Lords Sitting of 28 October 1998

Preamble
The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Oxford.

Lord Bragg
Melvyn Bragg, Esquire, having been created Baron Bragg, of Wigton in the County of Cumbria, for life—Was, in his robes, introduced between the Baroness Castle of Blackburn and the Baroness Jay of Paddington, and made the solemn Affirmation.
Lord Lindsay of Birker—Took the Oath.

The Lord Chancellor: Leave of Absence
The Lord Chancellor (Lord Irvine of Lairg)The Lord Chancellor (Lord Irvine of Lairg): My Lords, before business begins, I take the opportunity to inform the House that I am to attend the opening of the new European Court of Human Rights in Strasbourg on Tuesday 3rd November and will address a meeting of the American College of Trial Lawyers in Rome on Wednesday 4th November, when the House will sit. Accordingly, I trust that the House will grant me leave of absence.

Kazakhstan
2.44 p.m.
Viscount Waverley Viscount Waverley asked Her Majesty's Government:
What is their reaction to the speech by the President of Kazakhstan on 30th September to the people of that country and what practical measures they could support in relation to that speech.
The Parliamentary Under-Secretary of State, Foreign and Commonwealth Office (Baroness Symons of Vernham Dean): My Lords, Her Majesty's Government welcome President Nazarbaev's public commitment to democratic, economic and civil reform in Kazakhstan. We note that presidential elections have now been called for January 1999. We hope that they will be free and fair. We welcome the fact that the Kazakh authorities plan to invite international observers. We expect to co-operate with the Organisation for Security and Co-operation in Europe in monitoring the elections.
The United Kingdom supports Kazakhstan's reform efforts, for example, through the Department for International Development's Know-How Fund. We also support multilateral efforts to strengthen civil society in
1908
Kazakhstan through the activities of the European Union and the Organisation for Security and Co-operation in Europe.
Viscount Waverley: My Lords, Kazakhstan, together with all countries in central Asia, is set to become extremely important to this country. I welcome the Minister's support for the appointment of election monitors to review the process. Will she undertake to look at the matter again in order to ensure that there is sufficient ECGD coverage to accommodate Britain's business community and determine whether British specialists can be mobilised to assist in two of the world's grimmest social and environmental disasters, that of the Aral Sea and the Semipalantinsk nuclear testing region?
Baroness Symons of Vernham Dean: My Lords, I thank the noble Viscount for his welcome of my Answer. The Foreign Secretary has said that this part of the world represents an important development. He made that point in the context of the comprehensive spending review. The noble Viscount is right in saying that trade is a key component of our relationship with Kazakhstan. In 1997, our exports increased by 60 per cent. over the previous year to some £54 million. Exports in 1998 have already exceeded £60 million, so we hope that the upward trend will continue as the Caspian energy sector develops. Export Credits Guarantee Department cover is available and the exposure ceiling was doubled last year. I hope that that is encouraging.
The noble Viscount raised important questions about the Aral Sea. The Department for International Development and the Department of the Environment, Transport and the Regions have been following the disastrous environmental impact of the drying up of the Aral Sea. Two years ago they jointly funded a project in support of the World Bank's Aral Sea programme and more recently funded a self-standing project in Uzbekistan. I hope that the noble Viscount understands that Her Majesty's Government are taking an active role in both those important issues.
Lord Peston: My Lords, I welcome the Minister's response to the noble Viscount's important Question. The words "practical measures" appear in the Question and my noble friend referred to exports. However, does she agree that if Kazakhstan and similar countries are to prosper both economically and democratically they should be able to export? Therefore, countries such as ours and those in the European Union should not impose restraints on trade. Trade is good for their welfare and it is certainly good for their democracy.
Baroness Symons of Vernham Dean: My Lords, I agree with my noble friend Lord Peston. The issues were raised by the Minister of State, my honourable friend Miss Quin, when she visited Kazakhstan from 6th to 9th October. She made a keynote address to those attending the Kazakhstan international oil and gas exhibition in which she underlined the importance which the United Kingdom attaches to Kazakhstan as a trading partner.

1909
Moreover, we have told the Government of Kazakhstan that they need to create the right conditions to encourage foreign investment; notably, a fair and transparent legal regime. A few weeks ago, my honourable friend the Minister for Trade, Mr. Wilson, wrote to the chairman of the State Investment Committee about some of the specific problems faced by United Kingdom companies in Kazakhstan.
Baroness Strange: My Lords, is the Minister aware that last year members of the Kazakhstan Parliament visited the Inter-Parliamentary Union of this Parliament and that they were all extremely friendly and nice?
Baroness Symons of Vernham Dean: My Lords, I am sure that they were extremely friendly and nice and I hope that such exchanges will continue. The Kazakhstan record on democracy in the seven years since independence has been relatively good. However, it is not entirely unblemished. There have been concerns about the conduct of elections and referenda. Opposition parties are permitted. However, there are reports of opposition figures being harassed. I am pleased to receive the report from the noble Baroness, but "friendly and nice" must be reinforced by proper respect for democracy.
Lord Moynihan: My Lords, I preface my question by declaring that in my capacity as managing director of the Independent Power Corporation, with interests in Kazakhstan, I have responded in writing to the president's speech, as requested by the Kazakh Government. In his address, the President of Kazakhstan called political parties,
"the basic building blocks of democracy".
What support do the Government envisage lending to Kazakhstan in relation to the president's call for outside assistance to educate and train political parties in time for next year's national elections?
Baroness Symons of Vernham Dean: My Lords, the support that the Government are giving is largely through the EU and the OSCE. The European Union programme of technical assistance to the Commonwealth of Independent States supports reforms in the sectors of agriculture and agro-industry, structural and institutional reform, and infrastructure development. That includes support for the development of the Kazakh civil service, rural credit improvement and assistance in the fields of privatisation, commercial banking and the development of small and medium-sized enterprises.
The OSCE has recently decided to open a mission in Kazakhstan as part of a strategy to enhance its general presence in central Europe. It is hoped that through those fields it will be possible to concentrate on
1910
activities including election procedures, legislative reform, judicial reform and the very important development of civil society.
Lord Jenkins of Putney: My Lords, will my noble friend agree that Her Majesty's Government are sincere in their pursuance of the elimination of nuclear weapons?
Baroness Symons of Vernham Dean: My Lords, the Government make clear in all their bilateral relationships that they are indeed sincere in their pursuance of the elimination of nuclear weapons.
Baroness Williams of Crosby: My Lords, in view of the Minister's previous answer, is she aware that some of the non-governmental organisations working in Kazakhstan under the European democracy programme are unable to continue their work because of the failure to resolve a problem in relation to the European Human Rights Foundation which was given a contract to continue such work but the contract has still not been concluded after some six months? Will she look into that matter and ask her right honourable friend to raise the issue with the European Commission so that that vital democracy-building work in countries like Kazakhstan can go ahead?
Baroness Symons of Vernham Dean: My Lords, I am very happy to look into the question, as the noble Baroness, Lady Williams of Crosby, suggests. We look forward to the early establishment of an OSCE office in Kazakhstan. We believe that establishing such an office will help to strengthen civil society and will consolidate democratic change in Kazakhstan.
I should make clear that our embassy constantly monitors the progress of the central Asian states and the progress they are making in the field of democratic and civil reform. We and our EU partners will continue to raise our concerns if we feel that all the respective governments—and that obviously includes the Government of Kazakhstan—are not meeting any of their international obligations in that respect.

UN Human Rights Declaration: 50th Anniversary
2.52 p.m.
Lord Goodhart Lord Goodhart asked Her Majesty's Government:
How they propose to mark the fiftieth anniversary of the adoption by the United Nations of the Universal Declaration of Human Rights on 10th December 1948.
Baroness Symons of Vernham Dean: My Lords, the 50th anniversary is an important opportunity to re-affirm the universal nature of human rights. Five decades on, the declaration remains a common standard of achievement for all nations and all people. We are working closely with the United Nations Association

1911
and other NGOs to mark the anniversary in the United Kingdom. This includes meetings, seminars and events covering the full spectrum of human rights issues.
We have encouraged NGOs to use the 50th anniversary commemorations to stimulate young people's interests in human rights. The Foreign Office has funded information packs for all secondary schools which have been enthusiastically received. We are also organising a conference—human rights in the 21st century—attended by delegates from about 30 countries. My right honourable friend the Foreign Secretary addressed an Amnesty festival on 16th October at which he announced a number of important new initiatives.
Lord Goodhart: My Lords, I welcome the Minister's recognition of the importance of the Universal Declaration of Human Rights. Why is it that Her Majesty's Government have in substance left the organisation of the celebratory events to the United Nations Association? Again, while I recognise that the Government have made a great contribution to human rights this year by what is shortly to become the Human Rights Act, could not the Government link that with the 50th anniversary? I accept that there is no possibility of bringing the whole Act into force on 10th December, but will the Government consider bringing part of it into force on that date; in particular, what is now Clause 19 on ministerial compatibility statements? Will the Government lay a commencement order before Parliament on 10th December bringing the rest of the Human Rights Act into force as soon as possible, and not later than 1st October?
Baroness Symons of Vernham Dean: My Lords, what a long supplementary question! The noble Lord raised several issues. This country is celebrating the 50th anniversary in an entirely proper way. My right honourable friend the Prime Minister, the Foreign Secretary and my honourable friend Mr. Lloyd have signed up to Amnesty's Get Up, Sign Up, campaign. I urge others in your Lordships' House who are so minded to do so. We held a seminar at the FCO attended by NGOs, academics, government officials and private sector representatives at which a full range of human rights issues was discussed. We also welcome a full programme of events being organised by the United Nations. This is an international event and 24 such events are being organised by the United Nations. I am happy to give the noble Lord a list of those.
The noble Lord raises other questions which I understand the noble Lord, Lord Lester, raised with my honourable friend Mr. Lloyd at a meeting yesterday. Mr. Lloyd was able to tell the noble Lord, Lord Lester, that a number of issues are being looked at now. For example, the Government have announced a review of the UK's position under various international instruments.
It is important that the Government have been pursuing those issues and the legislation to which the noble Lord referred. He knows that very well and he knows also that I am in no position today to give an undertaking that it will be brought in on 10th December. I hope that that is not a desperate disappointment to the noble Lord. I hardly think
1912
it is. However, I hope that he will acknowledge that in the reviews to which I have referred the Government are sincere in trying to look at their position in that respect.
Lord Hardy of Wath: My Lords, in linking that important anniversary with the Council of Europe, will my noble friend accept that it would be paying tribute to the post-war Labour Government who played such an enormously important part in those developments?
Baroness Symons of Vernham Dean: My Lords, I am sure that all the appropriate tributes will be made. I am trying to impress upon your Lordships that an enormous amount of work is under way on human rights. I have referred to the various reviews which are taking place covering the additional ECHR protocol, the UN optional protocols and the individual petition mechanisms under the ICCPR, the convention on elimination of all forms of racial discrimination, and many other protocols which the United Kingdom Government are examining at present.
Baroness Chalker of Wallasey: My Lords, while not associating myself with the noble Lord, Lord Goodhart, in his supplementary question, I would like to know what position have the Government taken as regards the formation of a human rights centre in London which is being advanced by Amnesty International in order to give training on the proper respect for human rights, both to people in this country and across the world.
Baroness Symons of Vernham Dean: My Lords, the pre-election consultation paper Bringing Rights Home canvassed views on the establishment of a human rights commission, as I am sure the noble Baroness is aware. The Government's priority is to give further effect to ECHR rights in domestic law so that people can enforce those rights in the United Kingdom courts. The establishment of a human rights commission is not, in the Government's view, central to that particular objective.
The Lord Privy Seal (Baroness Jay of Paddington): My Lords, the clock has reached 15 minutes, which is half-way through Question Time. We must move on.

Internet Trading: Tax Receipts
3 p.m.
Lord Newby Lord Newby asked Her Majesty's Government:
What estimates they have made of the effects on corporate tax receipts of the growth of trading on the Internet.
Lord McIntosh of Haringey: My Lords, the Government are examining the effect of the growth of trading on the Internet on corporate and other tax receipts in close consultation with other governments and with the business community. The Organisation

1913
for Economic Co-operation and Development is the key forum in which discussions are taking place and the Government are taking a lead role.
Lord Newby: My Lords, I thank the Minister for that reply and stress his point that the Government should take a leading role in this. In negotiations through the OECD, will as much priority be placed on ensuring that tax is not avoided as ensuring that we do not find ourselves with double taxation, as has been the case up to now?
Lord McIntosh of Haringey: My Lords, one of the principles which came out of the Ottawa Conference earlier this month on OECD was that we should be seeking both to avoid double taxation and to achieve neutrality of taxation. That does not mean that there would need to be any new taxes and there would be no need to have the flat rate "bit tax" which some people have suggested.
Lord Peston: My Lords, can my noble friend clarify this intriguing Question a bit further? The noble Lord, Lord Newby, used the word "avoided". Is tax avoidance or tax evasion the issue here? As I understand it—much as one may think it deplorable—tax avoidance is perfectly legal and therefore it is peculiar that one would single out the Internet as one specific area in which to try to stop tax avoidance. Alternatively, do the Government suspect that trading via the Internet will lead to the total concealment of income so that there will be actual tax evasion?
Lord McIntosh of Haringey: My Lords, we are involved both with tax evasion and tax avoidance. We would be involved with tax evasion if there were to be any significant possibility of those trading on the Internet avoiding identifying themselves, either the customer or the supplier. Part of the international negotiation is to that effect. We are involved with tax avoidance if it is possible for anybody legally to slip through the net. That is why the co-operation of the major trading companies within OECD is so important.
Lord Avebury: My Lords, if somebody in the United Kingdom buys a piece of software by downloading it from a site in the United States, is that transaction subject to VAT? If so, has any money ever been collected for transactions of that nature?
Lord McIntosh of Haringey: My Lords, no. The location of the tax obligation is at the point of supply. The supplier in the United States would be eligible for such sales taxes as are applied in the state or city concerned.

Chile: Relations
3.2 p.m.
Viscount Montgomery of Alamein Viscount Montgomery of Alamein asked Her Majesty's Government:
Whether recent events will affect the United Kingdom's relations with Chile.
Baroness Symons of Vernham Dean: My Lords, we are working hard to make sure that the detention of Senator Pinochet does not affect our wider relations with Chile. The detention is, of course, a matter for the police and the courts. It is not politically motivated. It should not be seen as such—in Chile or anywhere else.
We have very cordial and close working relations with the Government of Chile. We have a shared commitment to free trade and last year our exports went up by 26 per cent. As my right honourable friend the Foreign Secretary said in another place yesterday, the Government are determined to prevent these legal proceedings undermining our excellent relations with the democratic Government of Chile.
Viscount Montgomery of Alamein: My Lords, I thank the noble Baroness for that reply, particularly her opening words. Is she aware that those of us who have been working for many years—in my case 43—to promote trade negotiations in Chile are absolutely dismayed by what is happening? All that good work is being destroyed at a stroke. Furthermore, the situation is chaotic at either end and made worse by the travel advisory notice.
Is the Minister saying that Her Majesty's Government can do nothing to expedite the early return home of an ancient, sick, long time ex-president of a country which has now had nine years of democracy—still very fragile but very important—and where we are now seen, unfortunately and unjustly, as the villains of the piece? It is through no fault of our own; it is a quarrel between Spain and Chile and we are caught in the middle.
Baroness Symons of Vernham Dean: My Lords, I am sure that the whole House will acknowledge the noble Viscount's great knowledge and expertise in relation to Latin America as a whole. The Government will continue to explain carefully that in Britain it is not politicians who decide who is arrested and who is not. The Government will also continue to explain, calmly and sensibly, that nothing that has happened should undermine our good relations with Chile. Equally, the Government will not undermine the rule of law in this country. The separation of powers between politics and the courts is crucial to the integrity of the rule of law. We cannot interfere with the process currently under legal scrutiny. We know that the Chilean Government have worked hard to promote democracy, trade and good government in Chile. We hope that they will understand that we, as a democracy, cannot intervene in the judicial process.
Lord Clinton-Davis: My Lords, I admire the answers of my noble friend. But does she agree that there can be

1915
nothing more significant, even the importance of trade—I speak as a former Trade Minister, an outstandingly successful one, of course—than respect for the rule of law? Did my noble friend draw an inference from what the noble Viscount was saying that, in his view, it would be possible to override what appears to be a legal request by simply averting one's gaze from the due process of law? Will my noble friend agree also that it is extremely unhelpful when a former Prime Minister, to whom I gave notice that I might intervene on this Question, says in effect that ideological concerns about the past should be of paramount importance in this regard?
Baroness Symons of Vernham Dean: My Lords, I am sure that the noble Viscount, Lord Montgomery of Alamein, respects the rule of law as much as any of us. I hope that we will not draw those inferences from what he said. I have explained the position to your Lordships as clearly as I can. This is a judicial, not a political, matter. The police acted on a request from the Spanish authorities for the provisional arrest of Senator Pinochet pending a formal request for extradition. The Government must allow the judicial process to take its course. The noble Viscount, I understand, is concerned about the wider implications in Chile. The Government are willing to listen to the concerns of the Chilean Government and to work hard to limit any damage to bilateral relations. I give that assurance to the noble Viscount as sincerely as he put his Question to me.
Lord Hurd of Westwell: My Lords, in spite of what the noble Baroness says, the Foreign Secretary said in another place yesterday that there are areas of discretion available to the Home Secretary after due process of law. Can the Minister clarify that statement? Does it mean that those areas of discretion are only available to the Home Secretary after every conceivable legal argument has been heard, given that lawyers and legal actions seem to be crowding in from all over Europe day by day? Does it mean that this problem could persist almost indefinitely? Is not that a frightening prospect, given all the evidence from many shades of opinion in Chile indicating that the settlement under which that country moved towards democracy is in danger of being ripped apart by the situation here?
Baroness Symons of Vernham Dean: My Lords, I can only reiterate to the noble Lord, Lord Hurd, that this is a question for the courts. The noble Lord will know that these matters are being dealt with in court today. He asks specific questions relating to immunity and access by my right honourable friend the Home Secretary. If that had really been the point that noble Lords wanted to put forward, they might have tabled a Question which more closely expressed it. Questions of immunity are being looked at today in court and nothing I am prepared to say at the Dispatch Box is going to prejudice that. Senator Pinochet's diplomatic passport did not entitle him to diplomatic immunity. Under the Vienna Convention only members of a permanent diplomatic mission are entitled to diplomatic immunity.
1916
But there are grey areas, which is why this matter is in court today. We shall know what the Lord Chief Justice has said before the end of the afternoon.
Lord Lester of Herne Hill: My Lords, can the Minister confirm that the previous Conservative government, like the present Government, was party to the international treaties providing for the trial and conviction of people alleged to have committed crimes of genocide and crimes against humanity, and to the extradition arrangements that would enable such persons to be extradited to a country with a court of competent jurisdiction? Can the Minister say whether there has been any change in this Government's policy compared to that of the previous government, including respecting the rule of law?
Baroness Symons of Vernham Dean: My Lords, I do not believe that the position is any different. The law remains the same. It is the same now as it was under the previous government. Are the noble Lord, Lord Hurd, and other noble Lords really suggesting that we did not go through the due process of law? I imagine that that is precisely what the party opposite would have done and it is what we are doing. The law must take its course over Senator Pinochet or anyone else.
Lord Ackner: My Lords, does the Minister agree that, after the due process of law has been carried through, there is a residual discretion in the Home Secretary as to whether or not any order made by the court should have effect?
Baroness Symons of Vernham Dean: Yes, my Lords. The Home Secretary will consider the formal request which must be certified with the seal of the Spanish Ministry of Justice, against the requirements of the Extradition Act 1989. I am sure that the noble and learned Lord is aware of that. My right honourable friend must decide—usually within seven days of receipt of a formal request—whether to issue an authority to proceed. He will consider, among other issues, whether the offences are extradition crimes; whether the request is properly authenticated; whether the offences are of a political character; and whether there are any compassionate circumstances. He does so on every request.
The Lord Bishop of Oxford: My Lords, today I received a letter from a friend telling me how his sister was tortured in a terrible way when General Pinochet was in power. She suffered electric shocks to the most intimate parts of her body. I pay deep respect, of course, to the due processes of the law and to all the answers that the Minister has given, but is it not important that the House should be reminded that terrible things have happened and that people guilty of such matters must be brought before the courts?
Baroness Symons of Vernham Dean: My Lords, I understand why the right reverend Prelate raises these issues. My own view is that we must look very carefully only at the judicial issue before us today. That is

1917
understood by Ministers in Chile. The Foreign Secretary met the Deputy Foreign Minister of Chile on 24th October. He had a telephone conversation with the Foreign Minister of Chile on 17th October. Both conversations were entirely cordial. I hope that the noble Viscount, Lord Montgomery, is reassured on those points. Both Chilean Ministers understood that the United Kingdom cannot intervene in a case which is before the courts. I am sorry that that point has not also been taken by the party opposite.

Business
Lord Carter: My Lords, at a convenient moment after 3.30 p.m. my noble friend Lady Hollis of Heigham will, with the leave of the House, repeat a Statement that has been made in another place on Welfare Reform and Uprating of Benefits.

Scotland Bill
3.15 p.m.
The Parliamentary Under-Secretary of State, Scottish Office (Lord Sewel): My Lords, I beg to move that the Bill be now further considered on Report.
Moved, That the Bill be further considered on Report.—(Lord Sewel.)
On Question, Motion agreed to.
Clause 23 [Power to call for witnesses and documents]:
The Lord Advocate (Lord Hardie)The Lord Advocate (Lord Hardie) moved Amendment No. 101:
Page 11, line 26, leave out from beginning to ("in") in line 10 on page 12 and insert ("concerning any subject for which any member of the Scottish Executive has general responsibility.
(1A) Subject to subsection (1B), the Parliament may impose such a requirement on a person outside Scotland only in connection with the discharge by him of—

(a) functions of the Scottish Administration, or

(b) functions of a Scottish public authority or cross-border public authority, or Border rivers functions (within the meaning of section 103(4)), which concern a subject for which any member of the Scottish Executive has general responsibility.

(1B) In relation to the exercise of functions of a Minister of the Crown, the Parliament may not impose such a requirement on—

(a) the Minister of the Crown, or

(b) a person in Crown employment, within the meaning of section 191(3) of the Employment Rights Act 1996,

unless the exercise concerns a subject for which any member of the Scottish Executive has general responsibility.
(1C) But the Parliament may not impose such a requirement in pursuance of subsection (1B) in connection with the exercise of functions which are exercisable—

(a) by the Scottish Ministers as well as by a Minister of the Crown, or

(b) by a Minister of the Crown only with the agreement of, or after consultation with, the Scottish Ministers.

(1D) Subsection (1C)(b) does not prevent the Parliament imposing such a requirement in connection with the exercise of functions which do not relate to reserved matters.
(1E) Where all the functions of a body relate to reserved matters, the Parliament may not impose such a requirement on any person in connection with the discharge by him of those functions.
(1F) The Parliament may not impose such a requirement on—

(a) a judge of any court, or

(b) a member of any tribunal").

The noble and learned Lord said: My Lords, Amendment No. 101 is one of a group of amendments to which amendments have been tabled by the Opposition. In moving it my intention is to speak to Amendments Nos. 104 to 110 and Amendments Nos. 118, 227, 229 and 230. I shall also speak to Amendment No. 103A.
The background to these amendments is that Clause 23 was originally framed in a certain way. Since then the ground on which it was originally built has moved considerably, particularly, for example, because of the amendments concerning the legislative competence of the Parliament, which were made in Committee.
In redrafting the clause to take account of these changes we have tried to state in ordinary language what it is that the Parliament may require someone to give evidence about, while preserving the various limitations to the Parliament's powers which are included in the clause as it presently stands.
The key alteration here is that we propose to replace references to "devolved matters" and,
"other matters in relation to which functions are exercisable by the Scottish Ministers"
with a reference to giving evidence or producing documents,
"concerning any subject for which any member of the Scottish Parliament has general responsibility".
We think that it is appropriate in this context to use, so far as possible, language which can be given its ordinary meaning, rather than tying the provision to the complexities of "matters", "relating to" and so on.
It is intended that this new formulation will cover what was previously covered, such as functions that are conferred on Scottish Ministers under or by virtue of Clauses 49, 59, 85 and 103, the retained functions of the Lord Advocate and functions of the First Minister. It is also intended to cover areas where the Scottish administration operate but where the Scottish Ministers may have no functions, simply a general overall responsibility.
In doing away with the reference to "devolved matters" we decided that it would not be right to tie a new definition entirely to functions. For example, in the field of health there are large areas of activity where Ministers' specific functions, as such, are limited, as matters stand, to making appointments to the bodies, which exercise direct responsibility for the delivery of services. We would not want there to be any room to argue that the Parliament's powers to hold inquiries into health issues was limited to the narrow "function" of making appointments. It should be able to investigate

1919
such issues, without facing artificial constraints. Similar issues could arise in areas where local authorities are responsible for the actual delivery of services.
In other words, the wording of the new provision is simply framed to avoid difficulties where it is clear that a particular subject falls within the responsibility of the Scottish administration, but where there may be scope for arguments as to what extent Ministers exercise actual functions in relation to it under existing legislation. Without this general construction, the Parliament could be hampered in the extent to which it is able to conduct effective inquiries into subjects which are clearly devolved. That was not a risk under the previous drafting, which included a general reference to "devolved matters".
I hope that it will help the House if I describe in some detail how the limitations on the parliament's power have been redrafted. I shall deal first with the provisions as regards persons outside Scotland. For those outside Scotland, the parliament can only impose a requirement in connection with a person's discharge of functions of the Scottish administration, or functions of a Scottish public authority or cross-border public authority, or Borders rivers functions, where those functions concern a subject for which any member of the Scottish executive has general responsibility. So, for example, a representative of a cross-border public authority can be summoned only in connection with the functions of that body relating to devolved matters, because only those functions concern a subject for which a member of the Scottish executive has general responsibility. I hope that noble Lords will agree that that reformulation is a sensible recasting of what was already there in subsection (3) of the present clause.
I turn now to Amendments Nos. 101A and 102. The Opposition's Amendment No. 102 seeks to delete the word "general" from general responsibility in subsection (1A)(b) of the new clause, which is about imposing requirements on persons outside Scotland, in particular in connection with the discharge of functions of Scottish public authorities and cross-border authorities. The Opposition's Amendment No. 101A seems to cover similar ground.
I have already explained why we have adopted the new phrase which may be causing noble Lords opposite a certain amount of concern. The word "general" is intentionally included in the drafting to reduce the scope for technical debates about the extent to which a particular issue is or is not the responsibility of Scottish ministers. We think that if we accepted those amendments, the intended position would be less clear. That is why we feel unable to do so.
I turn now to the matter of Ministers of the Crown under this new provision. The parliament will have very limited powers to impose a requirement to give evidence on Ministers of the Crown and their civil servants. The relevant provisions are set out in the proposed new subsections (1B) to (1D).
Again, the intention has been to restate, and where possible clarify, what is already in the clause. In relation to the exercise of ministerial functions, a Minister of the Crown or civil servant may only be called to answer for
1920
the exercise of such a function in so far as the exercise of that function concerns a subject for which any member of the executive has general responsibility.
The main example of this once more concerns cross-border public authorities. Noble Lords will recall that functions in relation to such authorities do not transfer automatically to Scottish ministers, but those bodies will exercise functions in relation to devolved matters and it is right that the parliament should be able to require a Minister of the Crown or his civil servants to give evidence in relation to his ministerial functions in connection with that authority where that concerns a devolved matter; in other words, a matter concerning which a member of the Scottish executive has general responsibility.
I turn now to Amendments Nos. 103B and 103D. As before, where a function is exercisable by Scottish ministers as well as by Ministers of the Crown; for example, by virtue of Clause 52, the parliament cannot require a Minister of the Crown to give evidence; nor can it do so merely because the Minister exercises a function with the agreement of, or after consultation with, Scottish ministers; for example, because of a provision made in an order under Clause 59(1)(c). This point was covered previously by Clause 23(5)(b) and with the redrafting, the new subsection (1D) is needed to preserve the effect of that previous paragraph. I hope that, again, this provides some reassurance in relation to Amendments Nos. 103B and 103D.
Amendment No. 103E seeks to delete new subsection (1E). Persons discharging functions of bodies, all the functions of which relate to reserved matters, may not be summoned in relation to those functions. That simply restates the provision originally at Clause 23(6)(a), but brings the language into line with that used elsewhere in the Bill.
The protection for judges and members of tribunals is retained. Amendment No. 227, to which I shall return in a moment, provides a definition of "tribunal" for all purposes in the Act, which allows the specific reference to tribunals,
"which exercise the judicial power of the state",
originally in Clause 23(6)(c) to be omitted. I am sorry that the noble and learned Lord, Lord Hope of Craighead, is not in his place because noble Lords will remember that he was concerned about that point in Committee. I believe that we have now addressed that.
I hope that this reassures the House that what are, I freely admit, complex provisions have not been substantially altered but, as far as possible, made clearer and more compatible with drafting elsewhere in the Bill.
Amendment No. 227 raises a slightly different point. It reflects a point raised in Committee that, although "tribunal" is defined for the purposes of this clause, it is not defined in other contexts in the Bill, most notably in Schedule 6 but also, for example, in Clauses 93 and 95. We think that "tribunal" ought to have a consistent

1921
definition throughout the Bill. In the Human Rights Bill, "tribunal" is defined as,
"any tribunal in which legal proceedings may be brought",
and we think that that definition is a sensible one to adopt also in this Bill. I hope noble Lords who have raised this issue will feel that that provides a useful clarification.
I am grateful for Amendment No. 103A. The particular purpose behind the special protection given to Ministers of the Crown in Clause 23(1B) is to avoid the problem of "double accountability"; in other words, the risk that individuals will find themselves answerable to two different parliaments at once. The proposed amendment seeks to extend that protection to those who have in the past been Ministers of the Crown. We are not certain that the amendment is necessary, but we are content to consider the points raised by it and, if necessary, to return at Third Reading with an appropriate amendment.
With that long explanation—I hope that noble Lords will accept that it was unavoidably lengthy—I hope that noble Lords will feel able to withdraw their amendments. I beg to move.
The Chairman of Committees (Lord Boston of Faversham): My Lords, we now come to Amendment No. 101A, as an amendment to Amendment No. 101. I must point out to the House that if Amendment No. 101A is agreed to, I cannot call Amendment No. 102.
Lord Mackay of Drumadoon Lord Mackay of Drumadoon moved, as an amendment to Amendment No. 101, Amendment No. 101A:
Line 10, leave out from ("which") to end of line 11 and insert ("relate to the exercise of the functions of the Scottish Administration").
The noble and learned Lord said: My Lords, in moving Amendment No. 101A, I shall, of course, deal with all the amendments which the noble and learned Lord the Lord Advocate has just discussed. I am sure that the whole House will be grateful to him for having explained why this raft of amendments is required. It illustrates yet again the value of an important and complex Bill being considered over a period of months in two separate Chambers. I may be wrong, but I think that some of the amendments that we are considering today seek to amend amendments that were made to the Bill in Committee. It is clear that serious further thought has been given by the Government to the drafting of the Bill. That is to be welcomed because of the importance of this matter for Scotland and, indeed, the whole of the United Kingdom.
I shall read carefully in Hansard what the noble and learned Lord has just said, but in speaking to the amendments perhaps I may illustrate what I understand the position to be. Perhaps in reply the noble and learned Lord will then confirm whether or not I am correct. Amendment No. 101A seeks to delete the words concerning any subject for which any member of the Scottish executive has general responsibility. My
1922
understanding is that the phrase which currently appears in the government amendments is of wider scope than the executive competence, as defined in Clauses 48 to 50 and anything that may be covered by a Section 59 order under Clause 59. Those clauses set out the ministerial functions of Scottish ministers. Some are derived from Clause 49, which is a general transfer of functions; others will derive from other clauses; and yet others will derive from any order made under Clause 59. We have a draft of such an Order in Council available for consideration. As I understand it, the noble and learned Lord the Lord Advocate said that this term is meant to be broader than that. I should be grateful if he would elaborate, by way of example, what he has in mind.
Another of my amendments seeks to delete the word "general". I have some difficulty in knowing the difference between a member of the Scottish executive having "responsibility" for a subject as opposed to "general responsibility" for a subject. The noble and learned Lord the Lord Advocate said that it might give rise to unnecessary dispute if the word is taken out. I venture to suggest that if the word remains in there might also be scope for disputes. It would be extremely helpful if that could be clarified before I decide whether or not to press Amendment No. 101A.
Moving on, I am grateful for the further consideration that has been given to Amendment No. 103A, and I will obviously not insist on that.
I remain concerned about the effects of the new subsection (1C) and (1B), to which Amendments Nos. 103 and 103E are directed. If a Minister of the Crown is to be summonable in certain circumstances, the distinctions which are set out in these two new subsections are somewhat artificial and may give rise to a measure of dispute.
I have no difficulty with Amendments Nos. 110 and 118, and the other amendment to which I have spoken, and I am content that they should be added to the Bill at this stage. I beg to move.
3.30 p.m.
Baroness Carnegy of Lour: My Lords, when the noble and learned Lord replies I should be grateful if he could tell the House exactly how the use of the word "general" will clarify the functions to which the clause refers. This will be very important. It will be a question of whether a request is valid or not. The meaning is crucial. Will the noble and learned Lord attempt to tell us where "general responsibility" begins and ends and what it actually means? It is very important.
It is quite difficult to follow the government amendments. Perhaps on another occasion it might be possible to remove a larger part of the Bill and put the re-written part in as a whole amendment. It would be easier for a lay person like myself to follow what is happening. As I understand it, the clause is being rewritten in two clauses. It is difficult to follow how it is done. I ask that as a subsidiary question, but the noble and learned Lord might take it on board for the sake of

1923
those of us who have some difficulty in following detailed, technical amendments. My specific question is about the word "general".
The Earl of Mar and Kellie: My Lords, these government amendments remove a chunk of the Bill and replace it with, I believe, words of greater clarity. The power to call for witnesses and documents has to be mentioned in this Bill because of the statutory nature of the parliament. Obviously the Parliament at Westminster has these powers, but they are not written down for well-known reasons. The replacement words in the amendments are clearer and are in more readable English. These powers are important to the work and ability of the Scottish parliament.
As to Amendment No. 110, it is a useful amendment which attempts to clarify the meaning of the clause. I approve of that, particularly as the Bill is specifying how an offence may be committed. Absolute clarity should be attempted in such circumstances. The court will find this helpful, particularly as such a prosecution might have a political context. Such a quasi-political trial will attract attention and it will therefore be helpful if the subjects specified in the notice are very clear and all encompassing. It will be important that the accused should have acted deliberately and not by accident. It would be disastrous if the first prosecutions under this clause were to founder on points of legal definition. These government amendments can be supported.
Lord Fraser of Carmyllie: My Lords, I support my noble friend Lady Carnegy in seeking further elucidation of what is meant by "general responsibility". I have in mind the issue of agriculture. I should have thought that the individual citizen in Scotland would believe that agriculture would fall within the remit of this Scottish parliament. However, as the noble Lord, Lord Sewel, indicated to us in a very interesting speech at Committee stage, the whole matter of agriculture as it is affected by the common agricultural policy is not to be within the purview of the Scottish parliament but is to fall within that reservation described as "foreign affairs".
I am confused. If agriculture is generally within the responsibility of the Scottish parliament, is this a route whereby it would become open to members of the Scottish parliament to make inquiries about matters relating to the common agricultural policy? As I understood the noble Lord's explanation at Committee stage, that would not properly be for the Scottish parliament but for Scottish MPs to pursue here in the Westminster Parliament.
Lord Renton: My Lords, I should like briefly to follow up the point made by my noble friend Lady Carnegy of Lour, who referred to the complicated situation created by the government amendments. I sympathise with my noble friends on the Front Bench who say that they have to make amendments to those amendments. That makes the matter even more complicated. It would have been so much better on this occasion to ask your Lordships to approve leaving out Clause 23 and substituting a completely redrafted new
1924
clause. Rather than pursue these detailed matters now, it might be very much better if the noble and learned Lord the Lord Advocate would agree to do that. It would simplify matters and, at the next stage, we could have a much more rational consideration of the whole matter.
The Earl of Balfour: My Lords, I wish to raise one point on Amendment No. 109, in which Clause 23 is divided into two parts. I am perfectly happy with subsections (8) and (9) going into another clause. Under subsection (8), a requirement under the section "Power to call for witnesses and documents" is imposed on the Clerk to give the person in question notice in writing. That is fair enough. Subsection (9) states how that notice should be sent—by registered post, and so on. But subsection (10) still deals with that person, stating:
"A person is not obliged under this section to answer any question or produce any document which he would he entitled to refuse to answer or produce in proceedings in a court in Scotland".
That belongs to subsections (8) and (9) and not in the other part of the clause. When I looked at this rather complicated group of amendments, I felt that subsection (10) should be in what will turn out to be the smaller of the two clauses.
Lord Hardie: My Lords, the point raised by the noble Earl, Lord Balfour, is clearly a drafting issue which we could certainly consider and, if necessary, rearrange for Third Reading. Having said that, I am not giving a guarantee that that would be the outcome of such consideration.
I understand the concern of the noble Baroness, Lady Carnegy of Lour, and the noble Lord, Lord Renton, about the way in which the amendments have been brought forward. I can only apologise if that has caused inconvenience to the House. Certainly, it is a matter which we can consider at any future stage should we be in a similar position with another Bill. The noble Lord, Lord Renton, proposes that we withdraw the amendments and come back with them at Third Reading. I have given brief consideration to that matter but, on reflection, I think it preferable to proceed with the amendments at this stage. By the time we reach Third Reading noble Lords will have had time to reflect on the amendments. If there are drafting issues, or issues which are appropriate for Third Reading, that might be the way to proceed.
The noble and learned Lord, Lord Mackay of Drumadoon, the noble Baroness, Lady Carnegy of Lour, and the noble and learned Lord, Lord Fraser of Carmyllie, asked about the general responsibilities. In my initial outline of the amendments I sought to explain that we were anxious to ensure that the parliament was not unduly restricted in matters which it could consider in this way. I used the example of health. I specifically sought examples because it is often helpful to point to an example. I considered health quite a good example illustrating how the responsibility of the parliament might well be very restricted in connection with making appointments to certain bodies and the bodies themselves carrying out the delivery of the services. In that situation we think it appropriate that the parliament should be able to address health issues and not confine itself only to appointments to boards, trusts and so on. That is the reasoning behind the use of a general approach.

1925
I understand the point made by the noble and learned Lord, Lord Mackay of Drumadoon, that by putting in the word "general" there may be disputes as to whether a matter comes within the general responsibility. That may be an easier question to answer. The present wording will give effect to the intention of the Bill in allowing the parliament to deal with matters which have been devolved. That is preferable to having a far too restrictive definition which would deny the parliament the opportunity to deal with such matters.
Perhaps I may move on to the point made by the noble and learned Lord, Lord Fraser of Carmyllie. Agriculture is devolved, so that would be a general responsibility of the parliament. It could request Scottish ministers to come before it and speak about the common agricultural policy. But the common agricultural policy is a matter for the United Kingdom Parliament. However, having said that, I certainly expect that the Scottish executive would make representations to the United Kingdom Parliament. It would be appropriate for the Scottish parliament to be able to ask Scottish ministers about their position on the common agricultural policy. Of course, the parliament could not refuse to implement the common agricultural policy, but it is clearly a matter which it could debate.
With those explanations, I hope I have assisted noble Lords to understand what we are about in this clause.
Lord Mackay of Drumadoon: My Lords, I am grateful to the noble and learned Lord. His further remarks confirm my initial impression that the amendments are designed to broaden the scope of the work which takes place before committees of the parliament and the parliament itself without in any sense increasing the statutory functions of the executive or the parliament. In that respect, the amendments fall to be welcomed. Most of us are united in the view that the parliament should work as successfully as possible. The elimination of any artificial limitations on its work is to be welcomed. I therefore do not insist on my Amendment No. 101A to Amendment No. 101.
Amendment No. 101A, as an amendment to Amendment No. 101, by leave, withdrawn.
[Amendments Nos. 102 to 103E not moved.]
On Question, Amendment No. 101 agreed to.
Lord Hardie Lord Hardie moved Amendments Nos. 104 to 108:
Page 12, line 12, leave out ("That power may be exercised") and insert ("Such a requirement may be imposed").
Page 12, line 15, leave out ("The Clerk shall give") and insert ("A requirement under section (Power to call for witnesses and documents) shall be imposed by the Clerk giving").
Page 12, line 18, leave out ("matters relating to") and insert ("subjects concerning").
Page 12, line 20, leave out from ("particular") to end of line 21 and insert ("subjects concerning which they are required").
Page 12, line 34, leave out ("relating to") and insert ("concerning").
On Question, amendments agreed to.
Lord Hoyle: My Lords, before we move to the Statement on welfare reform, I should like to take this opportunity to remind the House that the Companion indicates that discussion on a Statement should be confined to comments and questions for clarification. Peers who speak at length do so at the expense of other noble Lords.

