Lords Sitting of 2 April 2001

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

Zimbabwe
Lord Blaker asked Her Majesty's Government:
What dialogues the European Union and the Commonwealth are having with the Government of Zimbabwe; and what progress has been made.
The Parliamentary Under-Secretary of State, Foreign and Commonwealth Office (Baroness Scotland of Asthal): My Lords, the European Union has initiated a dialogue with the Government of Zimbabwe under Article 8 of the Cotonou agreement. Heads of Mission of the EU Troika (Sweden, Belgium and the Commission) in Harare have met with the Government of Zimbabwe to discuss how to take the dialogue forward. We are awaiting the government's response. As far as the Commonwealth is concerned, the Commonwealth Secretary General is responsible for taking forward the decisions taken by the Commonwealth Ministerial Action Group at its meeting on 19th and 20th March.
Lord Blaker: My Lords, I welcome the fact that the European Union is taking steps under Article 8 of the Cotonou agreement—I recall that that allows for action and not simply for words—can the Minister confirm that Mr Mugabe has shown himself not even prepared to consider the new and more generous proposals for land reform put forward by the Commercial Farmers' Union? Even the Commonwealth Heads of Government meeting in October were to take new steps in the direction of better arrangements for dealing with countries that show themselves to be in breach of the basic principles of the Commonwealth, is there not likely to be a great deal more ruin in Zimbabwe before October if the world continues not to act but simply to talk?
Baroness Scotland of Asthal: My Lords, I recognise the concern of the noble Lord about the current position, but the fact that CMAG met and suggested that there should be a three-country team to speak to Zimbabwe is important. We are waiting to see what comes of that. That is not simply talk; it is a positive action to try to ensure that Mr Mugabe understands the nature of the concern being expressed internationally.
On land reform, noble Lords know that we have said consistently that we would support a land reform programme which was transparent, fair and
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cost-effective and which formed part of the wider programme of the Government of Zimbabwe to reduce poverty as agreed by them in the 1998 Land Conference. We are doing everything that we can, as are our international partners, to ensure that Mr Mugabe understands the nature of the concerns and addresses them with greater vigour than he has done so far.
Baroness Williams of Crosby: My Lords, in view of the generous nature of the offer made by the Commercial Farmers' Union, can the Minister tell the House whether the World Bank has shown any interest in matching funding for that purpose? On a different point, can she also tell the House whether the leaders of the opposition are currently safe or have fled the country?
Baroness Scotland of Asthal: My Lords, I cannot give the noble Baroness an answer in relation to whether the World Bank has indicated its willingness to find matching funds, but I can undertake to make inquiries, and I shall write to the noble Baroness in due course.
I can reassure the House that we are in contact with the opposition. My right honourable friend the Foreign Secretary last spoke to Morgan Tsvangirai, the president of the Movement for Democratic Change, on 19th March. It is important that we keep proper track of exactly what is happening, listen acutely to the advice and to what is said to us by the opposition.
Lord Peyton of Yeovil: My Lords, can the noble Baroness consider stretching the dialogue to include the Government of France, as it may then come to light whether President Chirac is more animated by his dislike of this country or his sudden liking for Mr Mugabe?
Baroness Scotland of Asthal: My Lords, I can reassure the noble Lord that France is fully engaged in the EU dialogue. I presume that the noble Lord refers to the fact that Mr Mugabe visited France to discuss these matters. However, it is right to tell the House that I do not believe that he found that an entirely satisfactory experience. Everyone was given the opportunity to explore with him the difficulties with which he is challenged in Zimbabwe. I believe that the fact that he gave himself that opportunity to hear and to listen is a matter for congratulation as opposed to commiseration.
Baroness Chalker of Wallasey: My Lords, will the Minister undertake to talk with the Government of South Africa, who, despite criticism in some British press, have been making a tremendous effort to try to get other ministers, as well as President Mugabe, to see the damage that is being caused by the current policy to the whole of southern Africa?
Baroness Scotland of Asthal: My Lords, I can certainly reassure the noble Baroness that we are talking seriously to our South African colleagues on these issues. The Government of Zimbabwe are clearly in breach of certain of the principles. We welcome President Mbeki's announcement that he will soon meet President Mugabe. My honourable friend Mr Wilson met the South African Deputy Foreign Minister on 6th March when they also discussed the situation in Zimbabwe. So we are taking seriously the opportunities that are available to us as a result of interest shown by our South African colleagues.
Lord Campbell of Alloway: My Lords. does the Minister have information on the position of the judiciary in that country?
Baroness Scotland of Asthal: My Lords, it is right that there has been a great deal of concern about the judiciary in Zimbabwe. We share the concerns expressed by the UN special rapporteur on the independence of the judges and lawyers. He recently issued several statements and on 12th February he said:
"The Government [of Zimbabwe] must comply with its obligations under international standards and stop harassing and pressuring members of the judiciary. The allegation that the Government has called upon judges to seek early retirement will be seen as a clear violation of Principle 2 of the UN Basic Principles on the independence of the judiciary"
On 19th February, my honourable friend Mr Brian Wilson called in the Zimbabwe High Commissioner to express our concern at the harassment of the judiciary. Furthermore, members of the International Bar Association visited Harare in order to discuss the whole issue of the judiciary and the legal profession and we await their report.
Lord Craig of Radley: My Lords, is it true, as Dr Mugabe has asserted, that his government had reached an arrangement with the previous British government on recompense for the white farmers? He further claims that that agreement was set aside by the present Government. Can the Minister help us about that?
Baroness Scotland of Asthal: My Lords, that is not true. We have consistently set out the basis upon which we will assist as regards land reform. That has not changed. The fast-track programme does not meet the conditions which were set out and we have urged the Government of Zimbabwe to take immediate steps to end the illegal occupation of farms and to restore the rule of law.
Since 1980 the United Kingdom has contributed £44 million to land reform. The EU has also been a major contributor towards land reform in Zimbabwe. Commercial farms bring in about 40 per cent of Zimbabwe's foreign currency and account for 19 per cent of its GDP. We are very much doing our bit, but it means that Mr Mugabe must address the matter seriously and, if I may say so, honestly.

Glencairn
2.45 p.m.
Lord Dubs Lord Dubs asked Her Majesty's Government:
When the British Ambassador to the Republic of Ireland will vacate his official residence, Glencairn; for how much the building was sold; and what was the cost of buying a suitable alternative.
Baroness Scotland of Asthal: My Lords, we have acquired a replacement residence for our Ambassador which is presently being refurbished. Our Ambassador will move to his new residence on completion of the work. It is not our policy to reveal details of price and other terms agreed in such transactions, though I can tell the House that this transaction represented excellent value for money for the British taxpayer.
Lord Dubs: My Lords, I accept that there may be occasions when it is appropriate to dispose of embassies or ambassadorial residences. However, does my noble friend agree that in some countries we occupy buildings of such historic merit and prestige that they add significantly to our diplomatic effectiveness in those countries? For obvious reasons, would it not be a pity if we were to dispose of buildings in that category? I hope that my noble friend can give some assurances to that effect.
Baroness Scotland of Asthal: My Lords, my noble friend is right in saying that some buildings are of such enormous significance that it would be unwise to dispose of them. I can give that reassurance. However, in the 1998 Comprehensive Spending Review, the Foreign and Commonwealth Office agreed an asset recycling target with the Treasury to generate £90 million through sales of properties for the triennium financial year 1999–2000 to 2001–02 and £100 million in the triennium financial year 2001–02 to 2003–04. The proceeds are to be reinvested in capital projects. Targeted properties are those which are over scale, inefficient, poor value for money, not fit for the purpose or of considerable developmental potential.
Lord Glentoran: My Lords, does not the Minister agree that this is another demonstration of the Blair process of dumbing down British responsibilities and influence in other countries?
Baroness Scotland of Asthal: My Lords, I am sure that the noble Lord will not be disappointed to hear that on this occasion, and most unusually, I fundamentally disagree with him. It is clear that there were a number of significant difficulties with the property Glencairn. The noble Lord will know that the distance from Glencairn to Dublin caused difficulty. Indeed, a notorious murder was committed on that road and therefore security issues were involved. The advantage to be gained in selling the property, buying a most suitable Victorian property to replace it and making use of the opportunity to expand and invest was nothing other than plain good sense.
Baroness Rawlings: My Lords, it may have made financial sense to sell the Ambassador's residence of Glencairn, with low fixed interest rates, money cheap to borrow and booming house prices which are a consequence of Ireland's EU membership. But that aside, may I seek the Minister's assurance that this costing down is not part of an overall reduction package? Do the Government have any plans to reduce the complement of staff in Ireland?
Baroness Scotland of Asthal: My Lords, I have no indication that the complement of staff in Ireland will be reduced. If that comes to my attention I shall advise the noble Baroness of it. House prices in Ireland have risen and at the time we sold Glencairn we got good value for it and were able to purchase another property at a good rate. There has certainly been no dumbing down or costing down. We are making judicious good use of the properties available to us and to the maximum advantage. We shall continue to do that.
Lord Skelmersdale: My Lords, given the Minister's rationale for the sale of Glencairn, can she tell us whether any embassies around the world are being closed?
Baroness Scotland of Asthal: My Lords, unfortunately, I found it difficult to hear the noble Lord. I wish him a very happy birthday. The noble Lord referred to the closure of various embassies. I do not know whether he has particular embassies in mind. To the best of my knowledge and recollection, to date we have not closed any without giving proper notice and opening others elsewhere.
Lord Ezra: My Lords, can the noble Baroness indicate whether, generally speaking, when new premises arc required for embassies the policy is to buy rather than lease them, which was the policy in the past that did not turn out to be very cost-effective over the long term?
Baroness Scotland of Asthal: My Lords, we are trying to make the appropriate decisions. To date, the market has tended to indicate that purchase is the most stable way to proceed, but the noble Lord will also be aware that sometimes we need temporary accommodation which is conveniently dealt with by leasing. There is no hard and fast rule. We shall make the best commercial decision for the long term so that we make proper use of all our resources.
Baroness Young: My Lords, can the noble Baroness tell us whether the policy, which I believe she described as asset recycling if I understood her correctly, includes the disposal of other buildings of comparable standing and merit to the residence in Dublin? Does the noble Baroness agree that when in the past Foreign Office buildings have been disposed of, the result has been singularly unfortunate and has not helped our diplomatic representation abroad?
Baroness Scotland of Asthal: My Lords, I can reassure the noble Baroness that the impact on our
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diplomatic relations is fully taken into account before we make a decision as to whether to sell a property. The decision is not based simply on the best market price. We must look at what impact, if any, it will have on our ability to remain diplomatically in the first division.

Mongolia
2.52 p.m.
Baroness Trumpington Baroness Trumpington asked Her Majesty's Government:
What financial assistance they have given to Mongolia following the very severe winter.
Baroness Amos: My Lords, Mongolia has been hit by two consecutive winter disasters, or "dzuds". This winter's dzud alone has affected over 300,000 herders in 20 out of 21 provinces and 1.5 million livestock have died. The Government of Mongolia have launched an appeal for £8.2 million through the United Nations. The DfID has offered £1 million for the provision of emergency relief under the framework of the UN appeal.
Baroness Trumpington: My Lords, I am most grateful to the Minister. Her figures for the losses are not the same as those given me by the Mongolian ambassador to London. He told me that last year nearly 3 million livestock perished in the severe winter and it was anticipated that nearly 6 million would die this year, leaving the herders with no alternative means of livelihood. Does the noble Baroness share my enthusiasm for the Save the Children Fund and will she join me in offering great plaudits for its marvellous work, which I have seen, in difficult conditions in Mongolia?
Baroness Amos: My Lords, I am aware that the noble Baroness has visited Mongolia three times and is becoming quite expert in the field. The projections come from the Government of Mongolia and run until May. Therefore, the figures that I have given relate to the position as of now. As to the work of Save the Children Fund, I agree with the noble Baroness that it does an excellent job in Mongolia. That organisation manages the DfID small grants scheme to the tune of £225,000, which is in addition to the money that we provide through multilateral organisations like the World Bank, the EU TACIS programme and the UN.
Baroness Park of Monmouth: My Lords, as someone who served very briefly in Mongolia, I have a particular admiration for that country, which survives between two very large super-powers. It admires us because we established an embassy there before anyone else. Can I persuade the Minister that, although we have been generous in what we have given multilaterally through the World Bank, the UN and others, direct bilateral aid means a great deal to a small country? Before the UK-Mongolia meeting in May. will the Minister consider the possibility of further

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bilateral aid? Multilateral aid is very slow, ponderous and impersonal. Something that arrives quickly counts much more.
Baroness Amos: My Lords, we have been examining how we give funding to Mongolia. We believe that, because of the additional leverage we achieve through multilateral funding at this time, that is the most important aid to that country. As I said in response to the noble Baroness, Lady Trumpington, we have a small grants programme. I do not anticipate that we shall have a bilateral programme, but we shall study the matter again in the light of the noble Baroness's comments.
Baroness Rawlings: My Lords, we welcome the £245,000 that DfID has given to the Red Cross for operations in Mongolia. Sadly, the recent meteorological tragedy is nothing new to central Asia; it is a recurring problem. Can the Minister tell the House what assistance the Government are offering the authorities in Mongolia in regard to long-term planning and the avoidance of catastrophe?
Baroness Amos: My Lords, long-term assistance is provided principally through the UNDP coordination mechanism in Mongolia. The recent UN disaster and assessment team report, produced after a visit in January, pointed out that it was vital to Mongolia's future to transform the entire livestock production system into a fully sustainable sector of the economy. The suggestion is that UNDP, UNEP and the FAO should together prepare an appropriate project proposal to put to donors. Our assistance is through multilateral sources like the UN, the World Bank and the TACIS programme.

Home Care Charges: Consultation
2.57 p.m.
Lord Clement-Jones asked Her Majesty's Government:
Whether they can give any early indication of responses they have received to their consultation paper Fairer Charging Policies for Home Care and other non-residential Social Services.
The Parliamentary Under-Secretary of State, Department of Health(Lord Hunt of Kings Heath): My Lords, the Department of Health has received over 500 responses to the consultation paper and draft guidance. While some of the main principles of the draft guidance have been welcomed, concerns have been expressed over aspects of the proposed guidance, particularly on the treatment of earnings and possible disincentives for disabled people to take up paid employment. The Government are giving careful consideration to those responses.
Lord Clement-Jones: My Lords, I welcome the Minister's reply. I am glad that he makes no bones that
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concerns have been expressed. The guidance in its current form would have a very harsh impact on disabled people in work. Fifty-five per cent of their earnings could be taken into account. Those on income support, those in receipt of disability living allowance, and even those in receipt of intermediate care services would be liable to pay charges. Does that not demonstrate the difficulty of the Government's determination not to make personal care free? Will they undertake also to examine the impact of the guidance with a view to avoiding the hardship that will be caused if it remains in its current form?
Lord Hunt of Kings Heath: My Lords, as the noble Lord knows, the decision on personal care was taken by the Government because they believed that resources should best be targeted, first, in ensuring that care provided or supervised by registered nurses in nursing homes was the appropriate way to spend our resources, alongside the millions of pounds that we expect to spend on intermediate care. The noble Lord will recall that the Government's decision to consult on the issue of statutory guidance was welcomed because of the widely differing policies of local authorities. The Audit Commission report said that local authority practice was wildly inconsistent, lacking rationality and often not related to service policies. Overall, I believe that the statutory guidance will lead to much greater consistency, but I give an assurance to the noble Lord that in relation to the specific issue he raised we will meet representatives of the people concerned. We are very interested in discussing these matters with them.
Baroness Greengross: My Lords, is the Minister aware that great concern has been expressed that partners, not just spouses, may have their income taken into account, not for their own care but for the care of their partner? Can the noble Lord reassure the House that when the Government reach their final decisions they will ensure that such a situation does not continue?
Lord Hunt of Kings Heath: My Lords, the draft guidance sets out largely the current legal position and the circumstances in which a partner's resources may be taken into account under Section 17 of the Health and Social Services and Social Security Adjudications Act 1983. In some cases it may indeed be to the advantage of a user to be assessed with his or her partner, as the draft guidance points out. But we are certainly willing to look at making the guidance clearer on this issue in the light of comments.
Baroness Carnegy of Lour: My Lords, for clarity, can the noble Lord tell the House precisely what freedom local authorities will have within the context of statutory guidance to do what they think is right?
Lord Hunt of Kings Heath: My Lords, Section 7 of the Local Authority Social Services Act 1970 provides that local authorities must in the exercise of their social services functions, including the exercise of any

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discretion conferred by any relevant enactment, act under the general guidance of the Secretary of State. To act legally outside the terms of Section 7 guidance, a council would need to show that it had properly considered the guidance and had good reasons for acting differently; for example, because of particular local circumstances. However, I can reassure the noble Baroness that the statutory guidance that will be issued as a result of the consultation process can be regarded as the minimum requirement. It will be open to any local authority to be more generous in its charging scheme than that which is set out in the statutory guidance.
Earl Howe: My Lords, is the Minister aware that there is concern about the Government's seemingly ever-increasing use of setting national priorities and instituting ring-fenced budgets to go with them? While ring-fenced budgets have their place, they inhibit the freedom of local authorities to charge the kind of rates they might wish to charge, thereby putting an additional strain on what is an already tight social services budget.
Lord Hunt of Kings Heath: My Lords, the noble Earl's charge would have more strength to it were it not for the evidence of the Audit Commission report. It found a whole host of different charging mechanisms, which showed great inconsistency between local authorities. The charges often lacked rationality. Some local authorities applied a flat rate charge to all, irrespective of their circumstances. Some charged according to the user's means with no regard for the level of service. There was great concern among users and their representatives about how that impacted on individuals. I believe that statutory guidance is justified in this case. It was certainly warmly welcomed by most, if not all, representative organisations. The fact that local authorities can decide to be more generous than the guidance leaves them with a great deal of discretion. A further point is that Torbay council, whose model the statutory guidance has worked on, has shown that where a local authority operates a rational and fair scheme it will be to the benefit of many of its residents.
Earl Russell: My Lords, I note that the Minister made no response to the concern of my noble friend Lord Clement-Jones about people being required to pay charges out of income support. Would not a more informed discussion of this subject be possible if the Government were to commission research on the minimum income entitlement necessary to maintain good health?
Lord Hunt of Kings Heath: My Lords, I know that the noble Earl consistently raises the issue of good health and its relationship to wider social security benefits. It is certainly a matter that warrants consideration. The draft guidance clearly states that service users should not have their incomes reduced below basic levels of income support as a result of
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charges. That principle has been widely welcomed by those responding to the consultation and will Improve the record of many local authorities.

Business
Lord Carter: My Lords, after the Second Reading of the Social Security Contributions (Share Options) Bill, my noble friend the Leader of the House will, with the leave of the House, repeat a Statement that is being made in another place on the local elections.

Social Security Contributions (Share Options) Bill
3.5 p.m.
Lord McIntosh of Haringey: My Lords, I beg to move that this Bill be now read a second time
The Bill is part of the Government's response to meet the legitimate concerns of companies about the effects of aligning the income tax and national insurance treatment of employee share options. Before 6th April 1999, national insurance liability on employee share options arose solely at the date of grant of the option, to the extent that the option was granted at a discount. The income tax liability on the other hand has for many years crystallised at the date of exercise of the option. That differential treatment ended in 1999. Options granted on or after 6th April 1999 relating to shares which are readily convertible into cash are now subject to similar treatment under the national insurance rules as under the income tax and PAYE rules. Provided that the option is not capable of being exercised more than 10 years following its grant, there is no national insurance liability when the option is granted: instead, the liability arises at the date of exercise of the option, and the figure is the same as that which is chargeable to income tax.
Following that change in treatment, many companies expressed concern that the unpredictability of their secondary national insurance charge as employers has led to accounting difficulties and created uncertainty. The liability of a company as the secondary contributor is uncapped, and is dependent on the volatility of the company's share price.
Following a period of consultation, we introduced measures last year which went a long way towards meeting those concerns. We announced that employers would be able to ask their employees to bear the secondary national insurance charge on their share option gains. The announcement was made on 19th May 2000 and has been welcomed by the business community and its advisers. The legislation has allowed companies to remove the accounting difficulties and the uncertainty that the national insurance charge presented.
Last year's legislation was drafted to cover all options which had already been granted. But in practice it has been difficult for employers to negotiate

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with employees terms which change options already held by them. So for many companies that granted options between 6th April 1999, when the changes to the national insurance treatment took effect, and 19th May 2000, when the new rules for options were announced, the problem has remained. The point was raised in debate in this House last year, when the noble Lords, Lord Higgins and Lord Goodhart, mentioned their concern that the measures enacted last year did nothing to address historical liabilities on existing share options. They called on the Government to give some form of relief against the excessive liabilities faced by companies which granted options during the period between 6th April 1999 and 19th May 2000. Indeed, it was on the understanding that the Government would come back with such proposals, if necessary, that the Opposition gave their support to last year's measures.
The Government have been true to their word, and I suggest to the House that the present Bill meets the concerns in a simple and practical way. The Bill gives companies a simple and straightforward mechanism for settling their national insurance liabilities on the options they have granted between 6th April 1999 and 19th May 2000, and to do so early, in advance of the date when the actual gain is made by the employee. Companies that choose to take advantage of this will calculate the amount of national insurance due by reference to the accrued gain up to 7th November 2000, the day before the pre-Budget Statement when the proposals were announced.
Companies will be required to notify the Inland Revenue and pay the appropriate charge within a period of 92 days of Royal Assent of the Bill. In this way, the measures allow companies effectively to cap their national insurance liability by reference to the share price on 7th November last year, thereby giving companies the certainty they wanted. The company benefits by avoiding the need to make further provisions against profits. It will be able to remove the provision for the liability from its balance sheet and save national insurance costs in relation to any further upward movement of the share price. The Bill offers early settlement as a quid pro quo for certainty.
The measures were given an immediate welcome by the business community. A large firm of advisers described them as a,
"silver lining for firms struggling under the cloud of low share prices … allowing companies to foster greater employee share ownership and account for their liabilities in a more meaningful, predictable way".
I should say to the noble Baroness, Lady Noakes, that that statement came from the Pricewaterhouse Coopers Bristol branch and was published in the Western Daily Press on 13th November 2000.
I turn now to the detail of the Bill, outlining the measures clause by clause. Clause 1 defines the share options gains as those arising from options granted between 6th April 1999 and 19th May 2000 and exercised, assigned or released after 7th November
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2000. To take advantage of the arrangements, companies must notify the Inland Revenue within 92 days of Royal Assent of the Bill.
Clause 2 exempts such gains from the existing national insurance charge and substitutes a special contribution. This is at a rate of 12.2 per cent, which is the rate of secondary—that is, employer—contributions applicable during the tax year 2000–01. It is payable on the deemed gain, if any, as if the option had been exercised on 7th November 2000.
Clause 3 covers various situations where options are exchanged, or rolled over, for other options, or for consideration which may include a mixture of cash and other options. The provisions are necessarily complex, but they effectively confine the special contribution to options exchanged at parity. The existing national insurance charge remains in so far as the option is exchanged in excess of parity to prevent the use of this relieving Bill as a vehicle for avoidance.
Clause 4 covers three types of situation. First, the situation where an employee has agreed, under the provisions introduced last year, to bear the employer's national insurance liability on the option gain. The clause ensures that the same tax relief allowed to the employee under that measure will apply also to the special contribution he makes under the present Bill. Secondly, the clause prevents a possible double tax relief which could arise when relief was given on the one hand when a secondary Class 1 liability is replaced by a special contribution under the Bill, and again if the payment is not made within the 92-day deadline laid down in the Bill. Thirdly, the clause makes a technical adjustment to the PAYE rules to take account of the fact that tax relief in respect of the special contribution is not given at the same time as the contribution is actually paid.
Clauses 5 and 6 contain interpretation provisions and ensure that the Bill applies to Northern Ireland.
In Committee in another place, the Government accepted the force of many opposition amendments either by accepting the changes or by introducing amendments of their own. In this way, the deadline for paying the special contribution under the Bill was extended from 60 to 92 days following Royal Assent. This will give companies more time to decide whether settlement would be in their best interests. The rule was also changed which originally required companies with a nil liability nevertheless to submit a formal notice within the deadline. We accepted that this placed an unreasonable burden on businesses and we introduced an amendment deeming the notice to have been given.
The Opposition agreed to withdraw other amendments and new clauses on the understanding that we would put forward changes of our own when the Bill was considered on Report. This we did, and as a result the effectiveness of the rollover measures has been improved to remove an avoidance opportunity in the earlier drafting of the Bill and to make substantial improvements to the operation of the rollover provisions in Clause 3.

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I am afraid that we shall have to propose three minor amendments in Committee. The first, in Clause 3, corrects a technical point regarding the Bill's interaction with other national insurance contributions legislation and as such is necessary to ensure that the Bill works effectively. The other two, in Clause 5, prevent an interpretation which might attract NIC avoidance and thus prevent any mischief. The amendments will not change the widely understood basis on which this special contribution is calculated. If the Bill is given a Second Reading this afternoon, those three amendments will be tabled for later on in the day.
Moved, That the Bill be now read a second time.—(Lord Mchilosh of Haringey.)
3.15 p.m.
Lord Higgins: My Lords, as always, the House will be grateful to the noble Lord, Lord McIntosh, for his clear exposition of these matters. However, having listened to his remarks, no one could possibly doubt that these are matters of great complexity. Indeed, in some respects it will be difficult to comprehend them other than by reading what he has said, rather than by listening.
When I looked at the proceedings in another place, what struck me was that this Bill was programmed to provide that consideration of the Bill, which eventually began at around 2.30 p.m., should be concluded by 3.30 p.m., with the Third Reading taken at 4.15 p.m. I see that the Deputy Chief Whip seated opposite smiles at my remarks. But during my 33 years in another place it would have been inconceivable to limit in any way the length of time spent in debate on a Bill of this technical complexity. We have reached an extraordinary state of affairs when that is the case. Moreover, the Motion goes on to deal with consideration of Lords amendments and so forth. No doubt the noble Lord, Lord McIntosh, will be able to tell the House whether questions on any such Motions shall be put forthwith. On a matter which is this technical—it has sonic political content, but overwhelmingly we face here the task of ensuring that the details of the legislation are right—it is not acceptable for the House to be put in this position.
This has been a classic way for social security legislation to be dealt with since 1997. To a large extent, it reflects the degree to which the Department of Social Security has been taken over by the Treasury. More specifically, it reflects a failure to recognise that national insurance contributions have become a tax in everything but name; I repeat, in everything but name. The proceeds entering government coffers as a result of this legislation will have absolutely nothing to do with insurance and still less will this mean that those paying them will receive additional benefits as a result. Quite simply, this is yet another stealth tax.
If one looks at the history, the matter has been batted back and forth between the Treasury and the Department of Social Security in an extraordinary fashion. As the noble Lord mentioned, a 12.5 per cent national insurance contribution from employers on unapproved option schemes was announced originally
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by the Chancellor of the Exchequer in March 1999. Then, as a result of that, in March 2000 it was suggested that there should be consultation to amend the legislation, which clearly was not right. By May 2000 we had debated the Child Support, Pensions and Social Security Bill. The noble Lord, Lord Goodhart, and I took part in those discussions. The first debates were taken at midnight, with very little notice of what was being proposed. The second debate, on Report, was also taken very late in the evening.
Because I was caught somewhat unawares by this, my initial reaction was simply to say: if someone pays this national insurance contribution because the share price seems likely to rise, will they receive a refund if subsequently it drops down in the water, so to speak, when it is cashed in? I have not yet received a reply to that question. Perhaps the noble Lord could make clear the situation in his later remarks.
In November 2000, there was another pre-Budget report which accepted that some companies would have difficulties with the arrangements in cases where the options had already been given to employees. Further changes were then made, the effect of which was to establish a position where the employees also paid the employer's liability. Finally, there have been problems in regard to options granted between 6th April 1999 and 19th May 2000 with which the Bill seeks to deal.
What a way to legislate. This has been an unbelievable mess from beginning to end. I therefore ask one final question in regard to procedural issues: why are these problems being dealt with in this Bill rather than in the Finance Bill, which I understand is currently going through another place? No doubt the noble Lord will explain that.
There are objections in principle to the Bill. It essentially penalises companies—start-up companies in particular—which feel that they cannot afford to pay normal market rates of remuneration but offer options instead. This is very much in line with the Government's failure to comprehend some of these problems in relation to the IR35 matter, which also concerned entrepreneurial companies. I understand that the latest news today is that, while the High Court judgment has not come out firmly in favour of those appealing from the professional contractors group, it does mean that they will gain some advantage inasmuch as the situation will have been clarified.
This is another example of the way in which actions taken by the Government tend to suppress entrepreneurial activity rather than otherwise. if I am right—no doubt the noble Lord will confirm this—the result of all the changes which have been made since the idea was originally introduced by the Chancellor will be to tax employees not at the normal rate of tax on normal remuneration but, effectively, at a significantly higher rate of tax. I think I am right—these matters are so complex that it is difficult to be certain about anything—that it will be at a rate of something like 47.32 per cent.

