Deregulation and Contracting Out Bill

HL Deb 26 October 1994 vol 558 cc540-625

3.30 p.m.

Read a third time.

Clause 1 [Power to remove or reduce certain statutory burdens on businesses, individuals, etc.]:

The Minister of State, Department of Trade and Industry (Earl Ferrers) moved Amendment No. 1:

Page 2, line 28, leave out ("descriptions of case, including different provision for").

The noble Earl said: My Lords, with the permission of the House, in moving Amendment No. 1, I shall speak to Amendment No. 11.

During the first day of Report stage my noble friend Lord Peyton, supported by the noble and learned Lord, Lord Simon of Glaisdale, suggested that subsection (4)(d) of Clause 1 was unnecessary and could be deleted without losing any point of substance. My noble friend Lord Henley agreed that we would carefully consider the points which had been made. I am advised that if we were to delete paragraph (d) entirely, Ministers would be unable to make different provisions for different cases or to treat different parts of the country, such as Wales or Greater London, differently.

I very much share the noble Lord's objective of simplifying the drafting of legislation where this is possible without changing the substance of the legislation. We have reconsidered whether all the words are really required, and we have concluded that some simplification is possible but that some of the words are required. I am sure that these amendments will meet with the approval of my noble friend Lord Peyton and of the noble and learned Lord, Lord Simon of Glaisdale, as they are essentially in response to their request for simplification of the law. Wherever possible, I try to meet your Lordships' wishes and particularly when they are good wishes. I hope that I have done so on this occasion. I beg to move.

Lord Peyton of Yeovil

My Lords, I hasten to seize the opportunity to thank my noble friend very warmly for his proposed amendment to the words. The noble and learned Lord, Lord Simon of Glaisdale, and I, believing the words in paragraph (d) to be both unnecessary and inelegant, sought to persuade the Government that they could do without them. We failed to do that entirely; but, nevertheless, I am extremely grateful through him for the partial success which we have enjoyed. I particularly welcome the evidence which we have been provided with today that my noble friends Lord Ferrers and Lord Henley afford notable examples of Ministers who listen and pay attention to what is said from behind them. I do not wish to stress this, but I very much hope that the example which they have set will commend itself to other Ministers in their department.

Lord Simon of Glaisdale

My Lords, I associate myself with what the noble Lord, Lord Peyton, said and express my own thanks to the noble Earl. I confess—as I believe the noble Lord, Lord Peyton, does also—that the whole of that paragraph is unnecessary. But the noble Earl has gone into the matter very carefully with the draftsman and formed his own judgment. We are deeply grateful for that.

Only a few words have been excised but they are more important than would appear at first sight because that formula appears on the computer screen whenever the button for regulations is pressed. As the noble Earl has pointed out, at the beginning of this Bill that has occurred twice. It occurs in practically every Bill.

What the noble Earl has achieved is to reprogram the computer to operate more efficiently: to remove something from the draftsman's computer is a major task. Naturally, the draftsman wants to be on the safe side. He wants to guard himself against any possible argument that might prevent the achievement of the objective which he has been instructed to define. As a result, he will often be over-cautious. He will be particularly cautious when there is an attempt to alter a formula which has commended itself to his predecessors in the Parliamentary Counsel's Office. We are deeply indebted to the noble Earl.

Lord Peston

My Lords, perhaps I may intervene briefly to echo the remarks of the noble Lord, Lord Peyton, and of the noble and learned Lord, Lord Simon of Glaisdale. Perhaps I may also add to what the noble Lord, Lord Peyton, said in that I would be obliged if occasionally the Minister would also listen to some of the words coming from people who are facing him as well as from those sitting behind him. But I do not want to be too churlish this afternoon.

As a layman I find alarming the inability of the Government to delete paragraph (d). What they are saying is that if a paragraph like that is not included, the law would be idiotic—in other words, any normal person reading subsection (4) without paragraph (d) would take it for granted that an order can make different provision for different cases. It would be an absurd state of affairs if an order, purely because it is an order, could not make different provision for different cases. However, the noble Earl has told us that if that is not written into the Bill, the provision is inadequate. I find that quite amazing. Nonetheless, if the noble Earl tells me that that is so, I have to accept it because I am not an expert.

Clause 2(4) (d) will now read, "make different provision for different cases or different areas". As written, that means that a "case" is not the same as an "area". I am surprised—but I do not push the point in order to score points over the lawyers and draftsmen present —that one cannot leave out, different provision for different areas". That seems to be subsumed logically in the meaning of the word "case". But I do not press the point because we want to get on. However, it shows how extraordinary is the drafting of legislation these days.

Earl Ferrers

My Lords, I am deeply grateful to your Lordships for having agreed with the amendment. It is always quite a task to satisfy my noble friend Lord Peyton of Yeovil. He is endowed with great charm and intellectual ingenuity. The fact that I have been able to satisfy him this afternoon gives me enormous pleasure. The fact that I have also succeeded in satisfying the noble and learned Lord, Lord Simon of Glaisdale, is another source of great satisfaction, so that is a good start.

The noble Lord, Lord Peston, asked the Government to listen to the views coming from the opposite side of the House as well as to those coming from behind. We would be more than happy to accept some of the views of noble Lords opposite if they were good ones. My noble friend said that he thought that the words were unnecessary and inelegant in the original draft. They may be, but we have tried to take out the unnecessary and inelegant and to leave the necessary and elegant.

As regards the question raised by the noble Lord, Lord Peston, I know that he will not want me to go into a great deal of detail; but I believe that he will agree that, in considering his question, a "case" is very different to an "area". I am advised that it is necessary to have both words included.

On Question, amendment agreed to.

Clause 3 [Preliminary consultation]:

Lord Peston moved Amendment No. 2:

Page 3, line 39, after ("above") insert ("or sections 37, 69 or 70 below").

The noble Lord said: My Lords, in speaking to Amendment No. 2, with your Lordships' permission I should like to speak also to Amendments Nos. 4, 6, 7 and 8, all of which stand in my name and that of the noble Lord, Lord Rodgers of Quarry Bank.

This is our last main occasion for dealing with the Bill. I have been brooding over certain parts of it and, although we have discussed this topic at some length previously, I felt that one could not let this day go by without giving your Lordships some chance to think yet again on this matter. Your Lordships are aware that I do not care for the Bill anyway, but I have not been convinced from the beginning about why what we might call the "procedures and safeguards" of Part I have not been applied to what will be Section 37, which is to do with health and safety, and what will be Sections 69 and 70, which relate to contracting out generally. I have listened to and re-read the Government's statements but in the end—slightly to paraphrase what the noble Earl said about me—I do not find their arguments good ones. It simply does not make any sense within the context of the Bill to treat the contracting out and health and safety provisions in a different way.

I hope that your Lordships will bear with me because I have drawn your attention to this before. I refer to the recommendations of the Select Committee on the Scrutiny of Delegated Powers, which comprises some of the most eminent and sensible Members of your Lordships' House. I am still concerned that the Government felt unable to respond to what was said in that report. I repeat—for the last time—that the Committee recommended: The Committee accordingly urges the House to consider whether the procedure for deregulation orders, with the improved safeguards for parliamentary scrutiny, should apply not only to orders under Chapter I of Part I of the bill, but also to delegated legislation made under".

The report then refers to the original version of the Bill and to Clauses 27, 58 and 59, but I hope that your Lordships will agree with me that that now means Clauses 37, 69 and 70.

I do not believe that the Government have yet made any serious effort to convince your Lordships why they feel that the implicit recommendation in the Select Committee's 9th Report of 13th June 1994 cannot be accepted. I suppose that it is a curiosity—perhaps it is a tradition of your Lordships' House to which no one has drawn my attention in all my years here—that not one member of that committee has spoken in support of the committee's recommendation. I am not sure whether any members of that committee are present in the Chamber, but it has puzzled me throughout our deliberations that the committee makes a recommendation to your Lordships but no member of it appears to want to argue for it. I did not seek to divide the House on the matter but, had I done so, I wonder whether members of the committee would have voted for their own recommendation.

My main point is that this is the end of the matter. I find it deeply unsatisfying that the Government have neither accepted the recommendation (despite the judicious way in which it was put) nor, in my judgment, put up very good arguments to say why they cannot or will not do so. That is why I felt that we should have one last brief opportunity to reconsider the matter before proceeding. I beg to move.

3.45 p.m.

Earl Ferrers

My Lords, the noble Lord, Lord Peston, says that he has been brooding over this matter. I advise him not to do too much of that because it is very bad for the mental digestion. The noble Lord said that he wanted to have yet another go at this and I can understand that. I shall have another go too to see whether I can persuade him of something of which we have not been able to persuade him previously.

The Delegated Powers Scrutiny Committee recommended that consideration should be given to extending the special procedures of Clauses 3 and 4 to the order-making powers which are contained in what are now Clauses 37, 69 and 70 which relate to health and safety and contracting out. As the noble Lord said, we have considered that matter previously on a number of occasions.

The Government have given very careful consideration both to what was said in the report from the Delegated Powers Scrutiny Committee and to what has been said subsequently by your Lordships about what constitutes the appropriate parliamentary procedure for the making of orders under these clauses. I am bound to say that, having done so, we remain of the view that these are powers for which the affirmative resolution procedure is entirely appropriate and sufficient.

We believe that the powers in question are by no means as wide-ranging as has sometimes been suggested. Perhaps I may reiterate briefly what each of the clauses does.

Clause 37 allows for health and safety legislation, which was in place before the 1974 Health and Safety at Work, etc. Act, to be repealed or revoked without replacement. The power is available only in relation to a specific and identified body of legislation which relates to health and safety at work. There are some 40 Acts which form the "existing statutory provisions" in the Health and Safety at Work, etc. Act 1974. There are 200 statutory instruments which predate the 1974 Act and there are about 20 statutory instruments which have been enacted since the 1974 Act but which carried forward pre-1974 Act provisions. The position is that any legislation which occurred before the 1974 Act can be added to; it can be altered, but it cannot be revoked or repealed. This is in contrast with the power in Clause 1 which, provided that the various safeguards are met, is available in relation to any legislation which has been passed up to and including in the present Session.

The power in Clause 37 has a close precedent in the powers which we already have to remove post-1974 health and safety legislation. Unlike the pre-1974 powers, those powers allow legislation to be repealed, and they are subject only to the negative resolution procedure, whereas Clause 37 allows the same procedure to be used for pre-1974 Act provisions but provides for the stronger affirmative resolution procedure. We are of the view that that procedure will provide the appropriate level of scrutiny and that there is no justification for extending the special procedures which apply to orders under Clause 1 to regulations which can be made under Clause 37.

The order-making powers in Clauses 69 and 70 allow statutory functions to be named in an order with the result that in future those functions would be capable of delegation to private sector contractors. The basic nature of the functions themselves cannot be changed by such orders. The power is available only in closely defined circumstances which are clearly set out in the Bill. The functions concerned must be functions which can be delegated to the staff of the Minister, of the office holder or of the local authority on whom the function is conferred by statute. Certain functions are explicitly excluded.

Part II of the Bill confers only a very narrow power to make any change to existing primary legislation; namely, the provision in Clause 77(1) (b) that orders may contain incidental, consequential or supplemental amendments to enactments. Powers like this are well precedented in order-making powers which are subject to the affirmative resolution procedure and they are given a narrow interpretation both by Parliament and the courts.

The matters which need to be included as specific amendments in Schedule 16 to the Bill give an indication of how narrowly these powers will actually be construed. The schedule contains certain specific changes to primary legislation which have to be made before contractors can be used to carry out some existing statutory functions. None of the amendments to primary legislation which are made in Schedule 16 could be made as incidental, consequential or supplemental changes under the provision in Clause 77(1) (b), even though several of the changes are very minor.

Part II of the Bill represents a well precedented pattern for delegated powers in that it sets out the principles and constraints for the use of contractors in carrying out statutory functions and the circumstances in which such contracting out should be possible. Orders under Clauses 69 and 70 will simply name the particular statutory functions to which those principles will be applied.

The contrast between, on the one hand, either Part II of the Bill or Clause 37 and, on the other hand, the deregulation order-making power in Clause 1 is, in the Government's view, a big one. It was the Delegated Powers Scrutiny Committee itself which referred to the power in Clause 1 as being: unprecedented in time of peace". We have never sought to deny that it is an exceptional power as it is being made available to amend or to repeal provisions which have been made by primary legislation across a wide range of policy areas, with the consent of Parliament.

It is for that reason that we have provided unique arrangements for the scrutiny of orders which will be made under the power. We have listened to the arguments on this on a number of occasions, and we have come to the conclusion that it is not necessary to extend those specific and particular procedures for those unique occasions to the perfectly ordinary order-making powers in Clauses 37, 69 and 70. The noble Lord, Lord Peston, brooded over the weekend on this. I hope that he has been able to brood a little over what I have said, and that I have been able to persuade him that it is not necessary to do what he wants, that it is not without precedent, and that the arrangements that we have are reasonable ones.

Lord Peston

My Lords, I thank the Minister for his full answer, which of course happily is on the record which, given Pepper V. Hart, is important in terms of the use of these powers. Let me read out what was said in your Lordships' Select Committee on the Scrutiny of Delegated Powers. It said: There are, however, two provisions for delegated powers in the Bill for which the Committee consider that neither the affirmative nor the negative procedure provides an appropriate degree of parliamentary scrutiny. These are the powers to repeal certain health and safety provisions … and the power to contract out functions". The next sentence is one that I should have read out earlier: These are both policies which the House"— that is, your Lordships' House— might have expected to debate in detail in primary legislation; and both sets of powers are very widely drawn". I take it that what the Minister is now saying is that your Lordships' Select Committee was mistaken, and that we would not have been expected to debate all this in primary legislation. It is wrong in that regard. Whereas the committee says that both powers are widely drawn, the Minister says that they are not widely drawn, that they are narrowly drawn. I felt—and this is why I use the word "brooding"; I have been brooding about other matters too, as the Minister will see in due course—it to be a serious matter for the Government to reject such advice when the committee was endeavouring to be as helpful to your Lordships as it could be. These are not matters upon which I would wish to divide the House on a day like this. However, I wanted to get my argument on the record. I say this in a good spirit to the Minister; I thought that his getting his argument on the record was helpful. Having said that, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Peston moved Amendment No. 3: Page 3, line 43, at end insert ("and in each case state whom he has consulted and why").

The noble Lord said: My Lords, the amendment stands in my name alone, and I am very lonely. It relates to a matter that I have raised before. Recent events into which I shall obviously not go in any detail have made me worry about it a good deal more. Once the Bill becomes law—and it looks as though it will in the not too distant future—it will open up to pressure groups and bodies of all kinds the opportunity to press Ministers with arguments corresponding to what the Bill says; namely, that the regulations exist; they have been passed properly by both Houses of Parliament; they are in primary legislation; but we think they are a burden and, "We want you to use your powers to get rid of them".

As I said, without adverting to recent events about external pressures on Ministers and Members of Parliament, I am worried that those pressures should in any way be covert and not open to public scrutiny. It is a matter I raised earlier, and I raise it again. If the Minister were to make an order under Clause 1—of course I agree entirely that he should consult, and I am not seeking in any way to undermine consultation—he should have an explicit statutory obligation to say to whom he and his officials have been talking; why they have been talking; what the pressures have been, and all that type of thing.

As I say, I do not have to underline recent events to emphasise the necessity for such a thing if the power is to be used. I do not apologise for returning to this issue, but the case for open government here is so overwhelming that it should not depend upon the Minister himself choosing whether to reveal the basis of how he or she has moved to make an order. This relates to a matter which occurs later but where again I have to accept that the Government would not go with me. It relates to the question of representations being made and those making representations having rights to say, "Well we would like to say to you that this is a burden on us. We should like you to do something about it, but we want you not to let anyone know that we have done it". That is even more alarming in terms of open government.

Yet again, repeating what I said earlier, this is my last chance to raise such matters, and therefore I felt it to be my duty to place this matter before your Lordships to see whether the Government might not feel that this is an amendment that they should accept in the interests of openness and parliamentary democracy. I beg to move.

Earl Ferrers

My Lords, it was, I think, with a certain amount of horror that the noble Lord found that he was alone on this amendment. He must not worry too much about such things. Periodically one becomes lonely. It does not matter if one is right; it matters if one is wrong. He said mat he was worried. I do not like the idea of the noble Lord being worried, especially if the worry is unnecessary. I should like to try to allay the noble Lord's fears because what he is trying to do by the amendment is to require the Minister to state whom he has consulted and why he had consulted them.

If the noble Lord will be good enough to look at Clause 3(4) (e), (f), and (g) he will see that the matters referred to above—in other words what the Minister has to lay before Parliament—are: (e) any consultation undertaken as required by subsection (1) or subsection (2) above; (f) any representations received as a result of that consultation; and (g) the changes (if any) which the Minister has made to his original proposals in the light of those representations". Those are full requirements made upon the Minister before he lays a document before Parliament. The committee, which in this House will be the Delegated Powers Scrutiny Committee will, as a result, have full information not just as regards the removal or reduction of a burden and the maintaining of necessary protection, but also as to whom the Minister has consulted; on what he has consulted; and what he has done with the results. All that will be subject only to the provision of confidentiality, which appears in subsection (5). If, for example, an unreasonably short period of time had been provided for responses to the consultation or if some interested parties had been excluded from the consultation that would be readily apparent to everyone. The period for parliamentary scrutiny would allow further representations to be received and, as was said only last Thursday by my noble friend the Lord Privy Seal, the committee would be able to call witnesses.

I suggest that the point which the noble Lord's amendment seeks to address is met by the provisions of subsection (4) and that it would add nothing to the consultation or parliamentary scrutiny process.

Of course, the noble Lord is right in saying that people should be consulted and that the Minister should say whom he has consulted. However, the noble Lord may be content and less worried because that which his amendment seeks to include in to the Bill is already there.

4 p.m.

Lord Rodgers of Quarry Bank

My Lords, before the Minister sits down, perhaps I may clarify one matter. I understood him to say that the provisions of paragraphs (e), (f) and (g) granted the whole purpose of Amendment No. 3. However, perhaps sotto voce, he referred to the following paragraph relating to confidentiality. The noble Lord, Lord Peston, asked for openness, and I strongly support that view in particular in the present climate. However, is it right that the provisions in this part of the clause ensure confidentiality and therefore defeat a substantial proportion of the purpose of the amendment?

Earl Ferrers

My Lords, I find that question extraordinary. I cannot believe that the noble Lord, Lord Rodgers, wishes to have published that which is confidential. I cannot tell him what is confidential; that will be a matter for consideration. However, there is a well-established precedent for statutory consultation for confidentiality, if that is the wish of the person consulted. The Fair Trading Act 1973, the Health and Safety at Work etc. Act 1974 and the Consumer Protection Act 1987 carry provisions relating to full and frank consultation. However, if the person being consulted says, "This is confidential and I do not want it displayed", it is right to accept that understanding.

Lord Rodgers of Quarry Bank

My Lords, I may have misunderstood the Minister. Is he saying that despite the provisions of confidentiality, which in his view refer only to the content of the discussion, there will be no confidentiality about the people consulted?

Earl Ferrers

My Lords, I must consider that matter. I believe that there would be no confidentiality as regards the people consulted but that there might be confidentiality as regards what they said.

The noble Lord, Lord Rodgers, has raised an important point. We are not trying to hide anything but to make sure that that which is confidential in the fairness of business and consultation should not be made public property. That occurs throughout public life and all forms of consultation.

The confidentiality provision is a necessary safeguard for the consultees. It could be possible that in some cases it might not be appropriate to provide the details of the responses to Parliament, except in a non-attributable form, unless the person responding consents. I believe that the answer that I have given is correct; but if I have misled the noble Lord I shall let him know.

Lord Peston

My Lords, I thank the Minister and the noble Lord, Lord Rodgers of Quarry Bank.

The noble Lord put his finger on a matter which is of some anxiety and we have received some clarification. I can see a distinction between asking what is the provenance of the consultation—"Whom did you consult?", which I do not believe in almost any circumstances should be kept secret—and the details of the consultation. Perhaps I may give a theoretical example, which is theoretical because it is dealt with elsewhere in the Bill. Let us suppose that a group of London lorry drivers or owners of lorry firms said to the Minister, "We wish the rules on lorry driving through London to be changed because we believe that there is a burden on us"—which is dealt with in another part of the Bill—and proceed to demonstrate to the Minister what they believe will be the excess costs to themselves. I can understand them saying, "The data that we are giving you on the costs is commercially confidential and we would rather that it did not appear in the public domain". However, if they also said, "We don't want anyone to know that we made these representations", I would regard that as completely intolerable. That is the distinction.

I understand the Minister to say that the distinction is already taken care of in the Bill. He said that subsection (5) would not refer to "who" but to what we all understand to be "commercial in confidence"—we have all seen documents displaying that phrase. We need clarification on that matter.

Perhaps I may prevail on the Minister, although I know that it is tedious of me to do so. I take it that "any" in subsections (4) (e) and (f) subsumes "all"; in other words, "any" means "all" rather than "some". It is most important that it is "all" such consultations. However, does that provision relate to the prompting of the Ministerial intervention in the first place? I do not want pressure groups of any kind to be able to pressurise a Minister into taking various actions under these powers without us knowing who started the action.

I thought that my amendment was important because I read subsection (4) as meaning consultation after representations had been made in the first place. Will the Minister assure me that I am wrong and that "consultation" means consultation from the beginning— that is, from the moment anyone says to a Minister, "I do not like this burden and I want you to do something about it"? Will he confirm that Members of this House and another place will be told who such people are? That issue was exercising me, and if the Minister tells me that I am mistaken I shall be willing to accept that.

Earl Ferrers

My Lords, I believe that the noble Lord is worrying unduly. Anyone can go to a Minister at any time and say, "There is an unfair burden and it ought to be removed". Many people can do that and the Minister must make up his mind whether it is reasonable. If the Minister believes such action to be reasonable and that steps ought to be taken, before he lays the document before Parliament he must consult with interested parties. It may well be that some of that consultation is of a confidential nature. That would not necessarily be given, therefore; or it could be given in an unattributable form. I said that I did not believe that there would be any particular difficulty about disclosing the people whom the Minister had consulted. However, it is important to recognise that the Minister should be under no obligation to list every single person he has consulted. He might have spoken to his Ministers, to his officials and to all kinds of people.

The point is that when the Minister lays a document before Parliament it should be clear that he has gone through consultation and he should not necessarily list every single person who has given an opinion. I believe that to be reasonable. However, that does not mean to say that one is deliberately excluding from the public domain people who have made a contribution about which the Minister believes that he will keep quiet. It is a matter of genuine public consultation. I do not wish to give the impression that consultation would necessarily mean providing a list of people, each of whom may have given an opinion to the Minister. Consultation relating to a particular proposal is what the Minister needs to tell Parliament. The consultation may have taken place over many years and on a number of issues, and I do not believe that it would be sensible to include that.

The noble Lord, Lord Peston, was worried about whether "any" included "all". I can tell him that "any" does mean "all".

Lord Rodgers of Quarry Bank

My Lords, it seems to me that there is a distinction to be drawn here. A person may say to the Minister, "Do not let anybody know that I have been to see you". In that case, the Minister should not be able to say, "I will not tell anybody that you have been to see me". He must reveal the names of those who have been to see him and those whom he has consulted. However, somebody may say, "Of course you may tell Parliament that I have been to see you, but do not tell it what I have told you because it is commercially confidential". It seems to me that the second of those propositions is entirely reasonable and the noble Earl is right to say that any Minister or former Minister is familiar with that in all business relationships.

However, as the noble Lord, Lord Peston, said, it is essential that there should be a degree of openness. I cannot think of any circumstances, certainly no circumstances today, in which any individual who has made representations to a Minister under the provisions of this Bill should not be prepared to have his name mentioned in public.

Lord Skelmersdale

My Lords, before my noble friend replies, will he consider whether or not the debate is running rapidly into a Committee stage rather than a Third Reading debate?

Earl Ferrers

My Lords, with the leave of the House, I am most grateful to my noble friend Lord Skelmersdale for bringing us back onto the rails. I was being propelled off them at a rate of knots by the noble Lords, Lord Peston and Lord Rodgers. I was only trying to be helpful.