Welfare Reform and Uprating of Benefits
3.48 p.m.
The Parliamentary Under-Secretary of State, Department of Social Security (Baroness Hollis of Heigham): My Lords, with the leave of the House, I shall now repeat a Statement given in another place by my right honourable friend the Secretary of State for Social Security. The Statement reads as follows:
"With your permission, Madam Speaker, I would like to set out the next phase of the Government's plans to reform the welfare state and the annual uprating of benefits. We came to power with two huge challenges—to raise standards in education and to reform the welfare state. Today we rise to the challenge of welfare reform. Today we put words into action.
"Welfare reform is essential, because many people are poorer than they need be. Many are dependent on benefits when they need not be; and others are neglected when they should not be. Our central objective is to provide work for those who can and security for those who cannot. Our plans will be based on our belief in fairness, will give greatest help to those with the greatest needs and will make sure that benefits only go to those who are entitled to them.
"All reforms will be undertaken after consultation. The vast majority supported the principles and success measures set out in the Green Paper. I am happy to reaffirm them today. What I announce today will be the first of a series of announcements that will form the basis of legislation during this Parliament beginning early next year.
"Legislation will take effect over a number of years. All existing claimants who are eligible for their benefits when the changes are introduced will be protected.
"Today we are publishing three documents showing how we are putting principles into practice. The first is a document that shows what we have done so far on welfare reform—the New Deal, childcare, the working families tax credit—the principles that guide that reform and the new measures that we are planning.
"The second document sets out our plans for a single gateway, a 'something for something' deal for those out of work that will change the culture of the welfare state. The third is a consultation document on our plans to reform disability benefits to give more help to those in greatest need and to tackle the abuses in the current system.
"First, the benefits uprating. Today I can announce the largest ever increase in child benefit. As a result of the uprating from next April child benefit will rise by £2.95 to £14.40 a week. That represents real security for our children provided by this Government.
"Today I can announce, too, new help for the poorest pensioners with the introduction of a minimum income guarantee. The poorest pensioners will get a minimum of £75 a week. Pensioner couples will receive £116.60. Again, that means real security for today's pensioners from this Government.
"Most national insurance benefits will rise by the retail prices index—3.2 per cent. Means-tested benefits will generally increase by 2.1 per cent. in the normal way. I have placed the details of the uprating of benefits in the Vote Office.
"I turn to our plans for a single gateway to the benefit system for everyone of working age. When I looked at the current way the DSS hands out money I was amazed to learn that people can claim benefits without even having to turn up for an interview, without being given any help finding work. That will all change. We have created new opportunities for people to work: £195 million for the New Deal for disabled people; £190 million for national introduction of the New Deal for Lone Parents; and the first ever national childcare strategy. We are making sure work pays through the new minimum wage and the working families tax credit.
"We believe that in return it is only reasonable that people of working age—lone parents, the unemployed and people claiming incapacity benefits—should be required to attend an interview to discuss their options for work. There will, of course, be people such as the terminally ill for whom an interview would clearly be inappropriate and the rule will not apply.
"We are not forcing people to work. The interview will give real opportunities to people written off by the system. It will create a fundamental change in culture. People will no longer ask of the system, 'What can you do for me?' but, 'What can I do to help myself?'
"We will improve the quality of advice we give as we learn from the New Deal. We will proceed carefully, starting with pilots. The full scheme will be in place in April 2000.
"Now we turn to disability benefits. Here, too, we aim to provide work for those who can and security for those who cannot. When the severely disabled are not getting the help they need, when one million disabled people say that they want to work but are not given the chance and when one quarter of men over 60 are on incapacity benefit because the last government used it as a way of hiding the unemployment figures, we know that the system needs change.
"We promised in the Green Paper that disabled people should get the support they need to lead a fulfilling life with dignity. That is what we will do. First, the foundation for all that we do is an unshakeable commitment to comprehensive civil
1928
rights for disabled people to ensure that they are respected not just in the work place but in all areas of life.
"We are doing more. Today I can announce a £30 million programme of new help for disabled people seeking work, extra to the New Deal. But we also want to improve disability benefits. Disabled people with the greatest needs are not getting the support they need; others are receiving support that they should not. People disabled young in life with no hope of work get so little help through their severe disablement allowance that 70 per cent. of them have to claim income support. Disabled people on low incomes needing day and night care do not get enough help to meet their extra needs.
"Young children with little mobility receive no recognition from the system. At the same time, many of the claims to disability living allowance are not always supported by medical evidence. Some people have been awarded benefit for life even though they have conditions which are expected to improve.
"Today we set out for consultation proposals to provide more help to the most severely disabled people in greatest need and action to make sure that disability benefits go to the right people.
"First, we propose for new claimants to change the system of support to congenitally disabled people and others disabled young in life so that they get greater help. Those aged over 20 can already qualify for incapacity benefit if they have worked or, alternatively, for income support. In the future, severe disablement allowance (SDA) will no longer be available to them. However, many young people disabled before they were 20 have little hope of work. Today I can announce that we will therefore give them the biggest ever rise in support with an extra £25 a week in benefit.
"We propose a fundamental reform to incapacity benefit for future claimants only. The benefit is meant to be for people who are unable to work. Yet the number of claimants has risen threefold over the past 20 years, a time when the nation's health has been improving. But we are concerned that the benefit is becoming abused as an enhanced early retirement subsidy.
"For future claimants we will discourage the use of IB as an early retirement subsidy. People who have a private pension or health insurance payment of more than £50 will receive less support. Every pound of private income they have in excess of the £50 limit will reduce their benefit by 50p. Also, for future claimants we will restore IB to its original purpose as an insurance benefit for people who have worked. Too often it has been abused as a more generous form of support by the long term unemployed.
"We will strengthen the link between the work and benefit. Only people who have worked and paid recent contributions before the claim will be eligible for benefit. We will reform the all work test so that those who claim benefits have to give evidence of their work prospects. This will give information of the work disabled people can do.
"In addition we want to improve the provision for disabled people with the greatest needs. We will provide real security for the poorest disabled people with the highest care costs. Today I can announce a disability income guarantee which will give £129 a week to a single person and £169 to a couple. This guarantee will be extended to three and four year-olds so that a couple with one child on income support and disability living allowance with the highest care needs will get at least £199 a week.
"We will also extend the higher rate of DLA mobility component, worth an extra £35 a week, to all three and four year-old severely disabled children.
"The benefit integrity project which we inherited from the last government failed. It caused a lot of anxiety to disabled people. We will cancel the project. In its place we will put in a new system for reviewing claims to DLA and AA that is both fairer and more sensitive. It will work in the interests of disabled people. These changes will generate three-quarters of a billion pounds in long-term savings. But even with these changes, real terms spending on disabled people will continue to rise in the long run. These reforms do not affect the CSR plans announced by the Chancellor of the Exchequer in July.
"It is quite right that as our society gets wealthier the amount we spend on the most vulnerable should increase. But benefits must go to those for whom they were intended—to give most help to those in the greatest need—and must be affordable.
"The structural changes announced today will deliver significant savings over the longer run. But they do so by ensuring that greatest help goes to those in greatest need, and that benefits go to those for whom they were intended—work for those who can; security for those who cannot.
"Today, for the first time this Government will provide real security and record levels of child benefit. That is good news for those out of work who will be given better advice and opportunities to work, but bad news for those who abuse the system, and bad news for those who try to claim benefits they are not entitled to be on.
"Today this Government show a determination to modernise the welfare state and reshape it for today's world, so that it provides opportunities for all those who want to work, and delivers security to all those who need it.".
My Lords, I commend this Statement to the House.
4 p.m.
Lord Higgins: My Lords, the House will be grateful to the noble Baroness for repeating the Statement in your Lordships' House. In the Department of Social Security, Secretaries of State come and go, Ministers of State come and go, but the noble Baroness remains. For that we must be grateful because the complexity of these matters is immense. The expertise which the noble Baroness brings to the Front Bench is therefore greatly to be welcomed. I think all of us appreciate that. It is
1930
rather regrettable that the Statement has been made in the other place and in this House but appeared in large measure on page 2 of the Evening Standard ahead of that. That is typical of the way in which the department seems to leak badly. That is to be regretted.
I shall try to put this Statement in context. A crucial feature of the Government's whole plan is to reduce the amount spent on social security and to spend that money on health and education. When I raised this matter last week with the noble Lord, Lord McIntosh of Haringey, he said that the Government proposed to decrease the proportion of public expenditure spent on welfare rather than to decrease the absolute amount. I find it difficult to discover any statement to that effect. The statements made by the present Prime Minister before the election clearly implied there would be a cut in the absolute amount. Indeed the Labour Party manifesto gave the same impression. What is the overall effect of what is now proposed? Is it still the Government's intention that the social security budget as a whole should be cut both in absolute terms and as a proportion of national income? We are to have a lower rate of economic growth which may affect that issue. We should be given a clear answer to that point to put this Statement in context.
The present Secretary of State for Social Security carried out the comprehensive spending review when he was Chief Secretary. We were told that the plans for the next three years were set in concrete, whereas the present Government say they have planned ahead for three years but there is a degree of flexibility. If that is so, it is not now at all clear how the Secretary of State for Social Security will change the budgets that he said were set in concrete. The Statement is remarkable in that it states the reforms will not affect the comprehensive spending review plans announced by the Chancellor. The Government cannot have it both ways. Either there are changes in public expenditure, or there are not. They must presumably affect the comprehensive spending review plans.
Having said that, we of course welcome the general uprating as regards specific improvements in disability benefits and so on. Nonetheless, we shall need to consider carefully the structural changes which are proposed. We are told that there will be pilot schemes to test the changes and if it is felt that the pilots have been successful, the changes will be adopted nationally. However, the pilot scheme to test the lone parent proposal was extremely disappointing. Yet the Government are still going ahead with it. That casts some doubt as to whether pilot schemes are being operated in the way they should be operated.
The proposal for a single gateway is something which your Lordships will need to consider further. However, I cannot but remark that that builds on the basic jobseekers approach which the previous government introduced, and which at the time was heavily criticised by the then opposition. Nonetheless we shall need to consider carefully the single gateway proposal. We have not had an opportunity to examine the relevant document in any detail.
The noble Baroness lays much stress on protecting the position of existing claimants but not on protecting the position of existing contributors. Ever since the time of Beveridge we have had for many years a system where you contribute and in return for those contributions you receive benefits. However, since they came into power, the Government have increasingly undermined that contributory principle. They have undermined the idea that you pay contributions and then receive certain benefits as of right. A new contract for welfare: Support for Disabled People states, strangely, at paragraph 20,
"At present, people who have been unemployed and getting credits can qualify for Incapacity Benefit on the basis of contributions paid many years ago. We propose to change this so that entitlement to Incapacity Benefit requires contributions to have been paid more recently".
Will the noble Baroness tell us why the earlier contributions are now, apparently, to be regarded as worthless, because those who paid them presumably expected to obtain reasonable benefits in return?
Paragraph 21 relates to incapacity benefit. It is headed,
"introducing a fairer balance between public and private provision".
This afternoon the noble Baroness has told us that some of those who receive incapacity benefit are paid it in addition to what is described as a "reasonable pension". This is the pension paid to those who are in an occupational pension scheme. This group is suffering badly, particularly as regards schemes which have a defined contribution. Those people who are about to retire now are being hit heavily both by the decline in the stock market value of their assets, which determines the total fund, and more particularly by the decline in annuity rates. But we are now told that these people who have suffered from the effects of the Government's policy are now to have that pension reduced, if they receive incapacity benefit, on a basis of 50p for every pound over £50. That cannot encourage prudence. These people have made provision for their old age. Suddenly, out of the blue, with no warning or consultation, their just entitlement will be apparently reduced. That is a quite extraordinary provision to introduce.
Generally speaking, the whole contribution principle has been undermined. The noble Baroness and I have debated this previously in relation to the previous Budget. As regards the minimum guarantee for pensions, some people will receive the pension who have not contributed. We shall need to study the documents carefully in the light of the Statement. Perhaps the noble Baroness can tell us whether it is the case that incapacity benefit is being reduced for new claimants, as that is my understanding? I hope she can clarify that point.
These are extremely complex matters. It is difficult to examine them across the Floor of the House on the basis of a Statement that has only just become available. I hope therefore that ahead of the legislation, which as the noble Baroness said, will not be before next year, we can hold a debate in this House and go into these matters in great depth.
4.10 p.m.
Lord Goodhart: My Lords, perhaps I may follow the noble Lord, Lord Higgins, in paying personal tribute to the noble Baroness, Lady Hollis, for her work in the Department of Social Security. On these Benches we welcome much of the content of the Statement and the three documents published today. However, I have a number of criticisms and questions.
We welcome the increase in child benefit. It is a particularly valuable benefit, both because of its very high rate of take-up and because of the flexibility that it offers to parents, especially to mothers, who are given either the option of using it to pay for child care while remaining in work or to replace their previous income from work if they wish to stay at home to look after their children. We also welcome the minimum guarantee. However, we should like to know what the difference is between the proposed minimum income guarantee and the present right of poor pensioners to income support. Does that involve something more than a simple re-badging of income support to those of pensionable age?
Turning to the single gateway proposal, one was pleased to note the remarkable generosity of the Government in saying that those who are terminally ill need not apply for an interview! But there are a number of other categories. What about those, for instance, who are within one or two years of reaching retirement age? Do they have to attend an interview with a view to obtaining further jobs—which they are extremely likely at that age to get! What about lone parents with pre-school age children? Let us take the case of a woman deserted by her husband or partner, or whose husband or partner has died, leaving her with three children under five, one of them a baby. I accept that such people will not immediately be required to seek work, but is there any point in even requiring them to attend an interview when the prospect of work will not arise for them for several years? Will there be an opportunity for claimants to ask for a home visit where appropriate—as it will be in the case of the disabled or those people who suffer from agoraphobia or other problems which may make it difficult for them to leave home? Will there be appropriate arrangements for those who have difficulty in speaking English?
What are the sanctions for non-attendance at interviews? They are not spelt out in the Statement; however, I understand from the supporting documents that it is intended that benefits can be withdrawn as a sanction from those who do not attend. I can see that it may be an acceptable sanction for those who are free to work and have no reason to refuse, but what about the position of the single parent? Will such parents be at risk of having benefits withdrawn if they fail to attend an interview, with the consequences that that will have for their children?
Turning to disability benefits, again there is much in the Statement that we welcome. We accept that there have been abuses of incapacity benefit and the increase in the number of those drawing incapacity benefit over the past few years is wholly inexplicable in terms of the health of the nation. We welcome the proposal to

1933
improve help to congenitally disabled people and people who become disabled early in life. However, there are some oddities. The remark in the Statement that the benefit is meant to be for people who will never work is not exactly true. As I understand it, it is meant to be a benefit for people who are unable to work for a significant period of time as a result of disability and therefore applies to people who, let us say, suffer from a long-term disease but one which may well improve in the course of time.
I echo the remark of the noble Lord, Lord Higgins, that the proposal that people with a private pension or health insurance will lose incapacity support is a dangerous one. It will discourage savings. Furthermore, those who have to take early retirement will—quite apart from what we hope are short-term problems and falls in the stock market—because they are retiring at an early age, have had less opportunity to make contributions, will have fewer years of service and will as a result receive a lower pension than if they had stayed in work until normal retirement age. Therefore, if incapacity benefit is withdrawn they will suffer a double loss.
A cause for great concern is the statement that only those who have worked and paid contributions before making a claim will be eligible for benefit. Looking at the background document, that statement is incomplete. The intention is that incapacity benefit will be available only on the same terms as jobseeker's benefit; namely, to those who have paid at least one year's contributions within the past two years, and for that purpose the contribution credits payable on behalf of the unemployed will not be available. I can understand that approach in relation to jobseeker's benefit, but it seems absolutely wrong that, for instance, someone who has lost his job as a miner, is unemployed for more than a year and then becomes disabled will lose the right to incapacity benefit.
There also seems to be a loophole as regards students. If they are disabled at the age of 20 or more they will not qualify for the severe disablement allowance, since that is limited to those under 20; however, they will not qualify for incapacity benefit because they have no record of contributions.
So while we welcome much of the content of the Statement and will support the Government on many of the proposals, there are many matters that require investigation; indeed, in some cases they do not at present appear acceptable.
4.18 p.m.
Baroness Hollis of Heigham: My Lords, first, perhaps I may thank both noble Lords for the generosity of their personal comments. I take them as a generous tribute. I hope that I shall repay them in spades by being as tough-minded, argumentative and forensic as I can manage to be. I am sure that your Lordships would hope for nothing less.
The noble Lord, Lord Higgins, asked how we were balancing our expenditure plans with the CSR figures and so on. With his superb Treasury expertise, the noble
1934
Lord will know that average growth in the social security budget over the last Parliament of the previous administration was 4.1 per cent. a year. It is a matter of whether or not family credit is included, but I am taking like for like. Average growth in the social security budget under this Government will be 2.2 per cent. over the lifetime of this Parliament. That is the figure in the CSR; the Chancellor has repeated it; and we confirm it today. That is our expectation and it has not changed. It means that while social security expenditure will continue to grow it will be much less than it would have been under the previous administration. And much of that growth is demographically driven, for good reason: there are more pensioners, they are living longer, and they are entitled to benefit. As a result of the increased expenditure some £13 billion will go to pensioners; £3 billion on child benefit; £2 billion cumulatively to the unemployed and single parents; and something like £10 billion cumulatively over the lifetime of this Parliament to disabled people.
So the difference between us is that we have, so to speak, capped the growth; nonetheless, it will continue in real terms. As I hope the noble Lord will accept, within this package we are also seeking to focus our expenditure on the poorest and those who have the greatest needs, including disabled people.
The noble Lord said that the new deal for lone parents was disappointing. The pilots have so far shown that about 5,000 lone parents have, as a result of this scheme, gone into work or may have had their hours of work increased. Should the same ratio of jobs to interviews continue, about 100,000 lone parents will have the advantage of either an interview, moving into work or working additional hours, which they might not otherwise have done. That must be a worthwhile enterprise. No one on either the Government or the Opposition Benches has told the Government of any other way to help to encourage lone parents to go into work when they feel that the time is right.
The point about the gateway interview is that at the moment too often lone parents do not know what they do not know. There is a real problem for them of not knowing what opportunities for childcare we can offer or what training and education facilities we can offer. In the pilots for the single gateway we seek to ensure that every new claimant will, at the point at which the single parent claims income support for the first time, have an interview at which the income support claims and possibilities in future of a new deal, the right to child maintenance and the like, will all be discussed with them. I do not believe that that would be unreasonably intrusive. Thereafter, the lone parent should be able to make the choice as to what she sees fit for her life, whether she is ready to go back to work now or later. It is for her to choose. We wish to empower her with the information she may not yet have as to what choices, options and opportunities are available for her. I hope that this will be regarded as a real and positive achievement for lone parents.
A further point that the noble Lord made was that we may be protecting claimants but we are undermining the contributory principle. That issue was raised by the noble Lord, Lord Goodhart, in particular in relation to

1935
unemployed people who have been out of work for a considerable time, who then become disabled and who would not in the future be eligible for incapacity benefit. At the moment, someone could work for five years, be unemployed for 20 and in the 21st year of unemployment receive incapacity benefit. I know that this is reductio ad absurdum, but someone could earn £400 per week for four weeks and then have a right to contributory benefit for the rest of their lives. That cannot be sensible because the incapacity benefit was designed to replace the earnings of someone in work who is forced out of work because of sickness. That was the intent of IB and that is the intent that we are restoring. We are saying that within two years they should be within the labour market: "For two years you may have been out of work, but if you have been out for longer than that it is not reasonable to treat you as though you had been forced out of work recently by sickness or disability". That is the point of the change.
Lord Goodhart: My Lords, I am grateful to the Minister. Is it not a period of one year? In order to claim the benefit, you must have a complete contributions record for one of the past two years. So, effectively, it is only a one-year period.
Baroness Hollis of Heigham: My Lords, you must have made contributions within the past two years. However, we will follow up the precise details with the noble Lord. We seek to restore the connection between being in the labour market, being in work and paying national insurance and, when the contingency of sickness or disability unfortunately hits someone, having access to insurance-based benefit. Contrary to what the noble Lord said, what we are doing is reasserting the worth of the connection with the contributory principle rather than undermining it. In my view, over the past that has become far too diluted.
Both noble Lords raised questions as to whether our proposals for the pensions take-up for incapacity benefit were reasonable. We are not reducing people's occupational pensions. We are saying that incapacity benefit was designed as an earnings replacement benefit, not an early retirement benefit. I suggest that, partly as a result of the policies of the previous administration, we all know that many people have left work and gone on to IB as a form of more generous retirement pension. Also, under the previous administration, it was a way of massaging the unemployment figures. That is why one-quarter of all men between the ages of 60 and 64 are on incapacity benefit. That is not what the benefit was originally intended for and the nature of the contributory principle for sickness and disability was not intended to insure against that.
For example, back in 1953 only 28 per cent. of men in full-time work had an occupational pension. Now, something like 85 per cent. of men in full-time work, about 70 per cent. of women in full-time work and a proportion of those in part-time work have access to occupational pensions. The world has changed and it seems not unreasonable to work in partnership with the pension provision that people have so that we are not contributing twice over for the same contingency. If
1936
people receive a generous income from their occupational pension—as has been the case over the past decade—it seems reasonable to ask that it should be taken into account. For example, one-third of all people on IB have an occupational pension worth on average £85, but the top one-third of those with an occupational pension have an occupational pension on average of £181 a week. It seems to me not unreasonable to ask whether such people need the full incapacity benefit, when other people on income support never had a chance to build up that contribution record and therefore would have a much lower incapacity benefit and lower income. That is why we are making these changes.
The noble Lord asked whether incapacity benefit was being reduced for new claimants. No, we are not changing the rates of incapacity benefit, merely the contribution conditions, plus the occupational pensions taper.
The noble Lord, Lord Goodhart, asked what was the difference between that and the pensions income guarantee. We are giving an extra £5.75 to a single person and about £8 to a couple where they are on income support and receiving the highest rate of DLA and are on disability premium. In other words, we are targeting additional monies worth on average £5 or £8 to those who have severe physical or mental health disabilities and who have severe financial need. That is the group we seek to help.
Lord Goodhart: My Lords, I am grateful to the noble Baroness for giving way again. Is that inclusive of or on top of the uprating of 3.2 per cent. for the national insurance benefits?
Baroness Hollis of Heigham: My Lords, as of next April, it will include the uprating. If I have any information different from that, I will write to the noble Lord. He pressed me about interviews and who will be exempt. It is the kind of thing that will come up in discussions as a result of consultation with organisations and groups. For example, someone would not be expected to come to the interview who was terminally ill or who had been recently widowed, or was in poor health or had recently come out of hospital. That includes someone who may be of working age but is nevertheless elderly. That example will be discussed on its merits. Of course, we offer home visits where it is inappropriate for someone to come into the office.
With the interviews, we do not seek to dragoon into work people who are clearly unable to work or who, because of other responsibilities, choose not to work. We are trying to ensure that people know about the opportunities and support available in the system which they are not aware of now. We know that social security remains for so many people territory which baffles them by the degree of its complexity, forms and bureaucracy. By having a face-to-face interview in the office or at

1937
home, we hope to overcome the hurdles people face in understanding the information on the opportunities they want.
Lord Higgins: My Lords, what is the sanction if someone outside the exemptions mentioned fails to turn up?
Baroness Hollis of Heigham: This is a single gateway which is being piloted only for new claimants. Therefore, for new claimants to receive their benefits they will have to have an interview. So, for them, the issue of sanctions almost does not arise. The only claimants for whom it might arise are, for example, the widowed or terminally ill, and we shall respond on a person-to-person, case-by-case basis in the pilots proposed, at the point at which new claimants seek to sign on for the benefit they will have an interview. It may be that the interviewer will suggest that the person comes back at a later stage for further information and so on. But that is the proposal in the gateway. One is talking about 18 months to two years down the road if it is thought sensible to extend these pilots nationwide.
I accept that the Statement and the supporting documents are detailed and complex. I have tried to answer the points raised today by noble Lords as best I can. If I have missed any I shall write to noble Lords.
4.30 p.m.
Baroness Carnegy of Lour: My Lords, as a point of order, I know that technically there is no time limit on questions put by Front Bench spokesmen. We are not debating the documents but the Statement. That debate has already taken 30 minutes, and 20 minutes is to be allowed for Back-Benchers. Is it not time that we moved on to Back-Benchers?
Baroness Hollis of Heigham: My Lords, we are about to do so. However, as this is a major Statement that affects many millions of our fellow citizens I do not believe that it is unreasonable for the House to devote a little time to its implications.
Lord Morris of Manchester: My Lords, naturally I am glad the Government do not plan to attack the living standards of disabled people by cutting benefit levels. I welcome also their decisions to scrap the benefit integrity project and to give more help to disabled children and young people, more especially by extending mobility allowance to children aged three to five. That my noble friend shared the concerns felt by many of us in this House about the inhumanities of the benefit integrity project was never in doubt. Is she aware how grateful we are to her today for its demise? Does my noble friend agree that if we are to turn the movement of disabled people from welfare to work from a trickle to a flood urgent action must be taken to make public transport more accessible to them? Does she also agree that it is not tenable to condemn employers for discriminating against disabled jobseekers when, notwithstanding the Disability Discrimination Act, 92.5 per cent. of them are to be allowed to go on
1938
discriminating? Finally, can my noble friend confirm that no disabled person will be forced into work as a condition of receiving benefits and that the changes to severe disablement allowance mean that young people disabled early in their lives will now, for the first time, be floated off means-tested income support?
Baroness Hollis of Heigham: My Lords, my noble friend, who has done so much for disabled people, is absolutely right to draw our attention to the issues of public transport and employment discrimination. That is precisely why we need strong civil rights and to extend the remit of the existing DDA. My noble friend will be aware of some of the discussions that are taking place on that matter.
My noble friend's second question was whether I could confirm that no disabled person would be forced into work. Yes, my Lords: no disabled person will be forced into work. Thirdly, my noble friend asked me to confirm whether someone who was disabled before the age of 20 would for the first time be floated off income-related (means-tested) benefit and would instead after a year go on to the higher rate of incapacity benefit. I can confirm that for those young people who have never had a chance to enter the labour market and build up contributions, and therefore have had no opportunity to provide for themselves, we shall ensure that after a year they will have the higher rate of benefit, which will give many of them an extra £25 a week and float them off the need ever to claim income support.
Baroness Ludford: My Lords, can the Minister clarify one aspect of the practical impact of the single gateway system? I entirely agree with her comment that many people are baffled by the complexity of the forms and bureaucracy of the social security system. The gateway document begins by deploring the confusing array of agencies with which people have to deal, including the Benefits Agency and local authorities. But I am not clear whether it provides any more of a one-stop shop in terms of filling out forms and the exchange of information than the present arrangements. I note that claimants will gain access to information and help about a range of local authority services, including housing benefit, but will they still have to fill out a separate form to be sent back to the local authority, for example, for council tax benefit or housing benefit or will the Benefits agency, if that is the first agency with which they deal, pass on that information? I know that many people fall at this point. They get income support but have not filled out another complex form and returned it for the local authority benefits. That gives rise to all kinds of problems.
Baroness Hollis of Heigham: My Lords, I know that the issue that concerns the noble Baroness is the interface between social security benefits and local authority benefits. She will also know that housing benefit is under review at the moment. It may be that specific proposals will be made to make that interface more easily understood or managed. Our hope and expectation is to have a one-stop shop. If and as long as housing benefit remains the responsibility of local

1939
authorities—the noble Baroness should not read anything into that—clearly there needs to be a set of information exchanges based on the IT spine. We need to ensure that we have the computer system in place before we can develop effectively a single spine of information and, as a result, access to the full array of benefits. Like the noble Baroness, as far as possible I want a one-stop shop and one body of information that goes into the system which then triggers the entitlement to an array of benefits. She is absolutely right to say that that is the only way to ensure that people get the benefits to which they are entitled.
Lord Rix: My Lords, I echo the tributes that have been paid to the noble Baroness. I apologise for the quality of my voice. To adopt an old pantomime gag, I must have been drinking out of a damp glass. I congratulate the noble Baroness on the extension of the old-fashioned mobility allowance to three and four year-olds. That is marvellous news. I also congratulate her on the passport to higher incapacity benefit for the under 20s, although I am rather disturbed that it will not take place until 2001. Like the noble Lord, Lord Morris of Manchester, MENCAP is delighted about the cancellation of the benefits integrity project. Can the Minister guarantee that those younger disabled people, including learning disabled who stay on at college beyond the age of 20, will not lose out on the transfer to incapacity benefit?
Baroness Hollis of Heigham: My Lords, I am very grateful for the noble Lord's comments and his welcome for the extension of mobility allowance for the first time to small children aged three and four who may be going to nursery school, playgroups or whatever and have real mobility needs. I am delighted that the Government are able to announce today the proposal to introduce that change. Like the noble Lord, Lord Rix, I am also delighted that those who have been born with a severe learning impairment or who have become severely disabled before the age of 20 and can therefore never seek to support themselves will get a more generous and decent level of benefit. The noble Lord asked about a young person, particularly someone with a learning impairment, who might otherwise remain in education for longer and therefore whether the cut-off point at the age of 20 would debar that individual from benefit. This is a real issue. What we seek to do is to ensure that those who cannot enter into the labour market have access to IB. Clearly, if by virtue of a learning impairment a person takes longer to complete his or her full-time education it is difficult to say that that individual should not have access to the benefit. But we need to discuss this matter and consult to see how best to deal with it. It will take time before this emerges in the form of regulations. We shall see what we can do to address the very real issue that has been raised by the noble Lord.
Lord Skelmersdale: My Lords, there will be a good number of people on state benefits up and down the country who are absolutely delighted by what the noble Baroness has been able to repeat this afternoon. But does she believe that leopards blush? She has been rightly praised several times this afternoon for her
1940
knowledge of this very intricate subject, but at least in one respect she appears to have changed her views quite dramatically. The Statement praises the Government for being able to make the biggest single increase ever in child benefit. The figure is £2.95, if I have written it down correctly. The noble Baroness will recall—certainly I well remember it—fulminating about the unfairness of child benefit. What has changed? The noble Baroness appears to be confused.
Baroness Hollis of Heigham: My Lords, I hope that the noble Lord will forgive me; I am sure it is my stupidity. I do not understand the point about fulminating against the unfairness of child benefit.
Lord Skelmersdale: My Lords, I shall explain because it will be useful to have an answer. In the past, the noble Baroness has made the point—I agree with her—that child benefit goes to those who need it and are deserving of it and equally to those richer people who are not deserving of it. I précised that remark by talking about the unfairness of child benefit. I repeat my question. What has changed in the Government's thinking?
In response to the noble Lord, Lord Goodhart, the noble Baroness said she believed that over the lifetime of this Parliament the social security budget would rise by 2.2 per cent. a year. That must be an average over the lifetime of the Parliament. Without having read the papers, or having been able to add up even vaguely the figures announced in the Statement, it seems to me that it is an expensive Statement. Is the Minister saying that there will be an increase of 2.2 per cent. this year on the social security budget or that the 2.2 per cent. will be averaged out per year over the lifetime of the Parliament?
Baroness Hollis of Heigham: My Lords, I am not sure whether we are at cross purposes. It may help if I reflect on what the noble Lord says.
I sought to say that under this Government, as has been made clear in the CSR, our expected intent—we have no reason to think that we would depart from it—and our forecast therefore, is that social security expenditure will rise on average 2.2 per cent. Whether the figure is 1.3 per cent. or 2.2 per cent. depends on how one counts in the working families tax credit. That is the difference. I said that, within that, the growth is mainly demographically driven; that is, by the growing number of pensioners who, I am glad to say, are living longer. We are therefore cutting the expenditure in which the previous administration was engaged—expenditure on social and economic failure. I refer to the paying of benefits to people who would have liked to work but were unable to do so. That is the main difference in our policies.
The Statement today is not a cuts-led Statement. It would produce savings of only about £25 million a year by the end of this Parliament on a budget of £2,500 million. It is a principle-led one of work for those who can, security for those who cannot; and work relates to new deals, civil rights, minimum wage, and so

1941
on. It is security in terms of the benefits for those who have no access to the labour market and therefore need a decent and proper standard of living.
Lord Skelmersdale: My Lords, before the Minister concludes that point, can she tell us in absolute terms how much money the Statement adds to the social security budget?
Baroness Hollis of Heigham: My Lords, 2 per cent. per year on £100 billion will be £2 billion.
Baroness Pitkeathley: My Lords, like other noble Lords, I very much welcome the Statement, in particular the cancellation of the benefits integrity project which, as the Minister knows, has caused so much distress.
The extension of the mobility allowance to three and four year-olds will be greatly welcomed by parent carers. It is a huge step forward. However, the issue of carers benefits is absent from the Statement. As the noble Baroness knows only too well, the issue of carers' income and benefits is closely related to the issue of disability income. Can she assure me that the question of carers' income will be addressed through the national strategy for carers currently under consideration?
Baroness Hollis of Heigham: My Lords, I thank my noble friend for that remark. As noble Lords know, my noble friend will shortly leave her responsibilities with the NCA. I am sure the whole House will join me in paying tribute to the work she has done for carers who for so many years have been a neglected body. I am delighted to take this opportunity to pay that tribute.
As a result in part of the campaigning work my noble friend undertook, the Prime Minister set up the national carers strategy in which we seek to integrate the work being done within the Department of Health, the DSS and the DfEE. Carers benefits are part of that consideration. However, the strategy has been only recently set up and conclusions are far from being reached.

Scotland Bill
4.44 p.m.
Consideration of amendments on Report resumed on Clause 23.
Lord Mackay of Drumadoon Lord Mackay of Drumadoon moved Amendment No. 108A:
Page 12, line 40, at end insert—
("(12) No decision by the Lord Advocate to grant an authorisation to a procurator fiscal under subsection (11) shall be reviewable by any court.").
The noble and learned Lord said: My Lords, this amendment is linked with Amendment No. 111. It returns to an issue which I raised at Committee stage on 21st July of this year. The purpose of the amendments is self-explanatory. When the Lord Advocate or the Solicitor-General declines to answer a question or to
1942
produce a document to the parliament, or whether a procurator fiscal authorised by the Lord Advocate does so, the decision of the Law Officer should not be reviewed by a court of law. It was part of a theme on which I have spoken on a number of occasions in debates on the Bill: seeking to restrict so far as possible the role of the courts in the affairs of the parliament.
As I explained under the Human Rights Bill (which returns to your Lordships' House on Thursday of this week) for the first time it will be possible for the courts to review decisions of the Lord Advocate on certain issues as to whether or not to prosecute individuals and, if so, on what charges. I accept that that is a necessary consequence of the Bill in the terms in which it will in all probability become law. This was a related issue: to try to limit the role of the courts.
When the matter was debated previously, the noble and learned Lord the Lord Advocate indicated that the question was of some interest to the Government. I understood from what he said that it was a matter to which he would give further consideration. Therefore these amendments are tabled in the hope that, further consideration having taken place, a favourable response might be forthcoming.
I shall be grateful if in reply the noble and learned Lord could clarify one matter. In the definition of devolution issues, sub-paragraph (d) of Part I of Schedule 6 states:
"a question whether a purported or proposed exercise of a function by a member of the Scottish Executive is, or would be, incompatible with any of the Convention rights".
Sub-paragraph (e) states:
"a question whether a failure to act by a member of the Scottish Executive is incompatible with any of the Convention rights".
Am I correct in understanding that the use of that language covers the acts, or failures to act, of the Lord Advocate and the procurator fiscal in the carrying out of the independent functions which the Lord Advocate has as head of the system of criminal prosecution and the system for investigating sudden deaths in Scotland? It appears to me that it does. I refer to Amendment No. 145F which the Government intend to move as an amendment to Clause 53.
I am sure the noble and learned Lord the Lord Advocate understands the reason that I ask the question. If the acts of the Lord Advocate and the procurator fiscal fall within the terms of the sub-paragraphs of paragraph 1 of Schedule 6 it will mean that any final decision as to whether or not an action has been in conformity with convention rights, or is compatible with convention rights, will fall to be determined ultimately by the Judicial Council rather than by the Appellate Committee of your Lordships' House, as opposed to what will happen with other public authorities under the Human Rights Bill. I beg to move.
Lord Hardie: My Lords, as the noble and learned Lord observed, at an earlier stage I indicated that I would consider the matter. The Government have done so and I regret that we are unable to accept the amendments, which seek to remove the possibility of

1943
the Lord Advocate facing judicial review where in his judgment a question should not be answered or a document should not be produced to the parliament.
Amendment No. 111 would rule out the possibility of the courts being able to review a decision by the Lord Advocate or the Solicitor General to decline to answer a question or to produce a document about a particular criminal case on the ground that he considers that doing so might prejudice the proceedings in that case or would otherwise be contrary to the public interest.
The Government believe that the Bill as drafted strikes the right balance between the independence of the Lord Advocate in exercising his prosecution functions, and the independence which both the courts and Parliament recognise, and his accountability.
I accept that this is a very sensitive area, but, as I have already explained, we really do believe that we could not justify such an absolute bar as the amendment proposes. Nor do we believe that it would be necessary in practice in order to preserve the independence of the law officers. The mere fact that the courts could be asked to reach a judgment on this issue would not in itself undermine the independence of the Lord Advocate. Indeed, in extreme circumstances it might act as a safeguard, a point to which I shall return.
In any case, should such a case arise, I believe that we can expect the courts to be extremely keen to protect the independence of the law officers in reaching any decision, not only because that is the position which the courts adopt at present but also because the Bill recognises the importance of the law officers having the necessary independence of the executive when they are exercising the special functions of prosecutions or investigations of sudden deaths.
Amendment No. 108A relates to procurator fiscal. Clause 23(11) provides that a procurator fiscal is not obliged to answer any question or produce any document relating to the operation of the system of criminal prosecution in any particular case if the Lord Advocate considers that answering a question or producing a document might prejudice criminal proceedings in that case, or otherwise would be contrary to the public interest, and has authorised the procurator fiscal to refuse to answer a question or produce a document. Similar to Amendment No. 111, Amendment No. 108 would prevent any court from reviewing a decision from the Lord Advocate under Clause 23(11).
I have to say that we are not aware of any recent attempts to use the courts to force procurators fiscal to give evidence about the handling of cases. The most recent instance in Scotland of a procurator fiscal giving evidence at judicial proceedings was at the Dunblane fatal accident inquiry. However, in relation to those proceedings, the procurator fiscal depute was authorised by the noble and learned Lord, who was then Lord Advocate, to appear at the proceedings and was given strict guidance in relation to the questions that he should answer. Given this background, we should expect the courts to be reluctant to question the judgments of the Lord Advocate in this area.
1944
Moreover, as I have already suggested, I am not entirely persuaded that the amendment would strengthen the independence of the Lord Advocate. Assuming that the courts would be jealous to guard that independence, it is certainly possible to imagine that it might assist the Lord Advocate if he is able to demonstrate, in the extreme circumstance of his judgment being challenged, that the courts support his view. A future Lord Advocate might yet have cause to rue the day that that possibility was closed off.
I accept that the amendments are well intentioned and raise important matters. However, as I have indicated, I believe that they are unnecessary and I hope that the noble and learned Lord will feel able to withdraw them.
Finally, perhaps I may deal with a point that the noble and learned Lord raised. The Lord Advocate is a member of the Scottish executive and would be covered by the provisions in Schedule 6, including in respect of his actions as head of the system of criminal prosecution. That is consistent with what I have said hitherto. I hope that in those circumstances the noble and learned Lord will withdraw his amendment.
Lord Mackay of Drumadoon: My Lords, the noble and learned Lord will interrupt me if I am wrong, but I assume that that covers the actions of procurators fiscal as being officials of a member of the Scottish executive.
The noble and learned Lord rightly said that in the event of such an issue coming before the court, the court would treat it as one of great sensitivity and would seek if at all possible not to interfere with a proper exercise of the discretion of either the Lord Advocate or a procurator fiscal. My concern is to cut off any such court actions at source. It may be that that is unnecessary. Although I find it difficult to imagine that a Lord Advocate would welcome having a particular case reviewed in court, I accept that it is possible some time in the future. In those circumstances, I beg leave to withdraw Amendment No. 108A.
Amendment, by leave, withdrawn.
Lord Hardie Lord Hardie moved Amendment No. 109:
Divide Clause 23 into two clauses, the first (Power to call for witnesses and documents) to consist of subsections (1) to (7), (10) and (11) and the second (Witnesses and documents: notice) to consist of subsections (8) and (9).
The noble and learned Lord said: My Lords, this is a technical amendment. I beg to move.
[Amendment No. 109A, as an amendment to Amendment No. 109, not moved.]
On Question, Amendment No. 109 agreed to.
Clause 24 [Witnesses and documents: offences]:
Lord Hardie Lord Hardie moved Amendment No. 110:
Page 12, line 45, leave out ("relating to the matters") and insert ("concerning the subjects").
On Question, amendment agreed to.
Clause 26 [Participation of the Scottish Law Officers]:
[Amendment No. 111 not moved.]
Clause 27 [Acts of the Scottish Parliament]:
Lord Hardie Lord Hardie moved Amendment No. 112:
Page 14, line 20, leave out from first ("of") to end of line 22 and insert ("an Act of the Scottish Parliament is not affected by any invalidity in the proceedings of the Parliament leading to its enactment.").
The noble and learned Lord said: My Lords, I beg to move.
Lord Mackay of Drumadoon: My Lords, before the amendment is agreed to, perhaps I may raise in the Chamber a matter about which I wrote to the noble Lord, Lord Sewel, at the weekend. I requested that the Government make clear the full intentions of the amendment, in particular what is encompassed by the words "invalidity".
This is an issue on which we have touched from time to time in our discussions and debates on the Bill. On the last day of Committee, when discussing the effects on an Act of the Scottish parliament if it had been passed without standing orders being complied with or in contravention of some particular provision of standing orders, the noble and learned Lord the Lord Advocate indicated that any such challenge would be precluded by Clause 27(5) in its current terms. That subsection is being recast by this provision.
In addition to precluding challenge based on failure to comply with standing orders or some confusion as to the voting that took place, I am interested to know what other matters are covered by the word "invalidity". That is part of the wider issue of Parliamentary privilege with which we shall deal later on in our debates on Report. I am interested to know whether it is the Government's intention that Clause 27(5), as they propose to amend it, would exclude any inquiry by a court as to whether or not Parliament had available to it sufficient material, testimony or evidence which justified it enacting particular statutory provisions in the terms in which they wished. I wish to know also whether there were any circumstances in which it would be competent for the court to go behind the letter of the provision of an Act of the Scottish parliament to see whether it had come into being because of some misapprehension on the members' part as to what was the current state of the law; or the factual position relating to the substance of the provision; or any deception, whether innocent or otherwise, in somebody misleading a Committee which had looked to the Bill before it finally became an Act of the Scottish parliament.
Those are all issues which the courts would refuse to entertain in considering legislation passed by your Lordships' House and another place. Therefore, I seek to inquire of the Government what are the full ramifications of Amendment No. 112.
5 p.m.
Lord Renton: My Lords, I support my noble and learned friend in this matter. The rules of order which are bound to be observed and which should be observed in the Scottish parliament will be of no effect if legislation is passed in contravention of those rules.
1946
On many occasions that would not matter very much. It might be a very minor contravention. But rules of order, certainly in another place in our Parliament, provide that in financial matters certain rather rigorous procedures must be followed in order that the financial provisions may be of full effect. I just wonder what would be the result in the Scottish parliament if a rule of order governing a financial matter had not been observed.
Lord Sewel: My Lords, I had intended to deal with these matters when we discussed Amendment No. 138. I am happy to deal with them now or when we discuss that amendment but I should prefer not to deal with it on two occasions. Perhaps the noble and learned Lord, Lord Mackay of Drumadoon, will indicate whether he wants the explanation now or later.
Lord Mackay of Drumadoon: My Lords, if it is convenient, I should like to hear the explanation now.
Lord Sewel: My Lords, I thought the noble and learned Lord might say that. He is quite correct to say that he wrote to me seeking clarification of the provision in Clause 27(5).
The intention is that that provision should have the effect that an Act of the Scottish parliament may not be challenged on any procedural grounds. In that respect, it is intended to make the position of an Act of the Scottish parliament similar to that of an Act of the Westminster Parliament.
I understand that the position regarding Westminster Acts has been discussed in a number of judicial cases. The effect of those cases is that the validity of a Westminster Act cannot be challenged on the basis of arguments about the legitimacy of, for example, the manner in which an Act has been introduced as a Bill; or what was done previous to its introduction; or what passed in Parliament during the various stages of its progress through the two Houses.
Clause 27(5) is intended to confer similar protection on Acts of the Scottish parliament. Accordingly, the intention is that Clause 27(5) should certainly preclude challenges to the validity of an Act of the Scottish parliament on the basis that standing orders have not been properly followed during the parliamentary passage of that Act as a Bill. However, it is intended that it should preclude also challenges on other procedural grounds where it is suggested that a procedural rule of the parliament has not been followed. Therefore, an Act of the Scottish parliament will therefore be in a different position from subordinate legislation which can be challenged on the basis that the procedure prescribed for making the subordinate legislation has not been complied with. I hope that that gives a range of fairly comprehensive assurances which the noble and learned Lord sought.
Lord Mackay of Drumadoon: My Lords, I regret to disappoint the Minister. I am not sure that it provides all the safeguards that I am seeking. However, his response has been extremely helpful in that it clarifies the Government's intentions in relation to this

1947
amendment. That will be extremely useful not in relation to Amendment No. 138 but in relation to another amendment which we shall reach next week. Therefore, I am grateful to the Minister.
On Question, amendment agreed to.
Lord Steel of Aikwood Lord Steel of Aikwood moved Amendment No. 113:
Page 14, line 25, at end insert ("in relation to reserved matters").
The noble Lord said: My Lords, this refers to Clause 27(7) which at present states:
"This section does not affect the power of the Parliament of the United Kingdom to make laws for Scotland".
I wish to add the words "in relation to reserved matters". I am well aware that the Government will tell me that nothing in this legislation prevents this Parliament acting in its sovereign capacity in any way in the future that it so wishes. Indeed, if the Conservative Party were swept to power at the next election it will have the power to introduce legislation to abolish the Scottish parliament and all the work that we have been so painfully putting together. Were they to do that, I am sure that that would lead fairly quickly to the break-up of the United Kingdom. But there is no question that this Westminster Parliament retains absolute power over what happens under the provisions of this Bill.
Having said that, in my view there is no reason to have subsection (7) in the Bill at all. It is entirely unnecessary and otiose. But it is more than that. As worded at present, it is provocative and, indeed, positively offensive because it almost invites this Parliament to meddle in future in the law-making of Scotland on those matters which this Bill devolves to Scotland. That cannot be right. I hope that even if the Government do not accept the amendment or agree to delete subsection (7) altogether from the Bill, they will assure us that it is not intended that this Parliament in future should intervene in matters or attempt to make laws on those issues which we are busy devolving to Edinburgh at present.
It is important to have a clear statement on this because of an exchange which took place in this House on 4th March. It is my understanding that when the parliament is devolved the only residual Scottish executive responsibility here will be through the Secretary of State for Scotland whose post continues. Therefore, I assume that there will have to be some opportunity for Members of the other place to question the Secretary of State for Scotland on his responsibilities because he will be a Minister of the Crown and answerable to this Parliament. Clearly, Scottish Question Time, as we have known it up to now, will change. Almost all of the matters for which the Secretary of State is at present responsible will be devolved, and therefore Scottish Question Time in the House of Commons will cease the minute the Scottish parliament is up and running. That is my understanding.
The reason I raised this issue is that on 4th March the noble Lord, Lord Taylor of Gryffe, asked the then Leader of the House, the noble Lord, Lord Richard,
1948
what would be the consequence of that change in relation to this House. He said,
"Is my noble friend aware that from that date"—
the date on which the Scottish parliament comes into being—
"Scottish Questions will no longer be in order in the House of Commons?".
That is not strictly correct and I have described the situation that will obtain. The noble Lord continued,
"Can we have some assurance that similar strictures will not be applied in the House of Lords in these new constitutional arrangements?".
The noble Lord, Lord Richard, replied,
"My Lords, I am aware of no rules of order in your Lordships' House which would prevent a noble Lord from putting down such a question".—[Official Report, 4/3/98; col. 1200.]
That cannot be a complete or accurate answer. Who would answer Questions in this place on behalf of the Scottish executive and the Scottish parliament? It clearly cannot be right that Questions of that kind could be put in this House or in the other place.
I am grateful to the noble Lord, Lord Molyneaux of Killead, for drawing my attention to the fact that, during the days of Stormont, that was exactly what happened. There were no Questions on devolved matters in either House of Parliament, and there can be no Questions on devolved matters once this Act is in operation. Clause 27(7) as it stands, therefore, is dangerous and misleading. I should like to see it either amended or withdrawn, or at any rate to be given a clear statement from the Government as to the absolute limits that will be placed on future interventions from this Parliament in the internal affairs of Scotland after the Scottish parliament is up and running. I beg to move.
Lord Mackay of Ardbrecknish: My Lords, I had not intended to take part in the debate on this amendment because I had not understood what the noble Lord, Lord Steel, was getting at. However, having listened to him, I am tempted to rise to my feet and make a few observations.
First, we have been over this ground firmly with regard to many matters which are devolved but yet have a competence at Community level; for example, agriculture and fisheries. It was made clear to me that, despite these matters being devolved on the face of the Bill, Scottish Members of either this House or the other place could raise Questions on agriculture and fisheries in Scotland so long as they related to the common agriculture or common fisheries policies, or negotiations going on in relation to either.
As I understand it—the Minister made it clear to me and we were grateful for that—the position will be that the Minister for Agriculture, and in this House the Parliamentary Secretary, Ministry of Agriculture, will answer Questions on Scottish matters pertaining to agriculture and fisheries so far as they relate to the common agricultural and common fisheries policies. That is pretty well all of them and therefore gives us carte blanche to continue asking Questions, as my noble friend Lord Monro did yesterday when he asked about the problems of Scottish agriculture.