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We are faced with a measure which, in principle, has much to be said against it. Having said that, it would seem that the Government are seeking to put matters right with the Bill. We will certainly support doing that during the later stages of the Bill's consideration.
The problems stem from options issued between April 1999 and May 2000 in a number of respects. However, the extent to which there will be a burden is likely to be reduced, because on the operative date—I know that the noble Lord, Lord Goodhart, has concerns in regard to whether the operative date ought to be 7th November 2000, as it is in the Bill at present—many companies will find that the options are now under water and will involve no liability.
There are problems, however, in regard to the option of the one-off charge made available to companies by the Government. Companies must decide whether to pay the special one-off charge, which would then, if I understand it correctly, discharge their obligation altogether. However, the implication if they do not go ahead with that option is that the market will think that they do not expect their share price to rise. This will obviously have repercussions in the market.
Of course, there may be good reasons for companies to decide not to go ahead. It may be, quite simply, that they do not have the cash available to take advantage of the opportunity presented to them by the Government, or there may have been staff changes and so on. None the less, the overall effect is that that is likely to be taken by the market, to some extent, as an indication of what the companies expect their share prices to do and whether they think it is worth while taking the option given to them by the Government. Overall, of course, there is a shift from companies to employees which appears to involve a very high rate of tax on individuals if they wish to go ahead.
In another place, my honourable friend Mr Howard Flight succeeded, as the Minister has rightly acknowledged, in putting forward a number of amendments. The length of time in which a decision can been taken has been extended to 92 days. That is welcome. In addition to the three technical amendments mentioned by the noble Lord in opening, we still have concerns about the roll-over relief position. I shall not go into that matter in detail at this stage—I would be here a considerable time were I to do so—but there are still matters which we think should be considered.
We hope that the Government will be sympathetic to our attempts to bring the legislation into a form which, if not easily comprehensible—and the Chartered Institute of Taxation has described it in its present form as one of the most complex matters that has ever come before it for consideration—at least into a form where it is correct overall, even if it is difficult to comprehend.
I am not sure whether I should say that we shall be third time lucky with this legislation and get it right, or whether it is going down for the third time—possibly both. In all events, there are problems with the Bill. We
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do not think that the basic approach has been right—the matter has been badly handled—but, because it gives relief to the groups that we believe deserve encouragement in their entrepreneurial activities, we shall not oppose the Bill.
3.27 p.m.
Lord Goodhart: My Lords, like the noble Lords, Lord McIntosh and Lord Higgins, I took part in the debates on the Child Support, Pensions and Social Security Bill, as it then was.
It is obviously right that profits obtained by an employee from the exercise of an option should be taxable as income and subject to national insurance contributions on the same basis, unless the options fall within the class of approved share option schemes where tax relief is available.
It has, of course, been a long-standing problem that there have been different tax bases for income tax and national insurance contributions. It is right that those differences are now being greatly narrowed in this and other cases. The difference in the bases gave rise to a number of weird and wonderful NIC avoidance schemes—for example, payment in gold bars or other commodities, such as bismuth. I am not quite sure what bismuth is used for, apart from stomach pills.
The Government were therefore right to impose NIC liabilities on profits from the exercise of share options given to employees as part of their remuneration package. However, the dot.com bubble gave rise to an unforeseen problem. Share values increased so far that the employer's prospective liability for secondary Class I contributions became potentially enormous. Accounting requirements made it necessary to include provisions in current balance sheets for the potential liability for Class I contributions on the future exercise of the options. The result was that these liabilities made some IT companies nominally insolvent. Their power to borrow was, of course, adversely affected—or "seriously compromised", as I think the expression now is.
The Government stepped in by allowing employees to agree with employers that the employees should be liable for both primary and secondary contributions on the proceeds of the exercise of the option. That seems reasonable because, if an option is exercised when shares are standing very high, the employees can sell some of them to pay for the national insurance contributions. But that, as has been explained, left the problem of companies that granted options between April 1999, when the new grants of options became potentially liable to secondary Class 1 contributions on profits on the sale of shares, and May 2000, when companies were allowed to agree with employees that the employees should be liable for the secondary Class 1 contributions.
We accept that the problem needed to be dealt with and that the Bill is a suitable way of dealing with it. There is, however, one issue that I want to raise. The Bill proposes that companies should elect whether to stick with liability under the present rules or whether

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to agree to pay national insurance contributions on the basis of a notional sale on 7th November 2000. As the noble Lord, Lord Higgins, said, in a considerable number of cases those options were already valueless at November 2000 prices, and no problem arises there.
Although the value of dot.com shares was, by November 2000, well off its peak, it has gone down a great deal further since then. Companies whose options had some value as at 7th November will, therefore, be faced with a difficult decision if share values are now significantly below their value at that date. Do they elect to pay national insurance contributions on the value of the option as at 7th November 2000, if that is more than the current value of the shares; or do they stick with the present rules on NI C liabilities and avoid the charge as at November 2000, but at the same time face the risk that the shares might take off again and land the company with a large liability in the future? This is a particular problem for companies that are short of cash, as many companies in the dot.com and IT fields now are. Clearly, many may have difficulty in raising the money to pay for a liability based on the value as at November 2000 and having to be paid immediately.
The companies have 92 days in which to decide this question. The decision would be a great deal easier if liability to secondary Class 1 contributions was based on the value of the options not at 7th November last but at the date when the Bill is enacted or possibly the date when it was first introduced in the other place. This would avoid the problem that companies that wish to cap their liability can do so only by paying national insurance contributions on an unrealised gain that has since disappeared. I await the Government's answer on that issue.
3.33 p.m.
Baroness Noakes: My Lords, I support the Bill. Indeed, it would be difficult not to do so given that it is intended to modify the unfortunate impact of earlier legislation. I should not go so far as PricewaterhouseCoopers' Bristol office, but I agree with the general thrust of what it said.
I should declare an interest at the outset as a non-executive director of a company which stands to benefit from the enactment of the Bill, having granted a large number of options to key staff in the period covered by the Bill.
The real regret is that the Bill is necessary at all. It is a consequence of a decision taken by the Government to penalise unapproved share options by the imposition of employers' national insurance contributions.
The gains from unapproved share option schemes are now taxed very heavily, as my noble friend Lord Higgins said—at 47.32 per cent where the employee pays the national insurance contributions. There are ways of setting up share option schemes which do not involve this penal level of taxation. But they are highly restrictive schemes; the rules run to many pages in the Finance Act. Many companies find that the schemes simply do not allow them to reward key employees in
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the way in which they need. That applies to the enterprise management scheme, even after the recent relaxation in the Budget.
Many start-up companies, many new economy companies, many high growth businesses and many turn-around businesses find that they have to go outside the approved share option schemes and turn to unapproved share option schemes to reward key staff in the necessary way. These businesses are now penalised by the cumulative impact of tax and national insurance.
For key management staff, the impact of losing nearly half the gains by way of tax and national insurance is significantly demotivating, given that such schemes are intended to motivate people towards wealth creation. I hope that the Government will reexamine the role of share option schemes in wealth creation in this country. I hope that they will look again not simply, as I believe was stated in the Budget report, at the corporation tax aspect of share option schemes but also at the employee end of such schemes.
As I said at the outset, I do not want to oppose the Bill, because it will provide necessary relief. But it is not a perfect measure. Reference has been made to its sheer complexity, and to Clause 3 in particular. It has confounded many technical experts, and I freely confess that it defeated me.
I should be glad if the Minister would respond to some detailed points on the application of the Bill's provisions. First, Clause 1(5) refers to regulations that the Inland Revenue will make regarding the notice to be given under Clause 1. When will draft regulations be published? The Minister will be aware that many companies need to know as soon as possible whether they can take advantage of the Bill's provisions and precisely how that can be done, as they will have only 92 days following Royal Assent both to give notice under the terms of the clause and to pay the amount calculated under Clause 2.
Secondly, why must the time limit of 92 days run from Royal Assent? That is linked to my previous question. If the regulations are not available in draft form at an early stage, companies may find these matters difficult to deal with once the Bill is enacted. Would it not be fairer to specify a time-limit which would run from the date when the regulations are published? The Inland Revenue has said that it intends to publish regulations immediately after Royal Assent; but what happens if it does not do so? If the Inland Revenue, for one reason or another, fails to meet that time-scale, it will automatically impact on the time that is available to companies in meeting their time-limits under the Act. Will the Minister say how the Inland Revenue intends to publicise both the existence of the regulations and the impact of Royal Assent—that is, when the 92-day limit runs out. For a company trying to run its business, it is hard enough to keep track on that business, let alone monitoring when Royal Assent is given to a Bill or when a government department has issued regulations.
Thirdly, will the Minister explain how unlisted companies are affected by the new provisions? Will all companies that are not listed at 7th November 2000

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automatically be treated as resulting in a nil charge under Clause 2 as the shares are not "readily convertible assets"? If the Minister cannot give that assurance, will he say how he expects valuations to be completed and agreed within the 92-day period? In my experience, share valuations of unlisted companies are one of the most time-consuming activities for taxpayers, their advisers and the Inland Revenue. If there is no blanket exemption for unlisted companies, will the Minister confirm that all unlisted companies would be unwise to rely on the deemed notice provisions of Clause 1(6)? If it turns out that a liability should have arisen and no notice was given under Clause 1, the unlisted company's share options will not qualify for the Inland Revenue's discretionary extended deadline powers under Clause 2(5) because that clause requires a notice actually to have been given.
Fourthly, and lastly, will the Minister assist taxpayers and their advisers by requiring the Inland Revenue to publish a simple version, with worked examples of the how the roll-over provisions of Clause 3 are expected to apply? The provisions of this clause will be relevant in the calculation of share option gains long after the 92-day limit has expired. As I believe was stated earlier, this is very complex legislation. As I said, I do not wish to hold up the Bill, but if ever there were a candidate for the tax simplification skills demonstrated under the leadership of my noble and learned friend Lord Howe of Aberavon, Clause 3 would be that candidate.
3.40 p.m.
Lord McIntosh of Haringey: My Lords, I am grateful to noble Lords for their response to the Bill. I acknowledge its complexity; indeed, if it is beyond the noble Baroness, Lady Noakes, what hope is there for the rest of us? Interestingly, the noble Lord, Lord Higgins, concentrated the thrust of his remarks largely on process, rather than on the content of the Bill. I shall try to respond both to his points on process and to those on content.On the first point—namely, the way in which the Bill was programmed in another place—I am afraid that I am not really able to help the noble Lord. I believe that the rules on comity mean that it would be improper for me to comment on the procedures in another place. Of course, it is open to the Opposition to do so at any time, but it is not a matter for me. Such matters are for the authorities in the House of Commons.
The noble Lord's second point struck me as strange. He seems to think that this provision would put money through a stealth tax into the "Government's coffers", which, I believe, was the phrase that he used. I have to tell the noble Lord that the best estimate we can make is that the Bill will cost the National Insurance Fund £160 million in forgone national insurance contributions in future years. If the noble Lord wishes to count that as a stealth tax, I should point out that it is negative stealth tax. Indeed, when the noble Lord
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enters into a general election process at any time, I believe that his campaign guide ought to take that into account. I give way.
Lord Higgins: My Lords, is it not the case that the overall effect of the Government's proposals in this area will produce a huge amount of revenue? All this provision will do is to give back a small amount in specific circumstances of great complexity. Further, surely the Minister can tell the House whether or not amendments that we make in this place to the Bill will simply pass through "on the nod" in another place, or whether they will receive proper consideration.
Lord McIntosh of Haringey: No, my Lords; I cannot give the noble Lord an answer to his second point. That is a matter for another place. It would be quite improper for me to intervene. As to the noble Lord's first point, I should point out that this Bill will cost the National Insurance Fund £160 million. In those circumstances, it is inappropriate to talk about stealth taxes here today, regardless of what the noble Lord may wish to do at other times.
On a related point, the noble Lord asked me why this provision should not be included in a Finance Bill. The reason is the one that I have just given; namely, that this is a Bill that affects the National Insurance Fund rather than the Consolidated Fund. That is why the provision cannot go into a Finance Bill, which is a money Bill.
The noble Lord asked me whether there should be refunds when conditions change. I am not sure whether the noble Lord made the distinction, but there are two kinds of refund about which we could be talking. First, there are refunds for employees. The answer in that respect is yes; there certainly would be tax relief as for Class 1 contributions, which would be made through the self-assessment process. As for the second kind of refund—that for employers—the answer is no. Employers must make up their minds. That is why the longer period of 92 days has been agreed. They must make their best estimate of what is to their advantage. They have asked for this change to be made, and it is being made in response to requests from a significant number of employers.
We cannot have this provision in the form of a "movable feast", whereby employers are able to opt in and out as appears to suit them at the time, according to the state of their share price and what they believe that status might be in the future. So the answer there is no: employers must make a decision about what they think will happen to share prices and they must decide whether or not to take advantage of the opportunity. Indeed, it is no more than an opportunity, and one in which no one is obliged to take part. There is, of course, an element of risk involved for all employers. But it will not be the same element of risk for different employers. That is why we could not legislate in such a way as to remove the risk for all employers. In some cases it will be in different amounts.
The noble Lord, Lord Higgins, raised a point that was mentioned in another place about the burden on employees as regards share options. The previous

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legislation introduced in the Child Support, Pensions and Social Security Act 2000 allowed the employee to take on the employer's liability. That occurs only with the employee's consent, and does produce a higher marginal rate of income tax to 47.32 per cent after relief from income tax on the amount of the employer's national insurance contributions paid. But that option is not compulsory for employees. That is why no change is proposed to that provision.
The noble Lord, Lord Higgins, suggested that there may need to be further amendments on the roll-over provisions. However, he did not specify what they were likely to be. I shall await those amendments with interest and give them the due attention that they deserve.
I am grateful to the noble Lord, Lord Goodhart, for the tone of what he said; but part of my response to the noble Lord, Lord Higgins, applies to the comments made by the noble Lord, Lord Goodhart. Clearly, one has to choose a date of some kind for crystallisation. The date that we chose was the day before the Pre-Budget Report was announced, and before these provisions were first made public. We could choose any other date that we wished: some dates would be advantageous to certain companies and disadvantageous to other companies, while other dates would be advantageous to a different set of companies and disadvantageous to others. There is nothing very much that we can do about the situation; that is the nature of share prices. It is called capitalism—or, indeed, is one of the effects of capitalism.
If we were to do what the noble Lord, Lord Goodhart, suggested and change the date to that of Royal Assent, it would, first, be a date in the future and, therefore, would give rise to the possibility of avoidance; and, secondly, on the best estimate that we can make of the countervailing changes involved, it would cost the National Insurance Fund £100 million more. We are not prepared to follow that route.
I am grateful to the noble Baroness, Lady Noakes, for the detailed points that she made. I have to agree with her that it is indeed unapproved share schemes that are affected by the provision. I am interested in the noble Baroness's views on the wider issues, but I do not believe that they arise within the terms of the Bill. The noble Baroness asked me a number of specific questions about the regulations under Clause 1(5). The regulations will be published in draft next week. The likely contents of the required notification are already available on the Inland Revenue website. Under those circumstances, I believe that the noble Baroness's criticisms of the 92-day period and her fears that the publication of the draft regulations might be significantly later than that period can be assuaged. I believe that that also answers her question about publicity.
There is also the issue about how companies will know when Royal Assent takes effect. The Inland Revenue has written to all companies with unapproved share option schemes that have so notified the Revenue, as they should do. In the
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mailshot and the press release, the Inland Revenue has offered to advise all companies that have expressed an interest when Royal Assent is received. Indeed, over 400 companies have already expressed that interest.
The noble Baroness asked me about the position of unlisted companies and whether all of them would be treated as not liable because the share options are not readily convertible assets. Where the shares or share options of an unlisted company are not readily convertible assets, the company will be deemed to have made a notice and the special contribution will be nil.
I entirely agree with the noble Baroness about the difficulty of valuing the shares of unlisted companies, having been involved in running an unlisted company for many years. However, the shares in unlisted companies can be readily convertible assets and the company will then need to decide, like all other companies, whether or not to opt to pay a special contribution. A company does not have to have an agreed share option before it makes the payment; it is only required to pay an amount on a reasonable basis within the 92-day period.
The noble Baroness asked me whether there would be a simple version. Certainly I assure her that the Inland Revenue will publish a clear and simple guide with examples. Although I dread going back to the issue of IR35, my understanding of today's High Court judgment is that the legality of IR35 was upheld but that the Inland Revenue was taken severely to task for the quality of its guidance. Therefore, we have something to improve on there. I commend the Bill to the House.
On Question, Bill read a second time, and committed to a Committee of the Whole House.

Local Elections
3.51 p.m.
The Lord Privy Seal (Baroness Jay of Paddington): My Lords, with the leave of the House, I shall now repeat a Statement being made in another place by my right honourable friend the Home Secretary. The Statement is as follows:
"With permission, I should like to make a Statement about the decision to defer the local government elections which were due to take place next month.
"On 3rd May elections for 34 English county councils and 11 English unitary authorities were scheduled and just under a fortnight later, on 16th May, elections for 26 district councils in Northern Ireland were also due.
"The House will, however, be aware of the considerable scale of the representations which we have received to defer these elections because of foot and mouth disease.
"As my right honourable friend the Prime Minister has now made clear, we have listened very carefully to those representations.

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"We judge that in terms of practical arrangements, polling in May would be possible, and would produce fair results. Following changes to the law brought into force on 16th February, postal votes in England and Wales are now available on demand to any voter. With, literally, a handful of exceptions, schools in which many polling stations are sited have remained open and operational in all foot and mouth disease areas. Forms of canvassing have changed. Telephone canvassing is now a key way in which voters are contacted by candidates and the political parties.
"We have taken careful note of the impact on tourism, and the message which any lengthy or indeterminate deferral might send out. But on the other side of the equation, there has been the need for national and, in some areas, local politicians to be focused on the fight against foot and mouth disease, as the necessary machinery to deal with any eventuality is put in place; and there have been the feelings and sensitivities of people in the communities most severely affected by this dreadful disease to be considered.
"Taking account of these considerations we have therefore decided that these local elections should be deferred for a short while—in the case of England and Wales, for a five week period from 3rd May to Thursday 7th June, and in the case of Northern Ireland, for a three week period. from 16th May, also to 7th June.
"Some district and borough council by-elections are due on 3rd May, and others could be held on each Thursday thereafter before 7th June. In these circumstances the Government believe it best if all by-elections in this period are also postponed until 7th June. In the timescale it is not practical to defer by-elections due before 3rd May.
"A Bill to ask this House, and the other place, to give effect to these deferrals will be introduced as soon as possible. As preparations for local elections on 3rd May and 16th May will have to continue until legislation for their deferral receives Royal Assent, it is plainly in everyone's interest that the legislation should be passed as quickly as possible.
"There are a number of detailed consequential matters which will have to be dealt with in the legislation. I shall therefore make arrangements for the opposition parties to have an outline of the draft legislation later today.
"The House will be aware that the cost of administering local elections falls on the local authorities concerned. In respect of the elections that were due to take place in May, local authorities have already incurred expenditure and will be obliged to go on doing so until the new Bill receives Royal Assent. We shall, accordingly, be taking powers in the Bill to compensate local authorities for expenditure legitimately and unavoidably incurred.
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"Although nominations for the elections due on 3rd May do not close until tomorrow, some candidates may have incurred costs because of the deferral. These should be relatively small, but to cover this the maximum limit on candidates' expenses will be increased in the Bill by 50 per cent.
"The Bill will also provide that candidates validly nominated for elections due on 3rd May will not have to resubmit their nomination papers.
"Delaying elections is not a step to be taken lightly. Nevertheless, I hope the House will agree with me that a relatively short postponement of the kind I have set out is an appropriate response to the circumstances".
My Lords, that concludes the Statement made by my right honourable friend the Home Secretary. Before I sit down, it may be for the convenience of the House if I make a few comments about the handling of the Bill in this House. I understand that the Bill will be introduced in the Commons tomorrow and will arrive in this House on Wednesday evening. It has been agreed through the usual channels that we shall have Second Reading on Thursday and the remaining stages of the Bill will be taken next Monday, 9th April. The business which has already been published for those two days will be postponed until after the Easter Recess.
3.56 p.m.
Lord Strathclyde: My Lords, I thank the noble Baroness the Leader of the House for repeating the Statement today. As she rightly says, the decision to delay elections should not be lightly taken. We all agree with that.
However, the country will also be grateful that at long last the Prime Minister has come to acknowledge the gravity of the foot and mouth crisis. I assure the House that my party will co-operate in legislation that is required to postpone local elections and which will be a great relief to farmers in the affected areas and to those others right across the country who are living in fear of this disease.
The House will, of course, need time to scrutinise the legislation and some of the technical issues, including compensation, raised in the Statement. I am also grateful for the business statement that the noble Baroness has just made. I signal my agreement to it.
I welcome the fact that local authorities which have begun spending on elections will be compensated. But will the noble Baroness accept that legislation should be framed around taking the necessary powers to set a new date when it is clear it would be responsible to do so, rather than fixing one set date?
Can she say why it would be highly dangerous, as the Prime Minister said today, to delay local elections beyond 7th June but not beyond 3rd May? Would it not be more sensitive to country people to leave the election date open until it is clearer when the crisis might be resolved? Has she considered letting local elections go ahead earlier in some areas than in others in order not to burden people in the worst affected areas?

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Does not all this demonstrate how out of touch the Prime Minister has been that it took appeals from the two most reverend Primates and the Leaders of the Conservative and Liberal Democrat Parties before he was prepared to postpone his general election plans? Only last Thursday, the Leader of another place, Mrs Beckett and a stream of Cabinet colleagues said that to postpone local elections would send a,
"very strong and very negative signal to the world".
Does not the Prime Minister's decision send such a signal? I assume that the noble Baroness thinks that it does not. If not, why not? What has changed since last Thursday? Has the Prime Minister suddenly woken up to the fact that the countryside is bleeding? Or was it simply that he had a visit from Mr Philip Gould and Miss Anji Hunter with their focus group reports?
While we acknowledge that the noble Baroness, Lady Hayman, has been working hard, is it not now clear that the Government have acted all along far too unimaginatively and far too late? Does not the noble Baroness agree that crucial time was lost in the first two weeks when, to keep open the option of an early general election, spin doctors were told to play down the crisis and the Minister boasted that it was under control?
Was not the failure to deploy the Army until nine days after we called for it a catastrophic delay? Was not that mistake compounded by the token nature of the early Army deployment? Why, despite the findings of the report by the Duke of Northumberland on the 1967 outbreak, did the Government persist in resisting burial and insist only on burning carcasses? Why was there such dithering about the concept of a firebreak of slaughter around acute outbreaks and why was action taken so slowly? What has it taken so long to reach a point of decision about vaccination? Indeed, when will the Government take a final decision on vaccination? Why did it take two weeks after we called for it for the Government to announce compensation for farmers and a week to announce rate relief for local businesses?
Ministers are right to say that industries other than farming, notably tourism, have been desperately affected by the crisis. What action do the Government intend to take to provide further support for the tourism industry? Will the noble Baroness allow a day, perhaps after the Easter Recess, for a debate in the House on the future of this vital national industry?
I hope that the noble Baroness will address one particular point. What will be the criteria for deciding to hold local elections in June when it was wrong to hold them in May? What will have to be different from today? Can she set out for the House the objective test that will make it safe to hold elections then when it is unsafe to hold them now? The Prime Minister said this morning that one of his key criteria was the feelings and sensitivities of local communities. For example, if people in Devon are still as worried in June, if the farmers in Curnbria are as threatened with ruin as they are today, will those factors no longer be relevant to the Prime Minister's thinking? If not, does that not
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suggest that the Prime Minister's decision is more about looking good to focus groups than looking good to the countryside?
When and on what criteria will the Prime Minister decide that he no longer has to give his full attention to the crisis? When will he think it right for key Ministers to turn their backs on the crisis and start electioneering? When and why will there no longer be the need, as the Statement says, for national and local politicians to be focused on fighting the disease? And when will it be right for local communities to lose their elected voices? I hope that the noble Baroness can tell the House, therefore, the criteria against which the Cabinet has agreed to take that decision and what makes June right and May wrong.
Finally, does the noble Baroness accept that the postponement of the election makes a mockery of the way in which her noble friend the Captain of the Gentlemen-at-Arms has been driving the House? The Government have been cutting corners in a drive to push too many Bills through before a May election. Now that Parliament is not, after all, to be cut short this Thursday, this House must be allowed to take the time it needs to review government Bills. On broader issues, will the noble Baroness promise time to debate the White Paper on rural affairs?
The Government's response to this crisis has veered from the complacent to the incompetent. No amount of spin can replace the wasted weeks or make good hopes and livelihoods broken or years of toil destroyed. But there is time now perhaps to make up with single-minded attention for the main failures in the Government's handling of the crisis so far. So long as the Prime Minister genuinely puts the country first, stops dithering and takes some of the overdue actions which we on this side of the House have long been calling for, he will have the support of the whole of this House. But no one will forgive a continuation of the incompetence, complacency and self-serving spin-doctoring that we have seen over the past few weeks and for which our countryside is now paying such a terrible price.
4.4 p.m.
Lord Rodgers of Quarry Bank: My Lords, from these Benches, I, too, thank the noble Baroness the Leader of the House for repeating the Statement here. It is particularly appropriate to do so because there are now probably more noble Lords in this House than Members of the House of Commons with active or past service in local government. On Monday next, it will be appropriate to scrutinise the Bill carefully in Committee, Report and final stages to ensure that the expertise in this House is brought to bear on the detailed provisions.
I do not want to take part in another debate on the foot and mouth crisis and its tragic consequences or on rural affairs. These are very appropriate matters for the House to consider. However, at present we have before us a proposal for a Bill; and it is that Bill and the consequences for local government to which we should turn our minds.

