Lords Sitting of 19 July 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 Derby

Her Majesty The Queen Mother
The Lord Chancellor (Lord Irvine of Lairg): My Lords. I have to inform your Lordships that, pursuant to the Order of the House, I, together with the most reverend Primate the Archbishop of Canterbury, the noble Baroness, Lady Jay of Paddington, the noble Lords, Lord Strathclyde and Lord Boston of Faversham, the noble and gallant Lord, Lord Craig of Radley and the noble Lord, Lord Rodgers of Quarry Bank, waited upon Her Majesty Queen Elizabeth the Queen Mother yesterday with the Message of this House of 13th July and that Her Majesty made the following reply:
"My Lords and Members of the House of Commons:
"I was deeply touched by your messages of congratulations and by the sentiments you expressed on the occasion of my 100th birthday.
"I feel fortunate that during the last Century I have been given the opportunity to serve our Country in times of war and peace, and I have always been helped and uplifted by the love of my family, by the fortitude and courage of our people, and by my faith in Almighty God.
"I pray that future generations will live in peace and prosperity, and I send to you all my heartfelt thanks for your kind messages on my birthday."

United Nations: Humanitarian Intervention
2.37 p.m.
Lord Judd Lord Judd asked Her Majesty's Government:
What new proposals they will be putting to the United Nations millennium meetings on the future of humanitarian intervention by the United Nations, including military intervention.
The Parliamentary Under-Secretary of State, Foreign and Commonwealth Office (Baroness Scotland of Asthal): My Lords, we continue to consult with partners on our ideas for guidelines that could help the Security Council decide when and how to respond to large-scale violations of humanitarian law and crimes against humanity.
Discussions on humanitarian intervention will doubtless feature at the millennium summit and millennium assembly in September. We shall, of course, take this opportunity to build further consensus around our ideas as we continue to refine them. We do not envisage tabling any formal proposals on this occasion.
Lord Judd: My Lords, I thank my noble friend for that reply. However, does she agree that it is also essential to develop more flexibility and imagination in supporting the Secretary-General on initiatives, peacemaking and conflict resolution before it becomes necessary to deploy military forces? When military forces are deployed in the name of the UN, does she not agree that it is always essential to have a clear political analysis of how they will contribute towards a political solution, as well as ensuring that there is strengthened administration of those forces both in the field and back in the UN?
Baroness Scotland of Asthal: My Lords, I agree with my noble friend that those issues are of real importance. It is for that reason that this debate has to take place. There has to be a thickening of the understanding between nations in this regard. We are firmly of the view that prevention is far better than cure. This is a matter, therefore, that we shall continue to pursue.
Lord Archer of Sandwell: My Lords—
Baroness Williams of Crosby: My Lords, I am sure the Minister is aware of two specific points made by the Secretary-General in his millennium report. I wonder whether she might comment on them. First, cannot the Government take further the suggestions made in that report about standby arrangements both as regards troops that may be seconded for military intervention, but perhaps more radically the proposal for standby arrangements for non-governmental and civil groups which can enter quickly into a disaster situation? Secondly, the Minister will be aware that the Secretary-General praised, in particular, the United Kingdom Government, along with the Canadian, Swiss and German governments, for their work on targeting sanctions towards the political elites of countries which are in breach of the United Nations humanitarian standards. Can she tell the House what work has been done by the Government in that regard and what she hopes may emerge from it?
Baroness Scotland of Asthal: My Lords, I thank the noble Baroness for the recitation of the praise which rightly attaches to the efforts we have all tried to make in targeting sanctions so that they are more effective. The noble Baroness is right in saying that the highlighting of that by the Secretary-General was most telling.
As regards the suggestions concerning standby arrangements and the use of civil troops, the noble Baroness will know that those issues are being considered in depth and are being explored. I cannot help the noble Baroness as regards the stage which we have reached. However, the important fact is that the issues are being debated and given the appropriate level of informed concern.
Lord Archer of Sandwell: My Lords, does my noble friend agree—
Lord Howell of Guildford: My Lords, does the Minister agree that, while humanitarian intervention is a noble impulse, it is also a nebulous concept and does not appear to be covered properly by the existing UN charter or UN law? There is a need for clarification and either changing the law or defining more clearly when humanitarian intervention is justified. What line will the Government take about either changing the specifications at the United Nations or recognising that NATO has a right to intervene in European security matters regardless of what is decided at the UN?
Baroness Scotland of Asthal: My Lords, at this stage it is critical that we all understand that there has to be definition and clarity. There is a great deal of anxiety about how, when and under what conditions humanitarian intervention should take place. It is for that reason that Her Majesty's Government think it important that the debate, discussion, definition and attempt at increasing and enhancing clarity among nations should start. We have been very clear that this is a matter we wish to promote and talk about with our partners. Noble Lords will be aware that we have already put forward preliminary ideas trying to scope the ambit of the way forward. We shall listen with acuity to the international response we receive to this endeavour.
Lord Archer of Sandwell: My Lords—
Lord Hylton: My Lords—
Noble Lords: Archer!
Lord Hylton: My Lords, while I agree that prevention is by far the best way forward, does the Minister accept that major displacements of population should be one of the criteria? Will she take note of what has happened in eastern Turkey in recent years? Further, can the noble Baroness confirm that, so far, some 300,000 people have been displaced from their homes in the Moluccas in Indonesia?
Baroness Scotland of Asthal: My Lords, Her Majesty's Government firmly believe that we have a shared responsibility to act when confronted with massive violations of international humanitarian law and crimes against humanity. Indeed, we have made that absolutely clear. We note the developments in the areas that the noble Lord has just highlighted, which, of course, are matters of great concern. For that reason, we feel it essential to build the broadest possible consensus on the conditions and circumstances that make international action appropriate and, thereby, strengthen the ability of the
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Security Council to respond effectively and promptly. As I said earlier, we are discussing these issues to try to achieve that consensus. However, we must bear in mind the fact that any intervention must be focused so that it does more good than harm. We must be very balanced in the way we proceed in this area.
Lord Archer of Sandwell: My Lords, does my noble friend agree—
Noble Lords: This side!
Noble Lords: Archer!
The Lord Privy Seal (Baroness Jay of Paddington): My Lords, I am sorry. I have not been present throughout the whole of the debate on this Question, but I understand from what is being said around the House that my noble and learned friend Lord Archer has been trying to ask a question for some time. I believe that he should ask his question.
Lord Archer of Sandwell: My Lords, I am most grateful to my noble friend.
Where the Security Council is paralysed by the use of the veto, does my noble friend the Minister agree that it is inevitably left to groups like NATO to exercise a citizen's arrest and that, however necessary that may sometimes be, it is never as satisfactory as enforcing the rule of law in the name of the whole international community? Is my noble friend aware of Charter 99? Further, will the Government be supporting the call of Charter 99 for charter revision in the hope of modifying the veto in the interests of democratic global government?
Baroness Scotland of Asthal: My Lords, not surprisingly, I agree with much of what my noble and learned friend has said, but am unable to agree with some of it. Noble Lords will know that I have said from this Dispatch Box in the past that there is much in Charter 99 with which we concur, although we cannot accept some of it. The veto has played a very important role in the past; indeed, it is something that Her Majesty's Government do not intend to give up. We have not exercised our veto for the past 10 years. We believe that it is incredibly important for those who have the veto to exercise it responsibly and prudently. We would wish others to follow our example. However, I cannot tell my noble and learned friend that we think it would be prudent to do away with it.
Lord Jenkins of Putney: My Lords—
Noble Lords: Next Question!

UK Parliaments and Assemblies: Cost
2.47 p.m.
Lord Renton of Mount Harry Lord Renton of Mount Harry asked Her Majesty's Government:
What is their estimate of the total cost to the taxpayer in the current financial year of the parliaments and assemblies in the United Kingdom; and how this compares with the cost for the last financial year.
Lord McIntosh of Haringey: My Lords, the total cost to the taxpayer in the current financial year of the House of Commons is £246 million compared to £263.7 million in the last financial year. For the House of Lords, the figure is £50 million this year compared to £45.3 million last year. The costs of the Scottish Parliament, the National Assembly for Wales and the Northern Ireland Assembly are a devolved matter and are funded from within the budgets of the devolved administrations.
Lord Renton of Mount Harry: My Lords, if I may put it this way, I thank the noble Lord for escaping answering the point about the Scottish Parliament and the Welsh Assembly. Given the obvious cost of creating more and more elected assemblies, can the noble Lord say whether there is any moment at which the Government might pause and think again about their commitment to nine directly-elected regional assemblies in England? Is he aware of any enthusiasm for that idea, other than perhaps in the North West and the North East? Surely this is a time for reflection and for considering whether it is really wise to go ahead.
Lord McIntosh of Haringey: My Lords, that is an interesting departure, at a tangent, from the original Question. The noble Lord, Lord Renton, will no doubt he aware that in the Comprehensive Spending Review announcement yesterday the Chancellor of the Exchequer said that he was allocating another £500 million to the regional development agencies. Very considerable expenditure is being devolved to the regions of England. Therefore, the case for local democratic control of that expenditure has some significance.
Lord Carlile of Berriew: My Lords, given the fact that the Scottish Parliament and the Welsh Assembly were created by this Parliament and bearing in mind their importance to the whole United Kingdom political process, as well as to Scotland and Wales respectively, would it not be better if there were an effective way of those parliaments reporting to the Parliament that created them so that we can have meaningful debates both in this House and in the other place about their effectiveness?
Lord McIntosh of Haringey: My Lords, it is right that the administrations for Scotland, Wales and Northern Ireland report to their own elected
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assemblies. What notice Parliament in Westminster takes of them is a matter for Parliament. I have not heard any specific demand for a change in our arrangements.
Lord Richard: My Lords, is my noble friend aware that we cannot half-devolve? We either devolve power or we do not. If we have devolved power, particularly to the Scottish Parliament, it is for the Scottish Parliament to take decisions and for the Scottish electorate to judge them. It is not for this House and this Parliament.
Lord McIntosh of Haringey: My Lords, I am grateful to my noble friend for confirming the view that I took in response to the question of the noble Lord, Lord Carlile.
Lord Mackay of Ardbrecknish: My Lords, leading on from the question of the noble Lord, Lord Richard, does not the money that goes to the Scottish Parliament and the Welsh Assembly come from the Barnett formula? If so, it is of some interest to this House and the other place. Can the Minister confirm that the Barnett formula will continue to be used so that the Scottish Parliament, with its new building and so forth, which is very expensive, can he funded? Will he assure us that he will not take the advice of Mr Charles Kennedy and the Liberal Democrats who want to scrap the Barnett formula?
Lord McIntosh of Haringey: My Lords, it is not only Mr Charles Kennedy who wants to scrap the Barnett formula; it is also my noble friend Lord Barnett. But the Government have no plans to depart from the Barnett formula.
Lord Barnett: My Lords, perhaps I should make it clear to my noble friend, as I know he is aware, that I am in favour of scrapping the Barnett formula. It gives disproportionate amounts to certain parts of the country. Parts of the North West and the North East should receive more and Scotland should receive less. But if my noble friend and the Government wish to keep a formula called the "Barnett" formula, I do not object. It could be a Mark II.
Lord McIntosh of Haringey: My Lords, my noble friend is already a Mark II and effectively renews himself from time to time. The Barnett formula has a crude justice. It is based on population. The distribution of revenues to the regions of England is a matter for the Westminster Parliament.
Baroness Carnegy of Lour: My Lords, since the Barnett formula is based on increasing in Scotland the same proportion of expenditure as is increased in England, will account be taken of the increased costs of Parliament at Westminster, both the other place and this House, in so far as they relate to England, in calculating what will be allowed in the Barnett formula for the cost of the Scots Parliament? In other words, will the Barnett formula be consistent when it comes to

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the cost of the Scots Parliament? The noble Lord, Lord Barnett, looks a bit dazed at that suggestion. I am dazed myself, but it seems only fair.
Lord McIntosh of Haringey: My Lords, the question of the noble Baroness contains a complex piece of thinking which I do not entirely follow. The Barnett formula is based on population. What happens to the money allocated to Scotland within the Barnett formula, including the cost of the Scottish Parliament, is entirely a matter for the Scottish Parliament? As to the costs of Parliament at Westminster, the figures I gave show that the cost of the House of Commons is actually lower this year than last, in contrast with the House of Lords, which is higher.

UK Diplomats Overseas: Security
2.53 p.m.
Viscount Waverley Viscount Waverley asked Her Majesty's Government:
Whether, in the light of the assassination of Brigadier Saunders, Defence Attaché in Athens, they will conduct a world-wide security review for overseas United Kingdom diplomats.
Baroness Scotland of Asthal: My Lords, the safety of staff is our prime concern. A thorough review of the terrorist threat to all our missions overseas was conducted last year. A programme of increased protective measures is being undertaken where those are considered necessary.
We are thoroughly examining the events surrounding the murder of Brigadier Saunders. We shall ensure that any lessons learnt are reflected in our application of security measures in Athens and more widely. I am unable to give details without affecting the security of staff overseas.
Viscount Waverley: My Lords, I thank the Minister for that reply. While effective diplomacy does carry risks, and with the fortress approach not being an option, how can United Kingdom diplomats avoid being a soft target in an era of international terrorism and given that the Americans have battened down the hatches? More specifically, as the murder was Kosovo driven, will the Minister ensure that front-line diplomats are suitably protected from contentious policy issues?
Baroness Scotland of Asthal: My Lords, first, perhaps I can say straight away that it is of the utmost importance to Her Majesty's Government, as it has been important to every government before us, to secure the well-being of our diplomats who serve us so bravely abroad. Secondly, this wicked murder demonstrates the real service that our diplomats give to this country and the risks in which they place themselves on a daily basis. Regrettably, that is all too rarely acknowledged.
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However, in line with that we have undertaken the most rigorous reviews. There was a review as a result of the Dar es Salaam incident in 1998 when a matrix was developed to try to identify those missions which may be at most risk of collateral damage. That informed our policy. We have made sure that those issues continue to be examined and we shall spend sufficient money to ensure that they are addressed. This Government have made a large commitment—an additional £22 million—to the security of our people and every penny is well spent.
Lord Mackie of Benshie: My Lords, does the Minister believe that the measures taken by the host countries in many cases are sufficient to protect diplomats?
Baroness Scotland of Asthal: My Lords, we ascertain what measures are in place. That is a factor which is played into our security assessment so that when deciding the level of protection a specific post should have, we are conscious of the security protection provided by the host community. We also look at the mission's proximity to other missions which may also be subject to threat to enable us to make an assessment of the risk of any collateral damage to our mission. It is therefore a matter of which we are very much aware. We take it extremely seriously and try to factor it into our thinking as well as we can.
Lord Howell of Guildford: My Lords, will the noble Baroness accept that we on this side totally associate ourselves with the sentiments she expressed in relation to this tragedy? Also, we welcome her comments about increased security for our diplomats. That underlines what I said from this Dispatch Box the other day: diplomacy today is becoming a dangerous occupation and those who fulfil those duties are extremely brave people Although I recognise that the Foreign and Commonwealth Office has done a fair amount in recent years to increase security for ambassadors and their staff, can the noble Baroness reassure us that any extra money will be used to increase security further? In that way we can try to prevent, although it may never be completely possible, the kind of horrific tragedy that occurred in Athens with Brigadier Saunders.
Baroness Scotland of Asthal: My Lords, I welcome the comments of the noble Lord and entirely associate myself with them. It is right that we continue this effort and I can assure the noble Lord that our energy will be properly directed to that end.
Lord Acton: My Lords, is my noble friend aware that the widow of Brigadier Saunders, Mrs Heather Saunders, and her two daughters visited your Lordships' House yesterday and that all who met them were deeply impressed by their courage and dignity? On leaving, Mrs Saunders expressed their great joy at the day they had spent here. Might it not be appropriate to send a message to the Saunders family

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expressing your Lordships' pleasure at their enjoyment and sending the family the good wishes of your Lordships' House?
Noble Lords: Hear, hear!
Baroness Scotland of Asthal: My Lords, I can assure my noble friend that I was so aware. Indeed, I was privileged to be able to meet and spend some time with both Mrs Saunders and her daughters. We have much to be grateful for. They are great British people and great ambassadors for Britain. They have shown the sort of courage and tenacity that no one could have expected them to demonstrate in these circumstances. It was a small thing that they were able to come here, but I know that the whole House will join me in sending them our heartfelt best wishes. We wish them Godspeed in coming to terms with this terrible, wicked tragedy.
Noble Lords: Hear! Hear!
Lord Roper: My Lords, perhaps I may associate these Benches with the tributes paid to the family of Brigadier Saunders and to the members of the Diplomatic Service, and those from other departments who work with them, who have to put up with very difficult circumstances. Cannot more be done through co-operation with our partners in the European Union to deal with the causes of terrorism, which lead to situations such as the assassination of Brigadier Saunders?
Baroness Scotland of Asthal: My Lords, the noble Lord makes a very good point. This issue is being considered by a number of our partners. It is a tragic reality that terrorism is now truly international. It is something with which, regrettably, we have all to deal.

"Touchstone Issues" Leak
3.1 p.m.
Lord Roberts of Conwy Lord Roberts of Conwy asked Her Majesty's Government:
Whether they will investigate how the Prime Minister's memorandum "Touchstone Issues" came into the possession of The Times.
Lord Burlison: My Lords, steps are being taken to investigate the leak to the press of the Prime Minister's memorandum. The noble Lord will be aware that, in order to safeguard the effectiveness of both the investigation and the security arrangements in place to prevent leaks, it has been the practice of successive governments not to disclose information about how leak investigations are conducted.
Lord Roberts of Conwy: My Lords, I thank the noble Lord and congratulate him on his reply. He is quite clearly above suspicion. But is the Minister aware that as this leak of the Prime Minister's confessional is one
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of five leaks to date this month, there are some people who think that the leak is a new form of twisted spin? Can he give the House an assurance that this leak was in fact a genuine leak which the Government regret rather than a press hand-out, in which the Government delight?
Lord Burlison: My Lords, my colleagues are whispering that all spins are twisted. I think noble Lords perhaps appreciate my background. Before I came into this House, when people mentioned "spinners" to me I thought it was a pop group from the sixties. Although we make light of it at the moment, it is a very serious issue. I know that the noble Lord would wish to support the Government on this issue and to join us in condemning the circumstances surrounding the leak. I should also mention that the Government take the question of security very seriously. All government departments are responsible for ensuring that stringent security measures are in place. Where there has been a leak of sensitive information, inquiries will be undertaken to establish who is responsible.
Lord Tebbit: My Lords, can the Minister tell the House when a leak inquiry last identified and disciplined the leaker? Does he think that it may perhaps be better to take further action on the Freedom of Information of Bill and publish the whole darn lot of these things? It would probably be much to the Government's advantage to get it all over with on a regular basis so that Ministers cannot stab each other in the back in the press so easily.
Lord Burlison: My Lords, I simply say to the noble Lord that successive governments have developed policies similar to that which exists at the moment in relation to leaks of this nature. I can assure the House that they are not routine and are not undertaken on a routine basis. While it may not be possible in some cases to identify the individuals responsible, the inquiry process itself has a guarding effect and raises security awareness within departments. Where leaks occur, the Government will take whatever measures are necessary to ensure that the culprits are found.
Lord Mackay of Ardbrecknish: My Lords, perhaps I can help the noble Lord. I think that the answer to the question of my noble friend Lord Tebbit is "never"—at least that is the experience of those of us who were in government. Is it true that a game of pass-the-parcel was played in the office of the Leader of the House to see who would answer this Question and that the music was rigged by the Minister's elders—and, dare I say, betters—to make sure that the parcel stopped with him? Furthermore, has he read the leaked memo? Has he read in particular the sentence,
"It is bizarre that any government I lead should be seen as anti-family"?
Can I tempt the Minister to agree with me that what is bizarre is that any Prime Minister of the United Kingdom should ever write such self-pitying guff?
Lord Burlison: My Lords, as to the noble Lord's point about me answering the Question, the Cabinet

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Office Minister, for whom I am deputising, is away on official business of a long-standing nature. I simply make one point in response to the noble Lord's comments—that is, that it would seem that the leaks issue is orchestrated against the Government in order to deflect attention from what the Government are doing at the moment. I am quite certain that many noble Lords would rather debate today the £43 billion spending review that the Government announced yesterday than this issue.
Lord Haskel: My Lords, does my noble friend agree that perhaps there is not a leaker; perhaps the culprit is a hacker?
Lord Burlison: My Lords, that is certainly a consideration we should take on board. The Government have announced that an investigation will take place. We are not aware that there is any connection between the recent graffiti on the Cabinet Office website and the latest leak. However, I can assure my noble friend that the inquiry will explore a full range of possibilities, of which this will be one.
The Countess of Mar: My Lords, in view of the apparent dearth of plumbers in Westminster, could some of the £43 billion be spent in training them?
Lord Burlison: My Lords, I am sorry, I did not quite catch the noble Countess's question.
The Countess of Mar: My Lords, in view of the apparent shortage of plumbers around Westminster, could some of the £43 billion be spent on training them?
Lord Burlison: My Lords, I thank the noble Countess for her question. I realise that there is a pun in there somewhere and that there should be one in the reply. However, having said that, the Government take the leaks very seriously. Whether we need plumbers or training in this direction I am not sure, but certainly the Government take the issue of establishing responsibility for these leaks very seriously indeed.

Business of the House: Debates, 20th July
3.8 p.m.
Lord Carter: My Lords, it may be for the convenience of the House to know that the usual channels have agreed to a change in tomorrow's business. Owing to the number of Peers who wish to speak on the Second Reading of the Football (Disorder) Bill and other business tomorrow, the first Committee day of the Countryside and Rights of Way Bill has been postponed until next Tuesday, 25th July, which was to have been the second Committee day. Every effort is being made to ensure that all those with an interest in the Bill are made aware of this change.
Lord Henley: My Lords, I thank the Government Chief Whip for that wise and sensible statement.
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Perhaps I may put on record that we hope that all future statements from the Government about business management will be equally wise and sensible and that we shall have appropriate announcements in due course.
Lord Carter: My Lords, when the Opposition Chief Whip says that I am being wise and sensible I am very suspicious.

Procedure of the House: Select Committee Report
The Chairman of Committees (Lord Boston of Faversham): My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That the Third Report from the Select Committee (HL Paper 85) be agreed to.—(The Chairman of Committees.)
Following is the report referred to:
1. Humble Address for Queen's Consent
When a Private Member's Bill in the Lords is directed substantially to the Queen's prerogative, the practice is for the private Member to move an Address seeking the consent of the Crown before the Bill is introduced. This motion may be debated and opposed.
The origins of this procedure are unclear and it is confined to Private Members' Bills. The procedure does not exist in the Commons. The procedure can have the effect of denying the House any sight of the Bill because the Bill cannot be introduced if the Motion for the Humble Address is successfully opposed.' In the opinion of the Committee, it is not desirable that the House should, on a technicality, be able to reject a Bill before seeing it and debating it.
The Committee therefore recommends that the practice relating to Queen's consent should be the same for Private Members' Bills as for government Bills. In the case of a Bill substantially affecting the prerogative, the Government should, on behalf of the private Member, seek Queen's consent and, if it is granted, a Minister who is a privy counsellor should announce it to the House before Second Reading.
Her Majesty the Queen has been consulted about this recommendation and is content to let the House decide the issue.
2. Human Rights: changes to Standing Orders arising from the appointment of a Joint Committee
In the expectation that the two Houses of Parliament will agree to appoint a Joint Committee on Human Rights before the summer recess, and in view of the coming fully into force of the Human Rights Act 1998 on 2 October 2000, the Committee recommends amendments to Standing Orders consequential on such an appointment. A motion to amend the Standing Orders would only be tabled after the House has agreed to the appointment of a Human Rights Committee.
The changes proposed are set out below. They would have the following effects:
— to add the new Joint Committee to the list of sessional committees whose business is not interrupted by prorogation; and
— to make the Joint Committee responsible for scrutiny of remedial orders made under the Human Rights Act 1998, and to relieve the Joint Committee on Statutory Instruments of that responsibility.
The Committee also recommends that the rotation rule should be applied to the new Joint Committee, giving Lords Members a maximum period of service of four sessions. An extension of three years should be given to any Lord who may be chosen as chairman of the Joint Committee.
The Committee recommends one further amendment to Standing Order 73 (Joint Committee on Statutory Instruments) to bring it into line with an amendment already made in the House of Commons. The amendment is consequential on the devolution legislation. It would exclude from the consideration of the Joint Committee on Statutory Instruments any statutory instrument mad, by a member of the Scottish Executive or by the National Assembly for Wales, unless such a statutory instrument is required to be laid before the United Kingdom Parliament or either House of it.

Procedure of the House: Select Committee Report

  Proposed amendments to Standing Orders
  Standing Order 40 (arrangement of the Order Paper)
  After paragraph (6), insert the following new paragraph:
  ("(6A) Any motion relating to a report from the Joint Committee on Human Rights on a remedial order or draft remedial order laid under Schedule 2 to the Human Rights Act 1998 shall be entered before a motion to approve that order or draft order.")
  Standing Order 64 (sessional committees)
  After ("House of Lords' Offices Committee") insert ("Human Rights Committee")
  Standing Order 72 (affirmative instruments)
  In paragraph (1)(a), after ("Deregulation and Contracting Out Act 1994") insert ("or a draft remedial order or remedial order laid under Schedule 2 to the Human Rights Act 1998")
  In paragraph (b), after ("Delegated Powers and Deregulation Committee") insert:
  ("(c) in the case of a draft remedial order or remedial order laid under Schedule 2 to the Human Rights Act 1998, there has been laid before the House the report thereon of the Joint Committee on Human Rights:
  Provided that the report is laid

  (i) in the case of a draft remedial order, within 60 days of the laying of the draft order or

  (ii) in the case of an order not approved in draft, within 119 days of the making of the original order,

  such periods to be calculated in the manner prescribed by Schedule 2 to the Act;")
  Standing Order 73 (Joint Committee on Statutory Instruments)
  In paragraph (1), after ("Deregulation and Contracting Out Act 1994") insert ("and any remedial order or draft remedial order under Schedule 2 to the Human Rights Act 1998")
  In paragraph (2), line 4, after ("but) insert (—not including any statutory instrument made by a member of the Scottish Executive or by the National Assembly for Wales unless it is required to be laid before Parliament or either House of Parliament and").
  3. The Companion to the Standing Orders
  The Committee considered and approved a revised text of the Companion to the Standing Orders, as drafted by the sub-committee appointed on 4 April 2000. The Committee expressed its gratitude to the sub-committee for undertaking this arduous task.
  The Committee agreed that the Companion should be printed on standard A5 paper and continue to be a single volume.
  It is intended to revise and publish later in the year the Brief Guide to the procedure and practice of the House of Lords, drawing on the new edition of the Companion. The page size of the Brief Guide will be the same as it is now.1 This happened on the motion for an Humble Address on Lord Forsyth of Drumlean's Succession to the Crown Bill: 2 December 1999, HL Deb, cols 917–9.
  On Question, Motion agreed to.

Consolidated Fund (Appropriation) Bill
Lord McIntosh of Haringey: My Lords, I beg to move that this Bill be now read a second time.
Moved, That the Bill be now read a second time.—(Lord McIntosh of Haringey.)
On Question, Bill read a second time; Committee negatived.
Then, Standing Order No. 46 having been suspended (pursuant to Resolution of 18th July), Bill read a third time, and passed.

Cheques (Scotland) Bill [H.L.]
Lord Astor of Hever: My Lords, on behalf of my noble friend Lord Younger of Leckie, I beg to move that this Bill be now read a third time.
Moved, That the Bill be now read a third time.—(Lord Astor of Hever.)
On Question, Bill read a third time.
Lord Astor of Hever: My Lords, I beg to move that this Bill do now pass.
Moved, That the Bill do now pass.—(Lord Astor of Hever.)
On Question, Bill passed, and sent to the Commons.

Street Works Bill [H.L.]
Lord Peyton of Yeovil: My Lords, I beg to move that this Bill be now read a third time.
Moved, That the Bill be now read a third time.—(Lord Peyton of Yeovil.)
On Question, Bill read a third time.
An amendment (privilege) made.
Lord Peyton of Yeovil: My Lords, I beg to move that this Bill do now pass. I know that this is not the moment for a speech but I should like to inject a note of civility and gratitude in the direction of the Government Chief Whip, who has been most helpful. Perhaps I may express the hope that his natural helpfulness and courtesy will prove a means of influencing his colleagues in another place to see the light which is so obvious to himself. Perhaps I may also ask him to pass on to Mary Robertson a note of my gratitude and everlasting admiration. I am most grateful.

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Moved, That the Bill do now pass.—(Lord Peyton of Yeovil.)
On Question, Bill passed, and sent to the Commons.

Television Licences (Disclosure of Information) Bill
Read a third time, and passed.

Regulation of Investigatory Powers Bill
3.13 p.m.
Read a third time.
Clause 2 [Meaning and location of "interception" etc.]:
The Parliamentary Under-Secretary of State, Home Office (Lord Bassam of Brighton)The Parliamentary Under-Secretary of State, Home Office (Lord Bassam of Brighton) moved Amendment No. 1:
Page 5, line 37, leave out subsections (11) and (12)
The noble Lord said: My Lords, the new definition of communications data that we brought forward at Report stage was generally welcomed. The rather complicated amendment that we tabled sought to clarify the definition in such a way as to remove the possibility of catching the content of a communication. The intricate nature of the definition and the complex changes we had needed to make to that definition had led us to believe that we needed some way of coming back to this definition if changing technology required it. Hence our inclusion of an order-making power.
Admittedly, that proposal did not receive universal support. The noble Lords, Lord Cope and Lord McNally, expressed some concern that the order-making power did not include a limitation that any suggested definition would not he widened to include content. Although noble Lords accepted that it was never our intention to include content within the definition of communications data, their misgivings struck a chord, and I agreed to reflect further on the wording of our amendment to see whether we could provide a stricter formulation that would assuage the concerns that had been understandably expressed.
We considered various drafting arrangements to limit the power so that it could not be used to include more data than the current definition, as was always our intention, but the drafting exercise simply became too complex. The Government have therefore tabled Amendments Nos. 1 and 12 and consequential amendments, Amendments Nos. 47 and 49, to remove the order-making powers relating to the definition of communications data. I sense that the amendments will probably be welcomed by the House. I beg to move.
Lord Cope of Berkeley: My Lords, as the Minister said, I was one of those who had misgivings about the order-making power, particularly because it would have enabled the Government, by order, to extend
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some of the definitions in the Bill so as to be able to intercept e-mail traffic without the safeguards provided. That was not desirable. I quite understand that the Minister, his colleagues and advisers found it difficult to draft a different order-making power which would have had precisely the effect that we had suggested. In the circumstances, I believe that the Minister has done the right thing in withdrawing the order-making power through Amendments Nos. 1 and 12 and those that go with them.
Lord McNally: My Lords, if the spirit of this afternoon is to be "When in doubt, leave it out", we shall make very rapid progress indeed,
On Question, amendment agreed to.
Clause 10 [Modification of warrants and certificates]:
Lord Bassam of Brighton Lord Bassam of Brighton moved Amendment No. 2:
Page 13, line 26, leave out subsection (10) and insert-
("(10) For the purposes of this section-

(a) the scheduled parts of an interception warrant are any provisions of the warrant that are contained in a schedule of identifying factors comprised in the warrant for the purposes of section 8(2); and

(b) the modifications that are modifications of the scheduled parts of an interception warrant include the insertion of an additional such schedule in the warrant;

and references in this section to unscheduled parts of an interception warrant, and to their modification, shall be construed accordingly.").
The noble Lord said: My Lords, I am tempted to utter those fateful words, "This is a technical amendment". It is, actually. Noble Lords will recall that an interception warrant comes in two parts. The front part—or "unscheduled part"—contains the name of the target person or premises. The back part—or "scheduled part"—contains, in an ordinary case, the telephone numbers which are to be intercepted. There may be more than one schedule in the scheduled part, with each containing numbers belonging to a particular service provider. The difference in practice between the two parts of the warrant is that only the Secretary of State can modify the front part of the warrant, while the scheduled part may be modified by a senior official or, in urgent cases, by an authorised officer within the intercepting agency.
This amendment removes an ambiguity in the Bill by making it clear that modifying the scheduled part of a warrant can include adding a new schedule. So if a target changes not just his phone number but also his service provider, the necessary modification will keep up with him. This has always been the intention. The amendment seeks only to clarify Clause 10. I trust that the amendment will be satisfactory to the House. I beg to move.
On Question, amendment agreed to.
Clause 12 [Maintenance of interception capability]:
Lord Cope of Berkeley Lord Cope of Berkeley moved Amendment No. 3:
Page 15, line 22, leave out ("The person to whom a notice is given may") and insert ("Where a notice is given to any person under subsection (2) and otherwise than by virtue of subsection (5A)(c), that person may, before the end of such period as may be specified in an order under this section,").
The noble Lord said: My Lords, I move this amendment with great hopes of success on this occasion in view of the support given to our amendment by the noble Lords, Lord McNally and Lord Bassam of Brighton. That is probably a winning combination. The amendment and the other amendments grouped with it follow the decision of the House about the introduction of a technical advisory board. In moving that amendment at Report stage, I said that it was the principle which concerned me rather than the detail of the drafting. The Government have suggested some improvements in the drafting which are now embodied in this set of amendments. Those improvements should recommend themselves to the House.
The position remains that the technical advisory board will be set up and will have two duties. First, it will need to examine, together with others, statutory instruments involving the orders put forward by the Secretary of State as regards what are now known as black boxes; namely, the equipment to be put in place with Internet service providers to monitor e-mails and so forth. The technical advisory board will advise the Secretary of State on that matter. The reports that it will submit to the Secretary of State may well be published in part or in full, but that would depend on the members of the board and on the Secretary of State. No requirement has been put in the Bill. Obviously, some of the board's comments and recommendations may well be extremely confidential.
The second role of the technical advisory board will be to act as a form of appeal mechanism if a black box is imposed on a provider which seems unreasonable, either for technical reasons or because the move appears altogether over the top, as it were. In that case, the provider will be able to appeal to the technical advisory hoard, although it will remain for the Secretary of State to take the ultimate decision.
It was suggested in the amendment tabled on Report that the board should comprise six members drawn from the industry (service providers and so forth) and six members from the users of interception (the police, HM Customs and the security services). The amendments tabled today provide for a more flexible arrangement, still allowing for a balance between the two sides, but nevertheless including a provision that others may be appointed at the discretion of the Secretary of State, which might broadly represent consumers—those whose communications are likely to be intercepted. That meets the comments made on Report and at Committee stage by the noble Lord, Lord Desai, when similar amendments were discussed.
I hope that the technical advisory board will lead to greater co-operation within the statutory framework between the security agencies and the police on the one hand and the electronics experts, service providers and
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so forth on the other. That will lead to a greater mutual understanding of the requirements of both sides and hence to a more effective mechanism which, it is hoped, will interfere less than might otherwise be the case with the normal operations of service providers and ultimately with e-commerce. The amendments provided by the Government to this proposal are desirable and I commend them to the House. I beg to move.
Lord Bassam of Brighton: My Lords, I should like, first, to thank the noble Lord, Lord Cope, and the noble Lord, Lord McNally, for working so closely with the Government on this group of amendments. I pay tribute to their pragmatism as regards this issue. In the debate on Report the noble Lord, Lord Cope, said—quite rightly—that the principle was more important than the detail here. He made it clear that he was less concerned about the detail than the basic proposal for a board. Indeed, he has reflected that in his comments this afternoon. In my response on Report I said that not much lay between us on this issue. It was only the vehicle and detailed mechanisms that we were debating. What has been tabled today is a set of amendments which we believe will be far more workable.
Before I address the substance of the amendments, I wish to clarify one point. Some commentators have rather dramatically overestimated the number and range of telecommunications service providers on whom an interception capability requirement may be imposed. The consultation paper we published in June last year set out the kinds of areas we have in mind. These include the Internet service provider industry and the satellite market.
However, notices under Clause 12 will not be served wholesale across a market sector. In particular, I should like to emphasise that we do not envisage serving notices under Clause 12 with respect to telecommunication services provided solely to the financial markets. Interception is only ever used as a method of last resort—that is how we see this matter. We do not believe that requiring such services to develop and maintain an interception capability would be appropriate. I hope that this commitment will reassure those who are concerned that we may serve a notice on such companies and that they will derive further reassurance from the wording of the order which the Secretary of State will make under Clause 12 in due course.
Turning to the set of amendments before us, I shall explain how they achieve three things. First, they seek to clarify the function of the technical advisory board in considering a reference. Secondly, they provide that a notice is effectively suspended pending consideration by the board. Thirdly, they make it clear what may happen when a reference is made. Finally, as the noble Lord, Lord Cope, acknowledged, they introduce an element of further flexibility as to the constitution and membership of the advisory board.
I am glad that noble Lords opposite have joined together in tabling these amendments. On the question of the membership of the advisory board, as I said

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earlier, I know that no firm views were expressed as to the precise membership when this matter was debated last week. Some suggestions were made that voices above and beyond those of the communications industry and law enforcement should be heard on the advisory board. I am not entirely convinced that that would be appropriate. The board is likely to need to consider highly technical issues. It will need to focus its attention on such matters. None the less, the order-making power which is proposed in Clause 13 allows for flexibility here.
More important is that the flexibility engendered by the order-making power gives the Government some further time to consider the question of who should act as the chairman of the board. This is a point that has been raised by the noble Lord, Lord Cope, on previous occasions. It is a difficult issue to which we should like to give proper thought, along with industry. We shall consult with representatives on that matter.
Finally, we are yet to speak to industry about the precise composition of the board and would like to take those views before establishing it in an order made under the Bill. The important point to note is that the board should include representatives of industry, as identified at subsection (2)(a) of the proposed amendment; that the board should include membership from those who apply for interception warrants, as identified at subsection (2)(b); and, crucially, that there should be a balance between these two groups as stipulated at subsection (2)(d)
I shall be happy to work with these amendments. The joint drafting has greatly improved their quality and, as I said earlier, I am most grateful to noble Lords for their assistance in this matter.
Lord McNally: My Lords, before the Minister sits down, perhaps I may make a brief comment. Although the Minister was obviously not in a position to see for himself, when he reached the point he made about a possible chairman for the board, the noble Lord, Lord Desai, clearly indicated that he was a candidate.
Lord Bassam of Brighton: My Lords, I am grateful to the noble Lord for his advice.
Lord Hylton: My Lords, perhaps I may intervene to make a brief remark. I have been a Member of your Lordships' House since 1971. In that time I have seen many all-party amendments being passed on legislation. However, I do not ever recall seeing one to which a Government Minister had added his name. I hope that this is a good omen for the future. The mechanism may be suitable for dealing with technical and complex matters such as this.
On Question, amendment agreed to.
Lord Cope of Berkeley Lord Cope of Berkeley moved Amendments Nos. 4 to 6:
Page 15, line 23, leave out ("to") and insert-
("(5A) Where a notice given to any person under subsection (2) is referred to the Technical Advisory Board under subsection (5)-

(a) there shall be no requirement for that person to comply, except in pursuance of a notice under paragraph (c)(ii), with any obligations imposed by the notice;

(b) the Board shall").

Page 15, line 24, leave out ("and the Board") and insert (", for the person making the reference, of the notice referred to them and").
Page 15, line 25 at end insert ("; and
(c) the Secretary of State, after considering any report of the Board relating to the notice, may either-

(i) withdraw the notice; or

(ii) give a further notice under subsection (2) confirming its effect, with or without modifications").

On Question, amendments agreed to.
Clause 13 [Technical Advisory Board]:
Lord Cope of Berkeley Lord Cope of Berkeley moved Amendment No. 7:
Page 16, leave out lines 23 to 26 and insert ("such number of persons appointed by the Secretary of State as he may by order provide.
(2) The order providing for the membership of the Technical Advisory Board must also make provision which is calculated to ensure-

(a) that the membership of the Technical Advisory Board includes persons likely effectively to represent the interests of the persons on whom obligations may be imposed under section 12;

(b) that the membership of the Board includes persons likely effectively to represent the interests of the persons by or on whose behalf applications for interception warrants may be made;

(c) that such other persons (if any) as the Secretary of State thinks fit may be appointed to be members of the Board, and

(d) that the Board is so constituted as to produce a balance between the representation of the interests mentioned in paragraph (a) and the representation of those mentioned in paragraph (b).