Having tried to be helpful, I should say that although I long to agree with the noble Lord, Lord Rodgers, I do not agree with him. Ministers are always able to have private conversations and consultations with people. It would be wrong if they were prevented from doing that. If by any chance a person were to go to a Minister and say, "I want to tell you this in confidence", it would be intolerable if that had to be put in the public domain.

Lord Peston

My Lords, I thank the noble Earl. It would be intolerable if this were a normal Bill and not a Bill which undermines the procedures of Parliament. All my interventions are based on my original view of the Bill; namely, that it is an outrage.

I accept entirely the intervention made by the noble Lord, Lord Skelmersdale, but there is another problem as regards the Bill. Although I have tried very hard to avoid becoming involved in a Committee stage debate at this stage, it is extremely difficult to understand the implications of the Bill. I learn about the Bill each time that I return to it. I am sure that when it passes into law, it will dawn on me that there are enormous parts of it which I did not understand and which I shall wish I had investigated. That is no excuse for breaking the rules, but it is an explanation as to why sometimes one gets a little out of line in trying to deal with the matter.

The end of the noble Earl's reply was worse than the beginning because towards the end of the reply he was saying that it is acceptable for a Minister to choose not to reveal the names of those to whom he has spoken. I do not believe that that is acceptable if such powers are being used to amend primary legislation, and in view of what we have all been through in the past two or three weeks.

I have had my say and it is on the record. In a curious way, the Bill will be a running sore because in due course the Minister will bring orders before Parliament and one will be able to complain at great length about the use of the powers taken. Therefore, we have that to look forward to in the next year. Having said that, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 4 not moved.]

4.15 p.m.

Baroness Hilton of Eggardon moved Amendment No. 5: Page 4, line 14, at end insert: ("(bb) whether there is likely to be any impact on the natural environment if the burden, authorisation or requirement is removed or reduced and, if so, ways of reducing that impact where it is negative;").

The noble Baroness said: My Lords, this amendment has been moved at earlier stages of the Bill both in this House and in another place, but since the principle behind the amendment has been conceded by the Government it seems worth presenting it yet again in an attempt to give concrete expression to that principle.

In many ways, the Government have at least paid lip service to the need to have environmental impact assessments made in relation to new regulations. On Report in this House, the noble Earl, Lord Ferrers, reassured the House that the Government had no intention of deregulating at the expense of protection for the environment, wildlife or our natural heritage. Since that principle was conceded, it seems that the amendment would be a small addition which would help the Government to ensure that that is the case.

It will also give substance to the Government's claim in their document Sustainable Development—The UK. Strategy that the Government have long been committed to the integration of environmental concerns into decision making at all levels. If that is written into the: Bill, it will ensure that that part of government policy is; given expression.

In 1991, the Government published a document called Policy Appraisal and the Environment. Its introduction describes it as a guide for Civil Service administrators. It said that there should be increased awareness within government of the need to examine environmental impacts and offer a systematic approach to the treatment of environmental issues within policy analysis. Thus, if that were written into the Bill, the undertaking of environmental appraisals would underline and reinforce that instruction to the Civil Service.

The Government said also in that document that environmental appraisals should be seen as an opportunity rather than a burden. Again, if the amendment were accepted, it would increase the opportunities for Government departments to consider the environmental consequences of any regulations which they intended to produce.

Secondly, it would ensure that any possible environmental implications of proposals would not be overlooked. It is very easy in departments dealing with a variety of issues, matters and regulations to forget the environment. We have just seen a report about the effects of the increased use of unleaded petrol. We can see from that that sometimes well-intentioned policies which were intended to assist the environment have adverse effects on other aspects such as health.

The imposition of VAT on the costs of making repairs to existing buildings works against the repair of inner city buildings while encouraging the construction of new buildings, on which no VAT is imposed, on greenfield sites. Therefore, almost any aspect of government legislation can have an effect, intended or otherwise, on the environment. Therefore, it would be useful to have that made clear on the face of the Bill.

It would ensure also that, when a regulation comes before this House, the other place or parliamentary scrutiny committees, the maximum amount of information is available on any possible environmental implications.

We believe also that the Government should be concerned not merely with the short-term benefits of any regulations or legislation which they propose, but that they should attempt to take a strategic, long-term view. Any environmental impact assessment necessarily concentrates the mind on the long-term consequences of regulations and legislation.

Therefore, we seek a minimum assurance from the Government as regards the amendment that even if they do not accept it, they should at least give a verbal acceptance that what is proposed is essential. We should have that assurance on the record. I beg to move.

Earl Ferrers

My Lords, I fear that noble Lords opposite are having to display their anxieties and seek reassurances with regard to the Bill. I shall try to give the noble Baroness the reassurance which she seeks. I believe that I can do that relatively easily because the noble Baroness spoke about the importance of protecting the environment and reducing any negative impact. I assure the noble Baroness that the Government believe strongly that the legislative framework should provide proper and adequate protection for the environment. There is no question about that.

Your Lordships may recall from our earlier debates on Clause 1 that the deregulation order-making power could not be used where that would remove any necessary protection. The term "necessary protection" in Clause 1(1) would certainly encompass the protection which is necessary in order to safeguard the environment.

In recognition of the exceptional nature of the power which is provided by Clause 1 the Government have provided a number of checks to prevent its abuse. In particular, Clause 3 requires that a Minister must undertake a consultation exercise on any proposal which he wishes to make before he brings forward an order. The outcome of that consultation, together with other specified items of information about the proposal, are then required to be laid before Parliament at the beginning of the special scrutiny procedure. That is a matter to which reference was made during our debate on the previous amendment moved by the noble Lord, Lord Peston.

The matters which are required to be covered in the document already include details of the burden which it is proposed to remove or to reduce; whether the existing provision affords any necessary protection and, if so, how that protection is to be continued. The document will also include other details, including—and here, I fear, that I shall make the noble Lord, Lord Rodgers of Quarry Bank, more jumpy—subject to confidentiality, the results of any consultation which will have been undertaken and the changes, if any, which will have been made to the document as a result of that consultation. All those matters appear in Clause 3(4). The amendment just moved by the noble Baroness, Lady Hilton of Eggardon, seeks to add to the matters which are required to be included in the document. It seeks to include and add information about any implications for the "natural environment". The provisions as drafted—and, in particular, the requirement of Clause 3(4) (b) to describe how any necessary protection which is afforded by existing legislation is to be continued—would ensure that, in cases where the proposal has implications for the natural environment, they would be brought out in the explanatory document.

I hope that I have been able to reassure the noble Baroness. We are committed to providing necessary and proper protection for the environment. As I have tried to make clear, the order-making power could not be used to remove any protection which is described as "necessary protection" in this or in any other area. The document which will have to be placed before Parliament is bound to contain information on how any necessary protection for the environment will continue to be provided. With that deeply satisfactory reply, I hope that the noble Baroness will remain content and be less worried than she was when she moved the amendment.

Baroness Hilton of Eggardon

My Lords, the noble Earl's elegant and reassuring soft words have not wholly allayed my anxieties. I believe that some of the difficulty lies in the generality of the word "protection" which is not really defined in the Bill. However, as the noble Earl has given us the assurance that protection does include protection of the environment, I am partially reassured. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 6 to 8 not moved.]

Clause 5 [Powers to improve enforcement procedures]:

Lord Peston moved Amendment No. 9: Page 5, line 29, after ("protection") insert ("or unreasonably increasing the burden on any enforcement officer").

The noble Lord said: My Lords, as a preface to what I have to say, perhaps I may remind your Lordships that, when the noble Lord, Lord Vinson, introduced the considerations which gave rise to new Clauses 5 and 6 of the Bill, I tried to be as sympathetic as I could. I was very much on his side and hoped that the Government would be able to respond. Indeed, they have certainly made some effort to do so.

I do not want anything that I say on this or on the following few amendments to be interpreted as suggesting that I am backing down from my support for the need to treat enforcement in a reasonable and decent way. That is not what I have in mind. My concern is that a rather unscrupulous person—that is, not the kind of person that either the noble Lord, Lord Vinson, or myself, have in mind —might try to use Clauses 5 and 6 in order to get out of what are reasonable obligations by making the life of the enforcement officer or officers a misery by essentially raising this or that difficulty and thereby making it impossible for them to carry out their proper functions.

It is possible that the noble Earl will tell me that the situation has already been taken care of under the Bill. Indeed, I should very much like him to say so. I should like him to say that the words in Clause 5(1) (b), without jeopardising any necessary protection", would include the words of my amendment; namely, or unreasonably increasing the burden on any enforcement officer".

It is possible that the words could be read in that way. If the noble Earl tells me that that is the case, I shall be perfectly happy. However, if the words cannot be read in that way, we will have a serious problem. Despite all my sympathies and support for what is proposed, it would be quite wrong—as I am sure that we all agree— if an unreasonable burden was placed on enforcement officers. That is not what my amendment seeks to do.

In the main, I am seeking clarification and what the noble Earl himself referred to as reassurance. The noble Earl may not like that psychiatric role, but one of the burdens of being a Minister is that, if noble Lords from either side of the House express their concerns on a matter, at least one of the Minister's tasks is to say, "Don't worry, it's all perfectly OK". However, if the noble Earl does not feel that that comes naturally to him, it is most unfortunate. That is a burden that he must bear. As I said, I am asking for reassurance. I should like to be persuaded that my amendment is unnecessary. I beg to move.

Earl Ferrers

My Lords, adopting the position of a psychiatrist as the noble Lord wishes me to do, perhaps I may metaphorically lay the noble Lord, Lord Peston, on a psychiatrist's couch. I would touch him gently and say, "Don't worry, it's all perfectly all right". But perhaps the noble Lord would not wish me to sit down at this point.

Lord Peston

My Lords, yes I would.

Earl Ferrers

That is fine, my Lords. I can reassure the noble Lord that the amendment is unnecessary.

Lord Peston

My Lords, I am sorry to interrupt the Minister again, but he will have to rise to his feet later. Indeed, the exercise might be necessary. I take it that my interpretation is correct; namely, that my words are included in the expression, without jeopardising any necessary protection". That is really all I wanted to know.

Earl Ferrers

Yes, my Lords; that is perfectly true. The amendment is not necessary because the powers in Schedule 1 would give businesses the opportunity to challenge informally any enforcement action which the enforcement authority has said that it intends to take. They would require enforcement officers to give reasons for any immediate action which they intend to take or to ensure that third parties who have a direct interest are informed of the enforcement action which affects them. They would also require that, when formal enforcement action is taken, the business affected would have to be given a clear statement of what its rights of appeal are and how to exercise them.

We believe that there is already a great deal of good practice between enforcement authorities and businesses, but it is perfectly true that the powers could increase the burden on any enforcement officer who is not at present exercising his powers with fairness, transparency or consistency. It is much more likely that difficulties—for example, if there are any misunderstandings or in cases of over-zealous application of legislation—will be picked up and ironed out before the formal action is taken. Therefore, I believe that the powers will not add unnecessarily to the work of enforcement officers other than where enforcement officers are not at present exercising them with total fairness, transparency and consistency. In that respect, there could be an increase but, in general, there should not be.

Lord Peston

My Lords, I thank the Minister for that reply. It was most helpful. I was also helpful to him in the sense that he was able to rise to his feet, get some physical exercise momentarily and then sit. down again. Indeed, it is all an example of sweet reasonableness. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

4.30 p.m.

Lord Vinson moved Amendment No 10: Page 5, line 30, after ("fairness") insert ("proportionality").

The noble Lord said: My Lords, during the Report stage of the Bill, I suggested to my noble friend the Minister that the purposes of the legislation would be better clarified by the insertion of the word "proportionality" in the same line as the words currently in the Bill; namely, "fairness, transparency and consistency". I hope that my noble friend will still consider my suggestion now that the matter has been formally tabled because he will know that the law is so often misapplied through being applied in an unreasonable or disproportionate manner. Indeed, throughout the debates, both in this House and in another place this matter has been well recognised by the Ministers concerned.

For example, when summing up at Committee stage, the Minister of deregulation said on the afternoon of 28th April: The greatest single deregulatory gain that we could produce as a result of the deregulation initiative is a mechanism that is user-friendly, cheap and speedy. It must be able not only to identify, but to deal with cases when the decisions apparently fly in the face of common sense or when the costs that are imposed as a consequence of them are out of all proportion to the benefits that are supposed to be gained. I know that that was at the back of my hon. Friend's mind when tabling the new clause. I have the greatest possible sympathy with it, and I entirely share his aims. I hope that we can find the mechanism which, because of our debate, I guarantee we shall officially seek".—[Official Report, Commons, Standing Committee F, 28/4/94; col. 1226.]

So the Government are clearly committed to the concept of proportionality. Subsequently, at the press conference on 29th July, when details of the clause we are debating today were released by the Minister for deregulation, he said: There is a will to provide some mechanism that will act as a check on unreasonable use of draconian powers used to close businesses down. I would like to create a non-legalistic body to which businesses could appeal if they felt that the enforcement of a regulation lacked a sense of proportion".

It is for this reason that I, along with other noble friends, are pressing for the word "proportion" or "proportionality" to be inserted in Clause 5 (1) (b). I hope that on reflection the Minister will consider the use of such a word to be wholly appropriate, and all the more so because it is a term well recognised throughout the EEC of which we are a member, and from where many—some might say "too many"—regulations emanate. I await his positive reply on this matter; but if, for some reason, he is unable to accept our suggestion, I hope he will confirm that the appeal procedures authorised under these clauses may wholly embrace appeals against the perceived misapplication of regulation because it is perceived to be unreasonable or disproportionate to the alleged offence and is more than necessary to meet the intent of the regulation.

This matter has indeed received widespread support from all sides of the House—I am very indebted not least to the noble Lord, Lord Peston—both here and in another place. I believe it is the wish of Parliament that Clauses 4 and 5 are designed to, and should be interpreted as, dealing with this problem. I hope that my noble friend the Minister will make it quite clear, unequivocally, that they do so. I beg to move.

Lord Reay

My Lords, I am extremely grateful to the Government for having introduced Clause 5 which, together with Clause 6 and the new Schedule 1, give the Minister powers to improve enforcement procedures and to draw up model appeal provisions. The Government have taken a great deal of trouble to try to meet the anxieties of those of us who wanted to see a new appeals procedure introduced against the unreasonable decisions of the over-zealous bureaucrat.

However, an inseparable part of the thinking behind our original amendment, and the amendment which preceded it moved in another place, was a wish to provide redress in those cases where an official in applying regulations may have followed the letter of the regulation but showed no sense of proportion.

The word "proportion", or some variant of it, occurs repeatedly in debates on the subject; and, as my noble friend Lord Vinson, has pointed out, in many government contributions. Yet it is not plain that a concern for proportion is covered by the wording of Clause 5 as it now stands. I hope therefore that the Government will be able to accept our amendment. If they are not able to accept it, I hope at least that they will be able to give a strong, legally based indication that our anxieties are fully covered by the wording as it stands.

Lord Monson

My Lords, there is little I can add to the case for this amendment so ably put by the noble Lords, Lord Vinson and Lord Reay. It is the unimaginative lack of an adequate sense of proportion which contributes to the financial distress and the mental anguish suffered by so many men and women running, or trying to run, small businesses whose plight is highlighted almost daily by Mr. Christopher Booker in the Daily and Sunday Telegraph respectively. But it is these very people, after all, upon whom the Government always say they are relying to help pull this country out of recession and set it upon a course of sustained prosperity. I hope this amendment will be accepted.

Lord Northbourne

My Lords, I also wish to speak briefly in support of this amendment. It seems to me that the word "proportionality" deals with a rather different aspect of the situation to the words "fairness, transparency and consistency" because what I believe we mean by proportionality is that the punishment should fit the crime; that a regulation should not be put into force the severity of which, in terms of the damage to the business, is disproportionate to the risk which is caused by the action or lack of action complained of. I do not think that point is covered by the word "fairness". It is not necessarily unfair, it is not inconsistent and it is not necessarily untransparent to close down a business because its scrubbing boards are made of wood instead of stainless steel. But it may be totally disproportionate to the risk which the public may suffer if the wood were to stay in place for another month or two.

Lord Peston

My Lords, I wish to intervene for a moment but I certainly do not wish to say anything that would prevent the noble Earl from accepting this amendment simply because I wish to say a few words. However, we ought to remind ourselves that where the regulations are derived from the European Community this Bill is unable in any way to deal with them. We ought to realise that we can only confine ourselves to regulations that we ourselves have introduced. That is a point I raised in pointing out how flawed the Bill was to start with. I do not believe that we ought to raise people's hopes excessively in terms of what any of this could possibly do. I rise because I believe the example given by the noble Lord was an example that related to the European Community as regards whether a scrubbing board was made of wood or something else. I do not think there is anything we can do about that unless the noble Earl tells me that we can. I intervene simply to add that point.

Earl Ferrers

My Lords, the humility of the noble Lord, Lord Peston, is always a matter of astonishment! To think that he should feel that by his intervening for such a short period of time he would make me change my mind from accepting the amendment to not accepting it does not do justice to his own logic and ability to contribute to the debates. We are always glad of that contribution.

Lord Peston

My Lords, as the noble Earl knows, I have been a professor of economics for the past 30 years. Our watchword is, "humility always".

Earl Ferrers

My Lords, I am bound to say that is not always apparent in the noble Lord's colleagues—of course, I am talking about his economics colleagues, not his political ones.

On the previous amendment, the noble Lord said he had no objections to giving me a little physical exercise by making me rise up and down to answer his questions which of course disturbed my noble friend Lord Skelmersdale behind me. I do not offer physical exercise to the noble Lord, Lord Peston; but I suggest he practises a little mental exercise over this amendment because it is not easy. I have given a certain amount of consideration to it. My noble friend Lord Vinson has raised an important issue of whether Clauses 5 and 6 and Schedule 1 go far enough to address the anxieties about proportionality, and in particular whether the phrase used in Clause 5(1) (b), to improve (so far as fairness, transparency and consistency are concerned) is sufficiently wide to cover what is intended in respect of the use of these new powers.

The concept of proportionality is taken from Community and European jurisprudence. Your Lordships may think it is a curious word and I suppose it would be classed as "Eurospeak" which will immediately endear it to the noble Lord, Lord Bruce of Donington. In applying the concept of proportionality in United Kingdom law we need to be clear what we mean by it. In the sense in which we are using it in this debate, the word "proportionality" does not yet appear in the additional series of the Oxford English Dictionary. Some of your Lordships may think that that is a good thing.

In essence proportionality means that the legal power of the state should be applied only to the extent which is necessary to achieve the objective in question and that the benefits which are derived from achieving that objective should outweigh the burdens which will arise from it. What that means in practice will differ according to the nature of the power which is being applied. For present purposes, we are identifying two different aspects. The first aspect is that there can be law which, when applied properly and correctly, is unduly burdensome. Such a law could be said to lack proportionality if the benefits, which the requirement might confer, would clearly be outweighed by the cost. Alternatively, it might be disproportionate in that it laid down requirements which could not be achieved in a cost-effective way.

Where the law itself, correctly and reasonably applied, results in undue burdens, then the answer is to change the law. It may be possible to do this by existing powers. Sometimes, however, the problem lies with the requirements of the primary legislation or the powers which the primary legislation provides. In that case, the answer may be to use the order-making power in Clause 1. As your Lordships will be well aware, this can be used to reduce or to remove the burdens which have been imposed by legislation, where this can be done without removing any necessary protection.

It may be that what would be needed would be simply to change the nature of the requirements. In other instances these may be unduly burdensome only in particular cases. Where the requirements are discretionary, it may be appropriate to change the factors which have to be taken into consideration or the weight which has to be attached to them.

Sometimes that will not be possible. In this instance what would solve the problem would be if the legislation concerned provided for requirements to be waived in particular circumstances.

Section 50 of the Financial Services Act is an example of such a particular dispensing power. We are of the view that in appropriate cases the deregulation order-making power could be used to amend legislation so as to provide such a dispensing power for particular cases.

We, therefore, believe that Clause 1 provides the means to deal with legislation which is itself disproportionate or which cannot be applied in a proportionate way.

I said that there were two aspects to the notion of proportionality. The second aspect is the way in which the law is interpreted or the way in which it is applied administratively. Within the framework of the particular legislation, the action which is taken by an enforcement officer should be directed at what is necessary to achieve the objective of the law in question—neither more nor less.

In other words, the action must be proportionate and if it is not, the fact that it is not may indicate the: misapplication of discretionary powers or the misinterpretation of legal requirements. Frequently, there will be inconsistent application between different cases, but not necessarily, as there can be consistent over-enforcement.

What is needed is a mechanism to ensure that the: requirements of the substantive law—as amended, if necessary, by using the powers which are in Clause 1— are properly interpreted and applied. This is precisely what Clauses 5 and 6 and Schedule 1 have been designed to provide.

The requirement to give reasons, which appears in several elements of the schedule, addresses the mind of the regulator on whether any action which he is proposing is really necessary. In this way, transparency is a relevant concept in contributing towards a proportionate outcome.

Taken together with the concepts of consistency and, importantly, fairness, I can assure your Lordships that we believe that we have indeed ensured that the powers which are in Schedule 1, could be used where what is necessary is to achieve the result that the sanction which is to be applied should be no greater than that which is needed to achieve the objective of the law.

Given the different concepts which are involved in the word "proportionality", we do not believe that it would be helpful to add the word to the clause. Nor do we believe that it is necessary to do so in order to achieve the effects which I think we are all agreed should be the aim. I think that it would be wrong to do so, as it might be taken as in some way also implying that the powers under Clause 1 were not in fact directed at proportionality in the way in which we intend them to be directed. I can, therefore, give your Lordships the firmest possible assurance that the complementary powers, which are in Clauses 1, 5 and 6, will achieve what your Lordships wish and that the amendment is therefore unnecessary and to that extent undesirable.

I have dealt with this at some length and, indeed, with some complexity. I hope that the noble Lord, Lord Peston, has exercised his mental capacity in absorbing my reply. It is a complex subject. It is not easy. But it is important, and I thought that your Lordships might welcome a full explanation even if your Lordships may prefer to consider the issue tomorrow in writing, and at your Lordships' leisure.

Lord Simon of Glaisdale

My Lords, before the noble Earl finally sits down, will he give his thoughts on the point raised by the noble Lord, Lord Peston— namely, where our regulation is in pursuance of a European Community regulation. To many of us that is seen as the main difficulty to further advance in the situation which the noble Lord, Lord Vinson, and his colleagues have identified.

Earl Ferrers

My Lords, where European directives come into the issue, we are obliged to carry out the directives and to make our law comply with them. In so far as we have to do that, then we have to adjust our law. On this issue we are concerned with making adjustments to the law which is already in existence and, by so doing, to ensure that any action we take is not out of proportion—in other words, that the action taken does not exceed the benefits which accrue from it.

We cannot, of course, derogate from Community laws, but we may be able to alter the penalties. We shall certainly bear the noble and learned Lord's point in mind.

Lord Vinson

My Lords, it is indeed a complex subject. I hope that the many small firms of lawyers who will have to battle with the Act and advise their clients will be well guided by the explanation that has been given to us.

At this stage of the Bill, having attempted to clarify the position, one can do nothing further. Indeed, the position is clarified to the extent that quite clearly as regards UK application of EC regulations disproportion is covered. If the application of the regulation in all cases is more than is necessary to meet the intent of the regulation, I interpret from my noble friend's remarks that quite clearly there would be ground for appeal. On that basis, I believe that it would be appropriate for me to beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Earl Ferrers moved Amendment No. 11: Page 6, line 11, leave out ("descriptions of case, including different provision for").

The noble Earl said: My Lords, I spoke to this amendment with Amendment No. 1. I beg to move.

On Question, amendment agreed to.

Clause 6 [Model provisions with respect to appeals]:

4.45 p.m.

Earl Ferrers moved Amendment No. 12: Page 7, line 9, leave out from beginning to ("by") in line 10 and insert ("The Secretary of State shall").