1949
If we go a little further into areas such as health and education where Community competence is not relevant, the money that will be spent by the Scottish parliament will be voted for by the other place. It seems to me, therefore, that, with a little ingenuity, any Member of the other place could ask Questions about devolved Scottish matters so long as he or she ties the Question into the money voted by the House of Commons to be sent to the Scottish parliament.
Therefore Questions ought to be allowed in the other place in these matters. What I am not sure about is who will answer them. Frankly, I do not believe that the office of Secretary of State for Scotland will last very long after the devolution settlement comes in. Let us assume that, at least in the short term, he will answer. Am I right in assuming that he will be held answerable for the money sent and spent and therefore he will have to answer Questions?
Those are matters to which we will probably struggle to find answers. Whether we will find answers to them on this side of May or whether they will develop in the post-devolutionary phase is a different matter. I shall be interested to hear the Government's response.
5.15 p.m.
Lord Fraser of Carmyllie: My Lords, for slightly different reasons to the noble Lord, Lord Steel of Aikwood, I wondered why this provision was included in the Bill. Let us envisage the circumstance that it is not in the Bill. It does not seem to me that any possible restriction could be imposed on the power of this Parliament to legislate for Scotland at some point in the future.
Unlike the noble Lord, Lord Steel, I am not interested in having a statement of present intention from the Government. As I understand the constitutional theory, a future government would be perfectly entitled, where there is only a devolved parliament, to make laws for Scotland, not least (though I would not advise it) repealing this Act. If there is anything to be said for the Government, it is that at least they have been honourable in stating on the face of the Bill that this remains the case. It does not add or subtract anything to what is the proper constitutional position.
Lord Sewel: My Lords, noble Lords diagonally opposite tabled this amendment when Clause 27 was discussed in Committee and we have had much the same discussion as we had then. I remain unpersuaded by the arguments that I have heard. At the end of the day there is little between us in trying to describe the actual constitutional position and what the future arrangements are likely to be.
We believe that the Bill as a whole makes appropriate provision for sovereignty of the United Kingdom Parliament within the framework of devolution. That is the crux of it. We are implementing a constitutional
1950
arrangement which recognises—indeed has to recognise and rightly recognises—the sovereignty of the Parliament of the United Kingdom.
Lord Mackie of Benshie: My Lords, I thank the noble Lord for giving way. Is there any necessity to rub it in?
Lord Sewel: My Lords, it is not a matter of rubbing it in. I welcome the continuing sovereignty of the United Kingdom Parliament. However, in making such an arrangement it is important to capture in the Bill the essence of devolution as opposed to some other model, such as, perhaps, federalism. That is what subsection (7) does. In effect, it says that the United Kingdom Parliament retains all sovereignty, but it is invited to exercise that sovereignty in relation to devolved matters through conferring devolved competence on the Scottish parliament. Therefore, although, formally, the United Kingdom Parliament retains the ability to legislate on all matters, in practice it devolves the power to legislate other than on reserved matters to the Scottish parliament.
Clause 27 of the Bill makes it clear that the devolution of legislative competence to the Scottish parliament does not affect Westminster's ability to legislate for Scotland, even in relation to devolved matters. Indeed, as paragraph 4.4. of the White Paper explained, we envisage that there could be instances where it would be more convenient for legislation on devolved matters to be passed by the United Kingdom Parliament. However, as happened in relation to Northern Ireland earlier in the century, we would expect the convention to be established that Westminster would not normally legislate with regard to matters within the competence of the Scottish parliament without the consent of that parliament. It may just be convenient from time to time.
Various noble Lords have expressed concern about who will be accountable for various policies and who will answer questions about them. It is outwith the scope of this Bill to make arrangements for what would happen in this Parliament after devolution. In the other place the Procedure Committee is looking at what might happen to procedures there after devolution. It will be taking evidence from a range of sources and we should not prejudge the outcome of its considerations. However, as I have mentioned before, it is possible that a convention will develop in the other place that questions as regards matters within the competence of the Scottish parliament are not accepted if United Kingdom Ministers decline to answer them on the grounds that the subjects are matters for the Scottish executive. That approach has worked before in relation to Northern Ireland and I can see advantages in adopting it again.
No doubt your Lordships' House will want to reflect on what we do here following the outcome of the review in the other place. Personally, I should have thought that

1951
the kind of self-denying ordinance which may be followed elsewhere is worth considering. I suspect that will happen.
Lord Mackay of Ardbrecknish: My Lords, I am grateful to the noble Lord for answering the question about questions. Before he sits down I would like to be clear about legislation. Let us assume that the Government have negotiated on an issue which is devolved; for example, involving agriculture or fishing or some other issue. It has been negotiated in Brussels and a conclusion has been reached there which requires legislation. That has to be passed. Will it be passed by this House for the whole of the United Kingdom or will it pass legislation for England and Wales? I shall leave out Northern Ireland because it involves quite complex devolution. Will it be left to the Scottish parliament to pass parallel legislation for Scotland? I am unclear as to what will happen in those circumstances.
Lord Sewel: My Lords, there are sections of the Bill which we are likely to try to define as regards the nature of the relationship between this Parliament and the Scottish parliament in relation to the acceptance of international obligations and carrying them through into law. I would like to hold back on this until we reach that stage of the Bill.
Baroness Carnegy of Lour: My Lords, before the noble Lord continues, can he say how he sees the role of the Select Committees of this House? For example, there is Sub-Committee D of the European Communities Committee which concentrates on matters relating to agriculture and the like. Will they take into consideration the views of the Scottish parliament? Will the Select Committees address their recommendations to the Scottish parliament as well? These kinds of things should be sorted out before the Bill becomes law; otherwise there will be great confusion.
Lord Sewel: My Lords, I believe that we sometimes create problems for ourselves by seeking to define precisely all matters of detail, when in some cases the application of common sense, based on experience, is perhaps the best way forward. What the noble Baroness asked is a prime example. I believe that something sensible will occur, which is a proper and reasonable way of conducting business.
As regards a point raised by the noble Lord, Lord Mackay of Ardbrecknish, about the Secretary of State for Scotland, he will be answerable to the UK Parliament for the discharge purely of his functions, including the transmission, and the amount, of the block grant to the Scottish executive. However, how that grant is spent will be a matter for the Scottish parliament to consider. On that basis, I hope that the noble Lord will withdraw his amendment.
Lord Steel of Aikwood: My Lords, I am most grateful to the Minister for his reply. In a way I am sorry that I dragged the noble Lord, Lord Mackay of Ardbrecknish, into this discussion. He advanced a most dangerous doctrine by inviting ingenuity among
1952
Westminster parliamentarians in future to meddle—that appears to be his view—in the internal affairs of Scotland. I accept entirely what the Minister has just said in his closing remarks, that as long as the office of Secretary of State for Scotland exists—and I agree with the noble Lord, Lord Mackay, that it will not be for very long—it would be unacceptable for questions to be tabled to him about how money is spent simply on the excuse that he is responsible for the transfer of the block grant from the Treasury to Scotland.
The noble Lord, Lord Mackay of Ardbrecknish, introduced a Brussels red herring. I agree with the Minister in considering it a fair point as regards a subject such as agriculture and a clear correlation between Community competence, on the one hand, and the devolved administration of agriculture matters for Scotland, on the other. If there is some agreement where we have to legislate, for example, against, say, five-legged sheep, common sense dictates that the Scottish parliament and this Parliament would agree that one simple piece of legislation should go through this House affecting the whole of the United Kingdom. I do not believe that anyone would take offence at that.
However, if it were a matter relating to our external obligations, that would clearly be a reserved matter. I do not think there is a problem. I welcome what the Minister said about a convention that will grow. I agree with that; namely, that this Parliament will not normally legislate on devolved matters. I would rather that the Minister had added the words "nor interfere" in devolved matters. I do not believe that that is a matter for discussion or questions in this or the other House. I believe that it would be resented in Holyrood if this Parliament were seen to try to interfere in devolved matters. I accept the Minister's assurance that that is not intended and that a convention will develop. It is just unfortunate that these two lines remain in the Bill. We shall just have to agree to differ. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 28 [Legislative competence]:
Lord Sewel Lord Sewel moved Amendment No. 114:
Page 15, line 8, leave out subsection (5).
On Question, amendment agreed to.
Lord Hardie Lord Hardie moved Amendment No. 115:
Page 15, line 12, leave out subsection (6).
The noble and learned Lord said: My Lords, in moving this amendment I shall speak to Amendments Nos. 131, 145, 192 and 192A. Government Amendment No. 192 inserts a new clause which makes provision as to the interpretation of:
"(a) any provision of an Act before the Scottish parliament, or of a Bill for such an Act, and
(b) any provision of subordinate legislation, made, confirmed or approves, or purporting to be made, confirmed or approved, by a member of the Scottish Executive",
where such a provision could, on one reading, be outwith the competence of Parliament. The provision clarifies and replaces the existing provisions in respect

1953
of these matters in Clauses 28(6) and 50(4). Those subsections are consequentially deleted by Amendments Nos. 115 and 145.
In the sense that it builds on the existing clauses, this is not a new provision. It is, however, a very important one and it may be helpful if I briefly explain how it is intended to work. First, the new clause is intended to apply to the interpretation of Bills as well as to Acts of the Scottish parliament. It will therefore apply in any case where the Judicial Committee of the Privy Council is considering any reference to it of a Bill or of a devolution issue in connection with an Act of the Scottish parliament.
Secondly, the new clause makes it clear that any provisions in such legislation or in Bills which could be read widely as being outwith competence are to be read as narrowly as is required in order for them to be within legislative competence, but only so far as it is possible to do so.
An example might make this clearer. An Act of the Scottish parliament might make general provision enabling the Scottish ministers to hold a referendum on any matter. It would be possible to read that Act as enabling Scottish ministers to hold a referendum on some reserved matters such as independence or the monarchy. The Act would be ultra vires to that extent. However, in order to preserve the validity of that Act, the new clause would require the courts to read the Act as narrowly as is required for it to be intra vires, so far as it is possible to do so. In other words, the courts will be required to read the Act of the Scottish parliament as enabling only the holding of referendums on matters within the competence of the parliament. In that way, the Act is not rendered ultra vires to any extent.
This is thought to be the normal rule of construction which the courts would apply in construing legislation from parliaments with limited powers. They would seek to give effect to that legislation rather than to invalidate it. This is called the principle of efficacy. However, if a provision can clearly only be read as making provision outwith competence—for example, an Act of the Scottish parliament providing only for a referendum on independence or the monarchy—the new clause will not enable or require it to be read as being within competence.
We think it is necessary to have this provision to ensure that legislation made by the parliament and the executive can be given effect in relation to matters within their competence and does not have to be struck down merely because it could, on a broad reading, also potentially relate to matters outwith their competence.
As I have explained, Amendments Nos. 115 and 145 are consequential. They delete the redundant provisions in Clauses 28(6) and 50(4). I beg to move.
5.30 p.m.
The Earl of Mar and Kellie: My Lords, this group of amendments is clearly designed to establish a bias in favour of devolution. It is inevitable that some legislation passed by the Scottish parliament will be tantamount to sailing close to the wind. Wherever the
1954
line is drawn, it will be impossible to avoid coming up to the line. There cannot be a legislative no man's land. I am sure that those members of the Judicial Committee who have to rule on devolution issues will find helpful the instruction to read this legislation in favour of the Scottish parliament. This amendment will strengthen the devolution project as it maximises rather than minimises the powers devolved to the Scottish parliament.
Lord Mackay of Drumadoon: My Lords, the noble and learned Lord has helpfully and fully explained the reasoning behind the principal amendment in this group, Amendment No. 192. Perhaps I may invite him, however, to clarify one point, which is whether in practical terms subsection (2) of the new clause will have any different effect from subsection (6) of Clause 28 as it stands. I say that because when this issue was last debated in Committee, my recollection is that the noble and learned Lord, Lord Hope of Craighead, indicated that, if at all possible, the approach to the construction of legislation in one Bill should be the same as in another.
My amendment to Amendment No. 192, Amendment No. 192A, follows the approach taken in Clause 3(1) of the Human Rights Bill, which states:
"So far as it is possible to do so, primary legislation and subordinate legislation must be read and given effect in a way which is compatible with the Convention rights".
Under the Human Rights Bill as amended in another place—it falls to be considered by your Lordships this Thursday—subordinate legislation will include Acts of the Scottish parliament. Therefore, under the Human Rights Bill, they will fall to be construed by the approach set out in subsection (1) which follows a different style from that in the government amendment but a fairly similar style to that of subsection (6). It was probably for that reason that the noble and learned Lord, Lord Hope of Craighead, expressed the wish that, if at all possible, the same approach should be followed, because if the same provision of an Act of the Scottish parliament falls to be construed under two Bills as against convention rights in each instance, it seems desirable that, if at all possible, the two Acts should indicate that that construction should be along similar lines.
I welcome that part of Amendment No. 192 which indicates that this provision should apply at a pre-legislative stage. Obviously, that is the purpose which my amendment, Amendment No. 131, seeks to achieve.
As I have said, my main concern relates to subsection (2) of the new clause that is Amendment No. 192. I want to be quite clear about whether the Government are suggesting a different approach from that on which we have been proceeding until now in this Bill and in the Human Rights Bill.
Lord Renton: My Lords, I am not in broad disagreement with the Government over what they are intending in this group of amendments. However, if

1955
the Lord Advocate will look at Amendment No. 192 and at subsection (2) of that new clause, he will find that,
"Such a provision"—
that is, an Act of the Scottish parliament—
"is to be read as narrowly as is required for it to be within competence, if such a reading is possible, and is to have effect accordingly".
I believe that the word "narrowly" is capable of two interpretations. One is that the provision is to be read so strictly that if there is a doubt, it must be considered outside the competence. I wonder whether the noble and learned Lord would be good enough to consider his view of the wording of that subsection because I am not sure that it is consistent with the broad intention of this group of amendments.
Lord Hardie: My Lords, perhaps I may deal first with the point raised by the noble Lord, Lord Renton. Reading that subsection as a whole, the direction is to read the provision—that is, an Act of the Scottish parliament,
"as narrowly as is required for it to be within competence".
If there are two possible interpretations, one of which would have the effect of taking the provision outwith competence, while the other interpretation would bring it within competence, that is the direction or instruction that we are hoping to give the court. I hope that that explains what we are about. I hope also that we have achieved our objective with regard to the terminology.
I turn now to the points raised by the noble and learned Lord, Lord Mackay of Drumadoon. Following the earlier stages of the consideration of the Bill, and having regard to the comments of the noble and learned Lord, Lord Hope of Craighead, this matter was given detailed consideration by parliamentary draftsmen and by Ministers with their advice. I would emphasise that there is not very much between us as to the intention behind the provision. The amendments of the noble and learned Lord and our amendments are intended to ensure that the courts do not invalidate an Act of the Scottish parliament. In cases of ambiguity, both amendments require the courts to read an Act of the parliament in such a way as to assume that it was within the legislative competence of the parliament.
The difference is largely one of style. The amendment of the noble and learned Lord is more positive, whereas our position is more negative because it requires the court to read the Act narrowly. This matter has been considered by parliamentary counsel and it is their view that the way it is approached in this provision is more appropriate than the formulation of the noble and learned Lord. I understand how the noble and learned Lord came to such a formulation from the human rights legislation. That particular point was considered by parliamentary counsel and the view was taken that, in the context of this Bill, this terminology was the more favoured and more appropriate.
Lord Mackay of Drumadoon: My Lords, perhaps the noble and learned Lord is able to give an expression of the Government's intention. If a court failed to
1956
construe an Act of the Scottish parliament under Amendment No. 192, or if it construed it under Clause 3(1) of the Human Rights Bill, in practical terms would the same approach be adopted?
I accept that there are positive and negative ways of putting things. I am sure that the noble and learned Lord will concede that throughout the debate on this Bill we on these Benches have tried to be as positive as possible. Such negativity as there has been has come from other quarters, which I would not care to name in the presence of the noble Lord, Lord Mackie of Benshie.
Joking apart, I am not trying to open up a divide, I am trying to close one off. If it is possible for the noble and learned Lord—either today, on Thursday with the Human Rights Bill or when we come back to this on Third Reading—to make it clear that the form of words used by the parliamentary draftsman in Amendment No. 192 is, in practical terms, necessary to set the courts along an approach identical to that in the Human Rights Bill, that would cover any concern that I have.
Lord Hardie: My Lords, I am quite happy to give that assurance. I will come back and explain the matter more fully at Third Reading, if the House so wishes.
On Question, amendment agreed to.
Clause 29 [Legislative competence: supplementary]:
5.45 p.m.
Lord Mackay of Ardbrecknish Lord Mackay of Ardbrecknish moved Amendment No. 116:
Page 15, line 18, after ("functions") insert ("in relation to the regulation of sea fishing").
The noble Lord said: My Lords, before I speak to this amendment perhaps I could suggest that, to avoid confusion when we come to amendments which have already been spoken to, it might be handy if Ministers resurrect the old practice of getting up and saying that they have already spoken to them and that they beg to move. That would help us all—including, dare I say, the Government Whip—to follow where we are on the Bill and what we are doing.
Your Lordships might be puzzled by this amendment. When your Lordships read Clause 29(3), which was inserted into the Bill at Committee by the Government, you may wonder why I am attaching the words,
"in relation to the regulation of sea fishing".
The reason is very simple. When we discussed this matter in Committee on 21st July 1998, this subsection and a number of other amendments, which come later in the Bill, were all moved by the noble Lord, Lord Sewel, on the basis of dealing with a sea-fishing problem. The noble Lord, Lord Sewel, made it perfectly clear in col. 836 of the Official Report that this all had to do with,
"the exercise of ministerial and other functions in relation to the regulation of sea fishing [which] will often mean that functions are being exercised outside Scotland."—[Official Report, 21/7/98; col. 836.]
I do not want to pray in aid all that the noble Lord said to prove my point but, perhaps as a résumé, I will quote from column 838 of the Official Report where he said,
"In effect, Scottish Ministers will be responsible for managing fisheries within the Scottish zone and for managing Scottish boats; and MAFF Ministers will be responsible for managing fisheries within the English zone and for managing English boats".—[Official Report, 21/7/98; col. 838.]
Later in column 841 of the Official Report he said, "The amendments"—
in plural, including the amendment that incorporated this subsection into the Bill—
"are required, first, in order to ensure that there is an effective transfer to Scottish Ministers of functions in relation to the regulation of Scottish sea fisheries; and, secondly, to ensure that the competence of the Scottish parliament and of Scottish Ministers does not extend to regulating sea fishing by non-Scottish boats outside the Scottish zone of British fishery limits".—[Official Report, 21/7/98; col. 841.]
In other words, the whole debate was very much predicated on the fact that the whole group of amendments concerned sea fishing.
I said in my response that I accepted and understood what was being done. But I was puzzled as to why the first amendment—which is the amendment that we now see as Clause 29(3)—had no reference to sea fishing in it. The Minister said he would reflect on what I was saying during the summer. As he has not brought forward any amendments, clearly he has reflected and he has decided that he does not need to do anything.
As it stands, the functions in Clause 29(3) appear open-ended. It is quite a widely drawn subsection. We know from what the Minister said in Committee that it governs matters entirely relating to sea fisheries. For the avoidance of doubt we should put into the legislation the phrase that I have inserted so that it reads,
"specify functions in relation to the regulation of sea fishing".
No doubt the Minister will give me further assurances, but it would be easier if it was clear on the face of the Bill that this particular subsection referred to the regulation of sea fishing. I beg to move.
Lord Sewel: My Lords, I recognise the points made by the noble Lord, Lord Mackay of Ardbrecknish. He put the context of the earlier amendment and he got it absolutely right; we were talking about sea fisheries. But, on reflection, subsection (3) involves a little bit more than that and I will deal with that extension. Its whole purpose will be to clarify which existing ministerial functions will transfer to Scottish ministers by providing for Her Majesty, by Order in Council, to specify which functions are or are not exercisable in or as regards Scotland. Any order made under Clause 29(3) is subject to affirmative procedure, both at Westminster and in the Scottish parliament. The use of this power will require the agreement of both parliaments. There will be occasions when, although a function is exercisable outwith Scotland, it will be important to be able to regard it as one which is exercisable in or as regards Scotland by virtue of some other connection that it has to Scotland.
1958
The noble Lord is absolutely right in saying that the principal use will be in functions relating to sea fisheries. That is where it is essential that this process exists. But on reflection—I did think about it over the summer—I saw that it has other uses as well; for example, in relation to protection of the marine environment, where existing functions are similarly exercisable in relation to areas of the sea. So it is not just sea fishing but the associated marine environment where one needs this use of words to be able to act effectively.
When such regulatory functions are exercised outwith Scotland there will need to be clear connections to Scotland to justify action being taken by Scottish Ministers and for Scottish courts to recognise jurisdiction in trying offences under Scots law. At sea, however, it is possible to envisage various connections to Scotland that might be thought to satisfy the condition "as regards Scotland". Equally, it might be possible to establish various connections to other parts of the United Kingdom in respect of any particular function. The power could also be used in connection with the executive devolution of functions to Scottish Ministers under Clause 59; for example, by providing that the appointment of Scottish members of a UK or GB body operating in a reserved area is a function exercisable as regards Scotland, so that Scottish Ministers can be given a role in the exercise of the appointment function under Clause 59.
I think I have demonstrated that the principal reason for having the power is related to sea fisheries, but there are certain very, very secondary contexts in which the power would be exercisable and necessary as well. I mentioned the marine environment and the business of Scottish members on GB bodies and the ability of Scottish Ministers to be involved in those appointments. That is why there is reference to "as regards Scotland"—that is necessary—but it is a very minor extension beyond sea fisheries. I hope that satisfies the noble Lord, Lord Mackay.
Lord Mackay of Ardbrecknish: My Lords, I suspect that the Minister should be grateful to me for putting down this amendment because it has allowed him to put on record a much wider interpretation of this subsection than one would have construed from his words at the Committee stage. I suspect that if the Minister had tried to do something rather wider than sea fishing some aggrieved party might easily have taken him to court and prayed in aid his words at the Committee stage. So I think I have done the Minister a big favour—I hope he appreciates it—by allowing him to put it on the record, in case any Pepper v. Hart occasions arise, that this subsection must be interpreted a good deal wider than it was initially in Committee.
I am happy to accept the noble Lord's explanation. I am happy to accept that it does have a wider application. I am therefore content to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Sewel Lord Sewel moved Amendment No. 117:
Page 15, line 20, at end insert—
("() An Order in Council under this section may also make such modifications of—

(a) any enactment or prerogative instrument (including any enactment comprised in or made under this Act), or

(b) any other instrument or document,

as Her Majesty considers necessary or expedient in connection with other provision made by the Order.").
The noble Lord said: My Lords, in moving Amendment No. 117 I wish to speak also to Amendment No. 205. These are technical amendments which complete the package of government amendments to the powers to make subordinate legislation which we began in Committee. I am pleased to say that the Delegated Powers and Deregulation Committee has reported on our amendments and has welcomed them, recognising that the approach is easier to use and meets the concerns that the committee expressed in its earlier report. I beg to move.
Lord Renton: My Lords, last week, when we had the Northern Ireland Bill before us, we found provisions under which any use by the proposed assembly in Northern Ireland which appeared to be ultra vires could be referred to the judicial process in ways that were specified. The Government had tabled a new clause saying that if the Secretary of State thought it was ultra vires she could take steps to put it right. Reference was made to this Bill because in it we find that there are somewhat analogous powers, although they are not quite the same. I should be grateful if the Minister could tell the House what would happen in the following circumstances. Let us suppose that under Clause 29, as amended, an Order in Council were made in order to modify an enactment or prerogative instrument and then, under Clause 32, the matter was referred to the Judicial Committee, which reached a different conclusion from that of Her Majesty, acting, of course, on the advice of her Ministers. It would seem that the Secretary of State has some powers, but we need not trouble about those. But let us suppose that the Order in Council procedure and the decision of the judicial proceedings did not reach the same conclusion. What would happen? Which of them would have precedence?
Lord Sewel: And answer came there none, my Lords. I thank the noble Lord, Lord Renton, for that point. He will not be surprised to know that I cannot give him an answer here and now, but I promise to give him an answer as quickly and as fully as I can.
On Question, amendment agreed to.
Lord Hardie Lord Hardie moved Amendment No. 118:
Page 15, line 21, leave out subsection (4).
The noble and learned Lord said: My Lords, this amendment has already been spoken to. I beg to move.
On Question, amendment agreed to.
Clause 30 [Scrutiny of Bills by the Scottish Executive]:
[Amendment No. 119 had been withdrawn from the Marshalled List.]
Lord Mackay of Drumadoon Lord Mackay of Drumadoon moved Amendment No. 119A:
Page 15, line 30, at end insert—
("() The Scottish Executive and its members shall not be liable in damages to any person who suffers loss as a consequence of an incorrect statement made under subsection (1).").
The noble and learned Lord said: My Lords, this amendment and Amendment No. 119D return to an issue which arose in Committee on 28th July and relate to the statement which a member of the Scottish executive has to make on introducing a Bill to the new parliament. An issue arose as to the nature of the responsibility of the Minister on such an occasion. At one stage the noble Baroness, Lady Ramsay, indicated that there would be no legal responsibility on the individual Minister concerned, but in an earlier part of her speech she referred to the provisions of Clause 48(4), which seem to suggest that not only the Minister who made the statement but other Ministers would also be legally responsible.
From time to time, through no fault of the member of the Scottish executive concerned, an erroneous view will be taken as to the compatibility of a Bill with convention rights or any other aspect of the competence of the new parliament. There being a question of law, lawyers are not always correct, which is why we have a system of appellate courts to correct even the judges who occasionally get the law wrong. It seems to me to be entirely inappropriate that there should be any legal responsibility on a member of the executive or indeed any liability in damages. I have tabled these amendments in the hope that an unequivocal response can be given by the Government. I beg to move.
6 p.m.
Lord Hardie: My Lords, despite the clear explanation of the noble and learned Lord, Lord Mackay of Drumadoon, the Government do not believe that these amendments are necessary. They would prevent members of the Scottish executive or the presiding officer from being liable in damages if someone suffers loss as a consequence of an incorrect statement by a member of the executive that an Act containing the same provisions would be within the competence of the parliament.
We consider that the principles of ordinary law should apply and we do not think it would be right to afford a member of the Scottish executive or the presiding officer the additional protection of these amendments. If someone has suffered a loss as a result of reliance on a statement that proves later to be incorrect—or, more particularly, negligently made—and can demonstrate to a court that he has a competent and relevant action for damages, then it would be wrong to prevent either the member of the Scottish executive or the presiding officer from being liable in damages.

1961
I should point out that when we come to discuss Amendment No. 138, to which my noble friend will speak later, it will be seen that we have provided the parliament and its various officers with the minimal protection that we consider appropriate. If the Scottish parliament considers it appropriate to confer additional protections on the Scottish executive or the presiding officer in relation to damages then it could do that; subject, of course, to compliance with the European Convention on Human Rights. With that explanation, I invite the noble and learned Lord to withdraw his amendment.
Lord Mackay of Drumadoon: My Lords, I am grateful to the noble and learned Lord. He has certainly clarified the matter, although not quite in the way that I anticipated. As I understand his answer, it is to the effect that the Government do not exclude the possibility of legal liability and a liability in damages being established in an appropriate case, however unlikely that might be. However, as the purpose of tabling the amendments has been served, I beg leave to withdraw Amendment No. 119A.
Amendment, by leave, withdrawn.
[Amendment No. 119B not moved.]
Clause 31 [Scrutiny of Bills by the Presiding Officer]:
[Amendment No. 120 had been withdrawn from the Marshalled List.]
Lord Sewel Lord Sewel moved Amendment No. 121:
Page 15, line 37, leave out from beginning to ("Bills") in line 38 and insert ("It is for the Presiding Officer to submit").
The noble Lord said: My Lords, in moving this amendment I shall begin by speaking also to Amendments Nos. 122 and 124. The Government have brought forward these amendments after being convinced by the arguments that we heard at an earlier stage of the Bill which were offered by the noble and learned Lord, Lord Mackay of Drumadoon. I hope that the amendments virtually establish—in fact, entirely establish—what he sought to achieve at that time.
The amendments turn subsections (3) to (6) of Clause 31 into free standing duties. At present, the clause is written in terms of provisions which are required to be contained in standing orders. During the debate on this clause in Committee, noble Lords proposed that these would be better dealt with on the face of the Bill. We took the matter away, considered the arguments and, I am happy to say, found merit in the latter. We have, therefore, brought forward these amendments in order to capture what was requested.
Amendment No. 126 is a technical drafting amendment which will ensure that references to legislative competence are consistent. I shall not anticipate Amendment No. 129 because I am afraid I do not have particularly good news in that respect. Nevertheless, I beg to move Amendment No. 121.
The Earl of Mar and Kellie: My Lords, these government amendments represent a welcome revision of Clause 31. Indeed, the amended clause is certainly
1962
easier to read. Therefore, I can conclude that the amendments moved in Committee were useful catalysts for revision. The proposed procedure now seems straightforward.
I continue to believe that the opposition parties will pounce on anything that is, or seems to be, ultra vires. That action would be in the form of identifying incompetence by a member of the executive or by a Back-Bencher. Perhaps I should modify the expression "opposition parties" in the light of the hopes for consensual politics—or, possibly some hope. Perhaps the phase "non-executive parties" would be more in keeping. These government amendments have tidied up the clause and made it far less contentious.
Lord Mackay of Drumadoon: My Lords, I can certainly confirm that I welcome the government amendments which meet the points that I raised in Committee. I believe I was less than charitable on that occasion about the generosity of the noble Baroness, Lady Ramsay, and I withdraw unequivocally any criticisms that I then proffered. I am also grateful for the fact that Amendments Nos. 119 and 120 were withdrawn from the Marshalled List. I do not need to go into the background of that, but I pay tribute to the noble Lord, Lord Sewel, and his colleagues for recognising the point that was raised through the usual channels on these matters.
Amendment No. 129 addresses a matter raised by the noble and learned Lord, Lord Rodger of Earlsferry, when we debated the role of the presiding officer under Clause 31. On that occasion, your Lordships will recall that subsection (2) of that clause was altered from the way that it was set out in the original Bill. The noble and learned Lord suggested that the presiding officer should also be given the right to refer a Bill to the Judicial Committee for the purposes of pre-legislative scrutiny in the same way that is now proposed for the Advocate General, the Lord Advocate or the Attorney General. I fully anticipate that there may well be an attempt in another place to restructure Clause 31 in some way so as to accommodate the Government's views on the matter. But who can say what will happen to such an attempt?
Your Lordships are faced with Clause 31 in its present terms. On considering the Bill at a pre-legislative point, the Advocate General, the Lord Advocate, or indeed the Attorney General may consider it to be of value to refer the issue as to whether the Bill or any of its provisions is within legislative competence to the Judicial Committee. Therefore, it seems to me that the presiding officer—who, under the Bill, has a similar duty—should have a similar privilege of a right of reference. That is why, when we reach that stage, I intend to move Amendment No. 129.
On Question, amendment agreed to.
Lord Sewel Lord Sewel moved Amendment No. 122:
Page 15, line 39, leave out from beginning to ("not") and insert ("The Presiding Officer shall").
On Question, amendment agreed to.
Lord Steel of Aikwood Lord Steel of Aikwood moved Amendment No. 123:
Page 16, line 2, leave out ("Judicial Committee") and insert ("Constitutional Court").
The noble Lord said: My Lords, I should confess at once that I am slightly embarrassed by the absence of my noble friend Lord Lester, who is supposed to be moving this amendment. However, I understand that he is en route to the Chamber. Indeed, we have made such astonishingly fast progress on the Bill this afternoon that he has been caught out.
In Committee I said that at Report stage we would introduce a major amendment to establish in effect a constitutional court by which we mean to update the present procedures of the Judicial Committee of the Privy Council. The whole string of amendments which we are now discussing are mainly paving amendments to Amendment No. 206 on the Marshalled List which sets out a proposed new schedule to establish what we prefer to call a constitutional court.
My noble and learned friends have been active on the Northern Ireland Bill and are proposing a similar provision within that Bill. We are trying to tidy up what seems to be a piecemeal approach by the Government to this whole question of dealing with possible conflicts between the devolved parliaments and this Parliament after devolution. Because the Government have proceeded in a piecemeal fashion with the Wales Act, the Northern Ireland legislation and this legislation, no one appears to have given serious thought to establishing a proper constitutional court, as is common in most countries with devolved parliaments. We are relying instead on our ancient use of the Judicial Committee of the Privy Council. Although I am a member of the Privy Council I must admit that I have never met the Judicial Committee. However, I understand it is a large body with about 30 members—I stand open to correction—and consists of all the current serving and retired Law Lords, and that at any time any small number of these may be appointed to hear any particular case.
We propose that this rather large, amorphous body should be slimmed down and made more precise and that a constitutional court should be drawn from nine members of the Judicial Committee of the Privy Council. We propose that no fewer than four of these should be people who hold, or have held, high judicial office in England; that no fewer than two of them should hold, or have held, high judicial office in Scotland; and that at least one member of that nine should be someone who holds, or has held high, judicial office in Northern Ireland. We propose that on any one particular case:
"No fewer than five members of the Court (including at least one member who has held high judicial office in Scotland) shall sit to hear any proceedings under this Act".
I have not studied the Northern Ireland Bill, but I believe that my noble and learned friends have proposed a similar provision in that Bill as regards the member from Northern Ireland.
We then propose that there should be a nominating committee of persons set out in our draft new schedule who should recommend duly qualified persons to Her Majesty for appointment as the president or members of
1964
the court. We suggest that that nominating committee should consist of the Lord Chief Justice of England, the Master of the Rolls, the President of the Family Division, the Vice-Chancellor, the Lord President, the Lord Justice Clerk, the Lord Chief Justice of Northern Ireland, two persons appointed by the Speaker of the House of Commons, at least one of whom should be resident in Wales, one person appointed by the presiding officer of the Scottish parliament, and one person appointed by the presiding officer of the Northern Ireland Assembly. We have set out other self-explanatory provisions which relate to age limits and the qualifications of the court.
This is a serious attempt to stimulate a general debate on how we deal with constitutional disputes in the new era when we will have these three devolved assemblies or parliaments operating within the United Kingdom. I hope that we shall at least have a fruitful discussion on them. I beg to move.
6.15 p.m.
Lord Fraser of Carmyllie: My Lords, I appreciate the difficulty in which the noble Lord, Lord Steel of Aikwood, finds himself and I do not wish to add to that difficulty. However, there is one aspect of the proposal on which I seek clarification before I can reach any conclusion on it. I refer to the nominating committee for the constitutional court. The noble Lord has described the office holders which I would properly envisage would make up such a nominating committee. However, if you are a member of that nominating committee, can you sit on the constitutional court? It seems to me to be a rather startling proposition that you could nominate yourself. It seems to me that a number of those mentioned in paragraph eight of the proposed new schedule would be eminently suited to sit on a constitutional court. However, it would be odd if they could effectively appoint each other to be participants in that court.
Lord Selkirk of Douglas: My Lords, I shall speak briefly. I can envisage a strong case for a constitutional court, somewhat akin to the Supreme Court in the United States of America, if the constitutional arrangements were to change in the direction of federalism. I have had occasion to see the Supreme Court of the USA in action. It was enormously impressive. It had written pleadings before it and it decided a large number of cases dealing with states' rights as against federal rights in rapid succession. The Judicial Committee also has a wealth of constitutional experience from the 19th century—when it had to decide issues involving dominion rights and also provincial rights in Canada—to the present day when it has interpreted the rights and the protections of the Maoris in New Zealand under the Waitingi Treaty. I understand that this treaty protected the monarchy and in return the monarchy protected the rights of the Maoris. That was an extremely clever provision on the part of Queen Victoria and the Ministers who advised her at that time. At this stage the Government are right

1965
to place their confidence in the Judicial Committee of the Privy Council in view of its wealth of constitutional experience.
Lord Wilberforce: My Lords, I wish to add a few words at this stage. I cannot guarantee to keep speaking until the noble Lord, Lord Lester, enters the Chamber, but I had intended to offer some observations on this matter, as I indicated when the noble Lord, Lord Steel, said in Committee that he would table these amendments on Report. I said that I would be glad to see them.
I feel that the whole House ought to be grateful to the noble Lord, Lord Steel, and his colleague, the noble Lord, Lord Lester, who has recently entered the Chamber, for having given the House the opportunity to consider this important point. I hope that the amendments will receive consideration at this stage, although it may be difficult to reach a conclusion upon them.
There are various points involved in the proposals which we shall hear in due course from the noble Lord, Lord Lester. My particular concern relates to the composition of the court or body which will deal with devolution issues. Under the Wales Act, the Northern Ireland Bill and this Bill it has been decided to leave this matter to the Judicial Committee of the Privy Council. We have heard no reasoned explanation as to why that body was chosen. As the noble Lord has said, it is an amorphous body. I think he underestimated the potential number of its members. I would put the number at over 50 when one takes into account the Court of Appeal and retired Lord Justices of Appeal. At any rate it is an amorphous body which is limited only to a small extent by Clause 96 of the Bill.
The selection of the people to sit on any particular case is left to an informal process not defined by the Bill at all. It may be said—if the noble and learned Lord is to reply to this debate, he may say this—and it certainly could be said, that that is already the position under the existing law. At present the Judicial Committee is even larger than is contemplated by this Bill because potentially it could include Commonwealth members. The selection of members to sit on any individual case is by convention—I emphasise that word because there is no legal provision which states this—chosen by the senior Law Lord. Having had some small experience in that position, I can say that it works quite well, as do many other informal elements in our constitution. Up to now the Judicial Committee has been used to dealing with important constitutional points. Questions arising under the treaty of Waikato relating to the Maoris—I am glad to see that the noble and learned Lord, Lord Cooke, is in his place—have been decided by constitutional courts; and previously under the constitutions of Australia and Canada, until the right of appeal was abolished, very important questions were dealt with by the body so constituted in that informal manner.
Under this Bill we are entering upon a totally new dimension as compared with the kind of cases that have come up to be considered in Downing Street. There are
1966
questions of deep controversy, possibly political, which are likely to bear deeply upon the constitution of the United Kingdom and which are sure to be stirred up in Scotland by the active and vigorous elements there which are pressing for an extension of the powers of the Scottish parliament and will continue to do so. Difficult and sensitive questions are likely to arise. We have only to look at Schedule 5 to the Bill to see the vast range of questions that may have to be faced. We must also remember that decisions of the Privy Council, or whatever body it is, will be binding upon English courts and even upon the House of Lords. So there are questions of great difficulty and importance.
In those circumstances, is it not right to say that the process of selection of the judges to sit on a particular case is sure to come under scrutiny by those who are interested in extending the Scottish jurisdiction? Is it not desirable to remove that area from controversy altogether by giving a firm direction in this Bill?
We are between two very different concepts. Under the Bill there is an amorphous body, one that is not defined at all; under the amendments to be proposed from the Liberal Democrat Benches there is great precision, with everything spelt out down to the latest comma: the dominating committees, those who are qualified to sit and those who are not. There is very great precision. I do not know at this stage whether the Government are prepared to go as far as this at this very late stage in this one Bill, when the commitment in other Bills is more or less to a different system. Perhaps they are. I am sorry to speak in the absence of my noble and learned friends, particularly the noble and learned Lord, Lord Hope of Craighead. I hope that this does not go too far. I give general support to the concept proposed in these amendments. I hope that if the Government do not feel able to go the whole way and accept the whole elaborate structure, which is no doubt meritorious but requires a good deal of scrutiny by this place, given that the other place will not have time to examine it at all, perhaps they will at least be willing to contemplate a slightly more limited mechanism in this Bill under which, by an Order in Council made under Clause 96, it might be possible to give some greater definition to the nature of the body that is to sit on devolution issues.
I referred to Clause 96, which gives power up to a certain point to make Orders in Council. If that is not wide enough, it would be easy to extend it at a later stage so as to give power to deal with this matter. I make no suggestion. I simply hope that, if the Government are not willing to accept all the proposals holus-bolus that the noble Lord, Lord Lester, will later urge upon us, they will treat the matter seriously and contemplate including a provision in the Bill to give greater precision to the composition of this court which will deal with important questions. To that extent I warmly support the proposal.
Lord Cooke of Thorndon: My Lords, in supporting the tenor of the remarks made by my noble and learned friend Lord Wilberforce, I should first declare an interest, although it is highly contingent and somewhat temporary. As a number of noble Lords may confirm, at the age of 72, 75 seems to be rushing upon one.

1967
Clause 96(2)(b) of the Bill contains the words,
"ignoring for this purpose section 5 of the Appellate Jurisdiction Act 1887".
The effect is that there is to be ignored the membership of the Judicial Committee of the Privy Council drawn from the Commonwealth outside the United Kingdom. I respectfully raise the query whether that is justified.
Three points occur in that connection. First, for many years the Judicial Committee of the Privy Council, including Scottish and Northern Ireland Law Lords, has adjudicated on constitutional questions from various parts of the Commonwealth, including New Zealand and even Maori questions upon which the committee has been able to give guidance. A degree of reciprocity would seem not at all incongruous. Secondly, it is the case that in some other Commonwealth jurisdictions there is already a wider body of judicial experience of human rights law than as yet exists in the United Kingdom.
Thirdly, an inquiry is presently in being commonly known as the Bloody Sunday inquiry, relating to Northern Ireland. For that purpose an inquiry of three persons has been constituted. Two of the three are Commonwealth judges; one is a member of the Judicial Committee of the Privy Council. It has not been thought right to ignore the Commonwealth for that purpose. One therefore wonders why it is thought right to ignore Commonwealth members of the Judicial Committee for the purposes of the Scotland Bill, the Northern Ireland Bill and the legislation relating to Wales.
In principle there are valid reasons for preferring a Constitutional Court to the Judicial Committee of the Privy Council for the purpose of these devolved questions. The reasons pertain to experience, expertise, specialisation and temperament. Lord X may be admirably equipped to decide issues of domestic law, but by experience, interest and temperament may not be so well qualified to deal with human rights questions. They are a field of their own, in which there is a large body of international jurisprudence—a jurisprudence which requires a sympathetic appreciation of the aims of human rights combined with a certain amount of pragmatism and practicality, a combination of idealism and feet on the ground. It tends to be a field of its own and there is much to be said for a court of its own, a court which will have the opportunity of building up a body of jurisprudence not only within the United Kingdom but also attracting international respect. It would be a somewhat specialised, dedicated court, a limited corps of specialised judges.
It can be said that all this can be achieved under the existing mechanism of the Judicial Committee of the Privy Council. It is true, as I understand the position, that the senior Law Lord for the time being has a residual power in the Judicial Committee to nominate the five members of the committee who will sit on any one case. But that is not the end of the matter. Experience seems to show that there is an administrative element in the question as well: at a somewhat different level administrative convenience and even quite minor issues of expense may have some influence on the composition of the committee.
1968
From the point of view of a security for the effective ascertainment and development of the human rights law that will be required under these pieces of devolution legislation, it may well be that, as against the perhaps less than transparent methods of selecting the composition of the court to sit on individual cases, there will be something rather more open, rather more specialised and possibly therefore more effective in this field than what is at present proposed in the Bill.
It is for those reasons that I support the amendment put down by the noble Lord, Lord Lester, and his colleagues.
6.30 p.m.
Lord Lester of Herne Hill: My Lords, I owe the House an apology for having arrived late. Luckily I do not have to pay costs as I would perhaps in court! I am extremely grateful to my noble friend Lord Steel of Aikwood for having introduced and moved this and other amendments that are in truth the brainchild more of my noble friend Lord Goodhart and myself. It has given me the opportunity to listen to two of our truly great judges, the noble and learned Lords, Lord Wilberforce and Lord Cooke of Thorndon, before I explain some of the background to what is now being debated.
It is with great pleasure that I see the noble and learned Lord, Lord Hutton, in the House. I once had the privilege of joining him in a great case in Strasbourg. He is in that special category of judges from Northern Ireland who are especially brave and noted for their fearless independence.
The purpose of these amendments is to protect the independence of the judiciary and the constitutional separation of powers in the determination of constitutional issues by the final court. The means suggested by the amendments to achieve that aim are threefold: first, to create an appropriate pool of well qualified senior judges to serve on the court; secondly, to create a mechanism for appointing members of the court which is likely to enhance its independence and legitimacy; and, thirdly, to make the Lord Chancellor and former Lord Chancellors ineligible to sit judicially in the final court which determines these issues. That is dealt with by Amendment No. 196.
There will be differences of opinion as to whether we have chosen the right nomenclature for the final court—a "constitutional court", as in South Africa, rather than the Judicial Committee of the Privy Council. There will also he differences of opinion as to whether we have chosen the right way of creating the final court. We are not dogmatically committed to any particular mechanism. What we seek at this stage is to debate the important issues of principle which are essential for maintaining judicial independence and for the rule of law.
During my time at the Bar, the role of our judges has been transformed from being lions sheltered beneath the Throne to a more powerful and controversial judicial role as a co-ordinate branch of government. Subject to the principle of parliamentary supremacy, our courts must set aside Acts of Parliament if they are inconsistent

1969
with directly effective European Community law. With the development of judicial review, the courts scrutinise the decisions of Ministers, civil servants, and other public authorities to determine whether public powers have been abused.
Under the Human Rights Act, which is woven into the fabric of the devolution settlements, our courts will have to strive to interpret all existing and future legislation to be compatible with human rights guaranteed by the European Convention on Human Rights. If the Scottish Parliament or Scottish administration, or other public authorities, act in breach of Convention rights, or if they otherwise act beyond their devolved powers, the courts will have to prevent them from exceeding their powers.
The constitutional issues will be similar to the issues decided by courts elsewhere in the Commonwealth and in Europe: by the Supreme Court of Canada, or the High Court of Australia, or the Constitutional Court of South Africa, or of France or Germany. They will involve difficult and controversial decisions about where state power ends and where personal liberty begins; decisions about striking a fair balance between competing human rights; decisions about the respective powers and duties of the Parliament of Westminster and central Government and of the devolved legislatures and administrations.
These decisions are properly justiciable, but they will sometimes be politically and ethically controversial. That is why it is especially important to ensure that the independence, authority and legitimacy of the final court are securely protected.
We believe that the Judicial Committee of the Privy Council is an unsatisfactory model for a final constitutional court for three main reasons. In the first place, as noble Lords have indicated, it has a large and amorphous membership of retired and serving judges, dominated, because of the great size of the English Court of Appeal, by retired and serving judges from that English court. Unlike the House of Lords, whose membership is fixed and stable, the Privy Council, with a jurisdiction derived from the antique Judicial Committee Act 1833, is large, uneven, and geographically completely unbalanced. It is surely anomalous that the entire body of serving and retired members of the English Court of Appeal or for that matter of any other court, should automatically be eligible to sit on the Judicial Committee as the final court.
The second problem is that the composition of the Judicial Committee is in any particular case to be decided in theory by the Lord Chancellor and in practice by the senior Law Lord. There are no prescribed criteria in the Bill according to which the senior Law Lord is to choose from among the large pool of members of the Judicial Committee who have held high judicial office, whether in terms of their special expertise in public law, or in terms of the particular legal system of the United Kingdom where they have performed their judicial functions.
1970
Although the pool of potential members of the Judicial Committee is so large, as the noble and learned Lord, Lord Cooke of Thorndon, pointed out, some very experienced judges with great judicial experience in deciding constitutional cases are excluded from the pool. Under Clause 96(2) as it stands, the senior Law Lord will not be able to choose very senior and experienced Commonwealth judges, such as the noble and learned Lord, Lord Cooke of Thorndon, with much greater expertise in deciding constitutional issues than many of their British brethren. Normally, these judges would be eligible as members of the Judicial Committee but the Government seek to exclude them from the pool.
There is a very real danger that without prescribed and appropriate standards and criteria, the way in which the senior Law Lord exercises his discretionary powers of appointment, on the Lord Chancellor's behalf, in any particular case may become a matter of political controversy, whether in Edinburgh, Belfast, or London. If that happened it would impair the independence and legitimacy of the judicial process, turning the Judicial Committee into a political football, kicked hard by politicians for their partisan political ends.
Nor is that all. If because of the great workload already imposed upon the Lords of Appeal in Ordinary, the senior Law Lord were driven to choose less senior and experienced judges than the Law Lords there is a real danger that the Judicial Committee would lack the authority of the House of Lords. There is also a danger that decisions of the Judicial Committee might be inconsistent with decisions of the House of Lords, leading to awkward conflicts and a weakening of the authority of the judicial process and a lack of legal certainty.
The third flaw in the system proposed is that it breaches the separation of powers and the institutional independence of the judiciary. Under the legislation as it stands the present Lord Chancellor and former Lord Chancellors will remain eligible to sit judicially in the Judicial Committee, and for that matter in the Appeal Committee of this House, in devolution and human rights cases. This is the position even though the Government, of which the Lord Chancellor is a senior and very powerful Minister of justice, are directly or indirectly interested, and even though a party to the dispute is represented by the Attorney-General, the Lord Advocate, the Advocate General for Scotland or the Attorney-General for Northern Ireland.
No one doubts that the present Lord Chancellor wears his three official hats with panache and distinction: as legislator, as Minister of justice and as a senior judge. We do not doubt his personal independence and impartiality in any way. But what matters is that the institutional independence as well as the individual and personal independence of the judiciary should be seen to be free of direct or indirect government interference or any conflict of interest that breaches the separation of judicial from legislative and executive powers. It is no answer to the problem for the Lord Chancellor to delegate the function of appointing the members of the court to the senior Law Lord. That leaves a potentially embarrassing tension within the rather opaque system of choosing the court, especially were the Lord Chancellor

