Lords Sitting of 29 February 2000

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

Lord Brittan of Spennithorne
The Right Honourable Sir Leon Brittan, Knight, QC, having been created Baron Brittan of Spennithorne, of Spennithorne in the County of North Yorkshire, for life—Was, in his robes, introduced between the Lord Howe of Aberavon and the Lord Tugendhat.

Sterling/Euro Relationship
2.42 p.m.
Lord Renton of Mount Harry Lord Renton of Mount Harry asked Her Majesty's Government:
What impact the current rate of exchange between sterling and the euro has on exports of British goods.
Lord McIntosh of Haringey: My Lords, UK exporters have been coping well with sterling's appreciation against the euro. In the three months to December 1999 the volume of exports of goods to EU countries was 5 per cent up on a year earlier.
Lord Renton of Mount Harry: My Lords, I thank the noble Lord for that Answer. However, is he not perhaps a little too dismissive of a growing problem? Is he aware that only last week Sir Clive Thompson, president of the CBI, said:
"Exporters in particular are suffering from the strength of sterling. If it stays at this level against the euro, it will only be a matter of time before companies start reviewing their investment decisions, and look at relocating outside the UK"?
Does the noble Lord recall that when the UK left the exchange rate mechanism the rate of exchange was one pound to 2.77 deutschmarks, whereas it is now one pound to 3.21 deutschmarks? Does the Minister see any long-term improvement in the British economy to justify such an increase in our rate of exchange?
Lord McIntosh of Haringey: My Lords, I do not underestimate the difficulties for British industry, and British manufacturing industry in particular, with the high exchange rate against the euro. The noble Lord quotes Sir Clive Thompson of the CBI. However, I am sure he will be aware that the January CBI expectation survey indicated the first positive balance—in other words, more manufacturers expecting to improve their position—since the second
446
quarter of 1997. So Sir Clive's members are more confident than others may be. However, the problems are still there; and they are long term.
Lord Brookman: My Lords, will the Minister—
Noble Lords: The bishop.
The Lord Bishop of Hereford: My Lords, is the Minister able to give us any reassurance that the Government are prepared to draw down the available agrimonetary compensation to help the particularly beleaguered farming industry which is doubly disadvantaged by finding it difficult to export and knowing that CAP help is worth less to the industry because of the exchange rate? Will the noble Lord encourage his right honourable friend the Prime Minister to fulfil the promise he made about a month ago to meet leaders of the pig industry? It is badly affected and faces destitution and extinction.
Lord McIntosh of Haringey: My Lords, I was going to thank the right reverend Prelate for arbitrating between noble Lords who wished to intervene. However, I feel less inclined to thank him after that difficult question which does not arise from the Question on the Order Paper.
Lord Barnett: My Lords, has the Minister seen the recent minutes of the Bank of England Monetary Policy Committee? They refer to a recent IMF study which showed the pound about 15 per cent higher than it should be compared with most of the average industrialised countries. Is there not such a serious problem that the Chancellor should at least consider modifying the inflation target and the way it is used through the Bank of England Act? He still has those powers.
Lord McIntosh of Haringey: My Lords, my noble friend has been urging the Government to modify their inflation target ever since the Chancellor gave his directions to the Bank of England in May 1997. They were confirmed in the Bank of England Act 1998. No, we do not think that it would be right for us to target exchange rates as well as targeting price stability. If one targets factors which are potentially in conflict, the Bank of England does not know what to do if it has a choice.
Lord Newby: My Lords, does the Minister agree that the most helpful contribution to reducing the sterling exchange rate over a period would be for the Government now to announce a clear intention and a broad timetable for joining the euro?
Lord McIntosh of Haringey: My Lords, this is another siren voice which has been heard from the Liberal Democrat Benches for a considerable period of time. I do not know on what basis the Liberal Democrat Party thinks that an announcement of a

447
date for joining the euro would bring down the value of the pound. So far as I know, no evidence has been produced to that effect.
Lord Marsh: My Lords, is the Minister losing sight of the fact that for well over a year now the euro has been behaving totally contrary to the pattern that was forecast? Presumably something must be fundamentally wrong with the system—no one doubts the abilities of the people leading it—or it will right itself. Can the noble Lord tell us whether he still thinks that the euro will challenge the dollar?
Lord McIntosh of Haringey: My Lords, I do not believe that noble Lords can have it both ways. On the one hand, it is claimed that British manufacturing industry is suffering badly as a result of the high pound. The converse must be that European industry is benefiting from the low euro. Is there any indication—I should not be asking the question—that any damage is being done to European industry by the low level of the euro?
Lord Brookman: My Lords, will the Minister—
Baroness Hogg: My Lords—
The Attorney-General (Lord Williams of Mostyn): My Lords, I think that it should be the noble Baroness first followed by my noble and extremely helpful friend behind me.
Baroness Hogg: My Lords, I shall try also to be helpful and ask the Minister a non-siren question. Does the noble Lord agree with the Bank of England that there is no evidence from the trade figures that the long-term sustainable rate of the exchange rate for the UK has risen? Does he also accept the view of a number of members of the Monetary Policy Committee that there have already been bankruptcies in the UK which would not have occurred if the exchange rate were at a more sustainable level?
Lord McIntosh of Haringey: My Lords, we take seriously the views of the members of the Monetary Policy Committee. It is not our job to endorse or reject them. Certainly, we are aware of, and take seriously, the warnings about the long-term effect of exchange rates.
Lord Brookman: My Lords, will my noble friend confirm that the Labour Government put great importance on manufacturing in the United Kingdom? However, does he agree that industries such as British Steel, which has been renamed since its amalgamation with a Dutch firm, is in serious difficulty? As recently as last year, for every one pfennig movement in the deutschmark against sterling it was claiming a loss of £100 million in potential profit. Does he agree with that statement from that major exporter?
Lord McIntosh of Haringey: My Lords, I hope that I have not in any of my answers sought to
448
underestimate the difficulties for British manufacturing industry, in particular for the steel industry. That is why the Government have been taking action to encourage enterprise and investment in this country; for instance, the abolition of advance corporation tax, the cut in the main and small business rates of corporation tax and the extension of first year capital allowances.
Lord Saatchi: My Lords, is not the Minister being a little modest in his approach to my noble friend's Question? Do not the Government have a brilliant solution to the problem of the high pound versus the euro? Is it not that when they came into office the British economy was growing faster than that of France or Germany but that according to this week's Goldman Sachs forecast it is set to grow more slowly than the economies of those two countries? Presumably, when the markets wake up to the Government's achievement the pound will duly fall and the problem will have gone away.
Lord McIntosh of Haringey: My Lords, I hear siren voices from all sides of the House. When complaining about the rise in sterling, I must remind the noble Lord that in the 16 months before the election it was 20 per cent, but the rise in the 22 months since the election has been only 10 per cent. That is not exactly a condemnation of this Government.

Cultural Property: Illicit Dealings
2.52 p.m.
Lord Renfrew of Kaimsthorn Lord Renfrew of Kaimsthorn asked Her Majesty's Government:
Why there has been a delay in their consideration of the 1970 UNESCO Convention on the Means of Prohibiting and Preventing the Illicit Import, Export and Transfer of Ownership of Cultural Property.
Lord McIntosh of Haringey: My Lords, on 9th February, we announced in another place that we will not sign the convention. However, following representations from the noble Lord, Lord Renfrew, we are willing to look again at the difficulties of implementing the convention which had been identified. We shall also be looking at a range of options which might form the basis of an alternative approach.
Lord Renfrew of Kaimsthorn: My Lords, I thank the noble Lord for those well-intentioned words. Will he confirm that, while the world archaeological sites from Italy to Cambodia are being looted, it has taken the Government more than two years to decide to do nothing and to turn their back on the UNESCO Convention? Will he also confirm that the United States Government have found it possible within the framework of the UNESCO Convention to prevent the import of looted antiquities from, for instance,

449
Cambodia? Therefore, is it really so difficult for the United Kingdom Government to take a similar measure?
Lord McIntosh of Haringey: My Lords, I acknowledge and apologise for the time that it is taking to consider these matters, but they are extremely difficult. Perhaps I may give one example of the problems with the 1970 UNESCO Convention. Under British property law, a seller who does not have a title means a sale to which the buyer has no title. However, under the convention, the true owner would have to pay compensation. That would require a shift in primary legislation which would be difficult to achieve and might not be desirable.
As I understand the position, the US Government have not adopted one part of the convention because that would be difficult. Within the context of their own law, they have adopted parallel measures to achieve as much as they can from the convention. That is the alternative approach at which we are now looking.
Lord Strabolgi: My Lords, is my noble friend aware that, as a result of the Government not having ratified the convention, this country is losing to other countries important artefacts from the bronze age and other early periods as a result of illicit exports and smuggling, notably to the United States? What do they propose to do to stop the flow?
Lord McIntosh of Haringey: My Lords, my noble friend is right to complement the wise words of the noble Lord, Lord Renfrew, on the pillaging of sites in countries such as Cambodia and Italy, by drawing attention to the pillaging of sites in this country. We take the view that our export licensing conditions are perhaps not perfect but better than many others and would conform to the convention. However, if we are to achieve what the noble Lord, Lord Renfrew, wants, we would need a new criminal offence on importing stolen goods or goods which had been illegally exported.
Lord Marlesford: My Lords, does the Minister agree that the point raised by my noble friend is important but difficult? Is not the answer to set up a committee to investigate the matter, as did the Waverley Committee on the export of works of art? It is of world importance and Britain might be able to give a lead in getting a sensible solution to a crucial question for the future of world heritage.
Lord McIntosh of Haringey: My Lords, the noble Lord is right to draw attention to the difficulty and goes some way towards excusing the Government from the accusation of delay by the noble Lord, Lord Renfrew, which we acknowledge. Whether it would be right to set up a committee rather than to have the work done by government departments—and more than one department would be concerned—is another matter. The problems raised by the Waverley Committee still exist in the sense that one of the implications of adopting the UNESCO Convention
450
would be that there would have to be an inventory of nationally important cultural objects and that might be difficult to achieve.
Viscount Falkland: My Lords, can the Minister comment on the 1995 Unidroit Convention, which is closely related to this convention and which we also have not signed? It deals specifically with stolen and illegally exported cultural objects—crimes which are growing apace in the world.
Lord McIntosh of Haringey: My Lords, on 7th February, two days before the announcement to which I referred in my Answer, the Government announced that they had decided not to sign the Unidroit Convention. It has fewer difficulties than the 1970 UNESCO Convention, but there are still major problems with reconciling it with British law. That is why we are looking to an alternative approach which might not involve signing either the 1970 convention or the Unidroit Convention, but might still provide the protection that is quite properly demanded by noble Lords.
Baroness Rawlings: My Lords, for as long as I remember, I have fully supported my noble friend Lord Renfrew in pursuing this important question. When many countries have signed and ratified the convention, what does "look again" mean? Is it, as my noble friend Lady Trumpington said years ago when answering the Question as a Minister, that the scope is too wide?
Lord McIntosh of Haringey: My Lords, I hope that I have made it clear that we, too, support the objectives of the noble Lord, Lord Renfrew, and are grateful to him for pursuing the matter. One of the problems is that the definition of "cultural property" which would be involved in the conventions is dangerously wide and might have unintended consequences. However, the difficulties to which the noble Baroness draws attention are very real and I do not believe that there will be an easy or quick solution to them.

Prison Governors
2.59 p.m.
Lord Hurd of Westwell Lord Hurd of Westwell asked Her Majesty's Government:
How many governors of Her Majesty's prisons were, during 1998 and 1999, transferred to other positions after less than two years in post.
The Parliamentary Under-Secretary of State, Home Office (Lord Bassam of Brighton): My Lords, during 1998 and 1999 a total of eight governing governors transferred to other positions after less than two years in post. In seven cases those governors moved to a higher category establishment and in the eighth case

451
the governor moved up to head the Prison Service's training services on a short-term basis until the arrival of a newly recruited head.
Lord Hurd of Westwell: My Lords, I am grateful to the Minister for that reply, which obviously I shall need to study. However, can he confirm, for example, that Her Majesty's Prison at Glen Parva has had five governors in three years and Chelmsford one governor each year for six years? Those are not extraordinary but quite common examples. A great deal of good has been done in the Prison Service in recent years, but will the noble Lord agree that it is difficult to run a prison effectively under those circumstances? What can the Prison Service do to slow down what in many cases is a dizzy and very damaging merry-go-round?
Lord Bassam of Brighton: My Lords, I believe that the noble Lord is probably correct in his statistics, although clearly we need to look at them more closely. I believe that the process is working properly. An accelerated promotion scheme exists within the service and that is very important. In part, that may explain part of the problem with which we are dealing. It is important that we bring forward bright people in the service and, on the other hand, maintain the right balance by ensuring that we retain experienced people in post. However, by and large we believe that we have the balance right. The chief inspector is happy with the way in which appointments operate within the Prison Service. Unfortunately, there will be occasions when difficulties are caused in some prisons by governors taking new jobs and moving on perhaps rather more quickly than we should like.
Lord Avebury: My Lords, presumably the figures given by the noble Lord do not include the temporary secondment of governing governors to posts at area level, such as was the case when the governing governor at Wandsworth was removed recently, as he will recall. Does the Prison Service accept the recommendation by the chief inspector that one should not take governing governors away from a prison without providing a replacement? Can the noble Lord give an assurance on that point?
Lord Bassam of Brighton: My Lords, I am happy to give an assurance because the director-general, Martin Narey, has made it very clear that he intends to take note of and follow as strictly as possible the Chief Inspector of Prisons' comments, observations and criticisms. I am sure that the noble Lord will be aware that during the recent changeover of power at Wandsworth there was no gap between the departure of one governor and the arrival of another. However, I believe it is worth stressing that in most prisons in most circumstances the number two will be fully capable and well able to act in the governing governor position. We have extremely experienced governors who can carry out that important work.
Lord Dholakia: My Lords, I doubt that Her Majesty's Chief Inspector of Prisons will be happy when prisons such as Wayland, Rochester and Wandsworth, as my noble friend pointed out, have been without a prison governor for six months. In the case of Swansea the period has been even longer. Why do we take away some of our best people, leaving prisons without prison governors when problem prisons need good people?
Lord Bassam of Brighton: My Lords, I thought that I had made it clear that we do not, as a matter of practice, leave our prisons without good governors. Because of the governor grades—that is, Governors 1 to 5—within the Prison Service and within each prison, there is always a range of governor experience that can be drawn upon and governors can be moved into the primary position. It is most important that we have a broad base of experience within the Prison Service. Of course, that is not to say that we should not do all that we can to ensure a smooth transfer of office from one governor to the next. For that reason, we now pay much more attention to succession planning.
Lord Elton: My Lords, is it not the case that a prison is a very complex organism which takes a long time for anyone to understand? Therefore, an important qualification of an effective governor is the length of time that he has been in service in post. That being so, would it not be better to increase the number of occasions on which governing governors are promoted from among the governors in a prison which they already know, rather than sending governors to sort out another prison which presents them with a completely strange problem?
Lord Bassam of Brighton: My Lords, I believe that the noble Lord and I are on the same track. I agree with him entirely. It is for that reason that in many instances the second-in-command is promoted into the governing governor role. That provides for the good succession arrangement that we want. However, there will, of course, be occasions when we need to bring in specialist expertise when specialist support is required, and there are many excellent governors who perform that important job.
Lord Cope of Berkeley: My Lords, the Minister said that he believed that my noble friend Lord Hurd was probably right in the disturbing figures that he gave. Will he be kind enough to write to my noble friend, preferably sending a copy to the Library, after he has had the opportunity to become fully briefed on the matter? However, I must admit to having some sympathy for the noble Lord's correspondence secretary.
Lord Bassam of Brighton: My Lords, I suspect that I am a victim of very imaginative questioning in your Lordships' House. I am more than happy to confirm that that is exactly what I shall do. I should apologise to the House as my briefing does not cover the precise point raised earlier by the noble Lord, Lord Hurd.

Coal Generation
3.5 p.m.
Lord Dormand of Easington Lord Dormand of Easington asked Her Majesty's Government:
Whether they are satisfied with the progress of reforms introduced to remove market distortions working against coal generation.
The Minister for Science, Department of Trade and Industry (Lord Sainsbury of Turville): My Lords, the reform programme is well under way but not yet complete. The Director-General of Electricity Supply recently published for consultation a helpful summary of developments in competition in the electricity market. That summary indicates that significant progress has been made on several fronts. The director-general will report to the Department of Trade and Industry in the light of any comments which he receives.
Lord Dormand of Easington: My Lords, the Government said that the Utilities Bill, which is yet to be considered in your Lordships' House, will change the way in which the generation market operates. However, given that the German, French and Spanish coal industries receive an average subsidy of £47 per tonne and that the British production cost is £29 per tonne, will my noble friend, first, clarify in some detail how such a huge difference can be met by the Bill? Secondly, will my noble friend say whether there is any truth in the rumour that the moratorium on gas-fired stations is to be lifted soon?
Lord Sainsbury of Turville: My Lords, with regard to my noble friend's first question, the Utilities Bill will, of course, change the trading arrangements. One hopes that that will provide proper remuneration of flexible plant, which is important to the coal industry. Subsidies are paid to some European coal industries and to the Polish coal industry, and the Government have taken all possible action to encourage the Commission to take action on that. Of course, the situation is made much more difficult by the arrangements introduced in 1993 when the UK Government put forward a position of no subsidy to the UK industry, although proposals were made to subsidise other industries. That makes our position difficult. Of course, the major problem in Europe arises because South Africa, South America and Australia, which have supplies of open-cast coal from very wide and deep reserves, are able quite legitimately to export coal into Europe at approximately less than 30 per cent of our costs of coal production. That sets the tone of the market. At this point there are no proposals to change the position of the stricter consents policy for gas-fired stations.
Lord Elliott of Morpeth: My Lords, is the Minister aware that the last coalmine in the north-east of England is currently, sadly, threatened with closure? Is he further aware that, since privatisation, 400 miners
454
are producing the same tonnage as did 1,000 miners before it? Does he agree that in this case the reform of privatisation is in favour of future coal generation?
Lord Sainsbury of Turville: My Lords, the Government are well aware of the particular situation to which the noble Lord refers. Of course, greater productivity helps in such situations, but that must be set against the overall position of the coal market in Europe.
Lord Mason of Barnsley: My Lords, will my noble friend say what proposals have been received from the European Commission to help the British coal industry, and what has been our response so far?
Lord Sainsbury of Turville: My Lords, no proposals have been received so far from the Commission. The Commission has made it clear that it is for the UK Government, if they so wish, to bring forward any proposals to help the industry which meet the European Coal and Steel Community rules and, of course, plans to meet the costs of any such proposals.
Lord Ezra: My Lords—
Lord Bridges: My Lords—
Lord Williams of Mostyn: My Lords, I think we should hear first from the noble Lord, Lord Ezra, and then from the noble Lord on the Cross Benches.
Lord Ezra: My Lords, does the noble Lord accept that the coal industry has suffered extremely seriously from the high level of sterling which was the subject of the first Question on the Order Paper? As a result of that, British coal has been supplanted in our power stations. Will not the noble Lord give some consideration to the points raised in a recent debate on that subject; namely, giving temporary subvention to the coal industry so that it can maintain its position in the power stations pending the day when sterling is reduced to a more normal level? That subvention would be vastly lower than the amount being paid to other continental coal industries.
Lord Sainsbury of Turville: My Lords, it is an economic fact that the higher level of sterling will affect the cost of coal coming into this country. The Government have been approached by RJB Mining (UK) Limited in relation to aid for the industry. We are currently looking at all the possible options, although at this stage we have not found a way forward.
Lord Bridges: My Lords, have the Government considered the effect of the purchase of London Electricity by Electricité de France, a state-owned entity in that country? Does that introduce a further distortion into the market which needs examination and reference to the competition authorities?
Lord Sainsbury of Turville: My Lords, I do not believe that it does. On the supply side, the market has

455
been vastly increased and, therefore, a simple change of ownership does not affect the situation. But I shall look at the matter and if, on closer examination, an issue arises, I shall come back to the noble Lord.
Lord Jenkin of Roding: My Lords, what weight do the Government attach to the comparative emission costs of competing fuels? Has the Minister seen the recent report produced by the energy experts at Chatham House which has given the figures as regards costs in terms of pollution? For example, if those figures were translated into the costs of energy production, would it not show that the Government's policy of abandoning combined cycle gas-producing plants was extremely short-sighted?
Lord Sainsbury of Turville: My Lords, a basic axiom of any energy policy is that it has more than one objective. It has objectives which involve costs, environmental issues and security of supply. Clearly, we have taken the step of deferring some gas-fired power stations. On the other hand, we have permitted others because they involve extremely good quality combined heat and power. Therefore, the environmental aspect was a factor. One must always balance the two; one simply cannot consider one aspect alone.

European Communities (Amendment) Bill [H.L.]
Lord Pearson of Rannoch: My Lords, I beg leave to introduce a Bill to repeat Sections 2 and 3 of and Schedule 2 to the European Communities Act 1972. I beg to move that the Bill be now read a first time.
Moved, That the Bill be now read a first time.—(Lord Pearson of Rannoch.)
On Question, Bill read a first time, and to be printed.

Sexual Offences (Amendment) Bill
Brought from the Commons; read a first time, and to be printed.

Representation of the People Bill
3.15 p.m.
Report received.
Clause 1 [New system of electoral registration]:
Lord Bassam Lord Bassam of Brighton moved Amendment No. 1:
Page 2, line 23, after first ("a") insert ("qualifying").
The noble Lord said: My Lords, in moving this amendment, I shall speak also to Amendments Nos. 2 and 3. These amendments give effect to a commitment that I gave in Committee to bring forward a government amendment to ensure that those who have not been given leave to enter or remain in this country should not be able to register and vote.
These amendments do precisely that. In fact, in one respect, they go slightly further. The amendments will mean that a person who has entered the country illegally may not register. I imagine that it is unlikely that a person who is here illegally would do anything which may potentially bring them to the notice of the authorities. But I am sure that your Lordships would agree that illegal entrants should not have the right to vote.
The amendment in the name of the noble Lord, Lord Mackay of Ardbrecknish, is similar in intent. However, I want to deal with one aspect of his amendment. The first part of the amendment refers to non-Commonwealth citizens possibly being able to vote. We discussed nationality for the franchise at some length in Committee and I do not wish to go over that ground again. However, I emphasise that it is only Commonwealth and EU citizens who have the right to vote in our elections and EU citizens who are not British or Irish cannot vote in parliamentary elections. We have absolutely no plans to change that arrangement.
The amendments standing in my name close a potential loophole and I hope that all noble Lords will support them. I hope too that the noble Lord, Lord Mackay of Ardbrecknish, will recognise that my amendments achieve the same objective and purpose as his own and when the time comes, I hope that he will not press his amendment. I beg to move.
Lord Mackay of Ardbrecknish: My Lords, I am not sure whether this does not indicate a good start to the day. I am extremely grateful to the noble Lord, Lord Bassam of Brighton, for tabling his amendments and for honouring what he said in Committee when he indicated at col. 958 that he had considerable sympathy with my then amendment which he said was going in the right direction. He too has gone in the right direction here.
I tabled Amendment No. 4 simply to make sure that we do not lose sight of the issue. I obviously do not propose to do anything else with my Amendment No. 4, but I welcome government Amendments Nos. 1, 2 and 3 because they clarify the position with regard to asylum seekers who are also Commonwealth citizens. I hope to be able to continue to welcome the amendments moved by the noble Lord, Lord Bassam of Brighton, for the rest of the afternoon.
On Question, amendment agreed to.
Lord Bassam of Brighton Lord Bassam of Brighton moved Amendments Nos. 2 and 3:
Page 2, line 38, after first ("a") insert ("qualifying").
Page 3, line 20, after ("section") insert—
(""qualifying Commonwealth citizen" means a Commonwealth citizen who either—

(a) is not a person who requires leave under the Immigration Act 1971 to enter or remain in the United Kingdom, or

(b) is such a person but for the time being has (or is, by virtue of any enactment, to be treated as having) any description of such leave;").