The noble Earl said: My Lords, when I introduced this clause into the Bill at Report stage, the noble Lord, Lord Peston, asked why the word "may" had been used in this clause rather than the word "must". I am bound to say that the noble Lord periodically makes some perceptive and even on occasions helpful observations. When he stated earlier that he could not think why the Government listened to the Benches behind them, and not to the Benches opposite, I sought to assure him that we always listen to the Benches opposite.

I listened and, rather like the noble Lord, Lord Peston, I brooded on his amendment. I came to a happier conclusion as a result of my brooding than he did as a result of his brooding over my amendments. I thought that he had a good point, I congratulate him on it. We agree that the Secretary of State should prescribe model provisions with respect to appeals, and my amendment therefore replaces "may" with "shall". I hope that the noble Lord, Lord Peston, will be even more pleased now than he was at the beginning of this afternoon. I beg to move.

Lord Peston

My Lords, I thank the noble Earl. It gives me enormous pleasure because when people ask me what I do all day working on the Bill, I often have great difficulty in showing that it is anything useful. However, in future when the Bill is enacted, I shall be able to say that the "shall" moved by the noble Earl was really mine. Thus I thank the noble Earl most warmly.

On Question, amendment agreed to.

Earl Ferrers moved Amendment No. 13: Page 7, line 17, at end insert: ("( ) The Secretary of State shall perform his duty under this section in the manner which he considers is best calculated to secure—

1. (a)that appeals determined in accordance with the model provisions are determined without unnecessary delay; and
2. (b)that the costs or expenses incurred by the parties to appeals so determined are kept to the minimum.").

The noble Earl said: My Lords, we are getting on famously. At the Report stage of the Bill when this clause was introduced, my noble friend Lord Vinson suggested that two further areas for consideration— namely, timeliness and costliness—should be incorporated in the clause. He argued that it was important for a business that it should not have the sword of Damocles of an appeal hanging over it for months on end and that if appeal procedures turned out to be too costly then they would simply not be used and a great deal of unfairness would continue. I quite agree with my noble friend and I am grateful to him for drawing this to my attention. The timescales and costs involved in any enforcement appeal mechanism are important factors in determining how valuable an appeal mechanism is to business and, in particular, to small business.

Clearly, different cases will vary in terms of urgency and complexity and any appeal mechanism will have to take account of that. However, I agree that the Secretary of State should draw up the model appeals mechanism in such a way as will secure that appeals can be determined without unnecessary delay and that costs and expenses which will be incurred by the parties are kept to a minimum. That is what the amendment seeks to achieve and I am grateful to my noble friend for drawing it to my attention. I commend it to the House and beg to move.

Lord Northbourne

My Lords, perhaps I may take the opportunity to thank the noble Earl for the extent to which he and the Government have gone down the road which was so strongly advocated by the noble Lord, Lord Vinson, myself and others at the Committee stage. We are grateful to him for considering the problem of individuals who, for one reason or another, have suffered unfairly at the hands of over-zealous officials. I am most grateful.

Lord Vinson

My Lords, I join in those words and thank the noble Earl and the officials who drafted the appropriate amendments. It is rewarding when an idea— particularly one which has received so much support— is taken up by the Government and incorporated. Now that we are nearing the conclusion of the Bill, I am most grateful to all concerned.

On Question, amendment agreed to.

Clause 23 [Repeal of Part I of the Shops Act 1950]:

Lord Stallard moved Amendment No. 14: Page 24, line 38, leave out from ("shall") to end of line 39, and insert ("be amended as follows. (2) For sections 1 to 3 there shall be substituted—

"Public safety and hours of closing. 1.—(1) The council of a London borough or a district in England and Wales may, where it is satisfied that it is in the interests of public order and safety or the prevention of crime within its area, by resolution determine that a shop or shops in any part of its area shall be closed for the serving of customers from such hour and for such period between the hours of eleven o'clock in the evening and five o'clock in the morning as it considers appropriate in the furtherance of those interests. (2) A London borough or district council may exercise the power contained in subsection (1) above only after consultation with the police for the area concerned, and after consultation with organisations representative of such persons as appear to the London borough or district council to be concerned.

(3) Sections 4 to 13 and 15 to 16 of that Act shall cease to have effect.

(4) For section 14 there shall be substituted—

"Penalty.

14. The occupier or owner of any shop which is open for the serving of customers in breach of a resolution made under section 1(1) above shall be guilty of an offence and liable to a fine not exceeding level 2 on the standard scale." ").

The noble Lord said: My Lords, I beg to move this amendment standing in my name and that of my noble friend Lady Turner. The substance of the amendment was discussed both at Committee and Report stages, as well as to some extent at a meeting which I attended with the noble Earl in his office, following the Report stage. I am grateful to him for setting up that meeting for myself and the noble Viscount, Lord Bridgeman, to discuss this and other amendments.

I did not leave that meeting satisfied that I had done enough to persuade the noble Earl and perhaps other noble Lords that the amendment was necessary. Noble Lords will remember that we discussed at length what I considered to be the necessity for the amendment so I shall not have to repeat everything I said before.

However, there has been some confusion so I think we ought to be clear at the outset what the amendment is about. It is intended to provide a reserve power— and I emphasise the words "reserve power"—to require shops in a particular area, not throughout the whole borough or city, to close during the night where the commercial activity runs against the interests of public order and safety or the prevention of crime".

It is not a question of whether or not shops themselves engage in criminal activity—that has nothing to do with the amendment—or allow it to take place. It is the very fact that they are open for business and, one must presume, wanting to attract customers that may have struck at measures which the responsible authorities locally are taking to prevent crime or disorder in the middle of their communities.

I wish to go into a few details of what the amendment requires. It requires that a local authority must: be able to demonstrate not only that a problem of crime and disorder exists but also that closure of shops will assist in dealing with it. If a local authority cannot demonstrate both those points, then any resolution it makes can be challenged and held invalid. Before the local authority makes any resolution, it must consult the police force for the area concerned. If it does not, or if it takes no account of the views of the police in reaching that decision, then again the resolution can be challenged and held to be invalid.

Before the local authority makes any resolution, it must consult representatives of the people affected by the resolution. Once again, if that consultation is not genuine then the resolution will fail. I do not see why a decision that can pass those tests should be objected to by anyone. It seems to me that a resolution which can pass the test is essential to the local community.

In previous debates at the Committee and Report stages, both the noble Baroness and I described in detail the horrific situation in King's Cross, London. I know that the local community will welcome the power, if we achieve it. However, it is needed not only for King's Cross. I have heard from a number of local authorities who have similar problems and who are greatly worried, as I am, about the lack of that kind of provision. I have heard from the city of Coventry of the measures that it has taken, in partnership with the police and others, to tackle serious disturbances and crime in the city centre. There is a combination of measures such as control of late-night licences, street trading and new by-laws which all work together—as they do in King's Cross—to protect the fragile environment while its quality is improved.

Here, I must comment on the fact that I well remember the attempts of the noble Viscount, Lord Whitelaw, who was in his place a moment ago, to try to persuade local authorities to combine with the police to provide such agreements and to get some kind of order into the local situation where there were problems. I imagine that he would be delighted if he could have achieved the kind of consultations that are now taking place between the police and local authorities throughout the country on the aspects about which he was concerned as Home Secretary at the time. I hope that he will take that as a genuine attempt at least to justify his efforts. At the time when he was trying, it was difficult.

Thus, Coventry has a similar problem. In Sheffield, people face problems of drug dealing and rowdyism at four o'clock and five o'clock in the morning in the Wicker and Burngreave areas. In the Peckham area of Southwark in London, there exists perhaps the worst degree of street crime in London. I am sure that noble Lords will know of similar situations in other urban areas. Walsall Metropolitan Borough Council has pointed out the possibility of all-night shops becoming a focus for youngsters and others to congregate and generally cause a nuisance. The London Borough of Newham says that the knock-on effect of all that could well mean an increase in night-time crime, especially robbery. It says: "When better to rob a trader than when the tills are full in the late evening or early morning?" Lambeth points out that in some instances all-night opening might concentrate on local dealings as an auxiliary to local trading. There is a great deal of anxiety and I feel that there is more to come if the amendment is not accepted.

As was said in a previous debate, an open shop can provide light and refuge on the streets at night. I accept that. We all accept that there has been a vast improvement in certain parts of London, where shops light the street and provide some kind of improvement. But where that is the case, if the benefits outweigh the problems, then neither the police nor the local authority will want to see them closed. But where it happens the other way round, then of course they will want to take remedial action.

I recognise, too, that the regeneration of town and city centres is at present being actively encouraged by the Government. I welcome that. An important element can be bringing life back to traditional centres in the evening. Where that is not damaging, I support it. However, the point has been made to me by another local authority that the ability to succeed in these projects depends heavily on creating public confidence and a user-friendly environment. We are talking about fragile communities. To sweep away all possibility of regulation in this one regard; namely, in relation to shops, would be a very dangerous path to take when the same kinds of powers in relation to cafes, places of entertainment and others have proved so vital.

It may be that the power granted by this amendment will not be invoked by very many authorities at any given time. But I am convinced that it will be valuable to a great many at different times in the not too distant future.

I should now like to deal with a few smaller points. Noble Lords will note that this amendment does not amend Part I of the Shops Act, which places general controls on shop hours. There is no intention at all to do that. Those provisions are repealed by Clause 23, which has already been decided. This amendment is selective. It deliberately provides a power to a local authority in relation only to a part of its area. As I have said before, it is a measure to deal with particular circumstances, not to impose global or overall rules.

In our last debate, the noble Lord, Lord Henley, said that he did not foresee a large number of shops opening at night. If that proves to be the case, then few will have reason to object. But the evidence available to me is that it is a growing trend among small retailers in precisely the kind of area about which I am concerned. In that debate the noble Lord also welcomed the kind of partnership initiatives that I have described. I am sure that the local authority concerned will be pleased to read that. I have no wish to fall out with the noble Lord. But it is precisely those partnerships of local interest, those who know their own communities, who call for the measures that I have proposed.

I do not believe that the clause is at odds with the Bill. Nor is it at odds with the Government's commitment to co-operate with local authorities where, in conjunction with the police, they provide such protection for local neighbourhoods. It does nothing to damage the Government's commitment to measures to reduce the level of street crime. On the contrary, it can only assist the Government in the achievement of those aims. This amendment is a necessary improvement to what is already in the Bill.

In conclusion, I should like to ask the noble Earl two questions with which he may be able to deal between now and the final stage. Can he give us an assurance that he will consult his original advisers and ask them to investigate again the powers of the Secretary of State in these matters? Does the Bill as presently drafted give the Secretary of State powers to reinstate closing times? It might be helpful if he could give me replies to those questions. I beg to move.

5 p.m.

Baroness Turner of Camden

My Lords, I rise to support the amendment, which has my name to it and which has been moved in such detail by my noble friend Lord Stallard. Indeed, my noble friend has gone into so much detail that there is very little that I want to add, except to say that I live in Camden, not so very far from King's Cross. As we know, the King's Cross area has been a centre for prostitution, drug dealing and violence and has a name for it. The existence of that kind of set up has of course had a disastrous effect on residents in the adjoining area.

Successful joint initiatives have been taken under the current legislation, and I am informed that such initiatives would be prevented by the Bill as it now stands unless there is an amendment along the lines suggested by my noble friend Lord Stallard. The partnership of Islington and Camden councils and the Metropolitan Police took a variety of action, including a restriction on the licensing of night cafes to 1 a.m. closing. That had the effect of removing legitimacy for the presence of criminals in the vicinity.

Were the Bill to pass unamended, shops would be the only public buildings for which there was no regulation on late opening. It is very likely that night shops would provide, often unwillingly and quite unwittingly, a similar cover for drug dealers and prostitutes. I know that it is the Government's intention—and it is one that we all applaud —to reduce crime and the fear that the average citizen has displayed about crime in the community. I really do not think, unless the Government accept the amendment, that the Bill will help that situation. I spoke on this matter at some length in Committee and on Report. My noble friend has given a very detailed explanation of what the amendment would mean in practice. I hope therefore that we shall hear from the Minister this afternoon that, this time round at least, the Government are prepared to accept the advice of institutions like the Association of Metropolitan Authorities, and, I gather, the police, and to accept what was suggested by my noble friend.

Viscount Bridgeman

My Lords, noble Lords may recall that at Committee stage I raised an amendment which was followed through by my noble friend Lady Gardner of Parkes at Report stage. It referred to the nuisance that was, caused in residential areas by late night shopping. I, too, thank my noble friend the Minister for meeting me with the noble Lord, Lord Stallard. However, I am given to understand that the Government's view is that the existing environmental and noise legislation is adequate for dealing with this problem. A number of local authorities are not happy about that, and we shall have to see in the new deregulatory phase whether these powers appear to be adequate. If they are not, we shall have to address the problem again at a later stage.

Turning now to the amendment of the noble Lord, Lord Stallard, the problem, particularly in King's Cross, is immediate and very serious. The noble Lord referred to the partnership between local authorities and the police both there and elsewhere. It is absolutely essential that this valuable initiative is given as much legislative power as possible. If it appears to your Lordships that this amendment is a slight tightening up of regulations in what is generally a deregulatory Bill, I suggest that the situation is so serious that it is fully justified on this occasion. I support the amendment.

Baroness Hamwee

My Lords, I have spoken to similar amendments and to the predecessor amendments at different stages of this Bill. I have to say that in Committee I was not wholly persuaded that the amendments that had been moved were such as were required. They seemed to me to go a little far. But as we have continued to debate the issue I have become further and further persuaded of the need for the kind of protection which now, in a very modest and careful form, has been proposed today by the noble Lord, Lord Stallard. I wholeheartedly support his amendment.

Earl Ferrers

My Lords, I was very grateful to have had the opportunity of meeting with the noble Lord, Lord Stallard, and my noble friend Lord Bridgeman the other day on this subject. I considered very carefully what they said; I realise that there is a real point of anxiety. The noble Lord is quite right to be concerned about the areas of drug dealing and prostitution. He mentioned King's Cross and a number of other places. He told me then of the co-operation between the police and local authorities over this matter. That is extremely important; and I have no reason to believe that that co-operation would be any the less once the Bill becomes law. Indeed, I see absolutely no reason why it should be less, and I hope that that will not be the case.

The amendment tabled by the noble Lord in fact would replace the existing closing hour provisions of Part I of the Shops Act 1950 with a new power for local authorities which would allow them to close on a weekday or a Saturday all shops or any class of shops within the whole or any part of their area. However, the position at the moment is that shops have to be closed from 8 p.m. until midnight or 9 p.m. on Monday of the week until midnight. After that they can open. So they can open all night if they so wish. If the amendment were to come into operation, it would give the local authorities power to close shops between 11 p.m. at night and 5 a.m. in the morning which is, at the moment, when they are allowed to open.

First, let me say to the noble Lord that the amendment does not propose the retention of an existing power to be exercised under certain specified conditions; it proposes the creation of a new power. We have heard concerns that, if Part I of the Shops Act is repealed without any form of replacement, local authorities will be unable to take action against late night shops which may be providing cover for criminal activity.

That line of argument rests on the assumption that the repeal of the Shops Act itself will significantly change the pattern of shops' opening hours and thereby will create a problem where none existed before. With great respect to noble Lords, I do not believe that that is so. I do not believe that the repeal will change the pattern of consumer demand. People who want to shop late at night can do so now. Their numbers are unlikely to change substantially as a result of the repeal. The shops which open now are responding to that demand and there is no evidence to suggest either that their numbers will greatly increase or that they are currently causing problems for the police in their pursuit of criminals.

I accept entirely the concern of the noble Lord, Lord Stallard, about crime. He mentioned various places. The Government take very seriously all measures which could contribute to the fight against crime. But, equally, we have to be sure that the measures that we take are appropriate. Any proposal for a new regulatory power— one which at the moment does not exist and which is suggested by the noble Lord's amendment—has to be clearly demonstrated as both necessary and workable.

It is true that some local authorities have used their powers under other legislation to close late night cafes which have been associated with criminal activity. They have claimed that it has reduced the incidence of drug dealing and prostitution by depriving criminals of a place to go and an excuse to linger. Those powers still remain. It has also been said that late night shops could provide alternative cover for those kinds of activities. I do not find that suggestion very persuasive.

In fact, late night shops are quite different from cafés, takeaways and other premises which are dealt with by other legislation. The licensing and control of those premises are not affected by this repeal. Those licensing and controls will continue. It may be possible surreptitiously to pass drugs in a shop, but that can be done in the daytime just as much as at night. Drug pushers are not exclusively night birds. But unlike in a pub or café there is nowhere to sit and other customers are constantly moving about. Shop owners are unlikely to allow drug dealers and prostitutes to remain on their premises simply to ply their trade and criminals are likely to be deterred by the widespread introduction of closed-ciruit television systems in shops, which are now becoming increasingly commonplace.

There has been no suggestion that those shops which open now have become the focus for criminal activity. It is difficult to find any evidence that they would do so in the future. Indeed, in Scotland, to which the proposed power would also extend, the problems of drug dealing are centred on housing estates rather than shopping areas. Late night shops themselves are not seen as presenting any particular kind of threat.

Having said that, perhaps I may now turn from the question of necessity to the issue of practicality: how would the proposed power operate? The noble Lord's amendment includes the requirement to consult with the police and: organisations representative of such persons as appear … to be concerned". But consultation is not evidence. Before any action could be taken there would presumably need to be evidence of a threat to public order and safety or to the efforts to prevent crime. That evidence would have to be available to be tested on appeal. So presumably there would have to be an avenue of appeal, probably to the magistrates' court. That would be a necessary protection for those businesses which are likely to suffer from the imposition of restrictions to their trading hours. In other words, there would have to be some evidence for a local authority to say to this or that shop: "You must close because we believe that the opening of your shop is causing distress to the area". The shop owner would have to have some right of appeal and there would have to be some evidence that the local authority must produce in order to justify the action that they had taken against that shop as opposed to any of the competitors' shops. But if that kind of evidence were available, why could not prosecutions be brought against the criminals and their associates? I do not think it right to punish the shops, which equally happen to be the victims of criminal activities.

It may well be said that the evidence of a problem existing may not be sufficient to bring prosecutions. If that is so, the way is wide open for different interpretations of what is a perceived threat. Arbitrary decisions may well be taken to close some shops and not others. Such discrepancies are likely to apply between local authority areas as well as within the same local authority area. We will have run ourselves straight back into the very problems of the interpretation and practice of weekday shopping which dogged us so much throughout the debate on Sunday trading.

I do not wish in any way to understate the problems faced by the police and local authorities in certain inner cities. Nor do I wish to do anything other than congratulate those who have worked together so successfully in combating crime. The Government support local partnerships against crime. We should like to see them extended into the communities themselves. But I do not believe that the new power proposed by the noble Lord is necessary or appropriate to that task. Late night shops do not currently cause problems and are quite different in kind from those premises which have sometimes been a source of difficulty and which remain unaffected by the repeal.

This is a deregulation Bill. Far from deregulating what is already the law, the noble Lord's amendment introduces regulation where there was no regulation before. If evidence of criminal activity is insufficient for prosecutions, its use to support the imposition of restrictions on trading hours would reintroduce the likelihood of new anomalies in the regulation of shops. There is clear support from consumers for deregulated opening hours. We believe that shop hours should be determined by consumer demand.

The noble Lord, Lord Stallard, asked me whether I would consult the advisers to the Secretary of State about the powers to revive the closing hours. The Bill repeals all the powers in relation to closing hours, and that is our intention. Any further restrictions on closing hours would require further legislation. But for all the reasons that I have given, I do not consider those powers to be appropriate or necessary.

The noble Baroness, Lady Turner, was concerned about the police and their view of the problems which may arise. We take very seriously the views of the police on all matters of crime. Our view is that there is no evidence of serious criminal activity where those shops are concerned at that particular time of night. But if there is, the appropriate sanctions should be brought to bear directly on the criminals.

My noble friend Lord Bridgeman was worried about noise. I understand his concern but I do not believe that a new power would be appropriate. It could represent an increase in regulation; it would introduce new restrictions on trade.

I realise the public concern in relation to noise nuisance and the lack of consideration which some people show to the comfort of others. But I do not believe that this repeal will substantially alter the pattern of shop opening or the noise which is generated by shops. In addition, even if further action against noise is required—I am not persuaded that it is—the problem should be addressed directly through noise legislation rather than indirectly through the medium of closing orders.

I return to the point that I made at the beginning, that the amendment seeks to introduce a restriction preventing shops from opening during the night at a time when, at the moment, they are permitted to open. If the noble Lord wants to address the problem about which he is concerned, the right way to address it is through existing legislation to which local authorities have access and which relates to noise as opposed to shop opening hours.

Lord Stallard

My Lords, I listened with great interest to what the noble Earl said. I confess that I am still disappointed in his reply. We seem to be playing skittles: I put them up and he knocks them down. We have done that during Committee stage, Report stage and now at Third Reading. It is as though the Government are paying lip service to the seriousness of the problem but are not prepared to do anything about it. Nor are they prepared to support what has already been done.

I find it most objectionable that an expensive and intricate exercise called "Operation Welwyn" mounted by the Metropolitan Police in conjunction with Islington and Camden is not to be supported. It was an important operation. I offered to show the video produced by the police on that occasion to any Member who wanted to see it. I am sure that if they saw it they would immediately agree with the amendment. However, I had only one request from someone prepared even to look at it.

That operation will be totally undermined by the reply given by the noble Earl. He is trying to produce arguments that the amendment is dealing with separate shops and so forth. We are dealing with what was a real problem in that area. We are saying that any increase in commercial activity in that area will produce the same results as existed before Operation Welwyn. What happened was that there was a huge operation of commercial activity in the area which created the nuisance. Local authorities and the police dealt with it. The Bill puts us back in the situation where there could be an increase in mat kind of commercial activity which would, in my view and in the view of many other people, including the police, take us back to the position that existed previously.

The noble Earl gave the impression that we had not taken account of previous debates. We exempted Scotland from the application of the Bill. That is stated in the amendment. That was an objection made at a previous stage. We took note of it and left out Scotland. We also dropped the coverage of the whole of an area and said "part of an area. A local authority therefore must limit application to a part of any area. The noble Lord spoke of appeals. We have said in various contributions made that the actions would have to be reasonable to escape legal challenge. There are sufficient safeguards in the amendment to ensure that the local authority is being reasonable. If it is being unreasonable then the police could say so, as could the legal opinions of the various traders, their representatives and organisations. We have therefore covered all the objections raised.

The noble Earl did not raise anything new or constructive. All he did was try to knock down what he considers to be objections. I hope I am wrong, but I fear that as a result of the Bill in its present form we shall be back not just in Camden, but in many other areas of the country, to a situation which may get out of control if we are not careful. I do not intend to divide the House this evening; I want carefully to study and look at the responses. However, I have not said my last word on the matter yet. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 34 [Controls on London lorries: replacement of discretionary exceptions]:

The Parliamentary Under-Secretary of State, Department of Transport (Viscount Goschen) moved Amendment No. 15: Page 28, line 14, leave out from ("that") to ("the") in line 15 and insert ("doing so— (a) will have the effect that less of a burden is imposed on").

The noble Viscount said: My Lords, in moving Amendment No. 15 it may be for the convenience of the House for me to speak also to Amendment No. 17. At Report stage we discussed whether or not our proposals would add to the overall burden on business. As I then made clear, we are confident that they would not do so. To clarify the matter further I undertook to bring forward an amendment to the effect that the Secretary of State could only make an amending order if he were satisfied that the result would impose less of a burden on the carrying on of business. Amendment No. 15 does just that. I beg to move.

Lord Clinton-Davis

My Lords, in this Bill we have to be grateful for small mercies. The Government are still proposing to introduce a scheme which we believe to be fundamentally flawed, undesirable and introduced in the face of a scheme which worked well in the past and protected the environment of the people of London. Nonetheless, it would be churlish not to accept that, following representations made—notably by the noble Baroness, Lady Hamwee, and the noble Lord, Lord Jenkin of Roding—it is better now than before, assuming the amendments are accepted, which is not an unlikely scenario.

The interesting parts of the amendment relate to the: provisions in regard to "less of a burden" and the words, not have the effect of removing any necessary protection", which are to be viewed conjunctively. That is important. But having gone as far as this, it is a pity that the Government did not go a little further.