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In the Statement there is a plain admission that delaying elections is not a step to be taken lightly. That is what we should now focus on. Local elections have not been cancelled or postponed for over 50 years. I hope very much that postponement on this occasion will not be a precedent and that we shall wait at least another 50 years before it occurs again. The instrument of postponing democratic elections is well known in non-democratic countries. There is no fear that it is being done on that account now in this country. Nevertheless, fixed dates for elections, not to be changed by the government of the day whatever the circumstances, is a good principle. For that reason, I hope that the noble Baroness will make clear that it is not in this Government's mind that there shall be any repetition.
Inevitably, therefore, postponement should make us uncomfortable. But I should be even more uncomfortable if, as I understand the noble Lord, Lord Strathclyde, suggests, there were to be an open-ended commitment to local elections at an unspecified date in the future. That really would give the government of the day an opportunity which I think they should be denied. If governments have to make such a postponement, it is right that they should explain the position to the House and fix an alternative date which can be the subject of debate and not leave an open-ended commitment to hold elections when it may suit them best.
There has been a good deal of discussion—no one can complain about that—about whether the postponement of the elections, or holding them on 3rd May, would or would not be in the national interests or in the interest of any individual or political party. We must acknowledge that all those factors come into the minds of every Prime Minister faced with these very difficult decisions. It would be naïve to argue that Prime Ministers make decisions in the national interest except in so far as most of them identify the national interest with their own interest and that of their own parties. We should recognise that and not be hypocritical in present circumstances.
In the Statement, the arguments are put fairly for postponement of or carrying on with the 3rd May date. Indeed, if I were to weigh carefully in milligrams the arguments set out in the Statement I think that they marginally come down in favour of going ahead on 3rd May. But I think that that is a measures only of the dilemma in which the Prime Minister has been put. I agree that in the circumstances postponement makes the best sense.
I hope that the Bill will make progress. We shall help to see it through all its stages, provided—I make this absolutely clear—we are satisfied that the detail is right. In that respect, I make two suggestions. The first is that even in advance of Second Reading the noble Baroness and the Minister concerned seek to draw on the expertise of Members of this House who are willing to help get the Bill right before we enter Committee stage. Secondly, I hope that every step will be taken to ensure that the Home Office is on top of the detail and that clear, unequivocal statements are made by it and
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the appropriate departments to those in local government who will be affected by the outcome. I refer not only to elected members of local authorities but all those officials in local government who will have difficult decisions to make. The detail is important. The Home Office is not invulnerable in such matters. I hope that it will do better this time.
4.9 p.m.
Baroness Jay of Paddington: My Lords, I am grateful to both noble Lords for their recognition that this is a serious position and that a serious decision has been taken on the basis of the reasons that the Statement made very clear. The decision has been taken with great solemnity and a recognition of the seriousness of postponing democratic processes in this way.
I am grateful to the noble Lord, Lord Rodgers, for his support for those parts of the Bill that he mentioned. He referred to the expertise available in this House that could lend authority to our discussions even before the Bill comes here for Second Reading. I am sure that the Government will seek to facilitate that arrangement. During the morning I have asked for a list of those Members of this House who are directly affected by or involved in local elections. The noble Lord, Lord Rodgers, is right that several among our number are directly affected and that others who may not be directly involved in these circumstances have been elected and will be important in lending their authority to any discussions on the Bill, which we must get right quickly to facilitate the process.
I also agree with the noble Lord, Lord Rodgers, that this is not a time for another debate on foot and mouth. My noble friend Lady Hayman has reported regularly to this House with great authority and enormous attention to detail. I understand from my noble friend the Chief Whip that she has spoken six times on the subject in the past four weeks and, due to the efforts of the noble Viscount, Lord Cranborne, will do so again on Wednesday. I therefore do not intend to respond to the general points about the foot and mouth situation, except in so far as it impacts on the serious decision that has been taken today.
As I said, the criteria on which the decision was taken were set out in the Statement. A short delay enables certainty. That certainty affects the planning for local authorities and candidates involved in local elections and is also necessary across the broader spectrum for those in the farming community and in the wider sphere of economic activity who may be directly or indirectly affected by foot and mouth disease. It is agreed that 7th June strikes the right balance between a delay that enables the Government to accelerate and to put in place further strategies and mechanisms to halt and combat the disease—I am sure that the noble Lord, Lord Strathclyde, is aware that the Prime Minister has spent the greater part of his time on this problem in the past few weeks—and the uncertainties that would be caused by an open-ended delay. Again, I strongly agree with the noble Lord, Lord Rodgers, that it would be extraordinary for

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anyone to argue more than superficially in this House that it should be within the power of the executive to determine the date of elections by order.
We welcome the renewed attention to legislation that the noble Lord, Lord Strathclyde, promised from his Benches. The Government are delighted that already in this Session we have sent to the Commons eight major Bills without any defeats. We expect to continue to do the same in the additional weeks that are opened up to us.
It is not surprising that the Conservative Opposition should seek an open-ended delay and not to establish any date for elections. It is clear that they do not want an election at all.
Lord Strathclyde: My Lords, the noble Baroness talked about certainty, but until a few days ago there was certainty about the elections being on 3rd May. She did not answer my question about the criteria that were set for delaying that timetable. Is 7th June now set in stone, or will that timetable be subject to delays if the same circumstances are around a month from now?
Baroness Jay of Paddington: My Lords, I did not say this in my original reply because I thought that the point was self-evident, but the noble Lord has made the mistake of assuming that there is an obvious and immediate connection between the date of a local election, which has to be set in stone for the reasons that we have discussed, and the speculation that he is hoping to pursue about the possible date of any general election. This Statement does not mention general elections. The criteria for the local elections are set out in the Statement.
As the Statement says clearly, there is no practical reason why the elections should not be held in May. But the decision has been taken to postpone them in order to ensure that the massive upgrading of the practical means and resources necessary to deal with foot and mouth disease are finally and firmly put in place and to take into account the sensitivities of those who are combating the disease in what one might call the front line. Those are sufficient matters, but they are not practical matters. The practical point is that the local elections could be held on 3rd May, as originally intended.
4.15 p.m.
Lord Harrison: My Lords, will my noble friend the Leader of the House recognise that the clarity of the Government's Statement will be well accepted in the county of Cheshire, where we have a strong agricultural sector? Will she further recognise that we have a strong tourism industry and that any lengthy or indeterminate deferral of the elections could have a poor effect on the success of the tourism industry? Does she recognise that we require certainty, not the flights of the imagination given to us by the Leader of the Opposition?
Baroness Jay of Paddington: My Lords, I hope that the Statement has made it clear, as my noble friend
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rightly suggests, that the concerns of the tourism industry are as important as the concerns of everybody else in other parts of the economy. I understand that the tourism industry has welcomed the certainty that my noble friend described. He is right that the open-ended uncertainty that the Leader of the Opposition seems to be suggesting as the appropriate way forward would cause great problems to everybody.
Lord Dixon-Smith: My Lords, the more that the Leader of the House says about 7th June, the more she makes the case for holding the elections on 3rd May. It seems that the House is not to know the reasons for the change because there are no reasons for it other than those of political judgment.
On behalf of local government on this side of the House, I certainly welcome the Statement, particularly the points of detail about nomination and expenditure rules. Those are important points, because expenditure on printing comprises about 90 per cent of total expenditure in local elections. I know from inquiries that I have made at the office of my association—even though I have long been separated from the electoral process—that its election addresses are already printed. The association is facing an acute problem of overprinting, or reprinting, or perhaps an add-on. We shall need to consider the appropriate level of increase in election expenditure for candidates carefully in empirical terms. I hope that the Leader of the House will assure us that the Government's mind is not yet fixed on the issue, because we need to look at it in practical terms.
Baroness Jay of Paddington: My Lords. I am grateful to the noble Lord, with his experience, for welcoming those parts of the Statement that refer to the practical details, which will be set out even more fully in the Bill than was possible in the Statement. That is one reason why my right honourable friend the Home Secretary is anxious that Members of the Opposition parties should have an opportunity to look at the draft legislation at the earliest possible stage.
I know that those who are concerned with local elections spend the greatest amount of their money on printing. As I understand it, not only will many candidates already have published and printed their elections addresses, but local authorities may have already printed ballot papers. There will be compensation arrangements on those very practical but none the less very important matters. The current draft proposals contain provisions to compensate local authorities and to raise the expenses limit for candidates by 50 per cent. As I said, that will be a matter for considerable discussion at local level.
Baroness Scott of Needham Market: My Lords, I am grateful to the Leader of the House for her Statement today. I say that not just as a piece of parliamentary pleasantry but because, as a serving member of Suffolk County Council, I have a particular interest in the issue. I should like briefly to express in the strongest possible terms my opposition to the proposition made by the noble Lord, Lord Strathclyde, that there should

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be an open-ended delay. While of course I entirely agree with my noble friend Lord Rodgers that there are profound democratic implications, my opposition is rooted in the practicalities of attempting to run a council.
Of course, because councils know how their cycles work, they plan their business accordingly. All types of systems and processes, such as budget setting, structure planning, and so on, are in place, based entirely on the proposal that a new council will be formed in May. While local authorities may have the flexibility to deal with a one-month change in the election date, an open-ended delay will cause all kinds of difficulties for those authorities. That should not be underestimated.
My second and final point is that many hundreds of councillors will not be seeking re-election in May. They may be prepared to hang on for another month or so but, beyond that, real difficulties will arise for people who have made arrangements to move on in their lives. If the delay is open-ended, we face the danger that certain areas will, in effect, be unrepresented. I suggest that that is not a tenable position.
Baroness Jay of Paddington: My Lords, I am grateful to the noble Baroness, Lady Scott, because she is a Member of this House who speaks from practical experience of involvement in the local elections on this occasion. The points that she makes are, of course, entirely relevant to the Bill. I am sure that some councillors—I hope that they will be only a small minority—will not want to serve for the extra five weeks. That is the time period that would be entailed in terms of the English elections, and it would be slightly shorter in relation to Northern Ireland. As I understand it, those councillors can resign at any point. However, it is hoped that they will be in a minority.
It may be of help to the noble Baroness and to the House if I explain another matter that was raised concerning the serving of a full four-year term by councillors elected on 7th June. I believe that the position at present is that, as the alteration in the election date is a one-off change, councillors elected on 7th June will serve only three years and 11 months. That may also be relevant to councils' planning. However, councillors who intend to stand down at the election will remain in office until the new election date, except for, it is hoped, only a minority who wish to leave before then.
Lord Stoddart of Swindon: My Lords, although I have the utmost sympathy with the Prime Minister in his dilemma over these elections, I say to my noble friend that among some of my colleagues there will be much disappointment that the local elections are not to take place on 3rd May. I certainly do not believe that there is a case for putting off the elections. Over 90 per cent of the people involved are resident in urban and not country areas. However, I understand the dilemma.
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Together with the noble Lord, Lord Rodgers, I am concerned that a precedent may be set. I remind my noble friend that, even during the Falklands War, we did not put off the local elections. Therefore, so far as I can see, this is a most serious precedent. Although I am quite sure that the House will support these measures, I believe that we want some cast-iron assurances—I do not know how they can be given or whether they can be written into the Bill—that this is a one-off situation and that it will not be repeated, certainly by this Government. We want assurances that a Bill, or anything else, will not be drafted in such a way that a government of another political colour will be able to use it to their own advantage.
Baroness Jay of Paddington: My Lords, I am grateful to my noble friend for raising again the historic significance and the seriousness of this decision. I can assure him that that was taken very much into account in coming to this particularly difficult decision. I agree that some local parties of all political persuasions would have been standing in readiness for the election which was about to take place but which was postponed. Having recently visited Swindon—my noble friend's parliamentary constituency when he was in another place—I know that his local party is in very good shape and is keen to undertake an election.
There will be disappointment. However, as I said, I believe that this serious, one-off decision was taken in accordance with the balance of concerns expressed in the Statement. Of course, my noble friend is right. The vast majority of areas in this country are still disease-free. I do not believe that we should underestimate the importance of that; nor, indeed, should we subscribe to the picture that is sometimes conveyed, for example, in television and radio coverage, of the whole country being devastated. Some areas are of course extremely badly affected, but the majority of the UK remains disease-free.
Lord Hurd of Westwell: My Lords, perhaps I may ask the noble Baroness to clear up a confusion which seems to have entered into these exchanges. She and several noble Lords have stressed the importance of setting an exact date, and the constitutional monstrosity of not setting an exact date, for the county elections. She went along with the argument of the noble Lord behind her that, from the point of view of tourism, it is as though the world is waiting to find out the date of the Cheshire County Council elections and that people's decisions on whether or not to come here depend on that.
However, does that not represent a lot of shadowboxing? Does not the message to the farming community, to the countryside and to the people who may come to this country from abroad—we hope that they will do so—depend on the date of the general election? With regard to that, we are, of course, in precisely the position about which the noble Lord, Lord Rodgers, and the noble Baroness tut-tutted. The situation is an open-ended one in which the Prime Minister, without even bothering about an order, can

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decide the date. It is in relation to that that the criteria and the questions advanced by my noble friend are important.
As this is now a matter of public debate, and given the decision that the Prime Minister has taken today, are we not entitled to know a little more about the criteria on which he will choose the date of the general election? Given that the noble Baroness made it clear that there is no connection between what she said today and the date of the general election, can she lift the curtain a little on the really important decision?
Baroness Jay of Paddington: My Lords, I am rather surprised that, with his extremely long experience in Cabinet government, the noble Lord, Lord Hurd of Westwell, should suggest that the setting of the date of the general election is something that can be arranged far in advance. He will know only too well that if a general election were to be called six months ahead, under the constitutional arrangements, which in this country are always somewhat more fluid than others might like, the machinery of government would, in a sense, almost grind to a halt. He will know that there is a period known in Whitehall circles as "purdah", and that during that period government cannot continue.
All the aspirations which the noble Lord, Lord Strathclyde, and others advanced for continuing apace with the legislative programme, for continuing with the process of government and for doing what my right honourable friend the Prime Minister is most concerned about, which is to undertake the most significant and what he described as the "massive" upgrading of the effort against foot and mouth disease, would be inhibited.
Therefore, the noble Lord will know very well that it is the Prime Minister's prerogative, as it has been since time immemorial, not to announce the date of a general election and for the date of the general election to be, in a sense, disassociated even from the dissolution of Parliament. From the time that the Prime Minister goes to the Palace to invite Her Majesty the Queen to announce the date of the dissolution of Parliament, the machinery of government grinds down. I am sure that the noble Lord would not wish that to happen now.
Lord Waddington: My Lords, perhaps the noble Baroness will be able to help us on this matter. Is she saying that the local elections will take place on 7th June, whatever the situation and whether or not the foot and mouth outbreak is under control?
Baroness Jay of Paddington: My Lords, I can only—
Baroness Blatch: My Lords—
Baroness Jay of Paddington: My Lords, I have not even given an answer yet. I do not see why the noble Baroness, Lady Blatch, should intervene from a sedentary position. I can only repeat what I said in the Statement, which I believe is unequivocal. A Bill will
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be introduced to postpone the date of the local elections to 7th June. That Bill will be debated and have its Second Reading here on Thursday.
Lord Barnett: My Lords, does my noble friend accept that if we had more speeches such as that of the noble Lord, Lord Strathclyde, the case for something to occur earlier than 7th June would be very strong? However, the one serious point was made by the noble Lord, Lord Rodgers. Are the Government giving any consideration at all to removing the problems of the Prime Minister by having fixed-term elections? Is that in my noble friend's mind?
Baroness Jay of Paddington: My Lords, whether or not that was in my mind is not relevant to whether or not it was in the Prime Minister's mind. I entirely take the point made by my noble friend Lord Barnett. Interestingly, he may remember that we discussed that matter at some length during the passage of the House of Lords Act. The Opposition were determined to castigate the Government over whether or not we should remove the Prime Minister's prerogative relating to the date of the general election. That, of course, was two years ago and it is not surprising that the position has since changed. I agree with my noble friend about the speech of the noble Lord, Lord Strathclyde. All 1 can say—1 apologise for repeating myself—is that I suspect that he does not wish there ever to be a general election.
Lord Burnham: My Lords, what consideration have the Government given to a postponement of the national census?
Baroness Jay of Paddington: My Lords, the question of the national census has been examined and it has been agreed that it will go ahead at the end of April.
Earl Russell: My Lords, listening to the noble Lord, Lord Strathclyde, I was reminded of the late lain Macleod's maxim that one does not shoot Santa Claus. Does the noble Baroness the Lord Privy Seal agree that a strong argument for what the Government have done is that one should not in a democratic society undertake electoral arrangements that do not enjoy the confidence of the opposition? Under these circumstances, does she agree that one might have expected a slightly more generous response from the Opposition? The fact that they introduced a number of extraneous matters leads me to wonder whether it would be relevant to mention, in relation to delays at the beginning of the outbreak, the reduction in the number of vets, which was referred to in the Anderson report. That reduction occurred largely under the previous government. Should we not be a little careful of each other's glasshouses?
Baroness Jay of Paddington: My Lords, the noble Earl, as always, invites me to venture into complicated glasshouses. It is important to recognise that the noble Lord, Lord Strathclyde, said at the start of his remarks that he would support the measures being undertaken

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during the passage of the Bill. He said—his rights and responsibilities allow him to do this—that he might consider tabling amendments to the Bill but that he would not prevent the Bill receiving Royal Assent. The need to expedite that process is essential. Since the noble Earl mentions glasshouses, I am always rather amazed by the reaction of the party opposite when, in particular, my noble friend Lady Hayman gives a succession of extraordinarily authoritative and detailed statements. I compare that to the reaction to the work with which I was involved; that is, the response to the BSE episode some years ago.
Lord St John of Fawsley: My Lords, if the noble Baroness is looking for a generous response, will she accept one from me? It is given unofficially. I congratulate her on rediscovering an irenic form of discourse which she had forgotten in recent times. Does she agree that when a decision is taken in the national interest—when the national interest is put before party—that is likely to do more to restore public faith in the political process than any other act? Does she also agree that we should not descend to the level of the media and attribute the basest motives to everyone in political life?
Baroness Jay of Paddington: My Lords, I am always very grateful for the support of the noble Lord, Lord St John of Fawsley, and for his personal and political generosity. In this instance, he has stepped aside, as he often does, from what can be described as the "soundbite" exchange and has raised more important matters. As I have said twice in response to noble Lords, this has been a serious decision, taken, as everyone recognises, in an unusual context. There have been few examples of such decisions having to be taken. The fact that the Prime Minister took that step is a symbol of his wish to undertake national leadership—the noble Lord suggested that that was appropriate—rather than to concentrate on party political issues.
Lord Elton: My Lords, the surprising fact about the Statement is that it does not rely for its motive on the compelling reasons advanced by the noble Baroness, Lady Scott. They do not appear in it. The principal reason given was the,
"need for national and in some areas local politicians to be focused on the fight against foot and mouth disease, as the necessary machinery to deal with any eventuality is put in place".
That ties the decision entirely to foot and mouth disease. Does the choice of a date a month ahead mean that that "necessary machinery" will finally be in place?
Baroness Jay of Paddington: My Lords, I am sure that the noble Lord, Lord Elton, heard my right honourable friend the Prime Minister say this morning that he now has in place the mechanisms for a massive upgrading of the practical means and resources for dealing with the disease. He would obviously expect that to continue to have effect during the next three
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weeks. The Statement does not refer in detail to the points rightly raised by the noble Baroness simply as a result of the shortage of time. I am sure that the noble Lord will have noticed that those points have been addressed by the officials and Ministers concerned. That was why I was in a position to respond to the noble Baroness in the way I did.

Social Security (Reduced Rates of Class 1 Contributions) (Salary Related Contracted-out Schemes) Order 2001
4.36 p.m.
The Parliamentary Under-Secretary of State, Department of Social Security (Baroness Hollis of Heigham)rose to move, That the draft order laid before the House on 1st March be approved [10th Report from the Joint Committee].
The noble Baroness said: My Lords, I wonder whether I am going to keep a full House. Perhaps not!
I beg to move that the draft Social Security (Reduced Rate of Class 1 Contributions) (Salary Related Contracted-out Schemes) Order 2001, which was laid before this House on 1st March, be approved. I shall also speak to the draft Social Security (Reduced Rates of Class 1 Contributions, and Rebates) (Money Purchase Contracted-out Schemes) Order 2001 and the Social Security (Minimum Contributions to Appropriate Personal Pension Schemes) Order 2001, which were also laid before this House on 1st March.
My right honourable friend the Secretary of State has a statutory duty to review the contracting-out terms at least every five years. The last full review was in 1996, with the rebates proposed then taking effect from April 1997. There was, however, an interim review of the contracting-out terms for money purchase schemes in 1998, which changed the level of rebate for the last three years of the current quinquennium.
The present review began last August when the independent Government Actuary issued a consultation paper. He took account of the responses that he received in preparing his report to the Secretary of State, who has accepted the Government Actuary's advice in his own proposals. They were laid before the House together with the three draft orders and the Government Actuary's report on 1st March.
A great deal has changed in the pensions landscape since that last full review in 1996. I remind noble Lords that the Government inherited a situation in 1997 where many people were heading for poverty in retirement even when they had been in work for most of their lives. Our pensions reforms seek to turn that situation around by helping those who can save for their retirement to do so in funded schemes and by concentrating state help on those who are least able to provide for themselves.
We are committed to supporting occupational schemes, which are one of this country's great pension success stories. However, not everyone has access to an occupational pension scheme. We are therefore

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introducing stakeholder pension schemes from this April to provide a low-cost flexible means of saving in a private funded scheme for moderate and higher earners who do not have access to an occupational scheme.
In addition, we are reforming SERPS through the introduction of the state second pension, which will give more help to low and moderate earners (those earning between the annual lower earning limit and £21,600 in 1999 earnings terms). The state second pension is to come in from April 2002, which is the same time that the orders would take effect. The proposed level of rebate is based on the benefit that will he given up by contracting out of the state second pension and into a private scheme.
For low and moderate earners, the amount given up will vary according to whether someone is in an occupational or a personal pension scheme. That variation is taken into account in the orders. That different approach is what the pensions industry told us it would prefer when we consulted on the proposals for the arrangements for contracting out of the state second pension. It may make our calculations more complicated. However, noble Lords will know that computers can handle that.
What individuals need to know is that all the extra help in the state second pension for low and moderate earners will be available to those who contract out into a private pension through a combination of enhanced rebates and/or state scheme top-ups. This means that there should be no hard or difficult choices for people about whether to stay in or join a private pension scheme, in line with our long-term aim of increasing funded pension provision.
Turning to the level of rebates proposed in the orders, I should emphasise that they represent a significant increase in the level of rebate for all forms of contracting out. The Government Actuary advised increasing the rebate to take account, principally, of a reduction in the yield on both pre- and post-retirement investments and increased life expectancy. Other factors he has taken into account are related to the changing nature of the membership in contracted-out salary-related schemes; for instance, the increased average age of members and more female members. We accepted the Government Actuary's advice on all those matters.
In addition, we decided to raise the cap on the age-related rebate to money purchase schemes. The cap was agreed in 1996 and introduced in 1997 by the last government to restrain the cost on public finances and to discourage those who may not have sufficient time to benefit from a funded pension arrangement. Those reasons remain valid.
The cap is currently set at 9 per cent. Keeping it at that level would mean that those who will be around age 50 when these orders come into effect and who are currently contracted out, would have had to weigh up whether they would be better off contracting back into the state scheme. So we are proposing to increase the cap to 10.5 per cent. This means that all those currently contracted out can continue to be so.
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The overall effect of these changes on the cost of the rebate—in terms of revenue foregone—is an increase of £1.4 billion in the first year, rising to an extra £2.2 billion_by the end of the five-year period; in other words, approximately £10 billion. Those are sizeable increases. By comparison I invite noble Lords to consider the rebate for contracted-out salary-related pension schemes. The current total flat-rate reduction in national insurance contributions is 4.6 per cent of earnings between the lower and upper earnings limits. The proposed increased rate is 5.1 per cent. At first sight that is an increase of 0.5 per cent. but in fact it is much more than that.
The rebate is based on the value of the state benefit given up. For occupational schemes that continues to be assessed against what SERPS would have been if it had continued, with all the extra help for low and moderate earners being delivered through state scheme top-ups. Now, as noble Lords will know, the previous government progressively reduced the value of SERPS for everyone reaching state pension age in the current decade and beyond. So, had there been no change in the Government Actuary's assumptions (and no increase in the cap on age-related rebates) the level of the flat-rate rebates would have fallen—from 4.6 per cent to 4 per cent—because the value of the SERPS benefit given up would also have fallen for those reaching state pension age some time in the future.
Therefore, the real increase is from 4 per cent—that is, the real value of what that would have meant—to 5.1 per cent, or an increase of more than a quarter in the level of the rebate for salary-related schemes. We have decided that all of the increase in the flat-rate rebate for occupational schemes is to go to employers in recognition of the benefits provided by those schemes. Those increases take the total cost of rebates to £10.3 billion in the first year and £12.8 billion at the end of the five-year period in terms of revenue forgone.
We are aware that there may be those who wish the Government Actuary had gone further. There are those who take a pessimistic view of future yield on investments, and those who use only the time period and figures which support their own arguments. But the rebates, and the sizeable increase proposed, are a substantial current cost on public funds. Of course, they reduce future liability of the state to pay unfunded pensions, and we want to encourage more people to move into funded pensions, but it is still the case that they must be paid for now.
We have a duty to balance the needs of current and future pensioners. In the course of this Parliament we have committed a further £8.5 billion to helping today's pensioners. Now we are proposing to increase the amount going into building up funds for future pensioners by an extra £9.9 billion over the five years from 2002. We remain committed to encouraging private pension provision. We have fully accepted the Government Actuary's recommendations on increasing the level of rebates for those who contract out of the state scheme from April 2002 (when the state second pension is introduced). The orders are a fair reflection of the value of the state scheme benefits given

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up. They also strike a balance between public finance considerations and the interests of contracted-out schemes and their members.
In the light of that explanation, I commend the orders to the House and hope for their approval.
Moved, That the draft order laid before the House on 1st March be approved [10th Report from the Joint Committee].—(Baroness Hollis of Heigham.)
4.45 p.m.
Lord Higgins: My Lords, I must first declare an interest as the chairman of an occupational pension scheme which is to some extent affected by these orders. Secondly, I agree with the Minister that it would be helpful to speak to the three orders together although there are some variations between them and some aspects do not apply to all three.
I note with interest the way in which the Minister said that there is no need to worry about the complexity; the computer will cope with it. She managed to say that with a straight face which, after the past four years of listening to the noble Baroness on many occasions, I find intriguing.
At all events, these are important orders and reflect the fact that the private sector's funded schemes are important. Throughout, the Government stressed that they believe they are a great success story and should be encouraged. Indeed, I was surprised by a statement by Mr Jeff Rooker, whom we shall all miss in his ministerial role, in speaking perhaps for the last time on these matters in the House of Commons on these orders on 20th March, when he said,
"We remain committed to encouraging private pension provision. Our big picture plan is to shift from 60 per cent./40 per cent. ratio to 40 per cent./60 per cent. ratio in public and private provision".—[Official Report, Commons, 20/3/01; First Standing Committee on Delegated Legislation, col. 7.]
Given that statement, which is important, are we to understand that the Government's intention is that the structure of rebates shall encourage people to contract out of the national scheme rather than contract in?
As the noble Baroness rightly pointed out, this is part of the five-year review. There was an interim review but that related to provisions in the Budget rather than the usual five-year review. So the matters we are now considering are a review since April 1997 and will come into effect, as she rightly says, in April 2002. That being so, it spans the period between when rebates are related to SERPS and when they are related to the second state pension.
There is therefore a large structural change underlying these affairs during the period under consideration. I notice that the noble Baroness continues to refer to the change as being a "reform" of SERPS. As the noble Baroness, Lady Castle, is not here, she will not be contradicted in that respect, nor reminded by her, though she will be by me, that this clearly involves a broken election pledge. The Government said that they would maintain SERPS, whereas quite clearly the state second pension is somewhat different.
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The noble Baroness referred to stakeholder pensions, as did Mr Rooker in the debate to which I referred. It is right that stakeholders should not be treated differently from similar non-stakeholder pensions. It is right that the rebate should be the same, whether or not it is a stakeholder system. When we were discussing the underlying Bills which introduced the stakeholder pension and the state second pension, we referred to "decision trees". I gather that decision trees have been produced to enable people to consider the question whether they should take out a SERPS or some other pension arrangements.
Two points arise in that regard. I understand that the Financial Services Authority has had problems in building into the decision tree the initial decision as to whether or not someone should contract out. Perhaps the noble Baroness can tell me whether that is so. It seems to me that any such decision tree ought to begin by saying whether one should contract out.
I have seen a great deal about stakeholder pensions in the press recently. The Government are engaged in promoting them in a big way. To what extent is there a warning, so that we avoid mis-selling again, in that people might contribute to a stakeholder pension and then find that the minimum income guarantee is uprated in line with earnings rather than prices and, having contributed to a stakeholder pension, they would find at the end of the day that they receive no benefit? The noble Baroness shakes her head. Perhaps she can tell me whether that is being made clear to people who might be considering stakeholder pensions.
I turn now to the specific question of the size of the rebate. What I am not really clear about is the extent to which the orders we have before us today are the result of the Government Actuary's report or the result of the Secretary of State's decision. Both the Government Actuary's report and the Secretary of State's commentary have been published. As a result of the publication of those two documents a number of expert commentators have come to the conclusion that, despite what is obviously in absolute terms an increase in the amount of the rebates, the overall effect of these orders will either be neutral in the sense that they do not encourage people to contract out, which would seem to be contrary to the policy statement made earlier by the noble Baroness or alternatively, they will encourage people in certain age groups and circumstances, having contracted out, to contract back into SERPS. I understand that that is not what the Government intend.
Perhaps I may give another example. A member of William Mercer, which is well respected in this field, said that the effect of the new rates means that a 25-year-old man earning £30,000 a year would be £300 a year worse off in retirement by opting out of SERPS until the next review of rebates. I believe that Scottish Equitable has also gone on record to say that the effect of the figures in these orders will be either to discourage people from contracting out or even to encourage them to contract back in. The National Association of Pension Funds has expressed a similar view. I am genuinely puzzled. I do not know whether

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what they are saying is correct or not and whether the proposals in the orders will have the effect which is said by those outside experts to be the result of the Government's figures. It would be very helpful if the noble Baroness could clarify that particular point.
The other point she mentioned is the cap. I am not sure whether that also has a perverse effect in relation to government policies. I said at the beginning that the orders are not precisely the same in each case. As I understand it, the cap applies only in the case of the money purchase contracted-out schemes and will be raised as a result of these orders. Overall, the rebates need to be preserved. I certainly share the view, which is declared government policy, that we ought to encourage private schemes rather than use the rebate mechanism in such a way that it becomes counterproductive and, instead of encouraging contracting out and the move towards funded schemes, has the reverse effect. I shall be grateful if the noble Baroness can, from the detailed analysis, clarify the situation as far as that point is concerned.
Lord Goodhart: My Lords, actuaries practise an arcane science, which largely involves looking into crystal balls. The results are incomprehensible to the rest of us and for that reason, if for no other, I would not want to dispute or disagree with anything in the Government Actuary's report. I also have no objection to the first of these orders relating to salary-related contracted-out schemes. However, the other two orders raise the issue of the cap about which I have serious concerns.
As I understand it, the effect of age-related rebates is to pay on behalf of employees in each year an amount which, when topped up with reinvested income from the rebate, will produce at retirement an amount of income equal to the SERPS or SSP entitlement, which would have been earned by the contributor for the year in respect of which the rebate was paid. Owing to the longer period in respect of which income can be reinvested, the amount of the rebate needed to achieve that objective is therefore much smaller for younger earners than for older ones. The Government Actuary's tables show that for a 16 year-old the amount of rebate needed in 2002–03 as regards a money purchase or stakeholder scheme, or an appropriate personal pension, would be 2.6 per cent of relevant earnings whereas for a 58 year-old the amount needed is 19.1 per cent.
However, there is a cap on rebates which the Government propose to retain although they are proposing to increase it from 9 per cent to 10.5 per cent. The Government explain that the reason for the cap is to limit the burden on public expenditure. However, the result of the cap is that most earners from the mid-50s to the age of 65 will receive a rebate which is insufficient to provide a pension for that year and is equal to the SERPS entitlement.
At present there is a solution of a kind to that problem. The earner can opt back in to SERPS when he or she reaches the age of 50-plus and give up the rebate. If someone does that, the effect on the public finances is only on cash flow in effect. The rebate is tax
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revenue forgone now, but it is replaced by higher spending on SERPS or SSP later. But the need to opt back in to SERPS to maximise the pension adds to the complication of the pension scheme, and many earners will lose out by not opting back in at all or by doing it at the wrong time. Therefore, the cap is detrimental to earners even now when there is a possibility of opting back into SERPS. I wonder how much the cap now saves in revenue after taking into account the additional cost to SERPS or SSP in future.
I believe that there is a more serious problem which is that the situation will become significantly worse when we move on to the second stage of the state second pension and that becomes a fixed amount pension. It ceases to be an earnings-related pension because people who opt out of an SSP into a stakeholder pension will find that in later years their rebate is capped and, once we move on to the second stage of the SSP, they will not be able to escape the effect of the cap by opting back into the state second pension. At that stage the operation of the cap could become seriously unfair. Have the Government any plans in the long term to raise the cap further or preferably to phase it out altogether? I believe t hat it is a matter of real concern.
In theory, there is an alternative way of reducing the burden on public expenditure without causing hardship to anyone. That would be to pay lower rebates for men than for women to take into account the fact that the longer life expectancy of women makes their pensions more expensive. According to the actuary's report, the equality legislation makes that impossible. If so, that is an unfortunate and perhaps an unintended side-effect of the equality legislation.
5 p.m.
Baroness Hollis of Heigham: My Lords, I thank noble Lords for their comments on these orders. I shall start with the points raised by the noble Lord, Lord Higgins. He pointed out that the first time he came across the 40 per cent/60 per cent shift was when he read the speech of my right honourable friend Mr Rooker. That surprised me because the move from 60 per cent/40 per cent to 40 per cent/60 per cent was part of the background of the discussion of last summer in relation to previous pensions Bills in your Lordships' House. On the one hand we were seeking to encourage greater provision into pension funds as a savings vehicle; on the other hand we were seeking to develop such matters as stakeholder pensions for people currently reliant on schemes like SERPS Those who are somewhat higher earners would turn to stakeholder pensions and, therefore, private funded schemes. The remarks of my right honourable friend were made in that context and in the context of the discussions on earlier issues. I had certainly thought that that was part of the general currency.
The noble Lord also asked whether, as a result, rebates would encourage contracting out. He referred to the Government's "big picture". It is fair to say that rebates are intended to be a reflection, as the noble Lord, Lord Goodhart, said, of the value of the state