1971
to be unwise enough to seek to persuade the senior Law Lord to agree to his sitting as a member of the Judicial Committee or the Appellate Committee.
In two recent Written Answers the Lord Chancellor explained that where cases arise in which the Government or a Minister has an interest as a party litigant, or in which constitutional or political issues are involved, he will exercise his discretion so as not to sit where he considers that it would be inappropriate or improper to do so. With respect, that statement does not altogether deal with the problem. In the first place it should not be for the Lord Chancellor with his three hats to decide whether it is appropriate or proper for him to sit in such cases. The time has surely come to recognise that inevitably it would be constitutionally inappropriate and improper for the Lord Chancellor to sit in any case where the Government or a Minister has an interest as a party litigant or in which constitutional or political issues are involved; in other words—with great respect, it is difficult to say this in the presence of such a distinguished Lord Chancellor—the Lord Chancellor should disqualify himself or be disqualified from sitting in cases of that kind.
Secondly, we had supposed from an earlier Written Answer that the Lord Chancellor had completely delegated to the senior Law Lord the power to decide upon the composition of the Judicial Committee but his latest Answer suggests that he regards his own role as a matter to be determined by the Lord Chancellor himself. That would surely be inappropriate given the conflict of interest inherent in his many public offices.
Thirdly, the Lord Chancellor draws support for his Answers from the fact that Lord Chancellors have recently sat in criminal and tax appeals. That is true. But it does not mean that it was or is now appropriate for him or his predecessor to sit in cases involving the powers of the state and the relationship between the different branches of government. This is a sensitive matter in which counsel in such cases have felt embarrassed about the Lord Chancellor's presence as a member of the Appeal Committee. I do not refer to the present Lord Chancellor, but Lord Chancellors in general. I myself found it embarrassing when the previous Lord Chancellor sat in the appeal in Pepper v. Hart to decide whether it was permissible in law to have judicial recourse to parliamentary debates. The Lord Chancellor presided while the Attorney-General contended that recourse to Hansard would breach parliamentary privilege and weaken the good governance of the country.
The first appeal in which the present Lord Chancellor sat concerned judicial review of public authorities. Last week, I read of a criminal appeal involving the limits upon the right to freedom of association and assembly guaranteed by the human rights convention. There is real concern, not about the present Lord Chancellor, but the recent practice, in the light of the modernisation of the system, to sit in cases of that character. I have discussed the matter with a number of lawyers and judges: for example, Heather Hallett, QC, who chairs the Bar Council of England and Wales; Philip Dry, President of the Law Society of Scotland; Antoinette Curran, President of the Law Society of Northern
1972
Ireland; Roy Amlot, QC, recent chairman of the Criminal Bar Association; and Michael Lavery, QC, chairman of the Standing Advisory Commission on Human Rights in Northern Ireland. They all share our concern about the Lord Chancellor continuing to sit in such cases.
Were the Lord Chancellor to sit as a member of the Judicial Committee or the House of Lords in its judicial capacity in such cases I have little doubt that the European Court of Human Rights would, if necessary, find our system to have breached the guarantee of institutional judicial independence under Article 6 of the convention. It has already done so in the case of Procola, involving the Conseil d'Etat of Luxembourg. It would be deeply embarrassing if it became necessary to challenge the presence of the Lord Chancellor before his fellow Lords of Appeal in Ordinary and before the European Court. It would surely be better for the Lord Chancellor to concede the position gracefully, as I am sure he will, without the need for binding rules in tablets of stone. We greatly welcome the general thrust of the Government's constitutional reform programme. We hope that the Government will be willing to accept the implications of that programme for the choice of the final constitutional court and the way that its members are selected.
We have attempted to devise a broadly representative nominating process that avoids appointing judges only after what the noble and learned Lord, Lord Hailsham of St. Marylebone, has rightly described in relation to the appointment of American federal judges as a,
"cruel, and often politically motivated, scrutiny by a senate committee".
My noble friend Lord Goodhart, who drafted the amendments, will explain their scope and detail. I very much hope that there will be support for their aims from all sides of the House, especially from the Woolsack. I beg to move.
6.45 p.m.
Lord Hogg of Cumbernauld: My Lords, I congratulate the noble Lord, Lord Steel of Aikwood, for so ably standing in. He ran on to the pitch wearing a No. 12 jersey and demonstrated a professionalism that left all of us breathless. I am not a lawyer but I am concerned about the constitution. I am deeply aware of the fact that the Government have set their hand to constitutional reform in a very big way. By the time we reach the end of this Parliament we shall have witnessed constitutional change on a scale that has not been seen for decades.
I support constitutional change in all of the areas and along the lines proposed by the Government but I am conservative about changing the constitution. I believe that great care should be taken to get it right and to ensure that what we do on behalf of the people will last and serve them as well as the constitutional arrangements that they have had for so long. A constitutional court has, as a matter of government policy, already been opposed. It is interesting that no amendment was tabled to make such a proposal during the passage of the Human Rights Bill. It is also interesting that it did not emerge when the House discussed Wales. I believe that to bring it into the

1973
Scotland Bill in this way is to introduce too far-reaching a proposal and that it is better to examine this idea once all of the constitutional changes are in place and have worked their way through.
I do not much like Amendment No. 196, not least because I have always held Lord Chancellors in the highest regard. I hold the present Lord Chancellor in particularly high regard because he is a close friend. I would not like to consider the suggestion that power should be taken away in this way until I have examined carefully and thoughtfully the case made today by the noble Lord, Lord Lester, and others of our great legal Members.
I greatly admire the previous Lord Chancellor. I thought him a fine man in that role; indeed a fine man. Therefore, I say this to the House. The amendment may be a good idea. I do not know; I am not a legal man. But I wish to be able to consider it carefully. In order to do that, I hope that the noble Lord will not press his amendments this evening. There is plenty of time to change the constitution. However, if the noble Lord feels persuaded to press the amendments to a Division, I hope that the Government will resist them.
Lord Goodhart: My Lords, it is an extremely important issue. I have little to add to what my noble friend Lord Lester said. The arguments he put forward on why we should have a constitutional court are incontrovertible. I entirely agree with him on the reasons why the Lord Chancellor should not sit as a Member of the Judicial Committee of the Privy Council, or as a member of the constitutional court, for the purpose of deciding devolution issues. Effectively, they are issues between the Government at Westminster and the government at Holyrood.
The Lord Chancellor is a member of the Cabinet. He is de facto a Minister of Justice. It would hardly be surprising if in those circumstances, in the course of a dispute between Westminster and Holyrood, he was regarded as parti pris rather than someone who was impartial and independent. Impartiality and independence are at the core of the judicial system. It would be my hope that the senior Law Lord would not seek to appoint a sitting Lord Chancellor; nor would a sitting Lord Chancellor think it right to accept an invitation to sit on the Judicial Committee, if one were offered to him.
The position of former Lord Chancellors—we have excluded them from the amendments—is somewhat different.
Lord Fraser of Carmyllie: My Lords, before the noble Lord continues, will he elaborate a little on the position of former Lord Chancellors? In one fashion or another, I can understand that the present occupier of the Woolsack from time to time might be seen to be excluded in the case of a matter of high constitutional dispute. However, I have greater difficulty in understanding why someone who has left the Woolsack should be excluded from participation in this court. It is not difficult to think of very distinguished Lord Chancellors. One does not have to go back further than
1974
the present occupant's predecessor to find someone who might have occupied a position on such a constitutional court and have been a great adornment to it.
Lord Goodhart: My Lords, I accept entirely what the noble and learned Lord says. It is an arguable matter. In future there might be a Lord Chancellor who had been what one might describe as such a highly political animal that Holyrood might think it inconsistent with the existence of an impartial and independent tribunal for that particular Lord Chancellor to be a member. That is not an argument I apply to the previous Lord Chancellor. It could be argued that if there are some cases where it would be inappropriate for a former Lord Chancellor to sit it might be better to exclude former Lord Chancellors altogether rather than to have invidious questions arising as to whether an individual was or was not a desirable member of the constitutional court.
At this stage I do not propose to go into any detail about the nature of the amendment which I drafted at the request of my noble friend Lord Lester. I fully recognise the problems of timing. It is a fundamental issue. Our amendment was designed to raise the issue for debate rather than to provide fully worked-out legislation for the creation of a proper constitutional court. Nevertheless, the arguments in favour of a special constitutional court are extremely strong. In that respect, I am most grateful for the contributions of the noble and learned Lords, Lord Wilberforce and Lord Cooke of Thorndon, with their immense experience of sitting in the highest courts of their respective countries.
I believe that an immensely heavy burden will lie on the senior Law Lord. I saw the present senior Law Lord outside the Chamber; he is not present now. I shall be interested to know what he feels about the burden that will be placed upon him.
It is essential that the court is of the highest standard. When selecting judges to sit on panels, its work must have priority over the ordinary work of the House of Lords and other courts. The senior Law Lord will have to create what is in effect a constitutional court by identifying, from the wide scope offered him by the substantial membership of the Privy Council and those legally qualified to sit on its Judicial Committee, a group of judges who can develop a sense of teamwork and expertise in this field.
In the exercise of those functions, there is no doubt that the senior Law Lord may be exposed to political pressure. For that reason, even if the matter does not go forward on this occasion, I believe that it should be the start of further debate, as the noble Lord, Lord Hogg, suggested, leading in the not too distant future to the enactment of legislation providing for a properly chosen constitutional court with proper powers to act as such.
Lord Hutton: My Lords, notwithstanding the kind words of the noble Lord, Lord Lester of Herne Hill, for which I am most grateful, I rise to speak with considerable diffidence. My diffidence arises for a number of reasons. First, it is my maiden speech in your Lordships' House; and that itself is a reason for diffidence. Secondly, I realise that it is somewhat

1975
unusual to make a maiden speech at Report stage. However, the point on which I wish to speak had not arisen at the earlier stages of the Bill. I am grateful for all the helpful indications I have received that it might be permissible for me to speak at this Report stage.
My third reason for diffidence is that it is a Bill relating to Scotland and I, as a former judge in Northern Ireland, am venturing to speak on the amendments. But they relate to a proposed constitutional court of which at least one member will be a Northern Ireland judge, or a former Northern Ireland judge, and there would also be a representative of Northern Ireland on the proposed nominating committee. It would include one person appointed by the presiding officer of the Northern Ireland Assembly, as there would be one person appointed by the presiding officer of the parliament in Edinburgh. Therefore, I hope that your Lordships may feel that it is not inappropriate for me to speak on these amendments.
One of the objectives of the amendments is to ensure that if a devolution issue relating to Scotland becomes the subject of a final appeal from the Inner House of the Court of Session there would be at least one Scottish judge who would sit on the final appellate court. The amendments to the Northern Ireland Bill have the same objective in relation to a Northern Ireland judge.
However, I have a reservation about the proposal in the amendments that there should be a nominating committee which would recommend persons to Her Majesty for appointment to the proposed constitutional court, and in particular about the proposal that one member of that nominating committee would be a person appointed by the presiding officer of the Northern Ireland Assembly. My reservation arises in relation to a point which has already been made tonight by the noble and learned Lord, Lord Wilberforce. He made it during discussions on the Bill on 8th October, col. 618, in relation to whether dissenting opinions on devolution issues should be permitted in the Judicial Committee. The point he made was that devolution issues will be highly political issues when they come before the final court. Of course, devolution issues relating to Northern Ireland will also be highly political.
During the past quarter of a century many cases have come before the High Court and Court of Appeal in Northern Ireland which have had an intensely political background. There was, for example, a case where members of Sinn Fein could sit on local councils at a time when the IRA was conducting a terrorist campaign. But throughout those years, the judges in Northern Ireland strove to remain detached from and above the political frame. I hope, and I believe, that they have largely succeeded in doing so. So far as I am aware, there have never been any serious suggestions that the decisions of the Northern Ireland judges have been influenced by their political views.
I am concerned that if there were to be a nominating committee, particularly if one member were appointed by the presiding officer of the Northern Ireland Assembly, almost inevitably there would be a discussion, which would be bound to become known in the public sphere, about what were believed to be the
1976
political views and leanings of individual judges in a way which has not taken place before. If it were known that certain judges were being considered for appointment to the constitutional court suggestions would no doubt be made that judge A was believed to have nationalist views and judge B was believed to have unionist views. I believe that considerable harm could be done to public confidence in the judiciary—and this is such an important factor—if there were public debate and discussion about the political views of judges, as I believe there would be if a nominating committee were established.
I appreciate the points that have been made tonight by the noble and learned Lord, Lord Wilberforce, about the desirability of a better mechanism for defining the judges who would sit in this final court. I also appreciate the point made by the noble and learned Lord, Lord Cooke of Thorndon, that a similar body of judges would be able to develop a system of jurisprudence. However, I wish to raise for consideration the reservation that I mentioned about the risk which I feel would arise from the nominating committee proposed in the amendments.
7 p.m.
Lord Mackay of Drumadoon: My Lords, it is a privilege to be the first to congratulate the noble and learned Lord, Lord Hutton, on his maiden speech. In the careful speech which he has just delivered, he has made a valuable contribution to our debates on these important amendments and has well illustrated one of the sensitivities which are undoubtedly involved in setting up a constitutional court of the nature proposed by the noble Lord, Lord Lester, and his colleagues.
The noble and learned Lord, Lord Hutton, joined your Lordships' House last year as a Lord of Appeal in Ordinary after many years of distinguished service in the legal profession in Northern Ireland, initially as a practising lawyer and then as a judge. Those of us who are aware of the pressures under which judges work need not elaborate on the additional pressures imposed upon judges in Northern Ireland. It is right that we should pay public tribute to the service given by the noble and learned Lord before he became a Lord of Appeal in Ordinary.
Apart from being an able lawyer, the noble and learned Lord is a man of great charm with a wonderful sense of humour. I first came to know him a few years ago when I attended a conference in Athens of chief justices and senior prosecutors from the European Union. We sat for several days in a rather non-descript tourist hotel discussing the issues which one discusses at such conferences: the appointment and sacking of judges, how to combat international crime and so forth. All the time the sun shone and we gazed out of the window to the sea where many of us wished to go and bathe.
Our hosts believed that the conference would benefit from a visit to Delphi. We embarked on the bus to consult the oracle who, as your Lordships will recall, does not always speak in straightforward terms. It was on that trip that the noble and learned Lord came into

1977
his element. He communicated with the guides who showed us around in a most amusing and helpful manner. We all came away much better informed and were very grateful to him. I am sure that he has a great deal to contribute to our future debates on this and other Bills and we look forward to hearing from him frequently.
I turn to the amendments introduced by the noble Lord, Lord Steel. The skill he displayed earlier in the debate reminded me of my first acquaintance with him when we were at school. I hasten to add that I was several years behind him in age. My first recollection of the noble Lord's debating skills was when he took part in a mock election. On that occasion, he was a senior representative of one of the joke parties which were taking part. I am sure that if my noble friend Lord Mackay of Ardbrecknish were present he would observe that some things never change.
It is right that I should recognise that these amendments raise very important issues. The House will welcome the fact that they are being ventilated and we look forward with interest to the response of the noble and learned Lord the Lord Chancellor. Undoubtedly, the setting up of judicial procedures for the determination of devolution issues under the Wales, Scotland and Northern Ireland Bills has been a very important part of this tranche of legislation. It is clear that there is no easy solution to what is the best way to proceed.
I expect that in recent months I have not been alone in having ambivalent views as to whether it should be the Appellate Committee of your Lordships' House or the Judicial Committee of the Privy Council which should have the ultimate say in the resolution of devolution issues. There are arguments in favour of both solutions. Indeed, amendments seeking to change the position were tabled in the Wales Bill and debated at that time. The amendment brought forward by the noble Lord, Lord Lester, put forward a third solution and one which undoubtedly merits serious consideration.
Like the noble Lord, Lord Hogg, I am not yet convinced that the constitutional court is the correct approach. But I am convinced—and I share the view of the noble Lord, Lord Hogg, on this—that it is a matter which merits serious consideration. I very much hope that this may be the start of examining the whole issue.
It seems to me that before one establishes any body called a constitutional court a number of issues must be addressed. First, what is to be the totality of its role? Is it merely to deal with devolution issues, or is it to have a final say on human rights issues or other aspects of legal work which could be conveniently and sensibly diverted to that court and taken away from the Appellate Committee of your Lordships' House? I do not suggest that there are such issues but I suggest that those matters must be addressed.
Another major aspect to consider is the relationship of such a court with parliament itself. The third major issue is the composition, on which the noble Lord, Lord Lester, has touched, as has the noble Lord, Lord Goodhart. I believe that it would be a serious mistake to set up any body calling itself a constitutional court until
1978
all those issues have been fully addressed. For that reason, on these Benches we could not support the amendments if they are pressed, albeit that we fully support the good sense in raising this as an issue which merits consideration over the next few years.
7.15 p.m.
Lord Hope of Craighead: My Lords, I too congratulate my noble and learned friend Lord Hutton on his maiden speech. I am sure that I was not alone in being very impressed by the manner of his delivery and also the great perception which he was able to bring from his unique perspective of the implications of some of the detail of the amendments before us this evening.
I should apologise to the noble Lord, Lord Steel, because I was not here during his introduction to the amendment. I should apologise also to my noble and learned friend Lord Wilberforce for being invisible to him for, I believe, the second occasion within three weeks of discussion on this Bill.
I speak with the experience of having sat on the Judicial Committee from time to time. Therefore, I shall add one or two observations from, as it were, inside to supplement the points made by the noble Lord, Lord Lester, in his more detailed remarks in support of the amendment.
The issues which are behind the amendment are of great importance. I have already drawn attention in my speech on Second Reading to the constitutional significance of the changes which this Bill will bring about. I have no doubt that the judicial aspects of the Bill will have to serve as an anchor for the way in which the whole process of devolution will work itself forward within the framework which has been provided for it by the Bill.
Two points are of great importance in understanding the function which the Judicial Committee or the constitutional court, whatever it is called, will have to perform. One is that among the duties which it is being asked to perform under the Bill as it stands is the duty of preliminary scrutiny provided in Clause 32. My understanding of that measure is that it will provide the only guarantee which can be provided under the devolved structure that a Bill which has been passed by the Scottish parliament will be immune from further attack once it comes into force. It seems to me that that is an extremely important function and it is one which the judicial body may have to perform at very short notice. Therefore, in considering the whole issue, one should bear in mind not simply the matters which may arise under Schedule 6 but also the Clause 32 procedure.
The second point is that, taking the amendment as it is presented to us this evening, for, I believe, very good reasons, the qualifications which are put forward for membership of the constitutional court depend heavily on those judges who are already serving in very senior positions in our system. It seems to me inevitable that the bulk of the membership of a new court as so designed, as is certainly the case in the case of the Judicial Committee, will come from the Lords of Appeal in Ordinary, who have important functions to perform in your Lordships' House. Other senior judges may

1979
participate, although I rather suspect that if the Lord President of the Court of Session is being asked to be a member of the nominating committee, that disqualifies him from being a member of the constitutional court. That would be a disadvantage which may require further thought.
My experience of working within the body over the past two years has been that one of the strengths of the system from the administrative point of view is the flexibility which exists between the Appellate Committee of this House and the Judicial Committee of the Privy Council. It is often necessary at short notice to alter the scheduling of cases which come before your Lordships' House: cases over-run; some cases require to be introduced here as a matter of urgency; and some cases, for some reason, are shorter than has been expected. That phenomenon is present also in the Privy Council as it works at the moment.
I should have thought that it would be inevitable in the new process that matters will require to be decided at short notice by the new body. That seems to me to point strongly in favour of flexibility, using as best one can the administrative processes which we already have to support the existing Judicial Committee in its work.
Without elaborating, I am very much of the same view as the noble Lord, Lord Hogg of Cumbernauld, that this is not the juncture at which one should start to redesign the arrangements which we have for dealing with those extremely important issues. I am grateful to the noble Lords, Lord Steel and Lord Lester, for raising the issue because it certainly needs to be discussed. However, from my point of view, I prefer to leave the existing structures that we have, bearing in mind that time is now very short for us to have the processes in place for the coming into effect of the Bill.
However, one detail has been raised in the early course of this debate by my noble and learned friend Lord Cooke of Thorndon; that is, the issue of Commonwealth judges. There was force in the point that he made that those who have experience elsewhere in the Commonwealth of constitutional and human rights issues have an expertise which may be of value to the Judicial Committee in carrying out the functions which are given to it by the Bill. It seemed to me a pity that they were excluded under the Bill as it stands. Now that the issue has been raised, I warmly support the points which my noble and learned friend made on that issue.
Lord Clyde: My Lords, I add my warmest congratulations to my noble and learned friend Lord Hutton on his maiden speech. What impressed me in particular was the solid contribution which he made with reference to his own experience and the reality of this kind of problem.
I share the attraction, in theory, of the idea of a constitutional court, but I also strongly share the anxiety as to whether the introduction of such an institution is appropriate simply in the context of this Bill and the Scottish problems.
I suggest that one should put the attractive theory into the background and consider immediately the real problems that come from the reality of experience. It
1980
was said that the Judicial Committee of the Privy Council has a large and amorphous membership. That may be right. But what is the practice? In practice, from my experience I know that the composition is usually five of the Law Lords. As your Lordships are well aware, there are 12 Law Lords and we sit in two committees of five for four days a week. Five of us are in the Privy Council and five of us in the Appellate Committee of your Lordships' House. There are on occasions—relatively frequent occasions—one other or more rarely two others who help out in the Privy Council. But basically it is the membership from the Law Lords which comprises the present Privy Council.
I say that not with any complaint about the workload which that involves. As your Lordships with a quick understanding of arithmetic will appreciate, two committees of five out of a membership of 12 does not leave much room for manoeuvre, particularly as one of our members is presently engaged elsewhere on an inquiry. But the system works and I should like to think it works well.
What will be essential for the resolution of disputes under this Bill is a speedy and efficient system which can produce solutions and resolve disputes at short notice. If one has an elaborate institution which requires nominations to be made, which requires selections to be made, there will immediately be a practical problem in simply collecting the parties together. Can one be confident at this stage that there will be so much work as to secure that there will be a permanent body sitting week after week on these problems.
There is a second problem and it is as follows. One advantage of the work of the Judicial Committee and the Appellate Committee is that the five members know each other fairly well; get on reasonably well together; and can work together as a group effectively and I hope efficiently. If one is looking to gather individuals who may not be significantly identical for different cases, then one will not get that consistency, that common spirit which is important for the effective working of such a court.
Thirdly, if one is going to start afresh with a new body, we will have to create a secretariat, find premises, find the whole machinery which is required as a back-up. That can be done. It will cost money and it will take time. Fourthly—a point that has already been made—the existing members of the Judicial Committee of the Privy Council have been enabled to acquire some expertise in constitutional matters from cases coming from outside these shores. That is a starting point, at least a base, from which a jurisprudence in the problems that we are now to face can grow.
The noble Lord, Lord Lester, complained of the large and amorphous membership. I should like to counter that with an understanding of the reality of practice. He raised the problem of the separation of the powers. Again, one can see the force of that, but it relates principally to the practical problem of selecting the specific individuals who are to sit on the determining tribunal. That was his second point. How does one choose the individuals? That is perhaps at the heart of the whole problem and it is a problem of course which

1981
lies already within the proposed amendment. While the nominating body nominates seven individuals and the quorum is five, who is to identify and choose the five who are to sit. Therefore problems will arise even on this proposal.
In practice one would hope that the system at the moment works reasonably well. It is flexible, as my noble and learned friend Lord Hope of Craighead said, and can cater for last minute emergencies. If it is unacceptable to have one individual making nominations, perhaps the solution would be to provide for some small advisory body which would be available to help out, if that would give a better public image to the critical matter of selection. I suggest that it is in the selection that the heart of the problem may lie.
I am attracted by the idea of a constitutional court, but I believe it is too early.
Lord Lester of Herne Hill: My Lords, I am grateful to the noble and learned Lord, Lord Clyde, for giving way. I wonder whether he appreciates that we are seeking what he is advocating, though perhaps in an over-elaborate way. If one could have an assurance that Law Lords would sit as they do at present in the Judicial Committee of the Privy Council and that the large, amorphous group of retired and existing members of the English Court of Appeal, for example, would not sit and therefore one would have the seniority and authority which comes from the House of Lords and the Judicial Committee in their present composition, that would go a long way to meeting the point. I am not sure whether the noble and learned Lord appreciates that that is what we are seeking to achieve rather than some radical reconstruction.
Lord Clyde: My Lords, I certainly understood that the creation of a new court was a bold step forward and, as I said, it is a step I would have some sympathy in supporting in principle. But not yet and not here. In relation to the specific problem of appointment, there is very little in dispute. However, I wonder whether that is best done by one of the instant overnight conventions which are appearing in this new world, rather than by an express legislative provision.
The Lord Chancellor: My Lords, it was a pleasure to listen to the maiden speech of the noble and learned Lord, Lord Hutton, a highly distinguished former Lord Chief Justice of Northern Ireland, during your Lordships' debate on these amendments. We look forward to many contributions from the noble and learned Lord and I am sure that they will be of the same high quality and just as much to the point as his contribution this evening. He has no cause for diffidence, except when making a maiden speech.
The Government cannot accept Amendments Nos. 206 and 202 and the consequential amendments—Amendments Nos. 123 to 202—which would create a constitutional court to carry out the role which the Bill provides for the Judicial Committee of the Privy Council in determining questions concerning the legislative competence of the Scottish parliament and executive.
1982
The Government came down for the time being, as a matter of policy against a constitutional court in paragraph 2.4 of the White Paper, Rights Brought Home. That was the White Paper which preceded the Human Rights Bill. That Bill is to return to your Lordships' House tomorrow for its closing stages. No amendment to provide for a constitutional court was moved to the Human Rights Bill in the other place or this House.
An amendment for a quite differently appointed and composed constitutional court was sought to be made to the Scotland Bill in another place, but was comprehensively rejected by 388 votes to eight. Amendments of a different nature have now been tabled in this House, not having been tabled in the other place.
Next, the Welsh devolution legislation has already been enacted without any provision for a constitutional court. No amendment was moved to provide for such a court in either House. Under the Government of Wales Act, Schedule 8 paragraph 10, devolution issues go to the Judicial Committee. It is outside the scope of the Scotland Bill to replace those provisions in the Government of Wales Act with provisions for a constitutional court.
The backdrop to this issue is this: the Government are incrementally carrying into effect a major programme of constitutional reform—devolution to Scotland and Wales; the Human Rights Bill; in due course, a freedom of information Bill; the Northern Ireland Bill; and the legislation providing for an elected mayor and assembly for London. It may be that, after all that legislation beds down, longer-term thought should be given to the appropriateness of a specialist constitutional court. So I can be encouraging to that limited extent. But this Bill is not a natural vehicle for that, since policy has been settled for so long and the Welsh ship has left the harbour. If those proposing this amendment will forgive me—although I believe they have already conceded it—what they are really doing is putting down a marker for another day.
The one part of these amendments which the noble Lord, Lord Lester, did not dwell on in detail was how they propose the membership of this new constitutional court is to be determined. Your Lordships should consider the proposal and then consider how well thought out it is.
The amendments propose a nominating committee, consisting of seven senior judges, plus two persons appointed by the Speaker of the House of Commons, at least one of whom is to be resident in Wales; one person appointed by the presiding officer in the Scottish parliament; and one person appointed by the presiding officer of the Northern Ireland Assembly. So seven senior judges are to share with four lay people, I assume, the responsibility for nominating. Presumably, it is envisaged that these four will be drawn from the world of politics, and perhaps from the House of Commons, the Scottish parliament and the Northern Ireland Assembly. So seven senior judges are to share with four politicians—probably party politicians—the responsibility for appointing a nine person constitutional court, consisting of a president and eight other members, who shall be Lords of Appeal in Ordinary or hold other high judicial office.

1983
This raises for consideration whether four party politicians should share equally with seven of the most senior judges in the United Kingdom responsibility for appointing the new constitutional court. That prompts the question: why should four politicians participate in this function with the higher judiciary? What is the purpose of their involvement? My present view, which I believe the noble and learned Lord, Lord Hutton, expressed, is that this proposal carries with it a great danger.
It would appear that an important consideration in making recommendations for appointments to this new court would be the political attitude or outlook of those to be nominated. I am not persuaded by anything that I have heard in the debate today that it would be appropriate to involve politicians with the higher judiciary in a process for the recommendation to Her Majesty of those to appoint to the proposed constitutional court. It would fuel a perception that those appointed might not decide these cases strictly according to law because each had to pass some test of suitability on political grounds. This perception would be the stronger because only Lords of Appeal in Ordinary or those holding high judicial office can qualify under the amendments. So on what basis are party politicians to assess who among them are suitable for this role? What role could politicians rationally have in choosing among very senior judges unless to exercise some politically-based judgment on their comparative merits?
7.30 p.m.
Lord Lester of Herne Hill: My Lords, I am grateful to the Lord Chancellor for giving way. I wonder whether he is aware that, first, the amendment does not require politicians but only persons who are nominated. They do not need to be politicians. For example, they could be the Chairman of the Bar Council at the time. Secondly, is the noble and learned Lord also aware that these arrangements involve a much smaller political element than any of the arrangements of Commonwealth constitutional courts in countries like South Africa or Canada or the great constitutional courts of Europe, such as the German, French and Italian courts? Is he aware that they are much more modest, with a very small input of people appointed by politicians, in order to do the appointing?
The Lord Chancellor: My Lords, with great respect, it appears to me in the highest degree probable as regards the nature of the officers of the parliament and the assembly who will be in a position to nominate the lay persons that in practice they will be party politicians.
On this aspect of the matter I agree with the short speech made at the outset of this debate by the noble and learned Lord, Lord Fraser of Carmyllie. It is a curious notion that members of the nominating committee should be able to nominate themselves. Surely they must be able to do so because it would be odd in the extreme, as the noble and learned Lord pointed out, if they were to be excluded. It would be even more odd if politicians are sitting with them on the same nominating committee assessing the respective
1984
merits for appointment to the constitutional court of their judicial colleagues on the nominating committee. I suggest that more considered thought needs to be given to these amendments.
Since we are laying down markers, I do not favour the proposal that the court should be in some sense geographically balanced, so that no fewer than four of the judges shall be from England and Wales, no fewer than two Scottish and no fewer than one Northern Irish. This kind of provision requires careful thought because it suggests that the geographical origins of the judges may affect their judicial decisions—a suggestion that might well be made in a contentious devolution vires case but which must not be accepted. Judges decide according to law, uninfluenced by whether they come from the legal system of England and Wales, Northern Ireland or Scotland.
My view is that, certainly for the present, we stick with the Judicial Committee. The Judicial Committee can draw on eminent judicial figures from those who hold or have held the office of Lords of Appeal in Ordinary or other high judicial office in the United Kingdom. I can confirm that in practice it would be the senior Law Lord who would decide on the composition of the Judicial Committee in these cases; and he would have the broadest range of judicial experience from which to choose. We would expect a convention to develop along the lines of Scottish civil appeals to the House of Lords where there would always be at least one Scottish judge—and in practice perhaps more—sitting on the Judicial Committee for Scottish devolution cases.
I turn to Amendment No. 196. The noble Lord, Lord Lester, is seeking to establish what my role, and that of my predecessors and successors, will be in devolution cases. As regards Amendment No. 206 I emphasise to the noble Lord, Lord Goodhart, that no past or present Lord Chancellor may sit on the proposed constitutional court. When exercising their judicial functions as head of the judiciary, Lord Chancellors are bound by their judicial oath in the same manner as every other judge. Where cases come to the Judicial Committee under the devolution legislation I will exercise my discretion not to sit where I consider it would be inappropriate to do so. I have no doubt that any future Lord Chancellor would decide likewise.
It could perfectly well be that my decision would be that it is inappropriate for me to sit in every such case. But I do not believe that it is desirable to lay down rigid rules. Any Lord Chancellor would follow this sensible course where, for example, there is a dispute between the United Kingdom Government and the Scottish executive.
However, I do not accept in the present state of the debate at any rate that there is a category of case, even if it could be adequately defined, to be called constitutional which should be out of bounds for the Lord Chancellor when he sits as the head of the judiciary. There are many criminal cases which can be said to have a constitutional element, but frequently Lord Chancellors sit on them. Equally, Lord Chancellors often sit in tax appeals which are important disputes

1985
between the citizen and the state. It is not our way to lay down rigid rules fettering discretion in the decision whether it is appropriate to sit in particular cases. These decisions must be taken case by case.
So I cannot advise your Lordships to accept these amendments. We should stick for the time being with the Judicial Committee. It has a long history of dealing with cases and appeals of a constitutional character from the Commonwealth. I agree, therefore, with the wise words of the noble and learned Lord, Lord Mackay of Drumadoon, that the time for these amendments has certainly not yet come. With the greatest of respect to the proposers of these amendments, I suggest that they need much more considered thought and to be revisited on another occasion. Meanwhile, I encourage the noble Lord, Lord Steel of Aikwood, to seek your Lordships' leave to withdraw Amendment No. 123.
Lord Steel of Aikwood: My Lords, I am most grateful to all who have participated in this debate. I reiterate that our purpose in tabling the amendment was precisely to ensure that we should have for the first time a thorough debate on the proper constitutional and legal arrangements to put in place in our country post the devolution settlements. This debate has admirably achieved its purpose—and I say that without any intention of seeking to press the amendment to a Division.
Indeed, I am heartened by the fact that the noble and learned Lord the Lord Chancellor used the phrase "for the time being". In a strange way, that echoes what the Scottish Constitutional Convention said on the issue. It stated:
"The Act shall make provision for the settlement of disputes as to the relative powers of the UK and the Scottish Parliaments … an existing body shall be used in the first instance with options including the Appellate Committee of the House of Lords and the Judicial Committee of the Privy Council".
So even as far back as the deliberations of the Scottish Constitutional Convention, we were imagining that we might well be saddled with the existing arrangements for some time to come. The Lord Chancellor is correct that as the new bodies—the Northern Ireland Assembly, the Welsh assembly and the Scottish parliament—bed down, this subject will have to return to the agenda.
As has been said, we are seriously proposing a major series of constitutional reforms at the tail end of the 21st century and yet overlaying them with a system of appeal established well before the end of the last century. That seems a strange way to proceed. So, I have no doubt that this House and other organisations will return to this issue.
It is the case—I have experienced this on my travels in some parts of the Commonwealth—that some countries question the continuing role of the Judicial Committee of the Privy Council in dealing with appeals from sovereign jurisdictions elsewhere. I believe that even the Judicial Committee will probably want to consider its own future in the longer term.
I said in my opening speech that I had never met the Judicial Committee of the Privy Council. I should have made it clear that I have met many members of the Judicial Committee. Indeed, we were glad to hear from
1986
some in this debate. In particular, like others, I pay tribute to the maiden speech of the noble and learned Lord, Lord Hutton, who is among the several who have made criticisms of the proposals for the nominating committee. It was an initial attempt to put forward proposals to form the basis of discussions, but we must take on board the criticisms that have been made of the nominating procedure. We shall give further thought to that before resurrecting these proposals on any future occasion.
The noble and learned Lord, Lord Clyde, mentioned lack of premises, but I see no reason why the new constitutional court could not simply use the facilities which already exist for the Judicial Committee of the Privy Council.
Perhaps I may make three final points. The noble and learned Lord the Lord Chancellor will have noticed that I did not append my name to Amendment No. 196. That was because, like the noble Lord, Lord Hogg, I believe in keeping in with the Lord Chancellor! Nevertheless, my noble friend Lord Lester put forward a perfectly good argument for further discussion of the role of the Lord Chancellor in these proceedings.
Perhaps I may make a more serious point. One point that has not really been answered was that made by the noble and learned Lord, Lord Cooke, who asked why, in continuing to use the existing procedures, we should exclude judges from the Commonwealth, as the Bill suggests. I believe that we should revisit that point later. It may be helpful if I indicate to the House that we have already decided to table an amendment to Clause 96 to allow us to concentrate on that issue, perhaps next week when we reach that point in the Bill.
Finally, I only hope that as the noble and learned Lord the Lord Chancellor used the phrase "for the time being", he might agree that the time has come when perhaps he and others involved should consult senior judges and representatives of the profession in all four parts of the United Kingdom about long-term constitutional developments. This debate should be seen simply as a curtain-raiser to what should be a serious ongoing debate about the future nature of our constitutional arrangements. The debate has amply served its purpose. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Farrington of Ribbleton: My Lords, I beg to move that further consideration on Report be now adjourned until not before 8.45 p.m.
Moved accordingly, and, on Question, Motion agreed to.

The Utilities
7.45 p.m.
Lord Borrie Lord Borrie rose to ask Her Majesty's Government what plans they have to modernise the regulation of the utility industries so as to provide a fair deal for consumers in general and vulnerable consumers in particular.
The noble Lord said: My Lords, perhaps I may first express my delight at the fact that so many of my noble friends have agreed to take part in this debate. In addition to welcoming them, I welcome also the maiden speech that we are to hear shortly from the noble Baroness, Lady Sharp of Guildford. We look forward to hearing her with great interest. I should add that I must declare an interest in that I am a non-executive director of Three Valleys Water.
In my party's 1997 election manifesto we said in relation to the utility industries:
"we will promote competition wherever possible. Where competition is not an effective discipline … we will pursue tough effective regulation in the interests of customers".
Within a year of the election the Government published a comprehensive consultation paper directed at modernising the framework of utility regulation and enhanced the ability of regulators to promote competition along with the Director-General of Fair Trading through the Competition Bill, which is about to receive Royal Assent.
The Green Paper on utility regulation, which was published in March, and the White Paper, which was published in July, took as a starting point the competition that has been developing in the gas and electricity industries in particular. To a large extent, customers of both industries will in future be protected by competition from any exploitation rather than by regulation, although trading standards officers and others will need to be vigilant in various parts of our country to ensure that firms compete fairly and do not engage in misleading or confusing consumers. There have been some examples of that. I expect that we can all agree that firms should give customers clear information so that they can make sensible, intelligent choices as to supplier.
Moreover, there are certain parts of the industries to which I refer, particularly in what perhaps I may call "pipes and transmission", that will remain natural monopolies. They will require price regulation. Regulation will also be needed to ensure adequacy and certainty of supply, matters which a whole succession of consumer surveys have shown are high priorities among consumers. Regulation is also needed to ensure adequate long-term investment for the consumers of the future and for such other objectives as energy conservation and equity between different categories of customer. Domestic customers, for example, should not have to pay the costs of discounts given to attract the custom of large industrial concerns.
I have mentioned "vulnerable consumers"—one might say "disadvantaged consumers"—specifically in my Unstarred Question because if we were to follow the pure model of competition, prices would simply reflect costs—and it often costs more to supply disadvantaged consumers. I welcome the proposed new duty on regulators, which is set out in the White Paper, to have regard to ministerial guidance on social and environmental objectives.
The utilities provide essential services to the public, so it is surely a clear requirement of social justice that the Government should redress the balance when, as
1988
they admit in paragraph 58 of the White Paper is happening, wide tariff differentials may mean that the benefits of competition may not be being enjoyed fairly by all.
I expect that my noble friend Lord Islwyn will refer to the way in which standing charges can impinge unfairly on small users.
Since the White Paper was published the proposal to merge Ofgas and the electricity regulator Offer has been taken further with the announcement of the appointment of Mr. Callum McArthy to head the new body. That is an imaginative appointment with someone of substantial and relevant experience in the public and private sectors.
The structural change which many of us have argued for is a change to get away from the situation in which the one man or one woman regulator faces the chairman or chief executive of a powerful company. Sometimes there has been undue personal confrontation between individuals. I am glad, therefore, that the energy and telecommunications regulators are, in each case, to comprise in future a small board of three—a chair and two others. Decision making will then be shared, the regulator will have greater authority and there will be a check on the waywardness or awkwardness of individuals.
I am left in the dark as to what is to happen to the water regulator Ofwat. I know that that is not the responsibility of my noble friend the Minister and his department and that he may not be able to say what is to happen to Ofwat.
One utility company that currently embraces both electricity and water called Hyder had the bright idea during the consultation period of asking the former Master of the Rolls, the noble and learned Lord, Lord Donaldson of Lymington, to give an independent view on the Green Paper and on the structural matters. He made the point that shared decision-making, as he had known it in the Court of Appeal and industrial tribunals, was a good deal better than having to make a decision oneself when the only people you could discuss them with were staff and not with equals.
Putting another hat on for a moment, as a vice-president of the Institute of Trading Standards Administration, I feel that there ought to be a positive role in the regulatory process for the local authority trading standards officers. They are professionals in detecting trading malpractice and market failures and could be very useful as the eyes and ears of the national regulatory bodies which only have centralised offices. They also have the advantage of democratic legitimacy, being responsible and accountable to local councils.
In the main, I welcome what is said in the White Paper about consumer councils and the special remit they are to be given in the interests of disadvantaged consumers. As the White Paper says, they should be "powerful consumer advocates" at the heart of the regulatory system but, nonetheless, to one side or independent of it.
I have one doubt that I must put to my noble friend the Minister. I do not think that the role of consumer councils as consumer advocates sits frightfully well with the handling of individual consumer complaints. As the

1989
DTI has just issued a further consultation paper specifically on consumer councils, may I seek to influence Government thinking and propose that provision be made in the forthcoming Bill for the possibility of introducing an ombudsman system, organised to be independent of both suppliers and consumers. It would be helpful to set up an independent ombudsman scheme to handle the more intractable consumer complaints, with power to award compensation. Ombudsman schemes in the private sector have been very successful in recent years in providing low-cost and trusted dispute settlement machinery. That view is accepted by the noble and learned Lord, Lord Woolf, in the civil justice review, and accepted by the Treasury in its recently published draft Financial Services and Markets Bill.
It would be unfortunate if the matter is left out from the forthcoming legislation on utilities regulation. It is very unlikely that amending legislation would ever be a high priority. Why not provide for it in the Bill, with the timing of implementation left to Ministers?
7.55 p.m.
Baroness Sharp of Guildford: My Lords, I should like to begin by saying how I, as a newcomer to your Lordships' House, have appreciated the warmth and kindness that has been shown to me by everyone during this last week. Your Lordships and the Officers of the House have made me feel most welcome. I am most grateful to you all and honoured to be speaking for the first time in this great Chamber.
Two years ago I was a member of the commission set up by the Hansard Society to look into the regulation of public utilities. Its report was debated in this House in February 1997. I am delighted that it has been followed by a Green Paper and a White Paper. I am pleased that those two documents have followed so closely the recommendations made by the Hansard Society.
In particular, I welcome the Government's commitment to issue separate guidance on social and environmental objectives, and that they propose to introduce a new primary objective for regulators of protecting the interests of consumers.
I would also like to thank the noble Lord, Lord Borrie, for introducing the subject this evening. It is a most important subject. We ought to give greater consideration to the interests of consumers, particularly vulnerable consumers. I would make three points on that subject.
First, as the noble Lord, Lord Borrie, has suggested, in current legislation and Government thinking there is the notion that when competition is fully developed there is less need for the regulator, that the consumer will be adequately protected by general competition law. Certainly the consumer is benefiting at the moment from the lower prices that, generally speaking, competition is bringing. But competition is also bringing, by every post, a plethora of offers, claims and counter claims from the utilities. It is the well-informed consumer who benefits, but at present it is quite difficult to be well informed.
1990
It seems to me that two steps need to be taken. First, the regulator should ensure that the data provided by competing utilities can be easily compared and understood, just as, for example, car manufacturers are required to produce a common set of performance data for motor cars. Secondly, the statutory consumer bodies which are to be set up need to make sure that the data are widely available and in an understandable form.
My second point is to reiterate that to date, while competition has brought great benefit, the benefits are greater to the better off than to the less well off. As the noble Lord, Lord Borne, has already stressed, the financial disadvantages imposed on those who cannot pay by direct debit are fairly considerable. For example, with a pre-payment meter you are paying £25 a year more for your electricity and £50 a year more for your gas than others. There are 3.5 million households paying for their gas and electricity by pre-payment meter. That is approximately 20 per cent. of the households in this country.
It is not merely the extra costs that we should be concerned about but the inconvenience. I know of several elderly people who live in villages around Guildford, where I live, who have to come into Guildford by bus in order to top up their "smart card" for their pre-payment meters. Recently the in-town electricity showroom was closed down. That meant an additional bus journey to the out-of-town showroom in order to top up their cards. Fortunately, additional payment points have been opened in the middle of town, but the message is clear. If you do not have a car, the bus journey alone will cost £3 or £4. Who do the companies expect to make these journeys? Disproportionately, it is the old, the infirm and the young mums with kids. I do not think it is right and I hope that the Minister can assure us that something will be done.
Finally, I should like to say a word about the situation in relation to water, which to date has been expressly excluded from the Government's proposals. Although it has been privatised, the domestic water industry remains, and is likely to remain, a monopoly utility. As consumers, we have little choice but to accept and pay the bills we receive. The situation in this industry is very unsatisfactory. There have been relatively few meters installed and most bills are still based on the old, outdated rateable values. Most bills have increased very considerably. The average bill before privatisation was about £2 a week. It is now £5 a week on average and in the south west consumers pay more than £7 a week. There are many elderly people, living on their own, taking few baths, not running washing machines or dishwashers and not using garden hoses, who just cannot understand why their bills are so high. The notional sum allowed in income support is only £3 a week. Once again, it is those who can least afford it who have been hit hardest.
As I have said, I welcome the new emphasis to be given by the utility regulators to the interests of consumers. I believe it is a move in the right direction. But I believe that there are still many unanswered questions as to how, in the utilities sector, we can square competition with compassion.
8.1 p.m.
Lord Haskel: My Lords, on behalf of the whole House I should like to congratulate the noble Baroness, Lady Sharp of Guildford, on her maiden speech. One of the strengths of your Lordships' House is its pool of special knowledge. The noble Baroness will considerably add to it. She is an eminent teacher and researcher in economics, specialising in science, technology and innovation policy, subjects central to our competitiveness. From her concern for the vulnerable, we can see that she obviously knows about practical matters, too, so we certainly look forward to hearing her on many other occasions.
I congratulate my noble friend Lord Borrie on his timing. He has introduced this debate during the consultation period on the Government's proposals for setting up independent consumer councils for the different utilities. I hope the Minister will consider that this debate is part of that consultation. Quite rightly, my noble friend is concerned about a fair deal for consumers. He has a distinguished record of concern for consumers. But I believe that when consumers become valued customers, the balance swings in the consumer's favour. It is then that consumers will get the fair deal that my noble friend calls for.
The answer of course lies in competition because competition changes the way companies behave. It changes consumers into customers. However, competition in energy is still at an early stage and for the small consumer competition is non-existent in water and sewerage. So while competition is developing, there must be a modern regulator to look after the consumer, to see that prices are reasonable, to see that the service is reliable and that supply is consistent.
Of course, price used to be very simple, but it is now much more complicated, as the noble Baroness, Lady Sharp, explained. I suspect that the first task of the proposed consumer councils will be to inform consumers on matters of price and to sort out the competing claims, of which the noble Baroness spoke.
My noble friend Lord Borrie is concerned about vulnerable consumers. He is right. The vast majority of vulnerable consumers are on low incomes, yet they seem to pay the highest price, as the noble Baroness, Lady Sharp, told us. It is usually because they have pre-payment meters. This has always been a mystery to me. In every other business, customers who pay in advance pay the lowest price because there is no credit risk. So instead of paying more, those with pre-payment meters should be paying less. We do not know why they pay more as the whole matter is shrouded in commercial secrecy. Contrast that with the transparency in the United States where an organisation looking after the interests of consumers would be able to see the financial data justifying the higher costs. That does not seem to have harmed competition in America. I hope that the consumer councils will have the same facilities.
Baroness Farrington of Ribbleton: My Lords, with the greatest respect to my noble friend, I have to remind noble Lords that when "three" comes up on the clock it is actually the end of the three-minute time allotted to speakers.
8.5 p.m.
Lord Hardy of Wath: My Lords, as privatisation of water approached, I well remember a conversation I had with one of the leaders in the Yorkshire water industry. He assured me that when it was privatised it would become owned by the people of Yorkshire. I demurred. A little later, when there was an attempt to secure the election to the board of a responsible Yorkshire lady—not of our political persuasion—Yorkshire shareholders voted for that lady but she was wiped out by the votes of the institutions.
That they were not locally based was quite evident when Yorkshire Water refused to allow in three cases, in my then constituency, work to be carried out to relieve the problem of people who were having to live with sewage contamination. When I went to do a broadcast on this matter the spokesman for Yorkshire Water said that the regulator was at fault because the regulator would not let them spend any money on it. The fact remains—Yorkshire Water did not apologise for the misdirection of the Yorkshire people—that the regulator had said, "You cannot increase your prices. Your profits are so high that you can meet needs of that urgent kind from your existing profits".
As far as concerns electricity, the Government took the view that the regulator would protect the consumer. The regulator was principally responsible for the achievement of an incomprehensible pricing system. I recall asking him a question about the disregard of the fact that coal for electricity generated at coal-fired stations was a good deal cheaper than that from the new gas-powered stations and not getting an answer.
The worst situation was in the gas industry. Sir Denis Rooke, one of the most successful people in the utilities during the post-war period, could live with a very fine structure—a complex structure—of gas consumer protection and with a large number of showrooms, to which the noble Baroness, Lady Sharp, properly referred. When the previous Conservative administration came in and said that they would privatise gas they proposed to dismantle the structure. I was on the committee dealing with the Bill. The Government were proposing to call it the Gas Users' Council. I said that it would become known as GUC, which was an ugly term, and proposed instead that it should become the Gas Users' National Organisation. The Minister appeared very keen to accept my suggestion until I pointed out that it would become known as "Guano" instead.
The industry should be robust enough, as gas had been robust, to live with a proper structure of consumer protection and to live with a care for the poorest in the land and with a care for the disabled. Noble Lords will have seen the documents and briefings which we have received. I hope that they will receive adequate attention.
8.8 p.m.
Lord Desai: My Lords, I congratulate my long time friend, the noble Baroness, Lady Sharp. She has lived up to all our expectations by delivering on behalf of consumers a powerful and carefully researched speech on competition policy.

