in cost terms. I understand that it seem to be getting some good clarity there. I will read may be costly for a trader to remove rejected goods carefully, take some further advice, thank my noble which may have little or no residual value. At the same friend and all noble Lords who have taken part, and time, I understand that traders may be concerned that beg leave to withdraw the amendment. if consumers do not believe that rejected goods will be collected by the trader, the consumer will be able to Amendment 16 withdrawn. continue using them without cost. Amendment 17 not moved. On the surface, these may seem like legitimate concerns, but I should make two points. First, the short-term Clause 20 agreed. right to reject already exists under the current law for sales of goods, but there is little or no evidence of it Clause 21: Partial rejection of goods being abused by consumers and there is no reason to suspect that consumers will start abusing the right Amendment 18 not moved. under the Bill. Secondly, the Bill explicitly states that the consumer must make the goods available to the Clause 21 agreed. trader or return them if they have agreed to do so, so it is clear to both parties that goods are not at the Clause 22: Time limit for short-term right to reject consumer’s disposal once rejected. In order to reject, the goods must fail to meet the Amendment 19 requirements of the Bill; for example, falling below the Moved by Baroness King of Bow standards that a reasonable person—“reasonable” is a 19: Clause 22, page 13, line 12, at end insert— concept that we will come to throughout the Bill—would “( ) Where, given the nature of the goods and all the circumstances consider satisfactory. existing at the time the contract was entered into, it is reasonably foreseeable to the parties that the consumer will not be able to I restate that the removal of the right to reject is too ascertain whether the goods are in conformity with the contract broad a measure. There is little or no evidence for the within the time period set down in subsection (3), the time limit problem that the amendment seeks to address, and the for exercising the short-term right to reject in relation to those GC 109 Consumer Rights Bill[LORDS] Consumer Rights Bill GC 110

[BARONESS KING OF BOW] and can simply opt to hand back the vehicle. In a goods shall end once the consumer has had a reasonable period in worst-case scenario, as the FLA says, the customer which to ascertain whether the goods are in conformity with the might have had the car for a month and driven it contract.” extensively, clocking up thousands of miles, only to Baroness King of Bow (Lab): My Lords, Amendment 19 hand it back because of a very minor defect—for allows the period within which a consumer can exercise example, the windscreen wipers failing to work properly. the short-term right to reject to be extended beyond That is the case that the FLA makes. 30 days when necessary to give the consumer sufficient I am very happy for my noble friend to write, since time to assess the goods. In other words, the amendment this is a rather unexpected intervention. There is clearly is about limited flexibility and maintaining rights available a balance to be struck between ensuring that customers to consumers under current law. are able to return faulty goods and preventing potential When the Law Commission recommended a 30-day abuse. I therefore ask my noble friend whether the period for a consumer to exercise the initial right to department will clarify, in the accompanying guidance reject, it was on the basis that 30 days would be the to the Bill and in any associated publicity, that this “normal period” but that there would be flexibility in new short-term right to reject should be invoked only appropriate circumstances. The Bill recognises that if the quality of the goods is genuinely unsatisfactory— some goods will typically perish within 30 days, and in that is, the defects are not simply minor mechanical or those cases a 30-day right-to-reject period clearly is cosmetic ones—and ideally it should be done as soon not appropriate. However, the Bill does not recognise as possible within the 30-day period. that a longer period may be needed in some circumstances. Secondly, could my noble friend confirm how this Under current law, a consumer has a “reasonable” new short-term right to reject fits with Section 75 of period within which to exercise the initial right to the Consumer Credit Act, which already allows the reject. The Law Commission recognised that for many customer to make a claim against a supplier or lender purchases a court may consider a reasonable time to for breach of contract? This Consumer Rights Bill be longer than 30 days. We have some of the current gives the consumer a right to challenge the supplier, case law, including the court finding it reasonable for a whereas Section 75 of the CCA establishes an additional consumer to reject a new car after seven months. right to pursue the creditor for breach by the supplier. Presumably without this amendment a consumer would Will the Government be making clear in the guidance not have that protection from the courts. A more that the customer must obtain recourse from the supplier obvious example is a pregnant woman buying a pram first, and that the supplier must not renounce responsibility before her baby’s birth or goods bought out of season— on the grounds of Section 75? skis during the summer, lawnmowers in the winter, or the obvious Christmas present scenario. Baroness Jolly: My Lords, this amendment reflects Without the ability to extend the right to reject in a recommendation by the Law Commission in its 2009 such circumstances, consumers might be worse off report, Consumer Remedies for Faulty Goods. Many of under the Bill than under the current law, which allows the recommendations in that report are implemented that reasonable period. That is obviously our concern— in the goods chapter of the Bill. Indeed, a normal and not just ours: apart from the Law Commission, period of 30 days was recommended by the Law the BIS Select Committee recommended that, Commission as giving a reasonable opportunity for a “the Government reconsider an exception to the time limit for the consumer to inspect goods, as well as meeting the early right to reject where it is reasonably foreseeable that the expectation of consumers. However, I am concerned consumer would need a longer period to inspect the goods and to that the amendment would undermine the benefits of try them out in practice”. certainty provided by the 30-day time limit for the Amendment 19 would implement that recommendation. short-term right to reject. I beg to move. Here I am staying with the example of the pregnant Lord Clement-Jones: My Lords, I am intervening lady buying a pram. Let us look at the example of a rather unfairly on this amendment to say that I do not pregnant woman who buys baby equipment in preparation support it and that, as the Bill’s passage carries on, a for the birth of her child. The amendment would number of sectors will have their voices represented. I allow her to exercise the short-term right to reject want to raise issues that have been raised with me by potentially months after purchasing the goods, should the motor sector, particularly the Finance and Leasing it transpire that they were faulty. On the face of it, that Association, which represents a wide range of those may seem fair, but I see many issues that could arise to who finance the purchase of motor cars by consumers. make this impractical. If a friend who was not pregnant As we heard, Clause 22 introduces this 30-day right bought the same goods for the same unborn baby, it is to reject goods if they are of unsatisfactory quality, not clear whether it would be reasonably foreseeable however minor the defect. Sellers are unable to deduct that there might be a delay before they were used. the costs incurred—for example, depreciations—while Should all baby-related goods be subject to a longer the goods have been used by the consumer. As a result, period for rejection because it is not unreasonable to the right to reject could have a particular cost implication think that they may be for a baby who has not yet been in the world of motor finance, where 75% of private born? Or would this only be reasonably foreseeable if new car sales are bought on finance. New cars, as my the consumer said something to indicate it, or had a noble friend may know, typically lose 15% to 20% of sign, such as being pregnant? their value in the first 30 days, and in the event of a If it was reasonably foreseeable that there may be a defect the car dealer will have to offer to repair the car, delay before the consumer would use the goods fully, it although the customer is not obliged to accept that seems difficult to know what the reasonable period GC 111 Consumer Rights Bill[15 OCTOBER 2014] Consumer Rights Bill GC 112 would be. Take the example of a consumer buying skis some sympathy with what she was saying but in fact, in the summer. What is the reasonable period for the as things stand, we do not see Britain awash with consumer to be able to test them? A week into the businesses in disarray as a result of the current law. European ski season, or a month? Not until the end of Given that, it seems strange that we would reduce the the season? How would the trader know when the rights that consumers currently have. consumer came to return the goods whether a delay I thank the noble Lord, Lord Clement-Jones, for was reasonably foreseeable when the consumer bought raising the issue of balance because that is the key them? Would the trader have to keep a record of who issue here: the balance of rights for both businesses bought what and any relevant circumstances, such as and consumers. So, lastly, we think that this is an when they said they would start to use it? This would important issue. Both sides seem to come back to the be extremely burdensome on businesses. pregnant women conversation. On hearing of this debate, should any pregnant women with backache in 4.30 pm the middle of the night be reading the Hansard of this This amendment has the potential to leave traders Committee, they will no doubt hope that they do not in the position where they ignore the 30-day limit and have overdue babies but women who have premature provide refunds for faulty goods long after it, to avoid babies may rejoice at the current passage of the Bill. I falling foul of the proposed rule. This would totally beg leave to withdraw the amendment but we may well undermine the protection that the Bill seeks to provide. return to it at a future date. It would bring potential for dispute, as the parties may have different views of what was reasonably foreseeable Amendment 19 withdrawn. from the circumstances, and lead to a large degree of uncertainty. This is the exact opposite of what this Clause 22 agreed. measure is trying to achieve. A fixed time period provides clarity and gives the most certainty for consumers Clause 23: Right to repair or replacement and business alike. We must also remember that the Bill does not prevent the trader and consumer agreeing to exercise the short- Amendment 20 term right to reject later than the 30-day limit, should Moved by Baroness Hayter of Kentish Town the trader wish to offer a more flexible arrangement for the benefit of customers. A pram buyer might say 20: Clause 23, page 14, line 6, leave out paragraph (a) and “I would like to extend this beyond 30 days”; indeed, insert— many retailers already choose to offer refunds for “(a) do so as soon as reasonably practicable and in any extended periods. The right to reject applies if goods event within 14 days, unless the consumer expressly agrees otherwise; fall below the standards that a reasonable person would consider satisfactory. This may include minor (aa) do so without significant inconvenience to the consumer; and” defects and is not a change to the current law. Before I conclude, I would like to answer the point made by my noble friend Lord Clement-Jones. Section 75 Baroness Hayter of Kentish Town: Amendment 20, of the Consumer Credit Act already applies alongside which stands in my name and that of my noble friend the consumers’ rights under current law. The consumer Lord Stevenson, aims to provide greater clarity on can seek redress from the seller or the credit provider, how long a repair should take and, therefore, how long for example the credit card company. The Bill does not a consumer must wait before they may be entitled to a alter this interaction, nor would that be appropriate. refund or a price reduction. At Second Reading, the whole House was very supportive of the aim of the In regard to Amendment 19, I confirm that the Bill to increase clarity. Under current law, and under specified time limit of 30 days is a minimum that does the Bill, where a consumer asks for a faulty good to be not prevent competitive positioning by retailers to offer repaired, the trader has to do so within a “reasonable more flexible arrangements. Of course, the Bill also offers time”. However, “reasonable” is not specified, which further remedies once the time limit for the short-term causes uncertainty for the consumer but probably for right to reject has passed. For example, the options of businesses as well. repair or replacement and, afterwards, the final right to reject or a reduction in price are available. I therefore We are very keen that the Government’s new remedies hope that the noble Lords are prepared to withdraw should work but they will do so only if customers feel the amendment. confident about their rights, particularly about when they can exercise those rights. As we have just been discussing, elsewhere in the Bill there is a significant Baroness King of Bow: My Lords, I thank the change that we welcome, where the 30 days replaces Minister for her response but the key point here is that the reasonable period to reject. The Minister has just consumers, in some circumstances, will see a reduction emphasised the clarity of that. Our concern is that in in their rights under the current law. That is what this area the word “reasonable” remains as regards would worry me, if I were one of the Ministers taking how long it takes to complete a repair. Clearly, the the Bill through. It is the Consumer Rights Bill, not a range of goods covered goes from yo-yos to the double consumer rights reduction Bill. Notwithstanding the glazing referred to by the noble Lord, Lord Hodgson. examples of pregnant women all over Britain, we want It would apply to an enormous range of goods and to see those rights upheld. The Minister spoke about therefore it is difficult to have a precise time for all the undue burdens on business. In theory, I could have repairs. GC 113 Consumer Rights Bill[LORDS] Consumer Rights Bill GC 114

[BARONESS HAYTER OF KENTISH TOWN] The consumer need only notify the trader that they Amendment 20 therefore proposes a longstop, coupled wish to do so. On the other hand, repair or replacement with an obligation for traders to effect the repair of goods is a more involved process which will vary sooner if possible. For most repairs, 14 days would be according to the goods in question and the type of absolutely adequate, even if spare parts had to be fault. The application of a specific time period for sourced from overseas. But the amendment also would repair work cannot effectively take account of all the provide flexibility where the consumer could agree to relevant factors that affect the trader’s ability to provide a longer period where they are happy to do so. This a repair or replacement. may be in cases such as those raised by the Glass and Repairs are often not carried out by the trader Glazing Federation where on-site visits will have to themselves, so the goods may need to be transported take place before any repair could be ordered, let to and from the repairer. Further time is added if parts alone fitted. That flexibility obviously would be possible. need to be ordered. For complex goods, time-consuming For other goods, there is no reason why they should processes of diagnosing the fault and testing the repair not be repaired in less than 14 days. In a Which? may also be needed. The amount of control that the survey, more than half of the respondents said that trader has over those factors is proportionate to the traders should not have more than 14 days to effect a size of the trader. Small businesses have relatively little repair. After all, that would leave a customer without or no control over their suppliers and so would bear a the goods for quite a long time. larger burden. The British Retail Consortium gave the The clarity that this amendment seeks is to empower following evidence when this issue was discussed in the consumers to exercise their rights. In other words, they other place. It said that for small and medium businesses, will know that they can ask for a repair to be done in setting a deadline for repairs is, that time. We think that it will reduce unnecessary “more difficult … because they cannot have control over third disputes as to what is reasonable because both sides parties that are perhaps coming in to do the repair … If that was will know what to expect. It will also deter poor regulated, clearly that would be one-size-fits-all, and would, I practice. The problem that the consumer has is that, fear, penalise small, medium-sized and micro-businesses”.—[Official Report, Commons, Consumer Rights Bill Committee, 11/2/14; while they are awaiting a repair, they are caught: they col. 33.] do not have the good; they do not have the money, so The amendment would enable the consumer to they cannot replace it at another shop; and they agree to an alternative timescale. While this goes some cannot have it repaired by another trader because they way to providing flexibility we do not believe that it would have to pay for it. At that time, they would be does enough, for two reasons. First, it opens up the very vulnerable. We hope that this amendment will possibility of the consumer simply refusing to agree facilitate the clarity that the Government seek in this an alternative timescale where it is impossible for the Bill. I beg to move. trader to provide a repair or replacement within 14 days. This creates an opportunity for the consumer to Baroness Jolly: My Lords, first, I acknowledge that circumvent the first-tier remedies altogether, to the a minority of consumers may be frustrated by lengthy cost of the trader. Secondly, the amendment suggests waiting times when they have asked for a repair or a that the alternative timescale should be agreed in replacement. We have found little evidence that the advance. In many cases it will only become clear in the time taken for repairs is a common problem. The course of carrying out the repair that a longer period Consumer Engagement And Detriment Survey 2014 found is necessary. If a repair takes a long time, of course, that of those consumers who had experienced a problem the consumer may well suffer inconvenience from being with goods and services, only 5% had a problem with a without the goods. The Bill already allows the consumer failed or delayed repair and, of this group, delayed to move to the second-tier remedy if that happens. repair is likely to be a smaller problem. That protects the consumer, while still allowing the BIS has considered a time limit with regard to flexibility needed for the rules to work for different repairs and replacements. There was a consultation in goods and circumstances. 2012 and we discussed the issue further with stakeholders, The second main concern we have about this consumer organisations and traders. On the basis of amendment is the risk of unwanted consequences. I that consultation and those discussions, we concluded underline the fact that we believe that repair is a vital that the best approach is a simple limit of one repair remedy; it provides the trader with the opportunity to or replacement of goods that must be provided within put right what has gone wrong, while enabling the a reasonable time and without significant inconvenience consumer to have the goods they wanted. If done properly, to the consumer. I am concerned that setting a longstop it meets the needs of the consumer while reducing the date for repairs or replacements lacks the necessary burden on the trader and is more environmentally flexibility to deal with all types of goods in all friendly as it is less wasteful than rejection. We are circumstances. Attempting to apply such a broad rule therefore concerned about any amendment, such as would at the least be burdensome to some businesses, this one, that could shift the balance and lead to more but may also lead to unwanted consequences. rejections over repairs. The Bill provides flexibility because the time needed Imposing a backstop date may lead to a reduction to carry out a repair will depend on the goods and the in the quality of repairs. The trader may feel pressured circumstances. In most cases of repairs there are a to do a “rush job” to get it back in time rather than number of factors beyond the control of the trader, so having the time needed to get it right. If consumers a backstop period may impose a burden. If goods are begin to lose faith in repairs, this could lead to an faulty and the consumer wishes to reject them under increase in rejected goods, which would be wasteful the short-term right to reject, this is a simple process. and costly. This is not just limited to repairs. Flexibility GC 115 Consumer Rights Bill[15 OCTOBER 2014] Consumer Rights Bill GC 116 is also needed where a trader is to provide a replacement, the trader can offer further repairs and replacements, as the necessary time will depend on factors such as but only if the consumer agrees. Members of the motor stock, their source, and whether the goods were bespoke. industry and the trade seek clarity over the definition Bespoke goods are a good example of where the of “one repair”, and do not accept that the current amendment could be problematic. Many bespoke goods status of the draft guidance provides a fair interpretation will take longer than 14 days to make, in the case of a of what is really needed to give clarity. They point out replacement, or to repair. that the notion of a single attempt at repair, as set out Creating a backstop 14-day period, and requiring in the draft guidance, is problematic for highly complex the consumer’s agreement for a longer period, means consumer goods such as motor vehicles. They say that that the consumer would always have an automatic these complex products may show a fault that requires right to veto the repair or replacement and move more than one repair, involving a series of visits to the directly to rejection or money off for these types of garage so that the fault can be diagnosed and tested, and goods. This would be hugely detrimental to the whole have causes ruled out. In addition, a repair may appear industry, which is especially concerning when you complete but the fault may reappear, as can be the case consider that many of the businesses offering bespoke with electrical faults, and a second or subsequent repair goods are small, specialist traders that would be hit may fix the problem. These issues are likely to become hard by these costs. I therefore ask the noble Baroness increasingly apparent as motor vehicles become even to withdraw the amendment. more technologically complex, as they have done over the past few years. 4.45 pm The amendment seeks to include a definition of Baroness Hayter of Kentish Town: I thank the Minister “one repair” to permit a process of repair and provide for that thoughtful reply. Maybe we should revert to traders and dealers with a fair opportunity to fix these day one of Committee, though: if the Minister is complex goods. It is worth noting that the consumer going to help micro-businesses, we should make them will still be fully protected by the right to repair or consumers under the Bill. However, we decided that replacement under the amendment, as the process of on an earlier day. I want to put on record that we repair would still need to be completed within a reasonable welcome the main point about having one repair before time and without significant inconvenience to the rejection; we do not in any way question that. consumer. I hope that at least meets the interest of my I have only one comment. Which?, representing noble friend, as this is a matter of considerable concern. consumers, is very much in favour of this, and although On the previous amendment to which I spoke while I said its research showed that half its respondents seeking further clarification on the guidance, I note said that 14 days was the right limit, one in five that my noble friend answered the second point about of them actually said that it ought to be seven days. I the CCA but not the first: what clarification the guidance did not use that figure before. It is interesting that that would give for minor defects. Perhaps my noble friend group of consumers want quick repairs whereas the can write to me on that matter. In the mean time, I beg Minister quoted the British Retail Consortium, which to move. clearly represents a different interest, and to some extent this is a balance between the two. I thank her Baroness Hayter of Kentish Town: We think that the for her comments and beg leave to withdraw the noble Lord has brought an interesting issue to the amendment. Committee; I do not know whether the Government find it such. However, we are unconvinced that this Amendment 20 withdrawn. needs to be detailed in the Bill as suggested. The Bill simply states that repair means making the good conform Amendment 20A to the contract, which means making them deliver Moved by Lord Clement-Jones what was promised. I do not think that it says “at one 20A: Clause 23, page 14, line 34, after “Chapter” insert “— go”. Obviously, we look forward to hearing what the (a) ” Minister will say on that. However, the Committee will not be surprised that Lord Clement-Jones: My Lords, I shall speak also our worry is that the danger of the new wording is to to Amendment 20B. I am afraid that I am going to do allow a trader to make more than one repair and then exactly what the noble Baroness, Lady Hayter, did not claim that it was simply different stages of the same want to do, which was to question the “one repair” job, whereas actually they may have tried this, that and point. I return to some of the concerns of the motor then something else—and want another go if they did industry. The Society of Motor Manufacturers and not do it at first. I recognise that that is not what the Traders and the National Franchised Dealers Association noble Lord, Lord Clement-Jones, is aiming at, but the have raised significant concerns over the wording of wording might allow for that. It is exactly to avoid Clause 24 regarding “one repair” and the right to such situations where consumers are fobbed off by a reject the product and demand a refund. These concerns number of unsuccessful repairs before they can move are centred not on the principle of the right to repair to the next stage that we like the clarity of the Bill and or replacement itself but rather specifically on what would not want it jeopardised by these amendments, “one repair” entails. This issue is of course particularly no matter how well-intentioned they might be. pertinent to the final right to reject in Clause 24. As we are into personal stories, such as my clothes, At present the Bill does not specify what “one let us take my new car. Of course, it got a great big repair” would entail but the draft guidance states that problem and I took it back to Nick but rather than one repair means a single attempt at repair and that opening the bonnet all he did was to put a computer GC 117 Consumer Rights Bill[LORDS] Consumer Rights Bill GC 118

