Vol. 729 Tuesday No. 177 5 July 2011

PARLIAMENTARY DEBATES (HANSARD) HOUSE OF LORDS OFFICIAL REPORT

ORDER OF BUSINESS

Questions Diplomatic Missions: Unpaid Congestion Charges and Parking Fines Manufacturing: Investment Growth Forecast Audiovisual Media Services Directive Sudan: Framework Agreement Phone Hacking Private Notice Question Marine Navigation Bill [HL] First Reading Fourteen Statutory Instruments Motions to Refer to Grand Committee Localism Bill Committee (5th Day) Corporate Governance and Accountability Question for Short Debate Localism Bill Committee (5th Day) (Continued)

Grand Committee Eleven Statutory Instruments Debated

Written Statements Written Answers For column numbers see back page

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Earl Attlee: My Lords, I have had a brush with House of Lords Transport for London over the congestion charge and, unfortunately, I found it to be deadly efficient. Tuesday, 5 July 2011.

2.30 pm Lord Berkeley: My Lords, can the noble Earl tell the House whether the President of the United States and his very long and low-slung car—which went Prayers—read by the Lord Bishop of Derby. aground in Dublin, we are told—and his retinue of 40 other cars paid the congestion charge when they Diplomatic Missions: Unpaid Congestion came to London last month? Charges and Parking Fines Question Earl Attlee: My Lords, I expect that they probably claimed diplomatic immunity. 2.36 pm Asked by Lord Faulkner of Worcester Baroness Doocey: My Lords, I declare an interest as a Member of the London Assembly. Does the Minister To ask Her Majesty’s Government what steps agree that the abolition of the western extension zone they are taking to recover unpaid congestion charges gives the Government a new opportunity to renegotiate and parking fines incurred by diplomatic missions. this long-running saga?

Earl Attlee: My Lords, two-thirds of all foreign Earl Attlee: My Lords, the situation is simple: we missions pay the London congestion charge, but as believe that the Government of the United States diplomatic missions are immune from prosecution in should pay these congestion charges and parking fines UK courts, there is no legal course of action which as they occur. It does not really matter how far out the Her Majesty’s Government or local authorities can congestion charge zone goes, these fines and charges take to enforce payment of the congestion charge or are due. parking fines. The Foreign and Commonwealth Office, Transport for London and other local authorities Lord Davies of Oldham: My Lords, the Minister is continue to press non-paying diplomatic missions to right: sagas last a long time, and so has this particular pay the clearly outstanding congestion charges and abuse—for it is an abuse of our hospitality when parking fines. charges are not paid by foreign embassies. Why does the Minister not talk to his Foreign Office colleagues Lord Faulkner of Worcester: I thank the Minister and suggest that Foreign Office staff from this country very much for that Answer—disappointing though it working overseas will not pay any charges until we is, I am afraid. Does he agree that this is an absurd reach the sum that is owed to us by those delegations situation which cannot go on indefinitely? The total in that refuse to pay legitimate charges? unpaid congestion charge penalties rose from £36 million at the start of last year to £52 million by the end of April. Is not the answer perhaps for the Prime Minister Earl Attlee: The noble Lord will recognise that or the Foreign Secretary to sit down quietly with the diplomacy is a very delicate matter and that such a American ambassador—who owes £5 million of those course of action would be extremely ill advised. fines to the people of London—and explain to him that this is not a tax: it is a legitimate charge for Lord Glentoran: Will the Minister say what success services rendered under Article 34 of the Vienna the previous Government had with this problem, which Convention on Diplomatic Relations? If the American has been going on for many years? ambassador were to do it, I am sure that the others would follow. Earl Attlee: My Lords, I would like to keep this non-partisan. All Governments put pressure on the Earl Attlee: My Lords, the noble Lord suggests that Government of the United States and other countries. this situation could go on indefinitely. My noble friend I am pleased to say that we have had some success with Lord King, who briefed me, told me that he had to Kazakhstan, which has managed to regularise its overdue deal with this issue during his time in office, so it is a parking fines. long-running problem. On the noble Lord’s second question, I understand that the mayor has had a chat with the President of the United States, but he still did Lord Pearson of Rannoch: My Lords, have the not get very far. Government made a study of how the United Kingdom pays similar fines in other jurisdictions? Do we obey their rules: is it only they who do not obey ours? How Lord Trefgarne: My Lords, will my noble friend do we stand elsewhere? forgive me if I rain on his parade? Is he aware that the collection of congestion charges by Transport for London is a pretty haphazard affair? Some of us have had the Earl Attlee: My Lords, the noble Lord makes an misfortune, and on at least two occasions, of an allegation extremely important point. Our diplomats are very that we had not paid when we had. careful to pay all outstanding charges when they are 119 Diplomatic Missions[LORDS] Investment Growth Forecast 120

[EARL ATTLEE] in the rate of corporation tax and strong growth in overseas. We discourage any parking offences and in profitability. The findings of independent surveys by the United States our diplomats pay toll charges, the CBI and the manufacturers’ organisation, the EEF, which are equivalent to our congestion charge. also suggest that manufacturing investment will increase in 2011. Lord Tebbit: My Lords— Lord Sheldon: My Lords, I thank the noble Baroness Lord Avebury: My Lords— for that reply. On 28 April the Prime Minister said that there had been an increase in manufacturing output Lord Strathclyde: My Lords, my sense is that the and exports in the previous 12 months, but on 25 May House would like to hear from my noble friend Lord the EEF, the manufacturers’ organisation, commented Tebbit and then from my noble friend Lord Avebury. that although there was export growth, manufacturing investment was down. This was confirmed in June by Lord Tebbit: My Lords, could we not experiment the Project Management Institute. How does the noble with wheel clamping the CD-plated cars of particular Baroness consider these matters? embassies? That might have a good effect—and while we are about it, we could try wheel clamping one or Baroness Wilcox: There is no doubt that we have two Lib Dem Members of this House. gone through a soft period in the last three months. However, the latest surveys from the CBI and the EEF Earl Attlee: My Lords, I am sure that my noble suggest that output will grow overall in the second friend knows the details of the Vienna Convention on quarter of 2011, with manufacturers expecting growth Diplomatic Relations, under which diplomatic cars to continue well into the third quarter. are inviolable. Therefore, we cannot clamp them. Lord Razzall: My Lords, in the light of her Answer Lord Avebury: My Lords, perhaps I may make a and indeed the Question put by the noble Lord, Lord helpful suggestion. The Government should seek statutory Sheldon, might this not be a moment for the Minister power to tow away any vehicle that has been the to endorse the Statement last week by her colleague subject of several previous parking fines that remain the Business Secretary that Britain’s economy must unpaid. undergo a cultural revolution to prevent manufacturing losing so many school leavers and high-flying graduates Earl Attlee: My Lords, I repeat the point that I just to the City? What steps are she and her department made. Diplomatic cars are inviolable. The other problem prepared to take to promote the See Inside Manufacturing is that we could get into a tit-for-tat situation with our programme, in which young people visit schools to diplomats overseas. I suggest that that would not be a encourage others to train as career engineers, thereby sensible course of action. It would be much better to helping our exports and manufacturing? continue to apply the pressure that we do. Baroness Wilcox: The Government are well aware— Lord Pearson of Rannoch: My Lords, how does the certainly my boss, the Secretary of State, is well aware— noble Lord equate his last answer with his answer to that advanced manufacturing is what will take our me in which he said that we obey the rules overseas? country forward in the future. Investment in technology, How could there be any tit for tat? investment in skills and investment in the very thing that my noble friend has just mentioned are what will Earl Attlee: My Lords, my replies are not inconsistent. take us forward.

Lord Peston: I do not know where the Minister gets Manufacturing: Investment Growth her figures from, but the Office for National Statistics, Forecast in its latest published figures on business investment, Question tells us that business investment fell in the first quarter of this year; so I would like to know who she is 2.43 pm quoting as superior to the Office for National Statistics. However, is not the main question about the level of Asked by Lord Sheldon manufacturing output? Is the Minister aware that To ask Her Majesty’s Government what is their virtually everybody who is looking at the forecasts, for forecast for the growth of manufacturing investment both the British and the global economy, now expects in the current year. us to start going through a period of a fall in the expansion of manufacturing output locally and globally? The Parliamentary Under-Secretary of State, Is that not a matter that the Government ought to be Department for Business, Innovation and Skills (Baroness taking rather seriously? Wilcox): My Lords, the Government do not make forecasts of growth in manufacturing investment Baroness Wilcox: We are predicting growth—not specifically.However, the Office for Budget Responsibility very exciting, but we are. We must always remember has forecast total annual business investment growth that over the past 30 years manufacturing has declined of 6.7 per cent in 2011. This forecast is underpinned as a share of the economy; as a sector it has grown and by an extended period of low interest rates, reductions continues to grow. 121 Investment Growth Forecast[5 JULY 2011] Audiovisual Media Services Directive 122

The Lord Bishop of Derby: My Lords, I hope you Lord Young of Norwood Green: My Lords, it was will allow the Bishop of Derby to ask the Minister more than a shock for Bombardier employees who about Bombardier in the context of the very important have lost their jobs. Even more worrying, perhaps, is commitment to manufacturing investment. Could the its ability to bid for future contracts, such as Crossrail. Minister indicate to us where the design and making The point I want to emphasise is that British of trains fit into a strategy within which we have to manufacturers are failing to capitalise fully on the invest in manufacturing; and what investment in weak value of the pound as factory growth lags behind manufacturing in that strategy would have to say to a continental nations led by Germany. The purchasing highly skilled workforce in a place like Derby that it is managers’ index of UK factory output fell to 51.3 per facing collapse through lack of investment and lack of cent last month, just above the 50 per cent— opportunity? A noble Lord: Reading! Baroness Wilcox: There are a lot of questions from the right reverend Prelate. I will answer as many as I Lord Young of Norwood Green: I will be—that can, or as many as my Leader will allow me to. We all marks the divide between expansion and contraction. know about the announcement that Bombardier made That is the lowest reading since September 2009. What this morning that 1,200 jobs would be lost at the plant steps are the Government going to take to ensure that in Derby. The company had already told us that this British manufacturing is able to respond to an environment was going to happen regardless of whether it had won where the value of sterling should enable it to have a the Thameslink contract. As we know, this particular competitive advantage? industry is very volatile. The company has had enormous contracts, it is coming to the end of them and it did predict that it would lose jobs. As a volatile industry, it Baroness Wilcox: We are having a competitive has to hire and fire at will, but we hope that it is a advantage in countries such as China and India, where temporary situation. We are doing everything that we we are growing. That is very important to us. Competing can to try and help it grow. We are introducing 21 new with our European colleagues is one thing, but taking enterprise zones across the local enterprise partnership new business abroad from the BRICs is even more areas, which will benefit from superfast broadband, important to our country at this time. lower taxes and lower levels of regulation and planning controls. At the end of the day, it is very important for us to support our industry wherever we can. Audiovisual Media Services Directive Question Lord Hughes of Woodside: My Lords, did the Minister not hear on the one o’clock news today the chairman 2.52 pm of the Derby company, I believe, who gave no indication Asked by Lord Clement-Jones that it was going to have troubles anyway, and who claimed that the reason for Siemens getting the contract To ask Her Majesty’s Government whether they was that the Germans actually support Siemens through intend to review the operation of the Association subsidies? If we have to have competition in the European for Television on Demand in the regulation of Community, why can we not have it on a level playing video on demand under the Audiovisual Media field? Services Directive.

Baroness Wilcox: There is no doubt that it is always Baroness Rawlings: The AVMS—audiovisual media a shock when we do not get a contract like this. Today, services—directive has been implemented by way of the Transport Secretary and the Business Secretary co-regulation under which Ofcom has given the day-to-day have written to the Prime Minister underlining the responsibility to the Authority for Television on Demand, need to examine the wider issue of whether the UK is which to simplify I will refer to as ATVOD in future. It making best use of the application of the EU procurement is for those two bodies to make certain that the system rules. I think this House will be very glad to hear that. works. Ofcom plans to review this after March 2012. Ministers are aware of the range of concerns that have been discussed with Ofcom, ATVOD and the industry. Lord Vinson: Does the Minister agree that for the first time for many years the pound is close to parity level, which helps make our industry, at last, much Lord Clement-Jones: My Lords, I thank my noble more competitive internationally? Would she like to friend for that reply, which is reassuring because surely suggest to the Treasury that, in future instead of ATVOD is everything an industry-based co-regulatory having just an interest rate policy or an inflation scheme should not be: expensive, too wide in scope, policy, we should also have a rate of exchange policy far from light touch and, indeed, already giving rise to that might help us to support our industry over many litigation. I am delighted to hear that the DCMS will more decades in the future? be making sure that ATVOD is fit for purpose.

Baroness Wilcox: My noble friend makes a very Baroness Rawlings: My noble friend Lord Clement- important and interesting point, and I shall take it Jones makes a very good point. Our regulations specifically back. require that the fees be justifiable and proportionate in 123 Audiovisual Media Services Directive[LORDS] Sudan: Framework Agreement 124

[BARONESS RAWLINGS] services is hugely complicated? As the recent report respect of each provider. We are aware that the regulations of the Communications Committee pointed out and will inevitably have a cost, but we look to the regulators recommended, it would be to everyone’s advantage, to make certain that that cost is minimised. not least of all the public’s, if it became a bit simpler.

Baroness Gardner of Parkes: ATVODisavery Baroness Rawlings: I totally agree with my noble difficult name that we are all trying to come to terms friend that it is hugely complicated, and it has taken with, but is it a fact that a number of companies have me a great deal of time to get to grips with it, but we refused to pay the first full-year contribution? recognise that there may have been some initial problems with the regulation in the area, which is why we have Baroness Rawlings: My noble friend Lady Gardner looked to ATVOD and Ofcom to resolve these issues. is absolutely right. Some have not paid, but this is being looked at and is why Ofcom is going to be the backstop to follow these points through. Sudan: Framework Agreement Question Baroness Jones of Whitchurch: Will the Minister explain exactly what backstop powers Ofcom has retained 2.57 pm in order to intervene if it feels that ATVOD is not Asked by Lord Alton of Liverpool carrying out its functions properly? Does she agree with the original point made by the noble Lord, Lord To ask Her Majesty’s Government, in advance of Clement-Jones, that it has exceeded and expanded its Southern Sudan’s independence on 9 July, what is role way beyond that which was designated in the their assessment of the likely impact of the Framework original directive and that it needs to focus much more Agreement signed at Addis Ababa on 28 June on carefully just on raising standards in the video-on-demand securing peace and security in the region. industry? The Minister of State, Foreign and Commonwealth Baroness Rawlings: My Lords, this has been gone Office (Lord Howell of Guildford): My Lords, we fully through because of public consultation, and the actual support the ongoing discussions in Addis Ababa led responsibilities delegated to ATVOD include setting by President Mbeki. We assess that for it to secure and collecting the fees from the VOD service providers peace and security in the region, the framework agreement to meet the estimated costs of carrying out ATVOD must be used by both sides as a basis for the immediate functions. ATVOD’s power to set and collect fees is cessation of hostilities. subject to Ofcom’s prior written approval. We continue to urge north and south to negotiate to resolve all outstanding comprehensive peace agreement Baroness Benjamin: My Lords, in a recent survey, issues. 20 per cent of eight year-olds said that they had seen nudity online. Is my noble friend the Minister aware that on the most popular websites, children are exposed Lord Alton of Liverpool: My Lords, I thank the to advertising of an adult nature and are invited to Minister for his reply. Does he accept that for any of explore links to very explicit websites? If so, will the us who travelled in Southern Sudan during the war Government consider encouraging Ofcom to take further there, when some 2 million people died and 4 million measures to protect children and young people from others were displaced, any celebration of Southern being targeted in this way by putting in place simple Sudan’s landmark independence this coming weekend practical steps so that online media owners can take is tempered by these terrible atrocities which have been action to prevent clear-cut examples of inappropriate committed in recent days on the basis of ethnicity and content appearing in places where children are likely political affiliation, and by the dire failure of the to see them? ceasefire to stop the violence or displacements? As the comprehensive peace agreement expires this Baroness Rawlings: My noble friend Lady Benjamin weekend, and given the United Kingdom’s role as makes a very valid point, and it is necessary for the guarantor and as one of the brokers of that agreement, Government to encourage simple steps to be taken. will the Minister say whether we have raised, in the The Government believe that protecting children from UN Security Council, the importance of sustaining, harmful content in our media is of the greatest importance. rather than withdrawing, a continuing UN peacekeeping That is why, following the implementation of the presence in the area, and the importance of a robust audiovisual media services directive, providers of certain Chapter 6 mandate? Will the Minister also comment video on-demand services will now be required to on the bleak warning given by the most reverend comply with minimum standards set under the directive. Primate the Archbishop of Canterbury last weekend In 2010 these requirements were incorporated into that he could see another Darfur beginning to unfold UK law. They include the use of effective access in southern Kordofan, Abyei, and the areas to which controls. I have alluded?

Lord Inglewood: Does my noble friend agree that Lord Howell of Guildford: Naturally, on the last the whole system for the regulation of video on demand point, we hope that this warning, which no doubt is and other digital television-type and actual television justified by the long history of atrocities, is not fulfilled. 125 Sudan: Framework Agreement[5 JULY 2011] Sudan: Framework Agreement 126

As to the noble Lord’s question on the comprehensive and need better co-ordination. However, it is very peace agreement, in theory it ends on 9 July with the hard to see beyond the present pattern of continuing independence of Southern Sudan, but it has been an ugly conflict. As soon as we can see beyond it, these recognised that key issues are yet to be resolved and post-conflict arrangements should be put in place. For must be talked about. the moment, I can only say that these are the right As for our role with the United Nations, the UN ideas. We are moving towards them but there are some Security Council, as the noble Lord knows, has extended ugly, immediate problems that have got to be overcome the remit of UNMIS until 9 July and has signalled in order for peace to break out and for these very poor that it wants the remit to continue beyond then despite countries to begin to move on the long-term pattern to the continued strong opposition of Khartoum, which development with suitably arranged financial funding says that UNMIS must remove itself. As well as that, behind them. the United Nations Security Council Resolution 1990 empowers the Ethiopians to move into Abyei. They The Lord Bishop of Wakefield: My Lords, does the are on their way, although they have not yet arrived. Minister agree that the efforts made by the former Those are the activities of the United Nations and we South African President, Thabo Mbeki, in brokering continue to play a full and central part in them. the framework agreement demonstrate the viability and stability of both states of the Sudan, will to a Lord Chidgey: Is my noble friend aware that the large extent remain dependent on the continued support chair of the Sudan Disarmament Immobilisation and and assistance of the international community in helping Reintegration Committee has estimated that with the both sides to resolve the outstanding issues? In the current level of resources, when the conflict ends it light of the report of the European Union Committee will take at least six years to assimilate 150,000 surplus of this House, what steps are Her Majesty’s Government soldiers back into civilian life? What assistance do the taking with their European partners to hold the Khartoum Government plan to provide to speed up this DDR Government to the agreement? process and reduce the risk of what is a major security threat to the region? Lord Howell of Guildford: For a start, as the right reverent Prelate surely knows, we are backing and funding to a substantial degree the African Union Lord Howell of Guildford: Clearly, this is one more implementation panel, over which President Mbeki problem on top of the problems of refugees, resettlement, presides and into which he is putting enormous efforts. basic development and provision of infrastructure in That is our expression of support for the continuing the two countries; notably, in Southern Sudan, which work of the panel and of the products of the panel, is a very poor country, and in the north. I can give my including the framework agreement signed on 28 June, noble friend only the general answer that my right to which the noble Lord, Lord Alton, has already honourable friend the DfID Secretary of State has referred. We hope that will stay in place and will secure indicated that our substantial and detailed programmes the beginnings of some order, particularly in South to meet these and future problems will continue and Kordofan where a whole confused range of Arab and will be administered in a very detailed and hands-on non-Arab forces—some allegedly belonging to the way. south but in the north, and some in the north but belonging to the south—are fighting each other. We Baroness Kinnock of Holyhead: My Lords, the Minister are backing the Mbeki implementation panel and, will be well aware of the enormous needs of the new through that, many African Union people think that country soon to become a reality on Saturday. Those the best solutions will come. needs include health, education, infrastructure and There is an argument, which I only put before your huge gender disparities—92 per cent of women in Lordships, that while we must support the humanitarian Southern Sudan are illiterate. Will the Minister comment efforts and do everything we can to support peace, the on the heavy criticism now regularly made of the slow African Union itself is anxious that it and not outside disbursement of aid through the pooled donor fund powers should solve its problems. which is being used? Will he further comment on the need for long-term, predictable funding, rather than Lord Luce: My Lords, since Southern Sudan is the unpredictable, short-term financing that is currently proceeding this week towards independence—in what happening? we all agree is a very dangerous and very precarious Other post-conflict countries, such as Mozambique, situation which could lead to further disasters—may I Rwanda and Sierra Leone received long-term funding reinforce the point made by my noble friend Lord after the conflict ended, and Afghanistan still receives Alton that, as a sponsor of the comprehensive peace long-term predictable funding. Will the UK push for a agreement and with all our responsibilities over 60 years five or 10-year commitment to funding for essential with the Sudan, we should pull out all the stops to services, such as health and education, in the new persuade the international community, particularly Southern Sudan? the African community, to help hold the ring in that part of the world? Lord Howell of Guildford: All that the noble Baroness says is correct. The model followed elsewhere is that Lord Howell of Guildford: The noble Lord will which should be followed in the division of Sudan. It recognise, I am sure, that we are doing so. Enormous is very difficult. A lot of the activities are unco-ordinated efforts are being made on the diplomatic front, both in 127 Sudan: Framework Agreement[LORDS] Phone Hacking 128

[LORD HOWELL OF GUILDFORD] be made public. A number of parliamentary inquiries the UN and with the African Union and with all other and other reviews are also under way, and a number of parties involved. On top of that, the UK is one of the individual cases are currently before the courts. This chief funders and backers of development—medium, represents a broad span of activity across several short and long-term—in both Khartoum Sudan and aspects of this issue and the Government believe it Southern Sudan. We are not merely talking and making most appropriate to consider the outcome of the pleas for the ceasefire, of course we have to do that, police investigations and these various inquiries before but we are putting our money where our mouth is and deciding whether any further steps are necessary. making very substantial and solid commitments to a better future for these countries, which we hope will begin after 9 July. Lord Fowler: My Lords, I thank my noble friend for the reply, but I urge her to go further. I declare an interest in that I was once a journalist, but my view of Baroness Tonge: My Lords, the Minister will know the press is that newspapers are there to expose injustice that, sadly, oil reserves play a very great part in the and abuse of power, not to illegally intrude into the troubles of Southern Sudan and indeed in the government private lives of the public. of Sudan generally. The Chinese are very involved with oil extraction in Sudan. Will the Minister tell us Is my noble friend aware that since January of this whether our Government had any conversations about year I have asked four Questions on the Floor of this the Sudan with the Chinese when they visited? House on phone hacking? Steadily, month by month, the revelations have become more and more serious, with today’s revelation about Milly Dowler almost Lord Howell of Guildford: I am very glad that my beyond belief and certainly beyond contempt. Are we noble friend raised that issue. We tend to overlook the not now confronted with one of the biggest scandals fact that the Chinese nowadays not only have a commercial affecting the press in living memory and with clear involvement in many regions—particularly this region— evidence that a deliberate conspiracy has taken place but need to match their commercial involvement with against the public? Will she therefore recognise that some diplomatic responsibility. I am happy to say in this is not a matter of party politics but of protecting the Sudan situation that is beginning to be evident. the public, and that the only way that that can be done Our own envoy has had contact with the Chinese successfully is by an eventual independent inquiry envoy and the Chinese have made some extremely looking at all the evidence? Why cannot the Government helpful statements in support of calming the situation commit themselves to that today? and overcoming the difficulties in the disputed areas of Abyei and South Kordofan. We are finding that Beijing’s old stance of not wanting anything to do Baroness Browning: My Lords, I can understand with anybody else’s foreign policy is in this area my noble friend’s concern, and the concern of the beginning to give way to a more realistic and responsible House as a whole, at what is a truly shocking matter. attitude. That can only be helpful and we intend to This morning the Home Secretary, appearing before work with it. the Home Affairs Select Committee in another place, described what has happened, with the new information that has been received, as shocking and disgusting. Phone Hacking She reiterated today that we must await the outcome Private Notice Question of the police investigation, but she stated that, if these allegations are found to be true, there will need to be 3.08 pm new avenues to explore. Asked by Lord Fowler Lord Rosser: My Lords, we support the call of the To ask Her Majesty’s Government, in view of noble Lord, Lord Fowler, for an independent inquiry. the public concern over phone hacking following The latest disturbing allegations about phone hacking the latest reports, whether they will immediately will only have strengthened the feeling that parts of undertake to set up an independent inquiry once our national newspaper industry regard themselves criminal proceedings are complete. as being above the law and having no need to fear any action from the Press Complaints Commission. The Lord Fowler: My Lords, I beg leave to ask a Question Minister’s reply to the noble Lord, Lord Fowler, will of which I have given private notice. just not do. How many more potential phone- hacking scandals have to be unearthed, and how many more denials that they knew what was going on by The Minister of State, Home Office (Baroness editors and News International top executives do there Browning): My Lords, once again our thoughts are have to be, before this Government recognise the with the Dowler family. As the Prime Minister said, failings of previous investigations—by the police, by these allegations are truly dreadful and the police News International and by the Press Complaints should pursue their investigations wherever they lead Commission —and act? Will the Government set up them. an independent inquiry into phone hacking and the A police investigation into allegations of phone culture and practices of at least part of the national hacking is currently under way. It is important that the newspaper industry that have allowed these things to investigation is allowed to proceed and that the conclusions happen? 129 Phone Hacking[5 JULY 2011] Phone Hacking 130

Baroness Browning: My Lords, as noble Lords will made, will be ones on which I believe we can rely. know, this matter is subject now to a robust investigation Sir Paul Stephenson has said that questions should by the Metropolitan Police. The MPS has provided a be asked once the criminal inquiry and any judicial public update and made it clear that it can say no more process have been concluded. As I mentioned, the at this stage. Surrey Police, which is responsible for the police investigation is ongoing and it is a matter for Milly Dowler investigation, is also making no comment. that inquiry and that investigation to conclude. At Accordingly, this remains an ongoing operational matter that point, Sir Paul Stephenson said, questions should for the police on which Ministers can neither interfere be asked. I can assure the House that we will consider nor comment in any substantive way. The proper the outcome of police investigations as well as other course is for the investigation and the independent inquiries that are under way. I am not saying to the review of previous evidence to be allowed to proceed House today that we will not have an inquiry, but without interference. while police investigations are under way I cannot be pressed on that. Lord Prescott: My Lords, the hacking of Milly Dowler’s mobile is, so far, the latest and most obscene Lord Fellowes: My Lords, does the Minister agree action of this company of the Murdoch press. Will the that, at the end of this episode, it would be a good Minister confirm that it is still the Government’s view thing for the Press Complaints Commission either to that these criminal acts are irrelevant to Murdoch’s be given statutory powers or to be wound up? purchase of BSkyB? Is the Minister also aware that the regulator Ofcom has a duty and a statutory responsibility to investigate matters of privacy? Have Baroness Browning: My Lords, I am aware that the the Government asked Ofcom for its advice on that chairman of the Press Complaints Commission has matter before they come to a decision on BSkyB? expressed her grave concerns today that the News of the World lied in giving evidence. She was extremely angry that the Press Complaints Commission had Baroness Browning: My Lords, I have every sympathy been misled. That is a very serious matter, and I am for the noble Lord, Lord Prescott, who I believe is sure that my right honourable friend the Secretary of himself a victim of this phone-tapping scandal. Phone State for Culture, Media and Sport will want to take tapping or hacking is illegal and is not a matter that account of her views on that matter and what has the Government regard lightly. It is an offence for a happened with the Press Complaints Commission. person intentionally to intercept without lawful authority any communication in the course of its transmission. That applies equally to the media. The noble Lord The Lord Bishop of Manchester: My Lords, it seems asked me about the decision that my right honourable to me that two issues are germane to this debate. One friend the Secretary of State for Culture, Olympics, is the tragic matter of Milly Dowler and, clearly, the Media and Sport has to make about BSkyB. The judicial inquiry has to be pursued in that direction and House will be aware that the Secretary of State in that the police allowed to do what they are meant to do. department has to follow guidelines as already set out The second issue seems to me to be a much deeper one in law. He will follow those guidelines in making his and also a matter of some urgency for this House to decision. address once the particular inquiries relating to Milly Dowler are over. The noble Baroness, Lady Williams, Baroness Williams of Crosby: My noble friend the referred to what I believe are some serious underlying Minister is obviously doing everything that she can to ethical issues about this whole matter that this House try and help the House, but might she consider the must address and as soon as possible. I hope that the very serious situation in which there has been a Minister, while clearly having to make the point about considerable loss of trust both in police inquiries and the present inquiries, will give a more robust response in the work of the Press Complaints Commission? In to what has been said in all quarters of this House this that situation, would the Minister agree that we need a afternoon about the need for the deeper issues to be more fundamental look at the whole situation that addressed. now confronts us—one in which the media feel that, to some extent, they do not have to abide by the normal Baroness Browning: I thank the right reverend Prelate rules of civic behaviour in our society? Therefore, for the way he couched his question. He clearly should we not very seriously consider the proposal of understands from my replies that I cannot engage the my noble friend Lord Fowler, given that such an House today in a full debate on this, because we are independent complaints committee might recover trust waiting for these investigations and legal outcomes to from the public in making recommendations about be made public, but I have no doubt that once they are what should be done? in the public domain, we shall return to this subject with much vigour. Baroness Browning: I fully understand why my noble friend raises the issue of trust, because from the beginning Lord Borrie: My Lords— these matters have been conducted in ways which have given the public great concern. If I may, let me quote to my noble friend the words of Sir Paul Stephenson, Baroness Anelay of St Johns: My Lords, I regret given that the Met is now conducting a very robust that we have reached the limit of 10 minutes on the and vigorous investigation, whose conclusions, once Private Notice Question. 131 Arrangement of Business[LORDS] Legislative Reform Order 2011 132

Arrangement of Business Nationality, Immigration and Asylum Act Announcement 2002 (Juxtaposed Controls) (Amendment) Order 2011 3.19 pm Baroness Anelay of St Johns: My Lords, my right Immigration (Provision of Physical Data) honourable friend the Leader of the House of Commons (Amendment) Regulations 2011 made a Business Statement yesterday to set out how the other place would be invited to take the Police (Detention and Bail) Bill thorough its Commons stages Weights and Measures (Specified on Thursday 7 July. The two-clause Bill was published Quantities) (Unwrapped Bread and in draft last night and will be introduced into the Intoxicating Liquor) Order 2011 Commons later today. The Explanatory Note sets out why the Government Criminal Procedure (Legal Assistance, consider that the Bill merits expedited consideration Detention and Appeals) (Scotland) Act by both Houses. In short, the Bill will restore the law on the calculation of time spent in police detention to 2010 (Consequential Provisions) Order what it was commonly understood to be prior to the 2011 High Court judgment of 17 June in the case of Hookway. That decision held that police detention runs uninterrupted Adoption and Children (Scotland) Act for a maximum of 96 hours from the point at which detention is authorised, whether or not the person is 2007 (Consequential Modifications) Order on bail. The decision has significant operational 2011 implications for the ability of the police to investigate offences and protect the public. It is for those reasons Environmental Permitting (England and that the Government propose to expedite the passage Wales) (Amendment) Regulations 2011 of the Bill rather than wait for the outcome of the appeal to the Supreme Court, the result of which is in any case uncertain. National Minimum Wage (Amendment) It may be convenient for noble Lords to know that Regulations 2011 the usual channels have agreed to invite the House to take the Bill through all its Lords stages in the course National Minimum Wage (Amendment) of Tuesday 12 July, next week. We propose to start (No. 2) Regulations 2011 that day with the Second Reading of the Police (Detention and Bail) Bill. We will then pause, while continuing in that pause with the Committee stage of the Localism Renewable Heat Incentive (Amendment to Bill. That will give Members of the House the opportunity the Energy Act 2008) Regulations 2011 to table amendments to the Police (Detention and Bail) Bill and the clerks the opportunity to prepare a Renewable Heat Incentive Regulations Marshalled List. Later that day we will take the Committee 2011 stage in the usual way, after proceedings on the Localism Bill. If the Police (Detention and Bail) Bill is not amended in Committee, the Report stage and Third Storage of Carbon Dioxide (Access to Reading will then be taken formally. We will finish the Infrastructure) Regulations 2011 day, I hope, with the notification of Royal Assent. The next edition of the forthcoming business will set out Criminal Justice and Licensing (Scotland) this programme when it is published tomorrow morning. Act 2010 (Consequential Provisions and A speakers list for the Second Reading is now open, and the clerks have agreed to accept amendments to Modifications) Order 2011 the Bill immediately after its First Reading—that is, from the end of Thursday 7 July. This order of business Disclosure of State Pension Credit is of course subject to the will of the House, and on Information (Warm Home Discount) Monday my noble friend the Leader will move the Regulations 2011 Motion proposing to take the stages in one day. Legislative Reform (Epping Forest) Order Marine Navigation Bill [HL] 2011 First Reading Motions to Refer to Grand Committee

3.22 pm 3.22 pm Moved By Lord Strathclyde A Bill to make provision about marine navigation. That the draft orders and regulations be referred to a Grand Committee. The Bill was introduced by Lord Berkeley, read a first time and ordered to be printed. Motions agreed. 133 Localism Bill[5 JULY 2011] Localism Bill 134

Localism Bill going to be a rejuvenation of local authorities. Yet one Committee (5th Day) only needs to look at the size of the Bill to realise that, while that may be the objective, it is certainly not Relevant documents: 15th and 16th Reports from being produced in this Bill. The Bill is full of detailed the Delegated Powers Committee. directions, and powers to make regulations to give further detailed directions, as to how local authorities 3.23 pm are to use what is supposed to be their new freedom. I am not going to say more than that, or go through Schedule 5 : New Chapter 4ZA of Part 1 of the Local all the details. I hope that Ministers—who are going to Government Finance Act 1992 have an unusually long gap between this Committee stage and the Report stage, which will come after the Recess—will have a good, hard look at this Bill, to see Amendment 129LZZZA whether some of this centralisation and central direction, Moved by Lord Jenkin of Roding and this business of telling local authorities how to have their freedom and how to behave themselves, can 129LZZZA: Schedule 5, page 263, leave out lines 9 to 29 be removed from the Bill. I can assure my noble friends on the Front Bench that it will be extremely Lord Jenkin of Roding: My Lords, I hope that I will popular among the local authorities, who have had be able to deal with these amendments quite shortly. their hopes raised that they are at last going to have Last Thursday my noble friend Lord Shipley made freedom from central direction, and then find that this an admirable speech on the clause stand part debate Bill does nothing of the sort. I beg to move. before the amendments came up, and advanced all the arguments that I would have made in support of this The Lord Speaker (Baroness Hayman): Ihaveto group. The main difference between my noble friend inform the Committee that if this amendment is agreed and me was that he expounded his objectives—eloquently to I cannot call Amendments 129LZZA to 129LZZF and adequately, I thought—and I have tabled the by reason of pre-emption. amendments that would give effect to them. I do not intend to take the House through each of 3.30 pm these several amendments. However, I can say that the amendments have four main purposes in relation to Lord Greaves: My Lords, I have added my name to the possibility of a referendum on the council tax in amendments in this group and I agree with everything an area where it is thought that the council tax increase that the noble Lord, Lord Jenkin, has said. has been—to use to the word in the Bill—excessive. It I am sure that most Members of this Committee, should not be for the Government to lay down what is never mind of the whole House, will not spend a lot of excessive. There has been a lot of talk about this being time reading the details of Schedule 5 to the Bill and a new form of rate-capping. I know something about all the ways in which the Secretary of State will be able that, having dealt with that in an earlier part of my to lay down very detailed powers and instructions for political life. This is intended to be a protection for local authorities on how to carry out council tax council tax payers against an increase in council tax referendums. However, these measures are extraordinary, which goes beyond what they feel to be fair. and typical of a huge amount in the Bill. If the Bill The first point that I would like to make is that it constitutes localism, it is extremely detailed top-down should be for local people to determine whether they localism. find a suggested council tax increase excessive. Therefore, I have seven amendments in this group, six of which my amendments in a sense come under four groups. are effectively the same. They seek to remove the First, there are amendments which would delete the description of high council tax increases as “excessive”. Secretary of State’s powers to determine what constitutes The Bill says that if a council wants to impose a an excessive rate of council tax—this is likely to be council tax increase which is higher than the Secretary very different in different circumstances in different of State thinks is appropriate, as agreed by the House areas around the country. Secondly, it should therefore of Commons, it will be described as excessive. This is also be for the local authority to decide when a referendum bad legislation. The word is prejudicial rather than should be held. That should not be determined by neutral and is almost a slogan. One of the things that central government. If localism means anything, this the Secretary of State will be able to do is to determine is exactly what it is supposed to mean. Thirdly, it the question in any referendum that takes place. I can should be the councils, rather than the Secretary of imagine a question such as, “Do you agree with your State, which should decide how the referendum is council that they should impose an excessive rise in the going to be conducted. Finally, there are amendments council tax this year?”. That is the effect of “excessive”. which would delete powers for the Secretary of State Legislation should be neutral and should not use such to make a whole raft of regulations, on, among other words. My amendments seek to delete “excessive” and things, setting out the question to be asked in a replace it with, referendum, the allowable publicity accompanying a “higher than the level recommended by the Secretary of State referendum, and how votes ought to be counted. under the provisions of this Chapter”. I have dwelt on this issue before. The rhetoric of That is what the legislation should say. It should be Ministers in this Government has been that this is a value neutral and simply set out what the position is. brand new start, a real decentralisation of power from Of course, if the noble Lord’s amendments were all Whitehall to town hall and county hall, and that it is passed, mine would be pre-empted and would fall. I 135 Localism Bill[LORDS] Localism Bill 136

[LORD GREAVES] should be reserve capping powers and this is what the would be delighted if that were the case as I would Bill is about”, that is one thing, but if the argument is rather not have these detailed prescriptions there in that the Bill is about making sure that electors are the the first place. However, if we are going to have them, final arbiters in this, that helps us in our position on we should use proper language and not political slogans. the matter. My Amendment 129LABA concerns the date of I say to the noble Lord, Lord Jenkin, that there is a the referendum. It probes the Secretary of State’s question about his formulation. Under the Government’s ability to lay down detailed instructions on this and proposition, a level of council tax, if deemed excessive, seeks to ascertain why councils cannot be left to deal requires the authority to produce a substitute calculation. with this themselves. However, this is in effect already As I understand it, a substitute calculation is one that covered by the rather more sweeping amendments of is not excessive. I suppose that most authorities in this the noble Lord, Lord Jenkin, and therefore I do not position would compute a substitute council tax that need to speak to it further. was just a smidgen short of what the excessive level would be. I am not quite sure, on the noble Lord’s Lord McKenzie of Luton: My Lords, first, I wish to formulation, what that substitute calculation would be speak to the amendments spoken to by the noble and what would happen in circumstances where there Lord, Lord Greaves, with which we sympathise. It is was a referendum, 5 per cent of the electors called for not just a case of semantics and of substituting one it, and they did not support the level of council tax form of words for another. For the reason that he has that was proposed. What are the consequences of outlined, we agree with him that if “excessive” is used that? If the noble Lord could help us with that point, in the legislation it will inevitably end up in the question it would be appreciated. It is clear under the Government’s that is put to the voters in a referendum, as it would be propositions what the consequences would be, but I the technical term. We are denying local authorities am not quite sure what the consequences would be the right to campaign for the council tax increase that under the noble Lord’s formulation. they want. If we want to approach this matter in a I think that this has been a very helpful debate. It is neutral way, the very least we can do is to remove incumbent on the Minister to say whether the Government prejudicial legislation, as the noble Lord termed it. see the powers as capping powers and believe that they need them, or whether that is not their position The Minister may well say that “excessive” is not a and this is basically about letting electors decide what new term and that it is embodied in the current the appropriate or inappropriate level of council tax capping legislation. However, there is a difference between would be. that position and what may happen in the future because the current arrangements for capping will not be put to a popular vote. Therefore, that term is Lord Tope: My Lords, I suppose I can rise to speak effectively an internal term rather than one that would on behalf of the only party in this House that is inevitably feature in the referendum question on some unencumbered by a history of support for capping, basis or other. For that reason, I believe that we need but I will try to resist too much temptation there. My to recast the term that is in the legislation. name is obviously with my noble friend Lord Greaves I agree with the noble Lord, Lord Jenkin. It is a on his amendments. I think he is right and I hope that central point of our concern with this legislation that the Government will consider very carefully that fairly it is stuffed with detailed powers and that the Secretary simple change to wording which, as others have said, of State has to draw back from the nominal rights that is actually very important. If these provisions are to be it is seeking to give to local authorities. I doubt whether in Bill—like my noble friend Lord Greaves, I would the gap between finishing Committee in July—if we rather that they were not—it is important that we have do—and Report in September is long enough to unpick a neutral wording and not a prejudicial wording, some of the stuff that has come from our discussions which “excessive” must be, especially if that wording is today, but at least there is perhaps a longer gap than likely to be used either as part of a referendum question usual. Our attitude to the amendments of the noble or at least in support of any such referendum. Lord, Lord Jenkin, depends on precisely where the My particular reason for wanting to say a few Government are on this. When last Thursday we had words now is to support the noble Lord, Lord Jenkin, our first canter around the issue of capping powers, it both in his general and particular plea. The general was said that all Governments of all persuasions had plea relates to much less regulation and dictation from held to themselves a reserve power. If in fact it is the the Government, a message repeated throughout the Government’s position that they are eschewing that Bill. It is salutary to remember that when Ministers power, we do not feel obligated to hold to the position first announced the Bill, it was greeted with a pretty that I think I outlined—that it is difficult for us to widespread welcome right across local government. deny the current Government those powers if we took The aim and intention as enunciated by Ministers was, them in past years. If that is not one of the criteria of broadly speaking, welcomed. We knew that there would the Government, that point falls away.When he responds, be some things in here that we would less happy about, perhaps the Minister can tell us whether the Government but we thought that most things we would be fairly see the arrangements currently included in the Bill as happy about. Then we came to see the detail of the Bill capping powers, whether they believe that they should and the extent to which, as others have said, if it is have the right to hold those powers, or whether they localism at all, it is localism top-down. It is also are, by one formulation or other, happy to let local prescribed by ministerial regulation and it is potentially electors decide on what the appropriate level of council constrained by Secretary of State powers. I join the tax should be. If his response is, “Well, we think there noble Lord, Lord Jenkin, in urging Ministers, during 137 Localism Bill[5 JULY 2011] Localism Bill 138 what will be a longer than usual gap between Committee do not like this level of council tax, we will adopt that and Report, to take courage and look seriously at one”. Who is to say that the electorate will not feel the whether we need to be so risk averse that we hedge substitute to be excessive as well? everything with regulations, Secretary of State powers, and so on. I said at Second Reading that if we mean 3.45 pm localism, we have to trust local government. Some The amendments leave in place the Secretary of may occasionally get it wrong, but is that a reason to State’s power to direct that the process should not legislate for the vast majority that are to be trusted apply. This is sensible in principle but will leave the and should be trusted? authority in difficulty. As the Bill stands, the test he I turn now to the particular of this, which is about will use is: will this authority be unable to discharge its council tax capping. I do not have to be quite as functions or meet its financial obligations if it is not measured as the noble Lord, Lord McKenzie. I do not allowed to set an excessive council tax? The approach have to carry that history and I understand that. It is proposed in the amendments is much less clear cut. council tax capping, as others have said. In reality, it is They would leave unclear the arrangements that would probably the most effective capping that a Government lead to a referendum challenging a major precepting have ever had, because I suspect that very few, if any, authority’s council tax. Apparently the process is to be local authorities will take the risk of setting what is triggered by a petition to a billing authority. What prescribed as an excessive tax. It will be a huge risk: happens if a precepting authority covers several billing not just the risk of whether they can or cannot win a authority areas but only in one of them is a qualifying referendum but the cost and administrative upheaval petition raised? Is there to be a referendum across the of having to rebill later. precepting authority’s area, or not? A further concern That seems to me to fly in the face of a fairly basic is that several petitions could be launched without principle of localism. I have always believed that it was central organisation. a fundamental democratic principle that local councillors Our approach, while preserving a principal role for are elected—personally, I wish that they were elected central government in these local matters, is more under a fairer system, but, nevertheless, they are elected practical, much more coherent and less likely to cause —to determine the needs of their local community undue delay and confusion. We think it is right that and to balance those needs with the level of tax that authorities themselves should determine whether they has to be raised to meet them. That is a tricky balance. have set an excessive council tax—one that has breached Then they are accountable for their decisions to the the principles set down for the financial year by the people who elect them, the local people. We come Secretary of State and approved by the House of back to the fact that if there is to be a referendum on Commons. We also think it is right that if an authority council tax levels, it should be the local people who has set an excessive council tax it should arrange a determine the need for a referendum, not the Secretary referendum to give its electorate the final say on of State. To me, that is what localism is about, and that whether the decision should stand. is why I support both the general statements of the noble Lord, Lord Jenkin, and his particular in the amendment. Baroness Farrington of Ribbleton: Will the Minister indicate a preparedness to discuss between Committee Earl Attlee: My Lords, this is a large group. I shall and Report the implications of the amendment moved speak first to Amendments 129LZZZA, 129LZZG, by the noble Lord, Lord Jenkin of Roding? Having 129LZZH, 129LZZJ, 129LZAA, 129LZAB, 129LZC, had discussions with the noble Lord when he was 129LZE, 129LZF,129LABZA, 129LABZB and 129LBA. Secretary of State and I represented local authorities, These amendments from my noble friend Lord I think the Government would find helpful such Jenkin would require a referendum to be held only in discussions on the practicalities of the issues, which response to a local petition signed by local electors. I appear to be the issues that the noble Earl, Lord understand what my noble friend seeks to achieve. Attlee, is relying on. The noble Lord, Lord Jenkin of That may indeed be purer localism than the Government’s Roding, is very knowledgeable about the history and approach, but there would be grave practical difficulties the implications and he would be extremely helpful if in going down that road. My noble friend seeks to the Government were minded to move to quell the allow the timing to be determined locally, but time will fears of the noble Earl, Lord Attlee. be very short for such a petition to be organised, as council tax must be set in early March. If democratic Earl Attlee: My Lords, I am extremely grateful to control is to be effective, and not just cause financial the noble Baroness because I passed by my handwritten confusion, the electorate’s endorsement or otherwise notes and did not read them out. My noble friend of the authority’s decision should follow very soon Lord Jenkin set some homework for Ministers during after. Given the binding nature of the referendum, it the Recess. We will carefully consider the Committee’s would be necessary to establish that each signatory of deliberations, and we are grateful for all noble Lords’ the petition was a local government elector in the area. counsel, even if we do not agree with all of it. That would be a difficult, time-consuming, contentious The amendments in the name of my noble friend and potentially expensive precursor to the main event, Lord Greaves would change the wording of new the referendum itself. Section 52ZB so that an authority is no longer required The amendments leave in place of the notion of to determine whether it has set an “excessive” increase substitute calculations, but do not resolve with any in council tax. Instead it is required to determine certainty the basis on which those calculations should whether the increase is, be made. In effect, the authority will be saying, “If you “higher than the level recommended by the Secretary of State”. 139 Localism Bill[LORDS] Localism Bill 140

[EARL ATTLEE] Lord Beecham: What sort of categories might the We consider that it would not be appropriate to Secretary of State have in mind? Is the noble Earl change the wording of the new section in that way. referring to types of authority, or are there some other The question of whether an authority’s relevant basic criteria that the Secretary of State is likely to adopt? amount of council tax for a financial year is excessive will be decided in accordance with a set of principles Earl Attlee: My Lords, my understanding is that determined by the Secretary of State and approved by they are the different types of precepting authorities, the House of Commons. If an increase in council tax but I will clarify that in writing to the noble Lord. No is then set locally that exceeds the level anticipated by doubt there will be other matters that we will need to those principles, it is perfectly reasonable to call it write on in due course. excessive. The increase might be justified, but the authority will have to persuade the electorate of that. Many noble Lords have asked me questions. The It would be excessive because it exceeded the norm noble Lords, Lord Greaves, Lord Tope and Lord adopted by most authorities. The Government’s policy McKenzie, suggested that the word “excessive” in a on this must be set against the background that average referendum question might prejudice the result. Noble council tax increases have been high over the years, Lords made me think hard about this point but inspiration and in many years higher than inflation. This Government arrived. It might be possible to ensure that referendum have taken steps of their own to help move away from questions do not prejudice the matter, and we will this position, notably by funding a council tax freeze consider this point over the Summer Recess. for this year. Ultimately, however, the best way to The noble Lord, Lord McKenzie, asked whether control excessive local expenditure is to make sure the these measures are capping powers and whether the local electorate can put a stop to it. Government would be happy to see voters support a higher and excessive level. If voters make an informed Lord Greaves: The Minister said that it will be up to decision to support higher council tax, the Government the local authority to persuade the local electorate of will be perfectly happy. That is the principle behind the case that it is putting forward. Is it not the case the legislation. In view of what I have said, I hope that local authorities will not be allowed to spend noble Lords will feel able to withdraw their amendments. money on campaigning in such referendums? Baroness Scott of Needham Market: Before the Earl Attlee: My Lords, I am not certain of the details, noble Lord decides what to do with his amendment, and I hope we will come to a suitable amendment to will the Minister undertake during this gap to look at debate that. some dictionaries for definitions of “excessive”? I have taken advantage of the new rules of the House and Lord Jenkin of Roding: The noble Lord, Lord googled the word. The definitions all say that it describes McKenzie, asked that specific question last Thursday, a quantity or amount exceeding that which is justifiable, and my noble friend gave this very specific answer: tolerable or desirable—for example, excessive drinking. “The noble Lord, Lord McKenzie, asked whether authorities So will the noble Lord accept that “excessive” is a term can campaign for the proposed increase in council tax. No, it is that has connotations, whatever its original and absolute intended that they cannot. They must put the facts to the electorate meaning might be? I agree with my noble friend Lord and leave them to decide but individual councillors will be free to campaign”.—[Official Report, 30/06/11; col. 1971.] Greaves that it does not have a place in legislation. Is he saying that that stands, or is that not right now? Earl Attlee: My Lords, I cannot agree with my noble Earl Attlee: I am extremely grateful to my noble friend friend’s point that it does not have a place in legislation, for refreshing my memory. He is absolutely right; that but I undertake to consider whether the word “excessive” is the current situation. is appropriate in the referendum question.

Lord McKenzie of Luton: The Minister seems Lord Greaves: I am grateful for that; it is a step disinclined to accept the amendment, which would forward. If the Government are to do that over the remove the word “excessive” from the legislation. Will Recess, will they consult the Electoral Commission he give an undertaking that the word “excessive”, as about that matter, as it is a referendum question? applied to the proposed council tax of any local authority, will not have to feature in any referendum question? Earl Attlee: My Lords, I think it would be extremely Earl Attlee: My Lords, I hope to give the noble unlikely that we did not take advice from the Electoral Lord some comfort on that. Within the context of that Commission. policy, the Government think they are right to refer excessive increases and to require that such increases Lord Jenkin of Roding: My Lords, we have spent be approved via a referendum. There is enough flexibility more than half an hour on this amendment, following in these provisions to enable sensible principles to be the speech of the noble Lord, Lord Shipley, on Thursday. defined. The Secretary of State has the power to set I think the Government have got the message. I am different principles for different categories of authority; extremely grateful to my noble friend Lord Attlee for and, in exceptional circumstances, if an authority is undertaking to cogitate on these matters between unable to discharge its functions in an effective manner now and Report. I understand some of the difficulties or unable to meet its financial obligations, he can that his officials have put before him, but I was very disapply the referendum provisions altogether. encouraged to hear him say that he read from his own 141 Localism Bill[5 JULY 2011] Localism Bill 142 handwritten notes in response to the noble Baroness of State to decide on a yearly basis. The Secretary of opposite when he said he would look at all these State is already required to set out his principles in a matters again. In the light of that assurance, I hope report to the other place. It is inevitable that the the noble Lord, Lord McKenzie, will forgive me if I do reasons for the principles will be debated there before not go into detail about what the results of this might the other place gives its final approval. Therefore, the be. I do not regard these amendments as an infallible proposed new clause is unnecessary and I urge the way of achieving the overall purpose of less top-down noble Lord to withdraw the amendment. government control and more control by devolved local authorities. They are accountable to their electors 4pm and I suspect that my noble friend Lord Attlee really will look at this, as he said he would. I shall be happy Lord McKenzie of Luton: My Lords, I thank the to help him, and I shall perhaps bring along some of Minister for his reply. The amendment would have those who have been advising me on these matters. I operated not only in circumstances where there was beg leave to withdraw the amendment. differentiation between different sorts of authorities but where there was no differentiation, because Amendment 129LZZZA withdrawn. presumably, in making the judgment, the Secretary of State would have had to take into account a certain Amendments 129LZZA to 129LZZJ not moved. amount and range of information. I was simply seeking a situation where, when it came to the information to be taken into account in making the determination, either everyone will be in the same category or there Amendment 129LZA will be different categories, but either way this should be transparent and included in the report that goes to Moved by Lord McKenzie of Luton the House of Commons. If the Minister says that that 129LZA: Schedule 5, page 264, line 27, at end insert “, and would inevitably be the case and it would be covered must be accompanied by the reasons for determining why there in the report, I am happy that that is on the record and should be different categories of authority for the year under I beg leave to withdraw the amendment. consideration” Amendment 129LZA withdrawn. Lord McKenzie of Luton: My Lords, this is a straightforward matter and I hope it will not detain us Amendments 129LZAA and 129LZAB not moved. for long. In determining the principles by which a level of council tax is considered to be excessive—or whatever replacement word we may have—the Secretary of State Amendment 129LZB can adopt different principles for different categories of authority, a point just raised by my noble friend, Moved by Lord McKenzie of Luton but such principles must apply to all authorities in the 129LZB: Schedule 5, page 265, line 43, after “rates,” insert same category. There is nothing new in that and similar “non-domestic rates,” arrangements operate under existing capping rules. In determining categories of authority, the Secretary of Lord McKenzie of Luton: My Lords, I shall speak State must take into account any information which also to the other amendments in the group. I hope that he thinks is relevant. In the interests of transparency, noble Lords will forgive me if my speech is not so this amendment simply requires those reasons to be brief. Amendments 129LZB and 129LAB seek an set out in the report on the principles, which must be identical wording. The first relates to the substitute laid before the House of Commons. calculations of a billing authority, the second to substitute This is especially important because, in government calculations of a precepting authority. Each calls for terms, these matters are to be determined by the the inclusion in accruals of non-domestic rates in public. I do not know whether the Minister can expand addition to the redistribution of non-domestic rates. a little on what type of principles are likely to be This does no more than make provision for the localisation identified in the circumstances which would help members of the business rate in due course. In the absence of of the public, if they were to vote, and how and what such an adjustment, by what mechanism will these information would be conveyed to them. calculations take account of localised business rates, should that be where we end up? Prior to this happening, Earl Attlee: My Lords, this amendment appears to perhaps the Minister will confirm the position of assume that the Secretary of State will inevitably redistributive non-domestic rates. Will he confirm that determine different categories of authority in a set of currently, taking one year with another, amounts collected principles. That is not necessarily the case. The proposed are fully redistributed? Will he also confirm that there new Section 52ZC allows the Secretary of State to are no plans or discussions concerning the possibility determine different categories of authority, but he of charging amounts against the national pool before may also decide to apply the principles equally to all redistribution? authorities. Without pre-judging the Secretary of State’s Amendment 129LAC concerns the recovery of the decisions, he may, for example, determine as a category costs of a referendum. New Section 52ZN(7) allows districts, councils, counties, metropolitan boroughs, a billing authority to recover from a precepting police or fire authorities, which I think fully answers authority the cost of holding a referendum. However, the question that arose in the previous group of new Section 52ZN(8) gives the Secretary of State amendments. That would be a matter for the Secretary powers to deny or modify the right of a billing authority 143 Localism Bill[LORDS] Localism Bill 144

[LORD MCKENZIE OF LUTON] encountered issues of provider failure, litigation and to recover such costs. The impact assessment estimates redundancy costs, possibly because it is in transition that the cost of a referendum, depending on the size of to a delivery model that the Secretary of State might the local authority and whether other elections are find more acceptable. It may be that some of the held at the same time, could be between £85,000 and issues, for example, relating to contract litigation, where £300,000. Therefore, not inconsiderable sums are at it might be genuinely difficult to provide sufficient stake. In what circumstances is it envisaged that recovery information for a realistic assessment in a referendum of referendum expenses would be denied to a billing at a particular point in time, could be in point; indeed, authority? Does the Minister consider that the term, it could be prejudicial to a local authority’s case for it “incurred by the billing authority in connection with the referendum”, to do so. Sometimes it would difficult to condense quite sophisticated legal issues into information that will cover the costs of rebilling in the event of a would accompany a referendum question. So we have referendum not supporting the level of council tax two fundamental points that these particular amendments calculations—in other words, the costs associated not are seeking to probe. only with the referendum but with its consequences? If the term is not meant to cover that, how is this What does the Minister see as the boundaries of otherwise catered for? the use of these provisions? Discussion at the other end suggested that they were only to be applied in Amendment 129LE deletes a range of regulation- extreme, catastrophic circumstances. We postulated making powers that the Secretary of State has in other circumstances—but not routine—where a local connection with a referendum. In this respect, it is authority should not be forced through a referendum more focused and less ambitious than that of the with all the costs and uncertainties that this entails. noble Lord, Lord Greaves. The powers extend to the Our amendment, as well as a probe, also sets out an question to be asked; publicity; the limits on expenditure; alternative route for a local authority to benefit from the conduct of the authority, its members and its this provision, whatever its boundaries. There should officers; when, where and how voting is to take place; surely be a right to some independent assessment of how the votes are to be counted; and the disregarding whether these provisions apply. I would not commit it of alterations in a register of electors. Frankly, it is to the precise mechanism that we have set down; I outrageous that these matters cannot be left to an simply raise the issue of the principle. I beg to move. individual local authority. Amendments 129LF and 129LG deal with another matter. As the legislation currently stands, the Secretary of Lord Greaves: My Lords, I have a later amendment, State has power to determine that the referendum Amendment 129LEA, which is on its own. I would provisions are not to apply, notwithstanding that a have included it in this group if I had quite understood council’s tax calculations are, in his view, “excessive”. what the latter part of the amendment tabled by the The Secretary of State can do this if he considers that, noble Lord, Lord McKenzie, was about. The new without that level of increase, the authority would be, Section 52ZR, which the Bill would insert into the Local Government Finance Act 1992, provides for the “unable to discharge its functions … or … to meet its financial Secretary of State to give a direction, obligations”. “that the referendum provisions do not apply”, Our amendment is an opportunity to probe the meaning of this, but also to argue for an opportunity for a local because, authority to request an independent assessment of “the authority will be unable to discharge its functions in an whether the criteria are met. There was limited debate effective manner or … the authority will be unable to meet its financial obligations”. in Committee in the other place on this issue. The line that the Minister was taking was that this safeguard When speaking in the stand part debate introduced by was really only about a crisis or a catastrophe; for my noble friend Lord Shipley last week, the Minister example, the collapse of BCCI, where the Western referred to this briefly when he said that these provisions Isles had invested heavily. Clearly there are extreme would be used only in very extreme circumstances, examples, but where principles are applied to a local such as, authority as part of a category of authorities, they do “where the High Court has exercised its powers to appoint a not sufficiently take account of its specific circumstances. receiver where an authority has failed to service its debt”.—[Official Report, 30/6/11; col. 1971.] The Minister discussed the application of this safeguard I do not know how often that happens, but I do not where it was an issue about the level of services and think it has happened, certainly in England, in my lifetime. how they were provided. In the House of Commons It seems very rare, so I tabled Amendment 129LEA Bill Committee of 8 February, col. 440, he argued that for the purpose that the noble Lord, Lord McKenzie, local authorities had to set a budget that was lawful tabled his amendment: to probe the Government on and would enable them to fulfil their statutory functions. exactly what kind of circumstances this provision However, if such a lawful budget was deemed excessive, might be used in. In view of that, I will listen carefully it would only stand if supported in a referendum; if to the answer in this grouping, and I will not move my not, it could logically be the position that the authority amendment when we get to it. would therefore be unable to fulfil its functions. The fact that the Ministers may be satisfied in aggregate that local authorities have been provided with sufficient Earl Attlee: My Lords, Amendments 129ZB and resources—and we might argue about that—does not 129LAB would add the words “non-domestic rates” to mean that each and every one in the same category new Section 52ZF(3)(a) and new Section 52ZJ(4)(a). will be. It may be that a particular authority has There is no need to do this. The wording “redistributed 145 Localism Bill[5 JULY 2011] Localism Bill 146 non-domestic rates” covers the sums that would have arrangements. I can assure the noble Lord that the to be taken into account in respect of non-domestic regulations will be subject to consultation with the rates when an authority carried out its original council Electoral Commission. tax calculations. The noble Lord, Lord McKenzie, asked whether 4.15 pm amounts of non-domestic rates are fully redistributed. Amendment 129LABA removes the requirement The answer is yes, by virtue of Schedule 8 to the Local for a billing authority to hold a referendum on a Government Finance Act 1988. When making substitute precepting authority’s excessive council tax increase. calculations to determine an amount of council tax We consider that billing authorities are the appropriate that is not excessive by reference to the principles bodies to arrange council tax referendums, as they are under the new Sections 52ZF and 52ZJ, an authority responsible for administering the council tax system. must use the amount determined in its previous They also have experience of organising local elections, calculations for redistributed non-domestic rates. This whereas there are some precepting authorities, such as is because an authority should not be able to change police and fire and rescue authorities, that do not have its estimate of the amount it will accrue in the year in any experience of this. Billing authorities will also be respect of redistributed non-domestic rates to calculate best placed to co-ordinate referendums where more an amount of council tax which complies with the than one authority covering the same area sets an excessiveness principles. excessive increase in council tax. Where a major precepting authority sets an excessive increase in council tax, it follows that all billing authorities to which it issues a Lord McKenzie of Luton: Perhaps I can help the precept, will need to organise a referendum. In these Minister. The purpose of these amendments is much circumstances, to ensure the referendum is held on the more straightforward than that. It is simply to try to same day by billing authorities across the major precepting cater for the situation where we no longer have authority’s area, billing authorities are required to redistributed non-domestic rates but have directly billed hold the referendum on the ordinary day of local non-domestic rates. That is the sole purpose. elections. Provision is made so that billing authorities may recover the expenses they incur in connection Earl Attlee: My Lords, these are complex matters, with the referendum. and I am advised that I should read it all out. Amendments 129LF and 129LG relate to new Subsection (8) of new Section 52ZN provides the Section 52ZR, which is a reserve power for the Secretary Secretary of State with the power to modify or disapply of State to disapply the council tax referendum provisions a billing authority’s entitlement to recover costs in and would only be used in exceptional circumstances. connection with a council tax referendum from a It may, for instance, be used in a situation where the precepting authority. Amendment 129LAC would High Court has exercised its powers to appoint a remove this provision. This power is needed so that the receiver, because an authority has failed to service its Secretary of State may make different provision for debt. The amendment would mean that an authority the recovery of costs in a situation in which a number which sets an excessive council tax can seek an independent of billing authorities are required to hold a referendum assessment, and the Secretary of State would be compelled on a major precepting authority’s increase in council to give a direction to disapply a council tax referendum tax but one billing authority fails to do so. In this if that assessment comes to a particular conclusion. It situation, it would not be appropriate for those billing is inappropriate for an unelected and unaccountable authorities to recover their costs from the major precepting person to make the decision, since it will involve authority. Provision may instead be made for the factors beyond a simple financial assessment of the billing authorities to recover their costs from the defaulting authority’s position. It will, for example, involve a billing authority. We are aware that the Delegated judgment about whether local taxpayers should be Powers and Regulatory Reform Committee’s report entirely unprotected from excessive increases for a on this part of the Bill recommended that this power financial year. Depending upon the precise timing, should be subject to the affirmative procedure. We will one outcome could be for the Secretary of State to consider that recommendation carefully and will return refuse to issue a direction but to treat the authority as to the matter in due course, if required. a separate category when setting excessiveness principles. For these reasons, the Secretary of State expects the Amendment 129LE seeks to limit the matters the power of direction will genuinely be used only in Secretary of State may make provision for in regulations exceptional circumstances. regarding the conduct of council tax referendums. The regulations would include setting out what is acceptable These are very complex but important matters, and in terms of publicity, expenditure, the conduct of if I may I will write if there are any points which I have authorities, their members and officials, and the counting not covered. In the mean time, I hope noble Lords will of votes, so these are significant issues. We consider feel able to withdraw the amendments at the appropriate that it is important that these matters be prescribed in point. regulations, as an authority will be bound by the result of the council tax referendum, in contrast to a local Lord Greaves: The Minister said that the billing referendum. It is intended that the regulations made authority—I am thinking in terms of a two-tier area under these powers will be modelled on the Local with counties and districts—may be able to recover its Authorities (Conduct of Referendums) (England) costs. Should that not be automatic if the referendum Regulations 2007, which make provision in relation to is in relation to the level of council tax set by the the conduct of referendums on local government executive county council, for example? 147 Localism Bill[LORDS] Localism Bill 148