It may be helpful if the Minister could cover a number of undertakings that we believe to be important. Does it remain the Government's intention to control the movement of heavy lorries in London? Is it their intention to have a workable scheme for me whole of London administered by the boroughs working jointly?

Viscount Goschen

My Lords, with the leave of the House, perhaps I can intervene to say that we will probably cover those points when debating the next group of amendments with Amendment No. 16. Amendments Nos. 15 and 17 are on a more specific point and it may be better to leave the matters raised by the noble Lord to when I introduce Amendment No. 16.

On Question, amendment agreed to.

Viscount Goschen moved Amendment No. 16: Page 28, line 15, at end insert (", and (b) will not have the effect of removing any necessary protection.").

The noble Viscount said: My Lords, in moving Amendment No. 16, for the convenience of the House I shall speak also to Amendment No. 18.

These amendments respond to concerns which were expressed at earlier stages. As I said at Report stage, I entirely understand that noble Lords wish to be confident that this clause will not lead to a reduction in standards of environmental protection for Londoners. I recognise the importance of the protection afforded by the London lorry ban. Let me assure your Lordships once again that we have no intention of undermining that protection in any way. We have repeatedly given assurances that no order would be made under the power in Clause 34 unless the Secretary of State was satisfied that the ban itself could still be enforced effectively.

We believe that removal of the permit scheme would not undermine the effectiveness of the ban itself, although it would change the nature of enforcement activity. For example, failure to display a permit gives rise to many prosecutions at present, but there is no guarantee that all the vehicles seen with plates are conforming with the lorry ban conditions, particularly the tough routeing conditions. It is possible that many drivers who are currently prosecuted for not displaying a permit may in all other respects be conforming with the existing ban, including its routeing conditions. Conversely, there are many vehicles with permits which are not necessarily complying with the ban.

Enforcement will, of course, remain a matter for the London boroughs concerned, but we estimate that administrative savings of some £400,000 per annum will be achieved from abolition of the permit scheme, money which the boroughs could spend on additional, more effective, forms of enforcement such as police roadside stop checks and multi-agency checks. We are therefore confident that the ban can be enforced effectively without a bureaucratic permit regime.

Nevertheless, I accept that, despite the assurances which have been given on behalf of the Government, the feeling of the House is that those assurances should be reflected on the face of the legislation. Amendments Nos. 16 and 18 would therefore provide that the Secretary of State could make an order only if he were satisfied that it would not remove any necessary protection. This will ensure that the Secretary of State cannot make an amending order unless he is satisfied that the ban will be capable of proper enforcement.

I trust that these amendments cover the concerns that were very ably expressed at a previous stage by many noble Lords, including, in particular, the noble Baroness, Lady Hamwee. I commend the amendment to the House.

5.30 p.m.

Lord Clinton-Davis

My Lords, I apologise for having anticipated the debate but what is proposed still does not, in my view, go far enough. As I indicated in my original remarks, there is an advantage in seeing the conjunctive application of the two ideas. That is helpful and it is as a result of representations made by this House in debate, particularly by the noble Baroness, Lady Hamwee, and the noble Lord, Lord Jenkin, that this change has taken place. However, I am not convinced that it goes as far as it should. While the Minister may be satisfied that no degradation will be caused to the environment it may not be the view of the local authorities with which he consults that that will be the case. The Minister could override that view and take a different view altogether from that of the local authorities. I hope that in the light of what the Minister has said that possibility will not arise. Nonetheless, it is certainly conceivable.

The Minister has indicated that it is not the Government's intention to see any deterioration of environmental quality in London. That being the case, will he give an undertaking that if, notwithstanding the introduction of any such scheme, despite the caveats which have now been introduced, it became evident subsequently that there was a substantial deterioration in terms of environmental quality in the capital, the Government would undertake a review of the situation? Although it is helpful to have this process of consultation before the introduction of any scheme, will there be a continuing review of the position or a continuing measure of consultation while the scheme is in operation even after a pilot scheme might have been approved? Will the Government therefore give an undertaking that they would have no hesitation in reviewing the position once it had become clear through substantial evidence that there was a deterioration in the environment?

To that extent it is to be hoped that the Ministers concerned would use their influence to ensure that the Metropolitan Police also participated in future controls throughout the London area at no additional cost to the London boroughs. London boroughs have sufficient impositions made on them in terms of carrying out more and more duties and here they are expected to carry out the duty of enforcement. Presumably they will have little or no additional resources provided to them. What is to be the role of the Metropolitan Police, in conjunction with the boroughs, in ensuring that there is adequate enforcement of this new scheme?

I shall not go into the matter any further. I believe that the question of costs has been grossly exaggerated by the Government and I have evidence to refute what the Government have said in that regard during earlier debates. However, I do not think it would be helpful to go into that all now. What I look for is a response to the specific points that I have made during the course of this brief debate.

Baroness Hamwee

My Lords, I am grateful to the Minister for meeting the noble Lord, Lord Jenkin of Roding, and myself with his noble friend earlier this week, for being prepared to listen again to the concerns that have been expressed during debates on this matter and which were expressed again by us, and for reflecting those in Amendments Nos. 16 and 18. The issue which the noble Lord, Lord Jenkin, and I raised was that of enforceability. Though at first blush the reference to, not have the effect of removing any necessary protection", does not appear quite equivalent to enforceability, I see that it is an appropriate way forward. I am aware that there have been concerns as to how that concept can be expressed. I am further reassured today having realised that the same words are contained earlier in the Bill in Clause 3. I can therefore understand that it is an appropriate way forward.

Your Lordships will know that throughout the proceedings on the Bill I have been deeply unhappy with this clause. I remain unhappy. I am sad that it is included, but if it has to be included—clearly it is going to be—these words are certainly a help. They will ensure that proper scrutiny is given to the different criteria which should apply when and if—it may only be if—an order comes to be made. I do not agree with the Minister that the cost is £400,000 or indeed that that money could straightforwardly be made available for enforcement through other means. I have recently learnt that not only is it a question of costs but that if there is no permit scheme in operation there may well be a difficulty in devising a sign to go on the roadside which will properly reflect the scheme.

I have one further question. Will the Minister confirm—I am sure he will be able to—that in referring to "necessary protection" it is the public at large—the residents of London—who are to be protected?

The Earl of Harrowby

My Lords, it is clear to me that the noble Viscount is well aware of the concerns of the local authorities which are involved in this issue. I should like to underline from my knowledge the degree of feeling that exists on this matter and the worry that the noble Viscount's words will not be proved correct. What I wish particularly to do in rising to speak is to refer to what the noble Lord, Lord Clinton-Davis, said about reviewing the situation. I should like to take the question one stage further. Will the noble Viscount confirm that the Minister would have power to reverse an order once it had been made if it were proved that the. protection was being undermined, something which he has assured us he does not wish to see done?

Viscount Goschen

My Lords, I thank the noble Baroness, Lady Hamwee, for her welcome for this group of amendments and also the noble Lord, Lord Clinton-Davis, although he went further to say that he was much less satisfied with the provisions. Even at this late stage it is worth reinforcing the fact that it has never been our intention to reduce the protection provided by the ban. We believe in the ban and we believe that it will continue to serve Londoners. This amendment addresses the anxieties which were raised by noble Lords at Report stage and at earlier stages when we had very full discussions on these issues.

The noble Lord, Lord Clinton-Davis, brought up the issue of a review and how things will go in future. The important point is that any Secretary of State would have regard to the performance of the ban and the public view and would keep the matter under review. In answer to my noble friend Lord Harrowby, any regulation such as this could be reversed by Parliament.

As a final point, the noble Lord, Lord Clinton-Davis, raised the question of the role of the police. We believe that their role will be absolutely crucial to the enforcement of the ban under our new arrangements. We believe that their role will be to organise and to participate in an increased regime of stop checks which is really the best way of enforcing the ban.

The Earl of Harrowby

My Lords, the Minister said that the regulation can be reversed by Parliament. That was not the question that I asked. The Minister makes the order and parliamentary time is always short. I was asking whether the Minister has the power himself to reverse an order which he has made.

Viscount Goschen

My Lords, yes.

On Question, amendment agreed to.

Viscount Goschen moved Amendments Nos. 17 and 18: Page 28, line 28, leave out from ("satisfied") to ("under") in line 30 and insert: ("(a) that, if he does so, it will still be the case that less of a burden is imposed on the carrying on of business than was imposed before the replacement"). Page 28, line 31, at end insert (", and (b) that doing so will not have the effect of removing any necessary protection.").

On Question, amendments agreed to.

Clause 37 [Power to repeal certain health and safety provisions]:

Baroness Turner of Camden moved Amendment No. 19: Page 30, line 37, at end insert: ("( ) The Secretary of State shall have a duty to ensure that the powers under this section are exercised with a view to maintaining or improving standards of health and safety in the workplace and as they affect members of the public.").

The noble Baroness said: My Lords, I am returning to the whole matter of health and safety provision at Third Reading because, I regret to say, I found the: responses of the Minister to our attempts at amendment on Report rather unsatisfactory.

Perhaps I may make it quite clear that we on this side of the House understand that much of the legislation that the Government desire to remove from the statute book is out of date. We understand the intention. The Minister said at col. 1089 of the Official Report, that it is intended that the powers will be used to remove outdated and redundant law and that the Secretary of State would have the same power with respect to pre-1974 legislation as he already has with regard to post-1974 legislation. But there is a widespread fear that the use of the powers could lead to a decline in standards.

I shall not go over the ground already covered in Committee and Report because I am sure that we all agree on the absolute necessity of maintaining and, if possible, improving standards of health and safety not only for the sake of workforces everywhere, but also in the interests of members of the public who must use locations where work is being carried out or where it is being undertaken in the public domain.

At Report stage the Minister referred to a decline in the number of fatal accidents and of course we are glad when that occurs. Nonetheless, there are still too many accidents which result in grave and sometimes fatal injuries. It is because that is realised among trade unions and employees generally, as well as by the public, that any moves at deregulation by the Government must be against the background that standards will not decline, and everybody must understand that that is so.

I moved a simple amendment to that effect at Report but I, and I believe other noble friends, simply did not understand the Minister's response. The amendment did not seek to remove the powers granted in the Bill at all; it simply sought to write on to the face of the Bill the provision that standards would be maintained. In his response the Minister argued against the amendment on the grounds that, The amendment … would put us and the Health and Safety Commission right back at square one, making the clause unusable".—[Official Report, 13/10/94; col. 1089.]

But since the Minister himself had argued that the intention was to maintain standards anyway, it is difficult to see why an amendment that actually makes that clear would make this clause in the Bill "unusable". However, if we had a clause like this on the face of the Bill it would, I am sure, do much to allay the fears that have been expressed to me in some of the correspondence that I have received.

I repeat that the amendment in no way interferes with the powers within the Bill; it is simply intended to demonstrate that there will be no decline in standards. Therefore, I hope that the Minister, at this very late stage in the passage of the Bill, will reconsider the attitude which he has previously adopted to what I believe is really an anodyne amendment, but one which will have the effect, if it is adopted, of allaying the fears of a great many people outside this House. I beg to move.

5.45 p.m.

Lord Rochester

My Lords, in Committee I said that, on the face of it, an amendment in similar terms to this one, moved by the noble Baroness, Lady Dean of Thornton-le-Fylde, seemed reasonable. However, in response, the noble Lord, Lord Strathclyde, told us, as the noble Baroness, Lady Turner, has repeated today, that while the Health and Safety at Work etc. Act allowed the repeal without replacement of post-1974 legislation, it did not allow the repeal of outdated pre-1974 legislation. The Health and Safety Commission had alerted the Government to the deficiency and at the request of the commission what is now Clause 37 was proposed to remedy what was a technical fault.

That explanation, buttressed for me by the confidence I repose in the Health and Safety Commission, was sufficient to allay my anxieties although clearly not those of the noble Baroness, Lady Turner. That was why, when a similar amendment was moved at Report stage, I did not speak in support of it. On that occasion the noble Lord, Lord Henley, confirmed that the purpose of the clause was simply to remove outdated and redundant legislation. He gave a categoric assurance that the Government had no intention of reducing safety standards.

Nevertheless, a third amendment of the same kind has now been moved by the noble Baroness, Lady Turner. Apart from its substance I question, with due respect to the noble Baroness, whether it is in the general interest that at Third Reading of the Bill we should debate once more what is essentially the same matter. I am sorry that in those circumstances I cannot give positive support to the noble Baroness's amendment.

The Parliamentary Under-Secretary of State (Lord Henley)

My Lords, obviously I fully understand the concerns of the noble Baroness, Lady Turner, that the clause should not be used to undermine necessary safety standards. I had rather hoped that the assurances that I gave at an earlier stage would have been sufficient to have satisfied her about our intentions. I am very grateful for the words of the noble Lord, Lord Rochester, who was obviously satisfied by the assurances which I gave earlier and which my noble friend Lord Strathclyde gave before me.

However, I shall repeat them this evening in the hope that on this occasion they might satisfy the noble Baroness. I repeat the assurance that the Government gave on previous occasions that we have no intention of undermining necessary safety standards. Powers to revoke or repeal health and safety legislation are nothing new. We already have the power to repeal health and safety legislation introduced after 1974 and, moreover, that power has been used over 300 times during the past 20 years and very much to good effect. That power is not subject to the qualification which the noble Baroness is seeking to introduce in Clause 37.

However, health and safety standards have been reduced not one iota during that time. On the contrary— I believe that the noble Baroness was quite right to stress this—we can be very proud in this country of our health and safety record and the fact that standards have improved markedly. As I believe I said earlier, and the noble Baroness quoted me, we now have the lowest rate of fatal injury ever reported. We have health and safety standards which are certainly as good as any of our European partners and, in most cases, far better. This is due, at least in part, to the Health and Safety Commission's achievements in modernising the law. This clause will form part of that process by allowing the revocation or repeal of outdated and irrelevant laws and was introduced in response to the commission's own request for such a power—that is, the tripartite Health and Safety Commission.

The amendment proposed would mean that the power could be used only, with a view to maintaining or improving standards of health and safety". I agree that that may appear to be a reasonable requirement. However, I have to advise the House that it would make the clause unusable in practice.

The problem is that even when provisions have no practical or useful effect—either because the situation they refer to no longer exists or because the provision is covered by other more modern legislation—it would be virtually impossible to be satisfied that they have no effect whatsoever on health and safety standards. But that is in fact what the amendment would require us to do. We have taken legal advice on whether the words "with a view to" might overcome this problem but I am advised that they do not. So the amendment would render the clause useless, and the outdated legislation identified by the commission's Review of Regulation would continue to clutter up the statute book.

If it would help the noble Baroness, I shall give just one example. The Cotton Cloth Factories Regulations 1929 specify the times at which readings must be taken from a hygrometer in weaving sheds. This must, be observed on every day on which any workers are employed in the shed, between 15 and 30 minutes from the commencement of work, between 11 am and 12 noon, and (except on Saturday) between 4 and 5 pm". Most of the requirements of these prescriptive regulations, which now apply to a mere 20 factories in the UK, have already been replaced by modern legislation, and the Health and Safety Commission has recommended that the remaining provisions would be better subsumed in the goal-setting requirements of the Workplace (Health, Safety and Welfare) Regulations. However, I am advised that it would not be possible to revoke these regulations if the amendment were accepted. Although the regulations have no practical, useful effect, it would not be possible to be satisfied that they contributed absolutely nothing to maintaining or improving health and safety standards.

As I said before, and I again repeat it, we have no intention of reducing any necessary health and safety standards. We believe that these assurances—together with the obligation to consult and the affirmative resolution procedure—are full and sufficient safeguards. I therefore invite the noble Baroness to withdraw her amendment.

Baroness Turner of Camden

My Lords, I am obliged to the Minister for the response that he has just made which is very similar to that which he made to the amendment moved on Report. I note that the noble Lord told us this evening that he has taken legal advice, but I remain unconvinced that the inclusion of wording such as I propose on the face of the Bill, which would give an assurance that standards would be maintained or improved, would have the effect that he claims. Nevertheless, at this late stage in the passage of the Bill it is not my intention to seek to divide the House. I am grateful for the assurances that the Minister has put on the record in regard to the Government's intention about maintaining and improving standards. I shall read with interest his words in Hansard tomorrow with a view to assuring myself that they are as adequate as they seem to be at present.

I have every confidence in the Health and Safety Commission, which has done, and continues to do, a very good job in maintaining and improving health and safety standards in this country. I share the view that we have higher standards than many of our European neighbours. However, as I said earlier, my reason for tabling the amendment was that there is a widespread feeling outside the House—I have received letters about it from a number of organisations—that the mere provision of these powers could ultimately result in a decline in standards. We have the Minister's assurances that that will not be so and that the Health and Safety Commission will be involved. Having heard those assurances, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 38 [Inspection of independent schools]:

Lord Peston moved Amendment No. 20: Page 32, line 25, leave out ("may") and insert ("shall").

The noble Lord said: My Lords, Amendment No. 20 relates to Clause 38 which was introduced essentially by the noble Baroness, Lady Young. Over the years that I have been a Member of your Lordships' House, the noble Baroness and I have agreed on an enormous range of matters to do with education. I think that we still do. Unfortunately, when it comes to independent schools we disagree and we simply have to agree to differ. I can only say in mitigation on my side that life in your Lordships' House would be incredibly boring if all that we did was to say how right the noble Baroness is.

Although we disagree, it is not my purpose to re-examine the substance of Clause 38. My purpose in moving Amendment No. 20 is to seek to ensure that, if we have to have Clause 38, it is right rather than wrong.

Amendment No. 20 is not quite a drafting amendment but it is rather technical. If we are to go ahead and have new subsection 87(3), I simply do not understand why the Government have chosen the word "may", given that they want something to happen and are seeking to provide for it appropriately in the Bill. It may be that no one has thought of it, but I am convinced that if we an: to have the provisions, the word should be "shall". It is not quite a technical amendment because there is a certain amount of substance to substituting "shall" for "may". If the Minister reflects upon this, I am sure that he will want the word "shall" rather than "may". The noble Baroness might agree that that is what she wants. That is my only reason for moving the amendment; it is not to go into the detail of the whole thing for a second time. I beg to move.

Baroness Young

My Lords, I was very surprised when I saw Amendments Nos. 20 and 21 which stand in the name of the noble Lord, Lord Peston. He is right that we have frequently agreed on educational matters and it is a matter of much regret that on this particular issue he is so completely misguided. But there we are, you cannot have everything in life.

I was particularly surprised because when I introduced my amendment in Committee, to my great surprise the Labour Benches emptied entirely except for the figure of the noble Lord, Lord Graham, for whom I have the highest admiration, I am sure that he is equal to the entire Labour Benches. What conclusion was I to draw as I got up to speak and that happened? Did everybody suddenly take such a dislike to me that they felt that they must walk out? I flatter myself that that was not the case. The only conclusions, therefore, that I could draw were either that members of the party opposite felt that I was absolutely correct and there was no need to consider the matter further or that they were indifferent to the whole matter and felt that they could leave. It is difficult to know which it was—

Lord Peston

My Lords, my mind has gone—I am convinced of that—but I do not recall walking out. I thought that we had a row. I could have sworn that I was here, but perhaps I am thinking of another occasion. Although I agree that my memory is no longer as reliable as it used to be, I thought that I was here.

Baroness Young

My Lords, I am quite certain that if I had had a row with the noble Lord, Lord Peston, I would have remembered it. I do not think that we had a row. I have been a Member of your Lordships' House for 25 years and what happened was something new in my experience. Of course, it was late at night but I am quite clear that the noble Lord, Lord Peston, was not present, although a number of his colleagues were. The noble Baroness, Lady Hamwee, was present and spoke and I am sure that she will confirm that the Opposition side of the House was almost empty.

What conclusion am I supposed to draw from that but that the Labour Party did not regard this as a matter of such seriousness that it was worth having somebody on their Front Bench—or, indeed, on their Back Benches— to speak to the amendment? I recall the time; it was about 11 p.m., but those of us who are stalwart Members of your Lordships' House think nothing of making speeches at 11 p.m.

There it was. So imagine my surprise when we got to Report and the Government introduced an amendment to meet my amendment and all sorts of people suddenly felt that all sorts of things were wrong with it. I did not answer all the points on Report. I could have done so, but under our proceedings I can speak only once. So I was even more surprised when I saw yet more amendments being tabled on Third Reading.

Here we are, and the noble Lord, Lord Peston, all innocence, says that the first amendment is just technical. He spoke so briefly that I hardly had time to make a note of what he said. I think that he was saying that, if we wanted to get something done, the word "may" was weaker than the word "shall". I am not a lawyer, but I have learned in public life that there is a great deal of difference between "may" and "shall".

Lord Peston

Oh yes, my Lords!

Baroness Young

My Lords, what the word qualifies in this clause makes a difference, and I hope that my noble friend the Minister will not accept the amendment. I thought that the noble Lord had put the amendment down because he was concerned about the qualifications of the ISJC inspection team, and that he wished to ensure that the qualifications were higher. If that was one of the points at the back of his mind, I should like to repeat for the benefit of the House that the ISJC inspection teams came into being because in 1978 the Labour Government removed from independent schools the inspection by the Department of Education and Science which would have given them the qualification which recognised them as efficient. The Government decided to remove that. In order that the schools could satisfy themselves, and even more the parents, that they reached high standards, they introduced the ISJC inspections. In order to satisfy everyone that their standards were high—no one is interested in anything but high standards—the inspectors are always led by a former HMI, and most of the inspectors are former HMIs.

I was rather sad to hear someone say that if they were retired HMIs they were over the hill. If we regarded everyone over 60 as over the hill, your Lordships' House would be a poorer place. That is not a good criticism. Of course there are younger people who are notable exceptions, and we all look up to them greatly. I thought that this might be a serious point, and I wished to answer it.

The second point is that I, and ISJC schools, do not see that a distinction can be drawn between what is known as welfare and what we in schools call pastoral care. It is an interesting philosophical point which we could no doubt discuss at great length. I have asked a great many people what is the difference, and I am bound to say that I have not had a satisfactory answer. If one is responsible for running a boarding school, one of course needs high educational standards, but the pastoral care side of the school is equally important. The child is there for the whole of the term time, and it is important that the whole of his or her life should be taken care of properly. So we too have an interest in what we call pastoral care but which otherwise is called welfare.

The argument has been that welfare can only be looked after by social service departments. Social service departments do a good job for a great many people. They do an especially good job for children who have been removed from their parents, those who are in trouble, those who need care, or something like that; but the children about whom we are talking are children who are in schools under a contractual arrangement between the school and the parent, and they are in a completely different situation.

We do not believe that there is this thing called welfare which is not covered by our own inspections. I place those points on record because it is important for the House to know how important we think it is that the children should be looked after and taken care of properly.

Perhaps I may add just one further point. A criticism was raised about the frequency of inspections. Under the amendment, the schools will all be inspected by Ofsted every 10 years and by the ISJC every 10 years, and of course parents have the right to remove their children at any moment that they are dissatisfied with what is going on. That is a greater guarantee of high standards.

It is not the frequency of inspections that matters. What controls whether or not a school is a good school—whether it is issues of bullying or abuse, all of which are serious and need to be dealt with—is the head teacher and the teacher being in the school every day keeping an eye on everything. As I said when we last discussed this matter on Report, a school received a very good report from the social services department and yet a month later a case of abuse was found. I do not blame the social services in the least for that. They did their job. But we need to watch all the time for that type of thing. Eternal vigilance is needed.

I return now to the issue of "may" and "shall". We are talking about the inspectors' qualifications. When I was discussing the amendment—long before the Report stage—early in September, when I saw a draft of it, I said to the officials that I would like included in it a provision—I was not drafting, and I am not drafting now—which would say that the Secretary of State may not unreasonably withhold consent from someone. It is a provision which goes constantly into Bills, and one of which we are all aware. I was assured that that was unnecessary, because it was implicit in the amendment. I asked for a letter on that point, which I have on my file. A case is quoted supporting that statement. I therefore accepted that as being correct, and I stand by that.