[BARONESS HAYTER OF KENTISH TOWN] In fact, one of the examples given was that of a car. on top of the car, which seemed to tell him what was The limit of one mandatory repair or replacement wrong. I do not know how that worked but 55 minutes before the consumer is entitled to money back mitigates later it was completely mended. Cars, which I no this risk. The consumer should never find themselves longer understand even if I once did, may be more without a clear route to a satisfactory outcome for complex but one does not want to have to keep going them. back to the trader. We worry that the amendment These amendments would entirely undermine that would lose the clarity that there is in the Bill. certainty. For complex goods, they would allow a single repair to be extended indefinitely over a number Lord Borwick (Con): My Lords, Clauses 23 and 24 of attempts. The intention in the Bill is that after a as they stand seem to state that a consumer can have single repair attempt, the consumer is entitled to a their money back if one repair does not fix the problem. second-tier remedy if the goods are still faulty. Under That is reasonable for a product such as a television the amendments, while the consumer would not be but it may cause problems where the fault is less trapped in a series of failed repairs, they could easily obvious. Some products are incredibly complex; just become trapped in one ongoing repair without an end as complex as consumers. in sight. Just to be clear, the effect on the consumer While we are telling personal histories, from my would be the same, and I am sure that noble Lords can time in the London taxi industry I know that the see that. clause would cause huge problems for car repairs. We The noble Baroness, Lady Hayter, talked about one had a customer bring in a taxi for repairs to his rear repair and there have been some comments about axle. My mechanics could not find anything wrong what “one repair” means. The Bill is clear that a repair with it, and they therefore stupidly said that they had is an attempt to bring the goods into compliance with mended any problem that existed. However, the customer the Bill’s requirements. One repair is complete once brought the car back, insisting that he was hearing the trader returns the goods to the consumer in response dreadful noises from the back of the car. It turned out to the consumer’s request for a repair. that the customer had spanners stored in the boot of his taxi that were slipping around. He removed them Of course, it is also important to remember that the to bring the car to the garage, which is why no fault Bill does not prevent the consumer from agreeing to could be found. He then put the items back into the further repairs. If goods do not conform to the contract boot and so began hearing strange noises again as after a single repair attempt and the consumer would things slipped around, so he brought the taxi back in. prefer the trader to carry out a further repair rather Would the clause as drafted mean that we would have than rejecting the goods, they are entitled to choose had to refund him because we did not fix the problem that. the first time around? You can have two problems—one I know that the motor industry has an excellent masking the other—and you may need a process, as track record in providing good service to consumers, suggested in the amendment, to resolve some problems. and that rejection is rarely resorted to by consumers because of the warranties supplied for motor vehicles Baroness Jolly: I thank my noble friend Lord Clement- and the repairs that they provide. There is no reason to Jones for his clear explanation of the purpose of these believe that consumers will change this behaviour amendments, and other Peers who have added their under the Bill; they already have the right to reject thoughts. The amendments reflect concerns that the under the current legislation but choose not to do so in motor industry in particular has about a single repair many cases. or replacement. Officials have engaged with the industry If noble Lords consider the consumer’s position on this throughout the Bill process—I do not think when a fault occurs with a vehicle, they will see that a that spanners came into the conversation. If it will repair, rather than rejection, is often in the consumer’s help to allay the noble Lord’s fears, my noble friend interest. It makes sense that consumers take time to Lady Neville-Rolfe or I would be happy to meet with choose expensive items. It also makes sense that it is representatives of the motor industry to discuss their not very appealing to give up on something that one concerns. has spent a lot of time and money considering and I am concerned, however, that these amendments selecting. Presumably, the consumer has the car for would undermine the clarity of the Bill and the consumer practical reasons such as going to work, the school protection that it provides. When the Law Commission run, or doing the shopping. If the consumer rejects the consulted in 2008 on clarifying when consumers can vehicle, they will have the inconvenience of getting move to a second-tier remedy, it concluded that the another one to carry out these normal day-to-day best and simplest way to make the law on repairs and activities. However, the industry says that repairs are replacements an effective protection for consumers generally completed quickly, and where there could be was to create a cut-off so that after one failed repair or a delay a courtesy car is often provided to mitigate any replacement the consumer was entitled to a second-tier inconvenience to the consumer. remedy. In 2012 BIS consulted again on this matter I believe that repair will remain a crucial remedy and reached the same conclusion. that consumers want so long as business, such as the In both consultations, evidence was given by Which? motor industry, continues to provide effective, convenient and Citizens Advice of consumers becoming trapped repair. Crucially, the consumer is protected in the Bill in a cycle of repairs or replacements that failed to fix in the worst-case scenario of a series of repairs failing the problem but where it was not clear whether the to bring the vehicle up to standard. These amendments existing triggers for the second-tier remedies were met. would remove that protection. GC 119 Consumer Rights Bill[15 OCTOBER 2014] Consumer Rights Bill GC 120

Where the faith of the consumer in the trader is Clause 24 deals with the right of the consumer to eroded following a repair, the consumer should have receive a refund for faulty goods. It allows the seller to the right to exit the contract or get some money back. make a deduction from that refund to reflect the use They should not be trapped without further recourse. that the consumer has had of the goods if it has been On the basis that the amendments undermine a key over some time. For example, if a sofa falls apart after consumer protection that the Bill establishes, I must a year—and, no, I do not have such a sofa—the seller ask the noble Lord to withdraw the amendment. can deduct a proportion of the price which reflects the use that has been made of it at that time. However, if 5pm the refund is sought within six months, there should Lord Clement-Jones: My Lords, I thank my noble be a full refund with no deduction for use. friend for her response, rather negative though it was. I However, the Bill creates an exception to that full suspect that to some degree we are victims of our own refund within six months for items that it describes as personal experiences in this respect. The noble Lord, having an “active second-hand market”. Our fear is Lord Borwick, whose support I am grateful for, has that this could undermine the otherwise clear and had some unfortunate experiences from a business final right to reject. Our amendment would remove point of view; on the other hand the noble Baroness, that exception and retain the principle of a full refund Lady Hayter, looks at this through rose-tinted glasses, in the first six months for all goods. having had her car repaired in a trice. It therefore Our understanding of the background to the depends on where you stand on this. I do not accept introduction of the “active second-hand market” let-out the Minister’s point that the amendment would have is that it addresses the particular issues of new cars, the effect of extending the repair indefinitely or which it is estimated lose 40% of their value in their undermining, which was the word that she used, the first year, about 10% in their first couple of yards as whole edifice that has been established here—that is a they are driven off the forecourt and up to 20% in the rather an extreme view about this. first 30 days. The argument is that a car dealer should The Minister’s statement about what “one repair” not be required to provide a full refund in the first six constitutes may go further than the wording of the months when, simply because of the way the car guidance, some of elements of which I found quite market works, the car has lost a significant amount of helpful. That may horrify her, but she may have gone its value. further than guidance, in which case I would ask that the guidance is looked at in the light of what has been However, it seems to us that if the consumer, wanting constructed as a response today. That would be helpful. a new car, has bought a faulty one, they should get a full refund. Otherwise they cannot replace what they I suspect that the industry will continue to kick the thought they were buying—a new car—with another tyres of these clauses, to coin a phrase. It is still new car, because there will have been this deduction in concerned about them. It may be that some tweaking value. They will not be put back in the position where could be done without opening the door in the way they can buy a car and be the first registered owner, that the Minister thinks we have done in these which is what makes it an especially expensive thing to amendments. I think that there will be some further be the first owner of a car. The sums involved are quite discussions and I welcome in particular her offer, and considerable. I have it on good advice—since I have indeed on behalf of her noble friend Lady Neville-Rolfe not bought a new car, but rather have a newly bought as well, to continue those discussions with the industry, car—that a new car could cost £35,000 but, if it was which after all is an extremely important sector for us. faulty, the dealer could reduce what they got back by In the mean time, I beg leave to withdraw the amendment. £5,000. That leaves the consumer without a new car Amendment 20A withdrawn. but with only £30,000 instead of £35,000 in their bank, and perhaps only 500 miles on the clock. Amendment 20B not moved. The other issue about the drafting of this clause is that it does not restrict the exemption from the deduction Clause 23 agreed. for use only to cars, but covers every other sale of good where the trader can demonstrate that there is an Clause 24: Right to price reduction or final right to active second-hand market. The Government have reject argued that they have carefully drafted to cover only second-hand markets for sale “by traders to consumers”, to exclude the general eBay type of second-hand markets Amendment 21 of individuals selling to individuals. There are a lot of Moved by Baroness Hayter of Kentish Town other second-hand markets of traders to consumers, both online and on the high street, of furniture, second- 21: Clause 24, page 15, line 37, leave out from “unless” to end of line 39 hand clothing, vintage jewellery and—as I know better— bicycles, and so on, but if you bought a new one and Baroness Hayter of Kentish Town: My Lords, we that turns out to be faulty, you want the money back now move to a tricky and, from our point of view, to buy another new product. rather serious amendment. The other amendments We are therefore worried that consumers will be have been serious, but this is a significant amendment denied a full refund for new furniture that collapses, that we wish now to move. Amendment 21 stands in clothing that is so damaged that you cannot even wear my name and that of my noble friend. I shall speak it, or broken jewellery, simply because there is an also to Amendment 22. “active second-hand market” for these and the trader GC 121 Consumer Rights Bill[LORDS] Consumer Rights Bill GC 122

[BARONESS HAYTER OF KENTISH TOWN] It certainly seems unworkable, could be unfair and says, “I’ll deduct it for use, because you had some use could undermine consumers’ rights on a much wider of it”, even if they could not wear it or carry it, or range of goods. whatever the case may be. Another problem is that, as The British Vehicle Rental and Leasing Association the clause currently stands, the seller determines how supports our amendment. It pointed out that in certain much should be deducted for use; it is not a negotiable industries, particularly electric cars, there has not yet price. That creates quite an escape clause for dodgy been enough time to develop a second-hand market, traders, who have the freedom to set that reduction-for-use which might make it less likely that people would buy amount without it being reviewable as an unfair term a new type of car. They would know that if anything because it would count as priced. went wrong with it they might lose their rights and be The then Office of Fair Trading and the Law less likely to get their money back, the second-hand Commission have both opposed this exception. The market not being a deep one. OFT thought that the drafting on “trader to consumer” I urge the Government to rethink the clause. If it did not exclude eBay-type comparisons, as many traders really is simply cars that they have in mind, it might be operate on eBay. The Law Commission opposed the better to deal with them in a different way rather than deduction for use for the first six months and has risk a much wider range of goods being caught by this urged us in Parliament to consider removing it, citing provision. I beg to move. how much ill-feeling was caused by such deductions. As it said: Baroness Jolly: I thank the noble Baroness for “Consumers felt that where they had paid for new goods, they outlining the reasoning behind her amendments, and wanted new goods. If the first goods were faulty, they wanted to will look first at Amendment 21. The principle of be able to start again, with enough money to buy other new goods, not second hand ones”. deduction for use is fair. Where the consumer has enjoyed uninterrupted use of the goods, the consumer Which? worries that the let-out, should be accountable for that use. For example, if a “could leave consumers out of pocket”, consumer has been driving a car around for three years of normal use and then a fault manifests, the and, trader should be able to reduce the refund to take “does not give consumers the certainty and protection they account of those three years of unaffected use. Of need”. course it is right that consumers should be able to exit I understand that the Government have been focused the contract at that point, but it is unfair to require the on this let-out being for these very high-value goods, trader to bear the costs of that use. which lose their value very rapidly. The Minister in the When the Government consulted on the issue, only other House said that the drafting had followed the a very small minority of respondents to BIS’s consultation recommendations of the BIS Select Committee. However, favoured scrapping the deduction for use, and two-thirds the Select Committee was critical of the drafting, of online respondents agreed that it was right to allow pointing out that the lack of a definition of an “active a deduction to be applied in some instances. However, second hand market” had been criticised in many it is frustrating for consumers to get a partial refund submissions that it received. It also said that it would even though they have had little use of the goods. The apply to most goods, which rather contradicts what irritation of having to deal with a fault often eclipses the Government said about there “normally” being no what little enjoyment the consumer may have had deduction for use. The committee felt that the drafting from the goods, so the Bill includes a new protection would cover a lot of goods, and pointed again to the that prevents, in most cases, a deduction from being advice of the Law Commission that the deduction for applied within the first six months. There is a limited use was “inflammatory” for consumers. According to exception to this rule and it is this exception that the Select Committee, the Law Commission also said Amendment 21 would remove. that it was rarely employed, so it may be an unnecessary complication. 5.15 pm The Select Committee concluded that, The Government are concerned that there are some goods types—in particular, complex, high-value goods— “neither the policy … nor the drafting … on deduction for use is clear”. for which the removal of the right to make a deduction in the first six months could be hugely detrimental to It did not believe that the exemption from the six-month traders. Cars are the obvious example, but we do not refund rule was workable, and recommended the consider it appropriate to limit the exception to them deduction-for-use clause. It said that, should the provision in any way: other types of complex goods will benefit be retained, the reference to a second-hand market from the exception. The noble Baroness gave some comparison should be removed, with any deduction examples. There will be technologies and industries for use being based on the lifespan of the goods. In the that do not yet exist for which this exception would be case of the car I assume that this means that, if you appropriate. This is therefore as much about future- had it for five months, the deduction would be based proofing the law as it is about protecting existing on five months’ use rather than on whether you could traders. actually buy a five month-old car. We have included an exception aimed at these types The clause may again be well intentioned and aimed of goods because they may sometimes be subject to a at a particular problem with a particular product, but series of minor faults. A car might, for example, have the catch-all is so wide now that it is probably misguided. two small faults: the windscreen wipers might need GC 123 Consumer Rights Bill[15 OCTOBER 2014] Consumer Rights Bill GC 124 fixing and then an indicator bulb fails. These can both planes and cars, but it will include anything else where be quickly and easily addressed. I do not think it a make and model can be covered. We continue to would usually be reasonable for a consumer to reject have worries on that. This will therefore be something the whole car on this basis and expect a full refund, we will need to come back to, but for the moment I especially after driving it around for a few months. beg leave to withdraw the amendment. Traders will therefore be able to reduce the refund during this six-month period if they can demonstrate Amendment 21 withdrawn. an active business-to-consumer second-hand market in goods of the same make and model. We want this Amendment 22 not moved. exception to apply where it is most needed: to high-value Clause 24 agreed. or complex manufactured goods. Those types of goods tend to be those which traders have an interest in selling second-hand. Amendment 23 I stress the point that the market must be between Moved by Baroness Howe of Idlicote business and consumers, so that the exception does 23: After Clause 24, insert the following new Clause— not apply to goods that are commonly traded only “Right to redress between consumers, so the trader cannot point at sales (1) Where the consumer does not believe that remedies offered on online auction sites as justification to apply a adequately resolve the original problem, the consumer has a right deduction. Furthermore, the example market that the to seek redress from an alternative dispute resolution scheme, as trader uses as evidence must be in the same goods—taking provided for in statute or as approved by the competent authority. into consideration any factors that a reasonable consumer (2) The Secretary of State must appoint a single competent would be expected to consider—so the trader cannot authority. simply direct the consumer to a market in similar (3) For areas not covered by an approved or statutory alternative goods. For example, if a consumer would be expected dispute resolution scheme, the Secretary of State must appoint a to consider things such as the size or capacity of the residual body to provide this service. goods when buying them new, the trader would need (4) The Secretary of State must ensure that consumers have a to demonstrate an active business-to-consumer market single point of contact to identify the relevant alternative dispute resolution scheme.” in the same goods of the same size or capacity. In any case, any deduction that a trader applies must reflect Baroness Howe of Idlicote (CB): My Lords, the Bill the use that the consumer has had of the goods and offers an excellent opportunity to simplify and improve not simply the second-hand value of those goods. This the consumer rights and redress landscape across the is above all a deduction for use, not a deduction for UK. Much of the Bill is certainly to be welcomed, value. What represents a fair deduction will be made consolidating and simplifying the existing landscape on a case-by case basis. surrounding consumer redress as it does. However, it To sum up, I believe that this is a proportionate is notable that reference to alternative dispute resolution exception that represents a fair and sensible protection —ADR—as provided by ombudsman schemes and for business and is targeted where it is needed. The strongly backed by Which?, is absent from the Bill. criteria that we have set out mean that it is limited in ADR provides benefits to both customers and scope, so the vast majority of consumers will get a full businesses. For consumers, it offers free, fast and effective refund in the first six months. In any case where a redress when things go wrong. For businesses, it provides deduction is applied, it will fairly reflect the use the a cost-effective way of improving the trust in and consumer has had. performance of their organisation. However, the current Turning to Amendment 22, the subsection that it landscape surrounding ADR is complex and confused. would remove defines the concept of corresponding ADR is available in some sectors but not others. In goods, which is used in the exception to the six-month some sectors, ADR schemes cover only part of the rule on deduction for use. I have already explained the market; in others, multiple ombudsman schemes exist. importance of requiring the example market used in This patchwork of provision means that consumers the exception to be in goods of exactly the same type. face a complicated and confusing landscape and are The definition in this subsection is crucial to that often unaware of what support is available to them. I criterion and therefore to limiting the scope of the believe that my amendment would help to improve the exception. Without it, there is a real risk that the situation. exception may be used more widely than is intended. In keeping with the ethos of the Bill, the amendment I therefore ask the noble Baroness to withdraw the would simplify the ADR landscape and, importantly, amendment. strengthen access to redress for consumers across all sectors. Importantly, too, the new clause would formally Baroness Hayter of Kentish Town: I thank the Minister set out the existing rights to redress that consumers for that. Unfortunately what she said—that this is have and ensure that all ADR schemes are consistent aimed at complex and high-value goods, which I absolutely in standards and quality of services, improving the understand—is not stated in the Bill, so it will not just support and protection available to consumers. It would cover those goods. It will cover things where there is a also ensure that the Bill complements work currently make and model, but that does not necessarily make being undertaken as part of the transposition of the them complex or high-value. We can perhaps come on EU directive on ADR. The directive, to be transposed to whether or not it affects cars, but we have a real by spring 2015, requires businesses across all sectors to concern that this will go far further than complex and offer redress via an ADR scheme, either as a specific high-value goods: it may cover yachts, helicopters, jets, scheme or as part of a wider residual scheme. Lastly, GC 125 Consumer Rights Bill[LORDS] Consumer Rights Bill GC 126