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pension that is forgone when a person contracts out. It is not meant to influence behaviour or to load it in one direction rather than another. It is meant to produce a fair playing field. Contracting out may not necessarily be the best option for everyone. However, we believe that rebates will not discourage contracting out or encourage contracting back in.
The noble Lord asked specific questions about how the decision may be made.
Lord Higgins: My Lords, is the matter of rebates a separate issue from the matter of the cap?
Baroness Hollis of Heigham: My Lords, I shall turn to that in due course. The noble Lord then asked about the FSA decision trees and so on. Whether contracting out makes good sense or not will depend on individual circumstances. At this point people may want to consult a financial adviser and take professional advice for which they have to pay.
Alternatively, they could ask a stakeholder scheme provider for a comparison with the state pension scheme that is to be given up and the possible replacement pension that they may receive in a private arrangement. Those illustrations will be on the basis of a projection approved by the FSA. I hope that answers the points in relation to stakeholder decision trees.
The noble Lord went on to say that he was concerned as to whether the schemes were viable in terms of the amount of rebate. That is what I would call the Mercer point: a 25 year-old man earning £30,000 a year will have £300 a year less pension. It is a matter of the actuarial assumptions and whether they are correct.
I am not surprised that the funds argue for an increased rebate over and beyond what we propose. The advice that I have taken suggests that in that respect a fairly pessimistic set of assumptions is being employed. I am not surprised by that, but the Government Actuary advises that to accept the pessimistic assumptions of the firm of William Mercer and others quoted by the noble Lord would be equivalent to the rebate being invested to earn only half a per cent a year more than the rate at which earnings increase and before applying the annual 1 per cent charge. If that were the case, there would be a negative state.
I do not believe that that is the case. I believe I am right in saying that there is something like a 2 per cent gap. Actuaries may disagree about what will happen to financial economic conditions in the future, but despite the advice given us by the Government Actuary, a more pessimistic outcome appears to develop in line with the situations suggested by the noble Lord as drawing on the advice of William Mercer. Although legislation requires the Secretary of State to report to Parliament on the level of rebates at least every five years, having taken advice from the Government Actuary, that does not preclude him from reviewing matters and reporting to Parliament at shorter intervals if circumstances require.
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In 1998 there was an intermediate review of rebates and money purchase schemes that changed the level of rebates for those schemes for the last three years of account of the five-year period. That change was prompted by developments in the July 1997 Budget and the changing nature of occupational money purchase schemes.
There is plenty of opportunity to make correction, if we need to, should the Government Actuary's assumptions be wrong. Certainly the best advice I have received—for the purposes of this debate I checked this matter—is that the views quoted by William Mercer and other firms seem to be extraordinarily pessimistic because effectively they suggest a negative return on pension investment which seems to me improbable.
The noble Lord asked about stakeholders and MIG and whether we were giving advice that stakeholders could produce a sufficiently low return that would be overtaken by MIG and therefore it would not be worth doing. This was part of an earlier debate. I was trying to mouth to him that the whole point of the pension credit system—we are hoping to bring forward legislation as soon as appropriate—is that it will overcome the difficulty that over a period of nine years or 13 years, whatever your assumption, you could fall back on MIG despite modest savings.
So—if I may trespass on to an area that we have yet to explore in greater detail—for a single person on an income of up to £135 or a couple on up to £200, you would assume a MIG level of £100—an income of £100—and then people would keep 60 per cent of the private occupational pension that they had, including stakeholders, up to a figure of £135 for a single person and £200 for a couple. The pension credit is therefore an additional building block on top of the MIG sum, and the problem identified by the noble Lord should not arise.
During the passage of the Bill I was pressed hard on this issue. Pension credit is designed precisely so that those who are nearly poor—just above the MIG lines—and those who are penalised for having small savings will now find that they will enjoy a much enhanced pension.
I turn to the issue of the cap, which was the substance of the remarks of both noble Lords. First, I shall make some general points. The cap on age-related schemes was introduced to protect public funds. The noble Lord, Lord Goodhart, identified that without it rebates could be as high as 19.1 per cent, although I understood the figure to be 19.5 per cent, relevant earnings for someone aged 58 being some kind of notional value of state benefit given up. In turn, that could act as a perverse incentive for someone of that age to contract out into an inappropriate pension arrangement. The increase set out in these orders protects those who already have contracted out of a personal pension so that they are not faced with the dilemma of deciding whether they should contract back in to the state scheme.
We have then to decide whether to continue to increase the cap. We are dealing with quite a small number of people. My understanding is that the cap

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affects about a quarter of a million people compared with about 4 million people receiving age-related rebates at the moment. That relates only to those already contracted out of personal pensions who are aged 50 to 55 during the five years beginning 2002; it is not an issue for younger workers because of the changes made by the previous government to the SERFS accrual scheme.
The noble Lord, Lord Goodhart, asked about the implication of moving to the flat rate at the stage of the state second pension. We have said that when SSP becomes a flat rate that will apply only to those with a significant part of their working life ahead of them—for instance. those aged 45 or below at the point of change. That group would not be affected by the cap because the value of the state scheme benefits given up would have been affected by the declining value of SERFS.
I hope that that is a satisfactory answer for the noble Lord, given our current information. I hope I have done my best to answer the questions. I shall be happy to follow up in correspondence any particular details that noble Lords may want to explore subsequently. With those explanations, I hope that noble Lords will feel able to agree the orders today.
Lord Goodhart: My Lords, before the Minister sits down, can she set out in a letter the saving to the public funds of the cap, given that it now affects only 250,000 people?
On Question, Motion agreed to.

Social Security (Minimum Contributions to Appropriate Personal Pension Schemes) Order 2001
5.10 p.m.
Baroness Hollis of Heigham: My Lords, I beg to move.
Moved, That the draft orders laid before the House on 1st March be approved [10th Report from the Joint Committee].—(Baroness Hollis of Heigham.)
On Question, Motion agreed to.

Social Security (Breach of Community Order) Regulations 2001
5.11 p.m.
Baroness Hollis of Heighamrose to move, That the draft regulations laid before the House on 20th March be approved [12th Report from the Joint Committee].
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The noble Baroness said: My Lords, in moving the regulations, I shall speak also to the Motion tabled by the noble Earl, Lord Russell. Sections 62 to 66 of the Child Support, Pensions and Social Security Act allow specific benefits to be reduced or withdrawn from community sentence defaulters. Where a court has determined that a person has failed to comply with the requirements of a designated community sentence, these sections allow the Secretary of State to impose a benefit sanction by reducing or withdrawing specific benefits and training allowances.
The provisions were debated at length during the passage of the Bill and I do not intend to return to the arguments today. However, the Act inevitably left much of the detail to secondary legislation. The regulations before the House today provide that detail. But before outlining the contents of the regulations, I should like to spend some time describing how we shall introduce the provisions on a practical level.
It was always our intention to pilot and evaluate the measures before making any decision to extend them on a national basis. I can confirm, therefore, that these pilots will start in October this year and will last for one year. For an offender to be included in the pilots, he must come under the supervision of the probation service in one of the four pilot areas. Using figures supplied by the Home Office, we do not expect more than 3,000 claims over the year of the pilot exercise.
How will the pilot schemes operate? The first point to emphasise is that each offender will have ample opportunity to comply with the terms of his order before any consideration is given to imposing a sanction. He will know well in advance that his benefit is at risk if he breaches, having been initially warned by the court at the time of sentencing about the possible consequences of failing to comply with the community order. This warning will be reinforced by his probation officer when he commences his order.
It is for the probation service to determine when an offender should be returned to court for breach proceedings. Under national standards for the supervision of offenders in the community, offenders must be returned to court no later than a second unacceptable failure to comply. The probation service uses its professional judgment as to what is an acceptable or unacceptable failure, within Home Office guidelines.
Once the referral to court has been made. the first step is for the probation service to notify the Benefits Agency that the offender has been referred to court for breach proceedings. When the agency receives this information, it will issue a warning letter to the offender irrespective of whether he is on one of the affected benefits or not. This letter will advise that, if the court goes on to determine that he has been in breach of the order and he is in receipt of one of the relevant benefits or training allowances, he will incur a benefit sanction. In this way, the offender is made aware once again of the link between compliance with his community sentence and benefit receipt.
If the court then goes on to determine that an offender is in breach of the terms of his community nity sentence, the probation service will notify the Benefits

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Agency again. The agency will then undertake a check to confirm that the offender is in receipt of one of the relevant benefits or training allowances at that time.
There is no element of discretion about the imposition of the benefit sanction. If a court deems that an offender is in breach, then a sanction must be imposed. If the offender is not in receipt of one of the relevant benefits when the check is made, the Benefits Agency will retain the notification and check on a weekly basis for a further four weeks to see whether a claim is made. If the offender does make a claim in this period, the sanction will be applied for the remainder of the four-week period from when it would have started had a claim been held.
I turn to the pilots and evaluation. We fully intend to conduct a full and independent evaluation of the policy. A competitive tendering exercise has awarded the contract to an independent Oxford-based research organisation. Perhaps I may take a little time to detail the main aims of the evaluation. First, we want to assess the operational impact on the Benefits Agency, the probation service and the Employment Service. How do we best ensure good liaison between the parties involved? What are the implications for staff? Are there resource implications? By examining how the measures operate in practice, we will identify any improvements needed in procedures.
Secondly, we want to examine the behavioural impact of the sanctions on offenders and others involved. For example, do the benefit sanctions encourage greater compliance with community sentences or more active job-seeking?
These regulations provide the detail for the imposition of a benefit sanction for those offenders under particular community sentences and in receipt of specific benefits or training allowances.
Regulation 2 prescribes which training allowances, paid under Section 2 of the Employment and Training Act 1973, are affected by these provisions. These are the programme known as Work-based Learning for Adults and the New Deals for the unemployed. Some types of payments under Section 2 of the Act, such as those payable in employment zones, are excluded from these provisions.
Regulation 3 prescribes the period during which a breach of community order sanction is to apply to a person. It prescribes the commencement date and duration of the sanction period, both for those in receipt of one of the prescribed benefits at the time when the Secretary of State is notified of the court's decision and those who claim those benefits during the period in which the sanction may be applied. For the pilots, the benefit sanction will be imposed for four weeks.
Regulation 4 prescribes the percentage reductions to be applied to the amount of income support payable to a person during the period of a sanction; sets out the minimum amount of benefit which is to remain in payment; and provides for the rounding of amounts and for the date on which changes in the rate of benefit payable are to take effect. Income support is not
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withdrawn from an offender incurring a sanction under these provisions. It is reduced by 40 per cent of the single adult rate unless the claimant or a member of the family unit is either pregnant or seriously ill when the reduction is limited to 20 per cent of this reduction.
Regulation 5 prescribes that, where one member of a joint-claim couple is determined to have breached a community sentence, the offender is sanctioned on his or her part of the benefit while the "innocent" member continues to receive his or her part of the benefit entitlement provided that this person continues to meet the conditions for receipt of jobseeker's allowance and is not subject to a benefit sanction in his or her own right.
Regulations 6 to 11 prescribe the circumstances in which a person who is determined to have breached a community sentence is to be treated as a person in hardship and, therefore, entitled to apply for a reduced rate of income-based jobseeker's allowance. These provisions largely replicate the existing hardship provisions in the Jobseeker's Allowance Regulations 1996.
Hardship payments are likely to be made where the offender has no alternative source of finance and is likely to suffer hardship as a result of the imposition of the benefit sanction. Offenders in defined vulnerable groups can apply for a hardship payment immediately. These groups encompass family units where a member is pregnant, sick or disabled or where there are children. Where the offender or his family's personal circumstances do not include one of these categories, he may apply for a hardship payment two weeks after the sanction has been applied. A hardship payment is assessed by deducting 40 per cent of the single person's allowance from the overall benefit entitlement, or 20 per cent if the offender or a member of his family comes within a vulnerable group.
Payments relating to employment programmes, which will continue in payment during this period of a sanction under these provisions, are disregarded in the assessment of resources available to the individual or family where a claim for hardship payment is made.
Regulations 12 to 17 make similar provision to those in Regulations 6 to I1 in relation to the payment of hardship payments to members of joint-claim jobseeker's allowance couples. These provisions largely replicate the existing provisions in the Jobseeker's Allowance (Joint Claims) Regulations 2000.
Regulations 18 to 20 provide for the exchange of information from the probation service to the Benefits Agency from the initial notification of the start of breach proceedings to the reimbursement of benefit if the offender successfully appeals against the court determination.
Regulation 18 requires the probation service to provide to the Secretary of State in writing certain information relating to the offender as soon as information alleging a failure to comply with a relevant community order has been laid before the court. This will enable the Benefits Agency to send a

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warning letter. Regulation 19 requires the probation service to provide to the Secretary of State in writing certain information relating to the offender as soon as a court has determined that a failure to comply with a relevant order has occurred. Regulation 20 requires the probation service to provide to the Secretary of State in writing certain information relating to the offender as soon as a court has quashed or set aside on appeal an earlier determination that a failure to comply with a relevant order has occurred. Regulation 21 allows information relating to community orders or social security to be retained and used for the purposes of evaluating and monitoring the effect of this particular benefit sanction and for the purposes of maintaining statistics. This is to allow the evaluation to be carried out.
These regulations set out the details of how the linking of entitlement to benefits with compliance with community sentences will work in practice. The benefit sanction underlines that rights to benefits should be matched by responsibilities to society, and that includes the condition of entitlement to benefit. It makes it clear that rights to support from the state are conditional on offenders fulfilling their wider obligation to society to comply with their community sentences.
Finally, I confirm that these regulations are compatible with the rights and freedoms under the European Convention on Human Rights. I commend these regulations to the House. I beg to move.
Moved, That the draft regulations laid before the House on 20th March be approved [12th Report from the Joint Committee].—(Baroness Hollis of Heigham.)
Earl Russell: My Lords, I should like to speak to the Motion which stands in my name, which states:
"That this House calls on Her Majesty's Government to withdraw the Social Security (Breach of Community Order) Regulations 2001 and lay new regulations which may only be brought into force by a further order which shall be subject to the approval of both Houses of Parliament".
The Minister said that she would speak to it, but I did not hear that she had very much to say about it. From our past exchanges I believe that the Minister is aware what it is that I want to know. My complaint here is that the proposal involved in these regulations for benefit sanctions on those who are in breach of community orders is based on insufficient information. We want sufficient information before we can decide whether any such measure can be justified or defended.
I hope that the Minister may be able to provide at least a little assistance on the first matter. I should like to know with more precision exactly what information will be collected in the course of the pilots. I should like to know what income those who are subject to these sanctions will have left to live on. I have here the Home Office circular which says that the object includes,
"to examine the impact on offenders' compliance with sentence requirements, offending behaviour, claiming behaviour, compliance with training schemes, financial circumstances, and to assess any additional cost that the scheme incurs".
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That is very mildly encouraging, but your Lordships will agree that the focus is much more on addressing offending behaviour than the financial circumstances of the claimant. It is an extremely imprecise reference. If the Minister were able to flesh that out a bit and provide a little more precision I would find it extremely helpful.
We also want to know what kind of effect such sanctions are likely to have on the behaviour of the person who suffers them; namely, whether, as has been suggested by many people before, they tend to increase rather than reduce crime. I hope we all agree that if the measures that we are discussing increase rather than decrease crime, to that extent they are misguided. We should like to know the effect on the health of those concerned. Can the Minister tell us how many people subject to the pilots will be checked out if they disappear from the records? If they vanish will t hat fact be recorded? Will the pilots say that x percentage of people could not be traced? Will the pilots record what percentage of the people concerned became homeless? If the Minister is able to reply "yes" to all those questions it will be extremely helpful.
I also draw attention to two items reported in this morning's Independent. One is a Private Member's Bill to be introduced by Mr Woolas, Member for Oldham East and Saddleworth, which proposes to deprive people of social security benefits, including housing benefit—therefore, on a much wider basis than these regulations—for failure to include their names on the electoral register. I should welcome an assurance that the Government will give no support to any such Private Member's Bill. It rather suggests what I have feared for some time; namely, that the tendency to deprive people of social security benefits for any behaviour that we happen not to like is in danger of becoming addictive. That is something which needs attention.
The second matter is a press release put out today by the National Association of Probation Officers. The association advises its members to refuse to impose this sanction because it believes its effect is likely to be to increase crime. I have the press release here and, if she wishes, I can show it to the Minister afterwards. The position of someone in the public service who is asked to do what he believes to be wrong in terms of his own professional standards is an extremely difficult one. Everyone who has been in public service since the process of centralisation began in 1988 has experiences which lead him to sympathise. Speaking for myself, I would consider resigning from my profession rather than directly disobeying a lawful command. But in those circumstances I must ask the Minister for an assurance that if any members of the probation service resigned rather than comply with this measure they would not suffer the penalty of voluntary unemployment. I believe that that is a point of some importance.
As the Minister pointed out, this is a mandatory sentence and there is no element of discretion in this measure. There was no blush on her face as she said it, and I was sorry to observe that fact. When we engaged on this matter in the Social Security Fraud Bill the

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Minister attempted to argue that the research that we wanted carried out was impossible. I have consulted my honourable friend Professor Webb, whose expertise in matters of social policy research will be recognised by the Minister, as indeed I recognise hers. My honourable friend dealt with the Minister's point that in relation to the Social Security Fraud Bill one would have too small a sample. He said that there was no objection whatever to testing the effect of sanctions on a rather larger sample of those who had experienced it. Under the New Deal in the quarter January to March 1999, 4,636 people were sanctioned. At the end of that quarter there was a total of 48,750 subject to sanctions. I do not believe that even the Minister asked for a sample quite as large as that. It would be perfectly easy to take that sample, or some part of it, and assess the effect. That would create a rebuttable presumption that the effect in this case might be similar.
If the Minister wished to rebut that presumption she would have to find a way to do research on the present sample. I observe the noble Baroness to shake her head, but if she cannot get the information that we need to evaluate this matter she should fall back on the good traditional maxim "when in doubt, don't". The Department of Social Security has always said that it monitors the consequence of every measure that it introduces. If it cannot monitor the consequence of this one it should not do it.
The Minister invoked hardship payments, as one was sure she would. I simply do not understand how anybody can suffer a loss of 40 per cent of benefit without being in hardship. If that is possible, benefit levels are 40 per cent too high. One cannot see even the Treasury recommending that one should go before the electorate and defend a 40 per cent cut in the overall levels of benefit, especially in the light of the arguments of the Acheson Report that the present levels are too low.
Mr Harry Fletcher argues on behalf of the National Association of Probation Officers that,
"the only alternative source of income will be begging or stealing. This will increase crime".
There is research accessible to the Government which suggests that there might be something in that. Ministers have referred me over and over again to research reports 15, 18 and 86 of the Department for Education and Employment. There is no quantitative information in those reports. There are a series of impressionistic comments and general reflections.
I have in my hand a quotation from someone who had been disentitled. He said:
"They're asking for trouble, they're asking for people to steal".
That is not, by itself, a research finding, but it creates a research question that calls for a research answer. We have a study of 16 and 17 year-olds in South Glamorgan, published in 1994. It was an in-depth study of a sample of 26, of whom 20 had become criminal—four of them on a full-time basis. I admit that that was a total disentitlement, and not a 40 per cent disentitlement, so the effect could be different.
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But that is a question on which information should be available to us. It seems to me a lamentable lack of curiosity that that information is not there.
It is also suggested in those research reports that to a great extent what happens is that people borrow from relatives, friends and other people. That may well be the case. If so, it underlines the point I have made many times that we need information on the level of debt among those on social security benefit. It also raises what I find rather the more worrying reflection that the impact of these sanctions may weigh quite disproportionately on the solitary. The solitary and misfits are over-represented anyway among those on social security. If they experience a degree of hardship which others with stable families do not, that may well have a discriminatory effect which I do not believe is what the Government intend. But if that is what they are doing, they ought to know.
We shall be told in return a great deal about rights and responsibilities. We are dealing with the question of how severe the effect of the sanctions may be. The Minister will agree that the right to life is a human right. It is not contingent on the discharge of responsibilities. Since the noble and learned Lord, Lord Williams of Mostyn, played such a distinguished part in approving the protocol of the European Convention on Human Rights, the death penalty in this country has been illegal, without any reference to responsibilities. I supported that and I applauded it, as did many on the Government Benches. The right to eat is a human right. It is not contingent on responsibilities. Convicted prisoners enjoy it; convicted terrorists enjoy it. If the Minister says that what we are debating is on a quite different level, that is an evidential proposition which she must be prepared to quote evidence to sustain. I hope that she will agree to do so. If she does not, she will be taking a very large leap in the dark in a way which I regard as incompatible with the Department of Social Security's high standards of respect for evidence.
I look forward to the noble Baroness's reply. Whatever happens, in the not too far distant future this issue, in one form or another, must go before the voters. I shall listen to them with great interest, as I shall to the Minister.
5.30 p.m.
Lord Windlesham: My Lords, the order before the House is the final chapter of one of the more extraordinary parliamentary episodes of the current Session. It has taken 12 pages to produce what is effectively a face-saving settlement to a controversy that occupied a great deal of time earlier in the Session. The Government climbed down after considerable pressure from all parts of the House, including their own Benches. Ministers decided to abandon what was one of the most inappropriate penal sanctions ever put before Parliament. The sanction was that after one warning an offender who was subject to a community penalty—very often a probation order, but a range of other community penalties as well—and who was

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believed to have committed a further breach of the order would have his or her welfare benefits reduced or withdrawn in advance of any court hearing.
After considerable opposition to that proposal, it was moderated by the Secretary of State for Social Security. I acknowledge the helpful part played by the noble Baroness, Lady Hollis, in the compromise that the sanction would be retained, but only until after a finding of guilt by the court. That is where we now are. However, the Department of Social Security has no business to be involved in penalties for breaches of a court order at all. What has happened is that the Home Office too has been ploughing its furrow on the same issue; that is, breaches of community orders.
In a major Act of Parliament carried in the same Session—the Criminal Justice and Court Services Act 2000—there are penalties for breaches of community orders. I see the noble Lord, Lord Dholakia, in his place. My recollection is that he took part, as I did, in debates during that Bill in which we discussed what would be the appropriate penal response to a second breach. The Lord Chief Justice spoke on the same issue at Report stage. In brief, where a court has found that there has been a second breach after a warning, a mandatory sentence of imprisonment will be imposed. In this way, many of the Department of Social Security's clients will end up in custody in any event so the whole purpose of the order will have been defeated.
That is all I want to say. I am an intruder on the territory normally occupied so eloquently and effectively by my noble friend Lord Higgins. My noble friend suggested that I might like to take this opportunity to speak on the issue again, and I have taken advantage of the invitation to do so.
Viscount Tenby: My Lords, as I spoke briefly on the issue to which the noble Lord, Lord Windlesham, referred, perhaps I may from the Cross Benches reiterate my anxiety about the Department of Social Security coming into what is basically a penal matter. The noble Lord, Lord Windlesham, pointed that out. I also noted with great interest the remarks made by the noble Earl, Lord Russell.
I recall saying on the previous occasion that this matter was debated that I could not understand why the Home Office permitted the department to trespass on its territory in this way. According to my knowledge of the Home Office, the department must have had a very powerful and persuasive spokesman. However, quite apart from those considerations, a court of law, in the form of the magistrates' court, will deal with this. As the noble Earl said, if there are two breaches of a community service order, these people will in any case end up in custody.
Surely the most serious argument here is that the probation service has stated in effect that it is not going to operate the regulations, trial or no trial. One must also hear in mind the fact that if benefit is removed from such people who are, on the whole, completely disorganised individuals whose daily lives have been disordered for years until eventually they come before
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the court, the chances are that they will reoffered. They will have to do that in order to buy food, meet their heating costs and so forth.
I hope that the Minister will listen carefully to the remarks that have been made during this short debate. I know that she will because she is most conscientious and meticulous in these matters. Perhaps she will be able to accommodate, at least to an extent, the views of noble Lords in her reply.
Lord Higgins: My Lords, I have listened with great interest to the contribution from the noble Earl, Lord Russell, as well as to the interventions from my noble friend Lord Windlesham and from the noble Viscount, Lord Tenby. We debated this matter at considerable length and, if I may say, with considerable passion at earlier stages. My understanding is that the order effectively implements what was then the state of play that we had reached.
Although I have checked my post today, I have not received any further notice or press release from the probation service. If the officers are responding in the terms mentioned by the noble Earl, that is a matter which we shall need to consider very carefully. Having said that, I look forward to the Minister's comments on what is obviously an important matter involving considerable points of principle.
Lord Dholakia: My Lords, I apologise for intruding on the debate, given that the noble Lord, Lord Windlesham, has spoken for many noble Lords who were instrumental in raising this issue on a number of occasions when the relevant criminal justice legislation was passing through your Lordships' House. I am delighted now to be able to support the resolution set down in the name of my noble friend Lord Russell.
I note that the Minister has indicated that pilot schemes will be set up and will commence in October. Those of us who work in the field of criminal justice are aware of the developments. I believe that we do not necessarily need to run the pilot schemes to find out the precise impact such rules will have on offenders who have breached their community orders. Sufficient research is already available which gives a good indication of what is being sought here.
As a result of an all-party amendment proposed by the noble Lord, Lord Windlesham, the Government were prevented from applying this sanction before the case had come before the court. However, even with this improvement, the measure is counter-productive and bound to increase crime. Pushing people into even greater poverty must increase the temptation to steal, commit burglary, shoplift, solicit for prostitution or sell drugs.
The measure is effectively a double punishment and therefore is unjust. The courts will retain all their current powers to impose penalties for breach of orders, ranging from fines to imprisonment, and the withdrawal of benefits will be additional to whatever penalty the court imposes. Moreover, the double punishment will apply only to the poorest offenders because it will not affect offenders who are in work.