1993
Because time is short this evening I shall make but three quick points. As the noble Baroness and my noble friend Lord Borne indicated, price may fall in competition but price is not everything. When we buy any product of a utility we buy a whole what I call vector of characteristics. One of the things that the noble Baroness pointed out was that consumers pay a price over and above the price charged for the gas. For example, if I pay in advance or if I pay by standing order I am giving a loan to the utility. Indeed, I have given incredible amounts of money to British Telecom. I do not know why I do so. However, there is an implicit price which is larger than the price paid.
We ought to look at all the implicit and explicit prices paid by consumers. This is where most particularly the price paid by the vulnerable consumers, especially the blind, comes into the equation. What are the utilities doing to lower the extra price paid by the blind? Are the latter getting the sort of information which will help them so that they will not end up paying a higher price than ordinary well sighted consumers pay?
My noble friend Lord Borne is entirely correct to point out that if the utilities give business accounts a discount they should not, as it were, charge domestic consumers much more. But just as there is a principle of cross-subsidy among business consumers—because that is how the discount for large volumes works—I believe that they ought to cross-subsidise among consumers, especially the more vulnerable ones; indeed, I think that they should forgo some part of the profit. I believe that that would help.
I have one final point to make. I believe that eventually we will have to have a much more co-ordinated regulatory system across the different utilities. However, tonight is not the time to talk about it.
8.11 p.m.
Lord Islwyn: My Lords, I congratulate my noble friend on initiating this debate on a most worthwhile subject, though it is a pity that it is such a short debate. Nevertheless, my thoughts turn to the so-called "fat cats"—and what a horrible expression that is. I have in mind Sir Peter Bonham who is British Telecom's chief executive. His pay rocketed by 46 per cent. to more than £1 million last year and—wait for it!—he also had £1.5 million in bonuses.
Moreover, at Centrica the chief executive, Roy Gardener, earned a package of £493,000. His counterpart at British Gas, David Varney, got over £427,000, which was a 74 per cent. increase. At Southern Electric, Jim Forbes, the chief executive, earned £399,000 last year, which represented an increase of 45 per cent. Then there is that prime success story of privatisation, Yorkshire Water, where we find its chief executive, Mr. Keith Bond, a former police constable, received a 69 per cent. increase that took his salary to £298,000. Indeed, I could go on through a whole list of bosses who have simply abused the system. What an example that is to lower paid workers. We should also remember that all this is taking place as a result of what the late Lord Stockton (Mr. Harold Macmillan) described as the sale of the family silver.
1994
Overall, in this issue which my noble friend Lord Borne has described as a fair deal for consumers, I think particularly of less well-off pensioners and the way that they were treated by the last government. In the early days of that administration a decision was taken to alter the method of calculating the state pension. The dual assessment based upon inflation and average earnings was terminated and annual increases were subsequently based on the inflation rate alone. That change brought about a considerable loss of income for pensioners, especially those who tended to rely on state provision. I shall give your Lordships details as supplied to me by the Library of the House. The single state pension of £64.70 in April 1988 would have been £87.79 if it had risen in line with average earnings since 1979. That is a difference today of £23.9p per week. That figure clearly illustrates that pensioners have a genuine cause for grievance.
That leads me to another aspect which is highly relevant to our debate; namely, the fact that pensioners have to pay the standing charges to the former public utilities. I tabled a Question last Wednesday about this issue but I received a negative reply from the Government. I was most disappointed about it. The people, and pensioners in particular, expect a better deal from a Labour Government.
8.14 p.m.
Lord Currie of Marylebone: My Lords, I should, first, declare an interest as a consultant recently for Thames Water and as an unpaid adviser to the recent Offer/DTI review of the wholesale trading arrangements for electricity. I welcome this brief debate and I also welcome government policy towards regulation as it is evolving. I think it is right, wherever possible, to promote competition, not simply because of the price benefits that competition brings but also because competition is a major spur to innovation. We have seen that in telecoms and I believe that we will be surprised at the degree of innovation that we see in gas and electricity as competition spreads. I believe that that will be a major benefit to consumers.
However, we also have to recognise that there are limitations on competition. In particular, if we have the wrong industrial structure the competition will not necessarily deliver the right outcomes. If we look at the market in power generation we see that particular problem. It is one of the reasons why coal has been disadvantaged in the trading arrangements for electricity in the recent past. I therefore welcome the Government's commitment in principle to carrying out the reform and dismantling of the electricity pool and to the divestment of coal-fire generation capacity by some of the large generators.
The other area where competition may not bring the right outcome is for disadvantaged consumers, as my noble friend Lord Borne highlighted. Competition involves the unwinding of cross subsidies and that, in an industry where fixed costs are high, can mean that the poor—the low volume consumers—miss out. There are answers to that and they are ones which have been flagged by the Government. In particular, it is possible to use the regulated monopoly pipe or wires business—

1995
for example, Transco or the National Grid—to effect and to have cross subsidies which help the disadvantaged relative to the more advantaged consumers. That is the direction in which we should seek the answer. We must ensure that any intervention in that area is not such as to inhibit competition, because the latter is the key.
In conclusion, in looking forward I think that we may be entering an era where the "fat cat" problem—the excessive profits that we have been concerned with and the need for the windfall tax—is something of the past. Regulators have got better at their job and they are regulating in a much tougher way. I fear that some of the regulatory assumptions that have fed into regulatory decisions on the cost of capital may be over tough on the regulated companies, especially in view of the disturbances in the financial markets that we have recently seen. Indeed, this is a matter to which we shall have to return.
8.18 p.m.
Viscount Chandos: My Lords, I begin by declaring an interest as a director of an interactive television company which currently provides pilot services in Hull and London on the networks, respectively, of Kingston Communications and British Telecom, which are both regulated by Oftel. I, too, welcome the Green Paper and the White Paper issued by the DTI which recognise the need for a comprehensive review of utility regulation and the consultation document Regulating Communications issued in July.
The privatisation programme of the 1980s and the early 1990s conducted by the last government gave rise to a first generation of regulation and regulators which has increasingly been showing both its age and its mixed origins. While it is now broadly recognised on all sides of the House that the privatisation of at least some of the utilities has produced significant benefits, we equally can see that the priorities of the last government were not exclusively—or even primarily—the protection of the consumer: it is clear that the regulatory regimes in some cases were set to assist in the successful privatisation of the utilities concerned and in the satisfaction of objectives ranging from the management of the PSBR to the attempted stimulus of wider share ownership.
That is now history and it is time for a new generation of regulation to supersede the old, and in the words of the Green Paper,
"a determination to ensure that the regulatory regime serves the needs of consumers",
is therefore strongly to be welcomed, as will be legislation to place a primary duty on the regulators to protect the interests of consumers. I look forward with high hopes to what my noble friend the Minister will say on this and other issues raised in a few minutes.
I shall use the short time that remains to me briefly to address the complex area of telecommunications regulations. I hope that there might be another occasion when rather more time will be available for a debate on this subject, perhaps when the Government have been
1996
able to digest the responses to the consultation paper, Regulating Communications: Approaching Convergence in the Information Age.
While I do not pretend that communications are quite the lifeblood of consumers that water or power are, the burgeoning role of telecommunications networks in providing information, education and entertainment, in addition to voice communications, makes a dynamic and competitive telecommunications industry vital.
The decision to license cable operators for both television and telephony services has, at great financial and environmental cost, provided competition in local network provision, in parallel with that in trunk and business networks. I hope that in future there will be increased emphasis on the promotion of competition in service provision, and that the sunk cost of competing physical networks will not be allowed ironically to keep prices higher for consumers.
8.21 p.m.
Lord Kingsland: My Lords, in the debate on the Competition Bill the noble Lord, Lord Simon of Highbury, said that he wanted to leave open the question of whether the sectoral regulators or the Director General of Fair Trading should enforce the competition prohibitions. In a recent publication by the Office of Fair Trading in paragraph 4.4 we find the director general saying,
"Unless there are reasons for doing otherwise, the relevant regulator, rather than the Director General of Fair Trading, will apply the prohibitions in the Act when they relate to arrangements or conduct falling within his sector".
I urge the Minister, who is one of those responsible for the utilities review, to reject that philosophy. His own Government have said on several occasions that the Competition Bill is about applying uniform principles across the board. Only recently in your Lordships' House the Government were at pains, when rejecting the amendment of the noble Lord, Lord McNally, on predatory pricing, to say that the Competition Bill was not intended to be sector specialist—in that case, in relation to the media.
There are two additional reasons why I think the Minister should be extremely wary of following the proposal of the Office of Fair Trading. The first is that competition in each of the regulators' sectors means something quite different from competition in the Bill. Competition in the Bill is about looking ex post at a particular anti-competitive situation. Competition to a regulator is about confronting an initial monopoly or oligopoly and out of that situation, in a dynamic way, creating a competitive situation. It is not the same thing at all as competition under the Bill. There is a real danger, if the regulator exercises as a matter of practice competition powers under the Bill, that he will confuse that notion of competition with a notion of competition contained in his own regulatory Act.
The second reason why, in my submission, it would be inappropriate for the regulator to have these powers is that he has many other considerations to look at as well. He must consider the interest of the consumer, the environmental picture and the social dimension. All

1997
these things have to be factored in to his own regulatory decisions. Competition, on top of that, would be compromised.
8.24 p.m.
Lord Newby: My Lords, I join other noble Lords in congratulating the noble Lord, Lord Borrie, on introducing this debate. It is a particular pleasure for me to be able to congratulate my noble friend Lady Sharp of Guildford on her maiden speech. We on these Benches are particularly pleased to have the benefit of her expertise and experience. I am sure noble Lords will agree that these abilities and qualities will be of tremendous benefit to the House as a whole in the months and years ahead.
For many vulnerable people in this country, particularly pensioners, the utilities play a peculiarly large part in their lives. A large proportion of the post they receive is from the utilities and a large proportion of the regular payments they have to make is to utilities. Therefore this is a particularly important area to be discussing. A number of noble Lords have discussed problems which currently apply, not least high costs of standing charges and the problems of the high cost of prepayment meters.
I wish to refer to the problems which arise when faults occur in the utilities provided in the home. I know of a case of an elderly, partially sighted lady who discovered when she was having her water meter read that a large volume of water was flowing through even though all the taps were closed. This meant that there was a leak somewhere. The meter reader said, "I do not recommend that we fix this for you as it will cost you far too much. You ought to find your own plumber". That statement was deeply disturbing to the lady. She wanted someone from the utility to solve the problem rather than have to find someone from outside. The situation was already stressful for her in that she had discovered a water leak and she then had the additional problem of having to find someone to put it right.
I believe that similar cases occur in the gas industry as regards the restricted role of Transco in tackling gas leaks. One then has to get another specialist to deal with a leak. This area needs to be given further consideration. We therefore welcome the Government's commitment to issue statutory guidance on social objectives and environmental objectives. We on these Benches would prefer the environmental objectives to be given rather more significance, but we believe that this is a great step forward. We welcome anything the Minister can say this evening either on the timetable for the issuing of such guidance or on consultation which may take place between now and the guidance being issued.
As regards consumer councils, I am not sure that I agree with the noble Lord, Lord Borrie, about separating individual complaints and general policy issues. One finds that people in the legal field deal with individual miscarriages of justice and reform of the criminal law more generally. Experience in one area informs experience in the other area and gives great
1998
strength to what they do. We support the principle of statutory consumer councils and look forward to seeing that enacted.
8.27 p.m.
Earl Attlee: My Lords, I, too, am grateful to the noble Lord, Lord Borrie, for posing this Unstarred Question tonight. The House is indeed fortunate to have his services. I have only three minutes so I will have to be to the point. I wish I had longer to respond to the various points that noble Lords have made.
I am not supposed to do this but I would like to note the quality of the maiden speech from the noble Baroness, Lady Sharp. She made the interesting point that better-off consumers are well informed, more sophisticated and can take advantage of direct debit schemes. She also talked of the problems of pre-payment meters. I hope that eventually technology will help vulnerable consumers as well as those who are better off. I also welcome the Minister's first substantial speech from the Government's Dispatch Box. I am sure that in the future we shall have many interesting discussions on the Government's energy policy.
The role of utility regulation is to promote fair competition while at the same time protecting the interests of consumers in both the long and short term. Since privatisation we have seen greatly improved efficiency in the utilities which has been achieved through the rp-x formula. However, there is also a need for regulatory efficiency. That means that the Minister will have to strike the balance between short-term consumer benefit on the one hand and an over-demanding regulatory regime on the other, the latter being detrimental to future investment plans in the utilities.
The noble Lord, Lord Borrie, effectively drew attention to vulnerable consumers. I am sure that the Minister would agree with Ian Byatt that any measure that results in lower bills for some consumers will have to be funded by higher bills for others.
Perhaps I can tempt the Minister a little further. Does he agree that the provision of an adequate income for vulnerable consumers is a responsibility of the welfare system, and that of energy efficiency a part of taxation and housing policy? Therefore, although I accept that the utilities may have an input in these matters, is it really the role of a commercial concern to act as a welfare organisation? On the other hand, good business practice would suggest compassion in cases of genuine hardship.
We shall have to study today's Statement to see whether it can help. The noble Lord, Lord Borrie, referred to social justice, and I agree with his sentiments. Put simply, we need to move towards eliminating vulnerable consumers as much as we can.
The noble Lord, Lord Borrie, also spoke about the increased power of consumer councils. Will the Minister say how that will work? Will it not interfere with the duties of the regulator, who should regard the long-term interests of the consumer as paramount?

1999
In the longer term, we on these Benches hope to see fully developed competition in all the utilities. We are practically there with telecommunications. When effective competition is fully developed, we hope to see industry-specific regulation become unnecessary and reliance being placed solely on general competition law.
8.30 p.m.
The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Sainsbury of Turville): My Lords, I should like to thank my noble friend Lord Borrie for raising this important topic and for his thoughtful contribution to the debate. All those who have had contact with him when he was Director-General of Fair Trading, or in this House, know that he is not only a great expert on regulation, but also a fierce and effective champion of the consumer.
I also congratulate the noble Baroness, Lady Sharp, on an outstanding maiden speech. I know she has great knowledge of the economics of science, technology and innovation and, as Minister for Science, I look forward to listening to many more illuminating speeches from her.
I should also like to say to my noble friend Lord Haskel that we will, of course, consider the debate as part of the consultations on the Government's proposals for setting up independent consumer councils for the different utilities.
Water, energy and telecommunications are among the essentials of everyday life, and the public have a right to an efficient supply of these services, on fair terms. That is why the Government published a Green Paper on utilities regulation earlier this year. The Government's subsequent response to consultation set out three overall objectives for reform. We want to secure a fair deal for all consumers, including the disadvantaged. We want to create a regulatory framework which looks ahead to the next decade, in a world where competition is growing, convergence issues are arising, and multi-utility companies are emerging. And we want to create a climate in which the utility companies can innovate and improve efficiency wherever possible by ensuring that regulation is transparent, predictable and accountable.
The Government have set out a large number of proposals for reform to help achieve the overriding objectives that we have set. I want, however, in the time available, to focus on government plans which are aimed most directly at our objective of securing a better deal for consumers, and the disadvantaged in particular.
I should like to deal with three key changes which are aimed at giving all consumers a fairer deal. First, the Government propose that there should be a new primary duty on the regulators to protect and promote the interests of consumers wherever possible through promoting competition. The regulators' existing consumer duties are secondary duties. The Government believe that, when making decisions, the regulators must put the needs of consumers first.
Secondly, the Government intend to establish consumer councils for each of the utilities on a fully independent and statutory basis. That is a key consideration which will deal with many of the concerns
2000
that have arisen in the debate. We envisage the councils playing a key role in articulating a strategic, independent view of consumer interests to the regulators, companies, Parliament and the media. They will have statutory rights to be consulted by the regulator on key decisions affecting the consumer interest, and will have responsibility for handling complaints when those are not resolved by the utility companies. They will provide a one-stop shop for consumer complaints against the utilities.
The noble Lord, Lord Borrie, mentioned the incompatibility, as he saw it, of the advocacy role with the role of handling complaints. I wish to make clear that our proposals do not involve consumer councils taking on a formal educational role in these matters. Licence enforcement action will remain a matter for the regulator. However, there are examples in the water sector where companies have entered into voluntary agreements with customer service committees whereby the companies will accept a committee's adjudication. We want to encourage those developments.
However, I have taken note of the suggestion made by the noble Lord, Lord Borrie, of providing a formal ombudsman scheme in the legislation. My department is currently consulting on the detailed arrangements for establishing the new councils. We plan to announce the outcome of that consultation as soon as possible following the 16th November closing date for responses.
A third measure for strengthening the position of consumers is our plans to ensure that all the regulators have powers of the type already held by the gas regulator to impose financial penalties on companies for breach of overall and individual customer service standards.
The noble Lord, Lord Islwyn, raised the question of high pay for executives in the utilities. It is not for the Government to set executives' pay. However, we plan to encourage stronger links between customer service standards, price gaps and directors' pay. We shall, for example, be urging regulators to take account of levels of consumer service and satisfaction when setting new price caps. Moreover, we intend to legislate to require price-regulated utility companies to disclose the nature of any links between the pay of the directors of the regulated business and the service standards attained by that business, and if there is no link, to make that fact known.
In addition to these and other measures to help all consumers get a fair deal, the Government are particularly concerned about the position of the disadvantaged. Fuel poverty is a major issue. The liberalisation of energy markets has delivered real benefits to all consumers in lower prices, but there have been concerns that the disadvantaged may have benefited less than other consumers. The Gas Consumers Council and other organisations have been vocal in articulating the needs and concerns of disadvantaged consumers in competitive markets. There are concerns, for example, that the gap between prepayment meter tariffs and direct debit tariffs could become unacceptably large. We are alert to these problems, and have announced plans to ensure that the regulatory system is equipped to deal with them.

2001
I want to refer to three specific proposals announced by the Government for addressing the particular needs of the disadvantaged. First, the Government propose to modify the regulators' statutory duties as they affect the disadvantaged. The regulators' existing social duties vary somewhat between the utility sectors, but typically require the regulators to take into account the interests of the disabled, pensioners and rural consumers. These existing duties will be retained, but they will be extended to cover low-income consumers and, where this is not already the case, the chronically sick.
Secondly, we propose to introduce legislation to give Ministers powers, following full consultation, with Parliament and others, to issue statutory guidance to the regulators on social and indeed environmental objectives. I believe that that deals with the question raised by the noble Lords, Lord Desai and Lord Newby. However, I should make it clear that this would require primary legislation and in that way would keep the distinction clear when a situation arises which changes the framework within which regulation takes place.
The proposal has been widely welcomed. It will ensure that the utilities, as sectors, will make an appropriate contribution to wider social goals. It will make clear that the responsibility for setting objectives in those areas rests with the Government, not the regulators. It will improve the transparency and the predictability of regulation because the guidance will be strict and for a set duration for a number of years—perhaps the duration of a parliament.
The plans for powers to issue guidance recognise that economic regulation does not take place in a vacuum. The powers will also provide a mechanism allowing Ministers to guide regulators on how to interpret their social and environmental duties. That also addresses a point which has been raised. If liberalisation leads to an unwinding of some of the cross-subsidies that can be seen to have a beneficial effect—and the noble Lord, Lord Currie, raised the point—it is something as regards which the Government could take action through the mechanism to correct the situation.
The powers to issue guidance and the extension of the regulators' duties towards the disadvantaged are longer-term propositions requiring legislation to give them effect. The needs of the disadvantaged require more immediate consideration. That is why, in publishing the Green Paper A Fair Deal for Consumers, the Government asked the regulators to draw up a social action plan to ensure that disadvantaged consumers benefit from improved efficiency, more choice and greater fairness. This is the third element in our strategy for ensuring that the needs of the disadvantaged are reflected in the system of regulation.
We are not complacent. The position of the disadvantaged in competitive energy markets, and the other utility sectors, is a key government concern, and one that the Government intend to keep closely under review.
I should like to deal with the question of standing charges and I hope that I can be more helpful to the noble Lord, Lord Islwyn, on this occasion. Noble Lords
2002
will be interested to note that market forces are starting to deliver results in terms of a wider range of payment options and tariff structures for consumers. Some companies are now offering tariffs with no standing charge. In the gas sector, for example, both Norweb and British Fuels offer tariffs without a standing charge. Naturally, the unit charge is higher, but that may be an alternative which is attractive to consumers who have lower than average consumption. We hope that in these markets which are becoming competitive alternatives will be produced which deal with the question of standing charges.
In the water sector, which is not the responsibility of my department, the recent consultation document on water charging recognised that for some low users standing charges for those with water meters can represent a high proportion of water bills. The consultation invited views on whether we should move to a position where there are no standing charges. It is not, of course, a free option and any re-balancing of charges will produce winners and losers. My colleagues are currently considering responses to the water charging consultation.
There is, of course, a distinction between this situation which is a monopoly and those where competition is now beginning to take place. I mention it because it shows that we are very much alive to the issue and will take action if necessary.
The noble Baroness, Lady Sharp, raised the issue of pre-payment meters and direct debit tariffs. Again, it is an issue where much work has come through the social plan and I hope we will begin to see changes taking place on it. I very much take on board the point made by my noble friend Lord Haskel that in business customers who pay in advance usually pay the lowest price. I hope that the utilities will gradually begin to deal with the problem.
My noble friend Lord Borne raised the question of individual regulators versus boards. We wish to see a degree of depersonalisation of regulation and ensure that there are stronger checks and balances on individual regulators. That is why we have moved to a position of three people rather than one individual.
In closing, I wish to take this opportunity once again to thank all noble Lords for their contributions to the debate. I am afraid that I have not had time to deal with all the issues, in particular the one raised by the noble Lord, Lord Kingsland, on the relationship between the Competition Bill and the role of the regulators. This is an issue where we feel that the concurrent powers are right and as the markets become more competitive, it is right that the individual regulators should have the powers contained in the Competition Bill. I take the point that the position needs to be clear. Co-ordination is already being developed so that the regulators and the Director of Fair Trading will act in concert.
Noble Lords have made a number of excellent contributions to the debate and I trust that they will understand if I cannot deal with all the other points which arise. I assure the House that the Government will continue to press forward with the important work that they have initiated in the area. It is an important

2003
programme of reform and the Government believe that the proposals set out in their response to consultation will modernise the system of utility regulation and at the same time provide a fair deal for consumers in general and vulnerable consumers in particular.

Scotland Bill
8.46 p.m.
Consideration of amendments on Report resumed on Clause 31.
Lord Sewel Lord Sewel moved Amendment No. 124:
Page 16, line 4, leave out ("Standing orders shall ensure that,") and insert ("The Presiding Officer shall not submit a Bill in its unamended form for Royal Assent").
On Question, amendment agreed to.
[Amendment No. 125 not moved.]
Lord Sewel Lord Sewel moved Amendment No. 126:
Page 16, line 5, leave out ("a Bill or any provision of a Bill") and insert ("the Bill or any provision of it").
On Question, amendment agreed to.
Lord Hardie Lord Hardie moved Amendment No. 127:
Page 16, line 6, leave out from ("Parliament,") to end of line 7 and insert ("or
(b) a reference made in relation to the Bill under section 32 has been withdrawn following a request for withdrawal of the reference under section (ECJ references)(2)(b)").
The noble and learned Lord said: My Lords, in speaking to this amendment, with the leave of the House I wish also to speak to Amendments Nos. 132 and 136.
The Government consider that these amendments are necessary to ensure that Bills of the Scottish parliament are not unduly delayed. There may be cases where a law officer has referred a question of whether a Bill is within the legislative competence of the parliament to the Judicial Committee of the Privy Council, and the Judicial Committee decide in turn that it wants to refer the issue to the European Court of Justice for a preliminary ruling on some question of Community law. If the Judicial Committee made such a reference, the Bill could not, of course, be submitted for Royal Assent until the reference had been disposed of by the ECJ and by the Judicial Committee. Indeed, it might face quite a considerable delay while the ECJ was considering the issue.
These amendments provide that, if such a reference had been made, the parliament would be able to resolve to reconsider the Bill. Amendment No. 132 provides that, if the parliament resolved to reconsider a Bill, the presiding officer would be required to notify the law officers and the law officer who made the reference to the Judicial Committee would be required to request the withdrawal of the reference. Amendment No. 136 adds to the limited circumstances in Clause 34 in which the parliament can reconsider a Bill.
However, the parliament would not simply be able to reconsider the Bill, pass it and have the presiding officer submit it for Royal Assent. Amendment No. 127
2004
introduces an appropriate safeguard to prevent this happening. The parliament would be required to amend the Bill before it could be submitted for Royal Assent. At that stage a law officer could again refer the matter to the Judicial Committee if he considered that there was still a question as to whether the Bill was within the legislative competence of the parliament. We consider this to be a common sense approach. It prevents Bills being held up for considerable periods of time if the Judicial Committee refers a question to the European Court of Justice by giving the parliament power to reconsider them and removing the objection which prevents them from being submitted for Royal Assent. I hope that noble Lords agree that this is a sensible provision. I ask them to support the amendment.
The Earl of Balfour: My Lords, I should like to make one small appeal. I dislike abbreviations such as ECJ. I believe that its full title should be spelt out. When I was at school or in my younger days rpm always meant revolutions per minute and then it became retail price maintenance. There are other examples of that kind. I dislike abbreviations, and that is my only appeal in this case.
Lord Hardie: My Lords, I am happy to take on board that point.
On Question, amendment agreed to.
[Amendment No. 128 not moved.]
Clause 32 [Scrutiny of Bills by the Judicial Committee]:
Lord Mackay of Drumadoon Lord Mackay of Drumadoon moved Amendment No. 129:
Page 16, line 12, at beginning insert ("The Presiding Officer,").
The noble and learned Lord said: My Lords, this matter has already been spoken to. I beg to move.
Lord Sewel: My Lords, when we discussed Amendment No. 121 I indicated that the Government had been persuaded by the arguments advanced by the noble and learned Lord at that stage. I also indicated that all good things had to come to an end. As to Amendment No. 129, we have not been persuaded by the arguments of the noble and learned Lord. Clause 32 currently provides that the law officers of the United Kingdom government and the Scottish executive can make reference to the Judicial Committee if they consider that a Bill, or any provision of it, is outwith the legislative competence of the parliament. It would not be appropriate for the presiding officer to be able to make such reference. Such references are to be made in a four-week period once a Bill has been passed by the parliament.
Clause 31 provides that the presiding officer is required to decide whether a Bill is outwith the competence of the parliament. In reaching that decision he will no doubt want to take appropriate legal advice. It would not be appropriate to give him a role at the end of the process. Quite properly this role is confined to the law officers of the two administrations. Therefore, he has a role to play at the beginning of the process and the law officers have a role to play at the end. I do not

2005
believe that we should confuse the two. I am afraid that the Government are not persuaded by the arguments of the noble and learned Lord and I hope that he will feel able to withdraw his amendment.
Lord Mackay of Drumadoon: My Lords, the noble Lord has persuaded me that I should have drafted an additional consequential amendment to take account of the point that he makes; but he has not persuaded me on the fundamental issue that as currently drafted the presiding officer has a very important role to play in assessing whether a Bill is within or without the legislative competence of the parliament. This is a matter of importance and I seek to test the opinion of the House.
8.53 p.m.
On Question, Whether the said amendment (No. 129) shall be agreed to?
*Their Lordships divided: Contents, 39; Not-Contents, 86.

Division No. 1

CONTENTS

Attlee, E.

Lyell, L.

Balfour, E.

Mackay of Ardbrecknish, L.

Belstead, L.

Mackay of Drumadoon, L.

Broadbridge, L.

Mancroft, L.

Brougham and Vaux, L.

Middleton, L.

Byford, B.

Montrose, D.

Carnegy of Lour, B.

Northesk, E.

Carr of Hadley, L.

Norton of Louth, L.

Chesham, L.

Rennell, L.

Courtown, E. [Teller.]

Renton, L.

Craigavon, V.

Roberts of Conwy, L.

Crathorne, L.

Rowallan, L.

Cross, V.

Saltoun of Abernethy, Ly.

Dixon-Smith, L.

Selkirk of Douglas, L.

Ellenborough, L.

Skidelsky, L.

Ferrers, E.

Stodart of Leaston, L.

Fookes, B.

Strange, B.

Henley, L.

Ullswater, V.

Kingsland, L.

Vivian, L.

Luke, L. [Teller.]

Wise, L.

NOT-CONTENTS

Acton, L.

Davies of Coity, L.

Addington, L.

Dean of Thornton-le-Fylde, B.

Ahmed, L.

Desai, L.

Alli, L.

Dixon, L.

Amos, B.

Donoughue, L.

Archer of Sandwell, L.

Dormand of Easington, L.

Bach, L.

Evans of Parkside, L.

Bassam of Brighton, L.

Falconer of Thoroton, L.

Borrie, L.

Farrington of Ribbleton, B.

Burlison, L.

Gordon of Strathblane, L.

Carlisle, E.

Goudie, B.

Carmichael of Kelvingrove, L.

Graham of Edmonton, L.

Carter, L. [Teller.]

Grantchester, L.

Castle of Blackburn, B.

Grenfell, L.

Chandos, V.

Hardie, L.

Christopher, L.

Hardy of Wath, L.

Clarke of Hampstead, L.

Hilton of Eggardon, B.

Clinton-Davis, L.

Hogg of Cumbernauld, L.

Cocks of Hartcliffe, L.

Hollis of Heigham, B.

Crawley, B.

Hoyle, L.

Currie of Marylebone, L.

Hunt of Kings Heath, L.

2006

Islwyn, L.

Rea, L.

Jay of Paddington, B. [Lord Privy Seal.]

Redesdale, L.

Rendell of Babergh, B.

Jeger, B.

Sainsbury of Turville, L.

Judd, L.

Sawyer, L.

Kennedy of The Shaws, B.

Sewel, L.

Lockwood, B.

Simon, V.

Macdonald of Tradeston, L.

Smith of Gilmorehill, B.

McIntosh of Haringey, L. [Teller.]

Steel of Aikwood, L.

Mackenzie of Framwellgate, L.

Symons of Vernham Dean, B.

Mackie of Benshie, L.

Taylor of Blackburn, L.

McNair, L.

Thomson of Monifieth, L.

Maddock, B.

Thurso, V.

Mallalieu, B.

Tomlinson, L.

Mar and Kellie, E.

Tordoff, L.

Milner of Leeds, L.

Turner of Camden, B.

Monkswell, L.

Uddin, B.

Morris of Castle Morris, L.

Varley, L.

Nicol, B.

Whitty, L.

Pitkeathley, B.

Williams of Mostyn, L.

Ramsay of Cartvale, B.

Winston, L.

Randall of St. Budeaux, L.

Young of Old Scone, B.

[* see col. 2018]
Resolved in the negative, and amendment disagreed to accordingly.
9.1 p.m.
[Amendments Nos. 130 and 131 not moved.]
Lord Hardie Lord Hardie moved Amendment No. 132:
After Clause 32, insert the following new clause—
ECJ REFERENCES
(".—(1) This section applies where—

(a) a reference has been made in relation to a Bill under section 32,

(b) a reference for a preliminary ruling has been made by the Judicial Committee in connection with that reference, and

(c) neither of those references has been decided or otherwise disposed of.

(2) If the Parliament resolves that it wishes to reconsider the Bill—

(a) the Presiding Officer shall notify the Advocate General, the Lord Advocate and the Attorney General of that fact, and

(b) the person who made the reference in relation to the Bill under section 32 shall request the withdrawal of the reference.

(3) In this section "a reference for a preliminary ruling" means a reference of a question to the European Court under Article 177 of the Treaty establishing the European Community, Article 41 of the Treaty establishing the European Coal and Steel Community or Article 150 of the Treaty establishing the European Atomic Energy Community.").
On Question, amendment agreed to.
Clause 33 [Power to intervene in certain cases]:
Lord Mackay of Drumadoon Lord Mackay of Drumadoon moved Amendment No. 132A:
Page 16, line 38, leave out ("during") and insert ("before the expiry of").
The noble and learned Lord said: The amendment deals with a small point raised by the noble and learned Lord, Lord Hope of Craighead, at Committee stage when we discussed the provisions of Clause 33. As currently drafted the clause gives the Secretary of State the power to make an order prohibiting the presiding officer from submitting a Bill for Royal Assent. The

2007
times within which that order can be made are set out in Clause 33(3)(a),(b) and (c). The noble and learned Lord had concern over Clause 33(3)(c).
He pointed out that if a reference had taken place to the Judicial Committee it would not be competent for the Secretary of State to make an order until that Judicial Committee reference had been determined in one way or another. His concern was that the Judicial Committee might well be required to take up time considering references in relation to Bills where the Secretary of State had in mind to make an order prohibiting the Bill's submission for Royal Assent. My small amendment enables the order to be made prior to the four week period referred to in Clause 33(3)(c) in addition to the four week period itself. I beg to move.
Lord Sewel: My Lords, I am afraid we cannot accept the amendment. It may well go beyond what the noble and learned Lord indicated. It would extend the Secretary of State's powers in Clause 33 to prohibit, by order, the submission by the presiding officer of a Bill for Royal Assent.
Those powers are of course essential for the protection of international obligations, the interests of defence and national security and the law as it applies to reserved matters, but they are there as longstops. Their use would require to be justified and would be liable to be scrutinised by judicial review.
The extension proposed by the amendment would be entirely inappropriate. One effect of the amendment would be to extend the Secretary of State's power so as to encompass the period before the passing of the Bill. It cannot be right for the Secretary of State to be able to stop a Scottish Bill in its tracks when it is still being considered by the Scottish parliament. Nor can I see how such a power to interfere with the parliament's proceedings could be thought necessary to protect the interests which I have described.
Clause 33 provides ample safeguards as it stands. I cannot accept the proposition that any extension is necessary. The Bill already provides sufficient time for the Secretary of State to consider the terms of a Bill and make an order if necessary.
The danger of the amendment is that the Secretary of State could intervene during consideration by the parliament of the Bill when its final form is not known. Like this Bill, a Bill is liable to significant amendment as it goes through the parliament and the Secretary of State's reservations may well be removed in the course of events. This power should be exercised only once a Bill is complete and has passed all its stages.
I hope that the noble and learned Lord will agree with that. On that basis, I ask him to withdraw the amendment.
Lord Mackay of Drumadoon: My Lords, I take the point that my amendment may be too widely drafted. However, with the greatest respect to the Minister, he has not faced up to the argument I have advanced which was touched upon by the noble and learned Lord, Lord Hope of Craighead. If one focuses on Clause 33(3)(c), there is a practical issue. If a reference is made to the
2008
Judicial Committee, the Judicial Committee is required to make a decision or otherwise dispose of the issue before the order can be made. As the noble and learned Lord argued, it is possible that the Judicial Committee could take time in deciding a reference which is utterly academic in view of the fact that an order is to be made and the Secretary of State knows that all along.
I shall withdraw the amendment because I readily concede that it is not happily framed. However, I hope that before Third Reading it will be possible, by letter or otherwise, for the Minister to consider another solution to the practical problem advanced by the noble and learned Lord, Lord Hope. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Mackay of Drumadoon Lord Mackay of Drumadoon moved Amendment No. 132B:
Page 17, line 6, at end insert—
("() A document bearing a certificate purporting to be signed by or on behalf of the Secretary of State and setting out the existence, scope and terms of any international obligations or the nature and extent of any interests of defence or national security of the United Kingdom relied upon for the purpose of an order under this section shall, in any legal proceedings relating to such an order, be conclusive evidence of the matters detailed within the document.").
The noble and learned Lord said: My Lords, this amendment is grouped with Amendment No. 146D. The amendments arise from something said in Committee by the noble and learned Lord, Lord Rodger of Earlsferry, with some support from the noble Lord, Lord Thomas of Gresford. Orders under Clause 33 will be subject to judicial review. In any such judicial review it will be necessary for the court to be informed which international obligations or interests of defence or national security are said to be relevant to the issue of whether the Secretary of State has reasonable grounds to believe that the provisions of a particular Bill are incompatible with international obligations or interests of defence or national security.
The reasoning behind Clause 33 is that it is not possible to define international obligations or interests of defence or national security in such a way as to make them parameters of legislative competence, as with convention rights of Community law. That is because the domestic courts are not normally seized of the issue of determining Britain's international obligations.
My amendments follow up a suggestion made by the noble and learned Lord, Lord Rodger of Earlsferry, that some procedure by way of certificate be evolved. This would allow the relevant Secretary of State issuing the certificate to set out, for the benefit of the other parties to any judicial review proceedings and for the benefit of the court, the particular international obligations and interests of defence or national security that he had in mind when he addressed the issue which the courts will have to review, of whether there were reasonable grounds for taking the view that a particular Bill would be incompatible with such obligations or interests of national security or defence.
My amendments are based on similar statutory provisions where, by means of certificate, the court is informed about a certain state of events or factual

2009
circumstances relating to an issue which must be before it. There are statutory precedents for such certificates being conclusive in the way I suggest is appropriate here. In so far as the amendments take forward the suggestion made by the noble and learned Lord, Lord Rodger of Earlsferry, who was clearly looking ahead to the practicalities with which the courts will have to cope in dealing with cases arising out of the Scotland Bill, I hope that a favourable response will be received. I beg to move.
Lord Sewel: My Lords, these amendments would provide that the Secretary of State could produce in court a document bearing his certificate and describing the international obligation or the interest of defence or national security upon which he has based his decision to use one of his powers of intervention under Clauses 33 or 54. Furthermore, they would provide that the document would in any legal proceedings relating to such an order be conclusive evidence of the matters detailed within it.
I appreciate that the intention behind the amendments is to provide assistance to the courts in assessing what is an international obligation or the interests of defence or national security. As the noble and learned Lord indicated, the domestic courts do not generally take cognizance of international obligations. However, I do not believe that the amendments are appropriate.
First, I note that to use the powers in Clauses 33 or 54 the Secretary of State must have reasonable grounds to believe that a particular action or provision is incompatible with an international obligation or interests of defence or national security, or that an action is necessary by a member of the Scottish executive to ensure that an international obligation is fulfilled. The order itself must state the Secretary of State's reasons for making it.
In a judicial review of the use of the powers, the question would be whether those grounds are reasonable. The Secretary of State, in making such an order, will be aware that he must be able to demonstrate that it is being made on reasonable grounds. To my mind, it is inconceivable that he could do so without describing in some detail the matters that are the subject of that order. Obviously, the courts would place appropriate weight on all the material set out in the order in reaching a conclusion.
These amendments go further and would require the evidence in the document to be conclusive evidence of the matters detailed in it. That would simply go too far. It should be for the court to judge whether the Secretary of State's evidence is conclusive in that regard. That is an extremely important and fundamental issue. It is not sufficient just for the certificate to take with it the imprint of conclusiveness. It must be a matter for the courts to decide whether the Secretary of State has acted reasonably and reached an appropriate decision. Therefore, on that basis, I hope that the noble and learned Lord will feel able to withdraw the amendment.
9.15 p.m.
Lord Mackay of Drumadoon: My Lords, I am disappointed and I suspect so also will be the noble and learned Lord, Lord Rodger of Earlsferry, although I have not discussed the matter with him since he raised the issue.
The Minister's answer means that in judicial review proceedings there will be scope for a dispute, first, as to what are the international obligations of the United Kingdom, or what are the interests of the defence of the United Kingdom, or what are the interests of national security, before one moves on to the much more crucial issue of whether the Secretary of State had reasonable grounds to believe that a particular Bill was incompatible with one or other of the matters mentioned in Clause 33(1)(a).
I am quite sure that the noble and learned Lord, Lord Rodger of Earlsferry, made his suggestion in the hope that it may limit the scope and extent of judicial proceedings which may be raised to challenge any order made under Clause 33. That was certainly the purpose of bringing forward this amendment. However, the Government are quite clearly intent on resisting it, and tempted though I am, I do not seek the opinion of the House on this amendment. I beg leave to withdraw it.
Amendment, by leave, withdrawn.
Clause 34 [Stages of Bills]:
Lord Mackay of Ardbrecknish Lord Mackay of Ardbrecknish moved Amendment No. 133:
Page 17, line 7, leave out subsection (1) and insert—
("(1) Each Bill shall be considered by the Parliament at the following stages—

(a) a general debate on the principles of the Bill;

(b) a stage during which a committee of the Parliament may hear evidence on and shall consider representations received from interested parties on the subject matter of the Bill, and at the conclusion of which the committee shall report to the Parliament on the evidence and representations it has received;

(c) a stage for a further general debate on the Bill, in the light of the report prepared in terms of paragraph (b) hereof, with an opportunity for members to vote on the general principles of the Bill;

(d) a committee stage for members of the Parliament to consider and vote on the detail of the Bill;

(e) a report stage to consider any amendments subsequent to the committee stage in paragraph (d); and

(f) a final debate and vote on the Bill, at which the Parliament can either pass or reject it.