[BARONESS HOWE OF IDLICOTE] alternative dispute resolution will be critical parts of and equally importantly, it would provide for a single it. Having conceded that fundamental analysis and point of contact for consumers, who could then be intellectual point, we have this big omission in the Bill. directed to the relevant ADR scheme depending on Although the Government are working on implementing the nature of their problem. the EU directive and looking at the different options, The amendment would materially benefit consumers the amendment does not inhibit or undermine that across all sectors by formally establishing the right to detailed work. It does not prescribe exactly how the redress through ADR, paving the way for wider coverage directive will be implemented; rather, it makes clear in of ADR schemes and achieving simplification in the the Bill that the right to redress for consumers must system. I beg to move, and would welcome the views include access to an effective, independent alternative of the Government and others on the amendment. dispute resolution regime and that the duty is on the Secretary of State to ensure that that happens. The amendment would not prejudice the outcome of Baroness Drake (Lab): I support the noble Baroness, the consultation on the implementation of the ADR Lady Howe, on Amendment 23. At the moment, in so directive but would clearly place the duty on the many areas of retail, the primary route to a remedy if Secretary of State. Having followed the debate on this there is a dispute is to go to the courts, but going to a in the Commons, it would appear that the only argument court is far too daunting and complicated for many people. mobilised by the Government is that somehow it The paperwork may well put them off. The court fees would prejudice the outcome of consultation. I do not may act as a disincentive, especially if the goods think that it does, because it enshrines a fundamental purchased are modest in monetary value. Even if a principle which the Government concede is essential consumer wishes to begin by going to the small claims to an effective system of consumer rights. The detail of court, if a case is considered complex by the judge, it implementing that principle can be left to the outcome may be transferred to the normal county court list, of consultation and subsequent regulation. which would definitely deter and daunt most people. I realise that mediation has been introduced in 5.30 pm small claims cases, but the psychological impact of going to court—its legalistic aura, the language of the The Government have known for a while that the courts and dealing with the necessary paperwork—can EU directive had to be transposed into law. Given that all still be off-putting and a deterrent. The behavioural all the parties recognise the importance of an alternative response of consumers to alternative dispute resolution dispute resolution process to the exercise of consumer and the courts are very different. The court system is rights, not including the matter in the Bill is a lost not really fit for purpose for many ordinary consumers, opportunity. We do not know yet where in implementing certainly in respect of smaller consumer rights claims. the directive the Government will go on the continuum As the noble Baroness put it so compellingly, alternative from the minimal option of a dispute resolution process dispute resolution is essential, otherwise consumers of last resort to radical reform of the ombudsman will have their rights enshrined in a new Bill but many landscape. That is still a matter for Parliament to will be deterred from exercising them. Consumer inertia consider. The amendment would put a duty on the in pursuing rights and securing remedies will remain Secretary of State to put an independent and effective strong—an assumption, unfortunately, that some traders alternative dispute resolution scheme in place. build into their responses and their market behaviour. The noble Baroness made the important point that Consumer rights and access to an effective means her amendment goes with the grain of simplifying the of enforcing them need to be inseparable. Youcan give consumer experience. That is not only the experience consumers all the rights in the world, but if they are of the consumer when engaging with the trader but deterred from exercising them because the process is their experience when seeking redress. As the noble off-putting, complicated, disparate or whatever, as Baroness explained, we know that that can be off-putting; was clearly set out by the noble Baroness, their rights it can be complicated; and it can be variable, depending will not be effective and the market will remain on what economic sector we are looking at. Her dysfunctional in part. amendment is very clear and goes with the grain of the Bill, which is to simplify consumers’ experience in The Bill has several clauses that relate to redress, securing their rights and accessing redress. Particularly but it does not lock into an alternative dispute resolution compelling was her argument about a single point of scheme. It seems extraordinary that a Bill so focused contact, because who knows where the detail of the on securing and improving the position of consumer Government’s proposals on ADR will settle in the rights does not seize the opportunity to lock into light of the EU directive? Consumers need to have ADR. I know that the Government are consulting on easy access to knowledge and easy comprehension of the details of such a scheme in the light of the EU what the resolution alternatives are. They need a point directive, but that in itself is not a reason for missing of contact which will assist them in accessing redress the opportunity to use the Bill to place a duty on the when they need a resolution to their problem. I therefore Secretary of State to implement such an alternative strongly support the noble Baroness in her amendment. dispute resolution scheme. As the noble Baroness pointed out, a key purpose of the Bill is to consolidate, simplify and strengthen consumer law. Baroness Crawley (Lab): My Lords, I, too, support The Government agree—it was confirmed by the the amendment in the name of the noble Baroness, Minister, Jenny Willott—that if we are to have a Lady Howe of Idlicote, and, in doing so, refer noble consumer rights system that works, ombudsmen and Lords to my consumer interests in the register. GC 127 Consumer Rights Bill[15 OCTOBER 2014] Consumer Rights Bill GC 128

As we know, the alternative dispute resolution directive the OFT, as it was at the time, asked for the incorporation requires the existence of simple, efficient, fast and of the directive into the Bill. Two really quite good low-cost ways of resolving domestic and cross-border things are happening. I know that I am not allowed to consumer complaints—without the need to go to court, say that the Government are doing good things—but as my noble friend Lady Drake just said. It also assists they are with the Bill. Some people would not like me business, as the noble Baroness said. ADR should have to say that the EU was doing good things, but I am expertise; it should be independent; it should be impartial. happy to say that it is with its directive. So we have two The process should be transparent, effective, fair and good initiatives coming along, but would you know it? legal. Member states are required, as the noble Baroness, They are being handled in different ways with different Lady Howe, said, to identify competent authorities to legislative processes and on different timing. ensure that ADR entities are competent to deliver the It is not as if this is a difficult issue. The British directive’s requirements. That process is ongoing. Retail Consortium and the Federation of Small Businesses The important point to keep in front of us today is welcome the alternative dispute approach to dealing the need to keep the environment as simple and as with problems, rather than going to court. As Martin accessible as possible for the consumer. Although Lewis commented when he was giving oral evidence to there is a need for sectoral expertise in transposing the the Public Bill Committee, unless the Bill and the directive, it is also important to have a low number of directive are joined up, brands involved and a common front end or entry “you are going to have a wonderful Bill that gives people many point, as both noble Baronesses have referred to, for new rights”— the consumer to access a resolution to their complaint, he went further than I would about the Bill— be it a low-level complaint or a highly complex one. “that they are never going to be able to use”,—[Official Report, The amendment in the name of the noble Baroness, Commons, Consumer Rights Bill Committee, 11/2/14; col. 55.] Lady Howe, backed as it is by respected consumer bodies, because they will be without redress. The Government will give consumers the confidence of legislative heft have assured us that the new directive will be implemented when it comes to this important new aspect of justice by spring. However, we still await their response to the for consumers, which has attached to it a date of submissions that BIS got to its consultation, which I spring 2015. think finished five months ago. The clock may be slow Accepting the noble Baroness’s amendment is not in this Room today, but it is ticking. We may have no gold-plating in any way; it is ensuring that the chance to debate BIS’s response to the consultation Government’s implementation of the ADR directive because it may not be dealt with in primary legislation, is a feasible process in the first place. I hope that he which also seems a shame. ramendment is given the serious consideration that it Most importantly, the two items are two sides of deserves. the same coin, so we hope very much that the noble Baroness the Minister will accept the amendment today. Baroness Hayter of Kentish Town: My Lords, as has Whether or not the exact words please her we understand, been clearly stated, the proposed new clause addresses but if she could accept that there should be reference what my noble friend Lady Drake says is the extraordinary to and embedding of the ADR in the Bill, that would absence from the Bill of any mention of the EU be to the credit of the Government. We will then try to directive on ADR, the absence of any right to go to seek credit for it, but we will give it to the noble Baroness, independent redress, and indeed the absence of any Lady Howe, instead. It would be a wise Government reference to what has just been mentioned—the competent who did this and took the full credit for it. authority to be set up to approve such schemes according to the EU directive. Baroness Oppenheim-Barnes (Con): Could I just The amendment would also add a very welcome highlight one of the main points? The noble Baroness missing element from the directive: the right for a mentioned the AER. One of the directives that she has consumer to have their complaint heard by such an mentioned as dealing with the way in which payday alternative dispute scheme. Without such a scheme, we loan information is given by the providers is that it is wonder what will happen to consumers when they still given in the old form, with the AER only, with no cannot agree on the remedies set out in the Bill. written amount. The noble Baroness might recall that Elsewhere, the Government have said, “They should we had an amendment to the Financial Services Act, go to Citizens Advice”, which I hope will be well during which we were told that the Government at funded to do all this. However, even if they do so, that time—this is some time ago—were busily discussing Citizens Advice cannot adjudicate; nor can it enforce that directive and would be wanting to implement it as any remedy. As has been said, the only alternative then soon as possible. It seems to me that the request from is for the consumer to go to court for damages, and the the EU about AER was a very small, perfectly justified reality is that that will not happen. At the moment, and overdue one, and it is particularly disappointing if legal and financial clients, social housing tenants and the Bill becomes law before that amendment has been patients can all go to an ombudsman; there are statutory made by the Government. ombudsmen for all those. The Government are in due course going to implement the directive, so they agree The Parliamentary Under-Secretary of State, Department with us that consumers should have access to ombudsmen for Business, Innovation and Skills (Baroness Neville-Rolfe) across the whole market. (Con): My Lords, I thank the noble Baroness, Lady The BIS Select Committee asked the Government Howe, for raising this very important issue. Her interest why on earth the EU directive had not been included and expertise in consumer problems was demonstrated in the Bill. Which? regretted that it was omitted, and at Second Reading, which I missed, so it is very good GC 129 Consumer Rights Bill[LORDS] Consumer Rights Bill GC 130

[BARONESS NEVILLE-ROLFE] 5.45 pm to have her engaged on this important subject. The Baroness Hayter of Kentish Town: Can the noble noble Baroness, Lady Drake, also rightly underlined Baroness tell us when the consultation will be published? the value and importance of ADR and of ombudsmen and ombudswomen. Baroness Neville-Rolfe: All I can say is that the I want to make it clear that the Government are consultation will be published shortly. I confirmed very supportive of alternative dispute resolution, which that the implementation date for the directive is 2015. provides a more accessible route than the courts for The noble Baroness anticipates what I was going to consumers to obtain redress. Accessibility was a point say at the end, which I will say now. I assure your well made and emphasised by the noble Baroness, Lordships that our implementation plans for the Bill, Lady Crawley, and, as the noble Baroness, Lady Howe, which we discussed on Monday, will also advise businesses said, it is also good for business. The noble Baroness, of their forthcoming responsibilities under the ADR Lady Hayter, described the advantage of wider ADR regulations. Similarly, information to consumers will and talked—rightly, I think—of the benefits of both be available in one place—to meet the point that we this Bill and the ADR directive, so I thank her for that. will be joined up. If I may elaborate, our response will explain how Before I address the specific amendment, I shall we intend to make ADR widely available and accessible take a moment to reflect on what the Bill seeks to for consumer disputes and our plans for competent achieve. The Consumer Rights Bill sets out a simple authorities to monitor the provision of ADR. I hope and modern framework of consumer rights and, where that noble Lords will understand that I cannot set out appropriate, enhances measures to protect consumers. the full detail of the Government’s response before Clearer rights and remedies mean that both consumers publication. We consulted on whether a consumer and businesses will be better equipped to resolve any complaint helpdesk would be useful to help consumers issues at an early stage. Having said that, we recognise and business to access ADR, which was a point made that there will be occasions when problems arise that by the noble Baroness, Lady Drake. cannot be so easily resolved between the parties. In We will publish our intentions in our consultation these instances, access to alternative dispute resolution response document. Once we have published our response, can prove invaluable. we will work with partner bodies to prepare for implementation. We will then publish draft regulations I am glad to say that the Government will be to transpose the ADR directive by spring 2015. strengthening the framework for alternative dispute I would not want to affect the ongoing work to resolution when it implements the European directive implement the ADR directive in regulations by amending on ADR in July 2015, to which I think all the noble the Bill. The noble Baroness, Lady Howe, said that her Baronesses referred. Currently there are well established amendments would achieve consistency and simplification. mandatory ADR schemes in sectors with a high risk However, the ADR directive contains many provisions, of consumer detriment. It is worth remembering that. several of which are linked. That is why we feel that it One example is financial services, and I was interested is far better and more straightforward for businesses to read that the largest ADR provider in Europe is the to implement the ADR directive in one package. Our UK’s financial ombudsman, and that last year it resolved consultation response document will set out our plans 500,000 cases. Another example is energy, but in other for doing so. We certainly want to avoid any unhelpful sectors access to ADR is limited. The directive requires confusion that could be caused by implementing the us to address these gaps and ensure that ADR is directive partly through the Bill and partly through widely available. regulation. The noble Baroness, Lady Drake, raised an important We recently undertook a consultation exercise, which point about the need for the implementation of the has been referred to, on the best way to implement the ADR directive to complement consumer rights. I am ADR directive. Stakeholders were asked for their views glad to say that the changes that we will make to on the issues covered in this amendment, and we implement the ADR directive will complement the addressed several other issues in our consultation. We reforms in the Bill and improve access to and awareness proposed that the compulsory use of ADR should of the ADR. We want to take the same comprehensive continue to be targeted at sectors where consumers approach to ensure that we deliver the best possible most need it. We said that our preferred option was ADR framework. Our plans for implementation allow not to gold-plate the directive by introducing a blanket us to do so. I therefore ask the noble Baroness to compulsory requirement for all businesses to use ADR; withdraw her amendment. that would come at significant cost to businesses, which pay for the provision of ADR through a mixture of annual fees and case fees. However, we expect the Baroness Oppenheim-Barnes: Before my noble friend directive’s requirement for businesses to inform consumers sits down, can she tell the Committee what AER with complaints about ADR and to encourage much stands for? greater participation in ADR schemes. We will very shortly be publishing our consultation response document, Baroness Neville-Rolfe: ADR stands for alternative which will outline the Government’s proposals for dispute resolution. I thank the noble Baroness for her implementing the ADR directive and improving and intervention, which I did not think called for comment simplifying access to redress for consumers, a point but I am happy to discuss it with her on another raised by the noble Baroness, Lady Crawley. occasion. GC 131 Consumer Rights Bill[15 OCTOBER 2014] Consumer Rights Bill GC 132