(3) The Secretary of State shall not make an order under this section unless a draft of the order has been laid before Parliament and approved by a resolution of each House.").
On Question, amendment agreed to.
Clause 14 [Grants for interception costs]:
3.30 p.m.
Lord Bassam of Brighton Lord Bassam of Brighton moved Amendment No. 8:
Page 16, line 27, leave out subsection (1) and insert-
("(1) It shall be the duty of the Secretary of State to ensure that such arrangements are in force as are necessary for securing that a person who provides-

(a) a postal service, or

(b) a telecommunications service,

receives such contribution as is, in the circumstances of that person's case, a fair contribution towards the costs incurred, or likely to be incurred, by that person in consequence of the matters mentioned in subsection (2).").
The noble Lord said: My Lords, my name is, I suppose by the luck of the draw, at the top of the list of names to the amendment. It could have been moved by the noble Lord, Lord Cope, or the noble Lord, Lord McNally.
I wish to speak also to Amendments Nos. 9 and 10. These amendments clarify the effect of the amendments to this clause made by noble Lords last week. This clarification is necessary as the effect of the amendments last week was to create two separate but overlapping duties in Clause 14. The first duty, at Clause 14(1), was in respect of marginal costs for postal companies, marginal costs for telecommunications companies and capital costs for both. The second duty, at subsection 14(3), was in respect of the marginal costs of companies which also happen to be the subject of obligations under Clause 12.
Prior to last week's amendments, the obligation on the Secretary of State under subsection (3) was stronger than the discretion under subsection (1). Hence they were treated separately although there was a degree of overlap between them.
The effect of last week's amendments was to introduce an obligation under subsection (1). As both subsections now impose an obligation to pay contributions, or to see that contributions are paid, it is right that they should now be wrapped up into a single duty. The amendment is recast in terms of "arrangements" for securing that contributions are paid, as this allows other means of payment than direct payment from the Home Office. For example, contributions to the marginal costs for telephone interception may well come from the National Criminal Intelligence Service. That is what is now proposed in subsection (1) of this amendment. The issues for which payments can be made—listed in subsection (2)—remain unchanged.
This amendment incorporates a slight elaboration on the requirement to ensure a fair contribution in subsection (1). It specifies that considerations of fairness should look to the particular circumstances of the case in question; in other words, on a case by case basis. Particular notice should be taken of the circumstances of the service provider on whom the obligation is being imposed. We argue that that is the fairest way to deal with the matter. A wide variety of issues may be relevant here but I am pleased that the noble Lords opposite and I have been able to reach agreement that the duty of the Government to ensure fairness in the regime to be operated under Clause 12 carries with it an explicit commitment to consider the circumstances of each individual service provider approached when assessing what is a fair contribution. I would expect this to include a consideration of a wide variety of factors such as comparisons with international practice; the nature of any additional burden to be imposed; the size of the company in as far as that may be related to the ability of the company to absorb the burden, and other factors besides.
Amendment No. 9 includes a new subsection to replace existing subsection (3). This is merely the familiar provision that the Secretary of State may make arrangements for payments to be made out of money provided by Parliament in order to fulfil the duty identified at subsection (1). I beg to move.
Lord Cope of Berkeley: My Lords, as the noble Lord, Lord Bassam, pointed out, my name is also
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added to the amendment, which seeks to implement the decision that noble Lords took on Report with regard to cost.
With regard to the previous group of amendments, the Minister said, most helpfully, that the Government do not expect to make any requirement under Clause 12 to service providers who deal only with the financial services industry. I believe that that measure will be widely welcomed, as the Minister suggested. I hope that there will be great awareness of it.
Neither the amendment nor the Bill defines "fair". The proposed subsection (1) in the amendment states,
"such contribution as is, in the circumstances of that person's case, a fair contribution".
That permits the Government to allocate different proportionate contributions in different circumstances. It is right and fair in some circumstances—particularly in the case of a small company—for the Government to pay the whole cost of what is required; that is, the black boxes. As the black box will carry out the work that is required by the agencies of the Government, the police and so on, the presumption should be that it is fair that the agency concerned should pay the major cost of it.
I appreciate that it is argued that in some cases the equipment will also benefit service providers by providing them with extra information and facilities. Nevertheless, the main purpose of the black boxes is to serve the interests of the Government. Therefore, it is right that the taxpayer should pay the major part of the cost. Anyone who feels aggrieved at the settlement could no doubt seek judicial review in regard to the proportion of the cost that is considered fair.
I turn to the total cost. I admit to having become a little confused with regard to the sum of £20 million. I may have inadvertently contributed to my confusion and perhaps to other people's on this matter. However, my original understanding was that the sum of £20 million was the estimated cost of the black boxes, part of which was to be borne by the Government and part of which was to be borne by the ISPs.
However, my subsequent understanding was that the sum of £20 million was the total cost of the Government's contribution to the scheme. That implies that the total cost of the black boxes will be higher than that. For example, it might be £30 million, of which the Government would pay £20 million and the ISPs £10 million. It is, of course, difficult to estimate the cost because we are not sure how many service providers will be asked to install such equipment, or what the nature of the equipment is. The Smith report began a discussion on that matter but it by no means concluded it. The recommendations of the Smith report no longer appear to be a sound basis on which to proceed.
A large proportion of the costs will comprise the extent to which the facility is used. That is difficult for those inside government, let alone those outside, to determine. The facility may develop over time, but so may the cost of an individual black box. The one thing of which we can be certain is that the technology which

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is appropriate today for this purpose will probably have developed out of all recognition in a year or two, or three years, and probably in an even shorter period. That fact also makes any estimate of costs liable to change. However, this is an important matter. Whatever sum of money is paid by service providers—however large or small—will damage the competitiveness of British service providers compared with those overseas who do not have this overhead.
I appreciate that other countries may, in time, follow the lead given by the Government; so the competitive position may even out slightly if they do the exactly the same and adopt the same charging arrangements. But in the mean time—possibly for ever in regard to some smaller countries, especially tax havens—whatever the figure is, it will prove a competitive disadvantage to British service providers and others subject to the charge. I am sorry to expand at some length on this matter, but it is important. We should do our best to be clear about this before finally sending this piece of legislation on its way.
We have gone along with the Government a great deal in all these matters and they have moved in our direction a great deal. But the question of cost, and of how much of the cost will finally come out of the pockets of British service providers, is important to whether or not British electronics companies remain competitive in the world.
Lord McNally: My Lords, I should like to associate myself with the concerns expressed by the noble Lord, Lord Cope. As he said, we have moved a long way from the Bill's starting-point and the implication that the police, the security services and others could specify whatever equipment they thought necessary and the service providers would pick up the bill. There is now much less of a "blank cheque" approach.
However, the Alliance for Electronic Business has raised the point that service providers will, as their part of the bargain, be responsible for hardware and software, opportunity cost, IT development time and the costs of planning and management time. Is it clear, in return, that what is on offer from the Government is a Treasury-capped £20 million over three years? If that is what is on offer, the approach seems rather churlish. As all sides concede, we are entering unknown territory. It is difficult to understand how it is possible to be "fair" while capping and restricting the nature of the Government's commitment in advance. Industry is eager to know whether its understanding is correct; namely, that it is a hard fact that all that is on offer is £20 million over three years, capped by the Treasury.
Viscount Goschen: My Lords, I welcome the fact that the noble Lord, Lord Bassam, and his department have taken so constructively the decision of this House when this matter was put to a vote on Report. It is definitely an improvement to have the word "fair" included in the Bill, and to have some further explanation of what that means.
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Building on points raised by the two previous speakers, surely the £20 million mentioned previously by the noble Lord, Lord Bassam, is only an example for reference purposes. Clearly, we cannot say on the one hand that it is impossible to specify the amount of money that is to be set aside for this purpose when we do not yet know what the total bill will be, and, on the other, have a categorical statement in the Bill that the contribution by the Secretary of State will be "fair". Estimates of the total bill range from the upper hundreds of millions of pounds to some tens of millions of pounds, as put forward by the Government.
I should be grateful if the Minister will confirm that the figure he mentioned was a Treasury estimate and that it in no way binds the Government, or at least is in no way meant to be used by the courts in interpreting a "fair" contribution.
Lord Desai: My Lords, perhaps I may make one small point. As time moves on, the technology in this field becomes cheaper, not more expensive. That will be of some consolation to my noble friend.
3.45 p.m.
Lord Lucas: My Lords, I support what my noble friend Lord Cope said. It is enormously important that we do not get ourselves into the reverse position of that on flood defences—where people campaign to have the Government spend millions of pounds on defending properties worth a few tens of thousands because they are not required to make any contribution to saving their homes. The situation is to some extent reversed, although it is much better now than it was under the Bill as originally drafted, whereby the contributions required from industry could have been out of all proportion to those asked for from the Government.
It is important that the Government pay their fair share of the cost. It is important, however, that industry should pay something. The idea of people being able to charge the police for helping the police with their inquiries is undesirable. But we need to see the Government making a fair and, in concept, at least an equal contribution to the costs. That will keep the Government honest in terms of what they are asking for. I very much hope that the noble Lord will be able to give us that comfort.
Lord Bassam of Brighton: My Lords, the noble Lord, Lord Lucas, has almost made my argument for me, and I am grateful to him.
A number of valuable and valid points have been made in this brief exchange. I shall try to give such comfort as I can. We believe that the regulatory impact assessment figure of £20 million which we made plain last week is the best possible estimate in the circumstances. It can only be that. But spending up to that figure is in the gift of the agencies involved in carrying out the work. In a sense, how much they require must be their decision. That will obviously affect the amount of money spent.

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As I said, we believe that £20 million is the best estimate in the circumstances, and there is a degree of reassurance in that. I do not always think that we get it absolutely right, but we believe that that is the figure that we need to pay in these circumstances and that it is fair. Although we do not have a precise mechanism to determine "fairness" in each and every case, the fact that our approach is on a case-by-case basis in terms of the individual circumstances of the service provider means that we shall endeavour to operate the regime as fairly as we possibly can. A number of points have been made, but they all come back to the issue of what "fairness" will mean in each circumstance. We shall have to see how the regime works out.
The noble Lord, Lord Lucas, was right to say that it will come down to ensuring that people pay a reasonable price in the circumstances. We believe that we have got it right, but we shall continue to listen to those who make representations to us. We now have a mechanism for achieving that objective.
In the early stages of the debate there was—I shall not say a degree of hysteria, but certainly overblown concern about the costs. We have tried to keep a sense of proportion and we believe that, on balance, we have got it about right. The £20 million will work for a three-year period. During that time we shall have further opportunity to reflect carefully on how the system is working. We do not want to put UK companies at a competitive disadvantage. The noble Lord, Lord Cope, was right to raise that issue. For that reason, the smaller companies will be given rather greater assistance. Clearly, we do not want to do anything that stifles their growth and activity at the outset. We shall take very careful account of matters such as the planning costs of smaller companies, which I am aware is an important issue.
I am grateful to all noble Lords who have made constructive comments. I am aware that there is a great deal of concern about this issue. I believe that we were right to bring fairness into the legislation and to qualify it in a sensible way. I congratulate those who have played a part. I hope that we can now agree these amendments and carefully monitor the operation of the arrangements to ensure that they work in the best interests of industry. In this way we can guarantee the security of the system and combine fairness with a sense of proportion so that in future this part of the legislation works for the benefit of everyone.
On Question, amendment agreed to.
Lord Bach Lord Bach moved Amendments Nos. 9 and 10:
Page 16, line 43, at end insert-
("() For the purpose of complying with his duty under this section, the Secretary of State may make arrangements for payments to be made out of money provided by Parliament.").
Page 16, line 44, leave out subsection (3).
On Question, amendments agreed to.
Clause 16 [Extra safeguards in the case of certificated warrants]:
Lord Phillips of Sudbury Lord Phillips of Sudbury moved Amendment No. 11:
Page 19, line 12, leave out from ("necessary") to end of line 13 and insert ("for the purpose of preventing acts of terrorism; and").
The noble Lord said: My Lords, Amendment No. 11 harks back to Amendment No. 22 which I moved, at inordinate length, on Report on 12th July at cols. 317 to 320. In response, the noble Lord, Lord Bassarn, spoke at appropriate, not inordinate, length, at cols. 322 to 324. It would be a form of cruel punishment to go through all the issues again. None the less, I shall not be deterred from trying one last time to clarify, for those who must hereafter understand this piece of legislation, exactly what this clause, and the provisions which lock into it, provide in relation to trawled, or indiscriminate, as some would call it, interception of communications. I make no apology for that. We are told by all concerned beyond these walls that these parts of the Bill are of particular concern and potential importance to the industry and ordinary citizens so-called.
When I spoke at Report stage the noble Lord, Lord Bassam, kindly said that he would read Hansard, consider the various questions that I raised and come back to me. I fondly looked forward to discussions with the noble Lord and his officials. That did not take place very long ago. Unfortunately, in the interim I have been abroad and, therefore, there has been no discussion or correspondence.
Lord Bach: My Lords, I am to answer for the Government today on this issue. It is a shame that the noble Lord has been unable to take advantage of the offer made by my noble friend to facilitate further discussions and briefings on these matters. I am aware that the noble Lord, Lord Cope, took advantage of that opportunity which was also available to the noble Lord, Lord Phillips of Sudbury, and his party. It is a minor shame that the noble Lord and the noble Lord, Lord McNally, were unable to take advantage of that offer. I hope that when I come to explain the Government's position all will be put right.
Lord Phillips of Sudbury: My Lords, with respect I thought that that was precisely what I had said. To continue, I shall be grateful if when the noble Lord, Lord Bach, responds he is able to confirm that trawled interception of communications can be lawful only if, first, it takes place subject to a Clause 8(4) certificated warrant, and, secondly, that it can apply only to external communications. If one reads Hansard one sees that at the previous stage the noble Lord, Lord Bassam, said that it was still the Government's intention that Clause 8(4) warrants should be aimed at external communications. There was a scintilla of doubt put into my mind by that formulation.
This matter harks back to the problem of overlapping warrants and the informal regime that has grown up hitherto. I seek reassurance in the clearest possible terms that the regime of overlapping warrants

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does not, and cannot, allow trawling and the utilisation of the material trawled in relation to internal communications.
I make one further plea to the Government. Is it possible that in dealing with these very difficult clauses, with the interlocking parts of the Bill which are necessarily brought in by reference, the Government can develop an extra-statutory protocol with the interception of communications commissioner in order to agree just how a mixed catch of internal and external communications is to be handled in practical terms? I am still mystified by the fact that Clause 16 (Clause 15 at Report stage), which is concerned with extra safeguards in the case of certificated warrants, provides that,
"the requirements of this section … are that the intercepted material is read, looked at or listened to by the persons"—
no definition of "persons" is provided—
"to whom it becomes available by virtue of the warrant",
and so on. How can one know which are the internal and which are the external communications—the sheep and the goats—without reading, listening to or looking at the same?
My first point in relation to the notion of an extra-statutory protocol is that it may cover precisely how the interception of communications commissioner or his staff sit alongside the staff at GCHQ, or wherever, and engage in the business of sorting the sheep from the goats to ascertain, as far as is humanly possible, that the provisions of Clause 16(1) are complied with; namely, that such communications are looked at, listened to or read to the minimum extent necessary to decide which manner of beast they are. Secondly, there should be a regime of destruction of the material that is trawled which is not external. I believe that if that was the case a good number of noble Lords on this side of the House, on the Government Benches—this is not a partisan issue—and many outside this place would be greatly relieved. I shall be grateful if, when the Minister replies, he will consider that suggestion. I beg to move.
Lord McNally: My Lords, the noble Lord, Lord Bach, raised the question of whether or not we should have engaged in private briefings. The Government have been extremely generous and helpful in the progress of this Bill. However, we should not fall into the trap of believing that private briefings, however reassuring, are a substitute for provisions on the face of the Bill or words spoken from the Dispatch Box. I see the noble Lord nodding assent. Sometimes I worry, particularly in the world of spookery, that parliamentarians and politicians become intimidated, perhaps dazzled, by the intelligence world. Sometimes they are beguiled by the luxury of knowing something that the rest of us are not privileged to know, but if only we knew it we would understand why it was being done. In dealing with the intelligence community and its activities Parliament should always resist that tendency and retain a healthy scepticism in these matters.
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Therefore my question is simple and innocent. It has been a recurring theme throughout the Bill. Are we seeing here an extension of the powers of the security services or simply an update of the powers of previous legislation? I have never been quite clear about that. If it is an extension it may be entirely justifiable. If so, it should be justified and should not masquerade as simply an update.
4 p.m.
Lord Bach: My Lords, I am grateful for the contributions of the two Front Bench spokesmen from the Liberal Democrat Party. The noble Lord, Lord McNally, is right: there should always be some separation between the role of Parliament and briefings. It is fair to say that in some cases briefings are more important than others. I suspect that this instance may be one of them. No criticism is implied. Sometimes these meetings cannot take place; sometimes they can. I rather wish that in this instance it had. I think that I can go some way towards satisfying the noble Lords' concerns about this part of the Bill.
The provisions in Section 3(3) of the Interception of Communications Act, which are taken forward in this Bill as Clause 16(3), provide an important weapon for the law enforcement and security agencies. They allow for interception of external messages to or from a named individual in the British Islands, under the specific authority of the Secretary of State. The Secretary of State must consider that the interception is necessary and proportionate to the objects it seeks to achieve, just as he would if he signed an ordinary Clause 8(1) warrant in respect of that individual.
Why is this separate power provided? It is in fact less intrusive than a Clause 8(1) warrant. A warrant under Clause 8(1) would allow interception of all communications to or from a subject. In most cases the majority of these communications would be with other persons in the British Islands, and so would qualify as internal communications. But a certificate under Clause 15(3) refers to a warrant under Clause 8(4), the target of which can only be external communications. Therefore, a Clause 8(1) warrant will allow the interception of all my communications; but a Clause 8(4) warrant—that is what we are discussing in the amendment—with exactly the same safeguards in place will only allow the interception of my external communications, for example my international communications. It is not as intrusive as a Clause 8(1) warrant.
In some cases the external communications are all that is needed, and so there is no justification for obtaining the more intrusive Clause 8(1) warrant. The noble Lord, Lord Phillips, has been full of examples during the passage of the Bill, sometimes using Christian names very similar to those of some noble Lords on this side of the House. However, I shall not fall into that trap but I shall give an example.
Criminals in foreign countries often target victims in the UK, in an attempt to defraud them of large sums of money. The criminals communicate with their victims

1031
and take forward the fraud by various means, including telephone calls, faxes and e-mail. It is not practical to select these messages by reference to the foreign end, as the criminals take care to use a wide variety of telephone boxes, public fax machines and Internet cafés to hide their tracks. The best way to combat such a fraud will often be to select by reference to the victim's address, wholly innocent as that victim is. There would be no justification for intercepting the whole of the victim's internal communications; but to intercept only the external communications might be a proportionate and effective response. In such a case, the noble Lord's amendment would force the authorities to seek an unnecessary and excessive warrant—a Clause 8(1) warrant. This cannot be right. Using a Clause 8(4) warrant would be less intrusive than a Clause 8(1) warrant.
Why are we removing a safeguard, as it is perceived, that exists in the current Interception of Communications Act? I believe that this is the background to noble Lords' questions. We argue that we are not. The Bill in fact provides a more comprehensive set of rules than the current Act on when communications to or from targets in this country can be looked at under a certificated warrant. First, as I have said, no factor referable to an individual known to be in the British Islands can be used to determine what is "read, looked at or listened to" except with the Secretary of State's personal authority. This is, in terms of safeguards, as good as a warrant; and like a warrant, the permission is limited to three months.
So not only is there an inhibition on what goes into the certificate; there is also a direct connection between what is in the certificate and what may be looked at. This is a connection which is made explicit for the first time. In other words, what is on the certificate is all that cart be looked at. It is not present in the 1985 Act. It offers a legal guarantee that external warrants will not be used to target individuals in this country except in the circumstances I have described.
These provisions are indeed complicated. I am attempting to assure the noble Lord that the safeguards attached to the system are as robust as under the current Act—in some respects more so. The interception commissioners have in the past been careful and diligent to ensure that these provisions are properly followed. It almost goes without saying that we are confident, and the House can be confident, that the new commissioner will confirm this scrutiny.
I hope that my remarks go some way towards relieving the noble Lord's concerns about this part of the Bill.
Lord Chalfont: My Lords, perhaps the Minister can clear my mind about what seems an important issue. Is it not true that the Echelon network can already intercept any telephone call and any e-mail anywhere in the globe from satellite interception? If so, are not some of the warrants somewhat irrelevant?
Lord Bach: My Lords, I do not know the answer to the noble Lord's question. Even if I did, I am not sure
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that I would think it proper to answer his question today. These are matters of important concern. It is necessary to be careful in what one says from this Dispatch Box and anywhere in this House on matters of this kind. If the noble Lord would like an answer to his question, I shall be happy to give it at some future time.
Lord Chalfont: My Lords, there is nothing classified about this matter. It has all been in the public domain and public print. I am not sure why the question cannot be answered.
Lord Bach: My Lords, I am sure the noble Lord is right because he is an acknowledged expert in this field, as I am not. I shall be happy to answer ham when I know the answer myself.
Lord Nolan: My Lords, perhaps I may say from ray experience as commissioner that I see nothing dangerous or objectionable in the proposed new clause. The degree of coverage of external communications appears to be no wider than it has ever been, but more precisely spelt out. The effect of the amendment proposed by the noble Lords, Lord McNally and Lord Phillips, would unduly narrow the scope of what can be intercepted and would, indeed, be against the public interest.
Lord Phillips of Sudbury: My Lords, I am grateful for the Minister's comments. His practical illustration was easier to follow than some of the explanations given hitherto and I suspect that it shed more light on one aspect of the Bill. That is not a criticism, but I wonder whether when we are faced with such difficult and dense Bills it would help those on non-government Benches to have worked-through illustrations. They would make the whole task more approachable.
I am grateful for the Minister's explanation. I shall read Hansard carefully because I am not sure that I picked up every point that was made. The Minister did not refer to my final point about the practical illogicality of not reading and listening in order to sort the sheep from the goats and the prospect of an additional statutory protocol agreed between the Government and the interception of communications commissioner in order to verify this aspect of the workings of the Bill. It is important and we all understand that someone must look at the material in order to decide what is internal and what is external and must then forget all that is internal. Could that form a clear procedure? That would give great reassurance beyond these walls. In the mean time, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 21 [Lawful acquisition and disclosure of communications data]:
Lord Bassam of Brighton Lord Bassam of Brighton moved Amendment No. 12:
Page 26, line 12, leave out subsections (8) and (9).
On Question, amendment agreed to.
Clause 22[Obtaining and disclosing communications data]:
Lord Lucas Lord Lucas moved Amendment No. 13:
Page 27, line 9, at end insert—
("(5A) Where the communications data in whole or in part comprises data as defined in section 21(4)(a), the designated person shall first obtain a certificate from—

(a) any judge of the Crown Court or the High Court of Justiciary;

(b) any sheriff;

(c) any justice of the peace;

(d) any resident magistrate in Northern Ireland; or

(e) any person holding any such judicial office as entitles him to exercise the jurisdiction of a judge of the Crown Court or of a justice of the peace,

stating that access to the communications data is necessary and proportionate having regard to the sworn statement of the designated person as to the circumstances of the matter.
(5B) If the designated person reasonably believes that the special circumstances of the case are such that obtaining a certificate under subsection (5A) would cause an unacceptable delay to the issuing of a notice or authorisation under this section, the designated person may issue such notice or authorisation without obtaining a certificate but must then make a prompt report to the Interception of Communications Commissioner as to the circumstances of the matter.").
The noble Lord said: My Lords, the main purpose of Amendment No. 13 is to discuss again the level of authorisation appropriate to access communications data. I do not lay any store by the drafting of the amendment—I am sure that the Minister will be able to have fun with it, but that is not the purpose. If we manage to convince the Government that something must be done, I am sure that he will be able to produce a better version than mine.
I should like the Minister to cover two issues in his reply. First, I should like to be sure that we are ad idem on the practical extent of communications data, in particular traffic data. Secondly, I should like to understand what practical safeguards exist, not in a particular instance but over the long term, for ensuring that the wide range of the data is not misused in practice by the law enforcement authorities.
Perhaps like the noble Lord, Lord Bach, I may give an example. Let us examine the putative investigation of the recent leaks from No. 10. I understand that under the definition of "communications data", and under the power which the Bill gives to the authorities, a police superintendent could decide that he wanted to acquire a list of telephone numbers used by everyone in receipt of the memoranda and associated with the newspaper which printed them. On the basis of the communications data, consisting of the telephone bill or the equivalent used in tracking e-mail data, he could accurately match up the two sets of people to see where there had been communication between them. He could not tell the content of the communication but he could tell that communication had occurred.
Using the location data which will be inherent in the next generation of mobile telephones, he could track anyone he suspected of colluding with the other party. Provided that the two parties had their mobile telephones turned on, he could track them in real time, watch where they went and, if they came within 10
1034
yards of each other, he could know how long they spent there. That is a complete set of data for cracking a crime.
I suspect that the level of authorisation required for delving so far into people's lives should not be left with a police superintendent. As regards, in particular, location data and the details of communications, the authorisation should come from someone at a higher level. We are aware of the use made of telephone bills, but they should not be used casually in respect of minor crime or suspicion. We used to think of them as being used in connection with murder and serious crimes, but we must be careful about the ability we give the average policeman to pry into individual lives. The relationship between the police and their community is important. We must feel that they are, if not our servants, co-operating with us and working on a level with us. If we give them powers over the intimacies of our daily lives and they use them in a way that is uncomfortable to us, there will rapidly be a breakdown in the relationship between the Government and the police. We must be careful about that.
That brings me to the second issue which I hope the Minister will address. How will we become aware of abuses of the system, if they exist? We are all aware that there are abuses of the current system and the Bill is intended to deal with them. It is said that individual officers have used their ability to pick up people's telephone bills and see who has been telephoning whom in order to keep track of their girlfriends. There is nothing in the current system to stop that.
How shall we become aware of abuses if they happen? Who will be looking after the system for us and who will raise their hands and say, "No, this is happening too much and in the wrong way and we ought to do something about it"? I look forward to illumination from the Minister. I beg to move.
4.15 p.m.
Lord Bassam of Brighton: My Lords, the noble Lord has given us a timely reminder of the need to police by consent. Those are wise words. Given the intrusive nature of surveillance, they are well chosen words.
I am sure that the House is aware that the noble Lord and I discussed an almost identical amendment on Report. However, this amendment is different in that the noble Lord seeks to limit his request for judicial authorisation to subsection (4)(a) rather than to paragraphs (a) and (b) of subsection (4), as previously requested. Clearly, on Report my powers of persuasion were limited and insufficient for the task set by the noble Lord. I did not then entirely satisfy or meet the intention behind the amendment, but I trust that I shall have more success today.
At that stage, the noble Lord's main concern appeared to lie with the level of authorisation and I shall try to address that issue particularly as it pertains to the more intrusive communications data. As I explained, under the non-statutory arrangements agreed between the law enforcement agencies and the telecommunications industry, access to more intrusive types of communications data is authorised at a more

1035
senior level within the relevant agency. For example, the most intrusive communications data must be authorised by an assistant chief constable—a very senior level in the police service. More importantly, I can again assure the noble Lord that we intend to insist on higher level authorisations for intrusive data in an order which we shall make under Clause 25(3) and which will be set out in the codes of practice.
It should also be remembered that the Bill introduces the necessary and proportionate requirements, along with the new statutory provisions which provide independent oversight by the interception commissioner. I hope that that oversight by the commissioner's office in the annual report, where the audit team will examine the use made of the power, will offer the noble Lord a degree of comfort with regard to the accountability process. The scope for abuse, which, rightly I believe, is behind the amendment, is the issue on which we need to satisfy not only the noble Lord but others.
I accept that it is not only the level of authorisation which the noble Lord is concerned about; he is also concerned about what that higher level of authorisation should be. However, I am not entirely persuaded of the necessity of calling for a higher level of judicial authorisation. We suggest that access to communications data, even at the top end of the scale, is not more intrusive than directed surveillance—a point that I made before—or the use of covert human intelligence sources as set out in Part II of the Bill.
Quite rightly in our view, those Part II provisions have been approved by both Houses of Parliament without the introduction of judicial authorisation for that type of activity. Instead, the Bill provides for directed surveillance or the use of covert sources of intelligence to be authorised at a specified level within a designated public authority. I would argue that accessing communications data is comparable. Therefore, I see no strong reason why the internal authorisation procedures for accessing them, with the restrictions and oversight provisions that we have already set out, should be any different.
We both agree that there should he different levels of authorisation for the different levels of communications data requested. I believe that we differ only on whether to involve the judiciary in the authorisation procedure.
I hope that I have provided sufficient reasons as to why the Government are not persuaded that it is necessary to go down this route. I believe that the accountability provided by the commissioner's office, the level of authorisation and the seriousness with which we view it, and the important tests of reasonableness and proportionality should offer sufficient satisfaction and confidence in this particular part of the regime. I trust that on the basis of what I have said, the noble Lord will feel able to withdraw his amendment.
Lord Lucas: My Lords, I am grateful for that explanation. I believe that we shall have to wait to see how the matter develops in practice. When the commissioner examines how the power is being used, I hope that he will report to us in sufficient detail so that we may see and understand what is being done. I hope that we shall be able to see from his report that, in particular, location data on mobile phones is used either extremely infrequently or frequently so that we may know whether it is an occasional practice authorised at a very high level or a regular practice due to the fact that it is such a good method of obtaining information in many types of ordinary cases. I believe that if it is the latter, we should examine this area again.
I hope that I can rely on my understanding of what the Minister said with regard to the commissioner; that is, that when he reports he will provide us with sufficient information so that we may know that that is what is happening. However, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 49 [Notices requiring disclosure]:
Lord Bassam of Brighton Lord Bassam of Brighton moved Amendment No. 14:
Page 54, line 31, leave out from beginning to ("performance") in line 32 and insert ("necessary for the purpose of securing the effective exercise or proper").
The noble Lord said: My Lords, this should be a fairly short debate. The amendment fills out an undertaking we gave on Report. I believe that on Report the noble Lord, Lord McNally, proposed an amendment to raise the test for serving a disclosure notice in what is now Clause 49(2)(b)(ii). I said that I would take the matter away and return with our own change in time for today. This amendment is the fruit of that activity.
I trust that the amendment will be welcomed. It is important that the Bill covers all statutory powers which conceivably may be affected by the use of encryption. However, we are aware that the current test in Clause 49(2)(b)(ii) was regarded by some as being rather too loose. I am sure that that concern was behind the noble Lord's amendment. We propose to tighten the test substantially by introducing a necessity requirement. That would mean that notices could be served only under Clause 49(2)(b)(ii) where it was believed to be necessary for the purpose of securing the effective exercise or proper performance by a public authority. I hope that the amendment will be supported. I beg to move.
Lord Cope of Berkeley: My Lords, I believe that the use of the word "necessary" in this particular sub-paragraph is preferable to the words "likely to be of value" which were used previously. It brings it into line with some of the other clauses, including Clause 49(2)(b)(i) and the others related to it. I believe that it is a helpful improvement to the Bill.
Lord McNally: My Lords, I confirm what the Minister said. My desire was to see the bar cleared and raised a little. I believe that the Minster has done that and I thank him.
On Question, amendment agreed to.
Lord Lucas Lord Lucas moved Amendment No. 15:
Page 55, leave out line 6 and insert—
("() must describe the protected information to which the notice relates in sufficient detail to enable all those keys which would satisfy the requirements of section 50(3) and (6) to be identified;
() must, except where the notice includes a direction pursuant to section 50(3)(c), provide arrangements for the protected information to be delivered to the recipient in the event that—

(i) it is not already in his possession, or

(ii) it is only likely to come into the possession of any person or service in accordance with some paragraph of subsection (1);").

The noble Lord said: My Lords, in conformity with the spirit of co-operation that now exists in the House, I have copied the Government and the Liberal Democrat Front Benches with the briefing note constructed for me on this and, indeed, two other amendments by the redoubtable Dr Charles Lindsey of Manchester University. Therefore, on this occasion, the purpose and intention of my amendment will be lucidly clear. Due to my inadequacies, I am afraid that on previous occasions that has perhaps not always been the case.
This amendment attacks two related problems. First, currently Clause 49(4) does not explain how the noticee is to identify the required key where he does not have the protected information to hand. He is likely to have a number of keys which he has used on protected information. I believe that it is an important concession, made in the course of the passage of this Bill, that the person who is to release his key has the right to provide a session key if he so chooses. In doing so, he is not in any way breaching his security and he is providing the police, or whoever, with absolute evidence of the correct translation of the protected information.
However, in order to be able to deduce which session key he needs to provide, it will be necessary for him to be provided with information by the police or whoever holds the protected information. The first purpose of the amendment is to ensure that he has the right to receive that information so that he can disclose the correct key; otherwise, by not releasing that information, it would be possible for the police to make him divulge all his keys, and I believe that that would be an extremely undesirable state of play.
On Report, the Minister said that in some cases it would be improper for the Government to give the noticee the protected information. I cannot think of many cases in which that would be true. If the message is encrypted with his key, it must have been intended for his eyes. It would be inappropriate only if the police thought that they did not have all the information and did not want to disclose to the noticee how little they had and were able decrypt.
The amendment would bring that exceptional scenario—in which the police were reluctant to give any information to the key holder that would enable him to divulge the session key or produce the plain text—within the ambit of Clause 51, which provides all the protections that the Minister has graciously given us. Without the amendment, the police would be able to escape from all the new protections in Clause 51 by failing to provide the protected information or sufficient details to enable someone to disclose the right key, thereby forcing them to hand over all the keys without the need for any authorisation at chief of police level or notification to the commissioner.
I find this a difficult and technical concept, but I am sure that, having had sight of my briefing note for a while, the Minister and his advisers will have a better understanding of what I am after.
My final point is the fundamental one. There should not be a way of forcing someone to divulge their key other than under the protections that are available—and, if we pass the necessary amendments, will be available—under Clause 51. I beg to move.
4.30 p.m.
Lord Bassam of Brighton: My Lords, the aim of the first part of the amendment is already implicit in the Bill. Clause 49(4)(b) requires that disclosure notices must describe the protected information to which the notice relates and Clause 49(4)(f) requires that they must set out the disclosure required and the form and manner in which it is to be made. We are not sure that there is a need for the universal requirement suggested by the amendment. If the disclosure of plain text was required from a legitimate organisation, for example, the amendment would be redundant. The requirements set out in paragraphs (a) to (g) of Clause 49(4) set out what all notices must include. They are not optional requirements.
I think that I understand the concern behind the first part of the amendment tabled by the noble Lord, Lord Lucas. He may be worried that persons could be forced to hand over a master key rather than, say, a session key because the authority serving the notice provided insufficient information. Clearly, a notice must contain enough detail to enable the person served with it to know exactly what is being asked of him or her. That is also in the authorities' best interests.
We are addressing that in the code of practice. We have already set out a first stab at what a disclosure notice might look like in the initial draft code that we published last week. As your Lordships will have seen, we suggest, for example, that the notice makes it clear that where the disclosure of keys is required, or where someone does not have the relevant plain text in their possession, they have the flexibility to disclose any key of their choosing that carries out the necessary decryption. To do that, they will clearly need to know to what information the notice relates. That is properly a matter best left for the code of practice.

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The second part of the amendment covers similar ground. We discussed a similar amendment on Report, moved by the noble Lord, Lord Phillips of Sudbury. In this case, if a recipient of a Section 49 notice did not have the relevant protected information in his or her possession and there was no direction in the notice requiring that a key be disclosed, the person with permission to serve the notice would be required to deliver all that information to the recipient to allow him or her to decrypt it or disclose any key of his or her choosing that would decode it.
We cannot accept the amendment. As I said on Report, we recognise that there may be cases in which the recipient of a notice does not have the relevant protected information in their current possession, but has a relevant key. In such cases, providing the relevant protected information to a person may well be sensible, practical and right. There is no statutory bar to giving access to the information. However, there may be other cases in which it is not right to do that, such as when notices are to be served on persons suspected of criminality. That would make no sense. We do not believe it right that people should be supplied with the relevant protected information in all cases.
When the noble Lord, Lord Phillips of Sudbury, moved a similar amendment on Report, he wondered whether someone served with a disclosure notice who was not in possession of the relevant protected information at that time could be penalised unjustly under the Part III powers. I think that he described it as the "Willie and Steve" scenario. The short answer is "No". We recognise that the recipient of a disclosure notice will not always have the relevant protected information in their possession. In the scenario painted so ably by the noble Lord, Lord Phillips, it is entirely possible that someone may have received a message, decrypted it and destroyed it. They cannot be penalised for that. By virtue of Clause 50, they may disclose a key. If the circumstances are right, it may be possible for them to be given the protected information.
As I said on Report, we do not believe it right to include a blanket provision that a person serving a notice must in all cases provide the recipient of a notice with all the relevant protected information that they do not possess. That would be the effect of the amendment. In some cases that will be appropriate, but in others it will not. The issue is best dealt with in the code of practice. As I said on Report, we shall take away the comments of your Lordships and other interested parties and try to reflect them in fleshing out the details of the code on this point.
I hope that that will give the noble Lord some comfort and that he will feel more than able to withdraw the amendment.
Lord Lucas: My Lords, before the Minister sits down, will he answer the last point that I put to him? Am I right in thinking that, under the current wording of the Bill, if, for what everybody considers perfectly good reasons, a person is not provided with the protected information and is in effect required to
1040
hand over keys, he does not enjoy the protection of Clause 51, as he would if there was simply a direct request for the keys? If the police say, "We have some protected information and we require you to provide the plain text, so give us your keys", he has no protection, whereas if they just say, "We want your keys", he has protection. If that is the case, it is very undesirable, because the police will take the easy route. Rather than going to the chief of police to get permission to have the keys, they will just not produce the protected information, so that they can get the keys with a much lower level of authorisation.
Lord Bassam of Brighton: My Lords, I understand the noble Lord's concern. He is probably correct that there is no statutory power. We shall need to examine the issues on a case-by-case basis. The law enforcement agencies will have to approach the issue carefully. We shall take careful note of the noble Lord's comments and give careful consideration to the phraseology in the code of practice, because we can offer more comfort there than we can on the face of the Bill.
Lord Lucas: My Lords, I am grateful to the noble Lord for that reply. I am happy with what he said about the code of practice, and that being the right place to do things, for the first part of this amendment. He is obviously of the opinion that in principle the Bill covers everything which needs to be covered, and that issues can be fleshed out and dealt with in detail in the code of practice.
But, as we come to this part of the Bill, we are placing a great deal of reliance on the amendments which the Government made on Report, in what is now Clause 51, and on the amendments which are to be made to it today. If the amendments are accepted, people can have confidence that their keys will not be divulged on a whim. A very high level of authorisation will be required. Reference must be made to the commissioner, who is an independent member of the judiciary, and that will be done promptly. That is an environment in which people can feel relatively safe and can be sure that things are done well.
There is then apparently a great hole in the Bill where there are no safeguards or authorisations. All that has to happen is that the police have a piece of protected information that the "noticee" no longer has and they can open up his key box with hardly a "by your leave".
The amendment as it is now is not perfect, but unless this amendment is passed now the Government will not have the opportunity to set this matter right in another place. I am sure the Government do not intend that there should be this great hole in the Bill as it stands.
No discourtesy is intended to the noble Lord in pressing this amendment. He has done a great deal to improve this Bill as it is, but it has been done in a great rush. It seems to me that here is a major hole in the reassurances which the noble Lord has been providing, and which we have all been seeking. In respect of everything else that they have done, I seek to give the Government a little more time to consider whether

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something should be done to ensure that all of us, in particular major businesses, can feel entirely comfortable that our keys are safe in practice. I commend the amendment to the House.
4.43 p.m.
On Question, Whether the said amendment (No. 15) shall be agreed to?
Their Lordships divided: Contents, 118; Not-Contents, 132.

Division No. 1

CONTENTS

Addington, L.

Liverpool, E.

Alderdice, L.

Lucas, L.

Ampthill, L.

Luke, L.

Anelay of St Johns, B.

Lyell, L.

Astor, V.

McConnell, L.

Astor of Hever, L.

Mackay of Ardbrecknish, L.

Attlee, E.

Mackie of Benshie, L.

Barker, B.

McNally, L.

Beaumont of Whitley, L.

Maddock, B.

Biffen, L.

Mancroft, L.

Boardman, L.

Mar and Kellie, E.

Brabazon of Tara, L.

Montrose, D.

Brittan of Spennithorne, L.

Naseby, L.

Brougham and Vaux, L.

Newby, L.

Burnham, L.

Noakes, B.

Byford, B.

Northbrook, L.

Campbell of Croy, L.

Northesk, E.

Carlile of Berriew, L.

Norton of Louth, L.

Carnegy of Lour, B.

O'Cathain, B.

Chalfont, L.

Onslow, E.

Clark of Kempston, L.

Oxfuird, V.

Clement-Jones, L.

Palmer, L.

Coe, L.

Park of Monmouth, B.

Colwyn, L.

Peel, E.

Cope of Berkeley, L.

Phillips of Sudbury, L. [Teller]

Courtown, E.

Pilkington of Oxenford, L.

Crickhowell, L.

Razzall, L.

Dahrendorf, L.

Redesdale, L.

Dholakia, L.

Rees, L.

Dixon-Smith, L.

Rees-Mogg, L.

Elles, B.

Rennard, L.

Elton, L.

Roberts of Conwy, L.

Ezra, L.

Rodgers of Quarry Bank, L.

Geddes, L.

Rotherwick, L.

Geraint, L.

Russell, E.

Gilmour of Craigmillar, L.

Russell-Johnston, L.

Glentoran, L.

Scott of Needham Market, B.

Goodhart, L.

Selborne, E.

Goschen, V.

Selkirk of Douglas, L.

Gray of Contin, L.

Sharp of Guildford, B.

Greaves, L.

Sheppard of Didgemere, L.

Hanham, B.

Simon of Glaisdale, L.

Harris of Greenwich, L.

Smith of Clifton, L.

Haslam, L.

Soulsby of Swaffham Prior, L

Henley, L. [Teller]

Stodart of Leaston, L.

Higgins, L.

Strathclyde, L.

Hooper, B.

Swinfen, L.

Hooson, L.

Taverne, L.

Howe, E.

Taylor of Warwick, L.

Howell of Guildford, L.

Tebbit, L.

Hunt of Wirral, L.

Thomas of Gwydir, L.

Hylton, L.

Thomas of Walliswood, B.

Jenkin of Roding, L.

Tordoff, L.

Jenkins of Hillhead, L.

Vivian, L.

Jopling, L.

Wallace of Saltaire, L.

Kimball, L.

Watson of Richmond, L.

Lester of Herne Hill, L.

Wigoder, L.

1042

Wilcox, B.

Windlesham, L.

Willoughby de Broke, L.

Young, B.

NOT-CONTENTS

Acton, L.

Irvine of Lairg, L. (Lord Chancellor)

Ahmed, L.

Islwyn, L.

Alli, L.

Janner of Braunstone, L.

Amos, B.

Jay of Paddington, B. (Lord Privy Seal)

Andrews, B.

Jeger, B.

Archer of Sandwell, L.

Jenkins of Putney, L.

Ashley of Stoke, L.

Judd, L.

Bach, L.

King of West Bromwich, L.

Barnett, L.

Kirkhill, L.

Bassam of Brighton, L.

Lane of Horsell, L.

Berkeley, L.

Layard, L.

Bernstein of Craigweil, L.

Lea of Crondall, L.

Billingham, B.

Lipsey, L.

Blackstone, B.

Lockwood, B.

Blease, L.

Lofthouse of Pontefract, L.

Borrie, L.

Longford, E.

Bragg, L.

Macdonald of Tradeston, L.

Brennan, L.

McIntosh of Haringey, L. [Teller]

Brett, L.

McIntosh of Hudnall, B.

Brooke of Alverthorpe, L.

Mackenzie of Framwellgate, L

Brookman, L.

Mallalieu, B.

Brooks of Tremorfa, L.

Mason of Barnsley, L.

Burlison, L.

Massey of Darwen, B.

Carter, L. [Teller]

Mitchell, L.

Castle of Blackburn, B.

Molloy, L.

Clarke of Hampstead, L.

Molyneaux of Killead, L.

Clinton-Davis, L.

Morris of Castle Morris, L.