(1A) A period of not less than three calendar months shall separate the stages of the Bill mentioned in subsections (1)(c) and (e) unless otherwise provided for by a resolution of the Parliament.").
The noble Lord said: My Lords, we are returning here to the issue of how the Scottish parliament will deal with legislation. That issue overlaps the second debate we had at this Report stage relating to a second chamber of the Scottish parliament. As your Lordships know, the Government have set their minds against having any second chamber at all, despite the fact that in this Bill we have clear evidence of the importance of a second chamber, given the number of government amendments, let alone the amendments of anybody else, which have

2011
been brought forward. Without the Opposition doing anything, it will take the other place quite a large proportion of a day to get through the Government's own amendments.
I do not complain about that because it is an indication that the Government are listening to the arguments. This Bill is important. It is not like any other Bill which we have dealt with and it is doing something quite dramatic to the constitutional arrangements of the United Kingdom. I make no complaint of the fact that the Government are bringing forward so many amendments. But my point is that that illustrates the importance of having a second chamber where those matters can be debated, dare I say it, rather less dramatically than affairs are usually debated in the other place where there is often a lot more heat than light, whereas in your Lordships' House there is always light and sometimes a little heat.
This clause sets out stages of a Bill in the Scottish parliament. The Government have a contradictory position in this regard. Clause 34(1) sets out three stages of a Bill which seem to me to be entirely a replication of the procedures in another place: there shall be a general debate on the Bill and members can vote on its general principles. That sounds like a Second Reading. There is then provision for consideration of the detail of a Bill. That sounds very much like our Committee stage. There is then a final stage at which the Bill can be passed or rejected. That is certainly the Third Reading in the other place which is fairly automatic compared with the procedures in your Lordships' House. But the Bill says that the standing orders "shall include". I accept that it says that but it is prescriptive. It does not allow the Scottish parliament to start off with a clean sheet on how it deals with legislation. The Bill provides that those procedures must be followed.
And yet ironically, on 28th July when we discussed this in Committee, the noble Baroness, Lady Ramsay of Cartvale, said that:
"the Government believe that it is not for us to prescribe the working practices of the parliament".
Yet this clause prescribes the working practices of the parliament. The noble Baroness continues in col. 1404:
"The consultative steering group has already begun to consider how the legislative process might be handled by the Scottish parliament. It is very likely to recommend a vigorous pre-legislative process so that proposals for legislation which come before the parliament have been subject to rigorous scrutiny and participation and that the effects of the proposed legislation have been well considered".—[Official Report, 28/7/98; cols. 1403–1404.]
When we discussed on the first day of Report last week the question of a second chamber, the noble Lord, Lord Sewel, said, with reference to how the new parliament will approach the business of legislation,
"That is why we have set up the consultative steering group established by my right honourable friend the Secretary of State. The steering group has already recognised the importance of putting in place procedures to facilitate and encourage prior consultation on legislative proposals. It has endorsed the concept of ensuring that there are strong committees in the parliament able to scrutinise effectively any legislation that is brought before it".—[Official Report, 22/10/98; col. 1587.]
2012
One of my questions in the course of this debate is whether we can have some indication of the conclusions to which the consultative committee came so that we know, when we look at Clause 34, how the parliament is to approach legislation.
My amendment, which is simply a replica of the amendment I proposed in Committee—I said I thought I would return to it and indeed I am now doing so—proposes a situation not unlike that in Clause 34; not unlike our procedure here. But before it starts what I would call the parliamentary procedure we are used to here at Westminster, we should have a Bill presented with a general debate on the principles and then another stage during which the committee of the parliament can hear evidence, consider representations from interested parties on the subject matter of the Bill and report then to the parliament on the evidence and representations it received. We then move into what I might call a more conventional Westminster system.
No doubt there will be a lot of lip service paid to draft Bills and so forth. If it is not just lip service, I cannot see any reason why the kind of format suggested in this amendment should not be taken on board. If we are going to be prescriptive—I believe the Government are being prescriptive—we should certainly add in the prospect of draft Bills and the representation and evidence-taking that go with them. In many ways that would get round the lack of a second chamber. I have noticed that outside organisations often use this Chamber more than the other House in order to advance their case because they know that they have a better chance of winning an argument in your Lordships' House than in the House of Commons. Governments of both parties have occasionally found that to their cost.
I am suggesting in this amendment that, as we cannot have a second chamber in the Scottish parliament, those outside bodies ought to have a place in the legislative scheme of things where they can present their case and make their arguments.
The Minister will speak to Amendment No. 134. I have no objection to it. It deals with the fact that not all Bills are new legislation; some are consolidations as we call them here—I presume that is (a),
"Bills which restate the law".
Others are Bills which "repeal spent enactments" and "private Bills". I have no problem with that.
Amendment No. 134A seeks to make provision for the parliament to be able to introduce emergency legislation. That is sensible. The Minister perhaps includes that in the first subsection of his Amendment No. 134. It is perhaps not so obvious, but we dealt with it in our subsection though I notice that we are dealing with the three stages as set down by the Government. Clearly, if the Government accepted my amendment we would suggest that the five stages could be truncated.
We appreciate that the Scottish parliament may want to enact emergency legislation, though I have to say to your Lordships—your Lordships will not be surprised—that the history of emergency legislation is not one which leads me to believe that the Scottish parliament would be wise to use the procedures for it very often. Your Lordships were dragged back from the Recess in

2013
September to pass emergency legislation and at considerable cost. I doubt whether that emergency legislation has yet been used. It could easily have waited until we come back in the normal course of events, but that is another argument. I believe that sometimes emergency legislation is flawed. It is government showing a knee-jerk reaction. Dare I say that governments of all parties, when they take such action and bring forward legislation on that basis, very often do not get it entirely right. I would not go as far as to say that they get it wrong, but often they do not get it entirely right. Nonetheless, I believe the provision should be there because the Scottish parliament has such important powers that it may well need to use emergency legislation.
But my main point is that as regards the bulk of the legislation we should go further than just prescribe a system that looks like the House of Commons. We should prescribe, if I may so call it, a pre-legislative stage. That is what my amendment does. I beg to move.
Lord Mackie of Benshie: My Lords, it is always a pleasure to listen to the noble Lord, Lord Mackay of Ardbrecknish, after dinner. He is more amiable and we are better placed to receive him. In Clause 34 the Government have been a little nannyish in that they are setting out the general debate and so forth. I should have liked them to say that each Bill shall be considered in the parliament using the best evidence available from the Parliament of Great Britain and from Scandinavia and that a system shall be produced which examines the whole of legislation properly. However, I suppose that the best we can expect is that room is left for the Scottish parliament to make up its mind on a great number of new measures.
I also believe that both the noble Lord, Lord Mackay of Ardbrecknish and the noble and learned Lord, Lord Mackay of Drumadoon, have done rather well. It is a very good suggestion. The proposal would be a great improvement on the kind of procedure that we have in this House. It would remove the need for the second chamber which the noble Lord considers to be so essential.
The fact is that we are useful in this Chamber because of the imperfections of the other Chamber. That is why we are so essential here and why we and the Scottish parliament should see to it that the first chamber has a system for examining Bills which produces legislation that does not need an enormous number of corrections by the second chamber due to the imperfections of the first.
That is why we believe the amendment is unnecessary. It is a good suggestion for noble Lords to look at, but we cannot support putting such detail into the Bill. It is nannying the Scottish parliament to a quite unnecessary degree. The Government themselves have gone too far, but we shall put up with it if they show some regret.
9.30 p.m.
Lord Sewel: My Lords, in that case I immediately show regret. It is a matter of balance as to how far one goes in indicating a general framework which is required and necessary and how far one leaves a degree of flexibility to the parliament itself. We cannot support Amendment No. 133. I appreciate that the noble Lord wants to ensure that the parliament has sufficient opportunities to consider and vote on the Bills before it and I agree with that. I also agree that it is important that the parliament should hear and consider the views of the bodies interested in a Bill. However, it is not for us to prescribe the details of the working practices of the parliament. The Government cannot accept these amendments which intrude too far. It must be for the parliament to decide on its own procedures, including arrangements for the scrutiny of legislation, and to put in place appropriate standing orders. That is why I have no difficulty in saying that there is no incompatibility between what I am saying now and what my noble friend Lady Ramsay said at an earlier stage. It is clearly for the parliament to put in place its own working arrangements. However, we think it necessary to provide a rudimentary, basic framework that the standing orders should address as a minimum.
We have put in three minimum stages of parliamentary scrutiny. They will apply to the vast majority of Bills of the Scottish parliament. As the noble Lord, Lord Mackay of Ardbrecknish, indicated, they include a general debate on the Bill with an opportunity for members to vote on its general principles; consideration of, and an opportunity to vote on, the details of the Bill; and a final stage at which the Bill may be passed or rejected. The whole point is that that is not the be all and end all of it. That is the minimum requirement. Further details should be left for the Scottish parliament to decide.
Reference has been made to the consultative steering group which my right honourable friend the Secretary of State has set up. It is, indeed, considering the details of the processes of legislation and of scrutiny which will build around the basic framework that this Bill requires. Previously, we said that the report would be ready by the end of the year. Things are moving considerably faster and we can now be more optimistic. We think that the report will be ready by Christmas! The parliament will have the recommendations of that consultative steering group to help it in framing its standing orders, but it is very much a matter for the parliament to decide on its own procedures and working practices as long as the minimum provision is satisfied in terms of the three stages that we have identified in this Bill. On that basis, I hope that the noble Lord will feel able to withdraw his amendment.
Amendment No. 134 replaces the current provision in Clause 34(2) which allows standing orders to modify the provisions about stages of Bills which are set out in Clause 34(1). The second part of the new provision clarifies the types of Bill for which different provision may be made. Essentially, the Bills to which the provision applies are those for which the procedure needs to be simplified—the noble Lord, Lord Mackay, identified most of them—such as consolidation Bills,

2015
statute law repeal Bills and private Bills. At Westminster, special procedures exist for similar classes of Bill either in statute or in standing orders. The first part of the new provision enables standing orders to make provision to enable the parliament to expedite proceedings in relation to a particular Bill. That will be appropriate where a Bill is needed in an emergency. I have a great deal of sympathy with the points made on that by the noble Lord, Lord Mackay.
I note that the noble Lord has tabled an amendment to the Government's Amendment No. 134. However, the Government are unable to support that amendment. As I have explained, the government amendment would ensure that for certain classes of Bill the parliament can provide for different procedures. The Opposition's Amendment No. 134A would mean that even the special categories of Bill for which special provision is made in the Government's Amendment No. 134 would have to go through the three stages provided by Clause 34(1), although I appreciate that the amendment attempts to provide that there need not be any delay between the stages. That does not in our view provide sufficient flexibility for those categories of Bill.
I turn now to the Government's Amendment No. 137. This is a technical amendment. Paragraph 5 of Schedule 3 requires standing orders to provide, in effect, that a Bill which affects Crown interests shall not be passed unless the appropriate consent has been signified. The amendment ensures that the reference to the passing of the Bill in that provision includes the approval of a Bill once it has been reconsidered by the parliament under Clause 34(3). Such reconsideration would occur where the Judicial Committee has found a provision of the Bill to be ultra vires or the Secretary of State has made an order in relation to the Bill under Clause 33. We have reached the position where I have to indicate that we cannot accept Amendment No. 133.
Baroness Carnegy of Lour: My Lords, before the noble Lord sits down, can he clarify one point for me? What is the position of Her Majesty if the Bill is passed by the parliament, receives Royal Assent and then, some considerable time afterwards, is found to be ultra vires? What is the position of the Queen if she has given the Bill Royal Assent and it is found not to be valid?
Lord Sewel: My Lords, a timetable is set down for a challenge to the vires of a Scottish Bill. I do not think there is any way in which Her Majesty would be involved.
Lord Mackay of Drumadoon: My Lords, before the noble Lord sits down, can I ask him if that is correct? Surely a Bill is open to challenge indefinitely. Once a Bill becomes an Act of Parliament, an individual member of the public, who claims to be adversely affected by it, could raise proceedings and seek to have the Act reduced. That is one of the possibilities that lies ahead, once a Bill becomes an Act, after Royal Assent, as my noble friend Lady Carnegy said. She has raised a
2016
very interesting issue. I do not suggest that I know the answer to it, but if Her Majesty has given Royal Assent to a Bill that is ultra vires, quid juris?
Lord Sewel: My Lords, I have not quite got the drift of the point of the noble Baroness. The noble and learned Lord, Lord Mackay of Drumadoon, is quite right, it is open to challenge. But I do not see how that affects the position of Her Majesty at all.
Baroness Carnegy of Lour: My Lords, with the leave of the House, I am not a lawyer and I do not know all that much about the constitution, but it seems to me that in our system the ultimate accolade of a Bill is Royal Assent and it becomes law. Never before have I heard of anybody having to go and say to Her Majesty, "I am sorry, I have got this wrong. Will you please pull this back and do it again?"
Lord Sewel: My Lords, yes, the Queen grants Royal Assent—that is absolutely true—but the Queen is not involved if a Bill is challenged. Her role in approving a Bill passed by the Parliament is formal. She is not in anyway dragged into the argument about the vires or any matter like that.
Lord Mackay of Ardbrecknish: My Lords, my noble friend Lady Carnegy has raised an interesting point to which we may return. Possibly the Queen would be all right because the Government would make provisions and exercise some discretion in these matters—or the Home Secretary might exercise some discretion.
I was grateful to the noble Lord, Lord Mackie of Benshie, for saying that my amendment was a good suggestion at which he hoped members of the Scottish parliament would look. But he thought that not only was I nannying too much, but that the Government were nannying too much. He has a point. The Government cannot complain about my amendment when they have such a detailed clause in the Bill. It is almost a case of how far does nanny go.
The Minister seemed to agree that it would be sensible if the parliament heard from outside bodies during the legislative procedure which would improve the legislation, but that was for the parliament to provide these arrangements. He told me that the consultative steering committee would report by Christmas and give its suggestions. But they are only suggestions. With apologies to Alice, my question is: when is prescribing not being prescriptive? It would appear to be, "When I say so", according to Ministers. They cannot complain about me being prescriptive when they have Clause 34 here.
I am not convinced about this. If we have Clause 34(1) in the Bill, it is not a good argument to say, "Yes, we agree with what you are saying in your clause and that would be a good way for the Scottish parliament to proceed, but it is far too prescriptive". If Clause 34(1) was not in the Bill, I would understand that and I would settle back in my seat. But I am not sure that I do settle back comfortably in my seat. Before I make a decision, perhaps I should say that I fully accept Amendment No. 134 and the consequential amendments and I am content with the Government's

2017
arguments against my Amendment No. 134A. But I still feel that the points I make in my amendments are valid ones. If we are going to lay down processes in a Bill, I think we should lay down pre-legislative processes as well for a single chamber parliament. I am therefore going to seek the opinion of the House.
9.40 p.m.
On Question, Whether the said amendment (No. 133) shall be agreed to?
*Their Lordships divided: Contents, 37; Not-Contents, 85.

Division No. 2

CONTENTS

Annaly, L.

HolmPatrick, L.

Attlee, E. [Teller.]

Kingsland, L.

Balfour, E.

Kintore, E.

Byford, B.

Luke, L.

Carnegy of Lour, B.

Lyell, L.

Carnock, L.

Mackay of Ardbrecknish, L.

Carr of Hadley, L.

Mackay of Drumadoon, L.

Chalker of Wallasey, B.

Middleton, L.

Chesham, L.

Montrose, D.

Courtown, E. [Teller.]

Northesk, E.

Craigavon, V.

Norton of Louth, L.

Crathorne, L.

Renton, L.

Cross, V.

Rowallan, L.

Darcy de Knayth, B.

Selkirk of Douglas, L.

Dixon-Smith, L.

Stodart of Leaston, L.

Ellenborough, L.

Strange, B.

Fookes, B.

Trefgarne, L.

Fraser of Carmyllie, L.

Vivian, L.

Henley, L.

Wise, L.

NOT-CONTENTS

Acton, L.

Grantchester, L.

Ahmed, L.

Grenfell, L.

Alli, L.

Hardie, L.

Amos, B.

Hardy of Wath, L.

Archer of Sandwell, L.

Hilton of Eggardon, B.

Bach, L.

Hogg of Cumbernauld, L.

Bassam of Brighton, L.

Hollis of Heigham, B.

Berkeley, L.

Hoyle, L.

Borrie, L.

Hughes of Woodside, L.

Burlison, L.

Hunt of Kings Heath, L.

Carlisle, E.

Islwyn, L.

Carmichael of Kelvingrove, L

Jay of Paddington, B. [Lord Privy Seal.]

Carter, L. [Teller.]

Castle of Blackburn, B.

Jeger, B.

Chandos, V.

Judd, L.

Christopher, L.

Kennedy of The Shaws, B.

Clarke of Hampstead, L.

Lockwood, B.

Clinton-Davis, L.

Macdonald of Tradeston, L.

Cocks of Hartcliffe, L.

McIntosh of Haringey, L. [Teller.]

Crawley, B.

Mackenzie of Framwellgate, L.

Davies of Coity, L.

Mackie of Benshie, L.

Dean of Thornton-le-Fylde, B.

Maddock, B.

Desai, L.

Mallalieu, B.

Dixon, L.

Mar and Kellie, E.

Donoughue, L.

Milner of Leeds, L.

Dormand of Easington, L.

Monkswell, L.

Evans of Parkside, L.

Morris of Castle Morris, L.

Falconer of Thoroton, L.

Nicol, B.

Farrington of Ribbleton, B.

Phillips of Sudbury, L.

Gordon of Strathblane, L.

Pitkeathley, B.

Goudie, B.

Ramsay of Cartvale, B.

Graham of Edmonton, L.

Randall of St. Budeaux, L.

2018

Rea, L.

Thomson of Monifieth, L.

Rendell of Babergh, B.

Thurso, V.

Sainsbury of Turville, L.

Tomlinson, L.

St. John of Bletso, L.

Tordoff, L.

Sawyer, L.

Turner of Camden, B.

Sewel, L.

Uddin, B.

Simon, V.

Varley, L.

Smith of Gilmorehill, B.

Whitty, L.

Steel of Aikwood, L.

Williams of Mostyn, L.

Symons of Vernham Dean, B.

Winston, L.

Taylor of Blackburn, L.

Young of Old Scone, B.

[* see col. 2053]
Resolved in the negative, and amendment disagreed to accordingly.
9.49 p.m.
The Deputy Speaker (Lord Lyell): My Lords, before I call the next amendment I must inform the House that in a Division earlier this evening on Amendment No. 129, the numbers of those voting were Content, 40, Not Content, 85, rather than the numbers that were announced.
Lord Sewel Lord Sewel moved Amendment No. 134:
Page 17, line 13, leave out subsection (2) and insert—
("() Subsection (1) does not prevent standing orders making provision to enable the Parliament to expedite proceedings in relation to a particular Bill.
() Standing orders may make provision different from that required by subsection (1) for the procedure applicable to Bills of any of the following kinds—

(a) Bills which restate the law,

(b) Bills which repeal spent enactments,

(c) private Bills.").

The noble Lord said: My Lords, I have already spoken to this amendment. I beg to move.
On Question, amendment agreed to.
[Amendments Nos. 134A and 135 not moved.]
Lord Sewel Lord Sewel moved Amendment No. 136:
Page 17, line 18, at end insert—
("() a reference made in relation to the Bill under section 32 is withdrawn following a request for withdrawal of the reference under section (ECJ references)(2)(b),").
The noble Lord said: My Lords, I have already spoken to this amendment. I beg to move.
On Question, amendment agreed to.
Lord Sewel Lord Sewel moved Amendment No. 137:
Page 17, line 24, after ("36(1)(a)") insert ("and paragraph 5 of Schedule 3").
The noble Lord said: My Lords, I have already spoken to this amendment. I beg to move.
On Question, amendment agreed to.
Lord Sewel Lord Sewel moved Amendment No. 138:
After Clause 36, insert the following new clause—
PROCEEDINGS BY OR AGAINST THE PARLIAMENT ETC
(".—(1) Proceedings by or against the Parliament shall be instituted by or (as the case may be) against the corporation on behalf of the Parliament.
(2) Proceedings by or against—

(a) the Presiding Officer or a deputy, or

(b) any member of the staff of the Parliament,

shall be instituted by or (as the case may be) against the corporation on his behalf.
(3) In any proceedings against the Parliament, the court shall not make an order for suspension, interdict, reduction or specific performance (or other like order) but may instead make a declarator.
(4) In any proceedings against—

(a) any member of the Parliament,

(b) the Presiding Officer or a deputy,

(c) any member of the staff of the Parliament, or

(d) the Parliamentary corporation,

the court shall not make an order for suspension, interdict, reduction or specific performance (or other like order) if the effect of doing so would be to give any relief against the Parliament which could not have been given in proceedings against the Parliament.
(5) References in this section to an order include an interim order.").
The noble Lord said: My Lords, as I mentioned on the first day of Report in the debate on an earlier group of amendments about the validity of acts of various office holders, these amendments together with Amendment No. 138 are part of the results of our consideration of your Lordships' concerns that the parliament should be able to go about its business without undue interruption from the courts. Noble Lords made it clear that the Bill should say more about this than was contained in the Bill at an earlier stage. I hope noble Lords will agree that this is what this new clause achieves.
I hope it is reasonably self-explanatory. The new clause will restrict the remedies which may be granted against the parliament. We judge that it would be wise to ensure that no court may make an order for suspension, interdict, reduction or specific performance, or another like order, nor should it be able to make any interim order. We think this provides a broad protection against attempts to manipulate the business of the parliament via the courts. We hope that this will go a considerable way to assuaging the concerns expressed by noble Lords at earlier stages.
We do not think that we can put the parliament completely above the courts. For that reason we have left open to the courts the option of making a declarator. It will, of course, be for the parliament itself to decide how it should react to any such declarator. The parliament would not be liable for contempt of court if it merely decided to take no action to give an effect to a declarator. Rather, it will essentially be a political decision for the parliament to decide how to react in such cases. We believe the parliament will wish to be seen to be upholding the law and in most cases would expect it to comply with any court judgment, in particular any which directly affects the civil rights of individuals, for example, concerning the legitimacy of the withdrawal of rights and privileges of an MSP.
However, there may be circumstances in which it would be reasonable for the parliament to decide to take no action, notwithstanding the declarator to the effect that the parliament had acted unlawfully. For example, where a Bill which is nearing the end of its legislative passage is held not to have complied with some
2020
technical provision of standing orders about the procedures for introducing a Bill, it might be perfectly reasonable in those circumstances for the parliament to press on with that Bill, secure in the knowledge that the resultant Act could not be challenged because of the defect in procedure.
We think that this strikes the right balance for a body which has to be both free to go about the business of law making while not actually being above the law. We have also taken the opportunity in the new clause to prevent actions being pursued by the back door, against individuals associated with the parliament.
Finally, it may be helpful if I make it clear that under the Bill as presently drafted, and as we propose that it should be further amended, the parliament would have considerable competence to legislate about its protections from judicial proceedings. We intend to bring forward amendments to Schedule 4 which will make it clear that those parts of the Bill which deal with protection from judicial proceedings—namely, Clause 37 dealing with contempt of court, Clause 38, which provides some protection in the context of defamation, and the new clause in this amendment—may be modified by the parliament. I will explain the effect of those amendments in more detail when we come to debate them. However, the intention is that they would ensure that the parliament would have considerable scope to develop its own protections in the light of experience.
The parliament would, for example, be able to provide that certain types of proceedings could not be brought against it at all. However, it could do that only within the competence provided by the Bill. It could not, for example, make such provision as would infringe rights conferred by the proposed human rights Act, since it is prevented from doing so by Clause 28(2)(d). Noble Lords will appreciate that that is a significant point in its own right.
I am conscious that this is a potentially large and complex subject. I hope noble Lords will agree that we have the balance about right. We have concluded that we cannot justify attempting to mirror Westminster privileges. Those privileges are wide-ranging and in certain respects apply for largely historical reasons. We recognise, however, that the parliament needs protection. We believe that the collection of privileges that we now propose to provide, taken together with the proposed amendments to clarify the scope of the parliament's power to legislate on this matter, is the appropriate way to proceed. I hope that noble Lords will agree. I beg to move.
Baroness Carnegy of Lour: My Lords, this is an interesting matter. The noble Lord said that future amendments will allow the parliament to increase its own protection. He also said that he did not think it right that the parliament should have privilege in the way that this Parliament does. Does that mean that the amendments that he will bring forward will prevent the parliament having the kind of privilege that this

2021
Parliament has? Will there be boundaries as regards the scope that the parliament has for further legislating for its own protection?
The Earl of Mar and Kellie: My Lords, I wish to ask a question about the office holders mentioned in subsections (2) and (4). I wonder whether the words, "acting in their capacity as such", have been accidentally omitted. Without those words, I suspect that the individuals may end up being somewhat over-privileged.
Lord Mackay of Drumadoon: My Lords, I welcome this amendment. It undoubtedly meets one of the major concerns that I have expressed on more than one occasion in relation to the Bill as presently drafted. I have referred to the fact that in local authority affairs it is not uncommon for interdict proceedings to be raised for the purposes of trying to prevent a meeting taking place or an item of business being considered. I sought to persuade your Lordships and the Government that that would be highly undesirable in the affairs of the new parliament. I very much welcome the fact that that point is recognised in this amendment. It also covers other issues such as suspension, reduction or orders for specific performance.
I am grateful for the very detailed explanation of the Government's position lying behind this amendment, touching as it does on the attitude to the extension to the Scottish parliament of the concept of parliamentary privilege as enjoyed by this Parliament. That statement and the statement made earlier in relation to Amendment No. 112 will be of great assistance to me and, I suspect, other Members of this House when we consider Amendment No. 192B next week.
I hope it does not sound churlish if I say that I do not believe that the amendment goes far enough, but I welcome the stage that it has reached. I am sure it will be of great benefit not only to parliamentarians but to the courts in the years ahead.
Lord Sewel: My Lords, I thank the noble and learned Lord, Lord Mackay of Drumadoon, for what he said. I hope that we have got the balance about right. There may be nuances either side of the line, but broadly we have it right. In relation to the remarks of the noble Earl, Lord Mar and Kellie, I do not believe it is necessary to put in wording such as "in their capacity as presiding officer". The protection afforded to them would not protect them in relation to a private matter. The whole context of the clause makes it clear that it is in relation to the parliament. I believe that it is all right.
As for the point made by the noble Baroness, Lady Carnegy, we are not creating a situation where the parliament would have identical privileges to those enjoyed by this Parliament. The privileges enjoyed by this Parliament to an extent flow from history and the fact that the Parliament starts as a court. The limitations are those to which I referred in terms of Clauses 37, 38 and the new clause, so there is a limitation on the extent
2022
to which the parliament could accrete to itself new privileges. It is likely to be more helpful if we delay the provision until Schedule 4. I commend the amendment.
On Question, amendment agreed to.
10.p.m.
Clause 40 [Calculating time for meeting of the Parliament]:
Baroness Ramsay of Cartvale Baroness Ramsay of Cartvale moved Amendment No. 139:
Transpose Clause 40 to after Clause 3.
The noble Baroness said: My Lords, this is a technical amendment. It simply relocates Clause 40 to be alongside Clauses 2 and 3 because those are the only two clauses to which it relates. Clauses 2 and 3 require the parliament to meet within seven days, beginning immediately after the day of the poll at the general election. Clause 40 excludes Saturdays, Sundays and various holidays from the calculation. Given their close relationship, it seems to us only sensible to locate the provisions together. I beg to move.
On Question, amendment agreed to.
Lord Mackay of Ardbrecknish Lord Mackay of Ardbrecknish moved Amendment No. 139A:
After Clause 40, insert the following new clause—
POWER OF THE PARLIAMENT TO CHANGE TITLES
(" . The Parliament may change the titles "Scottish Executive" and "First Minister" to such other titles as it considers appropriate.").
The noble Lord said: My Lords, I beg to move Amendment No. 139A and with it speak to Amendments Nos. 139B and 139C. We have been over this ground a number of times. The first amendment simply empowers the parliament to decide on the titles of the Scottish executive (that is, the government of Scotland) and the First Minister (that is the Prime Minister).
The Government are being entirely, utterly and completely prescriptive in their approach to the titles, in contrast to the previous debating points they brought forward to your Lordships. Not only are they prescribing the titles but they seem determined that the parliament should not be able to change them. My view, which I have expressed to your Lordships before, is that despite the case the Government argue about Northern Ireland, "First Minister" will not last as a title. I suspect it will become "Prime Minister". To an extent, that would be a pity, not because I worry about a rival Prime Minister to the current incumbent in Downing Street north of the Border, but because it would be better if we used—as they do in some Commonwealth countries—the word "Premier" to describe the chief Minister of a devolved or state parliament.
We have been over this before. I wonder whether the Government have even reflected on changing their minds in so far as they might allow the Scottish parliament to decide. This is an issue which normally brings together the Liberal and Conservative Oppositions and the Government should take account of that and take on board the fact that we are not doing this in a negative way but because we think it would be a

2023
sensible way forward. It would give those gentlemen and ladies and that body the kind of titles that befit the kind of parliament the Government continue to tell me they wish to set up in Scotland. I beg to move.
Lord Renton: My Lords, I support the amendment moved by my noble friend Lord Mackay of Ardbrecknish. In particular I support Amendments Nos. 139B and 139C. There are two reasons for supporting that change. First, the title "premier" has a good precedent. In the past the head of the Stormont Government in Northern Ireland was known as the Premier. Secondly, "Premier" is shorter than "First Minister" and we should aim for brevity whenever we can.
Lord Fraser of Carmyllie: My Lords, of all the debates that we have had on this Bill I believe this to be the most fatuous. It is quite absurd that we continue to require of the Government a change when we all hope the Scottish parliament will have the guts and verve to say that it will give its leader whatever name it chooses. I am at one with the noble Lord, Lord Steel of Aikwood. If the parliament decides to describe that individual as the premier or prime minister factually that will be the way that the matter will evolve. It is quite clear to me that the Government are not prepared to accept this. It is dumb and insensitive and will not do them any good. The simple question I put to the Government is the following: if those who head up the Scottish executive determine that their first minister is to be described as the prime minister or premier is that in any sense justiciable? If that change is adopted by the parliament is there anything that this Parliament or the Scottish courts can do about it?
Baroness Ramsay of Cartvale: My Lords, with Amendments Nos. 139A, 139B and 139C the Opposition return us again to the question of whether it is appropriate for the Scotland Bill to prescribe by what names certain office holders created by the Bill should be known. These amendments in particular address the titles of the first minister and the Scottish executive. Previous amendments, with which we have all become very familiar, have addressed the title of presiding officer.
By now noble Lords know only too well, since I explained it at some length—at too great a length, according to the noble Lord, Lord Mackay of Ardbrecknish—only last Thursday on the first day of Report stage, that the Government believe that in the interest of legal certainty certain titles should be prescribed in the Bill. By prescribing the legal title of these important offices we ensure that references in this legislation and all future legislation is consistent and there is no confusion about the roles and responsibilities.
The Government consider that it is particularly important to ensure that the names First Minister and the Scottish executive are clearly established from the outset. As noble Lords will appreciate, the Bill places very important responsibilities on the members of the Scottish executive and the First Minister. It is important that everyone is clear about who is to exercise those
2024
responsibilities. I believe that people will find it more helpful in that regard to have distinct titles on the face of the Bill. The titles in the Bill serve the purpose and we believe that the amendments are unnecessary. The terms "First Minister" and "Scottish executive" are already in general use in the press.
As to the term "Premier" as an alternative to "First Minister", I see no advantage, with respect to the noble Lord who has moved the amendment and the noble Lord, Lord Renton. I appreciate that there is a history of the use of that title in other administrations, such as in the provincial and territorial parliaments of Canada. As the noble Lord, Lord Renton, explained, in the past it has been used in Northern Ireland. However, I remind the noble Lord that today the title is First Minister of the Northern Ireland Assembly, not "Premier". The title "First Minister" is in constant use in the press. Every time Mr. Trimble is mentioned the title "First Minister" comes automatically to most people's lips. In that context, the title "Premier" has a long and distinguished history.
But we are looking at a different situation and we must have regard to how the title would be received in Scotland today. When a similar amendment was debated in the other place the point was made that there was a risk of confusion with the Premier League, and there were other football references. I have no opinion on that matter. However, I believe that to introduce the term "Premier" now would create more confusion than enlightenment. As I have already said, the title "First Minister" is being increasingly used by the press and public. It is clear, unambiguous and descriptive of the office. The Government therefore believe that this is the right title and are not willing to accept the amendment.
The noble and learned Lord, Lord Fraser of Carmyllie, asked about the power of the parliament to change the titles. The Bill prescribes the legal titles for various offices. The provisions of the Bill which provide those titles cannot be altered by the parliament as they are not included in the list of provisions in Schedule 4 which the parliament will be able to modify. A partial direct answer is that the parliament would not be able to change those titles by standing orders. However—this answers the other part of the noble and learned Lord's question—it would be possible for the parliament in its standing orders to make provisions about the forms of address to be used in the proceedings of parliament if it so wished. It may choose to use terms other than those prescribed in the Bill within its own proceedings. But I am also sure that the parliament would wish to consider carefully whether it was appropriate for someone to be addressed other than by his legal title, bearing in mind the potential risk of public confusion. No doubt the parliament will wish to have regard to what terms become common usage among the public at large. Ultimately that usage would be a matter for the parliament to decide. I ask the noble Lord to withdraw the amendment.
Lord Steel of Aikwood: My Lords, the Government are being ridiculous on this question. I think that the word "fatuous" has been used. We could go through Roget's Thesaurus and produce a list of adjectives. It is

2025
a nonsensical argument which we have had over and again. The fact is that the parliament in Scotland will decide what to call its officials, as the Assembly in Northern Ireland has already done, and as is allowed for in the Government of Wales Bill. Why the Scotland Bill should be different from those two I do not understand.
I have a constructive suggestion to make to the Government. Why do they not convene a focus group and put all the titles to that group? I understand that that is the convention of the Labour Party. It would find that none of the titles had any resonance and common sense might be introduced before we reach Third Reading.
Lord Mackay of Ardbrecknish: My Lords, the reason that we return to the matter again and again is that we are overcome with amusement at the Government's arguments. They have gone a little further tonight. They have tried some new arguments: that there might be confusion with the Premier Division. My noble and learned friend Lord Mackay of Drumadoon who knows about these matters points out that in the higher courts of Scotland there is a First Division and a Second Division. Does the noble Baroness think that plaintiffs arraigned before either of those courts believe that they are going to a football match? Of course not. I think that that perhaps takes the prize.
My noble and learned friend also points out that in a court case reported recently the Lord Advocate had to oppose "Robbie the Pict". If someone can be called "Robbie the Pict" in legal journals, it seems to me that someone can be called Premier or First Minister.
The argument is definitely Alice in Wonderland. The noble Baroness's position is, "Words mean what I say they mean, and that is it". She answered my noble and learned friend Lord Fraser of Carmyllie with a "partial" direct answer. It is either a direct answer or it is not a direct answer. One cannot have a partial direct answer.
Like the other two noble Lords who have spoken, I cannot understand why the Government do not see how ridiculous their position is. The simple fact of the matter is that these people will be called what I think common parlance demands that they be called: that is, Prime Minister or Premier. I prefer the government to start with Premier; they might get that to hold. If they do not do so, the title will be Prime Minister. There is the Speaker. There is the First Minister; we have dealt with him. The other chaps and "chapesses" will be called Ministers. That is the simple fact of the matter. I believe that the Government are behaving most amazingly.
I should like to put in the Bill proper names for those people—names which are understood around the English speaking world, as my noble friend Lord Renton said. At the very least we should make it clear on the face of the Bill that the parliament can make its own decisions. We shall probably return to the matter at Third Reading to see whether the Government can come forward with any better arguments. I am almost tempted to say that we may give them a prize for the best argument they come up with. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
10.15 p.m.
Clause 41 [The Scottish Executive]:
[Amendments Nos. 139B and 139C not moved.]
Lord Mackay of Ardbrecknish Lord Mackay of Ardbrecknish moved Amendment No. 140:
Page 19, line 2, at end insert—
("() No Minister of the Crown may be appointed as a Scottish Minister (including as a Scottish Law Officer).").
The noble Lord said: My Lords, this and the related amendment deal with overlapping memberships. Until yesterday morning, the amendment was described in both the Welsh and Scottish Bills as "the Ron Davies amendment". Unfortunately, we have to change that. The problem is that as this and the Welsh Bill are constructed, it is possible for one and the same person to be a Minister of the Crown and a First Secretary or junior Minister in the Scottish government.
Earlier in our proceedings during discussions on agriculture and fisheries, the noble Lord, Lord Sewel, made it clear that:
"UK Ministers are accountable to a UK Parliament and Scottish Ministers are accountable to the Scottish parliament".—[Official Report, 28/7/98; col. 1434.]
The Minister was absolutely right. That is how it will be and that is how it should be. How is it possible for someone to be answerable to the Scottish parliament and to the UK parliament, which are different governments with different responsibilities, different collective Cabinet responsibility and different accountability? It is just not possible.
Earlier in the year Mr. Donald Dewar thought for a moment or two that he might at the same time be Secretary of State for Scotland and First Minister. I suppose that I had better use the term "First Minister" or I shall be sent to the tower for such an infringement of the Government's legalistic view. Mr. Donald Dewar, being an intelligent and honourable man, quickly realised that that was a ridiculous position and indicated that it would not be carried forward. It is a ridiculous position. No one should be allowed to contemplate it. That is true also for the other Ministers. My amendments simply put on the face of the Bill what I believe should be the position. It is that no Minister of the Crown in the United Kingdom Government can at the same time be a Minister in the Scottish parliament.
The noble Lord, Lord Sewel, in his defence, tried to flatter me by saying that my services might be needed by both governments looking after the same portfolio. Even that amount of flattery did not persuade me of the argument. I am not persuaded at all. I believe that we should make it clear that no one should be allowed to do both jobs. It is incompatible with the way we look at government and ministerial accountability. How can the same person be accountable to two different parliaments perhaps for two different policies? It is just not possible.
Therefore, I believe that we should put the words in my amendment on the face of the Bill so that it is clear for all time that no Minister of the Crown may be appointed a Scottish Minister, including a Scottish Law Officer, and no Minister of the Crown may be appointed

2027
as a junior Scottish Minister. I cannot believe that the noble Lord, Lord Sewel, will say that he can conceive of a circumstance—I hope that he does not give the same one that he tried last time—in which it might be otherwise. I beg to move, in the hope that the Government will either take the amendments on board or promise to return at Third Reading with their own amendment.
Lord Renton: My Lords, when the noble Lord replies, I wonder whether he will enlighten your Lordships as to whether, if somebody is both a Minister of the Crown and a Scottish Minister, he will be able to draw the salaries of both appointments.
Lord Stodart of Leaston: My Lords, I take the greatest risk in intervening, first, as a simple farmer talking about the professions, and, secondly, because of my fairly recent deficiency.
In the vintage days of Ross there were times in the Scottish Standing Committee in another place when there was kudos in taking 40 minutes to make a speech. I achieved that in a debate on the laws of land and tenancy in the Shetlands. I cannot remember the exact title of the debate.
Just today I remembered some advice I had before I got into another place in 1959. I would repeat it to the Opposition then. It was not totally unfounded. It concerned the use of chattels or small items involved in a will. I have only heard today that great expression called praepositus. None of the Opposition knew what I was talking about then.
I have had these glimmers of interest in and professional advice about the law, and I admire the profession. But I would not dream of doing anything other than supporting the argument.
Lord Sewel: My Lords, when we discussed this issue earlier, I offered an argument in defence of the position which was crafted carefully and deliberately to attempt to protect the future employment prospects of the noble Lord, Lord Mackay of Ardbrecknish. On that occasion, he spurned my offer so I took back that argument.
Seriously, we have looked at this matter and I recognise that there is a significant tension between the concepts of both ministerial accountability and collective responsibility and membership by the same person of two different executives. I assure the noble Lord, Lord Mackay of Ardbrecknish, that we have every intention of coming forward on Third Reading with amendments which will deal with this point, both for members of the Scottish executive and junior members, ensuring that they cannot hold office in the two executives concurrently.
Lord Mackay of Ardbrecknish: My Lords, bang goes one good set of amendments that could have given us a lot of sport! Having said that, I am grateful to the Minister. It is common sense and I am pleased that he has seen it. He obviously reflected on his argument on the last occasion and thought that it was not well founded. It seemed to be founded entirely on my
2028
position 20 years in the future. He probably realised that the Scottish parliament would be in a perilous state if, in 20 years time, it had to rely on my efforts. However, my noble friend Lord Renton is living proof that, if I were as fit as he, 20 years would not make much difference and I would be able to come to Scotland's aid in those circumstances.
Lord Sewel: My Lords, I might take back the offer if the noble Lord continues.
Lord Mackay of Ardbrecknish: My Lords, I am grateful to the Minister. This is sensible. It makes the position clear for the future. I am grateful for his comments and for accepting the principle behind the proposal. I look forward to his amendment. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 45 [The Scottish Law Officers]:
Lord Hardie Lord Hardie moved Amendment No. 140A:
Page 20, line 16, at end insert—
("(1A) The Lord Advocate and the Solicitor General for Scotland may at any time resign and shall do so if the Parliament resolves that the Scottish Executive no longer enjoys the confidence of the Parliament.
(1B) Where the Lord Advocate resigns in consequence of such a resolution, he shall be deemed to continue in office until the warrant of appointment of the person succeeding to the office of Lord Advocate is granted, but only for the purpose of exercising his retained functions.
(1C) Subsection (1B) is without prejudice to section 287 of the Criminal Procedure (Scotland) Act 1995 (demission of office by Lord Advocate).").
The noble and learned Lord said: My Lords, during consideration of the Bill in Committee, the noble and learned Lord, Lord Rodger of Earlsferry, raised some points upon whether the Lord Advocate could resign and whether he would be required to do so in the event of the parliament resolving that the Scottish executive no longer enjoyed the confidence of the parliament. That led us to consider further whether the Bill deals adequately with the Scottish Law Officers' right to resign and the circumstances in which they should be required to resign. Although there is nothing in the Bill which prevents the Scottish Law Officers from being able to resign, further reflection has led the Government to conclude that the Bill should make it clear that they are able to do so.
Clause 42(2) requires the First Minister to tender his resignation to Her Majesty if the parliament resolves that the Scottish executive no longer enjoys the confidence of the parliament. Clause 44(3)(c) requires a Minister appointed by the First Minister under Clause 44 to resign in the same circumstances and Clause 46(4)(c) also requires a Junior Scottish Minister to resign in those circumstances. As presently drafted, the Bill does not impose the same requirement on the Scottish Law Officers, although there is nothing to prevent them from doing so voluntarily. We reflected on that point also and concluded that the Bill should provide that the Scottish Law Officers should also be required to tender their resignations if the parliament resolves that the Scottish executive no longer enjoys the confidence of the parliament.
Amendment 140A contains savings provisions to provide that where the Lord Advocate is required to resign, he shall be deemed to continue in office until his successor is appointed for the purposes of the retained functions. It is important that there should always be a Lord Advocate for the purposes of the conduct of solemn criminal proceedings because all indictments run in the name of the Lord Advocate of the day and would fall if he demits office. I say that, though noble Lords may be aware from newspapers that there is a recent exception in Dumbarton. There is already an express provision in Section 287 of the Criminal Procedure (Scotland) Act 1995 for indictments to remain effective even although the Lord Advocate has demitted office and, where the office of Lord Advocate is vacant, for indictments to be brought in the name of the Solicitor-General. Amendment 140A provides for that provision to continue to have effect. However, as this existing savings provision is only for criminal proceedings, a general saving provision is also required for the purposes of the other retained functions of the Lord Advocate—in particular, his functions in relation to civil proceedings or his other Law Officer functions. I beg to move.
On Question, amendment agreed to.
Lord Selkirk of Douglas Lord Selkirk of Douglas moved Amendment No. 141:
Page 20, line 16, at end insert—
("() The Lord Advocate and Solicitor General for Scotland shall each be qualified as either—

(a) an advocate, or

(b) a solicitor under the Solicitors (Scotland) Act 1980.").