Baroness Howe of Idlicote: My Lords, first, I thank (c) in paragraph (1), for “and the measures taken” substitute the Minister for putting so explicitly the Government’s “and the measures or action taken, whether on a position of where they intend to be going with ADR— compulsory or voluntary basis,”.” now we all know what the initials stand for. She has raised a lot of expectations and some hope. We are all Baroness Hayter of Kentish Town: My Lords, concerned to ensure that it is kept on the agenda. We Amendment 24, which stands in my name and that of would not want it to be as slow as she has in mind. It is my noble friend Lord Stevenson, addresses a very clear that those of us who feel similarly will need to serious and sometimes fatal weakness in consumer table another amendment, which may be rather different, protection for electricity safety: when there is a generic at Report to see how things are progressing. and dangerous fault in a particular model of electrical Once again, I thank all my colleagues for so kindly goods. There is no adequate mechanism whereby other joining in to support the amendment from their owners of the same make and model are notified of professional background, and I beg leave to withdraw the need to stop using it and exchange it. the amendment. The amendment therefore requires manufacturers to inform enforcement agencies of the number of Amendment 23 withdrawn. consumers affected, and of the extent and type of damage and injuries that have been caused. It also Clauses 25 to 27 agreed. requires the Secretary of State to publish information on dangerous products and to consult consumer groups Amendment 24 when publishing their five-yearly report on consumer protection regulations. Moved by Baroness Hayter of Kentish Town This is an issue of great sadness, because it is very 24: After Clause 27, insert the following new Clause— much about deaths and injuries. There are probably 40 “Product safety and recall or 45 deaths a year in domestic fires that have been (1) The General Product Safety Regulations 2005 (SI 2005/1803) caused by faulty appliances. Although there is a system are amended as specified in the following subsections. for manufacturers to recall faulty products, it is very (2) In regulation 9 (obligations of producers and distributors), flawed because of the difficulties of alerting customers after paragraph (3)(d) insert— who have unwittingly bought such faulty products. It “(e) a summary of what the producer or distributor suspects, has also been undermined by unjustifiable delays on or has reasonable grounds to suspect, is the number of the part of some manufacturers in recalling products, consumers affected and the type of personal injuries and even once they know them to be unsafe. Such cases property damage which the risk associated to the product relate to potentially fatal faults, such as risks of fire, has caused”. electrocution or carbon monoxide poisoning. (3) In regulation 32 (reports), after paragraph (5), insert— It has been estimated that there are up to 2 million “(6) Before completing any report under this regulation, the unsafe products in people’s homes. Manufacturers Secretary of State shall consult the enforcement authorities, such bodies representative of producers and distributors, such bodies currently have no obligation to declare how many of representative of consumers and such other persons as he thinks those dangerous appliances are in circulation. Once fit.” manufacturers become aware of faults in their goods (4) In regulation 33(3) (duty to notify Secretary of State and there is no specific timeframe in which they have to Commission)— take action. In several instances, manufacturers have (a) after “specifying the reason for taking it” insert “, and taken years to take action after a fatal accident caused shall publish such measure, and the reasons for taking it, by one of their appliances. Current BIS guidelines say on his department’s website”, that a recall is expected, (b) after “of any modification or lifting of such a measure” “as soon as the manufacturer becomes aware of a problem”. insert “and shall publish any such modification or lifting immediately on his department’s website”. That is not specific—more than that, it is not mandatory. (5) In regulation 33(5)— The Government do not feel that this should be (a) after “the Secretary of State shall immediately” insert mandatory; they want to continue with the voluntary “publish such measure or action on his department’s approach. In the Commons, the Minister said that website and”, most—I emphasise, most—businesses take their (b) after “of any modification or withdrawal of any such customers’ safety seriously. I do not think that is good measure or action” insert “and shall publish any such enough: “most industries” is not “all industries”. We modification or withdrawal immediately on his department’s have to safeguard consumers not from the good businesses website”. but from those which do not take safety seriously. (6) In regulation 39 (information)— Electrical Safety First detailed a particularly sad (a) in paragraph (1), for “shall in general make available to case of a preventable death that happened because of the public such information as is available to it on the failures in the recall system—I am sure other noble following matters relating to the risks to consumer health Lords have received the same information. Mr Santosh and safety posed by a product” substitute “which has received a notification under regulation 9(1) shall immediately Benjamin-Muthiah, a 36 year-old father of two, died publish on its website in respect of the product”. in 2010 because of a fire in his home caused by a (b) after paragraph (1)(b), insert— recalled fridge-freezer. The manufacturer had been aware of a fault with the defrost timer on that defective “(c) a summary of the number of people reasonably suspected of being affected, and the type of personal injuries and fridge-freezer three years before 2010, but did not property damage reasonably suspected of being caused issue a safety notice until 2011, by which time as many by the risk”. as half a million had been sold. In 2013—two years GC 133 Consumer Rights Bill[LORDS] Consumer Rights Bill GC 134

[BARONESS HAYTER OF KENTISH TOWN] The General Product Safety Regulations 2005 place after the recall had started—the manufacturer estimated strict duties on producers and distributors to ensure that, although 190,000 had been repaired and 186,000 that only safe products are supplied. Importantly, were scrapped, about 114,000 were still unidentified these duties are backed by criminal penalties. However, and still in someone’s home. The coroner at the quite there will unfortunately be occasions when things go recent inquest on Mr Benjamin will, I think, have wrong and a product needs to be recalled. I very much written to the Chief Coroner rather than to the share the concerns of the noble Baroness, Lady Hayter, Government. However, he has written through his about accidents, especially fatal accidents. We need to official channels calling for the creation of a simple, learn all the time from such experiences. When a recall easy-to-use and government-funded all-national website is necessary, producers and distributors are legally where all products can be registered and accessed by obliged to notify and collaborate with trading standards consumers and retailers. He also called for increasing to ensure that all reasonable measures are taken so fines for manufacturers who fail to notify and for the that unsafe products are swiftly removed from the creation of a code of practice on product recalls. The market and the risks to consumers are addressed. Chief Fire Officers Association has also called for manufacturers to take legal responsibility for eradicating 6pm risks caused by faulty appliances. Peter Dartford of The Government acknowledge that there is scope the Chief Fire Officers Association has said: to improve the overall effectiveness of product recalls. “The reality is that it is the manufacturers who have created these risks and it is their moral and legal responsibility to ensure However, I do not believe that introducing the new that these risks are eradicated from homes”. reporting requirement suggested by noble Lords is the Our amendment would strengthen consumer protection right approach. Trading standards already work closely in line with the coroner’s recommendation and the fire with manufacturers and distributors when corrective officers’ views. Perhaps even more importantly, our action, such as a product recall, is required. Under the amendment is in line with the views of the families, 2005 regulations, if a producer or distributor discovers who have been quite needlessly bereaved of their loved that it has supplied an unsafe product, it must notify ones. I beg to move. trading standards, providing details of the risk and the actions taken to address the risk. Where the risk is Baroness Bakewell of Hardington Mandeville (LD): serious, further information must be provided, including My Lords, I support this amendment and I thank the all available information relevant for tracing the product. noble Baroness, Lady Hayter, for her example of Failing to notify trading standards is also a criminal Mr Benjamin, as it saves me the trouble of giving that offence. It is a criminal offence if the producer or same very tragic example. It seems not unreasonable distributor fails in its duties in respect of product for the trader to record the consumer’s details at the recalls, including any failure to co-operate with trading point of sale and return the guarantee card to the standards in acting to address the risk. If the co-operation manufacturer. This would seem a more efficient way proves insufficient, trading standards can issue a formal of dealing with it than the present, somewhat haphazard notice requiring certain action, such as a recall, to be system of leaving it to the consumer to fill in and taken. Failing to comply with such a notice results in return the guarantee—a document which is often at more substantial criminal penalties. the bottom of the packaging and sometimes overlooked. The noble Baroness, Lady Hayter, talked about If such a system were in existence, it would be much delays in recalling products when manufacturers know simpler to compile a register of consumers and contact that they are unsafe. She suggested that there were no them individually when and if a product recall is specific timescales. I know from personal experience in necessary. This would ensure that all those affected by business that manufacturers want to deal quickly with product recalls were aware, rather than some being left cases. Where a recall is required, the problems are in the dark about the risks they run by continuing to often practical rather than legal, such as tracing the use the product. unsafe products. Best practice is promoted most effectively Consumers, once they are aware of a product recall, through guidance and very strong collaboration developed are generally assiduous in returning their products to in partnership with producers and distributors, based the relevant trader for repair or replacement. This is on experience rather than yet more legislation, so that particularly important, as we have heard, where the the system is effective. It is worth emphasising that it is product has an electrical fault which could lead to very much in the interests of business to ensure that damaging and life-threatening domestic fires. The fire recalls are successful in order to avoid the criminal service, as we also heard, is able to produce quite liability that I have outlined, to avoid product liability frightening statistics on domestic fires caused by electrical claims from injured parties and to protect their reputations. faults, some of which tragically involve death. It is It is right that information on the risks posed and really important that we do all we can to protect the action taken is transparent where this is beneficial consumers from this fate and I am pleased to support to consumers. However, what will work for consumers this amendment. will depend on the circumstances and the specific action that is being taken. The Government consider Baroness Neville-Rolfe: My Lords, there is already that the proposal by noble Lords to compile and publish robust legislation on product safety that is based in such general data will be of little value to consumers. large part on an EU-wide regime. I have listened to the Moreover, the administrative burden of providing the debate and I would like to address the general, because information cannot be justified. However, we have I think the amendment is a general one, and then look made good progress in the electrical sector. We are at the electrical issues that have been raised. working with representatives from industry, consumer GC 135 Consumer Rights Bill[15 OCTOBER 2014] Consumer Rights Bill GC 136 groups, enforcement agencies and other interested parties enough, which is why they have called for this amendment. to ensure that effective corrective measures are taken. The Minister said that the legislation is robust, but it is As I have said, we are learning from experience. not working. We are having a death a week because of The noble Baroness, Lady Hayter, suggested a simple, faulty appliances, so that is not working. I do not ask easy-to-use government-funded website for consumers for the information now, but it would be helpful if she to register their products. A new initiative to improve could write and say how many prosecutions there were the ability of businesses to contact consumers is to be in the last five years of companies for not having launched on 4 November with support from my colleague, reported and taken necessary action. Jo Swinson, Parliamentary Under-Secretary of State However, my noble friend Lady Crawley raised an for Employment Relations and Consumer Affairs. In extraordinarily important point. It is also a surprise to particular, for product recalls, we need to ensure that find that this Government are saying that on this issue publicity to consumers is as effective as it possibly can they want the public sector—that is, trading standards—to be and consider all available means of communication deal with it, rather than the people who done wrong—the to identify those most appropriate for each individual manufacturers—who acted unwittingly to begin with, circumstance in a recall. That is in the best interests of but who made a faulty product that is leading to carbon consumers and of business. monoxide poisoning, electrocution, or death by fire. It Good work is being done in this area and a strong is interesting that the Minister wants not to absolve legislative base already exists. This will not be enhanced them of that but to say that the major responsibility is through additional legislation at this time. I thank to tell trading standards—that is, the public sector—which noble Lords for their comments and ask that the will do something about it. Other things that come amendment is withdrawn. from the Government are all about the public sector doing less and all of us, whether it is the big society or manufacturers, doing more. Therefore I am surprised Baroness Crawley: The Minister has reiterated a but also disappointed that the Minister does not want number of times the role of trading standards in to put more of an obligation on to the manufacturers crucial product recalls. However, does she agree that who have made these fire traps. However, she will the serious cuts to the trading standards departments understand from what I am saying that we feel very across the country and throughout local government strongly about this, and we will come back to it. It over the last number of years have impaired the certainly does not seem to be good consumer protection effectiveness that she talks about? when once a week somebody dies when they do not have to. However, for the moment I beg leave to Baroness Neville-Rolfe: My Lords, I am grateful to withdraw the amendment. the noble Baroness for giving me the opportunity to say what a good job I think trading standards do in Amendment 24 withdrawn. many of those very difficult cases, having worked with them for many years. It is true that many government Clauses 28 and 29 agreed. services have suffered from cuts as a result of the need to get the economy back on track and deal with the Clause 30: Goods under guarantee deficit problems that we inherited. As noble Lords know, spending and resourcing Amendment 25 not moved. decisions about local trading standards are made by the individual local authorities. They, rather than central Clause 30 agreed. government, are best placed to make decisions about the enforcement needs of their local communities. Clauses 31 and 32 agreed. However, I have talked to them about how you can focus and get local authorities to focus on the real Amendment 26 areas of importance, and they are trying to do that in Moved by Lord Stevenson of Balmacara often deeply difficult circumstances. BIS greatly values their work protecting consumers from everything from 26: After Clause 32, insert the following new Clause— rogue traders to scammers and so on. That is one of “Secondary ticketing platforms: ticket information the reasons why we have set up the National Trading (1) Where a ticket is sold through a secondary ticketing Standards Board and work with the Local Government platform— Association on trying to improve enforcement in local (a) the seller must provide all relevant information about the authority areas in important areas. Of course, product ticket, and safety and risk of death always come very high on (b) the secondary ticketing platform must publish all the their agenda. information about a ticket provided by the seller in a prominent and clear way. (2) Information to be requested by the secondary ticketing Baroness Hayter of Kentish Town: My Lords, I platform and provided by the seller for the purposes of subsection thank the noble Baroness, Lady Bakewell of Hardington (1) should include, but is not limited to— Mandeville, for her support for this amendment. (a) the name of the seller of the ticket; The Minister’s response will be deeply disappointing (b) the face value of the ticket; to the fire officers and Electrical Safety First, who (c) any age or other restrictions on the user of the ticket; worked on this and who have earned this amendment. and They are the stakeholders who are referred to, and (d) the designated block and row and the seat or ticket they do not feel that what the Government are doing is number, where applicable. GC 137 Consumer Rights Bill[LORDS] Consumer Rights Bill GC 138