When I looked at the amendment which removes the permissive "may" and replaces it with "shall", that rang alarm bells. I am sorry, perhaps it should not have done so. The noble Lord, Lord Peston, may frown, but one thing is absolutely for sure—I was not born yesterday. I have seen an awful lot of things in my public life. I like to dot the "i"s and cross the "t"s before I settle for something. I am not convinced that this matter is quite as simple as the noble Lord suggests. I am not suggesting of course that he is trying to pull the wool over my eyes. I am sure that he would not even think of that.

Lord Peston

My Lords, no, not in this case.

Baroness Young

My Lords, that is good. I am pleased to hear that. We are obviously agreed on that point. It is for those reasons that I hope my noble friend the Minister will not accept the amendment. I hope on the serious points I can give to the House the assurance as to what is implied by the amendment. I hope that the noble Lord, Lord Peston, will be able to withdraw it.

Baroness Hamwee

My Lords, perhaps I may use this opportunity to apologise to the noble Baroness if she felt that at the previous stage she was inhibited from answering the points which were being made from these Benches and the Labour Benches. A criticism was made then that we had allowed her to speak early in the debate. Let me repeat what I believe the noble Lord, Lord Peston, said on that occasion: there was no thought of gagging her from responding to points which were made; it was a matter of courtesy that, as she had effectively been the progenitor of the amendment, it seemed appropriate that she should speak first.

There are two, or perhaps three, points, upon which I would agree with the noble Baroness. I agree with her that in Committee the Labour Benches, for whatever reason—it was probably the lateness of the hour, which was even later than she said—were pretty empty, and that the row we had was on Report. That indicates the value of the proceedings, and of the fact that we can keep returning to matters. Not everything is obviously important the first time round. The importance dawns upon us subsequently. As the noble Lord, Lord Peston, said, the Bill becomes more difficult to deal with the more we read it.

The issue is an important one. Coincidentally, I received a letter yesterday from a Member of another place who is not of my party. He had not caught up with the Report stage but had read the Hansard of the Committee stage. He told me that, following approaches from a parent with children at a private school, he had been trying to extend the English legislation to such schools in Scotland. This debate will continue. Clearly out there in the world there is real concern about how the matter is dealt with.

Baroness Young

My Lords, I thank the noble Baroness for giving way. Was the school in question a member of the Independent Schools Joint Council? We must remember that the amendment applies only to ISJC schools and not to the others which will continue to be inspected.

Baroness Hamwee

My Lords, I am afraid that I cannot answer that question; but I take the point which the noble Baroness raises. However, the point that I am seeking to make is that the matter is of considerable anxiety to parents and others who are involved with children at independent schools.

I agree with the noble Baroness that the distinction between "may" and "shall" is important. However, I do not agree with her analysis of the position. If she and her colleagues are content with new Section 87B(1)— that there is the possibility of the Secretary of State imposing requirements—they should fear that he shall impose requirements, in particular given the final words: as the Secretary of State thinks fit". The amendment tabled by the noble Lord, Lord Peston, does not cut across the assurances that the noble: Baroness has reported; that consent would not unreasonably be withheld to the approval of particular inspectors. I believe that the alteration proposed by the noble Lord is an important requirement. I should certainly feel somewhat reassured on a matter about which I remain anxious—that the Government would give guidelines that monitoring must be in place, and so forth. That is not to the detriment of inspectors. Indeed, I believe that any inspector worth his salt would welcome the fact that those protections were in place. I support the amendment.

Lord Henley

My Lords, sadly, I have no memories of the earlier stages of the Bill. I suspect that they were conducted by my noble friend Lord Strathclyde prior to his elevation to the Chief Whip's Office. Obviously, I missed the most fascinating of debates and I regret that I come to the subject somewhat late.

We do not believe that the amendment is necessary or desirable. My noble friend Lady Young spoke at length on why the amendment as drafted is undesirable. As the noble Lord said, "may" and "shall" are very different words indeed. My noble friend made a most powerful speech which will have gone a long way towards persuading the House that the amendments are not necessary. Perhaps I may comment briefly on that.

We have already made clear that we would expect it to be necessary to impose some conditions, such as inspections at regular intervals and the inclusion of a person with suitable welfare experience in the inspection team, but in our view it is right that each case should be considered on its merits. I can assure the House that, in deciding what conditions it would be appropriate to impose, the Secretary of State would take fully into account the need to safeguard the welfare of children.

Clause 38 already provides that the Secretary of State must be satisfied that the person to be appointed would be an appropriate person to determine whether the welfare of children provided with accommodation in a boarding school is adequately safeguarded and promoted. We believe that that gives a very full safeguard.

I hope that with those assurances, and following the words of my noble friend Lady Young, the noble Lord will feel it unnecessary to press his amendment.

Lord Peston

My Lords, I thank all noble Lords who have spoken. I believe that the noble Baroness, Lady Young, and I were at cross-purposes. She referred to the Committee stage and I must admit that at that late time of night I was not in the mood for a great row about the future of independent schools. I had in mind the Report stage. At least we can agree on the facts.

I am totally mystified by the view of the noble Baroness and the Government. It is not in the spirit of the Bill to use the word "may". Anyone reading the rest of the Bill would say that there is no shadow of doubt that the Government mean "shall". No ulterior motive is involved; indeed, I believe that I am the innocent party. I had no idea that I should raise such wrath on the part of the noble Baroness, Lady Young. Indeed, had I done so I might not have pursued the amendment. I assumed that the Government must have had in mind "shall", and I remain mystified by the Minister's reply. He cannot possibly mean "may"; he must mean that the Government will impose on the person such requirements. What logical role does "may" have? The whole point of this clause must be "shall", and I am totally bewildered by the Minister's reply.

Given his assurances, I believe that "shall" is the word that he would like to have included. However, he has said that he will not do so and therefore there is no point in wasting everyone's time. Occasionally, I am bewildered that anyone should doubt my motives. As the noble Baroness knows, I am quite capable of producing great mischief; but I assure her that on this occasion I had no intention of doing so. I thought merely that the Government must have wanted "shall" and that if no one else would bring the matter forward I would do so. The Minister is perfectly happy to go on record with what I regard as a totally illogical position and if he insists on doing so, so be it. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

6.15 p.m.

Lord Peston moved Amendment No. 21: Page 32, line 30, at end insert ("following consultation with such persons as he considers appropriate").

The noble Lord said: My Lords, I rise with even greater trepidation. I hope that the noble Baroness will accept my assurance that I shall not go over the background to the clause. She knows my views on independent schools and I do not wish to have a substantive argument.

The expression "following consulting with such persons as he considers appropriate" appears frequently in the Bill and I am somewhat taken aback by the fact that it does not appear in this new section. As it appears throughout the Bill I believe that its omission here is an oversight. I assure the noble Baroness and the Minister that it is merely a case of my disliking the whole clause and if it were up to me we would not have Clause 38. However, as we must, I ask: where is the provision about consultation that occurs elsewhere?

I put the amendment forward in the same spirit and there is no pseudo-conspiracy on my part. I have a great desire to undermine independent schools, but this is not my way. When the time comes to deal with independent schools, I shall express my views and the noble Baroness knows those views. However, given what is in the Bill, the amendment does not relate to that but to the procedures. I hope that she accepts my bona fides on these matters and I look forward to hearing her view. I hope too that on this occasion we shall receive a modicum of logicality from the Minister. I beg to move.

Baroness Young

My Lords, I am particularly pleased that the noble Lord, Lord Peston, has approached his second amendment with trepidation. Obviously, we have absolutely the right relationship. I had not previously realised that and am delighted to hear it. I always welcome his views, in particular on subjects about which he believes that he is right and I am wrong. Of course, I believe that I am right and he is wrong.

I believe that it is unnecessary to add these words to the Bill. The noble Lord will be pleased to hear that I agree about consulting people—the Bill is full of instances where people will be consulted. I am certain that in this case consultations will take place. However, I do not believe that these words are necessary.

We are talking about inspections by the ISJC inspection team. There is no secret about the members of the team; who they are, their qualifications, what they have done, and so forth. There is nothing to hide. If anyone wishes to consult further they can do so. However, I believe the amendment to be unnecessary. Your Lordships' House is always saying that we must not have unnecessary legislation and unnecessary words and therefore I believe that it is better to leave the Bill as printed.

Baroness Hamwee

My Lords, I support the amendment. The noble Baroness, Lady Young, suggests that the words are unnecessary. However, I believe that we should ask whether they will do any harm. I do not believe that an extra half dozen or so words will undermine the drafting process to such an extent that we should be concerned about them as extra words in the legislation. There are far too many words in the Bill as it is. But the words do no harm and since they reflect everything which has been discussed in that context they should be welcomed and added to the Bill.

Lord Henley

My Lords, the idea of drafting which the noble Baroness, Lady Hamwee, has—that one can add words and it does not matter unless they do any harm—is rather extraordinary. On many occasions I have been told by noble Lords on all sides of the House that unnecessary words should be removed from legislation. But I shall not take issue with the noble Baroness because I believe that that is a very minor point.

If my noble friend Lady Young is so successful in producing trepidation in the noble Lord, Lord Peston, I am tempted to unleash her on many more occasions. We may then get through Bills somewhat faster.

Perhaps I may give the appropriate assurance and respond briefly to the noble Lord. I can give him an assurance that it is our practice to undertake appropriate consultation. We would certainly intend to consult generally on the requirements. Indeed, some such consultation has already taken place. However, it may not be necessary to undertake consultation on every single occasion before a further body is appointed.

In those circumstances, I hope that the noble Lord will accept that it is not wise or indeed necessary to have the words proposed by the amendment written into the Bill. I hope that the noble Lord will withdraw the amendment, while accepting on this occasion my logicality.

Lord Peston

My Lords, the reason that I used the word "trepidation" is that the two amendments are not put forward in order to look for trouble. As the noble Baroness knows, no one is better than I am at making trouble. I am just taken aback because I seem to have upset the noble Baroness when I thought that I was being helpful. However, let us leave that on one side.

I must say that the reply of the noble Lord, Lord Henley, was absurd. His reply would apply to the whole of the rest of the Bill. On every occasion on which I asked about consultation he could have said, "Oh, we believe in consultation, and there is no reason to provide for it in the Bill". It seems to me that he cannot get away with his answer; it will not do.

Following what the noble Baroness said, perhaps I may now pretend that there is something suspicious here. I have reached the conclusion that the Government believe that there must be something very special about independent schools because all the principles which appear in the Bill do not apply to those schools. That was not my thought when I tabled the amendment. I thought that they would be discussed on a par with the rest of the Bill.

I am now rather taken aback because on the one occasion that I point out that the Government have forgotten to provide for consultation I am told, "You can rely on the word of the Secretary of State about that. There is no need to include it in the Bill". If the Minister takes that view, that should apply to the rest of the Bill. The Minister's reply looks ridiculous in terms of what Hansard will now contain. In future, the Minister's reply could be used to undermine the rest of the Bill because he suggests that with regard to independent schools the Government are willing to abandon principles on which they built the Bill.

In the end, for my part, it is water off a duck's back. There are bigger fish to fry. I am sorry. That is two clichés and I shall stop at two clichés. I have in my office Every Boy's Bumper Book of Clichés but there is a limit to how many I can introduce on this occasion. For my part, these have not been the happiest few moments in dealing with the Bill. I do not believe that my amendments have been dealt with with the seriousness which they deserve. However, I do not regard wasting time as a useful exercise and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 46 [Duration of licences and grant of interim licences]:

Lord Clinton-Davis moved Amendment No. 22: Page 40, line 8, at end insert (", following a probationary period of 12 months, at the end of which period the licensing authority by whom it was initially granted shall review the grant of the licence. ( ) The matters which the licensing authority shall take into account when carrying out such a review shall include the safety record of the holder of the operator's licence.").

The noble Lord said: My Lords, in moving this amendment I shall speak also to Amendment No. 23.

Amendment No. 22 deals with provisions relating to heavy goods vehicles and seeks to introduce a probationary period of 12 months following which the licensing authority may review the grounds of the licence, and in addition, among the criteria which can be applied by the licensing authority for determining the review, the safety record of the holder of the operator's licence can be taken into account.

Amendment No. 23 deals with criteria in relation to the consideration by traffic commissioners of the; operators of public service vehicles to enable them to take into account the safety record of the operator and the extent to which the operator voluntarily complies with the best safety practice, in particular in relation to schoolchildren who may be carried. That relates to the use of seat-belts. I shall deal later with those issues in a little more detail.

At the outset I must say that I am extremely unhappy about the deregulation provisions with regard to heavy goods vehicles. The 1968 Act introduced strict controls on HGVs and licences were required to be considered on a five-yearly basis. I am not happy about the way in which enforcement has been undertaken. I believe that there was plenty of room for more effective enforcement of the strict rules which were enacted in 1968.

But we are now considering a diminution of those very strict safety requirements and I believe that that is driven by dogma and not by reason. Indeed, I should go so far as to say that there is a strong case for introducing a very much stricter enforcement of the law as it stands today rather than any reduction of it.

I believe that it is right to have a probationary period as we have set out in the amendment because we are entering into an area which needs to be looked at from time to time. The probationary period which we seek to introduce here is perfectly reasonable.

Of course, we cannot avoid all risks that are entailed in the use of heavy goods vehicles but at least some of the risks might be mitigated. The Government are really compelled to argue here, although they have not done so with any great skill or ability, that the present system has substantially failed and that it imposes too heavy a burden on industry. What is the evidence which they would utilise to corroborate that contention? Is there any public demand for a reduction in those standards? What is the evidence which would justify moving in that direction?

I believe that there has been an intensive lobbying campaign by the road haulage industry. It argues that it is perfectly safe to leave all that to market forces. We believe that that notion is, in this particular instance, misguided in the extreme.

In previous debates we have been told that transport managers dread the bureaucratic burden which they face with the five-yearly renewal of the operator's licence. I suppose that that is as useful an argument as any but, nevertheless, it is a discredited argument. That is precisely what one might expect them to say. The industry has wished to diminish the provisions over many years and this is the first Government who have succumbed to that wish since 1968. Those concerned do so on the basis of a report by the taskforce which is heavily biased politically. I have made previous comments about the taskforce and its composition. We simply do not place any great credence upon the views that have been represented.

The Government say that all they are doing is streamlining the system of management. They say, "We are providing for a continuous licensing system". I submit that that is pure camouflage. The background to the entire situation is far removed from that which the Government have represented it to be. It is a story of declining standards. The licensing review boards have confirmed that position. Road hauliers in recession have tried to cut costs and some have even tried to cut comers. I am not blaming the entire industry, but there are significant sections which are prepared to do so. After all, maintenance costs are very heavy and, therefore, they must be reviewed from time to time— just like the philosophy of this Government when it comes to issues affecting safety and the environment.

The findings are that one in four lorry accidents is caused by maintenance faults. I should have thought that that in itself would have justified a tightening of the enforcement of the rules. I say that because the toll in terms of human life is very substantial and the toll in terms of injuries is likewise: it is much too high. That is an enormous drain on the resources of the nation, to say nothing of the intensity of suffering which is caused to people and their families who might be so involved.

Is it not a fact that certain advice was given to the Government in a report which was not published by them but which was circulated, I believe, in Whitehall about a year ago—advice which argued that the extent of illegal operation of lorries was very difficult to determine from national statistics? Did not the report say that illegal operations seem to be endemic to the road transport industry? Further, did not the report say that corners were being cut because of the recession in order to reduce costs? What is the Government's response to that report, rather than the rather tendentious report of the taskforce upon which they rely? I believe that we argue perfectly logically that there is an overwhelming case not for a relaxation of controls but for more effective enforcement of them.

There is a system operating in Germany where an annual test of general road-worthiness takes place, together with an interim six-monthly examination to test the efficiency of brakes. The cost is estimated to be about £30 a lorry. That is not an overwhelming cost. Moreover, it seems to work and the German Minister of Transport takes the view that it is a system which saves lives. Why should that not apply in this country? Perhaps such tragedies as that of Sowerby Bridge when six people were killed by a runaway truck or that at Shelley near Huddersfield last July when, again, a runaway truck smashed into a house, might well be averted.

It was not long ago that the West Yorkshire police found that 70 per cent. of lorries examined in a special operation were faulty. Indeed, four of the 23 that were stopped were so dangerous that prohibition orders were served upon them which prevented them from travelling further until the necessary repairs were made. Of course, it is true to say that that was a special case. It was a special operation. Nevertheless, it is a significant factor which I believe is worth adducing.

The Government cannot deal with all the causes of heavy goods vehicle accidents. One of the problems is that they do not know about such causes. Indeed, they have no information showing how many fatal or serious crashes involving such vehicles were due to brake or maintenance problems. They should know, but they claim not to know. On the other hand, the Vehicle Inspectorate, which is a government agency, has established that of 4,092 lorry accidents that it investigated 983 were caused at least partly by mechanical failure. In its judgment, brake failures and crashes caused 75 deaths. It is all too easy to put the responsibility, as the Government frequently do, on man-made problems; for example, it was the driver's fault. However, I believe that the overwhelming number of fatal accidents in Britain were partly caused by the reasons to which I referred earlier.

It is also interesting to note that, while the overall number of fatal accidents in Britain has been falling, the proportion of accidents involving heavy goods vehicles has been increasing. It seems to increase where road traffic is busiest and freight traffic most concentrated. Inspector Kevin Sharp from the motorway unit of the West Yorkshire police believes that as few as 30 per cent. of lorries on the road are in good working condition. He drew the conclusion that the proposal that we are making will at least partially remedy the harm that will be done by the Government's preparedness to undertake deregulation.

Amendment No. 23 specifically requires the operation of criteria affecting public service vehicles to be followed by the traffic commissioner at the end of a probationary period of 12 months. He would take into account the safety record of the public service vehicle operator. Why should that not be the case? The extent to which the public service vehicle operator voluntarily complies with best safety practice, especially in relation to vehicles carrying school children, would also be an element that he would take into account. I believe that that is a perfectly reasonable proposal. It is odd that the Government have so far shown no indication of being prepared to accept it.

I do not want to recite a whole catalogue of hideous accidents that have taken place, although I have the evidence with me. I have in mind the type of incident which involved 12 children from Hadley Roman Catholic School—a matter referred to by my noble friend Lord Howell when the matter was last debated. The coroner found that, due to the fact that they were not wearing seat belts, the children were thrown from one end of the coach to the other, whereupon a fire started and they were trapped. Indeed, we have heard of many other such incidents, some equally serious while others have been less serious.

However, the Government continue to prevaricate about the use of seat belts. Characteristically, they tend to blame the European Commission for inaction. But they have failed consistently to take action. That point has been taken up by the Director-General (of Directorate-General VII) who deals with transport. The Government are perfectly at liberty to apply Article 36 of the Treaty of Rome which provides that they can undertake provisions dealing with health and safety, among other things, provided that they do not engage in any, disguised restriction on trade or any arbitrary discrimination against competitors". So they could apply higher standards; but, instead, they seek to suggest that the European Commission is at fault. Of course, the Commission is seeking to introduce provisions in that regard. From my own experience, I remember that the British Government were seriously at fault in resisting safety measures which, when I was a Commissioner, I suggested should be undertaken in relation to vehicles of this nature. Indeed, they were hardly in the van of progress at that time.

However, be that as it may, it appears that the previous Secretary of State made a comment on 15th June 1994 which showed that he favoured the use of seat belts. He said: Tragedies like the M.2 coach crash and the deaths of children in crashes in Strathclyde and north Yorkshire have highlighted the potential safety benefits for belts".

The Government ought to be taking action now in regard to the latter I propose to introduce an interim measure which I believe the Government ought to take into account. I see that that amuses the Minister. I do not regard it as a matter for amusement; indeed, it is a most serious matter which has taken a very heavy toll of life. I beg to move.

Viscount Goschen

My Lords, these amendments which we are discussing this evening are identical to those tabled, but not moved, by the noble Lord at the Report stage. I re-emphasise the Government's absolute commitment to maintaining and improving safety on British roads. Our proposals are entirely consistent with this aim, as I will demonstrate. These amendments are in no way necessary to achieve that objective.

We agree that there is a need to monitor carefully the performance of new operators. Special attention is already paid to the operations of those new to the business and the existing powers of traffic commissioners, together with the provisions of this Bill, will ensure that monitoring can be carried out effectively without the need for a probationary period. Were a probationary period to be introduced, it would create a year of uncertainty for operators who are just setting up a new business.

As a matter of practice, under the present system, new operators are given close attention and are invariably visited by the Vehicle Inspectorate within the first 12 months of operation to check that everything is in order. If an operator were found not to be up to scratch, he would face disciplinary action of the traffic commissioner. The move to continuous licensing would not affect this practice or the powers of the commissioner to take action against any operator who, at any time, was shown not to meet the standards required of licence holders. That is the absolute key here.

Continuous licensing does not mean that an operator will have a licence for life to act as he pleases. Disciplinary action can be taken by the traffic commissioner at any time if an operator's performance is unsatisfactory. All that it means is that he will not have to reapply for a licence every five years. Experience has shown that this is an unnecessary administrative burden in terms of time and cost, particularly to goods vehicle operators. For example, in 1993/94, out of some 16,000 applications for replacement goods vehicle operator licences, all but 250 resulted in fresh licences being granted in the terms applied for. Out of that 250, only 100 were refused and the remaining 150 were granted on reduced terms.

All operators are required to notify traffic commissioners if and when they are convicted of relevant offences. As regards PSVs, an operator is additionally required to report to the traffic commissioner any failure or damage to a PSV of a nature calculated to affect the safety of its occupants or of other road-users and reports on prohibitions and defective vehicles detected at roadside checks are sent by the Vehicle Inspectorate to the traffic commissioner.

It is unclear what is meant by the term "best safety practice" in the amendment. Clearly it is the responsibility of the operator to comply with road traffic law and the requirements of the operator licensing system, and the traffic commissioner can take action if he fails to do so. However, it should not be the business of the traffic commissioner to impose his own views of what best practice may or may not be.

Buses and coaches have a good safety record. Mile for mile, it is twice as safe to travel by bus or coach as by car. Statistics also show that the number of people killed or seriously injured in accidents involving buses and coaches has steadily declined, so that it is now 45 per cent. lower than it was in 1979. But the Government are very concerned that measures should be taken to minimise the risks to children. That is why the Secretary of State announced in July that the United Kingdom is to act ahead of the European Union and seek agreement to introduce compulsory fitment of seat belts to all minibuses and coaches used specifically for the transport of children. Some operators are pre-empting the legislation by fitting seat belts to their vehicles in response to passenger demand. It is open to local education authorities to specify these requirements for any vehicles they purchase or hire in for contract work.

But it should be remembered that the objective of the operator licensing system is to ensure that operators fully meet the requirements of the law as it stands rather than to impose the vagaries of "best practice", which, as I have said, is imprecise in its meaning.

The amendments tabled by the noble Lord, Lord Clinton-Davis, are quite unnecessary as it is already open to a traffic commissioner to review the operations of an operator and take disciplinary action against him at any time on the grounds that he has failed to meet the licensing requirements.

Lord Clinton-Davis

My Lords, rather than wait for agreement at European Union level, whether by qualified majority or otherwise, why do the Government not take advantage in this field of Article 36, as I suggested earlier? I told the Minister what Article 36 was about. It gives the Government the opportunity to do this. It has been suggested by Mr. Coleman, as I indicated too, that the Government would be open to do that provided they do not offend the provisions about setting up any discrimination against competitors or any arbitrary barrier to trade.

6.45 p.m.

Viscount Goschen

My Lords, I would say in answer to the point raised by the noble Lord that we are dependent on European legislation acting across the board. We have to allow vehicles meeting current EC standards, which require belts only in the front and other exposed seats, to be freely marketed in the United Kingdom. This applies to British as well as to European manufacturers. For the new rules to be fully effective they must be agreed and implemented throughout the European Union.