On Question, amendments agreed to.
[Amendment No. 4 not moved.]
Clause 6 [Notional residence: declarations of local connect ion]:
Lord Bassam of Brighton Lord Bassam of Brighton moved Amendment No. 5:
Page 9, line 32, at end insert—
("() Where a declaration of local connection made by a homeless person is delivered to the registration officer concerned during the period—

(a) beginning with the date when a vacancy occurs—

(i) in the seat for the parliamentary constituency within which the required address falls, or

(ii) in the seat for any Scottish Parliament constituency or National Assembly for Wales constituency within which it falls, and

(b) ending on the final nomination day (within the meaning of section I 3B below) for the parliamentary by-election, or (as the case may be) the election under section 9 of the Scotland Act 1998 or section 8 of the Government of Wales Act 1998, held in respect of that vacancy,

the declaration must state that, during the period of three months ending on the date of the declaration, the declarant has commonly been spending a substantial part of his time (whether during the day or at night) at, or near, the required address.").
The noble Lord said: My Lords, this amendment responds to other concerns that were raised both in your Lordships' House and in another place. It was suggested that there is potential for the new provisions allowing for registration by means of a declaration of local connection to be abused by people who might travel to an area where a by-election was pending, simply for the purposes of voting in that by-election.
One scenario which has been put forward is that a group of particularly politically active New Age travellers—I must say that in my experience, they are not particularly politically active, or active, for that matter, or travelled—could hear of a by-election in an area where they were not resident and could travel to and become resident in that area. As the Bill stands, it might then be possible for those people to register by means of a declaration of local connection.
As I said in Committee, it is unlikely that that scenario might occur, but the potential for abuse exists. We recognise that. I said at the time that we would look for a way to close off that possibility. The amendment would overcome the potential problem. It would require those who register by means of a declaration of local connection during a period when a by-election is pending to confirm that they have had a connection with the address which they give for registration purposes for the three months prior to the date on which the declaration is signed.
A homeless person who has been living in the area concerned for the requisite time but who has not got round to registering will be able to register, as indeed he should be able to. Carpetbaggers, if I might use that term, will not be able to make the required declaration.
It is normally perfectly obvious to all concerned when a convoy of New Age travellers has moved into an area so it will be apparent if they make a false declaration. Schedule 1(17), on page 27 of the Bill,
458
makes clear that making a false statement in a declaration of local connection is a criminal offence which can be punished with a fine of up to £5,000.
In Committee, the noble Lord, Lord Mackay of Ardbrecknish, moved an amendment for a similar purpose. On hearing of my commitment to table a government amendment, the noble Lord kindly agreed to withdraw his amendment, but chided me, in the nicest possible way, that the government solution would certainly cost more than the one that he proposed. I hope that the noble Lord will find that our attempt to deal with the problem will not place an undue strain on the public purse and that he and the rest of your Lordships will support the amendment. I beg to move.
Lord Mackay of Ardbrecknish: My Lords, once again, I rise to welcome an amendment moved by the Minister, which arose from a debate in Committee. There are usually two or three months between the date from which people know of a by-election and the by-election being held. Because of the new rolling register system, it is perfectly clear that there could be two or, indeed, three, opportunities for people to add their names to the register. It was against that background that we had an interesting debate.
I suppose for most by-elections it does not matter. However, for a by-election such as the one to be held in the Scottish parliamentary seat of Ayr where the Labour majority over Conservatives is a mere 25, I am sure your Lordships would agree that a little judicious moving around could have a significant effect on the result. I do not think that anything would help the Labour Party defending that particular seat, but we shall see what happens in mid-March.
I have two questions for the Minister. First, during the period of the three months ending on the date of the declaration, the declarant has commonly been spending a substantial part of his time at the required address. Can the Minister tell me how the registration officer will satisfy himself as to whether or not the declaration is correct?
Secondly, as your Lordships know, occasionally, for the convenience of the electorate, and the returning officer, by-elections which are due to be held in the spring tend to be held on the same day as local government elections. I wonder which would take precedent in that constituency. Would people be able to register for the local government elections without falling foul of the amendment, whereas registering for the parliamentary by-election would mean that they would have to satisfy the words of the amendment?
I fully concede that it is possible that nobody has given this matter a great deal of thought. I shall not be surprised or in any way take it amiss if the Minister tells me he will have to write to me on that issue. The issue might arise because frequently by-elections in the spring are held on the same day as local government

459
elections. The two registrations might therefore come into conflict. I should be grateful for advice before the amendment is passed.
Lord Bassam of Brighton: My Lords, as ever, the noble Lord is imaginative in his line of questioning, for which I commend him. As regards his first point, it will be down to the electoral registration officer to undertake investigation. He or she will need to use their staff to conduct inquiries. That will, perhaps, be the way forward. We could consider in terms of guidance how the electoral registration officer would satisfy himself on this issue.
As regards the second point, I see the difficulty posed by the noble Lord. I do not have an immediate or easy solution. However, we shall consider the matter. I shall be more than happy for my busy correspondence secretary to become even busier. We shall certainly follow up the matter. Perhaps I can deal with it at Third Reading if no other satisfactory course has been followed before then. I trust that will satisfy the noble Lord.
On Question, amendment agreed to.
The Chairman of Committees (Lord Boston of Faversham): My Lords, before calling Amendment No. 6, I must inform the House that if that amendment is agreed to, I cannot call Amendments Nos. 7 to 9 tabled in the name of the noble Lord, Lord Mackay of Ardbrecknish.
Clause 9 [Restriction on supply of information contained in register]:
Lord Campbell of Alloway Lord Campbell of Alloway moved Amendment No. 6:
Page 11, line 13, leave out from beginning to end of line 45 on page 12 and insert—
(""10. Provisions requiring that the register prepared by virtue of this Act which shall be open to further inspection shall not be used without the consent of the person registered for any commercial purpose.
11. Provisions making it an offence punishable on summary conviction by a line not exceeding level 5 on the standard scale to contravene regulations made in pursuance of paragraph 10 above.").
The noble Lord said: My Lords, Amendment No. 6 provides that the single register shall not be used for any commercial purposes without the consent of the person registered.
In Committee, we had a short but substantial debate on the amendment, which is now shorn of its exclusion for charities. That is because I was able to take on board a most useful contribution from the noble Lord, Lord Bach, with reference to the EU directive on direct marketing. It was accepted that this is a form of direct marketing if the register is used for commercial purposes.
We could not give the use of the full register to charities without, as the noble Lord rightly said, being in breach of that directive. I am grateful to the noble Lord for his help, which was acknowledged in Committee.
However, the principle which I contended, as the noble Lord, Lord Bach, rightly assumed, was that there would only be a single version of the register which would continue to be available for public inspection in public buildings which should not he used for any commercial purposes without the consent of the person registered. That principle was broadly supported by the noble Lord, Lord Goodhart, my noble friend Lord Norton of Louth and the noble Lord, Lord Thomson of Monifieth, who asked how the two-tier system proposed under Clause 9 would work and whether it would be enforceable. He said that we have a long way to go in considering the issues raised by Clause 9. The noble Lord, Lord Bach, in winding-up, did not really give an answer to these questions. I shall listen with great attention to what the Minister says today.
The noble Lord, Lord Bach, said that the Government had clear advice from the Data Protection Registrar that to make the full register available to anyone who wants to buy it would breach the directive and that there would be a risk of being found in breach of Article 8 of the convention. That was the extent of the advice the Government apparently received.
The Minister did not take the point that the use of the register for any purpose other than that for which it was devised, in particular for commercial purposes, without the consent of the person registered would be a breach of Article 8. I referred to a number of authorities—the Swedish case and the Netherlands case. I shall not repeat them; they are indicated in the Official Report. I urged the Minister to seek further advice—if necessary independent advice—from the Lord Chancellor's Department, the Attorney-General's Department or the Bar. I wonder whether he did so. If so, is the advice available? Again, I shall listen with great attention to what the Minister says when he winds up this debate today.
As my noble friend Lord Mackay of Ardbrecknish said, the ticking of the box even by the person registered—this marries to some extent with Amendments Nos. 7 and 8, as was said by the Chair—and each person registered is wholly unsatisfactory. Unless it is a general "yes" box or a general "no" box, the person registered, as my noble friend said also, should be able to tick a "no" box for selected purposes—say for credit companies, charities or any other category of unsolicited correspondence. There is an entitlement to have such selection. It does not appear that the Government have yet given their mind to that question and I shall listen with great attention to what the Minister says in that regard.
As I said in Committee, I read all the briefs which stoutly defend these commercial interests and have no need to repeat what I said then. I am not concerned with commercial interests; I am not concerned with contributions to political funds which may be made available by commercial interests with an annual income of £30 billion a year. I am concerned with what the Lord Chancellor said in relation to Article 8 of the

461
convention. He said it would be the ideal vehicle to develop the right of privacy and remedies for its invasion.
Your Lordships may feel that the use of the electoral register to validate a database and not to create it—I understand that to be the case—is no answer to the objection in principle that the register should not be used for any purpose other than that for which it was devised if an invasion of privacy in breach of Article 8 is involved; in other words, if the person registered has not consented to its use for that purpose. The two registers and the Clause 9 concept are a total misconception; they are unnecessary and unacceptable; they were devised only to serve those commercial interests.
To seek to resolve this question involving database protection, Article 8 and other considerations in a Representation of the People Bill is not well advised. It should be dealt with in a separate Bill. I accept that as a matter of principle the single register could always be used on grounds of national security, the prevention of crime or the investigation of fraud on the authority of the Secretary of State. But I suggest that Clause 9 should not stand part of the Bill unless amended as proposed. I beg to move.
3.30 p.m.
Lord Goodhart: My Lords, I rise because I have a good deal of sympathy for the objective behind the amendment of the noble Lord, Lord Campbell of Alloway, but am unable to support it because I feel it simplifies what is a complex situation. The Government's proposal for having an edited version of the register is the more effective one and the version in the amendment would cause difficulties. It would make it an offence of absolute liability for anyone to make use of the register and put them at risk of finding that somebody whom they thought had consented had not in fact done so.
On this issue I take the view that the Government have got it about right and am happy therefore with Clause 9 as it stands.
Lord Mackay of Ardbrecknish: My Lords, I wish I could agree with the noble Lord, Lord Goodhart, that the Government have got it about right. I am not entirely sure what the Government have got; whether it is right or not.
When I was reflecting on this difficult clause I recalled that at Second Reading I said to the Government that we would expect to see the draft regulations before we discussed this clause in Committee. We did not see them before we discussed it in Committee and have not seen them yet as far as I am aware, unless they are lurking somewhere in the Library and have not been brought to my attention. I suspect that, as we are in the middle of the Bill, they would have been brought to my attention. Those regulations are at the centre of our understanding of whether we should agree with this clause.
It is a pity that my noble friend Lord Norton of Louth is not in his place. He has a clearly formed view that the electoral register should be used for one reason
462
only; that is, for elections and for political parties to use it to fight those elections. The nice thing about that position is that it saves having to have any regulations; it saves going down the difficult road which my noble friend Lord Campbell of Alloway is inviting us to go down today.
The Government probably started with the full register being available only to political parties, to candidates, elected Members of Parliament and Members of the European Parliament, councillors and nobody else. The edited version which would come about when people decided whether they wanted to be in the edited version would be available for commercial purposes and for charities; they would be able to use the names and addresses in that register.
The Government were probably then approached by various companies who told them how difficult it was. In my e-mail today a company was telling me how difficult the situation was becoming. Its view was that, without the full register, it may be in breach of the fourth principle of the Data Protection Act; that is, that personal data shall be accurate and, where necessary, kept up to date. Without access to the full electoral register, the company believes that it will not actually be able to keep its mailing list up to date.
We discussed the question of how people receive mail when they have moved house in relation to the rolling register. I have in mind the problem of new owners or tenants receiving mail for the old owners or tenants for many months. Even worse and upsetting is the mail that is sent to those who are dead. We actually discussed that in terms of political parties sending out their leaflets, but the same must be true of mail order.
There is also the question of credit control and checking for credit and money laundering. The Government started to move back from saying that the register could not be used by anyone else. The net result is that some other people will be able to use the register for purposes other than those intended. We should know who those other people will be. In his reply, I hope that the Minister will be able to give us a very clear idea of what these regulations might contain and tell us where we are as regards the companies or bodies that will receive the full register. That information will have to be passed on to each and every one of us when we come to fill in our annual return specifying that we should be on the electoral register. We will have to know who will continue to receive our full details, even if we have ticked that box—and we shall deal with the box a little later. By ticking the box, many people may think that their details will not be given to anyone. But they will have to be told that that will not be the case.
As my noble friend Lord Campbell of Alloway said, if people are not told clearly about this, the Government may be in breach of the European convention. Once we have decided to go down the road of allowing some people to have access to the full register, it may well be very difficult to get out of being in breach of that convention. We are discussing a very difficult clause. Having started off with the best intentions, I think that the Government are beginning

463
to find themselves in quite a difficult position as regards judging to whom the information should be given.
In Committee I mentioned one company that thought all its rivals were going to receive a full copy of the register, but it would not. I wonder whether any progress has been made in that respect. We are moving in rather difficult territory. It would certainly help me to understand this clause better if I could hear from the Government exactly who was going to get the full register, apart from those whom we know ought to be able to do so; namely, those who will use it for electoral purposes. Moreover, in response to the point made by my noble friend Lord Campbell of Alloway that any commercial use of the register may be in breach of the convention rights of individuals, we need some kind of definitive statement from the Government.
Therefore, I hope that we shall receive some further information on these matters from the Government today so that we are very clear before we leave the Report stage as to exactly what will be the outcome as a result of Clause 9.
3.45 p.m.
Lord Bassam of Brighton: My Lords, I was pleased when I saw this amendment on the Marshalled List. I thought that it might give us the opportunity to discuss again, and clarify, some of the issues that were usefully raised in Committee. On that occasion, the noble Lord, Lord Campbell of Alloway, made a very learned and erudite speech; indeed, we had a most useful debate. If I cannot clarify all the issues that were raised then—and, again, helpfully this afternoon—I apologise. However, I shall try to make some progress.
Perhaps I may begin by dealing with a few points that were made in the contributions today of the noble Lords, Lord Campbell of Alloway and Lord Mackay, in order to try to give some assurance. The noble Lord, Lord Campbell of Alloway, asked whether we had taken any further advice. We have gone back and checked our advice, although perhaps not as widely as the noble Lord would have liked, especially as regards Article 8 of the European Convention on Human Rights. Nevertheless, we have taken advice in that respect. As the noble Lord will know, I have signed the ECHR compatibility certificate. We believe that we are on the right side of the law here. We are happy that we have got it right in regard to Section 19 of the Human Rights Act.
We also received advice from the Data Protection Registrar. That was clear before the Committee stage and remains so now. I should be happy to make available to the noble Lord, Lord Campbell of Alloway, copies of the correspondence that has taken place between my officials and the office of the Data Protection Registrar. I do not know whether that will help the noble Lord entirely with his line of inquiry, but I hope that it helps him in some way.
As regards Second Reading, the noble Lord, Lord Mackay, quite rightly raised the issue as to why there are no published regulations as yet with regard to this
464
clause. The reason is simply this. We are in the process of holding discussions with the industry as to how the new arrangements will operate, especially as regards the credit industry and others. Once those discussions have been completed, we will publish regulations in draft form for comment. Therefore, the noble Lord will have the opportunity to see them and noble Lords generally will have the opportunity to comment on them.
It is also my belief that the regulations relating to access to the electoral register that we propose to make under this Bill will comply fully with the ECHR. That must, of course, be the case. We are mindful of our obligations in terms of complying with the treaties and conventions to which the UK is a signatory. Indeed, the need to ensure that we are not in breach of the EU Data Protection Directive is an important consideration driving part of this policy. The simple fact is that it is a statutory requirement to complete the electoral registration form and to appear on the electoral register. As I am sure noble Lords are aware, a person who does not provide the necessary details may be prosecuted.
We do not consider that a situation in which one is obliged, on pain of prosecution, to submit personal information that can then be used for completely different purposes without one's consent is acceptable. More to the point, we do not believe that this state of affairs complies with the EU Data Protection Directive. We have taken advice from the Data Protection Registrar on this issue. Therefore, the status quo is not an option for us. We must bring forward something that works and put in place effective measures to strike what I believe most noble Lords will agree is a difficult balance; namely, trading off one thing against another. On the one hand there are the data protection and privacy concerns, which the Working Party on Electoral Procedures identified. However, on the other hand, a large number of commercial concerns currently make extensive use of the electoral register. If possible, we should avoid doing undue damage to their interests.
I believe that our debate in Committee reflected those competing concerns. At one end of the argument, the noble Lord, Lord Norton of Louth, suggested that the register should not be available for sale to anyone; but, at the other end of the argument, my noble friend Lord Borrie argued for a far wider availability of the register. Our proposals fall somewhere between the two exactly polar options. The Working Party on Electoral Procedures considered this issue in great detail and received a large amount of evidence. It concluded unanimously that there should continue to be a commercially available register. However, we are mindful that the same working party also recommended that people should have the choice as to whether their details are passed on to a commercial undertaking. That is why we intend that there should be two versions of the register in future: the full one, which will contain the name of all electors; and the edited highlights, so to speak, containing only the names of those who have not exercised their right to opt out of inclusion.

465
It is important for me to repeat an undertaking given by my ministerial colleagues in another place. We want the electorate to have sufficient information to make a fully informed choice as to whether or not to exercise the right to opt out. We have already said that we would be happy to hold discussions with the industries that currently use the register to help to settle the content of the explanatory material that is made available to voters.
The edited version of the register will be freely available for sale and people who buy it may, as now, use it for any purpose. However, access to the full electoral register and the uses to which it may be put will be limited. The full register will be available for electoral purposes to elected representatives, political parties and candidates. This is clearly sensible and, since the register is compiled for electoral purposes, this is entirely consistent with data protection principles.
I should also stress that the full register will continue to be available in town halls and libraries for public inspection, as is currently the case. We regard this as an important safeguard against electoral fraud. I am sure that many in your Lordships' House will agree with that point. We also propose that the full register should be made available to the police for the purposes of law enforcement and crime prevention. I am sure that none of your Lordships would object to that and, again, we believe that this would conform to the requirements of the EU Data Protection Directive.
As I have previously mentioned, we also intend that the full register should be available to credit reference agencies for the purpose of confirming identity in connection with credit applications. This should ensure that people who opt out of inclusion in the edited register do not end up suffering by being refused credit. That would be an unfortunate, unintended consequence. We have established with the Data Protection Registrar that she cannot see an objection to this proposal.
As I said earlier, we are currently in discussion with the credit industry on precisely how this would work in practice and to ensure that there will be proper safeguards in place which will mean that those who have access to the full register can use it only for the limited purpose for which it is supplied to them.
That brings me on to the question of direct mail or junk mail, as it is more commonly known. We do not believe that the full register should be made available to direct marketing companies. Those people who enjoy such mailings and wish to receive them can simply decide not to opt out. But there are other people who object to what they regard as an unwanted intrusion into their privacy and who see no reason why their personal details should be passed to direct mailing companies against their will. I am, of course, conscious that the electoral register is not the only, and perhaps not even the main, source of information for direct mailing companies, but the fact is that they make considerable use of it and we do not believe that they should be able to do this without the consent of the people concerned.
466
Equally importantly, the EU Data Protection Directive refers specifically to direct marketing. The advice we have received suggests that we could not continue to give direct marketers continued access to the full register without putting ourselves potentially in breach of the directive. That is an important consideration.
I apologise for having spoken at considerable length, but it is an important issue and I thought that your Lordships would find it helpful if I made a clear statement of the Government's position.
Lord Mackay of Ardbrecknish: My Lords, before the noble Lord leaves that point, I am sure that many of your Lordships have received correspondence from the charity sector. It is only fair for the Minister to make the position clear as regards charities. I think that I know what it is, but it would help those involved in the charity sector if the noble Lord placed the position on the record.
Lord Bassam of Brighton: My Lords, I am grateful to the noble Lord for that intervention. Our view, quite simply, is that the same argument applies to charities. Like everyone else, I admire the work done by charities but they are, after all, involved in the process of direct marketing to secure their cash position. That is understandable and it is quite right. But, however worthy they may be, they are direct marketers. In Committee, the noble Lord, Lord Goodhart, said,
"If I do not want to be on a charity mailing list, I believe that it is my right not to be on a charity mailing list."—[Official Report, 14/2/2000; col. 1035.]
I believe that many noble Lords subscribe to that view. I am rather indifferent on the matter. I am quite happy to receive that kind of mail, but many people take exception to it.
Politics is all about making difficult choices and weighing up competing and equally legitimate interests and concerns. We believe that the approach we are adopting is the best way of dealing with the difficult questions that this issue raises. I believe that those on all sides of the argument recognise the difficulties that exist. I believe that the legislation gives people choice in this matter and that that is the right way to proceed. We are giving people the clear opportunity to opt out.
The most common complaints that the Home Office and electoral administrators receive are from people, such as victims of domestic violence, who fear being tracked down through the electoral register. They are keen to ensure that the electoral register is not yet another avenue through which to track them down. I believe that I made the point in Committee that that might apply also to those who suspect that they may be victims of racial aggravation, harassment and attack. Those are important considerations.
I believe that we have the balance right. I hope that I have responded to the points that have emerged during our debates on the Bill. I realise that I have strayed somewhat from the narrow terms of the amendment of the noble Lord, Lord Campbell of Alloway, which I understand and for which I have a great deal of

467
sympathy. We are trying to strike a balance here. Time will judge whether it is the right balance. As I say, I believe that we have it about right. I hope that the consultations that we continue to hold with the industry will ensure that we perfect the matter, that we do not make the electoral register available for commercial purposes, as has happened in the past, and that we get it right in terms of the law and the EU Data Protection Directive. On that basis, I invite the noble Lord to withdraw his amendment.
Lord Campbell of Alloway: My Lords, I am grateful for the Minister's speech explaining the Government's position on what, after all, is an important question of principle. The noble Lord said that he believes that the Government are on the right side of the law in this matter. That is rather a dicey position, like sitting rather uncomfortably on a spiky fence. I would like to know why the Minister thinks that he is on the right side and I am wrong. I have not had access to his advice—I do not expect to; it is privileged and is a matter between the Government and their advisers—but I have not heard the substance of the argument. I am still of the opinion—I am entitled to be, on the authorities that I cited in Committee—that the Government are on the wrong side of the fence.
The noble Lord said that the Government have struck the right balance in this matter and that it falls between two polar options. That may be the case, but I still think that it falls into the bear trap of Article 8. I have the impression—it is difficult always to follow in detail until one has read what has been said—that none of the questions that I identified has been answered satisfactorily.
The Minister said, quite fairly, to my noble friend Lord Mackay of Ardbrecknish that he was not able to clarify certain facts. That is well understood; he did not have notice of them. I have to confess that I did not give the noble Lord notice of the questions that I identified. Therefore, there is an area that still warrants clarification. In those circumstances, I ask leave to consider with great care what the noble Lord has said, and any further documents of which he might care to let me have sight, and to come back to this again at Third Reading.
Lord Bassam of Brighton: My Lords, I indicated that I would be more than happy to make available to the noble Lord the background correspondence which may cover some of the issues about which he is rightly concerned. I am quite happy to make available to him the fruits of that correspondence before Third Reading, if that helps him.
Lord Campbell of Alloway: My Lords, I am very grateful to the Minister, but that is not precisely what I want. I take that as read. It makes total sense and I agree with the Minister and the noble Lord, Lord Bach, on that. I am really after the bear trap. What is the argument? Why am I wrong on the three authorities that I cited at Committee stage? Why are the Government advised that they are on the right side
468
of the law? That is what I wish to consider, fairly and objectively, between now and Third Reading. That is one of the reasons why I beg leave of the House to withdraw the amendment.
Amendment, by leave, withdrawn.
4 p.m.
Lord Mackay of Ardbrecknish Lord Mackay of Ardbrecknish moved Amendment No. 7:
Page 11, line 21, leave out (", or persons acting on behalf of such persons,").
The noble Lord said: My Lords, this amendment addresses the question of the ticking of the box that we have discussed. We went very far along the road of agreement in Committee—indeed, the Minister was very helpful in his response to the short debate that we had—but I still have one or two problems with the issue, which have not been helped by the comments I have just heard in the debate on the previous amendment.
In Committee, the Minister stated:
"Next to the name of each elector"—
and this is an important advance—
"will be a box that will need to be ticked if that person wishes to opt out of inclusion in the edited register".—[Official Report,14/2/00; col. 1050.]
That is certainly an advance on the original position, as set out in the other place, that there would be a box for each household.
We then went on to discuss how exactly each member of a household would be asked whether he or she wanted the box ticked. The Minister suggested that the head of a household will need to take reasonable steps to ascertain the preferences of other members of the household. In order to do that, it seems to me that the head of the household will have to be told exactly what he or she must do. He or she must be given clear guidance—I assume on the form—that the preferences of other members of the household have to be ascertained. In other words, it will not be good enough—as it was a few years ago when I had my voting age children at home—for me to decide that I was going to be ticked, my wife was going to be ticked and all my children were going to be ticked. I shall have to say to them, "Do you want this box ticked?".
After the discussions we have had, I think that I can give my youngsters a reasonable explanation of what ticking the box would mean, but I am not sure that most heads of households will be in that position. Will some kind of indication as to exactly what ticking the box means be sent out with the forms? Hopefully, if one ticks the box it will mean less junk mail. But equally if one ticks the box, one's name and address will still be available to credit companies and to banks and so on. As we discussed in Committee, these are issues which can be quite important to one's 18,19 and 20 year-old children when they decide perhaps to go and get their first hire purchase agreement to buy a car or a motor-bike or something like that. Perhaps a compelling argument for ticking the box is to make sure that they do not get such an agreement, but that is another matter.
It is quite important that the head of household knows exactly what is expected of him or her, and that he or she is able to communicate that to other members of the household when it comes to their deciding whether or not to tick the box. It is a pivotal issue. Perhaps the noble Lord, Lord Bach—who I think is to reply—can take us further than the helpful comments of his noble friend in Committee. I beg to move.
Lord Lucas: My Lords, I support my noble friend. It is still a difficult decision whether to agree that one's name should go forward on the register, even if one ticks the box for exclusion. If people are in a situation where those with whom they are working may one day want to find out where they live and do something nasty to them—I am thinking particularly of those working in the Prison Service or other areas where their address ought to be hard to find—they are still faced with the position, as I understand it, that they can conceal their address only by disfranchising themselves. Under the Government's proposals, such people cannot be both enfranchised and not have their name available to any member of the public who chooses to look for it in their local public library.
It is important that the implications of a decision to tick a particular box should be made clear to the person ticking the box and to the person whose box is being ticked. They may be under the illusion that ticking the box which exempts the publication of their name under some circumstances will ensure the level of protection they wish for, when in fact they will not achieve that by doing so.
Lord Bach: My Lords, in replying to the amendments, perhaps I may first of all give the noble Lord, Lord Mackay of Ardbrecknish, some comfort. Yes, we shall be giving guidance to all households on the consequences of opting in or opting out. I can give him some satisfaction so far as that is concerned. I understand that this is a probing amendment and that there will be further discussion. Therefore I do not need to go into what the effect of his amendment would be, and I move on from that.
I think that it is accepted on all sides of the House that, although it may seem slightly old-fashioned these days, it is a good idea to have an electoral registration form completed by the head of a household. There are good practical reasons for that. I put them shortly. It significantly reduces the number of forms that electoral registration officers have to process. That in itself is not a clinching argument, but to it is added the fact that registration officers have no way of knowing when new people move into a household or when people reach voting age. The present arrangements make one person, the head of the household—who, of course, in practice may be any member of the household—responsiblethat is the crucial word—for ensuring that all eligible people are on the electoral register.
470
We are concerned that without this arrangement many fewer young people will appear on the electoral register. That is a real and regrettable risk. We believe that a considerable number of young people may not be bothered to take the initiative to register as electors if it is left to them to do so. We do not say that lightly. It does not apply, of course, to the many young people who are very interested and involved and want their full democratic rights. But there are some young people who may not take advantage of that. We, of course, want the highest level of registration possible. It is not something that we can easily ignore. I hope that I carry the House with the line that we must preserve the present arrangements.
Lord Campbell of Alloway: My Lords, I am obliged to the Minister. I have a very short question. I may have got it wrong, but what happens if the head of a household wants a lot of junk mail and no one else in the household does—and he ticks the box?
Lord Bach: My Lords, if I may, I shall come back to that question when I have worked it out—although I am not sure that the noble Lord really expects me to.
As your Lordships are aware, in future there will be this additional guidance element to the registration form. Next to the name of each elector will be a box that will need to be ticked if that person wishes to opt out of inclusion in the edited register.
The Earl of Onslow: My Lords, I am grateful to the Minister. He referred earlier to "opting in" and "opting out". Does that mean that we will have a system where one actually wants junk mail as opposed to not wanting it? Would it not be much better that we should say "Yes, we accept having junk mail" as opposed to saying "Oh no, we do not want it". I may have got it all wrong.
Lord Bach: My Lords, in this particular case, one opts out.
The Earl of Onslow: Not opt in?
Lord Bach: No, my Lords. One opts out. There is an opt-out box. The head of the household will need to take reasonable steps to ascertain the preferences of the other members of the household. That would involve asking them what they wanted to do. That will not always be possible. We envisage that in a student hall of residence, for example, the warden might put up a notice saying that he intends to send back the electoral registration form in three weeks' time and that any resident who wished to opt out, and therefore not be on the edited register, should contact the warden within that period.
Any head of household—and this is important—who deliberately recorded the preferences of another member of the household falsely would be guilty of an offence of providing false information on the electoral registration form. That is the way we envisage it