[LORD STEVENSON OF BALMACARA] The secondary ticket market takes the view that (3) Where tickets are being resold in contravention of the people should have the right to buy surplus or unwanted terms and conditions agreed to by the original purchaser, this tickets, and argues that by providing a platform for must be stated prominently by the secondary ticketing platform at buyers and sellers, it offers an excellent service. In every stage of the purchasing process. many cases, that is true. It also thinks that the traditional (4) Information provided by virtue of this section must be— model means that only a very small number of tickets (a) accurate; and are made available, with the balance being sold at (b) prominently displayed before a buyer is able to complete premium prices to sponsors and corporate hospitality their purchase.” organisations. It is fair to say that this issue has a long history, Lord Stevenson of Balmacara: I shall speak also to with both this Government and the previous one Amendments 26 to 31, which I am glad have been trying to respond to public pressure, which is clearly grouped, because they deal variously with one or two pulling in two directions. On the one hand, people aspects relating to ticketing, and I think that there is a want access to tickets when they go on sale, but they great deal to be taken from the fact that an all-party are also against thousands of tickets being bought by alliance is putting forward the various points. I hope people seeking to make a profit rather than attending that the Government are in listening mode, at least on the event. Equally—people will say this within a few these matters. seconds—they feel that they ought to be able to buy What is a ticket? That is definitely not a rhetorical tickets if they decide, perhaps late in the day, that they question. We have a real problem about what we would like to see the event after all and get very understand by the word “ticket”. What does purchasing annoyed if they find that there are no tickets available a ticket confer on the purchaser in terms of rights and or the price is extraordinary. responsibilities? I would be very grateful if the Minister, Recent technological changes have had an effect on when she replies, would spend some time explaining this. We often find computerised botnets—as I think what the Government think a ticket is, because I they are called—hoovering up tickets on sale online. would be illuminated by that. What chance have ordinary punters to get tickets in There are two strands of thought. The promoters the first place? Most people will either have been or of many of our larger sporting and entertainment will know of people who were trying desperately to events feel that a ticket is an intangible right to attend buy tickets for the Olympic Games when they first an event or performance, a personal licence for the went on sale, and spent many hours on the phone person who bought the ticket—and, presumably, those waiting for someone to respond or online waiting for for whom he or she has bought the ticket—to attend a something to respond. Sometimes you won; sometimes specific event, occupying a designated seat. That is not you did not. Obviously, with very popular events there what is believed by the secondary ticket companies, will be a problem however you do it, but computerisation who take the view that a ticket is real property and, is both an advantage and a disadvantage. once bought, is available to the original purchaser to We are beginning to worry about money-laundering sell and resell to any third party willing to pay a and criminal gangs active in this area. If that is the market price for it. case, where should the public interest now lie? The problem is that there is no real accommodation There is already a huge amount of legislation. I will between those two approaches. On the one hand, the not go through it in detail but there is the Civic promoters of events feel that tickets which have not Government (Scotland) Act, the Criminal Justice and been released are being advertised and sold, which Public Order Act and the London Olympic Games means that the seller cannot guarantee that they will and Paralympic Games Act, and in addition to specific ever be able to honour that transaction. Tickets are legislation on touting there are legal remedies under being sold at prices well above their face value and the existing criminal law relating to theft, deception, purchasers have no idea that that has taken place. obstruction or threatening behaviour. In addition to Fans can end up buying tickets which do not guarantee primary legislation, there is a substantial amount of them entry even to the event to which they think that secondary legislation coming through from the Consumer they have bought a ticket, because there may be terms Protection from Unfair Trading Regulations 2008 and and conditions for the sale that have not been disclosed the Price Indications (Resale of Tickets) Regulations to them, which prevent them being transferred. I was 1994, some of which have a direct impact on the way at an event last weekend where I had a ticket issued by in which people are going to be treated if they are a reputable national theatre company which said clearly caught transacting secondary sales. on its face that it was not valid if sold at a premium price. Of course, I knew that, because I could read it; but others may not have spotted that. In general, the 6.15 pm view taken by many promoters is that consumers are However, there is a flaw in some of these regulations being priced out, mis-sold or even defrauded when in that they do not apply to consumer-to-consumer tickets are resold on the secondary market. transactions; they apply only when agents are involved. Two principles underlie that. The first is that promoters Accordingly, they do not apply to some of the issues should make tickets available to people at affordable that have caused the most concern recently. Secondary prices and that that should be protected; but also that legislation in this area is constantly being updated—indeed, consumers should be provided with more information it may have been done as recently as June 2014—and I about what they are buying when purchasing tickets hope that the Minister will be able to shed some light through secondary outlets. on where the law currently stands on these matters. 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The Committee will be aware that the London In response the former Minister, Hugh Robertson MP, Olympic and Paralympic Games Acts were probably said that the trigger for a change of government policy the most recent times when we discussed these issues, would be evidence of, and I am sure that they will come up again as others “large-scale criminality … taking place as a result of secondary speak to this debate. It is interesting that when the ticketing”.—[Official Report, Commons, 13/3/12; col. 64WH.] ticket touting laws were strengthened in the 2006 Act, I think we now have that evidence. Established in June it caused a bit of reaction among many of the major 2010, Operation Podium is a dedicated Metropolitan sports governing bodies. In April 2007 the Guardian Police unit created to combat organised crime around published a report on a letter sent by five sports the London Games. A report on that operation, made governing bodies to the Secretary of State demanding public in February 2013, looked at three types of that they be given the same legal protection against ticket crime—fraud, counterfeit and unauthorised ticket ticket touts that was to be enjoyed by the London selling—and set out a number of recommendations, Olympics and Paralympics. The governing bodies asked which included consideration to be given to introducing the Culture Secretary to reform a “two-tier” system legislation to govern the unauthorised sale of event that was now apparently surrounding ticket sales in tickets. It said, British sport. They said: “The lack of legislation in this area enables fraud and places “The sports community is frustrated that the government has the public at risk of economic crime”, made it an offence for tickets to be touted for the London 2012 Olympics … It is surely an anomaly that the Wimbledon tennis and that: tournament to be staged in late June 2012 will have no ticket-touting “The primary and secondary ticket market requires regulation protection, while the tennis tournament at the same venue just to ensure transparency, allowing consumers to understand who eight weeks later in the 2012 Olympics will … We would urge you they are buying from and affording them better protection from to address this anomaly so that there is no two-tier status between ticket crime”. the Olympics and other major sporting events held in the UK”. I draw attention to the DCMS Select Committee that Will the Minister update us on progress on implementing carried out an extremely thorough investigation in those recommendations? Will there be legislation, or 2007 following an OFT report in 2005 which found do the Government perhaps have better information that the secondary ticket market was not operating on this matter than the Metropolitan Police? satisfactorily. Its report was the subject of a Westminster I turn to our amendments. The RFU, which we Hall debate in April 2008. In his contribution, Don thank for its lobbying and provision of material in this Foster MP for the Liberal Democrats postulated that area, has told us that the prices set by it are at a level the approach should be based on the principle that, which it thinks is affordable for rugby fans of all “there is an important role for a well-organised secondary market backgrounds. It has ambitions to grow the sport further that has proper consumer protection built into it”.—[Official as part of the Rugby World Cup legacy. It states that it Report, Commons, 24/4/08; col. 531WH.] is important that rugby is, and is seen to be, a game for However, the debate highlighted the lack of enforcement all, which means that tickets to watch England must at that time, and figures were produced later in the remain affordable—for my part, being Scots, I have a debate showing that there were only some 20 convictions slightly different view: they should be priced out of the a year for ticket touting. Could the Minister update us world, so that nobody can go and watch them and on the present situation? It would be interesting to they lose, but I move on. The RFU tells us that, in its know whether it has been possible to mount more view, ticket touts price many of the people that it prosecutions and whether they have been successful. would like to see at its games out of the possibility of going. It has many examples from each season of When the then Minister, Gerry Sutcliffe MP, wound cases of mis-selling and fraud. As a not-for-profit up, he suggested that what was needed was a voluntary organisation, the RFU argues that every penny made code based on, or saved by the RFU is reinvested into rugby. It “a new code of principles that the market can sign up to”.—[Official believes that it is unfair that highly organised touts are Report, Commons, 24/4/08; col. 542WH.] buying up large numbers of tickets to resell at huge And what was to be in this code of principles? Improving profits while contributing nothing back to the game. the systems needed to prevent the exploitation of the Our amendments would ensure that all transactions ticket-buying public; countering bad practices such as which involve the resale of a ticket should include misleading information and erroneous and future selling; detailed information about the ticket, the seller and provisions on exchanges, returns and refunds; and the terms and conditions relating to resale. Websites controls on tickets, such as identity requirements. In facilitating secondary selling should be able to operate, fact, he suggested that photos should go on tickets. but they would then become accountable for checking That seems to be a very good agenda that we might that this information is provided to consumers. We do well consider as we go forward in this debate. The not think that there should be a requirement for problem, however, lies in the fact that it would be on a websites to check that the information is correct, but voluntary, not a statutory, basis. they should be obliged to remove advertisements for There was a debate in the Commons in March 2012 tickets if they are informed that the ticket information in which Michael Weatherley MP said: is incorrect or it is confirmed that the tickets may not “I am not advocating that every ticketed event be subject to be transferred. There is a legal case on this matter additional legislative support. Many artists and events will be which some of us may wish to refer to. happy for the secondary market to buy and sell their tickets, but those that wish to have protection should be able to apply for We believe that providing more information to support under law, in the same way the Olympics did”.—[Official consumers would mean that the primary seller—for Report, Commons, 13/3/12; col. 62WH.] example, the RFU for matches at Twickenham—could GC 141 Consumer Rights Bill[LORDS] Consumer Rights Bill GC 142

[LORD STEVENSON OF BALMACARA] ticket reselling websites as areas of concern. The report check that the ticket was genuine and being legitimately stressed the need for an open and transparent system sold. Providing consumers with exact details would for ticket reselling, with clear and appropriate regulations. ensure they knew what they were purchasing and that The new clauses address those shortcomings and would were not buying something which offered no proper increase consumer confidence in the secondary market. view or was at the wrong price. It seems logical that we The first two new clauses address the lack of should go down this route and make sure that the transparency, which the noble Lord, Lord Stevenson, arrangements are as outlined by the RFU. emphasised. Amendment 28 is about who is selling the As I indicated previously, the legislative change that ticket. It would place a duty on secondary ticketing we are looking for is in line with existing government platforms to provide basic identifying information policy. The Department for BIS published updated about the individual or business offering a particular arrangements for ticket resales in the Consumer Contracts ticket or set of tickets for sale. It would allow consumers (Information, Cancellation and Additional Charges) to say how prolific and reliable a particular seller was; Regulations 2013—which may again be updated in 2014 that would make the secondary ticketing platforms —which have the good intention of making more much more transparent. Importantly, it would also information available to the consumer, but they do not require secondary ticketing platforms to be transparent seem to be sufficiently applied and there is evidence in cases where the seller was also the event holder. The that abuses are still occurring. Since they apply only to practice of events organisers secretly allocating whole “traders”, we do not think that they will attach to blocks of tickets directly to the secondary market has “consumers” selling tickets within peer-to-peer sites. been on the rise. It was the subject of the Channel 4 The existing regulations are not explicit enough about “Dispatches” programme broadcast in 2012, entitled the information that must be provided. Our amendments “The Great Ticket Scandal”. There is also a dishonest address that concern by placing the key information practice whereby a secondary ticketing platform, or rather requirements in the Bill rather than leaving it to secondary its employees or shareholders, buy and sell tickets legislation. themselves, as the “Dispatches”programme also exposed. The RFU assures us that the amendment will not Amendment 29 relates to the transparency of the place any extra burden or additional costs on the industry, ticket itself. I was very interested in the introduction of as there are already requirements to list ticket information the noble Lord, Lord Stevenson, when he talked about details. As a result, the ticket sales process would become the ticket itself; in many cases, knowing the characteristics more transparent for the benefit of all. I beg to move. of a ticket would make a material difference to a buying decision, particularly in the case of seated Lord Clement-Jones: My Lords, I shall speak to events, in which a person’s position in the venue can Amendments 29 to 31. Although I think that I am make a significant difference to their enjoyment of the singing very much from the same hymn sheet as the performance or experience. Providing that information noble Lord, Lord Stevenson—I apologise if I go over would also give consumers the confidence that the some of the same ground because, as was the case in individual or company selling the ticket actually had the Commons, these amendments are in parallel to tickets in hand and was not just speculating that it those of the Labour Front Bench—these amendments would be able to provide them at a later date. Making follow directly from the conclusions and recommendations sure that consumers are made aware of the original of the recent excellent report by the All-Party Group price of the ticket that they are buying at the earliest on Ticket Abuse. I happen to be a member of that opportunity gives them another piece of the information group but, since I was not able to take part in the that they need to make an informed choice about inquiry, I cannot claim any credit for it. whether to enter into such a purchase. Any genuine The amendments are not an attempt to shackle an fans who need to sell on their tickets should not have a important and growing service for consumers or to problem providing the basic information about the ban the resale of tickets. While accepting that there is product that they are selling; nor should any professional a role for a legitimate secondary ticket market, the reseller. The secondary ticketing platforms which claim all-party group found considerable problems with how to have higher standards should therefore have no this market, which is estimated to be worth about problem adapting to the new provisions. £1 billion a year, works at present. Amendment 30 concerns the recourse available to In particular, it does not adhere to the same principles consumers. There have been numerous reports of event- of transparency and consumer protection to which goers being turned away with counterfeit or invalid other markets are held. With internet ticket selling tickets that they have bought via the big four secondary becoming more streamlined, touts are able to use ticketing websites, all of which heavily promote their sophisticated computer systems to buy large volumes reliability and guarantee that their tickets are genuine. of tickets automatically, mere seconds or minutes after Of course those websites offer refunds, but people they are available online. That can often mean that it is who come to venues with unusable tickets have all practically impossible for genuine fans to access the incurred at least some travel cost getting there. In event, forcing them to rely on an artificially created some cases, they have come from abroad for the express secondary market and depriving content creators of purpose of using the ticket. For such people, a full revenue for their event. refund on the ticket, while welcome, will still leave As the noble Lord, Lord Stevenson, mentioned, the them out of pocket. The new clause would therefore Met Police published a comprehensive report on allow those consumers to claim back the extra cost fraudulent ticketing and the dangers it posed to the associated with attending an event, up to a reasonable Olympics. It specifically cited ticket fraud, touting and level. GC 143 Consumer Rights Bill[15 OCTOBER 2014] Consumer Rights Bill GC 144

In practice, some resellers already offer reimbursement I was very interested in that reference, which almost of travel costs. The new clause would place primary harks back to our earlier debate about ADR. I would responsibility for that initial payback on the secondary be very grateful for chapter and verse on exactly what ticketing platforms because they offer guarantees which, my honourable friend was referring to in that Commons they say, consumers pay for in their significant service debate. She said: charges. However, having paid out that money, the “Armed with that information and access to redress, consumers new clause makes clear that the secondary ticketing will be empowered to make use of the market for their benefit and platform may recover it from the seller of the ticket. hopefully not fall victim to fraudulent, counterfeit or misleading The only individuals or businesses that the new clause ticket sales”. would hurt, therefore, are those who have sold fake or That is the second limb of my question to my noble invalid tickets and consequently caused financial loss friend. to the consumer. The new clause would have the On compensation, my honourable friend said that, positive benefit of giving consumers the confidence “the first port of call should be for the industry to source a that they would not be left out of pocket when they solution. Some of the larger event organisers … already have purchased tickets through the secondary market. refund procedures in place”. However, she admitted that some, “smaller players … have chosen not to”.—[Official Report, 13/5/14; 6.30 pm col. 691.] In the Commons, my honourable friend Jenny Willott That is the flaw in the whole argument. The big four said: sellers are powerful players. It is part of their unique “The Government agree that consumers should be protected selling proposition that they guarantee and make refunds from fraudulent, counterfeit and misleading ticket sales”. that are more generous than simply refunding tickets; She added that the new, updated Consumer Contracts they sometimes compensate for travel costs and so on. (Information, Cancellation and Additional Charges) But that is not true of many other players, and it is Regulations, “will come into force” in June this year, certainly not true of the ordinary ticket tout. I do not believe that voluntary action in these circumstances is “to empower and inform consumers”, adequate. I would like to think that in the best of all and that they would, possible worlds traders will get together and have a “ensure that consumers have all the information they need before common standard of service and so on, but I do not they buy”.—[Official Report, Commons, 13/5/14; col. 691.] believe that that will happen unprompted by legislation. That would include ticket sales. I am not moving an amendment but I beg to lay my I have had a careful look at these consumer contracts wares before the Minister. regulations and, although she was not specific, I think that she was referring to sub-paragraph (a) of Schedule 2, Baroness Heyhoe Flint (Con): My Lords, I wish to “Information relating to distance and off-premises speak specifically to Amendment 28, which, as my contracts”, under which there is a duty on the seller to noble friend Lord Clement-Jones has so eloquently outline, put, is inextricably linked to Amendments 26, 27, “the main characteristics of the goods or services, to the extent 29 and 31. I am pleased to have the opportunity to appropriate to the medium of communication and to the goods return to the subject I raised at Second Reading. I am or services”. delighted that, in doing so, I am joined by colleagues That is a very general statement that requires considerable from all sides, made up of many distinguished people—all unpacking. finely tuned athletes, of course—who have been The guidance issued to the consumer contract campaigning for many years to promote the interests regulations, as amended in June, poses a scenario of British sport. headed, “I am a trader selling tickets online, what do I The support for Amendment 28 demonstrates the need to do?”. Paragraph 17 states: need for specific action to protect the interests of “Schedule 2 of the Regulations lists the information you must sports fans when they purchase tickets to sporting provide to the consumer. Information on the main characteristics events. I apologise if I am repeating what has also been of the tickets and their total price (including delivery costs and stated so clearly by the noble Lord, Lord Stevenson, other charges) must be given to the consumer in a clear and but just because we call them fans does not mean we comprehensible way before the consumer purchases the ticket. Main characteristics include (if known to you) the date and time should forget that they are consumers. I identify to the of the event and the content of the event”. House that I am on the Board of the England and That is the trouble. It does not specify the information Wales Cricket Board, which is one of many sporting that must be provided in the same way as the clauses that organisations that have expressed support for these we are setting out today. Effectively, it is at the discretion amendments, such as the RFU, Wimbledon and the of the trader because the trader can plead ignorance in Ryder Cup, to name but three global event presentation these circumstances. That may be a fallible interpretation organisations. of the guidance and may not be the intention of the I thank the Minister for taking the time recently to regulations, but I do not believe that the regulations go meet with sports delegations on this issue. I shall nearly far enough in providing that kind of consumer reflect on that meeting in my comments and touch on security. the examples she requested. She asked for more feedback My honourable friend went on to say: and we too would like more feedback. “In addition, from October of this year we are making it First, I will address whether, as was suggested to us, easier for consumers who have been misled by a trader to take the amendment would place too many restrictions their own action to get their money back and, if appropriate, to into the market place and act as a burden on the buyer get damages as well”. and the seller. I cannot see how the amendment can GC 145 Consumer Rights Bill[LORDS] Consumer Rights Bill GC 146