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Inevitably, it will also affect other innocent family members, including young children, through its impact on total family income. As such, it surely raises a moral question about how society should deal with the families of offenders.
The national standards of the probation service now require that an offender must be returned to court for breach of an order on a second failure to comply. This could mean being 20 minutes to half an hour late for a probation or community service appointment on two occasions. The degree of hardship involved in the reduction or withdrawal of benefit will often be wholly disproportionate to the seriousness of the offence, especially as it will be additional to whatever punishment the court decides is appropriate for the breach.
There is a real risk that the measure could deter some probation officers from taking people back to court for breach of an order. We support the Government's view that community sentences should be strictly enforced. There is no problem about that. Furthermore, probation officers should be rigorous in returning people to court for persistent non-compliance. However, if probation officers know that the result of that action will be unjust and draconian, there must be a temptation not to record failures to comply in order to avoid such consequences.
The Government have argued that benefit entitlement has always been conditional; for example, there are benefit sanctions if someone in receipt of jobseeker's allowance does not actively seek work or if women do not co-operate with the CSA. However, requirements that benefit claimants should be willing to co-operate with attempts to find them employment or obtain maintenance are related directly to their need for benefit. In contrast, there is no direct relationship between breach of community sentences and the need for benefits to be paid to an individual who has no income. For that reason, the reduction or withdrawal of benefit introduces a gratuitous element which gives it all the hallmarks of an additional punishment.
We hope that the Government will think again and will withdraw this misguided measure. It is one thing to be tough on crime and criminals, but there is a real danger that the action proposed by the Government will lead to more crime. We have enough problems in our prisons today without the Government adding to them by enacting this ill-conceived legislation, and in particular the regulations before the House.
Perhaps I may also offer a word of warning. We should remember that black youngsters are up to twice as likely to be unemployed. Given that, we shall see a greater proportion of this group going through the criminal justice process. Although we have reached a late stage, the time is right to look again at these regulations.
5.45 p.m.
Baroness Hollis of Heigham: My Lords, as I expected, this has been a thoughtful and considered debate which has gone over issues that were discussed
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very thoroughly during the passage of the Bill. I have tried not to reopen the arguments, but I suspect that I shall need to trespass on some of those issues as I develop my reply.
I should like, first, to answer as best I can the points raised by the noble Earl, Lord Russell. His argument appeared to suggest that we could not and should not go ahead with pilot schemes before we have sufficient information to know what will be the effect of the pilots. With respect, the noble Earl knows perfectly well that that is the point of holding the pilot schemes. That is why we are introducing them—in order to ascertain the effects. If they work well. I hope that he will join me in wishing to extend them. If they do not work, we should be foolish to pursue them.
Earl Russell: My Lords, that is why I prefaced my remarks by saying that the Minister would save me a good deal of trouble if she could tell me more about the kind of information to be gathered by the pilots.
Baroness Hollis of Heigham: My Lords, I was about to do that. However, that is not an argument not to run pilot schemes. The point of the pilots is to gather sufficient information to judge whether this is a viable policy and to learn from and build on that experience so that we can work towards a possible national roll-out.
The noble Earl asked what the pilot schemes will examine, aside from what I have already outlined. The researchers will look at the impact of this sanction on long-term reconviction rates and the duration of breach of proceedings. Furthermore, we shall build up a profile of the kind of offender who is affected by the sanctions. We shall gather the views and perceptions of staff involved in administering the pilot exercise, as well as collecting the views and knowledge of offenders about the sanction.
Research methods will include not only analysis of the administrative data, as well as in-depth interviews from focus groups and of key members of staff in the probation service, the Benefits Agency and the Appeals Service, but also in-depth interviews with offenders. Thus the answers to the questions raised by the noble Earl—where would resources be found to make good shortfalls in income and what will be the effect on health?—should come to light after detailed interviews are held with offenders, as well as the postal survey of magistrates and justices' clerks. I fully expect that the kind of issues raised by the noble Earl will show up there.
I hope to give the noble Earl an assurance about housing benefit. We are talking about a four week sanction. Housing benefit will remain in payment throughout and, therefore, there should not be a direct effect on homelessness. Obviously, I accept that housing benefit does not necessarily in all cases fully cover the gap between the single reference rental, the local reference rental, the single room rent and the rent paid, but we are talking about four weeks and, given that most rent is paid monthly, we have no evidence to suggest that this would result in any risk of an increase in evictions or homelessness. Certainly, it is one of the

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issues we will be monitoring, but the point is that housing benefit as such—the core payment—will remain in place.
If the noble Earl wishes to intervene to make any further points about what the survey will be seeking to establish, I am very happy to extend my comments at this point.
Secondly, the noble Earl pressed me about the remarks in today's Independent attributed to Mr Woolas in another place. I read the article for the first time when I was on the train coming into London today. All I would say is that there is no official knowledge of this—and, therefore, no official views on it or support for it—in either the Home Office or the DSS as of today; it is news to us. I am sure that the noble Earl would not wish to press me beyond that. It is not a Home Office or DSS measure.
As to the Probation Service, I was asked what would happen if probation officers refused to impose the sanction. Probation officers do not impose the sanction. The whole point of the amendment of the noble Lord. Lord Windlesham, if I can put it that way—which the Government took over and together, around the House, we hammered out a compromise—is precisely that that decision does not rest with probation officers.
As professionals, probation officers will be required, within the guidelines of the Home Office, to determine whether—and they have appropriate discretion in this field—a person has broken a community sentence without reasonable grounds. Those reasonable grounds—including issues of health, an emergency with childcare and so on—were explored in your Lordships' House. That is a probation officer's job; he or she does nothing, as such, apart from reporting what he or she is doing to the Benefits Agency. The sanctions will follow the court decision, not the probation officer's referral. The probation officer is therefore not involved in sanctioning the individual.
Earl Russell: My Lords, I am sorry to intervene again. I have Mr Fletcher's press release here. He states that probation officers are to be advised not to report the breach of the order so that the court sanction would not be triggered.
Baroness Hollis of Heigham: My Lords, if he is saying that probation officers, when handling someone on a community sentence who broke that community sentence, were prepared not to take that person back to the court at all for fear of triggering a benefit sanction, I suggest that we would then have to look very carefully at the professional discipline of the Probation Service. I hope that that situation would not arise. Probation officers have an overriding responsibility to the offender to keep him on the straight and narrow and to the court to exercise that responsibility.
It should be remembered that a community sentence is an alternative to a custodial sentence. If a person does not abide by the terms of a community sentence,
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then, as indicated in the Criminal Justice Act, the court has a right to bring that person back and to decide whether, in the light of that breach, that person should now complete the rest of his or her sentence in prison.
Where someone has fragrantly broken a community sentence, to say that a probation officer can make a decision not to take that person back to the court, as the law lays down, would raise serious questions about what is the nature of the professionalism, the job, the duties and the responsibility to the wider community of the Probation Service. Like everyone in your Lordships' House, I hope and expect that that situation will not arise because probation officers will understand their responsibilities.
Lord Windlesham: My Lords, before the Minister leaves that point, can she help the House with this conundrum: if a second breach is established—and would, therefore, under her proposals, attract withdrawal of benefit—how would that relate to the fact that, once the breach is proved, it will attract a mandatory penal sanction, either of imprisonment or some other penalty? There appears to be no relationship between the two pieces of legislation. I have refreshed my mind by reading the summary of the Criminal Justice and Court Services Act; there is no reference to benefit withdrawal.
Baroness Hollis of Heigham: my Lords, I believe that the noble Lord is intervening to make the same point that he made in his speech. I was hoping to come to that in due course. I am happy to try to deal with that now, if the noble Lord wishes, but I was seeking to complete my responses to the noble Earl, Lord Russell. If the noble Lord will allow me, I shall come back to that point later.
The third point raised by the noble Earl, Lord Russell, related to the question of sample size. I was shaking my head about my concern in regard to the sample size for the fraud Bill, where we are talking about 300 cases. This has nothing to do with the fraud Bill. The concern here is not the size of the sample. I entirely agree that a sample of the size we may be talking about would be large enough to get the information needed. However, this is a different issue: the sanction runs for only four weeks and, in some cases, concerns a restricted amount of benefit withdrawal:£20 off the rate for a single person on the hardship scheme; £10 off if they are seriously ill or pregnant. To try to assess the impact of £10 per week times four weeks in terms of a person's health, state of well-being and so on—all issues that the noble Earl and I have explored many times—would be 'very difficult.
The problem with the fraud Bill was the size of the sample; the problem with this Bill, in terms of trying to assess the effect in any quantitative way, is the very short period for which the sanction runs. It is very difficult to work out what the effect may be of £10 or £20 off an income of £120, coming down to £100, over four weeks.
Certainly, by going for the qualitative method of interviewing those affected, and given that this is being carried out by an independent national centre for

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social research—which is entirely independent of government—I hope that the research will be of decent quality and allow us to evaluate whether this system is effective in encouraging people, largely young people, to abide by their community sentence.
I do not pretend for one moment that the sanction will not have an effect on people. That is the point of a sanction; the whole of the social security system is based on conditionality. If the only way for a sanction not to have an effect would be to raise benefit levels across the board by the amount that the benefit sanction would take away, that would not be an acceptable position for the Government.
The noble Earl, together with the noble Lord, Lord Dholakia, and the noble Viscount, Lord Tenby, said that the effect of this would be to make poorer those people who already had offences behind them; that they would seek to make up their income by begging or stealing; that that would increase crime and, therefore, this measure is self-defeating.
I am sorry, but there are alternatives. One is to abide by the community sentence; the other is to find a job rather than receive benefit. We are told that these people are so feckless that they cannot manage to attend interviews and so on, and that therefore it is unreasonable to expect them to get their lives in order and to turn up for a probation interview. I remind the House that nearly 40 per cent of those convicted of burglary, violence against the person, criminal damage, fraud or forgery in 1998 received a community sentence. A quarter of those convicted of sexual offences or robbery in 1998 also received a community sentence.
These are not trivial offences due to fecklessness, incompetence or an inability to get lives together; they are serious offences which would, under other circumstances, have merited a custodial sentence. The community has the right to be protected, particularly those most affected by such crime; that is, those people on the poorest council estates, who often suffer severe harassment, threat and worry as a result of people failing to abide by the community justice system and, frankly, cocking a snook at it. We have a responsibility to protect those who cannot withdraw behind privet hedges into the privacy and security of their own homes; who have to live cheek by jowl with young men and women who fail to respect appropriate behaviour in society.
As to the point about fecklessness, these are people who have their lives sufficiently in order that they can attend an interview to sign on to get their benefit, but somehow cannot manage to attend an interview in order to meet their probation officer. That is fecklessness being turned off and on to suit the individual. I give way to the noble Lord, Lord Windlesham.
Lord Windlesham: My Lords, that was a very eloquent statement; but the noble Baroness appears to be unable to get her mind around the fact that conduct of that sort will result automatically in criminal penalties following a conviction in court. Penalties are
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provided by the criminal law, up to and including imprisonment. So why are Ministers in the Department of Social Security instructing their unhappy department to add some special penalties of their own?
6 p.m.
Baroness Hollis of Heigham: My Lords, the DSS has always believed that benefits come with conditions attached. I know that that view is not entirely accepted by the House, but I believe it is accepted by the major opposition party. The condition may, for example, be that a claimant is available for and actively seeking work. It may be, as with the Child Support Agency, the requirement for a woman to name the father of her child where there is no good cause for her not to do so. If the condition is that a person observes the terms of a community sentence, in the Government's view that is a proper condition to attach to benefit. That is what we are seeking to do.
Earl Russell: My Lords, before we leave this topic, will the Minister concede that the desire to protect the community against crime is common to us both; the point at issue is which of us is doing it?
Baroness Hollis of Heigham: My Lords, pilot schemes have been set up to determine whether this measure will be effective in controlling the level of criminality which makes life on so many of our poorer council estates an absolute misery for those who are trying to lead decent and respectable lives there. If the pilot schemes do not work, I shall be one of the first to say so. If they do, I hope that I shall equally have the noble Earl's support in extending the scheme on a nation-wide basis.
I now turn to the points made by the noble Lord, Lord Windlesham. He asked about the interaction between Section 53 of the Criminal Justice and Courts Services Act and these regulations. That section provides for the court to decide whether, when an offender is in breach of his sentence, he will nevertheless go on to complete his order successfully. If the court believes that he will, it will allow the order to continue but will impose a penalty; if the court believes that he will not, it will impose a penalty of imprisonment. It is, therefore, wrong to say that all offenders will go to prison and as a result this provision is nugatory. There is one other point. Section 53 has not been commenced and will wait until the resources are available.
I hope that I have addressed the additional points raised by the noble Viscount, Lord Tenby, and the noble Lord, Lord Dholakia. I hope that the noble Lord, Lord Dholakia, does not believe that this provision in any sense bears unreasonably heavily on any one section of the community, such as the black community. It is the case that young people of Afro-Caribbean background may have a higher offending rate and a higher community sentence rate than other young people of, say, Asian, Chinese or Indian background, but the provision applies across the board to women and to men; and it applies to people irrespective of their ethnic background.

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We are saying that all of us in the community, as taxpayers, have a right to expect young people—this applies largely to young people—to observe their community sentences. If on a second offence they have failed to do so—in other words, they have been brought back before the court—this trigger will come into play.
As I said, we are experimenting in four pilot schemes. The schemes will be carefully, professionally and independently evaluated. If the effect on crime and on recommittal is not what we hope it will be, obviously that will bear heavily on whether we decide to roll out the scheme nationally if we are in a position so to do. But the way to find out is to go for the pilot schemes. The House accepted this idea at the time; I hope that noble Lords will accept it today. I commend the regulations to the House.
On Question, Motion agreed to.

Business
Lord Carter: My Lords, I can only apologise for the fact that my noble friend Lord Bassam is not present to introduce the Second Reading of the Criminal Justice and Police Bill. He was standing beside me only two minutes ago and I informed him that debate on the regulations was ending. I do not want to adjourn the House during pleasure unless noble Lords wish me to do so.
Baroness Hollis of Heigham: My Lords, I am sure that the noble Earl, Lord Russell, and I could continue our debate.
Lord Carter: My Lords, if the noble Earl were still in his place, he could explain why he did not want to move his amendment. However, my noble friend is entering the Chamber now.

Criminal Justice and Police Bill
6.6 p.m.
The Parliamentary Under-Secretary of State, Home Office (Lord Bassam of Brighton): My Lords, I apologise to the House for not being in my place.
I beg to move that this Bill be now read a second time.
The Bill that comes before your Lordships is a set of substantial and hard-hitting measures that cut right across the boundaries of our law enforcement process. With your Lordships' support, the Bill will fundamentally change the way in which the police and the criminal justice system operate. It will help us with our goal of building a more just, safe and tolerant society.
The Bill will hit hard at the yob elements in society who show no restraint in public. It will give practical protection on the ground to those vulnerable elements of our society, whether they are at risk when they try to give evidence at a court hearing, or whether they are
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being unjustly harassed in their own homes by the activities of animal rights "terrorists". It will rein in those young people making others' lives a misery, whether they are acting like bandits while on bail or whether they are in need of curfew orders to protect themselves and those around them.
The Bill offers a wide range of measures to drive down crime. It provides: improved measures in respect of fingerprints and DNA, to ensure that we make best use of the latest crime fighting technology; improved powers for the police and judiciary in respect of alcohol related disorder, search and seizure and sharing of information; and improved measures to modernise police organisation and training. These all combine to make this a highly practical and effective piece of legislation.
Perhaps I may briefly set out the main proposals in turn. Part I of the Bill contains measures for combating crime and disorder. Chapter 1 of Part I sets out our proposals on penalty notices. Penalty notices, in Clauses 1 to 11 , are a practical measure which enjoys the support of the Association of Chief Police Officers. They will help our policemen and women to deal quickly and firmly with aspects of minor disorder, freeing officers up from paperwork to get back on the streets fighting crime.
Penalty notices were well debated in the other place. I was glad to see that the Official Opposition had no objection in principle but were more concerned with points of detail—over which much debate took place. I welcome any constructive debate in this House that ensures that these measures operate to their full capacity.
Chapter 2 of the Bill contains a number of measures targeted at alcohol related crime and disorder. In short, these measures will enable swifter action to be taken in terms of closing certain licensed premises due to disorder or excessive noise and closing places which sell alcohol without a licence. The provisions will also strengthen the law to prevent the sale of alcohol to minors. I have had a constructive meeting with those noble Lords and honourable Members of another place who sit on the Parliamentary Beer Group to discuss these measures.
I hope that, following our debate, those concerned will feel able to put their full weight behind the proposals. I was glad to see that the alcohol measures and many of the other measures that I shall mention shortly—subject to points of detail—were broadly supported by Members on all sides in another place.
Chapter 3 of Part 1 completes the package of measures to combat crime and disorder. Restrictions on drug trafficking offenders in Clauses 33 to 37 will be an effective tool in restricting the activities of those who deal in drugs, while those measures (in Clauses 38 to 40) to protect witnesses will make it safer for those law-abiding members of the public who seek to give evidence in court. Again, I was glad to note that these measures received broad support in the other place.
Our strengthening of child curfews is significant, as set out in Clauses 45 and 46. I imagine that some noble Lords—perhaps of a Liberal Democrat

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persuasion—may be concerned about the principles involved. I should merely argue that these measures will be fundamental in protecting people in their own homes. We must act to protect those who are afraid to leave their front doors because of the gangs of youths that are known to stalk, and sometimes maraud around, the streets of many estates.
In response to the harassment and intimidation suffered by members of the scientific community at the hands of animal rights extremists, the Government inserted further measures in the Bill (Clauses 41 to 44) during the Committee and Report stages in another place. These amendments attracted wide support of both Conservative and Liberal Democrat Members.
I am sure that many noble Lords will be all too familiar with some of the unpleasant practices that have been used by animal rights extremists to terrorise law-abiding citizens in their own homes. Indeed, on a number of occasions in your Lordships' House good examples have been given of those practices. Many noble Lords have spoken powerfully on behalf of those seeking to advance animal scientific experimentation in controlled circumstances, quite properly, and have argued for their protection.
I am proud to say that the laws we have to protect animals in this country in relation to experimentation are the toughest in the world. The measures in Chapter 3 in respect of harassment at home, malicious communication, collective harassment and the disclosure of the home addresses of directors and secretaries of companies will protect those who are legitimately and lawfully going about their day-to-day business. It is only right that this House should also be seen to be fully behind this package of proposals.
Clauses 47 to 50 in Part 2 of the Bill deal with disclosure of information for the purposes of criminal proceedings. These provisions will improve the ability of government bodies to disclose information for specific crime-related purposes. We have to recognise the difficulty of fighting crime if potentially useful sources of information are not available to law enforcers.
The Government also see the information disclosure provisions as a key way to improve international cooperation in the fight against anti-competitive behaviour. We have listened carefully and closely to the CBI's concerns on those proposals. Safeguards have been put in place. These safeguards include the power of the Secretary of State to prohibit overseas information disclosure in cases that ought to be dealt with in the United Kingdom or a third country.
Part 3 of the Bill gives the police and the other law enforcement agencies powers to seize material and remove it for sifting elsewhere. The new clauses have two separate aims. First, the clauses give the police and other law enforcement agencies powers to remove material from premises for examination where it is not reasonably possible to carry out the process on the premises due to constraints of time or technology. Secondly, the clauses deal with problems arising where investigators need to seize material that is inextricably
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linked to other material that they would not currently be entitled to retain. For example, it may be impossible to separate specific items of information held on computer without losing critical data about when they were created, amended or deleted.
In Clauses 72 to 87, Part 4 makes a number of provisions in respect of the Police and Criminal Evidence Act 1984 and the Terrorism Act 2000. Some of these measures, such as powers of arrest for hit and run, kerb crawling, making the importation of indecent and obscene material a serious arrestable offence and the execution of process, received widespread support in the other place.
Measures in respect of detention hearings for terrorist suspects by video link will fine tune provision within the Terrorism Act 2000 to make a practical improvement in the way that terrorist suspects are dealt with. Those in respect of access to special procedure material will give DTI investigators powers that are already available to the police and Customs and Excise investigators.
Some of the most important measures within Part 4 relate to the taking of DNA samples and fingerprints. If enacted, they will give the criminal justice system a significant lever in the fight against crime. The measures will permit all fingerprints and DNA samples, taken on suspicion of involvement in an offence, to be retained. Currently Section 64 of the Police and Criminal Evidence Act specifies that, where a person is not prosecuted or is acquitted of the offence, the sample must be destroyed and the information derived from it cannot be used.
The need for this provision arises as a result of two recent cases—R v Weir and R v B. Compelling DNA evidence that linked one suspect to a rape and the other to a murder could not be used, and neither could be convicted. This was because at the time that the matches were made both defendants had either been acquitted, or a decision had been made not to proceed with the offences for which the DNA profiles were taken. The subsequent decision of the House of Lords, published on 14th December of last year, stated that where a DNA sample fell to be destroyed but had not been, although Section 64 of PACE prohibited its use in the investigation of any other offence, it did not make evidence obtained as a failure to comply with that prohibition inadmissible but left it to the discretion of the trial judge.
The position was unsatisfactory and the law clearly needed clarification. The Government decided that rather than live with a situation that might appear to encourage the police to retain DNA samples unlawfully, it would be preferable to put retention on a proper legal footing—hence the inclusion of these provisions in the Bill. These measures will also allow fingerprints or samples given voluntarily for the purposes of elimination, such as DNA intelligence screens, to be retained where the volunteer gives his written consent. The re-taking of fingerprints and samples in certain circumstances would also be permitted and the position on the exchange of information held on the fingerprint and DNA databases would be clarified.

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In bringing forward and proposing these measures we have carefully considered the rights of the individual and the broader rights that members of society have to be protected. We must be able to make the fullest use of the technology available to prevent and punish crime.
Other measures in Part 4 will include provision for remote reviews of detention to be conducted by video link—in certain circumstances by telephone—and for some other custody decisions to be undertaken by video link. I am confident that these measures will improve the efficiency of the review and custody system by enabling an expert custody officer to apply his knowledge to decisions that may need to be carried out at a distance.
Part 5 of the Bill introduces new arrangements for police training. It creates a new central police training and development authority as a non-departmental public body, whose primary aim will be delivering top-class training to police officers in England and Wales. Part 5 also includes measures to improve and modernise police training by introducing a mandatory core curriculum and qualifications for the police. It will improve the quality of training by the closer involvement of Her Majesty's Inspectorate of Constabulary. Those provisions are widely supported, practical measures to ensure that the police have the best possible training to support them in their work.
Part 6 deals with a number of provisions to improve the way in which the police service is organised. It makes small amendments governing police authorities and the service authorities for the National Crime Squad and the National Criminal Intelligence Service. They will permit the statutory appointment of vice chairmen, remove the maximum age limit for membership and permit these authorities to devise their own schemes for payment of allowances. It also introduces new funding arrangements for the National Crime Squad and the National Criminal Intelligence Service. Such provisions will remove the existing cumbersome and time-consuming arrangements for funding by means of contributions from police authorities, with direct funding from the Government. There are also some changes to the service authorities to make them more inclusive, and to streamline them by reducing the number of members.
Part 6 also contains a number of other straightforward changes to the organisation of the police. It re-introduces the ranks of deputy chief constable and chief superintendent, and the equivalent ranks in the Metropolitan Police, as well as making provisions about the role and appointment of deputy chief constables. It removes an anomaly in police disciplinary proceedings so that officers in those proceedings are subject to the new caution introduced in the Criminal Justice and Public Order Act 1994. This allows inferences to be drawn from a refusal to answer questions. Finally, it makes some small, but essential, changes to the pension arrangements for senior police officers with fixed term appointment
As well as dealing with miscellaneous and supplemental matters, the final part of the Bill, Part 7, contains important provisions in three areas. The first
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is in relation to the treatment of young offenders who are at risk of re-offending. The Bill, as drafted, will extend secure remand criteria, introduce electronic monitoring for juveniles on bail and remanded to local authority accommodation, and allow local authority remandees to be placed in secure training centres. These measures are essential in preventing juveniles from committing further offences while passing through the criminal justice system.
Secondly, this part of the Bill will provide additional safeguards for the vulnerable by helping the Criminal Records Bureau to prevent unsuitable people from becoming registered to countersign applications, a critical position of trust in the bureau's operational arrangements.
Thirdly, and finally, it will amend the Bail Act 1976 so that the courts will be required to give reasons for granting bail where the prosecutor makes representations against so doing.
The Government believe that this Bill is fundamental to building a safe, just and tolerant society. It gives valuable tools to the police, delivers a range of improvements to the criminal justice system and ensures that the public continue to receive the fullest protection. I commend the Bill to the House.
Moved, That the Bill be now read a second time.—(Lord Bassani of Brighton.)
6.21 p.m.
Lord Cope of Berkeley: My Lords, I am delighted that it now seems we are to have plenty of time to discuss the Bill as there is not to be an early general election. That seems to be one of the few good things to have come out of the foot and mouth outbreak. The Bill was only partly discussed in another place; indeed, whole parts of the Bill were not discussed at all in Committee or on Report.
This is the sixth Home Office Bill of the Session, not counting the one we heard about this afternoon that is to come before us in a day or two. Some of the others have required hundreds of amendments. The present Home Secretary has an exceptional ability to influence decisions on the Government's legislative programme. which has normally been thought of as overladen, but no corresponding influence over the appointment of sufficient departmental lawyers and parliamentary draftsmen, or, for that matter, officials, to prepare the legislation properly. I may be doing them an injustice. Perhaps it is a case of Ministers not being able to make up their minds sufficiently clearly, but either way it gives your Lordships' House an extra responsibility to scrutinise the proposals properly.
As became clear while the Minister spoke—if it was not clear before—this Bill is one of the Home Office's miscellaneous "ragbag" Bills. It has no theme. As far as I can see, it is made up like crazy paving rather than a mosaic with a clear picture emerging. I have the impression that Ministers sat around like customers in a pub chewing over events and the latest disaster on the

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television, saying, "Disgraceful—there ought to be a law against it". Except, of course, that Home Office officials immediately create such a law.
One consequence is that my speech will have no theme either. Before I launch into the details of the Bill, I welcome the interim report from the Joint Committee on Human Rights. I believe that this is the first Bill on which we have had a report from this new Joint Committee. It is a welcome development. As far as I am aware, the committee has not yet given its conclusions on the Bill. However, it has published a large amount of evidence it received, including from the Home Office, and the accounts of witnesses. That information is helpful, particularly when considering the human rights aspect of the Bill.
Part 1 of the Bill is a mini-ragbag in itself. It comprises on the spot penalties; alcohol offences related to public order; travel restrictions on drug dealers; intimidation of witnesses in civil proceedings and child curfew schemes for the under 16s. I am not altogether happy about the selection of offences to be the subject of fixed penalty notices. The fixed penalty notice will need, quite rightly, to state the offence and the alleged circumstances of the offence. For that reason it is no good using that procedure for offences which will require the policeman to write an essay there and then in the street describing the offence on the notice before he hands it to the individual concerned.
The main object, of course, is to speed up the whole process of bringing offenders to justice and to save bureaucracy. However, if the measure is used for the wrong offences, particularly for offences where the policeman's judgment on the spot is crucial as to someone's behaviour and whether or not that constitutes an offence, it will not achieve its object. On the other hand, there are some offences which are not at present included—and which it has been suggested might be—to which we shall need to give attention. Two examples are prostitutes' cards in telephone boxes and urinating in the street. Both of those are fairly clear offences which one would have thought might be the subject of measures of this kind.
I note that the Home Secretary can, by affirmative order, with the permission of Parliament, add any other offence to the list, though presumably he does not have any particular ones in mind at the moment or he would have included them in the Bill in the first place. I am interested to know why that power applies, apparently, only to those over 18. There is a separate provision for curfews for those under 16, but in practice it is quite often those aged 16 and 17 who are involved in the kind of offences we are talking about. They were discussed earlier in the consultation on the provisions but, as far as I can see, are not included in the Bill. I also note that if these offenders are challenged and given a ticket and do not pay the penalty, they end up in the magistrates' court anyway for non-payment of a fine.
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I have other questions with regard to records. The Society of Editors is concerned that it should know who has been fined. I am not sure about that. But the point is certainly worth considering. If someone is taken to court for these kinds of offences, the reporter at the local magistrates' court can make a note of the person's name and act as he or she thinks right. In effect, the use of these powers will be conducted in confidence between the offender concerned and the police unless the offender fails to pay and appears in court anyway for non-payment of the fine.
There is also the question of whether there will be a criminal record. As I understand it, there will not be a criminal record for anyone who is awarded a fixed penalty in these circumstances. However, it is important that there should be some kind of record. If an offender continues to display drunken behaviour, or whatever the offence is, the police will want to know that and to have a proper record of the fact that someone has been stopped for the same offence a number of times in the recent past. They can then consider whether to charge that person with a more serious offence or take him or her to court rather than issue a fixed penalty notice.
Part 1 contains a clause which concerns the names and addresses of directors and secretaries. This is obviously a welcome measure. I refer to the notorious case of Huntingdon Life Sciences, but a number of other people have found themselves in a similar situation. The clause provides for directors' and secretaries' private addresses to be concealed in the future. However, it does not address the fact that their private addresses are already on the record. It does not stop Companies House disclosing the addresses on previous annual returns. Therefore until the directors or secretary of the company change, their private addresses will remain well known. The provision does nothing for shareholders who have had similar problems.
It is not only the directors and secretaries of companies involved in scientific research, and so on, who are concerned, having been the subject of attacks from violent activists, but also farmers and others involved in GM crops and hunt staff. Although the law is strengthened a little in the Bill, those actions are thoroughly against the current law. The strongest police action is required.
Part 2 of the Bill relates to disclosure of information. It contains a clause allowing the tax authorities—Inland Revenue and the Customs—to disclose the secrets of tax returns. Until now they have always been regarded as some of the most confidential documents in the country. There are now to be extremely wide powers for information from tax returns, and other information gained by the tax authorities, to be disclosed. However, from correspondence and background information, I understand that they will be carried out only where serious crimes are involved. But that is not stated in the Bill. It is what is known in the tax jargon as a concession. The Revenue will not disclose all kinds of information. Where it wishes to do so, it will disclose the information only in serious cases.