Earl Attlee: My Lords, I can assure my noble friend Earl Attlee: My Lords, government Amendments that my words are very carefully chosen. 129LA and 129LB ensure that only residents and not business voters are entitled to vote in any council tax Lord McKenzie of Luton: My Lords, I thank the referendum in the City of London. This addresses an Minister for his very full response to these amendments. anomaly which has become apparent since the clauses We will need to read the record to see what we wish to were originally drafted. Without the amendment, business take forward from this, but I just want to follow up the voters in the City would be able to vote in a council tax point about the reserve powers that the Secretary of referendum even though they are not resident in the State is to have. area. The amendments therefore provide that it is only I can see that such powers would be necessary in a the residents of the City of London who can vote, range of circumstances—including in catastrophic which will bring the City in line with the position in circumstances, at one end of the spectrum—and we the rest of England regarding council tax referendums. are not arguing that, at the other end of the spectrum, I beg to move. there should be an automatic right to go to an unelected body to try to get off the consequences of this legislation. Lord McKenzie of Luton: My Lords, we are happy However, there could well be circumstances in-between. to support these amendments. It may be that the solution would be—and perhaps this is what the Minister was suggesting—that you would separately designate a particular authority as a Amendment 129LA agreed. special category, but in general these regulations will be applied to groups of authorities, if not all of them Amendment 129LAA together. Although the Government may well take the view that in aggregate they have enough to fulfil their Moved by Lord McKenzie of Luton functions, there could be circumstances of individual 129LAA: Schedule 5, page 267, line 17, at end insert— authorities where that is simply not the case. To be “( ) On application by a relevant authority, the Secretary of able to convince an electorate in a referendum that State may direct that the substitute calculations referred to in that is the case may not always be easy. There could be subsection (5) may be increased by an amount determined by the circumstances around litigation or sensitive commercial Secretary of State.” discussions where simply to spell out the upside and downside of that information provided in a referendum Lord McKenzie of Luton: My Lords, Amendment could be detrimental and prejudicial to the local authority. 129LAA seeks another safety valve for limited, possibly Therefore, has there not got to be some other safety exceptional, circumstances. Where an authority’s council valve in those sorts of circumstances, which are not tax is deemed to be excessive, it will be required to the authority defaulting on its debt but the authority hold a referendum. If the referendum does not approve potentially getting into quite severe difficulty because the basic amount of council tax, the council tax is set of the potential downside of a court case, for example? by reference to a substitute calculation. A substitute It would be left not able to raise the level of tax that it calculation is an amount predetermined by the authority, thought that it should be able to deal with. which would not be excessive under the rules. One That is the point we are probing, which we have might suppose that in most cases the substitute calculation coupled with a right for an independent assessment in would be just below what the Secretary of State would those circumstances. I ask the Minister to consider deem to be excessive. Our amendment would offer a that point seriously. Whatever the supposed evils of route to an authority to seek to have the substitute capping at the moment, one of the benefits was that at calculation increased by an amount to be determined least it was looked at on an authority-by-authority by the Secretary of State. So we are not suggesting basis. If you had an authority which was in a sense in a that this should be a reference to independent assessment. particular circumstance, that could be taken account We do not advance this proposition as a general of within the principles that had been set. That seems route to overturn the results of the referendum—it to be not available under this formulation, which is a would be necessary to develop specific criteria. However, real issue. there may be circumstances where a local authority should not be bound by the substitute calculation—for Earl Attlee: My Lords, while not agreeing to take the example, picking up a theme in relation to the previous matter away, I will unpack the issue with my officials amendment, events may arise between the commencement and, if necessary, write to the noble Lord. of a referendum and its conclusion which, if reflected in the information provided, might influence the Lord McKenzie of Luton: I am very grateful for result. It could be a contractual matter with adverse that. I beg leave to withdraw the amendment. consequences; it could be announced closures of major commercial undertakings, particularly if they were Amendment 129LZB withdrawn. localised NNDR, which could have a significant impact Amendments 129LZC to 129LZF not moved. on the council’s revenue base. What would happen if there was a genuine challenge to the result of a referendum? If this challenge were Amendment 129LA sustained, what is the position? Would the local authority Moved by Earl Attlee have to apply the substitute calculation, notwithstanding 129LA: Schedule 5, page 266, line 45, leave out from “Acts”to that an adverse result in the referendum was found to end of line 2 on page 267 be unsound? How would that all work? 149 Localism Bill[5 JULY 2011] Localism Bill 150

Earl Attlee: My Lords, this amendment seeks to Earl Attlee: My Lords, I imagine that the local allow an authority another bite at the cherry if it loses authority will have to adhere to its reduced budget a council tax referendum. It also is surprising to note, but, if I have anything to add on that point, I will write given the previous debate, that the amendment would to the noble Lord. give the Secretary of State a new power of direction. A council tax referendum will present a clear option to Lord McKenzie of Luton: I beg leave to withdraw. voters: to vote for either the authority’s preferred increase or for an increase that does not breach the Amendment 129LAA withdrawn. excessiveness principles. This amendment would allow the authority to apply to the Secretary of State to set Amendments 129LAB to 129LAC not moved. an excessive increase in council tax when the local electorate have voted against this, thus allowing him to override the referendum result. Amendment 129LB The noble Lord suggested that an extraordinary Moved by Earl Attlee situation could arise locally. However, the electorate would be aware of that when they chose whether to 129LB: Schedule 5, page 271, line 33, leave out from “Acts”to vote for an excessive increase or not. The principle of end of line 37 this provision is that the local electorate should take the decision and not the Secretary of State. The Secretary Amendment 129LB agreed. of State has a power to direct that the referendum provisions are not to apply. However, he may use this Amendment 129LBA not moved. power only where the authority is unable to discharge its functions in an effective manner or is unable to Amendments 129LC and 129LD had been withdrawn meet its financial obligations. The expectation is that from the Marshalled List. this power would only be used in exceptional circumstances, such as where the High Court has Amendments 129LE to 129LG not moved. appointed a receiver where an authority has failed to service its debt. It would not be appropriate for the 4.30 pm Secretary of State to be able to direct that an authority may set an excessive increase in council tax and take Amendment 129M the power of veto away from local electors as a matter of routine. I therefore urge the noble Lord to withdraw Moved by Earl Attlee his amendment. 129M: Schedule 5, page 280, line 29, at end insert— “(ba) the amount of any levies and special levies— Baroness Scott of Needham Market: Will the noble (i) issued to it for the year, or Lord consider a scenario in which a local authority is (ii) anticipated by it in pursuance of regulations under required to increase substantially its council tax because section 74 or 75 of the 1988 Act, or it has to pay one of the EU fines being introduced by (c) the amount of any expenditure it estimates it will incur the Government in an earlier part of the Bill? in the year that will be qualifying expenditure in taking steps to give effect to the result of any qualifying local referendum held in an area consisting of, or including, Earl Attlee: My Lords, I hope that the need to pay the whole of its area.” an EU fine will be an exceedingly unlikely event. Earl Attlee: My Lords, I shall speak also to government Amendments 129N to 129U. This group of amendments Lord McKenzie of Luton: My Lords, I am grateful addresses two specific issues concerning the calculation to the noble Lord for his response but I do not think of whether an authority’s council tax is excessive. he really dealt with the question about an EU fine. It is First, the amendments ensure that a referendum on a provided for in this Bill and if the provision is removed council tax rise is not triggered solely because of we would all be delighted. A fine could be visited on a planned expenditure which has already been explicitly local authority at the last minute potentially after it supported in a local referendum. The amendments has set its budget and its referendum detail is public. apply where a qualifying local referendum is held I want to return to what happens if there is a across the whole of the billing authority area, the challenge to the referendum—the Bill allows for that—and county council or the GLA. In such circumstances, an that challenge is sustained. If a local authority is authority may be able to disregard qualifying expenditure deemed to have an excessive council tax increase—we that it estimates it will incur in taking steps to give must stop using that term otherwise it is going to be effect to the result of that referendum when calculating inculcated in our own speech as well as the text of the whether an increase in council tax is excessive. This Bill—it has to hold a referendum. If that referendum means an authority will not have to take this expenditure does not support the council tax increase but is into account when determining whether it must hold a subsequently determined to be flawed, what are the council tax referendum. consequences? It seems to me there are no provisions The conditions for qualifying expenditure and for the Secretary of State or anyone else to bring qualifying local referendums will be prescribed by the redress to the local authority which has been on the Secretary of State in regulations. The regulations will receiving end of malpractice in respect of the referendum. include matters such as the information that must be 151 Localism Bill[LORDS] Localism Bill 152

[EARL ATTLEE] 129T: Schedule 5, page 280, line 45, at end insert “that would available in advance of the local referendum, the time be calculated by it under section 89(3) of the Greater London period within which the local referendum must have Authority Act 1999 if sections 85 and 86 of that Act did not been held and restrictions on the expenditure that may require or permit it— be disregarded. For the avoidance of doubt, we are (i) to take into account the amount of any levies issued making changes only to the calculation which determines to a constituent body for the year, whether a council tax is excessive. We are not changing (ii) to anticipate, in pursuance of regulations under section 74 of the 1988 Act, the issue of levies to a the calculation of council tax itself. constituent body, or Secondly, the amendments ensure that increasing (iii) to take into account the amount of any expenditure levies, which have to be treated as part of the billing it estimates a constituent body will incur in the year authorities and certain major precepting authorities’ that will be qualifying expenditure in taking steps expenditure for council tax purposes but are outside to give effect to the result of any qualifying local their control, do not tip the balance in requiring an referendum held in an area consisting of the whole authority to hold a council tax referendum. These of Greater London” amounts will therefore also not be taken into account 129U: Schedule 5, page 281, line 29, at end insert— when an authority calculates whether its council tax is “(9) In this section— excessive. I beg to move. “local referendum” has the meaning given by section 42(1) of the Localism Act 2011; “qualifying expenditure” means expenditure in relation to Lord McKenzie of Luton: My Lords, I think that which the prescribed conditions are met; I am grateful to the noble Earl for his explanation “qualifying local referendum” means a local referendum in but I would like to read the record. These seem not relation to which the prescribed conditions are met.” unreasonable amendments. Amendments 129N to 129U agreed. Amendment 129M agreed. Schedule 5, as amended, agreed.

Amendments 129N to 129U Schedule 6 agreed. Moved by Earl Attlee Clauses 60 to 66 agreed. 129N: Schedule 5, page 280, line 30, after “than” insert “a county council or” Schedule 7 agreed. 129P: Schedule 5, page 280, line 34, at end insert— “(2A) In the case of a major precepting authority that is a Clause 67 agreed. county council, any reference in this Chapter to the authority’s relevant basic amount of council tax for a financial year is a reference to the amount that would be calculated by it in relation Clause 68 : Duty to consider expression of interest to the year under section 42B(1) above if section 42A above did not require or permit it to take into account— Amendment 129V (a) the amount of any levies— (i) issued to it for the year, or Moved by Lord Greaves (ii) anticipated by it in pursuance of regulations under 129V: Clause 68, page 57, line 26, leave out from “with” to end section 74 of the 1988 Act, or of line 28 and insert “this Chapter” (b) the amount of any expenditure it estimates it will incur in the year that will be qualifying expenditure in taking Lord Greaves: My Lords, we now move on to steps to give effect to the result of any qualifying local referendum held in an area consisting of the whole of its Chapter 3 of Part 4 of the Bill, excitingly titled area.” “Community Right To Challenge”. I have seven more amendments in this group, along with my noble friend 129Q: Schedule 5, page 280, line 38, leave out from “amount” Lord Tope, and there are a couple from the Labour to “(referred” in line 39 Party. These are the first of a series of amendments on 129R: Schedule 5, page 280, line 41, after “year)” insert “that this community right to challenge part of the Bill would be calculated by it under section 88(2) of the Greater London Authority Act 1999 if sections 85 and 86 of that Act did which I am moving on behalf of the Liberal Democrats not require or permit it— on the basis of the criterion which the noble Baroness, (i) to take into account the amount of any levies issued Lady Andrews, put forward at Second Reading— to a constituent body for the year, workability.This is a completely new idea and a completely (ii) to anticipate, in pursuance of regulations under new set of provisions. It is extremely important that, section 74 of the 1988 Act, the issue of levies to a when they leave this House, they leave in a workable constituent body, or condition. They may already be in a workable condition, (iii) to take into account the amount of any expenditure or they may not. Our job is to make sure they are, it estimates a constituent body will incur in the year whether or not they require changes. that will be qualifying expenditure in taking steps to The basic principle—in rather obscure language, I give effect to the result of any qualifying local have to say—is that, referendum held in an area consisting of the whole of Greater London” “a relevant authority must consider an expression of interest” 129S: Schedule 5, page 280, line 42, leave out from “amount” if submitted by a relevant body that is interested in, to “(referred” in line 43 “providing or assisting in providing a relevant service”. 153 Localism Bill[5 JULY 2011] Localism Bill 154

I have to say that back in Colne this is not the whether it is a jolly wheeze thought up by one party—on language people use and, no doubt, when the community this occasion, according to the noble Lord, by the right to challenge gets down to the grass roots, people Conservative Party. I hope that members of the will have a plainer English explanation of what it is all Conservative Party in your Lordships’ House will tell about. The relevant authority is, as set out, a principal us when a jolly wheeze has their support but not that local authority in England, or a body set out in of the Liberal Democrats. It is a new form of coalition Clause 68(2)(d), which reads, Government, and I am enjoying it. “such other person or body carrying on functions of a public nature as the Secretary of State may specify by regulations”. Lord Greaves: The noble Baroness is, unusually, Here we have more mysterious regulations specifying wrong. It is not a new form of coalition Government; mysterious people. Before the Bill leaves this House we it is how most coalitions work. Different parties bring need to know who these people are, at the very least. different proposals to the table, compromises and A “relevant body” is defined as, trade-offs are reached and, one hopes, the best ideas from each of the parties come through. All I am “a voluntary or community body … a body of persons or a trust which is established for charitable purposes only … a parish saying is that it is no secret that the community right council … two or more employees of that authority”— to challenge, as it is now called, and indeed the community in other words, two or more employees of the council assets, that we will move on to discuss after this, came whose services are being challenged— from the Conservative Party. I am not criticising that party for that or saying that I do not support it. “or … such other person or body as may be specified by the Secretary of State by regulations”. When I opened my remarks I said clearly that what It is not a surprise to find that there, since it is what we we have to do with a new, untried, untested idea is find everywhere in the Bill, but, again, we need to ensure that it is going to work. If it does not, one of know what it means. two things will happen. A lot of difficulties will be caused on the ground because the idea has not been A “relevant service” which is being challenged on thought through properly or, alternatively, it will be the relevant authority by the relevant body is, realised that it has not been thought through properly “a service provided by or on behalf of that authority in the before these myriad regulations are produced and it exercise of any of its functions, other than” … will never happen, the regulations will never happen and “other than” is, effectively, a service that the and perhaps the chapter will never be commenced. Secretary of State makes regulations saying shall not What I and the Liberal Democrats are trying to do is be subject to the challenge. Yet again, we have a power to be satisfied that the proposals are workable before to the Secretary of State that we need to understand. they leave us so that they are actually a great success This, in many ways, is the nub of the problem. This when they go out there. is framework legislation, skeletal legislation, and there is a huge amount down to regulations. It might seem Lord Beecham: My Lords, the amendments in my boring to keep saying this, but in every part of the Bill name start with Amendment 130ZBA. In estate agents’ this seems to be the fundamental problem. What we parlance, the key to property is always described as have here is a new idea—what I would describe as a “location, location, location”. When it comes to this spiffing wheeze—that has been dreamt up by the legislation and the work of the Civil Service in advising Government. It has actually been dreamt up by the Ministers, the phrase seems to be “regulation, regulation, Conservative part of the Government and I do not regulation”, and it is to that that this amendment is complain about that; a coalition is a coalition of two addressed. The purpose of Amendment 130ZBA is to parties and each party has a right to bring its own require the Secretary of State, before making regulations spiffing wheezes to the table. We have to find out how prescribing which services may be tendered and which this is to be done as I do not think that we are being not after an expression of interest, to consult with the told that at the moment. I would like all these specific Local Government Association or any public bodies powers for the Secretary of State to be removed, or at to which the relevant section would apply. That echoes least a lot of them. pleas that fell on unsurprisingly deaf ears last night in Is there any hope that we are going to see draft this Chamber on the police reform Bill where similar copies of the regulations before the Bill leaves this requirements were sought that the Home Secretary House? We do not have them for Committee stage. would require that police commissioners consulted Will we have them by Report? If we do not have them with local authorities in respect of various matters. by then, I can see that there might be a certain amount That did not appeal to Ministers but I rather hope that of bother in the House. on this occasion Ministers will acknowledge that it That is all I that I really want to say about this. I would be sensible and right for the Secretary of State, have some more notes but they just repeat what I have before making regulations around this issue and indeed said, so I will not say it again. The noble Baroness, others in the Bill, to consult with a representative body Lady Farrington, is going to express shock and surprise for local government. that I have not said it three times. The second amendment would simply take out Clause 68(9). It is similarly designed to reduce the regulatory function to which other noble Lords—the Baroness Farrington of Ribbleton: Most certainly noble Lords, Lord Jenkin and Lord Greaves—have not. The noble Lord, Lord Greaves, ceased to surprise referred. I hope the Government will acknowledge me about 20 years ago. My point is that it is very that no harm will be done to them, and indeed the helpful for other parts of your Lordships’ House to general tenor of the legislation will be improved, if know when we are dealing with a government view or they were to accept these amendments. 155 Localism Bill[LORDS] Localism Bill 156

4.45pm are part of the Liberal Democrats’ vocabulary.Therefore, this measure may have been suggested by one part of Baroness Hamwee: My Lords, I am sure that they the coalition but I readily embrace it as a means of use plain English in Colne. I imagine that it is very giving communities an opportunity to come forward direct language, and I very much doubt that they use with better ways of delivering local services. However, the term “spiffing wheeze” or “jolly wheeze”. My noble we need to see what is in the regulations, on which friend may have forgotten that the department has consultation is still taking place. actually issued a plain English guide to the Bill.

Lord Greaves: A lot of people in Colne used to read Lord Beecham: Will the noble Lord confirm that the Beano. the Government accept the recommendations of the Delegated Powers Committee regarding regulations under this part of the Bill being subject to the affirmative Baroness Hamwee: But do they read the plain English procedure? guide to the Localism Bill? That says, on the community right to challenge, that many local authorities, “recognise the potential of social enterprises”. Lord Shutt of Greetland: My Lords, the Government are considering those recommendations. I will not I hope that my noble friend Lord Shutt of Greetland, make any promises on that but I believe that they are who I think will respond to the debate, will be able to very likely to take serious account of the committee’s say a word about whether in the Government’s mind views. It would be very unusual if they did not. social enterprises are something different from community groups. Many social enterprises are in fact businesses. Amendment 129V would remove the Secretary of That is not a criticism, but they are very different from State’s powers to specify requirements for expressions community groups. The application of these provisions of interest in regulations. We have taken this power to social enterprises is interesting. The guide refers to to ensure that power really is pushed down into the them providing, hands of communities. The majority of relevant “high-quality services at good value”, authorities will act within the spirit of the right but this power would prevent a recalcitrant authority requiring and delivering services “with”—that is, with local an unnecessarily burdensome amount of information authorities—“and through them”. I was interested in that would stymie a relevant body wishing to use the the “with”, which, in the legislation, finds its manifestation right. in, Amendment 130ZB would remove the Secretary of “assisting in providing a relevant service”. State’s power to exempt services from challenge. Taken I do not know whether my noble friend is able at this with Amendment 133ZK, which would remove the stage—we may need to wait for the regulations, which power for the Secretary of State to specify the grounds I, like the noble Lord, Lord Greaves, hope to see for rejecting an expression of interest, which we will before too long—to explain what that assistance might consider later, this amendment would give relevant look like. authorities discretion to reject a challenge to any of their services. As I have already explained, we have Lord Shutt of Greetland: My Lords, I thank those taken these powers to ensure that power really is who have contributed to this series of amendments. pushed down into the hands of communities. The We have a fresh start here, in that the community right majority of relevant authorities will act within the to challenge will hand the initiative to voluntary and spirit of the right, but this power would prevent a community bodies with good ideas about how services recalcitrant authority rejecting expressions of interest can be run better, and more cost effectively, ensuring out of hand. these ideas get a fair hearing, and will give them the Amendments 130ZA, 131ZA, 131G, 131H, 131E, time to organise themselves to bid to run these services. 131F and 131DA would remove the Secretary of State’s In making my preparations for the day, I spotted powers to make changes to the right in regulations. the word “regulation” more than once. I thought the Amendments 130ZA and 131ZA would remove the power best thing to do is to take this head on. Much of the to add relevant authorities and bodies. Amendments 131E detail of how the community right to challenge will and 131F concern the power to amend the definition work is to be included in regulations. In response to of a relevant body and voluntary and community amendments from noble Lords which touch on this bodies. Amendments 131G and 131H concern the detail, I will often have to explain that we are currently power to make any amendments to this chapter of the carefully considering issues that have been raised in Bill that are necessary as a consequence of adding our recent consultation. It is important that we get the relevant bodies and authorities, including making changes details right. I would like to reassure noble Lords to regulation-making powers. Amendment 131DA would that, on various issues on which we have consulted, we remove Clause 68(9), which contains many of these propose to set out the way forward prior to the Report powers. stage of the Bill. I am not promising, but if we can, we We have taken these powers to enable us to keep will see if we can get some draft regulations. That may pace with change and appetite for extension of the not be possible in all cases but we will endeavour to right. For example, the powers to add, amend and do so. repeal relevant bodies and amend the definitions of I understand what my noble friend Lord Greaves voluntary and community bodies enable us to ensure said. I had not thought of “jolly wheeze” as featuring that these definitions continue to reflect the types of in his vocabulary. However, community organisations organisation representing communities. 157 Localism Bill[5 JULY 2011] Localism Bill 158

Amendment 130ZBA would require the Secretary might have suggested some of those amendments. As of State to consult representatives of relevant authorities for the idea that this is all about letting 1,000 flowers and other public bodies affected by an extension of bloom, I invite my noble friend the Minister to come the right. We have recently concluded a consultation on over the tops and have a look at Colne at the on our proposals to use the various powers with all moment. It is in an absolutely beautiful condition those with an interest in the right and will consider the thanks to Colne in Bloom. There is a massive display need for consultation on future changes. Before extending of flowers; far more than 1,000. On the other hand, the right, we would need to have detailed discussions letting 1,000 flowers bloom did not do much good for with key interested parties, in particular to understand Mao Tse-Tung. It has different connotations. whether additional services might need to be excluded The Minister referred to recent consultations. Can from the challenge. he give us an assurance that the Government will I should respond to the noble Baroness, Lady Hamwee, publish a pretty full account of the results of those who mentioned one type of social enterprise. I have consultations and the evidence that they got? Will it be certainly seen in my life numerous names representing possible to access them? organisations that are not a sole trader or public limited company but which have some social, community, Lord Shutt of Greetland: I do not have it to hand, environmental or other involvement. It seems that it but I am pretty certain that they are to be published on does not stop. I think that the important thing is that 2 August. I think that that is the statutory date when other forms of enterprise might appear but that we are the results of the consultation must be published so yet to hear from. The way that the script is written that people know what people have had to say, so that covers anything that might happen in the future. In will be done. those circumstances, I trust that the amendments will not be pressed. Baroness Byford: Have those consultations finished, Baroness Hamwee: Before my noble friend responds, or are they ongoing? I wonder if I may just say a word about that last point on social enterprises. A community body is defined in Clause 68(8) as a body carrying on activities, Lord Shutt of Greetland: That formal consultation has now finished, but I am pretty certain that, bearing “primarily for the benefit of the community”. in mind that this is still going through your Lordships’ No one would quarrel with that, but the distinction House, other views will still be taken into account—but between a community and a voluntary body as defined, not in the formal consultation. is a reference—or, in the case of a community body, lack of reference—to profit, to it not being carried on for profit, or to what happens to the profit. Reading 5pm the words, Lord Greaves: Will what is published be a pretty “primarily for the benefit of the community”, good summary of what people said in the consultation, I wondered whether that was to be read as including as well as of the Government’s views? I think that the how profit is dealt with, whether it is to be ploughed Minister is saying yes to that. That is good news, as back for the benefit of the community. Perhaps this is was the fact that the Minister said that the department another matter for regulations. However, the distinction will endeavour to prepare draft regulations. People might be relevant in giving us a flavour of how the may have to work hard over the summer; some of us Government expect this new arrangement to work. will be watching from the south of France. Maybe it is a question of letting 1,000 flowers bloom, The Minister referred to unnecessary, burdensome and so on. information required by a recalcitrant authority. That is the same way of thinking: that councils cannot Lord Shutt of Greetland: Letting many flowers bloom be trusted to do things right, that some of them will be is the position. Clause 68(5) refers to a “voluntary or recalcitrant and that therefore everybody, even the community body”, and the noble Baroness has mentioned great majority who will do it right anyway, must be the differences there; to a body “established for charitable lumbered with the alternative unnecessary, burdensome purposes”; to the parish council; and then to “two or information, which is all the rules and regulations more employees”, and “more” could be considerably which come from central government to councils. more. How that “more” then establishes itself is another We are aware that the Department for Communities way forward. There are clearly two features here: the and Local Government is losing a lot of its staff. Who elements of “voluntary”, “community” or “charitable”; and where are the staff who will be employed to and the way in which employees choose to organise produce all that vast range of new rules and regulations— themselves. They are lumped together, but in many which, in our view, are unnecessary? We are not saying minds—in my mind at any rate—they are two distinct under any circumstances that there is no need for ways forward. regulations, Secretary of State orders or secondary Lord Beecham: The noble Lord may recall that I legislation. We are saying that the scale and amount have an amendment dealing with precisely that matter, of it is out of hand and will be more so as a result of which we will discuss later. the Bill. The Minister rightly said that we are in favour of Lord Greaves: My noble friends Lady Hamwee and pushing power down into communities, and that the Minister are straying on to matters covered by expressions of interest should not be rejected out of future amendments. I remind my noble friend that she hand. We all agree with that, but many later amendments 159 Localism Bill[LORDS] Localism Bill 160

[LORD GREAVES] I have worked for many years with a great number in this part are about safeguards to ensure that the of service users from the full range of health and process will not be dangerous or cause difficulties and social care environments, including those with mental problems. We will come to those. health problems, alcohol and drug addictions, those The Minister said that councils need to keep up to involved in the criminal justice system, and with people date and, for example, reflect the types of organisation of all ages, including the very young and older people. representative of their communities. I am sure that My experience consistently is that service users are not that can be done without taking all those extra powers. only very willing and keen but very capable of saying The problem is that if the power for regulations is what they think about services and how they would there, regulations will be produced, in some cases at like to see them improved. I would like to think that great length. Far from keeping councils in order, in among the reasons a local authority would accept a many cases they will simply prevent councils doing community right to challenge and go through a things in the best way for their local circumstances. procurement process for the service is because they My final point, to which, again, we will come, is want to see improvements. I cannot think of a better that the Minister said that some powers are to make it way of doing this than by ensuring that service users possible for the Secretary of State to exclude additional are involved in the process. services from the challenge. The problem is that we do Of course, we have then to consider how many not know which services will be included and which service users should be involved. What is the optimum will not. Again, we will come to amendments that will number? What might the minimum number be? I have probe that. no easy answers, but I am sure that other noble Lords It has been a useful introduction. I say thank you to will want to express a view on this. It seems to me that noble Lords who have taken part and to the Minister the number should be substantial, given the profound for his attempt to be helpful. I beg leave to withdraw impact that any change in provider could have on the amendment. those using the service. This approach gives credence Amendment 129V withdrawn. to service users as a body of people whose views must be considered. It also places a duty on those wishing to lay an expression of interest to make sure that they Amendment 129W have adequately consulted the service users, or are at Moved by Lord Patel of Bradford least in a position to do so. I would argue that there is also protection in taking that approach. By ensuring 129W: Clause 68, page 57, line 28, at end insert— that the views of those most affected by any proposed “( ) the expression of interest includes evidence that a change are taken into account, we can avoid the substantial number of the service users affected by the service support the expression of interest.” situation in which potential bodies seeking to challenge the current provision are not doing so solely in their Lord Patel of Bradford: My Lords, as has already own interests. been explained, Clause 68 concerns the duty placed on I hope that the Minister will be willing to consider relevant authorities to consider an expression of interest. this amendment and that he can give me some strong It is a very important clause, as it provides the foundation reassurance on what steps will be taken to ensure that for the community right to challenge process. The the views of those using services are taken fully into duty sets out the definitions of relevant authorities account. I beg to move. and bodies, definitions that we have already discussed and that we shall debate further in two or three later Lord True: My Lords, I have some sympathy, of amendments. It also sets out the terms by which an course, for the direction that the noble Lord is coming authority must consider an expression of interest. from, but he himself touched on important questions That is the part that the amendment would strengthen. of practicality. There are a lot of questions of practicality in these clauses. Many local authorities are in the Think for a moment about the meaning of this process of seeking to set up charitable trusts, social chapter, and indeed the thrust of the Bill: it is about enterprises, and other organisations such as those that the central role and importance of local communities were referred to in Clause 5. I am not quite sure how in determining the ways in which services are provided. the views of the service users would be established by When we talk about communities, whether we use the those wishing to make a challenge or put forward an terms, “community organisation”, “body” or “group”, expression of interest. If there were a small social we must be very careful about what we mean. There is enterprise to be formed from among a group of local always a risk that we assume that a particular community authority workers out of their interest in sustaining group, voluntary body or even a local authority high-quality services, it would be proposed that they understands all the communities that use services or have focus groups, referendums or other means to represents them. Clearly, we cannot have a situation in establish the reaction of service users. Although well which any individual or group can challenge the provision intentioned, the amendment might actually put obstacles of a particular service and have a right for their in the way of local authority workers establishing expression of interest to be considered. We must also social enterprises or bodies. guard against the interest being too narrow. When considering services it is only right that the views of I am a little nervous about the direction in which those who use the services should also be considered the amendment would take us. Clause 70 contains in any challenge. It is, after all, the service users who rules for local authorities and how they should consider will be most affected by changes made as a result of expressions of interest; there are duties laid upon local the challenge. authorities to take into account how any expression of 161 Localism Bill[5 JULY 2011] Localism Bill 162 interest would promote the well-being of people in the Lord Shutt of Greetland: The noble Lord is asking, local authority area. So although I understand where in effect, to put a regulation into the Bill. The government the noble Lord is coming from, this may add an extra line is that we do not need it in the Bill and therefore complication to an already complicated piece of legislation, this is regulation-free. and I could not support the amendment. Lord Greaves: To go back to the question I asked, Lord Shutt of Greetland: My Lords, this is the other the answer my noble friend gave is probably OK if the side of the coin in terms of whether one is being too two applications come in at the same time or within prescriptive. This amendment would require a relevant the same council cycle so that they can be discussed by body to demonstrate that a substantial number of whatever procedures a particular council has to deal service users support its proposal when submitting an with these matters. But does the Bill not say that once expression of interest. This puts an unnecessary burden an application has been accepted and is being considered, on relevant bodies, and the relevant authority if it no more applications for the same thing can be made must verify the information. Where more than one and accepted? Therefore, if one came in today and the relevant body submits an expression of interest, service other came in a couple of months later, perhaps in users could be approached several times, which may be response to the knowledge that the first one had gone frustrating and confusing. This will be magnified by in, it could not be accepted. How would that be dealt the fact that local people will use many different with? services. We agree that expressions of interest should 5.15 pm reflect the needs of service users. Relevant bodies will Lord Shutt of Greetland: I shall have to come back often have excellent insight into these needs. The Bill to the noble Lord on that. There two ways in which enables relevant authorities to specify periods for the these expressions can be made: one is that once we submission of expressions of interest in particular have an Act of Parliament, people can, as it were, just services. They could, for example, set periods that pitch; and the other is by authorities saying, “We are would enable relevant bodies to take into account the looking at various things and this is the starting date results of any consultation with service users, undertaken and this is the finishing date, when we look forward as part of the commissioning cycle. We are considering to people making expressions of interest”. If it were how service-user needs might be reflected in the the latter, it would be quite clear when expressions of requirements for an expression of interest. I hope, interest could be made. If people were just making a under these circumstances, that the Minister will feel it pitch, an authority might look at that and be surprised appropriate not to press the amendment. that something else turned up later. Lord Greaves: The Minister said that more than one Lord Patel of Bradford: The Minister said that the relevant body might submit an expression of interest best that he could offer was to put this into regulations. in a particular service at any given time. I am trying to That is obviously welcome. However, I am disappointed. think of an example. Two community groups might be The noble Lord clarified the problem of practicality interested in taking over a particular park. They might for me. I have worked in health and social care for be at daggers drawn and they will not want to put in a about 20 years and every service that is delivered will joint bid. How does the authority decide between never say that it will never engage with service users. those two community groups? I am trying to avoid Everyone is very happy to say, “Yes, we will engage using words like “relevant bodies”. Anybody out there with service users”, but they do not do it, simply listening to this discussion will not have the slightest because they think that practically they cannot manage clue what we mean by “relevant authorities”, “relevant it, that they will not get any benefit from it, and that bodies” and “relevant services”. But if two community they will talk to too many service users and confuse groups want to run the same park—for example, them. Using the words of the noble Lord, Lord Greaves, because it is on the border of two quite different this is utter nonsense. areas—how does the council decide which one to deal You can engage with service users, and there was with? huge appetite for that. I can give noble Lords example Lord Shutt of Greetland: My Lords, the council after example of people with mental health problems concerned will have its own procedures for dealing having impacted on social policy and on the policy of with these things, but the chances are that one submission the organisation and teaching professionals how they will be better than the other. If they are bang on equal, should inspect services. What matters is how we do it might come down to price, but councils have their that and the value that we give it. Perhaps I can give own decision-making ways. If the submissions are one example. Over the past 18 months, I have chaired almost identical, councils will just have to look at a review group on the effectiveness of drug treatment them with great care. But it would be strange if they in prison. We looked at the huge amount of money were identical. One could look at what lies behind the that we spend on drug treatment in prison, which is a application, the strength of the body, whether it looks very difficult environment. We brought together 20 experts: sustainable and whether the committee of the organisation governors, a chief probation officer, experts in the looks as if it is there for the long haul. I am quite drugs area and academics. Everyone came round the certain that these are all things the authority will be table to explore a strategy for commissioning and looking at. producing outcomes. We spent 18 months meeting, arguing and fighting. Lord Beecham: Can the Minister indicate that on One thing on which I insisted was talking to service this topic, at least, there will not be regulations from users, offenders, people currently in prison, ex-offenders the Government? and their families. We were not given a budget for it 163 Localism Bill[LORDS] Localism Bill 164

[LORD PATEL OF BRADFORD] because they said, “It is not practical. No offender or Amendment 130 ex-drug user will engage with the process, but have a go”. On a shoestring budget and in the space of six Moved by Lord Jenkin of Roding weeks, we engaged user groups across the country and 130: Clause 68, page 57, line 31, leave out paragraphs (a) to (d) asked them to talk to offenders, users, carers and and insert “any public body, including, but not limited to, local families. We anticipated that at most 50 people would authorities, government departments, government agencies and respond, but in those six weeks 550 current and non-departmental public bodies” ex-offenders and drug users responded. Lord Jenkin of Roding: My Lords, I shall speak also Ultimately, the views of those drug users affected to Amendments 131 and 132. No doubt other noble the way in which the final report—the Patel report—was Lords will speak to Amendment 130ZC. We have written. They underpinned everything that happened. discussed the question of challenges to local authorities This effected the best evidence base ever gathered on by local communities and other bodies that wish to drug treatment in prisons. They mirrored what that run their services. I am looking for a more ambitious evidence base said and highlighted what drug users community right to challenge. I support what is in the want and how they want it. With their evidence and Bill. It is a very useful expression of bringing forward their views, we produced an outcomes model. That one aspect of the big society so that local people can would not have happened unless we had engaged with become involved not just in yapping at the heels of the so-called most difficult, hard to reach groups. those who provide a service but in putting forward People have a huge appetite to be involved. It does not suggestions for how they could do it better. I like matter whether two or three groups want to consult that—but why does it stop at local government services? with service users; they should, because while they are My right honourable friend Greg Clark, the Minister consulting them and asking them what they want, of State for Decentralisation and Planning Policy, they might learn something about what they should be recently gave a lecture on the subject to the Local doing and how they should be delivering their service. Government Association. He was on the right lines It is crucial that this provision—that you cannot when he stated that Ministers are considering inviting deliver a service without engaging service users—is in councils and their partners to bid to manage a range the Bill. I am sure that in his heart of hearts the of public services using devolved budgets. This recognises Minister believes that. It is an important thing to do. that government services or services provided by non- My anxiety about not putting that into the Bill is that departmental bodies at national level may be run services will not do it; it will be an excuse not to do it. better and with more sensitivity to local needs and You have to force them to do it because it delivers circumstances if they are run at local level. They do goods. I will go away and think about this, and I would not all have to be run nationally. That is the point of appreciate it if the Minister thought more about it and the amendment. I am trying to provide a way in which talked to his officials to see whether there is any way in my right honourable friend’s aspirations could be put which we could strengthen the provisions of the Bill into practice across the public sector. that push those heading the new services to talk to If we are going to get this whole process going—I service users. It might not have to be a substantial admired the eloquence of the noble Lord, Lord Patel, number, or whatever the legal phrase is, but this should when he spoke of what was necessary—we need to happen because it is fundamental to the issue of the generate enthusiasm for, and understanding of, what community’s right to challenge. The Minister himself is being offered. This should be across the board and said that this was about handing power to the community. not limited to local government services. Therefore, Service users are a key aspect of the community, so we my amendment extends the right to challenge across have to push this. all public services, not just those guided by local Lord Shutt of Greetland: My Lords, I am holding government. Local authorities should be able to express the line with the Bill. Anyone who thinks about challenging an interest in running devolved national public services must put together all sorts of things to prove the on behalf of their communities, which should be able viability of their outfit and the people involved. If to offer to run the services. They may need help, which they have any wit, they will say that they believe that local authorities are best placed to deliver. they can do it and will have done some work in order Looking at it again with rather greater reluctance, I to prove that they are up to the job. If the noble Lord have to say that the suggestion that local authorities were a consultant to people wanting to put forward a should provide a list of the services that they might be proposal, that is the sort of thing that he would urge interested in devolving smacks of bureaucracy and I them and everyone else to do. am not particularly enthusiastic about it. I ought to withdraw the amendment; I speak to it with no enthusiasm Lord Patel of Bradford: Absolutely—if I was a at all and I am grateful to see that that view is shared. consultant, it would be done. Unfortunately, however, I will concentrate on the other amendments in this there are not many folk like me about. We can discuss group, which propose extending the measure to services rates later. I take on board what the Minister said. I will provided nationally by central government and by think about it further and I would appreciate it if the non-departmental public bodies and so on, and giving Minister, too, would think further about whether we local authorities the right to bid and the duty to help can strengthen this. I am sure that the issue will come local communities to do this. If you take London as back when we consider further aspects of the Bill. In an example—I declare my interest as one of the joint the mean time, I beg leave to withdraw the amendment. presidents of London Councils—the figures show that Amendment 129W withdrawn. in 2009-10 central government spent over £47 billion 165 Localism Bill[5 JULY 2011] Localism Bill 166 in London. Local authorities actually spent much less community, to say, “Yes, we are used to working with than that—about £29 billion—so only 40 per cent of families with multiple problems, and we could run this the total is spent by local authorities. By extending this service more effectively. We would like the right to measure, you are opening up a substantially larger challenge it”. I think the DWP might find that greatly pool from which one could get services provided locally. improves its ability to deliver the service—well, it Of course, not all services can be delivered locally would not be the DWP, it would be the others. The but a great many are. I shall give some examples in a important point is that this would then become a local moment. service and reflect local needs and local circumstances. Extending the community right to challenge and to That is one example. apply it to a wider public sector would effectively Another example may surprise noble Lords. It is address a lot of the problems that are inevitably caused Jobcentre Plus. It is again a national service run, by national bureaucracy. That often stands in the way ostensibly, on national criteria and to national standards of operational efficiency and, in particular, local sensitivity. right across the country, but anyone will tell you that A council could say, “If we did it for you, we would in areas of high unemployment—some of them are in have to do it for everybody”. How often has one heard some of the London boroughs—there are quite different that excuse? What we are looking for in this Bill is a needs from those in areas where there is relatively little greater opportunity for public services to be run locally, unemployment because services are growing and business where they can be responsive to local needs and is providing the opportunity. Surely here it should be circumstances. I will give some examples in a moment. possible for a local authority to say, “Look. We could One possibility is to have cross-departmental services run this better in our area. We would like to challenge that could be run effectively from a local level. Another the Department for Work and Pensions and offer to is to empower local authorities to support local aspirations. run the Jobcentre Plus in our area. We could do it Research commissioned by London Councils last year better, and probably less expensively”. identified over 150 non-departmental public bodies Youth justice and services such as youth offending that spend more than £100,000 a year that have an teams, which are currently funded through the nationally influence in London. If one takes account of even the sponsored YouthJustice Board, might be more effectively Government’s recent efforts to try to reduce the number delivered if they were tailored to local circumstances of these bodies, as in the Public Bodies Bill, London in line with the new financial incentives model for Councils estimates that at least 120 of these organisations crime reduction. Youthcrime, as we all know—indeed, remain active in the capital. Many of them are responsible I suspect that no one knows better than the noble for the delivery of public services for which local Lord, Lord Patel, who eloquently spoke about similar communities have no statutory ability to hold anyone problems a moment ago—is a complex and multifaceted to account. This is the target one is aiming at, the issue which would arguably benefit from an area-based substantial number of bodies that deliver services locally approach. but are not in any way locally accountable. Therefore There is the whole question of business regulation. local authorities should be able to help them. Businesses are not uniform and do not form a uniform The third point is that, if you are going to have a pattern across the country. It is another area that community right to challenge, for that to be a genuine could be run by local authorities or local councils. one, it should be open to all regardless of the local There are other examples, but I hope I have said community’s expertise or experience. It will need help enough to suggest that this is a realistic extension of and the local authorities are best able to give that. If the right to challenge, and it should include national you can achieve that, you will be achieving a degree of services, not just local authority services. I beg to move. local accountability for the services that are there for The Deputy Chairman of Committees (Viscount local people. Not only communities but the local Ullswater): My Lords, I must advise your Lordships authorities themselves should have the ability to challenge that if this amendment is agreed to I will not be able to national services on behalf of their communities and call Amendment 130ZA because of pre-emption. alongside other agencies, and to run services delivered by national public bodies within their area. This would Lord Greaves: My Lords, I have Amendment 130ZC ensure that communities have some local control and in this group, which I will speak to in a minute. Before that there would be some local accountability. I do, I want to say that I think we agree with a very great deal, if not everything, of what the noble Lord, 5.30 pm Lord Jenkin, has just said. We certainly agree with the Before I sit down, I shall mention a few examples of broad thrust of his amendments. It seems illogical that where I believe this could be made to work. Noble if there is to be a system in which local people can, in Lords will be aware of the European Social Fund, the terminology here, challenge the existing providers which is run by the Department for Work and Pensions. of a service and suggest that they might do it better, The DWP has recently proposed to spend its European that should be only for services that are provided by Social Fund money on providing employment support local government, not by other public bodies, because for families with multiple problems. That is a very when it comes down to it services provided by local worthy aim, but does it have to be provided nationally? government, as opposed to other public bodies, are Surely if you have different communities with different fairly arbitrary. There are good reasons for a lot of circumstances and families with very different needs them, but for some of them it is not very clear why and abilities, you need to have services that reflect local government does them and someone else does those differences. Therefore, it seems to me that it not. It is certainly not clear why someone else does a should be open to a local authority, or even to a local lot of things and local government does not in this 167 Localism Bill[LORDS] Localism Bill 168

[LORD GREAVES] has not improved since then. Some would say that it country. The division is arbitrary and it seems to me has not got worse, but others might disagree with that. that the relevant criteria should be whether it is a local It is an area that could be challenged. service and then whether it is desirable that this should The whole area of leisure and recreation has a very apply to it. local base to it in many cases. One example is country We agree very substantially with the noble Lord’s parks. Having a network of country parks across a Amendment 130, and with his Amendment 131, which wide council might be the best way to do it, or country would allow a local authority on behalf of its community parks might best be run at a local level and involving to take over in appropriate places. Of course, there is local people. great question mark over how funding is going to be arranged. You immediately get into all sorts of questions Lord Moynihan: I am grateful to my noble friend about whether there would be ring-fenced funding for for raising that. Very briefly, a classic example of this a particular service or whether it would be rolled up in are the national sport centres, which initially were set the general local government grant, the existing formula up to focus on excellence in sport and did so for many funding or whatever is going to replace it, and how decades but which increasingly have come to serve the that would be organised. Nevertheless, those are not local community through community use and Sport insuperable problems. Initially, one assumes that there for All. These are surely very good examples of where would be ring-fenced funding for particular services you can be far more aligned to local authorities—if that were transferred, but the basic principle is something they are run by local authorities—working with local that we would certainly support. clubs and with local governing bodies while protecting high-performance sport. The Minister is not enthusiastic about the noble Lord’s Amendment 132 requiring local authorities to Lord Greaves: I am grateful to my noble friend for produce a list of challengeable services. He suggested that intervention. Libraries are an example of this. In that it is bureaucratic. However, there is certainly some parts of the country they are very controversial another side of that coin because the Government are at the moment because they are being closed down on going to lay down a list of services that are not quite a large scale, while in other places they are not. challengeable and that are excluded. Indeed, they are So long as the existing funding for a library may be going to give themselves power in regulations to change transferred to districts, there is no reason at all why that list from time to time, as we have already discussed. districts cannot take libraries over. Indeed, the municipal If people know what they cannot challenge, presumably boroughs before 1974 were the library authorities, and they can work out what they can challenge, so it is not many of the fairly new libraries that now exist were really a problem and the noble Lord’s amendment is built by the boroughs and not by the county council. If probably unnecessary, whether or not it elicits enthusiasm. the county council is seriously looking at reorganising My Amendment 130ZC would allow a district council its library service, one of the ways in which it could in a two-tier area to challenge the county council and perhaps increase the efficiency of libraries and local to suggest in certain circumstances that it could take involvement in them is by transferring at least some of over county services. There is an ongoing argument in them to the districts. I am not saying that that is an some areas between districts and counties about what ideal solution everywhere, but it is something that counties do and what districts do. In my own county ought to be challengeable. There are a number of of Lancashire, there was a great deal of devolution things like that. from the county to the districts in 1974. It simply As for national services, the ward I represent on the followed existing practice with the old municipal boroughs council had a recent problem of raw sewage flowing and even some of the larger urban districts in the down from an inefficient septic tank system on a county. In recent years, the county council has been caravan site on a hillside and causing real problems to pulling services back and taking them to the centre, residents in the lane below. Noble Lords can imagine even though it is a large, far-flung council. I do not what their back gardens were like—not very pleasant know exactly how far it is from north to south, but it at all. The Environment Agency became involved in cannot be far off 80 or 100 miles, and it is 60 or this. It came and went and came and went, and the 70 miles from east to west, so it is a huge county. It is district council, which has no direct responsibility for also an area with strong districts, some of which used it, became involved, and in the end it was the district to be county boroughs and are still resentful of having council that actually organised the system, spent the been downgraded, and some of which have always money and connected the caravan site to the main been strong municipal boroughs and are now the basis sewage system. It then recharged the people who lived of strong districts. on the site and the people who own it. It was the District councils across the country vary hugely. district council that actually sorted it out on the ground, Some are, frankly, quite feeble and weak affairs, and even though, as far as I could work out, the statutory others try to behave as if they were unitary authorities responsibility lay with the Environment Agency. That but do not quite get away with it. Nevertheless, there is a classic example of the kind of service that, if are a lot of services that it can be argued would be transferred at a local level to a competent local council, better run at a local level and which in many cases might well be run better. have been. An example is local highway functions that As for the river system, the Environment Agency is cover not the main roads but local streets. In Lancashire, responsible for main rivers, but certainly in our part of they were run by most of the districts until three or the world some of the things that are classified as four years ago when the county decided to take most main rivers are tiny little streams. There is no reason at highway powers back to itself. Demonstrably, the system all why they should not be the responsibility of the 169 Localism Bill[5 JULY 2011] Localism Bill 170 district council. The district council has no statutory national services, in the same way as the Bill provides responsibility for rivers and it is not funded by government for them to challenge local services. for it, but some district councils employ drainage officers because they are the sensible people on the Lord Patel of Bradford: My Lords, I shall be very ground who sort out flooding and drainage problems brief. I have listened carefully to what the noble Lord, when they occur. How much better if they were actually Lord Jenkin of Roding, said, and I have read his statutorily responsible for it? I therefore support the amendment carefully. The basic principle of the proposal noble Lord’s amendment with some enthusiasm, and is exciting and warrants further investigation and put mine forward with enthusiasm as well. explanation, although I agree that a list would be Lord True: My Lords, I put my name to the first of completely bureaucratic. As for the idea that we could the two amendments tabled by the noble Lord, Lord take this a step further, I am excited by the community Jenkin, and I endorse all that he said. I can imagine right to challenge aspect but would want to be assured my noble friends the Ministers saying that it is not that the amendments would not in any way, shape or possible to graft this on to the Bill at this stage, but the form dilute the local community right to challenge. principle is a very good one, as my noble friends Lord Greaves and Lord Moynihan have also said. If the Lord Shutt of Greetland: My Lords, I thank the Ministers cannot accede to these amendments now, I noble Lords who have introduced these amendments. hope that they might be prepared between now and I wonder if I may deal first, out of sequence, with Report to talk to local authorities and local government Amendment 132. This amendment would require local associations about ways in which local authorities authorities to publish and maintain charitable services might be given opportunities to suggest ways of localising provided by all relevant authorities in their area. The more services. Government are already asking local authorities to I must apologise—and this may be a relief to some— publish important information about services, and the that I have to attend a full council meeting later this Bill already enables relevant authorities to specify evening, and if I am not in my place at 7 pm, with the periods during which expressions of interest can be less-than-coalitionist ardour that there is on opposition submitted for particular services, and requires them to benches in Richmond I might find that a division is publish details of these. This amendment would put called. I could not support my noble friend on the list additional administrative requirements on local authorities of challengeable services because—and he has made and falls into the trap of over-engineering the right, this point—it would cause bureaucratic problems for something which the Local Government Association local authorities. I did not put down amendments to has warned against. Clause 74, which comes later, because it would have Amendment 130 would change the definition of a been discourteous, anticipating that I was not going to relevant authority to extend community right to challenge be here. However, I must say that the other form of list to any public body. Amendments 131 and 130ZC that your Lordships will discuss later this evening might, propose changes to the definition of “relevant body” in my estimation, need at least two officers to compile that would enable local authorities to challenge other these kinds of lists. Therefore, while encouraging my relevant authorities, specifically government departments, noble friends the Ministers to resist my noble friend’s agencies and non-departmental public bodies, under amendment, I also hope—in anticipation, as it were—that Amendment 131, and county councils, where the relevant they will think more carefully later about the other body is a district council in a two-tier area, under lists that are imposed on local authorities in this Bill. Amendment 130ZC. The Bill already enables the Secretary Finally, I support the suggestion about countries of State to extend the right to other public bodies in and districts, and of course I also support the principle regulations—back to our friend. Our recent consultation relating to the Greater London Authority and London sought views on which other public bodies the right boroughs. Self-evidently, there are many things—in an should be extended to. Many respondents said they earlier debate I gave the example of running high streets felt that it should be extended to all public bodies. It —that London boroughs could do far more effectively was also suggested that local authorities should be than a regional authority. I hope again that my noble able to challenge other types of relevant authority. friends the Ministers will consider that too. Given this appetite, the Government are keen to explore the idea of extending the right to other public 5.45 pm bodies. However, many of those respondents also Baroness Thornton: My Lords, perhaps I may ask a felt that we should not rush into extending the right question. I have a great deal of sympathy for the noble before evaluating its impact in its current form. Before Lords’ amendments. I am not sure what my Front extending the right, we would need to have detailed Bench is going to say, but this sounds like a very useful discussions with key interested parties, in particular to discussion to have about how to extend local rights. understand whether additional services might need to My question, because I am a champion of social be excluded. enterprises and the voluntary sector, is whether they, My noble friend Lord Jenkin usefully gave us various too, will be able to challenge for those national services examples. I would just say that the examples are such that might appropriately be delivered at a local level. that other Ministers and departments would have to That would seem appropriate. get thoroughly involved and, by jingo, there would have to be some joined-up government in all this. I Lord Jenkin of Roding: Immediately, exactly the warm to the theme that it is exciting. I am just wondering same bodies and people, including local charities and whether it is too exciting for this Bill at the present voluntary bodies, should be able to challenge these time. 171 Localism Bill[LORDS] Localism Bill 172