471
working. Of course, the noble Lord is quite right to have drawn these amendments to the attention of the House because this is an important matter.
Lord Campbell of Alloway: My Lords, the head of the household ticks a box and opts out. What about the Article 8 rights of the members of the household who want to opt in? This is a total invasion of their rights in that regard.
Lord Bach: My Lords, by each potential voter's name there is a box. The head of the household goes through the form and ticks the boxes of those who have said to him that they want to opt out, or whom he reasonably believes want to opt out, and thus want to go on to the edited register. He ticks his own box and then their box. There is a requirement that what he does is reasonable. If he does something which he knows to be false, then he is liable for having committed an offence.
Lord Campbell of Alloway: My Lords, with respect, it will not work with Article 8. It cannot. Let us suppose he is unreasonable or drunk or something—anything—and he ticks the box. There are people in the house who have rights. Their rights under the European Convention on Human Rights have been disregarded.
Lord Bach: My Lords, we do not think that will happen. Of course, if it does, then no doubt a case will be brought and will be decided. We believe that the arrangements we are proposing, in particular the continuation of electoral registration by household, are the right ones. I should add that this approach has been discussed with and endorsed by the Data Protection Registrar. I hope that that gives the noble Lord, Lord Mackay, who moved the amendment, more idea of our proposals. Of course, we have now had a second discussion on this issue.
The Earl of Onslow: My Lords, I do not understand why we have to have opting out as opposed to opting in. Should it not be a conscious choice that you want junk mail—which most of us I think do not—rather than a conscious choice that you are going to get it unless you say no. What is the reasoning behind that?
Lord Bach: My Lords, the view has been taken that one would normally go on to the register if one were eligible to go on to the register. In order to come off the full register, it is necessary to opt out by the tick. We think that it should be that way around rather than the other.
Lord Mackay of Ardbrecknish: My Lords, I am grateful to the Minister for his answers there. Perhaps I may assure him that it does not worry me that the head of the household is going to continue to be the person responsible. That is perfectly all right. But then I suppose I am quite old-fashioned in many of my views, so it would be all right for me. I do not think it will be a problem.
472
As the debate progressed, it seemed to me to raise an interesting issue. If somebody ticks the box to opt out, thinking he has opted out of junk mail, the truth is that he will not have opted out of junk mail. All he would have done is to have opted out of junk mail originating from the electoral register. He will not have opted out of junk mail from what I understand are very extensive lists which are available and come from all sorts of sources. We went into that at Committee stage. I suspect that many people who tick this box thinking that that is an end to junk mail will be disappointed. The electoral registration officer may well have some irate customers on the telephone to him saying, "I ticked that box and I am still getting junk mail". The explanation which accompanies the electoral registration form will have to be carefully worded so that it does not give people the wrong impression of the consequences of ticking the box.
As we leave this issue, I look forward to seeing how it works in practice. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 8 not moved.]
4.15 p.m.
Lord Mackay of Ardbrecknish Lord Mackay of Ardbrecknish moved Amendment No. 9:
Page 11 leave out lines 32 to 34 and insert—
("(a) to supply free of charge copies of the full register and other documents, or prescribed parts of them, in document, electronic or disk format, to those persons entitled;').
The noble Lord said: My Lords, Amendment No. 9 relates to the provision of the electoral register in electronic form or disk format. Indeed I received an encouraging answer from the Minister at Committee stage. I just want to probe him further. I have little doubt that the officials have put into his folder a photocopy of a letter published in The Times of yesterday in the thought that it might come up. It is about e-commerce costs from a Mr Martin Steibelt. He said:
"Encouraged by the Chancellor's attempts to lure us into the era of electronic commerce … I decided to purchase our local voters' list on disk rather than as paper copy.
"Our electoral registration officer was happy to oblige but explained apologetically that, whilst the paper list would cost me £5, the electronic equivalent was £36. She went on to explain that these rates are set by government order and have nothing to do with the comparative costs of the two".
As the correspondent said, if the Government are serious about e-commerce and moving us into the Internet society, they will have to look at this rather more carefully. I should like to probe the position with regard to supplying the full register to political parties and to candidates or to Members of Parliament and so on in electronic form. Increasingly people want these registers in electronic form. At present, paper copies, as the correspondence column of The Times pointed out, are free to the political parties, MPs, councillors and so on. But if they are supplied on disk they can cost between £120 and £140 per council. I gather that part of the reason is to cover the cost of conversion. I am

473
not sure whether that is converting the paper form into electronic form or converting the electronic form as held by the ERO to the electronic form as held by the party or the MP.
I carried out some research on this issue and discovered that of the 19 London boroughs there are many different systems in which the electronic register is held. Therefore, there is a problem about conversion to the outside. I imagine that the same is true throughout the country. That raises the question of how EROs will exchange electronic information between themselves if in fact their systems are not compatible. It leads one to think that all EROs ought to ensure that the system on which they store the information is compatible with other systems and can talk to other systems without a great deal of trouble. In next to no time most political parties and most members of the other place will want the electoral register delivered to them in disk form. I have little doubt about that. It is important that we establish that the charges to political parties will not become oppressive and therefore discourage them from getting the information in disk form and not in paper form.
Paper form is expensive as well. It will cost the EROs a good deal of money to reproduce lots of paper registers, especially the one-sided versions which have to be made available at election time. Considerable costs are involved in the paper element. If we want to move people to an electronic system, we should not charge them any more than we charge currently for the paper method. I should be grateful to hear the Minister's view on the electronic form as opposed to the paper form. I beg to move.
Lord Peyton of Yeovil: My Lords, I shall speak only briefly. My respect for my noble friend is almost unlimited but I cannot understand the amendment and the reason for it. As I understand it, my noble friend is suggesting that political parties would find it inconvenient to have this information merely in printed form and that they ought therefore, on demand, to have it free. But someone has to pay. If my understanding of my noble friend's purpose is correct, I would with great reluctance beg to differ.
Before I sit down, I should just like to say that over the past hour or so we have had some particularly thrilling debates. The obvious destination for them is to be well and attractively bound and presented to suitable people as bedside reading. Some of what we have been listening to would be, as a cure for insomnia, almost without rival. I hate to irritate—I am sure that I have not seriously irritated—my noble friend, whose patience is legendary, but I should like to ask him whether my understanding of what he has proposed is seriously adrift. I hope that it is. If my understanding is correct, I hope that he will withdraw the amendment.
Lord Forsyth of Drumlean: My Lords, I did not intend to intervene on this amendment but my noble friend, whose amendment I support, has aroused my curiosity. All the time that I was in the other place my cupboards seemed to be filled with copies of registers, which were sent at great expense and no doubt
474
involved the destruction of large numbers of trees. Those who have visited the offices of political parties will have seen piles of registers. I should like to ask the Minister whether the department has considered making these electoral registers available on the Internet whether or not they are those which have been doctored to take account of people who do not want their names to be generally available. That would surely save a vast amount of paper. It would enable the political parties to download the information in whichever ways they chose and it would also reduce the cost, which we certainly experienced in the Conservative Party, when some poor soul at Conservative Central Office had to convert all the registers into a form which could be used for political campaigning purposes.
If the Government really are committed to e-commerce, why does not the Internet feature in their proposals in this respect? It would certainly save a great deal of printing and it would mean that the register could be maintained more effectively.
The Earl of Onslow: My Lords, the amendment seems to have produced an interesting debate. I am sorry that we will cause my noble friend Lord Peyton to go to sleep even quicker if we continue with the subject. What my noble friend Lord Forsyth has just said is completely right. Equally, if electoral rolls are on the Internet and are available to everyone, civil liberties considerations may be involved. This issue should be talked about. But it must be better to have the information on the Internet rather than on sheaves of paper, which are out of date every February when the roll is produced. The amendment has produced an interesting debate and it is worth pursuing.
Lord Lucas: My Lords, producing an electronic copy of the register is a great deal cheaper than producing a printed copy. It is immensely simple to do on whatever computer system one has. One can produce it in a standard comma separated variable form so that people know what they have and can pick it up. There is no justification in terms of cost for charging more for the electronic register than for the printed register. Indeed, the electronic register should be cheaper. But what one gets with an electronic version is an ability to use it much more conveniently. It is of much more value.
Do I understand that it is proposed that if I buy a copy of the register it is mine free to use? In other words, could I put the information on the Internet? The noble Lord may know that a company has bought up every hamlet's name as a domain name in this country. Presumably, if it were to add the electoral register information to that, it might make itself even more interesting as a place to visit. There is a good deal of local information around which would be very nice for those who wanted to look for people over the United Kingdom. It would be an easily searchable resource. There are all kinds of reasons why people might want to do that. Is the proposal that this will be there for us all to use freely and publish ourselves in any form that we choose? If that is the case, I should be

475
able to transcribe a copy through a voice recognition system on a computer to produce an audio tape for the amusement of my noble friend Lord Peyton at bedtime.
Lord Bassam of Brighton: My Lords, I am glad that we have helped a few insomniacs in our debates today. I am sure that, as the debate wears on, we will help a few more. I have been grateful in this debate for the number of interventions. That has certainly sparked up the issue. The debate started with the noble Lord, Lord Mackay, wanting some assurances. Perhaps that is as it will finish. Along the way I shall try to answer some of the points that have been raised.
I shall try to explain the amendment. It would serve two purposes. The first is that anyone entitled to a copy of the register would be able to have it in whatever format was most convenient to him. We discussed this issue in Committee. I said then that the Government did not believe that there was any longer a justification for the situation in which political parties and elected representatives could receive paper copies of the electoral register free of charge but were required to pay if they wanted to have it in electronic format. I said that we considered that those entitled to a free copy of the register should be able to receive it in whichever format was most suitable to them and that we wanted to initiate discussions with political parties and the electoral administrators, who after all have to try to deal with the problems associated with the register, so that we could take the matter forward. I am happy to repeat that undertaking. The noble Lord, Lord Mackay of Ardbrecknish, was kind enough to say at that stage that he considered my reply to be entirely satisfactory and that these matters could be dealt with in regulations, which is why we have not brought forward a government amendment for this purpose. That is the right way to proceed.
Perhaps I may deal with the second effect of the amendment. It would mean that every person who received a copy of the full register would get it free of charge. I hope that I can set the noble Lord's mind at rest. We have no plans to levy a charge on those electoral users who are currently entitled to a free copy of the electoral register. However, as I have explained, credit reference agencies will be given access to the full register for the purposes of checking identity in connection with credit applications. As they are commercial organisations, that seems to be right. It should be the case that they pay for their copies of the register. The fees for the register date from 1990. As a result of the restructuring of our electoral arrangements, we will have to update those fees to take account of the new arrangements.
We cannot dictate to local authorities the systems that they use. That point was raised by the noble Lord, Lord Mackay. That is part of the problem. Authorities have to go out into the market-place and secure best value in the tendering process for the system that they use to collate data and put it into electronic format. That creates other problems for us, but that is how it is, and it is understandable.
476
I could well understand the point made by the noble Lord, Lord Forsyth, about publishing the information on the Internet, but the legislation will make provision for opting out. To make the electoral register available on the Internet would simply defeat the object of that part of our legislative proposal. For that reason, it would not be appropriate.
4.30 p.m.
Lord Forsyth of Drumlean: My Lords, I am grateful to the Minister, but I do not follow his point. If people are able to opt out, presumably those names will not appear on the register. It seems extraordinary that credit rating agencies will be able to obtain a copy of the full register but ordinary electors will not have access. I thought that the Government were committed to the idea of freedom of information. Why, therefore, should people not readily be able to see who is entitled to vote in a constituency, and at low cost—indeed, judging by recent announcements by British Telecom, at no cost in the evening? Why should people be precluded from access to that information when they can obtain it by obtaining a copy of the register? Are the Government slightly confused between the commitment to e-commerce on behalf of the department and local authorities and a commitment to freedom of information? I should have thought that the new technology provided an opportunity to widen access for all.
Lord Bassam of Brighton: My Lords, we are not confused. This a complex area. Copies of the register will be publicly available—certainly in printed form and no doubt in public places in electronic form. Access is available, and will continue to be available.
Lord Forsyth of Drumlean: My Lords, I am grateful to the Minister—
Lord Bach: My Lords, I must make it clear that this is Report stage. Only the mover of an amendment speaks after the Minister on Report, save for short questions for elucidation. So the noble Lord is absolutely entitled to ask a short question for elucidation; otherwise, we really must move on.
Lord Forsyth of Drumlean: My Lords, perhaps I may ask the Minister a short question. Given that it is technically possible to put the electoral register on the Internet and, as he has indicated, prevent people downloading parts of it that are restricted, will the Minister look at this as a possible measure which might be brought in by his department in the interests of access and freedom of information?
Lord Bassam of Brighton: My Lords, I am happy to take that point away. It is a perfectly sensible way of looking at things. I shall reflect further and write to the noble Lord if that will satisfy the point.
I hope that, given what I have said, the noble Lord, Lord Mackay, will feel able to withdraw his amendment. This has been a useful debate. We shall no

477
doubt return in more detail to questions of e-commerce and ways in which we can use new technology to make our electoral system work more efficiently and effectively.
Lord Lucas: My Lords, before the noble Lord sits down, will he answer the question that I put to him? If I buy a copy of the register, am I free to publish that on the Internet myself or am I restricted some way in its use?
Lord Bassam of Brighton: My Lords, looking over my shoulder, as it were, I gather that the noble Lord can do so. I can give him that assurance.
The Earl of Onslow: My Lords, if that can be done, does it not blow the whole thing right open? If you can simply buy a record of everything and if my noble friend—who obviously knows how to work the Internet and I do not—can bung the information on the Internet, that blows the whole system open, does it not?
Lord Bassam of Brighton: My Lords, unless I am completely wrong, I believe that we are talking about the edited version.
Lord Mackay of Ardbrecknish: My Lords, that was very interesting indeed. Perhaps I should first apologise to my noble friend Lord Peyton of Yeovil that I am being particularly agreeable this afternoon to the Government. I hope that it will continue, but it is entirely dependent on them whether it continues for the rest of the afternoon. My noble friend will recall that the position was not quite so agreeable at Committee stage. If the Government are prepared to be reasonable, I have to be reasonable—difficult as it may sometimes be, at least to take my noble friend with me on these matters.
In this debate we have explored the whole question of the move from the paper form of the electoral register to electronic forms. As the debate continued, more and more doors appeared in the wall that the Government have attempted to build around the electoral register.
I fully understood the point made by the Minister to my noble friend Lord Lucas that it would he only the edited version that my noble friend would be able to put on the Internet. The full version cannot be made publicly available—except, of course, it can be placed in libraries. There will come a stage when libraries will say that they are geared up to the electronic world and that they would like the registers in electronic form in the same way as the political parties receive them. I think that we are about to see fairly dramatic changes in the way in which the electoral register is presented and stored. I am sure that libraries would far rather have the register in electronic form than in paper form.
Lord Bassam of Brighton: My Lords, I am grateful to the noble Lord for giving way. I take his point. I rise to correct something that I said a few moments ago. I misread the indications from the Box. Apparently it
478
would not be possible to put the register on the Internet, for the simple reason that that would represent a breach of copyright. I apologise to the House for a misleading statement. It is sometimes a case of misreading the signals.
Lord Mackay of Ardbrecknish: My Lords, I am grateful to the noble Lord. It now appears that the edited version cannot be put on the Internet but it can be put on disk to be sold on to other people, as at least one company in the credit control world already does, especially in regard to small firms. I believe the company's name is i-cd. It sent most of us letters.
I am grateful for the assurances that political parties will be able to move away from receiving a great pile of paper registers to electronic forms, and that they will not be charged for the electronic form as they are not currently charged for the paper form.
What the debate has opened up is that perhaps some of the hoped-for walls that the Government have built round the registration system will not in fact survive the electronic age. The Home Office may well need to return to these issues sooner than it ever planned to do. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Mackay of Ardbrecknish Lord Mackay of Ardbrecknish moved Amendment No. 10:
Before Clause 10, insert the following new clause—
FREE POST FOR GREATER LONDON AUTHORITY ELECTIONS
(" .—(1) The 1983 Act shall be amended as follows.
(2) After section 36(2B) there shall be inserted—
"(2C) Section 91 shall apply to elections under the Greater London Authority Act 1999 with such modifications as may be prescribed by regulations made by the Secretary of State."").
The noble Lord said: My Lords, in moving this amendment, I shall speak also to the other amendments standing in my name. They all return to the issue of the London elections and the position regarding mailshots.
Noble Lords will remember that we had debates on this subject last week. I do not intend to go over them in any great detail. However, perhaps I may recap briefly. The issue before the House last week was whether any free mailshot would be available to anyone on the London election scene in the same way as it was made available to candidates for the Scottish Parliament, the Welsh Assembly and the Northern Ireland Assembly and as it has always been made available to candidates for the other place and the European Parliament.
We reached the stage last week of defeating the Government on two orders. The result has been that we have held some discussions which have not yet concluded. The amendments that I have tabled, to which the noble Lord, Lord Goodhart, has also attached his name, seek to provide an interim debate as to where we are with regard to this question.
I hope that my amendment goes some way to show the Government how, with agreement, we can move forward. It is a rather complex and lengthy

479
amendment because it deals with many issues. The first important matter is that, rather than all the candidates for the mayoral and assembly posts each receiving a free delivery, which would be on a par with what happens in other parliaments and assemblies, the parties would get one free mailshot, as would independent candidates. That issue was raised at Committee stage. If it were only for the parties, then independent candidates for the assembly would find themselves locked out of the free mailshot.
That is what we decided to bring forward in this amendment. All the independents who stand, at whatever level, will have to face the cost of printing the leaflets for any mailshot. That will not be cheap. That was the first matter on which we were trying to go some way to meet the Government's objections. Principally, that would be for the mayoral candidate although he or she could, in the course of his leaflet, make mention of his or her friends standing for the assembly. To be honest, I do not believe that we need go further than that because in my experience the list top-up system is pretty much party-based. That is the beginning and the end of it unless there are very unusual factors like Mr Dennis Canavan, if I may mention his name without upsetting the digestive system of the governing party.
We have accepted that there would be one delivery. The question of how the delivery would be organised is also addressed in the amendment. It would be done in bundle form so that the leaflets can be delivered as one, although they would be produced separately by the parties. They would definitely be made to an agreed size and shape. They would be bundled together, not, I hope, as a booklet, which was one of the suggestions that I read about in yesterday's newspapers. It would be a package, if I may call it that, of, say, A4 sheets where each mayoral candidate has the chance to put his or her wares in front of the public.
I want to draw your Lordships' attention to certain important features of my amendment. If we are to have only one mailshot, it should certainly go to each elector. There are serious problems about households. Some may contain one person; many contain two or three people, but others, as they are defined, contain many. If it is a student hall of residence there will be many students. If it is an old folks home there will be many elderly people who would receive only one delivery for everyone. We believe that the mailshot should go to every elector.
As I said a few moments ago, a mayoral candidate should be allowed to include material on his assembly constituency colleagues. The bundling should allow for a leaflet printed by each party to an agreed size and weight so that they can all be put together.
The Conservative Party and the Liberal Democrats have gone some way to try to accommodate some of the Government's worries. We believe that they are excessively worried about the large number of bogus candidates who are in the election to advertise their wares. One of my colleagues in the other place called it, "The Curry House Candidate". We had elections over a very wide area for the European Parliament.
480
There is no great evidence that that happens. I believe that there would be ways to prevent it. For example, the Post Office has strict regulations which it could enforce more rigorously than it has occasionally in the past what can be allowed in a freepost. If the Government felt it necessary, we could perhaps increase the deposit to make it more expensive for a frivolous candidate to stand. The Government still have time to do that. There are various ways in which we could help to allay the Government's fears about frivolous candidates.
The really important matter as regards this amendment is that we want to flag up once again at this Report stage the importance that we attach to some form of free mail for these important elections. If the Government believe that this will be a significant and new form of government, somewhere between local government and the kind of devolved legislature that we have in Scotland, then they have to accept that there will have to be some new rules. In our various negotiations I hope that we can find a way towards those new rules so that the people of London, with an electorate of over 5 million, will all be able to receive through the post a piece of paper from the mayoral candidates explaining where they stand and the advantages—no candidate ever explains the disadvantages—that they would bring to London and the disadvantages that their opponents would bring. That is a right and proper way to proceed in this important election, I hope that my noble friend Lord Peyton of Yeovil has noted that, in order to keep this agreeable tone in our dealings with the Government, I have not mentioned Mr Ken Livingstone. I beg to move.
4.45 p.m.
Lord Bassam of Brighton: My Lords, it states in my speaking notes that I ought to make some introductory niceties. I am grateful for the prompt: briefings are always thorough.
Lord Peyton of Yeovil: My Lords, is the Minister replying now to the debate?
Lord Bassam of Brighton: My Lords, I was about to say that, perhaps for the benefit of the debate, it might be useful if I made the Government's position clear at the outset. I hope that that helps.
The Earl of Onslow: My Lords, does that mean that if we wish to intervene afterwards, Standing Orders apply and we cannot?
Lord Bach: My Lords, the Companion makes it clear that if the Minister speaks early in a debate at Report stage, other Members of the House can make a contribution, but that is limited to one speech.
Lord Bassam of Brighton: My Lords, I am grateful to the noble Lord for the clarification. Following the events of last Tuesday, the Government have been considering very carefully what we might do to meet the understandable wishes of your Lordships as

481
regards mailshots. It is fair to say at this early stage of my comments that I am very happy with the way in which the discussions have proceeded to date. We are very grateful for the time that noble Lords opposite have given to this complex issue. It is quite tricky. I hope that, in the spirit of trying to find solutions to these problems, the discussions can fruitfully continue.
It is fair to say that we accept the principle that there should be a free mailshot for the mayoral election. The case has been well argued and well put. We can see its merits. There is no demur on that point. We need to continue careful discussions with the major players so that we can sort out the problems.
However, two issues were put very forcefully in the debate last week and earlier at Committee stage of which we need to take very careful account. One is the question of cost. I believe it is accepted by all sides that that is a consideration. It informs our approach. The other is the question of abuse. I believe there is common agreement that we limit the scope for abuse in whatever format we decide on.
There is another issue which concerns me greatly. We are now very close to the start of the election. Nominations open on 24th March, which is just three-and-a-half weeks away. In our view, we cannot do anything which puts that election at risk through an ill-thought out, overly complex and ambitious scheme. Pragmatism must rule here and be at the heart of our further discussions on this subject.
I turn briefly to the question of cost. The scheme which the noble Lord, Lord Mackay, originally proposed follows very closely that available to candidates in European elections, the Scottish Parliament and the Welsh Assembly. With the help of the Post Office we calculated that, based on the original propositions, a single mailshot to every London elector would cost about £750,000. If the mailshot went to every London household the cost would be £420,000. Twenty-odd candidates across the range could mean expenditure of up to £15 million. We do not believe that it would be right to hit the public purse to that extent.
Abuse is another issue. Although abuse does not occur on a large scale it is a problem. The recent parliamentary by-election at Kensington and Chelsea attracted some 18 candidates. I believe it is generally agreed that not all of them were entirely serious candidates for that seat. We believe that the mayoral race, while different, may attract those who simply want to get on to the bandwagon of publicity, perhaps for a commercial gain. For a very small outlay candidates, frivolous or otherwise, can achieve an enormous benefit by participating in what is commonly agreed to be the highest profile election to take place in the UK before the general election.
I said earlier that we were grateful for the contributions, help and guidance that we had received from other parties. We are also grateful for the time that has been given up in debating this matter. We want to ensure that we use the time available to sort out the problems in a practical and pragmatic way. I hope that noble Lords will not press their amendments
482
this afternoon while we continue those discussions to try to iron out problems that have emerged during the past few days when we have focused attention on practical and pragmatic issues.
I turn briefly to the future. We propose to provide the Secretary of State with an order-making power to allow or require the GLA to arrange for the provision of information on candidates to the public in future elections. That power will be drawn extremely widely to allow for a range of possible ways to discharge that function. In the modern world we shall look at the Internet. There is also the possibility of using newspaper advertising as well as traditional mailing. We shall be unable to make use of those arrangements for this election, but we see benefits in adopting that course of action for future elections. We hope that for future elections we shall be able to provide a much better facility, but that will be for the GLA to decide. It will be for the GLA to determine the general direction of what we now call freepost.
The Government need to be convinced that any proposals are fair to all candidates—that is an important measure—that cost is reasonable and proportionate and that, in this instance, they do not jeopardise the effective and efficient running of the election. Some aspects of the proposals made by the Opposition when we last debated these matters need to be further discussed with the Post Office and mailing houses before we can make a final judgment. Those discussions, which continued up until a couple of hours before the debate this afternoon, need to continue in order to find a solution that is readily acceptable to all parties involved. I hope we can continue the discussions so that by next Monday we have an amendment to which we can all sign up that provides for an efficient and effective method to run the elections and makes adequate provision for the freepost to which all sides are committed.
With that, I trust that in a spirit of co-operation the noble Lord, Lord Mackay of Ardbrecknish, will withdraw his amendment and that in turn other noble Lords will withdraw their amendments so that we can sort out these complex matters for the future.
Lord Goodhart: My Lords, I greatly welcome the statement that has just been made by the noble Lord, Lord Bassam of Brighton. It is a basic principle of military tactics that if one finds oneself in an indefensible position one gets out of it as quickly as possible. The Government's position on the free mailshot has plainly been indefensible. It has had no support in the media. As for the broadsheets, the Government have been condemned by everything from the Guardian on the Left to the Daily Telegraph on the Right.
Certainly, it is to the Government's credit that they have recognised their position to be indefensible and have begun to get out of it. Agreement has not yet been reached. It is essential that negotiations should continue. However, there is not much time left. Third Reading of the Bill is due to begin on Monday and an amendment must be tabled by Thursday. A considerable number of technical issues remain to be