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Under Clause 48 the Secretary of State can give a direction restricting the power but only where the offence is capable of being tried in a United Kingdom court or in a third country. I do not understand Clause 48(3)(c) but we shall come to that in due course.
For example, a resident of Iraqi origin may be publishing a dissident magazine in the United Kingdom criticising the Iraqi government. I believe that it is not intended that the Revenue report that information—it may arise when considering his tax returns—to the Iraqi government. I understand that such criticism is thoroughly against the law in Iraq. Although that is not the intention, it is possible under the provisions of the Bill. Not to do so is only at the discretion of the Revenue or the Customs authorities.
A Chinese national resident in the United Kingdom might also be running a business in China through which he was evading a certain amount of Chinese tax. Again one might think that it was fair for the Revenue to report that to the Chinese authorities. However, the penalty in China for tax evasion in some circumstances is the death penalty. So in reporting an individual, the Revenue might bring him in danger of the death penalty. Those are somewhat extreme cases about which there is no apparent restriction in the Bill.
Part 3 relates to the seizure and retention of property by the police. There are serious issues regarding lawyer/client confidentiality in general, and legal/ professional privilege in particular. The Law Society was most concerned about what it saw as lack of proper consultation. That was a surprise to me; there had been previously quite a lot of consultation but not apparently at the last minute. In practice, there has been a procedure known as bagging up. When the police raid premises and collect papers, the lawyer for the individual whose premises are being raided is entitled, by general practice, to say, "There are some legal papers there". They are then sealed in a bag and taken to the police station. The bag is then opened only in the presence of the lawyer who is able to extract any papers to which legal privilege attaches. The different sides can argue in court later if there is some dispute as to whether legal privilege attaches to certain papers. But it means that the papers are not disclosed to the police, and legal professional privilege, which we all support, is in place. The system of bagging up—I gather that it works well in most cases and had been accepted as adequate until a recent case—has not provided the model on which the Bill is based. One wonders why.
There are concerns about journalistic material from the Society of Editors. There is talk of a code of practice. I am not sure what that would mean in practice. Editors and journalists in general are extremely protective of journalistic material for reasons which we well understand. But included in this part of the Bill are provisions relating to retention of DNA and fingerprint information. In many respects, that is clearly a very large step in the direction of Big Brother. The problem is whether the proposals will mean that people are less likely to co-operate with the police in big cases. A few years ago when I was a Member of another place, there was a particularly
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horrible murder of a young lady on her way home from a dance at one o'clock in the morning. She was abducted and murdered. It proved difficult to catch the individual. There was more and more publicity locally. For reasons which were well understood a huge number of fingerprints and DNA samples were taken from a large proportion of the local male population who could conceivably have been involved. Most people were entirely willing to give their samples and to be eliminated from the inquiry, helping the police to do all they could to catch the murderer.
Should there be similar cases—we have no wish to see them—in other parts of the country, it would not be many years before there was a national DNA database which included us all. I do not think that the Government are aiming at that but I should like reassurance. Guidance on the Bill suggests that the DNA of those who come forward voluntarily in a case such as the one to which I referred will not be retained. The Bill does not seem to allow for that. It is important for public confidence to know what will happen to the particulars obtained in that way. Everyone wants to catch such a criminal, and criminals generally. We do not want to put people off as a result of the retention provisions in Part 3.
Part 4 concerns PACE and related matters. I wish to refer to the use of video and telephone links for decisions about detention. I am not sure how that will work. Will the inspector talk over the telephone to the suspect or his legal adviser as well as to the police about his decision to extend custody? Will he be able to have a video conference with the accused and his legal adviser to decide whether it is right to extend the detention? Or will he talk only to the custody officer and other policemen involved in the case?
The provision for such work to be done at a distance is a tacit admission by the Government of the overstretch that police inspectors in particular have been talking about recently. There are 1,385 fewer inspectors in this country now than there were about six years ago. They are feeling the overstretch very severely. The Bill makes many provisions that require the permission of a police inspector or someone of more senior rank. If they are thin on the ground and trying to cover ever more boroughs in London, for example, it will be difficult for them to do their job properly or to give proper attention, when they are in the middle of one case, to whether to detain somebody in a different case.
Part 5 is about training. It is entirely appropriate that the Bill should include a section on police training. It concerns changes to the central training authority and changes in the financing, as the Minister said. But the whole Bill will require considerable effort to retrain the police and others concerned with the criminal justice system in the new provisions. I sometimes wonder whether Ministers realise the retraining effort required by such a huge Bill, particularly when it is one of six Bills so far this year—or this half-year. An awful lot of paper and overtime are required to keep up with all the changes in the law. We need to think carefully

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about that when bringing about desirable changes to the law at such a furious pace as we have been doing recently.
Part 6 is about police organisation and bringing back the ranks of deputy chief constable and chief superintendent—moving the chairs round again, as it were. It also makes provision for police disciplinary proceedings and the inference to be drawn from silence. That is a difficult provision that requires consideration, given that a lower standard of proof is required in police disciplinary matters to that required in criminal matters—the balance of probabilities rather than beyond all reasonable doubt. The inference to be drawn from silence is therefore not the same as in criminal cases.
Part 7 is described as, "Miscellaneous and Supplemental", but it contains not only the usual interpretation and commencement provisions, but also important changes to bail, secure remand, electronic tagging and criminal records.
The Bill seems to contain the sweepings from the Home Office pigeon holes. I must warn the Minister that Home Office pigeon holes are rather like the automat cafes of some years ago in America. The customer opened a glass door and took out their choice of meal whereupon a secret door immediately opened at the back and the slot was filled up again. Home Office pigeon holes are never empty. In time, some of the provisions in the Bill will prove valuable additions to the armoury of the criminal justice system while others clutter up the statute book and lead to waste time being wasted on retraining policemen and rearranging the chairs. The challenge in Committee will be to try to work out which are which.
6.44 p.m.
Lord McNally: My Lords, the noble Lord, Lord Cope, described the Bill as a ragbag without a theme. I hope that my response will have a theme: that Parliament, and this House in particular, has a solemn duty to resist bounced, hasty, ill-considered legislation. It has a duty to resist the sweepings from Home Office pigeon holes, to use the phrase of the noble Lord, Lord Cope. I hope that Ministers will not represent us as in any way soft on crime for insisting on a full and thorough examination of the Bill. Earlier this afternoon, before the Minister joined us, we heard a powerful speech from the noble Baroness, Lady Hollis, about the nightmare of living cheek by jowl with the feckless, the violent and the criminally inclined. No party in any part of this House or in any Chamber of this Parliament is anything other than totally committed to providing our citizens with the basic right to freedom from fear—fear of their neighbours and fear of the young and violent.
The Minister said, with a slight tone of condescension, that certain of the proposals dealing with the yob culture would attract some concern among the Liberal Democrats. Yes, we are concerned about the implication once again that the only responses to certain problems are ever more draconian
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laws and ever more draconian policing, when it has been proved beyond peradventure that on many sink estates the provision of a youth club, after-school facilities or sporting facilities—the provision of some hope—has at least as much impact on overall crime as ever more serious criminal sanctions.
As the noble Lord, Lord Cope, said, this is a big, wide-ranging Bill. It would be proper to treat it with due solemnity if it was the Home Office's first effort. but this is something like the 16th Home Office Bill that we have had in just over a Session and a half. The problem is that the Home Office has had a seamless succession from Michael Howard to Jack Straw. They both believe that a succession of measures to show a macho approach to crime and criminals is the way ahead.
One reason why Parliament, and this House in particular, should be concerned is that we have had a ratchet effect, with successive Bills chipping away at civil liberties. When they do not produce a magic impact on the crime statistics, another Bill is brought forward and the ratchet is moved another notch. It is not as though the Liberal Democrats have not warned the Government. We warned them against the erosion of police numbers and proposed various community and other measures to take the pressure off the police and allow them to do their core jobs. We have argued for alternatives to prison, instead of the continuation of this country's appalling record of putting ever more young offenders into young offender. institutions, which even the Government's own inspectors see as nothing more than universities of crime. Anyone who enters such an institution drug-free is very unlikely to emerge drug-free. But time and time again the Government bring before us legislation which inflicts yet one more turn of the screw.
Nothing better illustrates that than the curfew proposal. We thoroughly debated proposals in relation to curfews for children up to the age of 10, but none of them was taken up and nothing happened. So what do we do? We return with proposals for 16 year-olds. I quote from the Parliamentary Monitor of January 2001:
"The home secretary, Jack Straw, has admitted that the age limit of 10 for child curfews is too low. He blamed himself for the decision, saying that he went 'with caution' by not including older children. The fact that there has not yet been a single curfew applied was the fault of 'the conservativism of the social services departments' and he has called on them to use the full panoply of powers available to tackle unruly behaviour.
New fines for anti-social behaviour will also be introduced, although the government has retreated from 'marching yobs to cashpoint' machines in order to pay them".
We all remember when the Prime Minister had a blank page in a speeches. He put in that proposal in order to catch that evening's news headlines.
That has been the pattern. There has been no admission of having got things wrong, and, too often, proposals have been brought forward not with a longterm theme or strategy but with the sole purpose of catching the evening's news or following day's headlines.

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Another example is the new proposal for the remand of children in secure accommodation. This is what the Law Society brief says in relation to that:
"The treatment and care of children, whatever their offending history, is a sensitive matter and should be subject to public scrutiny and debate prior to legislative change".
Then we come to the real point:
"The late timing of the changes to the Bill was surely due to the recent publicity that the government was behind target in their pledge to reduce the case progression times for children identified as Persistent Young Offenders".
That is the exact point that I am making. A piece of legislation is brought forward not to deal with any long-term problem or to provide a long-term solution but for the purpose of a little quick-fix media manipulation.
Therefore, I believe that Parliament is right to be sceptical about a Government who are prone to cheap populism and too prone to quick fixes. We have seen that in the legislation that has been brought forward: a bomb explodes and new terrorism legislation is rushed through this House; football hooligans rampage and we have a football hooligan Bill; and the same has occurred with regard to animal rights protestors.
The probllem is that a response to a particular problem is given in legislative terms but the general principle embodied in that legislation remains and has wider implications. I agree with the noble Lord, Lord Cope, that it would be much more reassuring to have a theme and philosophy in Home Office legislation rather than a simple deluge of Bills and rapid responses to headlines, which has been the practice.
We all know why that occurs. We are told that, whatever the outcome of the general election, Jack Straw will be moving on. He will be able to do so with an absolutely perfect record: on no single issue has he ever been outflanked to the right by either Michael Howard or Ann Widdecombe—something of which I am sure he is considerably proud.
Therefore, we need less legislation from the Home Office. We on these Benches advise more pilot projects for some of the schemes that appear out of the pigeon holes. We also put forward the idea of establishing a Select Committee with the ability to take external evidence in examining some Home Office Bills in draft form. The human rights committee procedure would appear to be a good procedure for certain Bills.
We must get out of the habit of believing that, unless legislation is passed immediately, this day or at once, civilisation as we know it will come to an end. That is the recipe for ill considered and bad legislation. We must build into our procedures a process for taking a more measured look at proposals and for ensuring that outside interests, expert groups and others who are directly involved have a chance to provide input on legislation. The scattergun approach is not succeeding, as evidenced by the Home Office returning time and again with different wheezes in order to deal with problems.
I referred to a "scattergun" approach, and it would therefore be rather surprising if parts of the Bill did not hit the target. We welcome the measures on the various
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abuses of alcohol. I believe that we face a national schizophrenia in relation to alcohol. Only recently we passed a statutory instrument which greatly relaxed opening times. We live in an age in which both the relative price of alcohol and its availability to all sections of the community means that it is more accessible than at probably any time during the past century.
On television there is a much greater acceptance of alcohol abuse than there is of smoking. Now, one rarely sees a key character in a television play who smokes. Yet whole television series are built around men behaving badly and laddish behaviour. Such programmes are aimed mainly at the vulnerable, 15 to 20 year-old age groups. The proponents are usually on the verge of middle age but still cling on to the laddish image. Alcopops, again, can only be aimed at young drinkers, and sometimes advertisers take an irresponsible attitude. Therefore, I believe that more needs to be done, not least by the industry itself, in relation to alcohol and its connection with anti-social behaviour.
We support the measures in relation to drug traffickers and the protection of witnesses. We fully appreciate and support—and, indeed, have advocated—the need to break into the drugs supply line at a higher point. As the Minister knows, we have called for tougher action to be taken against money launderers—the people who often lubricate the drug trade.
We also welcome the measures against animal rights extremists. That leads me to an issue with which I believe society as a whole must come to terms. In the United States, and to a certain extent in this country, we have come across people who feel strongly about a single issue and believe that their strength of feeling puts them above the law. I refer to animal rights extremists, people who are anti-abortion, people who feel strongly about the environment, and people who simply believe that capitalism is wicked and that all capitalists are "fat cats".
However, the attitude which leads people to say, "My individual belief is so strong that I am against the law", cannot be accepted in a democratic society where a parliamentary process changes laws. I believe that that applies in all directions. If Parliament in its wisdom bans hunting, I shall look to people who want to hunt to accept that law, too. That cuts in all directions. We change our laws—our society—here in Parliament, not by intimidation or by breaking the law.
Our concerns are not unlike those of the noble Lord, Lord Cope. That reaffirms the need for a thorough Committee stage. We are concerned about the DNA database, and whether a move to a national DNA database may be involved; the use of curfews, which I discussed earlier; video-conferencing in relation to PACE; the lacuna involving 16 to 17 year-olds and fixed penalty notices; and aspects of police training, which my noble friend Lady Harris will discuss in

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detail. My noble friends Lord Dholakia and Lord Phillips of Sudbury—the fact that he is absent from these Benches does not mean that he is not interested—
Noble Lords: He is here.
Lord McNally: My Lords, is he? I knew that my noble friend Lord Dholakia was here, but my noble friend Lord Phillips of Sudbury especially asked me to tell the Minister that he cannot be here tonight but that he wants to play a full part in Committee. You have been warned!
I return to the point made by the noble Lord, Lord Cope: in another place the Bill did not get full consideration in Committee. It must be given the fullest consideration in Committee in this House. If the general election had been on 3rd May, we on these Benches would have strongly resisted nodding through the Bill. We do not believe that it has been properly or thoroughly examined in the other place; this House has a duty to do so. Our approach will involve words that I know are dear to the Minister's heart—we want proportionality and practicality to be the test of the proposals. The provisions must last longer than tomorrow's headlines or even next month's election campaign. They have to be tested against basic freedoms: against the freedom from fear, against civil liberties, human rights, the age-old freedoms of assembly and of speech and the right to privacy from an over-intrusive state. Those are the tests that we shall apply to the Bill.
The director-general of Liberty put the matter very well. He said:
"The Government continues to confuse being tough on crime with being tough on civil liberties and human rights. Eroding rights does not crack crime".
Quite so. We shall ensure during the Bill's Committee stage that eroding rights is not part of the Bill's outcome.
7.3 p.m.
Lord Northbourne: My Lords, I support the Bill's intent. In so far as I shall discuss the Bill rather than its background, I shall restrict myself to discussing Part 1, about which I have some reservations. I refer in particular to violent youth crime. yob culture, the abuse of drugs and persistent young offenders.
I am convinced that the Bill on its own will not effectively combat crime and disorder. To combat crime and disorder among young people—excluded young people in particular—three things are needed. The first is to make crime less attractive. That, we hope, the Bill will do. The second is to ensure that appropriate alternative opportunities exist. The third is that excluded and hard-to-reach young people should have the help they need to access those opportunities. I want to talk a little about the second and third of those requirements, which are essential if any policy to combat crime and disorder is to be effective.
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I make it absolutely clear from the start that I am not one of those who condones crime and that I am not making excuses for criminals. I am trying to sketch in the background with which many noble Lords are familiar; that is, the reality of some young people's lives in our society today. Unless we understand that reality we will not understand why crime seems to them to be an attractive option.
Each of us needs something to make our life seem worthwhile. That is true of all of us. Recent research involving a sample 1,500 boys—there was also a survey of girls, but I shall focus on the survey of boys in this context—showed that more than 12 per cent of boys in our society today do not believe that there is any future for them in the legitimate economy or as responsible fathers. That is a frightening figure. Those boys have not been prepared by their experience in their family, by the example of their father or by their experience in school to cope with the competitive, high-tech society that we live in today.
I shall discuss the Connexions service in more detail later, but for the moment I quote its definition of that kind of young person. It states,
"a significant minority experiences a wide range of acute problems and crises in adolescence including alcohol, drug and substance abuse, illiteracy, mental illness, serial offending and under-achievement".
Such excluded young people may be short on communication skills and have low self-esteem and they have probably never experienced any encouragement or success in their lives. Gone are the days when such a young man could expect to keep his end up and support a family provided that he was strong and prepared to work.
The Government came to power on the promise to be tough on crime and tough on the causes of crime. This Bill, and the other 16 Bills to which other noble Lords have referred, are a contribution to redeeming the first part of that promise. What about the second part? Are the Government actually going to deliver on that? Let us look at the progress so far. In 1999, the Government set up the Connexions service to address the problem. This month—April—2001 the first pilot schemes are being set up. The Connexions service for south London, from whose report I quoted a moment ago, envisages producing an action plan by 2002 and being fully operative by 2004. That is simply the pilot scheme. Can the Minister give a date by which the Government expect the Connexions service to be fully operative throughout the country? That may be an unfair question and if the Minister wishes to write to me about it, I shall understand.
Many noble Lords know that the Connexions service is intended to bring together existing local bodies that work for 13 to 19 year-olds. It will co-ordinate their provision and provide each young person with advice and guidance and, where necessary, a personal adviser or mentor. It is not itself a provider of services, such as special schools, special training facilities, sports clubs, youth services or any of the other services that young people need. Local authorities, LEAs and voluntary bodies provide—or fail to provide—those services; provision is very

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patchy. Yet, if the Connexions service is to work, it must have something to connect to. It needs the support of those services.
For decades, successive governments have allowed services for young people to be cut. Playing fields have been sold off, youth service budgets have been cut to the bone, special schools have been closed and core funding, which is central to voluntary providers, has been cut and cut again. An enormous investment in terms of money and effort will be needed to rebuild that infrastructure.
Each young person needs something to encourage him to believe that his life is worth living. If he does not find that in the legitimate economy, he will find it in crime. There is therefore an urgent need for a coherent cross-departmental government plan to rebuild services for young people.
That raises an interesting question. Who is responsible? We know that the Home Office and the judiciary are responsible for being tough on crime. Can the Minister say which department of state is responsible for co-ordinating action to address the causes of crime?
Finally, I should like to give the House just two examples of what appears to be a dramatic lack of co-operation between the Home Office, the Department for Education and Employment and the local education authorities. The first concerns the Special Educational Needs and Disability Bill. It is a well-established fact that some boys with emotional and behavioural difficulties benefit from being in a special school. The higher staff-pupil ratio helps them to catch up with their basic skills and they are not exposed to ridicule and derision, as they would be in a mainstream school, from other boys and girls who do not suffer from their disadvantage.
There are successful examples of such special schools throughout the country. One with which I am familiar on the Isle of Dogs is called the Burger Academy—the staff-pupil ratio is about six to one—and there are others. Those schools help young people to build their skills and self-confidence and eventually, very often, to reintegrate into mainstream education. Yet only a few weeks ago the Department for Education forced through your Lordships' House, against the advice of many of your Lordships on all sides of the House, clauses in the Special Educational Needs and Disability Bill which will effectively exclude many young people with emotional and behavioural difficulties from special schools. Only if their parents demand it or if they are disruptive will the local education authority be able to send them to a special school.
Such insecure and disturbed young people, vulnerable to bullying, will soon truant from a mainstream school. They will then be back on the streets facing the same severe risk of being drawn into crime. Surely if we believe in addressing the causes of crime, that does not make sense.
About a month ago my noble friend Lord Tenby arranged for four Members of your Lordships' House to visit the Medway Secure Training Centre. We were
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impressed by the work of the centre, and in particular by the fact that a number of young people, during the period of their stay, were becoming interested by the possibility that education could provide them with a way out of exclusion; a gateway to full membership of the consumer society.
Many of those young people, having completed the first half of their sentence in the secure training centre, were returning to their home communities to find that their local education authorities were unwilling to provide full-time education for them or even education at all, let alone the specialist catch-up education that they needed. I tabled a Question for Written Answer around one month ago and the Minister confirmed on 21st February that of the 259 young people aged under 16 who have so far passed through the Medway centre since February 2000, only nine have been accepted back into full-time education by their local education authorities; 68 are being provided with what is called "education outside school", which means a few hours a week. So most of the 250 are back on the streets.
It may well seem to your Lordships that I have strayed rather far from the Bill before us. I make no apology. Like the noble Lord, Lord McNally, I am convinced that this Bill will not work unless the Government address at the same time the causes of crime. To do so will cost money; but so does crime. A recent piece of research published by Barnardo's—I have deposited a copy in the Library—shows that prevention can cost less than one-tenth of the cost of intervention later in a young person's life. I am convinced that unless the Government do more to provide comprehensive, properly funded, coherent programmes of prevention and diversion to encourage those who are at risk into the legitimate economy, neither the building of more prisons nor fat Bills like this one—let alone 16 of them—will significantly reduce youth crime.
7.15 p.m.
Baroness Kennedy of The Shaws: My Lords, there are many sensible and positive proposals in this Bill and I commend the Government for introducing them. However, the Minister and the Secretary of State know that I am not a believer in the effectiveness of curfews. It is right to say that many people who are concerned with the welfare of children and young people share my lack of faith. In our view curfews will drive those who are already marginalised into further marginalisation. It is not the way to draw people into responsible behaviour.
The noble Lord, Lord Northbourne, spoke movingly about the problems faced by many young people and the need for a positive programme to help them into active citizenship and a productive life. For many young people, home is not a haven and a protective environment to which they should be immediately pushed back. The reason for gathering on street corners is often to avoid their domestic circumstances which, for many of them. may be violent, abusive and certainly unwelcoming.

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I know that my noble friend Lady David intends to deal with the issue of curfew in terms and I want to concentrate, in the time available, on the issue of the forensic database and DNA. The database we have in this country has proved a remarkably useful tool in bringing to justice those who commit serious crimes. The examples of its successes are well-known and have resulted in the arrest of those responsible for murders and other violent or sexual offences. So I agree that anything that can be done to assist is to be welcomed.
There is no doubt that the public support the use of a forensic database. The Human Genetics Commission, which was set up with the task of advising the Government on all aspects of genetics and which I chair, recently carried out a survey of public attitudes to the storage and use of personal genetic information. I believe that the poll was the largest survey yet undertaken of those views and its results make for interesting reading.
On the question of the use of forensic databases people were very clear in their feelings. In response to the question as to whether the police should be entitled to take a DNA sample from a person charged with murder, 98 per cent of those polled said that they should be so entitled, while 68 per cent said that they should also be entitled to take such a sample from those charged with burglary. Less serious offences such as shoplifting received less support as grounds for taking a DNA sample. But the overall picture was one which supported the taking of DNA samples by the police.
I shall return to the survey in a few moments. It may sound as though I am enthusiastic about the databases and I certainly share the Government's belief that we should support them. However, major human rights issues are involved which need to be considered in taking a view on the relevant clauses of the Bill. If the Bill goes ahead in its current form, the United Kingdom forensic database will officially include the DNA of many completely innocent people.
Let me return to the MORI poll commissioned by the HGC. When we asked people whether they believed that the forensic database should have the right to retain samples of those acquitted of a crime with which they had been charged, the majority—48 per cent—said that they should not. But hard on its heels 46 per cent said that they should be so allowed. That is a bare majority and one from which one could reasonably conclude that the opinion of the public is fairly evenly split. However, the fact that so many people have misgivings about retaining DNA samples should make us stop and think about the degree to which this measure enjoys public support.
The issues of legal and ethical principles to which the measure gives rise are extremely serious. I have rehearsed the benefits of having such a database. I should now like to allude to some of the concerns which the Human Genetics Commission received. It will be found that those concerns are really quite weighty.
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The first is the very basic one which touches upon the relationship between the state and the citizen. In this country we have long adhered to the notion that everybody is presumed innocent of a criminal offence until the contrary is proven. Taking intimate information on innocent people and holding it in official records merely on the basis that at some stage they have been suspected of a crime is a major step and, many would argue, a major erosion of the presumption of trust which exists between each of us and the state. Nobody likes to be suspected of criminal conduct; but being on a database of potential offenders, which will be regularly trawled by the police, means that in a very important sense one is on a list of suspects and that surely very subtly alters the way in which the state sees us and the way in which we see our fellow citizens. It is of course different if one has committed an offence. The state may quite reasonably say, "You have been convicted of a crime and we are going to keep you on the list in case you do it again". In other words, "We reserve the right to check up on you when similar offences are committed by unknown persons in future".
It is quite different if the person from whom the sample has been taken proves to be innocent. That person has committed no crime and nothing can therefore be said about any propensity to commit crime in the future. So why should he or she be kept on the database? What justification can there be other than to argue that perhaps they are really guilty and it has not been possible to prove it, or that the more people there are on the database the better, and that a big database will produce more positive results than a small one as a matter of elementary statistics. So we have the frightening move towards a national database.
The first of those arguments—that people are really guilty even though they are acquitted—is based on expediency and it is always a very dangerous principle on which to base any rules of criminal justice. The latter argument completely ignores the rights which people may claim to have under Article 8 of the European Convention on Human Rights that their DNA is a private matter and no concern of the state.
The Minister has said that the Bill goes further because it is intended that the DNA obtained from an intelligence screen, say, of all the people in a village who are asked to give a sample for the purposes of elimination will be kept on the national database, although they will be asked at the time if they consent to that. I believe that there are real issues here as to whether consent obtained in those circumstances could really be considered to be properly obtained consent especially where someone is doing it in circumstances where they may at that stage be a potential suspect.
Concern over issues of individual privacy have led a number of other countries to take a much more cautious view than the one commended in this Bill. The Human Genetics Commission has been examining these alternatives and recommends that

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they be given serious consideration. In fact, we were rather surprised that the Home Office did not contact the commission for its view.
In France, under the 1998 law allowing the lodging of DNA samples on the national forensic database, the level of the crime which has to be committed for the material to be kept is much higher than in this country and is effectively restricted to crimes involving substantial violence, sexual or otherwise, and homicide.
In Canada, under the DNA Identification Act 1998, there is listed in a schedule those crimes under the Canadian criminal code which merit inclusion on the database. They are all serious crimes. The Canadian database was the product of careful consideration involving a great deal of public debate and careful scrutiny of the proposed legislation of individual privacy by the federal privacy commissioner. As a result of this approach, with its scrupulous attention to human rights considerations, the legislation in Canada provides only for the retention of the samples of those who have been convicted of an offence and for the destruction of the samples of those who have been proved to be innocent. It also, very creditably, makes special provision for disposing of the samples of juvenile offenders after a certain period thereby ensuring that young men who typically offend in their teenage years and who may then become law-abiding are not labelled in this way as criminals for the rest of their lives.
By contrast, the British database contains, and will continue to contain, the DNA of those who have a brush with the law in their youth. Under our system these young men will remain on the database indefinitely, a fact which may serve as a permanent reminder to them of youthful crime out of which they have grown and which they may otherwise be entitled to forget once they become responsible adults. The French database also allows for people to be removed after a period of good behaviour. Once again, that is to ensure that those who have had a clean record for a good period of time can be allowed to think of themselves as no longer being suspects. I wonder whether the Government might consider that at the Committee stage of the Bill.
In my view the arguments in favour of maintaining the current system whereby the samples of those who are proved innocent, and the data obtained from such samples, are destroyed are weighty ones. However, if the view is taken that we should move to the proposed position whereby samples are kept, even if the person giving the sample is proved innocent, then it would be desirable to have some time limit to this retention. At the very least it should be possible for a person to apply to have his or her sample removed after a period during which they have not been convicted of a relevant criminal offence. That means that even if innocent people are going to be included on the database, those who object to that should be entitled to have their sample and data removed. Not to allow that is to ignore an objection which some people may have to having what is, after all, a very intimate biological sample held by others when one has done
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nothing to deserve it. Those who do not object to that may volunteer for the samples to be retained indefinitely and that of course would be their right.
If there is one thing which the Alder Hey inquiry and its counterpart in Scotland have shown, it is that people have very serious feelings about their own tissue and that of members of their family. These concerns over the way in which biological samples are treated by the state must be respected. That provides us with another reason to stop and think very carefully about the implications of these clauses.
7.26 p.m.
Lord Windlesham: My Lords, it is always a pleasure to follow the noble Baroness, Lady Kennedy of The Shaws. These Benches provide a splendid vantage point to observe the discomfort which sometimes her outspoken remarks provoke on her own Government's Front Bench. This evening she has spoken in a lower key although as relevantly and effectively as usual. Perhaps I may also say how much the House as a whole valued the profound insights of the noble Lord, Lord Northbourne, who speaks with special knowledge about young people.
I shall confine my remarks to Chapter 1 of Part 1 of the Bill, "On the Spot Penalties for Disorderly Behaviour". At first sight it seems an enterprising attempt by the Government to counter what is an evident social problem. No one will contest the Home Secretary's comment when moving the Second Reading of the Bill in the House of Commons that the anti-social behaviour of a yobbish minority all too often impinges on the quality of life of the law-abiding majority. He was also right to emphasise the extent of public nuisance caused by alcohol abuse, and underage drinking by young people, especially in town or city centres.
As a result, the opening clauses of the Bill contain some novel provisions for combating crime and disorder. The first point I should like to make is that, however easily coupling them together rolls off the tongue, crime and disorder are separate concepts with different sanctions attached to each. Whereas most crimes are specifically defined in legislation, often with stated penalties, disorder has no precise legal definition. In general terms it can be described as human conduct which disturbs others.
Against that background let us consider for a few minutes the proposal that a police officer should be empowered to issue penalty notices on the spot for disorderly behaviour. Practicalities apart, the main objection is that it is a further manifestation of a trend which we have seen only too often in recent years: that is, mixing criminal and civil law procedures. The principles and the protections of the criminal law, in particular the presumption of innocence and the burden of proof, are correspondingly diluted.
This House has always been concerned to scrutinise with particular care any extension in the reach of the criminal law. Despite its hybrid nature, it is safe to assume that Ministers intend the proposals set out in Chapter 1 of the Bill to be treated as a strengthening

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of criminal powers. A penalty notice can be issued if a police officer "has reason to believe" that at least one of the offences listed in Clause 1 has been committed by a person aged 18 or over. Yet that requirement falls short of being able to establish beyond all reasonable doubt that the person has committed the offence, which is the criminal standard of proof.
In technical language, a penalty notice is described as notice of the opportunity to discharge any liability to conviction of the offence by payment of a fixed penalty. Thus there is no criminal conviction, or indeed admission of guilt, as I understand it, associated with payment of the penalty; hence the justification for a lower standard of proof. This is all thin ice in terms of criminal procedure.
The alleged offender has the right to opt for trial by a court and to risk conviction if he, or less often she, so chooses. Failure either to pay the financial penalty, which is likely to be in the range of £50 to £200, or to opt for trial, may lead to the imposition of a fine equivalent to one-and-a-half times the penalty on the defaulter. Non-payment of such fines may result in imprisonment.
As a consequence, the population in the inner-city prisons, where overcrowding is at its highest and constructive activities are at their lowest, is likely to be swollen by an additional influx of people with inadequate personalities, low incomes, and an unsettled way of life. It is particularly unfortunate that there has been no prior consultation with the district judges the former stipendiary magistrates—who sit in the busy magistrates' courts in city centres and who have first-hand experience of the issues with which this Bill deals.
If all that sounds complicated—I am conscious it does—it is because once again the draftsman has had the unenviable task of trying to rescue a headline-grabbing initiative, and to reconcile it with the requirements of the rule of law.
I strongly believe that in this House, insulated as your Lordships are from the more extreme populist pressures to which Ministers and elected Members in another place are subject, we have a particular responsibility to resist encroachments on the rule of law, even where it is the probable result rather than the intended purpose.
If we look back to a somewhat similar initiative earlier in this Parliament, the anti-social behaviour order contained in the Crime and Disorder Act 1998, we find an example of an attempt to control anti-social behaviour in particular localities. The issue was not so different from that which we are discussing under this Bill. It too was a hybrid measure in that the application for an ASBO was treated as a civil procedure, subject to the burden of proof on a balance of probabilities, rather than to the criminal burden of proof of beyond reasonable doubt.
That legislation, like the present proposals, had decent enough antecedents: the furtherance of community safety, especially on crime-ridden housing estates. Yet the problems of implementation were such
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that in some parts of the country the orders have hardly been used at all. In the Commons debate on the present Bill, for example, it was stated that since their introduction ASBOs have been used on only two occasions in the whole of the Thames Valley Police area, one of the largest in the country.
If that legislation, which has been on the statute book for some time now, has failed to bear down effectively on anti-social behaviour because the police and the local authorities are reluctant to use it, why should it be thought that the present proposals on disorder are likely to be any more successful?
As an afterthought, I should explain that I had prepared what I regard as these relatively moderate criticisms before I was aware of the devastating strictures by the Criminal Bar Association of the proposals in Part 1 of the Bill. The detailed analysis by practitioners of some of the likely consequences of enforcing this measure, if enacted in the form in which it is before us at the moment, makes electrifying reading. The House should be grateful to the Joint Committee on Human Rights for reprinting the document verbatim in its first special report.
Surely it is also relevant that both the Police Federation and the Magistrates' Association—two professional bodies which would be closely associated with the implementation of this legislation—opposed the Home Office proposals in the consultation paper on fixed penalty notices. Referring to the type of incident that would attract a notice to be served at the scene, the Police Federation stated:
"We do not believe such offences readily lend themselves to such a scheme and therefore must express our deep concern as to the considerable operational impracticalities and public perception as to the implementation of such a concept".
The Magistrates' Association was equally forthright, stating:
"The Association opposes the introduction of fixed penalty notices for the offences set out in the consultation paper. Where the police decide that a warning or caution is insufficient the alleged offender should be 'fast-tracked' to a court on the next day, and dealt with in a proper and judicial manner".
I repeat,
"dealt with in a proper and judicial manner".
Those are fine words that surely should be ringing in our ears as we debate the provisions of this part of the Bill.
7.38 p.m.
Baroness Harris of Richmond: My Lords, I welcome the opportunity to speak on this important Bill. It is probably one of the most important Bills to have come before us this Session. I start by declaring an interest. As many noble Lords know, I chair the police authority in my home area of North Yorkshire. I am also deputy chairman of the Association of Police Authorities, the national body that represents all police authorities in England, Wales and Northern Ireland. The current service authorities for the National Crime Squad, of which I was formerly a member, and the National Criminal Intelligence Service are also members of that association.