Cocks of Hartcliffe, L.

Morris of Manchester, L.

Crawley, B.

Nicol, B.

Davies of Oldham, L.

Orme, L.

Desai, L.

Parekh, L.

Dixon, L.

Patel of Blackburn, L.

Donoughue, L.

Peston, L.

Dormand of Easington, L.

Plant of Highfield, L.

Elder, L.

Ponsonby of Shulbrede, L.

Evans of Parkside, L.

Puttnam, L.

Evans of Temple Guiting, L.

Ramsay of Cartvale, B.

Evans of Watford, L.

Randall of St. Budeaux, L.

Farrington of Ribbleton, B.

Rendell of Babergh, B.

Faulkner of Worcester, L.

Richard, L.

Fitt, L.

Rogers of Riverside, L.

Fyfe of Fairfield, L.

Sainsbury of Turville, L.

Gale, B.

Sawyer, L.

Gavron, L.

Scotland of Asthal, B.

Gibson of Market Rasen, B.

Sewel, L.

Gilbert, L.

Shepherd, L.

Gladwin of Clee, L.

Shore of Stepney, L.

Goldsmith, L.

Simon, V.

Gordon of Strathblane, L.

Slim, V.

Goudie, B.

Smith of Leigh, L.

Gould of Potternewton, B.

Stoddart of Swindon, L.

Grabiner, L.

Stone of Blackheath, L.

Graham of Edmonton, L.

Symons of Vernham Dean, B.

Grenfell, L.

Thornton, B.

Hardy of Wath, L.

Tomlinson, L.

Harris of Haringey, L.

Turner of Camden, B.

Harrison, L.

Warwick of Undercliffe, B.

Hayman, B.

Watson of Invergowrie, L.

Healey, L.

Wedderburn of Charlton, L.

Hilton of Eggardon, B.

Whitaker, B.

Hollis of Heigham, B.

Whitty, L.

Howie of Troon, L.

Wilkins, B.

Hoyle, L.

Williams of Elvel, L.

Hughes of Woodside, L.

Williams of Mostyn, L.

Hunt of Chesterton, L.

Williamson of Horton, L.

Hunt of Kings Heath, L.

Woolmer of Leeds, L.

Resolved in the negative, and amendment disagreed to accordingly.
4.53 p.m.
Lord Bassam of Brighton Lord Bassam of Brighton moved Amendment No. 16:
Page 55, line 18, at end insert—
("and the time specified for the purposes of paragraph (f) must allow a period for compliance which is reasonable in all the circumstances.").
The noble Lord said: My Lords, I am sure that this amendment will be as uncontroversial as the previous amendment. The noble Earl, Lord Northesk, tabled a similar amendment at Report stage, which I accepted in principle. I undertook to bring back our own amendment which is the result of that further consideration.
We said previously that, in practice, notices will set out a reasonable time for compliance. This amendment puts that requirement on the face of the Bill. What constitutes a "reasonable" time will, of course, vary from case to case. It is for the person giving permission for a Section 49 notice to be served properly to weigh up, having given the matter very careful thought. We have set out in the initial draft code of practice that any timing considerations will need to be fully justified. The code will be fleshed out, as I said earlier, when we receive further comments from interested parties.
There is a safeguard against unreasonable demands being made in Clause 53(4)(a), which provides a statutory defence to the offence of failure to comply where it was not reasonably practicable to do so in the time required by the terms of the notice. Given that this amendment was originally inspired by noble Lords opposite, I am sure that it will be welcomed by your Lordships' House. I beg to move.
The Earl of Northesk: My Lords, I welcome the amendment and thank the Minister for his generosity in tabling it.
Lord Phillips of Sudbury: My Lords, as we do from these Benches.
On Question, amendment agreed to.
Viscount Astor Viscount Astor moved Amendment No. 17:
Page 56, line 10, at end insert—
("() A notice under this section shall not confer any right to production of, or access to, items subject to legal privilege.").
The noble Viscount said: My Lords, in moving this amendment I shall speak also to Amendments Nos. 29 to 33 and Amendment No. 35. We debated at Report stage legal privilege and its protection. At the time the Minister indicated that the Bill would not detract from the position of legal privilege in the area of admissibility of evidence. The common law would apply. We accept that that may offer some protection in the arena of the courtroom. However, it does not address the issue of access to material which is subject to legal privilege.
Since the Minister's reply, we have had time to study the Data Protection Act, referred to by my noble and learned friend Lord Fraser of Carmyllie, and Section 18 of the Proceeds of Crime (Scotland) Act 1995. They
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recognise the importance of confidentiality in the solicitor-client relationship. Such communication should be privileged at all stages in the legal process. Provision is made on the face of the legislation to the effect that access will not be given to material which is subject to legal privilege.
If it is deemed appropriate to recognise the common law in this way in these two Acts, it is difficult to envisage why similar safeguards should not be incorporated in the present Bill. At Report stage the Minister correctly identified the protections available under the Police and Criminal Evidence Act 1984. I am advised that that Act does not extend to Scotland. Therefore, there is concern that the Minister's comments do not sufficiently take account of the Scottish situation.
That brings me to the amendments which I have tabled and which largely concern Scotland. Amendment No. 17 provides that there should be no right to require the disclosure of items subject to legal privilege under Clause 49. As the Minister knows, Article 8 of the European Convention on Human Rights enshrines the right to privacy. The law is there to protect the relationship between solicitor and client and has made provision for the doctrine of legal professional privilege. To preserve that relationship and ensure that communications are privileged, provision should be made on the face of the Bill to the effect that a notice under Clause 49 will not extend to the disclosure of information subject to legal privilege.
Amendment No. 29 extends the defences which will be available to persons failing to comply with a notice to take account of the doctrine of legal privilege. We believe that the Bill should make available a defence which takes account of the doctrine of legal privilege in circumstances where a legal adviser fails to comply with a notice.
Amendment No. 30 concerns medical confidentiality. I understand that the BMA is concerned about patient confidentiality, particularly as the NHS net will be an Internet service provider within the terms of the proposed legislation. That will place particular and specific duties on those responsible for the NHS net. The BMA is particularly concerned about the implication of these duties on the handling of confidential, named patient data. I understand that some of that is to be covered in a code of practice. But perhaps the Minister can help us as to aspects of confidentiality in the patient-doctor relationship and explain how it is to be protected by the code of practice.
The next amendment deals with the offence provisions in relation to tipping off and their application to professional legal advisers. The amendment inserts a new subsection reflecting the provisions currently contained within the Terrorism Bill which we believe affords an adequate protection for the concept of legal professional privilege.
Amendment No. 32 is concerned also with the tipping-off provisions in Clause 54 so that they do not extend to the disclosure of information subject to legal privilege. That is acknowledged in other legislation which incorporates tipping-off provisions.
Amendment No. 33 seeks to clarify situations in which information is deemed to have been obtained by a legal adviser in privileged circumstances. There has been debate about situations in which information will be considered to have been obtained in privileged circumstances. Clause 54 presently provides the circumstances in which legal privilege cannot be used as a defence to an allegation of failure to comply with a notice requiring disclosure. The exception to the general rule of legal privilege exists in situations where information comes to the adviser with a view to furthering a criminal purpose. The phrase,
"otherwise than with a view to furthering a criminal purpose",
has been the subject of consideration by the courts. It is unclear who must have knowledge of the criminal purpose.
The Law Society of Scotland has advised me that legal professional privilege could not be claimed in situations where the adviser himself was in possession of the information with the intention of furthering the criminal purpose. However, if the adviser had no knowledge of the criminal purpose, the doctrine could still apply.
So the proposed amendment adopts the definition of legal professional privilege contained in Section 33 of the Criminal Law (Consolidation) (Scotland) Act 1995. We believe that it is helpful to have similar statutory definitions of the concept of legal professional privilege and the amendment seeks to produce a harmony between those provisions.
The last amendment in the group provides a definition of the term "professional legal adviser" so that it is given on the face of the Bill to avoid any ambiguity as to what is meant by that term and when the doctrine of legal professional privilege can be invoked. It is necessary also to take account of the directive 98/5/EC—the EU Lawyers Establishment Directive—when framing this definition.
At an earlier stage, my noble and learned friend Lord Fraser of Carmyllie raised issues about the Data Protection Act 1984. The Minister said on a previous occasion that the common law is clear cut. If so, why was it necessary to include Section 31(2) in the Data Protection Act?
The Minister said that he believed that there are adequate safeguards for the legally protected material and referred to the code of practice. Of course, a code of practice is just that. That is all it is. It is there for guidance—nothing more. Account must be taken of it, but it is not the same as having a provision on the face of the Bill, whether by primary legislation or by order.
The Minister offered to write to my noble and learned friend Lord Fraser of Carmyllie. I realise that, in the short time that has been available in our rather hurried Session before we all go on holiday, that has not been possible. Therefore, it is important that the Government should answer the queries which my noble and learned friend and I have raised. I beg to move.
5 p.m.
Lord Bach: My Lords, we enjoyed several short debates on Report on the protection due to legally privileged material. Our position now is the same as it was then: some of these amendments are unnecessary because the protection they seek is already in the Bill; and other amendments seek to do things which we believe can be done more precisely in the code of practice and with more consultation. But I welcome the opportunity shortly to restate our position on this important subject.
First, we recognise the important status of communications between lawyer and client. Those communications need proper protection, not absolute protection because of the risk, in any sector and any profession, of abuse, but robust protection none the less.
Perhaps I may expand on that. Our starting position is that legal communications should not, in the normal course of law enforcement, be the subject of targeting by police and other agencies. But that is not all. It is also important that police and others are aware of the situations where they may come across legal communications inadvertently and know how to deal with those cases too.
Amendments Nos. 17, 29, 30 and 32 relate to no obligation to disclose legally/medically privileged material. Amendments Nos. 29 and 30 would ensure that a key cannot be required if its disclosure means a lawyer or doctor giving access to legally or medically privileged material. We agree with the sentiment. But we do not think the amendments are quite right, and we do not believe they are necessary. They are not right because they do not take into account the case where a key protects both privileged material and material of a quite different nature which is not privileged. In that case, and remembering that disclosure of a key is going to be unusual in any event, it may make more sense for the key to be disclosed but for law enforcement to be inhibited from looking at the privileged material.
The amendments are not necessary because nothing in the Bill reduces the protection given in law to privileged material. If it is protected from a disclosure requirement now, whether that is by virtue of English, Scots or Northern Ireland law, a notice under the Bill will not override that protection. The code of practice makes that clear. The Bill applies only to material that comes lawfully into the possession of law enforcement. In most circumstances, legally privileged material simply will not find itself in this position.
There is, of course, the question of exactly how far legally privileged material should be protected; for example, if there is no statutory bar on its being accessed by means of some other power, or where its status only becomes clear on decryption. As I said on Report, and repeat, we look forward to getting that question right in the codes of practice, in consultation with the professional bodies in all parts of the United Kingdom.
Amendments Nos. 17 and 32 are similar. Amendment No. 17 prohibits access to any legally privileged material. Amendment No. 32 focuses on the

1047
position of the lawyer confronted by a Section 49 notice. Again, we think they envisage a situation that for the most part simply will not exist. What is the underlying power that would enable the police to say to a lawyer, "Show us the communications you have had with your client"? If there is no such power, Part III of the Bill presents no danger to legal confidentiality.
We agree, however, that we need to get right both the procedure and the precise degree of protection for when a Section 49 notice does encroach on to legally privileged material, for whatever reason. We look forward to doing that, with help from others, in the code of practice.
Amendment No. 31 recrafts the protection given to professional legal advisers against the tipping-off offence. In principle, we do not disagree with the amendment. But we have looked at it closely and do not believe it adds anything to the Bill that is necessary. The amendment covers legal advice from the lawyer to the client or client's representative. So does the Bill, in Clause 54(6) and 54(7). The amendment covers advice in the context of actual or contemplated proceedings. So does the Bill. The amendment covers all other legal advice as well while the Bill at Clause 54(6) limits that to advice about the effect of Part III of the Bill. We believe the limitation in the Bill to be justified. A person served with a disclosure notice containing a secrecy requirement may well need legal advice on what the notice means and its consequences. The Bill allows for that, and the standard form of notice, which will be in the code of practice, will encourage him to seek legal advice.
Finally, the amendment appears to make the protection for legal advice an exception to the offence rather than a defence. Perhaps I may make two points. First, it is quite common for these provisions to be framed in terms of a defence. All the recent tipping-off offences do it in that way. We would find it difficult to accept an argument that that imposes a difficult or unjust burden on the legal adviser, remembering that the defence need only be established on a balance of probabilities, and that the facts supporting the defence are comfortably within the lawyer's reach. Secondly, we do not think that the amendment changes the position. That is because the general rule of law is that statutory exceptions to a criminal defence, available in special circumstances or by persons of specified classes or with special qualifications, are for the defence to prove.
Much of what I have had to say concerns the codes of practice. We are placing much emphasis on them. There is legislation in which some statutes explicitly protect legally privileged material. Here, the precise protection due to this material requires careful consideration. It cannot fall outside it altogether but it needs to be protected. We are convinced that our codes of practice are best placed to achieve that. Why do we say that? Codes of practice are, in effect, much more flexible than words that appear on the face of a statute. At present, we are negotiating with various organisations: legal, medical, spiritual and journalistic, to name but a few. The point is that
1048
safeguards must be specific and drafted in close consultation with representatives of those sections of those professions. We have started the process and had contact with representatives from all those organisations, including the BMA. We look forward to continuing the discussions so that we can put sufficient and appropriate safeguards in the code of practice.
The noble and learned Lord, Lord Fraser of Carmyllie, asked about PACE. He is right; PACE does not apply in Scotland. However, there are other common law protections given to legal material in Scotland. It is not for me to say whether such protections are better or worse than protections in England, nor, we would argue, a matter for the Bill. The key points are that the Bill does not subtract from legal protection given to legal material, whether such protection is statutory or non-statutory. The code of practice will say what should happen if, by virtue of these powers, law enforcement comes across legally privileged material. We repeat what we have often said: we intend the codes to provide tough safeguards against legal privilege being undermined.
We do not agree, should the argument be put forward, that codes of practice are somehow useless and not as good as having the words on the face of the statute. The codes to the Police and Criminal Evidence Act in England and Northern Ireland have done a great deal to regulate and govern police practice to the benefit of citizens.
Clause 72(1) imposes a legal duty on police officers and others, including in Scotland, to have regard to the codes of practice. Relevant provisions in codes of practice not only are, but must be, taken into account by courts when dealing with these matters. I repeat our willingness, indeed, our desire, to have full consultation on the codes of practice.
Amendment No. 35 adds a definition of "professional legal adviser". There is no definition in the Bill as presently drafted. We do not believe that one is necessary. There is no definition in other similar provisions creating tipping-off offences. However, we are confident that the term "professional legal adviser" covers all the things listed in Amendment No. 35.
The noble Lord asked a question about the National Health Service. He was good enough to give me advance warning of the point. At this stage it is impossible to say which Internet service providers will be subject to Clause 12 obligations. We have debated at considerable length how Clause 12 will work. Perhaps the best assurance I can give him is that the grounds for interception are extremely limited. Procedures for dealing with sensitive or privileged material will be addressed in the code of practice.
I am grateful to the noble Viscount for having tabled the amendments today and for a good debate. However, we do not believe that the amendments should be pressed.
5.15 p.m.
Lord Phillips of Sudbury: My Lords, before the Minister sits down, perhaps I may ask a question. In

1049
the light of the importance of the consultation on these difficult issues—which are extremely difficult; particularly, I suggest, as regards foreign lawyers who will be much affected by the Bill—is it the normal pattern of consultation to have a meeting to discuss such issues? Given the complexity and the importance of the issues to be dealt with on this aspect of the consultation, I am sure that the Law Society and the Law Society of Scotland would desire such a meeting.
Lord Bach: My Lords, I believe that consultations take place in different ways and at different times. However, I can see no objection to meetings between the organisations mentioned by the noble Lord and the Home Office. Indeed, I believe that such meetings would be helpful. I am grateful to the noble Lord.
Viscount Astor: My Lords, I am grateful to the Minister for his reply on various issues. As he stated, it is extremely important for full consultation to take place with such organisations as the BMA on the code of practice. Indeed, serious issues are raised concerning the National Health Service and its Internet service providers. It is crucial that the doctor/patient relationship is preserved. It is also crucial that any worries they have do not stop doctors using the Internet, which is of enormous value to them. It would be dangerous and bad for the National Health Service, and for doctors and patients if, as a result of concerns about the use of confidential material, they stopped using the Internet. That is a concern which I realise the Minister took on board. However, I hope that he will take it back to his colleagues in the Department of Health and that there will be full consultation.
I turn to the remarks made about Scottish law. I am standing in for my noble and learned friend Lord Fraser of Carmyllie. I have to admit to being half-Scottish. However, I should not dream of trying to become even half a lawyer. I am a pale shadow of my noble and learned friend. I am grateful for the remarks the Minister made on those amendments. I wish that I knew enough about Scottish law to come back to him on various points. However, I shall have to retire, thank him for his response and beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Bassam of Brighton Lord Bassam of Brighton moved Amendment No. 18:
Page 56, line 21, leave out ("putting it into") and insert ("disclosing it in").
The noble Lord said: My Lords, the noble Lord, Lord Lucas, proposed an amendment on Report which would have substituted "or" for "and" in what is now page 56, line 21. Some commentators have since returned to the subject, so we have given the matter further thought. We believe that the Bill can be clarified.
Where information is protected both by an obstacle to access, such as a password, and by encryption, it is right that the plain text requirement in Clause 50(1) should apply only where the person can overcome
1050
both obstacles. We remain of the view that the amendment tabled by the noble Lord on Report would not have worked. However, where there is a password and no decryption, it should be enough that the person has the password. The Bill implies that in all cases he must also have the means of putting the information into intelligible form. I suggest that that is misleading. In the case I have described, no such means are necessary.
The important thing is that the person must be able to achieve access to the information and be able to disclose it in intelligible form. The first amendment, I hope, makes that clear. If he can do those things, he need only disclose the plain text. We have been round this argument before, but that is primarily our objective. If he cannot do both those things, he must disclose the key. The second amendment, which operates on subsection (3), achieves that.
I hope that we have gone some way to achieving what the noble Lord, Lord Lucas, was seeking to achieve with his amendment and improved it. I beg to move.
Lord Lucas: My Lords, I am grateful to the Minister for taking into account the arguments which I passed on to him, for finding an elegant solution to the problem raised and for explaining the problem so much more eloquently than I did.
On Question, amendment agreed to.
Lord Lucas Lord Lucas moved Amendment No. 19:
Page 56, line 26, at end insert ("; and
(c) shall be required, where the notice so stipulates, to provide evidence, to the reasonable satisfaction of the person giving the notice, that the disclosure made truly represents the protected information in an intelligible form").
The noble Lord said: In moving Amendment No. 19 I shall speak also to Amendment No. 20. As with the previous amendment, I passed my briefing on these two amendments to the Minister, who will therefore understand that I am looking for a couple of ways to make it ever less likely that keys have to be divulged.
Amendment No. 19 makes it possible for the person requiring the plain text—the police officer—to demand proof that the plain text is the correct text. That means that, in circumstances where producing the key might be a severe embarrassment but the police have reason to be concerned that if they did not have the key they would not get the correct plain text, they have the option—it will be their option and, I suspect, that of the other person—of looking to a third party to provide the decryption or to some other form of evidence. That will reduce the number of occasions on which a key may be required. It does not seem to me, although the Minister may correct me, that at present the Bill contains the powers necessary to allow for that option.
Amendment No. 20 relates to occasions where there are several key holders to a specific piece of information. If that information was of particular value to a company, there might be half a dozen key

1051
holders of whom four or five are required to act together to open up the information. At the moment, if one of those key holders is served with a notice, he clearly cannot decrypt the information by himself and therefore has to surrender his key. If he was allowed to talk to his fellow key holders, then he would be in a position to decrypt the information without providing keys.
Again, I hope that the amendment is phrased in a way which will allow effective discretion to the police or whoever wants the information so that, in circumstances where such a procedure is inappropriate they will not have to follow it. But it will provide them with the means, the mechanism and the normal arrangements to ensure that, where it is at all possible for sufficient key holders to be brought together to provide the decryption, then that would be the preferred route. I beg to move.
Lord Cope of Berkeley: My Lords, I seek only to emphasise what my noble friend Lord Lucas said. We are all keen to reduce the number of occasions on which keys are required for a variety of reasons which we have discussed on previous occasions. That is why Amendment No. 19 is desirable, or something along those lines. My only hesitation is that I am not sure that what is sought to be done by Amendment No. 19 cannot be achieved by a less formal means than changing the statute. Subject to that, an obligation to prove the correctness of the plain text may help in some cases.
Lord Bassam of Brighton: My Lords, as the noble Lord will appreciate, this amendment takes us back to an earlier discussion. Again, I am grateful to the noble Lord, Lord Lucas, for his earlier suggestions. That is probably as far as I can go on Amendment No. 19, but I can be more encouraging on Amendment No. 20.
As we continue to state, where the authorities are dealing with an entirely legitimate organisation which is not, of itself, of security concern or suspected of involvement in any criminality, requiring the disclosure of the plain text—rather than a key—will be the norm. That is similar to what happens now when, for example, the police need to approach a bank for information stored electronically. They rely on the bank's integrity and, where necessary, use them as witnesses. We envisage the same sort of scenario over encrypted material. So when the authorities are dealing with a legitimate organisation it seems to us unnecessary to stipulate that evidence be obtained attesting to the accuracy of the disclosed information.
So if the provision is unnecessary for legitimate organisations, we must ask when it might be of use. We do not believe it would be appropriate where notices are served on persons or organisations who are suspected of being involved in criminality, for obvious reasons. Let me reiterate a couple of points I made on Report.
First, if someone is a suspected criminal, it does not seem to us to be appropriate to trust that person to go and prove, presumably by means of a third party, the authenticity of the relevant plain text. Secondly, there
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is also the timing point. There may be critical timing considerations involved in a specific investigation. An additional evidential stage or test would mean time taken up for compliance, for reviewing the evidence supplied and for responding to the view taken of the evidence. We really do not see how all of that can be built into the procedure without potentially damaging the effectiveness of the Part III power. I am sure there are few in your Lordships' House who want to undermine an effective and coherent approach to investigation. It would cast the investigating agency into an uncomfortable quasi-judicial role as reviewer of evidence.
Amendment No. 20 would further restrict the cases where a key must be disclosed. I understand entirely the spirit behind the amendment and to a large degree share the intent. I hope by now noble Lords will acknowledge our sympathy with this aim. We have done what we can, even to the extent of recently tabling amendments to bolster the principle that plain text is the norm. I am therefore genuinely sorry to have to oppose this amendment.
The amendment would apply to the person who has the protected information in his possession and a key to that information, but not all the keys necessary to produce plain text. The noble Lord would allow the person to seek the assistance of the person who has the missing key and by that means to deliver plain text.
I hope that those arrangements would normally apply. But as I explained on Report, we cannot allow the recipient of a notice as of right to tell someone else about the Section 49 notice, whether to seek assistance or for some other reason. That is because the notice may contain a secrecy requirement. On the other hand, where there are no operational reasons for preventing that sort of disclosure, I agree that it should be allowed.
This afternoon I give an undertaking that we will expressly make that point in the code of practice. I realise that that may not entirely satisfy the noble Lord's second amendment. However, it may be a neater and ultimately more effective way of achieving what the noble Lord is seeking. I trust with that explanation the noble Lord, Lord Lucas, will feel able to withdraw his amendment.
Lord Lucas: My Lords, I am grateful for the last point made by the Minister. At this stage we should accept the Government's decision on the other matters. I beg leave to withdraw the amendment.
[Amendment, by leave, withdrawn.]
[Amendment No. 20 not moved.]
Lord Bassam of Brighton Lord Bassam of Brighton moved Amendment No. 21:
Page 56, line 39, leave out ("putting it into") and insert ("disclosing it in").
On Question, amendment agreed to.
Clause 51 [Cases in which key Required]:
5.30 p.m.
Lord Bassam of Brighton Lord Bassam of Brighton moved Amendment No. 22:
Page 58, line 15, after ("police") insert ("or by a member of Her Majesty's forces who is a member of a police force").
The noble Lord said: My Lords, in moving this amendment, I shall speak also to government Amendments Nos. 23 and 26 and to Amendment No. 27, which is tabled in the name of the noble Lord, Lord Lucas. Amendments Nos. 22 and 23 represent a technical change. In looking at the change that we made on Report to what is now Clause 51(2), we noted that the military police are not properly covered in subsection (2)(a). We are proposing these technical changes to correct that point.
When, on Report last week, we discussed levels of authorisation for requiring that keys be disclosed, I indicated that we would look at imposing a requirement that any direction given by the persons mentioned in what is now Clause 51(2) should be notified to the relevant independent commissioner. Amendment No. 26 is the result of that undertaking. It means that any directions for the disclosure of keys given internally by the police, HM Customs or Her Majesty's forces be notified within seven days to either the Intelligence Services Commissioner or the Chief Surveillance Commissioner, as appropriate. We have already substantially increased the level of authority required for directions to be given requiring the disclosure of keys.
This amendment introduces what we believe is an additional, but important, safeguard. I expect the cases involving internal agency authorisations to be limited. But in the operational circumstances in which they might arise, I hope that this statutory notification requirement will add a measure of further reassurance. When we discussed the issue of authorisation last week, the noble Lord, Lord Cope, said that the suggestion of notifying a commissioner was well worth consideration. I hope, therefore, that this provision is welcome.
I am most interested in the suggestion made by the noble Lord, Lord Lucas, in Amendment No. 27. Unfortunately—no doubt the noble Lord will accept this—the amendment is technically deficient. Because of the rules of procedure at Third Reading, we have been unable to table a manuscript change to correct that deficiency. In any event, we do not believe that this matter needs to be reflected on the face of the Bill. We clearly agree that chief constables should be required to notify the commissioner as soon as they can. But we do not believe that such a stricture is easily compatible with one specifying a particular time-scale. The time-scale is the important consideration; and the Bill provides for a seven-day limit.
Having said that, we shall ensure that the code of practice should encourage best practice in terms of immediate notification, or something similar. The noble Lord will have ample opportunity to comment on the code, not least when it returns to Parliament
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under the affirmative resolution procedure. I am sorry that we could not be more helpful to the noble Lord; indeed, we desperately wanted to be but the procedure rules prevented us being so. However, in the light of my reassurance, I ask the noble Lord not to move his amendment and I trust that the House will accept the government amendments in this group. I beg to move.
Lord Lucas: My Lords, perhaps I may begin by picking up the Minister's final point. In that way, I can at least have the benefit of the thoughts of my colleagues on the Front Bench on my thoughts, and that might give me some guidance. I turn, first, to my Amendment No. 27. It seems to me that the procedures of this House are in the hands of the House. It is always possible for this House to do what it wants. If the noble Lord would care to indicate what amendment he would like to see, I am sure that with the agreement of the House nemine dissentiente, as the noble and learned Lord the Lord Chancellor said the other day, we could find some way of putting such a provision into the Bill.
However, if that is not possible, the sensible way to deal with the matter is to pass the amendment. The noble Lord could then set it right this afternoon in the other place. Either way, it seems to me that it is a very important reassurance for those companies that will be studying this Bill to know that it is not a seven-day delay. There is much opportunity for things to go wrong and for the situation to be made difficult during a seven-day period, whereas, if the reference is immediate or, in effect, immediate, people will feel pretty confident that the judgment of the commissioner will be the one that holds sway. With the commissioner being an independent judicial figure, I believe that that will give people a great deal of comfort.
I believe, therefore, that my amendment is important. It will cause the Chief Whip a minor inconvenience as regards this Bill making a brief reappearance in this Chamber, to general approbation, sometime tomorrow or, perhaps, the following day. Other than that, it should cause little inconvenience to get this part of the Bill right. In my view, it would make a great contribution to the overall effect of the Bill, as far as concerns the major players on the Internet.
With that in view, I have a few further questions for the Minister in the context of these amendments. First, am I right in thinking that the circumstances under which the Government envisage requiring keys come under two headings only, which might be called "trust" and "timeliness"—in other words, the first is the situation where they do not trust the person to provide plain text, and the second is where they need the information fast? Am I correct in thinking that those are the only two circumstances in which the Government envisage requiring such keys?
Secondly, on looking at the amendments that we have made to the Bill, it seems to me that the Government have an opportunity in another place to address the defect which both sides of the House seem to agree exists and which formed the subject of the

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amendment that I lost earlier. There is a route under Clause 49 for keys to be demanded that does not trigger the safeguards that now exist in Clause 51. I believe that a simple change to the references at the beginning of Clause 51 would put the matter right. I am sure that I could not draft it "on the fly" myself, but if the Government are willing, they will have the opportunity to do this in another place. I should, therefore, very much like to know from the Government whether they agree that this lacuna exists. I also hope that they will agree that it might be put right by such an amendment.
Lord Cope of Berkeley: My Lords, I shall speak, first, to the main amendment in this group, Amendment No. 26. It is good that an element of judicial oversight has been brought into the question of the disclosure of keys. It has been one of the most difficult and criticised aspects throughout our debates on the Bill that government agencies were acquiring the rights to require other people to give them keys.
That requirement has gradually been narrowed down a little during the proceedings on the Bill—notch by notch, as it were—and the safeguards have been increased. I have in mind, in particular, the new safeguard that keys shall be asked for only by direction of a chief officer of police, or the equivalent officer in Customs and Excise. Nevertheless, it was still the police who were going to make the decision. There are occasions when the time-scale would probably make that necessary and essential; for example, when terrorism and other types of very serious crime are being investigated. But, at the same time, for the police to approve such a requirement without any immediate oversight seems to be a disadvantage. Therefore, it seems to me that making the chief constable report to the commissioner that he has given such permission is an extremely important safeguard. That is particularly so when we consider the later amendments—Amendments Nos. 38, 39 and 40—which make it clear that the commissioner can make a report to the Prime Minister at any time.
A chief constable, an equivalent officer from Customs and Excise, or whoever, may require such a key. On learning about this a few days later, the commissioner may think that the officer concerned should not have done so in the particular circumstances. The fact that the commissioner can then report immediately to the Prime Minister that such action has taken place is a great reassurance. I think that will mean that in doubtful cases chief officers of police will obtain clearance in advance from the commissioner before requiring a key.
The commissioner will also be in a position to observe whether a pattern is developing in this regard, perhaps within a particular force or within the Customs and Excise. If he noticed several requests for keys, he could report that to the Prime Minister. It would take a determined chief officer of police not to think carefully before continuing with that course of action. More immediate judicial oversight is likely to prove more effective than the annual report of the commissioner—which, inevitably, is issued well after
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the event—in ensuring that keys are demanded only in special circumstances. This is an extremely important and welcome concession from the Government with regard to keys.
I turn to Amendment No. 27 in the name of my noble friend Lord Lucas, which seeks to speed up the giving of the notification to as soon as possible, and not longer than seven days, after the giving of the direction to which it relates. That is a highly desirable amendment. I accept that it may not be perfectly drafted. It is always possible for amateurs such as my noble friend and myself to overlook some legal point when drafting amendments. I am sure that if the Government and the House wished, we could put that matter right straight away. I hope that the Minister will suggest that. The amendments seem to me to constitute an extremely valuable additional safeguard with regard to the most sensitive aspect of the Bill; namely, demands for keys.
Viscount Goschen: My Lords, the Minister has made some important and welcome concessions. My noble friend Lord Lucas may be only an amateur but he is a gifted one in this regard. The Minister has suggested that my noble friend's amendment cannot be accepted on procedural grounds. However, the amendment could be referred to the other place, should that be the will of the House.
Lord Phillips of Sudbury: My Lords, we on these Benches concur entirely with what has been said by the noble Lords, Lord Lucas and Lord Cope of Berkeley. I suppose that there is a curiosity to see whether or not the reporting requirement to the chief surveillance commissioner on the one hand and the intelligence services commissioner on the other is sufficient. However, I fully accept that there is a right to report to the Prime Minister. In the light of experience Parliament may want to review whether there should be any further embellishment of that requirement and whether the relevant commissioner should have to refer the matter to a High Court judge with the matter in issue being, in effect, suspended until that occurs. Subject to that question mark, we are entirely in support of what is a crucial amendment to one of the heartland provisions of the whole Bill.
5.45 p.m.
Lord Bassam of Brighton: My Lords, I am not the world's greatest expert on procedure but the Companion states that manuscript amendments are not permitted at Third Reading and that the principal purposes of amendments at Third Reading are to clarify any remaining uncertainties, to improve the drafting and to enable the Government to fulfil undertakings given at an earlier stage of the Bill.
I fully accept the spirit in which the noble Lord's amendment is moved. However, it introduces an element of contradiction. Our amendments have imposed a duty on chief constables to notify the judicial commissioner of the giving of a direction within seven days of the giving of that direction. The noble Lord wants to tighten that time-scale to as soon

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as possible after the giving of the direction. We argue that that is not necessary. It would constitute bad policing and poor management to hold back a notification for longer than is necessary. We believe that the duty on chief officers is as robust as that which the noble Lord seeks. The wording that the noble Lord suggests might delay matters. Therefore, I cannot accept an amendment that is outside the procedures of the House. As I said, it is not necessary.
Viscount Goschen: My Lords, with the leave of the House, does the noble Lord accept that, should the House accept my noble friend's amendment, that amendment would then be considered in the other place and it would be open to Members of the other place to amend my noble friend's amendment to correct the drafting problems which the Minister has mentioned and we could all live happily ever after?
Viscount Astor: My Lords, does the Minister agree that if the amendment has been accepted it is within the procedure of the House? To say that the amendment is outside the procedure of the House is wrong and contrary to the rules of the House.
Lord Bassam of Brighton: My Lords, the point I tried to make when I said that the amendment was outside the procedure of the House is that if the noble Lord were to rewrite the amendment, it would be a manuscript amendment. However, I also questioned whether the amendment is necessary. I said that I fully accept the spirit behind the amendment. I also thought that I made it plain that we do not feel that it is necessary to include the amendment in the Bill as we can include it in an appropriate form in the code of practice. The code of practice will be an important measure, particularly in regard to interpreting legislation. As I say, we cannot accept a defective amendment and we cannot, as it were, spirit up a manuscript amendment and accept it simply because we feel that that is the right thing to do. Amendments should be properly circulated to enable them to be fully debated.
Lord Eden of Winton: My Lords, what action would the Minister take if the House accepted the amendment?
Lord Bassam of Brighton: My Lords, it is for the House to decide whether to accept the amendment. If the amendment were to be accepted, we would have to advise the other place that we considered the amendment to be defective. We would invite the other place to reconsider it and suggest a more appropriate wording.
Earlier the noble Lord, Lord Lucas, referred to the matters of trust and timeliness. I readily confirm that those are precisely the values which we seek. We see no reason why anything else should be the case. I hope that I have answered the noble Lord's point.
I am pleased with the debate that has taken place with regard to the Government's amendments. We think that we have the balance right. We have an
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element of judicial involvement. As the noble Lord, Lord Cope, has rightly acknowledged, it would be foolish for law enforcement officers to ignore the reference to a judicial commissioner, particularly where the latter was concerned by the pattern of events.
We feel that we have got an appropriate level of authorisation. I am pleased that there is an acceptance of that. I ask your Lordships to reject the noble Lord's amendment; it would be wrong and inappropriate if it were to be agreed to. I urge the House to accept the government amendments in the spirit in which they have been moved and agreed.
Lord Lucas: My Lords, before the noble Lord sits down, has he any reply to the other question I asked about whether he accepts that there is a lacuna in Clause 49, which allows keys to be obtained without going through Clause 51 procedures? Does he intend to see anything done about that in another place?
Lord Bassam of Brighton: My Lords, I am not sure that I do accept that a lacuna exists. I shall take the point away and give it further consideration. That is the best way I can leave it today.
On Question, amendment agreed to.
Lord Bassam of Brighton Lord Bassam of Brighton moved Amendment No. 23:
Page 58, line 20, at end insert ("who is not a member of a police force").
On Question, amendment agreed to.
Lord Cope of Berkeley Lord Cope of Berkeley moved Amendment No. 24:
Page 58, line 33, after ("proportionate") insert (", having regard to all the circumstances, including the effect on the reputation and business of the person.").
The noble Lord said: My Lords, in moving Amendment No. 24 I shall speak also to government Amendment No. 25—which would appear, on the face of it, to be a better drafted version of my amendment.
We are seeking to ensure that the effect on the business of someone whose key is being sought is taken into account in deciding whether or not the direction that a key should be given is proportionate to what is sought to be achieved by obtaining the key. Sometimes giving up a key may have an appalling effect on a business for which confidentiality is important. We have rehearsed this point in different ways throughout our discussions on the Bill.
The amendment, taken together with the government amendment which allows damages to be awarded if a key is lost, for example, will mean that those making the decisions to demand a key—chief constables and so on—will think carefully about who they are demanding it from. If they are demanding it from a business where huge consequences could follow, they will have to allow for that in making their decision.
This seems a useful amendment. As I said, the Government's version is slightly different from mine; it leaves out the word "reputation", which may be correct. I am glad that the Government are supporting the point which lies behind both amendments. I beg to move.
The Earl of Northesk: My Lords, I, too, welcome the amendment. No doubt we will in due course accept the government amendment; to my mind, too, its drafting is rather better.
I have one question for the Minister. The noble Lord will recall that on Report we debated, as my noble friend said, the interaction of key disclosure provisions with confidentiality requirements from other jurisdictions. As I understood the noble Lord's response, it is not unreasonable to suppose that such obligations will always be compromised to some extent by national rules requiring disclosure of information. I can understand that; I have no problem with it. But this argument does not address the point that it remains possible for the disclosure of a key to compromise the confidentiality of information that is wholly unconnected to that which is subject to the notice.
Of necessity, this class of information would not be subject to a statutory obligation of disclosure. In effect, cross-jurisdiction obligations of confidentiality would be breached without any legal defence. It is perhaps to state the obvious that this has the capacity to create considerable legal uncertainty about the regime among the international business community—and that, in turn, could have serious consequences on the competitiveness of the UK as a centre for e-business and financial services.
Are the Government entirely satisfied that the current provisions on the face of the Bill and in their amendment are free from the legal uncertainty to which I have referred? I should welcome any comment the Minister can make to relieve my anxieties.
Lord McNally: My Lords, this matter continues to be of concern to industry. A brief from the London Investment Bankers Association refers to,
"the particular concerns of our Members about the interaction with other confidentiality requirements to which they are subject in other countries, particularly where disclosure of a key could compromise the confidentiality of information (with possible criminal consequences) which is not the subject of a Section 49 notice".
We have debated this issue many times, but industry is concerned that the transfer of a key will open up doubts about confidentiality, particularly for the members of the London Investment Bankers Association, who have wide and very confidential international responsibilities.
Lord Lucas: My Lords, I shall be popping up on several occasions in the hope that the message will wing its way from the box to the Minister to deal with the back end of the amendment that we lost. My understanding of what the Minister said at that time is, yes, there is a lacuna in the Bill; yes, if the police, or
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whoever, were in possession of protected information that they were not prepared to reveal to the subject of the notice, they could force a disclosure of a key; and that disclosure would not be subject to the Clause 51 safeguards. If that is the case, then this amendment is all very well but it will not achieve anything because there is a great, gaping hole in the Bill around the side of it.
I should like to know at some stage whether I have completely misconstrued the Bill and what the Minister said, or whether there is a problem and we should be looking at ways of dealing with it.
Lord Bach: My Lords, we are at Third Reading and we are dealing with amendments tabled for Third Reading; we are not at Committee stage. I shall reply to the amendment moved properly by the noble Lord, Lord Cope, and suggest why our amendment is to be preferred. Some background questions have been asked. Whether they should have been asked is another matter—but they have been and I shall do my best to respond to them.
As far as concerns Amendment No. 24, we are all on the same side. We can see exactly what the noble Lord is trying to get at. He is trying explicitly to include in considerations of proportionality any considerations related to the potential impact on a business. We do not think that his amendment is in the correct place in Clause 51. We believe our amendment will achieve the same effect by amending subsection (5) of Clause 51. He is quite right, the word "reputation" does not appear in our amendment as it does in his. That is because we believe the value of the reputation in this context lies in its value for business. I ask the noble Lord very gently if he will consider withdrawing his amendment in favour of ours, which I should like to move next in our proceedings.
The point made by the noble Earl, Lord Northesk, concerns information other than the protected information which is covered by a key. That danger led to Clause 51(5), which was inserted at the instigation of the noble Earl, Lord Liverpool. We are as confident as we can be in relation to the matters mentioned by the noble Earl. We know that there are concerns from a business point of view. We have met them as best we can. But I really do not feel that Third Reading is the time to go over matters that were debated fully and properly at the Committee stage.
The Earl of Liverpool: My Lords, I rise only briefly to express my regret—
6 p.m.
Lord Bach: My Lords, we are at Third Reading and the rules of Report stage prevail. I am looking to the Table to see whether I am right about that. The last thing I want to do is to stop the noble Earl speaking, but those are the rules.
Lord Cope of Berkeley: My Lords, as between the two amendments—the government amendment

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and my amendment—I am convinced by the Government's case. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Bach Lord Bach moved Amendment No. 25:
Page 58, line 40, at end insert ("and
(b) any adverse effect that the giving of the direction might have on a business carried on by the person on whom the disclosure requirement is imposed.").
The noble Lord said: My Lords, this amendment has already been spoken to. I beg to move.
On Question, amendment agreed to.
Lord Bassam of Brighton Lord Bassam of Brighton moved Amendment No. 26:
Page 58, line 40, at end insert-
("(6) Where a direction for the purposes of subsection (1) is given by a chief officer of police, by the Commissioners of Customs and Excise or by a member of Her Majesty's forces, the person giving the direction shall give a notification that he has done so-

(a) in a case where the direction is given-

(i) by a member of Her Majesty's forces who is not a member of a police force, and

(ii) otherwise than in connection with activities of members of Her Majesty's forces in Northern Ireland,

to the Intelligences Services Commissioner; and

(b) in any other case, to the Chief Surveillance Commissioner.

(7) A notification under subsection (6)-

(a) must be given not more than seven days after the day of the giving of the direction to which it relates; and

(b) may be given either in writing or by being transmitted to the Commissioner in question by electronic means.").