483
settled. Those issues include the Government's proposals that messages from candidates should go out in a merged single booklet and that each candidate should have 200 words and a passport photograph. We believe that candidates should have greater freedom to decide what they want to say and how it should be laid out and that separate leaflets printed to a standard size—probably A4—should go out together collated in one envelope.
The most important outstanding issue to be decided is that which has already been touched on by the noble Lord, Lord Mackay of Ardbrecknish: does the mailshot go to each household or to each elector? If one had households with just two, three or even four adults one mailshot per household would not pose any problem, but it is not as simple as that. I fought three parliamentary elections in the old constituency of Kensington. Like many other inner-London areas in particular, Kensington does not conform to the pattern of single family households. In Kensington and many other parts of central London one finds residential homes for elderly people; student halls of residence; hostels of various kinds; half-way houses for people with psychiatric problems; and houses, many of which are split up into bedsits. For the purposes of the register all of these buildings are single households, which means that post goes through one letterbox.
The mailshot will consist of one letter to the whole of the household, although there may be 10, 20 or even, in the case of student halls of residence, 100 or more individuals living in that building. People who live in multiple occupation households are the least likely to vote; they may not even know that an election is to take place. Somewhere in the back of their minds they may be aware that an election is to take place but they have forgotten the date. It may well be that a free mailshot will tip the balance and get them out to the polling station, which we all agree is an essential objective if we are to have the kind of participation in the election of the first London mayor that is needed. We regard that as a very important issue to be settled, and on this the Government have not yet gone far enough to satisfy us. Although discussions need to continue—it is my intention today to withdraw any amendment in my name so that they can proceed—they cannot yet be taken as signed, sealed and delivered.
In conclusion, the outcome vindicates the action of your Lordships' House in defeating the statutory instrument last week. The power to reject statutory instruments is one that must be exercised extremely cautiously, but there are times when it can and should be used. I believe that last week was one of those times.
Lord Jopling: My Lords, I listened very carefully to the speech of the Minister. Having a suspicious nature, one possible solution that may be in the Government's mind crossed mine. I very much hope that the Minister will be able to tell the House that the solution that crosses my mind is not also in the Government's. I was struck by the way in which the Minister highlighted what he described as the frivolous candidates in the
484
recent by-election in Chelsea. The Government may seek to give a freepost to the serious but not the frivolous candidates. One could state that there would be a freepost to any candidate who made a contribution towards his or her freepost. For the sake of argument, let us put the figure at £50,000. That would be one way of sifting the serious from the frivolous candidates. However, I believe that that would be a wholly unacceptable solution. It would fly in the face of democracy. I hope that the Minister will give an undertaking that that is not in the Government's mind.
5 p.m.
Lord Beaumont of Whitley: My Lords, I, too, join in making that plea. I believe that that solution would be totally unacceptable. On behalf of my party—it is a serious candidate in these elections—I hope that the Government will take seriously the important matter of whether the election address goes to one voter or one household. The entire objective must be to get details of the policies as stated by the candidates, or the mayoral candidates, to each person entitled to vote. This cannot be done in terms of households; it can be achieved only by delivering to individuals. In the course of the negotiations which will continue, I sincerely hope that that point will be borne in mind.
Lord Peyton of Yeovil: My Lords, I was sorry to hear the noble Lord, Lord Goodhart, say clearly before the debate had concluded that it was his intention to withdraw the amendment. I am not sure that I would not like still to put the issue to the test, but evidently we shall not have the opportunity.
The Government have created a huge constituency without thinking through the consequences. They are now surprised and shocked by the problem which they obviously had not anticipated. Quite rightly, the Government have some regard to the expense involved in a free mailshot. On the other hand, it seems more important that the electoral process should not be violated merely to suit the convenience of the Government who had not anticipated this problem.
A previous speaker said that it was clearly necessary to be fair to the individual candidate. I believe that in many elections the individual candidate deserves the utmost sympathy. He has a difficult row to hoe. He has every problem and very little help. The political parties and their so-called important representatives—the gladiators who appear on television and are given ample opportunity—receive it all. The individual candidate has nothing. It is perfectly true to say that there are lots of freak candidates in elections. It is also true that many of the candidates representing political parties are pretty disappointing, so there is no great virtue in being selected by a political party. I worry that the last shreds of independence will be lost. Anyone who stands as an independent candidate today needs to have his brain examined; his chances of success are small without the machine to back him. That is a deplorable situation. We are threatened here with further damage to the important process which lies at the heart of democracy: the right of the

485
candidate to address himself to his electors individually, and not just to a household. That is a totally unacceptable, flabby compromise. I beg the Minister to take the issue very seriously. It is a matter of considerable concern.
I do not keep myself informed of every conversation between the Opposition, Government or Liberal Democrat Front Benches. However, when Front Benches come together in a quite unnatural harmony, I fear for the rest of us. I also fear for common sense and fairness. They seldom emerge from such a process. One puts common sense through the mangle—and heaven knows what will come out at the other end.
The Minister is not entitled to anticipate with any confidence that the mere fact that talks are taking place between Front Benches will bring him any comfort on the serious issues underlying the amendments. I return to the point I made at the beginning of my intervention. Not all of us are yet happy that the Government made the right decision by creating this huge constituency. We believe that even the Government may regret deeply the consequences—if they do not do so already. I am anxious now that one of those consequences should not be permanent and lasting further damage to the democratic process.
The Earl of Carnarvon: My Lords, I have the honour to be chairman of the All-Party London Group of your Lordships' House. In reaction to the Government's Green Paper on the governance of London, it was the unanimous view of that group that there should be one free mailshot. I think that that should be recorded.
Lord McCarthy: My Lords, my objection to the proposal now being accepted by the Government is largely on grounds of practicality. At present in local government elections one of the main things party activists do is to deliver the election addresses. For the most part—I can speak only for the Labour Party but I have seen other parties doing something similar—those are delivered by hand to each household but from the register. If one knows that there are 15 people in the house, one puts in 15 election addresses. With, for example, a hall of residence, one tries to find someone inside who knows where to place those addresses. One does one's best. That is the way it has always been done. Whatever else, it is practical. It has been done for a long time.
We are now being asked to do something entirely different in a local government context in these enormous constituencies. In general elections, European elections or by-elections the work is done centrally in constituencies. Everything is put in one place and at the appropriate time the Post Office picks it up, takes it away, and delivers it. The greater part of the work is again undertaken by local parties.
That system will not work. Indeed, no authority—Oxford City Council or whatever it may be—could authorise even the poll cards. The Government seem to be saying that what will happen is that we shall privatise the process, and use mailshot organisations because no one else can do what is required.
486
I am worried about this although I do not see how the Government can go back now! I do not believe that the mailshot organisations have ever done this kind of job before and I do not believe that they will do it efficiently. I fear that subsequently many candidates will claim that some of their election addresses have not been delivered to all the people on the electoral role. I believe that those who have pushed for this proposal, and those who have forced the Government into a corner, have a responsibility to come forward either today or subsequently and explain precisely how they would overcome the many practical problems.
Lord Rennard: My Lords, I do not have a team of civil servants to advise me on the small pleasantries that I should make at the commencement of any speech, but I am grateful to the Minister for the opportunity to talk to him directly and for making remarks which will allow me to say a little more than I might have done on an important issue.
It seems to me that a sensible, relatively cheap and practical compromise can be reached on this issue and I hope that the Government will soon accept it. First, perhaps I may make it plain that a 200-word statement with passport photograph in a common booklet delivered to each delivery point, irrespective of the number of residents, is not remotely acceptable.
I understand that that format is sometimes used by the Labour Party for some of its own internal elections. However, I suggest that, given recent events, it would not necessarily be wise to follow the Labour Party's example of how to conduct internal selections when electing people to public offices such as mayor of London or member of the London assembly.
Two-hundred-word statements in identical formats do not equate with adequate opportunities for candidates to describe how they would undertake what has been described as "the biggest job in London". Such a booklet would be so boring that it would run counter to everything that the Government are trying to do with their £4.3 million campaign to encourage Londoners to vote in the elections.
A fairer, reasonable and affordable alternative is possible and I believe that the Secretary of State could be permitted to allow the leaflets to be sent together to each elector in a single envelope or package, but not as part of a single booklet, which would be rather dull. It would mean that the candidates paid for their own leaflets, but they would be allowed to express themselves in their own way. The discretions now revolve around the issues of potential abuse, costs and practicalities.
I do not want to repeat all of last week's debate, but abuse of the freepost in elections under the existing regulations is incredibly rare. The existing regulations state that:
"Communications must contain matter relating to the election only".
If the Government wish to suggest that the words,
"and must not contain any material of a purely commercial nature",
that would deal with the problem, slight as it is.

487
Furthermore, I hope that the Government note that commercial abuse could apply in a 200-word statement in a booklet as equally as in a candidate's leaflet—unless they admit that the booklet would be so boring that no one would read it. Is that perhaps the intention of the exercise?
The principal objection to a booklet being delivered to every defined delivery point rather than to each voter is that many voters will never see it. Perhaps I may cite the Post Office regulations which define the delivery points for such a delivery. A house separated into flats with one common front door is one delivery point and receives only one leaflet, however many households and voters reside there. Blocks of flats—and there are many in London—with a locked main access door, receive only one leaflet per block, however many households and voters reside there. Hospitals, residential homes, forces camps or barracks receive only one leaflet, however many voters are resident there. For example, an old people's home with 37 residents may receive only one leaflet and a student hall of residence with, say, 1,700 students may still receive only one leaflet as one defined delivery point. I am sure that that is not what the Government intend, but it is what will happen if only one delivery point per household is agreed.
I shall now refer briefly to the question of costs. I have investigated a number of mailshot costings. One recently undertaken by a major company on behalf of a charity to 4.6 million individuals cost something less than £2 million. That even allowed for all the printing costs, which in the event of a freepost would be undertaken by all the candidates and parties. That costing also included the purchase of all the lists of the people to be mailed which, in the case of the freepost, would be free because it is based on the electoral register.
One estimate for a collated mailing which I received suggested that the cost of the mailshot for, say, 10 candidates each with an A4 leaflet, a covering letter that is personally addressed, inserted together in one overprinted envelope and with Post Office delivery to all 5 million voters could be as little as £1¼ million. Of course, the cost would increase if there were more candidates, but only marginally so. Therefore, the cost of the exercise of collating the leaflets and putting them in one envelope could be comparable with the Government's proposals.
Finally, I turn to the practicalities of the issue. It is agreed that the process of collating and filling envelopes could take two weeks. But there is sufficient time between the nominations closing, or even before the period for the withdrawal of candidates, and the time required for the Post Office to deliver the communications for this to happen. We are talking about the mayor's job being the biggest in London, but the job of organising the freepost in this way is small compared with what happens in general or European elections, or compared with what happened in the Scottish and Welsh elections.
488
Perhaps I may illustrate how small a job it is compared with what would happen in, say, a general election. If by any chance the Prime Minister were to tender his resignation tomorrow, there would be a general election on 23rd March. Between now and then the Post Office would have to have delivered literature from each of the candidates in each of the 84 London constituencies either to each of the 5 million voters or to each of the 3 million delivery points as many as six or more times across the whole of London. If the Government have a will, there is a way to have fair elections on time.
5.15 p.m.
Lord Forsyth of Drumlean: My Lords, I hesitate to be churlish to the Minister after he opened with such warm words, but I believe that we are dealing with big issues of considerable concern. The Minister's suggestions indicate that some of the messages conveyed in our debates are not getting through. I was particularly concerned by the suggestion that for some time in the future the matter would be devolved to the local authorities to decide, with the cost no doubt having to be found from their budgets. That is a way of passing the buck on constitutional reform which has not been thought through. It is apparent that the Government had not considered the issue, no doubt because they had already decided who the next mayor of London would be.
I do not agree with my noble friend Lord Peyton that independents will necessarily have a hard job in the campaign. One particular independent hangs like a ghost around the debate. I have become more and more persuaded that central to the argument is the determination on the part of the Labour Party to ensure that its official candidate has every advantage in that campaign. I understand that your Lordships would prefer me not to be too partisan in my remarks and I am desperately trying to be helpful to the Minister.
However, the arguments that we are hearing from the Benches opposite are extraordinary. Sometimes last week I thought that the arguments were surreal. One noble Lord loyally argued that this was junk mail. In other debates, we are told that they are manifestos which we dare not counter in this House. Manifestos are now described as "junk mail". They are the only opportunity for the candidates to set out unfiltered and in detail what they stand for and what they believe on particular issues. It is argued that people such as Ken Livingstone receive a great deal of publicity. However, all of us know that if we rely on the media to put across our message, it becomes very distorted and selective. Therefore, all candidates should have the right to send a manifesto to every elector they choose.
Under the time-honoured tradition in general elections, candidates can send through the freepost one mailing per household or one per person. They choose, and sometimes the political parties decide to save money by opting for one per household. However, that is a choice which should be for the candidate, not for the Government. If the Minister is concerned about cost, let us end the whole business of

489
having a mayor of London. Did it not occur to the Government that the process of establishing a mayor would involve substantial cost, just as has devolution in Scotland? I recall being denounced by Mr Donald Dewar for suggesting that the Scottish Parliament would cost £70 million. He said that that was ludicrous and that I was misleading the voters. He was absolutely right. It is now heading for £280 million! Substantial cost will be involved, so trying to save money on candidates publicising their manifestos is quite extraordinary.
I wish to make another point to the Minister. I believe that there is something deeply worrying about a government who have changed the rules in respect of using government information leaflets. When we were in government, we were told that we could not send out leaflets which were unsolicited. Very strict rules were imposed by the Cabinet Office which prevented Ministers from circulating information material. This Government seem to have got round those rules in a big way. Extremely large sums of money are being spent on publicity campaigns such as the present one, which we see on posters stating that this is the biggest job in London, on which the Government are spending nearly £5 million. Those rules have been changed for the Government—and the Government are now restricting access to publicity for people who might not agree with them. I believe that that is a most dangerous situation. Therefore, I hope that the Minister will reflect on the debate and recognise that if he seeks to limit the access of candidates to the electorate, that will undermine democracy and the credibility of the very post and election which he seeks to argue.
The noble Lord, Lord McCarthy, put forward another bizarre argument, if I may say so. He said that it would be impossible for the political parties to organise. Those arguments are becoming increasingly loyal, but also increasingly desperate. I hope that the Minister will listen to the voices from these Benches and from ordinary people in London. The danger is that the more the Government behave like this, the more they will act as a recruiting sergeant for people who will vote for men such as Ken Livingstone. People will see it as a way of demonstrating to the Government that they care about democracy and access to the voters, which this Government seem determined to frustrate.
Viscount Slim: My Lords, today we are all rising to speak at the same time. I have always taken instruction from the companion—your Lordships may care to read it occasionally—which states that we should defer every so often to other noble Lords.
I must declare that I am a Deputy Lieutenant of Greater London. As noble Lords know (although there are many new faces in various parts of your Lordships' House), in many ways I keep out of the politicising and the politics of your Lordships' House. However, I have a view, and that is allowed.
When I visit the boroughs, I do not say anything, but I get the impression that some of them are not exactly sold on the idea of a mayor of London. I say "some" and not "all" because I have not visited all of
490
them. However, they feel that the creation of a mayor will provide another tier from which they will receive instruction and that their freedom and flexibility will be removed.
I listened to the Minister, the noble Lord, Lord Bassam of Brighton, but did not find his remarks very encouraging. He spoke in a measured way, which was good, but he spoke with little passion. He spoke as though he did not believe what he was saying. I am sad because from these Benches I shall support any government, if they make sense. Lately, I have been having great difficulty in supporting Her Majesty's Government. On several occasions, I had great difficulty in supporting the previous administration. I believe that noble Lords on the Government Benches are making a mistake. I do not believe that they are thinking of the people. They are thinking of themselves and of their party. There are 15 million people in London who are worthy of their consideration. I am convinced that they are not giving it. I hope that some sense will prevail and that they will think of the people of Greater London.
Lord Harris of Haringey: My Lords, perhaps I may begin, as I did last week, by declaring an interest, having been selected by my party as a prospective candidate for the Greater London Assembly. I am also chair of the Association of London Government. That association held an all-party view that there should be some system of freepost, and I listened with great interest to the point made by the noble Earl, Lord Carnarvon. I had forgotten that the All-Party London Group also expressed a similar view some while back. I believe that the Government have moved substantially on this issue in the past few days. My noble friend Lord Bassam of Brighton is to be congratulated on the flexibility that he has shown in response to views that have been expressed on all sides of the House.
However, I must say that this afternoon one or two noble Lords seem to have lost the plot slightly on this issue. What are we all trying to achieve by having a system of freepost? If I remember correctly the arguments which were put forward the other day, the key point seemed to be that certain individuals—perhaps potential independents—or certain political parties would not be able to get across their message in the absence of a system of freepost. I believe that that is a compelling argument. However, what now appears to be in dispute is precisely how that message should be put across.
As I understand it, it is being proposed that there will be a booklet in which all those who are contesting, for example, the office of mayor of London will be required to set out their stall, as it were, to the electors in a standardised format. The party or individual concerned will be required simply to submit in a standard format the material which is to appear in the booklet. However, if we move to a system which requires that the candidates produce leaflets—perhaps they will be provided to a central place and stuffed into a large envelope or perhaps that will be done by some agency on their behalf—that will require a

491
substantially greater degree of resources and effort on behalf of the political parties or independents. Therefore, if we are arguing that we want to encourage those who might otherwise not get their voice across to do so, the Government's proposal for one standard format makes sense.
I turn to a matter which I am sure will be the subject of much debate and discussion. No doubt it was this morning and no doubt it will be over the next few days. I refer to the question of how many words are appropriate. Two hundred words may not be enough, although I would countenance anyone who is interested in putting ideas into the minds of the electorate that essays of longer than 200 words may not, in fact, be read to the end. The number of words, the size of the material and, indeed, the typeface, will no doubt be the subject of much discussion and debate. That, however, is a matter of detail as opposed to principle. But I should like to suggest that there should be a little more flexibility in relation to photographs and emblems. It sounds as though that is to be the case. Certainly, I believe that if we are to put party emblems on ballot papers, which I believe is now envisaged, those same party emblems should appear in the material put forward by the candidates.
The noble Lord opposite made the point that the format was perhaps influenced by that used by the Labour Party in its own internal arrangements. That is an interesting argument. The internal ballot which the Labour Party held for our candidacy for mayor was, indeed, in a standard format. Attached very helpfully, I believed, was a letter from the Prime Minister to party members on the subject of why the ballot was so important. If noble Lords opposite are suggesting that we should follow the pattern used by the Labour Party, no doubt a helpful guide from the Prime Minister on the issues facing London would be useful. However, I am sure that that is not what the noble Lord had in mind and, certainly, I would not advocate it.
5.30 p.m.
Earl Russell: My Lords, perhaps I may tell the noble Lord that we are happy to do without that assistance.
Lord Harris of Haringey: My Lords, I am grateful for that reassurance which I am sure will reassure the whole House.
Lord McNally: My Lords, will the noble Lord remind us how Labour voters reacted to that advice from the Prime Minister?
Lord Harris of Haringey: My Lords, all the Labour voters to whom I spoke were, indeed, deeply encouraged by the advice that they received from the Prime Minister. But in one or two instances other factors had upset them.
But the other issue which must be addressed is the question of frivolous candidates. I know that that gets brushed aside and that the specific example which I
492
cited in your Lordships' House last weeks seems to be being ignored. But that does happen. A standardised format with very specific requirements on what can and cannot be included can resolve the matter. It would be a mechanism which would enable us to be sure that the information coming from candidates enabling people to make up their minds is related to that election and is not related to extraneous factors.
The final issue is as to whether or not any such mailshot should be delivered to electors or to households. Some noble Lords who have spoken on that matter make quite compelling arguments about some doors through which this would have to go. It seems to me that it would not be beyond the wit of the civil servants who advise my noble friend Lord Bassam on how he might open his remarks today to try to define those households in which there may be a serious problem. In most households it is not an issue. One bundle of material about the election is probably more than sufficient on the door mat. Equally, I do not suppose that 100 bundles of material about the election which arrived through the doors of a hall of residence would be treated with any more thought than if a single copy arrived. There must be ways in which to provide sufficient extra material. But those matters should be looked at in the days ahead.
Finally, we have been told that this is all about preventing independent candidates from having a fair hearing. My point is that the best way of ensuring that independent candidates, whoever they may be, or small parties, whichever they may be and whoever they may represent, have the best, fairest and easiest chance, given the limited resources they might have available, is the sort of proposal which my noble friend has put on the table today.
Baroness Hanham: My Lords, some time ago the word "Kensington" was mentioned, which brought me to the front of my seat. A little while later the word "Chelsea" was mentioned which brought me almost to my feet. And, of course, the noble Lord, Lord Whitty, mentioned the by-election in his speech last week.
We had an excellent result in Kensington and Chelsea. But it would be fair to say also that there were several frivolous candidates. There was a Daily Sport candidate; there was a Lucy Lovebucket; and on a previous occasion there was a Miss Whiplash. It all added to the joy of the occasion and the election. Such candidates add to the occasion but they do not add to the occasion of what we are talking about today.
I want to reinforce the proposal that this free mail should go to each member of the electorate. I am conscious that each elector must have an electoral poll card. Indeed, that is mentioned in the amendment moved by my noble friend Lord Mackay. Everybody will receive a poll card and, therefore, by right, everybody should know who the candidates are.
When I spoke previously I pointed out that all of us who are involved in politics believe that this mayoralty race will grip London by the throat and that everybody will be enchanted and rushing around, waiting for the moment to vote. Probably we delude ourselves if that

493
is what we believe. Some people will understand about the election and will be raring to go and vote while others simply do not know and will be minded and perhaps encouraged to vote if they know something about the candidates.
That seems to me to be what democracy is about. It is about ensuring that people who are entitled to vote know who they are entitled to vote for and what those candidates stand for. Even if they are frivolous, they are still entitled to be voted for. Indeed, the Daily Sport lady received 15 votes in all in Kensington and Chelsea, which must have pleased her enormously, even if it did not please the Government.
Earl Russell: My Lords, I was a little sorry to hear the noble Lord, Lord Peyton of Yeovil, calling for a Division today. I do not want to enter into a contest with the noble Lord about our respective energies in upsetting apple carts. We have both upset a few in our time; we have upset a few together and had great fun doing it; and I expect we shall do it again.
But I am rather reluctant to upset an apple cart by breaking off a negotiation carried on in good faith. I have not been a party to the negotiation, but the information that I have had makes it clear to me that that negotiation is understood to be carried on in good faith and must therefore be welcomed. One does not break off such a negotiation.
The question is not whether there is good faith but whether it is sufficiently strong to be what theologians described as a "saving" faith. Will it be enough to carry us through to a solution? The Government are finding things quite extraordinarily difficult.
The measure of how difficult the Government find something is a fairly good barometer of the intensity of the political will to do it. There have been occasions when very difficult things indeed have been done by government, sometimes with very great haste; for example, to meet the conclusion of the financial year or to meet a deadline at Prorogation. We can all think of examples. I do not need to specify them.
When governments think that it is quite this difficult, they need a little political encouragement to strengthen their political will. I must confess that I grew a little cold inside listening to the noble Lord, Lord McCarthy. The noble Lord and I were both in this Chamber on the European Parliamentary Elections Bill. That Bill set up an election across the identical constituency of London with the identical number of voters, with the identical system of freepost which we would have liked. I did not hear the noble Lord saying that that was totally impractical. He did no such thing. Nor, indeed, have I heard any indication whatever that in the course of the London elections for the European Parliament anybody found that system in the least impractical.
The noble Lord said that we should have come forward with detailed proposals. As soon as we knew that there was such a requirement, we did so. The House has heard from my noble friend Lord Rennard, who has put all his skill, expertise and ingenuity into this task, and they are considerable. But until we got
494
down to the nuts and bolts after last Tuesday, we did not appreciate that there was any need to offer anything other than the standard well-tried and trusted system of freepost which was used in parliamentary and European elections and which we know works. I do not believe that the noble Lord, Lord McCarthy, knows to the contrary.
We hear a great deal about frivolous candidates. The noble Lord, Lord Harris of Haringey, suggested that nobody had yet responded to his example of the driving school. I heard my noble friend Lord Rennard, in this Chamber, replying to it in great detail in terms of the post office regulations. I found that reply entirely convincing. But if the Government are so concerned about frivolous candidates, why did they not feel the need to take that action in the European parliamentary elections for London? There was no such suggestion at all.
We have had the parallel of the Kensington and Chelsea by-election. On that, I cannot help agreeing with the remarks of the noble Baroness, Lady Hanham. The Government are well aware that the cost of a freepost for Greater London is greater than the cost of a freepost for Kensington and Chelsea. Of course, we concede that. But equally, I hope that the Government will concede that the cost of preparing material for a freepost for a candidate is equally much greater for Greater London than it is for Kensington and Chelsea. Therefore, any candidate who can afford the printing and preparation of the material for a freepost probably has other ways of getting his voice across, indeed possibly through the medium of a newspaper which the person responsible may own. The sort of person likely to be putting up a frivolous candidature is not likely to have enough money to do it with the Greater London mayoral election. If he had that much money, he would probably find a much better way of doing it.
I take strongly the point made by the noble Lord, Lord Goodhart, about halls of residence. Getting post into halls of residence is a nightmare. The percentage turnout in elections among people under 25 is a great deal lower than that in the rest of the country. That is a matter we should all deplore. We should all do something to change it. One single leaflet to a hall of residence is nowhere near adequate.
I listened with interest to the suggestion made by the noble Lord, Lord Harris of Haringey, about defining the households to which more than one delivery should be made. I suspect that that would he extremely difficult. Unless one uses a general definition of houses in multiple occupation, one would get into a great many technical questions. Nevertheless, if that is seen as a serious way forward, I do not see any reason why it should not be tried. We could sit down, try some definitions and see what happens.
The trouble is that the clock is ticking. I do not see how we can leave this business beyond Monday. Monday as a deadline for urgent business always creates certain practical problems. Increasingly, my definition of power is the number of weekend telephone numbers one possesses. A Monday deadline