[BARONESS HEYHOE FLINT] Even when the sales are placed on secondary sites place any unnecessary burdens on the ticket buyer. It deliberately to make a profit—which is surely acting as is in their interests to be told the face-value price of a trader in any other sense—it circumvents the regulations the ticket they are buying; its location in terms of that the Minister says will assist us. Can she therefore block, row and seat number, so that they understand confirm that, at present, the application of the regulations where they will be sitting; and, most crucially of all, only to traders allows for organised touts and others whether that ticket is rendered invalid if it is transferred. to evade the new regulations? These facts are material to making an informed decision I am sad to tell the Committee that so many people about whether to purchase the ticket. are doing this. Just yesterday, I went online again to As for the seller, I do not see that having to provide research the issue. On the Viagogo sites, I found scores this information is a restrictive burden. All the major of tickets for the opening Ashes match at the SWALEC sites that sell tickets already have online forms that stadium in Cardiff next July—tickets, incidentally, people have to fill in with their ticket details. It will which were only recently put on sale. Those tickets take just a few seconds more to add this additional have not even been sent to purchasers yet. Perhaps I information. Indeed, I tested it myself. I think it takes may cite an e-mail sent to the England and Wales about 20 seconds to provide this information, which is Cricket Board from a frustrated and angry consumer: nothing in the context of having to log in and enter “Dear Sir/Madam, I have tried and been unsuccessful in other information. Alternatively, in this modern age obtaining three tickets for day three of next year’s test match at people have the option of taking a picture of the ticket Edgbaston in the Ashes. Just by looking online for tickets, I have with their phone and uploading it, but I have not come across this advert”— currently conquered that art of IT communication. this relates to an eBay advert. The consumer went on: The Government already require information to be provided through the Consumer Contracts (Information, “Can you please explain to me how these companies get all these tickets and sell them at extortionate prices when genuine Cancellation and Additional Charges) Regulations 2013 fans cannot get them?” —I almost ran out of breath there. That is a very minor step, due to the lack of information and transparency In one instance, four tickets are listed at hugely to the buyer. My first question to the Minister is inflated prices but nowhere does the post tell me the whether she accepts that the amendment places very face value of the tickets. Nor does it tell me the exact little burden on the seller and that it is merely an seating location or whether Glamorgan County Cricket extension to the existing regulations her department Club, which is the host of the event, is permitting that introduced this summer. I am sure that the Minister ticket to be transferred. This advert—there are many will respond to this short debate by referring to those more like it on this and other sites—demonstrates the regulations. They are of course welcome and a step in flaws in the existing regulations. Will the Minister look the right direction. Indeed, they show me that the at these ads on sites such as Seatwave, Get Me In! and amendment is in line with the Government’s existing Viagogo? Perhaps she has already, because I know policy approach. However, these regulations, as has that my noble friend the Minister is a keen cricket fan. already been pointed out, have certain flaws. The main Can she confirm that they are currently in breach of one is that they apply only to sellers who are defined as existing regulations and that consumers are not getting “traders” and do not apply to consumers selling to the protection we would all wish to see? other consumers, as happens so often and is the business I have also seen example after example from model for secondary ticket sites. Wimbledon of consumers from around the world Let me give an example. Last year one of our major purchasing tickets at inflated prices and not receiving venues, Durham County Cricket Club, managed to what was advertised. There are examples referring to uncover the activities of Nicholas Hubscher—this in debenture tickets which were bought in good faith yet the public domain—a British Airways pilot who was were not debenture tickets, which classify which rather found to be, exclusive zone you sit in at Wimbledon. There are “touting on an industrial scale”, complaints from members of the ticket fraternity or as a sideline from his main occupation. I have a the supporters and fans of Wimbledon from the USA six-page selection of the cuttings and e-mail reports about tickets which they did not receive or with which officially identifying the 800 tickets that Hubscher they were refused entry. There were tickets that were touted, with a face value of between £50 and £100, not even for the original place that they had booked during the tests at the Oval, Old Trafford and Durham. and paid for. There were also tickets that had previously These tickets were partially sold for hugely inflated been stolen from another source. There are these fears prices on third-party ticketing websites such as Viagogo in the background, which have alarmed all the people and Seatwave. The tickets were obtained not though who have spoken so far. sophisticated software but through using multiple credit This amendment will make it a specific requirement cards and names. The England and Wales Cricket that the fan buying the ticket must be told what the Board, in conjunction with the venues, successfully terms and conditions of the transfer of that seat to brought a civil action against him in the High Court them are. Many sporting events do not allow seats to but it was a stroke of luck that they found him. It had be transferred above face value or without prior approval. nothing to do with the regulatory regime that the As the noble Lord, Lord Clement-Jones, pointed out, Government have in place. Yet in this case, despite we are talking about a £1 billion worldwide “business”. selling hundreds of tickets, Hubscher would not be I hope that the Minister will review carefully the case caught under the existing regulations as he would not for this amendment, work with those Peers and sporting come under the definition of a trader. organisations who have called for change and consider GC 147 Consumer Rights Bill[15 OCTOBER 2014] Consumer Rights Bill GC 148 whether this amendment or a revised version of it is Of course, the Government acted to ban ticket the right approach, ahead of Report and Third Reading touting at the London Olympics—at the behest of the in this House. IOC—and clearly the noble Lord, Lord Moynihan, must have had a major say in that decision. It is a great 6.45 pm shame that we did not learn from that experience. Without lack of information and transparency by Everyone agrees that one of the joys of the Olympics the seller there will be a risk of reputational damage to was the ambiance and general good will of the Games. the image of the United Kingdom in staging national That was aided by the fact that the approach to and global sports and entertainment events. We can sporting venues was not inundated with shady touts just read in the Daily Telegraph recently—and is it not doing their business and adding the air of menace they bound to be true, because it was in the Daily Telegraph?— often bring. Instead, we had smiling volunteers and a that after the Rugby World Cup tickets went on sale general ambiance as real fans entered the various for next year’s wonderful event, some tickets were venues. being sold on the secondary market for nearly 50 times We also saw the wonderful atmosphere that it generated their face value. Category A tickets for the final were at the sporting events, as the legislation restricted the also offered on Viagogo for up to £4,000 each following secondary market and helped more fans to get tickets. the Government’s refusal to outlaw secondary ticket What a shame that we did not learn directly from that sales. That is what alarms me and makes me wish to experience and create a positive legacy for all sporting speak so passionately about these amendments. events. I know that we often hear about the legacy We pride ourselves in the world of sport in this benefits that the Games created, but in that area we country on being fair and honourable. That is a rather certainly have yet to learn from that past experience. Corinthian approach, but the acceptance of these Today, we have an opportunity to make a difference. amendments, which have cross-party support, will ensure The amendments before us would not criminalise ticket protection of sporting pride and integrity. It would be touting. That is a debate for another day, although I more a kitemark of confidence to anybody as a consumer, hope it comes pretty soon. Instead, we can today but even more importantly, it would be protection for provide more protection for fans who buy tickets and those consumers whose anger and frustration is so introduce more transparency into the arrangements. apparent when they cannot quite legitimately acquire As others have said, it is an extension of measures that genuine tickets at genuine prices. For all the reasons the Government already have and, for that reason, I stated, I strongly support the other noble Lords who am hoping that the Minister will accept the amendment. have tabled these amendments. The proposed new clause builds on existing government regulations by making requirements of certain ticket Lord Pendry (Lab): My Lords, I will talk to this clutch details that must be provided. To my mind, this is of amendments, but specifically to Amendments 26 sensible. It will enable a sports fan to know the exact and 27. location of the seat that they are purchasing, its original Protecting sports fans from ticket touts and being cost and whether or not it is in the terms and conditions ripped off when buying tickets for leading sporting for that ticket to be transferred. This is important, as events is an issue that I and others have been working we know that fans are often grossly overcharged for on for over 20 years. At that time the focus was of tickets with no awareness that this is happening. In the course mainly on disorder issues in football, which most serious cases, the fan may not even get into the were highlighted by Lord Justice Taylor and his report event they have bought the ticket for. If it is against after the tragic events at Hillsborough stadium in those terms and conditions for the ticket to be resold, 1989. Way back in 1994 I led from the Labour Benches they find it invalid. in the other place a campaign to have the then Government extend the provisions they were introducing to ban Will the Minister address this particular question ticket touting at football events to other sports, in the when she replies? Can she explain why it is not in the Criminal Justice and Public Order Act 1994. We were interests of the consumer for them to be made aware partly successful in that we obtained reserve powers to whether it is within the terms and conditions of a be added to that Bill to allow a Home Secretary to ticket for that ticket to be transferred? Clearly, the designate other sporting events. The amendment to basic principle is that to sell something that does not that Bill was added in this place—just to show that we actually exist is wrong. This proposal would place no often have greater wisdom here than in the other extra burden on consumers. For the seller, it would place—but sadly, the measure has not yet been used, probably add seconds for the information that they by successive Governments. have to provide when listing a ticket for sale—or if they have the technical ability, which I certainly do Back then I was working with the noble Lord, Lord not, to take a snap of it on their smartphone and Moynihan, on this issue, and here we are today still upload that picture to the online sales process. battling away to protect sport and its fans. I hope that today we will be successful, as the amendments before Finally, as we have heard from the noble Lord, us have the support of the Opposition Front Benches Lord Stevenson, the amendments have the support of and eminent Peers with a long-standing interest in sporting organisations including the British Horseracing sport, including the noble Baronesses, Lady Heyhoe Board, the England and Wales Cricket Board, the Flint—as we have just heard—Lady Grey-Thompson, Rugby Football Union and Wimbledon tennis. All of and others. They know well the issues that arise from them have contacted me—and others, I am sure—to certain individuals and companies who try to rip off say how it would help them to meet their objectives of genuine sports fans. protecting their sporting events for the many and not GC 149 Consumer Rights Bill[LORDS] Consumer Rights Bill GC 150

[LORD PENDRY] It is a rare occasion for the title of a Bill fully and the few. I urge the Minister to accept the amendments concisely to reflect its intentions. On this occasion, the before her. In future all sports fans could have greater Consumer Rights Bill achieves that objective: it is a protection to see their favourite sporting events not Bill about consumers and it rightly seeks to protect being marred by the unscrupulous, who currently are and, where appropriate, strengthen consumer rights. It content to see genuine sporting fans being ripped off. is a Bill that addresses inadequacies in consumer protection and derives its strength from addressing malpractice Lord Borwick: My Lords, very few secondary markets against consumers, who can be exploited by loopholes are perfect but they are certainly welcome in that they in the law or interpretations of it which, without legal provide liquidity to the primary market. These backing, can lead to the exploitation of consumer amendments on secondary ticketing platforms would interests for commercial gain. It is therefore important get in the way of the primary market. When somebody in the context of these amendments to recognise that, buys a ticket for an event, they are investing in something in every sense, consumers are sports fans. that is often way into the future. Tickets for big shows The amendments should be seen as a constructive are often released a year in advance or more, so buying step towards protecting the interests of fans. As my tickets to such events strikes me as a rather entrepreneurial noble friend has said, they would make it a specific activity. It is risk-taking: you cannot know whether requirement that a fan buying a ticket must be informed you will enjoy the show or event and there are no of the terms and conditions of the transfer of the seat reviews to read or critics to listen to. Yet if you decide to them. that you cannot go to the event or change your mind, it is a good thing that there are proper secondary This was a key issue for us when hosting the Olympic platforms developing to sell those tickets. These Games. The subject of ticketing gained prominence amendments would mean that people would think for two reasons. The first was a decision made by the twice about that risk of buying tickets in the first International Olympic Committee not to provide a place. They would be distortionary. ticketing platform, a platform that incrementally built The noble Lord, Lord Stevenson, mentioned botnets. on the experience of previous Games. The IOC Games I think they were also mentioned by the noble Lord, department took the view that each host city should Lord Clement-Jones, with whom I entirely agreed on start from scratch and that the role of the IOC in this his earlier amendment. I am afraid that I disagree with context would be purely advisory. I made my view very him now because surely there are very good pieces of clear at the time: that ticketing each and every event at software that can stop the purchasing where computers an Olympic and Paralympic Games, while taking into buy automatically. Those aggravating things where account the myriad contractual requirements of the you have to fill in a distorted word to prove that you IOC and the Olympic family for free tickets, required a are human can stop the botnets. platform built on experience and expertise that should be refined and improved by each host city, not one The noble Baroness, Lady Heyhoe Flint, talked that is reinvented every four years. A pattern will about her aggravation that somebody was paying £4,000 emerge of the demand by the world’s athletes for free for a ticket to a cricket match. I am aggravated that tickets, greatest—not surprisingly—after they have that £4,000 is not going to the cricket club but rather completed their events. I believe that, had that been in to somebody else. If somebody is prepared to pay place, we would not have faced at the beginning of the £4,000 for a ticket to a cricket match, why is the cricket Games the issue of empty seats in areas allocated for club not charging that figure? That money would then the Olympic family. go to the sport rather than to somebody else. Of course, the real problem is the ticket touts outside The second reason emanated from the legal framework railway stations or on street corners who are selling for the Games and is directly relevant to these outright fake tickets or perhaps their electronic equivalents. amendments. The Olympic legislation was introduced Selling electronic tickets or trading on the street without by this Government specifically to protect fans who a licence is illegal; there is already legislation to deal sought to buy tickets for the Olympic and Paralympic with this problem. The secondary platforms are already Games. The Government were initially nervous about ensuring that resold tickets are valid. They usually addressing this issue at the time. Historically, they had insist that the face value of the original ticket is stated consistently taken a position that the resolution of any during the transaction. The market is providing solutions. problems through voluntary action by the market We do not need new legislation and new burdens. In participants was strongly to be preferred; that new any case, these amendments would hit the good guys regulation would be considered only as a last resort, instead of the bad guys. even for the Olympics, and only where there was clear evidence that it was in the public interest; and that new Lord Moynihan (Con): My Lords, I shall speak to regulation and the associated cost of enforcement Amendments 28 to 31, standing in the name of my were likely to impose greater burdens and restrictions noble friends Lady Heyhoe Flint and Lord Clement-Jones. of consumer choice as compared to market-led solutions. I see significant merits in Amendments 26 and 27, However, the Government, along with the police, which I would support had we not tabled our own the fans and the organisers of the Olympic Games, amendments to effectively the same objective. collectively took a very different view after the Olympic In the spirit of the noble Lord, Lord Stevenson, Games were over and they had time to reflect on the and my noble friend Lady Heyhoe Flint, I begin with effectiveness or otherwise of the legislation that had the question: what is a consumer? In the context of the been put in place. In that context, I say to my noble amendments before us, the answer is a sports fan. friend in sport, the noble Lord, Lord Pendry, that I GC 151 Consumer Rights Bill[15 OCTOBER 2014] Consumer Rights Bill GC 152 believe the Government learnt a lesson that I hope ticketing but to mitigate the potential for dishonesty they will not go back on as a result of the experience and fraud by focusing on transparency and the legally that was derived from those Games. binding provision for information. That is a small step in the right direction. It is not asking to go as far as 7pm implementing the Olympic legislation, which was referred to earlier in this exchange of views in Committee— I will quote from the Government’s response to the although there would be merit in considering that, if Department for Culture, Media and Sport Select we cannot persuade the Government to take this very Committee report on ticket touting, which I will bring small but important step in support of sports fans. to the attention of the Committee in a moment. More relevant to what I am saying now is their response The reasons have been well rehearsed today. Under after the Games on the sale of tickets: current legislation, consumers are the losers. Consumers deserve a better deal. We are also increasingly behind “The legislation provided a powerful signal of intent to deal the curve in this area, given what other countries are seriously with the issue of unauthorised sales of Olympic tickets. The increased maximum penalty fine level of £20,000 was regarded doing, such as Australia and the United States. I as a strong deterrent against the threat of organised criminal would focus the Government’s attention on the state ticket touting activity at the Games. The legislation formed part of New South Wales, in particular, which is once again of the response to this threat and was regarded as an effective overtaking us, as it has on gaming laws. deterrent when used in conjunction with the other preventative and disruptive actions taken by the police against organised crime The well-intentioned guidance that we have heard groups involved in ticket touting. Reference to the 2011 Act and about has been tried and tested and has failed. As my the £20,000 penalty fine also formed a useful part of the Metropolitan noble friend Lord Clement-Jones noted, it has not had Police’s pre-Games communications with companies involved in the effect sought by the Government. Ticket touting the secondary ticket market”. has significant connections with organised crime, with, I emphasise that point because the Government took as I mentioned, more than 1,000 professionals involved a very clear view that the legislation provided a powerful in ticket crime. The figure of over 1,000 is the signal of intent to deal seriously with the issue of Government’s figure that I cited earlier. unauthorised sales of Olympic tickets. Sport wants these changes. Today’s campaign has The level of crime behind this is important as well. I been led by a whole range of our major spectator will quote the Government on that: sports and supported by Nick Bitel, one of the UK’s “The Metropolitan Police reported that there were about two leading sports administrators and an eminent sports hundred arrests nationally … for the unauthorised selling of lawyer in his own right, who is also a powerful advocate tickets … during the Olympics and none during the Paralympics. for change. This was for two high profile events over 17 days and 10 days, respectively, with a total of nearly 11 million tickets available and Following the Games, the Government were going a huge level of demand from the public. By comparison, for a to deal with this under the major events legislation single high profile premier league game there could be (depending promised by DCMS, for which we are still waiting. In on the level of policing) circa 30 arrests of ticket touts. In the absence of that, I contend that it is opportune for addition, the Met reported that there was little day to day us to focus on the matter in the Bill and make this organised ticket touting activity at Olympic venues. There are”— small but significant change to protect the interests of again, this is a quote from the Government— the consumers—sports fans. Currently, fans continue “around a thousand known ‘professionals’ involved in ticket to be detrimentally affected. Only last month, we crime (ranging from touts to fraudsters) across the UK”. heard of the queues forming at the entrance to Gleneagles That is not insignificant. It is a major issue, and one for the Ryder Cup. Unknowingly, fans were in possession that ultimately impacts directly on the sports fans who of forged tickets. They had inadequate means of checking buy tickets. The report continues: the validity of the tickets because the people selling “Only a handful came to the Games”— them could legally ignore government advice and fail under the legislation that was in place— to provide the information required to demonstrate the validity of those tickets. “and all were arrested. There were no counterfeit tickets recovered or reported at Games venues”. Where ticket touting exists—by, frankly, ignoring I suggest to the Minister that such an endorsement government guidance—sport suffers from reputational by the Government, by the Department for Culture, damage. That has a negative effect both on sports fans Media and Sport, should be taken seriously. The DCMS, —the consumers—and on our chances to secure further through its endorsement of this legislation, logically international events on our shores, as the Olympic and opened the door to similar legislation for more sports Paralympic Games served to inspire a generation. than an Olympics or football, which is covered by All we are seeking is to make the guidance, which is separate legislation. Protection for fans could be extended good, legally binding. Those are the issues on which to all events recognised by the Government in receipt the noble Lord, Lord Pendry, and I have been campaigning of lottery or Treasury funding and support, or to for exactly 20 years—since 1994, when we were events clearly identified by the Government as critical considerably younger voices for sport. Mind you, we to the success of the “decade of British sport”, to were not without success at the outset, when we secured which the Prime Minister and indeed the Opposition an amendment tabled in your Lordships’ House in rightly attach priority. 1994 specifically with regard to football on the grounds However, our position today is nothing like as of public order consequences. draconian as the legislation that some people saw as I am sure that the Minister will support the relevant and successful for the Olympic and Paralympic amendments and the reasoning behind them that we Games. The proposal today is not to ban secondary have put to her today, but if by chance she were not to GC 153 Consumer Rights Bill[LORDS] Consumer Rights Bill GC 154