The noble Lord said: My Lords, I beg to move.
[Amendment No. 27, as an amendment to Amendment No. 26, not moved.]
On Question, Amendment No. 26 agreed to.
Lord McNally Lord McNally moved Amendment No. 28:
Leave out Clause 51.
The noble Lord said: My Lords, with this amendment we should like to discuss Amendments Nos. 50 and 51. We are at Third Reading. The intention behind the amendment is to ask the Government even at this late stage to pause and think. Yesterday's New York Times said of this measure:
"The measure … would make Britain the only Western democracy where the government could require anyone using the Internet to turn over the keys to decoding e-mails messages and other data".
Throughout the proceedings on the Bill, and in the last gasp briefings we have received from the Federation of The Electronics Industry, the CBI, investment bankers and so on, great concern has been expressed that the powers in the Bill will have serious and detrimental effects on business. We want to be absolutely sure that the Government know that the gun is loaded and that it is the considered advice of industry that there are
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consequences to carrying through Clause 51 and Part III. While there are all the other benefits of the Bill, is there not time to pause and consider the implications of Part III for e-commerce and Britain's international standing within it? I beg to move.
Lord Howell of Guildford: My Lords, I know that noble Lords will not want to go over this crucial part of the Bill again and would not want to do so at Third Reading. However, the proposal in the amendments either to drop altogether or delay the introduction of Part III and certainly Clause 51 gives an opportunity to those who are deeply worried about the Bill to ask a final question before it passes from our hands.
We know—it was said at Report stage—that the purpose here is to impose national legislation on what is a global communications system. That is bound to create some limitations on what can be achieved. We also know—again it was said at Report stage—that technology is moving very fast in this area and may well render some of the provisions of the Bill ineffective almost before it becomes a statute. What worries me about Clause 51 is best put as a question to the Minister. What will happen if a handler of data traffic—a person or persons on whom a disclosure requirement is served—or an Internet service provider, when asked for the key, says, "I do not know where it is. I have no idea of its location"? It may be that messages are passing between a giver and receiver within United Kingdom jurisdiction, but it is perfectly possible, as we heard at Report stage, for the Internet service provider to be in Dubai, the application service provider to be in Bangalore and the key to be anywhere. It could be in Bahrain or it could be moving around. It might not be located in any national jurisdiction and therefore would not be available.
Clause 51(5) of the Bill directs its attention towards,
"any protected information, in addition to the protected information in respect of which the disclosure requirement is imposed, to which the key is also a key".
That rings very loud warning bells. The experts and technologists, for good reasons or bad—probably for market driven reasons—will devise, and may already have devised, means by which the location of the key is just not possible. What will happen when the answer to the question, "Where is the key? You must provide the decryption key", is, "We do not know. We genuinely do not know where the key to these data lies. If you do not believe in the plain text and you feel it is justified that a notice should be served for the divulging of the key, I am sorry. We cannot help you. It lies without our jurisdiction and indeed perhaps without any jurisdiction"? How will that problem be solved?
People outside the House are already talking about a world in which the whole attempt to impose the spirit of Clause 51 and the related clauses will be rendered nugatory by the rapid advance in technology and may make our efforts in relation to this part of the Bill look rather ineffective and absurd.
Lord Marlesford: My Lords, perhaps I may support the noble Lord, Lord McNally, and my noble friend

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Lord Howell of Guildford by making one point. I do not necessarily blame the Government for trying to introduce this mistaken approach. I think it is possible that they have been badly advised by their officials. I am going to take two minutes of your Lordships' time to tell a story from the past, which in a sense illustrates that Whitehall officials are not necessarily the best people to advise on what the real electronic world is about.
Just before 1970, when I was young and enthusiastic about the capabilities of computers, I remember saying to a senior official in the Ministry of Health what a good thing it would be if the government were to start to make more use of computers in the administration of the National Health Service. The official said charmingly to me, "Mark, before we spend public money on computers, we have to be sure that they are here to stay".
I use that story as an example because the problem is almost certainly the advice that the Government have been getting. I would suggest that the advice that has been showered upon us from all sides is probably more relevant and should take precedence over the advice that Ministers have received.
Lord Lucas: My Lords, in speaking to Amendments Nos. 50 and 51, I should perhaps start by pointing out that my decision about what to do with the amendments will depend almost entirely on the answer to the question that I have now asked three times without receiving an answer. As Clause 49 is set out, is there or is there not a major hole in the Bill as a result of the ability of a police officer who holds encrypted information to refuse to provide that and instead make someone divulge the key? If there is not, perhaps we should give the Bill a chance to see how this will work in practice. However, if we are looking at a provision that contains a large hole about which the Government intend to do nothing, it is clear that we should not allow this part of the Bill on to the statute book without a long period of further reflection.
Part III covers a system for allowing the police and others to require keys. In practice, this will be largely ineffective. Anyone with a key will presumably carry that key in the form of a password inside their own head. Refusal to give up the key in circumstances where it might damage a person will, first, incur only a light sentence. In any case, there will be a powerful incentive not to divulge it in the first place.
Secondly, it must now be clear to the Government, following the judgment given in the speed camera case, that the Human Rights Act will be invoked on this matter. It is not possible to compel in statute someone to divulge a key held only in their head. That would amount to self-incrimination. If the Government have not yet taken detailed advice on that point, surely it is now time that they do so. As I said, it is clear from the judgment made in the speed camera case how a judgment in a case of this kind will be made. It may be that the Government wish to argue the toss here, but they must realise that the odds are stacked against them.
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This provision confers a right to require keys which is likely, at the end of the day, to reveal very little. It leads the police down a blind alley. It would be far better for them to try to acquire information through forensic hacking and by using conventional techniques such as intercepting communications at the computer; namely, by placing a bug, say, between the keyboard and the computer and collecting sufficient keystrokes to be sure that the password has been picked up during the course of such an operation. Many other procedures can be used rather than acquiring, keys. I do not believe that this part of the Bill will, in practice, do much for law enforcement.
On the other hand, this part of the Bill may do immense damage to the economy of this country. If someone is considering where to site an electronic operation protected by keys, the security of that system will be of enormous importance. During the passage of the Bill, the Government have done a great deal to improve on the original legislation. I had thought that we were moving towards the point where we had something that was worth letting go. However, I am very disappointed by the consistent refusal of the Government to answer my one final question. The noble Lord, Lord Bach, points to his noble friend the noble Lord, Lord Bassam. However, I gave the noble Lord, Lord Bach, an opportunity to respond a little earlier. If he had so responded, I would not have had to make this speech.
Lord Bach: My Lords, I hope that the noble Lord will be a little patient.
Lord Lucas: My Lords, the difficulty about being patient at Third Reading is that noble Lords have only one opportunity to make a point. I want the noble Lord to be quite clear about why I place such importance on my question.
Many international businesses need to decide where to place their keys. Wherever those keys are placed, it is as sure as eggs is eggs that the administration systems will follow. Wherever administration systems are set up, that location is likely to develop into the commercial heart of the business. Over time, if people cannot trust the UK as a safe place in which to store their keys, businesses will flow out of this country. That loss will be felt first in concerns such as Internet service providers, but later it will affect anyone dealing with confidential information on a large scale. The damage will be slow and insidious, but ultimately it will cause devastation in our business community.
As the noble Lord, Lord McNally, remarked, we are sticking our neck out here. This is the only major country that has so far opted to confer powers on its government to acquire keys. If others do not follow that route, we risk allowing every other country to point at the United Kingdom and say to business, "Your keys are not safe in the UK. They will he safe with us. Come here instead". Others will win business as a result. Over time, they will win a great deal of business.
As I said, I had hoped that the Government had moved sufficiently to allow us at least to give them a chance. However, I shall listen carefully to the

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Minister's remarks. If he has not satisfied my concerns, I shall return to the matter when we reach Amendment No. 50.
6.15 p.m.
The Earl of Northesk: My Lords, I am sure the Minister is aware that I could—I am tempted—make a long and impassioned speech on this point. I hope, therefore, that he will be pleased to hear that I intend to limit myself to only one observation.
I hope that the noble Lord will not resort to the argument that the recent announcement from the White House Chief of Staff, John Podesta, that the Clinton administration is considering similar legislation to the Regulation of Investigatory Powers Bill, is proof of how clever has been the United Kingdom in this area. The fact is that Mr Podesta's intervention concerns far more the protection of the dubious legality of the FBI's use of its cyber surveillance system, Carnivore.
My feeling here is that they would be much better advised to rely on the words of Esther Dyson as a commentary on the true position of the United States.
Lord Desai: My Lords, I am a little puzzled about this point. Noble Lords know that I did not much like this Bill in the first place, although my concerns lay more in the area of civil liberties rather than the effects on business. I do not feel any particular loyalty to the Bill. However, it is clear that the Government have moved a long way to clarify, accommodate and adjust the Bill. As a result of those efforts, the measure is now far better than it was when it began its journey through the House.
Two arguments have been advanced here. First, the technology is progressing so fast that it is not worth passing the measure. Secondly, the provisions are so dangerous that business will he driven away. Can a Bill be dangerous and ineffective at the same time? That appears to be a very strange combination. Either the Bill is ineffective, so it does not matter all that much, or it is dangerous, but no one has yet convinced me that it is dangerous.
If the noble Lord seeks to divide the House on this clause, I shall not be able to join him in the Lobby. I hope that he will not choose that course. If we stick by the improvements that have been made, we may yet pass a good Bill.
Lord Cope of Berkeley: My Lords, I think it is a little late to say that we shall still "get a good Bill". Only a few short debates held under strict rules—of which we have been reminded by the noble Lord, the Lord in Waiting—separate us from the point at which the Bill will pass into statute.
At the start of our debates I was impressed, and I remain impressed, by the sustained opposition made against the clauses permitting the police and others to demand keys. That opposition has come from many different groups, ranging from civil liberties organisations through to organisations in the City, the
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CBI, trade unions and so forth. All those groups have expressed their extreme worries about the provisions as a whole.
Nevertheless, while dealing with the Bill, I have adopted the policy of doing my best to improve it. Others have done so as well, both on this side of the House and, it must be said, on the Government Front Bench. I believe that it is now a better Bill for that. However, the point of principle here—the amendment goes to that point—remains as to whether, even though the Bill has been improved and more safeguards have been put in place, the Bill is still dangerous.
With respect to the comments made by the noble Lord, Lord Desai, I do believe that the Bill can be both ineffective and dangerous at the same time. One must consider the different aspects. Should the police and other law enforcement agencies discover that they cannot use this provision to acquire information, it will be ineffective. Criminals may be able to avoid the provisions simply by locating e-mails offshore, forgetting their passwords and so forth. If criminals can take such steps, the Bill will be rendered ineffective from the point of view of law enforcement. However, the Bill will still prove to be dangerous to the economy if it frightens away people who would otherwise consider investing over here.
The Prime Minister, along with everyone else, supports the notion that Britain should be at the forefront of the e-economy. We aim to support not only the e-commerce companies themselves, but all kinds of companies using the Internet and the Web to improve their businesses. That is the way forward. If we include in the Bill a provision for government agencies to demand keys—the only one in the world—even if it is not often used, it could frighten off business. It could be dangerous from a commercial point of view, even if it is not effective. Although we have improved the Bill immensely, there remains the valid question of whether this legislation will prove both dangerous and ineffective.
My noble friend Lord Lucas has returned several times to the question of whether there is a hole in the Bill—not in terms of its effectiveness for the law enforcement agencies, but in terms of the safeguards that we have so carefully piled up in an attempt to better the Bill's provisions. Will those safeguards in themselves be ineffective? If they are, we have wasted our time adding more safeguards. We have an indication that we are about to be reassured on that point by the Minister. However, without it, we may have wasted our time in attempting to improve the safeguards, even though on the face of it we have succeeded in doing so.
Lord Bassam of Brighton: My Lords, I was initially slightly dismayed to see Amendment No. 28 on the Marshalled List. However, it is probably healthy that we should have this debate one more time, and I thank the noble Lord, Lord McNally. It may be useful to bring the amendments tabled by the noble Lord, Lord Lucas, into the debate, as they cover similar territory. The first of the noble Lord's grouped amendments

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seeks to excise the circumstances in which keys can be required; the second seeks to delay Part III of the Bill. They go to the heart of the debate.
I think the noble Lord, Lord McNally, is trying to say that there should be absolutely no circumstances in which the authorities might be justified, or even permitted, to disclose a key or password. That is the stark meaning of the noble Lord's amendment. On a fundamental level, that cannot be right.
The circumstances under which keys can be demanded are a significant matter. We have redrafted Part III of the Bill in terms of a disclosure requirement. As I said, this emphasises clearly on the face of the Bill that disclosure of plain text is what we are after. That is what it is all about. We have rehearsed the reasons why there may be special circumstances in which keys may be required. We have added many different types of safeguards to the Bill to ensure that the keys are demanded only under very strict conditions. Underlying all this is the assertion that it must be possible in some circumstances to demand keys, for very good reasons.
I have no qualms about admitting that the majority of such instances will be cases of individuals suspected of involvement in criminality. There are those who have suggested that the requirement for keys should be limited to individuals alone and should never apply to business. I have no difficulty in reiterating how unlikely it is that keys will ever be asked for from any legitimate business. But, for as long as it remains possible that certain individuals or businesses may involve themselves in corrupt or criminal activities, it will be necessary to retain the power to demand keys in special circumstances.
The party of the noble Lord, Lord McNally, is strong on protecting individual rights—and that means, of course, rights for everyone. I am not sure how the amendment squares with that position since it has the effect of removing a potentially significant weapon which is needed to tackle crime of all descriptions. Society as a whole suffers if the police do not have the powers they need to do their job. Their powers are currently deficient in dealing with the criminal use of encryption. The reality is that there is currently no explicit disclosure power in UK law, nor a power to require anyone to disclose a key or password. This is the gap that we are plugging with Part III of the Bill by providing for a self-standing power requiring proper authorisation and subject to its own specific safeguards.
I am not sure whether the noble Lord, Lord McNally, has discussed this amendment with any chief constable, with the directors of the National Crime Squad or the National Criminal Intelligence Service, or with any of the child protection groups which have an interest in this area. They have a legitimate voice in this debate. The amendment in no way reflects that interest. No one seems to have taken on board the demands of the law enforcement agencies or of legitimate lobbying interest groups.
At Third Reading in another place the Government were criticised for not giving law enforcement the powers it needed in the Bill. We did not believe that the
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criticism was justified. But if there is a sure-fire way of ensuring that law enforcement is effectively hamstrung over encryption, it is by pursuing this amendment. I believe that the noble Lord, Lord Cope, recognises that there may be occasions when keys are required. In Committee on 28th June, when we moved amendments to put greater prominence on the face of the Bill to the disclosure of plain text, the noble Lord, Lord Cope, proposed similar wording which he said would:
"put plain text in the front line and … allow applications for a key only when absolutely necessary".—[Official Report, 28/6/00; col. 966.]
We had a useful debate around that principle. This, I believe, is the position we are currently at in regard to Clause 51.
In the light of the amendment, I have reflected on a couple of remarks made previously by the noble Lord, Lord McNally, about Part III in what has been, as I have said, a wholly constructive process. In Committee, the noble Lord said, at col. 955:
"I am not one of those who believe that the new cyberspace technology is a zone that should be outside the rule of law. I still have a sufficiently strong confidence in parliamentary democracy to believe that, as a necessary protection, all parliaments should be able to construct a framework within which people conduct their activities".
I agree entirely with those sentiments. Part III has been improved immeasurably by discussion in this House. But this amendment threatens to undo that good work. In fact, it would lead to what the noble Lord said should not happen: it would effectively mean that some criminals could operate with impunity. I am not sure that that is what the noble Lord desires.
The noble Lord, Lord McNally, also said in Committee, at col. 958:
"People out there are telling us that this new technology is so footloose and fancy free that it is beyond the powers of parliamentary democracies to control. I put forward the strongly held view that it is not".
Again, I could not agree more. But my point is that the effect of the amendment would be that some criminals would indeed be free from any meaningful effect of the rule of law. If that is so, we shall have failed to carry out our democratic duty.
At its heart, the Bill deals with powers that are necessary for keeping society as a whole safe. I have referred to that already. It is not a trite remark. It is right that these powers are properly regulated. The power to access keys in Clause 51 is closely restricted. I am not at all sure that people who may not have taken a deep interest in the Bill but who nevertheless have every right to live in a society where the police have the powers they need to tackle crime will understand, let alone appreciate, a decision by this House to damage law enforcement's powers in the way proposed by the amendment.
We are working, together with industry—both on the face of the Bill and with the codes—towards narrowing down as far as possible the circumstances under which keys can be demanded from business and to ensure that this is readily understood by everyone

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who may be in a position to demand keys. It is important to remember that when keys are asked for from anyone, the recipient of a notice is free to decide which key to disclose. The choice lies with them. What I do not think we can do is say that it will never be possible to demand keys altogether. In the case of the individual, this would remove a significant weapon against paedophile crime, among others. The Government believe that the power must remain and there is no more that they can give on this issue.
The Bill was sent here by another place with the wish on the part of some Members that it should be improved. At Third Reading in another place Mr Simon Hughes, spokesman for the party represented by the noble Lord, Lord McNally, voted for the Bill but said that he hoped your Lordship's House would deal with his party's one remaining significant objection to Part III. That objection was not about the principle of access to keys but the accusation that the offence under what is now Clause 53 unfairly reversed the burden of proof. We have fixed that, and a good deal else besides. I am grateful to all noble Lords for their part in that process.
I turn to Amendments Nos. 50 and 51. I am grateful to the noble Lord, Lord Lucas, for raising this matter and shall endeavour to answer his "lacuna" question. These amendments are fairly straightforward. However, it is worth informing the noble Lord about our aspirations as to implementation of the Bill because it has a bearing on the point which lies at the heart of the amendments. The priority for implementation rests in Part II and, to a very similar extent, Part I of this Bill. We believe that it is necessary to implement the provisions of Part II before the Human Rights Act comes into force on 2nd October of this year so as to provide reassurance that the daily surveillance operations and use of informants by the police, among others, can continue in a way that is entirely compatible with the requirements of the European Convention on Human Rights. We view that as an imperative and shall make every effort to ensure that Part II can be implemented to that timescale.
We have similar aspirations in relation to Chapter I of Part I of this Bill. The oversight provisions in Part IV are required to support any one of the other three parts of the Bill. For those reasons, we shall work hard to establish the oversight provisions in time for implementation of the Human Rights Act.
There remains the implementation of Part III, which is the specific object of the noble Lord's amendment. Part III involves new provisions with which both law enforcement and industry must come to terms. We need to conduct further work on the code of practice for Part III in conjunction with those in industry. Further, we need to ensure that all those who may impose a disclosure requirement, or the requirement for a key, are fully aware of the implications of what they do. There are powers in the Bill for circuit judges, among others, to impose such requirements. We must ensure that a training package is implemented for each judicial figure.
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In short, there is a considerable amount of work to do before Part III of this Bill can be implemented. We shall take note of the growing menace of the criminal use of encryption and proceed as fast as possible to educate all those who may be affected in one way or another by these provisions. However, this is a considerable workload. I do not believe that it will be possible to implement Part III this calendar year. At this stage we believe that we may be a considerable way into the next calendar year before Part III can be implemented. For this reason, I suspect that the aim of the noble Lord's amendment will be achieved simply through the enormity of the task that lies ahead of us. We do not want to limit ourselves to that stipulation on the face of legislation. We aim to monitor the criminal use of encryption as we go along, and that may alter the timescale. Further, it is possible that our arrangements may be put into place more speedily than seems likely at present.
Finally, I do not believe that if a delay of this kind is stipulated on the face of the Bill industry will be reassured. The real reassurance for industry is that we make progress and implement this legislation and it finds that the threats to its security, which we believe have been more imagined than real during the passage of this Bill, are illusory. The best reassurance to industry is to start this regime and let all see that it does not represent the threat that many fear. To that extent, we do not want to limit ourselves to a particular time frame.
A number of questions have been asked which I believe deserve answers. The noble Lord, Lord Howell, asked what happened when people did not know where the key was. The simple answer is that if they do not have it and cannot disclose it that is the end of the story. In response to a question put by the noble Lord, Lord Lucas, to which he has properly returned on a number of occasions, effectively keys are required by virtue of Clause 53. In those circumstances, Clause 51 does not apply. This is not a lacuna but an inevitable consequence of two facts: first, that the person may not have the protected information; secondly, that it may not be possible to show the individual the information for reasons of secrecy. Usually, that will be possible but in some cases it may not be. The situation described by the noble Lord is one in which the person does not have the information and it is not possible to show it to him. The noble Lord is concerned principally with businesses. It would be very unusual for a key to be required in those circumstances. The circumstance in which there is a withholding of information from the recipient of a notice, especially where the individual is a large or small business, is extremely unlikely. I believe that that should give the noble Lord sufficient reassurance.
The debates on these parts of the Bill have been very constructive. The Government understand the sensitivity of the issue of keys and access to them. I have sought to demonstrate throughout that the Government see very limited circumstances in which a key will be demanded. Plain text will always be preferable, but there will be situations in which it is clear that there is criminality at the root of it. We need

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access to keys in those very tightly constrained circumstances. I believe that we have clarified the narrowness of those circumstances beyond doubt.
Clearly, it is time to draw the debate to a close. However, I urge the noble Lords who have tabled these amendments not to press them. I believe that we have answered the questions put to us.
6.30 p.m.
Lord Swinfen: My Lords, before the noble Lord sits down, he did not answer the question about self-incrimination. If a person has, or is thought to have, possession of a key and fails to provide it, as a defence will he be able to exercise his right not to incriminate himself?
Lord Bassam of Brighton: My Lords, I am not sure that there is a simple answer to that question. As I explained to the noble Lord, Lord Howell, if the individual does not have access to the key or know where it is clearly it cannot be disclosed. In those circumstances, that is not only the end of the story but a perfectly reasonable defence. If those are the circumstances envisaged by the noble Lord that is probably also an answer to the point.
Lord Swinfen: My Lords, before the noble Lord sits down, my question does not relate to circumstances in which the individual does not know the key. I am concerned with those cases in which the individual knows the key but may incriminate himself by disclosing it. As I understand it, in this country no one is bound to incriminate himself.
Lord Bassam of Brighton: My Lords, I believe that in the circumstances described by the noble Lord it would not necessarily be a defence; nor do I believe that in this area the law is finally settled.
Lord Marlesford: My Lords, now that Hansard can be quoted in the courts, was the noble Lord being serious when he said a moment ago that if an individual did not have the key, or did not know where it was, that would be the end of the story? Frankly, if that is all that an individual has to say and there is no possibility of proceeding further it makes the whole exercise pointless.
Lord Bassam of Brighton: My Lords, I rest on my earlier explanation. The advice that we have been given is that that is the case, and we shall stick to it.
Lord Nolan: My Lords, the principle against self-incrimination has been breached many times by statute. Whenever a motorist is required to take a breathalyser test he may well incriminate himself. The principle against self-incrimination can be overridden by Act of Parliament.
Lord McNally: My Lords, many years ago when I served a Minister one of the ways to get brownie points was to introduce in debate a few damning quotations
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from the other side. In those circumstances, I extend my professional compliments to the noble Lord's support staff.
From the very start, everyone has acknowledged that we are trying to ride two horses at once. Perhaps I may cite the late Jimmy Maxton: "If you can't ride two horses at once, you should never have joined the circus". This has been a Home Office security Bill and a trade and industry Bill stitched together rather hastily. It has been our task to try to improve it.
I do not regret tabling Amendment No. 28. In fact as the debate unfolded I felt more and more sure that we were right to do so not least because of the response it provoked from the Minister. At this late stage, at Third Reading, the response contained some useful and clear statements on where the Government believe they have reached on this matter. We have expressed doubts; the Government have expressed their confidence. It has never been the wish of these Benches to wreck the Bill. In those circumstances, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 53 [Failure to comply with a notice]:
[Amendments Nos. 29 and 30 not moved.]
Clause 54 [Tipping-off]:
[Amendments Nos. 31 to 33 not moved.]
Clause 55 [General duties of specified authorities]:
Lord Bassam of Brighton Lord Bassam of Brighton moved Amendment No. 34:
Page 62, line 7, at end insert-
("(4) Subject to subsection (5), where any relevant person incurs any loss or damage in consequence of-

(a) any breach by a person to whom this section applies of the duty imposed on him by subsection (2), or

(b) any contravention by any person whatever of arrangements made in pursuance of that subsection in relation to persons under the control of a person to whom this section applies,

the breach or contravention shall be actionable against the person to whom this section applies at the suit or instance of the relevant person.
(5) A person is a relevant person for the purposes of subsection (4) if he is-

(a) a person who has made a disclosure in pursuance of a section 49 notice; or

(b) a person whose protected information or key has been disclosed in pursuance of such a notice;

and loss or damage shall be taken into account for the purposes of that subsection to the extent only that it relates to the disclosure of particular protected information or a particular key which, in the case of a person falling with paragraph (b), must be his information or key.
(6) For the purposes of subsection (5)-

(a) information belongs to a person if he has any right that would be infringed by an unauthorised disclosure of the information; and

(b) a key belongs to a person if it is a key to information that belongs to him or he has any right that would be infringed by an unauthorised disclosure of the key.

(7) In any proceedings brought by virtue of subsection (4), it shall be the duty of the court to have regard to any opinion with respect to the matters to which the proceedings relate that is or has been given by a relevant Commissioner.
(8) In this section "relevant Commissioner" means the Interception of Communications Commissioner, the Intelligence Services Commissioner, the Investigatory Powers Commissioner for Northern Ireland or any Surveillance Commissioner or Assistant Surveillance Commissioner.").
The noble Lord said: My Lords, this amendment addresses a concern that has been put to us on a number of occasions by industry. The concern is that once keys are seized under this legislation and notwithstanding the strict safeguards set out in Clause 55, there remains a possibility that keys could be compromised once they have been seized. Industry is rightly concerned to ensure that that possibility is minimised and that proper sanctions exist in case it occurs. We agree that it would be wrong for the consequences of insecure safeguarding to fall on the owners or users of keys. We also agree, as I indicated on Report, that the duty imposed on public authorities to look after keys should be actionable. In other words, if keys are insecurely stored the responsible public authority can be sued.
Before I spell out what these amendments do in detail, I fear that I need to spell out how unlikely it will be that we shall ever arrive in a position in which keys are compromised in this way or fashion. First, noble Lords will by now be very familiar with the state of preference for plain text on the face of the Bill. I made that clear in the previous debate. Noble Lords will also be familiar with the significant extra hurdles that need to be cleared before the keys themselves can be demanded. Thirdly, noble Lords will see the tight controls we place on the keys once they are seized, as set out in Clause 55.
All those factors considered, it seems most unlikely that keys will ever be compromised. In the past I have drawn an analogy with the intercept material which is subject to similar strict controls at present and which has not, to my knowledge, ever been compromised in the 15 years of operation of the Interception of Communications Act 1985. None the less, I appreciate that it is a matter of perception. I appreciate that were keys to be compromised in this way, the Bill should be clear where liability should lie.
Two elements of the liability are envisaged in this amendment. The first—at new subsection (4)(a)— would be in respect of a person who failed to ensure that adequate arrangements were in place for the protection of keys. The second—at new subsection (4)(b)—would apply to those who did not comply with the arrangements properly and thereby compromised the key. We believe that both elements are required. It could be as a result of failings in either aspect that keys came to be compromised. I believe that it would be an unlikely but hypothetical situation.
New subsection (5) sets out the individuals who may sue for these purposes. They are limited to those who have made a disclosure in pursuance of a Section 49 notice, or those whose protected information or key has been disclosed by someone else in pursuance of such a notice.
We think that that gets the balance about right between proper legal accountability on the one hand and unlimited remote claims on the other. However,
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noble Lords will note that someone whose information is protected by a key, even if that key is not "his" in the conventional sense of the word, is covered by the class of potential litigants. So a bank customer can sue on a failure to look after a bank key that he happens to use. That was a specific point raised on Report. I am happy to make the position clear now at Third Reading.
Finally, Amendment No. 42 allows for an order made under Clause 65 to allocate some or all of these proceedings to the tribunal to be established under Clause 65. Our initial view is that the tribunal should hear such cases where they are related to interception or where there is a secrecy notice attached.
I hope that I have explained in detail the importance of these amendments. They are designed to strengthen the obligation of the state to look after keys in the unlikely event that they are seized and to give industry redress in the still more unlikely event that things go wrong. I beg to move.
6.45 p.m.
Lord Cope of Berkeley: My Lords, I spoke on this point at an earlier stage. I, too, hope that no key is ever compromised. However, I believe that the amendment is necessary, first, in case a key is compromised, inadvertently or in any other way. It will give protection. Secondly, the fact that damages may be available will help to ensure that agencies which gain keys look after them properly. In some cases, they will have a huge financial penalty if they should fail in their duty in this respect.
On Question, amendment agreed to.
Clause 56 [Interpretation of Part III]:
[Amendment No. 35 not moved.]
Clause 57 [Interception of Communications Commissioner]:
Lord Bach Lord Bach moved Amendment No. 36:
Page 64, line 29, leave out from ("State") to end of line 32 and insert (", after consultation with the Interception of Communications Commissioner, shall-

(a) make such technical facilities available to the Commissioner, and

(b) subject to the approval of the Treasury as to numbers, provide the Commissioner with such staff,

as are sufficient to secure that the Commissioner is able properly to carry out his functions.").
The noble Lord said: My Lords, government Amendment No. 36 is designed to respond to Opposition concerns that the interception commissioner may not be provided with sufficient resources to do his job. Voicing those concerns, the noble Lord, Lord Phillips of Sudbury, made telling remarks on Report about the provisions of the Bill which relate to commissioner oversight. We have taken his comments to heart. I hope that he agrees.
We all agree that the commissioners are an important part of the Bill's safeguards; and these amendments have been devised to provide reassurance that the commissioners will be in a position to do their job effectively.
Amendment No. 36 imposes a duty on the Secretary of State to provide the commissioner with the technical facilities and staff as are sufficient to enable him properly to carry out his functions. Coupled with the requirement in Clause 58 that all those involved in the interception regime disclose to the commissioner all the documents and information he requires, I hope that the House will agree that the commissioner and his secretariat will be a force to be reckoned with, and that we have done what we can to give him the tools necessary to fulfil his expanded role as the regime enters a new era.
Amendments Nos. 39 and 40 are aimed to remove any doubts there may have been previously that the interception and intelligence services commissioners may report at any time to the Prime Minister on any matter relating to their functions as they think fit. We have extended this power to both commissioners for consistency's sake. We do not need to do that as regards the Chief Surveillance Commissioner. He has this power in Section 107 of the Police Act 1997. I beg to move.
The Deputy Speaker (Lord Geddes): My Lords, I must advise by your Lordships that if Amendment No. 36 is agreed to, I cannot call Amendment No. 37 due to pre-emption.
Lord Phillips of Sudbury: My Lords, at times during debate on the Bill it has been rather like mapping in a fog. However, one matter has stood out with absolute clarity: unless we have an effective enforcer of those provisions in the Bill designed to protect against abuse of the very large powers to be enacted, the job will be ill done. For that reason, we on these Benches felt strongly about resources as regards the interception of communications commissioner. I am delighted to read the Government's amendment, which appears to be slightly stronger than the amendment I ventured to put forward. I am therefore entirely in accord with the Government's proposal.
Lord Nolan: My Lords, speaking as a former commissioner, I welcome the amendments. When the Bill is enacted, the burden on the interception of communications commissioner will be greatly extended. In Committee I spoke of my fear that it may prove to be too much for one retired judge. It would certainly be too much for a serving judge and it may be necessary to appoint an assistant commissioner to help bear the load. Let us see what my successor feels about that after the Bill has come into force.
As regards access to the Prime Minister, de facto that has always been so. I have never had any difficulty in speaking to any Secretary of State and on one occasion when I thought it necessary I saw the Prime Minister within a very short time. There is no harm, and it would be all the better, to have that position enshrined in legislation. I therefore welcome the measures.
Before sitting down, perhaps from a watching position I may offer a few words of congratulation on the many good things the Bill has done to improve the
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interception process without in any way compromising the principles of safeguarding the citizen on which it is based. I shall not take up your Lordships' time with details, but all sides in your Lordships' House have combined to bring about the measures. There has been virtually no controversy about them and I am sure that the Bill is a welcome result for citizens.
Lord Bach: My Lords, the whole House will be grateful for the comments made by the noble and learned Lord, Lord Nolan, who has huge experience and expertise in this area. I am also grateful to the noble Lord, Lord Phillips of Sudbury, for his comments.
On Question, amendment agreed to.
[Amendment No. 37 not moved.]
Clause 58 [Co-operation with and reports by s. 57 Commissioner]:
Lord Phillips of Sudbury Lord Phillips of Sudbury had given notice of his intention to move Amendment No. 38:
Page 65, line 31, at end insert ("and may at any time report to him on any matter relating to his discharge of those functions").
The noble Lord said: My Lords, I am content with the Government's Amendments Nos. 39 and 40 and shall not move Amendment No. 38.
[Amendment No. 38 not moved.]
Lord Bach Lord Bach moved Amendment No. 39:
Page 65, line 31, at end insert-
("() The Interception of Communications Commissioner may also, at any time, make any such other report to the Prime Minister on any matter relating to the carrying out of the Commissioner's functions as the Commissioner thinks fit.").
On Question, amendment agreed to.
Clause 60 [Co-operation with and reports by s. 59 Commissioner]:
Lord Bach Lord Bach moved Amendment No. 40:
Page 67, line 25, at end insert-
("( ) The Intelligence Services Commissioner may also, at any time, make any such other report to the Prime Minister on any matter relating to the carrying out of the Commissioner's functions as the Commissioner thinks tit.").
On Question, amendment agreed to.
Clause 61 [Investigatory Powers Commissioner for Northern Ireland]:
Lord Bach Lord Bach moved Amendment No. 41:
Page 69, leave out line 3 and insert ("in Northern Ireland-

(a) in any capacity in which he is or was the holder of a high judicial office (within the meaning of the Appellate Jurisdiction Act 1876); or

(b) as a county court judge.").

The noble Lord said: My Lords, we tabled the amendment at the request of colleagues in Northern Ireland. Your Lordships may remember that at an earlier stage we tabled provisions relating to the post of an investigatory powers commissioner for Northern Ireland; and that is now Clause 61 of the Bill. The amendment slightly broadens the range of judicial figures who could hold the appointment. I beg to move.
On Question, amendment agreed to.
Clause 65 [The Tribunal]:
Lord Bach Lord Bach moved Amendment No. 42:
Page 71, line 10, after ("services;") insert-
("() they are proceedings brought by virtue of section 55(4);").
On Question, amendment agreed to.
Lord Bach Lord Bach moved Amendment No. 43:
Page 72, line 8, at end insert-
("but conduct does not take place in changeable circumstances to the extent that it is authorised by, or takes place with the permission of, a judicial authority").
The noble Lord said: My Lords, Amendments Nos. 43 to 45 respond to concerns that complaints about Section 49 notices may go to the tribunal established by the Bill if they are authorised by the Secretary of State, and to a court if authorised by that court. But they have nowhere to go otherwise; in other words, there is no avenue of complaint available concerning notices which are authorised internally by the police, Customs and the military. These amendments remedy that omission and ensure that a right of redress is provided in all circumstances. I beg to move.
On Question, amendment agreed to.
Lord Bach Lord Bach moved Amendments Nos. 44 and 45:
Page 72, leave out lines 16 to 19 and insert-
("(d) a permission for the purposes of Schedule 2 to this Act;
(e) a notice under section 49 of this Act; or").
Page 72, line 36, at end insert-
("(11) In this section "judicial authority" means-

(a) any judge of the High Court or of the Crown Court or any Circuit Judge;

(b) any judge of the High Court of Justiciary or any sheriff;

(c) any justice of the peace;

(d) any county court judge or resident magistrate in Northern Ireland;

(e) any person holding any such judicial office as entitles him to exercise the jurisdiction of a judge of the Crown Court or of a justice of the peace.").

On Question, amendments agreed to.
Clause 73 [Conduct in relation to wireless telegraphy]:
Lord Bach Lord Bach moved Amendment No. 46:
Page 81, line 46, leave out ("(4)") and insert ("(4)(a) or (c) to (g)").
The noble Lord said: My Lords, this is a technical amendment to Clause 73, which amends Section 5 of the Wireless Telegraphy Act 1949. This amendment arises out of concern raised by the Department of Trade and Industry in relation to the activities of Radiocommunications Agency (RA) officials. RA officials monitor radio transmissions to determine whether those transmitting have the appropriate licences for their activities and are complying with
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those licences. This activity currently takes place under the provisions of Section 5 of the Wireless Telegraphy Act 1949.
We are content that the Wireless Telegraphy Act provides sufficient cover, including Human Rights Act cover, for the RA's monitoring activities and that it therefore does not need a Part II authorisation for this monitoring. However, as some of its conduct could be capable of being authorised under Part II, the amendment to Section 5 set out in Clause 73 as drafted might prevent the RA obtaining authorisations under the Wireless Telegraphy Act.
This amendment is required to ensure that the RA is not precluded from obtaining a Wireless Telegraphy Act authority. I beg to move.
On Question, amendment agreed to.
Clause 78 [Orders, regulations and rules]:
Lord Bach Lord Bach moved Amendment No. 47:
Page 86, line 16, leave out ("2(12),").
On Question, amendment agreed to.
Lord Cope of Berkeley Lord Cope of Berkeley moved Amendment No. 48:
Page 86, line 16, after ("12(9),") insert ("13(3),").
On Question, amendment agreed to.
Lord Bach Lord Bach moved Amendment No. 49:
Page 86, line 16, leave out ("21(9),").
On Question, amendment agreed to.
Clause 83 [Short title, commencement and extent]:
Lord Lucas Lord Lucas moved Amendment No. 50:
Page 90, line 43, at beginning insert ("Subject to subsection (2A),").
The noble Lord said: My Lords, as the noble Lord, Lord Bassam, explained, the practical effect of the amendment is to give the Government an opportunity to delete Clause 3 from the Bill without having to come back with further primary legislation. Having listened to everything the Minister said today, I think that the Government will need that power. They have deliberately left a lacuna in the Bill. A request from the police for keys must be authorised at the level of chief officer of police and notified to the commissioner. If the police ask for plain text and are refused the protected information, they are therefore entitled to ask for keys. I agree that that should be the case, but if they go about obtaining keys in that way, the authorisation is at a lower level and there is no notification to the commissioner.
That is such a hole in the Bill that I do not believe that it will command confidence to any significant extent among major companies when making decisions about where to locate their business. I do not see how, in 12 months' time, the Government can but wish that they had not passed such legislation. My

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amendment merely gives them the opportunity to forget this provision quietly while causing them little trouble. I beg to move.
Lord McNally: My Lords, as I have already made clear to the noble Lord, these Benches would not support him if he decided to divide the House.
On Question, amendment negatived.
[Amendment No. 51 not moved.]
7 p.m.
Lord Bassam of Brighton: My Lords, I beg to move that this Bill do now pass. In doing so, I believe that it is only right that I spend a few moments reflecting on the progress that has been made with this important piece of government legislation and to offer my thanks and congratulations to all Members of your Lordships' House who have participated and played an important and, I believe, significant role in improving the quality of the Bill. Much has been said today about the role of the House in that regard, and I believe that a good deal of it is absolutely true. Many amendments have been moved, and many have been accepted—if not in absolute "plain text", then certainly in spirit. I have been most grateful for the constructive way in which noble Lords have responded.
We said that we would respond to industry representations and we have done so. There will be further opportunities for that to happen during the course of the discussions, debates and deliberations that will need to take place with regard to the code of practice. I believe that that will contribute significantly to ensuring that the legislation is workable.
An important section of the Bill that we did not debate at great length was Part II. I predict that Part II will be seen unashamedly as good news. It is not an area about which there has been great fuss or controversy, but it is important legislation that will put on a statutory footing the use made by law enforcement agencies of surveillance and covert intelligence sources. I believe that it will provide considerable reassurance to the public and will ensure compliance with the Human Rights Act, which comes into force later this year.
Noble Lords have conducted themselves well. We have had an interesting series of debates and I pay tribute to all who have taken part. I have been most grateful for the advice and guidance that we have received, particularly from time to time from the noble and learned Lord, Lord Nolan. I have also been grateful to my noble friend Lord Bach who has been extremely helpful and supportive in seeing through the debates. I also pay tribute to the good humour and sense of purpose exercised by all who have participated.
This a worthy piece of legislation. It certainly achieves government objectives in the field and I believe that it is something of which, rightly, we should be proud.
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Moved, That the Bill do now pass.—(Lord Bassam of Brighton.)
Lord Cope of Berkeley: My Lords, as the Minister said, we are sending back to another place a very different and much better Bill than we received. I believe that your Lordships' House can claim the credit for that. The Minister acknowledged again today the constructive approach adopted all round—from this Front Bench, from the adjacent Front Bench, if I may describe it as such, from my noble friends behind me and from all parts of the House.
The Minister, his colleague, the noble Lord, Lord Bach, and his officials and advisers have also been most helpful and constructive in trying to improve the Bill, encouraged no doubt from time to time by the noble Lord the Captain of the Gentlemen-at-Arms.
The reason that I believe your Lordships' House can take particular credit for the large number of improvements is not least because, when asked what amendments were likely to be made in the Lords, the Minister of State in another place replied that he considered that only minor and technical amendments would be required. In contrast, we have re-written large sections of the Bill: we have redefined traffic data; we have provided for a technical advisory board to look after the technical difficulties of black boxes; and we have tightened up the provisions for the Government to pay for those black boxes. This afternoon an extremely significant statement was made with regard to the fact that in most cases ISPs, which provide services only for financial organisations, would not require black boxes.
The vital Part III of the Bill concerning key disclosure has been turned round completely so that, instead of keys being demanded and plain text being accepted in lieu, the normal process will be that plain text is demanded and keys asked for only in rare cases. The various safeguards have been tightened up in several respects, notably, that no key is supposed to be demanded unless the chief constable or equivalent asks for it. He then becomes subject to judicial oversight of a kind in having to report to the commissioner. I say "supposed to" because the difficulty, to which my noble friend Lord Lucas drew attention, remains of the possibility of keys being demanded without those safeguards.
We have made various other changes to the Bill, all in all, I believe, leading to an important set of improvements. At the same time, the question remains as to how much damage may be done by Part III in particular to our aim, including that of the Government, that the United Kingdom should be at the forefront of e-commerce and that our companies should be able to use the web and the Internet as much as anyone else. I have no doubt that collectively your Lordships have done a great deal to mitigate that damage. However, at the same time, that possibility remains.
Apart from that part of the Bill, which obviously will require further thought by the Government, the remainder, as the noble and learned Lord, Lord

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Nolan, said a few moments ago, is of value. That is why I support the proposition that the Bill do now pass.
Lord McNally: My Lords, it has been mentioned on a number of occasions that the Bill, which, rightly, we have put through stiff tests, improves and strengthens civil liberties in this country. It brings within statute and within parliamentary control activities which previously were covered only vaguely. Although we have been determined that the Bill should be given the stiffest of examinations, there is, as the noble Lord, Lord Cope, and the noble and learned Lord, Lord Nolan, said, a good deal of satisfaction at the role that this House has played.
Many people have asked what kind of House the reformed House of Lords will be. I believe that the Regulation of Investigatory Powers Bill provides a good example of an advisory and revisory House doing its job properly. We have tried to put the Bill on three firm legs. With regard to the section on e-commerce, I remember in particular the intervention of the noble Lord, Lord Stevenson, as being powerful and influential in relation to civil liberties. The noble Lord, Lord Desai, has acted as a Buddha, watching over us and occasionally intervening on the matter. From their different perspectives the noble Baroness, Lady Thornton, and my noble friend Lady Harris have reminded us of the important issues to be considered in relation to police powers.
It would be remiss of these, and I suspect other, Benches if I did not place on record our thanks to Charles Lindsey, Caspar Bowden and Richard Clayton, who have given us useful advice as the Bill has unfolded. If I may make a plug for lobbying, this has been a useful example of how external experts and outside bodies can and should influence legislation. This House is particularly adept at using such advice well to improve legislation.
I, too, support the Motion that the Bill do now pass. I offer my sincere congratulations to the noble Lord, Lord Bassam of Brighton, who has carried a heavy burden, well supported by the noble Lord, Lord Bach, who, like a good second, has sponged him down whenever he looked like flagging and sent him back in the ring.
On Question, Bill passed, and returned to the Commons with amendments.