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This Bill is large and diverse. I shall confine my contribution to those aspects about which I have particular knowledge or expertise.
Effective, targeted training lies at the heart of modern, professional policing and a diverse, inclusive culture for the police service. The Association of Police Authorities has worked closely with the Government in helping to shape a reform programme for police training. It is an ambitious and a broad programme of work. A number of elements do not require legislation and are already under way. However, the clauses in the Bill are central to the success of the programme as a whole and in particular they would, as the Minister outlined, establish a new authority to oversee national police training arrangements; provide a core curriculum of basic police training; and allow for new, mandatory qualifications for certain police roles.
Overall, these measures will help to enhance further the already excellent standards of commitment and professionalism that exist in the police service, examples of which I witness daily in my work as chairman of North Yorkshire Police Authority. They are to be welcomed.
The Bill would also change significantly the accountability arrangements for the two national policing squads—the National Crime Squad and the National Criminal Intelligence Service. These provisions were not debated in detail in the other place and I urge this House to give careful scrutiny to them. They are important.
There are two issues involved, and they are linked. First, the Bill introduces new funding arrangements for the national squads. by direct grant from central government rather than the existing levy on police authorities. Secondly, the Bill reduces drastically the number of representatives of local police forces and authorities who serve on the two service authorities which oversee the work of the national squads.
As currently drafted, these provisions would weaken unnecessarily the existing links between local and national policing organisations; links which tie the national squads firmly into our arrangements for maintaining local accountability for policing actions. I do not believe that that is the Government's intent ion but I believe that it will happen in practice.
I place on record my admiration for the excellent work undertaken by the National Crime Squad and the National Criminal Intelligence Service in tackling some of the most serious crime and dangerous criminal gangs in this country and abroad. However, they do not operate in a vacuum and they are part of the overall policing family. Strong operational, organisational and cultural ties must be retained between the national squads and local police forces. All have an important role in the fight against crime.
A balance must be struck to find the right level of investment in policing at its different levels. Whatever the complexion of the government in power, this will be a difficult and delicate task and Parliament has a right to scrutinise their decisions closely. I know that the Association of Police Authorities has proposed drafting changes to the Government that would
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enhance consultation with all interested parties on the priorities for policing at local and national level and resources needed to meet them; enable Parliament to take an informed view on that consultation exercise when scrutinising the government proposals for grants to the national squads and for policing generally; and recognise more fully the value and breadth of experience which representatives of police authorities and forces bring to the work of the service authorities which oversee the two national squads. Once again, I encourage the Government to bring forward the amendment at the Committee stage and enable the House to debate these provisions properly.
I could not let the Second Reading pass without a word or two about those provisions which relate to police authorities themselves. These give statutory recognition to the role of vice chairmen; remove the bar on people over 70 serving on a police authority; and let police authorities decide what allowances their members should receive. I am delighted that the Government have finally recognised that police authorities are grown up enough, and responsible enough, to set the levels of their own allowances. At present, they have to run, cap in hand, to the Home Office all the time.
The time, energy and commitment which police authority members give to their work is incalculable. And I wish here to pay my deep gratitude to members of my own police authority in North Yorkshire who have given me such marvellous support throughout my years as their chairman. Police authority members do this work on top of their day jobs and other responsibilities. They need to be recompensed fairly and it is very important to encourage those sections currently under-represented to serve on police authorities; for instance, younger women, by having the flexibility to pay for baby-sitters.
I know that the Association of Police Authorities is drawing up a model scheme which will set sensible national guidelines for all authorities to follow. Independent advice on what those levels should be is being sought. I am sure that your Lordships will agree that it is only fair to seek to ensure that people are justly treated for the enormous amount of time they devote to public service. So that is one small step.
However, it is disappointing—and I misquote Neil Armstrong—that the Government did not feel able to make a somewhat larger leap. The Home Office will decide how police authority members should be reimbursed by way of expenses and will still say how much members will receive per mile if they go to police authority meetings by car, by bicycle or by skateboard! I shall return to that at the Committee stage. Nevertheless, I welcome the fact that the Government have finally honoured the long-standing commitments they made to the Association of Police Authorities to make these changes.
I must now introduce a new element into the debate; what I call the "Humberside judgment". As your Lordships may know, every police authority includes members from local councils. I myself am a councillor member of my police authority. Only a month or so

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ago, the High Court ruled that only councillors from political parties can be counted when appointing local authority members to police authorities. The judge felt bound by the wording of the Police Act to say that independent councillors—those who do not belong to a political party—must be ignored. I believe that that is manifestly unfair and inequitable. It means that no police authority can ever reflect the views of those members of the electorate who voted for an independent councillor. To give just one example, it means that the Isles of Scilly can never have a say in how they are policed.
That cannot be right. A simple technical amendment can put that right and the judge herself called on Parliament to make the change. I know that the Association of Police Authorities has pressed the Government to act in this Bill and the Government have not done so. I will continue to press for this change at future stages.
I conclude by asking the Government to think again about the proposed changes to the accountability of our two national police services; and to think again about the exclusion of independent councillors from police authorities. I am pleased that now there will be time to give proper consideration to these matters.
7.48 p.m.
Lord Brennan: My Lords, I shall express three welcomes for the Bill and one serious word of caution. The noble Lord, Lord Cope of Berkeley, said that the Bill was not a mosaic but was crazy paving. It is an unfortunate, perhaps an unhappy, fact of human behaviour that those who commit crime and those who have to detect and punish it cannot do so within a framework which is intellectually an attractive mosaic. That simply is not life. That is why from time to time the Home Office must bring forward a Bill which comprises many different aspects of the criminal justice system. This is such a Bill. It may lack uniformity, but it has one central theme which I support: the maintenance of public order and the protection of the public.
I shall illustrate that conclusion by three welcomes that show it to be a valid theme. The first is concerned with alcohol-related crime. As a member of Liberty, I commend this House on the most searching investigation of each and every clause of the Bill that might affect civil liberties. But the victims of crime also have civil liberties, one of which is the right to be protected from the commission of crime, or exposure to disorder. This Bill seeks to do that in relation to alcohol-related crime in several ways, two of which I highlight for note. The first is the imposition of on-thespot fixed penalty notices, the individual having the option to elect trial after considering his or her position.
I agree that this is a novel change to our system and that it lacks intellectual rigour because it links the control of crime and the effective protection of the public in a way to which we are not accustomed, but it should not be criticised for its originality. One should
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determine whether the change has the demerit which the noble Lord, Lord Windlesham, suggested. I think not. As my noble friend Lady Hollis put it earlier today, we are not dealing here with thousands of feckless individuals who have no idea what they are doing.
In university terms I am a native of Manchester. A friend of mine told me that in the past few years the city has done so well that every Friday, Saturday and Sunday night, at any time of year, half a million young people between the ages of 15 or 16 and 35 descend on the city. The key source of entertainment is drink. That is a social phenomenon to which we are not accustomed. A society which produces drinking on the part of so many people is a very rough and ready one. The ones who drink enjoy it and the victims of it suffer.
What are we supposed to do? Do we lecture to the sufferers about the importance of the human rights of those who may commit disorder, or do we seek to control it in an effective way? The issue of fixed penalty notices is one way that is worth trying, but they give rise to problems which I shall identify. The first is the collection of the fixed penalty which, as it stands, is no more than a fine without being related to a proven criminal offence. At the moment, about one-quarter of the fines imposed is not recovered. According to the most reliable LCD statistics, we lose about £45 million due to changes of address, lack of police powers, the inability of magistrates' courts to trace people and so on. It would be futile to introduce a form of fine—a fixed penalty—which was not effectively collected.
I invite the House to consider one particular offence which it is said arises under these proposals and gives me great concern in relation to fixed penalties. I refer to the offence of threatening, abusive or insulting words and behaviour, or any writing or sign which has the effect of causing distress. My fear is that such offences are very often committed with a racial motivation. I should be deeply concerned if it became the practice for police forces to treat that kind of offence as properly to be dealt with by a fixed penalty. I hope that in Committee we shall return to consideration of at least codes of practice to make sure that that does not happen. Subject to that, I welcome the change as one that is worth trying.
I associate that with the risk of closure faced by licensed premises if they do not enforce the licensing laws. Anyone with experience of the United States knows the degree of effort which the owners of licensed premises make to protect their licence. They exercise control in relation to the age of those who drink, and it works. It may not be pleasant for those in their late teens or early twenties who are excluded, but it works. When one accepts, as I do, that a minority of licensed premises will be at risk of closure, one sees that that too is a sanction that is worth trying.
Why are these new sanctions worth trying? One cannot overestimate the effect of alcohol-related crime and disorder on the functioning of our society. On any evening in any city centre or council estate this is a major new phenomenon which needs to be controlled. To believe that the human rights of those who commit

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such disorder are more important than the effects on the individuals who suffer from it is an imbalance that I do not accept.
I have spent some time on the question of alcohol-related crime in relation to disorder. It is also a fact that much serious crime is associated with drink. I remember discussing with the noble Lord, Lord Windlesham, in times past whether there were statistics to corroborate the anecdotal evidence available to those at the Bar about the vast increase in crime involving the use of knives. I understand that it is almost impossible to determine whether that anecdote is right, but many colleagues at the Bar tell me that the most serious offences of assault that they regularly encounter involve the use of knives stimulated by excessive drink. In that regard, a change of culture, not a total solution, is worth pursuing.
I refer much more briefly to my second welcome: the protection to be given to witnesses in civil proceedings. Some noble Lords may find it surprising, as I do, that someone who intimidates and seeks to pervert the course of justice in relation to offences that may carry a life sentence, or many years in prison, and allows someone else to escape such a penalty, is himself subject only to a maximum of five years' imprisonment, but that is the present law. This Bill adopts that in relation to civil proceedings. Looking at the Bill and the Explanatory Notes, I am a little concerned to see it suggested that in particular it is directed at breach of community orders. I presume that it is also intended to be directed at the pursuit of the proceeds of drug trafficking and, if it is implemented, the Proceeds of Crime Act where people play for big stakes and will be very ready to intimidate witnesses in such a quasi-civil proceeding. It may be that I am wrong and that the previous Act protects people in those cases; one or other should, and I look forward to confirmation that that is the law.
The third welcome relates to a matter about which I am particularly concerned because of my connections with children's charities. I refer to the preservation of DNA samples. I listened with great interest to the extremely interesting analysis of my noble friend Lady Kennedy of The Shaws. In Committee we must determine whether such a blanket power as the Bill presently provides to retain samples can be justified. I believe that it certainly can be justified in relation to crimes of murder and serious sexual offences. We are now in a society in which sex crimes against children in particular—paedophile rings—and sex crimes against women are very prevalent indeed. They are mostly the crimes perpetrated by strangers against their victims and in many such crimes DNA evidence, which can prove guilt to a near certainty, is a vital component in proving the commission of such a serious offence. The public would find it difficult to accept if this House did not devise some system that enabled DNA samples to be kept in order to assist in the detection of those who commit such very serious crimes. I noticed that although in its report the Joint Committee commented on Article 8 in terms of human rights considerations, it did not expressly criticise that part of the Bill; nor do
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I, but I am happy that it should be returned to in committee in order to ensure that it is applied reasonably and fairly.
I turn to my note of caution. Legal professional privilege enjoys its historical importance in our criminal and civil law because it protects the citizen against unreasonable interference by the state. Citizens can talk to their lawyer in private and by so doing protect their human rights and protect their desire to prove their innocence if charged, if they can. In the view of many, that is still a vital pare of our democracy. It distinguishes us from a totalitarian state where such concepts are regarded as irrelevant. It is an important feature of our legal life and of our system of human rights as we now have them and it should not be damaged or diminished without the most careful consideration.
In an age of electronic records, I find it difficult to accept that the Bill will allow the seizure of electronic material by people who have no idea what they are doing in terms of distinguishing between what is privileged and what is not. Once obtained, even with an obligation to return it as soon as possible if it is privileged, are we really to think that the information obtained by the police if it is privileged will not be stored, at least mentally if not in some permanent form? I find that extremely concerning. It could give rise to a state of affairs whereby, at one extreme. lawyers do not record their advice and, at another. they encrypt their communications with their client or their records of them.
I invite the Government to explain—not at this stage but perhaps in Committee—how these powers will interrelate with the Regulation of Investigatory Powers Act. If a solicitor has encrypted what he regards as privileged information, will he then face difficulties under that Act if he refuses to disclose the code because he says that it is privileged? I remember that under the Act it was said to be privileged and would remain so, but how will the Bill affect that, as it refers to seizure simpliciter, not seizure with the problem of encryption?
I have welcomed the Bill in some respects and on my previous point I have expressed significant caution. I conclude by commending two speeches. The first is the speech of the noble Lord, Lord Northbourne, who so rightly said that the causes of crime must be dealt with as well as the commission of crime. I also welcome the timely reminder of the noble Lord, Lord Windlesham, that we should always think of a Bill like this in relation to the rule of law. I agree; but with the rule of law embracing not only the rights of the accused or the suspect but also the right of each citizen to go about his or her business without affliction from public disorder or crime.
I close as I opened. A Bill like this is really aimed at the protection of the public. That is what it seeks to achieve. In Committee it can be refined, but its valid objectives for the public cannot be doubted.
8.5 p.m.
Lord Jenkin of Roding: My Lords, I am very happy to follow the noble Lord, Lord Brennan, and to take up his final remarks about the right of citizens to go about their lawful occasions without fear of crime or, I would add, of intimidation and harassment.
It is just less than a month ago that the All-Party Group on the Pharmaceutical Industry gathered together to hear an address and to take part in a discussion led by Brian Cass, the managing director of Huntingdon Life Sciences Limited. He described to us, in what I can only describe as horrifying detail, the appalling experiences which he and many members of the staff of his company have suffered over the past 18 months at the hands of animal rights terrorists. Perhaps I may say that I was delighted to hear the noble Lord, Lord Bassam, at the beginning of his speech refer to those people as terrorists. He did not repeat it but it was clearly in his script. To my mind, that is how we must look at the worst elements of the campaign.
The campaign is run by a body with the acronym Shac—Stop Huntingdon Animal Cruelty. But Shac's campaign of threats, intimidation and violence directed at the management and staff is quite frankly outrageous. Their cars have been torched, their homes have been beset by large and angry mobs and their windows have been smashed. They are subjected to harassment every time they enter and leave the company's premises. Only a few weeks ago, Mr Cass himself was attacked by a group of thugs, bludgeoned with pick-axes and had to be rescued by his wife. Such treatment has now been extended to individual shareholders and, where shares are held by companies, to the directors and shareholders of those companies. It has been extended to their bankers and their directors. Most recently, it has been extended to their brokers and also to customers of Huntingdon Life Sciences. Many of us who heard Mr Cass had not begun to realise the extent and sheer viciousness of Shac's so-called campaign. I know that I was not alone in feeling a sense of shame that we, as central to the body politic, seemed to have done so little to deal with what seemed to me to be a very real evil.
What have we had from the press? Mr Cass quoted the remark made by one journalist, who said, "Well it goes with the turf, doesn't it guy?", as much as to say that if you are engaged in a business involving controversy, what can you expect? There are those who say that the right to protest is one of our precious constitutional rights, and of course that is quite correct in terms of lawful, peaceful protest. But that is not what we are seeing in the case of Huntingdon Life Sciences.
A bad signal was sent—this point may be regarded as controversial—when in yielding to pressure the trustees of the Labour Party's pension fund decided that they would sell their investment in HLS. I believe that that sent a clear signal to Shac and its supporters that it was perfectly legitimate to try to force other people to do the same. That is exactly what they have done.
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They have attacked banks and their directors. It is a matter of some shame that the banks then withdrew their support. Only last week, I read in the Independent that:
"Two stockbroking firms that backed Huntingdon Life Sciences have walked out on the controversial animal testing company amid accusations that the Government and police failed to provide protection from animal rights extremists".
The article goes on to say that,
"this came after a campaign of harassment and intimidation directed against Winterflood by activists".
The Independent offered a comment on the City page of which I think we should take note. It opened by noting that:
"If Brian Winterflood is running scared, then things must be bad".
Mr Winterflood has a reputation in the City for being a toughie. The article closes by saying that,
"the capital markets have to be defended from those who would destroy them. Mr Winterflood's decision is a bad day for the City, and for British resolve more generally".
I agree with that.
Only at the weekend—new stories come forward almost every day—I read about another victim of this brutal campaign of intimidation. This time it concerned one of our leading biotechnology companies, British Biotech. The Financial Times stated the following:
"British Biotech yesterday became the first significant customer of Huntingdon Life Sciences to sever its relationship with the troubled drug-testing company after being targeted by anti-vivisectionists".
What is interesting is the report of the reaction of Shac. Greg Avery stated that:
"British Biotech had been 'heavily targeted' by his organisation over the past weeks. It is understood the company has received a barrage of hate e-mails and that campaigners have protested outside its Oxford offices.
'This is the first premier customer of HLS to withdraw,' said Mr Avery." He said Shac was gearing up to target other customers of the company, including Novartis and Roche of Switzerland, and Bayer of Germany.
'Anybody who is a customer of HLS is going to be in the firing line,' said Mr Avery. 'And no customers, no HLS. It's as simple as that.'".
One has to ask whether this is tolerable. For a while it appeared that very little was being done. When this Bill was introduced into another place, it contained nothing to deal with this. Indeed, at the suggestion that directors' names and private addresses should perhaps be withheld if they had a reasonable fear of being threatened with this kind of intimidation, the Government's first reaction was to say that a major review of company law was being carried out by the DTI. The matter should wait for that review. Happily, wiser counsels have prevailed. Clauses 41 to 44 of the Bill were added either in Committee or on Report in another place. They contain welcome measures aimed at countering this vicious campaign of terrorism.

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I shall quote from a consultation document issued just before the weekend which contains a useful summary of the action to be taken: Animal Rights Extremism: Government Strategy. The four measures are as follows:
"to provide a new power for police to move protestors away from homes, where such protests may cause harassment, alarm or distress"—
the point is made that this is aimed specifically at preventing the kind of intimidation which individuals may endure if protestors target their home or family, and,
"at protecting rights to privacy and family life".
The second measure aims to,
"strengthen the provisions on sending malicious communications and to make this an imprisonable offence".
This is to be extended under the new clause to electronic communications made by whatever means: telephone, e-mail, fax and so forth. Thirdly,
"to protect the home addresses of Directors in vulnerable companies, by providing that [they] … may be withheld from the public by use of a secure register".
Fourthly,
"to amend the Protection from Harassment Act 1997 to ensure that separate incidents of harassment organised by a group of people are caught by the Act".
I shall return to the final measure in a moment.
This document was published only last Friday. I commend it to anyone who wishes to understand what has been going on. It contains a remarkable account of the nature and extent of this protest campaign. Il makes for chilling reading.
The Government have now added their proposals to the Bill and 'we can discuss the reaction of Shac.
"Natasha Taylor of the Stop Huntingdon Animal Cruelty campaign said that Mr Straw's measures 'won't make a blind bit of difference to us closing down Huntingdon Life Sciences'".
She went on to say that:
"We are running a legal campaign which does not condone illegal activity. but history shows that there are always people in the animal rights movement who are prepared to step outside the law to achieve an end to animal abuse".
I suspect that if the noble Lord, Lord Brennan, or the noble Baroness, Lady Kennedy of the Shaws, were seeking to prosecute Ms Natasha Taylor, they might give her quite an uncomfortable time in relation to the second sentence in that statement. She knows perfectly well what she is inciting in her campaign. Her protestations of acting legally ring pretty hollow.
There is reason to believe that Clause 43 goes some way further than the description that I gave a moment ago; namely, to amend the Protection from Harassment Act to ensure that separate incidents of harassment organised by a group of people are caught by the Act. I should like to address a question to the Minister, to which I hope that he will be able to
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respond in his closing remarks. At first sight, the clause appears to catch anyone who aids, abets, counsels or procures an act of collective harassment. But does it do so? As I read the clause, I think that this may be ambivalent and I should like to know exactly what is intended here.
Perhaps I may cite an example. In Harlow there is a cluster of leading pharmaceutical companies. Three weeks ago a number of them were targeted by Shac invasions. The animal rights mobs battled their way into a number of company premises, overwhelming security staff and going on to cause a considerable amount of damage. All the attacks took place on the same day. The targets had been carefully identified and selected and it was obvious that the raids were planned and co-ordinated. What I should like to know is this: would Clause 43 as it now appears in the Bill catch not only those who were on the scene—I believe that the clause does that—but also those who may not have been there, but who planned and co-ordinated that series of violent invasions?
The leaders of Shac have not hidden themselves. I have quoted the names of two of them in my remarks. But they have been in receipt of very careful legal advice. They themselves take great care not to fall foul of the existing law. I ask again: will Clause 43 as drafted catch those who plan and organise collective harassment so that they will be found as much guilty of an offence as those who take part in the violent activity? If not, why not—or are we going to have to fall back on the notoriously difficult crime of criminal conspiracy in order to bring the leaders and instigators of such actions before the courts? This is a serious issue and I want a clear answer. It is something we have to deal with.
Before I sit down, perhaps I may remind the House that research to ensure the safety of drugs and other medical treatments must, by law, include the testing of products and components on animals. I have recently had open-heart surgery and I have read the fascinating history of Papworth Hospital. All the early experiments in heart surgery were carried out on pigs. Indeed, to my certain knowledge there is a Member of this House who at the moment has a pig's valve in his heart, and it is working extremely well. So one has a personal reason for recognising the importance of this research.
We in Britain have an extremely successful record in pharmaceutical discovery and innovation. We also have in the Animals (Scientific Procedures) Act 1986, the most scrupulous and comprehensive legislation in the world in balancing the needs of research with the welfare of laboratory animals. If the activities of Shac achieve their avowed purpose and drive these industries away from this country, not only would it do serious economic damage to the country as a whole but it would lead not to the end of these experiments but to their continuation in countries overseas which are much less protective of animal welfare than we are.
Again, only last week the Government published the interesting report of the Pharmaceutical Industry Competitiveness Task Force, which was jointly

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chaired by the noble Lord, Lord Hunt of Kings Heath, and Mr Tom McKillop, the chief executive officer of AstraZeneca. I shall read one short paragraph to demonstrate the industry's importance. Paragraph 1.1 states:
"The pharmaceutical industry based in the UK … is one of the most successful in the world. It is a prime example of what is needed in a successful knowledge economy".
These people, by their own avowed intention, are trying to put that at risk by their illegal harassment, threats and intimidation, and by what is described in the Home Office document as "outright terrorism". It is of the utmost importance that they should never succeed.
8.22 p.m.
Baroness David: My Lords, I am delighted to follow the noble Lord, Lord Jenkin of Roding, because a few months ago I went to a meeting of the Cambridgeshire Police Authority, where we heard the details of what was going on at Huntingdon. It was absolutely shocking. I endorse everything the noble Lord said about what the attackers are doing and condemn their actions totally.
The expense to the police authority was enormous. I am glad to say that the special appeal to the Home Office to increase the grant to the Cambridgeshire police was successful and that they received, I think, at least £1 million to help this year, which is badly needed. It is very discouraging for the police to have to spend so much time on these activities. I applaud the Government for having done something about the matter in the Bill—or perhaps the Commons for having forced the Government to do something.
I turn now to what I wish to say about the Bill. I intend to concentrate on one matter only; that is, the extension of curfews from the age of 10 to the age of 16. This appears in Clause 45.
When the child curfew scheme was brought in under the Crime and Disorder Act 1998, a QC advised a consortium of children's organisations that such curfews were in breach of the European Convention on Human Rights, now incorporated into the Human Rights Act. Because the 1998 Act proposed curfews only for under-10s, the QC considered that it would breach parents' rights to private and family life under Article 8 of the convention. The extension of curfews under this Bill to 16 year-olds therefore compounds the likely breach of the European convention because it will also directly breach older children's own rights under Article 8, their rights to liberty under Article 5, and to freedom of association under Article 11.
The European convention allows citizens' rights under these articles to be interfered with if this is "necessary"—he word in the Bill—but, given that police already have powers to take action in respect of any under-18 year-old who is acting in any way which might harm their social, educational or behavioural development, why is it necessary to curfew perfectly innocent and law-abiding children and young people
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living in a particular area when the police already have legal powers to deal with any children who are out late and acting in an anti-social or self-harming way?
I call attention to a letter written by HM Chief Inspector of Prisons, Sir David Ramsbotham, in answer to a letter on this matter from the Children's Rights Alliance. The letter states:
"I find the whole proposal [to extend child curfew] to run absolutely counter to all my instincts and beliefs about the way to treat our children. I am particularly concerned that society appears to be marginalising its young males. They are represented as failures at school; domestic circumstances mean that too many are denied adult male role models: proper jobs are denied to them and all that is available is a series of unskilled, unsatisfactory employment".
This echoes what was said by the noble Lord, Lord Northbourne, in his excellent speech.
I should like to make two other points. First, what about the children who are out late on the streets because of domestic violence or other forms of abuse within the family? A curfew may well force such children back into nightmarish homes and, for example, prevent them from staying late at a friend's house until a drunken parent is safely asleep.
Secondly, when one London area introduced a form of curfew, parents complained to children's organisations that their sons saw the curfew as a challenge and took to staying out deliberately to taunt the police. The parents said that things rapidly got worse, not better, and greatly added to the stress on families.
This is a serious matter. I hope that the Minister will pay attention to what has been said by the Children's Rights Alliance and respond to that. I should also like him to provide the House with an answer to the allegation that a curfew will breach the Human Rights Act.
8.28 p.m.
Baroness Noakes: My Lords, I wish to speak to the smallest part of the Bill, Part 2. Clauses 48 to 50 deal with information disclosure for the purposes of criminal proceedings. At their heart is an entirely laudable desire to ensure that information held by the state should be available to assist in the investigation of crimes and in criminal proceedings. But, as is so often the case, the Government have drafted very wide powers, the exercise of which could easily be injurious to citizens.
I will deal in particular with Clause 49, which concerns the disclosure of information by tax authorities. Members of the Institute of Chartered Accountants, in which I declare an interest as a council member, have expressed considerable concerns about this clause, as have other representative bodies of taxpayers' agents.
Taxpayers have always believed that information given to the tax authorities is given in strictest confidence. This helps to promote a culture of tax compliance. For example, taxpayers whose affairs have got in a mess are positively encouraged to make a clean breast of outstanding issues. Under a procedure known as the "Hansard" procedure, a taxpayer can do

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a deal with the Inland Revenue. If the taxpayer honestly owns up to past errors and makes a financial settlement—usually a very large financial settlement—the Inland Revenue will agree not to prosecute. This is clearly advantageous to the taxpayer. But it also promotes a culture of compliance, which is one of the linchpins of our tax system, as well as improving revenue collection.
How will this procedure work in future? What a taxpayer sometimes owns up to is a source of income or capital which has its origins in an illegal act. Will the Hansard procedure protect the taxpayer in future from information disclosure as well? If that is not the case, or if the taxpayer does not believe that that is the case, we could well see a diminution in the incidence of voluntary disclosure and settlement of past tax liabilities. That would be bad for individual taxpayers, for the culture of compliance in this country and for tax collection generally.
An area of difficulty under Clause 49 is that disclosure under the clause requires the authority of the commissioners concerned; namely, the Inland Revenue or Customs and Excise. One problem with this is that in practice disclosure may well be authorised by a much more junior official to whom the commissioners have delegated their powers. I should be interested to hear whether there are any administrative processes planned to provide some protection to taxpayers against the over-enthusiastic use of these new information disclosure powers below the level of the commissioners themselves. I note in particular that, unlike Clause 47, the clause provides no penalty for wrongful disclosure. How will taxpayers be protected against the misuse of these powers?
I believe that the Government should also consider altering the authorisation procedures from within the tax authorities to an external authority. A precedent exists for occasions when the Inland Revenue wishes to obtain information about a taxpayer from external sources. It needs to obtain the permission of either a general or a special commissioner under Section 20 of the Taxes Management Act; that is to say, someone outside the Inland Revenue has to authorise the obtaining of information. It seems to me that there should be a similar requirement for the Inland Revenue to seek authority from someone outside the Inland Revenue—perhaps from a general or special commissioner—before information about a taxpayer is revealed.
I also ask the Minister to reconsider whether taxpayers should have a right to make representations before information relating to them is disclosed outside the Inland Revenue or Customs and Excise. I am well aware that there could be difficulties involved in people being "tipped off"; nevertheless, under the Bill as drafted, the taxpayer has no right of redress or right of speech.
The new information disclosure power is not confined to crimes that have definitely been committed. It does not even require criminal investigations or criminal proceedings to be under
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way. Clause 49(2) refers to criminal investigations which "may be carried out" and to criminal proceedings which "may be initiated". This Js a very wide power. I believe that some protection for taxpayers is necessary. One way of providing protection is to ensure that disclosure cannot he made unless there is reasonable evidence that a crime has been committed.
Clause 49 is not limited to disclosure in the UK. It specifically covers criminal proceedings or investigations outside the UK. The provision is not restricted to criminal offences or suspected offences that would be treated as criminal if they were committed in the UK. For example, some acts which in this country are regarded as civil offences are regarded as criminal in other jurisdictions. Are we really creating a power to allow information to be passed outside the UK authorities for acts that we should not regard as criminal?
Penalties vary considerably around the world. We need to avoid exposing individuals in the UK to penalties that we should regard as unacceptable in this country—for example, death or a long term of imprisonment in circumstances where we should impose a fine. This is not fanciful; penalties vary considerably around the world. About a year ago, there was a report in the newspapers that the Russian tax authorities had set up a tax collection army trained in mortal combat.
I am told that a relatively common source of taxpayer disclosure under the Hansard procedures that I referred to earlier is from individuals who have brought money or other assets into this country from their former countries in breach of local laws. Many still have relatives in those countries and would fear for their own or their relatives' safety if disclosure were made. Ethnic minorities persecuted overseas may well be particularly affected by the application of these powers.
I believe that all of this increases the need for an external authority to be involved before any disclosures are made. I hope that the Government will re-examine the matter. I hope that they will examine also the specific case of disclosures outside the UK to ensure that disclosure can be made only where the offence concerned would be treated as criminal in the UK and where there is a broad equivalence of penalty provisions.
Finally, would the Minister, who has signed the usual declaration on the European Convention on Human Rights for the Bill, confirm that disclosure of information could not be made under the Bill to a foreign jurisdiction where that jurisdiction does not itself comply with an equivalent of the convention? If he is unable to confirm this, will the Government consider amending the Bill to achieve that protection?
8.37 p.m.
The Earl of Rosslyn: My Lords, I shall address my remarks to Part V of the Bill. In so doing, I declare an interest as a serving officer in the Metropolitan Police: I am a commander with responsibility for the force's training.