495
creates difficulties. If this business is not complete by Monday, there will be serious difficulties for all parties to the debate. I hope that the political will of the Government has been strengthened a little by the debate. If it has not, I do not know where they are going.
The Earl of Onslow: My Lords, the words which come to mind are, "Sinners that repenteth"; "No great joy in Heaven"; "There is nothing more virtuous than a reformed whore", and so forth. One must say to the Government, "Many congratulations on changing your minds". As one of my colleagues stated, it also shows that the Government had simply not thought what they would do.
The arguments on this issue were extremely clear last week. Noble Lords on the Front Bench stand comparison in ability to any government I have seen in the 30 years in which I have been a Member of this House. There may be one or two exceptions, but I shall leave that aside. They stand comparison and therefore were capable of understanding the arguments put forward.
However, as I have seen before in this House with this Government, they lacked the machinery in their minds to make decisions on the hoof. Frequently, when in government, we would give hell to our own Front Bench. The Opposition would give them hell and the Liberals would join in. The poor wretched Minister would feel miserable. Somebody would say, "They have a point; give way". There would not be a Division. Something would be done and a week would not be lost. In this instance, a week has been lost. Having made that point, I back up the comments made by the noble Earl, Lord Russell, about the importance of the Government meaning what they say and putting their political will into it. I am sure that they will, but I should like to help and encourage them on their way.
I should also like to emphasise the vital point made totally clear by everybody about the package being sent to individual electors. It seems to me that what appears on the leaflet is no concern of the Government. That should be left to the individual member. He cannot, of course, send them a whole copy of the Encyclopaedia Britannica. One leaflet from each candidate, placed in one envelope issued all at once seems to be sensible, intelligent and would meet the point raised on cost. As the noble Lord, Lord Hardy, mentioned last week, the leaflets are delivered and nobody reads them. Perhaps they would be more inclined to do so if the package came in a small, concentrated, well-produced form. That will enhance their choice in their right to vote. Perhaps I may say to the Government Front Bench, "Courage, mes enfants".They have the will and the support from all round the House. They can do it.
Lord Biffen: My Lords, I shall not detain your Lordships for long. However, I should like to place on record my appreciation for the statement made by the noble Lord, Lord Bassam of Brighton. He reacted as only he could to a situation created by the vote in this place.
496
This has been a magnificently spontaneous debate. As it proceeds, it has become clear that the issues raised are of such complexity and implication that they cannot be sorted out over the weekend and presented to this Chamber on Monday or thereafter. We have in prospect—the dream ticket of the two Front Benches—a botched job to deal with an immediate situation. However, behind us is a spectre, referred to by my noble friend Lord Forsyth. I refer to the whole frenetic desire for constitutional and institutional reform which has convulsed the politics of this country for the past two years. It is now seen to be producing consequences not properly assessed at the time and gives rise to difficulties every bit as much as those they were supposed to counter.
In this instance, very properly this House is required to consider how best we should proceed to fashion a revived local authority for the capital city of this country. We should be right on the first occasion. This should not be the subject of a re-run or a re-re-run. Perhaps this should remind us that in the mass of constitutional reform, a little caution and circumspection could be used.
Lord McNally: My Lords, in Committee the noble Viscount, Lord Onslow reminded us—
Noble Lords: Earl Onslow!
Lord McNally: My Lords, I apologise to the noble Earl, Lord Onslow. After the next reform we shall all be citizens. The noble Earl reminded us that most of our constitutional reform has been done on the hoof. I hope that Ministers will not take too much notice of the call for greater consideration from the noble Lord, Lord Biffen. When we spoke of reform of the Lords the same argument was made after a pause of 80 years between reforms.
I am pleased that the Government have gone ahead with their commitment to giving London strategic governance and a mayor of its own. However, what I found to be extraordinary about this debate—if I was the Government Chief Whip I would really ponder this—is the fact that we have a Through the Looking-Glass situation where the wisdom is coming from the noble Earl, Lord Onslow, and the rather strange behaviour from the Government Front Bench. Respectability beckons the noble Earl—
The Earl of Onslow: My Lords, desperation beckons the country!
Lord McNally: My Lords, the noble Lord, Lord Goodhart began his speech with the military maxim, "Retreat from an indefensible position". My advice would be the old maxim used by Denis Healey, "When in a hole, stop digging". It is extraordinary this afternoon that the Government Front Bench has not stopped digging.
The Minister grimaces. It would have been far better if he had simply stood up and said, "Negotiations are proceeding but I pledge to you that I shall find a solution to this". Instead of that, he

497
trotted out the questions of cost, abuse, and time which were thoroughly dealt with in Committee. On the question of cost, if the Minister wants to go back to Hansard, he will see that at one stage he was telling us that this would cost £40 million; it then went down to £15 million; and the last we heard it was just under £2 million. That indicates that it is a good thing to bargain!
Lord Bassam of Brighton: My Lords, the issue of cost is important. In Committee I said that the amendments on offer at that time were plainly a blank cheque. During the process of negotiation—that is all we have been talking about this evening—we came up with a formula which reduces the cost considerably. That is to everyone's credit. People focused on the issue of cost and took it seriously. It is important, as is the question of abuse, and as are the pragmatics and the practicalities of the issue. We should concentrate on that, and not on the high theory of it all.
Lord McNally: My Lords, the high theory of how elections are conducted is worth debating. The Minister provoked a debate which, with a different explanation, he may not have provoked, certainly without some of the contributions of his Back-Benchers. We still remain worried that time constraints now enter this argument. Some of those time constraints arise because the Government have not been fleet of foot or empowered enough to make decisions.
I understand that both the Government Office for London and the Home Office are taking part in the negotiations. The Government Office for London may he taking part in this for the first time, but the Home Office is full of clever people who have run many elections. I want an assurance from the Minister that people of experience and seniority will be involved to enable decisions to be made quickly. We do not want to come back next Monday and be given explanations in relation to time.
On a number of occasions, we have seen that where there is a will, there is a way. We are looking for commitment from the Government Front Bench that they intend to solve these problems rather than look for further problems, and that they will settle this matter in a way that will give confidence not only to these Benches, but also to the people of London. That confidence is severely lacking at the moment because of the way the Government have so far botched this job.
Lord Bassam of Brighton: My Lords, we have had a long and extensive third debate this evening on this issue. I have listened to some disparate comments, but want to bring the argument back to the pragmatism and practicalities of the issue; that is where the debate should rest.
We have given a clear commitment that we are happy to go forward with a freepost. What appears to divide us is how best we can achieve that at reasonable
498
cost and limiting the scope for abuse. That is where we should focus our attention. We need more time to resolve those important issues.
Our preferred option, as was made clear in the contributions, was that we should produce a single booklet with every candidate having equal access to it—with logos, head and shoulders (rather than head and off-the-shoulders in one case) and perhaps with a contribution from each candidate. That is what we put on offer. Yesterday, when we got down to the nutsand-bolts discussion, the noble Lords, Lord Rennard and Lord Goodhart, made a strong plea for a different approach. Instead of saying, "Sorry, nothing to discuss", we were happy to send away the officials from each of the major political parties to have nuts-and-bolts discussions with the officials of the Government Office for London. We felt that that was the pragmatic and sensible way to deal with this matter.
The Government want to see those discussions continue. We feel that that is the best way to find a solution that satisfies everyone's anxieties in all this. That is how we should approach it. We are not inventing timetables for the sake of it. They exist in legislation; they exist in the election process and we have to abide by them.
Another point I should make to your Lordships this evening is that legal processes are involved in the way in which elections operate. We must ensure that the processes, practices and procedures we adopt are fair to all the candidates. That must be right. We must ensure that we stick to the election law because that must guide the way in which we operate and inform ourselves.
A number of questions and points were raised during what has been a long debate. I do not intend to respond to them all. However, I can offer some reassurance on one or two. The noble Lord, Lord Jopling, was concerned that we should not try to invent ways of squeezing out or of disregarding the interests of smaller parties. I can assure him that that is neither our intention nor our objective in the way we approach this issue. In fact, our argument for the booklet solution was that it was equal and fair to all the parties that contribute to it. That was one of the elements that informed that approach. The noble Lord, Lord Rennard, made an equally strong case for a single sheet being put into an envelope as being fair to the smaller parties. We can judge over time whether or not that is the right approach. But we are not trying to discriminate against the smaller parties and I am sure the noble Lord, Lord Beaumont, will be happy with that. He made that self-same plea.
The noble Lord, Lord Peyton of Yeovil, made an interesting and important point in relation to the issue of individuals and households. That formed part of the discussions that have been taking place. It is fair to say that at the general election 70 per cent of all the freepost was delivered to households, not individual electors. The one party that performed particularly well in getting its material to the Post Office in last year's European elections was the Liberal Democrat

499
Party. By and large it tried to inform individual electors. The Labour and Conservative Parties were content to send their freepost mailshots to households.
That is how the situation was explained to me. There is a debate as to whether or not we can achieve the same for this set of mayoral elections. We need to focus on the practicalities and pragmatics. That is what we need to keep coming back to.
I can assure your Lordships that in bringing forward a proposal and agreeing to a freepost, we need to concentrate on getting it right. We need to ensure that we can deliver whatever solution we come up with so that people receive their freepost in time for it to influence in some way or other the way in which they vote on 4th May in the mayoral elections. We should bear that in mind at each and every step.
I was criticised for not being passionate enough in my original comments. I have always felt that I am a reasonably passionate sort of soul. I certainly feel passionate about the issue of elections. I want to see us get these elections right. We must ensure that what we promise, we can deliver. We are judged by delivery, as people constantly remind us. I hope that, with those assurances, the noble Lords, Lord Mackay of Ardbrecknish and Lord Goodhart, will feel able with confidence to withdraw their amendments so that we can concentrate on sorting out this issue to everyone's satisfaction for the future and for the good running of the election.
Lord Mackay of Ardbrecknish: My Lords, perhaps I may first help the noble Lord, the Captain of the Honourable Corps of the Gentlemen-at-Arms, by saying that I have no intention of seeking to press this amendment to a vote.
Lord Carter: My Lords, the noble Lord always calls me the Captain of the Honourable Corps of the Gentlemen-at-Arms rather than the Chief Whip, which is what everybody else calls me.
Lord Mackay of Ardbrecknish: My Lords, I was trying to elevate the noble Lord a bit above the vulgarities of just being the Chief Whip in controlling his troops. However, I do not intend to seek to press this amendment to a Division. I hope that does not disappoint some of my noble friends behind me.
I hope that this debate firmly underlined to the Government the seriousness with which your Lordships treat this issue in seeking to find a sensible solution to it. I shall not negotiate across the Dispatch Box; that would not be sensible. A noble Lord, accompanied by Mr Roger Pratt from Conservative Central Office, today met officials. I must repeat something that has already been said: those two gentlemen know a thing or two or five about fighting, winning and perhaps occasionally losing elections. They know a thing or two about getting a variety of leaflets out, not just the one to the Post Office, but also the one the workers put out. I just hope that they are in contact with people who also know about the technicalities of distributing leaflets.
500
Some of the objections I have heard seem to me to fail to take into account modern techniques, modern technology and the way that various mailshot firms are able quickly to produce very glossy material and have it delivered pretty efficiently. Indeed, even the Government seem increasingly to deluge at least my desk and post box with glossy material day after day. I have no doubt that that is produced at considerable expense, but it is delivered rather effectively.
There are modern ways of dealing with these issues and putting out leaflets that were not perhaps available a few years ago. I hope that the Government will consult some of the new companies in the field that know how to do this for help and advice. That immediately brings me to the remarks made by the noble Lord, Lord McCarthy. I wondered exactly where he was coming from for a while, but I suddenly realised that private firms might be involved in the process. That seems to be an anathema to the noble Lord. I hope that his Government have moved considerably from the position that the noble Lord still seems to take and that they now accept private firms—
Lord McCarthy: My Lords, the noble Lord has clearly had a much nicer experience with private mailshots than I have.
Lord Mackay of Ardbrecknish: My Lords, I am only the recipient of private mailshots, but those concerned seem to be able to bombard my friends and myself pretty efficiently with material. Indeed, one has only to look at magazines these days. One barely sees one that is not full of inserts. I am sure that that is done very efficiently and economically.
There is no problem as far as concerns producing a single mailshot with leaflets to a standard A4 size for each of the candidates who want to make use of such a facility. We have come a long way forward from the traditional system in this country. If we take the mayoral election alone—we are agreed that that is what we are talking about—the traditional way would have been for each candidate to have his own mailshot. I must point out to the noble Lord, Lord McCarthy, that the parties would have delivered that to the Post Office impeccably, as they have done for years.
We accept the Government's argument about cost. Although we are not totally convinced, we are prepared to listen to their great worries about many frivolous candidates abusing the mailshot facility. Therefore, we agree that there should be one mailshot. If we have agreed to that, which will hugely reduce all the potential costs, it seems to me that we should at least attempt to try to ensure that the material going out in that one mailshot presents the candidates as attractively as possible to the electorate of London. If they are presented attractively, I suggest that there will be a better chance that at least a few more of them may vote than would otherwise be the case.
I am not impressed by the booklet idea, with each candidate having a little bit of a page. That seems to me to be a poor solution. I do not believe that that is the only solution available. The other solution of an

501
individual piece of paper produced to a standard size by each of the candidates is perfectly feasible, given modern techniques of envelope filling.
Therefore, having gone a long way forward from the traditional method of doing this to having one mailshot per candidate, I think that we can actually start to look at the new technologies to ensure that the political parties and each individual candidate can produce his or her own leaflet to a standard size. As I said, the mail order people do this every day, as do magazines; indeed, everyone seems to do it. Those concerned can actually put it together and get it to the Post Office pretty efficiently. That is the right way to proceed. I can assure the noble Lord, Lord Harris of Haringey, that if we do so we will not need a covering letter from the Prime Minister. But, as the noble Lord, Lord McNally, pointed out, if it had been one-man, one-vote, the covering letter from the Prime Minister would have been firmly for the losing candidate. So perhaps a covering letter from the Prime Minister for Mr Dobson might be quite a good thing. I beg leave to withdraw my amendment.
Amendment, by leave, withdrawn.
[Amendment No. 11 not moved.]
Clause 10 [Pilot schemes]:
6 p.m.
Lord McNally Lord McNally moved Amendment No. 12:
Page 13, line 12, at end insert—
("() In exercising his powers under subsection (1) the Secretary of State shall give particular encouragement to pilot schemes which explore the use of the internet and other new technologies in the electoral process.").
The noble Lord said: My Lords, after that very stimulating debate, I wish to raise a point that I would have raised in Committee but, unfortunately, I was delayed by traffic. When Susan Kramer has the opportunity to put her excellent transport policy into practice, that is something that will no longer be available as an excuse. However, I did receive a slap on the wrist from the noble Lord, Lord Mackay, for withdrawing my amendment.
It is worth spending a little time on this matter because I want to raise issues which fall on the other side of the penny to those discussed in regard to Amendment No. 9. We have just discussed how the Internet and the new technologies would be used with the register. In some ways, that debate will be the last of such debates about how paper is distributed in elections. I say that because we are moving to the age of Internet elections.
Although the Minister proudly boasted on Second Reading that this legislation would bring our electoral law into the 21st century, my view is that it is, rather belatedly, just scrambling us into the 20th century. We must take on board the massive changes in technology that will affect the way that our parties are organised and how they get their messages to the electorate. Even as we legislate, my concern is that technology is moving ahead of electoral law. I understand that the Labour Party is giving priority at present to local parties assembling e-mail addresses for future
502
campaigning. It means that many electors will receive their electoral communications direct in the form of email letters.
I do not know how the assembly of such databases for political parties will be affected by, or indeed how it affects, the Data Protection Act, but that is a matter worth considering. Moreover, we know how meticulous the Representation of the People Act is about candidates' expenditure. We also know that that legislation watches very carefully every envelope and stamp. However, it does not seem to me to be anywhere near gearing up to control expenditure on the new technologies. For example, how does electronic campaigning get costed if you send 20,000 e-mails to 20,000 different voters? How does the cost of setting up a website bear against that? Indeed, this is already happening. I was told today—and this may already be happening in other parties—about prospective candidates for party nominations setting up their websites and inviting party members to visit those websites to find out what wonderful chaps and lasses they are.
There is another technicality in this respect. Many Members of the other place now have their own websites, throughout which they are referred to as "Members of Parliament". I understand that some of them even have moving pictures of themselves acting as Members of Parliament. We know that the electoral law specifies that Members of Parliament must stop using the term "MP" during a general election period. Does that mean that all those websites will have to be cleared for a general election? I think we should be told about that. Further, where does broadcasting stop and start? The new technologies will allow parties to broadcast on digital television and on web television with, as far as I can see, only the vaguest guidance as to how and where it can be controlled.
The amendment proposes that we should encourage Internet experiments, perhaps at local government level, just to see how some of the technology is working. There is a case here for a Home Office working party to bring together some of the experts and some of the party campaigners who are already starting to use this technology to consider the kind of impact that it will have on our electoral law. The Home Office should consider the American experience. I understand that Mr Jesse Ventura, the Governor of Minnesota, virtually ran his campaign as an Internet campaign. Senator McCain is apparently making great advances, not least in fundraising, through using the Internet.
This is, of course, a probing amendment but it is a serious one because I fear that legislation is falling behind technology. We do not want a whole raft of complaints and challenges at the time of a general election because one or other party has broken new ground in its Internet campaigning and then the other parties cry foul and the law is unable to rule on that. A Cabinet Office document leaked to the Guardian informs us that the Government are building up their own knowledge network to communicate direct to the electorate on the Internet. We are told that a third of our population already has access to the Internet. The

503
Government's ambition is for a "wired up" Britain. That kind of power in the hands of government to communicate via the Internet also poses a danger to proper, free, democratic elections in that it concentrates power both in the incumbents and in the big battalions.
As I say, this is a serious issue that merits careful study on the part of the Home Office at an early stage. It also merits involvement on the part of political parties. We need to study the American experience because invariably we find that what the Americans do in an election flows into our elections. Such a study and such initiatives would be timely. I should be interested to hear the Minister's thoughts on that. I beg to move.
Lord Lucas: My Lords, I want very much to support the amendment of the noble Lord, Lord McNally, and the arguments that he has made. Clearly the Internet will make a great deal of difference; in fact, I am sad that the Government have chosen not to involve the Internet in their extensive advertising campaign. There is no URL there for access to better and further information; one is left with a blank statement and nowhere to go to look further. That is a great missed opportunity.
Certainly the problems which the noble Lord, Lord McNally, mentioned will arise. Frivolous candidates, for instance, will find it extremely cost effective to get involved in elections because it will cost them so little to have access to any form of dissemination of information over the Internet. There are certainly tricks that one can use to turn elections. It is cheap. Information can be made available to people privately, as it were, in short order which one cannot do through newspapers or television. It will be a difficult technique to anticipate and counter. The earlier we get involved in studying it and seeing how it can be made to serve democracy rather than avert it the better.
Lord Mackay of Drumadoon: My Lords, before the Minister replies, I raise two questions of competency which may lie behind the amendment moved by the noble Lord, Lord McNally. Would it be competent for the registrar when making up his register to record people's e-mail addresses—their Internet addresses—in the register? If that is the case, is there anything in Clause 10(2) that would make it incompetent to have a scheme which allowed people to vote over the Internet?
6.15 p.m.
Lord Bassam of Brighton: My Lords, I am interested in the spirit behind this amendment. I am with the noble Lord in spirit, perhaps more than he might have imagined when tabling what he described as a probing amendment. The Government are also with the noble Lord in spirit. After all, we now have an "e-envoy". The Prime Minister has given a commitment to conduct 25 per cent of government business electronically. In developing the 44 local authority
504
local elections pilot schemes we have taken a keen interest in those that involve new technology, encourage e-commerce and make use of the Internet.
In my previous job as leader of Brighton and Hove Council it was part of our vision to create and generate a "wired" city. We had made a great deal of progress towards that objective when I resigned my post. I took a profound interest in that matter. We "wired up" nearly all of the schools within Brighton and Hove by the time I had to resign my post. I want to see these developments progress apace. My right honourable friend the Secretary of State is keen to encourage innovation. Having said that, we do not believe that the amendment is necessary, however keen we are to see innovation. We can encourage that innovation by other means.
As I am sure your Lordships will be aware, we received applications from 44 local authorities which want to run pilot schemes at the local elections, assuming that the Bill receives Royal Assent in time. We have been extremely encouraged by the number of applications that have been submitted and also by their breadth and quality. Eight of the schemes covered in the applications involve either electronic voting or counting. That is a significant departure. My right honourable friend has been able to give provisional approval to six of those applications.
Other applications that have been provisionally approved included all-postal ballots, early voting, extension of postal voting entitlement and mobile polling facilities, all of which we regard as being equally important innovations. We do not want to focus just on "e-innovations"; we want to focus across the broad span. By placing extra emphasis simply on innovations involving new technology, we may find that fewer local authorities decide to apply to run pilot schemes because they do not feel that they have the necessary capacity.
I was encouraged to read in the Municipal Journal— that is not at the top of everyone's weekend reading list although I am afraid that it is at the top of mine, sad character that I am—a small item on, I believe, Barnett Council, which conducted a budget consultation. It had posted a site and had invited people to respond via the Internet. It received about 1,000 responses. That figure was not as high as the number of paper responses it received. Nevertheless that encourages me to think that, even in these early stages of the development of Internet sites and so on, there is much capacity and much interest to see these matters taken further.
None of the applications this year has involved Internet voting, which I suspect may have something to do with the short time available to local authorities for preparing their applications. However, we are hopeful that in future years pilot scheme applications might involve Internet voting. That would be an interesting development and picks up the point that the noble Lord, Lord Lucas, made in part.
All such applications would be judged against the normal criteria. In the case of any involving Internet voting, clearly particular attention will need to be paid

505
to security issues and to the resilience and robustness of the system. I am no expert in those matters but with a new, emerging technology and with a new, emerging voting technique there is always the potential for abuse or fraud to occur. Only a couple of weeks ago it was reported that Yahoo.com had to be shut down following the action of hackers. Therefore we cannot afford to be complacent as regards these new approaches and when we try to tap into new technologies.
None the less, as I hope I have been able to demonstrate, the Government have the will to explore and continue to explore—and are receptive to—innovations in electronic procedures involving new technology. We hope that this will develop as part of the pilot process. Although, of course, there are always some difficult issues to overcome, we see a golden opportunity here.
In the light of what I have said and of our overall commitment, I trust that the noble Lord will feel sufficiently reassured to withdraw his amendment. No doubt he will continue to badger us, argue with us, stimulate us and encourage us to explore this issue further.
Lord McNally: My Lords, the great advantage of debates of this kind is that we get a glimpse into the private lives of Ministers. The thought of the noble Lord, Lord Bassam, finishing his last Red Box and then turning for a couple of hours relaxation to the Municipal Journal is most encouraging.
I take fully what the Minister said. I used this opportunity—and perhaps slightly abused it—to raise also the issue of political campaigning. I realise that that does not come within the terms of the Bill, but as I know that there are in the Home Office avid readers of Hansard, perhaps when the Minister has his next team meeting he may say "Do you think there is anything in this? Are our electoral laws going to cover new kinds of campaigning and fund-raising?"
I thank the Minister for his constructive response. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Mackay of Ardbrecknish Lord Mackay of Ardbrecknish moved Amendment No. 13:
Page 13. line 18, leave out (", where and how") and insert ("and where").
The noble Lord said: My Lords, this is an exploratory amendment which seeks to allow us to spend a few minutes discussing and exploring electronic counting and voting. Obviously it is related to the previous debate. It is different in that I hope we can address only the concept of voting machines and the like.
There are two reasons why the Government may well want to move in this direction. First, if we are allowed to vote in more than one place, there will have to be some form of electronic communication between the places to ensure that we do not vote in more than one place. I can see me dashing around all the places at which I am entitled to vote during the course of the
506
afternoon and registering my vote in each one of them. The current system of scoring a name off the register would not deal with that. Polling stations, of course, would need to be linked up electronically. I wonder where we are on that matter. Are any of the pilot schemes and local authorities going down that kind of road? Do they have the electronic machinery in place to allow them to do so and to ensure that security is up to scratch?
The second point concerns the matter of going into a polling station and, instead of the traditional method, voting electronically. I presume that that would lead on to electronic counting. I presume that the Government do not have any intention of carrying out electronic counting on the back of the traditional ballot paper. That would seem to be a pretty pointless exercise. We will get to electronic counting when we get to electronic machines.
I have agreed with the noble Lord, Lord Dubs, and the noble Baroness, Lady Gould, to sponsor an exhibition on Thursday—this is advertising time—in Committee Room 4, between 4 o'clock and 7.30 p.m., on electronic voting machines. I regret to say that it is not a British company but a Japanese company that deals in these matters. We thought it reasonable that your Lordships and Members of the other place should have a chance to see the equipment.
I should like to explore with the Minister how he sees these matters advancing. What electronic gadgetry will be employed in the pilots? I see from a Written Answer to the noble Lord, Lord Hardy of Wath, on 1st February that a number of applications for electronic voting have been received. How many of those have been accepted and what are their details, as far as the Minister can give them? We are interested in all these matters because I have little doubt that we shall go down the road of electronic voting. We shall have to ensure that as we go down that road we do not run into problems of security and so on which we have, at least by and large, dealt with in the voting systems that we are used to. I beg to move.
Lord Bassam of Brighton: My Lords, I am grateful to the noble Lord for his amendment and for putting his points cogently. I shall not be quite as helpful as I thought I might be in answering his questions.
The noble Lord raised a very important issue on which I can help him—that is, the issue of different polling stations where one could, in theory, vote on the same day. That is an important issue. We initially rejected one of the pilots that came forward because we did not feel that it had taken sufficient account of that particular issue. I think that it was from the Blackburn and Darwin local authority—they are now linked—and my understanding is that it has now established an electronic link to deal with the precise problem that the noble Lord has usefully raised. It is an issue of which we are very conscious.
Other issues will, of course, emerge as a consequence of introducing new technologies. I am reminded, for instance, as we look at some of the other issues involved in this, of marks on ballot papers. If we move

507
to a system of electronic counting we shall need to introduce measures such as bar codes on ballot papers. So we are moving a long way from the stubby pencil in the draughty church hall. People have difficulty in seeing how we can move away from marked papers to papers that are marked in some other way so that they can be properly and effectively counted, and new counting schemes will need to be reflected in the way in which ballot papers are prepared.
So we are conscious of those issues. We know that we will have to look very closely at the practicalities and that new technology in itself may mean that we shall have to reflect further on the way in which we regulate elections. They are issues that we shall have to confront in the future. This short probing amendment has shed some light in this area. When new pilots come forward—particularly those which open up the possibility of electronic voting and the use of voting machines and so on—we shall have to return to this issue. I should like to see a sponsored debate on this matter. It would usefully open up the whole area.
I am grateful that the noble Lord has put his name to the exhibition taking place this week. It is a very useful innovation and, if I find time, I shall certainly come along.
We are abreast of the issues. I hope that the noble Lord is satisfied with the spirit of my response. If I have missed any of his points, I shall study Hansard closely and carefully and come back to him in correspondence.
Lord Mackay of Ardbrecknish: My Lords, I shall spare the correspondence section of the Home Office another letter to me. I have made my points and the Minister has responded in a very constructive way. I think that perhaps after the experiments are over and the information has been collected, a debate would be extremely useful. We should perhaps try to remember that come the summer when the information and the results of these various experiments are to hand—particularly in regard to electronic voting because inevitably that is the direction in which we will go. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Jopling Lord Jopling moved Amendment No. 14:
Page 13, line 33, after ("shall") insert (", in conjunction with an independent body,").
The noble Lord said: My Lords, the House will recall that at the Committee stage I moved some amendments which were similar in their effect to the amendments I wish to move today. At that time I said to the Committee that I was concerned that, following various pilot schemes which may take place, a report submitted solely by the local authority might be in danger of being biased in one way or another. All of us who have been members of local authorities, or involved in the political world over the years, know that when an elected body submits a report it is always tempted—particularly when it concerns representation of the people—to slant that
508
report in a way which is helpful to its own political point of view. When pilot schemes take place it is inevitable that the local authorities who conduct those pilot schemes are tempted—we are all only human—to slant the report in a way which suits their party's interest. Those reports will be a good deal more valid if they are endorsed or have the involvement of an independent body.
I moved this amendment today because at the Committee stage I was encouraged by the Minister who said at the beginning of his reply to me:
"I have quite a lot of sympathy with the thought behind both of these amendments".—[Official Report, 15/2/2000; col. 1085.]
That led me today to find a way in which the Minister might be able to accept an amendment, bearing in mind what he said last week. I was also encouraged that in a brief, which I believe has been sent to many of your Lordships, the Local Government Association said that it too believes that reports should be submitted on all the pilot schemes by the local authority, by the new electoral commission and by some independent national assessment. Therefore, there would be three reports. I am trying to ensure that only one report is submitted by the local authority in conjunction with an independent body. That would give a great deal more validity to the content of the report.
In my amendment I have not tried to explain the definition of an independent body because I hope that, by putting down the bare amendment, I can encourage the Minister to say that this was a worthwhile step, bearing in mind the sympathy which he expressed in Committee, and that the parliamentary draftsman would be able to draft an amendment on the lines of this one of mine which would be acceptable to us at Third Reading. I beg to move.
6.30 p.m.
Lord Mackay of Ardbrecknish: My Lords, I intervene briefly to support my noble friend. If we are to have reports from the local authority it is important that we have an independent assessment from a university or some such body of what exactly happened in the election. Local authorities may not always want to give the actual results because they may wish to defend the fact that they undertook the experiment. They may feel obliged to try to put the best possible light on their experiment. Whatever experiment has been tried will not necessarily be the cause for increased turnout. There could be other causes. For example, one way in which one can push up the turnout at local elections is to have a controversial planning decision kicking around in the area. That can motivate people to come out and vote one way or another. A number of similar issues can drive up the turnout and therefore disguise the success or otherwise of the experiment. Therefore, it is important that we look to an independent body of some kind for assessment of an experiment. That is the way to be fair to the experiment and fair to the local authorities. I support my noble friend.
Lord Mackay of Drumadoon: My Lords, I too wish to support my noble friend's amendment. It seems to