The noble Lord said: My Lords, this issue was ventilated in earlier debates on the Bill. As the House well knows, in the 1920s the issue was raised as to whether the Lord Advocate can be either an advocate or a solicitor. At that time there was a proposal that a Glasgow solicitor should be appointed Lord Advocate. That proposal was rejected. Since then thinking has advanced considerably. Indeed, the Law Reform (Miscellaneous Provisions) (Scotland) Act 1990, which I took through the House of Commons, gave to solicitors the right to apply for rights of audience in the higher courts. I took that Bill through and believe strongly that solicitors should not be discriminated against when they are solicitor advocates and qualified as such. It is reasonable that suitably qualified solicitors should be able to become Lord Advocate and this amendment seeks to ensure that there is no bar to a solicitor becoming Lord Advocate.
Solicitor advocates can choose to be qualified either in the higher civil courts or in the higher criminal courts or in both. I can well understand that the Lord Advocate might advance the view and insist on only solicitor advocates who are qualified in both civil and criminal law being considered for appointment. I believe that it will be a sad day for Scotland if the Lord Advocate seeks to close off the tap to a considerable reservoir of legal talent. If he will not agree to this amendment, I hope that in due course noble Lords will seek to test the opinion of the House. I beg to move.
10.30 p.m.
Lord Fraser of Carmyllie: My Lords, this is a matter which has been considered previously during Committee stage. When it fell to the noble and learned Lord the Lord Advocate to respond he said,
"It is said that it was a radical suggestion that a solicitor should be appointed as Lord Advocate. The Lord President of the day—Lord President Clyde—wrote a memorandum to Downing Street, which was published. That memorandum states clearly that it is part of the unwritten constitutional law of the land that the Lord Advocate and Solicitor-General for Scotland are appointed from among the members of the Scottish Bar. That springs, in the same way as other parts of the law, from long custom. It has not been felt necessary in the past to prescribe the qualifications for office of the Scottish Law Officers and it is not clear why that should be necessary now".—[Official Report, 28/7/98; cols. 1484–5.]
When I read those words a tear of reassurance welled in my eye to know that the noble and learned Lord the Lord Advocate was still properly discharging the task that he previously occupied as shop steward for the Faculty of Advocates and that even in this soi-disant, radical Government the courses of reaction should be so prominent. I was pleased and reassured by that.
However, when we came to deal with the matter at a later stage when my noble and learned friend Lord Mackay of Drumadoon moved an amendment that the Advocate-General, which was a newly-created post, should be qualified as an advocate or a solicitor under the Solicitors (Scotland) Act 1980, in response the noble and learned Lord the Lord Advocate said,
"As noble Lords will be aware, the offices of Lord Advocate and Solicitor-General are held by custom by members of the Scottish Bar".
He is still absolutely on track and discharging the proper responsibilities of a shop steward. He continued:
"It has not been felt necessary in the past to prescribe the qualifications for those offices. It is not clear why that should be necessary in respect of the new office".
I am still deeply reassured that the noble and learned Lord still has these characteristic reactions within his thinking. He continued,
"Effectively, although the office of Advocate General is new, it will have functions similar to those held by the Lord Advocate. He or she will have to give advice to the United Kingdom Government on Scots law".
Up to this point I am really charmed by the argument and very keen to part company with my noble and learned friend Lord Mackay of Drumadoon. Suddenly, a couple of minutes later, the Lord Advocate gets a radical spring in his step and goes on to ask why issues of qualification should be put in statute. He said:
"Why should the Prime Minister not be entitled, if he thinks it appropriate, to appoint a professor who is not a member of either branch of the profession?"—[Official Report, 6/10/98; col. 376.]
That might be a good argument. It is certainly an alternative argument. What we need to resolve this evening is whether the argument which the noble and learned Lord first advanced, that there are unwritten rules about the role of the Scottish Law Officers and that we should not have them in any sense put about with express requirements, but should leave the practice as unwritten—that is an exceptionally good ruse to ensure that it remains within the purview of the Faculty of Advocates—is his true position rather than the

2031
completely different argument that he then advanced: that there should effectively be no qualification requirements for any one of the three law officers.
More seriously, I must advise the Government that those are two distinct arguments and it is not possible to ride both of them at the same time. If the noble and learned Lord thinks that it is time to acknowledge, as my noble friend Lord Selkirk of Douglas indicated, that there are those now qualified in the law of Scotland in respect of whom there is no reason why they should not become Lord Advocate or Solicitor General, given the rights of audience that they enjoy in the higher courts, then we should now put it on the face of the statute, or at least acknowledge that solicitors with those qualifications should be capable of occupying any one of the three roles. It is time to bring this to an end. We must discover whether these three high legal offices in the law of Scotland are to be open on a far wider basis or whether there will continue to be the narrow restriction pursued in the past.
Lord Renton: My Lords, a very powerful argument in favour of the amendment moved by my noble friend Lord Selkirk of Douglas and an argument which has not yet been put before the House is that the amendment would have the advantage of removing at last the historic anomaly whereby a solicitor may not become Solicitor-General.
Lord Mackay of Ardbrecknish: My Lords, I intervene only briefly in this debate because, as the House knows, I am the only Mackay who is not a lawyer. Therefore, I am here in the guise of referee.
I have not yet heard the argument of the noble and learned Lord the Lord Advocate, but he will have to work pretty hard to convince me that my noble friend Lord Selkirk of Douglas does not have a point. From the outside, there appear to be some pretty archaic and arcane divisions in the legal profession. Perhaps I say that because my son is a solicitor and would not qualify for either of these high offices, although I doubt whether he would want to be considered. It seems a bit ridiculous in this day and age, especially when some solicitors are allowed to appear in the higher courts, that a distinction should still be made with regard to the offices of Lord Advocate and Solicitor-General.
Unless my noble friend Lord Selkirk of Douglas is convinced by the arguments which are about to be led by the noble and learned Lord the Lord Advocate, I shall be happy to support him in the Lobby if he chooses to press the amendment to a Division.
Lord Hardie: My Lords, as has been said, the amendment would require the law officers to the Scottish executive to be legally qualified in Scotland either as an advocate or as a solicitor. That is the extent of the amendment. It does not specify that any solicitor has to have rights of audience, so we could be talking in terms of an advocate or solicitor of one day's standing being appointed. I am sure that that was not the intention.
2032
As noble Lords will be aware, the offices of Lord Advocate and Solicitor-General are held by custom by senior members of the Scottish Bar. The noble and learned Lord, Lord Fraser of Carmyllie, is correct that that was the position that I adopted both at the last Committee stage and in respect of the Advocate General. As I explained in Committee, it has not been felt necessary in the past to prescribe the qualifications for office of the Law Officers and I am still at a loss to understand why that is necessary now. To do so would be inconsistent with the Government's intention to legislate for a responsible parliament and executive which can be expected to ensure that holders of those vital offices are qualified for them. Surely that is the only question for the First Minister and the executive of the day.
As the noble and learned Lord, Lord Fraser of Carmyllie, stated, I referred at the Committee stage to the memorandum prepared by the first Lord President Clyde in 1924. In referring to that memorandum I did not say that I considered it inappropriate to appoint as Law Officers anyone who is not a member of the Faculty of Advocates, as the noble Lord, Lord Mackay of Ardbrecknish, has suggested.
The question of a possible appointment of a solicitor to one of these offices is a matter which is not really appropriate for this Bill. As with the appointment of any Minister, including the Law Officers, the decision as to who should be appointed is essentially for either the First Minister in Scotland or the Prime Minister in the context of the United Kingdom. There is nothing in the Bill to prevent a suitably qualified solicitor from being appointed as a Scottish Law Officer. But, just as I would not expect an advocate of one day standing to be appointed, I would not expect a solicitor of one day standing to be appointed.
The advent of rights of audience for solicitors and of solicitor-advocates may well give rise to a question as to whether it is strictly necessary for the Lord Advocate and the Solicitor-General to be drawn only from the Faculty of Advocates. I would suggest to the noble Lord that there are a number of interests which it would be appropriate to consult before proceeding with any change on this matter. In view of the wide range of the Law Officers' responsibilities, both formal and informal, the most important qualification is that he or she should command the respect of the courts, the respect of the legal profession and the respect of those that the Law Officers are appointed to advise, including the Scottish parliament.
At a previous stage of the Bill, the noble and learned Lord, Lord Hope of Craighead—who is not in his seat this evening—emphasised that the most important qualification was the need for someone of standing in the eyes of the court. That is the qualification that is required, not the formal qualification.
While it is true that more solicitors are seeking rights of audience in the supreme courts, they may only have rights if they satisfy certain criteria. Even then, at the present time very few have rights in both Supreme Courts—civil and criminal. Part of the function of the Lord Advocate is to deal with both civil and criminal

2033
law in the Supreme Court. It would be extremely difficult for someone who did not have a right of audience in both courts to hold office as either Lord Advocate or Solicitor General. This may be an issue which, in the fullness of time, the Scottish parliament may wish to consider, but it is not an appropriate subject for this Bill.
As I indicated at the outset, the amendment as it is framed could result in a newly-qualified advocate or solicitor, with no standing in the eyes of the courts, being appointed.
Lord Mackay of Ardbrecknish: My Lords, perhaps I may intervene. I am puzzled by that particular line of argument. Is there anything in the statute now that prevents a lawyer who was admitted to the Bar yesterday being appointed Lord Advocate? I understand that there is not. It is common sense that he or she would not be. It is not a terribly good argument for the noble and learned Lord the Lord Advocate to be advancing that, somehow or other, this amendment would mean that people would take leave of their senses and appoint somebody who had just been admitted to the Bar.
Lord Hardie: My Lords, I accept that there is no question of any statutory provision about the qualifications that are required at present. It is a matter of custom. As I have said, the noble and learned Lord, Lord Hope of Craighead, emphasised that the most important feature was the candidate's standing in the eyes of the court.
10.45 p.m.
Lord Fraser of Carmyllie: My Lords, I am most grateful to the noble and learned Lord for giving way. When we discussed the issue of the qualifications of the Advocate-General in Committee on 8th October, it was the noble and learned Lord the Lord Advocate who drew the parallel between the qualifications of those who held the office of Lord Advocate and Solicitor-General and the qualifications of the person who might be appointed to this new office of Advocate-General. Perhaps I may say to the noble and learned Lord that it seems to be an entirely apt parallel to be drawn. But where the noble and learned Lord loses me in his argument is that he has indicated that the qualifications of the Lord Advocate and Solicitor-General might be subsequently determined by the Scottish parliament. However, that cannot be true in respect of the Advocate-General because he will be an officer of the Westminster Parliament. If the Government are to develop a consistent argument, it must be true that what is said about the Lord Advocate and the Solicitor-General is equally true of the position of the Advocate-General.
Lord Hardie: My Lords, the noble and learned Lord will be aware that this amendment deals with the qualifications of the Lord Advocate and the Solicitor-General and not the Advocate-General. We had a vote on the Advocate-General and the House decided the issue. As far as concerns the Lord Advocate and the Solicitor-General, the fact of the matter is that
2034
after May that matter will be devolved. Is it appropriate for this Parliament to stipulate what qualifications should be required of these two offices, which will be offices of the Scottish parliament? At the end of the day, it will be a matter for the First Minister to decide who he will appoint, and there is nothing to prevent him from appointing a solicitor or a professor of law. It would have to be someone who had a standing in the eyes of the court.
Lord Fraser of Carmyllie: My Lords, the noble and learned Lord keeps saying that it will be someone of standing in the eyes of the court. I would hope that whoever is the Premier would appoint someone to these offices who enjoyed a standing in the eyes of the court. However, I have to say that it seems to me to be essentially an irrelevance because in appointing this individual it would be wholly unprecedented for the Prime Minister of the United Kingdom formally to request an opinion of the Scottish courts as to whether "X" was acceptable in the eyes of the court. It is a matter which lies within the political judgment of the First Minister or the Prime Minister of the day. I do not think the noble and learned Lord can escape by looking towards what might be the attitude of the court on the acceptability of a particular individual's qualifications and experience as a way to ensure that the right person was available.
Lord Renton: My Lords, before my noble and learned friend sits down, does he agree that within living memory, and perhaps going back centuries, every Law Officer on both sides of the Border has been appointed because he was already a King's Counsel or a Queen's Counsel?
Lord Fraser of Carmyllie: My Lords, with the leave of the House, I do not think I can respond to that point because I had intervened in the speech of the noble and learned Lord the Lord Advocate.
Lord Hardie: My Lords, to answer the point raised by the noble Lord, Lord Renton, I think that there have been one or two exceptions in recent years. The noble and learned Lord, Lord Fraser of Carmyllie, could confirm his status at the date of his appointment as Solicitor-General. I think that the last Solicitor-General was made a Queen's Counsel the day before his appointment. It was certainly fairly close to it.
I accept that this is a political issue for the Prime Minister or the First Minister of the day. However, the noble and learned Lord, Lord Fraser, will be aware that Prime Ministers—and, it is to be hoped, the First Minister—will not operate in a vacuum and will make appropriate inquiries about prospective candidates so that they will know what view the court may hold of a particular prospective candidate.
In short, I go back to the position outlined by the noble and learned Lord, Lord Hope of Craighead, that it is essential to have someone who has the confidence of the court. We know that, in practice, the politicians will take soundings to ensure that the appropriate person has that. All I am saying is that it is not

2035
appropriate to fetter the discretion of the First Minister by putting on the face of the Bill qualifications which may in fact have the effect of excluding certain candidates. In those circumstances, I ask the noble Lord to withdraw the amendment.
Lord Steel of Aikwood: My Lords, before the Minister sits down, I should like to make one point. It seems to me that the noble Lord, Lord Selkirk of Douglas, is simply trying to extend the range of people from whom the Premier may appoint the Lord Advocate and Solicitor-General. If it is a choice between the Lord Advocate quoting from the grandfather of the noble and learned Lord, Lord Clyde, in 1922 and custom or the radicals on the Conservative Benches, I think, on balance, we prefer the latter.
Lord Hardie: My Lords, perhaps I may deal with the noble Lord's point. It is not a question of extending the range of people from whom the Prime Minister may choose. I have said that the Prime Minister can choose whom he wishes, but the practice has been to appoint someone who has had a certain standing in the courts and someone who, traditionally, has been at the Bar—almost invariably at the senior Bar. Therefore, I am not restricting the Prime Minister's choice; nor, indeed, am I restricting the First Minister's choice. The latter will simply choose who he or she thinks is the appropriate candidate to be Lord Advocate or Solicitor-General.
Lord Selkirk of Douglas: My Lords, I have listened most carefully to what has been said and I am very grateful to noble Lords for their support of my amendment. I am particularly grateful to the noble Lord, Lord Steel of Aikwood. Indeed, he is absolutely right to suggest that what we are seeking to do is to extend the categories of those who could be eligible for consideration.
Of course, I fully accept that the noble and learned Lord the Lord Advocate is correct to say that rights of audience in both courts would be necessary and also that the person concerned should be of standing in the eyes of the court and have its confidence. However, the noble and learned Lord advanced an argument that appointments in the past have only been made by custom and that, by custom, those appointed have been advocates.
If I may say so, during all the long and distinguished years in which Lord Advocates have been appointed, not one woman has ever been appointed. It could equally well be argued that women have not been appointed as a matter of custom. I would not for one second defend that particular argument, but what we want is the best man or woman for the job. That is the test: the best man or woman for the job, and one of standing in the eyes of the court. The person might be an advocate or a solicitor/advocate; indeed, it might be a man or a woman. However, either way, we should aim for advancement on merit. Because the noble and learned Lord is reluctant to accept that principle, I seek to test the opinion of the House.
10.53 p.m.
On Question, Whether the said amendment (No. 141) shall be agreed to?
Their Lordships divided: Contents, 34; Not-Contents, 71.

Division No. 3

CONTENTS

Annaly, L.

Lyell, L.

Attlee, E.

Mackay of Ardbrecknish, L.

Blatch, B.

Mackay of Drumadoon, L.

Byford, B.

Mackie of Benshie, L.

Carlisle, E.

Mar and Kellie, E.

Carnegy of Lour, B.

Monson, L.

Carnock, L.

Montrose, D.

Chesham, L.

Northesk, E.

Courtown, E. [Teller.]

Phillips of Sudbury, L.

Dixon-Smith, L.

Renton, L.

Ellenborough, L.

Rowallan, L.

Fraser of Carmyllie, L.

Selkirk of Douglas, L.

Henley, L.

Steel of Aikwood, L.

HolmPatrick, L.

Strathclyde, L. [Teller.]

Hope of Craighead, L.

Thurso, V.

Kingsland, L.

Tordoff, L.

Luke, L.

Wilson of Tillyorn, L.

NOT-CONTENTS

Acton, L.

Hoyle, L.

Ahmed, L.

Hughes of Woodside, L.

Alli, L.

Hunt of Kings Heath, L.

Amos, B.

Islwyn, L.

Archer of Sandwell, L.

Jay of Paddington, B. [Lord Privy Seal.]

Bach, L.

Bassam of Brighton, L.

Judd, L.

Berkeley, L.

Kennedy of The Shaws, B.

Burlison, L.

Kintore, E.

Carmichael of Kelvingrove, L.

Lockwood, B.

Carter, L. [Teller.]

Macdonald of Tradeston, L.

Chandos, V.

McIntosh of Haringey, L. [Teller.]

Clarke of Hampstead, L.

Mackenzie of Framwellgate, L.

Clinton-Davis, L.

Monkswell, L.

Cocks of Hartcliffe, L.

Nicol, B.

Crawley, B.

Pitkeathley, B.

Davies of Coity, L.

Ponsonby of Shulbrede, L.

Davies of Oldham, L.

Puttnam, L.

Dean of Thornton-le-Fylde, B.

Ramsay of Cartvale, B.

Desai, L.

Randall of St. Budeaux, L.

Donoughue, L.

Rea, L.

Dormand of Easington, L.

Rendell of Babergh, B.

Evans of Parkside, L.

Sawyer, L.

Falconer of Thoroton, L.

Sewel, L.

Farrington of Ribbleton, B.

Simon, V.

Gordon of Strathblane, L.

Smith of Gilmorehill, B.

Goudie, B.

Stone of Blackheath, L.

Graham of Edmonton, L.

Symons of Vernham Dean, B.

Grantchester, L.

Taylor of Blackburn, L.

Grenfell, L.

Tomlinson, L.

Hardie, L.

Turner of Camden, B.

Hardy of Wath, L.

Uddin, B.

Harris of Haringey, L.

Whitty, L.

Hilton of Eggardon, B.

Williams of Mostyn, L.

Hogg of Cumbernauld, L.

Winston, L.

Hollis of Heigham, B.

Young of Old Scone, B.

Resolved in the negative, and amendment disagreed to accordingly.
11.1 p.m.
Clause 46 [Junior Scottish Ministers]:
[Amendment No. 141A not moved.]
Lord Sewel Lord Sewel moved Amendment No. 142:
After Clause 46, insert the following new clause—

VALIDITY OF ACTS OF SCOTTISH MINISTERS ETC
(". The validity of any act of a member of the Scottish Executive or junior Scottish Minister is not affected by any defect in his nomination by the Parliament or (as the case may be) in the Parliament's agreement to his appointment.").
On Question, amendment agreed to.
Lord Steel of Aikwood Lord Steel of Aikwood had given notice of his intention to move Amendment No. 143:
After Clause 46, insert the following new clause—

POWER TO CHANGE TITLES
(" . The Parliament may change any of the titles listed below to titles it considers more appropriate—

(a) Presiding Officer;

(b) Deputy Presiding Officer;

(c) Clerk of the Parliament;

(d) First Minister;

(e) Scottish Executive;

(f) Scottish Minister;

(g) junior Scottish Minister.").

The noble Lord said: My Lords, in view of the paucity of the Government's previous answers, I am sorely tempted. However, given the lateness of the hour I shall not move the amendment.
[Amendment No. 143 not moved.]
Clause 47 [The Civil Service]:
Lord Sewel Lord Sewel moved Amendment No. 144:
Page 21, line 29, after ("the") insert ("Scottish Consolidated").
The noble Lord said: My Lords, this is a technical amendment to make it clear that payments made by Scottish Ministers to the Minister for the Civil Service under Clause 47(7) are to be charged on the Scottish Consolidated Fund. These payments are made in respect of the provision of pensions, allowances and gratuities for staff of the Scottish administration under the Principal Civil Service Pension Scheme. These schemes will continue to be administered by the Minister for the Civil Service.
As drafted, Clause 47(8) refers to the payments being charged on "the Fund", and it should be clear from a reference in subsection (5) that the relevant fund is indeed the Scottish Consolidated Fund as opposed to the Consolidated Fund—the amendment simply ensures that there can be no doubt. I beg to move.
On Question, amendment agreed to.
Clause 48 [Exercise of Functions]:
Lord Sewel Lord Sewel moved Amendment No. 144A:
Page 22, line 11, leave out ("including this Act").
The noble Lord said: My Lords, this is a group of minor and technical amendments which clarify the meaning of "enactment" as used in the Scotland Bill. Until now we have proceeded on the basis of a general
2038
rule that references to the term "enactment" in the Bill would not include the Scotland Act itself or subordinate legislation made under it, and a number of amendments were made in Committee on the basis of that approach. We have now reconsidered the position and concluded that it would be simpler and more economical of drafting for the rule to be that references to "enactment" will include the Scotland Act and subordinate legislation under it, with exceptions in cases where this would be inappropriate. These amendments are to take account of that revised approach. I beg to move.
On Question, amendment agreed to.
Clause 49 [General transfer of functions]:
Baroness Ramsay of Cartvale Baroness Ramsay of Cartvale moved Amendment No. 144B:
Page 22, line 18, leave out ("including") and insert—
("() other").
The noble Baroness said: My Lords, this amendment is a technical change to the wording of Clause 49 to ensure that any functions conferred on a Minister of the Crown by a prerogative instrument such as a Royal Charter or warrant are transferred to the Scottish Ministers where they meet the other criteria for transfer. As I said, this is a technical change; however, I shall be happy to expand on my remarks if noble Lords wish to have any further information. I beg to move.
On Question, amendment agreed to.
Baroness Ramsay of Cartvale Baroness Ramsay of Cartvale moved Amendment No. 144C:
Page 22, line 25, leave out ("and").
The noble Baroness said: My Lords, Amendments Nos. 144C and 144D are minor and technical amendments. Clause 49 transfers to the Scottish ministers certain statutory functions which are conferred by "pre-commencement" enactments. Government Amendment No. 144D simply adds to the definition of a pre-commencement enactment in Clause 49(3) so that it includes subordinate legislation made under Clause 99 to the extent that that states that it is to be treated as a pre-commencement enactment. This will ensure that ministerial functions which are split using the Clause 99 power will transfer to the Scottish ministers where they are exercisable within devolved competence.
Amendment No. 144C is a minor drafting amendment which is consequential upon Amendment No. 144D. I commend them to the House.
On Question, amendment agreed to.
Baroness Ramsay of Cartvale Baroness Ramsay of Cartvale moved Amendment No. 144D:
Page 22, line 27, at end insert—
("() subordinate legislation under section 99, to the extent that the legislation states that it is to be treated as a pre-commencement enactment").
On Question, amendment agreed to.
Clause 50 [Devolved competence]:
Lord Sewel Lord Sewel moved Amendment No. 145:
Page 22, line 42, leave out subsection (4).
On Question, amendment agreed to.
Clause 51 [Functions exercisable with agreement]:
Baroness Ramsay of Cartvale Baroness Ramsay of Cartvale moved Amendment No. 145A:
Page 23, line 4, leave out ("not apply") and insert ("cease to have effect in relation").
The noble Baroness said: My Lords, this is a technical amendment so that the wording of Clause 51(1) is consistent with wording used elsewhere in the Bill, in particular Clause 111(2), which provides that certain provisions about the Consolidated Fund cease to have effect. I will expand on it if any noble Lord wishes. If not, I commend the amendment to the House.
On Question, amendment agreed to.
Clause 52 [Shared powers]:
Lord Sewel Lord Sewel moved Amendment No. 145B:
Page 23, line 10, leave out from beginning to ("under") and insert—
("(1) Despite the transfer by virtue of section 49 of any function").
The noble Lord said: My Lords, with permission I shall take Amendments Nos. 145B, 145D and 206A together. Amendments Nos. 145B and 145D are technical amendments to Clause 52. They make it clear that the Scottish ministers will be able to exercise the powers concerned only to the extent that they are transferred to them under Clause 49 and ensure that it is not only the powers that are shared with the Scottish ministers but also any ancillary duties. They also add an order-making power to Clause 52, enabling further functions to be exercisable concurrently.
Amendment No. 206A makes it clear that the order-making power introduced by Amendment No. 145D is subject to type G procedure. That means that any such order is subject to procedure at Westminster only.
The amendments introduce sensible flexibility and I commend them to the House. I beg to move.
On Question, amendment agreed to.
Lord Sewel Lord Sewel moved Amendment No. 145C:
Page 23, line 22, at end insert—
("()sections 2, 11(3) and 12(4) of the Employment and Training Act 1973 (power to make arrangements for employment and training etc. and to make certain payments),").
The noble Lord said: This amendment to Clause 52 is part of a package of amendments relating to training for employment and job search and support to ensure that the former is devolved and the latter is reserved. I expect to table the other amendments which will be amendments to Schedule 5 in time for the later days of Report. I hope that we shall have an opportunity to look at the other elements of that package when we come to debate those further amendments, but I would like to describe the main elements of it to your Lordships at this stage so that noble Lords are able to consider the context in which I support the amendment to Clause 52.
However, it may be sufficient to indicate that the thrust of these amendments is to ensure that training for employment is devolved and job search is reserved. On that basis, I beg to move.
On Question, amendment agreed to.
Lord Sewel Lord Sewel moved Amendment No. 145D:
Page 23, leave out lines 27 and 28 and insert ("the function shall be exercisable by a Minister of the Crown as well as by the Scottish Ministers.
(2) Despite the transfer of any other function by virtue of section 49, the function shall, if subordinate legislation so provides, be exercisable (or be exercisable so far as the legislation provides) by a Minister of the Crown as well as by the Scottish Ministers.
(3) Subordinate legislation under subsection (2) may not be made so as to come into force at any time after the function in question has become exercisable by the Scottish Ministers.").
On Question, amendment agreed to.
Lord Sewel Lord Sewel moved Amendment No. 145E:
Page 23, line 28, at end insert—
("(4) Any power referred to in section 49(2)(a) to establish, maintain or abolish a body, office or office-holder having functions which include both—

(a) functions which are exercisable in or as regards Scotland and do not relate to reserved matters, and

(b) other functions,

shall, despite that section, be exercisable jointly by the Minister of the Crown and the Scottish Ministers.
(5) In subsection (4), "office-holder" includes employee or other post-holder.").
The noble Lord said: My Lords, I beg to move Amendment No. 145E and speak also to Amendment No. 173B. Amendment No. 145E is a technical amendment. It simply enables the Scottish Ministers and UK Ministers to act jointly to establish, maintain or abolish a body, office or office-holder with functions which cross the reserved devolved boundary, notwithstanding the transfer of powers to Scottish Ministers by Clause 49. This is an entirely straightforward amendment which complements the provisions in Clauses 84 to 86 for cross-border public authorities.
Amendment No. 173B is consequential upon Amendment No. 145E. It adds the power introduced by Clause 52(4) to the list of provisions in Clause 85 which may be modified by Order in Council.
On Question, amendment agreed to.
Clause 53 [Community law and Convention rights]:
Lord Hardie Lord Hardie moved Amendment No. 145F:
Page 23, line 36, at end insert—
("(3) Subsection (2) does not apply to an act of the Lord Advocate—

(a) in prosecuting any offence, or

(b) in his capacity as head of the systems of criminal prosecution and investigation of deaths in Scotland,

which, because of subsection (2) of section 6 of the Human Rights Act 1998, is not unlawful under subsection (1) of that section.").
The noble and learned Lord said: My Lords, in moving Amendment No.145F I should like to speak also to Amendment No.230A. This is part of the package of technical amendments to ensure that the relationship between the Scotland Bill and the Human Rights Bill works properly. Noble Lords agreed to the earlier part of the package on the penultimate day of Committee. The earlier amendments ensured consistency between the Bills on title and interest, definitions and commencement provisions. These amendments deal with the position of the Lord Advocate. Amendment

2041
No. 145F ensures that the Lord Advocate is able to rely on the protection afforded by Clause 6(2) of the Human Rights Bill when he is prosecuting an offence or acting in his capacity as head of the systems of criminal prosecution and investigation of deaths.
Clause 6 of the Human Rights Bill provides that it is unlawful for a public authority which would include the Lord Advocate to act in a way that is incompatible with a convention right. Clause 6(2) provides that it is not unlawful if the act of the public authority was because it could not have acted differently as a result of primary legislation or the public authority was acting to give effect to provisions made under primary legislation. This is intended to protect a public authority where a Westminster Act required it to breach a convention right.
The amendment ensures that this protection is also afforded to the Lord Advocate where it is alleged that he has breached Clause 53(2) of the Scotland Bill which requires him to act compatibly with the convention rights. This ensures that the Lord Advocate could prosecute an offence contained in a UK Act even if it were in contravention of a convention right. Without the amendment the offence could be prosecuted by the Crown Prosecution Service in England but not by the Lord Advocate. The amendment also allows him to act in his capacity as head of the systems of criminal prosecution and investigation of deaths in Scotland if he is acting as required by a provision of the UK Act. Without the amendment disapplying Clause 53(2) he could not act in this way.
Amendment No. 230A is a consequential amendment that adds Clause 53(3) to Clause 121(2) which makes provision as to what happens to those provisions of the Scotland Bill which refer to the Human Rights Bill if they are commenced before the Human Rights Bill. It provides that they are to have effect as they will have effect when the Human Rights Bill is in force. I beg to move.
Lord Mackay of Drumadoon: My Lords, I can well understand why this amendment has been tabled. For the reasons given by the noble and learned Lord, the amendment seeks to make the provisions of this Bill compatible with those of the Human Rights Bill. But I find it slightly surprising that it is contemplated that the Lord Advocate would ever consciously act in the knowledge that by so doing he would contravene the convention rights of either an accused person or somebody affected by the discharge of his role in investigating sudden deaths in Scotland. I find that difficult to reconcile with the position explained by the noble and learned Lord during the Human Rights Bill: that he was happy to accept that his decisions as public prosecutor would be reviewable against convention rights.
It would assist me if the noble and learned Lord could give some practical examples of primary legislation which are prima facie in breach of convention rights which would require the Lord Advocate to act in a way contrary to or incompatible with convention rights. It might persuade me that it was in the public interest that
2042
this Parliament should give him statutory authority to proceed in the way provided in the amendment. As at present advised, having regard to the fact that the Lord Advocate has a discretion, I find it difficult to believe that any prosecution would be mounted if it were known in advance that convention rights were to be breached in some way by taking the prosecution to a conclusion.
Lord Hardie: My Lords, as the noble and learned Lord is aware from his own experience, the question of whether or not to prosecute is always one of balance. One has to weigh up various factors.
What is being contemplated—I am not sure that I can think of a specific example—is United Kingdom legislation which creates an offence but which itself was contrary to the convention. As the noble and learned Lord will be aware, that could be a conscious decision of this Parliament: to decide to pass legislation in contravention. As long as it was declared to Parliament, that would be a possibility. If an offence were created across the United Kingdom under a UK statute it would be appropriate that one of the considerations for the Lord Advocate would be whether he or she wished to prosecute in Scotland for that offence. Just as the Crown Prosecution Service in England could prosecute, it would be invidious if the Lord Advocate were precluded from prosecuting for the statutory offence under the United Kingdom Act simply because it contravened the convention right.
At this stage, I am unable to think of specific examples. Perhaps I may give consideration to that, and if I can think of a specific example I shall write to the noble and learned Lord and put a copy in the Library.
Lord Hope of Craighead: My Lords, will the noble and learned Lord explain what is meant by "in prosecuting"? Am I right to understand that the purpose of the amendment is to deal with decisions as to whether or not to prosecute, and not with the manner in which a prosecution is conducted? The distinction may be important in considering the rights of a person who is brought before the court. I think that the court would feel more comfortable if it were still open to challenge the manner in which an accused person were dealt with, bearing in mind the importance that the convention attaches to the right to a fair trial.
Lord Hardie: My Lords, I agree entirely with the noble and learned Lord that that is the position. I sought to explain to the noble and learned Lord, Lord Mackay of Drumadoon, that a UK Act may create an offence. The decision to prosecute in that situation may infringe a human right; that would be a factor. I would not contemplate the conduct of the prosecution being contrary to human rights—in other words, depriving an accused of legal representation, or anything of that kind. That is not what is being contemplated.
On Question, amendment agreed to.
Clause 54 [Power to prevent or require action]:
[Amendment No. 146 not moved.]
Lord Mackay of Drumadoon Lord Mackay of Drumadoon moved Amendment No. 146A:
Page 23, line 39, leave out from ("may") to end of line 40 and insert ("apply to the appropriate court for a declarator or declaration to that effect.").
The noble and learned Lord said: My Lords, I debated this amendment in Committee on 30th July at col. 1624 and I need not go over the matter in great detail. I confess that the relatively short argument I advanced then is the one to which I adhere now.
The purpose of the amendment is that if the Secretary of State is of the view that the Scottish executive has acted or refused to act in a way which gives rise to a measure of incompatibility with either international obligations or the interest of national security and defence he should have two options. The first is to go to the court and seek a declarator to that effect directed against the Scottish executive. The alternative is to exercise an order-making power and to take action at his own hand.
The problem with the clause as presently drafted is that it gives to the Secretary of State power to direct the Scottish executive along the lines set out in the clause. In particular, he can direct them to take action which, one sees from subsection (3), can include making, confirming or approving subordinate legislation and introducing a Bill to the Scottish parliament.
I believe that if a Secretary of State were ever to make such an order and direct the Scottish executive, in all probability of a different political party, either to make subordinate legislation or to introduce a Bill to parliament that would provoke a political crisis of major significance. He should have two alternatives. One is to go to court for a ruling. Then it is up to the Scottish executive to decide what to do in the light of such a ruling. Alternatively, he should take action at his own hand, make his own order, which will be subject to judicial review in the courts if he exceeds the powers given under Clause 54. I beg to move.
Lord Hardie: My Lords, in speaking to this amendment I shall speak also to Amendments Nos. 146B, 146C and 146E. These repeat amendments were tabled at Committee. I do not wish to repeat the detail of the debate which we had then. There would of course be attractions in provisions which enabled compliance by the Scottish ministers with international obligations to be enforced through the courts. But, as I explained previously, the domestic courts do not generally take cognisance of international obligations. That is why we have the limited powers of intervention in Clauses 33 and 54 for those international obligations which do not form part of our domestic law.
As noble Lords are aware, the Government regard these powers as essential back-stops; they are there as powers of last resort. One of the checks and balances on their use is the fact that the Secretary of State's use of the powers would be subject to judicial review. The question in the case of Clause 54(1) and (2) would be whether he had reasonable grounds for his belief that action is incompatible with an international obligation, or necessary to ensure compliance, or whether he otherwise acted unreasonably in making the order.
2044
As my noble friend explained earlier in connection with Amendment No. 146D, the order made by the Secretary of State must state his reasons for making it. It would be for the courts to judge whether that or any other evidence indicates that he has behaved unreasonably in making the order. They may well want to consider the nature of the international obligation concerned, but they would not be being asked to make a judgment about the compatibility of action by the Scottish ministers with the obligation.
Turning to Amendment No. 146C, I find it hard to see that a significant distinction of principle can be made between such a power for the Secretary of State to direct the Scottish executive to take action and that in Clause 54(2) which allows him to step in and take the action himself. It still seems to us that the second approach is more consistent with the devolution of responsibility to the Scottish ministers. I would argue also that it would be more conducive to agreement.
While we are considering Clause 54, I should take the opportunity to put on record my response to a point which the noble and learned Lord, Lord Fraser of Carmyllie, raised in correspondence with me during the Recess. The point was whether Clause 54(1) and (2) would enable the Secretary of State to direct the Lord Advocate to take, or not to take, action in his role in relation to prosecutions and fatal accident inquiries.
As noble Lords will be aware, the Bill contains a number of provisions which are designed to maintain the independence of the Lord Advocate as the public prosecutor and head of the system of deaths investigation in Scotland. In particular, Clause 45(2) provides that any decision of the Lord Advocate in his capacity as head of the systems of criminal prosecution and investigation of deaths in Scotland shall continue to be taken by him independently of any other person.
There is no express provision about the relationship between this clause and Clause 54. However, it is certainly not the intention behind Clause 54 to compromise the independence of the Lord Advocate in either of those roles. Indeed, we do not consider that it could ever be appropriate for the Secretary of State to use his powers of intervention in that way.
I trust that your Lordships will agree that in the light of those explanations, the powers of the Secretary of State under Clause 54 are entirely appropriate.
Amendment No. 146E seeks to protect members of the executive from being subject to orders for specific performance. I would remind your Lordships that Scottish ministers will be part of the Crown and will be protected by the provisions of the Crown Proceedings Act 1947, which at present ensures that the Crown cannot be subject to such orders. Instead, all that the courts can do is to issue a declarator. Therefore, in our view, the amendment is not necessary.
Lord Mackay of Drumadoon: My Lords, inevitably, perhaps, when we return to issues which were debated before, the views expressed on previous occasions no more persuade one side than they do the other. I take the point about Amendment No. 146E, but as regards the other amendments, I seek to test the opinion of the House.
11.27 p.m.
On Question, Whether the said amendment (No. 146A) shall be agreed to?
Their Lordships divided: Contents, 21; Not-Contents, 69.

Division No. 4

CONTENTS

Annaly, L.

Henley, L.

Attlee, E.

HolmPatrick, L.

Blatch, B.

Kingsland, L.

Byford, B.

Kintore, E.

Chesham, L.

Mackay of Ardbrecknish, L.

Mackay of Drumadoon, L.

Courtown, E. [Teller.]

Montrose, D.

Cranborne, V.

Northesk, E.

Dixon-Smith, L.

Rowallan, L.

Ellenborough, L.

Selkirk of Douglas, L.

Fraser of Carmyllie, L.

Strathclyde, L. [Teller.]

NOT-CONTENTS

Acton, L.

Islwyn, L.

Ahmed, L.

Jay of Paddington, B. [Lord Privy Seal.]

Alli, L.

Amos, B.

Judd, L.

Archer of Sandwell, L.

Kennedy of The Shaws, B.

Bach, L.

Lockwood, B.

Bassam of Brighton, L.

Macdonald of Tradeston, L.

Berkeley, L.

McIntosh of Haringey, L. [Teller.]

Burlison, L.

Mackenzie of Framwellgate, L.

Carlisle, E.

Mackie of Benshie, L.

Carmichael of Kelvingrove, L.

Mar and Kellie, E.

Carter, L. [Teller.]

Monkswell, L.

Chandos, V.

Monson, L.

Clarke of Hampstead, L.

Nicol, B.

Cocks of Hartcliffe, L.

Pitkeathley, B.

Crawley, B.

Plant of Highfield, L.

Davies of Coity, L.

Ponsonby of Shulbrede, L.

Davies of Oldham, L.

Puttnam, L.

Dean of Thornton-le-Fylde, B.

Ramsay of Cartvale, B.

Desai, L.

Rea, L.

Donoughue, L.

Rendell of Babergh, B.

Evans of Parkside, L.

Sawyer, L.

Falconer of Thoroton, L.

Sewel, L.

Farrington of Ribbleton, B.

Simon, V.

Gordon of Strathblane, L.

Smith of Gilmorehill, B.

Goudie, B.

Steel of Aikwood, L.

Graham of Edmonton, L.

Symons of Vernham Dean, B.

Grenfell, L.

Thurso, V.

Hardie, L.

Tomlinson, L.

Hardy of Wath, L.

Tordoff, L.

Harris of Haringey, L.

Turner of Camden, B.

Hogg of Cumbernauld, L.

Uddin, B.

Hoyle, L.

Whitty, L.

Hughes of Woodside, L.

Winston, L.

Hunt of Kings Heath, L.

Young of Old Scone, B.

Resolved in the negative, and amendment disagreed to accordingly.
11.35 p.m.
[Amendments Nos. 146B to 146E not moved.]
Clause 60 [Scottish Consolidated Fund]:
Lord Dixon-Smith Lord Dixon-Smith moved Amendment No. 147:
Page 26, line 9, at end insert—
("() When making payments under subsection (2), the Secretary of State shall, in order to determine the relationship between the annual total of payments made into the Scottish Consolidated Fund
2046
and the annual total of payments made in England to provide the equivalent services, have regard to the Revenue Support Grant formula in force for the time being to determine Government funding for individual local authorities in England.").
The noble Lord said: My Lords, when the House debated Clause 60 I was in company with a number of other noble Lords who had some concerns about this particular clause and the future of the funding of the Scottish parliament and how it was to be dealt with by the English Parliament. The Minister can feel quite pleased that his advocacy has clearly persuaded everybody else that the debate is not worth continuing, but I regret to say that nothing that he said at Committee stage has eliminated my concern.
It is worth reminding ourselves of what we are talking about. We are not talking about the Barnett formula, which is a method for distributing increases or decreases in government expenditure to Scotland. It is as simple as that. But it is worth reminding ourselves of one point and that is that the noble Lord, Lord Barnett, when he introduced that formula, was of the view that over time it would lead to expenditure in Scotland converging with expenditure in England.
The noble Lord, Lord Lang of Monkton, showed why that has not happened. He is a former Secretary of State for Scotland. He quite clearly indicated the success of a series of former Secretaries of State in their negotiations both in Cabinet and with the Treasury on behalf of Scotland. As a result of their work expenditure in Scotland continued to diverge from the average for the United Kingdom. In fact, the divergence is widening.
That leaves me with a question in the back of my mind as to what the Scottish block is and what is to happen to it in future. Is it to be the block as we see it today, simply uprated for inflation? If it is not to be that, how are changes to it to be arrived at? The Bill is singularly quiet on the subject. It is simply not satisfactory that this matter should be set in stone. For instance, how are we to deal with the consequences of either demographic or economic change, particularly, as has been mooted by my noble friend Lord Mackay of Ardbrecknish on the Front Bench, as there is a possibility of there not being a Secretary of State for Scotland?
In Clause 60 the Bill states that the Secretary of State will, from time to time, make payments to the Scottish Consolidated Fund. Presumably, if there is not a Secretary of State for Scotland the mechanism which will be on the face of the Bill will be invalid. There is then no mechanism to make payments. In his response I hope that the Minister will address that particular point.
But more than that, if there is a possibility that the Bill works in that way, does it place a constraint on the Prime Minister if, at some future point, he decides that the office of Secretary of State for Scotland is no longer appropriate and that the work can be passed on by a Minister of State, but he is constrained by the financial mechanism on the face of the Bill? We have heard so much caution from Government Ministers about getting things on the face of the Bill that might tie them down in the future.
We need to be much more open about this. For a Government who profess openness there is a singular lack of information. I cannot call it opacity because there is nothing to be opaque about: there is simply nothing. I do not find that satisfactory.
In Committee I proposed a fairly simple rudimentary formula which might have dealt with the way in which the Scottish grant might be calculated in the future. In rejecting it, the Minister made a perfectly valid point about the particular problem of the morbidity of the Scottish population. I defer to his expert knowledge of that. It is not something that I have taken to heart, although I have now taken to heart what the noble Lord said. So, I have looked for a more appropriate mechanism. More importantly, it is one that is already in use and accepted and approved by government—although I suppose it is only true to say that it is cordially disliked by those to whom it is applied. The revenue support grant formulae which are used to distribute government funds to local authorities are cordially disliked by all local authorities. That cordial dislike probably means that the formulae are fair!
When I asked to see the distribution formulae, I was offered a book well over an inch thick. I did not think it appropriate to introduce that at this hour so I have left it behind. However, as the Minister referred to morbidity, it is perhaps worth mentioning the sorts of factor that are involved in the revenue support grant calculations because the RSG bears closely on the demography of an area, taking into account the number of over-75s, pensioners and the disabled, as well as ethnic background, housing type and the number of single-parent families and educationally handicapped—and so on and so forth. It also covers matters such as miles of road, sparsity, drainage problems and sea defences. It is a widely used formula—and one that could usefully be used not to set the exact sum of the Scottish block but to determine the relationship between expenditure in Scotland and in England.
We shall have a big problem in this area in the future unless something is put on the face of the Bill. Governments in the future will have great difficulty in explaining how they are going to adjust the Scottish block—either to the other place where it will be of particular concern or to the Scottish parliament or to both. I suspect that it will be to both. It is in an attempt to reduce that problem that I have tabled this amendment. I beg to move.
Lord Sewel: My Lords, I appreciate that Amendment No. 147 is another attempt by the noble Lord, Lord Dixon-Smith, to introduce into the Bill a statutory formula based on relative need. However, as I explained in Committee, under current funding arrangements, relative need across the spectrum of government spending in Scotland is already built into public expenditure baselines. This ensures that relative need is properly captured.
As the noble Lord indicated, what the Barnett formula does is, on top of these needs-based baselines, to offer a means of determining, relatively painlessly, what the Scottish Office share of any changes to comparable
2048
public spending programmes should be. This part of the process is not needs-based. The Barnett formula is based purely on relative population numbers.
This arrangement is tried and tested; it is familiar to those who need to know about it; it has delivered fair settlements for Scotland for two decades; and it offers the prospect of continuity and stability for the new devolved administration at a time of enormous change.
Against that background, I am not at all persuaded that the noble Lord's amendment takes us forward at all. Indeed, I am bound to say that it is flawed in its conception. The fact is that a comparison of relative need in a local authority context and in a national context is a comparison of apples and oranges because national governments and local authorities do different things and have different functions. So what is an appropriate formula for one is almost definitionally not an appropriate formula for the other. It is likely that an assessment of relative needs for national governments will be carried out differently from the way we measure relative needs for local government. Local government has a completely different taxation system which is taken into account in the calculation of RSG. That will not be relevant to the relationship between the UK Government and the Scottish administration.
The noble Lord, Lord Dixon-Smith, raised two specific points, if I heard him correctly. First, he asked whether the whole payment into the Scottish Consolidated Fund would be invalid if there was no formula for determining it. That is not the case. The Bill empowers the Secretary of State to make payments into the fund of such amounts as he may determine. There is no requirement in the Bill to use a formula. We have indicated that we will stick with the Barnett formula, which has done the job in the past to the relative satisfaction of everybody concerned.
The other point that the noble Lord, Lord Dixon-Smith, made was whether the whole thing would come to a grinding halt if a Prime Minister of the day decided not to have a Secretary of State for Scotland. The convention is that when reference is made to a Secretary of State in an Act, the powers can be employed by any Secretary of State. It is not tied to a specific Secretary of State.
I admire the ingenuity of the noble Lord, Lord Dixon-Smith, in continuing to worry at this problem and coming up with alternative means of ensuring that the allocation of funds to the Scottish parliament will be on a needs basis. It is inappropriate to look at an RSG formula. You start off at the wrong place and finish up at the wrong destination. You start off at the wrong place simply because the services and functions of local authorities are very different from the services and functions of a national government such as the Scottish executive will be.
I will have to disappoint the noble Lord again. The Government cannot accept his amendments and I trust that he will withdraw them.
11.45 p.m.
Lord Dixon-Smith: My Lords, I thank the Minister for his explanation. His explanation sounds like

2049
something that I used to hear from my father on occasions: "My boy, we have always done things this way. That is the way we are going to do them. That is enough". That may be enough, but I am not sure it is appropriate. I will need to consider carefully what the Minister has said. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 61 [Payments out of the Fund]:
Lord Sewel Lord Sewel moved Amendment No. 147A:
Page 26, leave out line 36.
On Question, amendment agreed to.
Clause 62 [Borrowing by the Scottish Ministers etc.]:
Lord Sewel Lord Sewel moved Amendment No. 147B:
Page 27, line 9, leave out ("an") and insert ("any other").
On Question, amendment agreed to.
Clause 64 [Borrowing by statutory bodies]:
Lord Sewel Lord Sewel moved Amendment No. 147C:
Page 27, line 29, leave out subsection (3).
On Question, amendment agreed to.
Clause 65 [Auditor General for Scotland]:
Lord Mackay of Ardbrecknish Lord Mackay of Ardbrecknish had given notice of his intention to move Amendment No. 148:
Page 27, line 35, leave out from ("resolves") to end of line 37.
The noble Lord said: My Lords, I heard sufficient words from Ministers on Amendment No. 132 about qualified majorities. I shall not pursue this one and I will not move it.
[Amendment No. 148 not moved.]
Lord Sewel Lord Sewel moved Amendment No. 149:
Page 27, line 37, at end insert—
("() The validity of any act of the Auditor General for Scotland is not affected by any defect in his nomination by the Parliament.").
On Question, amendment agreed to.
Clause 66 [Financial control, accounts and audit]:
Lord Mackay of Ardbrecknish Lord Mackay of Ardbrecknish moved Amendment No. 150:
Page 28, line 44, at end insert—
("() In particular, Scottish legislation under subsection (1) shall provide for—

(a) accounts prepared under paragraphs (a) and (b) of that subsection to comply with any directions from time to time given by the Comptroller and Auditor General as to the form of the accounts, the information to be provided in them and the general practices and principles to be observed in their preparation, and

(b) the designation of accounting officers accountable to the Parliament for the expenditure to which the accounts relate and the specification of their responsibilities.