Child Support, Pensions and Social Security Bill
7.11 p.m.
The Parliamentary Under-Secretary of State, Department of Social Security (Baroness Hollis of Heigham): My Lords, I have it in command from Her Majesty the Queen to acquaint the House that Her Majesty, having been informed of the purport of the Child Support, Pensions and Social Security Bill, has
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consented to place her prerogative and interests, so far as they are affected by the Bill, at the disposal of Parliament for the purposes of the Bill.
Bill read a third time.
Clause 25 [Regulations]:
Baroness Hollis of Heigham Baroness Hollis of Heigham moved Amendment No. 1:
Page 23, line 7, leave out ("10") and insert ("10(1)").
The noble Baroness said: I shall speak also to Amendments Nos. 45, 46, 62 and 64. The amendments place a cap on the amount of child maintenance payable. The opposition amendments would limit the amount of maintenance that a non-resident parent can be asked to pay for his children to £200 a week for each qualifying child.
In our previous discussions on the subject, I have always acknowledged that the arguments for and against a maximum level of liability are finely balanced. I accepted your Lordships' point that the financial arrangements for very wealthy families on divorce or separation can be substantially more complex than for other families. In particular, the courts could have difficulties in shadowing the CSA rates if the parents are wealthy and have complicated financial arrangements. It was put to us that if child maintenance figures are high, it could be regarded as spouse maintenance rather than child maintenance. I therefore undertook to consider the matter further and report back to your Lordships today.
The government amendments are different from the opposition amendments, although they are similar in effect. The opposition amendments would cap the amount per child—£200 for one, £400 for two, £600 for three or more. We propose a cap on the amount of net weekly income taken into account for the purposes of making a maintenance calculation. That cap will be set at a net weekly income of £2,000, as calculated under Schedule 1 and regulations. That means, effectively, £300 for the first child, £400 for the second and £500 for the third. When there are two children, our method aligns with the opposition amendment, but it is also compatible with the rest of the CSA assessments.
The liability of a non-resident parent with a net weekly income of more than £2,000 who has one child to support and no children in his second family will be capped at £300 a week. If he has two children to support, it will be £400 a week, or £200 per child. If he has three or more children to support, the figure will be £500 per week, or £167 per child if there are three qualifying children.
We propose to take account of any children in the second family against the capped income. If there is one child in the second family, the £2,000 net income will be reduced by 15 per cent before the maintenance for the first family is calculated.
We believe that a cap based on an upper limit of net weekly income rather than an amount in respect of any one child is simpler to administer, simpler for parents to understand and consistent with the rest of the scheme. We recognise that the decision on the upper

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figure is inevitably somewhat arbitrary, but we believe that £2,000 is justifiable, reasonable and pragmatic. A net income limit of £2,000 is broadly equivalent to an annual salary of just under £170,000 gross. That is 10 times higher than the £200 cut-off for low earners and five times the national average wage. That is sufficiently high to ensure that all children benefit from a reasonable level of maintenance, while providing that only those who are likely to have more complicated financial arrangements are affected. We have provided powers to ensure that the upper limit can be amended by regulation, subject to the affirmative procedure, should that prove necessary in the light of experience or future changes in society.
The amendments also provide for the courts to make a top-up maintenance order, in the same way as is currently provided for in Section 8(6) of the 1991 Act. That is another measure that your Lordships pressed for at earlier stages and I gave assurances that I would consider it.
We remain convinced that court-based agreements should, in the main, be settled in line with CSA rates, as that will avoid fluctuations in the level of maintenance when the parent with care moves on or off benefit. That is why, under the reformed child support scheme, we propose to open up access to the CSA for private, non-benefit cases when parents are unhappy and a new court order has been in place for at least a year.
Allowing the courts to make a top-up maintenance order is an important safeguard to ensure that children continue to share in the living standards of non-resident parents, even when the non-resident parent is liable for the maximum amount of child support. Separating parents and their lawyers will need to bear in mind during negotiations on a divorce settlement that a non-resident parent's liability for child maintenance will not necessarily stop because his net income exceeds £2,000 a week.
Very few parents will be exempted. Those who are will have extremely complicated financial arrangements and it will be more appropriate for them to he dealt with by the courts. They will know what level of maintenance they will be taking into the settlement.
I should also make it clear for the record that if the non-resident parent applies to the CSA for a variation of his assessment because, for example, of the cost of staying in contact with the children, the variation will be applied to the full amount of net income rather than the capped income being reduced by a further variation. The income that we are not taking into account in setting maintenance liability will be available to meet other expenses.
I hope that the amendments will alleviate the concerns that were raised previously by the Opposition and others outside your Lordships' House about the effects of the new scheme on the court-based financial arrangements made on separation by a few wealthy parents. The amendments will allow the courts, in establishing financial arrangements for very wealthy parents, to work from a fixed maximum child support
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liability. That should make it easier to establish the other aspects of the financial package and—this is what matters to me—produce stability in the financial arrangements surrounding the well-being of the child.
I hope that noble Lords will not move their amendments and will be content that ours will have the effect that we were pressed to accept on Report. I beg to move.
Earl Russell: My Lords, before the Minister sits down, will she estimate how many are the very few non-resident parents who will be affected?
Baroness Hollis of Heigham: My Lords, we have a case load basis of about 1.2 million parents—both parents with care and non-resident parents. We estimate that between 50 and 100 may be affected.
Lord Higgins: My Lords, this is an important amendment, although, as the noble Earl, Lord Russell, has just pointed out, the number of individuals affected is not very great. None the less, there is a point of principle involved. On Second Reading, back on 17th April—it seems a long time ago—I said:
"Another aspect which causes us concern is that there is no upper limit on the amount which, under the new simplified formula, will be taken from the absent parent. There are important issues here which we can no doubt pursue in Committee—for example, where someone is immensely rich but an absent parent, the extent to which that income should be transferred back to the children of an original marriage".— [Official Report, 17/4/00; col. 469.]
This part of the Bill is—if I may use the expression—the child of the noble Baroness, Lady Hollis. She has done an immense amount of work on it in preparation and behind the scenes. She appreciated our concerns and said at earlier stages of the Bill that she would give them careful consideration.
As the Minister has pointed out, there are two sets of amendments. Our Amendments Nos. 41 and 42 would prescribe a maximum amount for each child, whereas the government amendments refer to a total income. They are broadly similar in intent, but they are not precisely the same. I am sure that whichever one is selected we shall find that one group of wealthy parents with one child will say they like it one way, and another with three children will say they like it another. Nonetheless, on the whole, that is something which we shall be able to tolerate. In particular, the noble Baroness has pointed out the complications which ensue as far as the second, third, or fourth families of a particular individual are concerned.
I have always been strongly of the view in debating such matters that, if the Government are clearly making a concession, which is undoubtedly the case on this occasion, it is wrong to perpetuate the debate more than necessary. I would simply say that we appreciate the care which the Minister has given to it. We welcome the amendment proposed. The matter is very finely balanced, but, rather than call a Division which

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we might lose, I think on balance it is better to accept the noble Baroness's amendment, and we on this side of the House do that with some enthusiasm.
On Question, amendment agreed to.
Lord Goodhart moved Lord Goodhart moved Amendment No. 2:
After Clause 32, insert the following new clause—

Child Support, Pensions and Social Security Bill
  Age addition
    AGE ADDITION
    . For section 79 of the Social Security Contributions and Benefits Act 1992 there shall be substituted—

    Age addition.
    79.—(1) A person who is above the age of 75 and who is entitled to a retirement pension of any category shall be entitled to an increase of the pension to be known as the "age addition".
    (2) A person who is in receipt of a pension or allowance payable by the Secretary of State by virtue of any enactment or instrument (whether passed or made before or after this Act is passed), and who—

    (a) is above the age of 75, and

    (b) fulfils such other conditions as may be prescribed,

    shall be entitled to an increase of the pension or allowance, also to be known as the "age addition".
    (3) A person who is above the age of 80 and is in receipt of age addition shall be entitled to an increase in the age addition, to be known as the "further age addition".
    (4) Age addition and further age addition shall be payable for the life of the person entitled, at weekly rates to be determined by the Secretary of State in regulations."").
    The noble Lord said: My Lords, this is a very important amendment. It is one which we were unable to vote upon at the Report stage because it did not come on for debate until nearly 10 p.m.
    What we are proposing here is that there should be a substantial addition to the basic state pension for pensioners who reach the age of 75, and a further and equally substantial addition on reaching the age of 80. This would, of course, replace the present absurd addition of 25p a week at the age of 80.
    The amendment does not specify the amount, for the obvious reason that the actual rate will need to be varied from year to year by regulations made by the Secretary of State. A recently published Liberal Democrat policy paper on ageing has proposed that there should be a £5 addition at 75 and a further £5 addition at the age of 80. Those are the figures we have in mind.
    The policy paper also proposes that there should be a £5 per week increase in the basic state pension for all pensioners as well as the age additions for the older pensioners. This amendment is confined to the age additions.
    We are particularly concerned with the older pensioners because older pensioners have, in some respects, greater needs. They need more heating and warmer clothes. They may need special food. They may need to use more expensive local shops because they cannot travel to the supermarket and bring back a heavy load of groceries.
    More important than that, old people as a group have lower pensions than younger pensioners. Occupational pensions are linked to earnings, in general, at the date of retirement, but after retirement they are subject at best to an increase in line with the retail price index. That increase may in many cases be capped at 5 per cent. Therefore, so long as real earnings continue to increase, those who retired the longest time ago will have the lowest pensions. Furthermore, the same will be true of the state second pensions. It is also, of course, a fact—and this is a significant fact—that the older pension cohort consists disproportionately of women—who live longer than men—and of pensioners living on their own, because so many of them are widows or widowers. Indeed, we know that some 40 per cent of people over the age of 80 do not have adequate state, occupational or personal pensions and have to rely on the minimum income guarantee to supplement their pension.
    The Minister has said many times before—and will no doubt say again this evening—that age is not a good test of need. She will say that disparity of incomes between older pensioners as a group and younger pensioners as a group is much smaller than the disparity of incomes between richer and poorer pensioners within each age cohort. That statement is, of course, perfectly true. I do not contest it for a moment.
    The Minister will say that we should therefore concentrate extra money on the poorest pensioners through the minimum income guarantee. Of course I welcome the minimum income guarantee. It plays—and will in any foreseeable circumstances continue to play—an important part in ensuring that the poorest pensioners have the means to secure a basic standard of living. However, the logical conclusion of that argument, which we have heard from the Minister, is that we should get rid of the right to a basic pension altogether and should concentrate only on the poorest among the elderly.
    But concentration on the minimum income guarantee ignores the fact that people who have contributed to their parents' pensions through their own national insurance contributions feel—and rightly feel—a need to be fairly treated when they come to draw their own pensions. They do not see an increase in the minimum income guarantee as fair if those who are not on the minimum income guarantee get no benefit for themselves
    The reaction of pensioners to last year's 75p a week increase in the basic pension shows what happens when pensioners feel that they are being treated unfairly, as I believe they plainly were last year. Yesterday we had a spending review promising extra expenditure of £43 billion a year. What do the pensioners get out of that? I will tell you exactly what they get out of that, they get a new telephone service to make it easier for them to contact the Benefits Agency. That is all that they get out of the spending review.
    The Minister may try to hide behind the technical defence that social security benefits are annually managed expenditure and the review deals with

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    something different, which is departmental expenditure limits. But, let me say now that that will not do. Page 5 of the spending review makes it clear that the £43 billion is based on the assumption that social security spending will increase in real terms only by 1.2 per cent a year up to the end of the year 2001–02. That amount is already almost entirely committed to the increase in the spending on the working families' tax credit and in effect leaves nothing for improvement to basic pensions beyond a rise in line with the cost of living.
    I predict that the fury of pensioners at their 75p per week increase last year is as nothing compared with what will be their fury when they realise that they are excluded from the goodies handed out by the Chancellor of the Exchequer yesterday. The Minister may, of course, say that if more of that £43 billion goes to pensioners it means there will be less for other good and worthy causes. My answer to that is, so be it. The Chancellor yesterday poured out a cornucopia of gifts, but what he gave to pensioners was no more than a tiny crumb. The additions which we propose are the minimum that is required to do justice to pensioners. I beg to move.
    7.30 p.m.
    Baroness Carnegy of Lour: My Lords, the noble Lord has made a clarion call for pensioners and as somebody who is over 75, I am extremely sympathetic. However, he does not say what the age addition should be, so we have no idea what sort of sum of money is involved. I should think it would be a very large sum indeed. It is entirely inappropriate for this House, as revising Chamber, to suggest such a thing.
    Of course, it is an excellent idea from the point of view of pensioners. I am not in a position to judge whether or not age is a good criterion but I know that the Government consider that it is not. I do not believe that this House should attempt to pass such an amendment.
    Lord Higgins: My Lords, after the events of yesterday and the speech which we have heard from the noble Lord, Lord Goodhart, it is clear that we on these Benches are certainly the most prudent of the three parties in terms of economic management. For that reason, I do not feel able to support the amendment in the name of the noble Lord, Lord Goodhart. However, I draw his attention to the recent statements which have been made by my right honourable friend the Leader of the Opposition as regards our own proposals on the subject.
    But, like the noble Lord, Lord Goodhart, I thought it appropriate, before taking a view on the amendment, to see what happened in the spending review announced yesterday. It is not insignificant that that is now entitled "Spending Review 2000" rather than "Comprehensive Spending Review". No doubt the Minister will tell us why it is not called the "Comprehensive Spending Review". Our view is—and this was mentioned by the noble Lord, Lord Goodhart—that it is probably because pensioners seem to be excluded to a remarkable extent.
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    I thought that that might be a rather cynical view and felt that I should see exactly what was said in the spending review. So I looked under "Departmental Reviews", which refers to Section 18, Department of Social Security, DSS, page 81. However, page 81 refers to the Ministry of Agriculture, Fisheries and Food. The pensions statements seem not to be there at all. I carried out further intensive research and found that there is a Department of Social Security Section 18 on page 87. I am not quite sure how that happened.
    At all events, the noble Lord, Lord Goodhart, is right to say that the reality of the situation is that all there is for pensioners is a new phone line which is to be established. Perhaps in passing the noble Baroness will tell us whether that will be a freephone number.
    What are pensioners likely to find if they ring up and ask various questions? I suppose someone could ring up and ask whether it is the case that quite a lot of the vast amount of money which the Chancellor is now proposing to spend is as a result of the changes previously made to advance corporation tax, which deprived pensioners of some £5 billion or more.
    Alternatively, pensioners may wish to inquire into a number of other matters. In particular, they may wish to clarify what was meant by the Chancellor in the four lines which he devoted to this subject yesterday, when he said:
    "I can also confirm that, in the autumn, the Government will publish our proposed plans for a new pensioner credit, with a view to further announcements on a Budget timetable".—[Officia Report, Commons, 18/7/2000; col. 224.]
    Of course, we are not in the least bit clear as to what the position will be in relation to a new pensioners' credit. What seems highly likely is that the Government will fiddle the figures in the same way that they did for the working families' tax credit by not conforming with internationally accepted standards for such matters to be treated as public expenditure or as a tax reduction. But clearly, it is the case that this should be treated as a public expenditure increase. But there is no sign of that whatever in the so-called spending review.
    Therefore, we hope that the Minister will clarify those matters, because they are all clearly relevant to the proposals for increased public expenditure which have been made by the noble Lord, Lord Goodhart, in his amendments. We look forward to hearing her defence of the Government's position as regards the overall expenditure situation.
    Baroness Crawley: My Lords, before the noble Lord sits down, the position of pensioners in the Comprehensive Spending Review has been criticised by both the noble Lords, Lord Higgins and Lord Goodhart. Does the noble Lord, Lord Higgins, not agree with me that, out of the £43 billion spending commitment in that review, the extra sums to be spent on health, for example, will have a very beneficial impact on many pensioners who are consumers of the health service?
    Lord Higgins: My Lords, clearly, that is so. But these amendments relate to their pensions. We merely have the throw-away four lines by the Chancellor in the

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    course of his speech which promise jam tomorrow but not jam today. I do not dispute at all the point made by the noble Baroness. Of course, that is so. But one needs also to take into account the extent to which the Government's proposals so far have an adverse effect on many pensioners.
    Earl Russell: My Lords, I shall not dispute the claim made by the noble Lord, Lord Higgins, that in the funding of pensions, his is the most prudent party. The figures which I have, which I hope are roughly the same as those of the noble Lord, show that his party is committing to pensions, over and above what the Government are committing, the sum of £300 million, whereas we on these Benches are offering to commit £3.5 billion. There is a distinct difference.
    In advancing that commitment, the noble Lord, Lord Higgins, illustrated why his party, like Sir Walter Raleigh, in 1066 and All That, is left over from the previous reign. If you follow questions of British social attitudes as regards whether people prefer tax cuts or increases in spending, the proportion favouring increases in spending has risen every year since 1983. At least in the past five years, the balance has clearly changed. The Government, very belatedly, are showing faint signs of realising that. The party of the noble Lord, Lord Higgins, has not yet realised it. It no doubt soon will.
    I say to the noble Baroness, Lady Carnegy of Lour, that I have spent a lot of time reading the passages in the Companion about the financial privilege of another place. As I understand it, the position is—and I have checked it with some care—that this House is always free to ask and the other place is always free to refuse, from which it does not necessarily follow that the other place will refuse on any particular occasion. There are people in another place who feel a certain anxiety about whether they will hold their seats. Some of those people believe that the funding of pensions will make a considerable contribution to the answer to that question.
    Like my noble friend, I was absolutely astonished that the Chancellor of the Exchequer did not take the opportunity in what he said yesterday to provide any increase in pensions. I appreciate, of course, all the technical arguments why it may not have been expedient to do so. But, in political terms, this is an emergency which has been coming for quite some time. I have seen it coming since I spoke to the Brent Pensioners' Forum in 1997, which is a while ago now. It has reached the point where, almost like the dissolution of a marriage, the trust of voters in the Labour Party is on the edge of disappearing beyond the point of recall.
    I suspect that yesterday, the Chancellor of the Exchequer had, and threw away, his last chance. If the effect of his actions is to make Mr Hague Prime Minister, one might wonder why he did that. That is not for me to speculate. But, if that is the case, we have this year left. If pensioners are to be satisfied, something must be done now. We can no longer have before us the amendment of the noble Baroness, Lady
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    Castle, which was disposed of at Report by a show of power that I have not seen produced by a government since the noble Baroness, Lady Thatcher, was in No. 10 Downing Street.
    We could not have supported that amendment, as the noble Baroness, Lady Castle, knows very well. We too have prudence, but we do not put it in quite the same place as the noble Lord, Lord Higgins, does. But since that amendment is not before us, the amendment which my noble friend Lord Goodhart has moved is the only show in town. So, if people on the Labour Benches do not want to see Mr Hague in Downing Street, they might think that this amendment is the best prospect that they have left. It is a lifeboat. We are happy to offer it to them and we will welcome aboard any of those who want to join us.
    I know that the Minister will make arguments about targeting. I remember the Minister herself, in some extremely able speeches in the single parent debates at the beginning of this Parliament, arguing that the hardship of being on benefit was in large part a measure of how long one had received it. I have weighed up those arguments and find them extremely powerful, especially in relation to pensioners. My noble friend Lord Goodhart touched on some of the points which are relevant, such as having to go to a nearer place for shopping and having to get a taxi because one cannot drive.
    But there are things such as the overcoat wearing out. As one gets older one feels the cold more. These big capital sums are one of the great hardships of any life on benefit. For that reason, the figures which the Minister will undoubtedly present will be telling very much less than the full story. This is a much better targeted amendment than the Minister will suggest.
    The Minister will of course sing the praises of the minimum income guarantee. I understand the good intentions behind MIG. I am not going to shoot the Minister; she is doing her best. She is making great efforts. Perhaps the noble Baroness, Lady Castle, would like to share the joke with me. I might enjoy it.
    Baroness Castle of Blackburn: I could not resist it. You said that you were not going to shoot her because she was doing her best. I merely added, "to shoot herself".
    Earl Russell: My Lords, the noble Baroness, Lady Castle, has a lot more confidence in the Minister's aim than I have. The Minister is doing her best to find the people who are entitled to MIG to take it up. But, as the noble Baroness, Lady Castle has explained to this House many times, there are a great many people for whom the obstacle to taking up MIG is a simple, plain matter of pride. They do not take charity. They believe that they have earned it.
    Since there are qualities in our population which I do not want to discourage, I believe that the people MIG is least likely to reach are those who need it most. For that reason I do not think that MIG can ever do what is wanted. I believe that my noble friend's amendment is the only thing that can. I hope that the House will view it with favour.
    7.45 p.m.
    Baroness Hollis of Heigham: My Lords, despite the bait laid down by the noble Lord, Lord Higgins, and to some degree by the noble Lord, Lord Goodhart, I do not intend at Third Reading of this Bill to go into a wider debate on the Comprehensive Spending Review, as opposed to the details of this amendment at Third Reading of this Bill.
    The purpose of this amendment is to allow the payment of an age addition to the basic state pension to people of 75 years of age and to allow for a higher age addition at the age of 80. As we have had a version of this at every stage of the Bill, noble Lords will not be surprised at my arguments any more than I am entirely surprised by the arguments adduced by the noble Lord, Lord Goodhart, this evening. I accept with the noble Lord that on average pensioner incomes tend to decline with age. But the differences within age cohorts are, as the noble Lord, Lord Goodhart, has acknowledged tonight, infinitely greater than the differences between them.
    To put these differences into context, we can look at the median cash incomes that couples are receiving. For couples under 75 years of age, the poorest one-fifth are receiving on average £133 per week; the top one-fifth are receiving £457. For the over 80s, the poorest one-fifth receive £113 and the top one-fifth receive £348. That means that in each age group the richest one-fifth receive more than three times as much as the poorest one-fifth. The difference between age groups is much smaller and only about 12 per cent less. To put it in cash terms, the average income range within each age cohort spans about £250. The average income between age cohorts is approximately £25. In other words, the range within each age cohort is about 10 times greater than the differences between age cohorts.
    In other words, that would mean that the Liberal Democrat amendment would give an additional £10 to those on £350 a week, providing they are over 80 years of age, but give nothing to those receiving £133 per week—about one third of the other group—because they are under 75 years of age. That is the effect of the amendment of the noble Lord, Lord Goodhart. There will be an extra £10 for those receiving £350 a week because they are over 80 years of age, and nothing at all for those receiving £133 per week because they are under the age of 75. What sort of justice is that? There is none.
    The noble Earl, Lord Russell, said that he had been persuaded in an earlier debate by the analogy with lone parents that people, through length of time on benefit, become poorer. That is true if pensioners were in the same position as lone parents. But lone parents are on benefit because they have no other income and therefore, over time, their capital goods wear out. Their income is the same irrespective of whether they have been receiving benefit for five years, 10 years or 20 years.
    The point about pensioners is that they do not all have the same income as lone parents. The point being made by the noble Earl, Lord Russell, substantiates the point made by government. It is precisely because of the
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    inequality of income, unlike the equality for lone parents, that we need to target help in the way that we propose. I give way to the noble Earl.
    Earl Russell: My Lords, I am grateful to the Minister. When we speak of lone parents, it is often assumed—it is most certainly assumed by the Minister—that they may have to return to work at some future date. We do not normally make that assumption about the pensioner in his 80s unless he is a Member of this House.
    Baroness Hollis of Heigham: My Lords, that is not a comment relevant to the point I was making, which was that lone parents are on benefit because they have no alternative income and experience poverty. There is persistent poverty and they are persistently on benefit. That is why we try to get them into work. Pensioners do not have a common income. If they did, my noble friend's amendment that she pressed at Committee and Report stages would have far greater resonance if pensioners all shared the same income in the same way as lone parents. It is because they do not and because the poorest one-fifth have only one-third or so of the income of the richest one-fifth, that to treat them all in the same way as my noble friend would, or treat them differently according to age, as the noble Lord, Lord Goodhart, would do, fails basically, simply and decently to address the poverty that is targeted on the poorest one-fifth, and to some extent the poorest two-fifths, of pensioners. That is why the Government are convinced that the best way to tackle pensioner poverty, and therefore ensure that those who need help get it whereas those who do not need help do not get it, is to produce, with their support, the minimum income guarantee irrespective of age.
    We are aware of the needs of pensioners who have failed to qualify for the minimum income guarantee. That is why we have raised the capital limits from next April from £3,000 to £6,000 and £8,000 to £12,000, to help those with smaller amounts of savings. As the noble Lord, Lord Higgins, perceptively noticed in the Chancellor's Statement, in the long term we shat be publishing in the autumn proposed plans for a new pensioner credit with a view to further announcements on a Budget timetable. That pensioner credit will be designed to ensure that pensioners who have worked hard all their lives are not penalised if they have a modest occupational pension or savings.
    The noble Lord, Lord Higgins, said that that was a throw-away line. On the contrary, that needs to be linked with what we are doing with MIG for those at or below the poverty line. We then need to look at our proposals for raising the capital limits for those just above the midline; the Chancellor's proposals for the autumn timetable for publishing plans for new pensioner credit and what we have been doing in this Bill and last summer's Bill, which has introduced a state second pension and a stakeholder pension. The noble Lord would surely accept that with the pensioner credit we are putting the last of the building blocks into a comprehensive and consistent pensioner programme which I hope will ensure that future generations of

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    pensioners will not suffer the poverty they have inherited over the past 20 years. I give way to the noble Lord.
    Lord Higgins: My Lords, does the Minister not agree that unless the Government fiddle the figures in the same way they did on the working families' tax credit, all the recognised standards of accountancy suggest that that should be treated as public expenditure, and the public expenditure review does not include it?
    Baroness Hollis of Heigham: My Lords, I have no knowledge of the way in which the Chancellor will account for that expenditure; whether that will be through the Inland Revenue and tax credits systems or through the DSS. However, I have somewhat greater knowledge of the working families' tax credit. The noble Lord, together with the noble Earl, Lord Russell, took part in those debates. Unlike family credit which was paid to the parent at home and was therefore a benefit, the working families' tax credit is paid through the wage packet and is therefore a tax credit. That point was well aired. I know that the noble Lord disagrees. I do not think that I shall persuade him, any more than he will persuade me. However, that was perfectly proper and acceptable by all accounting standards of which I am aware. As far as I know, there has been no criticism to that effect, except from the Conservative Party.
    I return to the amendment, rather than a wider debate on the CSR—
    Lord Higgins: My Lords, I apologise for interrupting the noble Baroness again. If it is not the case, as she suggests, that it is accepted by outside accountancy bodies, will she take steps to correct the statement?
    Baroness Hollis of Heigham: My Lords, it is a question of what weight one puts on particular views. I know that the Conservative Party wishes to see that included in the expenditure on the Department of Social Security. The whole philosophic push of the working families' tax credit is that this was no longer a benefit paid to a parent at home but an encouragement to ensure that work pays for those who, for whatever reason—for example, low levels of skill or low regional wages in their local economy—would otherwise find it difficult to manage and to make work pay if they re-entered the labour market. In that sense it was a tax credit to encourage an attractive wage and therefore make it worth while to work.
    We have had this debate. I do not think that it is appropriate to reargue it tonight. At the time, the noble Lord persisted in his points because he and his party are opposed to WFTC in the same way that they are opposed to the New Deal. As far as I can see, the only expenditure the Tory Party opposite is happy to support is that which ensures that people stay at home rather than go out to work and find it worth while to work either through the support of the New Deal or the WFTC. We have seen the Shadow Chancellor recently do a U-turn on the minimum wage. I think that it will not be long before we see the Shadow Chancellor do a
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    U-turn on the New Deal and the WFTC as he recognises that putting this together has ensured that we now have some of the lowest unemployment figures ever. Whereas we inherited youth unemployment of over half a million, it is now down to 50,000. Instead of sniping away at accounting conventions, it would have been gracious rather than churlish if the Benches opposite had joined in congratulating the Government on their performance in terms of their economic record so far.
    I return to the amendment. I am happy to stay on the wider territory of government expenditure if noble Lords wish. However, I suspect that most noble Lords would like me to proceed. The noble Earl, Lord Russell, said that this proposal was an alternative to the indignity of the charity of the minimum income guarantee. Again, either he has not read or listened to the previous debates or he has not addressed the facts. An age-related addition of the sort proposed by the noble Lord, Lord Goodhart, would lift 50,000 pensioners aged between 75 and 79 off MIG; 200,000 would remain on it. For those at £10, the proposal also in the amendment, it would lift 100,000 pensioners over 80 off MIG; 400,000 would remain on it.
    If the noble Earl, Lord Russell, persists in what he says, he must either say that MIG will no longer be necessary—in which case three-quarters of the pensioners who would benefit from the age-related addition as expressed by the noble Lord, Lord Goodhart, would be poorer because they would lose their entitlement to MIG—or accept the Government's position; that is, if we were to do that, they would still need to apply for MIG. Therefore, they would still need to apply for an income-related benefit in addition to an age-related benefit. We cannot have it both ways.
    The same is true of the amendment tabled by my noble friend on the earnings-related link. Because the age addition is so poorly targeted, in the same way as the earnings link, we have to have a minimum income guarantee on top. That means that the vast majority of people would still have to apply for an income-related top-up whether that is an age-related or earnings-related addition. Those facts are inescapable unless we are otherwise to consign three-quarters of pensioners currently eligible for MIG to a life of poverty lower than currently exists. I believe that the noble Earl wishes to intervene.
    Earl Russell: My Lords, I was describing how pensioners think of MIG. That is fact, and I have listened to it more times than I enjoy, even when it was aimed against my own party. I think that it is common ground between all parties that it will be a while before we can do without such a thing. We think—I should like to think that the noble Baroness does too—that there should be something else of right on offer.
    Baroness Hollis of Heigham: My Lords, I am reminded that it is Third Reading. Although I am being tempted by noble Lords opposite, I shall stop. The idea put forward by the Liberal Democrats means that the extra help that we are giving to low and moderate earners through the state second pension will not be

    1095
    available. The noble Lord's amendment will not work. Although it pays some money to older pensioners who need it, it gives a lot of money to older pensioners who do not need it and it does not help poorer pensioners, who will get nothing.
    I repeat that any pensioners who come through age-related cohorts, any more than earnings-related additions, would still need MIG on top if their poverty is to be addressed. That would mean that some money would go to those who do not need it, whereas others would not get enough. On the ground that the age-related rebates are no more adequately targeted on the needs of poorer pensioners than are my noble friend's earnings-related amendments, I ask your Lordships to reject the amendment.
    Lord Goodhart: My Lords, to some extent I believe that the Minister and I, in the course of this debate, have been ships that pass in the night. Our arguments may not have impacted on each other. This amendment is not just about helping those with the lowest incomes. Indeed, I understand that those who receive an amount of MIG which is larger than the amount of the proposed age addition will receive nothing. This amendment is about helping older pensioners who have income just above MIG or, in the 120,000 cases of those who will be taken off MIG by the proposed age increases, it is about getting them out of the need to fill in the forms and to go through what is a serious issue for older people of having to make those applications. Furthermore, the great majority of those 120,000 will receive additional benefits from the age additions we propose.
    So long as we have a contributory system, pensioners expect, and have a right to expect, that they will be treated fairly. That means that they should have been promised at least a small part of the vast sums which the Chancellor of the Exchequer dished out yesterday. The Minister said nothing about the derisory benefits provided for pensioners in the spending review and, indeed, there was little she could have said.
    If we divide on this amendment, we do not expect to win; we shall not receive support from the Conservatives. However, it seems to us that this is a simple but vital matter of justice for pensioners and, whatever the outcome, I shall take the opinion of the House.
    8 p.m.
    On Question, Whether the said amendment (No. 2) shall be agreed to?
    Their Lordships divided: Contents, 25; Not-Contents, 108.

    Division No. 2

    CONTENTS

    Alderdice, L.

    Goodhart, L. [Teller]

    Barker, B.

    Greaves, L.

    Carlileof Berriew, L.

    McNally, L.

    Clement-Jones, L.

    Mar and Kellie, E.

    Craigavon, V.

    Miller of Hendon, B.

    Falkland, V.

    Palmer, L.

    Geraint, L.

    Park of Monmouth, B.

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    Phillips of Sudbury, L.

    Tope, L.

    Roper, L.

    Tordoff, L.

    Russell, E. [Teller]

    Wallace of Saltaire, L.

    Shutt of Greetland, L.

    Watson of Richmond, L.

    Thomas of Gresford, L.

    Willoughby de Broke, L.

    Thomas of Walliswood, B.

    NOT-CONTENTS

    Acton, L.

    Hoyle, L.

    Ahmed, L.

    Hughes of Woodside, L.

    Alli, L.

    Hunt of Chesterton, L.

    Amos, B.

    Hunt of Kings Heath, L.

    Andrews, B.

    Jay of Paddington, B. (Lard Privy Seal)

    Archer of Sand well, L.

    Judd, L.

    Bach, L.

    Kennedy of The Shaws, B.

    Bassam of Brighton, L.

    King of West Bromwich, L.

    Berkeley, L.

    Kirkhill, L.

    Bernstein of Craigweil, L.

    Layard, L.

    Billingham, B.

    Lea of Crondall, L.

    Blackstone, B.

    Lipsey, L.

    Blease, L.

    Lockwood, B.

    Borne, L.

    Lofthouse of Pontefract, L.

    Brennan, L.

    Macdonald of Tradeston, L.

    Brett, L.

    McIntosh of Haringey, L. [Teller]

    Brooke of Alverthorpe, L.

    Brookman, L.

    McIntosh of Hudnall, B.

    Burlison, L.

    MacKenzie of Culkein, L.

    Carter, L. [Teller]

    Mackenzie of Framwellgate, L.

    Chandos, V.

    Mallalieu, B

    Clarke of Hampstead, L.

    Massey of Darwen, B.

    Cohen of Pimlico, B.

    Mitchell, L.

    Crawley, B.

    Molloy, L.

    Davies of Coity, L.

    Morris of Castle Morris, L.

    Davies of Oldham, L.

    Dean of Thornton-le-Fylde, B.

    Nicol, B.

    Desai, L.

    Patel of Blackburn, L.

    Dixon, L.

    Peston, L.

    Donoughue, L.

    Ponsonby of Shulbrede, L.

    Dormand of Easington, L.

    Puttnam, L.

    Elder, L.

    Ramsay of Cartvale, B.

    Evans of Parkside, L.

    Rea, L.

    Evans of Watford, L.

    Rendell of Babergh, B.

    Falconer of Thoroton, L.

    Renwick of Clifton, L.

    Farrington of Ribbleton, B.

    Rogers of Riverside, L.

    Faulkner of Worcester, L.

    Fyfe of Fairfield, L.

    St. John of Bletso, L.

    Gale, B.

    Sawyer, L.

    Gavron, L.

    Scotland of Asthal, B.

    Gibson of Market Rasen, B.

    Shepherd, L.

    Gilbert, L.

    Simon, V.

    Goldsmith, L.

    Symons of Vernham Dean, B.

    Gordon of Strathblane, L.

    Taylor of Blackburn, L.

    Gould of Potternewton, B.

    Thornton, B.

    Graham of Edmonton, L.

    Tomlinson, L.

    Grenfell, L.

    Turnberg, L.

    Hardy of Wath, L.

    Walker of Doncaster, L.

    Harris of Haringey, L.

    Warner, L.

    Harrison, L.

    Warwick of Undercliffe, B.

    Haskel, L.

    Watson of Invergowrie, L.

    Hayman, B.

    Whitaker, B.

    Hilton of Eggardon, B.

    Whitty, L.

    Hollis of Heigham, B.

    Wilkins, B.

    Howells of St. Davids, B.

    Woolmer of Leeds, L.