509
me that there are three simple reasons why this is a sensible route to follow. First, a report of a successful experiment will be the factual basis for possibly triggering the exercise of Clause 11 powers. It is correct to have as full and as independent a report as possible. My noble friend Lord Mackay of Ardbrecknish mentioned a planning application having a significant bearing on a local election. A by-election is taking place in Scotland at the moment and undoubtedly the activities of people who are not standing in that election are having a significant effect on the way in which the candidates are behaving, or seeking to behave, and the issues they seek to address.
Secondly, the Clause 11 order-making power which is triggered by a successful scheme under Clause 10, as it now is, can be applied not just to local elections but to a great variety of more significant elections; elections to the European Parliament, to the Scottish Parliament and indeed parliamentary elections themselves. I am aware that on the Marshalled List there are certain amendments which seek to delete those provisions, but, as the Bill currently stands, the Clause 11 power, once it is triggered by successful experiment, can be applied to wider sections of the electorate. It would be helpful to have some input from an independent body as to the possible significance of translating a successful experiment in one part of the country in a local election to a wider election.
Thirdly, some importance should be placed on the fact that it is indeed an order-making power that is to be found in Clause 11. In Clause 11(4) one reads that it is to be an order-making power subject to the affirmative resolution procedure of both Houses of Parliament, but as we all know, and as we have all recently been debating, although this House has the power to vote down an instrument, it does not have power to amend it. Therefore, it is very important to get the drafting right in the first instance. It would seem that a report with independent input might help those who are responsible for drafting any orders with which the Secretary of State wishes to proceed in terms of Clause 11.
Lord Bassam of Brighton: My Lords, I expressed some sympathy with the noble Lord, Lord Jopling, in Committee on this matter. I continue to have sympathy for the importance of having effective and objective evaluation of the pilot schemes. That is absolutely right. That is very much at the heart of—dare I say—Home Office thinking on this matter. But I do not think I can agree that the method that the noble Lord proposes is necessarily the right one to achieve that independence. I take the point that local authorities, if they are perhaps as mischievous as suggested by some, might want in some way to skew the fruits of the pilot schemes and perhaps interfere with the evaluation of them. I cannot see what would motivate them in that way because most, if not all, local authorities which are signed up to the pilot process are committed to making those schemes work, to making them effective and to achieving what we all seek here—greater participation and involvement in the democratic process.
510
Perhaps I have a more positive view of what local authorities are trying to achieve. It is based on my recent experience in this field. The noble Lord suggested that valuation reports on pilot schemes should not be prepared by the local authorities running them on their own but that an independent body should also be involved. There is another issue here of how we might see that independence; what that independent body might look like; and what that independent view might bring. Those are important issues. No doubt they would come with a cost.
I should have thought that any local authorities worth their salt in this field would in any event probably want to call on a local academic institution to provide them with a report that had some greater research behind it and some more independent thinking behind it. We cannot tell them that they should choose that route, but it is probably a route which many of them will of their own volition seek. Perhaps we could encourage them in that general direction. Therefore, I go some way towards where the noble Lord is coming from on this issue.
We ought to ensure that we get it right and that the local authorities concentrate on the important issues in evaluating the pilots. Whether they do it from within their own research resources or introduce an outside element—an independent element, if one likes—such as a university, will be for them. What we will insist on is that local authorities provide factual material on turn-out. We believe that to be very important, although it may or may not be a measure of success of the particular pilot. They should provide material on the take-up of measures and the cost of measures. We would also expect that there would be a series of structured interviews to seek the views of voters, nonvoters, the electoral staff involved in the process, candidates and parties. Local authorities will have to bring in some expertise to do that as those are not the areas of expertise which authorities, particularly the smaller authorities, will necessarily have within their own staff complement.
We do not believe that reports will be coloured by the subjective views of each local authority concerned. We cannot see that there is any scope for abuse, fraud or cooking the books. We do not think that local authorities will find that motivation as their inspiration. An authority will inevitably, as it is closest to how elections work, be in the best position to collect and collate all the material that the Home Office requires. We do not see the need to complicate matters and to add cost by bringing another separate independent body into the authority if it does not want to work in that way.
However, we may wish to note the upcoming creation of the electoral commission, for which another Bill yet to come before your Lordships' House provides. In due course we think that the electoral commission will have an important role to play in evaluating the way in which pilots operate. Under the terms of the Bill that introduces the commission, before a successful pilot can be rolled out a commission recommendation to that effect will be required. A strong and powerful recommendation

511
coming from an independent and validating body like the electoral commission will be very significant indeed.
In view of that assurance and my comments, generally of encouragement, to local authorities to seek independent advice and support for their researches in preparing their reports, I hope that the noble Lord will feel able to withdraw the amendment. The points raised by the noble and learned Lord, Lord Mackay of Drumadoon, will fall to be dealt with when we reach the discussion and debate on Clause 11, when I suspect that he may find rather more satisfaction than might initially have appeared to be the case.
6.45 p.m.
Lord Jopling: My Lords, perhaps I may try to retrieve something from the ashes of my desire to be helpful and the Minister's sympathy. I was intrigued when he said that he felt that it would be a good idea that when local authorities are conducting pilots and are producing reports subsequently they should do it in conjunction with an independent body. Therefore, I wonder whether I may try to retrieve a morsel from all of this and ask the noble Lord to give an undertaking that, in sending circulars on the conduct of pilots to local authorities, the Government will say that they would regard it as good practice for the planning and reporting of pilot schemes to be done in conjunction with an independent body. That would be only a crumb of comfort to me but it would be a positive and helpful if the Minister could give such an undertaking.
Lord Bassam of Brighton: My Lords, I am grateful to the noble Lord for putting the point in those terms. A morsel and a crumb! Let us see. It probably would be something that we would want to address. We would want to encourage and stimulate good practice. Good practice would probably involve using a local academic institution, perhaps in partnership with the authority's own resources. I am loath to commit us to imposing anything on local authorities because we have been inordinately grateful to the individual pilot authorities and to the Local Government Association for their co-operation. We should like to discuss the matter first with them. But I am very warm to the noble Lord's proposition.
It would help local authorities better to understand the impact of the pilots if they were to make use of local academic support and research. If the noble Lord is happy with that formulation, I shall take away his final proposition, give it further thought, ensure that we have discussions with the Local Government Association and give consideration to encouraging local authorities on best practice in regard to putting together their reports and researches following the impact of the pilots. We have already debated how we might discuss them in your Lordships' House. No doubt all of those pilot sites will find their way into a
512
more comprehensive document. We can perhaps debate that at a later date when these matters have been rolled out.
Lord Jopling: My Lords, leaving aside crumbs and morsels, I feel as though I have brought the Minister to the end of the diving board, with his arms outstretched ready to plunge into the pool, but I cannot persuade him in the final stage to jump. I would ask him to remember the words a few moments ago of my noble friend Lord Onslow, who said "Courage". If between now and Third Reading we are to produce another similar amendment, I hope he will be able to tell us that in future government circulars on this point will recommend an independent involvement as good practice. On that basis, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 15 and 16 not moved.]
Clause 11 [Revision of procedures in the light of pilot schemes]:
Lord Goodhart Lord Goodhart moved Amendment No. 17:
Page 14, line 32, leave out ("relevant elections of any description") and insert ("local government elections in England and Wales").
The noble Lord said: My Lords, we now come to Clause 11 which raises important constitutional issues that were discussed at some length both at Second Reading and at the Committee stage. Clause 10 provides for pilot schemes for changing the mechanics of the voting system for local government elections in England and Wales. Clause 11 then enables the Home Secretary, by statutory instrument, to apply the pilot schemes on a permanent basis not only to local government elections in England and Wales but to parliamentary, European, Scottish and Welsh elections and indeed to local government elections in Northern Ireland.
It is true that the mechanism of elections is not as important in the scale of things as is the franchise, but it is still a matter of considerable importance. Until now all issues, such as the question of the days on which elections are to be held and the time that polling stations are open on those days, have always been dealt with by primary legislation. What we will now have is power to roll out a pilot scheme across the country for all elections on the basis possibly of one trial in one local government area. We believe that to be quite inappropriate. That was certainly the view taken by the Select Committee on Delegated Powers and Deregulation, of which I am a member. In paragraph 26 of our fourth report of the current Session we said:
"The issue of where, when and how people vote is a matter of great importance. The House may wish to consider amending the bill to limit the power so that it extends only to elections in the category in which the pilot was conducted and covered by the report, namely local government. The affirmative procedure provided would be the appropriate level of parliamentary control for this more limited power".
Amendments Nos. 17 to 22 give effect to the recommendation of the Delegated Powers and Deregulation Committee; that is, a power to convert

513
pilot schemes into permanent rules by statutory instrument, limited exclusively to local government elections in England and Wales. I hope, indeed I believe, that the Government will accept the force of that argument. I beg to move.
Lord Bassam of Brighton: My Lords, it is not customary for a Minister to intervene at such an early stage in a debate but it may help the House if I do so. I shall try to keep my remarks reasonably brief.
We had a full discussion of the merits of Clause 11 of the Bill in Committee. On that occasion I set out the Government's view. We remain of the view that the power to roll out innovations that have been the subject of successful pilot schemes to all elections is an important one. It was a power that was recommended by the Working Party on Electoral Procedures—and I can assure your Lordships, having made inquiries, that the working party meant the power to apply to all elections and not simply to local elections.
We also believe that the electorate may find it slightly puzzling and not understand why, if an innovation has been tried and shown to be a success, it should not be applied to all elections as soon as is practically possible.
Nevertheless, we take the views that have been expressed by your Lordships seriously. We pay particular attention to the reports of the Select Committee on Delegated Powers and Deregulation. As your Lordships have pointed out, it is an important committee and its suggestions should be disregarded only in the most exceptional of circumstances. On reflection, we do not believe that this is the most exceptional of circumstances.
Accordingly, I can advise your Lordships that we shall be bringing forward government amendments to Clause 11 at Third Reading. The effect of the amendments will be to limit the power to roll out successful innovations only to local government elections. That is in line with the recommendation of the Delegated Powers and Deregulation Committee. That power will be subject to the affirmative resolution procedure.
I can also repeat a commitment that I made in Committee. The Delegated Powers and Deregulation Committee suggested that the electoral commission should have a role in determining whether pilot schemes should be rolled out, and I reiterate that that is the Government's intention. As your Lordships are aware, we do not believe that we can refer to the electoral commission in this Bill since that body does not yet exist and this is the earlier of the two Bills currently before Parliament which deal with electoral matters.
However, I can assure your Lordships that we shall be bringing forward an amendment to the other electoral Bill, the Political Parties, Elections and Referendums Bill, to provide that the Secretary of State will be able to make an order under Clause 11(1) of this Bill rolling out a pilot scheme only on the recommendation of the electoral commission.
514
That is, I hope, unambiguous. In the future, a roll out will be able to happen only if the electoral commission has recommended it and, as I have said, such a roll out will only encompass local elections. Should we want to extend the innovation to parliamentary or European parliamentary elections, primary legislation would be required. As I pointed out last time we debated this issue, parliamentary time is a scarce resource. I hope that, if we reach the position of bringing forward primary legislation to give wider effect to an innovation that has been successfully piloted and endorsed by the electoral commission, the Opposition parties, who have understandably been critical of Clause 11 in its present form, will do everything to ensure that popular legislation has a smooth passage. The noble Lords, Lord Mackay of Ardbrecknish and Lord Goodhart, may want to address this point, perhaps helpfully, in any further remarks that they make on the subject.
As I have made clear, it is not without a certain regret that we are proposing these changes, but it demonstrates, I trust, that the Government do take notice of the debates that take place in this House, that we listen to the arguments and are prepared to be flexible, and that we pay full regard to the reports of the Delegated Powers and Deregulation Committee. We may have sacrificed some of the flexibility that we had hoped to achieve in an area of policy development and delivery where I believe there is broad support for innovation; however, we have done so for all the right reasons. We are happy to give the commitment that we will table the government amendments as soon as we are able to do so. In the meantime, I trust that noble Lords in whose names the various amendments stand will feel able to withdraw them.
The Earl of Onslow: My Lords, again the Government are listening. They could have listened earlier. We still come up against something that is extremely difficult. If we are to alter the electoral process for local elections—either for parish councils in Cleethorpes or the Greater London or Surrey county councils—to do so solely by Order in Council is a dangerous approach. If the system is not right and the order cannot be amended, one is liable to be in a pickle—and one that will be extremely difficult to unpickle.
I hope that we shall take careful account of the fact that electoral processes should be developed in Parliament, amended in Parliament and finally passed by Parliament. They should not be done simply on the whim of the noble Lord, Lord Bassam, be he baleful or not baleful. I should say that to any Minister, be it on our side, be it Gladstone, be it the baleful noble Lord, Lord Bassam. It is bad, and we should be very, very careful.
Lord Mackay of Ardbrecknish: My Lords, perhaps I may respond to the Minister's intervention in reverse order of the main points that he made.

515
First, with regard to primary legislation, I have little doubt that, if we decide to change the electoral system for the other place, it ought to be done only if there is general agreement principally in the other place, whose elections these are. If that is the case, primary legislation can be passed expeditiously. Frankly, if there is not general agreement in the other place, I do not believe that primary legislation should not be passed at all if it changes in any significant way elections to the other place. These matters ought to be dealt with by agreement.
The second point relates to the news that the noble Lord gave us confirming what he said in Committee; namely, that he would bring forward changes to the next Bill setting up the electoral commission which would give it a role in some of the matters that we are discussing now. I am sure that we all welcome that. I know that my noble friend Lord Jopling will welcome it. We look forward to those amendments when the Bill comes before this House.
The most important announcement made by the Minister is that the Government accept the views of the Select Committee on Delegated Powers and Deregulation. That is a very sensible position for the Government to take. I do not look on it as a victory for the Conservative Party or the Liberal Democrat Party, or for the alliance between us. It is a victory for this House and for the setting up of the Select Committee. I chided the noble Lord that, if he was not careful, he would go down in history as the first Minister who had absolutely refused to take on board what the Select Committee had said. I am pleased that he has saved himself from that fate. I welcome his assurances and have no doubt that, on that basis, the noble Lord, Lord Goodhart, will withdraw his amendment.
Lord Goodhart: My Lords, the noble Lord, Lord Bassam, invited me to give an undertaking about our future attitude towards primary legislation introducing pilot schemes which have been tried out on local government. I cannot give any formal undertaking as to our view. However, I have no doubt that if the pilot scheme—
Lord Bassam of Brighton: My Lords, to pick up the earlier refrain, a little courage, a little courage!
Lord Goodhart: My Lords, I am happy to say that if a pilot scheme has been regarded as successful by voters who have tried it out, has been approved by the electoral commission and is not deeply controversial along party lines in the other place, I have no doubt whatever that we should support it in this House. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 18 to 23 not moved.]
Clause 13 [Assistance with voting for persons with disabilities]:
7 p.m.
Lord Ashley Lord Ashley of Stoke moved Amendment No. 23A:
Page 16, line 25, after ("orally") insert ("or in writing").
The noble Lord said: My Lords, this is a very simple amendment which, I believe, is not controversial and which will not detain the House, but it will assist profoundly deaf people if the Government are able to accept it.
There have been two significant changes in the voting processes. One is the new complexity. Voters are now faced with a long list of names, and sorting them out is not always easy. The second change is that people who, because of their disability, found it difficult to vote in person are no longer prepared to accept that situation.
I am glad that the electoral rules now entitle blind people to be assisted, when they vote, by a companion from the same constituency. Fortunately, Clause 13 of the Bill extends that facility to other disabilities and that is very welcome. It provides for the voter to make an oral declaration that he or she is unable to vote without the assistance of a companion. But the clause, as drafted, takes no account of profoundly deaf people without speech. They would be unable to make such a declaration about their incapacity. They need to be able to state their desire for help in writing. That is a very important issue for profoundly deaf people.
Many of the 50,000 people who are deaf or profoundly deaf who use British Sign Language (BSL) as their first language will have no need for help in the voting booth, but some will. Those who have a limited command of English can be frustrated in their efforts to understand complex voting procedures. They cannot simply ask questions of the presiding officer. They rely on British Sign Language for communication and should be allowed to use it with a companion when seeking explanations. Although the number who will benefit from this amendment is small, anything that we can do to reduce the existing barriers to deaf people voting will be a step forward for democracy.
The Government have a very easy wicket on this matter. It is a small, modest amendment with virtually no cost implications. In fact, I say that there is no cost involved at all. However, this provision can be of enormous value to the people concerned. It is an impediment to voting if the Bill goes through as it is. If we make this minor change, thousands of people can benefit. I hope that my noble friend and the Government are able to accept this amendment. I beg to move.
Lord Bassam of Brighton: My Lords, I am grateful for the opportunity to congratulate the noble Lord, Lord Ashley, on the eloquence with which he moved this amendment. I do not believe that Home Office Ministers very frequently get the opportunity to pay

517
tribute to the noble Lord for the way in which he tirelessly campaigns for those with disabilities. I am very pleased to have that opportunity this evening.
The amendment focuses on a deficiency in the way in which people with a disability may exercise their right to vote. Although I cannot readily accept the noble Lord's amendment this evening, I should like to provide the facility and opportunity for him to meet our officials who have been giving this matter some consideration in order to see what practical steps can be used in the confidence of the voting booth, as it were, in order to help those who suffer from deafness and speech deficiency which currently prevents them making use of Clause 13 in the way in which the noble Lord has described.
It may well be that this matter is ultimately best left to the common sense of the presiding officer in each polling station. But if we can accommodate the concerns that the noble Lord has quite understandably and properly raised, I should like to see that done. I have perhaps not been as positive in my response as the noble Lord would like, but perhaps we can have discussions with those who are concerned about the disability he wants us to address. I shall be more than pleased to join him in those discussions to see whether we can find a practical outcome to a real and genuine problem for the small number of persons who suffer from this particular disability. With that, I trust that the noble Lord will feel confident enough to withdraw his amendment.
Lord McNally: My Lords, before the noble Lord sits down, perhaps I may point out that I did not exercise my right to speak in support of this amendment because, quite honestly, I expected him to accept it. Does not the Minister appreciate that one of the reasons why the disabled have wanted provisions written into legislation rather than left to discretion is that too often that discretion has not been used in their favour? I wish the Minister well in his discussions with the noble Lord, Lord Ashley.
Lord Bassam of Brighton: My Lords, perhaps I may respond to that. I well understand the point. In my political life I have supported the general approach that the noble Lord has set out, which is that we should be more prescriptive here. It encourages and ensures that we get good practice. That is what I am after; namely, finding a practical solution. I am a pragmatist at heart.
I should like to see what we can achieve through discussions with the Association of Electoral Registration Officers and others to see what practical steps we can put in place. For that reason, I invite the noble Lord to take part in discussions, including with those other organisations which may be interested in this particular problem.
Lord Ashley of Stoke: My Lords, I am astonished at that response from my noble friend. One could not have a simpler, more modest and reasoned amendment. It is impossible for the Minister to say that the Government cannot accept this amendment;
518
but for what reasons, I do not know. If the matter is to be left to the good sense of the presiding officers, as has been suggested, there would be no problem. But they have not exercised their good sense. That is why the Royal National Institute for the Deaf and the British Deaf Association are concerned.
Deaf people have a major problem. They are anxious to vote. They want to exercise their democratic right. Yet when the matter is set out in the simple terms of this amendment the Government say that we should come along and talk about it. I am at a loss to understand that. We do not want to rely on presiding officers, but to have the right laid down in legislation, as the noble Lord, Lord McNally, very rightly said.
But the hour is late and I must not take up the time of the House. I am almost an interloper in this discussion. I have no rights as regards this Bill. I have made no other contribution to our consideration of it. I accept my noble friend's invitation to discuss the issue with his officials. We shall not get any further with them than the amendment which has been tabled. It is clear, simple, positive, constructive and helpful.
Lord McNally: My Lords, before the noble Lord sits down, may I suggest that if the discussions do not prove fruitful the noble Lord tables the amendment again? Perhaps at that point we could test the opinion of the House. I suspect that he would have widespread support. In the mean time, let us wish him well in fruitful discussions.
Lord Ashley of Stoke: My Lords, I warmly appreciate that intervention. I had expected to say that I warmly appreciate the Minister's response, but I cannot do that. Frankly, if the votes were available tonight, I would have sought to divide the House because the Minister's response is unacceptable. However, my noble friend has been helpful in offering discussions. I accept the offer in the spirit in which it was made. I reluctantly beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 16 [Citation, construction, commencement and extent]:
[Amendment No. 24 not moved.]
Schedule 1 [Registration: amendments of 1983 Act]:
Lord Mackay of Ardbrecknish Lord Mackay of Ardbrecknish moved Amendment No. 25:
Page 20, line 44, at end insert—
("() Subsection (6) above does not apply to the extent that regulations so provide; and regulations may in particular authorise a registration officer to retain entries in his register for up to one year, if he thinks fit, in cases where the form in subsection (4) above has not been returned in respect of any address.").
The noble Lord said: My Lords, this matter was debated at Committee stage, when the noble Lord, Lord Bassam, and I were involved in the same amendment. I sought to delete this part of the Bill and not replace it; the noble Lord sought to delete it and

519
replace it. In the result, it was deleted and the noble Lord got his replacement. I now return to the issue because I believe that it is worth addressing once more.
This amendment is concerned with the removal from the electoral register of the names of people who do not respond to the form and nobody knows whether or not they are still at the qualifying addresses. One can look at the 19 London boroughs to illustrate the problem. Of those boroughs, three have no carry-forward policy at all. Therefore, I am not entirely sure whether they carry forward people who do not return the form in the autumn of every year. They do not appear to have a proper policy. Twelve boroughs carry forward for one year only; two boroughs carry forward for two years; one carries forward for three years; and one carries forward indefinitely. Therefore, in the last case if the form is never returned someone remains on the register until perhaps one of the political parties notices it and makes an objection. I am not sure what is the position across the rest of the country, but I suspect that the pattern is somewhat similar. Perhaps the Minister can assist me in this matter.
The noble Lord, Lord Bassam, who replied to the debate in Committee, was reasonably sympathetic to the problem that I then raised but was not prepared to go the final furlong (if I may use racing terminology). I hope that this evening the noble Lord, Lord Bach, will do so. If different authorities throughout the country take different views about carry-forward policy it leads to a fairly arbitrary position. I do not suggest for a minute that an authority decides for political reasons to carry forward for one year, two years, three years or not at all. It would be quite hard to identify who would gain advantage from that.
However, carry-forward continues to make false the denominator of the calculation of turnout. If we seek to judge turnout it is important to know not only the number of people who vote but the denominator; that is, the number who are entitled to vote. If we do not get the denominator as accurate as possible the percentage turnout will always be a fairly false figure. I am advised that, following the 1997 election, 11,000 names were deleted from the register in Hackney. That was one-sixth of the total electoral register. Clearly, the figure for the turnout in Hackney in that election was a nonsense because it bore no relation to the number of people who could turn out.
I believe that I have made my case. Perhaps this evening the Minister can be a little more helpful, even if all authorities are told by circular that they should have one policy, which I suggest should be a one-year carry-forward. I beg to move.
7.15 p.m.
Lord Bach: My Lords, with the passion of a democrat and—if I may say so—a mathematician, the noble Lord has more or less persuaded us. There is little difference between the position of the Government and that of the noble Lord. It is very unfortunate that every year there are a number of
520
instances in which the electoral registration form is not returned despite the best efforts of registration officers. In such cases, unless the registration officer has some other evidence to suggest that the people who are registered at the addresses in question have moved away, he will normally retain the entries on the register, and that must be right. In cases of doubt the registration officer should always err on the side of enfranchising rather than disenfranchising people, but that has the effect of making the turnout figure a false one in itself.
The noble Lord referred, fascinatingly, to the 19 London boroughs. Perhaps I may quote some figures to him which are of equal interest. The University of Plymouth conducted a study last year which showed that 37 per cent of authorities carried over names for one year in cases where the form was not returned. Twenty-four per cent of those surveyed carried over names for two years. Other authorities carried over names for even longer, including 15 per cent—I believe that to be a high figure—which said that names were carried forward indefinitely.
We believe that this situation should and must be regularised and a consistent approach adopted around the country. That is why new Section 10A(7) allows for regulations to be made for names to be kept on the register for a prescribed period which, like the noble Lord, we believe should be one year. It seems hard to justify a longer period which may put out the figures and lead to potential abuse.
How does one achieve the end which the House seeks? We believe that a regulation-making power is sufficient for that purpose. I repeat that the prescribed period will be one year. The advantage of regulation rather than primary legislation is that if, say, we are all proved to be wrong in this matter and the period should be longer, or perhaps no period should be allowed at all, it will be easier to deal with the matter in this way than by primary legislation. On that basis I hope that, with goodwill breaking out all over, the noble Lord will withdraw his amendment.
Lord Mackay of Ardbrecknish: My Lords, I am delighted to withdraw my amendment. I have no problem with the Government dealing with this matter by regulation. I am delighted that they accept the argument and see the force of allowing carry-forward for only one year. If this afternoon proves anything it is the success of your Lordships' House as a revising Chamber. I beg leave to withdraw my amendment.
Amendment, by leave, withdrawn.
Lord Mackay of Ardbrecknish Lord Mackay of Ardbrecknish moved Amendment No. 26:
Page 21, line 13, leave out ("in accordance with the prescribed requirements").
The noble Lord said: My Lords, Amendment No. 26 is a probing amendment which is concerned with the prescribed requirements. Essentially, the amendment relates to challenges by members of the public to someone who is registered. I wonder what changes, if any, the Government propose to make in moving from

521
the old to the new method. Some changes must be made because we are moving to a rolling register, which is quite different from the old method. Under the old system, challenges against the draft register were allowed over 21 days.
Will there be a 21-day challenge available against the monthly register? If somebody goes on to the register on, say, 1st February but nobody notices it until June, will a challenge be mountable? I should like to hear the view of the Government about challenges to rolling registers. Can challenges be made to the monthly register or only to the major change in the autumn on 1st December? Are there to be any other changes to the way in which challenges have been accepted to date?
I hope that I have made my point briefly. I do not want to string out the amendment, which I believe is fairly self-explanatory. I hope that the Minister can give a satisfactory reply.
Lord Bach: My Lords, we understand that the intention behind this amendment is to give those who wish to object to the inclusion of a particular person on an electoral register greater freedom as to the form in which to make the objection. We rather support the existing requirements for making objections because they are simple and straightforward, which in this field are two great virtues.
An objection must be made in writing. It must be signed and dated, and must give the name and qualifying address—that is the one on the register in question—of the objector plus, if appropriate, an address for correspondence. It must state the name and address of the person against whom the objection is being made and the grounds of the objection. We believe that that is the very minimum of information that the electoral registration officer requires. I doubt whether he would be able to determine the objection if he did not have that material. We can see nothing wrong with prescribing it in regulations.
As the noble Lord said, the challenge was made in respect of the draft register. Under the new system, the challenge will be subsequent to the entry being included in the register. We have no plans to introduce different or additional requirements in this area. I hope that that short reply is acceptable to the noble Lord.
Lord Mackay of Ardbrecknish: My Lords, I am grateful to the Minister. It probably satisfies me. Challenges are an important part of keeping the register "clean", if I may so describe it; and political parties—they are probably the only ones—keep an eye on the register. I am pleased to have confirmation that challenges to the rolling register can be entertained. With those assurances, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Mackay of Ardbrecknish Lord Mackay of Ardbrecknish moved Amendment No. 27:
Page 40, line 32, at end insert—
("(12) When a nominated proxy is approved by an electoral registration officer to hold a permanent or particular proxy vote for an elector, the electoral registration officer shall within three working days of the application write to the elector to confirm the name and address of the appointed proxy, and the duration of the appointed proxy, unless—

(a) the elector is registered as an overseas elector, or

(b) the appointed proxy is registered at the same address.").