Lord Jenkin of Roding: My Lords, I have been comment on some other amendments in this group, hugely encouraged by the amount of support all around although I may leave that until they have been spoken the House for the fact that we should pursue this more to. My noble friend Lord Patel is right to say that ambitious right to challenge. I am very grateful in Clause 68 is important. I have always believed that particular to the noble Baroness, Lady Thornton, for socially owned businesses, founded and run in this what she said, and for the enthusiasm and excitement case by local people, have an important and valuable of the noble Lord, Lord Patel. Turning to my noble role to play in the provision of public services. friend, I have already indicated that I am not interested Amendment 130A seeks to put beyond doubt the in the lists, and perhaps I should have withdrawn that kind of enterprise which can challenge and be considered amendment. However, it was encouraging to hear him appropriate to contract for the services under say that the Government are keen to explore and that consideration. I seek clarification from the Minister he would have to involve Ministers in other departments. about this because, as it stands, it seems that the If the localism ambitions are to be achieved then every expression of interest could be used by local authority department will need to be involved in this, not just employees setting up a private company. I believe that the DCLG. that might be a loophole that would need to be closed. From what my noble friend Lord Attlee said in Amendment 130A states that, relation, for instance, to the discussions we had earlier “after ‘authority’ insert ‘who have formed an organisation for about EU fines, I am aware that he now has to discuss charitable purposes or a community interest company or industrial this with all the other departments concerned, which and provident society’”. is a good thing. If our amendments achieve that and That covers basically all the organisations that are not nothing else, that would be worth while. My noble private enterprises. friend Lord Shutt has offered grounds for hope. A few Amendment 131A again seeks to make completely weeks ago, when I discussed this with the Secretary of clear an issue which is, in a way, about the size of the State, his reply was fairly brief. He said, “Really, we organisation. I believe that there should be a requirement have got to be able to walk before we can run”. My that the expression of interest can be initiated by a noble friend used the phrase “before evaluating”. local organisation or in collaboration with a local I should like to feel that this is part of the Government’s organisation. Many national charities already provide ambition, something which we can look forward to as and contract for services at a local level—for example, an extension of the right to challenge, and something Barnardo’s and Action for Children, which I know which can be seen to be very much part of the coalition’s about through a long association with them. I believe policy. Recognising that it might be difficult to put this that those national charities, along with any national provision into the Bill at this stage—it was not considered, social enterprise—indeed, there are those that are I think, in the other place—we have to recognise that contracting which are building social businesses providing there are problems. However, I hope that my noble social care—would want to contract for those services friends on the Front Bench will start consulting now at a local level. But they have to prove that they are with the other departments that will be involved. With working collaboratively with local agencies to provide that, I beg leave to withdraw the amendment. locally integrated solutions. This would still allow national organisations, which Amendment 130 withdrawn. have great skills and experience in delivering these Amendments 130ZA to 130ZE not moved. services, to bid but would ensure that the Bill meets its main objective of devolving power and giving a voice Baroness Thornton: I am standing up to give the to local communities. The involvement of a national noble Lord, Lord Greaves, time to move his amendment, social enterprise or a national charity may be the which comes before mine in this group. difference between a local body being able to challenge and contract for local services and it not having the Lord Greaves: My Lords, if the House is willing to capacity to do so. It is important that large and small, be tolerant, I will admit that I was asleep. and local and national, collaborative working is part of this Bill and is put beyond doubt. That is what these The Deputy Chairman of Committees: My Lords, two amendments are about. I beg to move. I have called Amendment 130ZD and it was not moved. I now call Amendment 130A. Lord Greaves: My Lords, I apologise for falling asleep; it is these Zs all over the place which are doing Amendment 130A it. I am not speaking to Amendment 130ZD, which Moved by Baroness Thornton I missed. However, Amendment 133ZN has exactly the same meaning. I was going to apologise for putting 130A: Clause 68, page 58, line 7, after “authority” insert “who down the same amendment twice in the group but it have formed an organisation for charitable purposes or a community interest company or industrial and provident society” seems that that was providential. I certainly have a great deal of sympathy and support for what the noble Baroness Thornton: In that case, I will speak to my Baroness, Lady Thornton, has just said. amendments and give the noble Lord, Lord Greaves, a We put down amendments to take out the reference chance to catch up on his amendments in this group. to employees not because we do not think that in Before I do so, I declare an interest as an ambassador appropriate circumstances it is a good idea for employees for Sporta, the trade group of social enterprises which to take over running the services for which they are deals with local sports and leisure services, and as employed, but because we are not at all convinced that the founding chair of the Social Enterprise Coalition. this Bill is the best place to legislate for employee I shall speak to Amendments 130A and 131A, and buy-outs, employee buy-ins, employee takeovers or 173 Localism Bill[5 JULY 2011] Localism Bill 174 whatever. They do not quite fit with the concept of the “wholly or partly in the area in which the relevant service is community—however the community or somebody in provided”. the community is defined—making a challenge and Again, this is a question for the Government. If a saying, “We can run this service. Can we have a go community body wants to challenge for a particular please?”. Employees are very different in that sense as service in a particular area, whether it is the whole they represent the producer side of the service rather or part of a local authority area or quite a small than the consumer side and, clearly, if consumers or neighbourhood, surely its existence as a community citizens or residents take over a service, they become body should depend on the fact that it is active in that producers as well. Equally, employees can make the area and not somewhere else. That means that you same journey in the other direction. would not get people in Liverpool challenging to run services in Leeds or people in Preston challenging to run services in Pendle, or is that what is intended? Is it 6pm intended that the community should be the community However, it is different and some of the amendments in which the service is provided and in which it is put forward from over the way have shown that if you intended that the challenge should be made? are going to do it properly you may need different sorts of structures and organisations and to some extent Lord Newton of Braintree: My Lords, I want to build a different legal framework. Things such as worker with a couple of questions on what my noble friend co-operatives are very different from an organisation Lord Greaves and the noble Baroness have said. Definition in the community taking over running a park or seems to me to be quite an issue on my scanning of something more ambitious. this clause. The question that has just been asked There is also the question of how an expression of about what community you have to be in, so to speak, interest from employees will be measured by the council is at least worth asking and it will be interesting to see when it comes to procurement against alternative the answer. expressions of interest from the community or wherever. The other question is that I understand that there What is the basis for competition? Is it possible to set are definitions of charitable bodies and of industrial up competition on a fair basis when you have people and provident societies. Is there a definition of community so entrenched in the organisation and already running bodies? Where does the type of body known as a it? On the other hand, are they put at a disadvantage social enterprise come in all this? If you ask the by being set against, perhaps, commercial organisations Library for information on social enterprises, as I did which may want to come in and take advantage of the once a few months ago, you discover that there are procurement process? Perhaps it might be better if it about six different definitions from different quarters. were done on a separate and clearly understood basis Is social enterprise embraced in all this? Is it defined in run independently from the community process. It all this? Is it intended to be dealt with in the wrap-up would be interesting to hear the Government’s views clause about the Secretary of State having the right to on that. define other bodies? A lot of definition problems are Amendment 131ZB to Clause 68(5) refers to the raised but not answered by this clause. definition of a relevant body. It is just a small question of definition. It says that the Secretary of State may Lord Beecham: My Lords, I want to assist, in a sense, specify in regulations, inevitably, the noble Lord, Lord Newton, by clarifying the description “such other person or body”. of one particular— The amendment suggests it should read “category of bodies”; perhaps “category and classes of persons and bodies” might have been better. It reads at the moment Lord Jenkin of Roding: I apologise to the noble as if it is referring to a particular person or body, Lord, Lord Beecham, but for those of us who rely on which I do not think it means. Surely it should refer to the loop, the microphone is rather important. categories or classes of people and bodies. Amendment 131B probes the question of whether Lord Beecham: I shall be very brief. My Amendment and how a voluntary body can make a surplus. It relates 131AA looks at the definition that the noble Lord, to Clause 68(7) and the text at the moment reads: Lord Greaves, referred to in Clause 68(7). It seeks to “The fact that a body’s activities generate a surplus does not tighten the reference to the surplus by saying that the prevent it from being a voluntary body for the purposes of fact that a body’s activities generate a surplus does not subsection (5) so long as that surplus is used for the purposes of prevent it from being a voluntary body for the purposes those activities or invested in the community”. of the section. The original clause says: We are not quite sure what, “so long as that surplus is used for the purposes of those activities”. “the purposes of those activities”, With my amendment, it would say: really means here and we suggest that a phrase such as, “so long as that surplus is required to be and is used”. “for the benefit of the community”, In other words, it is not a casual use; it is a prescribed might be better since we are talking about voluntary use of the surplus in the way that you would find in a bodies—I think and hope—which operate in a particular charitable organisation. I hope the amendment is not area. That leads on to Amendment 131C to Clause 68(8) unhelpful and that it just emphasises the nature of the and the definition of a community body. It says that a organisation and that the surplus is required to be community body means, used—as well as, in practice, that it may be used—for “a body that carries on activities primarily for the benefit of the the purposes outlined. I hope the noble Lord will think community”. about that and perhaps take the amendment back or Our amendment would add, accept that it strengthens the intention of the clause. 175 Localism Bill[LORDS] Localism Bill 176

Lord Patel of Bradford: My Lords, I shall be brief. I Lord Shutt of Greetland: My Lords, there is rather a am specifically speaking to support Amendments 130A lot here and I thank noble Lords who have taken part. and 131A, both of which are concerned with the nature Before I come to my notes, Clause 68(5) refers to and type of relevant bodies that may submit an expression voluntary and committee bodies and they can be defined. of interest under the community right to challenge. It might not be absolute but they can be defined in As we have heard from my noble friend Lady some way or another. When the subsection says, Thornton, the purpose of Amendment 130A is to “a body of persons or a trust which is established for charitable bring greater clarity to the definition of a relevant purposes”, body—something the noble Lord, Lord Newton, raised— it does not say there about the community. That can be particularly to make it plain that this is intended to national. It then says, “a parish council”, which is include not only charitable organisations but community clearly local, and, interest companies and industrial or provident societies. “in relation to a relevant authority, two or more employees”, As the Bill stands now, the question as to what which might just be a partnership if it is two. If it is constitutes a voluntary or community body is unclear, more, it can be any form of enterprise that was thought as the noble Lord, Lord Greaves, has said. A voluntary of. I am aware of the theology that exists in the body is defined in the Bill by virtue of not being a different forms of co-operatives and so forth. There public or local authority and, can be all sorts and then there is the catch-all in our “the activities of which are not carried on for profit”, friend, “regulations”. while a community body is simply one that carries out Let us see how we can cope with the notes that have activities for the benefit of the community. There is been made on specific amendments. Amendment 131A potential confusion here. For example, does the Minister and 131C would require the voluntary and committee intend that a public or local authority is also a community bodies to have some local connection, whether operating body, and what of community interest companies primarily in or for the benefit of the community in the which are allowed to make a surplus? Does this mean relevant authority area, or working with a body that that they are not voluntary bodies for the purpose of does. We are keen to encourage local and national this? The amendment that my noble friend Lord Beecham bodies to work together to submit expressions of has suggested may be helpful in this case. interest and bid for any subsequent procurement exercises, I am a firm believer in the potential for local but many national organisations do excellent work community and voluntary groups to deliver services, locally in their own right—particularly for communities provided they are given the right support. I am concerned of interest, which may not always be well supported that without the additional clarification provided by by a local group. We would not, for example, want to Amendment 130A some important groups, including prevent the Alzheimer’s Society expressing an interest industrial and provident societies—which, as we are in running a relevant authority service. It is difficult all aware, have a proud and significant history of to argue that it would not represent the interests of representing local people—will be excluded from the vulnerable, elderly people in a local area. These community right to challenge. I hope the Minister will amendments could also prevent voluntary and community support the intention of this amendment. bodies that are successfully implementing innovations Amendment 131A is closely related to these issues in service delivery from replicating their approach and similar in intent to one tabled by the noble Lords, elsewhere. Lord Greaves and Lord Tope. This concerns the question Amendments 131AA and 131B propose different of whether those relevant bodies that may wish to use requirements around a voluntary body’s surplus. the right to challenge to become themselves providers Amendment 131B would require that surpluses should of services are in fact from or primarily working be used for the “benefit of”, as opposed to being for within the local area. My concern is that once a the “purposes of those activities”, challenge is made under the community right to challenge, “or invested in the community”. it might not be local community groups that enjoy the transfer of services but big business or non-local providers. Amendment 131AA would require that any surplus Therefore, it seems essential that in determining who was, can make an expression of interest to run a service, “required to be and used”, priority should be given to those local community as opposed to simply being “used”, groups first. “for the purposes of those activities or invested in the community”. If localism is to mean anything in practice, it should Amendment 131ZB would enable the Secretary of be local groups who benefit and, as people who live State to add “category of bodies” as a relevant body and work in the area, they should be the preferred rather than “person or body”. I am not clear what option. I accept that there will be some cases where it material difference these amendments may make. is desirable for a regional or national provider—such as Barnardo’s or National Children’s Home, as my 6.15 pm noble friend Lady Thornton said—to initiate the process. They will have a strong specialist offer to give but even Baroness Thornton: Perhaps I may help the Minister in these cases there will be real benefits in encouraging with this because the point about my noble friend’s local involvement and local partnership. The risk is Amendment 131AA is that where a voluntary body that this becomes an open invitation for non-local generates a surplus, it can be legitimately used for bodies to seek entry into an area. Again, I hope the several purposes. It can be used to undertake further Minister will agree that this would be undesirable and activities consistent with the social aims, as set out in look to support the amendment. its governing document, which could include but not 177 Localism Bill[5 JULY 2011] Localism Bill 178 be restricted to local community benefits. It could be Care now provides training for home care workers used to invest in strengthening the organisation itself, across the north-east. The point about this amendment so that it becomes more resilient and can expand its is that by defining the legal form that community work, and it can be used to repay loans and other groups, or any group of employees, use to do the investment. It might, for example, include a payment challenging, we actually safeguard the social purpose of dividends to shareholders following a community against private profit being made which then does not share issue within the limits established by the get put back into the community. incorporation of the community interest company or the IPS. Those are safeguards against excessive private Lord Shutt of Greetland: My Lords, I understand gain. I do not think this is the right amendment but what the noble Baroness is saying, but there is a the point is that it seeks to clarify whether points two concern about being overprescriptive. It is important and three are permitted within the Bill. We might need that we do not do anything to put employees off. We to discuss this further. can return to this; there is no reason why not; but we know what the intention is. It is to free up the opportunity Lord Shutt of Greetland: I am even more confused for employees to take part in a right to challenge. I am but I will endeavour to look at that in due course. As I far from certain that we should be prescribing that was saying, the Bill already states that a voluntary there are these various routes and it is outside the body’s activities should not be carried on for profit. theology if they take the fifth route and not routes one The purpose of a voluntary body’s activities should to four. We need to be a bit careful about that. surely be to benefit the particular community it represents. As for what the noble Baroness has said, we are in Lord Greaves: If there are not to be clear structures Committee and we can clearly look at this again, but which are recognised as appropriate, how do you prevent I saw this in simple terms. I cannot get it out of my the situation in which two employees make a right to head, quite frankly, that you may get a community challenge when they have absolutely no support from association bidding which, in its building, has a kitchen the rest of the employees, but because they have made where it will do its meals on wheels. It might make a the right to challenge, the process has to take place? bit of a profit from the meals on wheels service in that community. It seems to me that if it makes a small profit from that exercise, it can use that for the benefit Lord Beecham: Before the noble Lord replies, may I of the rest of the association that it is carrying on in point out that I have an amendment dealing with that building. That is as I see it in simple terms. precisely that matter as well? Amendment 130A would require employees of a relevant authority to set up a charity, community Lord Shutt of Greetland: I am quite clear that, if interest company or industrial and provident society there are two employees, we are back to the whole in order to submit an expression of interest. Requiring business about looking at who is backing this and employees to form a specified organisation in order to whether the people who will ultimately benefit from submit an expression of interest and get a fair hearing this service think that it is a good idea. It is unlikely for their idea would create an unnecessary and bureaucratic that the local authority would say, “Off you go; you burden. It risks putting employees off exercising the look a great pair”. It is very doubtful that that would right altogether. The Government are committed to be the case. That is the route to putting a stop to that. giving public sector workers the right to bid to take It may well be that our friend, regulations, will come over services that they deliver, and the community into this as to the power of stoppage that there would right to challenge implements this commitment for be in these circumstances. relevant authority employees. Amendment 133ZN would prevent the Secretary of State providing advice and assistance in using the Baroness Thornton: I am sorry for interrupting the right to a body that is formed of, or includes, any Minister again but this is a very important point. I can employees or ex-employees. That would introduce a cite two examples. Sunderland Home Care was set up disparity. It would mean that advice and assistance by home care workers as a co-operative and, quite could not be provided to a voluntary and community rightly, the employees of that local authority in Sunderland body formed of employees and ex-employees, but provided much better terms and conditions to contract could be provided to other voluntary and community with Sunderland Council. Greenwich Leisure started bodies that did not contain such individuals. No decisions the whole movement of leisure trusts because Greenwich have been made on the form of any advice and assistance Council was going to close down its swimming pools— in using the right, but we expect to focus on those that this was 10 or 12 years ago—due to something called need it most. This is likely to mean smaller, newer rate-capping, which some of your Lordships may voluntary bodies, but it is sensible that we have the remember, and it was the employees who initiated the powers to provide assistance to any relevant body that move to contract with the local authority to take over might need it. I understand that an impact assessment all the leisure services. has been done on this and the suggestion is that, Those examples both make a surplus—and quite across the country, £20 million will be required. It is right too—because that is how they reinvest back into not yet in any budget, but that is the suggestion in the their local communities, so that the charges in Greenwich impact assessment. for leisure services are now much lower proportionately Clause 73(4) ensures that this includes employees than they were. They are also both able to support who have formed a body to take on the delivery of a contracting in other areas, so that Sunderland Home service, including where they have left the employment 179 Localism Bill[LORDS] Localism Bill 180

[LORD SHUTT OF GREETLAND] The fear about the proposed community right to of the authority. This supports the Government’s challenge—and there is a lot of fear about the proposal—is commitment to give public sector workers the right to that it will lead to the fragmentation, privatisation and bid to take over the running of the service that they commercialisation of a lot of council services; that, in deliver. I trust that these comments will mean that the name of the community making the challenge and these amendments are not pressed at the present time. as a result of local community organisations, parish councils and whatever putting in the first challenge, Baroness Thornton: I rather expected that the noble the big boys will then come galloping in. The noble Lord, Lord Greaves, would be doing the heavy lifting Lord referred to the risk of non-local bodies moving at this point in the debate. I thank the Minister. We into the area. Perhaps there is a risk of local commercial need to have further discussions about this to make organisations of a slightly cowboy variety, or, more sure that we are safeguarding things. I say to the noble likely, large corporate companies, coming in and taking Lord, Lord Newton, that definitions are not a problem over, all in the name of the community. here, because we are seeking to create a variety of different ways for local organisations and groups to 6.30 pm set up social businesses which will be able to contract The fragmentation argument is very important in for services. The way that they will define themselves is relation to some services. It would be difficult in the by choosing a legal framework which fulfils the purpose area of refuse collection, for example, to fragment a as outlined in the Bill. There are only a few things that service and have one parish council taking over its they could choose: a company with charitable purposes; own little service; the whole question of economies of a community interest company or an IPS, a co-operative scale in refuse, recycling and so on might be lost if of a different sort. There is a limited number. They that happened. On the other hand, there might be define themselves, in a way. It looks complex, because circumstances in which that might work. However, there are lots of different ways of doing this and, in there are clearly some services in which fragmentation fact, the Government’s role in providing information is a problem. I am less concerned about fragmentation support at local level will be very important. With when it comes to truly local services; if they can be run that, I beg leave to withdraw the amendment. at a local level, that is fine. Some question whether this is a backdoor to Amendment 130A withdrawn. privatisation and compulsory competitive tendering of the sort that we used to have, except at least that Amendments 131 to 131C not moved. was done on an organised basis across services and authorities and the in-house services were able to Amendment 131D compete with outside services—some did so very successfully. The fear is that this will result in a much Moved by Lord Greaves more anarchic kind of competitive tendering— 131D: Clause 68, page 58, line 17, at end insert— disorganised, disruptive or perhaps unorganised—and “( ) This section does not apply to any company or other body could result in a damaging, fragmented breakdown of or person the activities of which are carried out for profit.” services. I am saying not that that is the inevitable result of this legislation but that that is the widespread Lord Greaves: My Lords, I was very carefully not fear of what it might result in. We therefore have to saying “Not moved”to any of those previous amendments. probe carefully to see how likely it is and what the I rise to move Amendment 131D, which is grouped dangers are. with Amendment 131ZP and with the question on The Minister tells me that the figure of £156,000 is whether Clause 73 should stand part, which is to be key. That is the level at which the annual cost of a moved by the noble Lord, Lord Patel, which should service requires it to be put out to competitive tender lead to another interesting debate. Amendment 131D under the procurement process under European rules. is a probing amendment to stimulate a discussion If the figure has changed since I last spoke to him then which follows on from the discussion we have just no doubt he will tell me. If a voluntary or community been having about the nature of the organisations group challenges for a very local service and it costs which might end up running local services, whether less than that to run each year, does the council have a they are very local services, such as looking after a procurement process to negotiate simply with that pocket park, or much more substantial services, such community group for it to take over the running of the as taking over refuse collection. In relation to “relevant pocket park, the local playground or whatever? bodies”—in other words, the bodies that are challenging On the other hand, if the figure is more than that, to take over services—my amendment would add the the service will have to be put out to competitive words: tender, in which case the whole world will be able to “This section does not apply to any company or person the come in and tender. If that happens, although there is activities of which are carried out for profit”. a clause in the Bill that refers to having to stick to It is clear that there is not an absolute distinction contract rules and so on, to what extent can the between profit-making and non-profit-making bodies. council not take the lowest tender, or not even take We have already discussed the way non-profit-making what appears to be the best value-for-money tender, bodies might make a surplus, but for the purposes of which may also be the lowest tender, and discriminate discussion, that is fair enough. Amendment 133ZP is a in favour of a local community group because of the belt-and-braces amendment, which would insert the additional advantages that that would have in terms same wording at the end of Clause 73. of local people getting involved in running their own 181 Localism Bill[5 JULY 2011] Localism Bill 182 local services? To what extent is that allowed and to for such assistance? Clause 73 goes on to give us an what extent is it not? To what extent is it inevitable that idea, which I again find a little troubling. Assistance if large corporate bodies put in lowest tenders—we all may come in the form of, know about economies of scale—they will take over? “the preparation of an expression of interest … participation in a What are the rules that will allow councils simply to procurement exercise”, say, “Actually, we don’t want this to happen, so we will and, as if this were not enough assistance already, it stop the whole process”? In his reply to the previous may also involve, debate, the Minister referred to the power of stoppage— the first time that I have heard the phrase—that will be “the provision of a relevant service”. set out in regulations. I am not sure that I see where I am left to wonder what the point is of the previous the regulations will come from but no doubt it is in clauses in the community right to challenge chapter, one of these dozens of regulations here. when the conclusion appears to be that the Secretary This is quite a curious part of the Bill. Under the of State is going to do it all. heading “Community right to challenge”, Chapter 3 I am not a lawyer, so I will leave it to noble Lords of Part 4 starts off with “Duty to consider expression who are to ponder the implications, but I am fairly of interest”, but almost every other clause over 24 pages certain that interference by the Secretary of State in is about dealing with the expression of interest. There local procurement exercises may well be against is little or nothing in this chapter about how the competition rules, not to mention the likely effect of process of procurement will work. Before the Bill this on local governance. leaves this House, we need to understand what rules the councils are going to operate under when they The Secretary of State has not yet finished—there carry out their procurement processes. Once they have is more in this clause. We go on to learn that the started such a process, on what basis can they stop it? Secretary of State may also do anything that he considers As I read the Bill, it is not clear what the basis is. If it appropriate in the operation of the whole community is simply left to councils to start it and then stop it, right to challenge chapter in respect of a body or one can see legal challenges happening further down person that is other than a previously defined relevant the line. body. Once more I am forced to question why the previous sections of the chapter were written and why All those fundamental questions lie beneath the noble Lords have spent the last few hours discussing amendments. I am certainly not against contracting such things as what constitutes a relevant body. It out in a properly planned and controlled way, nor are seems clear to me that this clause intends the Secretary we as a party. However, we have to remember that the of State to have the powers to bring into the community council and elected councillors are legally responsible right to challenge, at any time or place as he sees fit, for providing a lot of these services, and we cannot any body that he wishes. just hand over not only the operation of them but the ultimate responsibility for them, which will come back The clause goes yet further. The Secretary of State to them if things go wrong. also intends to interfere with finances. If it is the intention of the Secretary of State to provide “financial I look forward to what the Minister has to say in assistance” to local groups seeking to take up the response to this. These are fundamental questions, community right to challenge, why does he not make particularly about procurement. We have to get to the that assistance available to local authorities that have bottom of this before the Bill leaves this House. local knowledge so that they may decide on its use? That would be something practical, and something Lord Patel of Bradford: My Lords, I shall speak to which I have previously said is lacking from the Bill. Clause 73 stand part. On the face of it, the heading of However, this does not seem to be his intention. The the clause, “Provision of advice and assistance”, appears reason that I am suspicious is that the Secretary of to be very welcome. However, I am struggling with the State feels it necessary to include in the definition of direction of travel here. This is, after all, the Localism bodies to which he can give financial assistance those Bill whereby we are led to believe that the Secretary of that are not relevant bodies under the earlier clauses. State wishes to roll back the mighty arm of the state, Can the Minister explain who these bodies might be, yet here we find a clause that gives an astounding new and why the Secretary of State needs these new powers? array of powers for the Secretary of State to interfere, I say again that this is not localism. The aim of the I suggest, in local decision-making. community right to challenge is to enable local voluntary I shall outline the extent of that interference. Clause 73 and community groups, social enterprises, parish councils at least begins as it intends to go on. First, we are and local authority employees delivering a service to asked to endorse the following: challenge a local authority by making an expression “The Secretary of State may do anything that the Secretary of of interest in running any service for which they are State considers appropriate for the purpose of giving advice or responsible. I do not recall this meaning that the assistance to a relevant body”. Secretary of State shall attempt to supplant this very Now, while I am certain that the Secretary of State has local process in any way he considers appropriate, only the best intentions and that he means to provide including placing new bodies that are not defined helpful advice and assistance, I struggle to accept the under the Bill into the process. We have already debated idea that this may include anything that he considers the potential limitations and lack of clarity about the appropriate. I am also somewhat concerned at the use current definitions of a relevant body, and I am quite of the word “assistance”. What do we make of this? sure that it is the intention of this House that this Exactly what does the Secretary of State have in mind should not include the private sector. 183 Localism Bill[LORDS] Localism Bill 184

[LORD PATEL OF BRADFORD] can just say “buzz off”, or whether, in the regulations, I would have thought that the Secretary of State it cannot say “buzz off” unreasonably. I believe that might have learned something from the recent debate this is something that has to be worked through in over the role of competition in the health service regulations. He referred to the figure of £156,000; that about the risk of inviting the private sector to take is the threshold figure in terms of the Public Contracts over large parts of public services. If not, I am sure Regulations 2006. However, as well as the £156,000 that my noble friend Lady Thornton could give him a threshold figure, there is a list of services in Part B of quick lesson in this area. I have a strong suspicion—maybe Schedule 3 to those regulations which is quite lengthy, wrongly—that this clause may well be a backdoor to which that figure is not relevant. This includes attempt to bring in such privatisation. Indeed, I believe education, health and so forth. There are a large that this is the same point exercising the minds of the number of things which would fall outside that. noble Lord, Lord Greaves, and the noble Baroness, It is important to understand that there is nothing Lady Hamwee, whose commendable amendment seeks in the Localism Bill which addresses procurement. to restrict these new powers of the Secretary of State Procurement is up to local authorities. Local authorities so as explicitly to exclude the private sector. However, have worked out how they do that. I do not feel that this clause is one that can be corrected by amendment. The entire clause raises so many questions, and appears to fly in the face of localism and the 6.45 pm intentions of the Bill. Baroness Thornton: I do not understand, then, why It is for this reason that I oppose the question that Clause 73(1)(b) talks about, the clause stand part of the Bill. I hope the Minister “participation in a procurement exercise”. will either reassure me tremendously, or support my argument. Lord Shutt of Greetland: That would be the exercise that is carried out by the local authority. It does not Baroness Hamwee: My Lords, I wish to ask one say how the authority should procure, it simply question, which has occurred to me only while listening acknowledges that there will be a procurement exercise. to the debate—otherwise, it would have been down as I understand that these are wide-ranging powers, and an amendment. Does clause 73 extend to the Secretary I understand the noble Lord expressing his view on of State giving directions to a local authority to provide that. I think, however, that there are two quick financial assistance in this connection? The Minister responses—and the noble Baroness, Lady Thornton, can take it as my view that it should not. will no doubt warm to this theme. It could well be that if employees are expressing an interest, under these clauses, provision could be made—and that may indeed Lord Shutt of Greetland: My Lords, Amendment 131D be via a local authority rather than the Secretary of seeks to confirm that bodies which carry out activities State—to give them help and assistance in forming a for profit cannot be relevant bodies. Amendment 133ZP community interest company. That sort of advice and would prevent bodies which are carrying out profit-making assistance, and seed-corn money, might enable such activities from receiving advice and assistance in using groups of employees to enter into expressions of interest. the right to challenge. If they did not have that, they would be unable to. The definitions of voluntary and community body have been designed to enable a range of civil society organisations to use the right. This supports the Baroness Thornton: The noble Lord invites me to Government’s commitment to enable these groups to comment on this. My comment is that it is not the have greater involvement in running public services. Secretary of State’s job to provide this advice and This includes social enterprises and co-operatives, assistance. It is the local authority’s job, or else that of where not all profits may be reinvested in their some association which is under its control. It is the activities or the community provided that their Government’s job to provide the resources for them activities are for the benefit of the community. This to do it. This gives too much power to the Secretary requirement will ensure that any profits are indirectly of State. focused on their activities. It will also ensure that large, multinational companies and big conglomerates cannot use the right to challenge. I am aware that that Lord Shutt of Greetland: The noble Baroness takes is a concern. words out of my mouth. I did indeed say that that is exactly what could happen. I hope that, in the No decision has been made yet on the form that any circumstances, these amendments will not be pressed, assistance will take, but one would expect it to focus and that the clause will be able to stay. As I indicated on those who need it most. This is most likely to mean right at the start, regulations are with us, and we will smaller, newer voluntary and community bodies; but all need to see that we are happy with them. The noble it is sensible that we have the powers to provide Lord, Lord Greaves, said that he wanted convincing assistance to any relevant body that might need it. In before the Bill leaves this House. It will be a while yet answer the noble Lord, Lord Greaves, when I referred before it leaves. to the “power of stoppage”, that was my own phrase. I think that we have to look at regulations because it is not clear to me yet exactly how a local authority will Lord Patel of Bradford: Can the Minister give the cope when it encounters the whole business of people House an idea of when the draft regulations on this taking advantage of the right to challenge—whether it clause will be laid? 185 Localism Bill[5 JULY 2011] Localism Bill 186

Lord Shutt of Greetland: All I can do is repeat what Lord Newton of Braintree: I am very encouraged by I said at the beginning. Before we return to this, we that. shall either have draft regulations, or we will have an indication of where we are going. I cannot do more Baroness Hamwee: My Lords, I am relieved to hear than that. I suspect that there is some work to be done the Minister say that, as the noble Lord, Lord Newton, on this, although some work is being done as we are seemed to be referring to competitive tendering, which going on. We have only just got the response to the we have experienced in different forms over the years. I consultation. Every endeavour will be made, because want to pick up on a point that my noble friend made obviously it will assist their Lordships if this information earlier. This is an observation rather than a question. is available. The Minister said that the assistance would be given to whichever organisations needed it. I hope that the Lord Patel of Bradford: I think that the wording we regulations will be written with a view to benefiting are discussing is almost duplicated in Clause 88, which the community rather than the provider of the service. will be opposed by the noble Lords, Lord Greaves and Those two things may be the same in the long run, but Lord Tope, so it is worth taking a second look at the the benefit to the community should be the lens, as it extent of these powers. I am not entirely convinced were, through which one looks at the arrangements. that we have cracked this nut as lots of issues have not been debated fully. Lord Shutt of Greetland: My Lords, I understand the point that the noble Baroness is making. I will bear Lord Newton of Braintree: I hope that I may hop in it in mind and take it back to the department. before the noble Lord, Lord Greaves, sums up, because I have been left in a state of confusion—as, I suspect, Lord Greaves: My Lords, I thought that this group has the opposition Front Bench. I understand the might lead to an interesting discussion. We have had point that this provision is not intended to let in large, an interesting discussion, which I do not think can end multinational companies. We probably would not want today. I have the sense that of all the groups we have to do that and in any case it seems to me that the discussed so far, this is the one on which my noble number of large, multinational companies that would friend the Minister has batted something of a sticky want to bid for small, local contracts worth less than wicket. However, like a good Yorkshireman, he has £150,000 would be rather small. However, I am not rightly batted with a straight bat. There have been a clear whether it is the intention to do what this amendment few Bradfordians in the Committee today. The noble appears to do, which is to ban even a small profit-making Baroness, Lady Eaton, has just gone but there are still organisation. If that is the case, I am not sure that it a few of us left. The Minister does not quite qualify is justified. If we consider meals on wheels provision, as a Bradfordian by a couple of miles, but he is still small catering companies provide sandwiches for local using a straight bat. businesses and possibly meals for local old people’s welfare clubs. I do not see why they should be barred There are two fundamental issues in this group. simply because they are making a profit, if they can One was raised by the noble Lord, Lord Patel of provide a better value service than the organisations Bradford. The question of how this money is going to we are talking about here. I should like to know what be handed out, to whom and what criteria will apply is the answer is to that. very important. As we are all Bradfordians, I shall talk about Leeds. If there is an agreement between Leeds council and a big community-based group which would Lord Shutt of Greetland: The quick response is that like to take over a lot of community-based services, the community has the right to challenge. It is in the and that happens, it seems to me very appropriate for Bill—although I cannot turn to the relevant clause government money to be used to assist that process. quickly—and was certainly in the consultation document, The process will proceed on the basis of co-operation that there may well be circumstances where the community and people agreeing that a particular group requires goes into partnership. Going back to meals on wheels, help and assistance to build up its capacity. However, you could have the local community centre going into if the money is handed out to large national organisations, partnership with the local baker. Those sorts of things whether they be charities or other bodies, in order to could happen, but the community has the right to make speculative challenges or to come in after the challenge, not local businesses or conglomerates. challenge phase as part of the procurement for large-scale services such as children’s services or adult care services in large authorities, that would seem to me a less Lord Newton of Braintree: Can I be absolutely clear desirable use of the money. If it is to be used in about that? I am sorry; I am becoming as talkative relatively small or medium-sized amounts to bolster as the noble Baroness. I do not apologise for that as local community-based groups, that seems to me a I think she is doing rather well. If a profit-making good use of government money. However, I have company were involved with a community body, would problems with this provision being part and parcel of that be all right, even though it was making a profit? large national organisations taking over local services. That is the kind of thing that we shall have to probe Lord Shutt of Greetland: My Lords, it is my further. understanding that the community body could have as However, the fundamental issue in my amendments a partner another body that happened to be a profit- has not been confronted. My noble friend the Minister making body. stated clearly that large commercial organisations, 187 Localism Bill[LORDS] Localism Bill 188

[LORD GREAVES] amendment is about how the Government are going multinationals or others, will not be able to take part to have a continuous review of what is going on, and in the community right to challenge and will not be continuous consultation with local authorities on how able to make expressions of interest. We all understand it is happening. that but the problem arises at a later stage if it is a Amendment 133ZK provides more regulations and challenge for a service that costs £1 million a year restrictions. It is about the rejection of an expression to run and therefore has to be put out to a tendering of interest. It seems to me that there are two stages at process. As far as I can see, that would be very like which things can be rejected. One stage is where the the competitive tendering processes which used to be expression of interest is made and the authority can compulsory, and which some councils still carry out in simply say, “We are rejecting the expression of interest order to get the best value because that is the way they and are going no further”. At the moment, Clause 70(8) want to do it. If that is to happen on a compulsory says: basis as a result of what was initially a community right “The relevant authority may reject the expression of interest to challenge, a problem will arise. Procurement does only on one or more grounds specified by the Secretary of State not appear in the Bill. I have been looking at where it by regulations.” might appear. Clause 72 is headed “Supplementary”. That is crucial. Again, it would help if we could know Clause 72(1) states: what those regulations are; they ought to be in the Bill. “The Secretary of State may by regulations make further The second stage is procurement, which we have been provision about the consideration by a relevant authority of an talking about. expression of interest submitted by a relevant body”. Amendment 133ZL is a provision by which the That seems to allow the Secretary of State to make relevant authority, the council, can carry on as before any regulations he wants about the whole procurement with the exercise, even if the relevant body—the process. Clause 72(2) states that a relevant authority community body or the parish council—withdraws its must, expression of interest or refuses to agree to modify the “have regard to guidance issued by the Secretary of State”, expression of interest. It is an indication yet again that which, as we know, comprises instructions and does once the process has started, it will continue and be not even come to this place for us to nod it through. very difficult to stop. That is, I think, of concern to There are real issues here about the procurement process. some of us. We can see a situation in which a community If it is to be not in the Bill but in the regulations, the organisation as defined is persuaded to put in its procurement regulations—if there are to be any—have expression of interest. It is not really interested at all, to be among the regulations that the Minister manages but it gets the process going and is in league with one to dredge out of the department before we get to of the big boys, a big commercial organisation, which, Report. On that basis, I beg leave to withdraw the if the figure is over £156,000, will then come in and try amendment. to clean up. There are real concerns that there are loopholes here that need looking at before the system Amendment 131D withdrawn. is unleashed. I beg to move.

Amendments 131DA to 131H not moved. Lord Shutt of Greetland: Amendment 133ZK would remove the Secretary of State’s power to specify in 7pm regulations the grounds for rejecting an expression of interest. We have taken this power to ensure that power really is pushed down into the hands of Amendment 131J communities. The majority of relevant authorities will Moved by Lord Greaves of course act within the spirit of the right, but the power to specify the grounds on which an expression 131J: Clause 68, page 58, line 23, at end insert— of interest could be rejected prevents a recalcitrant “regarding services provided on behalf of more than one authority from rejecting it out of hand and defeating authority jointly” the purpose of the right. I accept that, as my noble friend indicates, we are back to regulations. Lord Greaves: This amendment is the first in a Amendment 131J would give a Secretary of State a group of four amendments. In moving it, I will also power to make provision in relation to services that speak to the three others. It is a miscellaneous group are provided jointly by authorities in regulations. We of different things that I put together to avoid getting would expect relevant authorities to take a common-sense leant on by the Whips. I think I can deal with these approach to services that are provided jointly, and to fairly quickly. agree together a period during which expressions of Amendment 131J is about how to deal with services interest could be submitted and arrangements made provided by more than one authority jointly. The two for considering them and for carrying out any subsequent adjoining authorities might be a district and a county procurement exercise. However, provision in relation in a two-tier system. I have a number of examples of to jointly provided services can already be made if that; I do not think I need to read them all out, but necessary under the powers in Clause 72. they include leisure facilities. Amendment 131K is Amendment 131K would require the Secretary of about how the Government are going to review what is State to consult representatives of relevant authorities going on. This is an all new, untried and untested when making regulations of guidance, and to have system that, we assume, will be brought into operation regard to their views. We have recently concluded a across the whole country at the same time, and the consultation, with all those with an interest in the 189 Localism Bill[5 JULY 2011] Localism Bill 190 right, on our proposals to use the various powers that Lord Greaves: The Minister is tempting me to go we have taken. We will consider the need for consultation into a whole new area, which I will resist, except on future changes. simply to say that there is culture in local government Amendment 133ZL would remove the authority nowadays that is very different from what it was 30 or under this chapter for a relevant authority to undertake 40 years ago; you do not do anything at all, on a procurement exercise when an expression of interest anything and in any way, unless you have permission has been withdrawn or a relevant body does not agree from the Government or the regional office, which has to modifications to it proposed by a relevant authority, now been abolished, or someone else up there, to do it. meaning that it has to be rejected rather than accepted. People are scared to death of doing things because An authority might wish to carry out a procurement they have lawyers who tell them that not only can they exercise in these situations if, for example, it is attractive not find the power in the legislation; they cannot find to the type of service delivery set out in the expression the instruction in the legislation and all the stuff that of interest and if the authority wants to initiate a that tells them exactly how to do it. That is the procurement exercise anyway, or if services are currently problem in local government now; it is in detailed contracted out and the company needs to undertake a bureaucratic thrall to central government, and we are procurement exercise in order to maintain service about to pass a Bill that increases that. continuity. Clause 71(7) provides clarity in stating that Having made that counterpoint to what my noble a relevant authority may determine whether to carry friend said—which might have some justification but out a procurement exercise where an expression of is, I think, part and parcel of the fact that people in interest has been withdrawn. I hope that that will Whitehall do not believe that local government can persuade my noble friend to withdraw his amendment. ever be trusted to do anything useful or sensible unless they are told how to do it as if they were in kindergarten—I beg leave to withdraw the amendment. Lord Greaves: My lords, I will withdraw it in a minute. However, I will, as always, read carefully what Amendment 131J withdrawn. my noble friend has said and decide whether any of the amendments in the group need further pursuit. The more I hear this debate, the more I am concerned Amendment 131K not moved. about the word “challenge”. I think “challenge” is wrong because it is an adversarial word. If any of Clause 68 agreed. these arrangements are going to work, there will have to be a willingness on both sides—that is to say, on the Amendment 132 not moved. part of councils and the organisations that are making a bid to run services—to make them work. There has to be co-operation. If that is not there, frankly the Amendment 133 arrangements are not going to work very successfully. Moved by Lord Lucas What is needed more than anything else in many 133: After Clause 68, insert the following new Clause— places is a culture change, which can best be created by people exhorting, explaining, being enthusiastic and “Duty to consider requests persuading, rather than having hundreds of thousands (1) A relevant authority must consider a request in accordance of words telling people in detail what to do. If people with this Chapter if— do not like what they are doing, they will do it grumpily, (a) it is submitted to an authority by a parish or town and it will not work very well. council, and The only question I will ask my noble friend the (b) it is made in writing and complies with such other requirements for requests as the Secretary of State may Minister concerns all this talk of recalcitrant authorities. specify by regulations. What estimate have the Government made of the number (2) In this Chapter “request” means a request to a relevant of local authorities which they expect to be recalcitrant authority that it should provide a service or perform a function in relation to this particular part of the Bill? (being a service or function that it already provides or performs, or is entitled to provide or perform) in a specified manner. (3) A relevant authority in receipt of such a request shall Lord Shutt of Greetland: I have no idea whether accede to it unless doing so would— there is any estimate. When starting afresh with a new (a) result in net additional expenditure or net reduced revenue, proposal, one of the things I think to myself is, or “Could local government have done this anyway? Could (b) adversely affect that authority’s wider interests or it have said, ‘It could be that all sorts of bodies could policies. do things rather better than us. Can we find ways in (4) In reaching a conclusion under subsection (3)(a), the which we can give these opportunities?’”. I am doubtful relevant authority shall take into account all consequent changes that I have heard the answer. Therefore, because this in expenditure or income, including any amounts that the parish has never been done, there might be a perception that council is prepared to pay the authority, except that it may not this is the sort of thing that local government would take into account any net reduction in revenue resulting from the not get up to on its own. The authorities could be enforcement of civil penalties.” recalcitrant in those circumstances, but in general I do not know, and I suspect that the calculation is not Lord Lucas: My Lords, the amendment gives a there because I do not see how you could get that town or parish council the power to put in a request to calculation. However, it is worth looking at what has its superior council, whether that is the district, county happened to date. or city council, to say, “We wish you to provide your 191 Localism Bill[LORDS] Localism Bill 192

[LORD LUCAS] I want the capabilities of neighbourhoods under services in a particular way”, or, “We wish you to the Bill extended to include the sort of things that exercise your functions in a particular way”, and for it people will care about in cities. In places such as to be imperative on the superior council that it accede Battersea, that is parking, music in pubs and licensing, to the request unless doing so would cost it money or and other such local authority functions. In the more interfere with its wider interests. impoverished parts of the inner city, it is likely to be There are three principal themes behind the education and provision for youth. Those are the sort amendment, all of which we will come to in my later of things that a community will care enough about to amendments. First, there is much to be said for producing want to influence and that will provide the motivation something between the current status and some of the for the creation of the sort of active neighbourhoods cathartic remedies offered in the Bill—in this case, the that the Bill is intended to achieve. community right to challenge. It is a serious prospect 7.15 pm to ask a small Hampshire town to take on rubbish collection, parking control or any other services that From all those points of view, the amendment is are provided on a large scale by the local authority, worth while. It is inevitable in the way in which I have and probably belong at that scale, but it is quite structured it that the town or parish council, in putting reasonable for it to say to the local authority, “When forward its proposals, will have to produce savings for the dustmen come round and spill a bag, we would like the superior council. Otherwise, the thing just will not them to pick it up rather than leaving the contents on work. It therefore builds in an element of saving and the ground, as your current contractor does”, or, cost-cutting, which I hope will be an additional attraction “Please can you desist from parking control on to the Government. I beg to move. Wednesdays, when we like to allow everyone free rein to get into the shops in the town centre”. To my mind, Lord Newton of Braintree: Prompted again by what such requests should be acceded to, but we will never I have heard—I hope that this is not out of order, do it through the community right to challenge. because it raises a point about the clause with which we have just finished—this is the first reference I have I propose this as a more gradual way, an in-between seen to town councils as distinct from parish councils. solution. We are giving such power and influence to Town councils are not specified as relevant bodies in town and parish councils that they will over the next the previous clause; they are included in the new decade or so grow much stronger than they are at the clause. What is the position of town councils under moment. There are many other things in which people the Bill? have an interest locally—not just planning but the whole way in which their local services are provided—and Lord Greaves: My Lords, legally, town councils are it seems unreasonable that the only way they should parish councils. I think that is the answer the Minister have to influence those things is in trying to put will give. It is true, anyway. The noble Earl, Lord together a consortium to take over from the superior Lytton, is poised to come in again. A town council is council the whole provision of those services. If they a parish council that has passed a resolution under can find a solid way to influence the services, if they about three lines of the Local Government Act 1972 can make a definite promise to their electorate that to call itself a town council. It can have a town mayor they will go to the superior council to ask for that to if it wishes, but it does not have to. I think that is all be done and to have every indication that it will, that there is to say about it, but the noble Earl might have will contribute to building strength at the bottom end other things to say. of the council structure. That will produce a much I strongly support the amendment moved by the more robust council when it comes to taking all the noble Lord, Lord Lucas. It is ridiculous if a parish decisions that will be asked of it under neighbourhood council can put in a lot of time and effort to consider planning. In strengthening communities and the basis taking over local services, has to do it through the for neighbourhood planning, the amendment has a expression of interest procedure and can then be outbid role. by other people. There is no sense in that. The Minister The third role concerns cities. In neighbourhood might say that it is unnecessary because if the district, planning, we are producing a structure that will work unitary, county or whatever council agrees to it, it can very well in the suburbs and the countryside, where happen anyway. My experience is of a borough council there is a great deal of value to be extracted from the that tries to offload things to the parishes such as planning process and where communities have a close public conveniences when the parishes do not want to interest in the way that development takes place. That take them on, but that is a different matter. Throughout is the case not only in the inner cities but in places such local government, there is a culture of conservatism as in Battersea in London, where I lodge. There is and fear of taking on and doing more things. Changing really no interest in controlling development because that culture is the most important thing that we have it is a matter of minutiae and individual planning to do. The amendment would be a very useful addition decisions. The place is built up, except for Clapham to the Bill. Common, and no one can touch that. There are no big decisions to be taken in our neighbourhood; there is The Earl of Lytton: My Lords, there is nothing like no incentive to get together as a community under the the words “parish council” to get me out of my seat. provisions of the Bill. However, if the neighbourhood Noble Lords will know of my interest in parish and was to be granted any sort of control over the enforcement town councils. To answer the first question, the noble of parking, 50 per cent of households would come out Lord, Lord Greaves, is right: fundamentally, structurally, to vote tomorrow. parish and town councils are effectively synonymous. 193 Localism Bill[5 JULY 2011] Localism Bill 194

The differences are in the way in which they operate, Parish and town councils in some instances—I am but structurally in their clerks, membership and rules not saying in every instance as they may not have the of engagement with which they have to comply, you facility to do it—would like to get hold of those to can more or less say that the term is synonymous one manage them properly and make sure, in particular, with the other, except that one happens to apply to a that they are not filched by neighbouring householders town. It is an area where we have great difficulty with or have things dumped on them where nobody seems what we might call the family of parish and town to be responsible. They may get driven over because it councils, because town councils such as Weston-super- happens to be a convenient place to pull off for dog Mare have huge budgets and are on a principal authority walking, as happens in my part of the parish. That is scale, whereas many tiny rural parishes, although they just one example of something that could be of benefit. may have quality parish council status, are extremely In general, I support the amendment but there is a small. That lack of consistency makes it very difficult caveat. The words, to deal with parishes as a cohesive whole. “net additional expenditure or net reduced revenue” I say straight away that I have not conferred with is a proviso that the noble Lord wants to insert under the noble Lord, Lord Lucas. I am very pleased that he subsection (3)(a). There is a problem with activities, has moved this amendment. There are some extremely services and things being passed to parish councils good examples of where principal authorities have felt shorn of any resource to deal with it. That is the that they had the confidence to pass on to a parish or classic thing that we refer to in parish and town town council a function that they knew could be dealt council circles as double taxation. The parish then has with readily, cost-effectively and which was well within to raise by precept a means of funding that expenditure the capacity of the town or parish council concerned. because the principal authority has said, “Yes, you can But I am bound to say that nationally, the track record have this but there is no funding to go with it”. I of passing things down to the lower tier has been fairly therefore enter a caveat on that. On subsection (4), poor, taking things as a whole. That is one of the I would flag up that it might be extremely difficult to issues that lies behind localism. We need to get that verify, knowing what little I know about local government straight. finance, to deal with the matters that the noble Lord is trying to cover there. I well understand his reasons for What the noble Lord, Lord Lucas, suggested was a putting them in, but I do not know how you would sort of localism-light in the sense of trying to avoid a prove it. However, in general I support the direction of bureaucratic and procedurally-driven process. On the travel of the amendment. whole I would welcome that as well. At Second Reading, I said that these things have to be rendered down to a localism scale—a community scale, not based on the Lord Newton of Braintree: My Lords, I knew it was sort of procedures and checks and balances that perhaps a mistake to mix with these experts. I had better apply to the much more senior aspects that must be apologise for not understanding the point about parish rightly dealt with by principal authorities. and town councils and indeed for stirring up the noble Earl, Lord Lytton, with his well- informed speech. I give one example. In my own parish council in Shipley in West Sussex, which is one of the largest I want to make two observations, one of which geographically but has one of the smallest populations builds on that. Town councils, in terms of their size in the whole of West Sussex, a parish councillor and perception of themselves, can be, as in his example commented some time ago on the problem the parish of Weston-super-Mare, completely different animals council was having with verges. People were encroaching from most of the parish councils that I know. My on road-side verges by extending their gardens, filling-in constituency contained two main towns—the towns road-side ditches, and doing all sorts of things that have not changed but the constituencies have—one of might include impairing forward visibility along the which was the main town, Braintree, and the other road. They were planting things, and so on and so was Witham, which was almost the same size, with forth. The verges, in so far as they were part of the 30,000 people in those days and possibly more now, highway, would have been vested in the highway authority, which had a town council. If I had tried telling them which in that instance is the county council. We know that it was just a jumped-up parish council, I would that all county councils are subject to cost constraints, have expected to lose the odd vote at the following and certainly West Sussex where I live is no stranger to election. The Government appear to be saying that all that and has introduced some commendable measures these bodies, which are not insignificant, are just to try to square the circle, so to speak. But it cannot be jumped-up parish councils. I do not think that that is in all places at all times and it cannot police those very sensible. Whatever parliamentary draftsmen may verges. Such things should be preserved in the generality say, it might be sensible to incorporate town councils of the public interest—they are assets of community in the wording of the Bill. I leave that thought with my value in many cases but they are often orphan pieces noble friends. of land. They may historically have been part of an Beyond that, there was one other thing that I wanted enclosure plan or something like that which attached to say. I agree with the noble Lord, Lord Greaves, that them to a particular estate or riparian owner, but over district and borough councils are not always great at time, and with the process of land registration, that wanting to devolve downwards. Presumably one of link has been lost. The boundary may have been the objects here is that they might be encouraged to do drawn to an ordnance survey boundary that was set that in appropriate circumstances. The only thing I back from the hard edge of the road, so you end up ask, having endlessly declared that my wife is a district with orphan strips. councillor, is that nobody tells her what I have said. 195 Localism Bill[LORDS] Localism Bill 196

Lord McKenzie of Luton: I wonder whether the district councils try to offload and the parish says, noble Lord can help me on a point which is prompted “No, we would sooner you kept doing this”. I do not by this proposition. If you are switching expenditure see that there is any reason why that cannot be done from one authority to another and precepting increasing under present arrangements. The right to challenge is on the one hand and reducing on the other, how does a different principle. There is a risk that this amendment that play as far as the calculations for council tax could catch relevant authorities in an endless and referenda are concerned? burdensome cycle of considering requests and counter- requests from different parish councils in their area Lord Shutt of Greetland: My Lords, I need real that have different ideas and preferences as to how notice of that last point as it is a bit technical. I have services should be run. not heard of parish council tax capping. I have never Finally, the amendment would risk cutting across heard of it and have a feeling that it is not there. That the community right to challenge as a whole. Requests is the simple response to that. from parish councils to provide services differently, It may be that having a little amendment putting which might include the service being provided by parish or town in the Bill could be helpful so that the parish council or by another organisation, would nobody is in any doubt that parish means parish and potentially override expressions of interest from other town. I understand and accept that. Of course, there is relevant bodies. I hope that in the circumstances the no symmetry in the sense of the sizes of parishes or noble Lord will feel able to withdraw his amendment. towns. For example, I was in the former Elland urban district council area, which never got parish council Lord Lucas: I thank my noble friend for that reply status, yet Todmorden, which is a borough council, but not for the content of it. We will come to these did. There is no symmetry, but nevertheless this House matters again. I understand what he is saying, but I has a wealth of experience of people involved in think that the Government are falling short of the parish and town councils, so it is not surprising that ambitions that they should have in his saying that. We such an amendment creates interest. are taking a step towards making parish councils Through the legislation as a whole, we are enhancing serious bodies for which serious people in the community the role of parish councils. They will be able to exercise stand and expect to do serious things. To put them in a the general power of competence when they meet position where the only thing that they can promise certain conditions. They will be able to nominate their electorate is to take a particular attitude on assets of community value and we propose that they planning is seriously missing a trick. There are many can express their intention to bid for an asset, triggering other things that good people in a community should the full moratorium or window of opportunity. They have an influence over. They should feel that they can will be able to initiate the preparation of neighbourhood go to their electorate and say, “I will do this for you”, plans and we will also be carefully considering the and not just, “I will go cap in hand to the district arrangements for parish polls as part of our proposals council” but “I will make a request that the district for local referendums. council has to consider”, or some equivalent. We However, we believe that Amendment 133 is a step ought to be looking at ways of empowering parish too far and, in addition, is unnecessary and risks councils and particularly town councils in relation to cutting across the intentions of the community right the districts and the counties that sit above them. I am to challenge. We already expect local authorities to sorry that the Government feel that they have gone far engage with their communities on services, including enough in this legislation. I hope that when we get with parish councils, as part of the commissioning experience of parish councils and town councils being and engagement process. Where there are representations, what they can be under this legislation, we will take a we would expect these to be considered and taken step forward. seriously. If representations are made and concern It is not so much the problems of the noble Earl, over service delivery remains, parish councils are already Lord Lytton, that I am thinking about. His sort of named as relevant bodies under the community right parish under this Bill will become rich in opportunities to challenge. They would be able to issue a challenge to raise funds as a result of development, which will to deliver the service if they believed they could do so enable it to do whatever it wants with its verges. It differently or better. Relevant authorities will have really will not be a problem for them, but the Bill is a carefully to consider these challenges. serious problem for city parishes, first of all because there are no parishes. If you look at my bit of Battersea, 7.30 pm there are no lines drawn other than the ward boundaries, and they change every time the Electoral Commission Lord Greaves: Will my noble friend confirm that it has hiccups. There is no community on the ground, and will still be possible for district councils or any principal Battersea is a relatively homogenous corner of London. council to come to an arrangement voluntarily with There are bits of London where you have an enormous their parish councils to transfer service delivery to the mix of different communities with strong ties within parish council outside the provisions of the community them and very few ties between them and to the right to challenge? locality. To build a community there which can take advantage of the facilities in this Bill to influence Lord Shutt of Greetland: My Lords, I believe that is planning requires that the organisations we create can the case. I do not see that that should be disturbed by have influence beyond mere planning. Most of the anything that the Bill is doing. The noble Lord talked lives of people in the community are dictated by the about it the other way round, saying that sometimes ways in which the local authority chooses to spend 197 Localism Bill[5 JULY 2011] Corporate Governance 198 money on them, to police them and to require things I later asked a question of the noble Lord, Lord Freud, of them. If they want to do something as simple as along similar lines. He indicated that the Government having a real influence over the provision made for had no ideas for new regulations in the current climate their children, particularly in terms of early years, but they are open to creative ways of improving the youth clubs, youth provision and help into work, all of quality of disclosure. So I ask the Minister: are the which are substantial programmes going through Government continuing to explore non-regulatory ways Government and through local authorities, they have to encourage better reporting by pension funds, and no right to do so. No one can promise that under this what assessment, if any, have the Government made Bill the neighbourhood will have a real influence on of the adequacy of the reporting at present? We need those sorts of things. Unless we offer communities to improve matters. that ability, we will never create the communities to The UK stewardship code encourages fund managers take advantage of this Bill. This will be a Bill that does to disclose their voting records and the Government not happen in the cities because no one ever gets going have confirmed that it is important that all institutional because no one can create the consensus because there investors disclose their voting. Voting and engagement are no powers on offer that are relevant to the local on social and environmental issues is an important communities. part of an investor’s toolkit for managing risk that I think that is a serious problem with the Bill and could affect savers and yet, after years of voluntary one that I hope the Government will think about. I codes, only 64 per cent of fund managers and 21 per hope that the Opposition will think about it, too, cent of pension schemes publicly disclose their voting because I associate the Opposition with having some standards. The Government have reserve powers to interest in cities from time to time. I was particularly make voting disclosure mandatory. Are they thinking disappointed by the noble Lord’s lack of interest in about it and under what circumstances might they this amendment. I hope I manage to interest him in contemplate it? Are they open to ideas of improving some of my later ones. It seems sad to me that the the quality of pension funds’ disclosures on the Opposition are just interested in the rural vote and management of environmental and social risks? Perhaps have no care left for cities. Perhaps that is being left to the Minister could tell us. the Liberal Democrats, for whose support I am grateful. Another, besetting problem is the short-term approach I beg leave to withdraw the amendment for now. to these matters. As Paul Abberley, CEO of Aviva Amendment 133 withdrawn. Investors, recently put it: House resumed. Committee to begin again not before “If you are investing in a company with a long-term time horizon, it very much matters to know about sustainability issues, 8.36 pm. but if you are taking a time horizon of an average holding of six weeks, you might take the view that there may be a time bomb Corporate Governance and Accountability ticking but it is unlikely to go off in my holding period”. Question for Short Debate I am very pleased that Vince Cable, the Secretary of 7.37 pm State, has announced a review of economic short-termism and published a call for evidence on a long-term focus Asked by Lord Harrison for corporate Britain. In addition, he has appointed To ask Her Majesty’s Government what steps Professor John Kay to oversee that with questions they are taking to improve corporate governance such as how best to ensure that the timescales over and accountability with respect to social and which companies and fund managers operate match environmental issues. the interests of clients and beneficiaries. Equally, how do you establish the most effective means of boosting Lord Harrison: My Lords, the UK corporate transparency for clients, underlying beneficiaries and governance framework is built on the principle that companies themselves? shareholders exercise oversight of company boards. The publication last year of the UK stewardship code Another worry is the misinterpretation of the fiduciary marked a recognition that this ownership role needed duty. The FairPensions report, Protecting Our Best to be taken more seriously by the institutional investment Interests: Rediscovering Fiduciary Obligation—I am community. Indeed, I believe the code should include pleased to acknowledge the help from FairPensions oversight of environmental, social and governance for this debate—was published in March 2011 and issues, not simply because it is the right thing to do or received a good hearing from Ministers Ed Davey and because these issues have a material impact on company Steve Webb. I wonder whether the Government will returns, but also because it translates into a competitive respond to this, to encompass and clarify. Howard advantage for business. Sadly, shareholder scrutiny Pearce of the Environment Agency pension fund argues does not always work, as in the case of the BP oil spill that, due to lax safety standards. Two months before that “all pension funds will need to adopt a climate change-proofed disaster, a shareholder resolution on tar sands—a financial investment strategy in the future to enable them to fulfil similar method of oil extraction to deep-water drilling— their fiduciary duties”. which was put forward to increase disclosure of the However, fiduciary duties should demand an enlightened risk involved, was rejected by 90 per cent of shareholders. approach to social and environmental issues, but we As the noble Lord, Lord Freud, commented in a all know that too often they are invoked to justify the recent debate, reverse. Pension fund members are told that their fund “some pressure on the BP board by its shareholders in relation to cannot be concerned with stopping climate change environmental issues, might have been especially valuable to the because it has a fiduciary duty to maximise returns. company”.—[Official Report, 15/3/11; col. GC 28.] On closer analysis, that seems daft. 199 Corporate Governance[LORDS] Corporate Governance 200