    Resolved in the negative, and amendment disagreed to accordingly.
    8.9 p.m.
    Baroness Castle of Blackburn Baroness Castle of Blackburn moved Amendment No. 3:
    Before Clause 36, insert the following new clause—

    REPORT ON COST OF PENSION UPRATING IN LINE WITH GENERAL EARNINGS LEVEL
    (" . The Government Actuary or the Deputy Government Actuary shall report to the Secretary of State his opinion on the effect on the level of the National Insurance Fund, and the effect which might be expected on the rates of contributions, in each year up to and including 2005–06 of annual increases in the basic pension by the percentage increase in the general level of earnings; and the Secretary of State shall lay a copy of the report before Parliament.").
    The noble Baroness said: Amendment No. 3 stands in my name and that of my noble friend Lady Turner. As I was about to say to the Minister when I was so rudely interrupted during our last debate on this Bill, her statistics, as always, are dazzling. But I am afraid that, as always, they are also incomplete and therefore misleading.
    It is essential to the understanding of our pensions arguments in this House to get the figures right. One of the things the Minister omitted to point out to the House, which is part of the argument, was that if the earnings link had been introduced when this Government came into office in 1997, it would today have added £9.70 to the basic pension.
    I know the Minister will say, "But you are proving my case"—the case which she had been arguing with such felicity during our last discussion on Amendment No. 2; namely, that that increase would shockingly go all the way up the line. I should point out to her that that happens to be the nature of insurance schemes. Insurance schemes do not add a means test for beneficiaries. If we subscribe, we are entitled to the results of those contributions. And the Minister's total indifference to the strengthening of the basic pension arises from the fact that not only she, but also the Government, abandoned the principle of state insurance altogether.
    I remind the Minister of what we said in our manifesto for the last election. We said that the basic state pension would be the building block of our pensions policy; and it would be without means test. But her whole theme now is targeting, which was, of course, Margaret Thatcher's theme: you should target your resources on the poorest pensioners. She can become very eloquent about it—by cutting off this assent of the basic state pension to a reasonable level through the earnings link, we will have more money to target the poorest pensioners.
    It really is a vital decision that this movement is making in this Bill. I should point out to her that the cost of restoring the earnings link does not fall on the British taxpayer. It is not a bit of welfare: it falls on the National Insurance Fund, which is financed and fed by the contributions of employers and employees. That has been a central part of our provision of security in retirement ever since the war. No government have sought to destroy that up till now. If we always say that you cannot do justice to the contributor to an insurance scheme because you must use your money to target, we are getting perilously near to the old poor law—are we not?—and to the destruction of what has always been the foundation of our policy on this side of the House.
    The other thing that the Minister has also omitted to point out is that the cost, which falls on the contributors, is always offset by rising contributions because this is an insurance scheme. The contributions are earnings related, but the pension that people receive is not. But that does not seem to worry her. I find that a little unfair. However, if that is accepted and we get a more complete statistical picture from the Minister, we find that all the time the revenue coming into the fund is going up along with the cost. In fact, the revenue is far outstripping the cost at present, as we argued last time. I do not intend to go over the old ground.
    The Minister loves to put on the frighteners. "Oh!", she said, "Look at the cost of restoring the earnings link. It would be £1 billion this year". She did not mention that the Chancellor in his Budget this year took away £1.35 billion from the National Insurance Fund to help the employers by reducing their contributions, as a sweetener to them to accept other levies that he wanted to place upon them. So it is the recipients of the pension from the National Insurance Fund who have paid for that sweetener to the employers. That is something that I am surprised she does not find rather distasteful. £1 billion this year, that is nothing. But she said that, by 2010, the cost will have increased to £7 billion and we will not be able to cut taxes. We should not believe that: it is nothing to do with taxes. It is the increased number of people you put on the means test that the taxpayer has to finance at an increased administrative cost. I should have thought that this House would have liked to weigh that in the balance of other arguments.
    This figure was alluded to in another place last March when Oona King tabled a parliamentary Question. She began by asking what would be the increased cost of restoring the earnings link to 2010. The Answer, as the Minister said, was £7 billion. But again today the Minister has not said what is coming in to offset it. So Oona King tabled a second Question. She asked what would be the increased revenue coming automatically into the National Insurance Fund by the year 2010. The Answer was £11 billion. So at least until 2010 there would be a surplus in the fund. That is a very important point.
    Do not the Government care about the insurance principle? They seem to be doing their best to destroy it, denying to the contributor to the fund the treatment that they will give to those on means testing—MIG. It is a new passion for means testing. This Government do not believe in insurance; they believe in targeting. I do not think that this House believes that. Speeches have been made which show that we are unhappy about that.
    The Government Actuary strengthens my argument in that regard. The Social Security Select Committee has now turned its attention to pensioner poverty. The Government Actuary was asked what increase in contributions would be necessary to secure the measure that we seek. That may be considered part of taxation by some people who are not as literate as we all are in this House. It appears that over the next five years no increase in contributions would be required

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    because of the surplus in the National Insurance Fund due to the fact that contributions are earnings related but the payments are not.
    I hope that the amendment we move today will appeal to all sides of the House. We were prevented on the previous occasion by a sleight of hand from resubmitting the earnings link question in the form that the measure then took. Although I agree with a good deal of what the noble Earl, Lord Russell, said, I do not agree that that is out of play. Today we ask the Secretary of State to instruct the Government Actuary to report on the annual adjustments to contributions that would be made necessary by the introduction of the earnings link, and then to report that to the House. If we do not want dazzling statistics but the objective truth, how can we reject such an amendment? The amendment seeks facts. We are not playing a political game of statistical cleverness; we are trying to get at the facts for the sake of all the pensioners who look to us for help. I entirely agree with what the noble Earl, Lord Russell, said about the hostility to means testing that is deeply rooted in pensioners.
    Only yesterday morning a pensioner said to me, "They have even changed the name of the National Insurance Office to the Social Security Office." Why should we label honest contributors as paupers who rely on our charity? There is an important principle here. The Minister need not try to hide the fact that the Government now view this as a matter of charity. In 1974, for the first time since the Beveridge report was introduced, we laid a statutory obligation on the government of the day to uprate pensions annually and to lay down the principle on which they should be uprated. That took the uncertainty out of the matter. I lived through that period and for part of that time I was a member of the Cabinet. Every year there was a kind of jostling for public sympathy. People used to say, "Oh, the poor pensioners—is it not time we gave them a hit?" I do not think that that is worthy of a civilised society today. I believe that we are in danger of undermining the automaticity of adjustment to the pension introduced after the war which we thought had been established for ever.
    I do not want to go back to 1948; I go back merely to 1978. However, I am a little worried when the Minister dismisses my arguments on the grounds that those decisions were taken years ago and the world has changed. I am glad that she is not the Minister of Health because our National Health Service is still rooted in the principles of 1948. I go back to 1997 and to what we could have done to strengthen the basic pension since then but have not done. Let us have the courage at least to establish the facts.
    There have been references to the Chancellor's Statement on his latest Comprehensive Spending Review. I do not know what the credit that he mentioned will involve. That is another thing we have to take on trust when we legislate in this place. However, if our amendment were to be carried, this House would have a regular opportunity to consider the financial situation year by year. I should have thought that is the kind of control we should like to have.
    I salute the Chancellor on his Statement which was a good Statement in most respects. However, the failure to mention pensioners was a little obvious. It took our renowned parliamentarian Mr Dennis Skinner to say to the Chancellor nicely, "We all welcome the fact that there is to be 4 per cent over inflation on this and 4 per cent on that. I am therefore confident that my right honourable friend will tell us that pensioners will get a 3, 4 or 5 per cent increase over inflation as part of the deal". The Chancellor replied, "My honourable friend is trying to get me to anticipate the further consultation which is now going to take place. I ask him to be patient. You have been patient for 22 years; you can wait a few more days or a few more weeks—not until November". What did he mean by that? Will he wait until we are all safely packed off for the summer holidays? What did he mean by a few more days or a few more weeks? Are we to be the only people who do not have a word to say? Cannot we say in this Bill that we want the Government Actuary to report on the cost of this measure year by year? We can then decide what we think should be done for our pensioners.
    Will the Minister tell the House what has been the success of the £15 million persuasion programme in which the Government have indulged to persuade those who qualify for the minimum income guarantee to take it up? I received a leaflet informing me that I may be entitled to the minimum income guarantee and how to apply for it. Presumably that leaflet has been delivered to millions of homes. What has been the increase in take-up of the minimum income guarantee since then? That is important. I refer to the £9.50 or £9.70 by which the basic pension would have been increased under this Government if we had reverted to the policy of 1974. We must remember that there are people whose income is just above the level necessary to qualify for MIG. They would bless her. They are excluded, so apparently we are going to hike it up a little bit. The Chancellor will come along—though why it cannot be part of the whole thing I do not know—and we will be told that some steps are going to be taken to offset a situation in which people who have saved and invested in another pension find themselves above the MIG limit. We are going to add a little bit of credit for them.
    That is what we are asking for with the amendment; that we should be told, year by year, in an official report—not ministerial figures—what is the current situation: how many are not taking it up; how many are excluded; who will benefit. To hear the Minister talk, you would think there were only 1.5 million to 2 million pensioners on income support. But that is out of 11 million pensioners; what about the others who are looking for some relief?
    I hope that the Minister will accept my amendment. The Government should accept it. If the matter is now going to further consultation, let us give them the opportunity to consult us. I beg to move.
    8.30 p.m.
    Lord Higgins: My Lords, the noble Baroness—
    Baroness Hollis of Heigham: My Lords, given the lateness of the hour, it might be for the convenience of the House if I respond right away. I will take the view of the House on this.
    Lord Higgins: My Lords, providing I can speak after the noble Baroness.
    Baroness Hollis of Heigham: Yes, my Lords. By all means.
    Lord Goodhart: Me as well, my Lords?
    Baroness Hollis of Heigham: Yes, my Lords. My noble friend in her amendment is asking the Government to publish information on the effect on the National Insurance Fund of the prices and earnings uprating. At the moment this information is carried in two separate reports: the annual uprating published in January and the five-yearly quinquennial review. My noble friend's amendment seeks that we bring the information from these two reports together.
    There are health warnings to be attached. The forecasts are necessarily uncertain and the information that my noble friend asks for, if anything, does not go far enough; it does not give a full and complete picture. However, my noble friend is asking for facts; we are happy to give them. We think that they will support the Government's case. In the light of that, I am entirely happy to accept my noble friend's amendment.
    Lord Higgins: My Lords, we have heard a truly remarkable speech from the noble Baroness, Lady Castle, this evening. The position of my party on the issue of linking earnings to pensions is clear and well known: we take the view that the state retirement pension should be linked to prices rather than to earnings. But the position of the noble Baroness, Lady Castle, is also well known, and she believes that the link should be restored.
    It is remarkable that she has had a degree of support from a number of sources recently—not least from the Social Security Committee in another place—on the contributory principle. Also, more especially, in the past few days the Scottish Affairs Select Committee on poverty in Scotland has said that,
    "The Government was right initially to concentrate on the poorest pensioners but we recommend it should now ensure at the earliest opportunity that the level of state retirement pension is linked to changes in national average earnings".
    This had a degree of support from a Mrs Irene Adams, who is Labour, I understand; Ms Anne Begg, who I believe is an enthusiastic supporter of Mr Blair; Mr Russell Brown, who is Labour, Mr Eric Clarke, who is Labour; and Mr Bill Tynan, who is also Labour.
    It is therefore important that the information the noble Baroness has asked for is available.
    Baroness Hollis of Heigham: My Lords, perhaps the noble Lord will allow me to intervene. Given that the
    1102
    Government have accepted the amendment and are happy to do so—the information is already in the public domain and we are just splicing together two sets of reports—I wonder whether we need to persist with this debate. I know that the noble Lord has other important issues on the agenda to discuss.
    Lord Higgins: My Lords, most certainly we have. But I must say that I find the attitude of the Government to the noble Baroness, Lady Castle, quite remarkable. The way in which at Report stage Tellers were put in by the Government in order to vote down the noble Baroness, Lady Castle, was one of the most sordid episodes I can remember in parliamentary life. I do not understand why the Minister cannot wait a moment or two before trying to curtail debate.
    Baroness Hollis of Heigham: My Lords, the reason—
    Lord Higgins: No, my Lords, I am not giving way. The noble Baroness is acting in a most extraordinary manner. I shall not delay the House more than a moment more. I believe the way in which the noble Baroness has been treated is disgraceful; I believe the way in which the Government are seeking yet again to curtail debate before we have a chance to speak in support of the noble Baroness, Lady Castle, is very strange. I shall not delay the House further. The situation speaks for itself—the Government are afraid of what the noble Baroness, Lady Castle, is saying and they are determined to try to gag her.
    Having said that, of course I am glad that the Minister has accepted the amendment. We look forward to seeing the figures, particularly in the context of the new proposed pensioner tax credit, which was referred to earlier.
    I shall not delay the House further on this occasion. It is a quite extraordinary episode and shows how the Government are frightened of what the noble Baroness, Lady Castle, is doing.
    Lord Goodhart: My Lords, I shall be very brief. I sat here at the end of the first day of Report stage when the noble Baroness, Lady Castle, was mugged by a number of her noble friends. Like the noble Lord, Lord Higgins, I found that an unpleasant occasion. On this occasion she has been mugged in an entirely different way—she has been mugged with kid gloves instead of boxing gloves by having her amendment accepted.
    The Minister makes a face showing incredulity, but it is obvious that the amendment is simply symbolic and a peg on which the noble Baroness, Lady Castle, could hang a speech in favour of earnings linking. That is not something on which we could have followed her all the way, but what we do believe—and what I am prepared to say now—is that there are times when it is right that the basic pension should be increased for all pensioners by a sum above the rate of the RPI for that year. In view of what happened yesterday in particular, this is one of those occasions. We believe—and I wish

    1103
    to say so now—that the basic pension for all pensioners should have been increased this year, or should be increased next year, by £5.
    Baroness Turner of Camden: My Lords, the amendment also stands in my name and I had intended to make a fairly lengthy speech. I shall not now bore your Lordships with it. I am grateful to the Minister for accepting the amendment; she is very wise to do so. I am glad that there will be an opportunity for both Houses in future to consider information as required by the text of the amendment.
    I am sure that everyone in the House agrees that a case has been made for a thorough look at the basic state pension; hopefully something will emerge in that respect in perhaps a few weeks' or months' time. I hope that we shall have some result. I am glad there has been this opportunity, at this quite late hour, to talk about the basic state pension. It is important that we should do so. I repeat: I am grateful to my noble friend for her statement this evening.
    Lord Stoddart of Swindon: My Lords, the speech I intended to make is not now necessary, but I want to congratulate my noble friends Lady Castle and Lady Turner on their ingenuity and sheer grit in pursuing this matter for so long to a successful conclusion. I congratulate my noble friend on the Front Bench and the Government on sensibly accepting the amendment.
    Baroness Park of Monmouth: My Lords, I support every word spoken by the noble Lord, Lord Stoddart.
    On Question, amendment agreed to.
    [Amendment No. 4 not moved.]
    Clause 50 [Directions for facilitating winding-up]:
    Lord Astor of Hever Lord Astor of Hever moved Amendment No. 5:
    Page 51, line 42, at end insert ("or
    (c) the Authority has made an order under section 11").
    The noble Lord said: My Lords, Amendment No. 5 addresses a less contentious matter. The amendment extends the circumstances in which OPRA can give a direction to facilitate winding-up. Where OPRA exercises its powers under Section 11 of the Welfare Reform and Pensions Act to make an order directing that an occupational pension scheme is wound up, OPRA should have the power to make directions about how the winding-up should be accomplished. The amendment ensures that OPRA has that power. I beg to move.
    Baroness Hollis of Heigham: My Lords, Clause 50 is part of the package of measures aimed at speeding up the winding up of occupational pension schemes. It gives OPRA power to direct action during the winding-up of the scheme. For various reasons the process can come to a standstill. Sometimes it may be because people winding up the scheme cannot get the information they need or that people are not acting as quickly as they should.
    1104
    It is important that those winding up the scheme should get support when they are experiencing difficulties and that any information they need to make progress should be provided to them. The clause allows OPRA to direct that information is provided to the trustees or managers or persons involved in the administration of the scheme, or to any other person that regulations prescribe. Amendment No. 5 would enable OPRA to direct action to speed up the winding up in all cases where it has already used its powers in Section 11 of the Pensions Act 1995 to direct that the scheme should be wound up. It would enable OPRA to issue directions at any time in the winding-up process for those cases, but not for cases where it is the trustees or managers rather than OPRA who have made the decision to wind up the scheme.
    Amendment No. 5 is unnecessary. When OPRA directs a scheme to wind up using its powers in Section 11 of the Pensions Act 1995 it must include in the order it makes any directions as to the manner and timing of the winding-up as it considers appropriate. It is at that stage that it has an opportunity to specify a timescale in which the winding-up must be completed and trustees will have a timescale to work to. The order made by OPRA has the same effect as if it was made under scheme rules. Trustees and managers would be expected to comply with the directions given by OPRA. If they are unable to comply they may request a review of any order made by OPRA.
    These are new requirements. If, in cases where OPRA has directed that the scheme be wound up, it becomes desirable for OPRA to be able to give further directions during the winding-up, this can be done in regulations. With that reassurance that the amendment is unnecessary, I hope that the noble Lord will withdraw it.
    Lord Astor of Hever: My Lords, I am grateful to the Minister for that reply. I am disappointed she feels that the amendment is unnecessary but she has given her reasons for that. I beg leave to withdraw the amendment.
    Amendment, by leave, withdrawn.
    Clause 53 [Jurisdiction of the Pensions Ombudsman]:
    8.45 p.m.
    Lord Astor of Hever Lord Astor of Hever moved Amendment No. 6:
    Leave out Clause 53.
    The noble Lord said: My Lords, I rise to give my objections to Clause 53 of the Bill and, with the leave of the House, to speak to Amendment No. 7. Clauses 53 and 54 introduce powers for the pensions ombudsman to decide matters which directly affect the benefits and interests of members and employers who are not party to the ombudsman's investigation. In our view, these clauses contain a significant extension of the jurisdiction of the pensions ombudsman and the nature of the cases which he or she then has power to determine. It would result in there being no material difference between the jurisdiction of the courts and the jurisdiction of the pensions ombudsman in determining pensions cases. However, the procedures

    1105
    in court contain many checks and balances and the judge will go to great lengths to ensure that all interests are properly considered. Oral hearings take place in court. They rarely take place in proceedings before the pensions ombudsman.
    The provisions contained in these clauses appear to be an attempt to get round the restriction apparently placed on the ombudsman's jurisdiction resulting from the case of Edge v. Pensions Ombudsman. However, in the view of the Law Society of Scotland, the case of Edge simply interpreted the extent of the powers given under the existing statute—the Pension Schemes Act 1993. In the absence of detailed rules protecting an individual's right to a fair hearing, the extension of powers in the way proposed in Clauses 53 and 54 may not be compliant with Article 6 of the European Convention on Human Rights. I beg to move.
    Baroness Hollis of Heigham: My Lords, Amendments Nos. 6 and 7 seek to remove Clauses 53 and 54 from the Bill. These clauses concern the powers and duties of the pensions ombudsman, what types of cases can be accepted and how investigations should be conducted.
    The pensions ombudsman provides a useful service to scheme members and those who run pension schemes. He can consider both complaints of maladministration and disputes of fact or law and provides a cost-effective way in which these issues can be dealt with. Clause 53 will allow the pensions ombudsman to consider five new types of case and fill in gaps in the pensions ombudsman's jurisdiction. There are a range of issues that the pensions ombudsman can investigate but some areas where he currently cannot. On the basis of past inquiries, it is anticipated that these new areas of jurisdiction will increase the pensions ombudsman's caseload by some 2 to 3 per cent. To the individuals concerned, however, each case is important. Scheme members and those who run pension schemes will have access to the pensions ombudsman in more circumstances and thus have those complaints and disputes dealt with in a cost-effective and efficient manner. Without the changes contained in Clause 53, the only option in many cases would be to take the matter to court. That is a daunting prospect and has financial implications.
    Clause 54 is also concerned with access to the pensions ombudsman. It ensures that the pensions ombudsman can look at cases that affect the interests of individuals not directly involved with the case. As a result of a ruling in the Court of Appeal last year, the existing pensions ombudsman legislation means that the pensions ombudsman should not accept a case if the investigation of it would impact on the interests of those not directly involved in the case. Such cases would have to go to court. These changes mean that the pensions ombudsman will be able to accept cases concerning such issues as winding up, death benefits and the use of surplus, which affect the interests of a range of individuals. The clause allows those whose
    1106
    interests may be affected by the complaint or dispute to be linked to the case, including members and those running pension schemes.
    Importantly, it also ensures that all those who have an interest in the case have the opportunity to put their point of view to the pensions ombudsman, either personally or through an appointed representative. They will also be informed of the outcome of the case and be bound by it. We believe that the clauses should remain in the Bill. In the light of that we hope that the noble Lord will withdraw the amendment.
    Lord Astor of Hever: My Lords, before the noble Baroness sits down, will she address my point that the two clauses may not comply with Article 6 of the European Convention on Human Rights?
    Baroness Hollis of Heigham: My Lords, I originally signed a statement to the effect that to the best of my belief, having taken advice at the highest possible level, the Bill is compliant. I have no reason to think that it is not. I shall check that point further. If the noble Lord would like to write to me to explain why he thinks the Bill may not be compliant, I shall be able to give him a fuller answer.
    Lord Astor of Hever: My Lords, I thank the noble Baroness. I shall write to her on the important point of the European Convention on Human Rights. In the meantime, I beg leave to withdraw the amendment.
    Amendment, by leave, withdrawn.
    Clause 54 [Investigations by the Pensions Ombudsman]:
    [Amendment No. 7 not moved.]
    Clause 55 [Prohibition on different rules for overseas residents etc.]:
    Baroness Hollis of Heigham Baroness Hollis of Heigham moved Amendment No. 8:
    Page 59, line 1, at beginning insert ("Except so far as regulations otherwise provide,").
    The noble Baroness said: My Lords, in moving Amendment No. 8, I should like to speak also to Amendments Nos. 9, 10, 11, 38 and 39. These amendments are needed to address concerns expressed by pension industry contacts. The existing practice of some occupational pension schemes is to pay annual increases in pension in payment based on the rate of inflation of the country of residence, not by reference to the rate of inflation in the UK. Our initial legal advice is that this practice would be prohibited under the terms of Clause 55 but the position under the terms of the directive is less clear.
    The amendments have two specific purposes. First, they provide that the clause shall come into effect on a date to be appointed in a commencement order instead of on Royal Assent. That will allow time to investigate fully the circumstances which have given rise to the pension industry's concerns. Secondly, they provide that regulations may specify exceptions to the provisions in Clause 55. Clearly, we want to avoid a situation whereby the legislation in the UK could

    1107
    cause UK schemes to be in breach of the terms of UK law even though the directive was not being breached. The regulation-making power may be used at a later date if necessary to make exceptions that would enable the UK to comply with the provisions of the directive without placing unnecessary restrictions on UK schemes. I commend the amendments to the House.
    Lord Higgins: My Lords, the House will be grateful for that explanation. I should like to add my own thanks to the Minister for writing to me on this issue. She has rightly pointed out that, at this stage, the Government are unable to come to a firm decision and are therefore taking provisional action while they try to sort matters out by statutory instrument once they are clear about the legal position. The noble Baroness referred to the EU directive, 98/49/EC, which is designed to safeguard the position of members of occupational pension schemes with statutory rights.
    However, what is not clear to me is why the Government agreed to this directive in the first place. It is difficult to see how the directive will operate in other member states. Is this measure aimed only at the United Kingdom? I believe that I am right in saying that, until recently, because, for example, of trade union pressure in France in pursuit of higher state pensions, it has been illegal to form company pension schemes. The situation in Germany is also very different. Germany does not have funded schemes. Indeed, the funds invested in British schemes are greater than those in the entirety of company schemes throughout the rest of the European Union. Moreover, in some countries of the European Union, if a company has set up a scheme but then finds that it has run into difficulties, it is able to claw back moneys that have previously been invested in the pension fund; that is a form of legalised "Maxwell" situation.
    Is it right to assume that this directive, to the implementation of which this clause gives effect, will not apply to other countries in Europe? It seems to me that either it should apply to all the countries or that it should not apply to us, unless the Government feel, in their wisdom, that this is an appropriate action so far as concerns this country. In that case, it could be done on a unilateral basis. However, in the context of the European pension system, this entire set-up is very strange.
    Perhaps I may make a further point. The Government, perhaps quite rightly, have decided to extend the provisions of this clause beyond the European Union to all overseas countries where a particular pension scheme takes into account the rates of inflation in the countries of domicile rather than the rate of inflation in this country. The Government are seeking, by dint of the clause and in the amendments, to protect against that. No doubt the noble Baroness will correct me if I am wrong on that point. It would
    1108
    seem strange, therefore, if a pension scheme is told that where the rate of inflation in, say, a South American country is 25 per cent, pensioners will receive rises of 25 per cent, but the scheme members resident in this country will receive rises equivalent only to the rate of inflation in this country. The effect of that on funds and surpluses, about which we all know, may be extremely unfair on members of such a scheme.
    It is clear that the Government were taken by surprise by the provisions of the directive. I feel, therefore, that the clause requires rather wider examination than simply to say, "Do not worry. We shall sort out the whole thing using a statutory instrument". Such an instrument is not easily amended and only very limited time will be allocated to debate it.
    To reach Third Reading of a Bill with such amendments being introduced seems to me to be an unsatisfactory situation. Perhaps, at least on some of the points that I have raised, the Minister can put our minds at rest.
    Baroness Hollis of Heigham: My Lords, I shall do my best to answer the questions put to me by the noble Lord, Lord Higgins, although I may need to follow up in writing some of his more detailed points.
    Why were the amendments brought forward at this stage? We were unaware that some schemes have rules which provide for different treatment for UK resident members from those who live outside the country. That did not come to light during consideration and adoption of the EU directive in 1998. We are now responding to concerns raised by the pensions industry and we need a little time to resolve the issues that have been raised.
    Why did we support the directive in the first place? The directive requires that schemes across the EU comply with practices that are common and universal in the UK; the directive spreads the good practice of the UK throughout the EU.
    Finally, the noble Lord asked whether the directive applies to all countries in the EU. Yes, it applies to them all. I hope that I have answered all the points. If not, I shall write to the noble Lord.
    Lord Higgins: My Lords, I understand that it is difficult for the Minister to deal with these highly complicated matters from the Dispatch Box. I shall look forward to receiving her reply to the points I have made previously.
    However, the Minister has said that the directive applies right across the European Union. It is clear that the departmental officials must have been very badly briefed in 1998 and it is unlikely that they were able to conduct the negotiations all that successfully if they did not know about the particular point which is covered by this clause. In any case, consultations should have taken place with the insurance industry. They would then have discovered exactly what it was that they were negotiating.

    1109
    The noble Baroness knows that I have declared an interest as the trustee of a pension fund, although not a fund affected in any way by this issue. I understand that it is not possible for this directive to apply, for example, in Germany.
    Baroness Nicol: My Lords, I thank the noble Lord for allowing me to intervene. I wonder whether the noble Lord is in order given that we are debating the Bill at Third Reading.
    Lord Higgins: My Lords, I am open to persuasion otherwise and I shall take into account the point made by the noble Baroness. However, in the interests of the pensions industry, it is important that we should be given clear answers to these points. I accept that the Minister will write to me.
    I shall return to the point that I do not believe that it will be possible for this directive to apply to pension schemes in, for example, Germany. If it did, it would be likely to bankrupt the company. No doubt, we shall learn more.
    This situation is unsatisfactory at Third Reading. However, I should point out that these amendments have been tabled only at Third Reading. No mention whatever was made of them at previous stages of the Bill.
    On Question, amendment agreed to.
    Baroness Hollis of Heigham Baroness Hollis of Heigham moved Amendments Nos. 9 to 11:
    Page 59, line 12, at beginning insert ("Except so far as regulations otherwise provide,").
    Page 59, line 27, leave out ("on or after the day of the passing") and insert ("after the coming into force of section 55").
    Page 59, line 35, leave out ("on or after the day of the passing") and insert ("after the coming into force of section 55").
    On Question, amendments agreed to.
    Clause 63 [Loss of benefit for breach of community order]:
    Baroness Hollis of Heigham Baroness Hollis of Heigham moved Amendment No. 12:
    Page 64, line 45, after ("failed") insert ("without reasonable excuse").
    The noble Baroness said: My Lords, we had two lengthy debates in Committee and on Report on the clauses that deal with the loss of benefit for breaches of community sentences. I made it clear that the Government believe that it is right that observing community sentences should be a condition of benefit entitlement. We do not believe that benefit should be awarded unconditionally, nor that those who fail to honour their obligations should receive the same levels of support from the benefit system as those who do.
    However, the proposal to impose the benefit sanction before the court has decided whether there has been a breach clearly raised major concerns, and
    1110
    on Report noble Lords amended the provisions of the Bill to ensure that the benefit loss should follow, rather than precede, the court's determination.
    The Government recognise the strength of feeling among noble Lords on this issue. I am pleased to say that we are willing to meet that point. In the light of the views expressed in this House by the noble Lord, Lord Windlesham, the right reverend Prelate the Bishop of Lincoln, my noble friend Lady Kennedy, the noble Earl, Lord Russell, and others, the Government have responded by agreeing that no benefit should be withdrawn before the court has determined whether a breach has occurred.
    In all but a tiny minority of cases—perhaps 400 out of 30,000 or so—the court does appear to uphold the judgment of the probation officer, but it is clear that for noble Lords this represents an issue of principle which the Government are willing to acknowledge. However, we believe that it is right that offenders should know that if they do not observe their community sentence, they stand to lose their benefits. Indeed, they have a right to know that that would be the case.
    To make that point clear, with the agreement of the noble Lord, Lord Windlesham, we have added a further provision. The Secretary of State (in the person of the Benefits Agency) will write to the offender at the point where he is referred back to court, informing him that he will face a loss of benefit if the court finds that he has breached his community order. The offender will thus be aware, well before the court reaches its decision, that by his actions he has put his benefit at risk. He will be aware also that it is the Benefits Agency, not the court, that will be stopping his benefit if the breach is proven. In order for the Secretary of State to be able to do this, he will need to be notified by the Probation Service (or the courts in Scotland) that an information has been laid or proceedings commenced as well as when the court makes its determination.
    Amendments Nos. 26, 28, 29, 30, 31 and 35 add back into the Bill the essence of the information requirement provisions at the laying of information stage. Amendment No. 33 imposes an obligation on the Secretary of State to notify the offender at that point. There are also a number of technical amendments to ensure that the Report amendments work properly.
    Amendments Nos. 12 and 22 supply appropriate wording in respect of the court's determination of the breach, ensuring that the wording here is consistent with that in criminal justice legislation—that is, a breach is where the failure to comply with the conditions of a sentence is without reasonable excuse. I hope that that will reassure my noble friend Lady Kennedy that we recognise the concerns that she expressed on Report. The insertion of those words means that if, for example, a lone parent has had a childcare crisis, there is a clear discretion to count that a "reasonable excuse". I am confident that that will be welcome.
    Amendments No 19, 23, 27 and 32 provide for benefit to be repaid if the offender successfully appeals the court's finding of a breach, which was overlooked

    1111
    in the amendments passed on Report. Otherwise, without the amendments, someone who was found in breach by the court and that decision was overturned on appeal, would not find himself or herself entitled to have benefits repaid. So, in good faith, we are extending the original amendment.
    The rest of the amendments are technical, tidying up provisions, removing unnecessary words.
    I hope that your Lordships will accept the amendments. We should seek to ensure that the fact that this is a measure about the conditions of entitlement to benefit, and not an additional criminal justice punishment, is well understood by those affected while respecting also the amendments passed on Report which ensure that there is no loss of benefit in the offender's pocket until after the court has determined that a community sentence has been breached. I commend the amendments to the House. I beg to move.
    9 p.m.
    Lord Windlesham: My Lords, this is the fourth and, I hope, last time that I shall speak about loss of benefit in the proceedings on the Bill. At each stage, the Government were left in no doubt about the strength of opinion in all parts of the House, objecting to the novel and misguided idea of linking the withdrawal or reduction of social security benefits to an alleged failure to comply with the conditions of a community penalty. The objections were shared by all ranks of the Probation Service—chief officers as well as line officers—the Magistrates' Association and the Justices Clerks' Society.
    On Report, after a long debate, the House voted by a substantial majority of 170 to 116 to accept a cross-party amendment in the names of the noble Earl, Lord Russell, the noble Baroness, Lady Kennedy of The Shaws, the right reverend Prelate the Bishop of Lincoln, and myself. The effect of the amendment was to delay the implementation of the loss of benefit sanction until after a court had made a determination that an offender had failed to comply with the requirements of a probation order, a community service order or a combination order.
    Although it is a convention of this House not to reopen at Third Reading an issue which has already been fully debated and decided on a Division, the Government have thought again and have come forward with a series of technical amendments which have been drafted by parliamentary counsel. These amendments, most unusually in my experience, are in the names both of the Minister and myself, speaking, as your Lordships will see, from the Opposition Benches. This accord indicates agreement reached at the earlier stage between the Government and my co-sponsors, if I may so describe them, on the key point; namely, that there should be no loss of benefit before a court has determined that a community sentence has been breached. That requirement is now included in the Bill as amended on Report.
    The procedure that will be followed was explained by the Minister in her introduction. In effect, it means that if a probation officer has reason to believe that an
    1112
    offender has failed to comply with the terms of a community order and is referred back to the court in proceedings for breach, at that stage the local benefits office will write to the offender informing him or her that they will face a loss of benefit unless the court finds that the breach is not proven.
    This is not an ideal solution. Speaking for myself, I should have preferred the entire notion of making the observance of a community penalty a condition for the receipt of a state benefit to be abandoned. I thought before, and I still think, that it is a wrong and mistaken approach and is unlikely to have the effects intended. But that is for another day. For now, I congratulate the Minister on bringing forward these changes. It is not an easy thing to do. The opinion of this House was quite clear. What was in doubt was whether or not the Government, with their substantial majority in the elected House, would be willing to accept our view. In the outcome, the Minister and the Government Chief Whip have been successful in ensuring that the decision of this House should prevail.
    This is a notable concession by the Government. It will give effect to the cross-party amendment carried on Report and, thanks to the government draftsman, the Bill will be in a state in which it can be enacted if the House of Commons is willing to accept the amendments made in this House. As such, they have my applause.
    Baroness Kennedy of The Shaws: My Lords, perhaps I, too, may express contentment that the Minister has made this concession. The government amendments go some way to meet the concerns expressed at previous stages by those who put their names to the amendments tabled by the noble Lord, Lord Windlesham. Like the noble Lord, I am deeply concerned that conditionality is to be extended in this way to include behaviour such as breaches of community service or of probation orders. Once the state decides that persons who are not well behaved should lose benefit it treads a very dangerous road. However, for the moment the Government are not to be moved on that matter. I hope that in the fullness of time they may be persuaded not to take this authoritarian route, which I deeply regret. However, I am pleased that the Government recognise the need for due process before anyone is at risk of losing benefit.
    I am also delighted that by Amendment No. 12 my noble friend Lady Hollis seeks to add the words "without reasonable excuse". This means that a probation officer has a greater degree of discretion than originally provided for in the Bill. It also means that there would not be a reference to the court or the benefits office in cases where there had been a failure to attend perhaps because of illness, responsibilities towards children or other matters, which would greatly concern noble Lords and the community at large. Many people on community service and probation orders have multiple social problems and it is difficult to get their lives back on track. This is not about being paternalistic but about recognising the reality of the problems faced by people who are on

    1113
    probation. Sometimes probation officers are very reluctant to see people lose benefit because that loss only adds to their problems and exposes them to greater risk of committing crime. I am grateful that the new wording has been included so that the matter will be referred either to the court or the benefits office only where there is no reasonable excuse. I support the amendments.
    Earl Russell: My Lords, I should like to express my great gratitude to the Minister and the noble Lord, Lord Windlesham, for the work they have put into these amendments. First and foremost, they are a conspicuous demonstration of the virtues of political skill. These days political skill is not always admired as I believe it should be. As with the skill of a good soldier, so the skill of a good politician is often best expressed in the avoidance of unnecessary battles. That is what has happened here, and I welcome it very warmly.
    Like the noble Baroness, Lady Kennedy, I welcome in particular the introduction of the concept of reasonable excuse. I recall that the Minister and I clashed on Report on the interpretation of the old test. The Minister has proved herself to be right in the most delightful manner possible, for which I thank her.
    I shall not reopen the argument about the clause as a whole. I agree with everything said by the noble Lord, Lord Windlesham, and the noble Baroness, Lady Kennedy. However, as the noble Lord, Lord Windlesham, said, that is for another day. Meanwhile, if the Minister will forgive me, I have just one slightly light-hearted remark to make. Whenever I observe a government Minister correcting our drafting, I am irresistibly reminded of a cat washing its kittens. It was needed, and it was well done.
    Baroness Carnegy of Lour: My Lords, earlier today the Minister was kind enough to tell me that she would endeavour to discover whether the changed procedure in Scotland had been worked out. I do not know whether the Minister is yet able to give me that information or will write to me subsequently. However, on 10th July in response to a Question for Written Answer tabled by my noble friend Lord Windlesham, the Minister described the procedure in Scotland before the change. It is important to know whether the new procedure has been settled.
    I remain anxious about the absence of a pilot scheme in Scotland. Obviously, it is possible to tell from a pilot scheme in England the reaction of young offenders to the loss of benefit. However, it is not possible to tell from such a pilot scheme whether the system will work smoothly. My colleague Mr David McLetchie, a Member of the Scottish Parliament, has tabled a Question asking whether the Scottish Executive under its devolved powers is willing to run a pilot scheme. I hope that that is helpful. The Government have not seen fit to ask the Scottish Executive about it.
    1114
    However, if that Question brings about such a pilot scheme, it should help the smooth working of the scheme.
    9.15 p.m.
    Lord Higgins: My Lords, after the matter was raised at Second Reading by my noble friend Lord Windlesham we had fine debates in Committee and on Report on the complex issues raised by the Government's original proposals. Like my noble friend I should have preferred the matter not to have appeared in the form that it did in the first place. None the less I am very glad that the Minister has prepared a series of amendments in conjunction with my noble friend which meet the main points raised even though the situation may not be perfect.
    Much was said in Committee and on Report about whether the Government's original formula was contrary to the European Convention on Human Rights. Despite the fact that there was a division of opinion then, my personal view is that the amendments before us will get the Minister off the hook. If we had not had these amendments, I believe that that would not have been the case.
    As on previous occasions, I am reminded of the late lain Macleod's dictum. When a government Minister made a major concession, he replied, "You don't shoot Santa Clause". I have always taken that to mean that one does not continue to debate indefinitely when the Minister has made the concession. On that basis, I congratulate my noble friend and the other all-party signatories on the matter. I believe that we, as a revising Chamber, have fulfilled the duty which falls upon us.
    Baroness Hollis of Heigham: My Lords, I am grateful for the warm welcome given to the amendments. Perhaps I may respond to the substantive point raised by the noble Baroness, Lady Carnegy of Lour. Because social security is not a devolved matter, the Scottish Executive has no power to pilot the scheme. If the finding of the pilots in England and Wales suggest that a pilot in Scotland would be desirable before the possibility of extending the policy nationally is determined, we shall consider that in consultation with the Scottish Executive. Although the procedures differ between the two, we think that similar operational issues would arise. But if we have any reason to think otherwise we shall pursue the matter further.
    I am grateful for the remark about not shooting Santa Clause, particularly as the noble Lord sought to do precisely that when I was accepting Amendment No. 3 on behalf of my noble friend Lady Castle. To refer to accepting an amendment as "mugging" is not the usual meaning of the word. None the less, in the spirit of good will and harmony I am grateful to your Lordships.
    On Question, amendment agreed to.
    Earl Russell Earl Russell moved Amendment No. 13:
    Page 65, line 7, leave out from ("(5),") to end of line 8 and insert ("the court may impose a loss of benefit at a rate not greater than the prescribed amount, and for a period not exceeding the prescribed period.").
    The noble Earl said: My Lords, in moving Amendment No. 13 I speak also to Amendments Nos. 14 to 18, 20 and 24. This is not intended as a group to reopen any past arguments. The clause is now water under the bridge. The procedure is now water under the bridge. These amendments are concerned with ameliorating the operation of a clause which is not being disputed on this occasion.
    The amendments attempt to do two things to the clause. First, they would make penalties under Clauses 63 to 67 non-mandatory. They would allow a discretion in the extent of penalty to be imposed. Secondly, they would reduce the extent of the penalty: the amount to not above 20 per cent and the duration to not above four weeks. These are serious, practical proposals which contradict nothing which has happened in the House so far.
    I have always thought that if a mandatory sentence happened to be just it could only ever possibly be so by coincidence. The point about a penalty is that the punishment should fit the crime, not the criminal offence. Even with a criminal offence so grave as murder, one murder, as we all know, is not the same as another. I shall not elaborate on the argument. It is familiar. But circumstances must always affect cases.
    I noticed recently a report in the newspapers of a very early case brought under a parenting order. A woman's child was failing to attend school regularly. She made the point, very reasonably I thought, that she was not in a good position to check whether the child was going to school since in this glorious flexible labour market of ours she was required to start work at 4.30 every morning. In those circumstances, I should have thought one might at least think twice about whether some mitigation of penalty were reasonable. On the other hand, if someone were offending for the fifth or sixth time, one might possibly consider whether some increase of penalty might be in order. Simply making it all flat rate, a mathematical tariff, is Plato's theory of justice again. I have never believed in it. I still do not.
    As regards the amount, I am sure that the Minister will argue that the purpose of a sanction is to cause hardship. That is not immediately in issue as at this moment no argument is being made about whether there should be a sanction. The question is one of proportionality between the offence and the sanction imposed on it and how much hardship should be imposed in relation to how much offence.
    I suspect that the Minister will say that there should be enough to cause compliance, but, if you consider the history of the criminal law, that must always be a utopian objective. Even when death was the normal penalty, it never once stopped offending. Even in countries which apply Sharia law, it never stops offending. I am afraid that offending will go on as long as human beings go on. If that is the Minister's objective, she will never achieve it.
    Therefore, we need to know how much suffering is caused and what is the effect of applying sanctions at any particular level. I presume from the present shape of the clause that the Minister believes that 20 per cent is not enough. I look forward to hearing her tell me why she believes that 20 per cent is not enough and we may perhaps carry on the debate from there. I beg to move.
    Baroness Hollis of Heigham: My Lords, these amendments would allow for the court to have discretion over whether or not the benefit sanction is imposed and the amount of the sanction, rather than for the sanction to be imposed automatically after the court determines that a breach has occurred, as we discussed in a previous amendment. It would constrain that discretion by limiting the extent to which any benefit may be reduced to a maximum of 20 per cent.
    The amendments also provide for a maximum 20 per cent reduction to apply to the hardship provisions for JSA recipients. That is redundant as hardship provisions are unnecessary where benefit is reduced rather than removed altogether. Finally, they would limit the maximum period for which benefit may be reduced to four weeks rather than 26 weeks.
    Amendment No. 13 provides that the benefit sanction becomes, in effect, an alternative or additional disposal of the court for breaches of community sentence, alongside the existing criminal disposals. This fundamentally alters the purpose of our proposals, including that discussed in the previous amendment. As a result, I would ask the noble Earl not to pursue the proposal.
    We have said that we are willing to accept that the loss of benefit should not occur until after the court makes its determination of the breach. But to go further and give the court discretion over whether the sanction should be imposed and over the amount of benefit payments would be undesirable and unprecedented. I do not believe that the courts are equipped to make benefit decisions. Their role in these measures is, and should remain, to determine whether or not a breach has been committed and to set the appropriate criminal penalty.
    The remainder of the amendments are designed to water down the benefit sanctions, presumably to minimise their impact on the offender. The Government do not believe it is reasonable to provide unconditional financial support to those who fail to honour their obligation to society to comply with their community sentences.
    The reason for the precise percentages is that the benefit sanctions we propose follow the same arrangements and are set at similar levels to other sanctions in the benefit system which deal with breaches of entitlement conditions. We believe that that is appropriate. It is consistent with other entitlement issues; it is fair; and it can be easily understood by both staff and claimants alike. I believe that the amendments would complicate the system unnecessarily and reduce the effectiveness of the sanction in encouraging offenders to face up to their responsibilities.