The noble Lord said: The amendment is about the need to keep proxy voting secure. We had an interesting debate in Committee; I shall not go over it. At col. 1122 of the Official Report of 15th February, the noble Lord, Lord Bassam of Brighton, invited me to withdraw my amendment,
"on the clear understanding that I am sympathetic to the purpose behind it. We shall try to bring back some provision to cover that eventuality".
Perhaps that will take place at Third Reading. I put down this marker to remind the noble Lord that we both agreed that there is a danger in proxy voting: that people's votes can be literally stolen from them. We are agreed that we should like to find some way to resolve the issue. Perhaps the Minister can give me an update. I beg to move.
Lord Bassam of Brighton: My Lords, I, too, can be brief. At Committee stage I said that I was sympathetic. I continue to be sympathetic. No doubt my sympathy will continue, extend and expand as we discuss the matter at Third Reading.
I have been busy checking my correspondence file. I thought that I had written to the noble Lord on the matter, but I am not entirely sure. Like the noble Lord, I am extremely concerned about proxy voters and the potential for abuse. I could give chapter and verse on vote stealing. It happened in one of my wards. I was extremely angry. We had a full investigation although it did not get us as far as I would have liked. I did not feel that the officials took the situation as seriously as they might have done.
Nevertheless, we want to deal with the issue. We think that regulations are a better way to achieve the purpose. I give a firm commitment today that we shall introduce regulations to achieve the end that the noble Lord seeks. I trust that with that commitment, he will feel able to withdraw the amendment.
Lord Mackay of Ardbrecknish: I am again grateful to the noble Lord for that reply. If he has sent me a letter—I could not argue on that—I have either not received it or my office system (that is, myself) has not put it in its correct folder.
Lord McNally: My Lords, perhaps I may remind the noble Lord that the letter of 23rd February was copied to me.
Lord Mackay of Ardbrecknish: My Lords, I shall just need to sack my secretary in the morning! I apologise to the Minister for even raising the issue.

523
However, at least we have it on the record. I am satisfied to deal with the matter by regulation. With the Minister's assurances that regulations will deal with the problem—we agreed in Committee that there was potential for stealing votes—I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Schedule 5 [Minor and consequential amendments]:
Lord Mackay of Ardbrecknish Lord Mackay of Ardbrecknish moved Amendment No. 28:
Page 43, line 46, at end insert—
("() Omit rule 20.").
The noble Lord said: My Lords, perhaps I had a letter from the Minister on this issue too! The amendment relates to the official mark. We had an amble around the course about the official mark. In this case the Minister was seized of the need to see whether a suitable replacement could be found for the official mark.
In Committee I pointed out that some people—not many but enough in one or two constituencies perhaps to make the difference—lost their vote because the official mark was not put on the ballot paper. No one has explained to me what good the official mark does nowadays. There are other serious infringements of the electoral law; the official mark does not address any of them.
I live in hope that the Government will take the issue on board and by a simple amendment remove the need for the official mark. As the noble Lord mentioned earlier, if we move towards electronic voting, an official mark becomes obsolete. However—dare I say this to the Minister?—not even his draftsman could improve on my drafting of the amendment to get rid of the official mark, which proposes simply to omit rule 20. I beg to move.
Lord Bassam of Brighton: My Lords, I shall not ooze more sympathy but give general encouragement. The noble Lord made his position commendably clear at Committee stage and today. It is a respectable position. He is not alone in holding that view. As I sought to explain in Committee, although the official mark has a venerable history—I believe from 1872—it does not mean that it has to be preserved unquestioningly, although it has undoubtedly served a purpose.
We accept the view of the Home Affairs Select Committee after consideration of the matter. It suggested that 2,000 or 3,000 ballot papers each time falling foul of the official mark was a problem, although, as the figures indicate, not a great one. It is unsatisfactory that otherwise valid votes are rejected simply because of an error by a polling station staff member.
For that reason, my ministerial colleague, Mike O'Brien, made clear in another place that we were keen to explore ways of replacing the official mark. We want to discuss that again with the major political parties and electoral administrators, who have an important view.
524
Noble Lords may be interested to know that a number of the pilot schemes which we hope to be able to run this May have as one of their elements doing away with the official mark and using a watermark instead. It is an interesting and valuable innovation. We shall monitor those schemes to see how well they work. I referred earlier to electronic voting and the possible introduction of bar codes. I understand that another pilot—I think at Broxbourne—will have a bar code on the voting papers. Bar codes or water marks may well replace the official mark.
We want the pilots to show us how effective other methods may be. If the pilots work—it is an area where we can be reasonably certain—no doubt that is an innovation which we can probably agree is valuable, and one that we can roll out nationally with the caveats mentioned in debate on Clause 11 about the need and value of independent evaluation of new techniques and methods such as these.
Yes, there is some sympathy for the amendment. There is certainly practical action. Let us consider the success of other methods of marking papers, ensuring that they can be properly validated in the future. Let us see how well the pilots work. I trust that, with those more than warm words, the noble Lord will feel able to withdraw the amendment.
Lord Mackay of Ardbrecknish: My Lords, given the progress that we made earlier, I was beginning to hope that I should win my battle about the official mark. It is not the first time I have brought the matter before your Lordships; I did so when I was a Back Bencher during the passage of another Bill in the early 1990s.
I suppose that progress on this matter is slow, but I remind the Minister what has been said by the Association of Electoral Administrators. It said that, disappointingly, some of the practical issues such as the abolition of the stamping instrument, have not been mentioned, but perhaps a couple of unstamped ballot papers resulting in election petitions during the pilot schemes may make the Home Secretary reconsider. We must encourage some controversy during the pilot schemes to see whether we can get the Home Secretary to think again.
Given the progress we have made today, it would be churlish of me to put the matter to the House. Therefore, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.

Business
Lord Bach: My Lords, as consideration of the Representation of the People Bill is now complete, tonight's Unstarred Question is no longer restricted to the one hour available for the Dinner Break business. Instead, a limit of one-and-a-half hours will apply. This change does not affect the time allocated to my noble friend Lord McIntosh of Haringey, but it increases to 11 minutes the time available to each of the other speakers.

525
However, if noble Lords prefer to avoid the inconvenience of changing and extending their speeches at such short notice, I can assure them that they will attract no criticism from these Benches nor, I strongly suspect, from the House as a whole.

Link Bank Network
7.31 p.m.
Lord Graham of Edmonton Lord Graham of Edmonton rose to ask Her Majesty's Government:
Whether they are aware of the present intention of the Link bank network to impose new charges on users of cash machines; and whether this would be consistent with the Government's policy to combat social exclusion.
The noble Lord said: My Lords, I begin by declaring an interest. I am the chairman of the United Kingdom Co-operative Council, an interest which appears in the Register of Interests. I do so especially because the Cooperative Bank is a member of that council, as is the Co-operative Insurance Society, the Co-operative Wholesale Society and all other expressions of the Cooperative enterprises. I also declare that I am a user of Nationwide's services. I can do no other; I did so even when it was called the Co-operative Permanent Building Society.
The timing of this short debate may or may not prove to be significant. I requested time for it some six weeks ago. As the House knows, timing is not in the gift of the usual channels but of the business managers, to whom I am most grateful. In the light of today's news, even my wording is out of date. Furthermore, like other noble Lords, I look forward to the maiden speech of the noble Baroness, Lady Greengross.
We are considering nothing less than a case of 21st century daylight robbery. Perhaps it is the first, but, sadly, it will not be the last. In my view, it is motivated by that most potent of basic instincts; greed. My Unstarred Question draws attention not only to this breathtaking exercise of corporate power, but also to the challenge it presents to the Government's strategy for giving those in need at the bottom of the pile some chance to share in the value of the banking world. In modern jargon, they are the socially excluded; deprived by virtue of their economic plight from enjoying, among other things, access to a bank account. We all know that that is the equivalent of a passport out of such exclusion into the modern world.
It is fashioned by many forces, but, in this context, shared by the action of the world of banks, which have presided over a resolution in which the typical person has been driven to rely on access to, not banks, not counters, not chequebooks, but, increasingly, the ATM; the hole in the wall. By their decision to exploit the situation, the large banks, led by Barclays, stand condemned as the modern "Hole in the Wall Gang". It is not only daylight, but modern highway and "high street" robbery as well.
The House is entitled to hear the basic facts, which are these. In 1985, the Link network was established to enable some large building societies, including the Abbey National, Nationwide, Girobank and the Cooperative Bank, to share access to their cash machines. Since then, the Link network has grown and grown. A system of intercharge fees between Link members ensures that each bank is compensated for the cost of its machines being used by the customers of another bank. The Co-operative Bank, for instance, pays around 30p to another bank or building society when its customers use a competitor's machine, but it does not charge the customers in any way. It does not need to. It looks upon that use as part of its overall cost structure, paid for out of the profit it makes from using its customers' money. Why should banks charge, exorbitantly and outrageously, above the cost to them of providing this service? It is a charge for asking for some of your own money.
Today, there are some 27,000 cash machines, access to which is created by the 34 banks and building societies in the Link partnership. From the beginning in 1985, when customers were not charged for cash machine withdrawals, we have moved to a situation in which certain banks charge their customers a so-called "disloyalty" fee for using other cash machines. Subsequently, many Link members have—regrettably, in my opinion—demutualised and have begun to introduce disloyalty charges.
Make no mistake, it was that move which first drove a coach and horses through the principle of free cash machine withdrawals. But the amount of£1.50 per transaction cannot possibly bear any relation to the actual cost. It can be justified only on the basis of profit-making and it undoubtedly falls most heavily on those who can ill afford to pay £1.50 when they take out cash. Imagine a small account holder needing to withdraw £10, say, twice a week. The on-cost is outrageous.
Why do customers remain with such banks or building societies? The first reason is inertia; changing bank is too much trouble. Secondly, there is a lack of information. Customers are not informed of the disloyalty charges until they appear a month later on their bank statements. Barclays Bank officials told me today that they strongly favour transparency, and I welcome that.
I use this short debate to reveal the murky waters of how some financial institutions use their market power to the disadvantage of those for whom they profess to cater: not only the socially excluded, but their own customers.
When we talk about cash machine users, we are not talking about a small minority. As a result of banks having closed hundreds of branches and forced customers to use ATMs, about 70 per cent of the cash people use in Britain today is taken from cash machines. Almost eight in 10 of the adult population has an ATM card. There are around 2 billion cash machine withdrawals every year.
Therefore, we have a system which, according to press reports, has been categorised by Don Cruickshank as,
"inefficient. anti-competitive and socially exclusive".
It is the intention of the big banks further to distort this unfair situation by adding an additional £1 charge to the £1.50 already paid by many customers. Many of those customers are at the bottom of the pile and do not deserve this imposition. Quite frankly, neither they nor any other users of ATMs should have to bear this unfair charge; a charge used substantially to boost already swollen profits. The Co-operative Bank absorbs its cost of 30p per transaction. Why cannot others? Mervyn Pedelty, its chief officer, put it like this:
"The reported moves by Barclays to charge other banks £1 for withdrawal is very disappointing when we all should be working towards improving customer services. It must not be forgotten that within Link there is already a system of interbank charges whereby we already pay other members to meet the costs of them serving our members. We therefore think it is wrong that Barclays feels that it needs to raise additional profit from withdrawals".
I would simply add that the operating profits of Barclays Bank increased in 1999 by 49 per cent to the figure of £2,942 million; nearly £3 billion. Why, in the light of such profits, Barclays wants to impose the £1 per use charge is beyond me. Today, its officials told me that the change to £1 per transaction would result in an increased cost to the bank. I note what it says, but I am more concerned about costs to poorer people than I am about the profits of Barclays Bank or any of the other big banks which support it.
I conclude by asking my noble friend whether he can comment on the accuracy of the press reports on Don Cruickshank's thrust of endorsing surcharges which will open the doors to charges for all. Will my noble friend support me in calling for a return to free cash machines for all? When the principle of surcharging is conceded, will the Government accept that 30p is the top charge to be tolerated?
Finally, will my noble friend take this opportunity to deny press reports that the 4,000 cash machines being installed in post offices may levy charges for withdrawals? Opening up banking in rural and deprived areas is a step in the right direction, but it needs to be done in such a way that encourages the prudent and does not pander to the feckless or the profligate; nor must it result in swelling the profits of those who already enjoy market domination.
I understand that today the Link organisation has accepted the proposal to introduce surcharging. I endorse the words of the chief executive of Nationwide, Brian Davis:
"It is a sad day for consumers and for the financial services industry which has passed up the opportunity to listen to its customers and others".
Nationwide and the Co-op Bank intend to maintain their free withdrawals policy. They need the support of the Government. The socially excluded need someone to stand up for them in the face of this corporate bullying. I look to the Minister for support in this matter.
7.41 p.m.
Baroness Greengross: My Lords, I want to begin my maiden speech by thanking noble Lords on all sides of the House, as well as the Officers, for their extraordinarily warm welcome to me and for their efforts to make me feel at home and to give me guidance and advice. I am beginning to learn about the conventions of the House and even a little about the geography, although that is more difficult.
Having worked so closely with Peers and Members of the other place for many years in my role as Chief Executive of Age Concern, it is a great privilege and honour now to be a Member of this House. I intend to play a full and active role here in the years to come, especially once I retire from Age Concern later this year. I am particularly grateful for the interest and active support that the House has given over the years to issues concerning social inclusiveness and the protection of disadvantaged people across the spectrum of society.
When thinking about what I was going to say this evening, I was reminded of a very distinguished Member of your Lordships' House, the late Lord Seebohm. He was an inspiration to me. He was Age Concern's first president and I met him in the late 1970s when I joined the organisation. As a former chairman of Barclays Bank, he combined the skills needed to head up one of our leading banks with an independent, keen and objective mind. His report on the future of social services was in its time both radical and innovative. That balanced approach to life was reflected in his very modest lifestyle and caring and tolerant approach to everyone who was privileged to know him.
My many years in the field of ageing have, I hope, given me some understanding of the needs of older people, whose numbers are growing rapidly and whose position, power and aspirations are changing as the balance of our population shifts dramatically. I have worked continuously to change negative attitudes towards ageing and older people and to improve the quality of later life. I also previously worked with vulnerable children and young people, combined with an academic career and a period in the commercial sector here in the UK and across Europe. Therefore, my interest in social exclusion spans most of my lifetime and all areas of major public policy.
Therefore, I am grateful that the noble Lord, Lord Graham, secured this short debate to call attention to proposed practice in this particular aspect of banking. I believed that it was an appropriate early occasion to make my maiden speech to your Lordships. I, too, am concerned that many banks and building societies might seek, or seem to be intending to seek, to levy quite heavy charges on users who do not hold accounts with them. We live in a technological age where funds are accessed increasingly through the "hole in the wall", as the noble Lord, Lord Graham, said, rather than over the counter.
Customers who lack transport or who have mobility restrictions could be particularly disadvantaged. What should mean greater flexibility and choice will be no

529
choice at all for people who have only one cash machine within easy reach of where they live. We must ensure that a new and vulnerable public—those who previously kept their money under the mattress or in the teapot and who now benefit from the security of a bank account for the first time—are not disadvantaged by punitive charges every time they withdraw some of their modest income or savings.
Our older population, which is growing fast, is not homogeneous. It encompasses both the richest and the poorest people in our country. Older people own 80 per cent of the wealth that is now in private hands, but almost half of our pensioner population still relies on the state pension and benefits for almost all its income. A new and substantial proportion of older people is also on the margin and would be among those hardest hit by the Link proposals.
Approximately 80 per cent of older people now have bank, building society or post office accounts. Of course, many will hold accounts with Link, including the Post Office Girobank itself (now part of the Alliance & Leicester). No doubt many more will do so in the future as the Post Office moves to automated payments. Might they in effect be charged for obtaining their state pension, especially if they live in a rural area or a small town where there is only one bank or post office with a cash machine? It would be bad enough to be charged for withdrawing other savings but it seems totally unacceptable to be charged to obtain one's pension. It is not difficult to understand why older people will see a charge of, say, £1 or £2 to withdraw £20, or even their weekly state pension, as totally unacceptable.
Well over half of all state pensioners still collect their pension in person in cash from their local post office every week. The sub-post office, which has long been important to many people, is also under threat and in our rapidly changing world it is very important that everyone should be ensured easy and equitable access to their own precious savings and income.
However, I also wish to be positive. It is dangerous to see people who are deemed to be socially excluded by policy makers as those who do not have bank accounts, do not know what the Internet is or do not want to learn something new when they are 65 or 75. Unprecedented longevity is a triumph to be celebrated at the start of the new millennium. Older people are not as technophobic or afraid of the modern world as the stereotypes would suggest. Those same older people who do not have a bank account might just also be surfing the net or learning a new skill. Only last week the DfEE announced a competition to find Britain's oldest learner. That is also why Age Concern's own Baby Boomer Bistro—the on-line chat room which we run—is an enormous success. Older people are the boom sector for IT. They are the fastest growing group of users—a fact recognised by the Government with initiatives such as the Learning Network, part of the Better Government for Older People project. This is all about social exclusion, especially of older people, but not because they need to be socially excluded.
530
Finally, the Government must be congratulated on beginning to address the needs of those who are socially excluded, as must be the noble Lord, Lord Graham, on making the connection with financial services. The Social Exclusion Unit itself had to be reminded that social exclusion does not stop at the age of 60 or 65. In fact, it can worsen with isolation and loneliness in later life. Therefore, I hope that these efforts will not be derailed by others, whether it be banks which charge people an undue amount or, indeed, anything to withdraw their own cash when post offices are closing down in local communities.
We have all heard that the Link network is to go ahead with charging and that it can decide on the level of charge to be imposed. If I were allowed to be somewhat more controversial than I am tonight, I should say that that is a missed opportunity and a very sad occasion.
I hope that, as Lord Seebohm and others sought to have, we may be able to have a similar balanced approach in welcoming the new technological innovations but we should build in appropriate safeguards to protect vulnerable people and, in particular, those who are older, so that they can all, whatever their socio-economic status, echo the recent words of the United Nations Secretary-General, Kofi Annan, when he said:
"I am an older person and I am proud of it".
7.51 p.m.
Lord Lucas: My Lords, it is a great honour to be chosen to congratulate the noble Baroness, Lady Greengross, on such a fine maiden speech. In the course of her life and work, the noble Baroness has achieved a great deal for other people. As a youngster, she championed the cause of the aged. As head of a single-issue pressure group, the noble Baroness is notable for having spoken to other groups about other interests widely separated from her own and for having listened to them. She has thereby built a constituency of interest and common cause which has enabled her to make an enormous difference to the lives of many people. It is a great pleasure that, as the noble Baroness enters the age at which she can benefit from all that she has done, she is allowing us to benefit from her presence here. We look forward to hearing from her many more times in the future.
I also congratulate the noble Lord, Lord Graham of Edmonton, on giving us the opportunity for this debate. He draws our attention to a matter which is crucially important; that is, that we should make sure that the structures of our society, both government and commercial, are such that they will allow access back into the mainstream of our society for people who find themselves excluded or on the edge of it.
In the cause of regulation and consumer interest, we have allowed the banking industry to develop a particular form of monopoly. That is not necessarily bad. We have gained a lot from the restrictions which we have placed on people's ability to open and operate banks in this country. But any form of monopoly such as that necessarily has potentially bad consequences

531
for the consumer and must be monitored. I am delighted that the Government appear to be doing that, but it seems to me that we should all accept that that is the right thing to do—that we should keep an eye on what banks are doing.
The banks in this country have a long history of soaking the private customer so that they can lose large sums in property or financing overseas governments. There is nothing new about the recent events but it is something of which we should be particularly aware because, whereas in the old days the poor were not so dependent on having bank accounts and being able to use them, now, in modern society, that is changing and it is becoming much more essential for anyone who wants to get on in the world we are creating to have access to banks and to have reasonably priced access to banks.
The principal ways in which people interact with banks these days are by having a card, which we are not discussing this evening but it is another source of problem—the difficulty which some people experience in getting even a debit card—and once you have that card, being able to use it to get cash out of your account at a reasonable price. That obviously involves any up-front charge made for the use of the ATM but also the charges back in the bank which are imposed on the management of the account.
If we allow the banks to impose what amounts to totally unreasonable cost penalties on the poor for using their accounts, we are making it much more difficult for those people to enjoy the sort of life we wish them to enjoy and which, in many cases, we are paying our taxes so that they should enjoy; and we are making it a great more difficult for them to find the extra pounds, the extra money, to make their lives better which surely should be the object of all our policies.
What do we need to do in this case? It is quite clear that we need to limit charges for the use of ATMs to an amount which is reasonable. The noble Lord, Lord Graham, said very clearly that the figure is 30p. That is what banks charge each other. They would not accept that charge unless they thought it was reasonable. They all have experience of using ATMs. To suggest that something which is effectively costing 30p should be sold onto the customer by what is often, locally, a monopoly supplier at £1.50 or £2.50 is completely unreasonable and is the sort of thing to which the competition authorities, very properly, should take a severe attitude.
We must also make sure that the ability to own and operate ATMs is widely available. These things are not generally a danger to customers so long as they are operated by someone reasonable. But it can prove quite difficult to persuade someone to put an ATM in a local shopping centre or a small town. My local small town in Hampshire—Liss—has long tried to get an ATM but no one will provide it because there are only a few banks which might be interested in providing it. Even if there is one, it will only be one. If it is a Barclays ATM, why should customers all be forced to change their accounts to Barclays so that they are not charged
532
£1.50 every time they take money out of the machine? In a way, access to ATMs under those circumstances becomes a service which is bundled with all the other services of the banks to the great disadvantage of the customer who should be able to choose to buy one service from one bank and different services from different banks.
We need to make charges, such as they will be, transparent. They should be evident on the outside of the machine and not something which you discover in the blink of an eye two-thirds of the way into a transaction on a rainy February evening.
I should be grateful if the Minister would confirm that we should be able to deal with this matter by regulation, because banking practices will change and change fast. I hope that the Minister will be able to confirm that regulations can be made under existing legislation or, if not, that we shall find an early opportunity to legislate on this matter.
7.57 p.m.
Lord Haskel: My Lords, I too am most grateful to my noble friend Lord Graham for introducing this debate. I am grateful to him for two reasons: first, because he has introduced a most interesting topic; and, secondly, because he has provided us with the opportunity of hearing an excellent maiden speech from the noble Baroness, Lady Greengross. It was thoughtful, entertaining and most enjoyable. I too am most grateful to the noble Baroness for all her work in making—shall I say?—my approaching old age more bearable and tolerable.
I too find the attitude of the banks towards cash machines—particularly, the big four clearing banks—confusing. Obviously, there is disagreement among the Link operators. Some, like Nationwide, are against charges; others, like Barclays, are for charges. So my hope for this debate is that we may have a little elucidation and explanation.
I understand that, today, the outcome of the meeting in Harrogate was that from 1st January 2001, there will be charges which will be fixed by the owners of the machines. I must confess that I am somewhat surprised. I was under the impression that we had moved on from shareholder value as being the main concern of large companies. I thought that we had moved into an era when firms realised that people want to deal with an official business which is also decent and fair; and that companies want to exhibit their decency and fairness not only by supporting charities and cultural activities but also by exhibiting some idealism themselves when providing goods and services to their customers.
That is why, in recent years, companies have set out their stakeholder principles to demonstrate their ethics and integrity and their loyalty to stakeholders. That is—I use the modern term—the modern concept of branding. I am at a loss to understand why the big four banks seem to be ignoring this point and seem to be indirectly reintroducing bank charges through the use of cash machines. Have their soaring profits made them careless? My noble friend Lord Graham gave us