Lord Wyatt of Weeford

My Lords, having listened to the noble Lord speaking for the Opposition and to the noble Minister speaking for the Government, the difference between them seems to be that the Government are quite happy to wait for an accident to happen and then take action, whereas the noble Lord on the Opposition Front Bench is saying, "For goodness' sake, take whatever precautions you can beforehand so that an accident does not happen". Anyone who travels long distances along motorways and other roads as I do, will see for himself that many of these vehicles are in a hopeless condition. They cannot possibly be inspected ad hoc, as it were, by the traffic commissioner because how can he be expected to know about them? However, a person could be appointed whose duty it was to inspect those vehicles after such period of time as the noble Lord, Lord Clinton-Davis, suggested. They could be inspected, for example, after 12 months of operation or at five-yearly intervals. Such a process must be right. I cannot see why an operator who has just established himself in business should face uncertainty by knowing that his licence may be taken away at the end of 12 months if his safety record is no good because, if he observes all the rules, he will not be in any danger at all.

Viscount Goschen

My Lords, with the leave of the House, I would remind the House that we are at Third Reading and therefore we should abide by the rules. However, with the leave of the House, I will respond to the noble Lord, Lord Wyatt, by reminding him that this initial check by the Vehicle Inspectorate and any subsequent checks which may be made at any time to confirm that an operator is operating safely and within the terms of his licence are quite separate from the opportunity to review goods vehicle operating centres at five-yearly intervals as provided by the Bill. The noble Lord is quite incorrect in saying that we are waiting for accidents to happen. We have a very good regulatory system and we submit that these checks by the Vehicle Inspectorate are the right way to go forward.

Lord Clinton-Davis

My Lords, I find the Minister's reply very much less than convincing. When he says that, as regards seat belts, the Government are terribly hidebound by European Union law at the moment, I must say that I have already indicated to him that that is not the case. As regards British vehicles, the Government could insist upon higher safety standards subject to the caveats I have mentioned. The Minister has not really responded to that With respect, I think he is wrong in the way that he has referred to the law here. I propose to test the opinion of the House.

6.49 p.m.

On Question, Whether the said amendment (No. 22) shall be agreed to?

Their Lordships divided: Contents, 43; Not-Contents, 101.

Division No.1
CONTENTS
Ailesbury, M.	Kirkhill, L.
Bledisloe, V.	Lockwood, B.
Boston of Faversham, L.	Mar and Kellie, E.
Bruce of Donington, L.	McNair, L.
Carmichael of Kelvingrove, L.	Meston, L.
Clinton-Davis, L.	Mishcon, L.
Cocks of Hartcliffe, L.	Monkswell, L.
Crook, L.	Moran, L.
David, B.	Nicol, B.
Dean of Beswick, L.	Peston, L.
Desai, L.	Portsmouth, Bp.
Dormand of Easington, L.	Richard, L.
	Ripon, BP.
Elis-Thomas, L.	Rochester, L.
Ewing of Kirkford, L.	Rodgers of QUARRY Bank, L.
Farrington of Ribbleton, B.	Ryder of Warsaw, B.
Geraint, L.	Shepherd, L.
Graham of Edmonton, L.	Stoddart of Swindon, L.
Hamwee, B.	Taylor of Blackburn, L.
Haskel, L. [Teller.]	Turner of Camden, B.
Hollis of Heigham, B.	Williams of Elvel, L.
Kilbracken, L.	Wyatt of Weeford, L. [Teller.]

NOT-CONTENTS
Addison, V.	Flather, B.
Aldington, L.	Fraser of Carmyllie, L.
Archer of Weston-Super-Mare, L.	Gisborough, L.
Arran, E [Teller.]	Goschen, V.
Ashboume, L.	Greenway, L.
Astor of Hever, L.	Gridley, L.
Astor, V.	Harmsworth, L.
Attlee, E	Harrowby, E.
Balfour, E.	Harvington, L.
Belstead, L.	Hayhoe, L.
Blaker, L.	Henley, L.
Blatch, B.	Holderness, L.
Brabazon of Tara, L.	HolmPatrick, L.
Broadbridge, L.	Hothfield, L.
Camegy of Lour, B.	Howe, E.
Camock, L.	Huntly, M.
Chesham, L.	Inglewood, L.
Clark of Kempston, L.	Kimball, L.
Colwyn, L.	Kintore, E
Courtown, E.	Lauderdale, E.
Cranborne, V. [Lord Privy Seal.]	Lindsay, E.
Crickhowell, L.	Lindsey and Abingdon, E.
Cross, V.	Liverpool, E.
Cumberlege, B.	Lucas of Chilworth, L.
Dean of Harptree, L.	Lucas, L.
Denham, L.	Lyell, L.
Dixon-Smith, L.	Mackay of Ardbrecknish, L.
Dundonald, E.	McColl of Dulwich, L.
Faithfull, B.	Melville, V.
Ferrers, E.	Mersey, V.
Finsberg, L.	Miller of Hendon, B.

Milverton, L.	Rodger of Earlsferry, L.
Monk Bretton, L.	Seccombe, B.
Morris, L.	Shaw of Northstead, L.
Mountevans, L.	simon of Glaisdale, L.
Mountgarret, V.	Skelmersdale, L.
Mowbray and Stourton, L.	St. john of Bletso, L.
Moyne, L.	Stewartby, L.
Munster, E.	Stockton, E.
Napier of Magdala, L.	Strange, B.
	Strathclyde, L.[Teller.]
Newall, L.	Tebbit, L.
Norrie, L.	Thomas of Gwydir, L.
Northbourne, L.	Torphichen, L.
Northesk, E.	Trumpington, B.
Orkney, E.	Vinson, L.
Park of Monmouth, B.	Vivian, L.
Prior, L.	Wade of Chorlton, L.
Rankeillour, L.	Westmorland, E.
Rawlings, B.	Wynford, L.
Reay, L.	Young, B.

Resolved in the negative, and amendment disagreed to accordingly.

6.57 p.m.

Clause 61 [Duration of licences]:

[Amendment No. 23 not moved.]

Clause 70 [Functions of local authorities]:

Baroness Hollis of Heigham moved Amendment No. 24: Page 62, line 38 at end insert: ("( ) Sections 19 and 20 of the Local Government Finance Act 1982 shall apply to any person authorised by virtue of this section to carry out a function of a local authority as though that person were a member or an employee of the authority.").

The noble Baroness said: My Lords, I beg to move the amendment standing in the names of the noble Lord, Lord Williams of Elvel, and myself. At Report stage, we moved two sets of amendments on the issues of probity. One dealt with quangos, Cabinet Ministers, and so on. The other amendment related to local government probity and audits—issues to which this amendment returns.

Referring to the amendment that we moved at Report stage—it concerned sleaze—the noble Earl, Lord Ferrers, stated at the time that I was "extravagant" in my concerns, that my remarks were "astonishing", my proposals "an absurdity", my anxieties "over the top", and other similarly judicious, balanced and appropriate remarks. We have seen how balanced, judicious and appropriate those remarks were as the events of the past week have unfolded and as the Prime Minister, if not the Minister, has accepted the anxieties exemplified from this side of the Chamber on the issue of sleaze and the need to clean it up. I hope that the Minister will convey to the Prime Minister that we on this side are appreciative of the fact that he at least listened to the concerns expressed on that amendment, even if the Minister felt unable to do so.

However, we explored the provisions of such an amendment at Report stage and we are moving it again for reasons that I hope will become apparent. The provision ensures that where a local authority contracts out an entire function, and not just aspects of that function, the same probity and checks on probity which apply to local authorities should also apply to the contractor.

At Report stage we discussed issues relating to the code of conduct of the ombudsman, and the powers of the auditor. At that stage, the Minister, the noble Lord, Lord Henley, was helpful and clear. He is always clear, but not always helpful. However, he was kind enough to enlarge on some of the points in a letter today which we were proud to receive. Following that discussion at Report stage and the Minister's letter, one point of difference remains, and that is what the amendment is about. Local authority councillors may be surcharged if they act illegally in providing a function, but no such power of surcharge applies to a private contractor who might be guilty of an identical offence, even though the: private contractor is in it for the money in a way that the councillor is not. A councillor may be surcharged for wilfully incurring extra, unnecessary or improper expenditure, even though he perhaps wrongly believes that it was in the best interests of the authority and it was the right thing to do. An example might be delaying setting a rate, which is the kind of thing for which councillors have been surcharged. From my experience, such an action is seldom, if ever, for personal gain. Yet following such a decision, surcharge, bankruptcy, disqualification, even jail and often the loss of a home may follow.

A contractor, motivated not by a sense of public interest—however misinformed that sense of public interest may have been—but by personal financial gain alone, nonetheless escapes such a sanction. Why? After all, local authority functions can already be delegated to employees of the council and those employees, not just the councillors, are liable to surcharge. Why should contractors who are in an arm's length but nonetheless quasi employee relationship be treated differently from the employees themselves?

What happens where council officers or members collude with the contract or illegally? In a report in The Times on 22nd October, a Westminster housing trust was described as set up "to sanitize" discriminatory house sales. Had it worked, the officers and members of the authority would have been liable to surcharge, but not the trustees or employees of the trust. Had their instructions not been put in writing and had the trust acted illegally on a verbal, as opposed to written, authority, the auditor would have been powerless to intervene. In other words, it puts a premium on councillors delegating functions, thus placing those responsibilities beyond the reach of the full powers of the auditor. That is what it means. By delegating functions, councillors can put those functions beyond the reach of the full controls of probity. That is what we are trying to check tonight, because it cannot: be right.

So on the first argument, it is unfair to draw a distinction between, on the one hand, contractors, who are free of surcharge, and, on the other hand, councillors and officers of a local authority and employees of that local authority, who are not. The threat of surcharge, the knowledge that it could happen, would help to clean up the act.

Is it really a problem? Unfortunately, yes. Compulsory competitive tendering and voluntary tendering have led to contracts being won by companies whose parent companies in the United States and France have, I understand, been convicted of improper or corrupt practices under the jurisdiction of their own countries. Waste Management Inc., for example, in the United States has been at odds with state and federal regulators mostly because of violations at its hazardous waste dumps and incinerators. It is my understanding that one of its subsidiaries has bought out the entire Cheshire architects, engineers and surveyors departments.

Another US company, Attwoods, was, I am told, fined, 4.5 million dollars in the United States for fraud. One of its US subsidiaries, Industrial Waste Services, has been the subject of repeated criminal cases.

Alternatively, let us take two French companies: Compagnie Générate des Eaux and Lyonnaise des Eaux, the two major water companies. I gather that both companies have been implicated by French MEPs in recent corruption scandals in France. According to the Financial Times, Lyonnaise des Eaux was implicated in the corruption scandal which this summer brought down M. Carignon, mayor of Grenoble and former communications minister.

All those companies which I have named, and many more, have subsidiary companies in this country. It is crucially important that such practices, which, to my understanding, are apparently carried on by those parent companies in the United States and France, are not imported here. Powers of surcharge would deter any such thought. It is desperately important that we keep and continue to keep local government clean as more and more of its work goes out to subsidiary companies some of whose parent companies have a record of criminal conviction in their own home countries.

If your Lordships will allow me, I will repeat the warning of Peat Marwick: contracting out of public services to private firms is likely to trigger an explosion in fraud and corruption".

The Audit Commission itself is neutral on the subject. It believes that it is a matter of, policy for government to determine".

I hope that your Lordships will determine tonight that the powers of audit should be extended and that the powers of surcharge should be applicable to contractors, as they are in all other walks of local authority life. I beg to move.

Lord Finsberg

My Lords, I listened with growing astonishment to what the noble Baroness said. What she is doing is advocating the practice of visiting the sins of the fathers upon the sons. I could not care less whether companies in any other part of the world are convicted while their subsidiaries tender quite separately for work in this country and are responsible to this country and to the laws of this country.

Much of what was said is hearsay, because the noble Baroness said, "I am told", "I hear". I prefer to rely upon the ability of local government officers and councillors. Like the noble Baroness, I have served 25 years in local government and have great faith in the ability of councillors and officials to probe and advise their councils as to the probity of a firm quoting for work in some contracted out service.

I believe that it would be the height of folly to say that because a company has committed crimes elsewhere, that company's subsidiary is liable to do so here. If it does, then it is liable to the laws of the country. What has been said is that those companies have been convicted in other countries, fined 4 million dollars, etc. If they break the law here, they will be fined. I believe that it is absolutely wrong to draw the comparison that the noble Baroness drew.

Lord Rodgers of Quarry Bank

My Lords, without repeating the powerful arguments of the noble Baroness, Lady Hollis, I wish to associate these Benches with the sentiments behind the amendment. I am surprised that the noble Lord said that he "could not care less"—those were the words that he used. It is possible to argue that it is not a case of the sins of the fathers being visited on the children. It is a rather more complex relationship than that.

It is possible to argue that, if a company commits an offence in one country, of course a subsidiary will not commit a comparable offence in another. However, to say that one could not care less is going much too far. I believe that the Minister would be ill advised to take the view and to repeat in this House that, in deciding whether a company is eligible for a contract here, he could not care less what breaches of law it may perform in another country. I think the Bill would be improved by the addition of the amendment and I await with great interest what the Minister has to say.

Lord Monkswell

My Lords, in rising to support my noble friend's amendment, I bring to the House the experience that I have in both industry and local government. Perhaps I may explain to your Lordships, in industry one of the factors that I found most salutary was the effect on managers of personal liability for their conduct and actions. For example, we may recall the penalties that were imposed by the Health and Safety at Work Act. The risk that individual managers who did not abide by the criteria of that Act would go to prison was immensely salutary in respect of the conduct of managers over matters of health and safety at work.

In other areas of companies' activities where the risk of personal liability for their actions did not exist, sometimes companies would take risks that would be covered by either the company or its insurance company paying up, and therefore individual managers would bear virtually no risk of liability.

Another factor arises from the experience that I have of local government. Here I can attest that risk of personal liability is very significant when very complex decisions have to be made as to conduct and decisions that are made by local councillors. Not only are they advised by their chief officers of the legal implications of the decisions in terms of personal liability, but individual councillors take those warnings very, very seriously, because, unfortunately, these penalties have been visited on a number of councillors throughout the United Kingdom. To suggest that companies can perform the functions of local government, with all the complicated factors that ensue, without the same sort of risks of personal penalty that apply to local councillors, is asking for trouble. That is why I beg the House to support the amendment that has been moved so ably by my noble friend.

Lord Henley

My Lords, when we started debating the provisions in Part II of this Bill, noble Lords opposite said it was scandalous that the responsibility for public service functions was being transferred to the private sector. The Government explained that this was not the case. The Bill provides that responsibility, both in terms of accountability and legal liability, remains very firmly in the public sector. This ensures that the interests of third parties are fully protected.

Now that this point seems to have been taken on board by most, if not all, of the party opposite, the noble Baroness seems to be telling us—certainly that is what the amendment seems to do—that it is a scandal that responsibility has not been transferred to the private sector. That is quite a leap.

The Government stand firmly by the principle that the responsibility for delivering public services, whether through public servants or outside contractors, must remain with those in the public sector on whom statute placed that particular responsibility. That situation should not change unless and until whichever the statute was that imposed that responsibility is amended by Parliament by means of primary legislation in the usual way.

That is the principle that is embodied in the Bill. It ensures that any third party who might have a claim arising out of the acts or omissions of a contractor would be able to make that claim against the public sector organisation, be it a local authority or central government department. That ensures there is no diminution in the protection of the public interest when functions are contracted out by means of the provisions in this Bill.

I can further assure the House that there is no cause for concern that the contracting out provisions create the potential for that avoidance of proper probity in financial affairs. As I have explained, responsibility for the function carried out by a contractor remains very firmly with the local authority, which must ensure that the terms of its contract provide for proper financial control.

Under Clause 72 the authority remains accountable and legally liable for the exercise of the function in question for all purposes. The district auditor would be able to audit as part of the local authority's accounts the contractual arrangements to perform the functions. It is through the terms of the contract and subsequent monitoring of the operation that the local authority has the means to safeguard against impropriety and wilful misconduct by the contractor and to take action if such behaviour should occur. The auditor would have regard to whether the officers and members of an authority had properly considered such questions if any question of surcharge arose.

The priority, obviously, for all of us must be to ensure that, in any local authority service, systems are in place to ensure effective management accountability at every level. A local authority has the power to ensure this through the terms of its contract and by proper management of that contract once it is let. Authorities may also, of course, include terms in contracts to recover any losses which might arise out of a contractor's acts or omissions. Further, any expenditure incurred by the contractor is incurred under the terms of a contract. Limits on discretion to incur expenditure would be set by the terms of that contract. It is the responsibility of the authority, of both members and officers, to set such limits as appropriate when they draw up the contracts. Obviously it is right that they should be answerable for that.

I hope, given the safeguards in the Bill, that I have made clear the principles on which it is based and the responsibilities of local authorities to manage their affairs responsibly. There should be no diminution in the protection of the public interest where functions are carried out. On that basis, I invite the noble Baroness to withdraw her amendment. If, however, she feels unable so to do, I invite the House to reject it.

7.15 p.m.

Baroness Hollis of Heigham

My Lords, I thank the Minister for his reply and I thank other noble Lords who have contributed to this short debate. First, I have to say that I was slightly distressed by the remarks of the noble Lord, Lord Finsberg, who has considerable experience as a former Minister. As the noble Lord, Lord Rodgers, said, the words attributed to him were that he "could not care less" if the companies had convictions elsewhere, so long—

Lord Finsberg

I am grateful to the noble Baroness for giving way. What I implied and intended to mean was that it is "utterly irrelevant". I chose the wrong words and I regret them.

Baroness Hollis of Heigham

My Lords, I am grateful to the noble Lord for clarifying his initial remarks. I understand that that is what he means—in which case I am puzzled now, not by his failure perhaps to grasp the issue but by his lack of logic. Why invent an issue when the track record is there to read? These are parent companies which, on well testified information in reputable newspapers such as the Financial Times, have been convicted of improper practices—corruption, embezzlement, fraud and so on— and have offended against regulations in the countries of their home jurisdiction. Those companies have subsidiaries in this country. Where the noble Lord, Lord Finsberg, myself and noble Lords on this side would entirely agree is that we do not wish to see the importation of those practices here. The only difference between us is on whether the powers of the auditor to surcharge would add to the likelihood of discouraging the import of such practices here.

I cannot believe that the noble Lord, Lord Finsberg, would not agree that, if a contractor had personal liability—as my noble friend Lord Monkswell said—for such an offence (not just company liability, but personal liability) that would be an additional deterrent to the importation of such practices. I cannot believe that the noble Lord, Lord Finsberg, would not agree with us that any additional penalty must be an additional deterrent. As he wishes to deter—and I am sure that there is no division between us on that point—then I am sure that he should be supporting us in this amendment, not opposing us.

The noble Lord, Lord Henley, said that there will be "no diminution in the protection of the public interest" in contracting out. The noble Lord still fails to grasp the key distinction between the contracting out of a service (let us take housing, for example,) such as rent collection —in which clearly the local authority has specified a service level; has specified the contract; has agreed the price after open competition; and continues to maintain a supervisory role. If that service is contracted out and the contractor fails to meet the standards required, the contract will be withdrawn. Very often it is withdrawn—for school meals, cleaning and the like. Clearly, in that case the noble Lord is entirely right that the local authority retains responsibility and powers of surcharge are probably not so appropriate.

What the Minister does not understand—if he does understand he should not have made those remarks—is that when not a service but an entire function, say the entire housing function of an authority, is contracted out, then by definition the local authority has stepped back from that responsibility and handed it to the contractor. It has retained the power of supervision, but at that point it is no longer a function but simply a shopping list of services. That is the difference between a shopping list of services, where responsibility is retained, and a function. The point about a function is that responsibility for the delivery of that service and for the whole array of service is in the hands of the private contractor.

We argue that where that happens—an entire function goes out—the contractor should stand in the same relationship to the public in terms of probity as if it were the local authority which was providing that function, including its employees and its councillors.

Lord Henley

My Lords, perhaps with the leave of the House I may come back on that point. There is simply no distinction between the two. In both cases the responsibility remains with the local authority and what I said earlier stands.

Baroness Hollis of Heigham

My Lords, then could I invite the Minister to define for the House a distinction between a function and a shopping list of services?

Lord Henley

My Lords, as I said, it makes no difference in either case. There is no need for me to draw up a list of differences between functions and services. In either case the responsibility remains with the local authority. It is up to the local authority to draw up the contract in an appropriate manner.

Baroness Hollis of Heigham

My Lords, with the leave of the House, am I right in believing that what the Minister is saying is that the local authority has responsibility but not power? The power has been contracted out to the contractor but the responsibility remains with the local authority for a function over which it has relinquished control and supervision. I hope that the Minister is aware of the green light that he is giving. Many of those involved in local government for many years, which includes many Members of your Lordships' House, have struggled long and hard to keep local government clean. I am sorry to hear the snort from the noble Lord opposite. The standards of probity in local government, as we now know, are far superior to those in many areas of public life —certainly that appeared following the Widdicombe inquiry —and in particular the private sector. It is estimated that there is something like £25 million a year of fraud in local government and £9 billion a year of fraud in the private sector. I am sure that the noble Lord is aware of that.

It has to be said that, if local authorities have failed to retain the power to arrange the service—have vacated the power—but have retained the responsibility for it, there may well be, as Price Waterhouse feared, an increase in corruption. I hope that for the record Ministers are going into this situation with their eyes open. For many decades many of us have struggled to keep local government clean. We are now warned that CCT and VCT without adequate controls are an invitation to some companies to cut corners and to engage in corruption. We are trying to increase the deterrents. The Audit Commission is neutral on this matter. The Minister rejects those deterrents. He and his Government must take responsibility for any subsequent abuse. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Hollis of Heighammoved Amendment No. 25: Before Clause 74, insert the following new clause:

("Discharge of functions by authorities

1. ..—(1) Subject to the provisions of this section, a local authority (a "contracting authority") may agree with any other local authority (a "supplying authority") that the supplying authority shall carry out for the contracting authority any activity or service which the contracting authority is required to, or may legitimately, carry out.
2. (2) An agreement under this section—
1. (a) may provide for activities or services to be carried out by two or more authorities jointly; and
2. (b) may include such terms as to payment as the authorities concerned consider appropriate.
3. (3) Anything requiring to be done by a supplying authority under an agreement under this section shall be treated as one of their statutory functions.
4. (4) This section is without prejudice to any other power under or by virtue of which a local authority may arrange for the carrying out of any of their activities or services by another authority.
5. (5) Subsections (1) to (4) above shall come into effect by an order made by statutory instrument under section 82(4) below and no such order shall be made before the Secretary of State has consulted such persons representative of local authorities as appear to be concerned.").

The noble Baroness said: My Lords, I should like to associate with this amendment Amendment No. 27, which also stands in the names of my noble friend Lord Williams of Elvel and myself.

Amendment No. 25 is about cross-boundary tendering. I had not expected to run this amendment for a second time, but the Minister's reply at Report stage was in some ways sufficiently worrying for us to feel it important to press him further on the matter and seek assurances from him. The amendment would allow one authority to provide a service for another. Why would an authority want to do that? Perhaps I may take as examples two services: street cleaning and archives.

An authority may be required under CCT to put a service out to competitive tender. Let us say it is street cleaning and I offer your Lordships an appropriate scenario. Let us suppose that the contract was won three years ago by a private company. The authority's own in-house team was disbanded and its vehicles, plant and depot sold off. The contract, which had never been entirely satisfactory, is due out again for tender. The market is underdeveloped. The existing contractor has performed poorly and there have been plenty of complaints from the users and clients. However, all the other bids that come in are more costly.

In those circumstances why should not the in-house team—the DSO (the direct service organisation) or DLO (the direct labour organisation) of an adjacent local authority bid for the work? It has won the competition in its own local authority and would bid here in open competition. It would only win the right to provide that service if it won it in open competition by offering the best value for money, that is to say, the cheapest price that would meet the quality specification. Surely it is in the best interests of both the local authority which has that DSO and the local authority which seeks a contractor for its service that it should bid. The authority seeking the contractor will get better value for money; the DSO bidding will have a wider basis of work, more regular work and therefore more cost-effective work. There can surely be no objection, except on ideological grounds. The Government do not want local authority DSOs and DLOs to compete because they fear that they might win; and because they might win, they are forbidden to compete.