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    We believe that the levels and duration of the sanctions we propose for the pilots strike the right balance between ensuring that appropriate sanctions are imposed for failing to meet benefit conditions and the avoidance of hardship.
    The noble Earl did not mention the four and 26 weeks, but perhaps I may mention that the ability to vary the amount and length of the sanctions by regulations is necessary to ensure that the Government are able to respond flexibly to the findings of the pilot. I can assure the House that at this stage we have no intention of increasing the length of sanction beyond four weeks. With that response, I urge your Lordships to reject the amendments.
    Earl Russell: My Lords, I thank the Minister for her point concerning four weeks. Of course, I never intended to vote on these amendments, least of all at this time of night. If I may say so, the Minister has not made that intention particularly easy for me to carry out.
    In response to the question about the extent of the sanction, she said only, "We have always done it this way", which is not by any means entirely true. It is in any case the response of the forces of conservatism. I rather thought that the Prime Minister disapproved of them. However, it does not look as though we shall have a meeting of minds on this subject tonight. We shall doubtless return to it later but, in the meantime, I beg leave to withdraw the amendment.
    Amendment, by leave, withdrawn.
    [Amendments Nos. 14 to 18 not moved.]
    Baroness Hollis of Heigham Baroness Hollis of Heigham moved Amendment No. 19:
    Page 65, line 29, at end insert—
    ("(5A) Where the determination by a court that was made in the offender's case is quashed or otherwise set aside by the decision of that or any other court, all such payments and other adjustments shall be made in his case as would be necessary if the restrictions imposed by or under this section in respect of that determination had not been imposed.").
    On Question, amendment agreed to.
    [Amendment No. 20 not moved.]
    Baroness Hollis of Heigham Baroness Hollis of Heigham moved Amendments Nos. 21 and 22:
    Page 65, line 32, leave out subsection (7).
    Page 66, line 23, leave out ("for paragraph (b)") and insert ("after the word "excuse" insert "(or, in the case of a probation order, failed)";
    ( ) for paragraph (b) of that subsection").
    On Question, amendments agreed to.
    Clause 64 [Loss of joint-claim jobseeker's allowance]:
    Baroness Hollis of Heigham Baroness Hollis of Heigham moved Amendment No. 23:
    Page 67, line 31, at end insert—
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    ("(5A) Subsection (5A) of section 63 shall apply for the purposes of this section in relation to any determination relating to one or both members of the joint-claim couple as it applies for the purposes of that section in relation to the determination relating to the offender.").
    On Question, amendment agreed to.
    [Amendment No. 24 not moved.]
    Baroness Hollis of Heigham Baroness Hollis of Heigham moved Amendment No. 25:
    Page 67, line 34, leave out subsection (7).
    On Question, amendment agreed to.
    Clause 65 [Information provision]:
    Baroness Hollis of Heigham Baroness Hollis of Heigham moved Amendments Nos. 26 to 35:
    Page 68, line 4, at end insert—
    ("( ) of the laying by a person employed or appointed by a probation committee of any information that a person has failed to comply with the requirements of a relevant community order;").
    Page 68, line 7, at end insert ("and
    ( ) of any circumstances by virtue of which any payment or adjustment might fall to be made by virtue of section 63(5A) or 64(5A)").
    Page 68, line 9, after ("any") insert ("proceedings are commenced that could result in a").
    Page 68, line 10, leave out ("has been made").
    Page 68, line 12, at end insert—
    ("( ) the commencement of the proceedings;").
    Page 68, line 13, leave out ("the determination") and insert ("any such determination made in the proceedings").
    Page 68, line 14, at end insert ("and
    ( ) any circumstances by virtue of which any payment or adjustment might fall to be made by virtue of section 63(5A) or 64(5A)").
    Page 68, line 14, at end insert—
    ("(3A) Where it appears to the Secretary of State that—

    (a) the laying of any information that has been laid in England and Wales, or

    (b) the commencement of any proceedings that have been commenced in Scotland,

    could result in a determination the making of which would result in the imposition by or under one or both of sections 63 and 64 of any restrictions, it shall he the duty of the Secretary of State to notify the person in whose case those restrictions would be imposed, or (as the case may be) the members of any joint-claim couple in whose case they would be imposed, of the consequences under those sections of such a determination in the case of that person, or couple.
    (3B) A notification required to be given by the Secretary of State under subsection (3A) must be given as soon as reasonably practicable after it first appears to the Secretary of State as mentioned in that subsection.").
    Page 68, line 15, leave out subsection (4).
    Page 69, line 4, at end insert—
    ("( ) For the purposes of this section proceedings that could result in such a determination as is mentioned in subsection (3) are commenced in Scotland when, and only when, a warrant to arrest the offender or to cite the offender to appear before a court is issued under section 232(1) or 239(4) of the Criminal Procedure (Scotland) Act 1995.").
    On Question, amendments agreed to.
    [Amendments Nos. 36 and 37 not moved.]
    Clause 87 [Commencement and transitional provisions]:
    Baroness Hollis of Heigham Baroness Hollis of Heigham moved Amendments Nos. 38 and 39:
    Page 95, leave out lines 1 to 3 and insert—
    ("(b) Chapters Ito 111 of Part 11 (other than sections 37 and 38 and paragraphs 4 to 6, 8(1), (3) and (4) and 13 of Schedule 5);").
    Page 95, line 6, leave out paragraph (g).
    On Question, amendments agreed to.
    [Amendment No. 40 not moved.]
    Schedule 1 [Substituted Part I of Schedule 1 to the Child Support Act 1991]:
    [Amendments Nos. 41 to 44 not moved.]
    Baroness Hollis of Heigham Baroness Hollis of Heigham moved Amendments Nos. 45 and 46:
    Page 99, line 32, at end insert—
    ("(3) Any amount of net weekly income (calculated as above) over £2,000 is to be ignored for the purposes of this Schedule.").
    Page 99, line 37, leave out ("or 7(7)") and insert (", 7(7) or 10(3)").
    On Question, amendments agreed to.
    Schedule 2 [Substituted Schedules 4A and 4B to the 1991 Act]:
    [Amendments Nos. 47 to 59 not moved.]
    Schedule 3 [Amendment of enactments relating to child support]:
    Baroness Hollis of Heigham Baroness Hollis of Heigham moved Amendment No. 60:
    Page 106, line 46, at end insert—
    ("() in subsection (3), at the beginning insert "Except as provided in subsection (3A),";").
    The noble Baroness said: My Lords, in moving Amendment No. 60, I wish to speak also to Amendments Nos. 61 and 65.
    I announced on Report that I would bring forward government amendments that would allow the courts to continue, as now, to have the power to vary court orders which are made after the child support reforms have been introduced. Clause 2 makes changes to the child support scheme so that more separated parents can apply for child support. It will allow parents who have a court order for child maintenance which has been in place for a year to apply to the CSA for a child support calculation instead.
    Those changes will not affect private clients with existing court orders; nor will they affect current arrangements whereby an existing court order will cease to have effect if a maintenance calculation is made as a result of a parent with care being on benefit.
    Parents with maintenance orders in force at the time that the reforms are introduced and those with written maintenance agreements made before April 1993 will, as now, use the courts for enforcement and variation of child maintenance liability. As your Lordships know, we are introducing a one-year waiting period. New orders will be any court order made after the reformed child support scheme has been introduced.
    The one-year waiting period is to ensure that those applying to the CSA have had time to consider fully the effects. We are also providing a two-month cooling off period. However, Clause 2 indirectly removes the ability of the courts to vary new court orders after they have been in force for a year. In the light of our debates on Report, in particular about Amendment No. 20, I told the noble Baroness, Lady Buscombe, that I would not be unsympathetic to allowing the courts to continue to have the power to vary new court orders made after the reforms are introduced.
    We had taken the view that in those circumstances parents should originally come to the CSA. However, having reflected on the noble Baroness's arguments, I have decided that there is something to be gained from allowing courts to continue to vary new court orders even when, in accordance with the provisions; of Clause 2, the CSA could accept an application for child support. We do not wish to force parents to come to the CSA when they remain content to leave maintenance to the court to decide, as long as the benefit system is not involved. When the courts are asked to vary court orders that were originally based on agreement between the parents, we are happy to leave the choice of whether to come to the CSA to the parents concerned.
    However, if a new court order is subsequently varied by the court, there will be no further 12-month bar to a child support application. In other words, the 12- month clock will continue to tick from the date of the original order. I hope that I have met with good will the arguments put forward by the noble Baroness, Lady Buscombe. I beg to move.
    9.30 p.m.
    Lord Higgins: My Lords, we are grateful to the Minister for the amendments. I know that my noble friend Lady Buscombe will be pleased. In the light of our earlier discussions, the sooner I sit down, the better, but we are grateful.
    Earl Russell: My Lords, perhaps I may say, with the greatest brevity, that I, too, welcome the amendments.
    On Question, amendment agreed to.
    Baroness Hollis of Heigham Baroness Hollis of Heigham moved Amendments Nos. 61 and 62:
    Page 106, line 47, leave out from beginning to end of line 2 on page 107 and insert—
    ("( ) for subsection (3A) there shall be substituted—
    "(3A) Unless a maintenance calculation has been made with respect to the child concerned, subsection (3) does not prevent a court from varying a maintenance order in relation to that child and the non-resident parent concerned—

    (a) if the maintenance order was made on or after the date prescribed for the purposes of section 4(10)(a) or 7(10)(a); or

    (b) where the order was made before then, in any case in which section 4(10) or 7(10) prevents the making of an application for a maintenance calculation with respect to or by that child."; and").

    Page 107, leave out lines 3 to 5 and insert—

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    ("( ) in subsection (6), for paragraph (b) there shall be substituted—
    "(b) the non-resident parent's net weekly income exceeds the figure referred to in paragraph 10(3) of Schedule 1 (as it has effect from time to time pursuant to regulations made under paragraph 10A(1)(b)); and".").
    On Question, amendments agreed to.
    Schedule 5 [Pensions: miscellaneous amendments and alternative to anti-franking rules]:
    Lord Astor of Hever Lord Astor of Hever moved Amendment No. 63:
    Page 118, line 29, leave out (—other benefits" there shall be inserted") and insert (""payment of" there shall be inserted "all of his pension or other benefits").
    The noble Lord said: My Lords, the amendment clarifies the definition of "pensioner member" for the purposes of the Pensions Act 1995. The current definition may include both a deferred and a pensioner member.
    In the view of the Law Society of Scotland, the three categories of acting, deferred and pensioner members ought to be mutually exclusive. Active members and pensioner members are currently mutually exclusive, but the same cannot be said of deferred members. Voluntary contributions can now be taken early and benefits can be taken in payment. If a deferred member had voluntary contributions in payment, they would appear to be a pensioner member as well. We believe that our amendment would rectify that by inserting the word "all". I beg to move.
    Baroness Hollis of Heigham: My Lords, I appreciate the clarity—and brevity—with which the noble Lord moved the amendment. At present, the payment of a pension means that the recipient is considered to be a pensioner member. He cannot be both an active member and a pensioner member. The measures in the Bill will mean that a member who remains in pensionable service will be an active member, as distinct from a pensioner member. Paragraph 8(3) of Schedule 5 will achieve that, facilitating a new flexibility that the Inland Revenue has proposed to allow members of occupational pension schemes who are approaching retirement age to take a part-payment of their pension rights while continuing to work. People who take advantage of that flexibility will be able to continue to contribute to and build up rights in the scheme as active members.
    The amendment would additionally require a pensioner member to be entitled to all of his pension or other benefits. That is unnecessary, in view of the amendment already made by paragraph 8(3) of Schedule 5. Far from clarifying the status of pensioner members, the amendment introduces confusion into the definition, and with it the risk of misinterpretation.
    I understand the noble Lord's concern to protect the rights of those with a pension. We share that concern, but we think that the amendment could cause confusion. It would add nothing to the general protection of pensions in payment afforded by the law in other ways. It might even result in the creation of a
    1122
    special class of member whose rights as an active member might be unclear. It could also reduce the flexibility that the Inland Revenue are proposing.
    Schedule 5 to the Bill seeks, as I have said, to place beyond doubt that a member who remains in employment and continues to contribute to and accrue benefits in his pension scheme has the protection necessary for active members' rights.
    The noble Lord's amendment would not clarify anything, nor would it give any more protection to those who take advantage of the Inland Revenue's proposal for flexibility. I am glad to have the opportunity to make that clear, and, in the light of that, I would hope the noble Lord will withdraw his amendment.
    Lord Astor of Hever: My Lords, I am grateful to the noble Baroness for that reply. It was felt that this was an important issue and I am grateful to the Minister for clarifying it.
    I should also like to thank the Minister on behalf of the Scottish Law Society for pointing out the error in the wording of its original amendment. I beg leave to withdraw the amendment.
    Amendment, by leave, withdrawn.
    Schedule 9 [Repeals and revocations]:
    Baroness Hollis of Heigham Baroness Hollis of Heigham moved Amendments Nos. 64 and 65:
    Page 148, line 25, column 3, leave out ("Section 8(6).").
    Page 149, line 15, column 3, leave out ("18(5)") and insert ("18(3) and (5)").
    On Question, amendments agreed to.
    Baroness Hollis: My Lords, I beg to move that this Bill do now pass, with one sentence only: I should like to thank your Lordships for the unfailing courtesy and good humour exhibited, especially when it was believed that the Government were wrong, and perhaps even harder when it was suspected that, despite their Lordships' views to the contrary, the Government might even be right. In the light of that, I should like to thank your Lordships. We now send the Bill, with the amendments made by your Lordships, to the other place. I commend the Bill to the House.
    Moved, That the Bill do now pass—(Baroness Hollis of Heigham.)
    Lord Higgins: My Lords, I shall not delay the House more than a moment or two, but I would like to express our thanks to the Minister, who has carried the entire burden of this Bill on her shoulders. She has done so with consummate skill, knowledge and expertise, and we are extremely grateful to her. If I may say so, I do not believe there is any other Minister who could have dealt with this Bill in a better or more efficient way than the noble Baroness. In particular, of course, the clauses dealing with the Child Support Agency are very much hers. I think she will look back in future years and say that that was a good piece of legislation. It is to be hoped that it works out. I have

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    fears that the combination of working two systems side by side will prove very difficult, but at all events, both behind the scenes and in this House, the noble Baroness has done a magnificent job.
    Earl Russell: My Lords, I, too, would like to thank the Minister, and all those with whom she has worked so hard to get this Bill through.
    Her courtesy and her skill have been very great indeed. We have seen a remarkable example of it tonight. That example is one of many.
    As regards the Bill, as I am sure the Minister knows, that is a different matter. She knows what I think about the CSA proposals and I shall not repeat them. If the issue of benefit and conditionality reaches this House again the Minister will think she has not seen anything yet. But, meanwhile, I thank her very much for everything she has done, and for the kindness and courtesy with which she has done it.
    On Question, Bill passed, and returned to the Commons with amendments.

Social Security Amendment (Students) Regulations 2000
9.33 p.m.
Baroness Amos Baroness Amos rose to move, That the draft regulations laid before the House on 21st June be approved [23rd Report from the Joint Committee].
The noble Baroness said: My Lords, I beg to move that the draft Social Security Amendment (Students) Regulations 2000, which were laid before this House on 21st June be approved.
The draft regulations before your Lordships today amend existing regulations in three ways. First, they improve the interface between the educational maintenance system and social security provision by introducing new provisions for students who are recovered ill and former carers and who want to resume their studies but are required to wait until the education institution permits them to do so.
Secondly, these draft regulations tighten the definition of full-time student for social security purposes to reinforce the policy intention that in general full-time students are not eligible for benefit.
Thirdly, we are taking the opportunity to introduce a better alignment of definitions across the income related benefits. These changes are technical.
In 1998, seeking to clarify the definition of full-time student for social security purposes, we referred draft regulations to the Social Security Advisory Committee. The committee conducted a public consultation exercise, and recommended that we look again at the provisions for students who, for a number of reasons, interrupt their studies.
The Command Paper before your Lordships today comprises three main elements: first, the original draft regulations which we referred to the Social Security Advisory Committee in 1998; secondly, the report produced by the advisory committee following its
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public consultation exercise on the draft 1998 regulations; thirdly, our response to the advisory committee's report. In addition, there are the draft regulations before your Lordships today.
Part-time students are eligible to claim social security benefits just like anyone else. But full-time students are in the main not eligible for social security benefits. This is for the very good reason that full-timestudents are supported by the educational maintenance system, which is designed for their needs; social security is not.
We already make an exception to that rule for prescribed vulnerable group full-time students—for example the long-term sick and lone parents—not because they are students but because they are vulnerable people who need additional support. Those vulnerable group full-time students are therefore eligible for social security benefits—typically income support and housing benefit.
The advisory committee's report focused on the interface between social security and educational maintenance provision. As we make clear in our published response to the committee, we are grateful to it for its observations, which we considered carefully. In summary, the committee recommended that we should not proceed with the draft 1998 regulations, but that we should review the interface between social security and educational maintenance provision.
I have already explained that these regulations clarify the policy that in general full-time students are not eligible for social security. I have also reminded noble Lords that we make an exception to that rule for full-time students in vulnerable groups. We now propose to make another exception. Some full-time students have to interrupt their studies because of illness or caring responsibilities. In some of these cases, when they are in a position to resume their studies, their educational establishment may not allow them to do so immediately. They may often have to wait until the beginning of the next academic year. In such circumstances, those "recovered ill" or "former carers" do not receive educational maintenance, nor are they eligible for social security because they have not finished their courses of full-time study.
The draft regulations fill that gap. Because full-time students in that position are expected to make every effort to support themselves—just like other people—these draft regulations provide that they will be eligible to claim Jobseeker's Allowance and, where appropriate, housing benefit, subject to the normal rules. More specifically, the period during which they will be able to claim benefit is from the date of recovery from illness, or the end of their caring duties, until they are able to rejoin their course or the start of the next academic year, whichever is sooner.
The report of the Social Security Advisory Committee made a number of additional points about full-time students who interrupt their studies for other reasons. Your Lordships have copies as part of the Command Paper, but I want to cover some of the detail here. First, as regards sickness, the Government

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have already acted here: mandatory support from the educational maintenance system has been more than doubled from 28 days to 60 days. If sickness should continue, the relevant education authority has discretion to extend support further. If sickness goes beyond 28 weeks, the student becomes eligible to claim social security benefits as a vulnerable group student as already prescribed in existing regulations.
The committee referred to full-time students who interrupt their studies for other reasons, ranging from academic difficulties to personal or domestic problems. In these cases, support is available from the educational maintenance system at the discretion of the relevant education authority, but officials will continue to keep them under review.
The committee also expressed concern that a full-time student who switched to part time would continue to be treated as a full-time student for social security purposes and therefore would not be eligible to claim benefit. That is not the case in practice. We understand that if a student wishes to change from full-time to part-time study, he or she has to abandon the full-time course. If that happens, the student is eligible to claim social security because our policy is that part-time students are eligible.
The draft regulations respond to a further recommendation by the committee. We originally proposed that, for social security purposes, postgraduates should continue to be treated as engaged on their course full time after the formal part of the course has ended, but while they are writing up a thesis or awaiting an oral examination. The committee asked that we reconsider it, and we have.
We are not proceeding with that amendment.This is not the end of the story. We continue to keep student provision under review. The regulations we are debating today represent positive progress in maintaining the interface between social security and educational maintenance. I commend the regulations to the House. I beg to move.
Moved, That the draft regulations laid before the House on 21st June be approved [23rd Report from the Joint Committee]—(Baroness Amos.)
9.45 p.m.
Earl Russell: My Lords, I must declare an interest in these regulations as a university teacher. They directly affect the interests of no fewer than three students for whom I am responsible at the moment. They affect the interests of students for whom I am responsible every year. These problems take up more time and effort in my working life than any other professional duty I have. I have seen the interface between social security and educational maintenance ruin the lives of large numbers of people who should have had good and successful careers.
These regulations are a missed opportunity. The Minister is a professional and she will not take personally anything that I say. I also thank the noble Baroness, Lady Hollis of Heigham, with whose office
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I have corresponded on many of these cases and on a great many occasions and been received with her usual courtesy and thoroughness.
These regulations were introduced by the Government, in their own words, because court judgments had,
"cast doubt on whether the present Regulations fully support the Government's stated policy intention: that a full-time student is to be regarded as such unless or until he completes, finally abandons, or is finally dismissed from, his course of study".
That sounds fine in theory until one begins to apply it to real cases. Then it becomes a great deal more difficult. One would have thought that it was a basic point of principle that everybody should be entitled either to educational maintenance as a student or to social security maintenance as an ordinary citizen. The problem arises because for a great many people in a great many different anomalous circumstances, that is not the case. Lord Justice Evans, giving judgment in the Webber case in 1997, said that in this case,
"the statute is sought to be interpreted…in order to create, for no apparent reason, 'an anomalous class of people left to destitution without state support of any kind'. I would require express words of the utmost clarity to persuade me that Parliament intended to produce that disgraceful result".
It is my daily responsibility to explain to distressed students that Parliament did intend to produce that result—and it is a very painful process. It brings our political system into disrepute. The trouble is that it was a misconceived policy intention in the first place. When one sets out to clarify a misconceived policy intention, one very often makes confusion worse confounded.
The first misapprehension, as the Minister stated it in 1990, was that students had withdrawn from the labour market. If only they had. The Minister said that students are supported by the educational maintenance system. The case is that they are in part supported by the educational maintenance system, supplemented by a large amount of part-time earnings. The concept of the full-time student is just about dead. The only surviving full-time students I know are those with rich parents, and there are not that many.
The second misapprehension is that student support covers 52 weeks; it does not. They reach their overdraft limits usually around the last week of term. The Minister talked about a concession for sick students of social security becoming available after 28 weeks. They will have been reduced to total destitution well before those 28 weeks are concluded. I think, in particular, of one person; a student estranged from his parents and therefore unable to go home in vacations. He is regularly in my room every June explaining that, unless extra money can be found from somewhere to get him through the long vacation, he has to withdraw immediately.
The Minister will invoke access funds, as she has done. However, access funds are not on a scale to support people through 22 weeks of the year. They are not on a scale to support any student through 28 weeks. I am reminded of the time I was five when I started to feed the hippopotamus at the Philadelphia zoo. I had a bag of peanuts and threw one to him. To

1127
my great pride it landed plum in the middle of his tongue. The hippopotamus simply kept his mouth open waiting to be fed. The position here is just about as appropriate to the occasion as that.
The Minister also mentioned discretionary funds from local authorities. The noble Baroness, Lady Hollis of Heigham made a study of this subject. She knows how difficult it is to get local authorities to dedicate funds to that purpose. I shall not make a speech about the financial difficulties of local authorities; I think that people are familiar with them.
The next misapprehension is that the boundary between being a student and not being a student is non-porous; it is totally porous, especially since the introduction of modular courses, into which universities have been considerably encouraged by people from within the Government and the Department for Education. When dealing with re-sits, which do happen, people may have to go through the process of preparing for a paper again. It may not be offered for examination until the same time the following year. Obviously, they will not be full-time students all through that year, so there we have a problem.
The Minister has allowed for cases of current sickness. However, in my experience the two most common reasons for students having to take time off are either time lost because of past illness, which is not allowed for, or that their debts have become so great that they need to earn money full-time before they can return. Sadly, that is very common indeed. Neither situation is allowed for.
I have not forgotten one of my own pupils who first discovered the existence of that problem in the summer of 1991 when the disentitlement to social security was only a few weeks old. Early in the long vacation she was found to have a cyst and was told that it had to be operated on. It provoked the same sort of fear it might provoke in anyone. Her father had just gone bankrupt. Her contribution cheque had just bounced. Clearly, she would need to spend her long vacation working. She asked me what money she would have to support her should the lump be malignant. The answer was that she could get support only if she withdraw finally from the college, detached herself from the educational institution totally and gave up hope of taking a degree. That was the situation in 1991. As far as I can see, it will remain the situation after the passage of these regulations.
In passing, will the Minister correct one thing she said? She talked about situations in which an educational institution was not willing to take the person back. But if we are dealing with a time in the middle of the long vacation and with somebody who needs regular teaching, in particular with somebody who needs to sit a course which is taught to a class on a regular weekly basis, it would have been a little more relevant to say that the educational institution "was not able" to take them back. When it is individual teaching that is needed, one can easily do it on one's own, and I regularly do. If it is an organised class or an examination, it is not so easy.
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I have one final point. These regulations were put before the Social Security Committee in 1998. It made an excellent report, as always, and I thank the committee for that. There was a small cost implication and, because the Government wished to remain within Conservative spending limits, they put off doing anything. I make no comment on that now; it is not germane. But in fact for the first two years this Government had a £3 billion undershoot on Conservative spending limits. Within that £3 billion they could perfectly easily have implemented the small concessions they have now brought in and I do not see why they did not.
Lord Higgins: My Lords, I cannot hope to match the noble Earl's experience in these matters. I have only ever taught at Yale University in America where different circumstances generally prevail, although I did have a number of students who were working their way through college. My best course of action, therefore, is to leave the Minister to reply to the points made by the noble Earl on the basis of his personal experience.
I wish to make just two points. First, can the Minister say, despite the statement in the Secretary of State's reply to the Social Security Advisory Committee that the Government are now seeking to engage in a joined-up approach to these issues between the Secretary of State for Education and Employment and the Department of Social Security, how many students she expects to fall in the gap between the support systems of those two bodies?
My second point echoes a comment made by the noble Earl and relates to paragraph 30 of the conclusion of the Secretary of State's response, which states:
"The Government acknowledges and regrets the delay in responding to the Report and in proceeding with these Regulations. The Government gave an undertaking to remain within the previous administration's spending plans for the first two years of this Parliament".
I find that to be an extraordinary reason. I do not know the precise amount of money involved; but the Government did not give any undertaking to stay within every single sector, broken down, of the previous allocations, and the kind of sums involved would have been well within the margins of error of the financial calculations which existed. At all events, there were clearly other funds available within the limits which the Government set themselves. So If hope that we can hear why a decision was not announced on what the Government proposed to do and whether there was any real justification for the delay which has obviously adversely affected a number of people in the mean time.
10 p.m.
Baroness Amos: My Lords, the noble Earl, Lord Russell, has always shown a commitment to the welfare of his students; and, indeed, he did so again this evening. Perhaps I may remind him that the main thrust of these regulations is beneficial. The noble Earl asked me a number of questions and mentioned

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specifically the point that I made in relation to sickness and the mandatory dates and times in terms of support from the educational maintenance system.
In my opening remarks I said that mandatory support from the educational maintenance system has doubled from 28 days to 60 days. If sickness should continue, the relevant education authority has a discretion, at that point, to extend support further. If it goes beyond 28 weeks, that is when the student becomes eligible to claim social security benefits. So there are various points along the way at which the student is eligible for support from the educational maintenance system.
As regards the noble Earl's comments about discretionary funds, I can tell him that we consulted with local authorities. We are concerned that the take-up of discretionary funds has been quite low. So it is clear that we need to improve the flow of information to students. We are also giving further guidance to LEAs in relation to the whole area of discretion. Therefore, we are hoping that the take-up will be much higher. As far as we understand it, the discretion is interpreted sympathetically by most LEAs. On the question of funding. I should stress that the money is not the LEA's own money. The Government give a full specific grant to cover any payments that have been authorised.
The noble Lord, Lord Higgins, asked about the number of students who are falling between the social security system and the education system. Again, the LEAs tell us that very few students approach them for discretionary support. Universities and students need to apply before LEAs can respond. Therefore, I am not able to answer the noble Lord's question in terms of the detail. We are giving students more information about the entitlement. However, if I have any further information in that respect, I shall be happy to write to the noble Lord.
As regards the length of time and the cost involved, the noble Lord talked about our commitment to remain within the spending limits of the previous administration for the first two years of the Parliament. The cost of the concession for "recovered ill" and "former carers" is some £3.5 million. Of course, that has to be considered against other spending priorities. I believe that that point was made in the other place by my honourable friend Angela Eagle who answered these questions last week—
Lord Higgins: Was there not an underspend overall?
Baroness Amos: In looking at any underspend, the noble Lord will understand that we considered a number of different priorities and made our decisions in relation to them. I believe I have answered—
Lord Higgins: Did you still then underspend?
Baroness Amos: I shall be happy to write to the noble Lord further on that matter. However, as I said, we considered a range of other issues and came to
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conclusions with respect to priorities which I believe we are perfectly entitled to do. On that basis, I commend the regulations to the House.
On Question, Motion agreed to.

Fur Farming (Prohibition) Bill
10.3 p.m.
The Minister of State, Ministry of Agriculture, Fisheries and Food (Baroness Hayman): My Lords, I beg to move that this Bill be now read a second time.
The Fur Farming (Prohibition) Bill was introduced in another place on 22nd November, thus fulfilling our pre-election pledge on the issue. It has a simple and a clear basis. The Government believe that it is wrong to keep animals solely or primarily for slaughter for the value of their fur. In the Government's view, fur farming is not consistent with a proper value and respect for animal life. Animal life should not be destroyed in the absence of a sufficient justification in terms of public benefit. Nor should animals be bred for such destruction in the absence of any such sufficient justification. All the indications are that this view is widely shared by the general public in the United Kingdom.
I wish to make clear at the outset that the Government believe that the position of fur farming is quite different from that of food production. Where the primary purpose of keeping an animal is the production of food, that purpose provides a sufficient public benefit to justify breeding the animals for slaughter. This is so even where the production of fur or hide is a secondary purpose of keeping an animal. We breed and kill animals for food. In the balance between respect for the dignity of animal life and our own survival, as a society we put survival first, and do our best to ensure that the animals we slaughter for food are well treated.
The Government are, of course, conscious of the concern that many have for the welfare of farmed mink. We share that concern and so we have sought to ensure that the highest possible standards are applied as long as fur farming continues. But this Bill is introduced on wider grounds and on the basic philosophy that animals should not be killed simply for the business of stripping their skins off their backs. That is, we believe, quite simply inappropriate in the 21st century. I should make clear to the House that the Government's view is that the Bill is compatible both with the Treaty of Rome and the European Convention on Human Rights.
The Bill will make it a criminal offence in England and Wales to keep animals solely or primarily for slaughter for the value of their fur or for breeding progeny for such slaughter. It will provide a winding-down period extending at least until the end of 2002, and it will require the Ministry of Agriculture, Fisheries and Food to make a scheme providing for compensation for certain categories of loss. I understand that the Scottish Executive will introduce

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its own legislation to ban fur farming in Scotland. This will prevent mink farmers from moving from England or Wales to continue fur farming in Scotland.
As far as we are aware, at present only mink are farmed solely or primarily for their fur in the United Kingdom. There are currently 13 licensed mink farms in England and none in Wales. Other animals apart from mink can, of course, be farmed for their fur, for example, arctic fox, chinchilla, racoon dog, sable and fisher. All these will be covered by the Bill.
It is not intended to prohibit the keeping of animals where the primary purpose is the production of meat, with fur production as a secondary purpose, as is generally the case with the farming of rabbits. Nor will the Bill ban the production of fur or wool which can be clipped or shorn without slaughtering the animal, for example, the fur of angora rabbits or alpacas.
The ban will have the effect of preventing the importation of animals into the United Kingdom for the purposes of fur farming. It will also prevent the keeping of animals for the purpose of exporting them from the UK to be used for fur production abroad. The import and export of fur skins and fur products will not be affected.
During the winding-down period, existing farmers will have to dispose of their animals. The method of disposal will be at their discretion. It is likely that most will be slaughtered for their fur. Any such slaughter would be covered by existing animal welfare legislation which would continue in force. Some animals may be sold abroad. This will be legally acceptable, provided the animals are sold before the ban comes into force. I should make clear, however—I know that this is of concern to many in your Lordships' House—that at no point, either during the winding-down period or after the ban comes into force will farmers be permitted to release farmed mink into the wild. It is currently an offence under the Wildlife and Countryside Act 1981 to release mink or to allow them to escape into the wild. It is also an offence under the Destructive Imported Animals Act 1932 to release mink or wilfully allow them to escape. These controls will remain in place.
At all times the Ministry of Agriculture, Fisheries and Food will continue to enforce the security requirements of the Mink Keeping Regulations 1975. These regulations prescribe the precautions that must be taken to prevent mink from escaping. In recognition of the serious damage to the environment that released mink can cause, the Ministry will remain vigilant against the illegal release of mink by animal rights protesters.
Turning to the detail of the Bill, it has seven clauses. Clause 1 creates a primary offence of keeping animals solely or primarily for slaughter for the value of their fur or for breeding progeny for such slaughter. The clause also creates a secondary offence of knowingly to cause or permit another person to keep animals for the prohibited purpose.
A person who keeps animals partly for slaughter for the value of their fur and partly for another purpose will only be guilty of the offence if slaughter is the
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primary purpose for keeping the animals. We anticipate that there will be relatively few cases where a person is guilty of the secondary offence I described. An example would be where the director of an overseas company may have caused the company to have committed an offence. For both the primary and secondary offences, the penalty on conviction is a fine not exceeding £20,000.
Clause 2 gives the court power to make an order for the forfeiture and destruction or other disposal of the animals following conviction for either the primary or the secondary offence. Clause 3 deals with the effect of a forfeiture order. It provides a right of appeal to the Crown Court for anyone claiming to have an interest in the animals being forfeited.
Clause 4 gives a power of entry and inspection to enable the evidence of an offence to be gathered and gives a power to enter premises to carry out a forfeiture order. Intentionally obstructing or delaying arty person in the exercise of either power of entry will be an offence.
Clause 5 requires the Minister of Agriculture, Fisheries and Food to make a scheme for paying compensation to fur farmers who incur losses as a result of the banning of fur farming. The clause also allows the National Assembly of Wales to make a compensation scheme. There will be a duty to consult with those affected before making such a scheme. Such a scheme may provide for compensation to be paid whether or not the fur farmers are still in business at the date on which the ban comes into force.
I know that there is a great deal of interest in the compensation provisions of the Bill. The details of the compensation package—although not the principle of paying compensation—are not contained in the Bill but will be the subject of secondary legislation once the Bill becomes law. Only licensed fur farming businesses in existence on 2nd March 1999 will be eligible to claim compensation. No compensation will be payable for expenditure on assets acquired after that date. Existing fur farmers were reminded on 30th November 1999 of this cut-off date, which was originally announced when the Private Member's Bill to ban fur farming was presented in another place in the previous Session.
The full and exact details of the compensation scheme will be decided in the light of the consultation exercise. I should make clear at this stage that nothing has been definitely ruled out of the scheme and we are willing to consider all reasonable options. At present it is envisaged that the compensation scheme will be used to pay compensation where assets have ceased to have a use and the investment cannot be recouped by resale. We will decide on whether or not to compensate for income after the consultation exercise. The principal assets of fur farming are the land, buildings and equipment, breeding stock and young stock for slaughter. No compensation ought to be required for the land as it has alternative uses. Compensation may be required for buildings and equipment which do not have alternative uses. It may be required for wastage of some livestock over a winding-down period of two to three years. Disputes over compensation claims will be settled by either arbitration or the Lands Tribunal.

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Clause 6 provides that the power to authorise a person to exercise the power of entry and the power to make a compensation scheme rests with the Minister for Agriculture, Fisheries and Food in England and the National Assembly for Wales.
Clause 7 requires the Minister to make the commencement order for the ban to come into force. This may not be done before 1st January 2003. The Bill will thus provide a winding-down period extending at least until the end of 2002. The purpose of this delayed commencement is to give fur farmers an opportunity to adjust their affairs and to wind down their businesses in advance of the ban. In particular, it provides an opportunity to slaughter any existing stocks of animals; to give notice to employees; to make arrangements for future employment and the future use of land on which animals are currently kept; and to avoid incurring any new capital expenditure, other than that which is incurred for the purpose of complying with any statutory obligation.
The power to make a compensation scheme will come into force two months after the Bill receives Royal Assent. The power can be exercised to enable compensation to be paid to fur farmers who close their businesses in advance of the date on which the ban comes into force.
As I said earlier, the Government's view is that the Bill is compatible with the Treaty of Rome and the European Convention on Human Rights. We consider that, although the ban arguably has an equivalent effect to a quantitative restriction on imports, the ban is lawful under EC law, being justified by Article 30 of the EC Treaty. As I have just outlined, there will be a winding-down period before the ban comes into force. That, together with the payment of compensation for certain categories of loss, reinforces the Government's view that the Bill is compatible with the European Convention on Human Rights. On that basis, I commend the Bill to the House.
Moved, That the Bill be now read a second time.—(Baroness Hayman.)
10.15 p.m.
Lord Kimball: My Lords, I must declare an interest as a member of the National Farmers Union, the body that has been representing the interests of the fur farmers in all the negotiations.
On all sides of the House we have enormous respect and admiration for the Minister. It grieves me to have to say this to her. Does she actually realise that she has introduced into the House a Bill of Attainder which will deprive people of their right to earn a living and which has not been preceded by any trial? The last Act of Attainder was in 1798, the time of the rebellion in the southern Irish states. Lord Edward Fitzgerald had an Act of Attainder passed against him for trying to make the Irish ports available to Napoleon. The first Act of Attainder was under Henry VIII. So I am rather shattered that the noble Baroness should have moved into this area. Many of us on this side of the House are concerned by the draconian nature of the legislation.
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We are all grateful to the Captain of the Gentlemen-at-Arms in that over the past two years he has sensibly realised the danger of allowing this legislation to come forward under the Private Member's Bill procedure. That would have been an absolute disaster.
Lord Carter: My Lords, the noble Lord is doing immense damage to my career. I wish he would stop!
Lord Kimball: My Lords, I am not. I am just saying how important it is for the procedures of Parliament that a Private Member's Bill should not come forward which involves the spending of money. That dangerous habit is proceeding in another place and must be nipped in the bud. We are grateful to the noble Lord for his excellent efforts. But we must face the fact that the fur farming industry has been operating under a form of stricture for the past two years, since the previous Private Member's Bill was muted.
I am privileged to have had a very enjoyable time meeting and consulting the mink farmers of this country. I realise that the worst thing they have had is a period of great uncertainty in the industry and a prolonged period of harassment, culminating with a judgment by the Crown Prosecution Service against the people who had been harassing one major mink farm in Northumberland. Fur farmers as a whole have been terrorised by acts of the animal welfare extremists. If you run a voluntary organisation or a gathering of extremists, what are you going to move on to? You keep the body together only by having something to campaign about. If they cannot campaign against fur farmers, I hate to think who their next victims will be. I hope that the Government will not be so misguided as to give in to them, as they have in this case. Fur farmers have also suffered at the hands of a misguided media campaign.
Having said that, I must admit to noble Lords that the 13 fur farmers have come to the conclusion that the sensible thing to do is to wind up their industry, subject to full and fair compensation. However, when we come to examine what will comprise full and fair compensation, let us be absolutely realistic about it.
Fur farming is a very prosperous agricultural diversification. In reality, which sheep farmer would not be thrilled if his ewes produced four to five lambs each year that could be sold, after seven months, for around £25? That is the reality of the situation. A single breeding mink gives birth on average to between four and seven young. At the end of nine months, the pelt of each mink is worth between £22 and £28. I have taken those figures from auction prices published in Copenhagen. As regards compensation, let us not pretend that this has not been an extremely profitable and worthwhile agricultural diversification.
What has also made an impression on me is the plight of the poor ladies who grade the furs at Christmas time? How will they earn their Christmas money? The industry makes a significant contribution to the rural economy.
Noble Lords will know that each year, early in December, every fur farm must make a return under the Destructive Imported Animals Act 1932. The exact

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number of breeding mink is known. When considering compensation, all that needs to be done is to look at the agricultural return and base the payment on, I suggest, the average stocking rate of mink farms over the past five years, discounting the period of three years of uncertainty. That would be the right and fair way to approach this.
Furthermore, in looking at the level of compensation, will the noble Baroness bear in mind that loss of income is a crucial factor in such compensation? Will she further bear in mind the very large capital expenditure outlay involved in fur farming? I looked around a pelting place where the machinery used to remove the fat from the inside of the skin—a piece of equipment with an extremely limited life—cost almost £20,000. I was relieved that, when referring to compensation, the noble Baroness said that she appreciated the problems as regards restoring the sites on which these farms are based. Very little use can be made of the existing specialised buildings. They will need to be torn down and the sites cleared.
The noble Baroness quoted the European Union. I hate having to use an argument that the EU could in any way be of value to the English countryside, but we must face facts. The only country in the EU to have banned fur farming is Austria, although I appreciate that Austria may not be the flavour of the moment within the EU. However, I checked on the figures and allowed for the difference in exchange rates. It appears that the Austrian Government paid their fur farmers the equivalent of £390 for each breeding female. That is the level of financial compensation that has already been established.
It grieves me greatly to have to take the line that all that can now be done is to secure the best deal possible for the fur farmers because it is time that they gave up. I should like to see the industry continue, underpinned by high standards of animal welfare by means of regulation and enforcement. That is how we normally proceed in this country.
Let us be realistic about mink. The animals are regularly fed and watered in a safe environment. The mink thrive. When one visits a racecourse, one sees many people standing around in the paddock, looking at the horses. What in fact are they looking at? They may decide that they admire the conformation of a certain animal, but what they are really considering is, "What are their coats like? Are the horses thriving?" I promise your Lordships that at any mink farm that I have visited, you can walk down the rows of cages and ask the owner to open a cage-door and produce a mink, and the animals look glossy, well and happy. Of course they do, if the skins are to be sold.
I should like to see well regulated and prosperous agricultural diversification allowed to continue. But that is not to be the case. The Government have decided that they are going to go on with this Bill of Attainder. All I would say to the noble Baroness is: please may we have fair and promote compensation? Can we have an assurance that the mink farmers will not suffer the same fate as the pistol shooters? Two years ago, pistol shooters were promised fair
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compensation, and compensation for their specialist equipment; they have not yet seen it. There has been enough uncertainty affecting the fur farming industry for the past three years. Our job is to obtain an undertaking from the noble Baroness that she will proceed promptly with the quick delivery of a fair compensation scheme.
10.25 p.m.
Baroness Mallalieu: My Lords, I too should declare an interest, albeit a tenuous one. The British Fur Trade Association has affiliated membership of the Countryside Alliance, of which I am the current president. The Countryside Alliance holds no views on the Bill, which it regards as a matter for the NFU, to which, I understand, most of the remaining fur farmers belong. The views I express are entirely my own.
I should make clear as a starting-point my strong dislike of intensive animal husbandry. I particularly dislike the keeping of animals and birds in small cages. Legislation which improves the conditions in which such livestock are kept will have my full support where it is based on proper veterinary advice.
I also dislike the terrible damage which escaped animals—mink, in particular—have caused to our wildlife and our rivers and streams over many years. Many of the escapes were not the fault of the farmer, but the result of deliberate terrorist activity committed by people who said they loved animals. Many of the mink released died of starvation or in road accidents, being unfamiliar with life in the wild. Those which could be rounded up could often not be returned to their original family groups and often fought, with terrible injury or death as a consequence. Some animal lovers!
If the Bill had set out further to regulate and improve welfare conditions, particularly if it had done so in conjunction with other European countries where fur farming takes place, and if it had contained provisions to encourage the small number of remaining farmers to surrender their licences in return for fair compensation, it would have had my full support.
Instead, we have a Bill which seeks to criminalise 13 farmers, some of them in business in a very small way. One must pause for a moment and ask why the Government are proceeding with this matter now, at a time when the Session is crowded to bursting point with other legislation and when, I imagine, every government department has draft Bills of real substance for which it has been unable to secure parliamentary time—particularly when the European Commission has begun to work on its own fur farming directive.
The answer is to be found in the history of this matter. Before the 1997 general election, Mr Elliot Morley, who is now the Parliamentary Secretary to the Ministry of Agriculture, was appointed shadow spokesman for animal welfare. He accepted research assistants from the International Fund for Animal Welfare—which he properly declared in the Register of Members' Interests. That organization, contrary to