[LORD MOYNIHAN] probably achieve a great deal to make the situation do so, she might consider extending the legislation on slightly better. That is all we are asking for—to try to the statute book that allows the Home Secretary to make it slightly better and preserve what is important. take action on this front on a wider scale than just That is about all that we can hope for. As my noble within the sport of football. In the context of Lord friend Lord Moynihan has pointed out, we have tried Justice Taylor’s report, I would argue that ticket touting and succeeded with a more draconian system for an and lax controls are often the precursor to public event that was at the top of sporting demand, the order offences at sporting grounds. However, my noble Olympics, so surely having something here that at least friend has a better route to follow today: to accept the gave greater certainty could not hurt. amendments and let the noble Lord, Lord Pendry, and me have a second opportunity to celebrate successful Lord Stoneham of Droxford (LD): My Lords, I am moves to protect the interests of sports fans and the somewhat reluctant to go slightly against the tide in governing bodies that put on these events. the face of noble Lords who I greatly admire in the I see no reason why we should not build on experience sporting world speaking here today.I have great sympathy of the Games in Committee and, through consensus, with what my noble friends Lord Clement-Jones and avoid taking the amendments to a vote at Report or Lord Moynihan, the noble Lord, Lord Hendry, and Third Reading. In my experience in your Lordships’ my noble friend Lady Heyhoe Flint said about the war House, well thought through legislation on sport builds on ticket touts; I support that, and I support the all-party consensus and secures the support of the values in it. However, we have to ask a number of House. In sport, that has been in no small measure specific questions about these amendments and what due to the work of the noble Lord, Lord Stevenson, this legislation can actually do. who has been a consistent friend of sport, along with my noble friend in sport, the noble Lord, Lord Pendry, Most authorised resale ticket sites give guarantees the best Minister for Sport this country never had. on the validity of tickets or provide a value back if the Together with the work of the noble Lord, Lord Pannick, tickets are not valid. One of the issues is how we get the noble Baroness, Lady Grey-Thompson—who, people to use those sites more. We do not want to incidentally, is en route to this Committee from a upset any move away from them, which would be into speaking engagement in Cardiff, and offers her apologies the hands of people who are fraudulent and are trying if she does not make it—the indefatigable noble Lord, to break the system. Lord Addington, the forensic mindset of the noble The other thing that is very important is that the Lord, Lord Clement-Jones, and the assiduous work of public want the opportunity to resell and buy in the my noble friend Lady Heyhoe Flint, they provide a secondary market. This is particularly important when powerful cross-party voice in your Lordships’ House tickets are being sold a year ahead of the event. for sport. I hope that their agreement on this key issue Another problem is that often the tickets are not of how to protect the consumer, the sports fan, will be issued until six weeks or so before the event, so some carefully considered by the Minister. of the information that might be required in the resale market might not be available. Lord Addington (LD): My Lords, I was debating There is already considerable legislation against whether or not I should speak but, having been told fraud and against competition and there are issues of that I am expected to, I think that I probably have to. I restraint of trade, all of which need to be taken into should declare a couple of interests. Probably the most account. We also have to ask ourselves why this primary important one is that I am a lifelong rugby player. legislation is being asked to make specific requirements Even now at this advancing age I still occasionally don in one sector. Should it be doing that? Should we not a jersey and wander around the pitch—I would say have more embracing legislation that deals with this “run” but wandering is a bit closer to it now. issue? All the recognised operators have an interest in One of the first points made by the noble Lord, preventing fraud; that is what actually protects their Lord Stevenson, was that if you are generating income brand, as any fraud inevitably undermines their genuine from these major events, at least some of it—as much business. of it as possible—should go to the grass roots, and There is an issue with sellers providing information, many of the events that we are talking about do that. particularly individual consumers. I am not sure that I Then there was the other major point about the fact want my name going on a ticket that I might have had that by touting in this way you are devaluing the event if it has gone through a recognised secondary provider—in for the fan, the people who often actually make it a fact, I certainly would not want that. So the guarantee special event. To talk about Rugby Union, and I thank is the key, as is establishing that the tickets are valid. the RFU for once or twice giving me tickets, I would say that makes those games so special is the fans, so 7.15 pm you are actually damaging your base if you allow One of the things that the Government should these things to happen. These people do not go to an respond to in this debate, and I am sure they will, is the “event”; they are going to watch a sport and give some question of what they are going to do to deal with enthusiasm. That will be helped by this amendment; these automated computer programs, and what legislation you will help to build it up and layer it through. Please they are prepared to consider. That is probably a more pay attention to this. effective means of dealing with this problem than just The Government have been given—what shall we providing more information and putting a greater say?—a very moderate set of proposals. Any one of burden on those who are actually trying to work these amendments, or any combination of them, could through the authorised resale market. GC 155 Consumer Rights Bill[15 OCTOBER 2014] Consumer Rights Bill GC 156

Secondary markets provide an opportunity for fans the ticket. In fact, there are no fewer than 24 information to buy tickets, and we should recognise that there is requirements on that list covering all the information overwhelming public support for some form of resale that the consumer needs to make an informed decision. system. Markets move up and down, so secondary In guidance on the regulations, we have included a markets do not just deal with higher prices; they also specific paragraph on how the information requirements have to deal when the price has gone down. I have apply to tickets. I can quote directly from the guidance already asked whether this is an appropriate place to to reassure your Lordships that much of the information have specific legislation that deals with one sector that listed in the amendment is already required. The guidance is actually more complex than just asking for more states: information. “Information on the main characteristics of the tickets and On transparency, the recognised providers already their total price (including delivery costs and other charges) must provide the face value of the ticket and the location of be given to the consumer in a clear and comprehensible way the seat when it is known and available, as well as before the consumer purchases the ticket … For a ticket associated with a particular reserved seat (e.g. Seat 1, Row A) the seat information on any restrictions. If we start asking for number is a main characteristic”. more information, that might become disproportionate and it runs the risk of driving the fraudulent market The regulations build on existing consumer law. The overseas, which would be more difficult to control. Consumer Protection from Unfair Trading Regulations There are a number of issues that have to be taken into 2008 protect consumers from being misled into a account in considering this amendment before we can purchase by a trader. give it support. The noble Lord, Lord Clement-Jones, asked about the October regulations. They are the Consumer Baroness Neville-Rolfe: My Lords, we have heard a Protection (Amendment) Regulations 2014; is that range of detailed and informed comments during this right? debate and I thank all noble Lords for their contributions, to which I have listened very carefully; it was good to Lord Clement-Jones: I did, but before my noble have a variety of points made, and I am grateful to all friend moves on to that, I quoted from the guidance noble Lords who have spoken. I am also grateful to and pointed out that, effectively, this is voluntary. The the various sports, music and ticketing businesses that guidance states: have spent time briefing me and the Government on “Main characteristics include (if known to you)”. these issues. In fact I should probably declare an I directly quoted from the regulations, as well. My interest as a big sports fan and a mother of cricketers. noble friend has cited other parts of the guidance, but Given the breadth of this issue and the different that is the crucial part. angles that people are coming from, I will divide my response into the two main types of sales in this Baroness Neville-Rolfe: I thank the noble Lord for market: sales from a trader to a consumer, and sales that clarification. Perhaps I can continue to address between consumers. I will then touch on the issue in the trader side. Where a consumer is sold a ticket that Amendment 30 concerning refunds and compensation. is claimed to be on the front row, for example, which Before I do that, I shall briefly address the philosophical turns out to be on the back row, that would breach the question posed by the noble Lord, Lord Stevenson, of 2008 regulations. Advertising for sale a ticket that a whether a ticket—because it is either a goods item or trader is not in a position to sell because the ticket is an intangible legal right—is even capable of being sold either not available through the primary outlet yet or on or transferred. The answer is that it is possible for a because the trader is awaiting the outcome of a ballot ticket to be defined either way. However, I am advised would also be a breach of the regulations, as well as a that this is ultimately a matter for judicial consideration, potential Fraud Act offence. Criminal penalties reinforce so it is not appropriate to attempt a determination in the legislation. A trader or a marketplace can be this Bill, or indeed for the Government to state publicly subject to a fine or even imprisonment if these regulations how we think a court would or should determine that are breached. In conclusion, we believe that there is question. already sufficient law in place to ensure that consumers I turn to Amendments 26, 28 and 29 on business-to- have all the information they need about what they are consumer sales. I reassure the House that when traders buying before they buy from a trader. sell to consumers there are already rules in place to The noble Lord, Lord Stevenson, asked about botnets. ensure that consumers are aware who they are buying A range of offences is available to law enforcement to from and what they are buying. My noble friend Lord tackle the fraudulent sale of tickets and the criminal Clement-Jones said that the market was not subject to harvesting of tickets from online ticket sales. The the same rules on transparency as other sectors, but Computer Misuse Act 1990 sets out the framework of this is simply not the case. The ticketing market is subject offences associated with interfering with a computer, to consumer laws, including information requirements, including the criminal use of tools or articles to commit to the same extent as any other retail sector. a computer misuse offence, such as a botnet. It was The Consumer Contracts (Information, Cancellation good to hear from my noble friend Lord Borwick that and Additional Charges) Regulations 2013, to which he believes that we are on the way to solving the botnet my noble friend Lady Heyhoe Flint referred, set out problem. clearly in list form what information must be provided. The noble Lord, Lord Stevenson, also asserted that For distance and online sales, such as ticket sales, that there is evidence of large-scale criminal activity. We includes the price, the identity of the trader, contact disagree. Europe Economics found that 90% of sales details for the trader and the main characteristics of are by consumers such as you or me. There is already a GC 157 Consumer Rights Bill[LORDS] Consumer Rights Bill GC 158

[BARONESS NEVILLE-ROLFE] over 70% of consumers think that they should be able strong framework to deal with criminality, such as to resell their tickets. Not only is it the right thing to fraud and money-laundering laws, which the noble do to allow this market to operate, but that statistic Lord mentioned, that might take place in a market. also indicates that if we restricted the legitimate resale Additional legislation for ticket marketing would not market, consumers would find other ways to sell on address such criminal activity. Obviously it is important the black or grey markets. We also know that consumers to work with the police and other enforcement authorities, care about protecting their data and identity online. and we will review the data that the noble Lord asked The Communications Consumer Panel reports that for to see what up-to-date data we have. I will write to nearly two-thirds of social network users said that they him on that point. had a high level of concern about the use of information My noble friend Lady Heyhoe Flint said, “Will the from profiles by companies. In that same survey, the Minister look at the websites?”. I will, but the enforcement largest top-of-mind concern related to the safety of of the law is for the CMA and trading standards. We personal details or ID theft, with just over one-quarter have done some research. These sites already require of internet users spontaneously mentioning it. key information to be given. All these sites have money- Most consumers would not be comfortable having back guarantees. Most ticket transactions pass without their contact details prominently displayed on a website. problem—it is over 90%—so I think progress has been I am not sure I would like that—but I am sure I am not made there. the only one who already receives too much junk mail. My noble friend Lord Moynihan gave us a very Consumers want to sell online and to protect their personal interesting summary of his experience with the data. The current regulatory system allows that, while Olympics—that wonderful summer which we all enjoyed protecting consumers when they buy from traders. in the brilliant sunshine, and the success of the Games. Indeed, as he described, it was very successful in terms 7.30 pm of ticket sales, although of course there were some My noble friend Lady Heyhoe Flint also asked gaps in the audience, which was a sadness for consumers whether individuals selling a large number of tickets who would have liked to have been sitting in those to a trader did so as traders or as consumers. If an seats. A ticket resale regime was a condition for hosting individual is selling a significant number of tickets as a the Olympic Games. We brought that in and said at commercial enterprise—that is, to make profit—they the time that such cases have to be considered on a are highly likely to be classified as a trader under case-by-case basis. I do not think that my noble friend existing legislation. This will obviously turn on the was suggesting that this should be extended widely but circumstances of each case, but it is a key point. he was asking us to consider that issue. I will now comment on the provision of information. My noble friend Lord Moynihan also asserted that Legislation is already in place to ensure consumers get other countries had found a good way to regulate the information they need when buying from traders. ticket sales. Our finding is that the evidence is mixed. When consumers buy and sell with other consumers New South Wales has a draft Fair Trading Amendment they should, in contrast, be allowed to do so without (Ticket Reselling) Bill restricting ticket resales, and we burdensome regulation. That would be my summary do not yet know its impact. As we understand it, these on that point. new restrictions are not the same as those in one of the On the question of refunds and damages, my noble amendments under discussion today. We have also friends who have tabled Amendment 30 raise a valid seen press reports arguing that Queensland’s anti-scalping point: consumers who have been sold something which laws, as I think they call them, have had little effect. is not what it claimed to be should have access to However, obviously we will keep those under review. redress. However, the change proposed risks a perverse I have tried to talk about traders. I should now like impact on the market. For example, it would mean to turn to the subject of Amendments 26, 28 and 29, that consumers would have an incentive to use the which is consumer-to-consumer sales. We want consumers resale market, rather than the primary market, where to be active and empowered in the market as buyers the ticket price is rarely refunded, never mind the and sellers. It is a fact of life that sometimes consumers additional costs. Instead of going to the All England have a ticket that they cannot use. At this time of year Lawn Tennis Club for their tickets, they would go I might buy tickets for my husband, a son and myself straight to the secondary market. We do not want to for a classical concert in the Royal Parks next summer. influence consumers’ decisions in that way. We also If my husband is taken ill six months later and cannot need to consider how rogue traders might react: would attend, I need to resell the ticket. That means that I they just sell tickets that do not exist or are not what can get my money back and it gives other consumers they say they are, knowing that the marketplace would the chance to attend the sold-out event. We see no have to refund the consumer? Again, we do not want need to restrict this. Consumers should be able to to encourage that. freely and easily resell in this way tickets that they Let me reassure the House that consumers are cannot use; my noble friend Lord Borwick made this already protected, either in legislation or through voluntary point very well. The OFT has said that secondary industry measures. All four main online marketplaces agents can, have refund policies in place; where a ticket bought on “provide a useful function for consumers who need tickets for these sites turns out to be invalid they will refund or events and are willing and able to pay premium prices”. replace the ticket. Some make this easier for the consumer My noble friend Lady Heyhoe Flint asked about by not charging them until after the event. My noble the impact of her amendment and how to build on the friend Lord Stoneham spoke interestingly about the 2013 regulations. I shall try to answer. We know that role these sites now play in honest resale. In addition, GC 159 Consumer Rights Bill[15 OCTOBER 2014] Consumer Rights Bill GC 160 thanks to new legislation bought in by the Government, my noble friend has said that there is an issue about consumers now have a private right to seek redress— the information given about an ordinary seller who is including damages—if they are misled into a purchase. an ordinary consumer who has bought a ticket and I am pleased to reassure the Committee that industry wants to resell it, and the whole of their history is has already taken action. I am not convinced it would revealed for all to see on the secondary market. That is be appropriate to go further, certainly in the terms a perfectly valid objection and it may be a bridge too proposed in Amendment 30. far. But there are many other aspects of these amendments It was good to hear from the noble Lord, Lord which are extremely important. Pendry, in view of all that he has done for football. He My noble friend prayed in aid the regulations. The spoke about Section 166 of the Criminal Justice and fact is that they are there but they are not adequate. I Public Order Act 1994. That provision has not been am grateful to the noble Lord, Lord Moynihan, for extended to cover other sporting events as there is no using the word “forensic”. If you look at the impact of comparable public order threat. Incidents of violence these consumer regulations, you see that they are not and disorder are now very rare at sporting events sufficient to drive good behaviour, which is all that we other than football. The Home Office keeps this situation are talking about in these circumstances. The main under review through the UK football policing unit four resellers in the secondary market may well do and at European level. However, it is not appropriate what they can. They do not always publicise exactly to confuse public order legislation with the protection what the tickets relate to. There may be merit in of commercial interests or event integrity of the kind considering some sort of regulation where consumers that we are debating. do not have to pay for their tickets until the identity is I have spoken at length. It has been a very good known. It may be that you need a condition precedent: debate. As the noble Lords, Lord Stevenson and Lord for example, having made the reservation, the consumer Pendry, and my noble friend Lord Moynihan have all perhaps should not have pay until the seat number can said, this matter has a long history and lots of legislation be stated. It is perfectly possible to think of a situation already exists. As a result, there is already a significant where that would be a valid way of behaving. level of consumer protection in place, some of which I will chew over what my noble friend has said but is very recent, including voluntary action by the industry we have quite a bit more discussion to take place. itself. I will of course read Hansard carefully, but it Clearly, she recognises the strength of feeling in feels as though we have enough legislation. I would Committee. I think that this is a matter that we will ask that the amendment be withdrawn. take further during the course of the Bill.