533
the numbers. This seems dangerous ground. The economics of banking are changing. The socially excluded, too, can become banking customers.
I understand from recent figures that only 22 per cent of current account customers change banks. That may well have been true in the past. However, in the recent past we had far less telephone banking than today. We did not have banking with supermarkets and chain stores. Supermarkets now offer cashback. How long will it be before garages, for instance, offer cashback or operate their own cash machines? Surely sooner rather than later cashpoint machines will do other things than provide cash and statements.
What about Internet banking? The report issued by PriceWaterhouse Coopers dated 25 February forecast 50 new Internet banking offerings this year alone. It seems to me that these new kinds of service are more likely to help the socially excluded. They will not be helped by the main clearing banks, which are interested in their better-off customers. That is understandable. They can sell to such customers all kinds of other products: mortgages, health insurance, life assurance, home insurance, pensions, hire-purchase and travel arrangements. You name it; they will sell it.
The socially excluded cannot afford most of those products. That is why the banks are not really interested in them. Like the noble Lord, Lord Lucas, I hope that the regulators will take a look at the Harrogate agreement. The consumer panel of the FSA should be concerned about the high prices charged to customers. Mr Don Cruickshank has said that a reasonable charge would be 15p to 30p instead of up to £2.50, which apparently can be charged. The Office of Fair Trading should be concerned about banks discriminating against different classes of customer. They seem to be discriminating between one set of users of cash machines—their own customers—and another set of users—other banks' customers.
With impeccable timing, upon which my noble friend Lord Graham should be congratulated, The Competition Act comes into force tomorrow. The Competition Commission should be interested in exploring whether the agreement is contrary to Article 84 and should be registered. I suspect that some smart lawyers have advised that, as each cash machine owner fixes its own charges, the agreement is not anti-competitive. But regulators also need to decide whether the larger banks, which own most of the cash machines, are guilty of market abuse by discriminating, with high charges, against the small banks, which own far fewer machines.
While all that is going on, customers can take their current accounts elsewhere, and will probably do so, encouraged by the new sources of cash being made available to them. Meanwhile, it will be nice to see the banks being more transparent about cash machines. I understand that there will be a warning to customers about to use a machine telling them what the charges will be and giving them a chance to change their mind.
534
I welcome that as a better deal for customers. I also welcome the promise by Co-op Bank and Nationwide to refund any charges.
I suppose that banking is becoming a public utility, such as water or a public service like the Post Office. I believe that the noble Lord, Lord Lucas, implied that. It is recognised as such in California, where it is subject to a kind of universal service obligation. There is an obligation to give access to banking for all, as has been asked for by my noble friend Lord Graham. We may eventually see that here if the free market does not operate. Free market competition eliminated bank charges. I hope that the Harrogate agreement will not be a way of reintroducing them.
8.4 p.m.
Baroness Dean of Thornton-le-Fylde: My Lords, I join fellow noble Lords in welcoming this short debate. I particularly thank my noble friend Lord Graham, whose timing is impeccable in view of the decision taken today. That is no surprise to me. I was on the Back Benches when he was Chief Whip. His timing was certainly extremely helpful in many a debate then.
Lord Graham of Edmonton: That's the way to do it!
Baroness Dean of Thornton-le-Fylde: I also welcome the speech of my noble friend Lady Greengross. She has vast experience and the House will look forward to her contributions. Perhaps in future my noble friend will be more controversial than she has been allowed, by custom, to be tonight.
The current development by the banks is simply a fight for the customer without any concern for the social implications of what they are doing. It is about abuse of market dominance. The present confused situation and the proposals by some, but not all, of the banks will worsen social exclusion. That will be particularly so in rural areas and in areas where the banks feel they do not have a place. I refer to some of the sink estates and poor areas of this country. What the banks are doing is appalling. It almost goes back some years to the review about bank charges. The public were absolutely astonished at the way in which they were being ripped off by the banks, of which they were customers.
I changed what I planned to say after receiving a press release from Barclays. Rarely have I been so enraged by receiving something. It contains the headline that the "Link decision" is a victory for consumers and for common sense. If that is not an abuse of the English language, I do not know what is. It states that consumers will have choice. I do not know what choice consumers have in rural areas. They may be miles from a cashpoint machine. There may be only one machine which may not belong to the bank of which they are a customer or the bank into which their pension is paid. They will have no choice. They will have to pay a fee. Depending upon the bank, they may also have to pay a so-called "disloyalty fee". It may be that they are not drawing from their savings

535
but from their pension. Many people use banks in that way and do not hold substantial amounts of money in their bank accounts.
This decision today is not a victory for consumers. It is an abuse of consumers and of consumer choice. The press release states that customers will know in advance of any charges. However, we know from the work carried out by Don Cruickshank, but, more importantly, from what the banks are charging each other at the moment—that is, 30p—that they will charge fees which cannot be justified to their customers and all other people who use the machines. I agree strongly with the comments of the noble Lord, Lord Lucas. We certainly need regulation. If banks are to act in this manner, which is market-dominance-led, there should be regulation.
The press release states that user fees will encourage investment in bigger and better cash machines. It goes on to state:
"A switch to user fees is likely to result in the reduction of income".
That statement is completely contradictory. The press release does not state what the charges will be. It does not state that the disloyalty payments will discontinue, nor that there will be a guarantee of more machines. By implication, it states that the devil will take the hindmost as far as the consumer is concerned. The biggest and most powerful banks will edge and elbow the smaller banks out of the market. Consumers may go to that one hole in the wall in their rural area or out of their area if they live on one of the dreadful sink estates. They will see the name of the bank on the hole in the wall. They will know that they do not have to pay a charge if they are with that bank, and will be encouraged to change their account to that bank. We will then see less consumer choice and much more market dominance than we have at the moment.
Today has been a bad day for the consumer; a bad day for social inclusion; and a bad day in the long term for the banks themselves if we say that we will not accept these decisions. I see the present Government, of all governments, as the champion of the consumer. When my noble friend replies to the debate, perhaps he can give us some assurances in relation to the regulation of the high fees being charged. This may involve the private sector. but sometimes the consumer needs protection from market dominance.
One of the anxieties in the debate in relation to post offices and people obtaining their benefits from the hole in the wall is what the charges will be and also what choice the consumer will have.
8.10 p.m.
Lord Newby: My Lords, like other noble Lords who have spoken, I am extremely grateful to the noble Lord, Lord Graham of Edmonton, for initiating this debate. Even if he did not know how appropriate the time was, he is to be congratulated because it is so appropriate. Equally, it was a delight to listen to the maiden speech of the noble Baroness, Lady Greengross. It must be said that, if the noble Baroness
536
had been making it on many other subjects in the dinner break, I might not have heard it, so I am doubly grateful that she chose this subject.
I am sure we all agree that many aspects of the present situation are unsatisfactory. First, the scale and extent of disloyalty fees; 85 per cent of transactions today are covered by disloyalty fees of up to £1.50. Secondly, most people making those transactions do not realise the scale and extent of the fees. There is a tremendous lack of transparency in that regard. Thirdly, we all agree that the uneven spread of cash machines is unacceptable, both in terms of areas of social exclusion and in rural areas. Fourthly, we agree also that it is unsatisfactory to impose a new fee structure, particularly one in which the fees bear no relation to the marginal cost of making a transaction.
We know what is wrong. In general terms we also know what we want to see. First, we want maximum and increased coverage of cash machines. Secondly, we want to see maximum transparency so people know what they are paying. Thirdly, we want to see the greatest possible degree of competition. Fourthly, we want to see minimum, and arguably and hopefully zero, costs for making a transaction.
How do the Link decisions announced earlier today meet those criteria? On one count only—namely, transparency—do they do so unambiguously. That is a move we should welcome. When we come to increased coverage, the best one can say is that the jury is still out. A number of noble Lords made the point that there is no guarantee that the banks will increase the number of cash machines, and certainly not the number in the most deprived areas. They claim that, following a similar decision in the US, the number of cash machines either doubled or tripled in a short period of time. Let us hope that we receive assurances from them that they will put their money where their mouth is and begin to expand the cash machine network in areas from which, rather than expanding, they have been withdrawing in recent years.
In terms of coverage we must also look at other activity in this area. I was talking earlier today to the National Federation of Retail Newsagents, which entered into an agreement with Euronet to introduce cash machines into newsagents in areas where bank cash machines are currently absent. That is a welcome development. We should also press Link, in its discussions with the Post Office and the Government, in respect of electronic transfer of state benefits. That may produce more general cash withdrawal opportunities into the sub-Post Office network, which, by definition, reaches more people than the current cash machine network.
Understandably, the issue which rightly generated most heat today and in the run-up to the Link decision related to cost. I share the view expressed by every other noble Lord that for large banks to seek to charge £1 is excessive, particularly in relation to the cost of transactions and the amount likely to be withdrawn by poorer customers, not least students and young people. We seek to encourage them to open bank accounts. Other noble Lords may have received, as I

537
did, an analysis undertaken on behalf of M&G of the proportion of adults in this country who have savings. Apparently, nearly 25 million adults have less than £500 in savings. Many prefer to go into debt when confronted with unexpected expenditure. That cannot make financial sense and we should be doing everything we can to encourage them to open bank accounts. The prospect of being charged 10 per cent—or possibly 25 per cent if the disloyalty fee continues as a result of today's decision—is moving things in the wrong direction.
It is difficult to be quite as condemnatory of charges at the point of use in the case of the newsagents. They are not involved with the large banks and unless there is some return for those installing the cash machines, they will simply not be installed. That demonstrates that the whole area is both confused and more complicated than first meets the eye.
I agree that extending the cash machine network is an essential component of persuading a greater proportion of people to join the banking system. But it is not the only solution. The Policy Action Team report No. 14 of last autumn makes a whole raft of proposals in this area which are being considered by both the Treasury and the British Bankers' Association. It deals, among other things, with entry level accounts and the need for better education. It rightly goes way beyond the cash machine issue. Therefore, in looking at social exclusion and formal entry of people into the financial services sector, we need a multi-faceted approach, beginning with cashpoints.
I had great sympathy with most of the points made by Don Cruickshank last week and hope that they will be acted upon. The first was that, if any charges were to be imposed, they should reflect the cost. I hope that many other banks will follow the example of the Nationwide and the Co-op and not impose such charges. I hope equally that all banks will commit themselves to a single charge across the country so we do not have differential charges between rural and urban areas, and prosperous and poor areas. As I understand it, today's decision will allow that kind of differential charging to take place.
Secondly, Don Cruickshank asked that charges be transparent on the screen. That is likely to happen as a result of today's decision. Thirdly, he suggested that the charges should not discriminate against telephone and Internet banks. That sector is changing more rapidly than many realise. Fourthly, he said that non-banks should be able to set up cash machine networks. That again is an important way of increasing competition in this sector.
However, I urge the banks to give up the disloyalty fee. Whatever argument there may have been for it has now gone. Barclays, who have been rightly criticised in a number of respects this evening, gave up the disloyalty fee last October. So people banking with Barclays will not be faced with charges of £2.50: they will be faced with charges of £1 which is bad enough, but there has been a certain exaggeration of some of
538
the charges. I hope that all the other banks which are still charging a hidden disloyalty fee of up to £1.50 now voluntarily agree to abolish that fee.
We need a broad strategy to bring the use of cash machines to socially excluded groups. It must encompass rural as well as inner-city areas and mesh in with other policy changes. In my view, doubts about the future of rural post offices and the proposed changes in the benefit system offer both a threat and an opportunity. Such a strategy should involve pressure on the banks, but it must also involve dialogue with them.
As the noble Lord, Lord Graham, said, the banks pride themselves in public of being socially aware and interested in the well-being of the communities that they claim to serve. We must now name and shame the banks and get them to act in such a way that they both reduce fees and expand networks that we believe are essential. I am not arguing for that instead of any regulatory hand on them, but I think that we need both a carrot and a stick. The Link network needs to open up its procedures and economics.
While preparing for this evening's debate, it was very difficult for me to find out what was going on and how the system works. In the interests of their consumers, I think that banks need to be more open—
Lord Haskel: My Lords, before the noble Lord sits down, perhaps I may point out to him that the press release from Barclays to which my noble friend referred states that the bank will abolish its disloyalty fees until the new methods of charging can be introduced with pre-notification.
Lord Newby: My Lords, I am grateful to the noble Lord. This demonstrates that this is a difficult and confusing area. I find it difficult to know quite what is meant, other than that they may possibly put more than £1 on the charges after 2001. I am sure that Barclays will take note of this debate. Indeed, I am sure that we shall all receive a clear, detailed letter within the next few days explaining that I cannot possibly be right in thinking that the bank will really increase its fees any further.
The real question is how we can move this agenda forward. My suggestion is not a purely regulatory one, although I believe that that is relevant. We should be asking the Social Exclusion Unit to look at this, not just in terms of analysing the problem but also of producing components of the solution and driving them through Whitehall. Perhaps I may introduce a really controversial element to the debate: I actually think that this would be an extremely useful issue for consideration by a cross-cutting committee of your Lordships' House, which I think should be looking at social exclusion. However, I do know when I am beaten. We may have to wait sometime for that to happen.
As I said at the beginning of my remarks, I am extremely grateful to the noble Lord, Lord Graham, for initiating this debate. Clearly this issue must be kept under review, but tonight's debate has made a very good start.
8.22 p.m.
Baroness Miller of Hendon: My Lords, I must begin by declaring an interest. I, my husband, my sons and our family business have been, and are, very long-standing customers of Barclays Bank.
Many years ago there was a very successful bank advertising campaign. I cannot remember whether it was on behalf of one bank or on behalf of the bank advertising association. However, it depicted the bank manager lurking in a cupboard at the customer's home. The implication was that bank managers were not frightening but nice, friendly people who were there to help people at any time.
Bank branches have now been transformed into profit centres. Facilities that used to be given free, as a customer service—such as the provision of references—are now charged for. Working at a bank, which used to be the very epitome of a job for life where an able and educated employee—whatever his or her background—could climb the promotion ladder, is now an extremely precarious occupation as the banks and other financial institutions shed jobs, thousands at a time, and as automation and computerisation take over.
The advent of the bank cash machine, the so-called "hole-in-the-wall" machine, has further depleted the number of jobs at the bank counters. But what a boon those machines were trumpeted to be when they were first introduced, especially when the banks were closed on Saturdays. You can get cash any day and at any hour of the day or night. All you need is your card and the ability to remember you PIN number. You can even collect local currency abroad—so who needs travellers' cheques? There is even a row of those machines down in the basement of this building. Someone actually asked me whether I used them and I said that I do not use them very often because my best hole-in-wall hank is my husband. I just ask him and let him go down and use it if he is available. I always make jokes about my husband when he happens to be watching the proceedings.
It has long been theorised that, with the advent of the credit card and charge cards, we would eventually evolve into a "cashless society". I think I can predict that that will never happen—not so long as we need what I call "walking about money"; that is to say, money to buy a newspaper, a bus ticket or a drink at the local. There are still huge numbers of people for whom credit cards, bank cards or access to cash machines are of absolutely no use whatever. Because they are without bank accounts or access to credit, usually because they are too poor, they just do not have the benefit of using such things. I suppose some people could describe them as "socially excluded". However, as the noble Baroness, Lady Greengross, explained exclusive and inclusive in such detail, I feel that I can delete that part of my notes.
For a large number of bank customers those machines have become an increasingly used and necessary facility, especially with the ruthless closing of smaller bank branches in villages and high streets that have failed to meet the criterion of being a profit
540
centre. There are, of course, other means of getting cash out of your account without using a machine or queuing up at the branch. Many large supermarkets are willing to give you cashback when you use a bank cash card. But this service is not as altruistic as it sounds because it reduces the physical amount of cash that the supermarket has to handle at the end of the day and reduces the security risk. In her own small way, my mother acquires cash by asking our greengrocer, who is still old-fashioned enough to deliver, to change cheques for her.
I just mentioned handling money. It is not appreciated that this is the least profitable part of all the banks' business. In fact, they lose money to it. When the American serial bank robber Willie Sutton was eventually caught by the FBI, he was asked why he kept robbing banks. He replied, "Because that's where the money is". To be fair to the banks, which is rather hard in view of what everyone has said and the briefings and letters that have been referred to, all of those bundles of notes lying in bank tills and in their vaults are not earning the banks any interest. I suppose that that is one of the reasons why they feel they need to make this charge. The cost of installing the machines, of expanding their number, of maintaining and servicing them, of running the computer systems and of the inter-bank book-keeping that they depend on, to say nothing of the physical work that is needed to keep them stuffed with bank notes, may possibly justify some small charge.
However, we all believe that banks ought to be crediting their own customers with some of the benefits that they are getting by reducing the number of staff they need to employ and even because of the benefits that the banks get from interest on overdrafts, or from the free use of our money sitting on the current account. Even on the aspect of servicing competitor banks' customers, there is the swings and roundabouts concept because they, in turn, service yours.
I believe that the Government are having to reconsider their plans for the method of payment of state benefits. The idea of simply paying them into beneficiaries' bank accounts may not work because so many of them do not have these bank accounts. Moreover, such a scheme would destroy thousands of village post offices and the village shops that so many people need for support in isolated communities. I am not sure whether it was the noble Baroness, Lady Dean, or the noble Baroness, Lady Greengross, who made a point in this connection, but one of them said that if you actually have to pay for the service when you draw out your benefit, it really would be extremely ludicrous and most unfair.
There is, perhaps, another means of distributing small amounts of notes and coins that it is uneconomic for banks and their computer systems to handle. The local post office could operate a discretionary cashback facility to customers, which they could do even without any machinery other than the guarantee implied by the cheque card. In itself, that might alleviate the aspect of social inclusion that might be

541
suffered by the less well-off or those without easy access to cash machines operated by their own personal bank.
Given the public concern that is being expressed on this whole matter, I congratulate the noble Lord, Lord Graham of Edmonton, on having brought this matter to the attention of your Lordships' House. The only pity is the timing. For example, had this debate taken place yesterday instead of today, this House could have sent a powerful message to that same board regarding our feelings on the subject, not necessarily as individual paying customers but as a voice of the public. We should regret that we were unable to do that before the announcement was made earlier this evening.
The impending report by the former telecoms regulator, Don Cruickshank has been widely leaked, including on the BBC "Watchdog" programme last Thursday. The noble Lord, Lord Newby, mentioned some of the recommendations and I shall not go through them again. Don Cruickshank thought that the charge should be capped and low. He thought that it should not be more than 15p to 29p.
Before I entered the Chamber this evening I turned on Ceefax to see whether there was any more information available than was issued in the press release. There was mention of a charge of £2.50. I think that has to be wrong and the BBC has it wrong. The noble Lord shakes his head; perhaps that is not wrong. However, I assume that that figure is reached from the £1.50 disloyalty fee and the suggested £1 surcharge. I do not know. However, I noted in an earlier press report, which I do not have with me, that Barclays Bank abandoned the disloyalty charge in October 1999. I am not sure where that takes us. However, as I am a customer of Barclays and I have been quite tough on Barclays, I ought to try to redress the situation one tiny bit, if that is possible.
In one of the briefings Barclays stated that it thought it would take three years to implement the necessary software changes. However, I understand from the news today that this will be done by January 2001. The same Barclays briefing states,
"The amount of the charges should he clearly displayed on screen. Consumers can then decide, before they use a cash machine, whether or not they wish to proceed".
We would certainly all agree with that. Transparency, which was not evident before, is absolutely essential. As I said a few moments ago, it is most unfortunate that we did not have the opportunity to send a strong message to those attending the meeting in Harrogate before they made their proposals today. We could have sent them a simple message summarised in just 10 words; namely, "There should be moderate or no charges and full disclosure".
8.32 p.m.
Lord McIntosh of Haringey: My Lords, my noble friend Lord Graham expressed some anxiety about the timing of this debate. With the exception of the point that the noble Baroness, Lady Miller, has just made, I should have thought his timing was immaculate. We
542
should consider what he has achieved by tabling this Unstarred Question six weeks ago. First of all, he gets Don Cruickshank to leak the important parts of his own report last Friday.
Lord Graham of Edmonton: My Lords, that was me?
Lord McIntosh of Haringey: My Lords, my noble friend did that all by himself" Then my noble friend gets the Office of Fair Trading to issue a press release on the subject yesterday. Then he gets the Link board to meet in a hot, steamy room in Harrogate from 11 o'clock in the morning until 4.30 in the afternoon, agonising over the issue which my noble friend has raised. Then, best of all, he gets the noble Baroness, Lady Greengross, to make an excellent maiden speech in this debate. I think that he has done pretty well.
The noble Baroness, Lady Miller, questions that because she thinks that our views ought to have been available to the Link board at its meeting today. Indeed, she has a point. However, I notice that although all noble Lords who have taken part in this debate have received briefing from Barclays Bank—except me—every single speaker has been antagonistic to Barclays Bank, even the noble Baroness, Lady Miller, who, like me, is a customer of Barclays Bank. At the end of her remarks, she felt some need to curry favour with her bank manager. I do not know what her overdraft is like at the moment! Therefore, I should have thought that the briefing Barclays sent to noble Lords for the debate was particularly counter-productive.
It is important to reach common ground, as far as we can, on the nature of the agreement which the Link board reached today. Certainly the resolution from the Link board meeting, which was issued as a Link interchange press release today, is pretty thin. It really does not explain much and it leaves open some questions. I believe that we can welcome some points without hesitation. As has been universally agreed, we welcome the transparency which will make charges known on screen to people withdrawing cash who will be able to change their mind if they do not like the charges which are to be levied. The Government have urged that on the British Bankers' Association for a number of months and it has taken an awfully long time to do anything about it, but let us welcome it while we can.
The decision that the Link network should be open to all—including customers from bodies other than banks and including those who do not have their own ATMs—is welcome because that will involve a new element of competition. It is much less clear what the benefit or disbenefit is of the decisions on surcharges. Indeed, it is not entirely clear what the decisions are. My understanding is that a disloyalty charge is out. A disloyalty charge is a charge made by a bank to its own customers for using a cash machine of another bank. However, as far as we can see, that will be replaced by what is called a "surcharge", which is a charge imposed by a bank when customers use machines other than those of their own bank—but that is a charge raised by the other bank rather than the customer's own bank.

543
It is not entirely clear to me that consumers will benefit from that. A charge made by one bank is just as damaging to the pocket as a charge made by another bank. In any case, the customer will pay. It is certainly not clear to me that the decision not to impose a limit on the surcharge—I understand that that decision was taken on a vote in the Link board—is to the benefit of customers. We shall have to study the decision in a good deal more detail before we reach a firm conclusion. There is even some ambiguity in the Barclays press release about whether the disloyalty charge will be abolished for good. That point was raised by the noble Lord, Lord Newby, as well as by my noble friend Lord Graham.
What do we think about these measures? Clearly, our views are only provisional until we have more detail. We welcome transparency and opening up the network. We welcome the removal of double charging, if that is the case. However, we cannot be entirely clear about that. We are much less clear that the surcharge decision is to the benefit of consumers. On the face of it, it is disappointing that the cap on charges, which Don Cruickshank explained the need for, has been rejected.
As many noble Lords have said, we must also consider the implications for social exclusion. In banking terms, we want there to be available a basic bank account on which there are no charges for access. Of course, as a price for that, there are to be no overdraft facilities or frills. The question we have to ask ourselves is whether the availability of a basic bank account will be undermined to any significant extent by the decision taken by the Link board today.
It is appropriate for me to say what government action has been taken on banking questions, on competition and on social exclusion. We have been active in this area. First, we appointed Don Cruickshank to investigate banking efficiency and competition. We await his full report which will be produced by the end of March of this year. In advance he has given us some indication of his views on the issues which are before the House today. In advance he has approved the decisions with regard to opening up the network and with regard to transparency. He wanted to open up cash banking considerably, but I do not think that that has been achieved in the decisions.
The Government too have observed that the Office of Fair Trading, in a fairly effective press release yesterday, has indicated that it will keep a very beady eye on banking. It will do so using the powers under the Competition Act, which, as has been said, comes into effect at midnight tonight. The Act introduces two new prohibitions. One relates to agreements, whether written or not, which prevent, restrict or distort competition and which may affect trade within the United Kingdom (the Chapter I prohibition); and the other relates to conduct by undertakings which amounts to abuse of a dominant position in a market and which may affect trade within the United Kingdom (the Chapter II prohibition). It will be
544
interesting to see whether the Director General of Fair Trading thinks that those prohibitions may apply to the banking industry.
The Director General has already expressed his concerns to the Link executive, indicating that he would be concerned if charges which were out of proportion to the cost of service provision were imposed on customers, a point made by a number of noble Lords. He has indicated also that he would not want such charges to penalise disproportionately the less well off or those who have limited access to ATMs. Clearly the role of the Office of Fair Trading under the regime of the Competition Act will have considerable effects on banking competition and will complement whatever conclusions Mr Cruickshank comes to.
But the Government's actions have not been confined to Cruickshank or to the Competition Act. As I have said, we have been encouraging basic accounts with banks that already offer them. The no-frills free access account is clearly to the advantage of the least well off in our society. It would be good if it included free access to cash machines, a point made by the noble Baroness, Lady Greengross.
Reference has been made in public—although not so much today—to the benefit changes announced by the Department of Social Security. I can assure the noble Baroness, Lady Greengross, that even after these changes take place in 2003 there will not be compulsion on anybody drawing benefits or pensions to have a bank account and to draw from that bank account. There will still be the option of cash payment through post offices.
In encouraging post offices to provide a better service, we are investing no less than £500 million in the Horizon IT project for improving the computerisation of the 18,000 post offices in this country. We want them to provide quicker and more efficient services. We want them also to provide new services, which may well include new cash machines in rural towns and villages and in deprived areas in our cities which currently have inadequate banking facilities.
Lord Graham of Edmonton: My Lords, the Minister has touched on post offices. I asked whether he had in mind that when these services were provided in post offices a charge would be made.
Lord McIntosh of Haringey: My Lords, I was just coming to that point. That decision, of course, will be for the Post Office and not for the Government. Certainly the Post Office will take into account the freedom which will exist for it either to charge or not to charge. I am sure that it will be influenced by my noble friend's views.
The Post Office is under investigation at the moment by the Cabinet Office Performance and Innovation Unit. The study, which is being carried out at the moment—and which will be reported to the Prime Minister by the end of March of this year—will assess the social value of the counters network; it will research new business opportunities for the Post Office

545
within the government and private sectors; it will consider how the Post Office can best contribute to the Government's objectives in future; and it will assess the case for providing further support for post offices in rural and socially excluded urban areas which have high social value but may not be viable commercially. When that report is issued we shall be closer to an answer to my noble friend's Question.
546
This has been a most valuable debate. It has given me an opportunity to express on behalf of the Government our concern both for proper competition between banks to the benefit of consumers and for the issue of social exclusion, a matter dealt with most powerfully by a number of noble Lords in this interesting debate.
House adjourned at fourteen minutes before nine o'clock.