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the description sometimes given it by the media, is not a charity. It is an American-based organisation which appeals to the public for money by publishing sensational animal rights advertising campaigns world-wide. It receives donations in vast measure. Successful campaigns are important to it because they generate more funds for future campaigns.
As part of his brief, Mr Morley produced a leaflet entitled New Life for Animals which, among other things, advocated a ban on fur farming. There was no manifesto commitment to that effect. That is the pledge to which the Minister has just referred.
Shortly before the election in 1997, the Political Animal Lobby, a sister organisation of the International Fund for Animal Welfare, from which most of its funds were derived, made donations to a number of political parties, by far the largest of which was a sum well in excess of £1 million to the Labour Party. So it is that as this Parliament moves towards its closing stages somehow the Bill finds a place in the crowded legislative programme.
At Second Reading in another place Mr Morley made it clear, as the Minister has done today, that the Bill was not introduced primarily as an animal welfare measure, quite unlike the Private Member's Bill, introduced in another place by the honourable Member for Liverpool Garston, which did not reach this House. I suspect the reason is that the Government knew very well that if they had tried to do so they would almost certainly have fallen foul of Articles 28 and 29 of the European convention. Instead, they placed before Parliament a public morality Bill in an attempt, which I believe the Minister frankly admitted, to slip it in under Article 30.
In another place Mr Morley said:
"Fur farming is not consistent with a proper value and respect for animal life".—[Official Report, Commons, 15/5/00; col. 41.]
The noble Baroness repeated those words today. According to Mr Morley, apparently it is morally acceptable to rear and kill an animal for its meat but not right to rear it and kill it in order to wear its skin—unless the skin is a by-product of the meat, in which case it becomes morally acceptable again.
The truth is that it is of no consequence to the animal what happens to it after it is dead. It is, surely, the conditions in which it is kept and the way it is treated while alive that should form the basis of legislation which this House should consider. If the conditions in which mink are kept currently are unsatisfactory, by all means legislate to change and improve them. But, please, spare us the politically correct claptrap about public morality in the way this Bill has been introduced.
Significantly, following its examination of the industry in this country, the Farm Animal Welfare Council, which clearly had reservations about fur farming, as I do, did not advise a ban but listed recommendations for improved conditions. The reality is that no single mink will be any better off as a result of the Bill. As the noble Baroness said, the majority will be killed. So long as there is a profitable
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market, mink will be bred and kept, often in less satisfactory conditions, in the 12 EU countries where fur farming continues to be legal.
This Bill will almost certainly reach the statute book because the farmers have, frankly, had enough of terrorism and vilification. Those 13 farmers will lose their livelihoods. The very least that the Government can do if they want this law is to provide proper compensation, which involves giving an undertaking now that that will include loss of earnings. It is not good enough to say, as did Mr Morley in the other place, that the Government will consider that aspect after the Bill has passed into law and the consultation exercise has been completed. After all, the beneficiaries of the Bill are, on the one hand, the Government who will be able to say that they have discharged a debt, and, on the other, the animal rights lobby which will draw some comfort from it.
I warn the Government of this. When you once take the animal rights shilling and begin to dance to its tune the music does not stop when you want it to, and serious problems are likely to follow. It will become increasingly difficult to manage the countryside and its wildlife properly if the Government are afraid to authorise the necessary culling of badgers when TB is shown to be spread by them to cattle. It will become increasingly difficult to license necessary and important research involving animals with the result that that research cannot be done in this country and our finest doctors and scientists will be forced to go abroad to do this work, and others, not Britain, will benefit from their achievements.
Ultimately, what is the moral difference between rearing an animal to eat it or to wear it? Mr Morley says that there is one, but to the animal there is none. The job of Ministers is surely not to give lectures on morality, to seek to force their personal ethics on others or to do the bidding of rich pressure groups. It is to make real improvements for people and animals, to open up new opportunities for the people of this country, not to make them into criminals.
I have known the noble Baroness for over 30 years. Good sense and sound judgment are her trade marks. I am sorry that she finds herself having to present this illiberal piece of politically correct gesture politics to this House. She has my sympathy.
10.36 p.m.
Lord Monson: My Lords, it is an enormous pleasure as well as a hard act to follow the noble Baroness, Lady Mallalieu. It was interesting to observe in the current edition of the House Magazine that she is by no means the only Labour parliamentarian to regard this Bill with disfavour.
I declare, first, that I have absolutely no interest whatsoever to declare. Unlike the noble Lord, Lord Kimball, I have not met, or had any representations from, the few remaining fur farmers. It is sad, as the noble Baroness, Lady Mallalieu, said, that the noble Baroness, Lady Hayman—she is deservedly popular in all quarters of this House, as the noble Lord, Lord Kimball pointed out—has been landed with the task of

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piloting through this House this thoroughly illiberal Bill. It is not only illiberal but dangerous, setting all sorts of alarming precedents. It is not only dangerous but hypocritical. "Hypocritical" is a strong term, so I propose to justify it.
In order to secure the votes of the urban and suburban population, all too large a proportion of whom are unwilling or incapable of making any mental connection between the meat they eat virtually every day of the year and the killing of animals and the shedding of copious quantities of blood in the process, the Government imply that the Bill is designed to stop a unique form of animal cruelty. But it has nothing essentially to do with cruelty, unique or otherwise. If, after careful research, a team of vets, biologists and other scientists concerned with animal welfare were to recommend that the cages in which these animals are kept are too small for comfort and should be made larger, the Government would be totally entitled morally to legislate to remedy that; and I should happily support them. However, it is clear that, even if the cages were 20 times their current size, it would not deter the Government from bringing forward this Bill.
It appears that it is not humane or practical considerations but doctrinaire considerations which drive them. But even doctrine presupposes a certain consistency and at least a degree of logic. The politically correct term "inappropriate" is subjective and therefore quite inadequate. Therefore what philosophy underlies the Bill? Is it that no animal shall be kept in a cage, however large the cage? But then broiler chickens and the rearing of rabbits would have to be banned, to say nothing of zoos.
Is it that no animals should ever be killed by humans, only by predators or the particular diseases of old age, as members of eastern religions and many vegans believe? Obviously not. Is it that animals should be killed only when it is necessary to human health and survival? Obviously not, as humans can perfectly well survive without meat and the Government have not banned meat—at least, not yet! Is it that animals should never be killed other than for food? Obviously not, as animal experiments which end in death continue and leather shoes are still legal.
Is it that animals should be killed only for the production of mundane products as opposed to luxury ones? Here we may be getting nearer the mark but we are not there yet. After all, animals may still legally be killed for their musk glands, producing extremely expensive scent and much meat in the luxury class; for example, the first grouse of the season, expensive cuts of beef and so forth. As regards non-edible luxuries, consider expensive leather coats, handbags, purses, jewel boxes and so on. Some of the leather doubtless emanates from countries whose religious dietary laws make consumption of the carcasses taboo for the inhabitants.
Nor is fur necessarily a luxury. It would not seem a luxury to anyone obliged to spend a winter in Russia or in the eastern or central parts of Canada. So the logic and the arguments do not add up—unless
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veganism prevails in Government circles and this is merely the prelude to a long series of bans. For self-evident electoral reasons, that is probably unlikely.
About 20 years ago I happened to stumble across one of Bertrand Russell's more striking maxims. It had been translated into French, so I do not know exactly how it read in the original English. Unfortunately, the noble Earl, Lord Russell, who might have been able to help, is not in his place. The gist of the observation was that the test of a country's civilisation was whether it treated small minorities as well as it treated larger minorities. That was a typically acute observation, as large minorities who have the capacity to cause trouble and disruption are often, though not always, treated with some respect by governments. On the other hand, the feelings and interests of small minorities—the minority we are discussing is particularly tiny—can be safely ignored. That is all the more reason, especially bearing in mind the dangerous precedent set by the Bill, why their interests should not be ignored by this House.
10.42 p.m.
Earl Peel: My Lords, initially, I had no intention of taking part in this Second Reading debate. That was until I received a briefing supporting the legislation. When I read what I can only describe as the selective nature of the argument supporting such a ban, and was told that it was immoral to keep animals for their fur and that fur was surely a luxury, I began to feel a sense of indignation. Having listened to what the noble Baroness, Lady Mallalieu, told the House about the history of the Bill and the reason why the Government have introduced it, my antagonism towards it has grown. What she said was sad and disturbing. I cannot disagree with anything she said and I believe that those are the reasons why the Bill is before us today.
I do not want to say much, other than to protest. I have little knowledge of fur farming, but I become extremely angry when mindless vandals release mink into the wild. They then cause irreparable damage to wildlife and those responsible have no concern whatever.
From what my noble friend Lord Kimball said, I gather also that the few remaining fur farmers are now resigned to their fate and, quite understandably, are concerned primarily with receiving the maximum compensation, which I believe they are due. That is a point to which I may return in just a moment.
What really bothers me is the imperious way in which this moral diktat is being placed upon us simply because one or two Government Ministers appear to have a hang-up about wearing fur. They try to substantiate their action by saying that the majority of people are in favour of a ban. As the noble Lord, Lord Monson, said—I agree with him—and as has been said elsewhere and in this House many times, that is no reason to ban anything. The whole principle of parliamentary democracy must be broad enough to incorporate the wishes and habits of minority interests.

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In any event, if we are to argue for a majority point, I can only assume that on Monday the Government will give way on Section 28. I doubt it, but the same principle applies. What is more, I have seen figures—I assume that they are right—which show that over 80 per cent of people believe that it is acceptable to farm animals for any purpose provided that the farming principles are supported by proper standards of animal welfare. I believe that that is the absolute key to this argument. As the National Farmers Union said, we want regulation rather than criminalisation.
I believe that the Government are absolutely right to ensure that proper standards are set and adhered to. I do not believe that any right-minded individual could disagree with that. I am only too well aware that there have been one or two dreadful cases where fur farmers have not gone any way to adhering to those standards, and it is only right and proper that they should have been closed down. However, I should like to ask the Minister whether those affected by the legislation were given an opportunity to meet the required standards of welfare before the legislation was introduced; and, if so, how long they were given to meet those standards.
We are told that fur is a luxury and that there is no justification for wearing it. Who says so? Who makes those subjective judgments? From what I have read in the newspapers—so it must be right, must it not?—it appears that fur is the height of modern-day fashion. The fashion comes and it goes. However, I suggest that that is irrelevant. I believe in the right of the consumer to choose to buy fur if he or she wishes to do so.
We are told that producing—
Baroness Hayman: My Lords, I am grateful to the noble Earl. I believe that I made it clear in my speech that there is nothing in the Bill that prohibits a consumer from buying fur. The Bill deals only with the activities of breeding and slaughtering animals for their fur.
Earl Peel: My Lords, I accept what the noble Baroness says but I still believe that consumers should be able to buy fur which would be banned under this legislation. That is my point. I shall come to the question of imports in just a moment because I was not absolutely certain what the noble Baroness said on that particular point.
We are told that producing fur is immoral. I return to the point that, provided that the welfare standards are of a sufficiently high level, this legislation is, quite frankly, irrelevant. Like other noble Lords who have already spoken, I believe that killing an animal for meat is no different from killing an animal for its skin. It is a perfectly natural phenomenon that has happened since time immemorial. The only reason that it is being stopped now is that the Government have decided that it should no longer happen.
I am reminded of a silly story about somebody who was very dear to me and my family. She went into a shop in Middlesbrough to buy a muff and the person behind the counter said, "Yes, madam. What fur?" She
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replied, "To keep my hands warm, of course." The point of that story is simple. Why should not that lady be given the opportunity of choosing for herself whether she wants to buy a fur? She did not want a synthetic product; she wanted the real thing. I see no reason why she should not be allowed to have it.
The Minister said that alpaca farming would not be caught by the Bill. I cannot see much difference between producing alpaca for the hair on the animal and farming for fur. Ultimately, the animal has to die. Whether it is killed immediately or later in its life makes little difference. I should be interested to know whether the Minister can justify the difference.
The Minister also mentioned imports. As I understand it, at least six European countries have decided not to impose any such legislation. Will the fur produced in those countries be banned in this country? If not, that is double standards. If the Government intend to prevent such imports, I should be interested to know how.
Finally, I come to compensation, which the noble Lord, Lord Kimball, mentioned. The Government have said that capital assets will be compensated. However, the fur farmers' operations will not be available for alternative income production. I hope that the Government will take loss of income into account in the compensation package. I think that it was the noble Lord, Lord Kimball, who pointed out that the Home Office has been immensely slow in dealing with compensation for firearms under the two Acts. The Government have a bad record on compensation. I hope that the Minister will assure the House that there will be no delays in compensating fur farmers for what I believe are their rights under this confiscation Bill.
To summarise, I believe that the Bill is a nonsense. It is based on no more than the cynical whims of a few Ministers. It has no logic behind it. It would be only too easy to argue that we do not require meat to survive. That is true. Will we all one day be forced into being vegetarians for the sake of animal welfare and political correctness? I remain bewildered about why the Bill has been introduced in this way. I hope that the Minister will be able to explain further why we have to have it.
10.54 p.m.
Baroness Gale: My Lords, I welcome this Bill to end fur farming in England and Wales. It is possible that I will be a lone voice in the Chamber. I have been involved for many years in animal welfare organisations, including being the vice-chair of the Labour Animal Welfare Society.
I welcome the Bill for a number of reasons. The first is that there is a moral case to be made. Government have a special role in defending the interests of the innocent and the vulnerable, and that is what this Bill addresses.
Most people want to live in a society that discourages the infliction of suffering; to live in a less cruel society. Government cannot make people be

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kind to animals, but they should try and reflect the genuine concern of the majority that cruelty does not prosper. I believe the Bill contains these sentiments.
My second reason for supporting this Bill is that no one needs to wear mink fur. I will quote from a book called Cruelty and Christian Conscience published in 1992:
"In today's sophisticated world, the killing of creatures for the sake of their fur, often with great cruelty, is entirely unjustifiable. Humans do not need to wear fur. There are so many attractive alternatives available for those who want to be seen in 'fur'. It is now possible to buy simulated fur, which is warm and attractive and complimentary to creatures it copies. In a civilised, aware, society the killing of creatures for their pelts has no justification"
I add that fur farms breed mink for the sole purpose of providing the fur for mink coats, mainly for women to wear. As someone who has spent all my working life defending and supporting the rights of women, I could not defend the right of a woman to wear a mink coat. It is not necessary and I believe it is sheer vanity.
My third reason is that there is a clear desire by a majority of people in this country to end fur farming, and public opinion polls have shown that 75 per cent of people support a ban on fur farming. Hardly anyone in this country now wears fur. All big department stores have closed their fur departments. I am not aware of any stores, either big or small, that now sell furs in this country.
This is surely a question of consumers not just voting with their feet, but shouting in a very loud voice that they do not wish to wear fur. The Bill does not state that department stores cannot sell fur in this country if the consumer wishes to buy it. Consumers have clearly shown that they do not wish to purchase fur garments and hardly anybody in this country now wears a fur coat.
I believe this is a good Bill and will end the practice of breeding animals simply for their fur. The fur farmers who would have to cease business would be compensated. The Bill gives them time to adjust to their new circumstances, as Clauses 1 to 4 will not come into force before 1st January 2003. The Bill reflects public opinion and the majority of people welcome it.
In conclusion, this Bill deals with moral issues. it deals with how society cares about creatures for which we have responsibility, and it deals with unnecessary cruelty.
The people of this country in the main welcome it, and, as I understand it, as has been mentioned earlier in this debate, the fur farmers have accepted the Bill.
I am pleased this Bill is with us today. I believe this Labour Government have shown great courage in bringing this Bill forward, and I am very proud to be part of a Government that can bring this measure to us tonight. I look forward to its smooth passage through your Lordships' House.
11 p.m.
Lady Saltoun of Abernethy: My Lords, I have been looking at the feet of government Ministers and at the feet of Members of the Government whose Bill this is.
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I have observed that most government Ministers and most Members of the Government are shod in leather shoes, or at least shoes which appear to be made of leather—what I think the shops advertise as leather uppers. Certainly, the Minister is wearing a very, very elegant pair of shoes which I would suspect have leather uppers at least. I have also observed that a great many female Members of the Government have leather handbags.
I am very sorry and perhaps I am extremely stupid and obtuse but I cannot see the moral difference between killing an animal for shoes or to make a handbag or to eat a steak. I just cannot understand why it is so terribly morally appalling to kill an animal for clothing but apparently not morally appalling to kill an animal for food. I just do not think this makes any sense at all.
What seems to me important is the quality of life that the animal has while it is alive. What we should surely be going towards is enforcing regulations on the keeping and breeding of animals for food or arty other purpose rather than prohibiting their breeding at all. This is just totally idiotic.
If it was the month of February, I would be wearing my fur coat in this Chamber now. Often in February I would very much like to because it gets pretty chilly. I can only say to your Lordships that I did not have a fur coat until animal rights activists started throwing paint at people who were wearing them. When that happened, I went out and bought a fur coat, simply in order to strike a blow for freedom. I want tonight to strike a little blow for freedom.
11.5 p.m.
The Earl of Shrewsbury: My Lords, I declare an interest as a member of the National Farmers Union and of the Country Landowners Association. I congratulate the noble Baroness, Lady Mallalieu, on what I thought was an astoundingly good speech. She hit the nail on the head with every sentence.
I am neither in favour of nor against the farming of animals for their fur. I have no interest in it. But I am totally against the banning of any legal activity without very considerable justification. I firmly believe that the route that this Government should be taking is that of strong regulation of the industry, ensuring that the highest possible standards of animal welfare are enforced and complied with.
I was entirely against the banning of handguns—indeed, I was very much involved in that campaign—first, by the last administration, my party, and then by the present Government. The banning of handguns has achieved absolutely nothing. I am absolutely certain that the banning of farming animals for their fur will also achieve absolutely nothing, for the very reason that this industry in the United Kingdom is minuscule, with only 13 or so producers. Probably the Government would do a great deal better to ban the activities of those who wish to disrupt the legal activities of those who farm animals for their fur and for research purposes.

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Some years ago a cousin of mine owned and ran a mink farm on the edge of Cannock Chase in Staffordshire. I might add that it was a very well-run, humane operation. One night his farm was raided and broken into. The cages were opened and the mink let free. In the morning following the break-in many mink were found cowering in the corners of their pens through sheer fright. A number had been released into the wild and many died from stress. They were captive animals which had never had to hunt for food. They were fed regularly and well and had never lived in a wild environment. Those which were released and were not recaptured caused absolute havoc among the wildlife of the countryside around where I live and they certainly still do. We try to catch them all the time. They have now become feral. So much for animal rights.
The Government justify this ban with the words "public morality". That is a little rich and extremely weak. If fur farming is contrary to public morality, is it publicly moral to kill a sheep and sell its skin? Is it publicly moral to kill a beef animal and sell its hide to be used for leather shoes, jackets, bags and what have you? Is it publicly moral to rear rabbits for human consumption and use their pelts for clothing? I have a serious objection to Halal slaughtering, as do many veterinary surgeons. Is Halal slaughtering against public morality? I doubt it. Perhaps the Minister can tell me: if not, why not?
A recent public opinion poll by Taylor Nelson Sofres plc revealed that the British public, contrary to what the noble Baroness, Lady Gale, mentioned, overwhelmingly support the farming of animals for any purpose provided that good animal welfare is practised. Surely, that is the basis of livestock farming. The poll was not one conducted on behalf of those groups which have lobbied the Government for a ban on fur farming: it had a much wider base than that. It included all the British public from every walk of life, not just the animal liberationists.
I am sure the Government will get their ban. We all know that. It is up to Parliament to make absolutely certain that those who suffer the loss of their legal business are treated fairly. They must be fairly and adequately compensated for their enforced loss of business.
Fur farming is a highly specialist type of farming. The equipment used cannot be used for other purposes. Therefore, when the ban becomes law that equipment will be rendered completely useless. Compensation for that equipment must be paid. The precedent for such compensation is, of course, the handgun ban. Although it took a long while for the compensation to be paid, it paid for the affected weapons and other ancillary equipment. In addition, the farmers who will lose their businesses at the introduction of this ban run profitable businesses from which they derive their living. Their capital is tied up in their businesses.
We in the agricultural industry constantly hear the Government telling us to diversify. What could a fur farmer diversify into? Perhaps the Minister can
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provide your Lordships with a few ideas. It would be grossly unjust if those affected by the ban were not to receive compensation for the loss of their business. Their business should be valued on the basis of a going concern by an independent firm of accountants knowledgeable about fur farming and the Government should pay the full compensation valuation.
I understand that the Minister, Mr Morley, stated in another place that compensation would be looked at after the ban has taken effect. At the beginning of this debate, the Minister mentioned the cut-off date, which I believe is 2nd March 1999. I am not sure of the significance of that date. Perhaps the Minister can advise the House on that.
Mr Morley's comments, as I have heard them, are simply not good enough. This House must fight to ensure that adequate and fair compensation is built into the Bill before it passes into law. The amount of compensation involved will not be particularly large.
In conclusion, I believe the Bill to be wholly unwarranted and completely unnecessary. It is yet another heavy-handed approach by a nanny Government which believes in placating the few with loud enough voices and big enough pockets. It will achieve absolutely nothing, while altering dramatically the lives of the few who have farmed legally, efficiently and humanely for years. The fur trade which will disappear from this country will be replaced by other fur farmers abroad where welfare standards are atrocious in comparison to those practised here. The Government will be doing no favours whatever to those animals which are farmed for their fur in this country.
11.11 p.m.
Baroness Miller of Chilthorne Domer: My Lords, I find tonight's debate most interesting, particularly concerning issues of morality and especially so after yesterday's lengthy debate when the Conservative Benches were arguing for many issues, about which our children must be clear in moral terms, to be strictly laid down in legislation. The Conservatives wanted to impose strict, dogmatic views through legislation, whereas today the moral and philosophical issues should apparently not play any part in the consideration of this Bill.
I find that particularly ironic because the young people about whom we were talking yesterday do not care about very much in politics. However, one issue which usually makes them stand up to have their views heard is that of animal rights. They are interested in animal welfare issues. Indeed, if a poll were taken among the under-30s of their views on fur farming, the results would be very different—
Earl Peel: My Lords, I thank the noble Baroness for giving way. She referred to "animal rights". Does she mean animal rights or animal welfare, because there is a world of difference between the two?
Baroness Miller of Chilthorne Domer: My Lords, I am talking about young people interested in animal

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rights. In addressing the Bill, I shall move on to talk about animal welfare. Young people are interested in the issues of animals and how they are kept, in both animal rights and animal welfare, but they would call it animal rights.
We have moved on and young people are anxious that we move on further. The wearing of fur coats started in the caveman era when there was no other option and when animals lived in the wild. They were taken for their fur coats and died in the wild. Things were very different. Now there are too few animals in the wild for us to want to take them for their coats. We have mostly stopped being hunters and have developed alternative clothes.
The noble Lord, Lord Monson, quoted other examples, such as musk glands. I would add the example of aphrodisiacs from tigers. We do not find that an acceptable way to use our wild animals. It is interesting that no one this evening has differentiated between the fact that mink are essentially wild animals that roam over vast territories and have a semi-aquatic life and that, through tradition, sheep and cows have become domesticated and live more naturally.
Perhaps I may draw the attention of noble Lords to the five freedoms listed by the RSPCA as a measure of whether or not it is reasonable to keep an animal for the purpose man wishes. They are freedom from thirst, hunger and malnutrition; freedom from the need for appropriate comfort and shelter; the prevention or rapid diagnosis and treatment of injury, disease or infestation; freedom from fear; and freedom to display most normal patterns of behaviour.
It is important to hear in mind that the mink is essentially a wild animal and has a semi-aquatic lifestyle when comparing them with sheep. I declare that I am not vegetarian and wear leather shoes. I find the fact that we farm sheep and cows for food acceptable. But I can imagine a time in the distant future—200 or 300 years hence—when people view that differently.
Although we on these Benches are not generally in favour of banning things and it is not a road we enjoy taking, in this instance we will go along with the Government in their wish to introduce this Bill, particularly in view of the fact that the industry has now run down to a very small size and compensation could, if the Government were so minded, be generous to those remaining in it. That is an important consideration in choosing this moment to phase out the keeping of animals for fur.
I am concerned about the issues of compensation. There may be a temptation on the part of the Treasury to say that, because only a small number of businesses are involved, the issue itself is very small. I remind noble Lords of the reply of the noble Lord, Lord McIntosh, to me when I asked a question in relation to the sparkling cider industry. He said, "I am sorry for the individuals concerned, but they are very few". In that case there were 28 or 29. So, although there may be only a few fur farmers involved, to them it is a big issue. I urge the Government to be clear as to what compensation offer they will make. We may need to come back to that issue at a later stage.
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In conclusion, I should like to ask the Minister a question on a point of detail: what will happen to the livestock? Will there be an option to export it to other countries or do the Government expect the stock to be killed? Other noble Lords covered the points in relation to the re-use of assets.
11.17 p.m.
Lord Luke: My Lords, it is very late and I shall do my best not to keep your Lordships too long. I declare an interest as a member of the CLA.
This "nonsense of a Bill"—I forget which noble Lord said that but it thoroughly describes the Bill—is brought before your Lordships with the object of stopping fur farming in this country. It will stop a small band of beleaguered farmers from carrying on their legitimate businesses and from earning an entirely respectable living thereby. It criminalises those people on the grounds of what the Government call "public morality". That is not the same reason as that given on the introduction of the failed Private Member's Bill in another place, which was animal welfare". I wonder why.
However, those farmers are not the real target. Those the Government believe they are getting at are the wearers of fur. So where in this Bill do the Government ban the wearing of fur in this country? Or is it not included because they have created the biggest demand in history for ermine? I fear not. It is because such a Bill would contravene European law and human rights. This Bill, therefore, is a second-best attempt to satisfy their animal welfare paymasters.
Apparently there is a difference between wearing fur from an animal killed specifically for eating and one which is killed to supply clothing. I am afraid that I, like many other noble Lords, cannot see any difference at all and believe that such an argument goes directly against common sense.
If this principle of, "Thou shalt not do this because we don't like it", is enshrined in legislation, as it would be by this Bill, it would be only too easy to extend it to anything that this Government feel that they want to extend it to—a point made by my noble friend Lord Peel and the noble Lord, Lord Monson. The wearing of leather has been mentioned. The argument applies also to sheep fleeces, rabbit skins, the eating of any meat and certainly to the abolition of hunting, shooting and fishing. People's rights do not come into it unless those who might be targeted carry a significant number of votes.
This Bill will not in any way influence the wearing of fur which is now, as was mentioned by my noble friend Lord Peel, on the increase throughout the world; neither will it affect fur farming elsewhere in the EU. It will simply hand an increased share of the market in fur production and trade to our EU competitors. It will not improve the lives of mink anywhere in the world. I should point out to the noble Baroness, Lady Miller, that, although they seem to be pretty wild if you get bitten by one, mink are in fact domesticated and have been so for some 80 years. As has been said, if you

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let them out into the countryside, they do not know what to do. Of course, they soon learn, but they do not know at first.
We on this side of the House are extremely sensitive to any suggestion that we are not in favour of the highest possible welfare standards for animals kept for farming purposes or, indeed, for any purpose. I believe that we have sometimes been impugned on this issue. Indeed, I wonder whether noble Lords are aware of the way in which really wild mink and foxes are trapped in Canada, Russia, South America, and so on. They are caught by the leg and either bleed to death, starve to death or freeze to death; or all three at once, and slowly. Is that what the animal welfare lobby wants? Of course not, but those people want to ban all wearing of fur. I wonder what noble Lords think about Eskimos. They trap a great number of animals in this rather unpleasant way, but they need the fur to stay alive.
Government supporters who oppose the wearing of fur as part of other people's legitimate lifestyle are determined to force their views on to the rest of us. As my honourable friend Malcolm Moss said in another place, quoting the journalist Roger Scruton:
"To imagine that we have the right to outlaw those lifestyles merely because they get up our class-conscious noses, is to base our legislation not on public morality, but on private snobbery"—
I give way.
Baroness Castle of Blackburn: Thank you. I am very grateful. The noble Lord referred to the leg-hold trap. During the 10 years that I was a Member of the European Parliament, I was an active member of the group on animal welfare. One of our prime aims was to get the leg-hold trap banned, not only in Europe—we succeeded in that—but also throughout those countries that traded with us in Europe. Parliament passed that law but, I am sorry to say, our own Commissioner, Sir Leon Brittan (not my party's Commissioner; the Commissioner of the noble Lord's party) argued against it ferociously on the ground that the World Trade Organisation would not tolerate it. So we did know in Europe; and we did care in Europe. We will fight and continue to fight for the abolition of the leg-hold trap. It is the indifference of people like the noble Lord which paves the way for the continuation of this barbaric habit, which I think is contrary to public morality.
Lord Luke: My Lords, we always love to hear the noble Baroness, Lady Castle, speaking; indeed, it is absolutely marvellous. However, I believe that what she has just said is not terribly relevant to what happens in Europe. Unfortunately, due to that intervention, I believe that I have lost my thread completely.
In spite of what the Minister said, it seems that there is a possibility that this Bill may contravene European law, whatever may be the reasons for changing from animal welfare to public morality as a way of getting past it.
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In 1998, fur-bearing animals, together with cattle, pigs and sheep, were identified as being part of the established farming industry. Would the European Parliament and the Council of Ministers have supported that if mink and fox farming were seen as cruel and unnecessary? Incidentally, the British Government voted in favour of that measure. Has the Minister any estimate of the likely cost to the British taxpayer of defending possible actions in European courts?
I shall not enlarge on the public morality argument as it has been covered by other noble Lords, in particular in the interesting and informed speech of the noble Baroness, Lady Mallalieu. As far as I am concerned, it means nothing. However, I remind noble Lords that Nick Brown himself admitted on 22nd June that,
"'Public morality' is not susceptible to an absolute definition: it inevitably involves subjective judgment".—[Official Report, Commons, 22/6/00; WA300.]
The ticklish question of compensation has been mentioned by many speakers. As my noble friend Lord Kimball said, fur farmers have been under threat for many years from both the Labour Party and from a band or bands of terrorists whose motives, beyond an obvious delight in destruction for its own sake, are dubious in the extreme. So, it seems only right and proper that the compensation that the Government have correctly guaranteed to pay to dispossessed fur farmers should reflect the real value of the businesses which the former are closing down. What criteria will be used in assessing levels of compensation?
It will, I think, be legal to buy mink pelts in France after the enactment of this Bill, bring them across the Channel and sell them to retailers here and abroad, so what a waste of taxpayers' money in compensation to achieve precisely nothing. This demonstrates, if nothing else, this Government's fixation with presentation, which they put above substance, and with populism, which they put above the rights of minorities. This, I am afraid, is the act of an illiberal and intolerant government. Public morality means, in effect, public opinion for this Government. As my noble friend Lord Peel said, support for minorities and minority opinion is perhaps the most important factor in a properly democratic system of government. Anything else is an abuse of democracy.
We on these Benches will not divide on the Bill, but, make no mistake, we do not like it at all. I thoroughly agree with my right honourable friend Douglas Hogg, who called it in another place,
"an odious little Bill—political correctness gone mad".
11.27 p.m.
Baroness Hayman: My Lords, we have heard some strong language, as from the noble Lord, Lord Luke, just now, and some interesting arguments. I hope that noble Lords meant to be kind in the words that they addressed to me and that I am not in any sense an "illiberal", if I may coin a noun.
I say to the noble Lord, Lord Luke, that simply because a view or an activity is performed by a minority that does not ipso facto make it either moral

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or acceptable. Judgments have to be made. While he is quite right to say that we should be careful of the rights of minorities, simply because a minority wishes to indulge in something particularly unpleasant does not mean that it should be supported or allowed to be legal.
The Earl of Shrewsbury: My Lords, can I conclude from what the noble Baroness has just said to the House that therefore the activities of the various animal rights terrorists over numerous years are morally acceptable?
Baroness Hayman: Absolutely not, my Lords. I do not think that anything I have said has suggested that they are either morally or legally right, as I think I made clear in my speech. I have made clear recently in the issue of the sabotaging of the Krebs trials in regard to badgers and bovine TB the absolute opposition of the Government to illegal activity and to the disruption of legal pursuits.
I was trying to explain to the noble Lord that the issues which have been explained in very black and white terms today are issues of judgment and value judgment. Simply because something is supported by either a majority or a minority does not mean that the view of the Government of the day must be that it should be enacted in legislation. We can think of many examples of that—for instance, the analogy with Section 28 has been made.
I was interested when the noble Lord, Lord Luke, said that he found it difficult to see the nuance between animals for food production and animals for fur production. The noble Lady, Lady Saltoun, found it difficult to understand the difference between the use of a by-product of an animal that was kept for food—for example, for leather and sheepskin—but the noble Baroness, Lady Miller, did not find it difficult to see the distinction between the two.
I am sure that when we come to the discussion of an issue which will be hotly debated in this House—fox hunting—there will be those on the Benches opposite who will argue for the continuation of the hunting of mammals with hounds but who would not argue for the reinstatement of bear baiting and cock fighting.
Judgments have to be made about what is appropriate and acceptable in a society at any one time. The speech by my noble friend Lady Gale made it clear that it would be wrong for noble Lords, whose opinions I respect and who are perfectly entitled to believe that the line is being drawn in the wrong place at this time with this particular Bill—I disagree with them, but they are entitled to that view—to assume that they are dealing with the views of one or two Ministers in another place. A large number of people support a ban on fur farming. There has been a great deal of correspondence about it and a great many opinion surveys that have borne that out. I am not suggesting that just because something is supported by a large number of people or a small number of people
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it should therefore become government policy, but one should not underestimate the amount of support for this measure.
Earl Peel: Does the noble Baroness accept the findings of the opinion poll which established quite clearly that farming for any purpose is acceptable—I think 81 per cent of the people polled agreed—provided that the animal welfare standards were up to scratch? That is the key issue.
Baroness Hayman: I have not seen that particular poll; I should like to see it. I accept the noble Earl's view that that may well be the view of some people or many people. In many opinion polls, the answer you get depends very much on how you phrase the question. I was not basing the Government's position simply on majority support, as I think the noble Earl accepts, but on the Government's interpretation of public morality at the present time. I am sure that we will have that debate on Section 28 on Monday.
It is important that I should say one thing very clearly. In the course of speeches—which I know were strongly felt—aspersions were cast on the motivation of my honourable friend Mr Elliot Morley in terms of the introduction of this Bill. Noble Lords who know my honourable friend should accept that he has a long-standing and deep and personal commitment on these issues. They may not share his views but I do not think that he should be accused in any way of hypocrisy on this issue.
Baroness Mallalieu: My Lords, I thank the noble Baroness for giving way. It may have been my remarks which gave rise to the comments that she has just made. I would not for a moment intend that anything I said should reflect a suggestion that Mr Elliot Morley is other than wholly sincere in the views which he holds.
Baroness Hayman: My Lords, I am extremely grateful to my noble friend. I felt it important to get that on the record.
I dealt with some of the basic arguments in my opening remarks. I was asked why we consider that it is not right to kill farmed animals for their fur but acceptable to kill farmed animals for meat. That reflects the view that the breeding of animals for slaughter is not right or wrong per se in any circumstances. It depends on the purpose for which the animal is slaughtered. I hope noble Lords will agree that it is incumbent on us always to challenge the motive for killing anything. If the motive or purpose does not justify the slaughter, the slaughter cannot be justified by the fact that the animals were bred specifically to be slaughtered for that purpose. We believe that the primary purpose of keeping an animal for the production of food is justified in terms of sufficient public benefit and that that is so even where

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the production of fur or hide is a secondary purpose of keeping the animal. I accept that noble Lords may not share that view, but that is our view.
Lady Saltoun of Abernethy: My Lords, I am very sorry but I do not think that that is acceptable. That is the doctrine of expediency.
Baroness Hayman: My Lords, it is a doctrine of analysing differences in specific circumstances and coming to judgments about the nuances and rules which one applies. I accept that the noble Lady may not agree, but I am saying that the Government see a distinction. We believe that that distinction around purpose will be seen by other people; that the support of Members in another place, reflecting, one hopes, the views of their constituents, was strongly in favour of the Bill; and that many people can see such a distinction between the farming of animals for food and the farming of animals for fur.
Some specific questions were raised. The noble Lord, Lord Kimball, worried me with his assertions on Acts of Attainder. Erskine May tells us somewhat reassuringly that Acts of Attainder are now of historic interest only. Since they followed on the imposition of death penalties, I am sure the noble Lord will be reassured by that. It was not suggested that the abolition of either bear baiting in 1835 or cock fighting in 1849 was equivalent to an Act of Attainder. However, I understand that noble Lords have strong feelings. I understand that noble Lords have questions to ask. Perhaps I may deal later in my speech with the issue of compensation. I suspect that we shall return to that issue at later stages of the Bill.
The noble Lord, Lord Luke, challenged my assertion that the Bill is compatible with the European Convention on Human Rights. Under Article 1 of its first protocol, the convention guarantees the right to peaceful enjoyment of property and possessions. Any interference with the use of property must achieve a fair balance between the general interests of the community and the individual's right to the enjoyment of possessions. It is the view of the Government that the provisions are compatible with the ECHR. We believe that over-riding moral arguments can be brought forward in favour of a ban. A period of at least two to three years is being allowed before the ban comes into force and compensation will be payable. There will be a duty to consult on compensation with those affected.
Perhaps at this point I may respond to the query raised by the noble Baroness, Lady Miller, about what is to happen to the livestock involved. A variety of options are available at the discretion of the farmer. We believe that the majority will go for slaughter for the pelts, but they could be sold abroad, as long as that is done before the ban comes into force. In terms of exports and imports—a point raised by the noble Earl, Lord Peel—as I tried to make clear, nothing in the Bill affects the trade in fur. Only the trade in animals is affected.
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I believe that the noble Earl also suggested that we should be concerned about animal welfare standards in countries where fur farming is not banned. The noble Earl, along with the noble Lord, Lord Kimball, was absolutely right to point out that the only other country within the EU to have imposed a ban is Austria. I believe that the Dutch are also looking at a potential ban.
I should also point out that the EU directive on the protection of animals kept for farming purposes also covers animals farmed for their fur. That directive lays down minimum welfare standards. We have participated in Council of Europe discussions on changes to raise standards in order to fulfil our obligations as regards animal welfare throughout the Community.
Earl Peel: My Lords, is the noble Baroness saying that mink produced in another European country could still be imported for use in this country? If that is what she is saying—I see that she is shaking her head; that is not what she is trying to say—I would regard that as totally hypocritical. Could she confirm her statement?
Baroness Hayman: My Lords, I am trying to find the exact language to make the position absolutely clear. The difference is that the import of animals to breed and slaughter for fur would be illegal. The import of the fur itself would not be illegal. That difference occurs because each country within Europe is entitled to decide for itself the balance between public morality and the carrying on of a business. Different countries take different views on that issue. That is the situation.
I was trying to suggest to the noble Earl that we have not completely abrogated responsibility for ensuring that, as regards standards in animal welfare, we make every effort to take the lead within the Community. That is because we uphold very high standards of animal welfare in this country. Only last Friday the noble Baroness and I discussed the need to secure a level playing field on this issue.
The noble Earl, Lord Shrewsbury, asked me about the significance of the cut-off date for compensation; namely, 2nd March 1999. That date was chosen because it marked the Second Reading of the Private Member's Bill in another place. Obviously, one needs to put a constraint on the potential of people entering the business theoretically in order to claim compensation.
Perhaps I may move on to the issues relating to compensation. I believe that throughout the debate it has been recognised that, given the support now offered by the NFU and from the affected farmers, the Bill should progress—although I take the point that that acceptance has not come about on the matter of principle. A great deal of interest has been expressed on the issue of compensation. As I explained, the Bill is an enabling measure and it is not appropriate for details of the compensation scheme to be included in the Bill itself. But, on behalf of the Government, I

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should like to reassure noble Lords that we expect fair compensation to be made available to fur farmers put out of business by the ban.
Under the Bill, the Government are required to consult publicly on the details of the compensation scheme. This is in order to allow the views of fur farmers to be taken fully into account in an open and fair manner. I should not want there to be any perception, real or otherwise, that the Government would not take into account the views of the industry.
I have been pressed to say exactly what will or will not be in the compensation scheme—for example, whether it will be based on headage, and whether income and costs associated with closure will be taken into account. We have not ruled out any items at this stage. But to give guarantees now would prejudge the outcome of the consultation exercise, and that would not be right.
Lord Luke: My Lords, I am grateful to the noble Baroness for giving way. She spoke of "consulting publicly". I thought that the consultation was to take place with members of the industry—in other words, the farmers. I did not know that there would be public consultation. Perhaps she would be kind enough to say what that means.
Baroness Hayman: My Lords, I meant that, in the normal sense of the word, it would not be secret consultation. If that is incorrect, I shall of course write to the noble Lord to correct it. It may well be that, for example, trade associations or the NFU are equally appropriate bodies for consultation. Perhaps I may take advice on the point. The answer may be that anyone can comment in a consultation but that the consultation itself will be addressed to the farmers who are affected. As I think I made clear in my earlier remarks, it is from the affected farmers that we particularly want to hear.
In our commitment to providing a fair scheme, we must consider the options with an open mind and be persuaded of the strength of the argument. It will perhaps be of help if I say something about the process that we intend to follow. We are proposing to use professional valuers and accountants to assess the assets and income of fur farmers to assist us in drawing up the compensation scheme. We shall then consult those affected by the Bill over the details of the scheme.
Several noble Lords raised the issue of timing. This is usually done over a two-month period. The Government will then consider the responses to the consultation exercise and draw up a statutory instrument to be laid before Parliament. It would be wrong to suggest that that would not take a number of months, but the Government understand the need to move as fast as possible on the matter. As I said, there
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is no bar to people who have already wound down their businesses, so long as they were in business on the operable date for claiming compensation. So there is some flexibility there.
I suspect that we shall return to specific details of the compensation scheme at a later stage in our consideration of the Bill.
The Earl of Shrewsbury: My Lords, I thank the noble Baroness for giving way. Will the Minister do her utmost to ensure that the compensation issues are fast-tracked? The experience of many people in the hand-gun world when hand-guns were banned was appalling. The inefficiencies on the part of the unit of the Home Office concerned with compensation were awful. Many people had to wait for months—in some cases years—to receive adequate compensation. I ask the Minister to advise her honourable and right honourable friends that it is most important to provide compensation quickly.
Baroness Hayman: My Lords, I understand the strength of feeling about the need for a speedy response. Obviously, one cannot so telescope a consultation exercise as to make it unfair. Equally, I am a great believer in learning from experience. If there are lessons to be learnt about how these matters can be dealt with more smoothly I undertake to do all that I can to ensure that that takes place.
Lord Luke: My Lords, I thank the Minister for giving away. Can we have this in two months' time, and before the Bill passes through both House?
Baroness Hayman: My Lords, I believe I made clear that this is an enabling Bill which contains a responsibility to put in place a compensation scheme. Once the Bill becomes law we can move on to the next stage. That cannot be done in anticipation of the Bill becoming law. On that basis, I hope the House will give the Bill a Second Reading this evening.
On Question, Bill read a second time, and committed to a Committee of the Whole House.
Lord Carter: My Lords, in rising to move that the House do now adjourn, I cannot help observing that proportionately nearly as many interventions were made during my noble friend's wind-up speech as were made during the wind-up speech of my noble friend Lord Whitty on the Countryside and Rights of Way Bill. I make that observation merely as an innocent observer of the passing scene in your Lordships' House. I beg to move that the House do now adjourn.
Moved accordingly, and, on Question, Motion agreed to.
House adjourned at eight minutes before midnight.