[LORD HARRISON] this had been an all-day debate rather than just an I am a great supporter of narrative reporting. I hour’s debate. I share his view that, for all the stakeholders think it is an improvement on what we have had before in the debate, the institutional community is not sufficiently in company reports. Nevertheless, we have problems well engaged currently and the stewardship code offers relating to unreliable information. Many investors say a serious opportunity. that the lack of verification makes it difficult for them The fact is that we in the UK should be proud that to rely on narrative reports, which can be misleading UK companies have been at the forefront of the or present a rose-tinted view of the world. The OFR process. A large majority of major UK firms publish included an enhanced audit, requiring a higher standard high-quality social and environmental information on of verification than is currently the regime. Sometimes an annual basis. Many produce stand-alone reports it is up against incomplete information. Many companies dealing with financial and social performance. Frankly, focus on peripheral corporate citizenship activities many of them are too large, too lengthy, too detailed undertaken during the year, such as volunteering—I and sometimes irrelevant. Those of us who have been am wholly in favour of volunteering—rather than on Ministers for a certain time know that the way to key social and environmental risks to their core business silence Ministers is to bombard them with paper, and such as water, security and scarcity. No official guidance a corporate report lasting 500 pages is a way of befuddling has been published on what constitutes an adequate rather than informing. report. Perhaps the Minister can comment on that. Companies see the importance of good corporate A third problem is inadequate enforcement. The ethics and strategy and of reporting properly and fully regulator has judged that two-thirds of annual reports about the full nature of their activities. I agree with the fall short of legal requirements in relation to principal noble Lord that volunteering is not the same as human risk, yet in 2008-09 it did not take enforcement action rights, female empowerment and avoiding child labour. against a single company. The regulator is not resourced We already go further in non-financial disclosures to take active enforcement action and generally responds than most other EU members. I am concerned about only to complaints from investors and NGOs. In the further stringent regulations that might impose a light of that, I ask the Minister whether the Government significant administrative burden on firms without a can confirm that they still intend to bring forward corresponding gain in transparency. proposals specifically to drive up the quality of social I declare an interest as I am on the UK advisory and environmental reporting, as indicated in the coalition committee of the International Chamber of Commerce. agreement. Do the Government accept that better We have drawn attention to the fact that allowing a reporting will achieve their objective only if investors certain degree of discretion in non-financial reporting have confidence in it? Do they therefore agree that any enhances transparency by allowing companies to focus new reporting regime must contain improved mechanisms on issues of more relevance and materiality to their for guaranteeing the reliability of information, whether business operations. By contrast, the tick-box approach, through enhanced audit or more robust enforcement? which I think many of us would like to avoid, would I declare an interest as the vice-chairman of the All-Party produce a sea of data and information, at considerable Group on Corporate Governance. cost to UK plcs, that would be impenetrable to all but In conclusion, I ask the Minister whether she can the most persistent reader. I think the CBI has similar put the matter in this frame. Sometimes we worry views. about the introduction of legislation but, to my mind, It is understandable that there is a desire for greater and in my assessment of it, we have to create a view clarity. Since the Companies Act 2006, on which I that consideration for environmental and social and made my maiden speech in this House, we have seen corporate governance is not a chore but a cheerleader great development. My honourable friend’s department, for a better approach to what a company is doing. It BIS, has consulted on narrative reporting. We are can enhance its competitiveness within the market if it fortunate to have her as our Minister because she had complies not only in a tick-box way, but with verve, a significant commercial business career and was also inspiration and interest. I ask the Minister whether, chair of the National Consumer Council, so she can when they think about it deeply, her Government are balance all the interests involved. Perhaps she will let capable of leading the charge of encouraging companies us know what the Government are doing to improve to take this more positive attitude, which I think will the quality of narrative reports to ensure improved carry with it the appropriate approach to something disclosures on the environmental and social impact of which is very important to investors, to shareholders corporate activities. and to pension fund holders for the future. I am very grateful to all those who are to contribute to this Above all, I want to emphasise that the ability of debate. I look forward to the Minister’s reply. global business to be a force for good, for female empowerment, for sustainability and for anticorruption in many parts of the world, should not be underestimated. Baroness Northover: I remind noble Lords that this As we look for modifications, we should remember the is a time-limited debate. When the clock shows “3”, opportunities that are there. noble Lords will have had their time. 7.50 pm 7.47 pm Lord Haskel: My Lords, my noble friend Lord Harrison Baroness Bottomley of Nettlestone: My Lords, the outlined the benefits of good corporate governance House is grateful to the noble Lord for identifying a and reporting. Do they increase profits, the rate of subject that is of such concern that we all wish that return or shareholder value? I do not think that anybody 201 Corporate Governance[5 JULY 2011] Corporate Governance 202 knows. Therefore, strong forces oppose these activities Of course, reporting by companies is only part of and see them as a waste of money that distracts accountability. The other part, referred to by a number management from dealing with competition. Because of noble Lords, is the accountability of those who one cannot show them as assets on balance sheets, invest in companies. For many years, investors have they have no effect on shareholder value. These issues been remarkably uninterested in social and environmental change with fashion. They are unpredictable and performance. This is beginning to change because have little impact on the short-term horizon of many people can see, not least in relation to climate change, managers. that how companies relate to the environment will A good metaphor for these conflicting views is the have a material effect on their long-term sustainability, way in which we manage our forests. The Minister particularly in some of the extractive industries. It will may find the subject of forests painful, but the metaphor also be logical for pension funds, because of the is not mine: it came from Mark Goyder, the founder of long-term implication of companies’ environmental Tomorrow’s Company. We can cut down trees and and social impacts, to take account of those factors in harvest wood for an immediate cash benefit; then we their investment decisions. However, as we have already are left with barren land. Alternatively, we can nurture heard, there are serious concerns about whether they the forest, plant for the future, take out the dead wood can do that legally, given their fiduciary duties. Do the and let new plants and wildlife thrive in the forest, and Government believe that a review of that issue is now thereby open up new horizons. Many of us would like appropriate? to know which companies are good at forestry so that we can deal with them, work in them or invest our savings or pension funds in them. 7.56 pm Many of us like to drink Fairtrade tea and coffee Baroness Young of Hornsey: My Lords, I, too, because we know that everybody in the value chain thank the noble Lord, Lord Harrison, for securing has had a square deal, or we may look for the Carbon this debate. I will declare my interests. I work with Trust Standard mark that tells us that an organisation various organisations concerned with ethical and has tackled its emissions. Branding enables us to make sustainable fashion, including Made-By, the Centre this choice. Helpfully, as my noble friend reminded us, for Sustainable Fashion and Cotton Made in Africa. I Tomorrow’s Company has produced a stewardship am also a patron of Anti-Slavery International. code that incorporates many things that we are debating Many of us balk at the idea of introducing more this evening. Will the Government support and facilitate legislation and complex regulation, especially when a branding exercise to enable us to recognise the good some businesses are taking the initiative. For example, companies that play such an important social and the Responsible Sourcing Network has created a pledge environmental role in our economy? for US and European companies publicly to state their opposition to the use of forced child labour in the 7.53 pm harvesting of Uzbeki cotton and to refuse to use it in Lord Newby: I thank the noble Lord, Lord Harrison, their products. There must also be firm action from for introducing the debate. I declare an interest as an the EU, and from the Governments and importers in adviser to companies on issues of corporate governance those countries that trade with Uzbekistan. and responsibility. There is no doubt that the past Self-regulation and voluntary measures on their decade has seen a sea change in attitudes to social and own are not always enough to secure the necessary environmental accountancy, with both voluntary codes support for the people and environments that are most such as that of the Global Reporting Initiative, which vulnerable to exploitation. Reacting to stakeholder has been widely taken up across the world, and statutory demands for greater transparency and responsibility, provisions such as the Companies Act 2006, which has Governments in Europe and the US are legislating already been referred to and which has required companies on corporate governance and accountability. In 2008, in the UK for the first time to report on their social Denmark adopted an amendment to the Danish Financial and environmental impacts. Statements Act requiring large businesses and listed The previous Government planned to go slightly and state-owned companies to account in their annual further and introduce a full operating and financial reports for their work on CSR. Spain has made a review, before Gordon Brown got cold feet at the last similar move with the Sustainable Economy Act, which minute. The principal difference between an OFR and will come into force in March 2011. what we have under the Companies Act is the requirement Where do we need to be? We should aim high. for some sort of audit. While I agree with the noble Sir Geoffrey Chandler, founder of Amnesty International’s Baroness, Lady Bottomley, about wanting to avoid a business group and a former director of Shell and of pure tick-box approach, at present the quality of reporting the National Economic Development Office, argued on social and environmental issues is extremely mixed. that all businesses should be required to ensure that Only 9 per cent of companies that Deloitte surveyed their operations and supply chains comply with the reported on their carbon emissions in line with Defra Universal Declaration of Human Rights. An important guidelines. Reporting by companies of community step towards this aspiration would be to include a investment is both extremely difficult and patchy.Requiring requirement in the combined code of corporate an audit would improve standards. Under the Climate governance that businesses should report annually on Change Act, the Government have the potential to the measures that they are putting in place to achieve make carbon reporting by companies mandatory. Does this, to uphold the rule of law and to ensure the Minister think that the time has come for that environmental sustainability in their international provision to be brought into effect? operations. 203 Corporate Governance[LORDS] Corporate Governance 204

[BARONESS YOUNG OF HORNSEY] Lastly, investors and institutions have been criticised Professor John Ruggie, UN special rapporteur on for perhaps not being active enough, particularly those business and human rights, argued for measures to that hold shares for a short period. I welcome very advance corporate legal responsibility through countries much the Government’s encouragement for greater establishing extraterritorial jurisdiction over corporations employee share ownership. I think that is a very good for violations of international laws and conventions. thing, and as the Government and others try to explain What plans for action do the Government have to why participating in a capitalist economy is a good improve the quality of social and environmental reporting, thing, at the same time they should stress financial and how might they move towards the high aspirations benefits and their promotion and the opportunities for articulated by Sir Geoffrey Chandler and Professor people with shares newly given to take an active interest Ruggie? in the social and environmental agenda of the companies of which, after all, as employees, they are now part-owners. 7.59 pm 8.03 pm Lord Patten: My Lords, I want to make three points before the clock strikes three. First of all, I strongly Baroness Sherlock: My Lords, the Minister may believe in the corporate, social and environmental struggle to make us all equally happy, but I hope to agenda. I equally strongly believe in the enterprise find some common ground at least. I add my voice to economy in this country. It is extremely important that those who look at the reasons why environmental and our growth agenda succeeds at a time of fragile economic social reporting should be something that we promote. recovery. Therefore I believe it is extremely important For a start, it would help to increase public trust in that across the piece, in the areas of environmental business and in those who regulate it, which we could responsibility and corporate social responsibility, do with as much of as possible. Nevertheless, reporting there is no more unnecessary loading of unnecessary requirements are mainly there to make sure that regulation on the shoulders of businesses, which are stakeholders can make informed judgments about trying to create jobs and employment opportunity. It companies. If we overly limit that to too narrow is extremely important to counterbalance the quite financial information, we fail to take seriously the proper pleas for better reporting, greater clarity and indirect, unintended or non-financial costs—or indeed all the rest that we have seen. Along with our growth benefits—of corporate activity. The consequences are agenda, we also have, as a coalition, a happiness very serious. In economic terms, it fails to account for agenda. I know that the Minister wants to make me externalities and in practice can distort a market. In happy, and I hope that she will indeed make this social terms, it fails to take account of the full range of Back-Bench Peer happy in her wind-up speech by stakeholders who have a legitimate interest in the saying that we are not going to have any more unnecessary company’s activities because they—we—are affected regulation in this area of corporate social responsibility by them. and environmental social responsibility between now Is the noble Lord, Lord Patten, right in saying that and 2015. no more regulation is needed? I fear not. If we look at Secondly, there are of course some successful the environment, it seems very clear that voluntary companies that have made very good money by selling reporting simply cannot deliver results on the scale themselves quite properly as ethical producers. Body and at the pace that is necessary to meet the reduction Shop and Lush are examples from the cosmetics world, in emissions that British law already requires. In my while Ben & Jerry’s and Innocent are producers in the view, carbon reporting should therefore be mandatory, worlds of ice creams, fruit drinks and vegetables. By at least for large companies. In terms of social accounting, comparison, most companies make cars, build buildings we have heard ample evidence that current narrative or supply services and try to be good corporate citizens, reporting requirements are not being followed. A recent just as most individuals try to be good individual report from the Corporate Responsibility Coalition citizens. They are generally now, I think, very responsible summarised the problems pretty well as follows: in these areas. The noble Lord, Lord Harrison, who “vague corporate obligations … insufficient auditor involvement has a good track record for introducing interesting and … weak enforcement”. debates of this sort, said in his very interesting speech Apart from that, it is going swimmingly. that he wanted more companies to take the view that There is good practice out there. I discovered recently this was an important issue. In my experience, in that the first plc in Britain to produce an audited declaring my own financial and corporate interests, I social report was not a corporate giant but Traidcraft, think most companies do indeed take this very seriously a medium-sized company founded in Durham in 1979 and have already taken the view that this is something to fight poverty through trade. I am sure that my noble that they should do. In other words, it has entered into friend Lord Haskel has enjoyed some of its chocolate their corporate DNA. Just as belatedly, in the slipstream bars and tea. In 1993, Traidcraft published an audited we are seeing the need to have more women and social report, and I hope that the Minister has had the greater diversity on the boards of our companies opportunity to look at its social accounts. I found getting into the DNA. It is lagging a bit and still has them fascinating. They told me more about the impact some way to go, but with the enactment of the Bribery of that company not just on its customers, members Act last Friday, we are going to see ethical training and supporters but on its supply chain right the way and ethical codes also coming along and getting into through to its staff and the lives of the very farmers the DNA of companies. That is a very considerable out in developing countries. That is a true social agenda indeed and I think that the direction of travel report. I encourage the Minister to comment on it and is right. to share some of the methodology with larger companies. 205 Corporate Governance[5 JULY 2011] Corporate Governance 206

There is so much more that companies could do. If many companies focusing on corporate citizenship they will not, they must be required to, I regret. At the activities, such as volunteering, rather than on key very least, we should see full monitoring and compliance social and environmental risks to their core business. with the current requirements. However, we also need Could the Minister tell us, in winding up, whether she some guidance on what should be reported on, and we intends to bring forward proposals specifically to drive need an audit standard and, crucially, a timetable for up the quality of social and environmental reporting, when disclosure of social data will be verified. If data as indicated in the coalition agreement? cannot be verified, it simply undermines their legitimacy at all. We may, in fact, discourage people from doing 8.09 pm this rather than encourage them. Lord Moynihan: My Lords, I thank the noble Lord, Lord Harrison, for securing this debate. I declare an 8.06 pm interest as a director of the US-based Rowan Group Lord German: My Lords, I declare my interest as a of companies and chair of its health, safety and trustee of a pension fund, and I want to speak exclusively environment committee. about the investment in pension funds. It is there, of I agree with my noble friend Lord Patten that the course, where people are investing their money day in, vast majority of companies see a clear alignment between day out, month in, month out, preparing for the world social and environmental issues and their overall business in which they want to live when they retire. That is why strategy. However, some companies have a gap between social and environmental issues are going to be extremely their board’s aspirations with regard to social and important for them. However, the chain of command, environmental issues and the way they are enabled and as it were, between the investment itself—from the enacted within their own organisations. I hope that pension fund investors right through to the people tonight’s debate will enable government to work afresh who manage the money on their behalf—is very long with companies to close the gap between companies’ indeed. It is very difficult to see transparency through stated social and environmental policies and the actions that route. That is why I think it is important that and investments they make to pursue those objectives, these issues should be discussed and understood right particularly where the objectives may lack a clear throughout that long chain. financial return on investment or drive long-term rather Since 2000, pension funds have had to state the extent than short-term benefits. to which they take into account social, environmental As my noble friend Lord Newby said, Deloitte, in and ethical considerations. However, much of the its impressive analysis of sustainability and business reporting has been very much a tick box, where people today, concluded that while many companies promote would tick a small box or put in a straight statement, the sustainability concept of the triple bottom line— which would not give enough information to the person pursuing performance in economic, social and whose money was going into that investment fund. We environmental spheres—most companies primarily invest believe that, from the disclosure of information, you in environmental initiatives out of the three. I believe get more empowerment and that the person who is we live in a generation where there is an imperative putting their funding in is getting more empowerment for companies to consider broadening their efforts in for their money. We have had years of voluntary the communities in which they operate as well as in the codes, yet only 64 per cent of fund managers and physical environment. In this context, I support the 21 per cent of pension schemes publicly disclose their proposal for companies to drive for competitive advantage voting records so that the investors in that company by helping them establish or maintain a voluntary can see them. Obviously, investors have a right to social licence to operate in their target communities know and understand, but disclosure is only the first and markets; that is, to gain the support of the people step to empowerment in the part-ownership that they who live and work in those communities and markets. have in the company. These objectives and principles can be embedded in The Government have reserve powers, which they the corporate governance criteria followed by all have taken, to make voting disclosure mandatory if companies and, of course, in their reporting policies, voluntary disclosure does not generate sufficient not least where social and environmental issues are improvement. Of course, the coalition agreement contains usually considered alongside safety within the remit of a commitment to, HSE committees. I agree with the noble Lord, Lord “reinstate an Operating and Financial Review to ensure that Harrison, that social, environmental and safety issues directors’ social and environmental duties have to be covered in should all meet the legal and voluntary requirements company reporting and investigate further ways of improving to be fully and appropriately covered in annual reports corporate accountability and transparency”. and, I would add, in internal reporting to employees I know that the Government have consulted on this and, as the noble Lord, Lord German, has just said, to and are intending to launch a further consultation in the investment community as well. July; but could the Minister tell us where the direction From my experience the energy sector, human safety of travel is on this particular part of the coalition and environmental protection, regulatory oversight of agreement and where it is likely to end up? licensing, energy exploration and production require There are three key problems that I think we need reforms and a new priority within corporate governance, to address in this whole area of pension funds. The even beyond those significant improvements already first one is unreliable information; that is, the lack of made by the sector and this Government. This is an verification, making it difficult for investors to rely on area where co-operation and dialogue with government reports that look through rose-tinted spectacles. Secondly, should be preferred to further primary legislation at there is the problem of incomplete information, with this time. 207 Corporate Governance[LORDS] Corporate Governance 208

8.12 pm Too many companies are pressed by the short-term- Lord Whitty: My Lords, I congratulate the coalition profit instincts of the stock market and investment on rectifying what I thought was part of a very bad banks and cannot think long term. I worked for a mistake by the previous Government whereby, even local newspaper company with strong family ownership though the noble Baroness’s department was all lined traditions. It believed in investing long term for the up to introduce operational and financial review provisions next generation and for its local communities. We that would have required companies to report on worried constantly about the dangers of overgearing social and environmental objectives, the carpet was in a very cyclical industry. It was taken over in 1999 by pulled from under them by the Treasury, as the noble an executive team committed to a business model of Lord, Lord Newby, said. I am glad that the intention borrowing, cutting costs and assuming that the boom is there; now let us see the reality. would go on for ever. Ten years later, that company came to the brink of bankruptcy, and shareholder I am going to dwell largely on carbon reporting, value today is 2.5 per cent of what it was in 2007. It and I declare an interest as a member of the Environment simply never thought long term. Agency’s board. In that capacity, I chair the Environment Agency’s pension scheme, whose chief officer my noble Successful companies can get introverted and arrogant. friend Lord Harrison has already quoted, which attempts They can become oblivious to their communities and to ensure that our investments help to induce some markets, particularly if they are too dominant in their more effective environmental and social reporting. markets. I believe the high-paying bankers got remote and out of touch with reality for those reasons. Even Clear environmental reporting, particularly on Tesco seriously contemplated unacceptable tax-avoidance greenhouse gases, has a major effect not only on schemes despite its prime dependence on British transparency but also on internal management behaviour consumers, and News International, which I worked and external investors’ priorities. Without clear, effective for at the time of the current phone-tapping scandal, and audited reporting, we will not meet the changes but not as a journalist, perhaps will find that it became that are required in company behaviour in order to too arrogant with its success and out of touch in its meet the climate change objectives that were laid down pursuit of competitive advantage. Some of its executives with all-party support in the Climate Change Act. lacked a hinterland that would have warned them The Climate Change Act provides enabling powers against the consequences of their actions. It is frightening in this respect. It is also important to recognise that, that a risk taken nine years earlier can finally catch up as far as the institutions, particularly pension funds, with that company. are concerned, there is no conflict between a proper interpretation of fiduciary responsibility, an interest We need counters to short-termism and arrogance. in climate-change proofing the activities, objectives Principal shareholders are now largely pension funds, and balance of activities of companies and investors which should be primarily interested in the long term. of funds. Indeed, all such large bodies should include Wider social responsibilities need instilling in directors within their objectives a climate-change proofing strategy, to keep them in touch with their communities and but that is not the case. markets. The key for the Government—and I am pleased that the coalition is reviewing this—is to clarify As others have said, only just over half of large the requirements for company reporting, to improve companies have any reporting of climate change identification of risks and to force directors to address objectives and, of those, only 22 per cent have any their social and environmental concerns and risks. reporting that relates to the Defra guidelines. As the Greater concern for social and corporate responsibility noble Lord, Lord Newby, said, only 9 per cent of should help counter company arrogance and complacency, larger companies fully comply, according to the and we should encourage the accountability of pension Deloitte survey. That does not indicate—and I am fund managers to their savers, so social and environmental afraid I have to differ with the noble Lord, Lord risk is at the forefront of their responsibility as Patten—that there has been a change in the DNA of shareholders. corporations, or at least in that of their auditors and accountants. As the noble Lord, Lord Moynihan, said, it may be that the good intentions of the board 8.18 pm are not being reflected through the technical reporting Lord Young of Norwood Green: My Lords, I also responsibilities. However, without those indicators wish to congratulate the noble Lord, Lord Harrison, internally and externally, we cannot achieve the climate for introducing this debate on such an important issue. change objectives that we need, so they are a vital tool I declare an interest as vice-chair of the Ethical for those objectives. Trading Initiative, which is a tripartite organisation I hope that the Minister will be able to say tonight whereby companies, trade unions and NGOs work that the wind is moving in the right direction on this together to improve the lives of workers throughout and that we will see some action. I look forward to her supply chains, which in today’s world are truly global. response. Companies that sign up to The ETI Base Code, which is based on the ILO conventions, agree that, 8.15 pm “Employment is freely chosen … There is no forced, bonded or Lord Stoneham of Droxford: My Lords, I want to involuntary … labour …. Freedom of association and the right to collective bargaining are respected … Working conditions are address two issues in the context of this debate. I safe … Child labour shall not be used … Living wages are paid … believe that there is too much emphasis on short-termism Working hours are not excessive … No discrimination is practised in companies and there is often a danger of arrogance, … Regular employment is provided … No harsh or inhumane particularly in dominant market positions. treatment is allowed”. 209 Corporate Governance[5 JULY 2011] Corporate Governance 210

Needless to say, all these companies are on a journey, managed to get through so many speeches in such a but there is a real pledge and commitment in their short time with so many questions, and my noble reporting to try to live up to these principles enshrined friend is already telling me to get a move on, so I shall. in the base code. As my noble friend Lady Bottomley stressed, strong In this brief contribution I will touch only on the corporate governance must be at the heart of successful issues of transparency and accountability, which seem capital markets which work both for companies needing to me the key themes that have run through this to raise capital and investors looking for solid and debate. Let me quote from a speech that Ed Miliband sustainable returns. It is essential for the long-term made on responsibility. He said: health of our British economy. It is equally clear that “On pay, companies should publish the ratio of the pay of its accountability and transparency are the bedrock of a top earner compared to its average employee. If it can be justified vibrant corporate sector. They build trust and, as the by performance, they should have nothing to fear. We need noble Lord, Lord Harrison, said, underpin business shareholders to better exercise their responsibilities to scrutinise decision-making and long-term performance. Britain top pay. And we also need to recognise—as many great companies do—that firms are accountable to their workers as well as their has been a pioneer in developing high standards of shareholders. Some companies already understand that having an corporate governance but we are far from complacent. employee on the committee that decides top pay is the right thing A few weeks ago my right honourable friend the to do. We should debate whether this requirement should be Secretary of State for Business announced that he had extended to all firms. And of course the same should be true in asked Professor John Kay to lead the review of the the public sector. So we need responsibility at the top of society, effect of British equity markets on the competitiveness but we also need it at the bottom”. of British business. This will address issues of vital On the need to avoid the short-termism that has importance to the long-term performance and governance been referred to during this debate, Ed Miliband said: of British quoted companies. I am delighted to note “It is worth recalling that JP Morgan founded his financial the support of the noble Lord, Lord Harrison, for the company on the idea that the ratio of pay between the highest and lowest paid employee should be no more than 20 to 1”. Secretary of State’s thinking on this. Interestingly, the noble Lord, Lord Patten of Barnes—not My noble friend Lord Patten asked whether the to be confused with the noble Lord, Lord Patten, who Government will introduce further regulation. As we spoke in this debate—recommended something similar said in the call for evidence, on a long-term focus for in a contribution he made on Andrew Marr’s breakfast corporate Britain the best solutions are those which are show. The new chair of the BBC Trust suggested that owned and driven by market participants and investors he was interested in the “very good ideas” contained in in companies. Therefore, we want to work with the the Hutton report on public sector pay, which suggest companies and the City to develop business-led solutions. not a ratio but certainly something like this 20 times My noble friend Lord Newby asked whether the approach. The Hutton report said that that pay multiples Government should review fiduciary duties. The Kay should be published and any increase in the figure review will consider whether government policies directly should be explained publicly. relevant to institutional shareholders and fund managers I want to end on this question of whether exhortation, promote time horizons and effective collective engagement. as opposed to a bit more regulation, is the right way If that is not clear, we will write. I am not sure whether forward. We can see from this debate that there is still I answered that correctly. We recognise the importance a long way to go on the quality of reporting from of social environmental issues to the long-term success many companies. How important is this? We should of businesses. All directors have a general duty to have focus our minds on the fact that, in October 2012, regard to the impact of the company’s operations on another 9 million people will start to be enrolled into the community and the environment. That is reflected pension schemes, in which their savings clearly will be in the way in which they report to their shareholders, at an investment risk because they will be members of notably in the business review part of the company’s defined contribution schemes. There is a real importance annual report. in ensuring that companies are not short term in their The purpose of the business review is to help approach and that they genuinely recognise their shareholders assess how the directors have complied environmental and social responsibilities. with this duty. Quoted companies must provide I look forward to hearing the response of the noble information in the business review about environmental, Minister. social and community issues to the extent necessary for an understanding of the company’s business. Some 8.22 pm companies already make high-quality disclosures but The Parliamentary Under-Secretary of State, the standards are not applied consistently, as we have Department for Business, Innovation and Skills (Baroness heard. Getting this right is crucial if we want to Wilcox): My Lords, I should like to thank the noble achieve balanced and sustainable economic growth. Lord, Lord Harrison, for raising this important and In the growth review, we gave a clear commitment to timely question on what steps the Government are taking simplify the reporting framework. The work we have to improve corporate governance and accountability been doing on narrative reporting is important. Our on social and environmental issues, a subject that I aim is to give shareholders the information that they have some knowledge of, because I wrote the first need to make well informed decisions without adding corporate and social responsibility document for Cadbury to the regulatory burden. Schweppes, and, well you see where it got them. I am The noble Baroness, Lady Sherlock, spoke of therefore going to try to answer as many questions as introducing a higher audit requirement. In July, the possible as I go through, because this really has been a Government will consult fully on these matters. They most engaging debate. I am amazed that we have will of course need to avoid placing additional regulatory 211 Corporate Governance[LORDS] Corporate Governance 212

[BARONESS WILCOX] The noble Lord, Lord Harrison, asked whether requirements on business unless there is clear evidence proposals will be brought forward specifically to drive that they will help to improve the quality and relevance up the quality of social and environmental reporting of the disclosures. We aspire to make reports less as indicated in the coalition agreement. The answer is complex and cluttered. We will enable quoted companies yes. The Government’s consultation will address how to provide clear and relevant information to investors social and environmental reporting can be better integrated about strategy, performance and risk, using a more into the narrative reporting framework to drive up the concise report with supporting information on the quality of disclosures of this information. company’s website. Better governance is allied with stronger corporate The noble Lord, Lord Harrison, asked what constitutes responsibility, an issue we take very seriously. It is not adequate reporting and assurance of the information just about businesses not doing harm; it is about them contained therein. I thank the noble Lord for that helping to build a better society. We are committed to question. An adequate report meets the needs of investors helping businesses succeed so that they create the jobs, and, as such, investors should engage with companies the wealth and the opportunity that our country needs. to determine specific standards of assurance. We want to encourage enterprise and make it easier My noble friend Lord Patten asked whether the for small firms to grow. Our commitment to business Government will introduce more regulation in narrative and the commitment we are asking for in return from reporting. We want to ensure that we have the right all businesses, large and small, is set out in Every framework, which would be a win for everyone. Boards Business Commits. This responsibility deal between should face less complexity and shareholders and other businesses and the Government asks them to show readers should be able to access information more that they are serious about meeting their social easily. That means removing any duplicate requirements, responsibilities by, among other things, protecting the improving guidance and making it easier for companies environment and supporting communities. to adapt to national and international developments. Our consultation, which will run from July to October, Finally, I should like to mention the recent review will consult on proposals to address these aims and we by the noble Lord, Lord Davies, Women on Boards, look forward to receiving the views of many noble which highlighted the low numbers of women reaching Lords who are here tonight. senior positions in our companies. The report set out a body of evidence that showed that diverse boards are The noble Lord, Lord Haskel, asked whether the in a better position to make good decisions. A company Government will support a branding exercise. The and its shareholders profit from this. As a result of the Government support a range of industry-led awards report, things are already changing. The Financial in this area, which have proved to be very effective. Times reports that in the first two months of this year, They will continue to support these and I would 35 per cent of new FTSE 100 board appointments were encourage the noble Lord to help us in this. women. If there is not enough change in the next few The noble Baroness, Lady Young, asked whether years then the Government will consider what further the Government will bring forward proposals specifically action they will take. However, the key recommendations to drive up the quality of social environmental reporting of the noble Lord, Lord Davies, are for companies as indicated in the coalition agreement. The answer is themselves. These are aimed at the larger companies, yes. The Government’s consultation will address the the FTSE 100 or 350. However, I would hope that all issue of how social and environmental reporting can companies will think about the report and about how be better integrated into the narrative reporting framework they can benefit from its findings. to drive up the quality of the disclosures of this information. The noble Lord, Lord Harrison, asked some detailed, In answer to the question asked by the noble Baroness, important and pertinent questions about pensions as Lady Sherlock, no decision has been taken yet on did the noble Lord, Lord German. My answer to them whether to regulate. The consultation is aimed at both is, as I have no doubt the noble Lord, Lord understanding whether regulation is necessarily the Harrison, knows, pensions are the responsibility of best way to ensure consistency in reporting. My noble the Department for Work and Pensions and I will friend Lord Newby and the noble Lord, Lord Whitty, liaise with colleagues in DWP and write to both noble asked whether the time has come to review the reporting Lords to ensure I provide a coherent and joined-up of environmental emissions. The Government have answer. launched a consultation to consider options including As we work through these issues our conclusions a voluntary alternative to promote more widespread will be informed by the principles underpinning our and consistent reporting of greenhouse gas emissions thinking on how to renew the corporate governance by companies in their annual reports. This was an framework; a commitment to rebuilding trust; a open consultation with no preferred option. It closed determination to empower shareholders and a focus today and it will report in the autumn. on protecting long-term values. We are not in the We must keep an eye on the European and international business of weighing companies and investors down agendas. Commissioner Barnier published his Green with more regulation and higher costs but we are Paper on corporate governance in April and the going to shine our spotlight on corporate governance Government will respond to it, ensuring that Britain to improve accountability and transparency and secure continues to play a key role in shaping European long-term, sustainable economic growth for United thinking. My right honourable friend the Secretary of Kingdom companies. I wonder whether the noble State for Business will be taking forward our thinking Lord, Lord Harrison, would like to have a final thought. in the international arena this summer. There is no reply but I am sure that if he wishes to— 213 Corporate Governance[5 JULY 2011] Localism Bill 214

Baroness Northover: I am more than happy to allow Secretary of State will be able to make in relation to the noble Lord, Lord Harrison, to speak, given that those. I can only underline what my noble friend Lord we have a minute. Shipley has just said.

Lord Harrison: Perhaps before the Minister sits Lord Beecham: My Lords, I also have an amendment down, I could thank her for her thoughtful reply. I in this group. First, I endorse what the noble Lords, look forward to some of the developments from the Lord Shipley and Lord Greaves, have said in speaking Government. I would like to extend my thanks to all to their amendments. My Amendment 133ZEA is Members who have participated in what was a very effectively to replace the Secretary of State’s regulatory interesting and fascinating debate. I hope that we can function—again we come across the Secretary of State’s return to it as matters develop. Once again, I thank regulations—with the relevant authority being allowed everyone. to determine and publicise the relevant periods between accepting an expression of interest and beginning the procurement exercise. That really ought to be a matter Localism Bill for local circumstances and local decision and not Committee (5th Day) (Continued) something prescribed nationally. Relevant documents: 15th and 16th Report from the Delegated Powers Committee. Lord Shutt of Greetland: My Lords, Amendment 133ZC would remove the Secretary of State’s power to 8.37 pm specify minimum periods for the submission of expressions of interest. Amendment 133ZEA would require relevant Clause 69 : Timing of expressions of interest authorities to set and publicise minimum and maximum periods between an expression of interest being accepted and a procurement exercise starting. Amendment 133ZE Amendment 133ZA would remove the Secretary of State’s power to specify these periods, which would have a similar effect. We Moved by Lord Shipley have taken these powers to ensure that power really is 133ZA: Clause 69, page 58, line 27, leave out “may” and insert pushed down into the hands of communities. “should” The power to specify minimum periods for submission of expressions of interest will ensure that relevant Lord Shipley: I shall also speak to Amendment 133ZB bodies have sufficient time to prepare and submit and I shall be very brief, because a number of the them. The power to specify a minimum period between issues that I would have raised were raised earlier in an expression of interest being accepted and a procurement amendments on this section. It is interesting that in exercise starting will, in particular, ensure that employees, this chapter, which has four pages, the Secretary of where they are not the challengers, have sufficient time State is mentioned 19 times. It seems very odd that in a to decide whether they wish to organise themselves Bill about localism, the Secretary of State has to have to bid, and do so effectively. This will support the 19 separate possible roles. My amendment is simply Government’s commitment to give public sector workers about how the timing and consideration of expressions the right to bid to take over running the services they of interest could be progressed. Put simply, relevant deliver. It should also help smaller and newer voluntary authorities would have to specify when these would be. and community bodies. The power to specify a maximum It seems to me that local government can be trusted period will prevent a procurement exercise from being to do more things for itself. Given that councils will unnecessarily delayed. have a power of general competence under this Bill, The majority of relevant authorities will, of course, we might consider allowing them to prove that they act within the spirit of the right, but these powers will are generally competent to do things for themselves prevent a recalcitrant authority from specifying periods and do not need the constant intervention of the that are so short that they stymie relevant bodies Secretary of State in a whole range of ways which do wishing to use the right. However, following our recent not support the principle of localism. There is a key consultation, we are carefully considering whether principle here: this is an example of where the powers some discretion could be given to relevant authorities of the Secretary of State could simply be written out on the timescales associated with the process to enable of the Bill and local authorities could be given a them to take account of local circumstances. responsibility for defining when expressions of interest Clause 69(2) gives discretion to relevant authorities could come in and when the authority would then to specify periods during which expressions of interest consider them. As a consequence, the role of the could be submitted in particular services. Amendments Secretary of State and a considerable number of the 133ZA and 133ZB would instead require relevant 19 separate roles of the Secretary of State in this authorities to specify periods during which expressions four-page chapter could be reduced. of interest in a particular service would be considered, changing the emphasis of this provision. Relevant Lord Greaves: My Lords, I have two amendments bodies would then be able to submit expressions of in this group, Amendments 133ZC and 133ZE. They interest at any time. However, this amendment could are all about the maximum and minimum periods by result in expressions of interest being submitted so far which local authorities have to deal with expressions in advance that they would be out of date by the time of interest and the rules and regulations that the the relevant authority considered them. The time within 215 Localism Bill[LORDS] Localism Bill 216

[LORD SHUTT OF GREETLAND] Amendments 133ZB and 133ZC not moved. which a relevant authority must notify a relevant body of its decision on an expression of interest, provided Clause 69 agreed. for in Clause 71(4), is intended to provide time for consideration of expressions of interest. I trust that, in the circumstances, noble Lords will feel able to withdraw Clause 70 : Consideration of expression of interest their amendments. Amendment 133ZD Lord Greaves: From my point of view, if this provides a bit more flexibility to deal with local holidays and Moved by Lord Greaves things like that, it is welcome, but the whole thing is 133ZD: Clause 70, page 59, line 1, leave out from “must” to still complete nonsense. The idea that local authorities end of line 3 and insert— need to be told exactly what the minimum or maximum “(a) decide whether or not to carry out a procurement periods are, or need new rules to say, “This is exactly exercise relating to the provision on behalf of the authority the flexibility you can have to increase it, or reduce it, of the relevant service to which the expression of interest or whatever”, is treating local authorities, as I said relates, and before, first of all like wholly owned subsidiaries of (b) either— national government, and secondly like a kindergarten (i) carry out such an exercise, or which needs to have its whole life organised for it by (ii) negotiate with the relevant body on the terms on people from above. It is absolutely crazy and is typical which the body may carry out the provision of the of the entire ethos which lies behind the Bill. All the relevant service.” good stuff in the Bill is being ruined by this complete nonsense that local authorities have to be told what to Lord Greaves: I have this somewhere. Sorry, my do and how to do it in detail. I was thinking about this Lords, I got a bit carried away with the previous over dinner. I said before that it is to do with local amendment and stopped sorting my papers out. I authority cultures. Local authorities will never learn shall speak also to my five other amendments in this to be grown-up people who can make their own decisions group. There is also a Labour amendment in the and organise their own lives if this culture continues. group. My honourable friend Andrew Stunell, one of the Amendment 133ZD follows a pattern of debate Ministers responsible for the Bill, complains almost and amendments on this chapter in that it tries to give every time I see him that he goes to local authorities local authorities more freedom to make their own and they keep asking him how they are going to deal choices and attempts to minimise constraint by the with the new general power of competence. He says, Secretary of State. It would give local authorities the “It is a new general power of competence and you choice whether or not to respond to an expression of yourselves will decide how you’re going to deal with interest with a procurement exercise. We discussed this it”. That is wonderful, but all through the Bill we have in some detail in our debates on amendments before all these detailed regulations that go against that. the dinner hour, so I will not go into that in any more Local authorities nowadays will not do anything detail now. This is an area that I think we will want to unless they have such regulations. So long as these come back to in later discussions. regulations continue, local authorities will lack imagination The reason for Amendment 133ZF, which refers to and enterprise. They will be the opposite of what we Clause 70(6) and (7), is to try to find out what they want them to be. The civil servants and the Government mean. Subsection (6) reads: have to let go. Until they do so, there is no hope. “A relevant authority must, in carrying out the exercise referred to in subsection (2), consider how it might promote or improve 8.45 pm the social, economic or environmental well-being of the authority’s Lord Shipley: My Lords, I agree with much of what area by means of that exercise”. my noble friend Lord Greaves has said. This is about This is a welcome provision, because it suggests that, the issue of competence. A power of general competence as part of dealing with the expression of interest that implies that people are able to do things because they comes in, the social, economic and environmental are competent to do them, but for local authorities well-being of the authority’s area has to be looked at. I there is a separate meaning for “competence”, which is assume that when it says “the authority’s area”, it also the ability to do it. Local authorities have the ability to means the specific part of the authority’s area that the do it; maybe some do not but many do. Those that do expression of interest refers to. It would be interesting not will have to grow in the role to enable them to do to have a comment on that. Subsection (7) then says: so. However, a four-page chapter in which the words “Subsection (6) applies only so far as is consistent with the law “Secretary of State” are mentioned 19 times should applying to the awarding of contracts for the provision on behalf not be part and parcel of a Localism Bill. I hope that of the authority of the relevant service in question”. between now and Report that further thought will be This is simply an amendment to probe what that given to this and that someone somewhere might means in practice. I understand what it means on attempt to remove some of these mentions of the paper, but in reality what balance will be given when Secretary of State so that the words appear only an authority is considering how to deal with a particular where they really need to. I beg leave to withdraw the expression of interest, and particularly with the amendment. procurement exercise? If what really applies is the lawyers coming along and saying, “This is how this Amendment 133ZA withdrawn. authority awards contracts, and this is how it has to be 217 Localism Bill[5 JULY 2011] Localism Bill 218 done”, the reference to social, economic and environmental In other words, if the provider is not performing well-being may not actually mean very much. Or does adequately, can the council move in in default, as it it mean that the authority’s rules on the awarding of can with a normal contract, and take over the service, contracts—its financial regulations and so on—can be or is it lost for ever once it is out in the community, changed in order to give more weight to the kind of even if it is no good? things that we talked about earlier, such as community Amendment 133ZJ would apply the provisions of involvement and the enhancement of particular areas, the Transfer of Undertakings (Protection of Employment) even if that is not the cheapest way? Regulations 2006, usually known as TUPE. Clearly, if Amendment 133ZG would insert a new provision, it is a question of looking after a pocket park at the which reads: end of a street, that can simply be transferred to a “Any contract or other agreement that the relevant authority community group such as the parish council. However, enters into under the provisions of this section shall be time-limited”. if these provisions were used to transfer a refuse collection service, TUPE provisions would normally This might happen automatically, but it would be apply. Do they apply in the case of transfers under this interesting to hear the Minister say what the Government’s legislation? view is. Does this hand over a local service for ever, or is it the normal sort of contract that a local authority The final amendment in the group, Amendment would have with an outside contractor to provide a 133ZM, is headed “Application of duties”. It seeks to service, which would be time-limited to five or 10 years, investigate whether the Equality Act 2010 will apply in or whatever it might be? respect of the provision of a relevant service under the Bill. Will it be deemed to apply to the relevant body Amendment 133ZH would add four more provisions. when that body is providing the service? If all you are The first is: doing is looking after a pocket park at a very local “Any contract or other agreement that the relevant authority level, common sense suggests that the Act will not enters into under the provisions of this section may be subject to apply, but if you are transferring a service that involves such arrangements for supervision, monitoring and assessment as employing people and providing a significant service the relevant authority thinks are necessary”. such as social services to people, does the equality Is it a question of handing a service over to someone legislation still apply to those services, some of which in the community, or an organisation comes in and might well be duties on the local authority that are takes advantage of the procurement exercise, who is being carried out by someone else? I beg to move. then responsible for it lock, stock and barrel, or does the council still have a residual responsibility? Will it be treated like a normal council contract—for example, Lord Patel of Bradford: My Lords, the noble Lord, a contract for refuse collections and recycling—or is it Lord Greaves, has raised important issues, and I look something different? Will there be a lighter touch in forward to the Minister’s response to them. I speak supervision? Will there be any supervision whatever? particularly to Amendment 133ZEC, which seeks to If it is something that the council has a duty to do by include a provision relating to expressions of interest. law, and there is no supervision, how does that tie in Clause 70(5) already calls on relevant authorities to with the council’s duty? consider the likely impact of any expression of interest The second provision the amendment would add is on promoting or improving the, that, “social, economic or environmental well-being of the authority’s area”. “Any contract or other agreement that the relevant authority enters into under the provisions of this section may be subject to I greatly welcome this and believe that it is an essential stipulations about the minimum level of services that must be component of the consideration. However, I wish to provided and standards relating to their provision”. strengthen it by including a consideration of equality. This is the same kind of argument. It is the kind of As noble Lords know, I have a long-standing interest thing that would happen automatically with a normal in equality and feel passionately that this is a vital council contract. Does it apply in this case? If it does issue for all public services. I greatly welcomed the not, what guarantees are there that a proper service previous Government’s introduction of the Equality will be provided in future? Act and have watched with some concern the current Government’s apparent retreat from many of the excellent The third proposed subsection states: provisions in that Act. “Each such contract may contain provisions relating to the It seems appropriate that we should do all we can to action that may be taken by the relevant authority if a stipulated ensure that equality is a prime consideration under the level or standard of service is not provided”— community empowerment chapters of the Localism in other words, if people are not providing the service Bill. The noble Lord, Lord Greaves, shares this concern. that they said they would provide when they made the His Amendment 133ZM seeks to ensure that the expression of interest and when the procurement exercise provisions of the Equality Act 2010 that apply to took place. If they do not provide the service, what relevant authorities will also apply to relevant bodies. happens? Is the council responsible for stepping in and I wish to go somewhat further than this as I believe we doing something about it, or does it just hold its hands need to ensure that the existing equality requirements in the air and say, “That’s tough, that’s the way it is”? are strengthened. I wish to outline three reasons why The amendment further states: this is important. “Such provisions may include a procedure by which the relevant First, there is a risk that the community right to authority may take over the provision of the relevant service challenge could result in the exclusion of vital voluntary itself”. and community groups that currently empower people 219 Localism Bill[LORDS] Localism Bill 220

[LORD PATEL OF BRADFORD] value and nature of the contract that may be awarded and ensure that local decision-making promotes equality. as a result. Therefore, where the service is of a nature Groups working with specific communities, such as or value to which the Public Contract Regulations lesbian, gay, bi-sexual and transgender communities, 2006 apply, the relevant authority will need to follow black and minority ethnic communities, people with the procedures set out in those regulations for advertising, disabilities, and faith groups, should all be given robust tendering and awarding contracts. However, where support to take up the community challenge. Without those regulations do not apply—for example, where specific protections to ensure this, such as a duty to the value of the service is below the threshold of consider equality, many of these groups would be £156,000 for local authorities or the services are otherwise passed over. exempt—authorities have the discretion to decide how to procure the service, just as they already do when 9pm contracting out services. Secondly, many will judge the community right to Amendment 133ZJ would require any contract that challenge by the degree to which it delivers improved a relevant authority entered into following a successful outcomes for the most disadvantaged members of the challenge to be subject to the Transfer of Undertakings community and provides safeguards to protect vulnerable (Protection of Employment) Regulations 2006—TUPE. people, including older and younger people. If the The TUPE regulations already specify the instances in community right to challenge is to be credible, it must which they will apply. We are not seeking to change provide tangible benefits for these groups. those through the community right to challenge. Thirdly, we need to ensure that there is a level Amendment 133ZEC would require a relevant playing field. Many of the groups who will wish to authority to consider whether acceptance of an expression take up the community challenge will work every day of interest would promote or improve equality of with vulnerable and disadvantaged communities, often service provision in its area. Amendment 133ZM would with very scarce resources and capacity. These groups, apply the duties with which a relevant authority must which we know are often the best at reaching people comply under the Equality Act 2010 when delivering traditionally neglected by statutory services, will face a service to a relevant body delivering a service on its significant challenges in undertaking the process of behalf. competing to run services. In order to ensure that they Relevant authorities will need to comply with their are best supported in this process, a duty to consider duties under the Equality Act when delivering services equality would be really helpful. This is vital, especially directly, when considering expressions of interest, when if we are to ensure that the community right to challenge contracting out following a successful challenge under promotes and improves equality for local people and the right, and when procuring services outside the does not disadvantage vulnerable groups or negatively right. As is currently the case, when contracting out impact on the provision of local services. I hope that services authorities will need to satisfy themselves that the Minister is a little bit amenable to this suggestion, they have fulfilled their duties, for example by including and I feel very strongly that consideration of equality appropriate requirements in contracts. should be included in this important chapter of the Bill. Amendment 133ZF would remove the requirement I am sure the Minister will say that lots of the services for a relevant authority’s consideration of how it are covered by this legislation anyway, but again the might promote or improve the social, environmental issue is about making it explicit so that people do or economic well-being of its area through the consider it and we give the opportunity to some of procurement exercise, to be consistent with procurement those groups that traditionally would not get it. law. The amendment would remove clarity where it is needed. A relevant authority considering how it might Lord Shutt of Greetland: My Lords, I thank the two promote or improve the social, economic or environmental noble Lords who have taken part in the debate. I have well-being of its area must do so in a way that complies several notes here for responding to these things, and with procurement law. Failure to do so provides a if I do not pick everything, I hope I can write to them number of grounds for legal challenge. afterwards. Amendment 133ZH would enable a relevant authority We have to remember as a preliminary to all this to specify in relation to contracts entered into following that this is the Localism Bill and there are some new a successful challenge: arrangements for supervision, things here, but that that does not get rid of old things. monitoring and assessment; service levels and standards; Therefore, if something is in the law at the moment, no and the action that may be taken by the authority other apple carts are upset. That is the fact of the Bill. where those are not met, including a procedure by However, Amendments 133ZD, 133ZJ, 133ZM and which the authority may take the service back in-house. 133ZEC address areas in which existing legislation Relevant authorities can and do include requirements will apply and where services are contracted out following in contracts for performance and monitoring. The a successful challenge under the right. Amendment 133ZD right does not restrict them from continuing to do so. would require a relevant authority accepting an expression Amendment 133ZG would require contracts let of interest to decide whether it was going to carry out following a successful challenge to be time-limited. a procurement exercise, and either carry out that exercise Authorities enjoy the freedom to enter into contracts or negotiate with a relevant body on the terms on for whatever period is relevant to the needs of their which it may deliver the service. service users and to the need to obtain value for Clause 70(3) already requires the procurement exercise money. The amendment would unnecessarily restrict carried out by the relevant authority following a successful that freedom. In other words, there is no prescription challenge to be appropriate and have regard to the on that. That is not a regulation; it is not in the Bill. 221 Localism Bill[5 JULY 2011] Localism Bill 222

In the circumstances, I hope that the amendment to reject the expression of interest on the grounds of a may be withdrawn. serious risk of the intention of the expression of interest being frustrated by some entirely extraneous Lord Greaves: My Lords, there have been a number body being able to enter into the procurement procedure of useful and welcome statements, which have helped and win the contract. This is not intended to be a us to understand how this might work. I will read destructive proposal. On the contrary, it is intended to them carefully, as usual. There are one or two other help the legislation fulfil its intentions, and I hope that issues, such as the TUPE business, for which the the Government, if not tonight, will be prepared to Minister said that nothing has changed, but it might look at these two amendments to see whether they can still be helpful to know how it might apply to different be adopted in the interests of their own position on circumstances under the Bill. For the moment, I beg the Bill. I beg to move. leave to withdraw the amendment. In general, they were very helpful responses, and I will read them carefully. Lord Shutt of Greetland: My Lords, Amendment Amendment 133ZD withdrawn. 133ZDA would require that a majority of the workforce affected by an expression of interest submitted by employees of the relevant authority consented to a Amendment 133ZDA procurement exercise before it went ahead. We agree Moved by Lord Beecham that employees affected by an expression of interest submitted by their colleagues should be engaged in the 133ZDA: Clause 70, page 59, line 3, at end insert “but in the case of an expression of interest from a relevant body as defined development of the proposal and we are looking at by section 68(5)(d) only if a majority of the workforce likely to be how this might be reflected in the requirements for an affected by such a procurement exercise consents to it” expression of interest. The face-to-face meetings, intranet updates and staff clinics undertaken when some 1,200 staff Lord Beecham: This amendment, and the other from the Hull Primary Care Trust transferred to a amendment in this small group, Amendment 133ZEB, social enterprise under the NHS right to request scheme relate to the situation where the challenge is made by is a good example of how employees have been engaged two or more employees of the authority under the in a proposal. However, when a local authority decides provisions of the Bill. The first amendment requires to undertake a procurement exercise for services outside the consent of the majority of the workforce likely to the community right to challenge, there is no requirement be affected before the authority is obliged to accept to secure the consent of the majority of the workforce the expression of interest. That seems a sensible affected by it. This amendment may therefore act as a precaution. barrier to services being provided differently and better. A previous amendment would have raised the number Of course, the requirement for employers to inform from two to five but, if I may say so, that is almost and consult representatives and employees affected by irrelevant. It would be wrong for a very small group of a prospective transfer of employment will continue to employees of an authority to have an expression of apply. interest accepted without the support of people in the Amendment 133ZEB would enable a relevant authority authority who might be affected by the decision to to reject expressions of interest when EU procurement proceed with the challenge. I hope that the Minister or competition law is likely to apply.The Public Contracts would agree it would be essential in those circumstances Regulations 2006, which are part of our domestic law for a majority of those who would be so affected to that implement EU procurement law, set out requirements endorse the proposition, even if it were made by a in relation to procedures for advertising, tendering relatively small number. It would not be a cumbersome and awarding contracts when the value of the service or difficult exercise to test the opinion of the relevant is more than £156,000 for relevant authorities or the workforce, and it would clearly be a sensible precaution. service is not otherwise exempt. Authorities will already The other amendment is based on concerns about need to comply with these requirements in deciding the operation of EU competition and procurement what kind of procurement exercise to carry out for a law, particularly in the case of a service that had been service, and will need to continue to do so following a carried out by the authority becoming outsourced. successful challenge under the right. The amendment This is legal territory into which I venture with trepidation. would enable relevant authorities to reject an expression It has never been my area of legal specialism; it is not of interest in all but the smallest services, dramatically an area in which perhaps many in my profession are reducing the scope of the right. I hope that the noble all that confident. There seems to be a risk in these Lord will withdraw his amendment. cases that when an undertaking has been carried out by a public body and outsourcing takes place with the 9.15 pm relevant workforce, that may expose the procedure to Lord Beecham: I will first deal with the rather the rigours of the competition and procurement laws strange analogy that the Minister has drawn between that might then lead not to a community organisation this situation where a small number of employees can taking over but a private enterprise, which is quite precipitate a process and a situation where an authority outside the intentions of the legislation. decides to outsource. The noble Lord identified a case The amendment would require the authority to involving several hundred employees but it might well take a view—and take advice, of course—about the be even more than that. The trigger in that case is the potential problem. If it was not a problem, of course, authority; the trigger in the case in the Bill is potentially the expression of interest could go ahead. If it were to a handful of fellow employees making an approach be a problem the amendment would allow the authority under the provisions of the legislation, affecting 223 Localism Bill[LORDS] Localism Bill 224

[LORD BEECHAM] and a new procedure. As with the right of community substantially more. That seems to me to be quite a challenge, this House has, I believe, a duty to ensure different situation. While one would hope that there that the legislation is workable. would be a process of consultation along the lines that I shall speak also to six other amendments in the the Minister referred to in the case of Hull Primary group, which are in my name, and there are many Care Trust, there is nothing in the Bill that would other amendments in the names of other noble Lords. require it. So I hope that the Minster will have another Amendment 133D, which leads the group, seeks to look at that. change the definition of what is to be in the list which In so far as the competition requirements are the local authority maintains. Clause 74(1) states: concerned, with respect, I think that the Minister is “A local authority must maintain a list of land in its area that slightly missing the point that I am making, which is is land of community value”. not about the general provision for procurement but We seek to change that to, about the particular circumstances that might apply to “a list of businesses in its area that are businesses of community an undertaking of a public authority being outsourced value”. by its workforce under the provisions of the Bill. This is a probing amendment to probe the meaning I understand that the Minister is not prepared to of “land”, “businesses” and “buildings”, which are all accept either amendment tonight, but I reiterate my referred to in this part of the Bill. There is also request that these matters be looked at between now something more fundamental behind it, which is the and Report. Otherwise, it may well be that we will have question of what, in a community, is of value to return to the issue at Report and potentially test the people. As far as this proposal is concerned, is it land, opinion of the House. However, at this stage I will or is it what people do with the land; in other words, withdraw the amendment. the businesses? There is a fundamental distinction and it is worth debating. There is also the matter of whether Amendment 133ZDA withdrawn. land, as such, should be maintained on the register or whether it should be dealt with in some other way. We Amendments 133ZE to 133ZK not moved. will come to those amendments in due course. Amendment 136ZAB— Clause 70 agreed.

Lord Beecham: Does the noble Lord have a view on Clause 71 : Consideration of expression of interest: the utility of Clause 74(2) which reads: further provisions “The list maintained under subsection (1)”— Amendment 133ZL not moved. with which the noble Lord has just dealt— “by a local authority is to be known as its list of assets of Clause 71 agreed. community value”. Does he think that is useful or would he have in mind a Amendment 133ZM not moved. further amendment about that?