At Report stage the Minister's comment was that local authorities were not trading organisations. That comment—which he may or may not repeat tonight— baffles me. DLOs and DSOs under CCT have been constructed precisely to be trading organisations, to make a separation between purchaser and provider and to make a 5 per cent. return on capital. An organisation is required to make a 5 per cent. return on capital and to win the contract in open competition. How can the Minister possibly say that a local authority and its DSOs and DLOs are not trading organisations? All that the Minister is doing is restricting the area in which they can trade and therefore is effectively limiting their economic viability.

The Minister may say that without adequate safeguards taxpayers' money would be put at risk. Perhaps I may use the word "baloney". If the taxpayers' money is not at risk when they performed that service for their own local authority, why is it at risk for any other local authority? It is precisely the expertise of the local authority's in-house DLOs and DSOs—whose experience, skilled and committed staff and appropriate back-up of resources in finance, personnel and administration have allowed them to win the contract in their own authority—which will allow them to produce value for money and therefore savings for an adjacent local authority. I suggest that that is one argument for allowing one organisation to bid for the. contract in another authority.

My second example is one that worried your Lordships in the summer; namely, libraries and archives. Some of the local government proposals that will undoubtedly come before this House may produce situations in which there will be unitary authorities alongside, say, two-tier authorities—counties and districts. Before 1974, there were county boroughs, such as my city, "nested", so to speak, inside a county council, with its urban and rural district councils, and local authorities regularly provided services for each other. My own county borough, the City of Norwich, provided the FE college for the county of Norfolk. It is now unclear whether such arrangements will be legal after the process of local government reorganisation has been completed. It may well be sensible for joint arrangements or lead authority arrangements to be devised. Indeed, it may be essential to introduce them to maintain the morale of staff and the continuity of service. But what did the Minister say at Report stage which so worried us and the noble Baroness, Lady Hamwee? He said: the Government have expressed themselves as willing to look at suggestions which would achieve greater flexibility after reorganisation".

But he also said: the Government will be looking … [at] this issue post-reorganisation".—[Official Report, 18/10/94, col. 174.]

How can local authorities reorganise if they do not know, until they have done it, whether what they have done will turn out to be legal? That is what the Minister is saying: "Go ahead if you wish and we will decide afterwards whether or not what you have done is legal and whether you need a new legal framework". You may, and we may give it to you; or you may, and we may not give it to you; or you may not and we shall not need to give it to you. Nobody knows. That is an absurdity. Cannot the Government clarify the legal framework within which local authorities can make joint arrangements or lead arrangements so that they can re-enter the period of reorganisation with confidence that they are acting legally? Surely that is not unreasonable.

The proposed clause fits neatly into the Government's requirements that local authorities become more commercially oriented. Further, the clause would clarify for local governments that they were acting legally and appropriately and that they certainly would not be eligible for surcharge if they should proceed with joint and lead arrangements. It is surely right that people know what the law is so that they can operate within it. I therefore invite the Minister to accept the amendment. I beg to move.

7.30 p.m.

Lord Rodgers of Quarry Bank

My Lords, the noble Baroness, Lady Hollis, referred to post-reorganisation and quoted Ministers as having said that these were matters which could be dealt with at that time. As I understand it there is no longer going to be much reorganisation and therefore the argument that we should wait until some future date hitherto unknown does not stand up.

I want to approach the amendment in an interrogative way. I lack the recent and deep experience of the noble Baroness, Lady Hollis, in relation to local governments. But for six years, until February this year, I was the director general of the Royal Institute of British Architects. In that capacity I had a good deal to do with local authorities with sizeable architects departments and with the Government's intention to introduce compulsory competitive tendering in that area.

I want to draw the attention of the House to the outstanding architectural achievements of Hampshire County Council, of which some noble Lords may already be aware. It has a first rate county architect and has achieved a great deal. I must say that it was achieved during a period when the leadership of Hampshire County Council was Conservative; in other words, what was achieved was with the full support of the elected local members. As we know, Hampshire schools have not only won architectural awards, but they have also been and remain immensely popular with parents, teachers and pupils.

My question is this. In Hampshire County Council we have an outstanding local authority architects department. The members of staff have great specialist skills in designing schools. Other local authorities come to look at what Hampshire has done. Indeed, other county councils may have a good record in architects' departments, such as Essex and Staffordshire. But the point is that Hampshire has expertise in this area. Do I understand that with the Bill as drafted it will be impossible for the Hampshire county architects department, on a cross-boundary basis, to tender for the design of schools in other counties? I find that extremely hard to believe. Perhaps the Minister will tell me if I am wrong.

If I am wrong my support for the amendment may be qualified. However, I should like some reassurance. It would plainly be nonsense if Hampshire County Council could not tender for the design of schools in other local authorities.

Lord Henley

My Lords, the noble Baroness tabled this amendment at Report stage, seeking to clarify the powers of local authorities to trade across their boundaries. The issue is, I appreciate, somewhat complex, and I hope that I can set out the position more clearly and in more detail now than was possible during the earlier debate.

The noble Baroness had two broad concerns: first, the general question of the scope given to local authorities to undertake work for each other (and specifically the question of whether a direct labour or services organisation may tender for a contract of another local authority); and, secondly, the need to facilitate arrangements for local government reform. On the first broad issue, as the noble Baroness is aware, the powers for local authorities to undertake work for one another are governed by Section 101 of the Local Government Act 1972 and the Local Authorities (Goods and Services) Act 1970. I shall say a little more about them later on. While the Government accept that it is in the taxpayers' interests for local authorities to be able to operate as cost effectively as possible, there are nevertheless countervailing reasons for limiting authorities' powers in that respect.

First—I feel that I should repeat this though the noble Baroness may not like it—local authorities are not created purely as trading organisations. There may be trading organisations within them, but local authorities are there for rather different reasons and purposes. For them to become so without adequate safeguards could put taxpayers' money at risk. Secondly, it could create unfair competition for the private sector which does not have the ultimate security of a tax base to underwrite its risk.

Lord Peston

My Lords, it has limited liability, which is the equivalent.

Lord Henley

My Lords, some companies have limited liability but there are also individuals who trade as individuals who are not in that position. I am saying that local authorities have the ultimate security of a tax base which is much better than the security of being a limited company.

We have, therefore, expressed a willingness to consider proposals from local authorities for greater flexibility, given those caveats. Acknowledging those two conflicting pressures, and being prepared to listen to suggestions for different arrangements is not, I think, arguing for two incompatible aspects as the noble Baroness suggested. It is merely realism. As I understand it, local authorities are intending to put proposals to government in due course.

On the specific point of whether a direct labour or services organisation may tender for a contract from another local authority, the simple answer is that that can happen. However, in England, in doing so, an authority may only use temporarily spare capacity and, if the work is subject to competition legislation, it must also fulfil the requirements governing works contracts in Sections 6 and 7 of the Local Government Act 1988. In Wales the Local Government (Wales) Act 1994 also allows local authorities to undertake cross boundary trading in certain limited circumstances. There are similar provisions in the Local Government (Scotland) Bill.

The noble Baroness also suggested that the amendment proposed would facilitate local government reorganisation. I believe that the powers already available offer sufficient flexibility for authorities affected by reorganisation, to make arrangements for discharge of their functions including delegation and voluntary joint working.

Section 101, to which I referred earlier, gives the authorities the power to arrange for the discharge of functions by authorities in return for payment. Section 112 gives authorities the power to appoint such staff as they think necessary for the proper discharge of those functions. Section 113 gives local authorities the power to place various members of their staff at the disposal of other authorities. Various voluntary joint arrangements can lawfully be made under the powers of Sections 101, 112 and 113 unless expressly excluded by Section 101 or other legislation specific to a particular function. For instance, authority A may draw up an agency agreement with authority B to provide leisure facilities. As part of that agreement authority A could stipulate how it wished the function to be discharged and would retain ultimate responsibility for the function. Authority B would need to provide services to ensure that the function was properly discharged and could employ additional staff for that purpose.

If we can improve upon existing arrangements in the light of proposals from local authorities themselves, we will consider doing so. In the meantime, I see no impediment to reorganisation arising from the existing arrangement.

Perhaps I can turn briefly to the example given by the noble Lord, Lord Rodgers, when he was talking about the architects department and specifically citing the case of Hampshire. I, too, have seen some of its schools and I seem to remember one where a large number of rooms were built in wood. However, I may be misremembering that point.

As I understand it, in order to tender for work in another local authority, the tendering local authority would need to have temporarily spare capacity. If the condition is satisfied in that example, Hampshire County Council could do so under the existing powers. However, as I made clear, I do not see this acting as any impediment to reorganisation. We would certainly welcome the views of the local authority associations as to whether they consider that further developments are necessary.

Lord Peston

My Lords, it would be helpful if the noble Lord could clarify this point. Is he saying that a local authority with excess capacity—for example, the architect's department—could tender under the powers we are discussing in this Bill in terms of contracting out functions? Is that what he is saying?

Lord Henley

My Lords, I am saying that under Section 101 of the Local Government Act 1972 there are already sufficient powers. What the Hampshire County Council architect's department needs to do is show that there is temporarily spare capacity. In other words, we are not giving a carte blanche to the authority to expand its architect's department into a major architectural firm. It is if there is temporarily spare capacity that it would seem that it is a sensible use of that.

Lord Peston

My Lords, if I may interrupt, that is not what the noble Lord, Lord Rodgers, was asking. We are discussing this Bill. He asked about a local authority which was seeking to have a function contracted out under this Bill. He asked whether another local authority—I accept the noble Lord's point about spare capacity—which was able to do the work could simply say, "We understand that you want to do this architectural work. Let us do it". It is nothing to do with the Local Government Act. It is to do with this Bill.

Lord Henley

My Lords, the 1970 Act and the Local Government Act 1972 are the relevant Acts in this case. They are the ones that would give the power to Hampshire County Council on those occasions. We are not talking about what the Bill would do. lit is what the existing legislation would do.

In the light of those assurances, and in the light of the assurances I have given about reorganisation and the confirmation that there will be further discussion on these matters in partnership with local government, I invite the noble Baroness to withdraw her amendment.

Baroness Hollis of Heigham

My Lords, I believe that I should thank the Minister for his reply but I am not entirely sure. When he began I thought he was going helpfully to clarify the matter for us. At the end of that explanation I am almost more confused than I was before I started.

Perhaps I may make two or three points on the noble Lord's remarks. First, he made a distinction. He said that, local authorities are not created purely as trading organisations", but that there may, be trading organisations within them", which was indeed the point that we were making. But it is not a local authority that tenders for another local authority's work. It is the trading organisation within a local authority that would compete for a contract of another local authority. If the Minister agrees with that reading of it, the objection he previously raised is no longer valid, because we are indeed dealing with a trading organisation.

At Report stage the Minister could not support our amendment because he felt that the enterprise was too risky. He appears to be saying tonight that because the organisation has "the ultimate security of a tax base" it is not risky enough. In other words, the organisation cannot fail, and that is therefore unfair to private contractors. I invite the Minister to comment on that. What worries me still more is that I do not understand the point about temporarily spare capacity.

What the Minister is saying, as I understand him, is that the existing Acts empower a local authority with temporarily spare capacity to use that or to make that available to another local authority. That is fine. But what we are seeking in this amendment is that local authorities which have trading organisations, as all local authorities now do, should not be disqualified from competing for a contract of another local authority. Therefore, I ask the Minister whether in future, if a local authority with a good architect's department seeks to tender for the architectural work of building schools in an adjacent authority, under this Bill it will be empowered to do so. I ask the Minister to clarify that point for us.

Lord Henley

My Lords, with the leave of the House—I think that the House is being very tolerant bearing in mind that we are at Third Reading—the Bill does not change the existing arrangement for cross-boundary trading. We are dependent on the 1970 and 1972 Acts. If the noble Baroness can bear with those until further discussions have taken place, that is the best way to go forward.

Baroness Hollis of Heigham

My Lords, as there is so much confusion concerning the understanding of the Minister's input among people who have been involved in local government, it does indeed suggest that we are going to need some clarification here. The words "temporarily spare capacity" have been used. How long is "temporarily"? How much is "spare", and for how long? These are clearly weasel words; but I take the Minister's point that this is a matter that will clearly have to be resolved. We need to read his remarks carefully, and I have no doubt that local authorities will need to press the Minister further. It will not do for local authorities to be seeking to manage change in a climate where they do not know the legal framework in which they are operating. That legal framework has not been clarified as a result of the Minister's response. Nonetheless, with the leave of the House, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 74 [Powers of certain office-holders]:

[Amendment No. 26 not moved.]

Clause 82 [Short title, commencement and extent]:

[Amendment No. 27 not moved.]

7.45 p.m.

Lord Simon of Glaisdalemoved Amendment No. 28: Page 69, line 19, leave out ("day") and insert ("days").

The noble and learned Lord said: My Lords, in moving this amendment, I wish to speak also to Amendment No. 29. I apologise for the fact that they are starred amendments. That was because on the last occasion the noble Lord, Lord Henley, very kindly said that if I withdrew such amendments, he would consider the matter further. However, I was left, unhappily, with the feeling that I had not made my point really clear and so I wrote to the noble Lord. Before putting down any amendments, I waited to receive his reply. The fact that his reply did not satisfy me, as is obvious from the re-tabling of the amendments, does not derogate in any way from my gratitude for the care that he has taken.

As it was originally introduced, this subsection ran: The remaining provisions of this Act … shall come into force on such day as the Secretary of State may by order … appoint; and different days may be so appointed for different provisions or for different purposes".

We succeeded in chipping away at that. The words "for different provisions or" have disappeared. But in my respectful submission nothing is required after "may by order appoint".

The first amendment substitutes "days" (in the plural) for "day". As your Lordships know, by the Interpretation Act the singular includes the plural and the plural includes the singular. It is very much a matter of the style which the draftsman employs. However, if there is a change of usage, as I suggest we should have here, it is a very strong signal to the court on interpretation. If the word "days" is used, it shows beyond any doubt that all the provisions need not be brought in on one day. That is the first amendment.

As I say, the second amendment is to leave out everything after the word "appoint" in line 20. I ventured to say last time that the remaining words are quite unnecessary and that it is inconceivable that any court would hold that without those words the provision may be brought in for different purposes on different days. In his letter the noble Lord said that he was advised that it was not inconceivable. When I spoke last time I ventured to suggest that if there was any doubt about the matter the Law Officers' opinion may be requested. I had said that also in relation to the amendment to Clause 1.

My first question is this: have the Law Officers been asked to advise on this? The noble Lord did not say that in his letter, but it may be that the Law Officers have been asked to advise. If I had been told that they had and that they advised in favour of the Bill as it stands, I would certainly not have put down the amendments. As regards that matter, Sir Robert Andrew recommended in his report on the government legal services that parliamentary counsel should come under the Law Officers' Departments. Of all his recommendations unfortunately that one was not accepted. That is the first point.

The second point is this: I hope that the noble Lord will not think it impertinent when I say that it should be firmly accepted that it is the Minister and not the draftsman who is responsible for the Bill. The Minister must exercise his independent judgment and, dare I say it, when a question is raised which is not in agreement with the drafting of the Bill, it is all the more important that the Minister should form his independent judgment.

Without going into it, last time I mentioned something that happened as regards the Charities Bill. It had a provision that a charity's accounts should be audited if its annual income was more than £100,000 or its annual expenditure was more than £100,000 or both. Everybody said that the words "or both" were quite unnecessary. However, it was argued stoutly that without those words, if the charity's expenditure and income were both over £100,000 there was no requirement for an audit.

In Committee my noble friend Lord Allen of Abbeydale moved to excise those words. The noble Earl, Lord Ferrers, was in charge of the Bill and stuck stoutly by the drafting. He said that he was advised that there might be an ambiguity. My noble and learned friend Lord Brightman was a Member of that Public Bill Committee and he spoke confidently for all the Law Lords. He said that it was quite inconceivable that any of his colleagues would think that those two words were necessary.

My noble friend Lord Allen of Abbeydale returned to the matter at Report stage and the noble Earl in charge of the Bill was equally firm. He said that he was advised that the words were necessary. It was only at Third Reading that he gave way and the words were eliminated. I have since seen in context and in statute that if those words had been necessary in the Charities Act they would have been necessary in subsequent statutes, but they were not included and we have got on perfectly well without them. So I say again that we can get on perfectly well without the words which are sought to be omitted by the second amendment. I beg to move.

Lord Henley

My Lords, obviously I have the greatest respect for the noble and learned Lord's continued vigilance to ensure that the drafting of the Bill is no more complex than is necessary. At previous stages of the Bill the noble and learned Lord pressed us to simplify the provisions of Clause 82 which allow different provisions of the Bill to be commenced on different days for different purposes. In response, I believe that we have to some extent simplified the drafting of the clause by the amendments which we moved at an earlier stage. But having simplified them to a certain extent I have to say, with the greatest respect to the noble and learned Lord, that I cannot go any further. However, I can assure him that we have considered this matter extremely carefully.

The noble and learned Lord has suggested that if the whole of the final part of Clause 82(4) were to be omitted it would be inconceivable that a court would interpret the subsection other than as allowing Ministers to commence a particular provision on different days for different purposes. Having taken further advice on this point, I fear that I have to say to the noble and learned Lord that we must simply agree to differ on it. I appreciate that he asked me to expand a little on the legal advice that we have taken. I can say that we have taken the appropriate advice, but he will be aware that it is not the Government's practice to discuss consideration of legal advice within the Government. I can assure the House that we considered these points very carefully.

Lord Simon of Glaisdale

My Lords, perhaps the Minister will allow me to say that, as a former Law Officer, what he has said is not in accordance with the practice.

Lord Henley

My Lords, I am sorry to say, with the greatest respect to the noble and learned Lord, that that is not now the case. It is not the Government's practice to discuss consideration of legal advice within the Government. I can assure the noble and learned Lord that these matters were considered very carefully.

I now go back to the substance of the amendment. I believe that there is a very real risk that a court might indeed interpret the provision more restrictively if the words, and different days may be so appointed for different purposes were not included, however clear Ministers made it in the House that that was the intention of the provision.

Obviously, I remain in sympathy with the noble and learned Lord's objective in ensuring that the statute book contains no unnecessary words, but I do not believe his amendments are necessary. I am genuinely sorry that I am unable to go further to meet the suggestions which the noble and learned Lord has put forward so eloquently both today and on previous occasions. I hope that he will accept that I have taken the matter as far as I can and that on that basis the noble and learned Lord will withdraw his amendment.

Lord Simon of Glaisdale

My Lords, in view of the lateness of the hour, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 29 not moved.]

Schedule 6 [Striking Off of Non-trading Private Companies: Northern Ireland]:

Lord Henley moved Amendment No. 30: Page 87, line 23 at end insert ("or").

The noble Lord said: My Lords, this is a technical amendment. Its purpose is to resolve an inconsistency between Great Britain and Northern Ireland provisions. I beg to move.

On Question, amendment agreed to.

8 p.m.

Schedule 8 [Schedule to be Inserted in the Betting, Gaming and Lotteries Act 1963 after Schedule 5].

Baroness Turner of Camden moved Amendment No. 31: Page 93, line 6, at end insert: ("and (c) work necessary to ensure that either (a) or (b) above can take place.").

The noble Baroness said: My Lords, on Report, I sought to move an amendment designed to remove the anomaly which I believe is admitted to exist with regard to workers on racetracks, such as greyhound racetracks, who will be expected to work on Sundays. Through the Bill the Government are introducing measures designed to ensure that racetrack workers whose employment is directly concerned with betting would have the protection that is afforded to shop workers by the Sunday Trading Act 1994 should they decide that they do not want to work on Sundays. However, such protection will be available only to workers regarded as "betting workers"—in other words, workers whose work is directly concerned with betting.

On Report, the Minister sought to justify mat at cols. 1029 and 1030 of Hansard, saying that workers throughout the leisure industry had often been expected to work on Sundays. However, until recent legislation, betting was unlawful on Sundays. That is no longer the case and, as people can bet on Sundays, it is only right that betting employees should have the protection of the Sunday Trading Act if they do not want to work on Sundays.

It had been drawn to my attention that that position created anomalies in that employees employed as betting workers on greyhound tracks would have the protection of the Act, but other workers at precisely the same venue, without whom the tracks could not function, would not have such protection. I refer to catering staff, cloakroom attendants and clerical and administrative workers. There could be some difficulty about the position of clerical and administrative workers due to the question of whether they are engaged directly on betting work.

It was pointed out to me on Report—I tend to agree— that the amendment that I then tabled was much too widely drawn and would cover all leisure employees whether or not they had originally been engaged to work on Sundays. I said then that I would endeavour to come back with something a little more specific on Third Reading. I said that it was difficult to avoid all anomalies. I still think that that is the case, but surely there is a much more stark anomaly when people working at the same place have different levels of protection. One group will have the protection of the Sunday Trading Act and can opt out of the obligation to work on Sundays without penalty, while the other group cannot do so. As I said on Report, that anomaly is already being brought to the attention of Members in another place, some of whom are being approached by constituents who work on greyhound racing tracks.

I hope that the Minister will be able to help this evening, because I have tried to devise a form of wording that will be specific to the betting industry and that will cover people working in the betting industry without being applicable across the board to the leisure industry. I believe that that was one of the problems with the amendment that I sought to move in Committee. I beg to move.

Lord Rochester

My Lords, on Report I supported the principle of the amendment moved by the noble Baroness, Lady Turner, which was designed, as she has said, to ensure that people who are employed to enable racing to take place on a Sunday should, like betting workers, enjoy the same employment rights as those accorded to shop workers under the Sunday Trading Act. However, as the noble Baroness acknowledged, that amendment was drawn too widely, covering not only racing but other sporting events also.

Amendment No. 31 has accordingly been drafted more narrowly to ensure that the work to be covered is confined strictly to that set out in Schedule 8(1). Surely it is right that people undertaking any ancillary work that may need to be done to enable a betting office to open on a Sunday for use in effecting betting transactions should have the same employment rights as those engaged on the transactions themselves. I hope that the Minister will accept the amendment on behalf of the Government.

Lord Henley

My Lords, the Bill removes the prohibition which has hitherto been placed on Sunday betting. The Government have therefore agreed that new employment protection rights should be provided for betting workers, in view of the fact that they may well have entered the industry in the perfectly reasonable belief that, due to the current restrictions, they could not be expected to work on Sundays. These rights are introduced in Schedule 8 to the Bill, which the noble Baroness now seeks to amend. I appreciate the noble Baroness's anxieties and that she is making a genuine attempt not to so widen the new rights that they cover all Sunday workers throughout the leisure industry or wherever. However, I have to say quite simply that somewhere the line has to be drawn.

Under the definition of "betting work" in Schedule 8, the new rights will extend to those engaged in all types of work in licensed betting offices, which would not normally have been open for business on a Sunday in the past.

However, the situation at racing tracks is quite different. Many staff there already work on Sundays, for example, to prepare for weekday racing or to oversee other events such as Sunday markets and so on. I believe that such employees may properly be regarded as part of the leisure industry, in which Sunday working is already commonplace. The Government therefore do not consider that special new rights are justified in these cases.

The Government believe that the new rights should continue to be confined to those they are designed to protect: that is, at tracks, those actually involved in betting transactions. Other workers will continue to enjoy the normal protections under their contracts of employment and under employment protection legislation. I hope therefore that the noble Baroness will feel able to withdraw her amendment.

Baroness Turner of Camden

My Lords, I am rather disappointed by the Minister's response in view of the fact that he acknowledges that I have made a genuine attempt to meet the objections to my original amendment which I moved on Report. I do not think that staff who work at racetracks will find the Minister's explanation acceptable. We may very well find that at some time in the future as a result of pressure (perhaps on MPs or in other ways) the Government will have to amend the legislation in order to cope with the fact that people working in the same place have different protections and it is felt that that is neither acceptable nor fair.