Lord Clement-Jones: Before the noble Lord, Lord Lord Stevenson of Balmacara: My Lords, I share Stevenson, responds, I want to make just a couple of the disappointment that the noble Lord, Lord Clement- comments. I, of course, also will read Hansard carefully. Jones, expressed at the response to the debate. It was a I am somewhat disappointed because I am not sure very high-quality debate with some very important that the voices in the debate have been heard clearly. I and influential speakers with track records and experience. feel that somewhat of the straw man or Aunt Sally is It is not so much that their points were rebutted—that being erected here as if the proponents of these is what Governments do—but to have them rebutted amendments are trying to restrict the secondary market in such an inventive way seems to me to trivialise what and prevent resale. My noble friend Lord Stoneham is an important point. We need to think very hard talked about restraint of trade. I thought that that was about what the next steps in this should be. For quite extraordinary and that we were almost in the example, the Government do not seem to have a view realms of the EU or something. That is not the on my genuine question of what a ticket is, yet they are intention; nor is it the intention to drive people away regulating out of their ears—or that is what they say from the event organisers to the secondary market. I they are doing. To do so on the basis of not knowing do not believe that that would be the impact of what what the central point is seems to be specious in the we are talking about here; that is, to get the benefit of extreme. If they do not know what a ticket is, is it any a guarantee delivered by a secondary market in the wonder that the regulations do not do the trick? possible event that a ticket is invalid or fraudulent. It is absolutely clear from what has been said today Surely, when you buy it from the event organiser, you and from the evidence that we have received that the know that it jolly well is not fraudulent or invalid. I am current regulatory structure is a bit of a joke. It does not really sure about that argument. not do what it is required to do: to make an efficient I could say many other things. As to the whole market for those who are trying to sell tickets for notion of the secondary market being entrepreneurial, events they are running and for those who wish to if you know that a major sporting event is coming attend them in a genuine capacity. It is not catching all down the track, I do not know how entrepreneurial the activity that is going through. The Government you have to be to reckon that a ticket for the World say that it is designed for traders, but somehow consumers Cup is worth money and will be worth a great deal are in a different category. I do not think that distinction more money the nearer the time. I am sure that the stands up in what we are doing. noble Lord, Lord Borwick, is a great friend of The guidance that has been issued has been tried entrepreneurs but there is entrepreneurialism and and tested already and is clearly failing. It does not entrepreneurialism, in my view, in all of this. I think work. We need to do something about that. Under the that a little bit of a splendid smokescreen is being regulations that have been in force since June 2014, I erected around this issue. However, I take it from what have been told by several sports bodies that no tickets GC 161 Consumer Rights Bill[LORDS] Consumer Rights Bill GC 162

[LORD STEVENSON OF BALMACARA] but if they were arriving through some form of criminal that they can find on sale have the seat numbers or gang activity, that is not a very satisfactory situation. seller details provided. Are we to believe that no tickets As was made very clear in the debates, the amendments at all are being sold by these traders? I do not think so. taken together give a range of options for the Government Also, what exactly is a trader? During her response to look at. That is a rich opportunity for the Government the Minister seemed to imply that there would be a to come back with something sensible at later stages in case for arguing that people who bought tickets in the Bill. We are not saying that there is a particular excess of their personal demand could be treated as solution to this; there is a range of things that the traders. If that is the situation, why do we not say that Government could do. We are tending not to be in regulatory form so that it is clear? It is currently up draconian. We are not insisting on banning secondary to the seller to define whether they are a trader or a ticketing; we are trying to say that there is a gap here in consumer. In the example given by the noble Baroness, expectation. The genuine fan, the keen person who Lady Heyhoe Flint, the BA pilot who was caught wishes to go to an activity but cannot access tickets at selling several hundred Ashes tickets would definitely the beginning of the process and has to pay over the have been a trader by any definition yet was not odds for them, is not well served by the information prosecuted in that way. This is largely about consumer requirements. This simply is not working well. It could protection. Consumers are not going to be concerned be changed through very minor regulatory change. It about whether their ticket is coming from a trader or a should be in the Bill because it is clear that the consumer. They should have the right to know what secondary legislation is not working. I really cannot they are buying. That is the basis of all the consumer understand why the Government are happy to be discussions we have had on the Bill so far. It seems odd accused of standing by while consumers are being to carve this out in a different way. exploited. We will undoubtedly return to this. I hope that I take the view that, if the Government are not between now and when this matter comes back on going to outlaw secondary ticketing—I do not think Report there may be an opportunity to have a further, they should—they must regulate properly for what more in depth discussion with the Minister where we they want: the desirable things, the things that will might get further down the line on this. In the interim, help the sports and help consumers. That will help to I beg leave to withdraw my amendment. create a proper and open arrangement that is not susceptible to criminal activity of the type that we Amendment 26 withdrawn. heard about from the noble Lord, Lord Moynihan, but which seemed to be rebutted by the Minister when Amendments 27 to 31 not moved. she responded. The noble Lord, Lord Moynihan, said that there were about 1,000 people involved in criminal Baroness Neville-Rolfe: My Lords, this may be a activity from known facts as a result of the Government’s convenient moment for the Committee to adjourn. investigations into the Olympic and Paralympic Games. What exactly is she saying if she says that some The Deputy Chairman of Committees (Baroness economists say that there is not any criminal activity Pitkeathley) (Lab): The Committee stands adjourned. because it was consumers who were buying the tickets? Of course it was consumers who were buying them, Committee adjourned at 7.45 pm. WS 33 Written Statements[15 OCTOBER 2014] Written Statements WS 34

integrate RPAS into European airspace but Member Written Statements States stressed the need for a gradual approach which ensured the primacy of safety and sufficient time for Wednesday 15 October 2014 the development of associated technologies. I strongly pressed that any future regulatory proposals should avoid stifling innovation and provide a framework EU: Transport Council proportionate to the risk. Latvia stated that it was Statement keen to progress political discussions on RPAS during its Presidency and would host an event in Riga in March 2015. The Minister of State, Department for Transport (Baroness Kramer) (LD): My Honourable Friend, the On the Single European Sky II+ Progress Report, Parliamentary Under Secretary of State for Transport the Presidency reported that good progress was being (Robert Goodwill) has made the following Ministerial made on this challenging file and invited Ministers to Statement: a policy discussion on the Single European Sky in I attended the first Transport Council under the Romeon6-7November 2014, with a view to reaching Italian Presidency in Luxembourg on Wednesday General Approach at the December Transport Council. 8 October. The Presidency presented its paper on elections to The Council adopted a General Approach on the the International Civil Aviation Organisation (ICAO) Ports Services Regulation. Following intense negotiations Council. I urged EU Member States to support the with other Member States and the Commission the on-going consensus-seeking process among the pan- UK secured an important competitive market exemption European 44 states of the European Civil Aviation clause, ensuring that, where effective competition Conference (ECAC) to decide this matter. The Council demonstrably exists, this Regulation would not impose took note. additional unnecessary burdens on ports. In the main, The Netherlands spoke movingly on aviation safety ports in the UK fit this criterion. and the follow up to the crash of Malaysian Airlines Despite concerns from some Member States that Flight MH17, and informed Council on the preliminary the proposed Regulation does not go far enough, findings of the investigation by Dutch Safety Board particularly with regards to scope and financial with expert support from the UK, Ukraine, the USA, transparency, all Member States voted in favour of the Malaysia and Netherlands. The interim report concluded proposal apart from Lithuania, who voted against, that the aircraft had been penetrated from the exterior and the UK, who abstained. Looking ahead to their by a number of high energy objects which led to a loss upcoming Presidency Latvia indicated that they would of structural integrity and the break-up of the aircraft. look to sustain momentum on this dossier. The investigation was expected to issue its final report The Council also reached a General Approach on by July 2015. A concurrent criminal investigation had the revised Directive on the cross-border exchange of been launched. The Netherlands asked Member States information on traffic offences. I fully supported the to contribute to the ongoing ICAO taskforce which road safety objectives of the proposal but simultaneously aimed to review procedures for civil flights over conflict expressed concerns that we had not been given enough zones with a view to better exchange of information. time to analyse the detail and reserved the right to The Commission added that its External Action Service examine whether future proposals in this area contained would be working with EU Member States to determine Justice and Home Affairs content. As a result I formally a mechanism for information sharing with EU airlines. tabled a joint minute statement with Ireland setting I expressed our sincere sympathy and solidarity with out these concerns and abstained. the Netherlands and stated that we would continue our active engagement in the ICAO taskforce. In the Council’s first discussion on the Fourth Railway Package market pillar, I strongly endorsed In a wide range of Any Other Business, the Presidency proposals to liberalise the domestic rail passenger summarised the outcome of the Informal Transport market. I emphasised that the effects of competition Council held in Milan on 16 – 17 September, which in the UK over the last twenty years had delivered a had focussed on the Trans-European Transport Network thriving rail industry. Some Member States supported (TEN-T). The discussions on planning, governance market opening in principle but the Council was clearly and financing of infrastructure would feed into the divided with many favouring investment over market mid-term review of the Europe 2020 Strategy. In his opening as a more effective means of securing rail’s last Transport Council, Vice-President Kallas reflected future. The Commission emphasised that investment that he was proud of his achievements in re-shaping alone was not the solution to combating rail’s declining TEN-T and urged Council to ensure transport secured competitiveness and loss of modal share and that an appropriate share of President Juncker’s recently the market pillar was an essential complement to the announced ¤300 billion investment programme. technical pillar to deliver rail’s full potential. The Poland presented an information paper on the situation Presidency agreed it was inconceivable to consider of road hauliers in the context of the Russian import the Fourth Railway Package without the market pillar ban on certain EU products, calling upon Member and restated its ambition to reach General Approach States and the Commission to help mitigate the effects at the December Transport Council. of the Russian import ban on the road haulage sector. The Council went on to discuss the opening of the Three Member States echoed these concerns and called market to the civil use of Remotely Piloted Aircraft for measures to be taken at an EU level. The Commission Systems (RPAS). There was unanimous support to expressed sympathy with those Member States but WS 35 Written Statements[LORDS] Written Statements WS 36 underlined the importance of the wider political context A copy of the evidence will be placed in the Libraries and stated that it was not planning to amend legislation of both Houses and will be available from the BIS at this stage. website at www.bis.gov.uk. Finally, the Commission updated the Council on the recent Galileo satellites incident, indicating that the most likely cause was a mechanical fault and a full Police: Taser Statistics report was due by the end of October. The launch Statement planned for December would be postponed until the root cause was established and corrected. This was likely to be within the first half of 2015. The Parliamentary Under-Secretary of State, Home Office (Lord Bates) (Con): My hon Friend the Minister of State for Policing and Criminal Justice (Mike Penning) National Minimum Wage has today made the following Written Ministerial Statement Statement: I am today publishing the statistics on police use of The Parliamentary Under-Secretary of State, Department Taser in England and Wales for the six month period for Business, Innovation and Skills (Baroness Neville-Rolfe) between 1 January and 30 June 2014. These show that: (Con): My hon Friend the Parliamentary Under Secretary • The total number of times Taser was used by the of State for Employment Relations and Consumer police in this period is 5,107. Affairs (Jo Swinson) has today made the following • Non-discharges account for 81% of the Taser use. statement. • The most common use of Taser in this period was I am pleased to announce that the Government has ‘red dot’, which accounted for 52% of overall use. written to the Low Pay Commission setting out what • The percentage for ‘drive stun’ and ‘angle drive we would like the Commission to consider on the stun’ accounted for 3% of overall use. National Minimum Wage. The document contains the Government’s interim evidence on economic and non- • The percentage for ‘fired’ accounted for 16% of economic issues, including the minimum wage rates, overall use. the youth labour market and apprenticeships. An updated Full details are available from https://www.gov.uk/ version of the evidence will be published later when government/statistics/police-use-of-taser-statistics- the latest information on earnings and economic forecasts england-and-wales-january-to-june-2014 and a copy will be included. will be placed in the House Library. WA 41 Written Answers[15 OCTOBER 2014] Written Answers WA 42

The Parliamentary Under-Secretary of State, Ministry Written Answers of Defence (Lord Astor of Hever) (Con): There are Wednesday 15 October 2014 currently 32 personnel deployed overseas in Maritime Patrol Aircraft roles under the Seedcorn initiative with a further seven on traditional exchange programmes. Iraq 115 personnel are currently operating in other flying Questions roles in the UK. Asked by Lord West of Spithead To ask Her Majesty’s Government whether Iraqi naval officers are still being trained at Britannia Probation Royal Naval College, Dartmouth; and how many Question have trained there to date. [HL1952] Asked by Lord Beecham The Parliamentary Under-Secretary of State, Ministry To ask Her Majesty’s Government how many of Defence (Lord Astor of Hever) (Con): Iraqi naval contracts they have entered into on the same or officers continue to be trained at Britannia Royal similar basis as the proposed contracts with private Naval College. Records indicate that 36 individuals sector providers of the probation service, containing have received training there over the last 10 years. penal clauses requiring 100 per cent compensation Asked by Lord West of Spithead in the event of cancellation. [HL1888] To ask Her Majesty’s Government when the Royal Navy ceased mentoring the Iraqi navy at Umm Qasr; and for how many years they undertook The Minister of State, Ministry of Justice (Lord that role. [HL1953] Faulks) (Con): In this instance to provide you with the information you ask would exceed the disproportionate cost threshold. Individual contract managers would Lord Astor of Hever: The UK-Iraq Training and need to search through hundreds of contract files to Maritime Support Agreement entered into force on confirm whether the clauses in each one of their 22 November 2009, it came to an end on 22 May 2011. contracts are on the same or a similar basis to the clauses within the draft Transforming Rehabilitation Mediterranean Sea contracts. Question I can however tell you that voluntary termination is a standard clause in government contracts which is Asked by Lord Hylton designed to provide flexibility for government while To ask Her Majesty’s Government what naval or maintaining the balance of value for money for the tax air-sea rescue contribution they will make to prevent payer. refugees and migrants drowning in the Mediterranean. Voluntary termination compensation would only [HL1977] be payable to the contractor if a contract is terminated through no fault of the contractor. The Minister of State, Foreign and Commonwealth Office (Baroness Anelay of St Johns) (Con): We do not support planned search and rescue operations in the Mediterranean. We believe that they create an unintended Railways: Electrification “pull factor”, encouraging more migrants to attempt Question the dangerous sea crossing and thereby leading to more tragic and unnecessary deaths. The Government Asked by Lord Berkeley believes the most effective way to prevent refugees and To ask Her Majesty’s Government, further migrants attempting this dangerous crossing is to focus to the Written Answers by Baroness Kramer on our attention on countries of origin and transit, as 15 September (HL1794 and HL1795), since 1 June well as taking steps to fight the people smugglers who 2014 how many meetings have been held between wilfully put lives at risk by packing migrants into (1) the Department for Transport and Network unseaworthy boats. Rail, and (2) the Department for Transport and the Office of Rail Regulation, to discuss the costs of Military Aircraft the electrification schemes. [HL1880] Question Asked by Lord West of Spithead The Minister of State, Department for Transport To ask Her Majesty’s Government, further to (Baroness Kramer) (LD): The Department attends a the Written Answer by Lord Astor of Hever on number of meetings with both Network Rail and the 26 September (HL1820), how many ex-Nimrod Office of Rail Regulation across various levels with a aircrews are still serving in maritime patrol aircraft broad agenda. These include costs, deliverability, appointments worldwide; and how many are flying construction synergies and scope of works. Electrification in other roles in the United Kingdom. [HL1950] schemes and related issues are often discussed. WA 43 Written Answers[LORDS] Written Answers WA 44

Welfare Assistance Schemes 2015/16. The Department for Work and Pensions are Questions carrying out a review into how the funds in 2013/14 have been used. I refer the noble Lady to the comments Asked by Lord Bassam of Brighton of my noble Friend the Lord De Mauley of 25 January 2012 during the debate on the Welfare Reform Act To ask Her Majesty’s Government what assessment 2012. He said, they have made of the impact on local authorities, “Following the introduction of localised assistance, the department families, charities and vulnerable individuals of ending has already made plans to conduct a review in 2014-15 to obtain local welfare assistance in April 2015. [HL1834] appropriate information from a representative cross-section of at To ask Her Majesty’s Government what measures least 50 local authorities, which represents one-third of the total, in order to help inform future funding levels. We have committed they are taking to help local authorities to continue to using this opportunity to gather further information about the to offer discretionary support schemes following way in which local authorities have used the funding.” the decision to end local welfare assistance.[HL1835] To ask Her Majesty’s Government whether they plan to reconsider the date by which local welfare West Africa assistance is due to end in the light of the delays to Question the roll-out of Universal Credit. [HL1836] Asked by Baroness Kinnock of Holyhead

The Parliamentary Under-Secretary of State, Department To ask Her Majesty’s Government whether they for Communities and Local Government (Lord Ahmad have made an assessment of the economic effects of of Wimbledon) (Con): This issue is under review, I refer the Ebola outbreak on Sierra Leone and Liberia. the noble Lord to the attached consultation paper on [HL1969] local welfare provision published by HM Government on 10 October 2014. I have placed a copy in the The Minister of State, Foreign and Commonwealth Library of the House. Office (Baroness Anelay of St Johns) (Con): The Ebola Asked by Baroness King of Bow outbreak has significantly affected the agriculture, tourism and services sectors of the Sierra Leonean To ask Her Majesty’s Government what are the and Liberian economies. Mining has also been affected, terms of reference of the review into the impact of though to a lesser extent. As a result, the World Bank the abolition of funding for local welfare assistance has reduced growth forecasts in Sierra Leone and schemes. [HL1906] Liberia by 3.3 percentage points (pp) and 3.4pp respectively. Reports also indicate rising inflation. Lord Ahmad of Wimbledon: There has been no If the virus is not contained, productivity in Sierra abolition of funding for local welfare schemes. From Leone and Liberia will soon start to suffer a longer 2015/16 there was going to be no specific grant but we term decline likely to see decreases in foreign direct are looking again at how the funding is provided in investment as planned investments are deferred. Wednesday 15 October 2014

ALPHABETICAL INDEX TO WRITTEN STATEMENTS

Col. No. Col. No. EU: Transport Council ...... 33 Police: Taser Statistics...... 36 National Minimum Wage ...... 35

Wednesday 15 October 2014

ALPHABETICAL INDEX TO WRITTEN ANSWERS

Col. No. Col. No. Iraq...... 41 Probation...... 42 Railways: Electrification ...... 42 Mediterranean Sea...... 41 Welfare Assistance Schemes...... 43 Military Aircraft...... 41 West Africa...... 44 NUMERICAL INDEX TO WRITTEN ANSWERS

Col. No. Col. No. [HL1834] ...... 43 [HL1906] ...... 43

[HL1835] ...... 43 [HL1950] ...... 41 [HL1952] ...... 41 [HL1836] ...... 43 [HL1953] ...... 41 [HL1880] ...... 42 [HL1969] ...... 44 [HL1888] ...... 42 [HL1977] ...... 41 Volume 756 Wednesday No. 39 15 October 2014

CONTENTS

Wednesday 15 October 2014 Introduction: Lord Farmer...... 189 Questions Health: Ebola ...... 189 Schools: Class Sizes ...... 191 ISIS ...... 194 Palestine: Recognition ...... 196 Wales Bill Committee (2nd Day)...... 198 Energy: Onshore Wind Farming Question for Short Debate ...... 252 Wales Bill Committee (2nd Day) (Continued) ...... 268 Grand Committee Consumer Rights Bill Committee (2nd Day) ...... GC 99 Written Statements...... WS 33 Written Answers...... WA 4 1