() The Scottish legislation referred to in subsection (1) shall make provision that, if the Comptroller and Auditor General so directs, the provisions referred to in subsection (1) and the functions under subsection (2) shall, to such extent and with such modifications as the direction concerned may provide, apply to any
2050
body established by an enactment and specified in the direction, in relation to which it is within the legislative competence of the Parliament to make such provision.").
The noble Lord said: My Lords, this amendment deals with the whole question of the supervision of the accounts of the Scottish parliament and the role of the Scottish parliament and the other place in dealing with the accounts. As your Lordships know, the other place has the Public Accounts Committee and there is also the Comptroller and Auditor General. The accounts prepared by government are scrutinised by the Comptroller and Auditor General, who reports to the Public Accounts Committee, which hears evidence and grills Ministers and is of very considerable importance in the other place.
It appears that in future the money sent by the other place to the Scottish parliament will not be subject to the scrutiny of the Comptroller and Auditor General and will not be subject to the scrutiny of the Public Accounts Committee. However, in the Bill it is perfectly clear that the Scottish parliament will appoint an auditor who will have most, if not all, of the powers of the Comptroller and Auditor General. Indeed, it allows for the possibility of this scrutiny by the Scottish parliament, or a committee thereof, of the accounts of the parliament.
In Committee on 30th July I proposed an amendment which required that the procedures of the Scottish parliament should be subject to directions given from time to time by the Treasury. The Government chided me for believing in the nanny state as far as concerns the Scottish parliament—I think that is a fair shorthand of what I was accused of doing—and said that it was wrong that the Treasury should have a role in this. I have decided to return to the issue. I accept that it may be wrong that the Treasury has a role, but I am still not entirely convinced that the other place should not have some role, not so much in the detail but in making sure that the auditor in the Scottish parliament and the arrangements in the Scottish parliament give the scrutiny to the financial affairs of the government that they ought to receive.
I am sure that the parliament will set up a perfectly proper system and that there will be no problem, but I think that there is a case to be argued that either the Public Accounts Committee of the other place or the Comptroller and Auditor General should be able to say to the Scottish parliament or to the auditor in Scotland, "That is not quite right. I would rather you did it in this way because, after all, the money you are checking is the money which, up to now, I have checked". That is certainly true. Money spent by the Scottish Office has been subject to the supervision of the Comptroller and Auditor General and investigation by the Public Accounts Committee. These powers are to be moved to the Scottish parliament—that is right and proper—but I do think that there is an argument for saying that either the Public Accounts Committee or, as in my amendment, the Comptroller and Auditor General ought to at least have a back-stop power to be able to give directions about the form of the accounts, the information provided in them and the general practice and principles if it is deemed necessary.
I hope that this is not too much of a nanny, but I come back to the point that this money is being voted by the Members of the other place. They are responsible for raising the money in taxation. I think that there ought to be some back-stop provision for the accounting and control procedures in the other place to be satisfied that what the Scottish parliament is setting up is right. I have therefore put forward this amendment—it is very much changed from the amendment I put forward in Committee—as an effort to try to find a way out of what I believe is a dilemma in the responsibility for money raised by the other place. I beg to move.
Baroness Ramsay of Cartvale: My Lords, I appreciate the points that the noble Lord, Lord Mackay of Ardbrecknish, has made in presenting the amendment. I am familiar with his thinking from what he said in Committee. As we see it, the noble Lord's current amendment contains three separate themes. I think it might be helpful, therefore, if I were to deal with each of those themes in turn.
First, the amendment proposes that Scottish legislation will provide that the Comptroller and Auditor General should be given the power to direct the form and, in effect, supervise the preparation of the accounts of the Scottish executive and other persons receiving money directly from the Scottish Consolidated Fund. We do not believe that that would be appropriate.
It will be the right and privilege—indeed, the duty—of the Scottish parliament to hold the Scottish executive to account. That is one of its primary roles. It must, therefore, be for the parliament to decide the detail of how the executive should account to it. Clause 66 is not intended to be exhaustive. It sets out a framework for the accounting by the executive to the parliament. The parliament itself will legislate on the detail, including the form of the accounts and the standards to be applied or how they are to be prescribed. As the noble Lord knows, we have set up a committee of financial and other experts—the Financial Issues Advisory Group—to advise the incoming parliament and executive on these matters. That group will be making proposals on the content of the annual accounts of the executive.
The accounts will be audited by the Auditor General for Scotland or auditors appointed by him. The auditors will be independent of direction both of the executive and of members of the parliament. They will be bound by their own professional standards and by those laid down by such as the Auditing Practices Board. Of course, the auditors' reports must be published.
Secondly, the amendment proposes that Scottish legislation must provide for the designation of accounting officers. We find this part of the amendment a little difficult to understand, as Clause 66(1)(e) does precisely that. It does not use the term "accounting officers"; but that is exactly what it means.
This particular provision serves two important functions. First, it gives the parliament direct access to officials on the detail of the executive's actions in undertaking expenditure. It also gives those officials a standing separate from that of their ministers—a useful safeguard for the parliament in the checks and balances required in operating any such system.
2052
Thirdly, the amendment deals with the position of other bodies; that is, bodies not receiving money directly from the Scottish Consolidated Fund. If any body receives money directly from the fund, Clause 66(1) and (2) already apply. Moreover, Clause 66(4) already makes it clear that the parliament can make further provision for ensuring the accountability of others receiving sums derived from the Scottish Consolidated Fund. The bodies to which this amendment would apply are those which will be funded, or partly funded, by the Scottish ministers. That would include such bodies as local authorities, health service bodies, non-departmental bodies set up under statute and further education colleges.
We believe that there may be some misunderstanding here. The existing legislation under which these bodies operate will remain in force. That includes the accounting and auditing provisions of that legislation, save that Scottish bodies currently audited by the Comptroller and Auditor General will in future be audited by the Auditor General for Scotland. In view of those explanations, I hope that the noble Lord will find it possible to withdraw his amendment.
Midnight
Lord Mackay of Ardbrecknish: My Lords, I am grateful to the noble Baroness for those comments. I certainly think that as regards the final part of my amendment she has probably said sufficient to allay my concerns. Indeed, I think the same is true as regards paragraph (b) of my amendment, although those people who are much more involved in this kind of work than I will probably want to cast an eye over what she said. I understand and appreciate her arguments in as far as I have followed them.
I am still just a little unsure, however, about how the spending of public money will be overseen by an auditor or by the Public Accounts Committee. I refer to the £14 billion of expenditure which will go from the other place—it is the House of Commons not the Treasury which votes supply—to the Scottish parliament and the Scottish executive. I come back to the point that this large tranche of money will, I suspect, be the only tranche of money which the House of Commons will vote upon but will not oversee. That is what bothers me. I do not particularly want the House of Commons to do the checking, but I want it, through the Public Accounts Committee or the Comptroller and Auditor General, to have some locus in making sure that the systems set up by the Scottish parliament are adequate.
However, I can see that I shall not make any progress on that, but it is a problem and I rather fear that at some time in the future the other place might get "stroppy" about it and someone might ask, "Why have we absolutely no way—through the Public Accounts Committee or the Comptroller and Auditor General—of ensuring that the £14 billion is properly spent?" In some ways I am trying to take out an insurance policy against that day, but I accept that it is perhaps rather late in the day to be taking out insurance policies in these matters. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Deputy Speaker (Baroness Turner of Camden): My Lords, I must inform the House that in the second Division this evening the number who voted Content was 38 and not 37 as announced.
Lord Sewel Lord Sewel moved Amendment No. 150A:
Page 29, leave out lines 4 and 5.
On Question, amendment agreed to.
Lord Sewel Lord Sewel moved Amendment No. 150B:
Page 29, line 9, leave out from ("any") to end of line and insert ("other").
On Question, amendment agreed to.
Lord Sewel Lord Sewel moved Amendment No. 150C:
Page 29, line 19, at end insert ("and "other legislation" means provision made by any other enactment").
On Question, amendment agreed to.
Lord Rowallan Lord Rowallan moved Amendment No. 151:
Before Clause 69, insert the following new clause—
("POWER TO IMPOSE LEVY
POWER TO IMPOSE LEVY ON SCOTTISH TAXPAYERS
.—(1) The Parliament shall have the power to impose on persons resident in Scotland a levy of up to three pence in the pound on those persons' income, net of income tax.
(2) A person is resident in Scotland within the meaning of subsection (1) if he owns or rents his primary dwelling place in Scotland.
(3) The Parliament shall only exercise the power referred to in subsection (1) if it passes a resolution to that effect.
(4) The Secretary of State may by order make further provision about the levy.
(5) An order under subsection (4) shall not be made unless a draft of the order has been laid before both Houses of Parliament and approved by resolution of each House.").
The noble Lord said: My Lords, this is a probing amendment, along with Amendments Nos. 152, 153,155 to 159 and 231. I realise that I am going right into the Holy Grail here in this amendment and that I risk the wrath of those who drew up the White Paper, the referendum and the Scottish Constitutional Convention. I am sure also that the noble Baroness, Lady Ramsay of Cartvale, and the noble Lord, Lord Steel of Aikwood, are both looking at me with astonishment. However, I want to probe the Government on several problems that have arisen.
The first problem as I see it concerns residency. We have heard the story of English based lorry drivers who will be deemed to be Scottish taxpayers, whereas Scottish lorry drivers may not. We have heard about people who use the Stranraer ferry who spend more nights in Scotland than in Northern Ireland even though they live in Northern Ireland.
Raising money through the income tax system would also cause problems. Those working for a firm which has one factory in England and another in Scotland will receive different sums of money. The trade unions will become upset about that. At the end of the day it will probably be the Scottish employer who will pay for it.
In Committee, the noble Lord, Lord Sanderson of Bowden, referred to the idea of a levy. I wondered how sensible or silly an idea it was. It amounts to tax gathering rather than tax collection. Approximately 50 per cent. of Scottish voters are taxpayers. We have been told that that would approximate to an average payment from each taxpayer of £200, with a maximum of £600.
If every one of the 4.2 million voters paid, and £430 million was to be raised, each taxpayer would pay just over £100. Thus accountability would be assured. I must admit that I have always been slightly against people having a vote on other people paying taxes when they do not pay themselves.
This is a probing amendment. I have not thought through the method of raising the levy. However, I seek an opinion from the Government as to why they went down the income tax route rather than proposing a general levy. It seems to have caused a large number of problems which are becoming manifest as we progress through the Bill. I look forward to the Minister's reply. I beg to move.
Lord Sewel: My Lords, I ask the noble Lord, Lord Rowallan, to show a degree of patience. He raised the problem of residency and lorry drivers. He merely has to wait until the next set of amendments and I shall reveal all—or nearly all.
I also urge on him a degree of caution. He is advancing the argument that one should not have a vote without paying a degree of tax. I merely ask him to cast his mind back to the poll tax. That was the argument behind that little experiment, and look how that ended in tears. So I would dissuade the noble Lord from developing that argument too far.
I freely recognise that this set of amendments is an attempt by the noble Lord, not so much to reach the Holy Grail but dare I say it, to cut through the Gordian knot of complexity surrounding the Bill's tax varying powers. The attempt is superficially attractive—one short clause to replace seven clauses. No doubt it has its attractions. However, I must advise noble Lords that the provision in Amendment No. 151 serves only to gloss over the inevitable complexities of any tax system. Many questions are left, not so much unanswered but even unasked, in the amendments tabled by the noble Lord. They are certainly not in any sense "magicked away".
The flaw in the noble Lord's proposal is that it leaves almost all of the inevitable detail that would be required if the proposed levy was to work to an order-making power. There is a place for order-making powers in tax law, but the amendment moves the balance much too far towards secondary legislation.
It is no use arguing that there would be little need for more detail. Where, for example, is there a provision defining what income should be included in the calculation of liability? Where does the amendment state how long a levy resolution will last? Where does it state what increments the levy should be set in? Where is anything said about Scottish residents who move

2055
during the period of assessment for the levy? What, indeed, is that period of assessment? And so on, and so on.
These are details which cannot be swept under the carpet. Nor are there details such as how a levy could possibly be based upon income net of income tax when a proper assessment of income tax liability is often not finalised until after the end of the year in which the relevant income is earned. That is a fundamental problem with the approach that the noble Lord offers us. Nor are there details as to how the Scottish parliament would assess an individual's income. It cannot be assumed that Inland Revenue records could be piggy-backed. These records are protected by strong confidentiality rules, and rightly so. The Scottish parliament might therefore be obliged to create an entirely new structure for running what would in effect be a parallel Scottish income tax system. No provision is made either about the collection of the levy or implementation of the PAYE system for this purpose or for the creation of compliance and enforcement arrangements.
I could go on, but I think I may have made the point. All those issues are covered either directly in Part IV of the Bill or elsewhere in the income tax Acts of which Clauses 69 to 76 will form a part. None is covered in what the noble Lord offers us. His clause is short only because, I am afraid, a heck of a lot is missing from it and it would have to be found in some way and put in it. I do not think this is the way out of the problem that he sees.
As I have said on many occasions, we have always worked on the basis that it would be an income tax-varying power, a constrained and limited income tax-varying power. That is understood now. Everyone is working on that basis and it would be of no service to disturb that approach and try to replace it with the kind of provision that the noble Lord wishes. So I hope that with the memory of the poll tax in his mind, he will turn away from this attraction.
Lord Rowallan: My Lords, as I indicated at the beginning of my comments, this is purely a probing amendment. I am well aware of the pieces that were missing from the legislation, but it is difficult to write a whole new raft of ideas in a short time.
I am grateful to the Minister for his detailed reply. I was fairly certain that that was the view he would take, but I thought it was worthwhile exploring the subject, if nothing else. I do not necessarily believe in it myself, but it was an option because we seem to be getting into an almighty hole over income tax and residence.
I am interested to hear the Minister say that he is about to give us a way out of it, and I look forward to it enormously. Bearing that in mind, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 69 [Power to fix basic rate for Scottish taxpayers]:
[Amendment No.152 not moved.]
Clause 70 [Supplemental provision with respect to resolutions]:
[Amendment No. 153 not moved.]
Clause 71 [Scottish taxpayers]:
Lord Sewel Lord Sewel moved Amendment No. 153A:
Page 32, line 19, leave out ("beginning or").
The noble Lord said: My Lords, when we addressed the issue of the definition of a Scottish taxpayer at Committee stage, I gave an undertaking to look again at the drafting of Clause 71 and to meet representatives of the Law Society of Scotland, the CBI and the Institute of Chartered Accountants in Scotland. I have been able to hold those meetings.
First, I had a useful meeting on 21st October with the three bodies concerned. We discussed in particular the proposals for basing the definition of a Scottish taxpayer on the concept of residence, the substance of an amendment earlier supported by the Law Society. It was discussed at the Committee stage and has now reappeared as Amendment No. 154. However, I think that amendment may represent an earlier stage in the thinking of the Law Society from which it has now moved on.
While there were a number of differing views around the table, there was a recognition that applying the concept of residence in this context could give rise to some serious anomalies. I think particularly of the problem of, when we use ordinary residence, what happens when someone moves during the course of the tax year. We finish with the possibility of someone being both a Scottish taxpayer and an English taxpayer for the entire tax year, which is not a condition devoutly to he wished upon many.
There was, however, general acceptance that most of the difficult cases that had been identified could be removed or substantially diminished if the Government amended the definition of what was effectively a day spent in Scotland and thus eliminated the double counting that could arise under the current provision in Clause 71(4)(a). That now provides that a person is regarded as having spent a day in Scotland only if he is in Scotland at the beginning or end of that day. It was pointed out by a number of noble Lords at that stage that the famous lorry driver could qualify as a Scottish taxpayer on the basis of spending 92 non-consecutive nights in Scotland. I offered the view that that was a difficult position to sustain, particularly if regard was had to the future development of regional government, perhaps with tax-varying powers throughout the United Kingdom. One could theoretically end up as a variable taxpayer in three different areas, which would again not be a very comfortable position in which to find oneself.
The Government discussed the matter and sought a solution. We did not seek to maintain the position in the Bill. We have listened and have tabled Amendments No.153A and 153B which we believe precisely address the problem. They have the effect of ensuring that if a person is in Scotland at midnight he will only ever clock up one day spent in Scotland. This means that, assuming a person spends the whole year in the United Kingdom, he will have to spend 183 nights in Scotland before

2057
qualifying as a Scottish taxpayer. We believe that that is a very simple solution to a problem which has become too complex.
The three organisations whom I met were content with the amendments on the basis that they substantially addressed their concerns about Clause 71. I hope that noble Lords will also receive them in similar fashion and agree with them. I also hope your Lordships will accept that the discussion with the professional bodies has moved us somewhat from the position proposed by Amendment No.154. That amendment would create rather than resolve anomalies. I hope that in light of what I have said the noble Lord is able to withdraw his amendment.
12.15 a.m.
Lord Selkirk of Douglas: My Lords, I thank the Minister for coming so far to meet the concerns raised by the CBI, the Law Society of Scotland and the Institute of Chartered Accountants, who are working very much at the coalface of tax law. They commend the Government for responding positively to the points that have been raised. It would be useful if the Minister could make clear that the definition of Scottish taxpayers would not be interpreted by the Inland Revenue as including travellers from England who merely wished to stay overnight in Scotland. On a related and connected subject, I thank the Minister for his letter of 27th October on the subject of charities. I am a trustee of a charity. I should be glad if the Minister could confirm that charities in Scotland would not have to pay more tax than charities in England. Furthermore, can he expose for consultation the orders that will carry this policy into effect under Clause 75(2)?
Lord Hughes of Woodside: My Lords, given the time I shall not detain the House for long. This appears to be the only amendment that provides me with an opportunity to make the following point. Some noble Lords may recall that in July there was a lengthy debate about the unified business rate. I referred to the Aberdeen Chamber of Commerce and said that not all its members were entirely in favour of the rate. I have since had a letter from Mr. Derek Marnock, the chief executive, to say that he does not recognise the views I attributed to certain members of the chamber of commerce as being the official policy of the chamber of commerce. In the 27 years I was in another place I always had extremely good relations with the chamber of commerce. I never wittingly or unwittingly misrepresent their views. I replied to Mr. Derek Marnock that, although I was satisfied that some members of the chamber of commerce were not entirely thrilled with the unified business rate—indeed, in his letter to me he goes some way towards meeting that point—I would take the earliest opportunity to make it clear that the official policy of the chamber of commerce in Aberdeen is that it has made the maintenance of the UBR one of the principal requirements for the Scottish parliament. I am happy to make it clear that that is the official view of the chamber
2058
of commerce in Aberdeen. If it is felt that in any way I misrepresented it, I apologise. It was not my intention to do so.
Lord Mackay of Ardbrecknish: My Lords, my amendment, Amendment No. 154, is grouped with the amendment. As the Minister rightly supposes, the amendment has been on the Marshalled List for some time and has been overtaken by his amendments.
Before I turn to these amendments, perhaps I may say that the Aberdeen Chamber of Commerce sent me a copy of the correspondence. I am sure that it will be pleased that the noble Lord, Lord Hughes of Woodside, has put its view on the record. It is also nice that the noble Lord has contributed. He has the honour of being the first person on the Government Back Benches who has shown any interest in this important Bill throughout the day. If my memory serves me aright, there was only a brief intervention from the noble Lord, Lord Desai, during the first day of Report. I was about to say that the Liberal Democrats have been quite active. Perhaps the noble Lord, Lord Steel, wishes to intervene.
Lord Steel of Aikwood: My Lords, the noble Lord is being a little unfair. He is forgetting the contribution of the noble Lord, Lord Hogg, earlier in the proceedings.
Lord Mackay of Ardbrecknish: My Lords, I cannot remember the contribution of the noble Lord, Lord Hogg. Perhaps it was on the first day of Report—or perhaps in Committee.
Noble Lords: Today!
Lord Mackay of Ardbrecknish: My Lords, it must have been when I was not present and the lawyers were having a go. My welcome to the noble Lord, Lord Hughes, is therefore not as fulsome as it would have been if he had been the first to contribute. I am glad to see that two Back-Bench Labour Members have decided that it is an important issue.
Lord Steel of Aikwood: My Lords, I am tempted to say that if the noble Lord came more often he would not make these mistakes.
Lord Mackay of Ardbrecknish: My Lords, if I came more often I might be tempted to make longer speeches!
I am grateful to the Minister for his undertaking in Committee that he would consider the matter of residence; and for his assurance that he would meet the three groups, which he did. Like them, I am satisfied that the difficulty we all appreciated in the initial definitions of residency have now been dealt with by the Government. I think that it is unlikely that anyone will be caught who is not to all intents and purposes resident in Scotland simply by staying overnight in Scotland for 183 days when a day is defined as just the end of the day. I hope that if that happens the Inland Revenue will be able to use its discretion.
I do not wish to go into the "if's and "but"s. However, I can foresee that an individual might be caught. I refer to people such as the stewardesses on the

2059
first flight down from Scotland in the morning who stay overnight in Scotland in order to be on that plane. It is not a plane I take often. They might run up 183 days. No one has come forward with an example of someone who might be in that category and whom we would not want to be caught as a Scottish taxpayer. I am fairly content that 183 days more than meets the objections we put forward at Committee stage.
Again, I am grateful to the Government for listening to the arguments put forward and for responding. I welcome Amendment No. 153A.
Lord Sewel: My Lords, with the leave of the House, perhaps I may respond to the points raised by the noble Lord, Lord Selkirk of Douglas, about the 183 nights. Travellers would have to clock up 183 nights in Scotland. I believe that spending so many nights in Scotland is a clear demonstration of strong affection towards Scotland. I should have thought that such people would be more than happy to be classified to be Scottish taxpayers.
Secondly, I confirm that the Bill has no effect on the tax liabilities of charities. I also confirm that any orders provided for in the Bill will first be the subject of consultation. I hope that the noble Lord is satisfied.
On Question, amendment agreed to.
Lord Sewel Lord Sewel moved Amendment No. 153B:
Page 32, line 21, leave out ("elsewhere in the United Kingdom at the beginning or") and insert ("in the United Kingdom at the").
On Question, amendment agreed to.
[Amendments Nos. 154 and 155 not moved.]
Clause 72 [Changes to income tax structure]:
[Amendment No. 156 not moved.]
Clause 73 [Accounting for additional Scottish tax]:
[Amendment No. 157 not moved.]
Clause 74 [Effect of tax reduction for Scottish taxpayers]:
[Amendment No. 158 not moved.]
Clause 75 [Supplemental powers to modify enactments]:
[Amendment No. 159 not moved.]
Lord Mackay of Ardbrecknish Lord Mackay of Ardbrecknish moved Amendment No. 159A:
After Clause 75, insert the following new clause—
INCOME TAX RELIEF
(" .—(1) Income tax relief at the United Kingdom basic rate will continue to be applied to personal pensions and free standing additional voluntary contributions.
(2) Where the Scottish Parliament passes a resolution to vary the basic rate of income tax in Scotland, the different sums in tax relief between the United Kingdom basic rate of tax and the Scottish varied rate of tax will be assessed direct on the individual taxpayer and collected direct from, or paid to, the individual taxpayer by the Board of Inland Revenue.").
The noble Lord said: My Lords, it is late to try to get one's mind around a complicated argument. I do not suppose that the new clause is properly drafted by any manner of means. It is tabled more by way of a probe
2060
to see where the Government's thinking lies with regard to income tax relief as applied to personal pensions and free-standing additional voluntary contributions.
The pensions industry in Scotland and throughout the United Kingdom is concerned about the impact which the Scottish variable rate might have on its ability to deliver personal pensions and free-standing additional voluntary contributions in an economic way. Currently, tax relief is given in such premiums at the UK basic rate. But, of course, if that were to change because the Scottish parliament introduced a Scottish variable rate, the Scottish basic rate would be different from the basic rate applied to people in England, Wales and Northern Ireland.
To date, the addresses and so forth of policyholders are not of huge importance from year to year. Most regular premiums for such accounts are received directly from bank accounts. A variety of figures has been bandied about as to the cost to the pensions industry of setting up systems to deal with this problem and keep it up to date. The Inland Revenue has made certain suggestions and the pensions industry has estimated costs to the industry of anything from £50 million and £125 million to operate the new system. Of course, that cost must be borne by policyholders. Companies would pass it on. That would be difficult, but it would be doubly difficult for the pension companies to pass that cost on to policyholders in England and Wales, because it has nothing to do with them. Therefore, the whole burden might have to be carried by policyholders in Scotland, which would add significantly to the costs of running their personal pensions or their free-standing additional voluntary schemes.
That is the problem, but there are two possible solutions. The first is to allow the basic rate relief on pensions at the UK level and do not involve SVR. The other is to allow the basic rate on the premiums and allow policyholders to obtain relief for the SVR via their self-assessment forms. It is true to say that not everybody fills in self-assessment forms so that is not much of a solution. However, I put that forward because it was one of the initial suggestions.
We know that the Government are aware of this problem and, indeed, in a letter to the CBI in Scotland, the Chancellor of the Exchequer indicated that. The CBI wrote to the Chancellor on 28th July and received a reply on 1st October which, even by Treasury standards, is a fairly slow response time. In view of the length of the letter and the fact that it did not say very much, it could have been written the day after it was received.
However it said:
"My officials are actively looking at keeping any additional compliance burden on pension providers to the minimum necessary and I agree that the forum you suggest for exploring these matters is the appropriate one. You will appreciate that any final decision on the way forward must have due regard to the Government's priorities more generally. I cannot, therefore, give you a commitment that the most favoured option of the insurance industry will be accommodated. However, it is right that every viable option is explored".
That is Treasury-speak for saying, "Yes, we think something should be done but we are not sure what it should be". I wonder whether the Government have

2061
made any further progress. It is on that basis that I put forward this amendment which would opt for one of the solutions in the first part.
I do not believe that the second option is feasible. For those people who do not fill in self-assessment forms, the matter could be dealt with by their income tax returns. However, I believe that my first proposal is better. Income tax relief would be just at the United Kingdom basic rate and the complications of the Scottish variable rate would therefore not come into the matter. It may be rough justice, but it seems to me better than imposing on the pension industry and ultimately on policyholders a considerable additional expense of having to keep a database on where every one of their policyholders is a taxpayer within the United Kingdom. I hope that that explanation is clear and brief, even at this time of night. I beg to move.
12.30 a.m.
Lord Sewel: My Lords, I should say first that the issue which Amendment No. 159A is intended to tackle is one with which I am already fairly familiar. I had a detailed and useful discussion about it when I met representatives of CBI Scotland, the Institute of Chartered Accountants in Scotland and the Law Society of Scotland on 21st October. I can probably do no better, in replying to the noble Lord, than to report to the House the outcome of those discussions.
The representative bodies expressed the concern of pension providers that if they were required to claim different levels of basic rate tax relief in respect of personal pensions and FSAVCs and, for this purpose, had to identify which of their customers were Scottish taxpayers, they would face compliance costs of upwards of £50 million. They argued that those costs would have to be passed on to their customers and that that might lead to some products being removed from the market.
I made it clear in response to those concerns that the Government recognise the potential problem; that we had not reached any final conclusion about the best way of dealing with it; and that we were still very much in the process of consulting the industry about possible ways forward. I made it clear that the Government's aim was to minimise compliance costs wherever possible and that the objective of the current consultation with the industry was to identify a range of possible options and the totality of the cost of each and then to consider further which represented the best way of proceeding.
This is a matter for secondary legislation rather than the Bill, and that is accepted by the professional bodies. It is one among a range of issues on which the Inland Revenue is currently consulting before making appropriate regulations. That seems to be an entirely sensible way to proceed, given the complexity of the issue.
I recognise the various options raised by the noble Lord, Lord Mackay of Ardbrecknish. They are among the range of options being considered. It would seem to me that it is not beyond the wit of man to find a system where the two data sets of Scottish taxpayers and pension holders could start talking together, and then
2062
something akin to an automatic or passive claim could be made. However, I am not in possession of sufficient detailed knowledge to come to a conclusion on that, but would hope that it would be one of the options that will at least be explored.
As I indicated, we are taking this seriously. We are consulting the practitioners most directly concerned with the issue and are committed to working with them to identify an appropriate solution to the problem. On that basis, I hope the noble Lord has heard enough to enable him to withdraw his amendment.
Lord Mackay of Ardbrecknish: My Lords, I had hoped to have rounded up a fairly successful day in hearing news that the Government had managed to come to a solution to this problem, as they have to a few others we discussed. However, this is a difficult issue and I do not pretend for a moment that it will be easy for the Government to resolve it.
I perhaps missed out one other point that concerns the industry; that is, that whatever the solution is it will incur some costs. Will the industry need to put into place that system immediately the Scottish parliament is up and running, or could it wait until the parliament decided whether or not to use the variable rate? It may be that the parliament may decide never to use the variable rate and it would be daft if the industry had to go to a great deal of trouble and expense, even if it were minimised, if it were never needed. Perhaps that is something the Minister can also reflect on in his deliberations.
As I understand it, the Labour Party is committed now to saying that it will not increase the tax, because other parties certainly are. The only party that wants to increase the tax is the Liberal Democrat Party, in order to do good works as it sees it. But if I were advising the pensions industry I would tell it not to worry too much about that. It is an important issue for the pensions industry, and that aspect ought to be borne in mind by the Minister. It is not just a question of finding a solution; it is also a question of asking whether the industry needs to do something about this immediately the parliament starts, or whether it can wait until parliament decides it wants to use the SVR.
I am grateful to the Minister for his thoughts on the matter. I hope, though not with much faith, that we will have a solution by the time we reach Third Reading so that this matter may be put to bed. The Minister indicates that that is doubtful and I appreciate that. However, I have assurances that efforts have been made to find a solution which will be to the satisfaction both of the Treasury and of the pensions industry. Mindful of the fact that the Government keep telling us of the importance of pensions, despite the £5 billion hike they have put on pensions under ACT—I could not resist that—they will attempt to find ways to help the industry if they have to change their systems in order to accommodate different types of taxpayers within the United Kingdom. On that basis, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 78 [Limits on salaries of members of the Parliament]:
Lord Mackay of Ardbrecknish Lord Mackay of Ardbrecknish moved Amendment No. 160:
Page 36, line 39, leave out ("ensure that") and insert ("make provision for").
The noble Lord said: My Lords, this amendment relates to Clause 78, which deals with a situation in which an individual is a Member of the Scottish parliament, the House of Commons and of the European Parliament. It lays down, in the usual prescriptive manner, what should be done; namely, that the salary ought to be reduced.
At Committee stage I had a rather unsatisfactory exchange with the Government Front Bench. The clause says that the salary should be reduced by a particular proportion. I could not get any kind of ball park figure as to what proportion the Government might have in mind. It could be 1 per cent., and in my view that would obey entirely this clause in the Bill. It could also be 99 per cent., and that would also entirely obey Clause 78. The Government must have some idea about what they mean in this context.
However, having had lectures about not being prescriptive, I decided simply to redraft the clause by removing the prescriptions and saying that Parliament shall make provision,
"that the amount of salary payable to a member of the Parliament is in accordance with section 77",
if any salary is payable to him because he is a Member of the other place or the European Parliament and leave it like that. It should be left to the good sense of the parliament. Even at this time of night it is an amendment that should appeal to the Government. I say to them that they ought not to be prescriptive. They should trust the parliament's good sense to treat this matter properly, seriously and sensibly. I look forward to the acceptance of this amendment by the noble Baroness, Lady Ramsay of Cartvale, who, to date, has not accepted any of my bright ideas. I beg to move.
Baroness Ramsay of Cartvale: My Lords, I think that we are all in agreement that there should be something on the face of this Bill which deals with the prospect of a member of the Scottish parliament being in receipt of an additional salary as a Member of either the other place or the European Parliament. But the difference we have is how this is achieved. The obvious way to deal with it is to reduce or abate the salary received as a member of the Scottish parliament. Clause 78 ensures that this will happen.
I appreciate the concerns raised by the noble Lord, Lord Mackay of Ardbrecknish, and other noble Lords at Committee stage who consider that this issue should be left entirely to the parliament. However, in this instance we disagree. We believe that the public will expect us to ensure that some action is taken to reduce salaries when a member is claiming a salary from another parliament. The level of any reduction, however, should be for the parliament to determine and this is precisely what this clause provides. In response to Amendment No. 162 proposed by the noble Lord we consider that
2064
Clause 78, as it is drafted, goes a long way to allowing the parliament freedom to decide what reductions there should be in the salary of those members who have a dual role.
The level of reductions to salaries is not fixed. We believe that the parliament will be responsible enough to the electorate to set appropriate levels and what we have provided in Clause 78(2) gives considerable discretion to the parliament to decide what reduction there should be.
Under this clause there is nothing preventing the parliament, as the noble Lord, Lord Mackay of Ardbrecknish, pointed out, from deciding that an MSP's salary could be reduced by as much as 99 per cent. or as little as 1 per cent. This will entirely be a matter for the parliament to determine, but we consider it is helpful to provide it with a framework.
Dual membership is more likely to be an issue during the early days of the parliament. Therefore, in order to have some provision in place from day one, the Secretary of State has commissioned the Senior Salaries Review Body to consider what an appropriate level of abatement should be until such time as the parliament can consider this issue. It is hoped that thereafter the parliament will continue to take independent advice on salary abatements.
In view of this explanation I hope that the noble Lord will withdraw his amendment.
Lord Mackay of Ardbrecknish: My Lords, it seems to me that as the Senior Salaries Review Body is to report to the Government about the initial decisions, which can only be taken by the Government because the Scottish parliament is not up and running, then surely the latter can take advice from that body when the parliament is in existence. The noble Baroness has not in the least convinced me that the Government need to have a prescription in the clause, which is drawn as vaguely as she has admitted. In truth, it does not specify anything. I think that I could make out an argument that 99.999 per cent. was "a proportion". That does not stand up.
It would be much simpler to do what I have suggested. Clause 78 would then signal clearly to the parliament that it had to deal with this matter. It could ask the Senior Salaries Review Body what to do and that would be it. We would not have this vague provision about "a particular proportion" in subsection (2). That is what annoys me above all. If there were a third subsection stating that the particular proportion should be not more than such-and-such and not less than such-and-such—in other words, outlining the parameters—I would have some sympathy with it, but when the provisions are this vague, I believe that my suggestion is far better. It leaves the matter entirely at the discretion of the parliament. In the interests of not being prescriptive, I wish to seek the opinion of the House.
12.45 a.m.
On Question, Whether the said amendment (No. 160) shall be agreed to?
Their Lordships divided: Contents, 15; Not-Contents, 53.

Division No. 5

CONTENTS

Attlee, E.

Mackay of Drumadoon, L.

Byford, B.

Mackie of Benshie, L.

Carlisle, E.

Mar and Kellie, E.

Chesham, L.

Montrose, D.

Dixon-Smith, L.

Rowallan, L.

Ellenborough, L.

Selkirk of Douglas, L.

Mackay of Ardbrecknish, L. [Teller.]

Steel of Aikwood, L.

Strathclyde, L. [Teller.]

NOT-CONTENTS

Acton, L.

Hoyle, L.

Ahmed, L.

Hughes of Woodside, L.

Alli, L.

Hunt of Kings Heath, L.

Amos, B.

Jay of Paddington, B. [Lord Privy Seal.]

Bach, L.

Berkeley, L.

Judd, L.

Carmichael of Kelvingrove, L.

Macdonald of Tradeston, L.

Carter, L. [Teller.]

McIntosh of Haringey, L.

Chandos, V.

[Teller.]

Clarke of Hampstead, L.

Mackenzie of Framwellgate, L.

Cocks of Hartcliffe, L.

Monkswell, L.

Crawley, B.

Nicol, B.

Davies of Coity, L.

Pitkeathley, B.

Davies of Oldham, L.

Plant of Highfield, L.

Dean of Thornton-le-Fylde, B.

Ponsonby of Shulbrede, L.

Desai, L.

Puttnam, L.

Donoughue, L.

Ramsay of Cartvale, B.

Rea, L.

Falconer of Thoroton, L.

Rendell of Babergh, B.

Farrington of Ribbleton, B.

Sawyer, L.

Gordon of Strathblane, L.

Sewel, L.

Goudie, B.

Smith of Gilmorehill, B.

Graham of Edmonton, L.

Symons of Vernham Dean, B.

Grenfell, L.

Tomlinson, L.

Hardie, L.

Uddin, B.

Hardy of Wath, L.

Whitty, L.

Harris of Haringey, L.

Winston, L.

Hogg of Cumbernauld, L.

Young of Old Scone, B.

Resolved in the negative, and amendment disagreed to accordingly.
12.54 a.m.
[Amendments Nos. 161 and 162 not moved.]
Clause 82 [Scottish representation at Westminster]:
Lord Rowallan Lord Rowallan moved Amendment No. 163:
Page 38, line 23, at end insert—
("() In rule 1(1) (Great Britain not to have substantially more or less than 613 constituencies), after "Britain" there is inserted "for the purposes of elections to the House of Commons".").
The noble Lord said: My Lords, I had supposed that this grouping would have been included in the grouping of my earlier amendment. The Scotland Bill omits the Parliamentary Constituencies Act 1986. These amendments ensure that the conditions of that Act still apply in Scotland but not for England for election to Westminster. This is an important clause and I know that my noble friend Lord Mackay of Ardbrecknish will
2066
be speaking to it at length in a moment. The noble Viscount, Lord Thurso, put the Liberal amendment on the issue earlier and it has now been pushed through to the other place. It was won on a Division. I hope that these amendments will add to the strength of that amendment as it is considered in the other place. I beg to move.
The Earl of Mar and Kellie: My Lords, perhaps I may speak to my amendment, Amendment No. 173, which, slightly surprisingly, has been grouped with those of the noble Lord, Lord Rowallan.
I am opposing the inclusion of this clause as a procedural device to allow further discussion of the issue of the Scottish representation in this House after devolution. I was not allowed to table an amendment—that is, a new clause—to this effect. Had I been allowed to do so, I would have tabled it thus: "New clause. After Clause 82: (1) At least 10 per cent. of the Peers shall be domiciled in Scotland (2) These Peers shall have a duty, among others, to scrutinise the Scottish and Scots law elements of UK legislation which are reserved to the UK Parliament". In the margin alongside would have been the words "Working Peers from Scotland".
My purpose in all this is to establish a minimum quota of working Peers who are domiciled in Scotland. I should like to start by offering two definitions. The first is that of "Working Peers". By this I mean active participant Members of the House. I see the future need for effective categorising of Peers either as working Peers or as honorary Peers. The second definition is that of the word "domiciled". This is a Scots law concept relating to a person's primary residence. I see qualification by domicile as being an insurance that the Peer is subject to Scots law on a day-to-day basis.
The historical background to this issue lies in Articles 22 and 23 of the Treaty of Union 1706 and the two Acts which ratify that treaty. In 1706 there were 26 bishops and 180 Peers of England. The Peerage of Scotland then numbered 160. The population of the two countries was then in a ratio of five to one. The Peerage of Scotland was somewhat humiliated by its restriction to 16 representative Peers. They formed a group comprising 7 per cent. of this House. I would add the distinction that the process of election as a representative Peer did create a forerunner of my demand for categorisation as working Peers. Clearly, a representative Peer would only have sought the position to take an active part in the House, and of course failure to perform would have led to rejection at the next election.
Since 1963 the whole Peerage of Scotland has been admitted to this House. Their attendance to Scottish and UK matters has been, and continues to be, substantial. At the Committee stage, while opposing the Motion that Clause 82 stand part of the Bill, I complained that, of 104 Life Peers created since May 1997, only 11 were domiciled in Scotland. While that may appear to conform to my 10 per cent. requirement, I am not satisfied that we have any guarantees that these Peers will attend regularly and scrutinise Scottish legislation. Therefore, we cannot see them as 11 working Peers.

2067
I believe that we need a guarantee to be built into the Bill to ensure that there is an adequate quota of working Peers from Scotland. The need for this will become ever more urgent in view of the imminent departure of the peerage of Scotland, and of other Scots with hereditary peerages of Great Britain and the United Kingdom.
I believe that there are about 40 life Peers who are domiciled in Scotland. That number is inadequate, for two reasons: first, that 40 is less than 10 per cent. of the 600 proposed for the reformed House; and, secondly, that the 40 life Peers who I have just mentioned are by no means all in my "working Peers" category. The success of the devolution project and the future success of the United Kingdom as a multicultural and multinational state both depend, among other things, on the confidence of the people of Scotland in the future composition of both Houses of the UK Parliament.
1 a.m.
Lord Sewel: My Lords, I should like, first, to deal with the amendments tabled by the noble Lord, Lord Rowallan. With these amendments the noble Lord is attempting to ensure that there will be at least 71 seats in the Scottish parliament. I have to say that I do not think it would be appropriate to amend Clause 82 in this way.
Last week, your Lordships amended the Bill to provide that the Boundary Commission should carry out a separate review of the Scottish parliamentary constituencies. We are, of course, considering the implications of those amendments. We do not think that it would be appropriate at this stage to seek to address the issue of the constituencies of the Scottish parliament by the further amendments proposed. I hope, therefore, that the noble Lord will feel able to withdraw his amendment.
I turn now to Amendment No. 173. I listened with very great interest to what the noble Earl said when proposing this amendment. However, the only difficultly was that I could not recognise the connection between what he said and what the amendment would achieve. The amendment seeks to achieve the simple deletion of Clause 82. As presently framed, the clause would, among other things, remove the rule that Scotland should have no fewer than 71 constituencies. Indeed, that instruction to the Boundary Commission would be removed, together with other aspects of the nature of the Scottish representation at Westminster in relation to the House of Commons.
In moving his amendment which would delete all those provisions, the noble Earl talked exclusively about the composition of this House. Basically, I could not follow the line of argument. I give way to the noble Earl.
The Earl of Mar and Kellie: My Lords, I am grateful to the Minister for giving way. I said at the beginning of my remarks that I had felt forced to adopt this as a procedural device in order to encourage the
2068
discussion which we are now having. I did not in fact want to delete Clause 82; but I did want to discuss the representation of Scotland in this House.
Lord Sewel: My Lords, as usual, the noble Earl has made a distinctive contribution to our proceedings. Indeed, he has brought to our attention for the second time the importance that he attaches to the composition of this House. However, I regret to say that there is nothing in the Bill that enables that issue to be addressed. I hope, therefore, that both the noble Earl and the noble Lord will feel able to withdraw their amendments.
Lord Rowallan: My Lords, I thank the Minister very much for that reply. I totally accept that, while such matters are being considered in the other place, it would be inappropriate for us to discuss them. Therefore, I beg leave to withdraw my amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 164 and 165 not moved.]
The Deputy Speaker (Lord Chesham): My Lords, I believe that I should inform the House that if Amendment No. 166 is agreed to I cannot call Amendment No. 167.
Lord Mackay of Ardbrecknish Lord Mackay of Ardbrecknish moved Amendment No. 166:
Page 38, line 25, leave out subsection (3).
The noble Lord said: My Lords, Amendments Nos. 166 and 167 offer the Government two options. We discussed in relation to Schedule 1 the special position the Bill gives to Orkney and Shetland. I proposed that it should also make special provision for the Western Isles. The Minister rejected my argument and, unfortunately, I believe the House rejected it too in a Division.
However, for the sake of consistency, I mention this issue with regard to Scottish representation at Westminster. The Bill as it stands makes special provision for Orkney and Shetland. It states that the constituency of Orkney and Shetland will not include any other part of Scotland. The provision is couched in nice legalistic terms but that in effect is what it states. It defines Orkney and Shetland for all time as one constituency. My Amendment No. 167 states that the Western Isles should be given the same protection.
The Government argued in response to my amendments in Committee and on the first day of Report that I should leave this matter to the good sense of the Boundary Commission which would not include the Western Isles in with anywhere else. I think I retorted, fairly justifiably, that if the Boundary Commission is to show such good sense with regard to the Western Isles, why are the Government not prepared to trust it to show the same good sense with regard to Orkney and Shetland. My Amendment No. 166 is based on the belief that as the Boundary Commission is composed of terribly sensible people who would never consider including the Western Isles with any other part of Scotland, they are sensible enough not to do that with

2069
Orkney and Shetland. Therefore we do not need special provision in that case as we can rely on the good sense of the Boundary Commission not to do that.
However, if we do not believe we can rely on the good sense of the Boundary Commission, my Amendment No. 167 seeks to protect the position of the Western Isles. I have already explained this argument, but I think it has become more important as I understand that if the Government were to accept the proposals of the noble Lord, Lord Jenkins of Hillhead, and if the electorate in this country were to accept the ditching of the traditional method of first-past-the-post—which I do not believe they will—the number of Scottish constituencies would decline even more than by the figure of about 14, which they will decline by under Clause 82(4). My rough calculation is that the average size of constituencies in Scotland under the Jenkins' proposal would be about 86,000. With the best will in the world, the Boundary Commission would find it hard to leave the Western Isles alone, especially if it was told it had to leave Orkney and Shetland alone. As I said before, there is an argument for putting the Western Isles in with Skye. That argument was proposed by some people—although not by me—at the previous boundary revision.
In the light of these new proposals on the horizon, there is an even greater likelihood that the Western Isles may well be included with a chunk of either the Inner Hebrides or the Inner Hebrides and the mainland in order to try to meet the 86,000 quota which would be the result of a combination of the Jenkins' proposal and the proposals in this Bill. Therefore I believe there is a strong case for protecting the position of the Western Isles.
I know the Government have defeated me before on this issue but I think the argument is stronger now because the number of Scottish seats will decrease and the quota will increase. I therefore would like to know the Government's view on this issue. If they tell me I must trust the Boundary Commission, I may be tempted to press Amendment No. 166, which trusts the Boundary Commission as regards Orkney and Shetland. I beg to move.
Lord Sewel: My Lords, as the noble Lord, Lord Mackay of Ardbrecknish, has told us, he sought the views of the House on whether the Bill should make provision guaranteeing a separate constituency for the Western Isles in the Scottish parliament. Your Lordships decided that it should not. Now the noble Lord has returned for our views on whether the Western Isles should form a separate constituency for the United Kingdom Parliament. I am sure it will come as no surprise to him to hear that the Government do not accept this amendment.
The noble Lord explained that he is probing as to why Clause 82(3) needs to make this provision for Orkney and Shetland and why it does not mention the Western Isles. Indeed, his amendment replaces the reference to the Orkney and Shetland constituency with a reference to the Western Isles constituency.
2070
The provisions in Schedule 1 and Clause 82(3) give effect to the agreement reached in the constitutional convention that there should be separate Scottish parliamentary representation for Orkney and Shetland—nothing more and nothing less. That is what the reference in this clause of the Bill is all about. It is to secure the representation in the Scottish parliament of separate constituencies for Orkney and Shetland.
There is no need to make equivalent provision for the Western Isles. We are making no changes to that constituency in the Bill. However, we have decided that it would be right to ensure that Orkney and Shetland have separate representation in the Scottish parliament and so have split the constituency. We are not splitting a Westminster constituency in relation to the Western Isles. That is what Clause 82 is all about. The noble Lord is trying to extend the effect of Clause 82 beyond that for which it was devised.
Lord Mackay of Ardbrecknish: My Lords, I am grateful to the noble Lord for giving way. We had this difficulty in Committee, and I am still in some difficulty. I appreciate that Schedule 1 states that in the Scottish parliament the Isles of Orkney and the Shetland Isles should have an MSP each. I am not arguing about that; it is fine. What I still do not understand is why the provision has to be included in a clause dealing with the arrangements at Westminster.
If there were no reference to Orkney and Shetland in the clause, Orkney and Shetland would still have an MSP each under Schedule 1. I am puzzled by this argument. The Minister used it in Committee, and a number of noble Lords intervened and pointed to the rubric; namely, "Scottish representation at Westminster". We are talking about Scottish representation at Westminster. Even if this clause were not in the Bill, Orkney and Shetland would still have an MSP each. So I am very puzzled. I can see other arguments to the effect that Orkney and Shetland should always be protected in a UK context; however, I find it hard to see how the separate Orkney and Shetland MSPs are dependent on this part of the Bill.
Lord Sewel: My Lords, one thinks of what would happen if Orkney and Shetland, or part of Orkney and Shetland, became part of another constituency which included an area other than Orkney and Shetland. The build-up to the representation within the Scottish parliament would be disturbed, because the building block would not be there. There is the building block of a Westminster parliamentary constituency which consists entirely of Orkney and Shetland, and solely of Orkney and Shetland, and it is then split. Separate representation for Orkney and Shetland cannot be achieved if part of Orkney and Shetland is linked in a Westminster constituency with another area. I believe that explains the point.
Lord Mackay of Ardbrecknish: My Lords, I understand that. If the Government do not amend the Bill which currently provides for 129 MSPs into the future, with no provision for them to decline to match the Westminster seats, the argument the Minister has

2071
made falls. But so long as we are doing a one-to-one and keeping the number of MSPs and MPs coupled, at last I understand his point. However, he would have to reconsider the argument if the Government are able to accept the principles behind the amendment about the 129, carried against the Government.
I think I understand slightly better why the Government have the provision in Clause 82. At this time of night, I shall not have a dispute between Orkney and Shetland and the Western Isles. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 167 to 172 not moved.]
[Amendment No. 173 not moved.]
Clause 85 [Power to adapt etc. cross-border public authorities]:
Lord Sewel Lord Sewel moved Amendment No. 173A:
Page 40, line 1, leave out ("(if any)").
The noble Lord said: My Lords, this is an appropriate amendment on which to finish our deliberations for the evening. It is a drafting amendment which I can safely say is both minor and technical. It simply deletes the redundant words "if any" from Clause 85(2)(c). It is
2072
based on the startling proposition that one clearly cannot amend the constitution of an authority if it does not have one in the first place. I beg to move.
On Question, amendment agreed to.
Lord Sewel Lord Sewel moved Amendment No. 173B:
Page 40, line 2, after ("section") insert (" 52(4) or").
On Question, amendment agreed to.
Lord Carter: My Lords, before I move that further consideration on Report be adjourned, I should like to congratulate the House on the expeditious way in which it has dealt with a long list, including an important Statement. It just goes to show what the threat of an early breakfast will do!
I am extremely grateful and I beg to move that further consideration on Report be now adjourned.
Moved accordingly, and, on Question, Motion agreed to.

European Parliamentary Elections Bill
Returned from the Commons with the amendments disagreed to, with reasons for such disagreement. The Commons reasons were ordered to be printed.
House adjourned at seventeen minutes past one o'clock.