I fear that there is no point in pressing this to a vote at this time and with a very thin House, although I am disappointed that it has not been found possible to come to terms with the case that the noble Lord, Lord Rochester, and I have advanced on two occasions. However, having heard what the Minister has said— although I am not at all happy about it and believe that the Government may find that they have to amend the legislation in the not-too-distant future —I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Schedule 16 [Amendments etc. for Facilitating Contracting Out]:

Baroness Hollis of Heighammoved Amendment No. 32: Page 129, line 20, at end insert:

("Local Government Act 1988 (c. 9)

1. —.(1) In paragraph (b) of subsection (10) of section 19 of the Local Government Act 1988 (Provisions supplementary to or consequential on section 17), after the words "permitted by section 18 above" there shall be added the words "or by subsection (10A) below".
2. (2) After subsection (10) of that section, there shall be inserted the following subsection—
615
• "(10A) Nothing in section 17 above shall preclude an authority from including in a draft contract or draft tender for a contract terms or provisions relating to workforce matters and considering the responses to them with regard to the composition of contractors' workforces"
• (3) For subsection (12) there shall be substituted the following subsection—
• "(12) In this section—
• "workforce matters" means matters falling within paragraph (a), but no other paragraph, of subsection (5) of section 17 above;
• and any expression used in section 17 above shall have the same meaning as in this section.").

The noble Baroness said: My Lords, in moving Amendment No. 32, which stands in the names of my noble friend Lord Williams of Elvel and myself, I believe that I need to make a typographical correction to the last two lines of the amendment, which should read: any expression used in this section and section 17 above shall have the same meaning in this section as in that section".

I understand that that is simply a typographical correction which does not affect the sense of the amendment.

The amendment would have the effect of lifting the restriction on local authorities which prevents them from including terms dealing with, for example, the composition of the contractor's workforce in tender documentation and draft contracts through their inclusion in the list of non-commercial considerations in Section 17(5) of the Local Government Act 1988. That would apply to CCT and voluntary competitive tendering alike.

What would it mean? It would mean that a local authority could regard the composition of the workforce as a relevant matter in determining the terms of its draft contract—not the awarding of the contract, but the terms of the draft contract. As a result, it could ensure that the draft contract included references to the long-term unemployed, to a proper proportion of disabled workers, women, ethnic minorities and the like. Why? It would ensure that social gain as well as commercial advantage would flow from the award of such a contract in exactly the same way as a local authority, in awarding a big building contract, might seek planning gain for the local community such as, for example, a large open space. There is no difference in principle.

Why should that be desirable? On Report, the Minister gave us two broadbrush reasons for rejecting such an amendment. The first was that European legislation would not allow any public procurement contract to discriminate against other contractors if there were any restriction as to nationality; in other words, the contract may not contain a local labour clause. However I understand from the letter which the Minister was kind enough to send me that that does not apply to an amendment such as this. The Dutch Beentjes case established that contracts could be required to carry other social objectives such as tackling the problem of disabled people's lack of employment opportunities and the problem of the long-term unemployed, provided that it was not discriminatory against other nationalities by being confined to a particular locality. The amendment is not so discriminatory. So, within the Minister's own definition, it does not offend EC law. I am sure that the Minister will want to confirm that when he replies.

If that is the case, as I believe it is, we are left only with the Minister's second objection to the amendment: that it runs counter to UK law. That is right, which is why we are seeking to change it. The Government, as the Minister said on Report, do not believe that procurement decisions should achieve social objectives. He went on to say that it was a general principle of government policy that social aims such as urban regeneration and equal opportunities should not be pursued through commercial contracts, and that they had a raft of other policies and provisions to support those social aims. Quite so! And it all costs us much more to achieve because the Government allow private contractors to abdicate from social responsibility in their commercial contracts.

The dispute between us is not whether urban regeneration or equal opportunities are desirable—the Minister concedes that they are—but whether those policies can and should be incorporated into commercial contracts. In his letter the Minister says: I do not believe that the case has been made". What does the Minister count as evidence? What information does he require for the case to be made? We have a right to know. The Minister says that the case has not been made, so what would he count as relevant evidence for the case to be made so that it may be possible to return to this point at another time?

I should like to make two points. The first is why should contractors be allowed to opt out of social responsibility in their labour employment practices? We do not allow contractors to opt out of responsibility for environmental considerations— pollution, or waste disposal—although they would if we let them. We do not allow them to opt out of health and safety legislation associated with dangerous substances, noises, fumes, heat, surfaces, temperatures at work, and so forth, although they would if they could. Indeed, the DSS's own departmental research shows that taxpayers subsidise to the tune of over £655 million a year dangerous and irresponsible employers in relation to benefits for industrial injuries which could have been prevented had those employers followed appropriate practices.

Why should labour market social responsibility not also be incorporated into commercial responsibility? Why should it not be privatised? After all, employers do not operate in a vacuum. They need skilled labour, training programmes, key worker housing and the local authority infrastructure in which to operate and make a profit. Why in turn should not their labour practices reflect the partnership?

Secondly, if employers do not embody socially responsible practices in their labour market policies, they may become irresponsible by exporting the costs on to others. When a commercial contractor pays no heed to long-term unemployment or disabled people, but still, for example, brings in labour from outside without consideration, what happens? He undermines other policies that government and local authorities are funding, which therefore become more expensive to achieve. Let me give one brief example. The Government stopped requiring employers to pay a levy to a training board and to train apprentices themselves. As a consequence, employers now do not train. Instead, often they poach. It is cheaper to poach, and poaching is offset by higher wages, or is made possible by offering higher wages which in turn generate a competitive cycle which helps to generate wage inflation. At the same time, government and local authorities have to fund TECs to make good the consequent training deficit. That is all because we do not have employers properly fulfilling their responsibilities for training. Commercial contractors have abdicated from such social responsibility. We want them to continue to carry it.

This is a value-for-money amendment. I hope that even at this 59th minute of the 11th hour it will generate government support. It is an amendment designed to ensure that private contractors do not opt out of the community in which they operate, and that they, too, accept social responsibility for their labour practices. I beg to move.

8.15 p.m.

Lord Henley

My Lords, I do not believe that I can take the noble Baroness much further. There is obviously a wide ideological gulf between the noble Baroness and myself, and I am not going to attempt to bridge it. I suspect that we might have a repeat of the very interesting debate that we had at an earlier stage of the Bill, when we slightly lost track of the Bill itself.

I should like to correct just one small fact. The noble Baroness implied that employers are no longer involving themselves in training. I can assure her that employers are spending something in the order of £20 billion a year on the training of their employees. That figure has not changed much. It did not drop during the recession. The noble Baroness mentioned the letter that I wrote to her, which I hope she found helpful. If I have not already done so, I shall ensure that a copy of my letter is placed in the Library. I should like to quote just one paragraph from it to put into context the noble Baroness's interpretation of the case that I was making in that letter: In the Beentjes case, the court indicated that the clause on long-term unemployment could be held to infringe the principle of non discrimination on grounds of nationality if it appeared that such a condition could only be fulfilled by national firms, or if firms from other member states would find it more difficult to fulfil". As I attempted to explain in the debate, given the need to conform with the requirement of non-discrimination and other principles of EC law, the practical scope for developing lawful contract compliance clauses may be limited. I should say also that the amendment would allow authorities, if they chose, to include in draft contracts and tenders for contracts, terms or provisions relating to the contractors' workforce. Those terms and conditions could include the terms and conditions of employment by contractors of their workers, the composition of the workforce, the arrangements for promotion, transfer or training of staff, or any other opportunities afforded to a contractor's workforce. Such an amendment would give local authorities an unacceptable degree of influence over issues which are properly internal organisational matters for their contractors, and it could well deter competition at the expense of the local authority and its local tax payers.

Again, as I have explained previously to the noble Baroness, both in the House and in the letter from which I have just quoted, powers of the kind that the amendment seeks to permit would not be acceptable. Value-for-money is at the heart of our public procurement policy in the UK. We believe that that policy, which is reflected in Part II of the Local Government Act 1988, and which the amendment seeks to undermine, is the right one.

None of that detracts from our deep commitment to supporting our wider social objectives; for example, on urban regeneration and equal opportunities. However, we do not see contract compliance in general, and the amendment in particular, as the way to achieve those ends. The Government do not believe that the case for pursuing those objectives through commercial contracts has been made. I therefore invite the noble Baroness to withdraw the amendment.

Baroness Hollis of Heigham

My Lords, I thank the Minister for that reply. He was right in saying that there is an ideological gulf between us. That gulf has been widened by his reply. He referred to the fact that the amendment would allow local authorities an unacceptable degree of influence over decisions which belong to the contractor which are properly internal.

Perhaps the Minister did not listen fully to the points being made and with the attentiveness that one might expect. The thrust of the argument was that the decisions are not properly internal. The whole point of the amendment is that they are external in the sense that the decisions that the contractor makes about his labour force have direct implications for the economy and the community in which that activity is taking place. If the contractor chooses not to employ long-term unemployed people, disabled people, ethnic minorities and so forth the needs of those groups must be met and offset by other programmes and patterns of expenditure. Therefore, although one may save £1 for the local authority on the contract, one must spend £2 on making good the exporting of those costs to other programmes.

Why is the Minister so determined to corral and confine his programmes instead of diffusing them, which is sensible, through the activities of all organisations such as private employers, voluntary organisations, local authorities and trade unions across the community? Surely that is what "partnership" and "community regeneration" mean. I am sorry that the Minister has failed to understand that if this country is to regenerate, it needs to build from that basis upwards. That is why so many urban regeneration programmes have failed, as the DTI's research shows. The programmes have not been people-based; they have been property-based. The amendment would allow commercial contracts by enabling socially responsible policies in the labour market to be people-based and not property-based. That would allow all of us further to implement government policies on equal opportunities and urban regeneration with the best possible value for money.

The noble Lord prefers cheapness to value for money. That is a great mistake, but it is too late to change his mind. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Earl Ferrers

My Lords, I beg to move that the Bill do now pass. I cannot help but recall the final report that a young man received when he left school. It began, "All good things come to an end". That was a most apposite thought with regard to the deliberations on this Bill. We have reached the last stage of a complicated Bill. The subjects that it covers reflect its enormous breadth. They have ranged from children to pubs and to the law on charities. We have gone from slaughterhouses to operators' licensing and from hairdressing on Sundays to health and safety. Through it all has rumbled the requirements and obligations of local authorities and of government.

Our debates have not been limited to matters covered by the Bill. In a true innovative capacity not unknown to your Lordships we have debated matters ranging from deregulation for friendly societies to new authorities for national parks and even, by an ingenious device of the noble Lord, Lord Williams of Elvel, new regulations for Lloyd's. The deregulation initiative is a continuing initiative and that has been reflected in the fact that the Bill has grown as a result of the considerations that your Lordships have seen fit to give it.

When the Bill came to this House it contained about 20 specific deregulatory measures. It now contains more than 30, which is an increase of 50 per cent. In today's jargon, I suppose that some would say that that is not bad value for money. I am sure that it would worry the noble and learned Lord, Lord Simon of Glaisdale, who trembles as he sees the statute book growing. That is always a matter of anxiety for him.

We have also added important new clauses in order to improve the enforcement procedures. The Bill will also allow the process of deregulation to continue through use of the new deregulation order-making powers. The contracting-out part of the Bill has also led to a number of debates on a whole host of different subjects. It contains important provisions that will enable those responsible for the provision of public services to seek further improvements in efficiency and effectiveness through competition as well as improvements in quality and savings in costs.

I became involved in the Bill only in its latter stages. My noble friend Lord Strathclyde bore the burden and heat of the day until he found himself propelled into the more military sphere of being Captain of the Gentlemen-at-Arms. I know that he considered that your Lordships had some helpful and useful debates.

As always, the noble Lord, Lord Peston, contributed knowledgeable and pertinent arguments in his usual inimitable style. Although we did not always agree with what he said, we sometimes agreed with him and gave him concessions. I thank him for the courteous way in which he always made his points and contributions and for the understanding manner in which he dealt with us.

The noble Lord became so infected with the Bill that he contracted out some of his responsibilities to the noble Lords, Lord Clinton-Davis and Lord Williams of Elvel, and to the noble Baronesses, Lady Hollis of Heigham and Lady Turner of Camden. They all played a notable part in our debates.

The noble Lords, Lord Rodgers and Lord Tordoff, and the noble Baroness, Lady Hamwee, made important contributions to a complicated subject. I thank them and all noble Lords who have taken part for the way in which they approached our considerations. That enabled the Bill to be given, as it should be given, a thorough examination.

I pay tribute to the way in which noble Lords understood the Bill. It is not an easy Bill—I certainly did not find it easy but there is nothing surprising in that! Those of us who sit on the Government Front Bench have the advantage of a number of skilled professional advisers, as do noble Lords opposite. However, it is never easy in Opposition to deal with such matters and to comprehend everything. That is particularly the case with complicated Bills. I congratulate noble Lords opposite on the way in which they grasped and understood the Bill, which hits been far from easy.

As one would expect in regard to an important Bill such as this, the Cross-Benchers played a valuable role. In particular, the noble and learned Lord, Lord Simon of Glaisdale, was true to form and from Clause 1 to the final clause he made a number of distinguished contributions to our debates. He always reminded us of our obligations to the statute book, what we do to it and what we put on it.

I also thank my noble friends behind me who contributed so much to many of our debates. Many noble Lords participated in debates on the many different subjects. In addition to the noble Lord, Lord Peston, I single out only my noble friends Lord Vinson and Lady Young as having prompted the debates which led to additional clauses on new matters being added to the Bill. I thank my noble friends Lord Henley and Lord Goschen for the considerable heat and burden of the Bill that they carried with their usual charm and competence and their ability to comprehend subjects which would have daunted many lesser mortals.

Regulations are important; we must have them in our national life for a whole variety of purposes. But throughout life there is a tendency to add to things and not to diminish them. The deregulation task force discovered that there were some 3,500 regulations which, in the modern language of today, "impacted" on business. That is a terrible verb. Nowadays people like using terrible verbs; rather like having to "exit" from something! One way or another—and this Bill is one of the ways—the Government hope, in the language of the bruiser, to "deal with" those that are unduly burdensome.

We have already earmarked a quarter of those regulations for action and that must help business; it must make life easier; it must give value for money; and it must enable business to be more competitive. If that is so, business will succeed and the economy of the country will improve. It will also make our lives a great deal easier and simpler.

This is an important piece of legislation, albeit that it has been a difficult piece of legislation for all of your Lordships to take through this House. I believe that the Bill will bring substantial benefits to business, the taxpayer and society as a whole. I commend it to your Lordships.

Moved, That the Bill do now pass.—(Earl Ferrers.)

8.30 p.m.

Lord Peston

My Lords, in responding to and thanking the noble Earl I shall be brief. It is late. But I have to say that I am not in the best of tempers and I would not wish to say anything about one or two aspects of today's deliberations which I should regret tomorrow.

Noble Lords may ask whether my view of the Bill is what it was at the outset and I have to say that it is. I regard it as a constitutional outrage, and to repeat some remarks that I made earlier, when noble Lords and honourable Members in the other place complain about the excess power of the Executive I shall remind them that they voted for the Bill.

Nevertheless, that is not what I wish to say now. My present task is different; namely, to thank noble Lords for their contributions. The Bill was kicked off by the noble Lord, Lord Strathclyde, who did an excellent job with what the noble Earl has described as a very difficult Bill. It is certainly the most difficult piece of legislation with which I have tried to come to grips. The noble Lord, Lord Strathclyde, did an excellent job, but it is no disrespect to him to say that when the noble Earl, Lord Ferrers, came on just after half-time there seemed to be no diminution in performance. I say that with some envy because the Bill is difficult and I was impressed by how the noble Earl took over and was able to handle the rather complex set of issues before us.

I also congratulate the rest of the very powerful team that the Government put up. The noble Lord, Lord Mackay of Ardbrecknish, was on until just after half-time. As usual, he did a first-class job. He seemed to be replaced by the noble Viscount, Lord Goschen. In particular, I am indebted to both of them because they accepted one amendment which I moved which dealt with the anomalous treatment of SeaCat. They responded to my amendment in an excellent way and I am indebted to them for that. Finally, it is always a pleasure to deal with the noble Lord, Lord Henley, because he is extremely forthright and, although we often disagree, it is a pleasure to argue with him. Therefore, the Government fielded an excellent team and from that point of view for me it was an excellent experience.

We also fielded a very powerful team. The noble Earl referred to my subcontracting, but because of the complexities of the Bill I preferred to have various of my noble friends dealing with matters which they understood rather than trying to struggle through as best I could. Therefore, I am indebted to my noble friends Lord Williams of Elvel, Lady Hollis, Lord Clinton-Davis, Lady Turner, Lady Hilton and Lord Howell. In particular, I am indebted to my noble friend Lord Carter who handled some of the most esoteric parts of the Bill, from slaughterhouses on the one hand to matters to do with co-ops on the other. He has asked me to thank the noble Earl in particular for the Government's response to some of the worries of the co-op societies and credit unions. The Government's response was extremely reassuring, as the noble Earl is aware. Therefore, my noble friend wished me to place his thanks for that on record.

I must thank also the noble Baroness, Lady Hamwee, and the noble Lord, Lord Rodgers of Quarry Bank, for their contributions. I thought that the noble Lord, Lord Rodgers of Quarry Bank, made the most important contribution. I assure noble Lords that when a Labour Government are responsible for these matters they will take very seriously the question of regulation and deregulation. The line that we shall pursue will be precisely that recommended by the noble Lord, Lord Rodgers; namely, that there should be an annual deregulation Bill. That makes extremely good sense.

The last person that I have to thank is the noble and learned Lord, Lord Simon of Glaisdale. That is particularly difficult for me because all I ever knew about Henry VIII clauses I was told by the noble and learned Lord, Lord Simon of Glaisdale. As an economist rather than a constitutional lawyer, I had no idea what a Henry VIII clause was until I came to your Lordships' House. The first time the subject was raised I had to ask what it was. I was told that the person who knew about it was the noble and learned Lord, Lord Simon of Glaisdale. He is the expert. Therefore, it is with some regret that, when I argued that the Bill should be rejected outright because it is one massive Henry VIII clause, he disagreed with me. However, I have learnt that you win some, you lose some. But the contributions made by the noble and learned Lord were extremely helpful to us.

I cannot name every other noble Lord who took part in our debates. I merely echo the remarks made by the noble Earl, Lord Ferrers. Many other noble Lords contributed and improved the Bill. We are all indebted to them. I thank them all and I thank the Government's team in particular.

Lord Rodgers of Quarry Bank

My Lords, having listened to what the noble Earl, Lord Ferrers, and the noble Lord, Lord Peston, have said, I feel that we should now be going away for a very long time, perhaps for the Summer Recess. However, my noble friends Lord Tordoff, Lady Hamwee, Lord Rochester and I will be here again tomorrow to pick up the debates where we are leaving off tonight.

For me, this was a new experience. It has been a long time since I have been involved in legislation from Second Reading to the end of Third Reading, and when I was so involved it was in another place. The debates here were infinitely more courteous than those I remember from long ago and I greatly appreciate the contributions made by the noble Earl and all his colleagues. It is too late to list them this evening. I greatly enjoyed too entering into debate together with and sometimes, although not always, agreeing with the noble Lord, Lord Peston.

I was glad to hear that, even if I have not been able to persuade the Government of anything in the course of the debates, I have persuaded Her Majesty's Opposition that there should be an annual deregulation Bill.

I thought that our debates on Chapter I were extremely important and interesting. Of course, that was due in no small part to the contribution of the noble and learned Lord, Lord Simon of Glaisdale. But I have to say—and I hope that this will be regarded only as mischievous—that, whereas I thought that throughout our debates the remarks of the noble Lord, Lord Peston, represented the voice of new Labour, I heard with great interest in the debate last Thursday initiated by the noble and learned Lord, Lord Simon of Glaisdale, the speech of the noble Lord, Lord McIntosh of Haringey, and I thought that that was the old order speaking still. I believe that fundamentally the view on this side of the House between both our parties is that the less secondary legislation we have the better and the more primary legislation there is—the more scrutiny there is —the better that is for the whole parliamentary process.

I wish that we were going to return to the Bill very briefly in three years' time to decide whether it should be renewed in the light of experience. Indeed, that is the one matter that remains which I regret. With no loss of face and no disadvantage, the Government could have agreed to allow the provisions of Chapter I to prevail for three years, at the end of which we could have debated them and decided whether they should be changed.

As I say, I have greatly enjoyed our debates and have profited by and learned from the contributions made by all Members of this House. I am glad to see the Bill now go on its way.

Lord Simon of Glaisdale

My Lords, I wanted to stay to speak to the Motion so that appreciation could be expressed from the Cross-Benches to those who have had to wield the labouring oars throughout the long discussions on the Bill. The noble Earl, Lord Ferrers, never ceases to amaze me. Just before the Summer Recess, I left the House at about midnight just as he was juggling competently with the by no means easy concept of criminal corroboration. Two days later, I came into your Lordships' House and he had changed his job. However, he was equally competent with the concept of caveat emptor, although as a Wykehamist he was nearer to the classical pronunciation than the barbarism of lawyers. I noticed that the noble Lord, Lord Peston, was equally classical and equally conversant on that occasion.

A number of noble Lords have spoken from the "Treasury Bench", but we must acknowledge at this moment when the Bill is being passed the initiation of the legislation by the noble Lord, Lord Strathclyde, and the admirable way that he conducted it on behalf of the Government. I venture to mention only one other noble Lord because he answered a number of my amendments. I refer to the noble Lord, Lord Henley, whose courtesy both from the Dispatch Box and in correspondence was quite exemplary.

I believe that we owe a great deal to the noble Lord, Lord Peston, as, indeed, we do to all the Front-Bench speakers. I say that because, during the early stages of the Bill, the debates went on until the early hours of the morning. It meant that, if the Bill was to be scrutinised at all, the labour fell almost entirely on the few Front-Bench speakers. Latterly, however, we managed to rise much earlier. We owe the noble Lord, Lord Peston, a great deal for that fact. We are most grateful for his good humour at the Dispatch Box which certainly has not lessened his debating power. Of course, he has fielded an exceptional team of experts; but, nevertheless, he has managed them so that the Bill has been scrutinised very closely.

I am glad to see that the noble Lord, Lord Rodgers of Quarry Bank, has recovered from falling off a ladder in the garden. The noble Lord's debating skills have added a great deal to our discussions on the Bill. I believe that the Bill itself is an essay in supply-side economics. From the beginning, I have been itching to ask the noble Lord, Lord Peston, to give us the modern and authoritative explanation of it. I have refrained from so doing because, on the Finance Bill, I asked the noble Lord to explain to us the current economic theory to account for the manic-depressive cycles of the economy. Good naturedly, the noble Lord consented to do so. However, the concept was so abstruse and the terminology so recondite that we rapidly retreated to our familiar sunspots. Noble Lords on the Cross-Benches are most grateful for the way that the noble Lord has conducted the Bill. We are also grateful to the other Cross-Bench speakers and to the noble Lord, Lord Rodgers.

As I said, this seems to be an essay in supply-side economics. The noble Lord, Lord Peston, valuably reminded us at the beginning, by quoting Adam Smith, that the sole object of production is consumption. We have been faced with the fact that some consumer protection on a very wide basis can be so intense as to preclude any production at all at a profit, so the consumer thereby suffers.

Your Lordships take a close interest in Henry VIII clauses and their abuse. However, while considering them we were faced with the fact that, if we were to get the Bill at all as we saw it, it was necessary to vouchsafe considerable Henry VIII power to the Executive. There were three safeguards which we thought were required. The first was an alternative method of scrutiny which we debated last week. Although it is cumbersome, I believe that we can be confident that, next to legislative scrutiny in total Parliament, we have achieved the best that we can. Secondly, we thought that we should have power finally to vote against statutory instruments. That was also conceded last week.

The third thing that we wanted—and I am sorry to say that we did not achieve it—was some term to the extreme powers that are provided by the Bill. The noble Lord, Lord Rodgers, proposed a three-year term, but it was not a complete cut-off; indeed, the term could be renewed. If I may say so, I thought that it was a very grave mistake on the part of the Government not to accept so reasonable an offer. I believe that that is the major blot on the Bill as it now stands. I shall end as I began with an expression of thanks from the Cross-Benches to all noble Lords for the way that they have shaped the Bill.

Earl Ferrers

My Lords, it only falls to me to thank your Lordships for having taken part in this very brief debate proposing that the Bill do now pass. I should like to reiterate my thanks for all the courtesies that have been expressed by noble Lords to the remainder of your Lordships over the conduct of the Bill.

On Question, Bill passed and returned to the Commons with amendments.