Clause 72 agreed. Lord Greaves: I do not know. If the local authority is maintaining a list of land or businesses of community Clause 73 : Provision of advice and assistance value, it will no doubt be known as the list of assets of community value. Whether the words are required in Amendments 133ZN to 133ZP not moved. legislation is something I have long since stopped wondering about. I am sure that some of us could get Clause 73 agreed. round a table and reduce the size of this Bill considerably just by omitting stuff that appears to add nothing. I Amendments 133A to 133C not moved. am not sure that that is our job. I would love to go through deleting stuff, but the Government would not accept it. When I do, they do not accept it. I have no Clause 74 : List of assets of community value real comment on that. The Bill refers to a building or land specified in Amendment 133D regulations, as a definition of the buildings and land Moved by Lord Greaves which perhaps ought to be in the list of community assets. Again, it refers to a building or land, and 133D: Clause 74, page 61, line 5, leave out “land in its area that appears to refer to a particular building or particular is land” and insert “businesses in its area that are businesses” land, but it seems to me that it ought to refer to a class of building or land or a category of building or land. Lord Greaves: My Lords, we now move on to Amendments 136ZB and 136ZC go together and Chapter 4 of Part 4 of the Bill, which relates to assets are rather more specialist. Amendment 136ZB is quite of community value and the compilation of lists of long. It states: assets of community value by local authorities, the “For the purposes of this section “land of community value” definition of community land, the procedures for including does not include … an allotment, common, open space, nature the land in the list, and so on. This is an important reserve or playing field in the ownership or management of a chapter. It is entirely new legislation, with new ideas national or local authority or a charity whose purpose includes 225 Localism Bill[5 JULY 2011] Localism Bill 226 the management or conservation of that land for the public enormous consternation and we have had endless benefit … access land, or … land governed by an approved estate discussions—useful discussions. If the Committee will management scheme under section 19 of the Leasehold Reform allow me, I will take five or 10 minutes to go into it. Act 1967 or section 69 of the Leasehold Reform, Housing and Urban Development act 1993”. The idea behind this chapter is very simple. We Amendment 136ZC defines the terms. As defined know already that many communities, both urban and in the amendment, access land is land defined as such rural, have lost the use of buildings or land that were under the Countryside and Rights of Way Act 2000. It important to them because they were sold privately or covers very large areas. For example, the whole of the without an interested community group having time Lake District is access land, either because it is urban to raise the necessary funds. There are instances of an common or because it has been described as access adult education centre in Calderdale, a Methodist land. Very large areas of the uplands of this country church in Cornwall and any number of village shops are access land, and many places have commons that and pubs, as well as other community assets, which are access land. Clearly this is land of community noble Lords will be aware of in their villages and towns. value, which is why it has been defined as access land Local authorities can, of course, already choose to on which people can engage in what I believe is termed transfer assets to local community ownership or “recreation on foot”. However, it would be ludicrous if management. They can do so on favourable terms all that land were to be included in this legislation. where it will promote local well-being under existing These amendments exclude it. legislation. The Government have actively supported The list of allotments, commons, open spaces and this and want it to continue. The assets of community so on removes from the Part 4 procedure land already value provisions that we are considering today are reasonably protected by statute, and land where the aimed at situations where the local authority does not present owners should not be encouraged to believe choose to do so, and at assets owned by other public that they can offload it on other people or perhaps on bodies and by charitable or private owners. We are public authorities. It is also desirable to simplify the giving communities the right to nominate assets of creation of the lists. Many areas, large and small, are community value and local authorities a duty to list defined in this way and might be included. However, if them if they satisfy certain criteria. Then, if—and only they were it would be likely to lead to a large number if—the owner of a listed asset decides to dispose of it, of disputes that would be difficult to resolve. he or she will not be able to do so for a defined period. This will allow interested community groups the The definitions of allotment, common and open opportunity to prepare a business plan and raise the space are similar to those in Clauses 163(3) and 183(10) necessary funds to bid for the asset. The owner will in the London sections, which repeat definitions from not be restricted in marketing the property in preparation previous legislation over the years. It should be noted for its disposal during this period. The word “disposal” that the definition of “allotment” does not include the is used as opposed to “sale” because these provisions normally understood meaning of allotment, which is will apply both to freehold sales and to the granting either a statutory allotment under the Allotments and assignment of long leases. Those will be the Act 1922 or a council or other allotment probably let definition of “disposal”. However, I can assure your on an annual garden tenancy. These allotments are the Lordships that it is our clear intention that the provisions specialist fuel and field garden allotments under an will not apply to transfers made by inheritance, gifts Inclosure Act, which some of us will remember discussing or transfers between family members and between during the passage of previous legislation. partners in the same firm or trustees of a single trust; The amendments do not seek to prevent the transfer these will be able to proceed unimpeded. or leasing of any of these excluded classes of land to We are continuing to explore other appropriate appropriate charitable organisations—by agreement exemptions, and I would like to address these and and after full consultation with the public and those other issues concerning the operation of the moratorium affected—but it should not be under the pressure of rules when we consider Clause 82, which may not be this procedure. These classes of land have protection today. I also want to stress that these provisions do not that is long established and rather specialist, and it restrict in any way the freedom of the owner of a listed should remain. asset to dispose of it to whomever they choose and at Amendment 133E questions the five-year time limit whatever price they choose. They only affect when for land and buildings that are included— they can do so. Furthermore, they do not confer a right of first refusal, unlike the Community Right to Lord Teverson: That is in the next group. Buy scheme that operates in rural Scotland. Also, they do not directly place any restriction on what an owner can do with their property, once listed, while it remains Lord Greaves: I beg your pardon. I beg to move in their ownership. This is because it is planning policy Amendment 133D. that determines the permitted use of a particular site. An owner can, of course, apply for planning permission 9.30 pm for change of use; this will be dealt with by the local The Parliamentary Under-Secretary of State, planning authority in the normal way. In that situation, Department for Communities and Local Government the authority may consider the fact that an asset has (Baroness Hanham): My Lords, before we proceed any been listed as a material consideration, or they may not. further, it might be helpful to Hansard and to the rest We are acutely aware that we have to balance the of the discussion if I give a short résumé of the community benefit that these provisions will bring purposes behind this part of the Bill. It has caused with the rights of property owners. That is why we 227 Localism Bill[LORDS] Localism Bill 228

[BARONESS HANHAM] Earl Attlee: My Lords, I suggest that we go into the have built a range of safeguards into the process. detail of the amendments and then, if the noble Lord Landowners will have a right to request that the local wishes, have a good stand part debate. authority review a listing decision. We also intend to introduce a right of appeal against a review decision. Lord Cameron of Dillington: On the whole of The Bill allows for the payment of compensation, Chapter 4? At which stage? After the first amendment? and it is our firm intention to put in place a compensation scheme, administered by the local authority, which Earl Attlee: On the appropriate clause stand part will consider claims for costs and loss incurred by debate. non-public owners—that is, private owners—in complying with the requirements of the scheme. Lord Hodgson of Astley Abbotts: My Lords, I am The Bill provides for a number of more detailed extremely grateful to my noble friend for her explanation. aspects of the scheme to be set out in regulations. This She gave us quite a lot of information at a fairly rapid will make it possible to review how those provisions rate. I have been scribbling down some of the points are working after a year or two and to make adjustments that she made, and I found myself very sympathetic if they appear necessary. It has also allowed us to with her comments about the need for balance and the consult widely on the details, and we have been carefully need to satisfy certain criteria. Then she turned to the considering the 256 responses to the consultation, question of consistency across the country and a which ended on 3 May. They will inform our views national standard. That is where my Amendment 136 about this as we go along. comes in. It inserts in Clause 74(5) the requirement There is another balance to strike. On the one hand, that there should be a definition of an asset of community consistency across the country is desirable, giving value. That establishes consistency across the country. certainty for interests represented nationally. This could I have not participated in this Bill so far, so I should be achieved by putting more detail in the Bill or in make it clear at the beginning that I support its thrust. regulations. On the other hand, in encouraging localism, I favour community empowerment. I think it is a good we want to allow local authorities to use their discretion Conservative principle, and I am on the side of the and respond to local circumstances and views. There little battalions. Indeed, having just chaired a task are amendments before us, which we will discuss in a force on red tape and having seen hundreds of examples minute, that support both these points of view, so from across the country, one or two of which I may following careful consideration of all the representations refer to later, I know how important and vibrant local we have received we believe that certain things should community feeling is, so I very much support the be set nationally to ensure fairness, to safeguard people’s localism idea. Perhaps I may take a minor swipe as I rights and to make it easier for citizens and communities go past. It is rather extraordinary that we should, as a to make use of these provisions alongside the others party or Government, appoint Sir Terry Leahy, the in the Bill. However, we also believe that there is ex-chief executive of Tesco, as our adviser. Sir Terry considerable scope for local decision-making, and our Leahy has had a very distinguished career, building up intention is to use delegated powers frugally to ensure Tesco nationally and internationally, but his entire appropriate local flexibility. career has been devoted to destroying localism. His We expect the debate to focus on four aspects of the plan, of course, is to have a Tesco store on every provisions in particular. The amendments suggest that corner, and every butcher, baker and candlestick-maker this is right. They are the definition of an asset of should be wiped out. It is a slightly strange appointment, community value, who has the right to make a community but there we are. nomination, the length of the moratorium periods I agree with my noble friend that there is a balance and the types of disposals that will be exempt from the to be struck between the community entitlement and provisions. There are amendments about a few other the right to private property. This amendment, and matters. We have set out our current thinking on these indeed the later amendments which I shall be speaking and other areas of detail in the discussion paper to—probably at our next sitting of the Committee—seek deposited in the House Library last week, and I informed to explore this balance and discover the Government’s noble Lords that it was there. We will be happy to thinking. expand on our thinking on these areas when we debate I first need to declare at least a couple of interests. the relevant clauses, and we can take into account The first is that I am the senior independent director what has been said. of a listed company, which is one of Britain’s largest I thought it might be helpful to put that in context brewers and pub operators. We operate five breweries and then, as we discuss the amendments, I will respond and over 2,000 pubs across the country, some of which to them individually at the end of the debate. are managed and some of which are tenanted; we are an integrated business, not a pubco. Some of what I say will therefore have a pub flavour about it, if I Lord Cameron of Dillington: The Minister has set may use that phrase, but I think there is a good deal of out in detail her view of Chapter 4. I have a completely read across to other assets which are of interest to opposing view of it. I have put my name to the stand the community and on which I am sure other noble part of every single clause to set out an imposing view Lords will wish to speak. The other interest that I at this early stage before we get into the detailed ought to declare is that I am president of the National amendments. Is that in order, or does the Minister Council for Voluntary Organisations, and—before want to take some detailed amendments first? someone else points it out—the NCVO has briefed 229 Localism Bill[5 JULY 2011] Localism Bill 230 against my amendments, which just shows that that is I am perfectly well aware that many will argue that what makes horse racing. There is clearly a balance to what I am suggesting is the antithesis of localism. The be struck. briefing from the LGA says that, My concerns and my reasons for speaking to this “what is valuable to communities in the Cotswolds will not amendment are partly philosophical and partly practical. necessarily be the same as what is valuable to communities in I will deal with the philosophical point first. As my inner-city Manchester”. noble friend has made clear, the right to enjoy one’s I accept that point. But if one accepts the fundamental private property is an absolutely fundamental part of importance of the right to enjoy one’s private property, our society. The Englishman’s home is his castle: it to have a variable interpretation across the country provides stability for our society; it provides people must be undesirable and unwelcome. Some may argue with a stake in our society and in the order of that that local authorities are likely to arrive at broadly the society. If I may exaggerate grossly to make a point, same conclusions and definitions. I wish I thought development experts will say that property rights are a that that were the case. I fear that there will be great key part of any country developing satisfactorily. If differences and some capricious outcomes which we you do not know when your property may be removed simply cannot foreshadow or foresee tonight. from you, why bother to invest? Merely go and stick it I referred previously to my red tape task force, and in Switzerland and wait for the inevitable to happen. I shall give an example of how local authority capriciousness am not in any way suggesting that there will be wholesale can develop. Charities and voluntary groups depend a expropriation. I am, however, suggesting that there great deal on street collections. Charitable collections may be the law of unintended consequences. It may are governed nationally but also have a degree of local deter people from offering their assets for use by the authority variability. We received interesting evidence community, for fear of precedent; and as noble Lords from the Sainsbury Foundation about the way in will have seen in the briefings we have had, woods, which local councils interpret the permissions for local cricket pitches and use of buildings are all issues that collections. It states: have been raised by various interest groups talking “Local councils vary widely in their procedures. Doncaster about the background to this Bill. It would surely be a Council, for example, assesses applications within 14 days. shame if we were to impede much worthwhile activity Wolverhampton informs applicants of the outcome within 12 weeks. at a local level. Most councils require applications to be made a month in advance; but North Lincolnshire requires all applications to be submitted So much for the philosophy; what practically needs by 30 November for collections the following year. Basingstoke to be done? My amendment suggests that we should has a simple one page form requiring the name of the charity and insert a definition on what constitutes an asset of proposed dates for collections. North Lincolnshire requires the community value on the face of the Bill. This will names and addresses of the charity’s secretary, treasurer, auditors reduce the fear of the unknown factor. What factors and bankers. Wolverhampton requires collectors to undergo a and issues could be included there? I think there is an police check. Surrey Heath wants to know whether the collector is argument that it should only operate for local businesses. going to be accompanied by an animal”. I understand that the wish is to have farm shops, These are the sorts of capricious outcomes that we will village stores, restaurants and pubs, but national chains— have. They are undesirable and a cause of confusion to even Sir Terry with his store—might not be as appropriate charities, as seen in this narrow example, and you will as an asset of community value. The question is also have a much wider application in the concerns of this whether there is any alternative provision in the locality; Bill. We need to avoid this sort of situation when it if there are two restaurants or two pubs, for example, comes to establishing assets of community value. The should one of them be able to be listed? As the noble definition in the Bill would be a good place to start. Lord, Lord Greaves, said, there needs to be some distinguishing between the service that is being offered Lord Cotter: My Lords, first, I thank the Minister and the premises in which it is being offered. Many for her comments. There is no question that I and communities will like having a shop, a post office, or a many noble Lords engaged in the Bill, as well as those shop and post office combined, but suppose it is outside this Chamber, support the intention to support bought up by the community and turned into an local communities by giving them a chance to have antique shop; that is rather a different issue. their say. This amendment has a particular point to make on behalf of businesses. It is designed to ensure 9.45 pm that no private assets are put on the list. The fear is There are also possibly some reasons to prevent that, once a private asset is put on the list, it possibly flipping; that is, the purchase and then the resale when will have an effect on the market value and thus make it turns out that the commercial enterprise is not quite it more difficult to sell. That would be very discouraging as easy as was expected. Again, as the noble Lord who and could tangibly affect not only the business people is no longer on the Front Bench said, there are existing but the community as well, and have a negative impact rights to be respected. Taking the example of tenanted on both the community and the owner of the business. pubs, the landlord will probably live above the pub Local people might wish to list a very much appreciated and therefore will have a premises, a dwelling, which local shop for fear that the owner might sell it on for will be part of his home for himself and his family. use as flats or offices and deny the community a There are TUPE and other employment issues. Finally, valuable asset. People could be overzealous perhaps in there is the evidence of local support and the need for what goes on the list—I will be very interested to know a local connection. These are some of the things that what the Minister thinks of this—and will try to should be evidence in a national standard that we are protect their much valued shop in this case. Of course, seeking to establish. it can have a counterproductive effect on future businesses 231 Localism Bill[LORDS] Localism Bill 232

[LORD COTTER] for them to continue to allow their assets to be used by and they may feel that they could have, if you like, the the community. If we do not get this right the net rug taken from under them. I hope the Minister can effect will be negative whereas what we are seeking to understand what I am saying and can respond to this do is a positive thing for many communities. concern. The idea is to maintain the many things people would like to have in the community but at the Lord Moynihan: My Lords, I support Amendments same time to protect the property owner because the 136, 136ZA and 136ZD, to which my noble friend has market value could be adversely affected. just spoken. In so doing I need to declare an interest as chairman of the British Olympic Association which Lord Gardiner of Kimble: My Lords, I want to has, among its principal objectives, the promotional of speak to Amendment 136ZD in my name and that of sport and recreation. my noble friend Lord Cathcart. My noble friend the I seek guidance from my noble friend the Minister Minister is aware that I raised reservations at Second because I can see a great deal of good news for sport Reading about this part of the Bill and the unintended and recreation. Inasmuch as local authorities will consequences affecting private owners who allow their have a duty to maintain a list of assets, the freedom property to be used for community use. I thank my to determine the form and content of the list, to set noble friend for her explanation earlier because it out specific requirements and to allow community starts to clarify the intentions. However, the intention nominations to be proposed, there is in many respects of this amendment is to provide greater clarity and a presumption in favour of listing sport and recreation also thereby allay justified concerns with a definition assets. I would have no problem whatever if this legislation of an asset of community value and to provide clear applied exclusively to local authority or public sector guidance to local authorities, which is essential if we facilities. Indeed, we had a lengthy debate this afternoon are to avoid confusion and unnecessary legal action on Amendment 130, where my noble friend Lord which could be the case if we do not get this definition Jenkin sought to insert, right. “any public body, including, but not limited to, local authorities, I also think that we should strengthen the tests government departments, government agencies and non-departmental which have to be met in relation to nominations for public bodies”. the community asset register. We should firm up and In that context, I see real benefit. As I say, I have no define what is intended by community value. The problem whatever with supporting it. On the contrary, primary requirement in all cases should be that assets it would enhance sport and recreation provision if the of community value must promote social well-being principles within this Bill, which I support, applied to through their past or current use. There should also those public sector facilities. Many playing fields owned be a secondary requirement, where local authorities by the Government and many local authority facilities consider it appropriate, of furthering the economic would fall into that category. and environmental well-being of the community. However, as I read it and as I listened to the debate, The amendment sets out the various factors that Clause 74(1) and the amendments to which I speak local authorities must take into account: current use; apply to assets of community value wherever they are planning policies that affect the asset, which could found, including on private property. Many noble include planning permissions already in place; what Lords have understandable reservations regarding pubs the nominator is proposing to use the asset for; evidence and local shops, for example, but the situation regarding of wider support for the nominator’s proposals within sport and recreation facilities is, I would argue, very the community; where there may be another site in the different. Organised competitive sport in this country locality which could serve the same purpose. I think over the past 200 years has its roots in the relationship very much of the local library that might be closing between landowners and sporting activity. Many cricket but another publically owned property could be used grounds, for example, are still located in the grounds for that purpose. of homes around the country. Many equestrian or However, in accepting that exclusions from the sailing events and fishing activities are to be discovered listing will need to be in the regulations rather than in on privately-owned land. The history of British sport the Bill, the key one is that most residential premises rests on the amicable nexus between sport and recreation, must be excluded from listing. I say most because I can on the one hand, and the good will of the private understand the asset where there is a pub where the property owners—long may that remain the case—but living accommodation is secondary to the purpose. I as currently drafted the Bill risks halting that process. am persuaded that village shops, post offices and pubs The reason is this: that relationship is based on should be assets, which if communities wish to bid, good will, on tradition, on the work of volunteers, the they should be in a position to do so. love of sport and recreation and, in many cases, clubs There are so many examples of private individuals which have been formed, nurtured and flourished on enabling communities to use part of their residential the cornerstones of local communities to this day. As I premises and it is essential that the regulations make it understand it, the sole purpose in this context of the absolutely clear that these premises are not included. list would be to create transparency, providing a legislative I therefore hope that my noble friend the Minister will process for local communities to bid for listed facilities. give this amendment due consideration and bring The bid, of course, could be rejected. Apart from that back on Report a comprehensive amendment on the benefit of greater transparency, I seek guidance from definition of an asset of community value. As far as the Minister because I do not see any further benefit. I am concerned the test will be that private owners will On the contrary, at the moment a mutually agreed sale not in any way be advised that it would not be sensible can be agreed between the landowner and a community 233 Localism Bill[5 JULY 2011] Localism Bill 234 that uses those facilities. Simply put, the Bill provides are owned in the public sector for community use—many for that transparency, then adds a whole series of playing fields we go past daily that are unused or measures which will negatively impact on the intention underutilised—so that the local community can benefit and good will of many landowners and homeowners from availing themselves of those facilities. If we can to make their facilities available to the local community. engage with that in the Bill and increase participation Let me cite an example. A private landowner who as a result, there will be real benefit, but if the unintended has a squash court attached to his property might consequence is that we impact negatively on the good want to provide a local village school with the opportunity will in the private sector and among private landowners regularly to use that court, but with this legislation the to make these facilities available, it would be a very person concerned is unlikely to do so. He or she will sorry day for sport and recreation. certainly be very wary of so doing. When the property is up for sale, a search initiated by a future buyer may Lord Jenkin of Roding: I want to make one or two find that squash court is now listed under this legislation. points. I have been hugely impressed by what my noble A buyer making an offer may be time-constrained and friends have been saying about this. I listened with care thus walk from the sale or offer a reduced price. A to what my noble friend on the Front Bench said buyer may well walk from a sale faced by a hostile about the objectives behind these provisions and I local community, with the power of the press on their shall want to read that very carefully in order fully to side given the publicised moratorium on the sale and understand. I am not sure, possibly as a result of my the provisions in the Bill. I am sure that nobody in this poor hearing, that I got it all, but I will read it. House, on either side, can foresee this, but nevertheless My fear is due to the fact that the whole essence of there are risks that a future Government of a different localism is supposed to be building a partnership political complexion might embed the full list in new between local authorities and local communities. It right-to-buy legislation, damaging the value of the depends for its development on the good will that will properties, or, looked at another way, putting a new be generated by this process. I have put my name to a tax on today’s market value of the properties. Put lot of amendments, including that to which the noble simply, many landowners will avoid these risks and Lord, Lord Cotter, spoke earlier, because it seems to shelve their plans to provide for sport and recreation me that that is essential. today. We are talking about public assets. I find it quite If my noble friend the Minister can allay these extraordinary that this is intended to apply to a wide concerns I will rest persuaded, but on reading the range of privately owned assets. Businesses, yes—the Bill—I have not had the privilege that my noble friend noble Lord, Lord Greaves, made the point that, if there Lord Hodgson has had of many letters or briefings on is a business such as a post office, a pub or something this subject; indeed, I have not had a single briefing—I else that is going out of business, it is perfectly reasonable am concerned that where there is good will among that a community might wish to say, “We can run this. individual owners of properties, where, through their We will take it over. We cannot open for the full time, good will and intent, they build strong relations with but we will be open so many hours in the week” and be their local communities, allow primary schools to able to do that. That is a voluntary and community access their land and use those facilities, the tennis partnership. court, swimming pool or squash court, the consequence What I find difficult is that this is all to be imposed of the Bill, which may be an unintended consequence, by central government. There must be some way in will be such that that individual immediately stops which the statute could be drafted so as to build on the doing that any more for fear that listing will impact on idea of community partnership with local authorities the final value of the house. If there is a way to address rather than giving everyone the sense that this is being that in the Bill and to recognise that nothing could be imposed on them from the centre. One fact tells the more damaging than multiplying that across the country story: there are 54 references to specific cases where with the negative impact that that would have on sport the Secretary of State can issue regulations from the and recreation facilities and the negative impact that it centre in this part of the Bill alone. The whole thing is would have on good will and local communities—which being imposed from the centre. is what the Bill is all about in driving localism—I I do not want to go on singing this song because I would be content to support the Bill, to move forward have sung it a good deal during the passage of the Bill, and to persuade my colleagues in the British Olympic but the amount of detail that the Government are Association that this is a subject that does not warrant seeking to impose is absurd. Why do they have to the concern that it currently has. decide and lay down what is of community value? Put simply, there are many landowners who I believe Why can a local authority not establish criteria? Guidance will avoid these risks, as I say, and shelve their plans to could be given about the sort of principles, but does provide for sport and recreation. That would, frankly, that need to be included in statute? Why does the be a disaster, particularly in the countryside, and I am Secretary of State have to decide who can make a sure that it is not the Government’s intention. As a nomination and who cannot? This gets the whole result I ask my noble friend to address himself to my thing off on entirely the wrong footing, and it is the three amendments and to take this clause away in wrong sort of emotional approach to what one is order to see how sport and recreation can be fully trying to achieve—that is, localism, local responsibility protected, particularly those facilities I have focused and the ability of local authorities to respond to the on this evening which are owned in the private sector desires of the local community. After all, the councillors by private landowners. I emphasise that I fully support are elected by people from the local community. That the provisions of the Bill to free up many facilities that is the relationship that one should be building on. As a 235 Localism Bill[LORDS] Localism Bill 236

[LORD JENKIN OF RODING] derelict land under the A40 to create a thriving community. number of people, including my noble friends Lord In North Yorkshire local villagers bought a failing Greaves and Lord Tope, have said, this gives the pub last year and have thus safeguarded a vital community impression that no one in Whitehall trusts local authorities resource. However, a major impediment to this has unless they are being told what to do. been the lack of a window of opportunity, to allow I am sorry, but I get quite hot under the collar time for community groups to bid for key assets in about this because it rather upsets me. I have some their neighbourhoods before the assets are sold on the sympathy with the noble Lord, Lord Cameron of open market. Often key assets of huge community Dillington, who put his name to the question on significance have slipped through their fingers as a whether the clause stand part, to which I have also result. added my name. Having considered the details of This is an important and practical step. The the anxieties and objections of the local authority Government have sought to build safeguards into the associations—I have them all here but I will not weary Bill, to protect owners’ interests. It would be a great the House with them—I have come to the view that we shame if we were to lose what would be a relatively cannot go ahead with this part in the way that it is modest step towards giving communities the right to currently conceived or drafted. The whole concept make use of assets which they very much need. behind this seems to be drawn up on the wrong principles. I hate having to differ in such a rooted way Lord Flight: My Lords, as I understand it, what this from my noble friends on the Front Bench but one is about, as the noble Baroness has just described, in really has been driven to this. I have not had anything the concept of a period of pause. It has not yet been like the representations that my noble friends have had specifically defined, but if the shop or the pub closes, and have spoken about but, hearing them and realising the community might have a period of six months, what is behind this, I beg my noble friends to think during which to get the money together to buy it. again. During such a period the owner would be constrained from selling it. Baroness Thornton: My Lords, it is time that someone In itself, that sounds not unreasonable. I am somewhat stood up and said how much they welcome what the concerned at the length and complexity of legislation Minister had to say and how much they agree, although that that rather simple idea has given birth to. When I it may not help her for me to say so from these sit back and think about it, the issue of price is Benches. On what the noble Lord, Lord Moynihan, absolutely fundamental. As was just pointed out by said about Governments of a different complexion, I the noble Earl, Lord Cathcart, this is a right to bid, say to him that in my view my own Government were not to buy. However, if the owner of the property does really rather timid on this matter. not wish to sell, or believes that he can sell at a much Why does the community right to buy matter? higher price, then clearly he is not going to sell, and so There are thousands of community organisations in the right to bid is not going to do the community this country that need the right to buy. This is not much good. Equally, if it turns into a right to buy, about central government imposing something on there is still the question: what is the price? Who is the local community; it is about giving a right to buy. going to determine the price? Will there be some I shall take a moment to explain. Healthy, viable premium in the price? I am a little concerned that communities are in the interests of landowners and these very complex arrangements—the central objective everyone else. The community right to buy in the Bill might more easily be achieved simply by defining a is a significant step towards realising the aspirations of time period in which community groups have grace to localism, the big society, the good society and community assemble the money—as they are presently structured regeneration—aspirations that to a high degree are may be self-defeating in a situation in which the owner shared across the political spectrum. It would be a is not willing to sell. To say that price should be left to bitter blow for hundreds of communities if these market—well, what is market, when something has actually quite modest proposals were derailed in this been listed? I am not sure that the provisions of the House. Bill can achieve their objectives without thinking about price. Earl Cathcart: My Lords, just for clarity, I point out that the noble Baroness referred to a “community 10.15 pm right to buy”, whereas the Bill is actually about the The Earl of Lytton: My Lords, I need to declare my right to bid. Did the noble Baroness mean “right to interest which I have not previously declared—there bid” rather than “right to buy”? has been no need to do so until this part of the Bill—as a landowner and a practising chartered surveyor Baroness Thornton: Thank you for that clarification. as well as my interest in local councils. As the noble Baroness said, it is not about forcing I need to bring a technical aspect to bear here. a sale, or forcing landowners to sell to a particular However, before I do so, I should like to comment on bidder; it is about creating even more use of assets, something said by the noble Baroness, Lady Hanham, some of which were previously liabilities. In the past, in her introductory remarks. The provisions of the Bill disused buildings, wasteland, schools, libraries, town go well beyond what might be described as the recovery halls and offices which were becoming redundant have of assets that were in, but have passed out of, community all been used by local communities. The Bill promotes use. As regards some of the things about which the an extension of that activity. For example, in London noble Lord, Lord Cameron of Dillington, is concerned, the Westway Development Trust took over 40 acres of a much wider aspect seems to be appearing. 237 Localism Bill[5 JULY 2011] Localism Bill 238

In my professional life I have prepared lots of lists I pay warm tribute to those who give of their of property assets. I worked for nearly seven years in substance in rural areas and demonstrate their recognition the public sector and during that time dealt with a lot of local need and to the imaginativeness of their of things for local authorities, health trusts and responses. My one plea to my noble friend the Minister government departments, so I know something about is that that generosity of spirit should not be unduly preparing lists. I suggest that the proposed list is very curtailed by the letter of the law, which can turn the far from being a free bet. The process would involve landscape into briars and brambles which deter rather drawing up, managing, publishing, and possibly providing than welcome sensible development. I, in turn, have free of charge, a list of indeterminate size and complexity. welcomed the amendment as being an insurance policy Why is that the case? It is because regulation cannot to support one’s desire to be helpful to the community foretell what propositions will come forward as a rather than to ring one’s assets around with defences result of the Bill’s provisions. against hazard. The obligation is subject to what the Secretary of I end with the amendment of my noble friend Lord State may decide following consultation. It is perhaps Hodgson and support his Amendment 136, though by a pity that the Government have not yet published placing it in line 19 of page 61, it means it offers late their response to the results of the consultation on rather than early assistance in illuminating the first their paper entitled, Proposals to Introduce a Community four lines of that page. It is the opposite of the example Right to Buy—Assets of Community Value.Indue once set by a Polish Bishop who was visiting a parish deference to the noble Baroness on the opposition in his diocese, an episode that could be helpful to Benches, the right to buy was not a term that she many a parliamentarian. When greeted by the curate, coined, it was in the consultation document, as I the Bishop said, “When I visit parishes in my diocese, perceive it. I look forward to that response informing I am accustomed to be greeted by the sound of bells, the Report stage of the Bill. I hope that I will receive and that has not happened today”. The curate said, a reassurance from the Minister that it will be “My lord, there are three reasons. The first is there are forthcoming before that stage so that we all have time no bells”. “Pray go no further,”said the Bishop. Although to consider it. my noble friend Lord Hodgson has placed his amendment I go back to the list. There will be rules about quite far down on page 61, I still think it is an content, additions, deletions and modifications. The extremely valuable contribution to the Bill. list will have to delve into issues of ownership, some of them quite detailed and probably some that are Baroness Byford: My Lords, I have waited very commercially sensitive and may even be confidential. patiently because my name is not added to any of The list will have to be maintained alongside another those amendments, but I support the amendments “not in” list of failed nominations. All I would say at tabled by my noble friends. I will pick up on what the this juncture is that even on a conservative basis this Minister said to us earlier. In some ways it was a will be a resource-hungry exercise for local authorities. shame that my noble friend Lord Cameron was not allowed to express his broader concerns on the whole Lord Brooke of Sutton Mandeville: My Lords, like of this section. My noble friend quite rightly said that my noble friend Lord Hodgson, this is my maiden the Government have it in mind to introduce a right of speech on the Bill. I intend it to be generic rather than appeal, so clearly they recognise that the Bill, as currently go into detail and I hope, therefore, to be brief. I regret laid down, is far from satisfactory, and that we will the hour at which we are holding this debate, although get a compensation scheme later. My question to the my noble friend the Minister showed admirable initiative Minister is: how soon will we have sight of what a in opening it with the statement that she did. It is a compensation scheme might be, or when will we know pity that the noble Lord, Lord Cameron of Dillington, what right of appeal will be formally moved hopefully did not have the opportunity to paint the larger landscape between now and Report? before we started getting into the detail. I have a farm in Suffolk that is listed in my interests I am speaking in particular to Amendment 136ZD, here, but in this particular context I have no interests in the names of my noble friends Lord Gardiner of that are particularly relevant to this. However, I was Kimble and Lord Cathcart, to which the former spoke formerly one of the patrons of ViRSA, which the a little while ago. I express my admiration for their noble Lady, Baroness Thornton will recognise. We exercise in clarification. The instincts that underlie dealt for many years with post offices being squeezed generosity to one’s community are the big society writ and unable to make a living in support of their long-term early. I was a London inner-city Member of Parliament well-being—we are talking here of sub-postmasters for nearly a quarter of a century, and London is and sub-postmistresses. In his amendment, the noble nothing if it is not a collection of villages where the Lord, Lord Cotter, clarified quite well the difficulties instincts of the big society apply. I have in a recent that we face with this Bill. Are we talking about the debate identified in my own constituency Pimlico and loss of a facility that is established within one’s own Soho as model inner-city communities, if in different community, or are we in fact looking at a facility, such modes. I have, however, had an address in Wiltshire for as a post office, that is also someone’s dwelling place? half my life and these characteristics of the big society Those are two very different issues, and my noble or, as Burke might put it, the small platoon society, are friend, when she comes to wind up, might perhaps perhaps evidenced even more vividly in the countryside enlarge upon that because it is crucial that we know because of the way everyone knows everyone else and exactly where we stand. For example, in some areas where the roots of families are at least as deep as those that I know, post offices that have been under threat of parallel families in the cities, if not more so. have managed to relocate into shops, churches, or 239 Localism Bill[LORDS] Localism Bill 240

[BARONESS BYFORD] name. I shall not go over that ground again. I also wherever. Provided that we keep them, it is very good welcome the opening remarks of the Minister. I did that they have been enabled to remain and be a vibrant not catch all of it, and will read with interest in part of that particular community. To me, therefore, Hansard tomorrow exactly what she said. She may there is a great difference between a particular service well have allayed some of the fears that we have heard that is offered and the buildings in which it is set. This about relating to this chapter. has been touched on, but I would like the Minister to Some months ago—it may have been many months address that particularly. ago—I recall the Prime Minister saying that he would My noble friends also expressed concern about bring forward measures for communities to save their land, and to a certain extent about personal privacy, village shop, pub and post office. That is an admirable and about investigations that could be made under the idea, and here we have Chapter 4 before us, but now proposals in this section of the Bill that would also we have a huge expansion of the assets that communities worry me. We know only too well of investigations of can save to include all assets from which members of things that are held on computer disks and things that the community derive some benefit. That has put the get moved around. Some of this might not be well held cat among the pigeons for those landowners and others in the public domain, to be honest. This is the balance who allow their communities to enjoy the open spaces that we have to get right in the Bill. I support the Bill. of their farms in one way or another. As other noble As I said earlier on, I am a great believer in localism in Lords have said, the unintended consequence of the its truest sense and from the lowest level. Noble Lords way that the Bill is written is that landowners will who have not heard me say before will hear me say withdraw permission for any activity on their land, a now that, at the parish level, whether in cities or in point powerfully put by my noble friend Lord Moynihan. country areas, localism is most important. That would be disastrous. If it were to happen, it To pick up on a point made earlier, within local would go against the grain of the big society, which is councils, authorities or parishes, there will be different what the Bill is meant to be all about. interpretations of how they want to proceed. Again, Amendment 133D goes some way to remedy that, I would be glad if the Minister could reflect on that in as it focuses on business assets—that is, the village her response. shop the pub and the post office—which, after all, was Lastly, I am concerned—not from my point of the original intention of the Prime Minister. view, because we have no interest in it—that that could There is another amendment in the names of my well have an effect on the land value or the land noble friends Lord Jenkin and Lord Greaves, Amendment market of people’s private, individual holdings. I hope 136ZZB. That would leave out subsection (1) and that the Government will reflect on that. insert that, As I said at the beginning, I am very grateful to my “the local authority will determine whether or not a building or noble friend Lady Hanham for her statement on other land is of community value”. inheritance and gifts between families and trusts and I am afraid that I do not share the view of my noble considering the question of the holding for a limited friend Lord Jenkin. I am slightly nervous of leaving it time if those assets are bid for. I cannot see any reason to a local authority to say what it thinks an asset of why you would bid if you are not going to buy. There community value is. What if the local authority is is no logic. signed up to the idea that all assets should be to the benefit of communities? That would be very dangerous Lord Lucas: Price. for landlords and I do not think that I could support that. Baroness Byford: As my noble friend says, it would In this area, I was having a similar thought about be the price, but one is not going to bid for something tabling an amendment that would try to take the unless one has the ultimate purpose of wanting to buy. matter back to business assets rather than all assets. I, too, am sorry that we are discussing this very My idea was to provide that “a building or other land important part of the Bill at this time of night, but we may be of community value if it is used on a commercial are. I am grateful to all noble Lords who have spoken basis by the local community”. That is very much in and seek clarification from the Minister on many of the same vein as the first amendment in the group— the points made, which I fear will make us rather late Amendment 133D—on business assets. finishing tonight. I thank my noble friends for proposing their amendments, which I support. 10.30 pm Lord Cameron of Dillington: My Lords, I have had Lord Lucas: My Lords, this is going to make for a a note from the government Front Bench saying, “Do very interesting Division on Report. It will be fascinating say what you wanted to say”, but I believe that it is far to see who ends up in which Lobby. too late at this time of night for me to say what I I should declare an interest that I own an asset of wanted to say. Like all good bedtime stories, as in The community value—a woodland in Kent. I would be Arabian Nights, I will leave the next episode until we happy to go along with the Bill’s provisions but that is meet again. for me. It is my decision and my feeling about my relationship with the community. Any suggestion that Earl Cathcart: My Lords, obviously, I support assets of community value are restricted to assets that Amendment 136ZD, ably proposed and argued for by are already in community use when it comes to land is my noble friend Lord Gardiner, to which I added my extremely dangerous. It produces exactly the side-effects 241 Localism Bill[5 JULY 2011] Localism Bill 242 that all my noble friends have been talking about of possible. We have had the opportunity now to discuss immediately causing assets to be withdrawn from the amendments pretty widely and I will speak to community use. them as well as I can in a minute or two. There is no great function for this part of the Bill I want to say from the outset that we are looking at when it comes to rural communities anyway. Under this all the time. I hear what has been said and where I the neighbourhood planning provisions rural communities cannot answer questions put forward by noble Lords with a lot of land and space to spare, and therefore an satisfactorily, we will clearly need to make sure that by ability to develop, will be in a very strong position to the next stage we have had the sort of discussions the do deals to support the businesses that they want to noble Lord, Lord Patel, is talking about. Indeed, we support and mould communities in their own ways. have already had considerable discussions on the points They are the great winners from neighbourhood made. The fact that they have come up again probably planning. I suspect that suburban communities with means that we have not satisfied noble Lords and we decent amounts of space will do equally well. I am will have to try and do that and look at making concerned about the example that was adduced about revisions to the Bill before the next stages. the problems that arise in cities where neighbourhood In my opening remarks I tried to bring this back planning has very little to offer. Such communities by from being a very wide problem into being quite a and large will not have the ability to tackle these things simple, singular matter. The purpose behind these proactively, to accumulate wealth to be able to support provisions is to try and ensure that, when a valuable or buy assets as and when they are wanted and to asset in a local community comes up for sale, the local think ahead in the way in which it will happen in rural community has a window of opportunity to see if it communities. I do not have an answer to the question can get the money together to buy it. I know this is posed by the noble Baroness, Lady Thornton, about happening all over the place. There are lots of examples what happens in cities, but for rural communities this already of people buying their local pubs or shops to part of the Bill is entirely unnecessary, as neighbourhood keep them from going out of business. planning will do it all. There are also plenty of examples of people saying, “If only we had had a bit of time, we could perhaps Lord Patel of Bradford: My Lords, I will be very have done something to preserve this and protect it for brief as the noble Baroness, Lady Byford, covered our local community”, and that is what we are offering many of the points succinctly. First, I thank the Minister here. It is not going to be a very long time; it is just for her intervention earlier. It was very helpful, but I going to be a short time for people to say, “That is a think that we need to study the note in the Library. I valuable asset. We have already said that we like it. If it have a feeling that this will be an iterative process. We comes up for sale, we want the opportunity to see would certainly welcome involvement in that and further whether we can, as a community, get the money together”. meetings. What the Bill does not do is say that they can buy that Notwithstanding the benefits that my noble friend facility if they cannot afford it at the price that the Lady Thornton pointed out in respect of this clause seller is asking. During the time that the community is to local communities and local areas, we recognise putting the money together, there is nothing to stop the good intentions and the thrust behind many of the the person selling from going through all the negotiations amendments and the arguments that have been presented, and discussions that they want. At the end of the day, together with carefully crafted amendments. We obviously the seller may be perfectly happy to sell whatever it is need to look carefully at the practicalities of what this to the community, and they can do that. There is means. I can say certainly that the point made by the nothing in the provisions that says that they cannot noble Lord, Lord Moynihan, struck a chord. It is sell to the community at an early stage if they want to. clearly an issue that we need to take further and seek All we say is that there is a window of opportunity for more clarification from the Government. the community to find out whether they can do something. We agree with the comments made by the noble Most noble Lords have not seen that as being Lord, Lord Jenkin, in respect of the centralised delegated unreasonable, but there is a certain feeling of pressure powers. We are completely on board with that. That and compulsion about this which really is not there. issue has kept coming up throughout all the debates The only compulsion, if I can put it that way, is the and needs to be looked at very carefully. As I say, fact that the asset has to be notified in advance as I think this is going to be an iterative process. The being something in which the local community is amendments pose some very serious questions that we interested. That is where a list comes in. need to explore further, and I look forward to what the Minister has to say about that. We will certainly want In a village, I do not know how many pubs people to sit round the table with the Minister and others and can claim to have an interest in. I am not sure how look at this a bit more carefully. many assets there will be in a town centre in which people can have an interest, but probably not a lot. I do not think we are talking about a multitude of areas Baroness Hanham: My Lords, this has been a longer on which people will want to put their finger and say, debate than we would have hoped for at this time of “If you are going to sell it, this is an asset that we night. I fully accept that this is not ideal but that is want”. Public assets can also be listed. If a local how the business has gone. We could not have stopped authority decides to sell a sports ground, for example, at 9.30 pm. I kept hoping that somebody would manage that is an area where this provision would intervene, so to keep the debate on the previous amendments going that it could have an opportunity to see whether it long enough for us to stop, but that has not been could buy it. 243 Localism Bill[LORDS] Localism Bill 244

[BARONESS HANHAM] consultation processes have gone on and are going on, I shall read very carefully what has been said and I and some regulation will come about as a result of shall make sure that my colleagues do too. We have to those consultations to make this part of the Bill work. be able to answer more clearly than I can tonight the Amendment 136ZBA proposes an ingenious way of concerns that are being raised. I cannot say that they addressing concerns that have been expressed on behalf are not justified because I cannot narrow it down of landowners who make land or buildings available sufficiently at this stage to say categorically that this for community use. This point was made very clearly will be the situation. As regards the fears expressed by by my noble friends Lord Moynihan and Lord Gardiner. noble Lords about land assets being devalued because We have had a lot of discussion about this outside the part of the land will have been identified as an asset, a House. I will take the example of a corner of an compensation scheme will come into effect. On the agricultural field used for the cricket club or disused point about something on a list coming up in a land clay pits to which people have access for walking. The search, presumably someone will say it is there anyway, suggestions in Amendment 136ZBA are interesting but I do not know whether that will devalue it. I do and we will give them further consideration. not see why it should just because someone is trying to get some money together. It might delay the sale, but We have some sympathy also with the intention there will be compensation if that happens. behind Amendment 136ZAB, tabled by the noble Lords, Lord Greaves and Lord Tope. Since the provisions The fact that my noble friend Lord Moynihan are breaking new ground, we will need to learn from spoke about the loss of sports and recreation facilities experience how they work. However, we will need to if this goes ahead, and that other noble Lords commented give further consideration to those as well. on the fact that landowners will be advised not to let their land be used for any community facility, is something Amendment 136ZAC would limit the power to of which we need to take cognizance. If that is what is decide whether an asset meets the definition to a local being said, and if that is a fear, that will stretch out authority and no other body. The present thinking is further as we go through the Bill. We need to take note that it will be only the local authority, as defined in of that and I can assure noble Lords that we will Clause 91, which can exercise that power as the democratic discuss it and come back on that. authority. My noble friend Lord Jenkin asked why this I will go through the amendments. Some people will was being laid down from the centre and why local be quite happy with what I am saying and others will authorities could not make up their own minds about not be. Going through the brief on the amendments who will be able to nominate an asset, what the asset will pick up some of the points that have been raised will be and whether it will go on the list. The centre is and may explain matters better than I can at this time laying down only the ground rules for this. It would be of night. impossible to leave it to local authorities to decide what an asset is without giving them guidance as to We do not think that Amendment 136, tabled by my what an asset of community value might be, and noble friend Lord Hodgson, is necessary. Clause 75(1) whether there are limitations about which they need to and (2) say that there will be an indication under know. Of course it will be up to local authorities to regulations of what will be involved. We will try to see decide whether a community that is looking at something that there is reasonable coherence about that so that will be able to deliver or whether it is just putting when we come to the next stage it is understood as well forward a sighting shot. They will be in charge of as it can be. It will involve buildings such as pubs and making sure that the community is not simply using a local community facilities. I am not sure how much delaying tactic but putting forward something that has wider it will go, but we will ensure that it is well a reasonable expectation of being successful. understood. I recognise that there has been pressure from noble Lords for greater certainty, including over I made it clear in my opening statement that it is definitions. We are very grateful to noble Lords who our intention through regulations to exclude types of have raised this matter. My noble friends Lord Gardiner land such as residential premises from the listing—that and Lord Cathcart raised the issue in connection with point was made by my noble friend Lord Moynihan— Amendment 136ZD. unless, for example, they are integral to a pub or shop. If you have a pub with residential accommodation Amendment 136ZD also combines a primary attached to it, you will not just be able to list the pub if requirement that assets of community value have been it also has residential accommodation that is being or are promoting social well-being with a number of used. We cannot support the remaining exclusions. factors that local authorities must take into account as secondary considerations in arriving at final decisions Amendment 133D fundamentally misconstrues the on listing. These include relevant planning policies, purpose of the provision by proposing to replace land the use that the nominator is proposing for the asset, and buildings with businesses. It is wider than that. It evidence of community support for the nomination will not just be confined to businesses as such, but we and the availability of other assets locally that could need to talk about how much wider it is going to go. It serve the same purpose. As I said, we will give this would be entirely inconsistent with the rest of the careful consideration and consult more on it. In doing chapter and would effectively exclude most public so, we will have in mind the recommendation of the assets from these provisions, since they would not be Delegated Powers and Regulatory Reform Committee considered to be businesses, although they are crucial that any regulations under Clause 75 should be subject to the aims of the policy. to the affirmative procedure. On the other hand, Amendment 136ZA would limit There has been a lot of criticism about the number land of community value to publicly owned land, or of regulations laid out in the Bill. One reason is that land that a private owner agreed is of community 245 Localism Bill[5 JULY 2011] Localism Bill 246 value. This would in effect limit it only to publicly Lord Greaves: My Lords, I have lots of things to say owned land, since most private owners would probably about everything in this group, but I am not going to not agree to make their land subject to the rules of the because I might get lynched if I tried. It is a while since scheme. An owner can, after all, voluntarily choose to anybody was lynched in this building and I do not delay a sale to give a community group time to prepare want to be the next. a bid if they want to. They can also sell it to the First of all, I thank the Minster for the very detailed community if they want to. By effectively excluding care with which she has taken the debate on these private assets from the provisions, this amendment amendments, even at this time of night. It has been would exclude some of the key assets that we want to extremely helpful. A lot of useful stuff will be recorded help communities to save, such as the last village shop in Hansard, and I think it will help us very much in or pub. what is clearly going to be quite a lot of further debate Amendments 136ZB and 136ZC make a different on the rest of the groupings on this part of the Bill. point. They seem to propose excluding land for which I just want to comment on Amendment 136ZBA. I public access is already guaranteed under statute, or did not comment on it when I originally opened the which is very unlikely to be put on sale but which is group because I discovered that I had a slightly out-of-date self-evidently of community value. In both cases, while list of groupings and it was not on it, which caused me listing would be unlikely to lead to any further action, confusion. The Minister referred to this amendment there is no reason, we believe, for not allowing such and said the Government were looking at it land to be listed to provide for the unlikely event that it sympathetically.The proposed amendment would exclude does come up for disposal. land and buildings that have an ancillary use of We have another series of amendments, all based community value but where it is not the main use. This on the same theme that local authorities should be is a fairly well known concept in planning. I am not allowed to operate the scheme as they wish within sure that it is exactly transferable but, where there is a some very broad parameters set out in the Bill. It is a sporting use or another public use that is ancillary, question of balance. As I have said, we will be considering minor or part-time, it clearly has to be excluded. I that further. believe that that would go a long way to solve the I am conscious of the many questions raised by problems that were eloquently explained by the noble noble Lords, not all of which I have answered either in Lord, Lord Moynihan. I was very pleased indeed that my opening remarks, in my response to the amendments the Minister said that the Government were looking at or by what I have said. However, I hope that I have the concept raised in my Amendment 136ZBA. covered enough of them to make noble Lords realise Having said that, I now look forward to further that my ears are wide open to this. We appreciate that debate on these matters on Thursday. I beg leave to this is a controversial area of the Bill, but we have been withdraw the amendment. having discussions and will continue to do so to see that we end up not with unintended consequences in Amendment 133D withdrawn. this Bill but with what we believe would be a valuable asset, which is to be able to ensure that local communities House resumed. have an opportunity, if it arose, to take over buildings of community value if they can afford to do so. House adjourned at 10.55 pm.

GC 69 Arrangement of Business[5 JULY 2011] Land Registration Rules 2011 GC 70

A conveyancer with a network access agreement can Grand Committee make electronic applications to the Land Registry that may result in a change to the register of land. Tuesday, 5 July 2011. The Legal Services Act 2007 regulates the provision of legal services in England and Wales. Among its Arrangement of Business provisions, it sets out which legal activities are “reserved”, and who can carry out those reserved legal activities. Announcement One category of reserved legal activity is “reserved instrument activity”, which includes preparing certain 3.30 pm conveyancing documents for the purposes of the Land The Deputy Chairman of Committees (Baroness Registration Act 2002, and making applications or Harris of Richmond): My Lords, before the Minister lodging documents for registration with the Land moves that the first statutory instrument be considered, Registry. Under the Legal Services Act, only an I remind noble Lords that in the case of each statutory “authorised person” is allowed to carry out a reserved instrument the Motion before the Committee will be legal activity. “Person” includes a body of persons. that the Committee do consider the statutory instrument The authorised person may be authorised to carry out in question. I should make it clear that the Motions to all or only some of the reserved legal activities. It is a approve the statutory instruments will be moved in the criminal offence to carry on a reserved legal activity if Chamber in the usual way. If there is a Division in the a person is not authorised to do so. House, the Committee will adjourn for 10 minutes. Much of the Legal Services Act 2007 came into force in 2010. Later this year, it is expected that further Land Registration (Network Access) sections of the Act will come into force that will allow for the introduction of licensed bodies, which are (Amendment) Rules 2011 commonly referred to as alternative business structures. Considered in Grand Committee The purpose is to relax the statutory and regulatory limitations on the ownership and management of legal 3.31 pm practices to allow for greater flexibility and choice in Moved By Lord McNally the provision of legal services. That the Grand Committee do report to the The Land Registration (Network Access) Rules House that it has considered the Land Registration 2008 came into force before the changes made by the (Network Access) (Amendment) Rules 2011 Legal Services Act. At that time, the provision of Relevant documents: 23rd Report from the Joint reserved legal activities was subject to the provisions Committee on Statutory Instruments of the Solicitors Act 1974 and various other enactments. The network access rules were drafted to be consistent The Minister of State, Ministry of Justice (Lord with those enactments. At that time, the regulation of McNally): My Lords, the noble Baroness, Lady Royall, legal services was based around the regulation of beat me to the punch by whispering across the point individual solicitors, barristers, licensed conveyancers that I was going to make. Looking at her sitting in and notaries. Under the Legal Services Act, there is a solitary splendour, I am reminded of the advice that move towards the regulation of bodies that deliver you face your opponents but your enemies are behind legal services. you. Now that the Legal Services Act has made changes The rules before us today amend the Land Registration to the regulation of legal services, and more changes (Network Access) Rules 2008, which make provision are on their way with the introduction of alternative about network access agreements. These are agreements business structures, it is necessary to amend the network with the Chief Land Registrar conferring authority to access rules for consistency with the new legislation. It have access to the Land Registry’s electronic network would be inappropriate for the Chief Land Registrar on a person who is not a member of the Land Registry. to enter into a network access agreement with a person The purpose of these draft rules is to ensure that or body that was not authorised under the Legal the criteria that applicants for a network access agreement Services Act to undertake land registration activities. must meet are consistent with the terms of the Legal The rules before us today amend the criteria to be Services Act 2007, which makes provision for the met by applicants for a network access agreement to regulation of persons who carry on certain legal activities. bring them into line with the Legal Services Act and to It may be helpful if I say something about land make adjustments to take account of alternative business registration legislation and the Legal Services Act structures. These rules will allow for a person or body before considering these rules in more detail. The that is authorised under the Legal Services Act to Land Registration Act 2002 enables the Chief Land carry on legal activities relating to land registration, or Registrar to set up a land registry network to be used a person or body that employs such an authorised for electronic conveyancing. It provides that a person person who will undertake those activities or direct who is not a member of the Land Registry staff may and supervise them, to enter into a network access have access to the network only if authorised by a agreement, provided that they also meet other criteria network access agreement entered into with the Chief set out in the network access rules. One class of body Land Registrar. The Land Registration (Network Access) that can currently enter into a network access agreement Rules 2008 provide the criteria to be met by an applicant will be unaffected—a government department. This is for a network access agreement, and also some of the because of the exemption for public officers from the terms that a network access agreement must contain. provisions of the Legal Services Act. GC 71 Land Registration Rules 2011[LORDS] Land Registration Rules 2011 GC 72

[LORD MCNALLY] That states the obvious; it is the position at the moment. In addition, amendments have been made to The summary goes on: the definition of “intervention”, and “disciplinary “Land Registry customers may further benefit if the new proceedings”to include reference to licensing authorities definition of ‘conveyancer’”— which will regulate alternative business structures; and that is, these rules— the insurance criterion has been amended so that the “leads to better quality conveyancing practices compared to words correspond with wording used in the Legal current levels”. Services Act. Why it should lead to better conveyancing practices Members of the Committee will see that the than the current system, under which conveyancing is amendments will come into force on the day that carried out by qualified lawyers or managing executives, Section 71 of the Legal Services Act comes into force. I do not know. The summary continues: That section will allow for the commencement of “Ensuring ABS firms fall within the definition should also alternative business structures. In drawing up the lead to increased competition in the conveyancing market, which amendments, the Government intended to ensure a may provide efficiency benefits for society, and direct benefits for level playing field for all legal service providers—whether Land Registry customers in the form of lower prices and/or traditional conveyancing practices or alternative business increased choice”. structures. This reflects the policy behind the Legal The sort of situation that I envisage, particularly in a Services Act. tight housing market, is that developers will offer a The Lord Chancellor must consult such persons as conveyancing service, or an ABS. They will have an he considers appropriate before making rules relating interest in the outcome of the conveyance of their own to access to the Land Registry’s electronic network. homes and access to the registry. They may act for An impact assessment was also undertaken. The majority both parties. All the checks and balances that have of those who responded to the consultation and impact developed over the years to protect the consumer and assessment supported the proposals. householder will be weakened. In summary, the rules update the criteria for entitlement I have had my usual rant on this subject, so I shall to a network access agreement with the Chief Land leave it at that. I cannot say that I welcome this Registrar, reflecting provisions already made by the measure. Legal Services Act. I therefore commend these draft rules to the Committee. Lord Hodgson of Astley Abbotts: My Lords, I had not intended to intervene on this matter but since “network access” appears in the title of the rules that Lord Thomas of Gresford: My Lords, the important we are discussing, I seek reassurance from my noble point that should be appreciated—I am sure that it friend about the checks that are being made to ensure is—is that when a title is registered, it is an absolute that those who are not authorised do not obtain title. It can be obtained by fraud or by any other access. Something that has recently come to public means, but it is an absolute title, once registration has notice is the ELMER database, which is operated by been granted. That means that the person who owns the Serious and Organised Crime Agency. This is that title can sell it on and deal with it as if it were his where reports of suspicious activity are collected for own. Any issue as to how that registration has been purposes of investigating money laundering. It appeared obtained is left for litigation. Therefore, it is crucial that the rules were perfectly tightly drawn, and that that the integrity of the register is maintained. So only SOCA and police forces throughout the country much depends on trust. We trust that the people who could obtain access to the information that is contained make these applications will do so honestly, with proper there. There are now 1.2 million records on the suspicious consideration of all the issues and in the interests of activity report database. Subsequently, now it transpires their clients. That is why we have all these rules, which that actually all sorts of social security departments endeavour to ensure that the very competent staff of and other operations are able to get into the database. the Land Registry are not deceived by applications Given the importance of this, and the critical nature of from outside. the functions being carried out, it would be good to What is this all about? It brings the alternative know that careful checks are being made to ensure business structures system into the position of being that people who are not entitled to access do not get it. an authorised applicant to deal with the Land Registry. I have expressed my views on these alternative business 3.45 pm structures so often that I sound a little like Cassandra. However, I foresee trouble. If there is trouble in the Baroness Royall of Blaisdon: My Lords, I shall future, it is not the lawyers who will suffer; they will do make a brief intervention on this, with a couple of very well. It is the consumer and the customer who quick questions. In the Explanatory Notes somewhere will suffer. it says that the first alternative business structures will be established in October this year. Is it anticipated There is a lack of confidence in the way that this that that is the case? Furthermore, there is mention of has been put forward. The summary of the impact an informal consolidated text in the document. What assessment says on page 3, under the heading is the state of an informal consolidated text, as opposed “Other key non-monetised benefits by ‘main affected to a proper consolidated body of law? groups’”: “The proposals will avoid the potential costs to Land Registry I very much welcome the update of the Land Registry customers outlined in the base case by ensuring only persons portal guidance notes, which will be important. However, authorised to prepare and make applications relating to land following on from what the noble Lord, Lord Thomas registration are able to do so”. of Gresford, has said, and the noble Lord, Lord Hodgson GC 73 Land Registration Rules 2011[5 JULY 2011] Rehabilitation of Offenders Act GC 74 of Astley Abbotts, there are clearly potential problems could pose a threat to their civil liberties. I shall quote, with this order. There is to be a post-implementation as I do frequently in other places, something that the review in 2015. I have two things to say about that. In noble Lord, Lord Thomas of Gresford, once said to view of the concerns expressed by noble Lords, are the me. He said that in a free society there must be a limit five years before there is any sort of review not a little to what the state knows about the individual. In our too long? If consumers have been found to be suffering modern world, vast amounts of information are amassed. as a result of this order, perhaps the Government What is more, there is almost limitless technological might seek to act before then. If the review finds that ability to exchange that information unless checks and the policy objectives of the order have not been met balances are put in place. That is partly the responsibility and that consumers have been harmed as a result, will of government and Parliament. the Government seek to act and revise the order in I hope that I have covered the points that colleagues some way to ensure that consumers do not continue to have raised. As I have said, the measures bring the suffer as a result? various Acts into kilter and anticipate new structures. On that basis, I hope that the Committee will agree the Lord McNally: I am grateful to noble Lords who Motion. have participated. On the important question of when Motion agreed. alternative business structures will be introduced, the Legal Services Board and the Ministry of Justice are working towards October 2011 for implementation. Rehabilitation of Offenders Act 1974 The noble Baroness was in government long enough (Exceptions) (Amendment) (England and to know that saying that we are working towards that Wales) Order 2011 is as firm a commitment as I can make at this precise moment—but that is the objective. Considered in Grand Committee On the question asked by the noble Lord, Lord Thomas, about the importance of the integrity of the 3.55 pm Land Registry process, I need no urging on that. I am Moved By Lord McNally the Minister responsible for the Land Registry. One thing that I continually impress on colleagues from That the Grand Committee do report to the other departments is that we have a very important House that it has considered the Rehabilitation of public asset in the trust that people put in the Land Offenders Act 1974 (Exceptions) (Amendment) Registry process, and rightly so. For the great majority (England and Wales) Order 2011 of us, the title and ownership of our property—those Relevant documents: 23rd Report from the Joint of us who are house owners—represents the biggest Committee on Statutory Instruments. investment that we ever make in our lives. So the integrity of that process is extremely important. Although The Minister of State, Ministry of Justice (Lord I have heard before the doubts expressed by the noble McNally): My Lords, as the Committee will be aware, Lord, Lord Thomas, about alternative business structures, the Rehabilitation of Offenders Act 1974 exists to I would not go so far as to describe him as a Conservative support the resettlement of offenders into society on matters of legal structures. where they have demonstrated that they have put their Our aim is to bring what we hope will be some criminal behaviour behind them. After a prolonged exciting competitive pressures into the delivery of legal period of time, therefore, the Act declares convictions services, and those responsible for delivery will keep a spent and an ex-offender need no longer declare them. close eye on things. In a recent meeting on related When they apply for jobs, or seek insurance, they need matters, the noble Baroness, Lady Hayter, attending in not disclose this information and subsequently not her capacity as chair of the Legal Services Consumer suffer the potential discrimination as a result of it. Panel, expressed confidence in the overall checks and There must of course be exceptions to this rule. balances being put in place. Alternative business structures Where, for example, someone is applying to work with will provide opportunities for practitioners from different children or with vulnerable adults, it is appropriate professions, legal and non-legal, to join up to ensure that the employer knows the full history of the individual. that it is economically viable for them to continue to The exceptions order to the Act is the means by which provide legal and associated services and gain efficiency this is achieved. savings. The exceptions order lists certain activities that are Although we promised a review after five years, exempt from the Act. This means that where an individual Land Registry constantly reviews its practices and will is applying for a job within a specified activity or is review the network access rules if alternative business involved in specified proceedings, their full criminal structures result, paying particular regard to consumers. record history is available to the employer. If an The noble Lord, Lord Hodgson, spoke about the individual has a conviction that has been declared use of databases—I think that he referred to the spent, the prospective employer will then see it. We suspicious activity database. Thorough checks are made must be careful not to jeopardise the operation of the before entering into network access agreements and Rehabilitation of Offenders Act, so the activities listed continuing checks are made to make sure that there is on the exceptions order are only those that present an no abuse. However, the noble Lord raised an interesting opportunity for people involved to cause harm to the broader point. The advance of technology has meant public or the work concerned is of a sensitive nature, that the ability of the state and private industry to which might include children, the finance sector or amass vast amounts of information about the individual national security. GC 75 Rehabilitation of Offenders Act[LORDS] Rehabilitation of Offenders Act GC 76

[LORD MCNALLY] seeking to take up the role of head of legal practice This careful balance between allowing offenders to and head of finance and administration. This will lead law-abiding lives by removing barriers and ensure that they are fit and proper for appointment. maintaining public protection needs to keep pace with I am aware that a further request has recently been the present. The exceptions order must therefore remain made by the Legal Services Board for non-lawyer up to date with developments elsewhere. The order owners and managers of alternative business structures presented today is an illustration of the Government to be added to the exceptions order. At this early stage, seeking to maintain this balance in line with the no decision has been made. We will of course give developments occurring in the financial and legal sectors. careful consideration to this request, and this process Noble Lords will know that wide proposals for is under way. reform of the Rehabilitation of Offenders Act are The final amendment is one of wording only. There being considered by the Government. Today is not the is currently an entry on the exceptions order relating day to debate these, and I cannot make further to “actuary”. The term is currently defined in the announcements at this stage. exceptions order as, The current exceptions order enables the Financial “a member of the Institute of Actuaries or a member or student Services Authority to take spent convictions into account of the Faculty of Actuaries”. when authorising a person to carry out regulated On 1 August 2010, these two bodies merged to become activities under the Financial Services and Markets the Institute and Faculty of Actuaries. In order to Act 2000. This amendment will enable the Financial continue to give effect to the applicable exception the Services Authority to take spent convictions into account definition is to be updated to reflect this change. when authorising a new category of business—payments I hope that I will have the agreement of all noble institutions. Lords that the exceptions order is an important means of protecting the public. The instrument presented Payments institutions were brought within the scope today responds to the latest analysis of risks. It therefore of regulation by the Financial Services Authority in ensures that legislation is up to date and effective in its 2009. They provide payment services, for example aim, while maintaining the vital balance towards the enabling cash to be placed in or withdrawn from a resettlement of offenders that the Rehabilitation of payment account, and range from large credit card Offenders Act seeks to achieve. I beg to move. companies to sole traders offering to send money abroad for a small fee. Money remitters, for example, Lord Hunt of Wirral: My Lords, I declare an interest transfer large amounts of money to and from overseas, in the global firm of solicitors, Beachcroft LLP, where with many specialising in remitting funds to specific I have been a partner since 1969, and as vice-chairman accounts, such as in India, Pakistan or Poland, on of Justice. I say that with trepidation in the presence of behalf of immigrant communities. In many cases these the emeritus chairman of Justice—my noble friend customers are financially disadvantaged people, who Lord Goodhart—because Justice must deserve a great have limited access to the banking system. deal of credit for the original rehabilitation of offenders There have been a number of failures of business in legislation. the money remittance industry, and the failures have However, I need help from my noble friend the uncovered an element of mismanagement, financial Minister on giving a commitment—a commitment impropriety or fraud. It is therefore important that the that was given by the party opposite when it had Financial Services Authority can assess those responsible responsibility. I also gave personal commitments when for management of these businesses before authorising I was leading for the Opposition from the Front Bench them to carry on business. This amendment will therefore and made it clear, right at the outset, that a single set bring payments institutions within the exceptions order of regulatory standards would be required for alternative so that the Financial Services Authority can take into business structures. account the full background of those responsible for The Minister has received a fascinating brief from the management of these bodies. his officials to explain the mistake in singling out The second amendment relates to the introduction “head of legal practice” or “head of finance and of alternative business structures, which will allow administration”. I warmly commend the officials for lawyers and non-lawyers to work together to provide having thought up this reason, but it was two years legal and non-legal services. These bodies will be licensed ago that we made it clear that it is the owners and and regulated by licensing authorities. Two new roles— managers of the alternative business structures who head of legal practice and head of finance must be the people in the spotlight. It may well be that administration—are being introduced and will be they will need under them a head of legal practice or responsible for an alternative business structure’s finance and administration, but at the end of the day compliance with their licence. Licensing authorities the key role played by the owner/investor/manager of must be satisfied that individuals applying to be heads the alternative business structures must mean that of legal practice and heads of finance administration they should be subject to the same authorisation rules are fit and proper persons for appointment. In particular, as solicitors in regard to disclosing criminal offences. not only will persons in these roles be responsible for Why? Because we must ensure, as both Front Benches compliance with the body’s licence, they could have agreed we had to, that convicted criminals are not able access to vulnerable clients, client money and personal to become owners and managers of legal practices. or sensitive client information. Making this amendment It is not just that a request has only just been means that licensing authorities can seek information received from the Legal Services Board, because it was on previous convictions and cautions from applicants in June 2009 that the Solicitors Regulation Authority GC 77 Rehabilitation of Offenders Act[5 JULY 2011] Rehabilitation of Offenders Act GC 78 made it clear that a single set of regulatory standards Lord Thomas of Gresford: My Lords, I support my would be required. Why on earth this is not included noble friends in their comments. On the previous now I just do not know, because what it means is that occasion, as I am sure the noble Lord will recall, I someone who has served a sentence for a serious crime used the illustration of having appeared in Hong such as money laundering does not have to disclose Kong in a case where I was instructed by what turned this when applying to be an owner or investor in an out to be a Triad-backed solicitor’s firm. The solicitor alternative business structure firm. was merely the front man. Therefore, the owners and I suppose that my noble friend can immediately mangers of a firm must be of a proper standard. move to give me assistance by promising that there While my noble friend was replying to the previous will be a further order to rectify this omission, which debate, I suddenly recalled that within the past three will then make it clear that the exemption of course years I have represented someone charged with stealing also applies to owners and managers of ABS firms, as a house. It was a fairly unlikely charge, which I had well as to the heads of legal practice and finance and not come across before, but there were two solicitors in administration within those firms. the dock with the person in question. This is the real world. This is where people who are undesirable can move in and take advantage of the legal system if it Lord Dholakia: My Lords, I thank my noble friend does not contain all the safeguards. The necessity for the Minister for the explanation that he offered on the owners and managers of alternative business structure order. My noble friend Lord Thomas of Gresford has firms to be subject to the same checks as every other commented on some aspects of the order, particularly solicitors firm is essential, so I support my noble in relation to the Legal Services Act 2007 (Appeals friend. from Licensing Authority Decisions) Order 2011. I intend to build on that. However, let me make a Baroness Royall of Blaisdon: My Lords, I also support confession first. My noble friend Lord Hunt just wanted what noble Lords opposite have said. Of course, as the a minute from me, but in that minute he has stolen half Minister said, we have to be careful not to jeopardise my thunder. But I can build on what he said—and the workings of the Rehabilitation of Offenders Act certainly the Minister might look sympathetically at 1974, but there clearly have to be exceptions. Like why we are making this request. noble Lords opposite, frankly I do not understand As one who is promoting the Rehabilitation of why this order does not encompass ABS firms, or the Offenders (Amendment) Bill, I am aware that this head of legal practice and head of finance administration, order is adding additional exceptions to the Rehabilitation to which the Minister referred. In view of the strong of Offenders Act, which does not include external feelings that have been expressed in Committee this owners. The matter was brought to the attention of afternoon, I wonder whether the Minister would consider the Ministry of Justice by the Solicitors Regulation taking back this order and relaying it once proper Authority, which said that a single set of regulatory consideration has been given to the inclusion of the standards will be required, based on the existing ones owners of ABS firms. I think that all noble Lords for solicitors and traditional law firms and on the present would like to see one single set of regulations. assumption that all potential owners of alternative That would make for much better government and business structures will have to disclose all previous much better governance, and I should be grateful for criminal convictions. It would be very helpful to know the Minister’s views. from my noble friend the Minister why the Government If the noble Lord is not able to take back this have not included external owners in the list of exceptions. order—and he may not be able to do so—I should be The Solicitors Regulation Authority is clear that it will grateful for an assurance that he will come back in the not be able to subject external owners and managers very near future with another order that encompasses to the same standard of fitness and propriety checks the ownership of ABS firms. I quote from his honourable as apply to solicitors. I am told that the SRA conducted a friend Jonathan Djanogly, who, when speaking for the public consultation and no objections were raised Conservative opposition in the House of Commons—I about alternative business structure owners and am afraid that I do not have the words of the noble managers. Lord, Lord Hunt of Wirral, in front of me—said: Will the Minister now intervene to ensure that the “The effectiveness of fitness-to-own provisions is a crucial liberalisation of the market can occur with appropriate element of the public protections that need to be in place before public protection? My Private Member’s Bill includes external ownership of ABS firms can safely be permitted. It is exceptions in serious cases, and that is right; it is how it essential to avoid the spectre of law firms being owned by criminal should be, if we are to build the confidence of the elements”.—[Official Report, Commons, Legal Services Bill public in the structures that we promote. The crux of Committee, 22/6/07; col. 300.] the matter is to establish a strict regulatory regime so I think that, unless we have an order before us in the that serious criminals cannot take control of legal very near future that encompasses ABS firms, we will practices. This is where changes are necessary. indeed have that spectre before us. There is a clear divide between what the Ministry of Justice is proposing and what is required by the SRA Lord McNally: I knew I was right when I said that of the Law Society. It would be helpful to have the the enemies are behind me, but very constructive enemies Minister’s reasons for this order. It poses difficulties they have been. One of the benefits of this procedure for the SRA, whose task it is to establish standards, is that we can examine orders such as this in a non-partisan and it is the SRA’s view that it cannot license ABS but expert way. As much as it is within my power to until these exceptions are in place. give the assurances that the noble Baroness, Lady GC 79 Rehabilitation of Offenders Act[LORDS] Corporate Manslaughter/Homicide Act GC 80

[LORD MCNALLY] the custody area of UK Border Agency customs facilities Royall, has asked for, I give those assurances. The or being held in Ministry of Defence service custody points that have been made by my noble friends during premises. this debate should be treated with proper urgency. I The purpose of the commencement order is to am not in a position to withdraw the order, which implement Section 2(1)(d) of the Corporate Manslaughter covers matters that it is important to take forward. and Corporate Homicide Act 2007—which I shall However, the noble Baroness is quite right: in opposition refer to as the “custody provisions”. The amendment both Jonathan Djanogly in the other place and my order will extend the provisions to facilities not already noble friend Lord Hunt made it very clear that the covered in the Act; namely, Ministry of Defence service effectiveness of fitness-to-own provisions was a crucial custody premises and customs custody facilities which element of the consumer protection measures that have now become the responsibility of the UK Border needed to be in place for all ABSs. That position has Agency. not changed. I can assure the Committee that the gist of this Before going into the detail of the orders, I shall debate—or at least Hansard—will be made known to briefly remind Members of the Committee of the my colleagues in the Ministry of Justice, along with context surrounding the custody provisions. The Corporate the strong message that a sense of urgency is needed in Manslaughter and Corporate Homicide Act 2007 created taking this matter forward. The argument that a an offence whereby an organisation could be found compelling case and a clear understanding of the guilty of corporate manslaughter if the way in which potential risks are needed to justify inclusion in exception its activities were managed or organised resulted in a orders is valid. Licensing authorities have a range of death and amounted to a gross breach of a relevant regulatory powers and will be required to put in place duty of care to the deceased. The breach must be strict licensing rules to ensure that licensing bodies are grossly negligent and a substantial part of it must have properly regulated and consumers adequately protected. been in the way activities were managed by senior management. Nevertheless, I accept the point made by my noble friend Lord Dholakia. I hope we can carry forward his The offence was created to deal with the problem of initiative in producing a new Private Member’s Bill obtaining convictions of corporate bodies because of that updates the Act. If we are to get general public the operation of the identification principle, which support for a rehabilitation of offenders Act, and required the prosecution to show that the offence was carry public confidence in it, we must have exception in essence committed by the “directing mind” of an orders to give the protections that the public require. organisation. This meant that, in some instances, because Certainly, the case made today for owners being part of the complexities of the decision-making process in of the Act is, to my mind as a lay man, almost big companies, it was not possible to identify a single unanswerable. I hear what has been said. It would individual—that is to say, the directing mind—with seem only natural to a simple lay man that owners and specific responsibility for the failing. The new offence managers of ABSs should be included in the order. I allows an organisation’s liability to be assessed on a will take the very strong recommendations of this wider basis, providing a more effective means of Committee back to colleagues. In the mean time, I ask accountability for very serious management failings the Committee to accept this order. across the organisation. The majority of the Act came into force on 6 April Motion agreed. 2008, with the exception of the custody provisions, whose implementation Parliament agreed would be Corporate Manslaughter and Corporate delayed by three to five years. During the final stages Homicide Act 2007 (Commencement of the Bill’s passage through Parliament, a lengthy discussion took place as to whether deaths in custody No. 3) Order 2011 should be covered by the Act. After much debate, the Considered in Grand Committee then Government were finally persuaded to accept clauses that would extend the Act to the management 4.18 pm of custody, but argued that custody providers would Moved By Lord McNally need time to prepare. A compromise agreement was reached to the effect that the custody provisions would That the Grand Committee do report to the be implemented between three and five years after the House that it has considered the Corporate Act came into force. The Bill was passed on this basis. Manslaughter and Corporate Homicide Act 2007 Custody providers have since indicated their readiness (Commencement No. 3) Order 2011. to implement the provisions in two reports to Parliament, Relevant documents: 23rd Report from the Joint published in 2008 and 2009. Committee on Statutory Instruments. The custody provisions do not create additional duties. All custody providers already owe duties of The Minister of State, Ministry of Justice (Lord care to detainees. The commencement order makes McNally): My Lords, the commercial order would these duties of care relevant for the purposes of the implement Section 2(1)(d) of the Corporate Manslaughter offence in the Act, which means that, once commenced, and Corporate Homicide Act 2007. The amendment an organisation responsible for the management of order would add two categories of person to the list custody, including a government department, could be contained in Section 2(2) of the Act. These are persons convicted of corporate manslaughter if its management owed a duty of care by virtue of either being held in failings led to a death. GC 81 Corporate Manslaughter/Homicide Act[5 JULY 2011] Corporate Manslaughter/Homicide Act GC 82

The commencement order simply illustrates the I should mention also that a recent and important coalition Government’s long-standing commitment to change in this law came into effect a couple of days commence a provision which we fought for during the ago with the Bribery Act, which makes liability for passage of the Bill. We felt then, and still do now, that bribery subject not to any particular identification of there is no good reason why a victim of a failing by a any particular individual who is responsible but simply government department should not be afforded the to the incompetence of the corporation itself. Therefore, same protection as the victim of a failing by a private I very much welcome this particular amendment. corporation. We believe that the state has a particular responsibility to those for whom it has a duty of care, Baroness Royall of Blaisdon: My Lords, I, too, such as persons held in custody, and should lead by welcome the orders. As the Minister said, at the time example. Having established that custody providers of the passage of the Corporate Manslaughter and are ready to comply with the custody provisions in the Corporate Homicide Act 2007 there was much discussion Act, we are here today to debate commencement of about this issue in both Houses. It was absolutely right the provisions at the earliest available opportunity. that the Bill should encompass this particular aspect, We are here today also to debate an amendment because it is important that an organisation can be order which brings military and customs facilities into found guilty of manslaughter if the way in which its the scope of the Act. This is an important amendment activities were managed or organised causes a death. that ensures that the law will be applied consistently to That is absolutely right. It is particularly important all custody providers. The intention to extend the Act for the victims’ families because they need the certainty is nothing new; it was signalled in the annual progress that such deaths can be properly investigated and report that I have already mentioned, and we have authorities brought to justice. been assured by the relevant departments that the I have only a couple of questions. My first question custody providers concerned are ready for implementation. relates to the custody suites in the UK Border Agency As with commencement, the question is not so and the Ministry of Defence. Is it intended that there much why extend but what possible reason can there will be a review of those specific holding and detention be not to extend. I put it to the House that there is areas? Like the noble Lord, Lord Thomas of Gresford, none. I believe that both orders constitute positive and I would like an assurance that those in the private necessary developments, and I trust that the members sector who are responsible for the custody and transporting of this Committee will agree. of offenders can also be brought to justice. In the other place, a member of the DUP asked Lord Thomas of Gresford: My Lords, it is helpful to whether or not there had been discussions with the put this order into some context. The corporate Northern Ireland Assembly. It was not absolutely manslaughter provisions were considered by the clear from the Minister’s response what discussions Independent Advisory Panel on Deaths in Custody. had taken place with the Assembly. I realise that they When one looks at the statistics on page 9 of the are a separate entity but it is important that discussions report, which was a joint Ministry of Justice and should take place between the Assembly and the Home Office report, one sees that in 1999 there were Government and I would grateful for information 643 deaths in state custody. That number has reduced from the Minister. in the past two years to 483 and 366, but that is a lot of people who have died in custody. It is important that 4.30 pm there should be corporate responsibility, not simply Lord McNally: I thank all noble Lords who have for claims of negligence but for criminal claims. contributed to the debate and for the general welcome We are very pleased that this order is now being that has been given to the orders. introduced. On the question asked by my noble friend Lord I have two questions for the Minister. One relates to Thomas of Gresford, Section 28 provides that the Act service custody. Do I take it that the Ministry of extends only to England, Wales, Scotland and Northern Defence could be criminally liable for a death in Ireland; it will not apply to Ministry of Defence service custody abroad? The other matter that concerns facilities abroad. If I am wrong about that I shall write me is whether the private organisations that provide to my noble friend. However, I believe that to be prison accommodation and in particular transport correct. come within the provisions of the Act, so that any On the issue of private providers, which was referred default on their part means that they will be subject to to by both the noble Baroness, Lady Royall, and my criminal liability as well as to liability in civil law. noble friend Lord Thomas of Gresford, the Act applies to contracted services. Contracted service providers of Lord Goodhart: My Lords, I would like to step in custody will continue to be responsible for their actions briefly on this matter. The law dealing with the liability in delivering safe custody. The Act does not place new of corporations for offences, or matters for which the duties on them. We will retain residual responsibilities corporation has been responsible, has been inadequate in relation to the management and monitoring of the in recent years. In particular, to make the corporation contractual arrangements, and they will be covered by liable for homicide, as in this case, or for other purposes, the Act in this respect. They will have the same duties it has been necessary for it to be shown that not only of care. was the corporation itself negligent but that negligence On the issue of inspection, in respect of the Border could be attributed to a directive member of the Agency customs facilities, a review relating to the care corporation. Therefore, I very much welcome this of an arrested teenager was initiated as a result of a particular piece of this particular order. death in custody in 2007 and is due to be finalised by GC 83 Corporate Manslaughter/Homicide Act[LORDS] Charities Act 2006 Regulations 2011 GC 84

[LORD MCNALLY] have given the contract to such a body in the first the Chief Medical Officer. Once the recommendations place. This is what makes this job both interesting and have been finalised, the UKBA will be reviewing its frightening at times. I shall write to my noble friend to processes and initiating an implementation programme. clarify. In respect of the MoD, the Army has reviewed its need for service custody facilities and in September Motion agreed. 2010 endorsed some recommendations, including an immediate reduction of authorised unit custodial facilities from 67 to 22. Corporate Manslaughter and Corporate The points made by the Committee have been Homicide Act 2007 (Amendment) Order extremely relevant, not least the rather chilling figures 2011 of the number of deaths in custody. Over recent years— Considered in Grand Committee this applies also to the record of the previous Administration—there has been a consistent attempt Moved By Lord McNally by government to address the problems. My noble friend Lord Thomas will agree that the bald figures That the Grand Committee do report to the cover a range of reasons for death in custody.Nevertheless, House that it has considered the Corporate in recent years the police, prison authorities and all Manslaughter and Corporate Homicide Act 2007 those who have a duty of care have made a real effort (Amendment) Order 2011 to address the reasons for deaths and to prevent them Relevant documents: 23rd Report from the Joint wherever possible. They have changed techniques for Committee on Statutory Instruments dealing with violent prisoners, changed the furniture in cells and limited opportunities for suicides. They Motion agreed. have introduced a whole range of activities and initiatives to tackle the problem. Charities Act 2006 (Principal Regulators There is no doubt that the Government, as the of Exempt Charities) Regulations 2011 state, freely accept in this order the responsibilities Considered in Grand Committee that they imposed on the private sector with the initial Act. I remember my noble friend Lord Goodhart and 4.41 pm others pressing these matters when we were in opposition and I am pleased that we are able to bring these orders Moved By Baroness Verma together. That the Grand Committee do report to the Criminal justice is devolved in Northern Ireland House that it has considered the Charities Act 2006 and the local Minister and Assembly have the (Principal Regulators of Exempt Charities) Regulations relevant commencement powers under the Corporate 2011. Manslaughter and Corporate Homicide Act, which Relevant document: 23rd Report from the Joint we understand the Assembly is looking at. I am the Committee on Statutory Instruments. Minister in the MoJ responsible for contact with the devolved Assemblies and Administrations and I shall Baroness Verma: My Lords, I shall take together make sure that our views on and experiences of this this order and the Charities Act 2006 (Changes in aspect are made available to our colleagues in Northern Exempt Charities) Order 2011. The two instruments Ireland. relate to the regulation as charities of three classes of state-funded educational charity: academies, sixth-form Lord Thomas of Gresford: In relation to private colleges, and foundation and voluntary schools. provision of prison and transport facilities, what is the The changes in the exempt charities order will relationship between those private facilities and the reconfer exempt-charity status on sixth-form colleges department? Could the department resist a charge and foundation and voluntary schools. Academies under the Corporate Manslaughter and Corporate are charities and will become exempt charities from Homicide Act on the basis that the responsibility has 1 August 2011 by virtue of the Academies Act 2010. been contracted out? My noble friend may not be able The principal regulator regulations will appoint to answer straightaway, but I would be grateful if he principal regulators for all three groups of exempt could clarify that at some stage. charities, with the duty to promote their charity law compliance. Exempt charities have not been regulated Lord McNally: I certainly cannot answer that directly; in the same way as other charities. The general law of I will have to write. It is an interesting point. I shall not charity applies to exempt charities, but they are exempt mention providers by name, but if a private prison or a from many provisions of the Charities Acts, cannot private transporter of prisoners was guilty of corporate register with the Charity Commission and are exempt manslaughter, would the line of responsibility run from its supervisory powers. The categories of exempt back to the MoJ? I take it that that is the point. It is an institutions, in so far as they are charities, are mostly interesting point. I suspect that, on the one hand, the set out in Schedule 2 to the Charities Act 1993. suggestion would be that the responsibility for the Historically, exempt status was usually conferred corporate manslaughter would be that of the provider by legislation on charities that were already regulated, and that the provider would be charged; on the other so additional supervision by the Charity Commission hand, there is the argument that the MoJ should never was considered unnecessary.However, this was challenged GC 85 Charities Act 2006 Regulations 2011[5 JULY 2011] Charities Act 2006 Regulations 2011 GC 86 in 2002 by the then Prime Minister’s Strategy Unit, Taking each of the three categories in turn, I will deal which found that the position was anomalous, confusing first with academies. Academies will, from 1 August for the public, and potentially risked the integrity of this year, be exempt charities when Section 12(4) of charitable status. the Academies Act 2010 is commenced. As of 1 July there were 801 academies in England. There are no Most respondents to a public consultation in 2003 academies in Wales. agreed that exempt charities benefiting from the advantages of charitable status should come under During the debate on the Academies Act 2010 it some form of regulatory oversight as charities, but was proposed that the YoungPeople’s Learning Agency concerns were expressed that duplication or new regulatory should be appointed as the principal regulator of burdens should be avoided. academies. However, following the review of public bodies, the YPLA will, subject to parliamentary approval, The Charities Act 2006 marked a new approach. be succeeded next year by the Education Funding Wherever possible, a body that already has oversight Agency, an executive agency of the Department for responsibility will become the main or “principal” Education. Therefore it is now considered more regulator for an exempt charity or group of exempt appropriate to appoint the Secretary of State for Education charities. Principal regulators have a new duty to as principal regulator of academies, because he has promote charity law compliance in the charities for existing funding and regulatory roles. which they are responsible. They have two key roles: first, providing tailored advice for their sector or In practice, the YPLA and its proposed successor, signposting to relevant guidance to help trustees meet the EFA, would carry out much of the necessary their legal obligations; and, secondly, stepping in where information gathering which would then be used to something goes wrong. In serious cases, it is likely that report to and advise the Secretary of State on his the Charity Commission will also need to be involved. principal regulatory role. The principal regulator regulations therefore appoint the Secretary of State as The aim of the principal regulator approach is for principal regulator of academies. smarter regulation that maintains trust and confidence in charities but avoids regulatory duplication by using The second category is what I have referred to as the regulator’s existing processes and procedures to foundation and voluntary schools. In fact, it includes promote charity law compliance. Where it is not possible the following bodies: the governing bodies of foundation, to identify a principal regulator for a charity or group voluntary and foundation special schools, foundation of charities, they will cease to be exempt and, if their bodies established under Section 21 of the School income exceeds a £100,000 annual income threshold, Standards and Framework Act 1998, and connected will be required to register with the commission. institutions. There are believed to be over 8,100 of these charities Although that is not the case for any of the charities in England, and 175 in Wales. Historically they have we are considering today, since 2006 there has been been exempt charities, but in January 2009 they ceased phased implementation of this new approach. In some to be exempt, although transitional provisions pending cases the 2006 Act itself removed exempt status from a final decision on their status have meant that they groups of charities, but it also provides the Minister continue to be treated as if they are exempt. These for the Cabinet Office with a power in Section 11 to transitional provisions are due to expire on 1 September, remove, or to confer, exempt charity status from a having already been extended twice. charity or class of charities. This power can be exercised only if the Minister is satisfied that the change is In 2010 the Cabinet Office consulted on the proposal desirable in the interest of ensuring appropriate or to reconfer exempt charity status on foundation and effective charity regulation of the charities or charity voluntary schools, and appoint an appropriate principal concerned. In addition, the 2006 Act provides the regulator. Responses strongly supported the proposal Minister with the power in Section 13 to appoint a to reconfer exempt charity status, although views differed principal regulator for an exempt charity or class of over which personal body should be appointed as exempt charities. principal regulator. The 2006 Act increases the extent to which exempt The Department for Education regulates these charities charities are subject to the Charity Commission’s under education law, so is ideally placed to take on the regulatory jurisdiction in Sections 12 and 14 and role of principal regulator. This ensures compliance Schedule 5. But importantly, the Charity Commission with charity law while avoiding regulatory duplication, cannot exercise its regulatory compliance powers in in line with the Government’s commitment to reducing relation to an exempt charity without first consulting the burden of regulation on schools. the exempt charity’s principal regulator—in Section 14 The changes in the exempt charities order reconfers —and it cannot open a statutory inquiry into an exempt charity status on these foundation and voluntary exempt charity unless invited to do so by the principal school charities. The principal regulator regulations regulator listed in Schedule 5. appoint the Secretary of State for Education as principal I will now summarise the changes that these instruments regulator of these charities in England and Welsh will bring about, which were announced to Parliament Ministers as principal regulator of these charities in in a Written Ministerial Statement on 30 March this Wales. year by the Minister for Civil Society, Nick Hurd MP, Following detailed analysis by the Cabinet Office, and the Under-Secretary of State for Education, the working with the Charity Commission, the Department Minister responsible for schools, my noble friend for Education and Welsh Assembly Government, these Lord Hill. arrangements are considered to provide the most GC 87 Charities Act 2006 Regulations 2011[LORDS] Charities Act 2006 Regulations 2011 GC 88

[BARONESS VERMA] The Charity Commission is currently developing appropriate regulatory oversight of foundation and memoranda of understanding to formalise the details voluntary schools as charities, while keeping the burden of the relationship between the principal regulators of regulation to a minimum. and the commission. It is also setting up a committee The third and final category is sixth-form college of principal regulators which will meet annually to corporations. There are currently 94 sixth-form college share best practice. corporations in England and none in Wales. They The impact of the changes made by these instruments were created following amendments made to the Further will be reviewed within three years of commencement. and Higher Education Act 1992 by the Apprenticeships, Although a statutory review of the 2006 Act will begin Skills, Children and Learning Act 2009. It was always later this year and will include an evaluation of the intended that they would be exempt charities, as this changes made by the Act to exempt charities, this will was the status of the institutions that became sixth-form be too soon to properly consider the impact of the college corporations in April 2010. For this reason, changes made by these instruments. the commission has not required sixth-form college These instruments will ensure that academies, corporations to register. foundation and voluntary schools and sixth-form colleges As with foundation and voluntary schools, the are regulated appropriately and effectively as charities Department for Education has an existing regulatory but through existing oversight mechanisms to ensure oversight role under education law. It is ideally placed that regulation is proportionate. I therefore commend to take on the principal regulator role, promoting this order to the Committee. compliance with charity law through existing procedures without additional regulatory requirements. The Charities Lord Phillips of Sudbury: My Lords, I am grateful Act 2006 (Changes in Exempt Charities) Order confers to my noble friend the Minister for that introduction. I exempt status, as was intended from the outset, and broadly welcome the regulations. I have one specific, the principal regulators regulations appoint the Secretary rather gritty point to put to her. I have given notice of of State for Education as their principal regulator. it to her officials, so I hope that it may be possible for I should add that we also propose to appoint the an answer to be available today. I have one general Secretary of State for Education as principal regulator point on which I would be very interested in her of certain exempt charities connected to academies response and then another general point which needs and sixth-form colleges. This will have to be done to be made in the light of the regulations. separately by a negative procedure statutory instrument, I shall deal with the gritty point as quickly as I can. as regrettably these charities were overlooked when It arises out of the statutory instrument dealing with the instruments before us were laid. principal regulators. Regulation 7 introduces a new section, Section 71A, into the Apprenticeships, Skills, The duty imposed by the Charities Act 2006 on Children and Learning Act 2009. New subsection (1) principal regulators of exempt charities is forward gives a discretion to the Young People’s Learning looking. This means that they are required only to Agency to provide the principal regulator, the Secretary promote compliance by the charity trustees with charity of State, with information that he or she may need in law obligations arising on or after, or ongoing on, the order more effectively to carry out his or her duty as commencement date. Principal regulators will not be regulator. We have already heard today that the YPLA required to take action relating to matters which occur is likely to be replaced in not too long a time by the before the commencement date and in connection education funding agency. I hope that that does not with which no charity law obligation is continuing at mean that we shall need further amending legislation that date. to substitute EFA for YPLA. But why only a discretion? The Office for Civil Society and the Charity Surely the YPLA should be under an obligation to Commission have worked closely with the Department provide assistance, information or advice to the principal for Education, the YPLA and the Welsh Assembly regulator, so long as it is a reasonable request. The Government on these proposals, and key representative Minister might like to comment on that. bodies of the schools and colleges have been kept My first general observation relates to the particular informed of progress. No significant concerns have character of a government department as a principal been raised about the forthcoming changes or the regulator. There is growing anxiety within the charity instruments that will give effect to them. sector about the preservation of what is an absolutely For exempt charities under the principal regulator fundamental characteristic of any charity: its regime, there will be little, if any, noticeable impact on independence. It is often not understood among the a day-to-day basis. They will continue, as now, under wider public that one of the bedrock guarantors of the their existing regulatory regime, albeit with their regulator integrity of each and every charity—however small or also promoting charity law compliance. large it is, whether it has trustees appointed by outsiders For academies and sixth-form colleges, the YPLA or not, and whether it is funded from a particular will continue to have a role. The principal regulator source or not—is that it has absolute independence regulations make provision for this by amending the and responsibility for its own affairs. Its trustees have Apprenticeships, Skills, Children and Learning Act one sole purpose in life, which is to forward its charitable 2009 to enable the YPLA to assist, advise or provide purposes to the best of their ability for the benefit of information to the Secretary of State for Education as the public. principal regulator. An impact is likely to be felt only Having the Secretary of State for Education as the when something goes badly wrong and the regulators principal regulator is sure to involve conflicts of interest need to intervene. all along the way. Whatever Government are in power, GC 89 Charities Act 2006 Regulations 2011[5 JULY 2011] Charities Act 2006 Regulations 2011 GC 90 they will have their own agenda. The voluntary sector Lord Hodgson of Astley Abbotts: My Lords, my is a very important part of the provision of education noble friend Lord Phillips, from his lengthy experience generally. The measure seems to warrant a little more in the charity field, has carried most of the points with thought. I do not for a moment propose to question him. I shall attempt to sweep up behind a little, if I the Secretary of State for Education being principal may, and raise a couple of issues. Before doing so, I regulator in these statutory instruments, but the concern need to declare interests as president of the National is germane and relevant. Perhaps the Minister will Council for Voluntary Organisations and as chairman take back to the Government the need for some informal, of the Armed Forces Charities Advisory Company. internal consideration of the independence factor, as I I wanted to speak on this issue because, first, the call it. concept of exempt charities is complex and their structure and rationale is not immediately apparent. Secondly, 5pm these exempt charities are of course educational charities, I move on to my final point, which I hope Members and it is around education and health, but particularly of the Committee will think relevant to our deliberations. education, that the whole issue of public benefit and I wish to comment on the complexity of these statutory charitable status revolves in the case of private schools. instruments. What I am about to say will not in any Therefore, it is important that we give these instruments way reflect upon the quality and bona fides of the civil a proper degree of scrutiny. servants responsible for these instruments, because One danger and one problem or issue that arose they do their level best, and it will not reflect on the during the passage of the Academies Act was whether calibre of the parliamentary draftsmen. I know from we had undermined the issue of presumption, because long engagement with them what an impossibly difficult the Act merely stated that these institutions would be task they have and how superbly, on the whole, they charitable, full stop. Having spent a great deal of time undertake it. earlier removing presumption and making sure that The second of these instruments—the one dealing all charities had to justify their public benefit status, it with the definition of exempt charities—makes clear seemed strange and possibly dangerous that we would in a way that is rarely visible the fact that there was a suddenly say that a group of charities—in this case, cock-up. Is one allowed to use that term in Parliament? schools—was exempt. Therefore, the question of how they are going to be regulated and the nature of the Lord Wallace of Saltaire: I think so. regulator is important. As for when the regulator takes over from the Lord Phillips of Sudbury: There was a cock-up in Charity Commission, originally the 2006 draft Bill prior legislation that led to the need for the second of suggested that exempt charities could only disappear. these statutory instruments to confirm that sixth-form Originally, the Bill as drafted allowed only for exempt college corporations should have exempt status charities to be removed; the original concept was that re-conferred on them. There is no question or doubt they would finally fade out. However, some of us, that their exempt status was removed from them including my noble friend Lord Phillips and I, decided unintentionally. I commend whoever wrote the helpful that it would be better to have a two-way valve, not a Explanatory Memorandum on the delicate language one-way valve. Indeed, it is the two-way valve that employed therein. It explains: is being used to create a new category of exempt “Sixth form colleges which are charities had their exempt charities. status removed by the ASCL Act. It is unclear whether this was intentional”. When we examined some of the exempt charity Wonderfully clear it was not. I make this point not to regulators, there were some surprises, which have a make fun of those who were party to the error. The read-across to this debate. The regulator for universities parties most responsible for it were in this place, is the Higher Education Funding Council for England. because it is we who churn out, day in and day out, It has always been surprising that that is the regulator tidal waves of primary and secondary legislation. It is because it has no charitable knowledge at all; it is we who fail to scrutinise adequately that tidal wave, merely a funding body. I shall come back to that again and it is we, therefore, who did not see when the ASCL in connection with the proposals for the regulator and Bill was introduced that by an unintentional side wind the Secretary of State in the current regulation. We these sixth-form college corporations were deprived of have had some grave disappointments. Given that we their valuable exempt status. It seems as though they were trying to create a proportionate regime, it was a have been in a sort of ghostly limbo until now, but at shame that the MoD was not prepared to take on least we are putting them out of their misery. some of the requirements of the exempt regulation for I wanted to raise this issue because it is not often Armed Forces charities, because there are many hundreds that such a blatant example of the weight of interlocking of them and they require a particular light touch. legislation is clearly shown to be false in its outcomes. On the upside, you can have light-touch and I put it to the Committee that charity law has become proportionate regulation focused on a particular group barbaric. Happily, when I started practising law, nine of exempt charities, but there is a down side, which is times out of 10, such matters would never darken the regulatory arbitrage. You can find ways to fall between doors of a lawyer’s office, but those days are long the cracks of the regulatory regime, which is something gone. We are, even in these instruments, creating another that we have to be very careful about. As I understand web in which to catch the unwary, forcing the prudential it, there will be two principal regulators. One of them into seeking expensive advice and generally making is the Secretary of State for Education—that is very the voluntary sector a victim of our excessive endeavours. clear, although there are some down sides that my GC 91 Charities Act 2006 Regulations 2011[LORDS] Charities Act 2006 Regulations 2011 GC 92

[LORD HODGSON OF ASTLEY ABBOTTS] and therefore I do not quite see why the Secretary of noble friend has just mentioned—but in the Welsh State has to have a continuing role here. That seems to situation the regulator is a “responsible person”, which be centralising rather than devolving. is defined in Regulation 6(2). It means a person who, “isorwas…aWelsh Minister”, Baroness Royall of Blaisdon: My Lords, I, too, am was, grateful to the Minister for introducing these orders. Of course, it is right to ensure that there is proportionate “acting on behalf of the Welsh Ministers”, but effective oversight of charities under charity law or was, while keeping the regulatory burden to the minimum “a member of a committee established by the Welsh Ministers”. necessary, but that regulation must be effective and This is not an attack on the devolution process but it ensure proper compliance with charity law. Therefore, does mean that nobody is identified as the regulator I share the concerns of noble Lords who have spoken for the Welsh educational institutions. I think that about the potential conflict of interest and perhaps responsibility should lie with someone, or some defined the impact on the independence of charities if the body, and there is a danger here of having an amorphous Secretary of State is to be the regulator for so many of and opaque nature of responsibility with regard to these institutions. I, too, think that again this is a Welsh educational institutions. demonstration of centralisation rather than enabling organisations to flourish, and that dismays me. I should On the question of memoranda of understanding, be grateful for the Minister’s views but I also hope that through which we can avoid regulatory arbitrage, I the Government will reflect on potential conflicts of assume that there will be two—one with the English interest in relation to the Secretary of State’s role as regulator, the Secretary of State, and one with the regulator and his role as Secretary of State for Education. Welsh person. It will be interesting to know from my noble friend who that person will be in the light of the I find no reference to free schools in the documents rather opaque drafting of the regulation. This will be before us and I do not understand their status. Are the first time that we have had two regulators—one for they charities or not? I do not know. All academies are England and one for Wales. As I look through the included. However, I do not know what the status of other exempt regulators, I see that DCMS regulates free schools is and I should be grateful for some museums and galleries for both England and Wales. clarification. If they are charities, who is the principal We are now dividing them for the first time and regulator? creating an interesting precedent. In the Academies Act 2010, as the Minister said, it was agreed that a principal regulator would be required I share the concerns that my noble friend Lord for academies and, as noble Lords have said, it was Phillips raised about role of the Secretary of State for proposed that this should be the YPLA. Then along Education in respect of England. This is a tiny part of came the Public Bodies Bill and the aim to abolish the his empire and can hardly have the attention that it YPLA. Of course, the Bill is still in Committee in the might deserve. There is the issue of independence that House of Commons. my noble friend underlined, as well as the question of conflicts of interest that may arise in the future. I was I have a few questions. First, is it not precipitate to quite attracted by the idea that the YPLA should be a appoint the Secretary of State for Education as the regulator. If it is to be succeeded by the education regulator when the YPLA has not yet been abolished? funding agency, so be it. After all, if the Higher Like the noble Lord, Lord Hodgson, I wonder why the Education Funding Council is doing universities, why Education Funding Agency should not be the regulator should the education funding agency not do this group rather than the Secretary of State. Secondly, the of educational institutions? As the Explanatory memoranda of understanding are clearly extremely Memorandum says: important and I wonder whether Parliament will be able to see them before they are concluded. “In practice, the YPLA (and its proposed successor the EFA) will carry out much of the necessary information gathering which My last question is a small one. The section relating would then be used to report to and advise the Secretary of to monitoring and review is a little perplexing. A State”? review is supposed to commence later this year. However, Why not just have them carry out the role? It would be this will be pretty worthless in relation to the regulator a good devolution of power. It would remove the role because the review of the 2006 Act is expected to from the Secretary of State and avoid the conflicts of follow shortly after the change is made by these regulations. interest to which my noble friend referred. Essentially, I am asking: why have two reviews? Why not have one review in three years’ time? That would In conclusion, I understand that these are technical obviate a lot of work that will go into reviewing in the questions. I am sorry that my technical e-mailing skills mean time. are not sufficient to have been able to get them to my noble friend in advance of this afternoon’s debate, but 5.15 pm I think that they are important. In these stringent, difficult and suspicious times, we need to maintain the Baroness Verma: I am grateful for the extremely culture of the charity brand, especially in the field of knowledgeable contributions of noble Lords this education. Some precedents are being set here and we afternoon. I start by thanking my noble friends Lord need to be careful that we are not doing something Phillips and Lord Hodgson, and the noble Baroness, that we will later regret. I think that, in line with the Lady Royall, for their warm welcome to these regulations. Government’s overall policy, devolving power for Many questions have been thrown at me; I shall try to regulation to the lowest possible level is appropriate, respond to them in the order in which they were asked. GC 93 Charities Act 2006 Regulations 2011[5 JULY 2011] Charities Act 2006 Order 2011 GC 94

I thank my noble friend Lord Phillips for prior notification to promote charity law unless charity law compliance of his questions. I passed his notes to the civil servants. requires it. Expertise in charity law lies with the Charity I hope that, through my response, he will be reassured Commission. That is why the commission has investigation that we have taken his concerns seriously. I am pleased and enforcement powers in relation to exempt charities. that my noble friend Lord Hodgson’s train arrived on My noble friend also asked why the Education time so that he was able to tease out of me further Funding Agency is not the regulator. As I said to my details of an extremely complex area of law. noble friend Lord Phillips, the EFA will be an agency In response to my noble friend Lord Phillips, the of the Secretary of State. It will not have a separate YPLA is fully committed to supporting the Secretary legal personality, so it cannot be appointed as the of State in his or her role as the principal regulator. principal regulator. The consultation went across all the agencies, all of which agreed that the Secretary of State would be ideally positioned to be the regulator. The YPLA has Lord Hodgson of Astley Abbotts: Will the MOU be worked closely with the EFA, the Department for in place when the regulations come into force on Education, the Cabinet Office and the Charity 1 August? Commission on the development of the Secretary of State’s role as the principal regulator. Much of what the YPLA will do will be to support the Secretary of Baroness Verma: I have been told by my experts State as part of the existing day-to-day functions of behind me that it will be shortly afterwards. the regulator. In practice, I am not sure that we should The noble Baroness, Lady Royall, reminded us of see the YPLA refusing any reasonable request from the effectiveness of the regulators. The principal regulator the Secretary of State for advice and information. I approach will not mean less effective regulation. It will hope my noble friend is reassured that the YPLA, be entirely valid to use different models of regulation when it is replaced by the EFA, will continue to fulfil to fit the circumstances so that we end up with smarter its role of supporting the Secretary of State. regulation that maintains trust and confidence in charities. I come to independence, on which I think my noble Using an existing regulator’s processes and procedures friend is about to challenge me. to oversee charity compliance avoids costly and wasteful duplication. Lord Phillips of Sudbury: I am grateful for what the The noble Baroness asked also about free schools. noble Baroness said but why can the regulations not Free schools are a type of academy. They are charities just say that the YPLA “shall” provide reasonable in the same way as other academies. She asked also assistance, information and advice. Why not “shall” about the MOUs between the Charity Commission instead of “may”? and principal regulators. MOUs will be published on the Charity Commission website. We are happy to Baroness Verma: Since this is a legal and technical deposit copies in the House Library. matter, perhaps I could write to my noble friend. I know that such words can change the law very quickly, I suspect that I have not given satisfactory answers and I shall not be drawn into that trap by my noble to my noble friends who are experts in this area. I hope friend today. that they can be assured that I will provide written responses to questions to which they feel they have not On the issue of independence, both the Charity answers. Commission and the Cabinet Office are satisfied that the appointment of the Secretary of State for Education The regulations are about making the system leaner and the Welsh Minister as principal regulators will not and smarter. I therefore commend them to the House. give rise to an inherent conflict of interest. The commission and the principal regulator will work together to ensure Motion agreed. that a charity’s independence is maintained. The functioning roles already have accountability. There is no conflict, since assurance is largely derived from the funding function and both roles require similar levels Charities Act 2006 (Changes in Exempt of assurance. Charities) Order 2011 We all accept that the law on exempt charities is an incredibly complex area with a complex history. More Considered in Grand Committee than anybody else in this Committee, my noble friend is aware of the difficulties that this law raises. I accept that we would rather be in a better position, but we are 5.22 pm where we are and it is difficult to unpick some of the Moved By Baroness Verma complexities. As a result, we should go for a simpler legal regulatory framework for exempt charities. It has That the Grand Committee do report to the always been intended for exempt charities to be exempt. House that it has considered the Charities Act 2006 When the ASCL Bill was enacted, it was agreed that (Changes in Exempt Charities) Order 2011. this would be done through exempt-charity SIs. That Relevant document: 23rd Report from the Joint is what these instruments do. Committee on Statutory Instruments. My noble friend Lord Hodgson spoke on the MOUs. Principal regulators are not expected to be experts in charity law. It is not their job to be, nor is it their duty Motion agreed. 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Distribution of Dormant Account Money April. A number of concerns were raised about the use (Apportionment) Order 2011 of the Barnett formula, principally revolving around the established criticisms that the formula is outdated Considered in Grand Committee and does not take into account the varying needs across the constituent countries of the UK. I can 5.23 pm assure noble Lords that we have considered these Moved By Baroness Verma: concerns very carefully. However, based on advice from the Treasury and in line with normal devolved That the Grand Committee do report to the spending, we maintain that the formula remains the House that it has considered the Distribution of most transparent, robust and sustainable method of Dormant Account Money (Apportionment) Order apportionment. This judgment was communicated to 2011 the devolved Administrations in letters from the Minister for the Cabinet Office on 6 April, thereby formally Relevant documents: 22nd Report from the Joint ending the consultation process. Committee on Statutory Instruments While keeping within the constraints of the Baroness Verma: My Lords, this apportionment parliamentary timetable, we have been keen to ensure order marks the culmination of a long process to do that the apportionment order is passed as soon as something useful with dormant account money. The possible so that the dormant account money can be Dormant Bank and Building Society Accounts Act put to good use as soon as the first tranche becomes 2008 created the legislative framework required to use available later in the summer. While England’s portion this money for the good of society while protecting the will be used to establish a big society bank, which will rights of account holders. In line with the original Act help build a social investment market and broaden the and in consultation with the Big Lottery Fund, which finance options open to civil society organisations, is the designated distributor of dormant accounts with the passing of this order, Scotland, Wales and money, England, Scotland, Wales and Northern Ireland Northern Ireland will be able to use their portions to are all determining their own spending priorities for it. fund their own social and environmental programmes. As the Prime Minister announced in July of last year, I therefore commend the order to the Committee. I England’s portion will be used to set up a big society beg to move. bank. Current estimates suggest that there is about £400 million of eligible dormant accounts in the UK. Lord Higgins: My Lords, I have a long-standing Some of this will be kept back to meet claims from interest in the question of dormant bank accounts. customers, as is right and proper. However, the Reclaim Indeed, at one stage I was an arbitrator on the claims Fund estimates that between £60 million to 100 million resolution tribunal for dormant accounts in Switzerland. will be released for public spending over the course of I have only one or two points to make on the order, the first year. Subsequent releases will be made according the first of which concerns the question of distribution. to the rate of reclaim. As the Minister said, there were considerable discussions This order sets out how the money available for on this issue. She said that in the course of the discussions public spending will be apportioned between England the devolved Administrations argued that the allocation and the devolved Administrations. In accordance with of the money should be changed and that it should be communications at the time of the original Act in distributed in relation to the various needs of the 2008, the order divides the money on a per capita devolved areas, whereas the very good and helpful basis; in other words, in line with the Barnett formula. brief states that it does not take into account need. It Based on the latest population estimates by the Office is not the same thing. “Need” implies that certain for National Statistics, the percentages are as follows: groups of people have a need for money as against the England, 83.9 per cent; Scotland, 8.4 per cent; Wales, overall allocation—which, presumably, will happen in 4.9 per cent; and Northern Ireland 2.8 per cent. While the course of normal government decisions. the application of the Barnett formula to the In all events, could the Minister say what evidence apportionment of dormant account money is in line the devolved Administrations produced to argue that with previous expectations, the decision to use the it ought to be done on the basis of need? Whatever formula was made only after a period of consultations one thinks about the Barnett formula—and many with the devolved Administrations, as required by the views have been expressed about it, not least by the Act. noble Lord, Lord Barnett—I have come to the conclusion Following the passage of the transfer of functions of the Treasury that this is probably right way of order on 31 January, the Minister for the Cabinet doing it. Office had responsibility for leading this process. Prior The second point, which is interesting, is that this to the formal consultations, Cabinet Office officials money is normally going to go, as I understand it, to informed officials in the devolved Administrations the Big Lottery Fund. The money going to the devolved and territorial offices of the Government’s intention Administrations—I presume, the Minister will correct to use the Barnett formula, thereby preparing the way me if I am wrong—will be allocated by the fund. for the ministerial process. However there is also an intriguing passage in the The formal consultation process was conducted Explanatory Memorandum, which states: through an exchange of letters between the Minister “With the Prime Minister’s announcement on 19 July 2010, for the Cabinet Office and his ministerial counterparts England’s portion is committed to setting up a Big Society Bank, in the devolved Administrations during March and which will be a social investment wholesaler”. 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I am not at all clear what a “social investment It appears that some interesting suggestions have wholesaler” is—perhaps the Minister could clarify been canvassed by experts in this area. I draw attention that. But in all events it looks as though England will in particular to the views of Professor Iain McLean of have its chunk allocated to the big society bank, Nuffield College, Oxford, on how other countries whereas the other devolved Administrations will tackle this problem. He drew attention to the example not. of how the Australian provinces meet to decide these I understand and support the idea of a big society issues. The time has come at least to put in hand bank, and the idea of the big society, which the Prime significant research, because there is a widespread Minister is understandably so enthusiastic about. But perception that the Barnett formula’s outcomes are if that is so, why has an apparently arbitrary decision not just inequitable. However, it would be a mistake, been taken, which I do not think is reflected at all in on the back of this order, to carry that out as far as it any of the legislation, that England’s portion shall go has been carried out in other forums. to the big society bank, rather than any of the other The question of the amounts of money available is uses which the lottery fund might have used it for? of great interest, and I am happy to have heard from Although we have a Big Lottery Fund which is my noble friend that the sums anticipated for this year responsible for making this kind of decision, it is are in the order of between £60 million and £100 million. apparently to be overruled in this case by the Prime Have any assessments been made as to whether that Minister’s statement. I am not the least bit clear what those sums will be a one-off, or whether they will the financial and legislative basis is for his decision to continue—and if so, at what level? I realise that that is overrule that, and why—instead of the normal process a difficult issue to hypothesise about, but if any work of going through the Big Lottery Fund—we suddenly has been done, it would be interesting if it could be find it is to be done by a big society bank. No doubt shared with the Committee. I am grateful to my noble that has not been set up yet. I presume there will be friend for what she has said. some delay, whereas if it went straight to the Big Lottery Fund, the money would be allocated immediately, Baroness Royall of Blaisdon: My Lords, I, too, am or at least much sooner than it would under the grateful to the Minister for her introduction. I certainly arrangements set out in the Explanatory Memorandum. support the order and I am glad that the money will be I would be most grateful if the Minister could clarify distributed. I recognise that now is not the time to those particular points. discuss how the dormant accounts money is to be spent, nor is it the time to have a discussion about the big society bank. However, I have reservations about 5.30 pm the big society bank because, while I believe that it will Lord Maclennan of Rogart: My Lords, my noble help some people and organisations, it is a very small friend Lord Higgins has raised a number of the points answer to the problems that they will encounter as a which I would otherwise have raised, but we wish to result of cuts in local authority services. reinforce his inquiries. I note that the money is being The noble Lord, Lord Maclennan, asked whether handled in Scotland, Wales and Northern Ireland by the noble Baroness thought that the £60 million to the Big Lottery Fund. What prioritisation, if any, is £100 million that it is estimated will come from dormant being indicated by the Governments of the countries bank accounts this year will be a one-off, or if such an to which power has been devolved? What relationship amount of money can go into the big society bank is there between the views of the Governments in these every year. If it is a one-off, my concern about the countries and the Big Lottery Fund? Will it be open to viability of the big society bank is exacerbated because them to seek to influence the judgment of what is if there is to be a bank that will really fulfil what is apparently being described as money for the public likely to be an important role in supporting charities sector? It is to my mind rather odd that no public and civil society, it has to be more sustainable than consultations were deemed necessary to consider this something that will get possibly £60 million next year—or matter, or other matters related to the distribution of possibly not. Who knows? That raises some concerns. the dormant account moneys, since the amount is not I hear what the noble Baroness says about the negligible. I would be very interested to know if—in Barnett formula. Discussions have taken place on the course of the discussions about how the money whether or not there are other options and, clearly, the might be divided up—any representations were made decision has been taken and has come down in favour by the devolved Governments about how the money of the Barnett formula. It would be interesting to ought to be spent. Were they content with the proposal know what discussions have taken place, and with that it should be left to the discretion of the Big whom, in order to reach that decision. I am concerned Lottery Fund? about its specific impact on Wales because it is widely So far as the reliance upon the Barnett formula is recognised that Wales tends to lose out as a consequence concerned, there have been many occasions—some of the Barnett formula. recently in our House—when the limitations of the As I said, I am glad that the money is to be formula have been considered. Perhaps this is not the distributed and welcome the order. However, it raises occasion to reopen that question, but it is a little profound concerns which must be addressed, if not disappointing that we have received an indication that today then in the future. the Barnett formula is considered to be the best method of financing the Governments of the devolved countries, without any indication that any sort of inquiry has Baroness Verma: I thank my noble friends and the been made by the Government. noble Baroness, Lady Royall, for their broad warm GC 99 Dormant Account Money Order 2011[LORDS] Dormant Account Money Order 2011 GC 100

[BARONESS VERMA] are using. However, it has proved to be currently the welcome for the order. I expected the order to raise most transparent and easily understood formula of all questions, on some of which, I am afraid, I shall have those that are around. I hope noble Lords will be to write to noble Lords. satisfied. I know I have not been able to respond to all My noble friends Lord Higgins and Lord Oakeshott questions but I undertake to ensure that all noble raised concerns around the use of the Barnett formula Lords are written to. On that basis, I commend the and asked why not other formulas. It was found that order to the Committee. the Barnett formula was the most robust way of allocating the money. The Big Lottery Fund’s way of distribution Lord Higgins: My Lords, I should like to seek a is not a government formula and therefore does not little further clarification. I stress that I am, despite all have a wider standing beyond the distribution of lottery its imperfections, in favour of the use of the Barnett funds. The Government recognise that concerns have formula for the allocation of funds between different been expressed about the system of devolved funding; parts of the United Kingdom. However, that does not however, their position remains that the priority is to solve the problem of which formula is being used to reduce the budget deficit and that any decision to distribute the money, as against distributing it between change the current system must await the stabilisation the regions. I am anxious to save my noble friend of public finances. However, we have to find an alternative unnecessary correspondence. Why, instead of the normal and, until we do, noble Lords will have to accept that procedure being used—whereby the money for each of the Barnett formula has its strengths. the regions goes into the Big Lottery Fund—is the My noble friend Lord Higgins asked about the money suddenly being siphoned off into the big society term “social investment wholesaler”. The big society bank? Apparently this is not happening in the regions, bank will be a social investment wholesaler. It is a although one would have thought that the big society term used in dormant accounts legislation and is one was a UK-wide concept. Why do we suddenly find the of three areas where English dormant accounts can be allocation of resources—apparently contrary to the spent. The other two are youth provision and financial Act, although I might be wrong about that—being left inclusion and capability. to the big society bank, rather than to the existing My noble friend Lord Clement-Jones asked about arrangements set out in legislation? Alternatively, why public consultation on the distribution of dormant is it not all going to the big society bank? How do the accounts. The Government carried out a public criteria for these two bodies differ? consultation on how the English portion of the dormant accounts should be spent prior to the 2008 Act. As a Baroness Verma: My noble friend of course wants result, the dormant accounts Act allows the English far more detailed clarification than I am about to give portion to be used for youth provision, financial inclusion him. I undertake to ensure that such clarification is and capability or a social investment wholesaler. passed to all Members. However, the devolved Assemblies I was asked about the monies going into the big and authorities can make orders to restrict the kind of society bank and whether this would be a one-off. We purposes and people to which money from dormant have £60 million to £100 million that we are going to accounts may be distributed. That comes under the allocate. However, there is a reclaim fund and we need Sections 19 to 21 of the Dormant Bank and Building to see how much of that is drawn on. Of course, if Society Accounts Act 2008; some safeguards are already money is then still left, it is only right and fair that it is in place. However, I completely understand my noble put to positive and good use through the big society friend’s concern. Therefore, to ensure further clarity I bank so that people and smaller organisations can would rather undertake to write and give a much fuller draw on it. The decision will, of course, be made after explanation that will, I hope, satisfy him. the independent reclaim fund has looked at how the progress of reclaim has worked. The questions that were asked today centred basically Lord Higgins: My Lords, I am afraid that an exchange around confidence in ensuring that the monies reach of correspondence does not clarify something in the the right people and that we are making the best use of same way as having it dealt with on the Floor of the the dormant accounts. I think there is agreement over House. Can I be clear? What is the financial basis of the framework that we are using, which was passed in the Prime Minister’s statement, allocating this money 2008. Since taking office, the Government have worked to the other fund, rather than to the Big Lottery hard, taking the necessary steps to make sure that Fund? money from dormant accounts made available for public spending is put to good use as soon as possible. Baroness Verma: As I said earlier to noble Lords, A reclaim fund has been established by Co-operative the Prime Minister has made it clear that for him the Financial Services and authorised by the FSA. As I priority in England is to be able to set up the big have indicated from the outset, the estimated £60 million society bank to ensure that dormant accounts are used to £100 million from dormant accounts will be released for the needs of organisations in England. My noble by the fund over the first year. It is imperative that we friend is now querying the needs of the devolved are able to spend this money as soon as possible. Assemblies. However, I would give justice to my noble In taking the decision, the Government have considered friend only if I could write to him and to other noble thoroughly some of the concerns that noble Lords Lords because I would not want to have something have raised today. I stress to the Committee that we misread or misheard in giving clarification. I may be understand that there are criticisms of the formula we able to do so now but, then again, I may not. GC 101 Dormant Account Money Order 2011[5 JULY 2011] Ministerial and other Salaries GC 102

Under the Dormant Bank and Building Society receive reduced salaries but, because of the rules governing Accounts Act 2008, following the transfer of functions ministerial pensions, their contributions have to remain order the Minister for the Cabinet Office must give based on their entitled level of salary as set by the directions to the Big Lottery Fund on how the English Ministerial and other Salaries Act 1975 as it stands. portion should be spent. I am not quite sure that that This has meant that departments have had to make up will satisfy my noble friend and therefore I continue to the shortfall in pension contributions between the say that I shall write to noble Lords. reduced and the entitled levels of salary for Ministers and officeholders. The amending order will eliminate Lord Higgins: I am most grateful to my noble the need for departments to do this and will save the friend. I look forward to her letter to see whether the Government approximately £100,000 per year. Minister can, in fact, make such an order. As I mentioned, ministerial and other officeholders’ salaries are currently governed by the Motion agreed. Ministerial and other Salaries Act 1975, as amended. The salaries of all Ministers, the Speaker in each House and the six paid opposition officeholders fall under the remit of this Act. These individuals have Ministerial and other Salaries Act 1975 been informed of this order and the changes that it (Amendment) Order 2011 will make to the Act. Currently, increases to ministerial salaries are linked to the average increase Considered in Grand Committee in the mid-points of the senior Civil Service pay bands. This order will effectively nullify the link 5.51 pm during this Parliament but it will apply again after the Moved By Baroness Verma Dissolution of Parliament. I should point out that over several years ministerial That the Grand Committee do report to the salaries have not, in practice, remained in line with the House that it has considered the Ministerial and legislation. Since 2008, Ministers in the former other Salaries Act 1975 (Amendment) Order 2011 Government had waived any entitlement to increases Relevant documents: 19th Report from the Joint in their salary. This order will therefore bridge the gap Committee on Statutory Instruments that has grown between the legislation and what is happening on the ground. Given the Government’s policy on a Civil Service and wider public sector pay Baroness Verma: My Lords, this is an order that my freeze, it is right that Ministers show leadership during right honourable friend the Prime Minister has specifically this time of financial constraint. Since taking office, requested to formalise in legislation the coalition this Government have saved around £700,000 on Government’s policy on ministerial salaries, as announced Ministers’ pay. Over a full five years, this will represent on 13 May last year. The order was laid before Parliament a £4 million saving. I commend the order to the on 21 March and agreed to in the Delegated Legislation Committee. Committee in another place on 21 June. The order, which is intended to remain in force for the lifetime of this Parliament, will ensure that ministerial Lord Maclennan of Rogart: My Lords, I welcome and other officeholder salaries are reduced in legislation the opportunity that the laying of this order gives to as they have been reduced in practice since the coalition enable some scrutiny of the policy lying behind it. Government took office. The salaries and offices affected The practice of making alterations to the levels of are specified in the amendment order and these salaries ministerial salaries is not new, and particular aspects cannot be at any other rate during this Parliament of this order are worthy of consideration. It is perhaps without further amendments to the legislation. Lords remarkable that since 1975 there have been 30 previous Ministers can be assured that their salaries will examples of alterations to ministerial salaries. My remain as listed in the order until the Dissolution of noble friend the Minister has made it clear that to Parliament. some extent this is, on this occasion, gesture politics. It The Government’s policy is that Ministers’ total is about signalling to those in the public sector that remuneration is 5 per cent less than that claimed by Ministers are also bearing some of the brunt of the equivalent Ministers in the former Government. In the financial situation that the country is in. It has to be case of Lords Ministers, “total remuneration” in the said, however, that the savings to which my noble context of the order simply refers to their ministerial friend has referred are rather minuscule. It might salary. For Commons Ministers, it refers specifically reasonably be inquired as to whether such savings to ministerial and MPs’ pay taken together, with the might have been better made by reducing the total reduction then applied solely to the ministerial salary number of Ministers, which seems inexorably to have element. Since entering office, therefore, Ministers have increased over the past 100 years—notwithstanding waived their entitlement to receive a full ministerial the devolution of power and the apparent commitment salary and have been receiving a reduced salary ever of the present Government to decentralise power further. since. There has been no shedding of Ministers to accommodate The order also ensures that ministerial and other that philosophy. officeholder pension contributions and future accruals I wonder whether the setting of an example by are brought into line with the reduced ministerial Ministers will be regarded by those in the public sector salary levels. Currently, Ministers and other officeholders as amounting to anything more than a row of beans, GC 103 Ministerial and other Salaries[LORDS] Ministerial and other Salaries GC 104

[LORD MACLENNAN OF ROGART] our public services in general are too deep and being in the light of the fact that large cuts in the public sector made too fast, I do not think that that is the case in are being made among civil servants and public authorities relation to ministerial salaries. The Prime Minister around the country. If savings of public funding can was correct when he acted as a sort of catalyst for this be made at that level, some thought ought to have legislation. been given to saving at the top in Whitehall. The question arises of why the Government have taken an inflexible view to this order, which does not match or Baroness Verma: Again, I start by thanking my mirror what has happened in the past? Circumstances noble friends and the noble Baroness for their broadly change, and it is to be hoped that they will change warm welcome for the order and for their questions within the lifetime of this Parliament. To set these about ministerial salaries. I should like to start by proposals in stone, as apparently the Prime Minister responding to the point made by my noble friend Lord has decided to do, does not seem to be a pragmatic Maclennan—whose name, I hope, I have got right this approach to ministerial pay. time—about it being gesture politics. The fact is that From the point of view of clarification, I should be we need to show that we in government are prepared interested to know what the true position is concerning to take some of the bites that are going to affect every the changes in the pension arrangements. My single citizen because of the financial difficulties that understanding is that this is not intended to be this country is in. I want to resist saying that it is retrospective in its effect and that the raising of the gesture politics: we have a duty to show that we are contributions will take effect only when the order willing to take some of the pain. It may not look as comes into force. I should be most grateful for my though it is a lot of the pain but those of us who work noble friend’s comments on some of these points. incredibly hard feel that it is only right that we all share in it, and the previous Government did the 6pm same. The Earl of Courtown: My Lords, I am most grateful I should also like to thank my noble friend for his to the Minister for telling the Committee that there has kind words. Ministers in both this House and another been a £700,000 saving in ministerial salaries. However, place work very hard and often with gruelling hours does that take into account those Ministers, Whips on subjects that we have to get our minds around very and Members of the Front Bench who do not receive a quickly, as is the case today. This is not my normal salary? I should be interested to know how many remit—and I think that is true of the noble Baroness, Members on the Front Bench in this House and the too. other place are not in receipt of a salary. If they are There are 13 unpaid Ministers in government, three not, do they accrue any form of pension benefit? I in the Commons and 10 in the Lords. The former think that the Ministers in this House do a grand Administration had the same number of unpaid Ministers job—the same as when the noble Baroness, Lady Royall, before leaving office, with nine from the Commons and was in power—and they are not paid nearly enough. I four from the Lords. The Government believe that the look forward to hearing what my noble friend has number of Ministers should be dictated by need, and to say. on this basis have carefully considered all the appointments that they have made. Because of the nature of the coalition Government and the challenge of delivering Baroness Royall of Blaisdon: My Lords, I declare an the programme for government, the Prime Minister interest as being in receipt of a ministerial or other did not think that it was possible to reduce significantly salary. I have been for some time and I am very the number of Ministers at this time. However, the grateful to the Government. Government have reduced the number of Ministers I am also very grateful to the Minister for pointing who regularly attend meetings of the Cabinet. I hope out that the previous Government also had a policy of that has answered my noble friend’s question. not increasing salaries. Of course, I am attracted—I would be, wouldn’t I?—by the idea from the noble The Earl of Courtown: Perhaps I did not explain Lord, Lord Maclennan, that, rather than reduce well enough the point that I was really making. The ministerial salaries, there should be a reduction in Minister said that at the other end there are three Ministers. I jest but I believe now, as I did when we Ministers not in receipt of a salary, and 10 noble were in government, that there are too many Ministers. friends at this end. At least down the other end they I do not think that that should have an impact on receive a parliamentary salary. salaries but I firmly believe that there are too many Ministers—in the other place, of course—although Baroness Verma: My Lords, I enter into territory Ministers work phenomenally hard. that is way over my pay grade, and the safest option I am not sure what the noble Earl was getting at but for me is now for me to retreat into a safer area. I shall I think that it is wrong in principle for there to be respond to the question about pension contributions. unpaid Ministers. A Minister is a Minister; they do a It is correct that these measures are not retrospective; fantastic job and should be paid accordingly. salaries in the amendment order come into effect when Of course, when everyone in the whole country is the order comes into force. On the question of unpaid having to tighten their belts, it is right that those in Ministers who might be in receipt of pensions—no, it receipt of ministerial salaries should do likewise. Resources deals only with salaried Ministers. Unpaid Ministers are limited and we have to take our share of the pain. are not entitled to a pension under the parliamentary Although I would strenuously argue that the cuts to pension scheme. GC 105 Ministerial and other Salaries[5 JULY 2011] Communications Act 2003 Order 2011 GC 106

I am not getting much more inspiration from behind making informed decisions relating to remedy of the me on any further questions, so I undertake to write market and consumer protection. This could have to noble Lords on any questions that have not been detrimental impacts on both the communication markets answered. and the consumer. Amendments to Article 10(3) of the authorisation Motion agreed. directive as well as to Article 21a of the revised framework directive require that Ofcom be able to levy dissuasive financial sanctions for most breaches of the regulatory Communications Act 2003 (Maximum obligations, including its information-gathering powers Penalty for Contravention of Information under Sections 135, 136 and 191 of the Communications Requirements) Order 2011 Act 2003. Ofcom already has powers to impose financial Considered in Grand Committee. penalties for breaches of these provisions, but the current limit for such penalties is only £50,000. Having reviewed the maximum level of the penalty, the 6.08 pm Government no longer believe that this level of penalty Moved By Baroness Rawlings is sufficiently dissuasive to prevent non-compliance with information-gathering requests. That the Grand Committee do report to the The Government see the ability to levy an increased House that it has considered the Communications penalty for failure to comply with an information Act 2003 (Maximum Penalty for Contravention of request as key to making certain that Ofcom has the Information Requirements) Order 2011 necessary information available to make effective and Relevant documents: 23rd Report from the Joint correct regulatory decisions. Recent changes to the Committee on Statutory Instruments Ofcom enforcement regime in relation to silent calls raised the maximum level of penalty that Ofcom can Baroness Rawlings: My Lords, telecommunications levy for breaches from £50,000 to £2 million. This are a vital part of the UK economy, worth over amendment to the Communications Act 2003 will £35 billion in GDP alone. Perhaps more significantly, mirror that increase in the maximum level of penalty they help to underpin our online and internet economy— in respect of non-compliance with requests from Ofcom the largest per capita ICT market in the world and the for information. Other financial penalties in the driver of innovation and growth in the UK. It is Communications Act have been increased, too, to absolutely critical that in this fast-moving and dynamic sums above the current penalty. For example, there sector we have the necessary regulatory framework will now be no financial advantage to companies capable of keeping pace with market developments refusing to answer an information request and taking and technological change. This is why the Government a £50,000 penalty, as the maximum level of penalty have implemented the European framework on electronic will be £2 million. The use of this power by Ofcom communications. Those changes became law on 26 May must be appropriate and proportionate to the breach this year. The changes to the framework are, first, of the information-gathering powers under the relevant good for business, which will benefit from the improved sections of the Act. The Government are clear that the regulatory framework to encourage investment, and, UK has no discretion on the implementation of these secondly, they will provide greater competition and provisions. We must therefore provide for dissuasive innovation among electronic communications providers. penalties, as they are the law and are required by the They will be beneficial, too, for consumers, who will European directive. gain from access to higher-quality and lower-cost The Government consulted on a change to the level communications services. Benefits for the former will of penalty as part of our wider consultation last year include improved, reasonably priced choice of supplier on the implementation of amendments to the European and contract terms. For the latter, they will include framework for electronic communications. Respondents strengthened rights on privacy and confidentiality, from across both the telecommunications sector and with faster switching processes and improved accessibility. the consumer rights groups were broadly supportive The UK approach to implementation has been of this proposal. They recognised that it is of fundamental light touch and has the support of business. It has importance to the conduct of Ofcom’s regulatory functions been informed by a comprehensive and open dialogue under the framework that it is able to gather whatever with the people concerned, as well as a determination information it needs. to avoid all over-regulation. Respondents also agreed that it is important that The framework contained a number of amendments Ofcom is able to levy dissuasive penalties, particularly granting new powers to Ofcom, the independent regulator. on those operating short-term scams where the potential The powers will make certain that Ofcom has the gains can exceed the amount of the fine. The people appropriate tools to carry out its statutory functions concerned also struck a cautionary note, arguing that, effectively. These functions include the ability to make given the high level of the potential fine, its levy regulatory decisions on the markets. In order to make should be proportionate to the type of breach of the them effective, Ofcom needs access to information information requests. I am pleased to say that this is held by communications providers. recognised in our approach. If the providers do not comply with information The Government are aware, however, that not all requests, it will hinder Ofcom in fulfilling its duty as the people concerned agreed with the proposed increase the communications regulator. This could prevent Ofcom in the level of sanction. Some suggested that the GC 107 Communications Act 2003 Order 2011[LORDS] Communications Act 2003 Order 2011 GC 108

[BARONESS RAWLINGS] Lord Clement-Jones: My Lords, I understand the current level of penalty for failure to comply is already purpose of this order; the reasons for it were very dissuasive and claimed that there is little evidence that cogently set out by my noble friend. European directives companies are not complying with information requests. in the telecoms area have been extremely important in The Government have looked long and hard at the making sure that we have a level playing field in level of the sanctions available to Ofcom under its telecommunications across Europe. I doubt anybody information-gathering powers. We have worked closely would deny that the European framework is extremely with the regulator, Ofcom, to analyse and test its important. However, this is only one part of the powers, including its current enforcement powers. We implementation of the changes to the European firmly believe that Ofcom’s enforcement powers in framework of directives. The question that occurs to relation to the information-gathering requests made me is: why are we not dealing with all the other aspects under Sections 135, 136 and 191 of the Communications of the changes at the same time? One could then see Act 2003 are not equivalent to the other enforcement the full context in which those changes are being powers available to Ofcom and are not genuinely made. I wonder whether I may have missed three dissuasive. Therefore, we will increase the level of fine statutory instruments this month, which is easily done, that Ofcom can levy for failure to comply with an especially in this House. I may not have missed them—they information-gathering request up to a maximum of may be coming down the track—but it would seem £2 million. convenient for us to deal with them and this rather draconian order at the same time. The impact assessment This will be done for the following reasons. First, that comes with the Explanatory Memorandum deals the Government are aware that some communications with the whole slew of other changes being made to providers have refused to comply with an information the European framework and the other five directives request or have provided inaccurate information on a that are part of it. Therefore, it would have been number of occurrences during the years 2009 and convenient to deal with them at the same time. 2010. Some respondents claimed that the current level As the Minister says, the consultation broadly of sanction available to Ofcom was already sufficiently supported raising the level of the sanction to £2 million. dissuasive. The Government, however, have seen evidence However, “dissuasive” is, on the face of it, quite a that suggests that there is a lack of deterrent effect in subjective word. I wonder whether the Minister could the current regime. This means that businesses can, define “dissuasive”—a word she used three or four and do, take the risk of not providing accurate information times in the course of her excellent introduction. For as requested or providing any information. Potentially, instance, what is dissuasive about a penalty of £2 million therefore, they gain financial and other business advantages as opposed to £1 million? I wonder whether this is less through the delay, and even the avoidance, of the full of a legal definition and more of a value judgment. I effect of Ofcom’s enforcement powers under the Act. am perfectly okay with it being a value judgment, but This in turn can have significant detrimental impacts we need to accept that it is and that it is a judgment on both markets and consumer protections. made by the Government, who are not really objective Secondly, non-compliance or delayed compliance in the circumstances. with information requests under Sections 135, 136 and I fully understand the nature of the changes being 191 of the Communications Act 2003 hinders Ofcom made to the authorisation directive in terms of specific in fulfilling its duty as regulator. We see the ability to sanction. However, I find parts of the impact assessment levy an increased level of penalty for failure to comply confusing. Looking at the impact assessment that with an information request as key to making certain deals with the authorisation directive, policy option 1 that Ofcom has the necessary information available to is: make effective and correct regulatory decisions. “Implementation of the Authorisation Directive—articles for Thirdly, increases in the level of sanction in other which there are no options in implementation”. areas—for instance, silent calls—could provide Then we move swiftly on to policy option 2, which is: communications providers with an incentive to refuse “Preferred implementation of the Authorisation Directive—articles to respond to an information request and face a penalty for which there are options in implementation”. of a maximum of £50,000 rather than answer the Which option have we chosen? It is not clear to me request, demonstrate a breach of other regulatory from this impact assessment which option we have burdens and risk a far higher penalty. chosen. I assume that we have chosen policy option 2, but there was no explanation of that in the Minister’s Fourthly, the penalty will apply only to those who introduction. It would be extremely valuable if she do not comply properly with Ofcom’s information could explain which of the policy options has been requests. Two million pounds is the maximum level of adopted. Indeed, perhaps I was not even looking at fine that Ofcom will be able to levy, and the penalty the right impact assessment; that is always a possibility. imposed in any specific case must be, as I said, proportionate to the breach. Her Majesty’s Government believe that this order is Lord Moynihan: My Lords, my intervention on this a necessary and important change to the powers of the will be very brief. I echo my noble friend’s comments regulator, Ofcom. This change will help to make certain about the Minister’s excellent introduction. I should that Ofcom is able to make fully informed decisions on like the Minister to give us a little more clarity, if the market it regulates; this can only be good for possible, on the consultation outcome. The rise from business and good for consumers. Therefore I commend £50,000 to a maximum of £2 million, based on a value this order to the Committee. judgment, is large. Descending on the £2 million is the GC 109 Communications Act 2003 Order 2011[5 JULY 2011] Communications Act 2003 Order 2011 GC 110 issue that I shall focus on. Could the Minister, in The potential impact on a smaller company certainly replying, let us know a little more about the level of came through in some of the responses but has not response to the consultation exercise which was supportive really been picked up on. Many companies in this field of the figure of £2 million? The Explanatory Note do not have profits greater than £50,000 per year. To includes a breakdown of small groups and groups that be fined at the level of £2 million is an awesome took different views, but I should be grateful if the thought. Minister could tell us whether there was overwhelming We were told that there was a large consultation but or significant majority support for the proposal that I agree with noble Lords that the information about she has brought to the Committee today. who was actually consulted is not available. We were told that the responses were broadly supportive but we were unable to identify—certainly by size or by range— Lord Stevenson of Balmacara: My Lords, I, too, what those companies were. On reading the impact welcome the Minister’s introduction, which was extremely statement, it seems that the evidence used was only the fulsome and interesting. Like other noble Lords who 11 cases that have been considered by Ofcom since have spoken, I understand and broadly welcome the 2005, of which three were multiple occurrences. So we objectives of the order. However, I, too, have a number are talking about only eight different cases, which of points that I want to draw out and the Minister to seem to be quite a small sample on which to base such respond to when she is able to do so. a draconian increase. We understand that the need for the order is the EU In making a judgment that this measure is appropriate directive and the requirement to implement the better and proportionate, the Government are acting as both regulation directive. The Minister said that she had no judge and jury. I am not sure that that is the right way discretion on that, but there is quite a lot of discretion to approach this. I would have liked to have seen more within the directive because it does not specify a figure quantitative evidence in the impact statement. of £2 million, as has already been mentioned by the The comment made in some of the paperwork is noble Lord, Lord Clement-Jones. It is a ministerial that as a result of this change there may well be an decision that this is the way to be “appropriate”, increase in the number of appeals made against such “effective” and “dissuasive”—the terminology used. Is fines. That will obviously cost and it may be that the it appropriate? Will it be effective? Will the net effect overall effect is not significant. In her summation, the be dissuasive? That point came through in earlier Minister said that this would be good for business and speeches and I shall be interested to hear the Minister’s good for consumers. I am not sure. This is more likely response. to be another example of gold-plating what is required As far as we can tell, Ministers have judged that by the EU directive, which is aimed at providing only £50,000 in fines is not dissuasive. Whichever way we appropriate, effective and dissuasive powers. It is not a read the impact statement—it was rather a heavy fixed amount. It is perhaps not so much gold-plating read—the evidence may support that level of penalty but platinum-plating. It is hardly a light touch; rather, as regards certain companies, and certainly for those it is a heavy plundering. where the returns are much greater than £50,000 for an alleged breach of not providing the information. Baroness Rawlings: My Lords, this has been a However, is it really appropriate to increase fines by constructive small debate, and I am very grateful to 40 per cent in order to remedy a lack of provision of noble Lords who have contributed. The change that I information? It is not exactly on the same scale as the have outlined today will raise the level of penalty that examples given by the Minister. The only real example the independent regulator, Ofcom, is able to levy for a that I could find was where companies were undertaking breach of its information-gathering requests from £50,000 short-term scams, although it was not clear what those to £2 million. It is a necessary and welcome part of the were—perhaps we could have a discussion about them United Kingdom’s implementation of the European in the response—or what sort of returns there were on framework on electronic communications. As in any them. If they were that profitable, I should like to fast-moving and dynamic sector, it is vital that the know more about them. regulator is able to make necessary and timely decisions To explain, we are not really against the order but in response to changes in the market. The increase in there are some questions. Is £2 million the right figure? penalty will help to make certain that the regulator’s The argument that it is the same figure that they have enforcement powers for such a breach are sufficiently used in other places is not sufficient. We need to know dissuasive and that the United Kingdom is fully compliant more about what the £2 million does in terms of with European law. dissuasion and whether it is indeed appropriate and I turn to the questions from my noble friend Lord effective. Has consideration been given to another Clement-Jones. The other changes have been passed penalty? We were given one option, which was discussed, and were made law on 26 May. They were passed by but it would not be difficult to think of a more negative resolution in a statutory instrument. The dissuasive penalty in a situation whereby, as a result of change has been decided with Ofcom, and £2 million the lack of the provision of information, the company will make certain the equivalence with other enforcement concerned gained significantly in its trading activities. measures. It is quite hard to see what that would be, but let us We have listened to many people concerned, who assume that that is the case. If the company made a have said that the level of this penalty must be significant profit as a result, perhaps the appropriate proportionate to the breach. My noble friend Lord and dissuasive penalty would be the removal of that Moynihan asked for more details of the consultation gain. level. We conducted a full and proper consultation GC 111 Communications Act 2003 Order 2011[LORDS] Gambling Act 2005 Order 2011 GC 112

[BARONESS RAWLINGS] Relevant document: 23rd Report from the Joint from autumn last year. The response from industry Committee on Statutory Instruments. was clear; it is vital that Ofcom is able to make properly informed decisions about this fast-moving Baroness Rawlings: My Lords, the legislation we are sector. This means gathering all the necessary information debating this evening concerns category B3 gaming through the effective and proportionate use of its machines. These are slot machines which currently information-gathering powers. Although a small number allow a maximum stake of £1 and a maximum prize of businesses raised limited concerns about the level of limit of £500. They are most commonly found in adult the penalty sanction, the majority of the people concerned gaming centres – which are more frequently referred supported the Government’s proposals. In fact, all to as “AGCs”– and bingo premises. Under the provisions respondents to the consultation recognised that it is of the Gambling Act, a maximum of four of these important for Ofcom to be able to levy dissuasive machines can be offered by an AGC, while bingo penalties for the breach of such powers, particularly premises may offer a maximum of eight. on those operating short-term scams, as I mentioned, when the potential gains to the operator can exceed The Categories of Gaming Machine (Amendment) the amount of fine. Regulations 2011 will increase the stake limit for B3 machines—that is, the maximum amount that can be Four hundred and twenty organisations were consulted, staked on a single game—from £1 to £2, while the and from 70-plus came replies. There were also more Gambling Act 2005 (Gaming Machines in Adult Gaming than 80 separate meetings, events and round tables Centres and Bingo Premises) Order 2011 will vary the with the industry, the regulator and consumer groups. maximum number of these machines that AGCs and The noble Lord, Lord Stevenson, asked whether bingo clubs can offer customers to 20 per cent of the the change was necessary and whether it was not total number of gaming machines available for use on gold-plated. Changes to Ofcom’s information-gathering an individual premises. powers are intended to enable Ofcom to fulfil its role as the regulator more effectively. This change should The changes have been requested by the amusement not place significant burdens on industry, and it will and bingo industries. The AGCs and bingo clubs have apply only to businesses in breach of the UK regulation. been struggling for some years with difficult trading conditions arising from the economic downturn. These The noble Lord, Lord Stevenson, asked as well difficult trading conditions are also affecting other about the choice, which was between keeping £50,000 related sectors, in particular British gaming machine as a maximum and finding a sum that was consistent. manufacturers and suppliers. The British Amusement There were more than 70 responses to the consultation, Catering Trade Association—which represents the and most responses on this change were in favour of majority of the AGCs and gaming machine manufacturers the £2 million sum. Only some of the larger companies in Britain—estimates that revenues across the industry were against. are now down some 36 per cent since 2007, with over The short-term scams mostly concern premium rate 250 arcades and 1,300 jobs lost. BACTA also estimates numbers run for 30 days. Sums run into the hundreds that gaming machine manufacturing output has dropped of thousands. They have been a serious concern for the by 40 per cent since 2006, with employment in the regulator and for the European Commission. sector down by 33 per cent during 2009. Alongside The noble Lord asked about the impact on smaller this, figures produced by the Bingo Association show businesses. The penalty does not have to be £2 million; that 128 clubs have closed since 2006, with gross that is the maximum. As I said earlier, it needs to be gaming sales having fallen by some £900 million since appropriate and proportionate. It is for Ofcom to 2008-09 and employment down by nearly 30 per cent decide, subject to appeal to the Competition Appeal since 2006. Tribunal. Category B3 gaming machines are an intrinsic part Her Majesty’s Government believe that this is a of the business model for AGCs and bingo clubs. They necessary and important change to the powers of the are very popular with adult players and generate significant regulator. As I said, it will benefit both businesses and levels of revenue for these businesses. These changes consumers. I recommend the order. will allow them to adapt and develop their business model to meet the challenges of the current economic Motion agreed. climate. Amusement arcades and bingo halls are some of the oldest tourism and leisure businesses in Britain Gambling Act 2005 (Gaming Machines in and occupy unique roles in the leisure industry. The Adult Gaming Centres and Bingo AGCs in Britain employ nearly 20,000 people. They Premises) Order 2011 are often a vital part of many seaside towns, where Considered in Grand Committee they form an integral part of the local tourism offer and are significant employers not only in terms of 6.36 pm individual premises but also in supporting businesses involved in manufacturing, supply and maintenance. Moved By Baroness Rawlings Bingo clubs also form a significant part of local That the Grand Committee do report to the economies in terms of employment. The industry House that it has considered the Gambling Act employs some 17,000 people. But they also play a 2005 (Gaming Machines in Adult Gaming Centres wider role. Some 3 million people in Britain play and Bingo Premises) Order 2011. bingo, and bingo clubs very often provide a valuable GC 113 Gambling Act 2005 Order 2011[5 JULY 2011] Gambling Act 2005 Order 2011 GC 114 social amenity. They fulfil an important social function not see B3 gaming machines as a risk to the public. In in many communities, especially for older and retired fact, the current regulations have led to unintended people—older women in particular. consequences: such is the demand for B3 machines However, gambling is different to other industries. from customers in AGCs and bingo clubs that operators For the overwhelming majority of people in Britain, have often resorted to splitting their premises artificially gambling is a pastime, and does not present any problems, in order to meet this demand. This is not conducive to but for a tiny minority of people it is a darker business. effective regulation. The 2010 gambling prevalence survey showed that The measures we are debating this evening are not problem gambling levels in Britain had increased from simply about allowing operators to install more machines 0.6 per cent to 0.9 per cent of the adult population and charge more for their use. They should stimulate over the last three years. That is nearly half a million demand for new B3 game formats and new machines people. This risk is why gambling in Britain is carefully across the amusement and bingo industries, thus offering regulated. In the case of gaming machines, a robust a timely boost to manufacturers and suppliers as regulatory framework is in place. There is a comprehensive operators look to refresh their offer. Operators will be licensing system for operators, manufacturers and able respond to customer demand without having to suppliers; and stringent rules covering access, supervision, play fast and loose with the regulations by artificially and the technical standards of the machines. Regulations splitting their premises. also strictly control the amount that customers can The Government estimate these measures should stake and win, and the numbers and types of machines see an injection of up to 3,000 new B3 machines into gambling premises businesses can offer. the market as operators take advantage of more flexible This regulation works. Britain has very low rates of machine entitlements. This could see an increase in problem gambling compared to other jurisdictions. revenues of £8.5 million a year across these industries. However, as a consequence operators face restrictions This is a modest amount, but it will offer security for around the types of commercial decisions they have to social and economic assets in local areas and protect take to maintain and grow their businesses. They are jobs. It will make the difference in keeping smaller unable to adjust product pricing to absorb increasing bingo clubs open and provide a potential lifeline to costs, and as machine numbers are set centrally, they many small family-run arcades, particularly in seaside are limited in how they can respond to demand and towns, which are struggling in the current economic tailor their offer to meet local circumstances. Amusement climate. and bingo industries have therefore asked the Government Finally, the Government are committed to removing to change the rules around category B gaming machines unnecessary red tape and barriers to create the conditions to allow the stakes permitted to be raised and the for growth in the leisure economies. Consequently, incidence of such machines increased. these measures are a minor adjustment to the regulatory Following a public consultation, the Government framework put in place by the Gambling Act. They are persuaded that the situation facing AGCs and are not about promoting gambling; they are about bingo clubs is sufficiently grave to justify a recalibration providing long overdue help to many tourism and of the stake limits and entitlements for B3 machines. leisure businesses. We want amusement arcades and By bringing forward these measures the Government bingo clubs to remain competitive in these tough want to give greater flexibility to these businesses to economic times. These are some of the oldest tourism make the necessary commercial decisions about the and leisure businesses in Britain, employing between products they offer customers for B3 gaming machines them some 37,000 people. They are important elements in Britain—both through new machines and new game of many local economies, particularly in seaside towns, formats, thereby offering a boost to the manufacture as I said. We want them to thrive. I commend the and supply sectors. regulations and the order to the Committee. The Government would like these businesses to thrive, but not at any cost. I referred earlier to the level 6.45 pm of problem gambling in Britain and I want to make it Lord Clement-Jones: My Lords, I thank my noble clear that protection of the public—especially young friend the Minister for her introduction, which I believe and vulnerable people—will remain paramount. A makes a strong case for redressing the balance, as I see public consultation on these measures closed in January, it, between licensed betting offices on the one hand, and a wide range of views for and against was expressed. and arcades, AGCs and bingo clubs on the other. The Government have taken notice of these views and She mentioned figures, which are contained in the are confident that these matters do not present a risk Explanatory Memorandum, about the closures of bingo to problem gambling. They balance meeting the needs clubs and AGCs over the last few years. There are of business with protection of the public. The fact is some 400 closures—391, to be precise. That illustrates that what research there is about the impact of gaming the problems that those establishments have faced machines on problem gambling is inconclusive. There over the past few years. is no clear evidence—further research is continuing; I pay tribute to BACTA and some of the other but it will take time to bear fruit, and in the mean time organisations for the persistence with which they have businesses are suffering and jobs are being lost. pursued this issue on B3 machines. We have to accept Let us bear it in mind that the 2010 prevalence that the previous B3 regime encouraged premises to survey showed that participation in slot machines has get round the limits by splitting their space up into decreased since 2007 from 14 per cent to 13 per cent. separate areas, as the Minister mentioned. This Based on the available evidence, the Government do announcement has been mooted for some time; indeed, GC 115 Gambling Act 2005 Order 2011[LORDS] Gambling Act 2005 Order 2011 GC 116

[LORD CLEMENT-JONES] happened in the past two years. In other words, the when one looks back at debates on orders on C and D economic impact of this is getting more and more category machines under the previous Government, it serious. We can see that from the background against was clear that there was a debate over whether the B3 which, over the past two years, there have been changes could be made at that time. Certainly, favourable approximately 200 arcade closures, representing some noises were made by Mr Sutcliffe and others, but 800 job losses. However, there are many more than nothing was ever really done about it. So I welcome those 800 when you consider the part-time nature of very much that that is now happening. positions over the summer. In addition to the loss to There are some issues, however. What worries me is local businesses, there is a direct knock-on effect on that these things are done so often in a piecemeal related enterprises such as souvenir, gift and high fashion. We had the C and D changes in 2009, and we street food and beverage shops, many of which are are having these B3 changes now. It is extremely based in seaside resorts. The life-blood of those seaside important that there is a regular review of these issues, resorts is local businesses—those gift shops and high and that the state of economics of bingo clubs and street shops. It is good to note that the work being AGCs is regularly examined. They are an important done by so many of these small, family-run businesses part of the amusement economy—indeed, the seaside at the seaside generates local activity and employment. economy. I note that the Minister in the other place is However, those businesses are under very serious a Member of Parliament who represents a seaside economic constraints, because of which the Prime town. It is very important that there should be regular Minister made a pre-election pledge to throw a lifeline reviews. I believe that a regular stakes and prizes to the traditional British amusement industry by reversing review used to take place. I do not know whether it is changes made under the Gambling Act 2005 to the planned to reinstitute that on, say, a regular three-yearly operation of amusement machines. These proposals basis. There seemed to be some hint in what Mr Penrose give effect to that pledge and would see a return of a said in the other place that that might be the case. maximum stake for category B3 machines from £1 to However, it is important, if possible, to make that £2, as the Minister said, and an increase in machine commitment. entitlement to 20 per cent of machines sited, or four Review is also important to see the impact that machines, whichever is the greater. According to some these new machines will have, not only on the of the estimates in the impact assessment, this small establishments but on the public’s gambling habits. It change that the Committee is considering would raise was notable from the debate in the other place that in the order of £8.3 million for the industry. I ask my there are differences of view over the impact of this noble friend: is that the correct figure? If so, the order on the sheer number of machines that might be financial assistance will alleviate some of the pressures introduced. There was clearly a wide discrepancy between threatening the industry since the introduction of the the Government’s quite low figure of 3,000 extra Gambling Act 2005, and other economic pressures felt machines and the figure cited by others, which was by the sector. I therefore support the measures. considerably higher. Out of interest, I ask the Minister whether, given There is also the question of which other establishments the proposed increase, the next generation of machines should be able to benefit from changes in machines. will have the capacity to take a £2 coin, or will we have Not everybody goes to bingo halls or AGCs. Snooker to plug in two £1 coins? We have not touched on the halls have also come up in debate. I hope that the related issue of whether the Government are considering Minister and her colleagues in the DCMS will also increasing the prize limit from £500 for category B consider that issue. machines in the future and, if so, when. Finally, one thing puzzles me. I think that this is a I thank my noble friend for her comments—it was, sensible order and the right way to proceed. However, again, another eloquent opening speech. I emphasise it appears that the Gambling Commission has a different that given the speed of economic decline in this sector view on how these additional B3 machines should be it would perhaps be of value to the Government in the calculated. It would be helpful if the Minister could future to revise the levels we are talking about today explain where the Government differ from the Gambling on a more frequent basis than they have done in the Commission, and why they have decided not to accept past. its advice in these circumstances. Lord Stevenson of Balmacara: My Lords, I start Lord Moynihan: My Lords, I also support the with a complaint. In volunteering to undertake this government proposals before the Committee. I echo slot—no pun intended—I felt peculiarly disadvantaged the comments of my noble friend about the effectiveness because I have never knowingly interacted with a gambling of BACTA, the trade body for the British amusement machine of any type. I may have led a very sheltered industry. It is good to see highly professional trade life but it has never come my way. There is plenty of associations working with small, family-run businesses, space in here so we could have had a demonstration or many of which are based at the seaside and more than a machine to play with while the Committee sat for 500 of which are members. BACTA does excellent hours on earlier orders. At least we would have better work and has done so for several years. understood the mechanics, if not the economics, of the What struck me about the Minister’s speech was industry. I hope that when the Minister replies she will that she looked at the economic impact over the past respond to that in an appropriate way. five or six years; indeed, she went back as far as 2006 There is no concern about the aim here, which is to at one stage in her statistical analysis. Over the past allow the business more flexibility to respond to the five years, the reality is that the serious decline has economic climate. I recognise the unintended consequences GC 117 Gambling Act 2005 Order 2011[5 JULY 2011] Gambling Act 2005 Order 2011 GC 118 of the current regime, where operators are manipulating from existing customers in existing premises. That the rules by artificially splitting premises. I wonder would be a problem, and I am not sure whether the what an artificial split of premises is, but I think we get view is that that will be the case. I think that it is not the the picture. case, but we nevertheless need to keep an eye on this. The key is that in the Government’s judgment this I agree with the noble Lord, Lord Clement-Jones, will not undermine the central aim of the Gambling that there will be a need for a regular review of this Act 2005, which is, of course, public protection and whole area, not just because of the integrated way in ensuring that gambling is crime free, fair, open and which all the various venues and machines fit together, protects children and vulnerable adults. We have heard but because we do not know enough about the way reassurances from the Minister and I do not think that that gambling trends are going—particularly problem these changes will undermine that. gambling trends. If we are talking about 500,000 people, that is a sufficient number for us to want to keep an The noble Lord, Lord Clement-Jones, referred to eye on the situation. We do not really know what will the Gambling Commission, which is the Government’s be the total number of machines, consequent on the principal adviser in this area. It is interesting that its changes, and it would be interesting to have regular various comments, which are seeded throughout the feedback on that. impact statements and other documents that we have seen, suggest that gambling machines are becoming a There is mention in the documentation of the impact little less popular—although the decline is relatively of tax on the way that the industry will work, and small—and that they do not seem to lead to problem there is the suggestion of a machine games duty. I am gambling. In our regime, prizes are quite low by not sure whether the level for that has yet been set, or international comparison, and the combination of whether that proposal has been implemented. When that and a robust licensing regime suggests that there the Minister responds, can she give us some information is room to make the changes proposed. on that, because it will be an important aspect of this? It would also be useful to track more accurately the On the other hand, the recommendation from the change in takings. The figures that the noble Lord, Gambling Commission is that we should not look at Lord Moynihan, mentioned were startlingly large. If changes in areas such as B3 machines in isolation, a the measures indeed generate more than £8.3 million point picked up by other noble Lords; we need a wider in additional revenues in this area, we would like to prospectus when we are considering changes. That know about that. It was also mentioned somewhere in point did not come through well in the documents that the documentation that the Government are a bit I saw. This is a complicated situation, and not only doubtful about the BACTA figures on generating within the venues and places we are talking about. income. Again, it would be helpful if the Minister Changes here will redouble pressures for changes could respond on that. elsewhere, as has been mentioned. In some senses— although one does not wish to restrict choice in these Finally, there is mention of further research being matters—if we are really concerned about the growth carried out by the Responsible Gambling Strategy in gambling, any increase in availability is, in principle, Board and the Responsible Gambling Fund that could a bad thing. feed into this regular review. The outcome of that will be awaited with interest. On the consultation, I read in the documents that there were 92 consultees— mainly from the industry, 7pm although there were some consumer groups—and that they were offered a wide range of options, ranging Baroness Rawlings: My Lords, this has been a very from do nothing to changes in relation to floor space. helpful debate and I thank all noble Lords who have Like the noble Lord, Lord Clement-Jones, I was perplexed spoken. I thank my noble friend Lord Clement-Jones that the Government did not accept the advice from for his support, and I will try and answer his three its principal adviser, the Gambling Commission, on questions. The first was regarding a regular review, this matter and went for option 5, the model wanted which the noble Lord, Lord Stevenson, also wanted to by the industry. The Gambling Commission wanted know about. We would like a more systematic approach option 6, which required that the increased number of to be in place, and we are minded to return to a machines permitted should be related to floor space, triennial review system, as the noble Lord, Lord Clement- which is the common sense and logical position. Anything Jones, mentioned. We hope to develop this area with else would be rather odd to calculate as you would the industry and the Gambling Commission, and to have an assessment of the total number of machines explore how it might work. There are no plans for the and then a proportion of that subject to a floor limit. moment to make changes to stake and prize limits for That does not seem a robust way of doing this. The B2 machines. size of the premises is important because it will reflect The noble Lord’s second question was regarding the number of people who can use it. That would be a other establishments. The Government have made clear better way but, nevertheless, it will be interesting to their commitment to the British amusement industry hear the Minister’s response on this. to deliver these measures. The Minister for Tourism is There are three or four points on which the Minister meeting Rileys Clubs Ltd tomorrow, Wednesday 6 July, might reflect before she responds. Clearly, the Government to discuss this issue, and it would be wrong to pre-empt have to balance the growth in popularity of the B2 that meeting. machines in betting offices and the impact of the On the noble Lord’s third question, also mentioned proposal on other gambling centres, which might draw by the noble Lord, Lord Stevenson, the Gambling customers away, rather than try to maximise the spend Commission originally favoured an approach based GC 119 Gambling Act 2005 Order 2011[LORDS] Categories of Gaming Machine Regs. GC 120

[BARONESS RAWLINGS] Decisions on the eventual rates and thresholds for a upon floor space. The Government took these views new duty will be made by the Chancellor in the 2012 into account but felt, on balance, that the 20 per cent Budget. The Treasury has launched a consultation on formula would be better placed to meet the needs of the design characteristics of the new duty. We would both the AGCs and bingo clubs, plus, it would offer a urge all interested parties to engage as fully as possible real boost to the machine manufacturers. with the Treasury on this matter. I am aware of the My noble friend Lord Moynihan is very knowledgeable industry’s concern about any additional tax burdens in this area, because I believe he took through the and have made my Treasury colleagues aware of the previous Bill. I totally agree with him regarding the industry’s difficult economic situation and the need to seaside resorts and that the Prime Minister supported minimise burdens on operators. this at a very early stage. As to the estimate of the This has been a very constructive debate. I thank all economic benefit set out in the impact assessment, the noble Lords who have contributed. I commend the impact assessment was considered by the independent order to the Committee. regulatory policy committee and was assessed as being a reasonable estimate of impact. We therefore believe Motion agreed. that it is an accurate estimate. The noble Lord asked whether the new generation Categories of Gaming Machine of machines would take the £2 coin. Yes, they will. (Amendment) Regulations 2011 I am sorry that the noble Lord, Lord Stevenson, Considered in Grand Committee has never tried slot machines, because they are rather fun for a flutter, but perhaps your Lordships’ House is 7.06 pm not quite the right place to have them. Moved By Baroness Rawlings

Lord Stevenson of Balmacara: I mentioned it only That the Grand Committee do report to the because the age profile and ambience here seemed so House that it has considered the Categories of appropriate. Gaming Machine (Amendment) Regulations 2011. Relevant document: 23rd Report from the Joint Baroness Rawlings: Oh, well. Perhaps that is another Committee on Statutory Instruments. place and another time. Motion agreed. The noble Lord asked a more serious question about tax, which of course is a matter for the Treasury. Committee adjourned at 7.07 pm. WS 7 Written Statements[5 JULY 2011] Written Statements WS 8

Over the summer, the RPA chief executive, Mark Written Statements Grimshaw, will be developing a strategic plan for the agency with his new executive team. This will include Tuesday 5 July 2011 an evidenced based review of what the payment timetable for SPS 2011 might look like, to be both challenging and realistic. The plan will be put to the RPA Oversight Animal Health Executive Agency: Annual Board for approval in the autumn and the final version Report and Accounts published soon after. More generally, the Board will Statement continue to monitor the agency’s efforts closely to ensure a line is finally drawn under all the legacy data The Parliamentary Under-Secretary of State, Department issues over the coming year. for Environment, Food and Rural Affairs (Lord Henley): I will continue to keep the House informed on the My right honourable friend the Minister for Agriculture Agency’s progress. and Food (Jim Paice) has today made the following Statement. The 2010-11 annual report and accounts for the Animal Health Executive Agency was laid before ECOFIN Parliament today. Statement

Common Agricultural Policy: Single The Commercial Secretary to the Treasury (Lord Payment Scheme Sassoon): My right honourable friend the Chancellor Statement of the Exchequer (George Osborne) has today made the following Written Ministerial Statement. The Parliamentary Under-Secretary of State, Department The Economic and Financial Affairs Council will for Environment, Food and Rural Affairs (Lord Henley): be held in Brussels on 12 July 2011. The following My right honourable friend the Minister for Agriculture items are on the agenda: and Food (Jim Paice) has today made the following Savings Taxation Directive statement. The savings directive forms part of the EU’s good 30 June marked the end of the regulatory payment governance in taxation agenda, which complements window for payments under the 2010 Single Payment G20 efforts to improve international tax co-operation Scheme (SPS.) At that point, the Rural Payments and reflects latest OECD standards on tax transparency. Agency (RPA) had paid a total of £1.75 billion to Depending on the progress of negotiations, the council some 103,604 claimants. That leaves a total of some may hold a further discussion on amendments to 594 claimants to be paid up to a maximum of £25 million. the directive, which seek automatic exchange of tax It is likely that further work will reveal that some of information with the aim of combating cross-border these cases are not eligible for payment and most of tax fraud. The UK fully supports the aims of the the remainder cannot be paid at present due to reasons amending directive, and hopes that the EU can move such as probate. towards an agreement. These figures demonstrate that RPA has succeeded Presentation of the Polish Presidency work programme in paying over 99 per cent of eligible claimants within the payment window and met the EU benchmark of The Polish presidency will present its ECOFIN 95.238 per cent of the total value of payments to be work programme for the second half of 2011. made, so avoiding the prospect of late payment penalties. Follow up to the G20 Deputies meeting in Paris on This is particularly pleasing given the focus this year 8 and 9 July 2011 on ensuring accuracy of payments in order to begin Ministers will hold an exchange of views on the drawing a line under the legacy of IT and data problems main outcomes of the G20 Deputies’ meeting, which that have dogged the agency since the chaotic is scheduled to discuss the following issues of interest implementation of SPS in 2005. Significant progress to ECOFIN: the global economy and framework for has been made on legacy data correction activity so strong, sustainable and balanced growth, reform of providing greater confidence for farmers about their the International Monetary System, financial regulation subsequent scheme year payments. Nevertheless, I and commodities. recognise that a significant number of farmers had to wait longer than usual for the payment, which I regret. Follow-up to the June European Council on 24 June 2011 I recognise also that there remains much for the Council will discuss the outcomes of the European agency to do in terms of making payments to both the Council, where leaders concluded the first European remaining 2010 claimants, including top ups to those semester, and welcomed the near completion of the who received an initial hardship payment, and those implementation of the comprehensive package of who are due additional sums for the 2005-2009 schemes. measures it agreed last March to stimulate growth and The remaining backlog of potential error cases also to strengthen economic governance. The Government needs to be reviewed and overpayments notified to achieved their priorities: assurances that the European claimants and recovered. This significant volume of Financial Stability Mechanism (the EFSM) would not work will be undertaken alongside processing of 2011 be used for Greece; language that actions taken as a scheme payments. result of the European Banking Authority’s stress WS 9 Written Statements[LORDS] Written Statements WS 10 tests would be consistent with international standards; to influence discussions in other fora, such as on the and strong language on world trade, Doha, deregulation EU budget and CAP Reform. Others, notably Denmark and the single market. and Italy, argued that they should be subject to fuller examination first, to avoid the risk of signing up to Bank stress tests something that would not be achieved. I was able This discussion follows on from the June ECOFIN to accept language that endorsed the targets, but only dinner, and Ministers will hold an exchange of views if the targets, as well as the actions, took fully into on the European Banking Authority stress tests, account international agreements. I highlighted the which are due to be published in the first half of July. recently published Natural Environment White Paper, The focus is likely to be on communicating the results, the UK National Ecosystem Assessment and the England and how to link the results to the backstops measures Biodiversity Strategy. I identified the importance of put in place by member states to address potential delivering biodiversity objectives through a reformed vulnerabilities in their banking systems. The Government CAP.Conclusions were ultimately agreed that endorsed believe that it is important to increase confidence in the strategy, considered that the strategy and its targets the European banking system through the implementation were a key instrument to enable the EU to reach its of coherent and transparent measures to address any overall 2020 target and emphasised the need for further vulnerabilities. It is also important to demonstrate the discussion on the actions. EU’s commitment to medium-term reforms, as agreed The council then adopted conclusions on the protection internationally, by implementing Basel III in full. of water resources and integrated sustainable water 11th Facility for Euro-Mediterranean Investment and management in the European Union and beyond. Partnership (FEMIP) Ministerial meeting There was an exchange of views on expectations for FEMIP brings together the whole range of services the upcoming Commission Blueprint to Safeguard provided by the European Investment Bank to assist Europe’s Water Resources to be produced in 2012. I the economic development and the integration of the stressed the importance of the protection of water Mediterranean partner countries (Algeria, Egypt, Gaza/ resources and integrated sustainable water management West Bank, Israel, Jordan, Lebanon, Morocco, Syria and the need to put in place measures to conserve and and Tunisia). Ministers will discuss FEMIP’s three-year make better use of these resources. The forthcoming operational plan (2011-13) and approve its: Annual Commission fitness check provided an opportunity Report 2010; Trust Fund Activity Report 2005-10 and to thoroughly review existing EU water legislation to the Way Forward; conclusions and follow-up of the ensure it was effective and fit for purpose and I highlighted 2011 FEMIP Conference on the potential of public-private the importance of integration of water issues into partnerships; and topics for its conferences in 2012. other policies, notably agriculture. On the issue of water shortage and drought, I emphasised that the importance of these topics does not mean that further EU: Environment Council EU legislation in this area is necessarily required, as Statement some member states propose. Over lunch and into the afternoon session Ministers discussed the conclusions on the Commission’s Roadmap The Parliamentary Under-Secretary of State, for moving to a competitive low-carbon economy in Department for Environment, Food and Rural Affairs 2050. Chris Huhne called for these to welcome the (Lord Henley): My right honourable friend the Secretary important analysis in the Roadmap; endorse the cost- of State has today made the following Statement. effective trajectory it sets out including the milestones My right honourable friend the Secretary of State for 2020, 2030 and 2040; and set a timetable for the for Energy and Climate Change (Chris Huhne) and I Commission to produce further analysis of the policy represented the UK at the Environment Council in changes needed to deliver these reductions. Only one Luxembourg on 21 June. Stewart Stevenson, Scottish member state refused to note the Commission’s finding Minister for Environment and Climate Change, also that a 25 per cent domestic emissions reduction in joined the delegation. 2020 was on this cost effective pathway, and so discussion At the beginning of the council, the presidency ended with the adoption of presidency conclusions presented its progress report on the proposal for a reflecting the majority view. directive on control of major-accident hazards involving A progress report on the proposal for a regulation dangerous substances (Seveso III), which highlighted on the possibility for member states to restrict or the key issues that remained for discussion during the prohibit the cultivation of GMOs in their territory Polish presidency, in particular: the scope of the directive, developed into an exchange of views. Those member the provisions on public information and the inspections states which support the proposal strongly endorsed regime. The council noted the progress report. the progress made. The UK and Germany, amongst Ministers agreed council conclusions on the EU others, reiterated our concerns about the impact on Biodiversity Strategy to 2020. There was very strong the single market and WTO obligations, and the potential support for the strategy itself, but some debate around negative impact on safe products finding their way to whether to endorse the associated targets and actions the market. The UK supported proportional and proposed by the Commission, or to leave these for pragmatic regulation on the cultivation of GMOs and further discussion. There was general acceptance that while we supported subsidiarity, this should not be at the actions needed further discussion, but the Commission the expense of the single market or the EU’s WTO and several member states were keen that council obligations. We encouraged the Commission to ensure should specifically endorse the targets now, as a means the effective operation of the current system. WS 11 Written Statements[5 JULY 2011] Written Statements WS 12

Under other business France called for an EU Home and Communities Agency management plan for cormorants, the Netherlands for Regulation Committee action on nanomaterials, and Denmark spoke on not using credits from industrial gas CDM projects for Statement compliance with the effort sharing decision targets. The incoming Polish presidency outlined its environment The Parliamentary Under-Secretary of State, Department priorities: biodiversity; resource efficiency; climate change for Communities and Local Government (Baroness Hanham): (adaptation and preparations for the conference in My right honourable friend the Minister for Housing Durban); and, preparations for the UN Rio+20 and Local Government (Grant Shapps) has made the conference. following Written Ministerial Statement. I wish to inform Parliament that Communities and Local Government has obtained approval for an advance Fire and Rescue Service from the Contingencies Fund to allow the recruitment Statement and appointment of a chair, with support arrangements, and for the recruitment of committee members, for The Parliamentary Under-Secretary of State, Department the reformed Homes and Communities Agency’s (HCA) for Communities and Local Government (Baroness Hanham): Regulation Committee ahead of Royal Assent of the My honourable friend the Parliamentary Under-Secretary Localism Bill, which is currently before Parliament. of State (Bob Neill) has made the following Written Bringing forward this expenditure through a Ministerial Statement. Contingencies Fund advance will enable efficiency Today the Government are publishing their response savings to be achieved and provide significant reductions to the consultation on the future of fire and rescue in public spending. control services in England announced in my statement The HCA’s Regulation Committee will focus on the to the House of 13 January 2011 [Official Report economic regulation of the social housing sector. Col. 22WS]. This followed the closure of the FiReControl Economic regulation provides investors with necessary project in December 2010. assurance that the sector is properly governed and First I would like to thank all those who responded financially viable. to the consultation—the department received 61 responses, Parliamentary approval for resources of £14,000 for including from most fire and rescue authorities and this new service will be sought in a Supplementary services, by the closing date of 8 April. The great Estimate for Communities and Local Government. majority of those responding to the consultation believed Pending that approval, urgent expenditure estimated that improved resilience and efficiency—and the enhanced at £14,000 will be met by repayable cash advances technology needed to support these—were as important from the Contingencies Fund. today as when FiReControl began in 2004. Most responding also agreed with the Government’s preferred Insolvency Service: Performance Targets approach of achieving these objectives now through Statement encouraging increased collaboration—in a locally determined manner—with some Government support. The Parliamentary Under-Secretary of State, Department This approach will deliver efficiency and resilience for Business, Innovation and Skills (Baroness Wilcox): benefits for fire and rescue authorities in the best way My honourable friend the Minister for Employment for their area, as well as build national resilience Relations, Consumer and Postal Affairs (Edward Davey) through local solutions. has today made the following Statement. I am announcing today that the Government is I have today agreed to the publication of the Insolvency making available £81 million for fire and rescue authorities Service’s corporate plan for the period 2011-15. in England to improve the resilience, efficiency and Over the past 18 months there has been a significant technology in their control services. As a guideline, fall in the number of bankruptcies which has driven this will provide up to £1.8 million for each authority. the number of new compulsory insolvency cases dealt Authorities will be invited to submit their plans by with the official receiver down from 78,000 cases in 4 November 2011. The plans will be assessed for value 2009-10 to an expected level of 45,000 to 55,000 cases for taxpayers’ money and resilience improvements. in 2011-12. In response to this, the service has cut its In addition, a further £1.8 million will be made costs principally by reducing its staff complement available to the fire and rescue sector for initiatives from 3,200 to 2,100 by May 2010. likely to deliver co-ordination and resilience improvements While this is significant reduction in capacity in a across the fire and rescue services, such as the development relatively short time, I am satisfied that the service will of common technical and procedural standards. be able to maintain the levels of service that it achieved I am very grateful to the Local Government Group in 2010-11 and so I have decided that the service’s and the Chief Fire Officers’ Association for their targets for timeliness, customer satisfaction and efficiency co-operation in developing this proposal. They have should be maintained at 2010-11 levels. The service agreed to be part of the oversight process. Today I will will aim to achieve a real-terms reduction in insolvency be circulating further guidance, together with a copy case administration fees of 2.5 per cent compared to of the response document, to all chairs of fire and last year. rescue authorities and chief fire officers. A copy of the At the same time as insolvency case numbers have response document will be available on the Department fallen, the average value of assets in bankruptcy estates for Communities and Local Government website. Copies has also fallen, making the insolvency case administration have been placed in the Library of the House. fee more difficult to recover and putting upward pressure WS 13 Written Statements[LORDS] Written Statements WS 14 on the service’s bad debt position. In response to this, Insolvency Service Published Targets in 2011-12 the service, working with BIS, will review 2010-11 Target 2011-12 Target how it raises and collects the case administration fee Action redundancy and whether it is possible to move to a more effective payment claims and lower-risk fee regime which is fair to those affected, within 3 weeks 78% 80% relying less on internal cross subsidy and leading to within 6 weeks 92% 93% lower fees overall. 1 This is a combined indicator covering bankruptcy and Action will continue to be taken against bankrupts redundancy cases. and company directors in respect of financial misconduct or dishonesty and the service will continue to investigate In addition to these targets the service is required to the affairs of companies in the public interest. Since meet government-wide targets relating to replying to 2009 the service has undertaken a stakeholder satisfaction correspondence from members of both Houses of survey of the level of confidence in its enforcement Parliament, and making payments to suppliers, as regime, achieving an overall confidence level of 68 per follows. cent and 64 per cent in the two surveys to date. I have asked the service to explore what drives this confidence Other Targets 2010-11 Target 2011-12 Target level so as to facilitate work towards a return to a 68 per cent confidence level during 2011-12. I have Reply to 100% 100% also set a timeliness target in relation to the instigation correspondence from Members of of disqualification proceedings against company directors Parliament within in appropriate cases. 10 days Process payments to 100% 100% I have set the service targets in relation to the suppliers within 30 timeliness of releasing reports to creditors in insolvency days cases, and of processing claims for redundancy payments. I have also asked the service to at least maintain the overall satisfaction levels of its principal customers The Government have also instructed departments and users. and agencies to maximise levels of payment of undisputed invoices within eight days. The corporate plan will be available from today, 5 July 2011 at http://www.insolvency.gov.uk/aboutus/ CorporatePlan.pdf. Copies of this document will also be placed in the Libraries of the House. Justice: Interpretation and Insolvency Service Published Targets Translation Services 2010-11 Target 2011-12 Target Statement

Customer Focus User Satisfaction 90% 90% The Minister of State, Ministry of Justice (Lord levels as measured McNally): My honourable friend the Parliamentary through the Agency User Satisfaction Under-Secretary of State, Ministry of Justice (Crispin Index 1 Blunt) has made the following Written Ministerial Case Statement. Administration Against a background of the need to make economies Level of real term 2.5% 2.5% right across the public sector I announced, in a Written reduction in fees for insolvency case Ministerial Statement on 15 September 2010, that the administration Government were proposing to make changes to the Percentage of provision of interpretation and translation services reports issued to across the justice sector to cut the cost and make more creditors within 8 efficient provision while safeguarding quality. weeks for bankruptcy 92% 92% In pursuit of that aim the Ministry of Justice cases conducted a competitive dialogue procurement process for company cases 80% 80% to explore how these services could be delivered more Enforcement efficiently, before taking a decision on the way forward. That process resulted in a proposed framework agreement Stakeholder 68% 68% confidence in the with a single supplier, under which justice sector Insolvency Service’s organisations could contract for language services as enforcement regime needed. Having sought and taken account of the views The average time 19 Months 19 Months of interested parties, the Government have decided from insolvency that a framework agreement is the best way to meet order to the instigation of their objectives. disqualification The Ministry of Justice will contract under the proceedings in framework on behalf of Her Majesty’s Courts and appropriate cases Tribunal Service and the National Offender Management Redundancy Service. Other justice sector organisations, including Payments police forces, have indicated that they intend to sign WS 15 Written Statements[5 JULY 2011] Written Statements WS 16 contracts under the framework agreement as soon as The Airports Slot Allocation (Amendment) they can. In some cases this will be when pre-existing Regulations 2011, laid before Parliament today, will contracts come to an end. come into force on 1 August 2011. They will temporarily The framework agreement will deliver significant amend the existing regulations so as to provide new administrative and financial savings over the current powers to ensure that during the Games period the approach. It will do this by introducing market forces available air space capacity over the south east of into language services provision and providing a single England will be able to accommodate the maximum point of contact available to staff at any time of day possible number of extra flights, whilst minimising the for the provision of all language services, including risk of disruption or delay to existing services. These interpretation, translation and language services for regulations will cease to have effect on 31 December 2012. the deaf and deafblind. In conjunction with the new regulations, and following Language services will now be booked through two rounds of consultation, on 1 August 2011 the various mechanisms including a secure internet portal, Secretary of State for Transport will designate the telephone or e-mail. This does away with the current airports listed below as temporarily co-ordinated until time-consuming and inefficient process of making 15 August 2012, but only in respect of slot allocation direct telephone contact with each individual interpreter during the period of 21 July 2012 to 15 August 2012 to check their availability for work. A single request inclusive. This period corresponds to the anticipated will be all that is required, reducing the burden on peak demand for air services for the Games. staff. In the south east of England, Heathrow, Gatwick, Stansted and London City are already co-ordinated Interpreters’ details will be held centrally on a new airports. Airports that will additionally be co-ordinated register maintained by the supplier, which will be for the Olympics period are: Birmingham Airport, freely accessible to the justice sector and legal practitioners. Blackbushe Airport, Bournemouth Airport, Cambridge The Government have always been clear however Airport, Chalgrove Airport, Coventry Airport, Cranfield that efficiency cannot be at the expense of quality. Airport, Damyns Hall Aerodrome, Denham Aerodrome, Clear quality standards specify the qualifications and Dunsfold Aerodrome, Duxford Airport, Elstree Airport, experience required for interpreters to work in the Fairoaks Airport, Farnborough Airport, Goodwood justice sector. A strict code of conduct sets out the Aerodrome, Lee-on-Solent Airport, Leicester Airport, high standard of professional conduct expected of London Biggin Hill Airport, London Luton Airport, them. A robust, accessible complaints process has also London Oxford Airport, London Southend Airport, Lydd been designed, with effective sanctions to ensure that (London Ashford Airport), Manston Airport, North breaches of these standards are investigated and dealt Weald Airfield, Old Sarum Airfield, Peterborough with proportionately and properly. Conington Airfield, RAF Northolt, Redhill Aerodrome, The supplier will be obliged under the framework Rochester Airport, Shoreham Airport, Southampton to increase the pool of appropriately qualified, experienced Airport, Stapleford Airport, Sywell Aerodrome, Thruxton and security cleared interpreters beyond the current Airport, White Waltham Airfield, Wycombe Air Park. limits, and to collect and monitor detailed management During this period all flights operating in controlled information to allow better planning for future needs. airspace and intending to use a co-ordinated airport Failure to do so will result in the supplier being will need to obtain, and operate in accordance with, financially penalised. pre-booked take-off or landing slots. Slots will be Moving over to the framework agreement will result allocated by Airport Coordination Ltd, the existing in a more efficient and effective service for the public UK slot co-ordinator, in accordance with the relevant which is forecast to result in savings of at least £18 million EU regulation. on the current yearly spending in this area of £60 million. It will ensure, through the various benefits it offers, Taxation: Policy that the Government continue to be able to provide Statement access to efficient, high quality language services for those in need, while getting value for money on behalf The Commercial Secretary to the Treasury (Lord of the public. Sassoon): My honourable friend the Economic Secretary to the Treasury (Justine Greening) has today issued the following Written Ministerial Statement. Olympic Games 2012 I can announce today that the annual rate of the Statement ring fence expenditure supplement (RFES) for the North Sea fiscal regime will be increased from 6 per cent to 10 per cent, following discussions with industry Earl Attlee: My right honourable friend the Secretary initiated at Budget 2011. This provides extra support of State for Transport (Philip Hammond) has made for investment in the North Sea, including in marginal the following Ministerial Statement. fields that qualify for the current field allowance, and As part of the Government’s strategy to ensure will also support the ongoing considerations on new successful delivery of efficient transport services for categories of field allowance. the 2012 London Olympic Games, I am today announcing In the March Budget, as part of a package of the introduction of new measures to limit disruption measures to help motorists cope with high petrol and delay to all flights using airports in the south east prices, the Government announced a fair fuel stabiliser of England during the expected period of peak demand that would be funded by higher taxation of the profits for air services for the Games. from oil and gas companies when oil prices are high. WS 17 Written Statements[LORDS] Written Statements WS 18

The Government said at that time that they would In line with the published guidance, an assessment consider with the oil and gas industry the case for a of value for money was undertaken. The department new category of field that would qualify for field is confident that the overall package of proposals allowance to support investment in marginal fields. approved in this first round represents high value for In the course of those discussions with industry, the money. Government have identified that the ability of a company I have decided to fund 39 proposals in this round. to benefit fully from the field allowance is dependent Thirty-four proposals will be funded in full and a on whether a company has sufficient current taxable further five proposals will be funded in part. Thirteen income against which to off-set expenditure. This is proposals are considered to have potential when scored addressed to some extent by the ring fence expenditure against the fund criteria, but in my view require further supplement, which currently allows companies with work. Their promoters will be invited to improve their insufficient taxable income to uprate losses by 6 per offer and resubmit to the department in February cent for six accounting periods. 2012, or to improve their offer in the context of their The increase to 10 per cent will help ensure existing large project proposal, where this proposal is shortlisted. field allowances work more effectively and equitably The full list of decisions is attached. to support investment in marginal fields. It also brings RFES in line with the discount rate typically used by By the deadline of 6 June, the department received the sector. 19 expressions of interest for larger projects (requesting Increases in the rate of supplement may be made by between £5 million and £50 million funding from order. The Government intends to lay the necessary DfT). I intend to announce at the end of July the order before the House of Commons in the autumn, shortlist of those authorities invited to prepare a with the increase in RFES effective from 1 January 2012. detailed business case for their proposal. Detailed business cases will be submitted to the department The OBR will publish the full scorecard costings of by December 2011. The department has received this measure over the forecast period at the time of its 41 expressions of interest for tranche two small project autumn forecast. Initial estimations are that the change funding, for submission by February 2012. I intend to is expected to cost around £50 million a year by the announce successful projects in this second round in end of the forecast period (2015-16). the early summer of 2012. The Government will continue to engage with oil and gas companies on the case for new categories of I am very pleased that all eligible local authorities field qualifying for field allowance, and will provide across England (with the exception of the Isles of further updates to Parliament in due course. Scilly) have now applied for funding to the Local Sustainable Transport Fund, either as a lead bidder, or as a partner authority to a large project. The fund has Transport: Sustainable Transport been well received by local government and I am Statement confident that it will be effective in addressing the two key objectives of supporting growth and cutting carbon. Local Sustainable Transport Fund Earl Attlee: My honourable friend the Parliamentary Projects approved for funding Under-Secretary of State for Transport (Norman Baker) Local LSTF Project DfT funding has made the following Ministerial Statement. Authority Name 2011-15 (£m) I am pleased to announce that the Department is today awarding £155.5 million to support authorities North East in delivering local economic growth whilst cutting Darlington Local Motion 4.076 carbon emissions from transport. Durham * South 2.008 The department has received 73 bids to tranche one Durham of the Local Sustainable Transport Fund from 66 lead embracing Local Motion authorities. All bids were for small projects requiring Redcar and Get Moving 1.490 less than £5 million funding from DfT. Twelve bids Cleveland Redcar & were submitted as key components to large projects. Cleveland Proposals were assessed against the criteria as published Tyne and An Active 4.904 in the Guidance on the Application Process, which Wear ITA Future for was published on 19 January. Successful proposals Tyne and Wear (Key were those judged to perform well against the twin Component) objectives of supporting the local economy and facilitating North West economic development, and of reducing carbon emissions. Cumbria Lake District 4.890 If proposals met these initial criteria, they were also Sustainable scored on their potential to deliver wider social and Visitor economic benefits, to improve safety, to bring about Transport improvements to air quality, or to promote increased Beacon Area levels of physical activity. Merseytravel Facilitating 4.877 Sustainable Proposals were required to demonstrate financial Access to sustainability with benefits enduring beyond the life of Employment the fund, to incorporate a credible delivery plan, and in Merseyside (Key to include a commitment to make a local contribution Component) towards the overall costs. WS 19 Written Statements[5 JULY 2011] Written Statements WS 20

Local Sustainable Transport Fund Local Sustainable Transport Fund Projects approved for funding Projects approved for funding Local LSTF Project DfT funding Local LSTF Project DfT funding Authority Name 2011-15 (£m) Authority Name 2011-15 (£m)

Sefton * Sefton and 1.550 Dudley Brierley Hill 0.362 West Active Travel Lancashire Partnership Visitor (BHATP) Economy Herefordshire Destination 4.973 Project Hereford Transport for Greater 4.938 Shropshire Shropshire 4.990 Greater Manchester Sustainable Manchester Commuter Transport Cycle Project Package (Key Telford and Telford 3.526 Component) Wrekin * Future – local Yorkshire and action for The Humber sustainable South A sustainable 4.981 growth (Key Yorkshire ITA journey to Component) work in South Warwickshire Stratford- 4.995 Yorkshire upon-Avon (Key Local Component) Sustainable West (1) DITA 1.102 Transport Yorkshire ITA Connecting Project through the Dales Worcestershire Choose how 2.815 Metro (West you move 2 Yorkshire East of Passenger England Transport Executive) Hertfordshire Big Herts Big 1.990 Ideas (Key (2) “Getting 4.169 Component) transport to work” - An Luton Sustainable 4.996 initiative to Luton support the Improvement sustainable Partnership growth of Peterborough Travelchoice 5.000 employment Plus in West Yorkshire Southend-on- Smarter, 4.816 (Key Sea Active and Component) Sustainable Southend York Sustainable 4.645 Transport Suffolk Lowestoft 5.000 Yo rk - a Local Links programme to Thurrock Thurrock 5.000 “reduce Sustainable carbon Travel emissions, Choices stimulate economic South East growth Brighton and Lewes Road 4.030 through Hove Corridor influencing travel Hampshire Hampshire 4.076 behaviour and Sustainable encouraging Transport modal shift” Towns * East Midlands Kent Growth 2.273 without Leicester Leicester—Fit 4.418 Gridlock for Business Oxfordshire The 5.000 Nottingham Nottingham 4.925 Oxfordshire Urban Area Arc: LSTF Key Supporting Component Employment Bid (Key Growth and Component) Accessing Higher West Education & Midlands Healthcare in Birmingham Bike North 4.123 Oxford (Key Birmingham Component) WS 21 Written Statements[LORDS] Written Statements WS 22

Local Sustainable Transport Fund Projects invited to resubmit through Tranche 2 Projects approved for funding Local Authority LSTF Project Name Local LSTF Project DfT funding Authority Name 2011-15 (£m) West Midlands Stoke-on-Trent City North Staffordshire Reading Sustainable 4.902 Council Sustainable Access for Transport Package Reading: East of England Overcoming Barriers & Cambridgeshire Travel for Boundaries County Council Cambridgeshire Southampton Southampton 3.960 Central My Journey: Travel Sustainable Bedfordshire Choices for Central Travel City Council Bedfordshire Surrey * Surrey 3.930 Norfolk County Connecting Norfolk TravelSMART Council to Growth (Key South East Component) West Sussex County West Sussex South West Council Sustainable Travel Bristol (in West of 5.000 Towns partnership England Key South West with Bath and Commuter North East Routes (Key Gloucestershire Cheltenham and Somerset, Component) County Council Gloucester North Sustainable Travel Somerset and Programme South Somerset County Moving Bridgwater Gloucestershire) Council Forward Devon Breaking the 4.941 link between ** As a Key Component bidder, Derby will be invited to economic incorporate their key component package into their Large growth, Project business case if shortlisted. If not shortlisted, Derby will carbon and be invited to resubmit to Tranche 2. congestion Plymouth 1) Plymouth 1) 4.330 Connect Projects refused funding 2) ITSO 2) 2.980 Smart Local Authority LSTF Project Name Ticketing North East throughout All South Hartlepool Borough Access Hartlepool West England Council Swindon SWIFT 4.472 Stockton-on-Tees Stockton Active (Swindon Borough Council Travel Workplace North West Initiative for Transport) Blackpool Council Jump-starting Blackpool’s * Partial funding approved sustainable transport future: * Combating climate change, improving quality of life Projects invited to resubmit through Tranche 2 * Supporting the Local Authority LSTF Project Name local economy, growing sustainable North East tourism Middlesbrough Sustainable Cumbria County Cumbria Connected Council Middlesbrough Council Northumberland South East Yorkshire and The County Council Northumberland Humber Sustainable Travel North Lincolnshire International Towns Council Gateway Area Wide North West Travel Plan Blackburn with Blackburn with East Midlands Darwen Borough Darwen Connect Derbyshire County 1) Matlock-Buxton Council Programme Council Cycle Ring and East Midlands Connections Derby City Council Derby Sustainable 2) Sustainable ** Travel Transport in North Nottinghamshire Nottinghamshire East Derbyshire County Council sustainable market Leicester City Bike Club Plus towns Council Rutland County Travel 4 Rutland Northamptonshire Connecting Council County Council Northamptonshire WS 23 Written Statements[5 JULY 2011] Written Statements WS 24

Projects refused funding Projects refused funding Local Authority LSTF Project Name Local Authority LSTF Project Name

West Midlands South East Buckinghamshire 1) Smarter Business Solihull Lets Go Local County Council Travel Solutions Metropolitan Borough Council 2) Sustainable School Travel Walsall Active Sustainable Support Metropolitan Travel and Road Borough Council Safety Scheme Medway Council Medway gets active! (A*STARS) Milton Keynes Milton Keynes Council Walking and Wolverhampton Creating Capacity Cycling Network City Council and Connecting Improvements, Places Information East of England Provision and Promotion Bedford Borough Access to Bedford Council South West Essex County The Essex Dorset County School Travel Council Integrated County Council Health Check Towns Smarter (STHC) Choices Programme Borough of Poole Poole Town Centre and Hamworthy Luton Borough SEMLEP Inter- Smarter Choices Council urban Bus Package Improvements

WA 31 Written Answers[5 JULY 2011] Written Answers WA 32

of 10 weeks, primarily for personnel who are about to Written Answers deploy on operations and who develop medical problems that place them in medically downgraded categories. Tuesday 5 July 2011 The data provided are provisional and subject to change as the DPTS is a live system and is subject to Afghanistan constant updates. The 2011-12 budget for the treatment of Armed Question Forces personnel in NHS facilities is just under £21 million Asked by Lord Hylton which includes in-patient and out-patient activity. The annual in-patient activity is projected to be approximately To ask Her Majesty’s Government whether the 9,000 personnel for 2011-12. In addition to these preparations for peace in Afghanistan will make contracts service personnel can be treated in any NHS provision for dialogues at provincial and local level. facility under NHS-funded arrangements, as mentioned [HL10524] above. The MoD does not have data for this activity and they could only be provided at disproportionate The Minister of State, Foreign and Commonwealth cost. Office (Lord Howell of Guildford): We support the Asked by Lord Chidgey Afghan Government’s peace and reconciliation efforts. The Afghan Peace and Reintegration Programme has To ask Her Majesty’s Government how many established Provincial Peace Councils in 33 of armed forces medical staff are being employed in Afghanistan’s 34 provinces to enable dialogue at the National Health Service hospitals, and what percentage local level. In addition, the High Peace Council has of their work is related to non-military patients. undertaken a number of visits to provinces across [HL10372] Afghanistan, including Herat, Helmand, Kandahar, Balkh and Nangahar, to discuss the Afghan Government’s Lord Astor of Hever: A total of 1,162 trained approach. defence medical personnel are currently working within host NHS Trusts. This figure is fluid as a consequence Armed Forces: Staff of medical personnel being deployed on operations. There are also a number of personnel on short-term Questions detachments and/or locally arranged placements that Asked by Lord Chidgey have an honorary contract within an NHS hospital in order to maintain professional currency. These contracts To ask Her Majesty’s Government how many are generally arranged by the individuals, therefore servicemen and women are currently receiving numbers are difficult to establish. There are also a in-patient treatment in National Health Service number of medical personnel in training that have not hospitals, and what is the cost of this treatment to been included in the figures above because they are yet (a) the Ministry of Defence budget and (b) the to provide a service. NHS budget. [HL10371] It is difficult to quantify the percentage of work related to non-military patients as Defence Medical The Parliamentary Under-Secretary of State, Ministry Services (DMS) personnel are placed in host NHS of Defence (Lord Astor of Hever): We do not currently Trusts to develop and maintain their clinical skills in hold information on all service personnel receiving order to meet operational requirements. By definition in-patient treatment in NHS hospitals as, for example, military personnel are a fit group and normally require those that enter of their own accord are placed under routine, non-urgent treatment whereas DMS personnel a generic category by the respective hospital, thus need exposure to very sick and/or complex patients. making them difficult to identify. The predominance of their clinical focus is therefore However, what can be provided are the numbers of civilian, the exception to this being the care provided service personnel medically evacuated currently either to operational casualties at the Queen Elizabeth Hospital receiving, or waiting for, secondary healthcare within in Birmingham. the hospitals that host our Ministry of Defence (MoD) Hospital Units (MDHUs) or at the Queen Elizabeth Hospital in Birmingham. The data have been extracted Aviation: Air Quality from the Defence Patient Tracking System (DPTS) as Questions at 23 June 2011. Asked by The Countess of Mar There are 58 UK service personnel recorded as currently receiving in-patient treatment in NHS hospitals. To ask Her Majesty’s Government what is the In addition, there are 702 UK service personnel recorded legal limit of exposure to mixtures of chemicals with a future appointment expected, of which six have that occur when synthetic jet engine oil is heated; an in-patient appointment booked and 41 have a and whether workplace limits for exposure to those future appointment booked. It is not currently known chemicals apply to the cabin and flight deck of an whether the remaining 655 service personnel will be aircraft at altitude. [HL10260] offered an in-patient or out-patient appointment. The MoD also has contractual arrangements with Earl Attlee: In the UK, EH40/2005 “Workplace several NHS trusts, where it commissions elective Exposure Limits”(consolidated with amendments 2007), secondary healthcare against an accelerated pathway which is a Health and Safety Executive publication, WA 33 Written Answers[LORDS] Written Answers WA 34 lists workplace chemical exposure limits. Some, but Asked by Lord Walton of Detchant not all, of these chemicals are likely to be found in synthetic jet engine oils and will vary from manufacturer To ask Her Majesty’s Government what action to manufacturer. These exposure limits would be applicable they have taken to ascertain whether healthcare to cabin and flight crew of aircraft operated by UK workers accused of anti-Government activity in airlines. Bahrain are guaranteed a fair trial. [HL10492] Asked by The Countess of Mar Lord Howell of Guildford: Our embassy in Bahrain To ask Her Majesty’s Government, further to has been able to attend some of the many trials the Written Answers by Lord Attlee on 23 June currently taking place in the National Safety Courts, (WA 320), whether they will place a copy of the including the trials of the medical staff. We continue Cranfield University Research in the Library of to urge the Government of Bahrain that due process is the House, together with the page references for the carefully and transparently followed in the trial of the information referred to in ministerial answers to 48 medical staff. Questions for Written Answer HL9569; HL9570; HL9571; HL9572; HL9573; HL9574; HL9622; Benefits HL9623; HL9625; HL9626 HL9691; HL10002 and HL10003. [HL10542] Question Asked by Lord Kirkwood of Kirkhope Earl Attlee: Copies of the Cranfield University report have been placed electronically in the Libraries To ask Her Majesty’s Government what proportion of the House. The report has not been published in of household income was paid out in direct and hard copy. The information we have on cabin air is in indirect taxation by families in the lowest quintile the Cranfield University report. With respect to the of household income compared to households with conditions of flight experienced during the study, the median incomes and in the highest income quintile report concluded that there was no evidence that in the latest year for which figures are available. pollutants were occurring in cabin air at levels exceeding [HL10497] available health and safety standards and guidelines. The next step is for the research studies commissioned Lord Taylor of Holbeach: The information requested by the Department for Transport to be referred to the falls within the responsibility of the UK Statistics Committee on Toxicity. This will be done once the last Authority. I have asked the authority to reply. study—swab test research—has been completed by the Institute of Occupational Medicine in Edinburgh. Letter from Stephen Penneck, Director General for ONS, to Lord Kirkwood of Kirkhope, dated July 2011. Bahrain As Director General for the Office for National Statistics, I have been asked to reply to your recent Questions question To ask Her Majesty’s Government what Asked by Lord Hylton proportion of household income was paid out in direct and indirect taxation by families in the lowest To ask Her Majesty’s Government what plans quintile of household income compared to households they have to enquire about the fate of some 250 with median incomes and in the highest income quintile injured protesters and opposition members in Bahrain, in the latest year for which figures are available (HL10497). whose whereabouts are not known. [HL10422] Our analysis is provided at the household rather than family level. The table provided shows average The Minister of State, Foreign and Commonwealth household direct taxes, and indirect taxes, as a proportion Office (Lord Howell of Guildford): The UK Government of average household gross income in the UK, for continue to urge the Government of Bahrain to meet those households in the bottom income quintile, those all their human rights obligations and uphold political in the top income quintile and the mean and median freedoms, equal access to justice and the rule of law. averages for all households. Gross incomes include We also continue to raise specific cases of particular income from employment, self-employment, pensions, concern. We have made clear that we expect those who investment income, and cash benefits and the quintile have been detained to be treated in accordance with groups are based on households ranked by equivalised international standards. disposable income. Asked by Lord Walton of Detchant The mean estimates are taken from reference tables 1 To ask Her Majesty’s Government what assurances and 3 of the Effects of Taxes and Benefits on Household they will be seeking from the Government of Bahrain Income dataset, which uses data from the Living Costs that healthcare workers will be free to treat all sick and Food Survey, which has a sample covering and injured persons regardless of the political approximately 5,500 households in the UK. The data affiliations of their potential patients. [HL10491] are for 2009-10 and are the latest available. The full version of these reference tables can be accessed at the Lord Howell of Guildford: We remain deeply concerned following link: http://www.statistics.gov.uk/downloads/ by the arrest and trial of a large number of doctors, theme_economy/all-fig-and-tabs-0910.xls. nurses and paramedics. We continue to urge the The median estimates have been calculated from Government of Bahrain to ensure that medical personnel the same dataset, although are not included in the can treat their patients free from political interference. published analysis. WA 35 Written Answers[5 JULY 2011] Written Answers WA 36

These estimates, as with any involving sample surveys, Chronic Fatigue Syndrome and Myalgic are subject to a margin of uncertainty. Encephalomyelitis Table 1: Average gross incomes,1 and taxes by quintile groups of All households,2 2009-10 Question Mean Median Asked by Lord Alton of Liverpool Bottom Top All All quintile quintile households households To ask Her Majesty’s Government in the light of Average per evidence linking school absences for long-term household illness with Chronic Fatigue Syndrome/Myalgic (£ per year) Encephalomyelitis, what guidance they currently Gross income 11,730 79,889 36,373 27,494 issue to schools and parents about the illness and a Total direct 1,195 19,500 7,230 4,212 child’s right to education outside the classroom; taxes and what plans, if any, they have to extend this Total indirect 2,965 7,441 4,743 3,882 guidance. [HL10434] taxes Direct taxes as 10.2 24.4 19.9 15.3 a percentage of The Parliamentary Under-Secretary of State for gross income Schools (Lord Hill of Oareford): We are committed to Indirect taxes as 25.3 9.3 13.0 14.1 ensuring that children with long-term illnesses receive a percentage of as normal an education as possible. Statutory guidance gross income published jointly with the Department of Health in Notes: 2001 sets out the national minimum standards for the 1 Income from employment, self-employment, pensions, education of children who are unable to attend school investment income, and cash benefits. because of medical needs. It also sets out the roles and 2 Quintile groups of all households ranked by equivalised responsibilities of mainstream schools in meeting the disposable income, using the modified-OECD scale. needs of children who are on their roll but are away Source: from school due to illness. We do not publish separate Living Costs and Food survey, Office for National Statistics guidance on managing specific illnesses and health conditions. Background Note Further guidance for schools on Managing Medicines 1. The mean data provided are based on data from in Schools and Early Years was published in 2005. This the annual analysis “The effects of taxes and benefits recommended, among other things, that there should in household income”. The latest analysis for 2009/10 be a clear policy in each school, an individual healthcare was published on the National Statistics website on plan for any child with medical needs, and training for 19 May 2011 at http://www.statistics.gov.uk/cci/article staff. .asp?lD=2690. The Government will commence, from this September, 2. The median data are calculated from the same the provisions in Section 3 of the Children, Schools dataset, although are not published in the ONS analysis. and Families Act 2010. This will place a duty on local Headline median income data from this analysis have authorities to provide full-time education for all children been provided, when requested for previous PQs. who they place in alternative provision. The only 3. The analysis is based on data from the Living exemption will be where, for reasons which relate to Costs and Food Survey, which is a sample survey the physical or mental health of the child, it would not covering approximately 5,500 households in the UK. be in the child’s best interests to be in full-time education. 4. The figures are weighted by population. Current guidance will be amended to reflect this 5. The income decile groups are constructed using change in legislation. disposable household income, adjusted (or equivalised) for household size and composition, as a proxy for standard of living, using the modified OECD scale. Control of Substances Hazardous to Health Regulations 2002 Question Children’s Act 1989 Asked by Question The Countess of Mar Asked by The Countess of Mar To ask Her Majesty’s Government what assessment they have made of whether either the Civil Aviation To ask Her Majesty’s Government what is the Authority or the Health and Safety Executive are average cost to public funds of child protection actively enforcing the Control of Substances Hazardous cases under Section 47 of the Children’s Act 1989. to Health Regulations 2002 (as amended) for United [HL10432] Kingdom aircrew; and, if they are not, what assessment they have made of why they are not doing so. The Parliamentary Under-Secretary of State for [HL10259] Schools (Lord Hill of Oareford): The Government do not hold information centrally on the costs to public Earl Attlee: The operation of aircraft in and over funds of undertaking Section 47 enquiries under the Great Britain is subject to the Health and Safety at Children Act 1989. Work etc Act 1974. Consequently, the Control of WA 37 Written Answers[LORDS] Written Answers WA 38

Substances Hazardous to Health Regulations (COSHH) Asked by Lord Jones of Cheltenham 2002 (as amended) do apply to aircraft in flight in airspace above Great Britain. However, the Civil Aviation To ask Her Majesty’s Government whether they Authority (Working Time) Regulations 2004 (as amended), will introduce universal access to video relay services also impose a duty on employers to ensure adequate to enable deaf British Sign Language users to access health and safety protection of aircraft crew on British- telecommunications services including emergency registered aircraft at all times. These regulations cover services. [HL10310] aircraft in flight and are enforced by the CAA. The Government require that the Civil Aviation (Working Time) Regulations 2004 (as amended) should Baroness Rawlings: A new article in the Universal be enforced in a proportionate and reasonable way. Service Directive (USD) required member states to The CAA’s approach is to liaise with industry, agree enable relevant national authorities to specify, where guidance and react to complaints as appropriate. appropriate, requirements to be met by undertakings providing publicly available electronic communications services to ensure access and choice for disabled end-users. Electronic Communications The UK has implemented this in a way that will allow Questions Ofcom to make equivalence a general condition on all providers of networks and services. Asked by Lord Jones of Cheltenham Ofcom is currently undertaking a review which will assess whether current arrangements for the provision To ask Her Majesty’s Government when they of relay services are adequate in delivering equivalence will meet their obligations under the revised European to voice telephony for hearing (including BSL users) Union Electronic Communications Framework to and speech impaired end-users. ensure that disabled end-users enjoy access to communications services which is functionally This review will involve looking at, amongst other equivalent to that enjoyed by other end-users. things, the existing text relay service plus additional [HL10309] relay services including video relay. It will also include a cost benefit analysis of the different potential options. The Government think this is the sensible way forward, Baroness Rawlings: The UK has met all its obligations and we believe it would be inappropriate to try and in relation to implementation of the revised EU Electronic anticipate or influence the outcome of that review. Communications Framework, in full and on time—one However, we are confident it will bring about of the few member states to have done so. improvements for disabled telecoms end-users. In relation to the primary new provisions on Article 26 of the USD requires “that access for equivalence for disabled end-users the UK has met its disabled end-users to emergency services is equivalent member state obligation to enable Ofcom to specify, to that enjoyed by other users”. This will be a consideration where appropriate, requirements to be met by undertakings in Ofcom’s review of relay services. However, it is providing publicly available electronic communication important to note that for those with speech and services to ensure that disabled end-users have equivalent hearing disabilities access to emergency services is access and choice in relation to electronic communications currently available through an emergency SMS facility services. which connects to 999 call handling facilities as well as The UK has implemented these revisions by making via text relay. changes to the Communications Act 2003 that make Asked by Lord Jones of Cheltenham the requirements of Article 7, USD (“Measures for Disabled End-Users” within the context of Chapter II To ask Her Majesty’s Government whether they “Universal Service Obligations, including Social will assess (a) how many jobs would be created, and Obligations”) contingent on Article 23a of the USD, (b) the net benefit to the United Kingdom economy, which will allow Ofcom to make equivalence a general of the universal introduction of video relay services. condition on all providers of networks and services. [HL10311] Separately, Ofcom is currently undertaking a review which will assess whether current arrangements for the provision of relay services are adequate in delivering Baroness Rawlings: The Government have not made equivalence to voice telephony for hearing (including any formal assessment of the benefits of introducing BSL users) and speech-impaired end-users. This review universal video relay in the UK. will involve looking at, amongst other things, the We received a substantial number of contributions existing text relay service and additional relay services, (including cost benefit analysis and impact assessments) including video relay. It will also include a cost benefit in response to our consultation on implementing the analysis of the different potential options. The revised EU Electronic Communications Framework, Government believe this is the sensible way forward many of those lobbying for the mandating of universal and we believe it would be inappropriate to try and video relay.These included a report by Europe Economics anticipate or influence the outcome of that review. (commissioned by the American video relay provider, However, we are confident it will bring improvements SorensonsVRS, and included in its response). Whilst for disabled end-users. these figures have been drawn up with a view to The changes that we have made to the Communications making a case for video relay, we do not doubt that the Act will enable Ofcom to deliver on the outcomes of economic and social situation of many BSL users is their review. improved by access to video relay. It should be noted WA 39 Written Answers[5 JULY 2011] Written Answers WA 40 that video relay is available on a commercial basis in Number of households containing someone aged 60 or over the UK, financed for many users by the Department in fuel poverty in England (rounded to nearest thousand) for Work and Pensions’ Access to Work scheme. Separately, Ofcom, the independent telecoms regulator, 2003 634,000 is currently undertaking a review of relay service provision 2004 604,000 in the UK. This review will look at relay services 2005 794,000 including video relay and will include the costs and 2006 1,285,000 benefits of the different potential options. The 2007 1,462,000 Government believe this is a sensible way forward but 2008 1,720,000 it would be inappropriate to attempt to anticipate or influence the outcome of this review. However, we are The following table shows the total number of confident it will bring benefits and advances in equivalence households (ie regardless of economic status) and for disabled end-users. proportion of households in fuel poverty in each of the London boroughs in 2008:

Estimated number of Energy: Fuel Poverty households in fuel Questions poverty (rounded to % of households Borough nearest 100) fuel poor Asked by Lord Kennedy of Southwark City of London 300 7.0% To ask Her Majesty’s Government, further to Barking and 8,100 12.1% the Written Answer by Lord Marland on 20 June Dagenham (WA 242), why they have stopped collecting data Barnet 12,900 10.1% for the local authority fuel poverty indicator and Bexley 8,200 9.4% replaced them with central modelling for all local Brent 12,900 12.7% authorities by the Department of Energy and Climate Bromley 11,200 9.0% Change. [HL10471] Camden 11,000 11.9% Croydon 13,100 9.5% Ealing 12,000 10.1% The Parliamentary Under-Secretary of State, Enfield 12,600 11.3% Department of Energy and Climate Change (Lord Greenwich 10,900 11.2% Marland): The fuel poverty indicator (NI187) imposed Hackney 12,100 13.5% a burden on local authorities for the collection of data Hammersmith and 8,700 11.5% and did not measure fuel poverty consistently. As Fulham such, the obligation to collect and report these data Haringey 12,000 12.7% was removed from local authorities in line with the Harrow 7,900 10.0% announcement made by the Secretary of State for Havering 9,200 10.1% Communities and Local Government in October 2010. Hillingdon 8,500 8.9% The indicator estimated the proportion of dwellings Hounslow 8,000 9.3% occupied by benefit recipients in each area that were Islington 11,000 12.5% either energy-efficient (SAP 65 and above), or energy- Kensington and 9,200 11.7 inefficient (SAP 35 and below) which is not a measure Chelsea of fuel poverty. Modelled data, published by DECC Kingston upon 5,400 8.8% and produced centrally, estimate fuel poverty consistently Thames and on a similar basis to that used for the national Lambeth 13,700 11.3% statistics on fuel poverty. It places no burden on local Lewisham 11,600 10.9% authorities. In addition, users and local authorities Merton 7,200 9.1% responded positively to a consultation carried out in Newham 13,000 13.7% 2009 on the modelled sub-regional data. Redbridge 10,100 10.8% Richmond upon 6,500 8.6% Asked by Lord Kennedy of Southwark Thames Southwark 12,300 11.3% To ask Her Majesty’s Government how many Sutton 6,600 8.7% pensioners in the 32 London Boroughs and the Tower Hamlets 9,900 11.2% City of London were living in fuel poverty in each Waltham Forest 10,600 12.0% of the years since 1996 up until the last year for Wandsworth 10,800 9.2% which records are available. [HL10617] Westminster 10,800 11.6%

Lord Marland: Sub-regional fuel poverty estimates Similar data for fuel poverty in London boroughs are not available split by economic status, ie for pensioners (and other sub-regional geographies) are available for or other groups. The table below shows the number of 2006 on the DECC website at http://www.decc.gov.uk/ fuel poor households in England containing someone en/content/cms/statistics/fuelpovstats/archive/ aged 60 or over in each of the years 2003 to 2008 (the archive.aspx, and for 2003 at http: only years for which this information is currently //www.fuelpovertyindicator.org.uk/ available). newfpi.php?mopt=1&pid-defining. WA 41 Written Answers[LORDS] Written Answers WA 42

Energy: Nuclear Power Stations The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Astor of Hever): The Ministry of Question Defence and its external agencies release records to Asked by Lord Reay the National Archives in accordance with the Public Records Act 1956. The MoD withholds from release To ask Her Majesty’s Government what were the to the public at the National Archives files that are load factors for each nuclear and gas-fired power over 30 years old, or extracts from them, if and for so station in the United Kingdom for each of the past long as their contents are judged to be sensitive. five years; and what were the reasons for any variations In relation to nuclear test veterans and recent legal from year to year. [HL10307] proceedings, the MoD has within the context of the High Court and the War Pensions Tribunal proceedings The Parliamentary Under-Secretary of State, worked to ensure that all relevant material from classified Department of Energy and Climate Change (Lord documents can be used, subject to special security Marland): Load factors for individual stations are arrangements. As part of this process the MoD conducted treated as commercially sensitive. However, DECC a major disclosure exercise in 2008 which has continued publishes aggregated load factors annually in the Digest into 2011 and over 12,000 documents have been disclosed. of UK Energy Statistics (DUKES). Table 1 gives the The Court of Appeal judgment on the nuclear test load factors for nuclear and combined cycle gas turbine veterans’ group action on 22 November 2010 noted (CCGT) stations for the past five years. 2009 is the that the MoD had taken its duty of disclosure very latest year available; data for 2010 will be published at seriously. the end of July 2011. Table 1: Load factor (%) Year Nuclear CCGT EU: Budget 2005 72.4 60.9 Question 2006 69.3 55.1 Asked by Lord Lester of Herne Hill 2007 59.6 64.3 2008 49.4 70.9 To ask Her Majesty’s Government how the level 2009 65.4 62.8 of funding and staffing of the European Union Source: Agency for Fundamental Rights and the European Table 5.10 DUKES 2010 Institute for Gender Equality compares with that of the European Human Rights Commissioner. Power stations do not operate at 100 per cent as the [HL10486] system needs to respond to changes in demand for electricity. CCGT output largely follows changes in electricity demand during the day and the relative The Minister of State, Foreign and Commonwealth price between gas and coal. The load factor fell in Office (Lord Howell of Guildford): The Institute for 2009 due to lower electricity demand, the increase in Gender Equality received a total contribution from nuclear output and an increase in capacity as a new the EU budget of ¤7.5 million in 2011. The 2012 EU station opened. budget is still being negotiated. Staff numbers were 27 in 2011. Load factors at nuclear stations are lower in recent years compared to the peak of 80 per cent seen in the The EU Agency for Fundamental rights received a late 1990s. This is due to an increase in maintenance total contribution from the EU budget of ¤20 million work. In 2008 the load factor was particularly low due in 2011. The 2012 EU budget is still being negotiated. to additional outages at Heysham and Hartlepool. Staff numbers were 72 in 2011. The Human Rights Commissioner’s allocation from the Council of Europe’s 2011 ordinary budget was ¤4,756,600. In addition, the EU contributed ¤1,586,400. Energy: Nuclear Tests In 2011, it had a total of 31 staff: 22 permanent; four Questions temporary; and five officials seconded from national Administrations. Asked by Baroness Brinton To ask Her Majesty’s Government what percentage of all documents held by the Ministry of Defence, Atomic Weapons Establishment and external agencies EU: Financial Assistance to Member relating to the planning and execution of the British States nuclear tests and subsequent clean-up operations Question have been disclosed. [HL10443] Asked by Lord Myners To ask Her Majesty’s Government whether they will place in the Library of the House a list of all To ask Her Majesty’s Government whether the documents held by the Ministry of Defence, Atomic Bank of England has accepted or guaranteed, in Weapons Establishment and external agencies relating whole or in part, debt issued by the Government of to the planning and execution of the British nuclear Greece or institutions from that country as security tests. [HL10444] for loans to the European Central Bank. [HL10283] WA 43 Written Answers[5 JULY 2011] Written Answers WA 44

The Commercial Secretary to the Treasury (Lord Exports Sassoon): The Bank of England has not guaranteed, or accepted, any debt issued by the Government of Questions Greece or by institutions from that country, either as Asked by Lord Hunt of Chesterton collateral or outright holdings in any of its operations. The Bank’s sovereign collateral policy for transactions To ask Her Majesty’s Government how the Scotland conducted under the Sterling Monetary Framework is Office intends to develop exports with competitive available at: http://www.bankofengland.co.uk/markets/ technological and commercial capabilities.[HL10288] marketnotice110211.pdf. The Advocate-General for Scotland (Lord Wallace Debt issued by the Government of Greece, or by of Tankerness): I refer the noble Lord to the Answer institutions from that country, is not eligible. The given by my noble friend Lady Wilcox (Official Report, Bank has a swap line with the European Central 22 June 2010, col. WA 304). Bank, where drawings are collateralised by euro cash (see http://www.bankofengland.co.uk/publications/ Asked by Lord Hunt of Chesterton news/2010/148.htm). To ask Her Majesty’s Government how the Department for Transport intends to develop exports EU: Taxation with competitive technological and commercial Question capabilities. [HL10289] Asked by Lord Stoddart of Swindon Earl Attlee: I refer the noble Lord to the Answer To ask Her Majesty’s Government, further to given by my noble friend Lady Wilcox on 22 June 2011 the Written Answer by Lord Sassoon on 16 June (Official Report, col. WA 304) (WA 207–8) concerning the taxation of savings, Asked by Lord Hunt of Chesterton how many bank account details have been disclosed To ask Her Majesty’s Government how the Wales to other European Union nation states; and which Office intends to develop exports with competitive states they are. [HL10249] technological and commercial capabilities.[HL10291] The Commercial Secretary to the Treasury (Lord The Advocate-General for Scotland (Lord Wallace Sassoon): In 2010, HM Revenue and Customs provided of Tankerness): The Wales Office works closely with the tax authorities of other member states with the both the relevant Whitehall departments and the Welsh number of records of savings interest payments, as set 1 Government to boost Welsh exports across a range of out below : sectors. Member State 2010 Forestry Commission Austria 8,636 Question Belgium 14,130 Bulgaria 1,770 Asked by Lord Harrison Cyprus 27,523 To ask Her Majesty’s Government what assessment Czech Republic 3,586 they have made of the effect of any forthcoming Denmark 5,151 redundancies on the work of the Forestry Commission. Estonia 351 [HL10446] Finland 2,398 France 123,492 The Parliamentary Under-Secretary of State, Germany 76,628 Department for Environment, Food and Rural Affairs Greece 35,319 (Lord Henley): As with many other parts of the public Hungary 3,504 sector, the Forestry Commission must work within a Ireland 71,675 challenging spending review settlement, reflecting the Italy 30,362 Government’s determination to tackle the nation’s Latvia 896 financial deficit. Lithuania 2,499 Forestry Commission England has developed proposals Luxembourg 1,069 to operate within a reducing budget over the spending Malta 11,543 review period. Resources will be focused on priority Netherlands 20,906 programmes set out in Forestry Commission England’s Poland 14,009 corporate plan for 2011-15, which is available on its Portugal 16,138 website. Romania 2,741 Slovakia 1,913 Government Departments: Scientific Slovenia 347 Advisers Spain 101,735 Questions Sweden 10,040 Asked by Total 588,361 Lord Willis of Knaresborough To ask Her Majesty’s Government who is the 1 The number of records are not a precise reflection of the number of savings accounts as they include some corrected or Departmental Chief Scientific Adviser for the Wales replacement records which cannot be separated out from the Office; and (a) when they were appointed and for totals. how long, (b) what is their academic or experience WA 45 Written Answers[LORDS] Written Answers WA 46

background, (c) what is their civil service rank, (d) Houses of Parliament: Visitors whether their post is full-time or part-time, and what other work commitments they have, and (e) Question on how many occasions during the past year they Asked by Lord Berkeley have had meetings with the Secretary of State for Wales or the Minister to whom they have direct To ask the Chairman of Committees what plans responsibility. [HL10144] he has to reduce queuing times and improve shelter for members of the public visiting the parliamentary The Advocate-General for Scotland (Lord Wallace estate. [HL10417] of Tankerness): No such position exists within the Wales Office. The Chairman of Committees (Lord Brabazon of Tara): The Administration are aware that there are Asked by Lord Willis of Knaresborough sometimes long queues at the Cromwell Green Entrance To ask Her Majesty’s Government, further to and the matter is currently under consideration by the the Written Answer by Lord Marland on 20 June Parliamentary Visitor Board, which is considering (WA 242–3), how many scheduled meetings have proposals to provide shelter for guests arriving at this been held between the departmental Chief Scientific entrance. Black Rod’s Garden Entrance has recently Adviser for the Department of Energy and Climate been refurbished and a second search lane has been Change and the Secretary of State at DECC between added. This has relieved pressure from the Cromwell Green Entrance as all Lords’ banqueting guests can 31 May 2010 and 1 June 2011. [HL10435] now be admitted via Black Rod’s Garden Entrance. In order to further relieve pressure on the Cromwell The Parliamentary Under-Secretary of State, Green Entrance, a trial is being conducted to assess Department of Energy and Climate Change (Lord the impact of some visitor route tours beginning at Marland): DECC’s Chief Scientist and Secretary of Black Rod’s Garden Entrance, and a proposal is also State have met frequently between 31 May 2010 and being developed to make improvements to the search 1 June 2011. It has been the practice of successive lanes in Portcullis House. Administrations not to reveal details of such meetings. Isle of Man Government: Ministerial Meetings Question Question Asked by Lord Judd Asked by Lord Knight of Weymouth To ask Her Majesty’s Government whether they To ask Her Majesty’s Government what bilateral will place in the Library of the House copies of any meetings between Ministers and the Parliamentary correspondence they hold from the Government of Under-Secretary of State for the Natural Environment the Isle of Man about proposed nuclear developments and Fisheries since May 2010 have included either in west Cumbria; and what discussions or rural affairs or biodiversity as agenda items. correspondence they have had with the Government [HL10380] of the Isle of Man on this subject. [HL10181]

The Parliamentary Under-Secretary of State, The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs Department of Energy and Climate Change (Lord (Lord Henley): Ministers regularly meet colleagues to Marland): DECC officials attend a number of forums discuss a range of issues as part of the process of at which representatives of the Isle of Man Government policy development and delivery. are present and discussions will have covered a number of issues, including those relating to the nuclear sector. We do not, as a matter of course, place copies of Health: Epilepsy correspondence between the UK and other Governments Question in the Libraries of the House. Asked by Baroness Ford Israel: Property To ask Her Majesty’s Government whether they have any plans to increase the provision of specialist Question epilepsy nurses. [HL10327] Asked by Baroness Tonge

The Parliamentary Under-Secretary of State, To ask Her Majesty’s Government what assessment Department of Health (Earl Howe): Local National they have made of exhibitions in London advertising Health Service organisations are responsible for the property to buy in illegal Israeli settlements. skill mix of their work force, including the number of [HL10527] specialist epilepsy nurses. They are best placed to assess the health needs of their local community and The Minister of State, Foreign and Commonwealth must have the freedom to train and deploy staff in Office (Lord Howell of Guildford): We make clear ways appropriate for local conditions. through our travel advice that there are risks involved WA 47 Written Answers[5 JULY 2011] Written Answers WA 48 with purchasing property in Israeli settlements on Northern Ireland: Human Rights land considered to be occupied under international Commission law, in East Jerusalem, the West Bank and the Golan. Question Potential purchasers should be aware that a future Asked by Lord Laird peace deal between Israel and the Palestinians, or between Israel and Syria, could have consequences for To ask Her Majesty’s Government, further to property they purchase in these settlements. The the Written Answer by Lord Shutt of Greetland on Foreign and Commonwealth Office does not offer 23 November (WA 313) about qualifications for legal advice on or become involved in private property membership of the Northern Ireland Human Rights disputes. Commission, why an applicant’s support for human We voted in favour of a key UN Security Council rights is not a condition for qualification. [HL10403] Resolution on settlements in February because our views on this issue are clear: settlements are illegal Lord Shutt of Greetland: As previously stated in the under international law, an obstacle to peace and Answers given on 10 November 2010 (Official Report, constitute a threat to a two-state solution. All settlement col. WA 89), and 23 November 2010 (Official Report, activity, including in East Jerusalem, should cease col. WA 313), all appointments to the Northern Ireland immediately. Human Rights Commission are on merit and take place via open competition, regulated by the Office of the Commissioner for Public Appointments (OCPA). In accordance with the OCPA Code of Practice for NHS: Productivity Ministerial Appointments to Public Bodies, when setting Question the selection criteria, appointments panels must “ensure that these do not contain requirements which are Asked by Lord Mawhinney unnecessary or may deter applications from a particular group within society”. As my previous answer of To ask Her Majesty’s Government, further to 23 November 2010 (Official Report, col. WA 313), the Written Answer by Earl Howe on 24 March suggested, applicants’ approval of particular individual (WA 203), what are the measures of quality used to or collective rights is not among the criteria required adjust the growth in the volume of outputs in NHS for appointment. The Government are not seeking a productivity calculations; how each measure of quality body of commissioners who are all of the same outlook. is calculated; and how it affects the productivity Knowledge and understanding of human rights issues calculation. [HL10278] is, however, a criterion for appointment. Asked by Lord Laird The Parliamentary Under-Secretary of State, Department of Health (Earl Howe): I refer the noble To ask Her Majesty’s Government whether the Lord to the Answer I gave him on 4 July (Official Northern Ireland Office has awarded bonuses to Report, col. WA 19-21). staff and members of the Northern Ireland Human Rights Commission in the last three years; to whom; how much; and why each bonus was given. Northern Ireland Office: Correspondence [HL10406] Question Lord Shutt of Greetland: The Northern Ireland Office does not award bonuses to staff and members Asked by Lord Laird of the Northern Ireland Human Rights Commission. To ask Her Majesty’s Government what correspondence took place between the Northern Ireland Office and the Northern Ireland Human Olympic and Paralympic Games 2012 Rights Commission in May 2011; and whether they Question will place copies in the Library of the House. Asked by Lord Kennedy of Southwark [HL10450] To ask Her Majesty’s Government, further to the Written Answer by Baroness Garden of Frognal Lord Shutt of Greetland: The following letters between on 20 June (WA 255–6) regarding the 3,300 Olympic the Northern Ireland Office (NIO) and the Northern tickets to be allocated to business leaders and Ireland Human Rights Commission (NIHRC) during dignitaries, how many will be allocated to FIFA. May 2011 will be placed in the Libraries of both [HL10455] Houses: letter dated 18 May 2011 from PS/Secretary of Baroness Garden of Frognal: No tickets will be State to the NIHRC Director; allocated to FIFA. As with all international federations, letter dated 24 May 2011 from Director-General FIFA is able to order a small number of tickets from NIO to NIHRC Director; and the London Organising Committee for their sport and letter dated 31 May 2011 from PS/Secretary of a limited number for the opening and closing ceremonies. State to NIHRC Director. This is a contractual commitment. WA 49 Written Answers[LORDS] Written Answers WA 50

Olympic Games 2012 Ahmadiyya community in Pakistan. Most recently our High Commissioner to Pakistan stressed the Questions importance of interfaith harmony with a range of Asked by Lord Watson of Invergowrie religious leaders in the Punjab in June. The Parliamentary Under-Secretary of State, my honourable friend the To ask Her Majesty’s Government what proportion Member for North East Bedfordshire (Alistair Burt) of the resources allocated to delivering a London discussed religious freedom with the newly appointed 2012 sporting legacy for young people will be spent Pakistan Prime Minister’s adviser on interfaith harmony in (a) England, (b) Northern Ireland, (c) Scotland, and minority affairs in May. He also met with religious and (d) Wales. [HL10414] leaders from across Pakistan as part of the Ministry’s Interfaith Council. Ministers and our High Commission Baroness Garden of Frognal: The London 2012 in Islamabad will continue to maintain regular contact. Games provide an opportunity for a sporting legacy across the UK. However, sport is a devolved matter Asked by Lord Alton of Liverpool and it is for the home sports councils to decide what To ask Her Majesty’s Government what representations resources to allocate to deliver a sporting legacy from they have made to the Government of Pakistan about the 2012 Games. Sport England’s £135 million mass violence against the Ahmadiyya Muslims; and what participation initiative Places, People, Play, includes assessment they have made of the threats and intimidation Sportivate, a ¤32 million lottery programme that will against that community in the United Kingdom. give 14 to 25 year olds access to six-week courses in a [HL10429] range of sports. Sport England are also making £35.5 million available for the School Games in England up to 2014-15. The UK Government are hopeful that Lord Howell of Guildford: We frequently engage the Scotland, Wales and Northern Ireland will participate Pakistani authorities on the protection of minority in this national event, building on the traditions of the groups, including specifically on the issues facing the current UK School Games. Sir Menzies Campbell was Ahmadiyya community in Pakistan. Most recently appointed as an ambassador for the School Games, our High Commissioner to Pakistan stressed the with a focus on securing a UK-wide legacy for the importance of interfaith harmony with a range of School Games programme. religious leaders in the Punjab in June. The Parliamentary Under-Secretary of State, my honourable friend the Asked by Lord Watson of Invergowrie Member for North East Bedfordshire (Alistair Burt) To ask Her Majesty’s Government what discussed religious freedom with the newly-appointed representations they intend to make to the Nations Pakistan Prime Minister’s Advisor on Interfaith Harmony and Regions Group to ensure that the Places People and Minority Affairs in May. He also met with religious Play initiative is extended throughout the United leaders from across Pakistan as part of the Ministry’s Kingdom. [HL10415] Interfaith Council. Ministers and our High Commission in Islamabad will continue to maintain regular contact. Baroness Garden of Frognal: The Nations and Regions The Ahmadiyya community has raised their treatment Group, established by the Government Olympic Executive in the UK with the Foreign and Commonwealth Office and the London 2012 Organising Committee, works and we have discussed this with the Home Office. The directly with each UK nation and region to help them Government take very seriously their responsibility to realise and maximise the benefits from the economic, protect religious groups in the UK. sporting and cultural opportunities offered by the Asked by Lord Alton of Liverpool Games. Places People Play is a Sport England initiative to deliver a mass-participation legacy for England, To ask Her Majesty’s Government what assessment which Sport England has allocated a proportion of its they have made of the likelihood of the Government National Lottery funding to deliver. As sport is a of Pakistan ratifying the International Covenant devolved matter, it is for the home sports councils to on Economic, Social and Cultural Rights, and signing decide how to apply their National Lottery funding. both the International Covenant on Civil and Political Rights and the Convention against Torture. Pakistan [HL10430] Questions Lord Howell of Guildford: Pakistan ratified the Asked by Lord Alton of Liverpool International Covenant on Economic, Social and Cultural To ask Her Majesty’s Government what Rights on 17 April 2008. Pakistan signed the International representations they have made to the Government Covenant on Civil and Political Rights (ICCPR) on of Pakistan about the 2002 executive order which 17 April 2008 and ratified it on 23 June 2010. Pakistan denied 4 million Ahmadiyya Muslims the right to signed the Convention against Torture and other forms vote, unless they are willing to sign a declaration of Cruel and Unusual Punishment (CAT) on 17 April denouncing their own community. [HL10428] 2008 and ratified it on 23 June 2010. Pakistan lodged a number of reservations against The Minister of State, Foreign and Commonwealth the ICCPR and CAT upon ratification. The UK, Office (Lord Howell of Guildford): We frequently engage along with EU partners, has worked with Pakistan to the Pakistani authorities on the protection of minority address these reservations. We welcome the statement groups, including specifically on the issues facing the issued by the Pakistani Prime Minister’s office on WA 51 Written Answers[5 JULY 2011] Written Answers WA 52

22 June announcing that they would withdraw the Railways: High Speed 2 majority of their reservations against both treaties. The UK lodged objections against Pakistan’s current Questions reservations on 28 June. Once Pakistan has formally Asked by Lord Berkeley lodged changes to its reservations, we will consider our response to their changes carefully. To ask Her Majesty’s Government, in respect of the first phase of the proposed High Speed 2 line, whether trains operating on HS2 and beyond its Prisoners: Transfers limits on the conventional rail network will be capable of tilting on the conventional network. Question [HL10466] Asked by Lord Avebury To ask Her Majesty’s Government, in respect of To ask Her Majesty’s Government whether they the first phase of the proposed High Speed 2 line, will ask the Prison Service to conduct an investigation what is the expected journey time from London to into the alleged practice by prison governors of Glasgow using HS2 with and without tilting on the transferring certain prisoners to other establishments conventional network, compared with existing journey in advance of an inspection by the Chief Inspector times. [HL10467] of Prisons. [HL10233] Earl Attlee: At this early stage in the Government’s The Minister of State, Ministry of Justice (Lord proposals for a high-speed rail network, no decisions McNally): Following allegations that prisoners had have been made regarding the detailed specification of been transferred in advance of inspections between rolling stock. At this point however, the Government Pentonville and Wandsworth in 2009 and from Brixton do not anticipate that trains operating on HS2 will be in 2008 the National Offender Management Service capable of tilting, either on the high-speed network or conducted investigations which found that this had on the conventional network. This is because tilting been the case. Disciplinary proceedings followed. The trains are necessarily heavier than non-tilting trains, then Justice Secretary also commissioned a wider review and increasing the weight of a vehicle ultimately results of the transfer of prisoners prior to inspection which in a reduction of maximum speed. This means that a was published on 11 March 2010. The review was tilting train would not be able to operate at speeds of conducted by the director of analytical services at the 225 mph or 250 mph as required by the HS2 route. Ministry of Justice and HMCIP. Following this work, the report concluded that We tested our assumptions on tilting trains both there was no evidence that the practice identified in with train manufacturers and with our technical challenge the transfers between Wandsworth and Pentonville panel, who agreed with our conclusions. It is possible and also at Brixton took place at any other prison. that future technology would permit a tilting high-speed train to be built, but no manufacturer could visualise and offer either credible costs or likelihood of successful Public Sector: Staff commercial development of such a product. There are Question currently no tilting high-speed trains anywhere in the world. Asked by Lord Myners Services running off HS2 onto the west coast main To ask Her Majesty’s Government whether there line to continue to Scotland would be speed-limited by are any positions in public sector employment that the curvature of the route in a number of locations. require applicants in same-sex relationships to declare However there is scope for increasing the non-tilt line that they are celibate. [HL10282] speed from 110 mph to 125 mph or higher at a number of locations. Between Lichfield—where HS2 rejoins Lord Taylor of Holbeach: This information is not the WCML—and Glasgow, the difference in time between held centrally. To collate it in the form requested a non-tilting 110 mph train and a tilting 125 mph would incur disproportionate cost. Pendolino is estimated to be 13 minutes. HS2 Ltd believes that by reviewing the assumptions behind the WCML upgrade works it should be possible to run Railways: Ebbw Valley non-tilting trains at 125 mph for lengthy sections, and Question thereby regain 6 or 7 of the lost 13 minutes. Similarly from Lichfield to Manchester a 110 mph non-tilt train Asked by Lord Touhig would lose two minutes, of which we believe one To ask Her Majesty’s Government what is the minute could be regained. The HS2 business case is current timetable for extending the Ebbw Valley based on these journey time assumptions. line from Ebbw Vale Parkway to Ebbw town; and A high level assessment of journey times indicates how much it will cost. [HL10164] that the London to Glasgow journey would take four hours using a London to the West Midlands high-speed Earl Attlee: Train services on the Ebbw Valley line line, reducing to three hours and 30 minutes once the are specified by the Welsh Government and it is for Y network became operational. This compares to a them to determine plans and identify costs to extend current, standard journey time of four hours and the current service from Ebbw Vale Parkway. 30 minutes. WA 53 Written Answers[LORDS] Written Answers WA 54

Roads: Dartford Crossing parallel. As a result, a number of officials from these organisations have been engaged in free schools work Question at different stages. Asked by Lord Tebbit To ask Her Majesty’s Government what are the gross and net takings at the Dartford Thames Sunday Trading crossing. [HL10554] Questions Asked by Lord Alton of Liverpool Earl Attlee: The Highways Agency publishes accounts annually for the Dartford-Thurrock crossing charging To ask Her Majesty’s Government what scheme, which are laid before Parliament. Information representations they have received from (a) trade for the periods 2003-04 to 2009-10 is available from unions, (b) retail organisations, and (c) other groups, the Library of both Houses and also available from on Sunday trading since September 2010. [HL10514] the Highways Agency website at: http://www. To ask Her Majesty’s Government what research highways.gov.uk/roads/projects/4068.aspx. they have (a) assessed, and (b) commissioned since The latest published accounts for 2009-10 show for September 2010, into the social implications of the year ended 31 March 2010, gross income was relaxing Sunday trading restrictions; and whether £71.8 million and net proceeds was £37.2 million. they will assess possible effects of easing or removing Sunday trading restrictions on (1) parental involvement in children’s education, and (2) parent-child contact Royal Yacht “Britannia” time. [HL10515] Question To ask Her Majesty’s Government what research they (a) have conducted since September 2010, and Asked by Lord Lexden (b) plan to conduct in the next six months, on the To ask Her Majesty’s Government whether they likely impact of proposed changes to the Sunday will refit the Royal Yacht Britannia so it can re-enter Trading Act 1994 on shops of under 3,000 square the service of Her Majesty the Queen in the year of feet. [HL10516] her Diamond Jubilee. [HL10383] To ask Her Majesty’s Government what plans they have to change the law on Sunday trading The Parliamentary Under-Secretary of State, Ministry during the next two years. [HL10562] of Defence (Lord Astor of Hever): There are no plans to refit the former Royal Yacht “Britannia”. Since the The Parliamentary Under-Secretary of State, ship’s decommissioning and sale to Forth Ports Ltd in Department for Business, Innovation and Skills (Baroness April 1998, “Britannia”has been preserved and operated Wilcox): Since September 2010, my department has by the Royal Yacht Britannia Trust as a popular received 2,695 responses about Sunday trading legislation, tourist attraction. via the Government’s Red Tape Challenge. These included representations from a trade union, small retail businesses, faith groups and individuals. In that period the department Schools: Free Schools also directly received two representations from a trade Question union and three from individuals, two of which were sent via their Member of Parliament. The department Asked by Lord Knight of Weymouth has also responded to ten parliamentary Questions since September 2010 on the subject. To ask Her Majesty’s Government how many (a) civil servants in the Department for Education, The Government have not commissioned any research (b) staff of the DfE’s arm’s-length bodies, and (c) into relaxing Sunday trading restrictions since September contractors working for either the DfE or its arm’s- 2010 and at present have no plans to do so. The length bodies are currently working on the free Government currently have no plans to change the law schools policy. [HL10379] on Sunday trading.

The Parliamentary Under-Secretary of State for Schools (Lord Hill of Oareford): As at 27 June 2011, Turkey there are around 100 civil servants in the department’s Question Free School Group employed on policy and Asked by Lord Hylton implementation work in connection with free schools, and a further 15 involved with university technical To ask Her Majesty’s Government what assessment colleges and studio schools. they have made of the sentencing of Mrs Emine Further support is provided by Partnerships for Ayna and Mr Hatip Dicle under Turkish anti-terrorism Schools (PfS) and the YoungPeople’s Learning Agency law, after both were elected to the Grand National (YPLA). Neither organisation is structured to dedicate Assembly; and whether they will make representations full time individuals or teams to any one policy but to the Government of Turkey and the Inter- instead work across a broad range of projects in Parliamentary Union. [HL10523] WA 55 Written Answers[5 JULY 2011] Written Answers WA 56

The Minister of State, Foreign and Commonwealth Earl Attlee: The Department for Transport is working Office (Lord Howell of Guildford): The UK Government with international bodies to draft recommendations do not plan to make specific representations to the on adding artificial sound to quiet vehicles. Such Government of Turkey and the Inter-Parliamentary recommendations may specify the characteristic of Union on these cases. It is not UK Government practice the sound and the speed up to which such sound to comment on individual judicial processes, but we should be generated. Tyre noise is an important source expect high legal and judicial standards to be observed. of noise at speeds found on rural roads where noise Our embassy in Ankara will continue to monitor the levels from electric and conventional vehicles are similar. situation closely. The Department for Transport will soon be publishing the report of research on the audibility of electric vehicles. Turks and Caicos Islands Question Asked by Lord Ashcroft Waste Management: Fly Tipping Question To ask Her Majesty’s Government whether any commitments were obtained from airlines to use a Asked by Lord Kennedy of Southwark proposed extended runway in Providenciales, Turks and Caicos, before construction commenced. To ask Her Majesty’s Government what is their [HL10440] assessment of the cost to the United Kingdom economy of fly-tipping on private land. [HL10475] The Minister of State, Foreign and Commonwealth Office (Lord Howell of Guildford): Work on Providenciales The Parliamentary Under-Secretary of State, Airport runway resurfacing and extension project began Department for Environment, Food and Rural Affairs in July last year, and will soon be completed. Prior to (Lord Henley): We are working in partnership with the the start of the project, commitments were secured Environment Agency and a number of private landowners from WestJet, Continental and Jet Blue, and all three to improve the data available on incidents of fly-tipping airlines have commenced flights to the Turks and on private land, given there is no reporting requirement. Caicos Islands since the project began. The Turks and At present the data available do not permit us to make Caicos Islands Airports Authority has also been in an assessment of the cost of these incidents to the UK discussion with a number of other airlines that are economy. The partnership project with the Environment awaiting the extension either to introduce flights, new Agency includes the National Farmers Union and the aircraft types or to extend their operations. Country Land Association, who have reported instances of fly-tipping on private land in pilot areas (West Vehicles: Electric Midlands and the north-west) since April 2009, and later nationally, to the national fly-tipping database Question (Flycapture). There have been low levels of reporting Asked by Baroness Byford to the database, and between April 2009 and March 2011 a total of 1,827 instances were recorded by all To ask Her Majesty’s Government how they will private landowners in the project. We are working ensure that electric powered vehicles will be audible with landowners and the Environment Agency to try to walkers, cyclists and riders using rural roads in to increase the number of landowners who report this all weathers. [HL10335] data to the Flycapture database.

Tuesday 5 July 2011

ALPHABETICAL INDEX TO WRITTEN STATEMENTS

Col. No. Col. No. Animal Health Executive Agency: Annual Report and Home and Communities Agency Regulation Committee... 12 Accounts ...... 7 Insolvency Service: Performance Targets ...... 12

Common Agricultural Policy: Single Payment Scheme...... 7 Justice: Interpretation and Translation Services...... 14 ECOFIN ...... 8 Olympic Games 2012...... 15 EU: Environment Council...... 9 Taxation: Policy...... 16

Fire and Rescue Service ...... 11 Transport: Sustainable Transport ...... 17

Tuesday 5 July 2011

ALPHABETICAL INDEX TO WRITTEN ANSWERS

Col. No. Col. No. Afghanistan...... 31 Isle of Man...... 46

Armed Forces: Staff...... 31 Israel: Property ...... 46

Aviation: Air Quality ...... 32 NHS: Productivity...... 47 Bahrain...... 33 Northern Ireland: Human Rights Commission ...... 48 Benefits...... 34 Northern Ireland Office: Correspondence ...... 47 Children’s Act 1989 ...... 35 Olympic and Paralympic Games 2012 ...... 48 Chronic Fatigue Syndrome and Myalgic Encephalomyelitis...... 36 Olympic Games 2012...... 49

Control of Substances Hazardous to Health Pakistan...... 49 Regulations 2002 ...... 36

Electronic Communications...... 37 Prisoners: Transfers ...... 51

Energy: Fuel Poverty ...... 39 Public Sector: Staff ...... 51

Energy: Nuclear Power Stations...... 41 Railways: Ebbw Valley...... 51

Energy: Nuclear Tests...... 41 Railways: High Speed 2 ...... 52

EU: Budget...... 42 Roads: Dartford Crossing...... 53 EU: Financial Assistance to Member States ...... 42 Royal Yacht “Britannia”...... 53 EU: Taxation ...... 43 Schools: Free Schools ...... 53 Exports...... 44 Sunday Trading ...... 54 Forestry Commission...... 44 Turkey ...... 54 Government Departments: Scientific Advisers ...... 44 Turks and Caicos Islands...... 55 Government: Ministerial Meetings ...... 45

Health: Epilepsy ...... 45 Vehicles: Electric...... 55

Houses of Parliament: Visitors ...... 46 Waste Management: Fly Tipping...... 56 NUMERICAL INDEX TO WRITTEN ANSWERS

Col. No. Col. No. [HL10144] ...... 45 [HL10428] ...... 49

[HL10164] ...... 51 [HL10429] ...... 50

[HL10181] ...... 46 [HL10430] ...... 50

[HL10233] ...... 51 [HL10432] ...... 35

[HL10249] ...... 43 [HL10434] ...... 36

[HL10259] ...... 36 [HL10435] ...... 45

[HL10260] ...... 32 [HL10440] ...... 55

[HL10278] ...... 47 [HL10443] ...... 41

[HL10282] ...... 51 [HL10444] ...... 41

[HL10283] ...... 42 [HL10446] ...... 44

[HL10288] ...... 44 [HL10450] ...... 47

[HL10289] ...... 44 [HL10455] ...... 48

[HL10291] ...... 44 [HL10466] ...... 52

[HL10307] ...... 41 [HL10467] ...... 52

[HL10309] ...... 37 [HL10471] ...... 39

[HL10310] ...... 38 [HL10475] ...... 56

[HL10311] ...... 38 [HL10486] ...... 42

[HL10327] ...... 45 [HL10491] ...... 33

[HL10335] ...... 55 [HL10492] ...... 34

[HL10371] ...... 31 [HL10497] ...... 34

[HL10372] ...... 32 [HL10514] ...... 54

[HL10379] ...... 53 [HL10515] ...... 54

[HL10380] ...... 45 [HL10516] ...... 54

[HL10383] ...... 53 [HL10523] ...... 54

[HL10403] ...... 48 [HL10524] ...... 31

[HL10406] ...... 48 [HL10527] ...... 46

[HL10414] ...... 49 [HL10542] ...... 33

[HL10415] ...... 49 [HL10554] ...... 53

[HL10417] ...... 46 [HL10562] ...... 54

[HL10422] ...... 33 [HL10617] ...... 39 Volume 729 Tuesday No. 177 5 July 2011

CONTENTS

Tuesday 5 July 2011 Questions Diplomatic Missions: Unpaid Congestion Charges and Parking Fines...... 117 Manufacturing: Investment Growth Forecast...... 119 Audiovisual Media Services Directive ...... 122 Sudan: Framework Agreement...... 124 Phone Hacking Private Notice Question ...... 127 Marine Navigation Bill [HL] First Reading ...... 131 Fourteen Statutory Instruments Motions to Refer to Grand Committee ...... 132 Localism Bill Committee (5th Day)...... 133 Corporate Governance and Accountability Question for Short Debate ...... 197 Localism Bill Committee (5th Day) (Continued) ...... 213 Grand Committee Eleven Statutory Instruments Debated ...... GC 69 Written Statements ...... WS 7 Written Answers...... WA 3 1