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In order to be effective, the police service depends on the consent of the communities it serves. That consent depends significantly on the trust and respect that people have for the police. Increasingly, such trust is proportionate to the level of professionalism that we show.
Achieving such high standards of professionalism represents a real challenge for the service since policing is made up of so many different roles, each requiring appropriate attitudes, knowledge and often a high level of technical skills. Many of the situations in which officers will apply those skills will be hostile or stressful. The way in which we recruit and train them will, therefore, be central to effective policing.
Timely, relevant and effective training is recognised as fundamental in preparing officers to deal with the operational complexities of the modern world. As policing has become more complex and demanding, and as the pressures on the service have increased, so has the demand for training. Your Lordships' House, if I may say so politely, has played its part in that, since in the past 10 years over 100 separate pieces of legislation have been enacted which have had major training implications for the police service.
In 1999, an Inspectorate report estimated that the total cost of training police officers throughout the service in any one year was as high as —391 million. That figure took no account of the costs of training civilian support staff or members of the Special Constabulary. More recent studies have suggested that the figure could be considerably higher.
Since May 1998, five major reports have been published examining how such training in England and Wales is organised. These included the first thematic inspection of training by Her Majesty's Inspector of Constabulary and an inquiry by the Home Affairs Committee in another place. Many aspects of that collective thinking are now reflected in Part V of the Bill and have led to the creation of the central police training and development authority. It was recognised that the service had put considerable effort and resources into training delivery but that it needed to put more effort into managing training.
The creation of the new authority to act as a focus for developing and promoting professional excellence across the police service is, therefore, welcome.
There appears to be wide agreement that such professionalism would be enhanced by a set of occupational standards for policing. These would specify the minimum level of competence, knowledge and skills that an officer must have to carry out a specific task or role. It would be open to individual forces to exceed the national occupational standards, and forces would continue to be able to choose training whose style or ethos best suited the force. The Bill provides the framework within which this can now happen, with a core curriculum to support those occupational standards and mandatory qualifications for certain ranks and roles.
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The Policing and Reducing Crime Unit paper in 1998, for example, identified the advantages of a core curriculum for the training of officers investigating allegations of child abuse. While policing should never ignore its local context, corporate common standards of service delivery are sometimes legitimate and desirable, provided that any qualification is linked to competence in operational performance.
So the Bill may influence positively the content of police training, but what of how it is achieved? Her Majesty's Inspector of Constabulary has estimated that an "average"—if I may use that word—constable could receive as much as 14 days' training in a year, which compares with 2.8 days for all public sector organisations and 3.2 days in the private sector. This illustrates the scale of training delivered in the police service. Although it represents a positive investment in staff skills, the service must also consider using alternative learning strategies; for example, on average, only about 5 per cent of training in forces is currently delivered by distance learning. A more flexible approach to when and where such training is delivered could reduce abstraction levels from the frontline. The proposed role for the new authority in developing this thinking is, therefore, welcome.
My own force has been active in developing both computer-based training programmes and sophisticated simulation training for major incidents, and the investigation of serious crime. Officers are faced with a realistic and challenging recreations of live policing events. The system is now being used for other aspects of police training. At a time when partnership working is so central to the promotion of community safety, we are also using the system to deliver joint training with other agencies. It is pleasing to see that the Bill defines so inclusively the functions of the new authority to encourage just such collaborative approaches.
However, training cannot raise standards in isolation—effective leadership is also required, as well as an organisational culture that provides opportunities for self-development and continuous learning. But an investment in training will enable the service to accelerate the personal development of its staff, and so improve those skills and abilities upon which successful policing depends. Part 5 of the Bill will, I believe, contribute positively to that end.
8.43 p.m.
Lord Elton: My Lords, it was in 1984 that I took through your Lordships' House the Police and Criminal Evidence Bill, or PACE. It was quite an interesting experience because a general election had been called—how things change!—halfway through the procedure for that Bill in the previous Parliament. When that Bill fell, your Lordships had gone through virtually the whole process of the legislation. So I took it through the House for a second time on what one would have thought was common ground, yet a host of amendments were tabled. At the end of the Bill's passage, I believed that we had a landmark piece of legislation and that at last we had put everything to bed: the system was there; it would work; and

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criminals would be detected, arrested and put into smoothly-functioning prisons where they would be reformed before they were turned out again. I did not feel quite so confident about the prisons because I was the Minister in charge of them and I knew that they were not achieving that aim.
However, I should not have been so green about the other aspects of the effects of that Bill, because my previous position had been a short-term appointment in what was then the Department of Health and Social Security. During that time I was introduced to a particular form of intermediate treatment called the "Norfolk trail", and discovered that the rate of re-offending for children who had been through that process was between 16 per cent and 20 per cent lower than the rate for those who were sent for custodial treatment. That started me off on a trail that I followed enthusiastically when I left government. However, I did not leave your Lordships' House. I found that we were on a sort of "legislative treadmill"; indeed, one got to recognise the spokes as they came round. We have had main programme legislation on criminal justice themes on 26 occasions in this House since PACE went through. There has been no dramatic improvement in offending rates, or in rehabilitation since that time.
I am speaking here tonight in recognition of the fact that this is a rag-tag of a Bill. I cannot make a coherent speech, but one can do very effectively what my noble friend Lord Jenkin of Roding did about a piece of it. I should like to sign tip to every word that he uttered on the subject of the animal rights business. I have been encouraged in the theme that I seek to address because we are at the end of this Parliament, and we have a different view of the Government from what we had at the beginning. As a result of my experience at the Department of Health and seeing the "Norfolk trail", as well as further investigations, I invested much of my time and enthusiasm in, first, chairing the Intermediate Treatment Fund and then, out of its ashes when it was demolished by my right honourable friend, Virginia Bottomley, at the department, I chaired the DIVERT Trust, which was aimed at giving children what the noble Lord, Lord McNally, called "hope"—in other words, some hope in life.
I do not believe that we have achieved that aim. However, I should like to commend what the Government have achieved in the way of setting up the youth offending teams and securing a genuine form of co-operation across different services that, in my day, were more accustomed to bickering than co-operating. That is a welcome move. But what made the defeat of my parliamentary House of Commons colleagues in 1997 a little more bearable than it otherwise would have been was the enthusiasm with which Mr Jack Straw and his colleagues in another place supported the complaints made by myself and my noble friends here against the developing Conservative policy of those days of locking up an increasing number of young people, and giving the voluntary agencies a diminishing amount of core funding to enable them to provide the hope that such youngsters were not getting from the state system.
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The fact that they had been so vociferous and effective in resisting such measures—for example, the institution of secure training centres in the last years of the previous Parliament—made many of us feel that a little benefit might be derived from the change of party in power. The first indication that that was not going to happen was the confirmation of the contracts for the building of all the secure training centres, followed by the continued diminution of the paying of core funding to the voluntary agencies.
I am on my feet this evening because I wish to remind your Lordships now—as, indeed. I did at the end of the previous Parliament and at the beginning of this one—that children starved of love will not grow up into whole and effective citizens, unless something is done to replace it. Children brought up without hope will turn vicious. There are two clauses only in the Bill that deal with young people. However, all old lags have been young lags previously. One of the disturbing findings of the report in 1994 of the Audit Commission entitled Misspent Youth, which was a seminal paper and one that I commend to your Lordships still, was that young people were not growing out of crime at the rate that they formerly were. If we do not get the young people before they become criminals, it will become impossibly difficult to control them when they are criminals.
In 1996, the audit office reported that only 3 per cent of all the crime by young offenders ever resulted in arrest. I set that against the moving and well informed speech of the noble Earl, Lord Rosslyn, from the Cross Benches. An enormous amount of police effort and other effort is deployed to catch 3 per cent of the people responsible for crime. Of those 3 per cent, 1.8 per cent were cautioned and 1.3 per cent were charged and summonsed. Of that 1.3 per cent, no fewer than a quarter of the cases were discontinued or dismissed.
We are spending over £1,000 million a year on that effort and it is producing a ridiculously small result. Yet we think that by heaping statute upon statute upon statute upon statute we shall resolve the problem. We shall not. We shall not catch them. We shall catch only 3 per cent of them. We shall not reform those whom we catch. We shall reform perhaps 10 per cent. We must get to them first. It is not very cheerful for me to say to your Lordships, "In large part I think that you are wasting your time", but, in comparison with what we might be doing, we are.
If only these vast resources and these skilled and trained people were devoted to finding children destitute of love, who have been taught in schools with no proper discipline. Children rebel in order to discover where the parameters of proper behaviour lie. If they are not stopped when they reach them, they will go further. Proper discipline in a school is vital. If they do not feel that they have the respect of their contemporaries, they will seek to achieve it. If there are no legitimate ways to achieve it because the resources are not available to enable them to do so through sport, music or public works, they will do so through crime. Having been defined as someone's brother or sister—some known person—he or she will suddenly

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become the hard man who has been caught by the police, or better still the clever guy who got away with it. There will be more of them.
I shall not delay the House longer except to say that I feel passionately that if whoever sits behind the Green Box on the other side of the Chamber after the next election does not seize the point that we have to get to people before they go wrong rather than remedy them afterwards, your Lordships will waste another Parliament and further damage will be done to our society.
8.53 p.m.
Lord Dholakia: My Lords, this has been a remarkable Second Reading debate with a good input from all speakers. I do not think that I can disagree with much of what has been said.
This Bill comes before us at a time when there is no certainty that it will become law. Even if the date of the general election were to drag on until June, it is unlikely that the Bill would go through all its stages. Of course, the last thing we want to do is to delay some of the measures in the Bill. We certainly welcome some of them. However, there are other contentious issues on which compromise is not possible unless there are some fundamental changes, which we should have preferred to negotiate. As has quite rightly been pointed out, the Commons did not have enough time to consider the Bill. We should spend sufficient time to put that right, even if it means that we may run out of time.
Like many criminal justice Bills, the Bill before the House is a mixed bag with a range of provisions ranging from the desirable to the counter-productive. I agree with the noble Lord, Lord Cope, and my noble friend Lord McNally that the Bill lacks any philosophical thread. It is rather a hotchpotch of measures to solve problems. It also gives the impression that there is an insatiable appetite on the part of the Home Office to enact legislation without seriously considering its impact. I shall identify issues of serious concern to back up the comments of many noble Lords.
The Bill smacks of political one-upmanship by Labour over the Tories. It throws an additional burden on our police forces whose capacity to meet the public expectations of policing is fairly limited. I trust that the Minister will prove me wrong, but I simply have to look at the number of laws enacted by the Home Office to prove my point. I welcome the contribution of my noble friend Lady Harris of Richmond and of the noble Earl, Lord Rosslyn, both of whom speak from direct experience of the police service.
One of the most welcome measures contained in the Bill is the establishment of the police training and development authority, including a requirement on the new authority to submit an annual report at the end of each financial year, detailing how it has carried out its functions during the previous year. The establishment of the authority is a welcome response
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by the Government to the report of the Stephen Lawrence inquiry and to reports on police training by the Home Affairs Committee, both of which demonstrated the inadequacy of many aspects of police training, including training in community and race relations. The establishment of the new authority should help to achieve an improvement and greater consistency in the provision of training for members of the police service. The Bill also contains some useful measures to combat alcohol-related disorder and to protect witnesses in civil proceedings.
Many noble Lords have spoken about fixed penalty notices. I have today received a letter from the Minister about the first 11 clauses of the Bill, which introduce fixed penalties for disorder offences. Unfortunately, he failed to enclose the draft text of a note which gave an indication of the guidance that might be issued to the police on the operation of the new scheme. I hope that the Minister will forgive me if some of my comments have already been dealt with in his draft notes. But if the document was available since the Bill's passage through the Commons, why was it sent to Members of this House only today?
I do not dispute that the measures will allow the police to issue penalty notices on the spot or at a police station for a range of offences. The police will have to consider whether there is reasonable cause to think that an offence has been committed. The police will also have to consider where a penalty notice appears to be an appropriate response. We are also told that the scheme is a discretionary one. This discretion leads the policeman to decide whether the matter should be dealt with by the courts and, if that is the case, he will have the usual power to arrest and charge the offender.
The noble Lord, Lord Windlesham, has already pointed out—he is right—that we must question the Minister on some points. Is there not a danger that the provisions contained in Clauses 1 to 6 will lead to a mix of criminal and civil law procedures? Where do we stand in relation to the principles of presumption of innocence and the burden of proof? I believe that Liberty is rightly concerned because even if a criminal conviction is not envisaged, the relevant behaviour can be by definition criminal and lead to a criminal conviction if a penalty is not accepted. The blurring of the boundary between criminal and civil law is to be regretted. People issued with fixed penalty notices will have the right to go to court if they argue that they have not committed the offence for which they have received the notice. Unlike the fixed penalties for speeding, which can be confirmed by modern gadgets including traffic cameras, the discretion not only puts the police in an invidious position but also adds to the workload of our overstretched courts.
However, there are some important caveats. First, the Government have talked a great deal about the use of fixed penalties for drunken offenders who are causing a nuisance. However, that is probably one of the least useful areas for fixed penalty notices, not least because people who are drunk and disorderly are very likely to discard or lose the notices.

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On a general point, and while on the subject of discretion, will the Minister give an assurance that the use of new powers is ethnically monitored to ensure that they are not used in a discriminatory manner? Will such information be published under Section 95 of the Criminal Justice Act 1991? We expect far too much of our police officers. We are asking them to have "reason to believe" rather than establishing beyond all "reasonable doubt" that the person committed the offence.
The noble Lord, Lord Brennan, mentioned half a million people often being in the centre of Manchester on a Friday evening. I know that he is right. In company with police officers, I visited Manchester when I was a member of the Police Complaints Authority. I would not wish to be a policeman issuing a fixed penalty notice to a crowd at that stage.
I turn to child curfew orders. We were right to oppose the imposition of the original child curfew orders for those up to 10 years-old. We were told how important this measure was in dealing with offending behaviour by children under 10 years of age. I do not believe that either the police or the local authorities like this provision. I am not aware of any occasions when such orders have been used. We are now asked to approve the extension of local child curfew schemes to children up to the age of 16. This is a misguided and highly illiberal measure. It will impose serious restrictions on the overwhelming majority of law-abiding young people and their families. A single mother with three teenage children will not be able to let them to go out to youth activities or football training which would involve them getting home after 9 p.m. unless she could collect each of them herself—something that is frequently not practical. As participation in constructive activity is associated with a reduced likelihood of delinquency, those restrictions on legitimate activity by young people could well increase the level of crime rather than reduce it.
It is significant that the evidence from the United States of America indicates that the fall in youth crime in recent years has been no greater in states which operate curfews than in areas which do not. Is not there a lesson for us here? What is the evidence that such draconian measures are required? Can the Minister cite any past examples where such a restriction could be adequately policed? It is fundamentally wrong to stigmatise many of our young people by a blanket curfew. It is impracticable and we do not have enough police officers to ensure that such a proposal could work effectively.
There is another danger in that we are not targeting individuals but whole geographical areas, with blanket bans on the activities of young people. That penalises the innocent as well as the alleged troublemakers. It is possible to stray into a curfew area unknowingly. Quite simply, we could not put "no entry" signs at every access road in a specific location.
No one can dispute that we need strategies to allow the police and local authorities to deal with the individual young people who cause a problem. However, we have got the equation wrong. We are, in
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effect, saying that the way to stop mugging is to lock up all the old ladies. The Minister may wish to think again about this provision.
I turn to the third aspect of the Bill which is contentious. I refer to the restriction on the use and destruction of fingerprints and samples. It would be helpful if the Minister could indicate which organisations he had consulted before deciding to introduce such a measure. We all acknowledge that DNA now plays a significant part in a wide range of criminal cases. It perhaps supersedes all forms of identification which have been used in the past. It is there to prove innocence as well as guilt. Our police forces are more effective in fighting crime when they have DNA evidence which cannot be disputed. The present law provides for the DNA and fingerprints to be destroyed if a conviction does not follow from the taking of the samples. The noble Baroness, Lady Kennedy of The Shaws, rightly pointed that out. Of course, the Minister could cite cases where DNA evidence could not be used because the defendants were either acquitted of another crime or a decision was taken not to proceed with the offences for which the DNA was obtained.
These are matters of individual rights and liberties which we must uphold. Someone going through a due process of law who is found not guilty of the offence, or someone who has never been through the process, must have a right to demand that his privacy and liberty be respected. There is no question but that those who are found not guilty must be presumed innocent. Of course, the Government concede the point that people who are innocent and who have not broken any law or gone through any police procedures should not lose their right to resist having their DNA, fingerprints or other samples held without their authority. But then a different laws applies to others although they may be found to be not guilty.
I have another matter of concern. How reliable is police information? I quote from a press cutting sent to me about a police computer. It states:
"The Police National Computer holds 50 million files on criminal intelligence. Punch has found that not only is the entire system not registered under the Data Protection Act but that huge amounts of its incriminating data are inaccurate".
A Liberty spokeswoman says:
"It is tempting to dismiss this as a comedy of errors, but we must not. It highlights just how much information is held on individuals in this country, and how vital it is to have powerful and properly enforced safeguards to ensure this information is not misused and the public's right to privacy is not undermined by the creeping advance of a know all surveillance state".
It is a dangerous step to go down on the road to denying innocent people their freedom and liberty. I am surprised that the Labour Party, which so frequently in the past has guarded the liberty of the individual, should sacrifice its principles in this Bill. We shall oppose this measure at the appropriate time.
A further area of concern is the Bill's provision that the codes of practice under the Police and Criminal Evidence Act will be modified by negative resolution rather than by debate in each House of Parliament. The codes of practice cover such areas as stop and

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search, searching of premises, detention and treatment, identification procedures and the tape recording of interviews with suspects. It is important that those areas should be fully debated rather than be subject to the more limited safeguards of the negative resolution procedure.
If the Bill needs our co-operation this side of the general election, the Minister will have to negotiate with us. It is not what he wants, but what is appropriate between the needs of the state as against the rights and liberties of the individual.
9.7 p.m.
Baroness Buscombe: My Lords, in winding up this important and high quality debate on behalf of Her Majesty's Opposition, I shall endeavour to reflect briefly on some of the aspects of the Bill and upon what noble Lords have said today.
This is, as my noble friend Lord Cope of Berkeley said, a rag-bag Bill, albeit it carries with it far-reaching consequences. It erodes the burden of proof generally required for evidence of a criminal offence; it allows an individual to commit offences repeatedly without incurring a criminal record; and it raises substantial civil liberty issues relating, for example, to DNA testing and the disclosure of Inland Revenue and Customs and Excise records. It also carries with it considerable expectations in terms of police presence if its measures are to be effective. However, it does not tackle the significant rise in violent crime, as we had been told that the Government would do.
Moreover, I remind the Minister of the contributions of the noble Lords, Lord Northbourne and Lord Elton, who addressed the reality of the lives of young people today—those in the fringe who are insecure. disturbed and excluded, or those who are starved of love and brought up without hope. We need to encourage those children that life is worth living outside the world of crime. The Bill does not tackle the root cause of crime—what I call the bigger picture.
As my noble friend Lord Cope of Berkeley said, the Bill received scant scrutiny in another place. Indeed, much of its latter parts were not scrutinised at all. Perhaps it would make sense for our Committee to begin its scrutiny with Part 7 and work backwards. That way, with the uncertainties and indecisions of the Government's timetable, each part and clause would have at least one chance for consideration in one House.
Part 1 contains three chapters and relates to penalty notices. We accept that in principle it provides a swift way of dealing with someone believed to be guilty of certain prescribed offences. It should be noted that 10 of those 12 offences are already arrestable, and not all of them are clear-cut. For example, it should be fairly straightforward for a police officer to judge—because he or she will effectively become judge and jury—whether a person is trespassing on a railway. However, it may be very difficult to assess the disorderly behaviour of someone who is drunk. In addition, how does one serve a penalty notice on someone who is
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drunk and disorderly? How drunk and disorderly could a person be and how many times before they attracted a criminal record? How destructive could a person be without lawful excuse before attracting a criminal record.
It is awfully tempting to make a pun with the byline, "Crime pays", when all that one will have to do to make up for one's misdemeanours is pay up. What about victims of criminal damage? Will they receive compensation following the use of fixed penalty_ notices?
As my noble friend Lord Windlesham so eloquently said, the Bill is an attempt by the draftsman to rescue a headline-grabbing initiative by wrestling with the need to reconcile the rule of law. The Home Secretary said on Second Reading in another place:
"The Bill has a simple aim: it is to aid the police and the courts in further reducing crime and the fear of crime".—[Official Report, Commons, 29/1/01: col. 34.]
That is laudable stuff, but in reality this part of the Bill is being introduced as an alternative to properly resourcing an overstretched and understaffed police force—a force that has 2,500 fewer officers than it had when this Government came to power in 1997.
In addition to the offences listed in Clause 1(1), I should like the Minister to respond to two other categories already referred to by my noble friend Lord Cope of Berkeley, which we believe should be in the Bill. We have received correspondence from Westminster City Council, which is looking to us for support on the growing and extremely unpleasant incidence of fouling of the streets and the placing of prostitutes' cards in telephone boxes.
Street fouling is not currently an offence unless a bylaw is in place. Your Lordships will know that enforcing bylaws involves the arrest and lengthy processing of any offenders. Westminster City Council informs us that street fouling is now perhaps the single aspect of antisocial behaviour that most undermines the quality of life for those who live and work in parts of the city. Under the Bill, an individual could be given a penalty on the spot if he or she was urinating or defecating in a public place while drunk and disorderly, but not if he or she was sober. It is strange, too, that a pet owner is legally responsible for his pet's toilet habits, but not his own.
The second issue is placing prostitutes' cards in telephone boxes. We believe that the placing of a card advertising a prostitute's services should be an arrestable offence. It is another growing problem in London and other cities across the country. It significantly affects the quality of life for those who live and work in the areas concerned and it is an awful advertisement for our tourists to endure. I am particularly concerned about children and young people. There is evidence that these cards are being swapped like Pokemon cards in some London school playgrounds. A consultation document on the subject was published in 1999. The period for consultation and response is long over. Will the Minister tell us why nothing has been done? Will he consider adding those two offences to the Bill?

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I turn to Chapter 2 of Part 1 concerning alcohol-related disorder. I want to concentrate my comments on the proposed power of local authorities effectively to create at will and with ease designated public places, more commonly known as "alcohol-free zones". I shall use a live example. In North Cornwall, the local authority has introduced a by-law to make the town and beaches of Rock an alcohol-free zone. It has done so in response to residents' concerns regarding extensive under-age drinking, together with noisy and anti-social behaviour in the town, which happens to be extremely popular among young people.
That is all very well. However, the residents of the nearby village of Trebetherick are now concerned that the problem will simply move to their area. They are responding by asking local residents—I declare an interest as I shall be resident there with my family for part of this summer, general election permitting—to pay for extra policing to the tune of £5,000 in order to combat the potential problem.
There are two important points in relation to this matter. First, the creation of alcohol-free zones does not cure the problem; it simply moves it on. Secondly, residents know that they cannot rely on the local force to combat the problem because there are just not enough police officers to cope. Can the Minister tell us how that problem will be resolved by this Bill?
Further, we must expect to see local authorities all over the country introduce such zones in an effort to deflect drunk and disorderly behaviour. Unfortunately, that will mean that those of us who might like to consume a glass of wine or a beer while enjoying the countryside or the beach will be breaking the law. It will be akin to parking on a double yellow line—wrong and uncomfortable. Does the Minister really intend that?
I turn to Chapter 3 of Part 1 of the Bill relating to child curfew orders. Again, in principle it sounds like a good idea. However, given that no such orders have been made in the 28 months since they became available, the reality is that the Home Secretary is clearly seeking to save face following a failed child curfew scheme by raising the age limit from 10 to 16. I listened with care to the speech of the noble Baroness, Lady David, who said that curfews lead to further marginalisation of some already disadvantaged children.
I turn to the speech of my noble friend Lord Jenkin of Roding, who referred to Huntingdon Life Sciences and the harrowing report of the experiences that have been suffered there. I support what my noble friend said, and I repeat the important question that he posed to the Minister. Will Clause 43—a welcome measure—catch those who plan and organise collective harassment? I refer not only to those who attend and play their part at the event but also to those who organise such acts of terrorism. Will they be ensnared by this clause?
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In relation to Part 2 and disclosure of information, I repeat the question put by the shadow Home Secretary in another place. Will the Minister reassure us that the police will require disclosure only when it is manifestly required in connection with a serious investigation? In particular, I listened with care to the points made in relation to the disclosure of information by tax authorities and the implications of this Bill, addressed with clarity by the noble Baroness, Lady Noakes. I hope that the Minister also listened with care.
In response to Part 3, some noble Lords—in particular, the noble Lord, Lord Brennan—expressed considerable concerns with regard to the proposed power of seizure and other police powers. In addition, the Law Society of Scotland has expressed concern regarding the erosion of the doctrine of legal professional privilege.
I move on to Part 4 of the Bill concerning proposals in relation to DNA. I believe that we must be cautious. Can we be sure that those who provide a DNA sample for whatever reason will be informed that their sample will be retained and by whom? We must take care to ensure that we do not deter those who willingly provide a DNA sample on a voluntary basis. Again, I listened with care to the noble Baroness, Lady Kennedy of The Shaws, who referred to the major human rights issues and also the important relationship between state and citizens. Perhaps real consideration should be given in Committee to age and the level of crime in relation to the retention of samples. I noticed that the noble Baroness singled out juveniles and the noble Lord, Lord Brennan, singled out murder and sex crimes.
I turn to Part 5 concerning the setting up of a central police training authority. I urge caution. As my noble friend Lord Cope of Berkeley said, we want to be sure that this is worthwhile and not simply a rearranging of the chairs. That said, I listened with interest to the noble Baroness, Lady Harris of Richmond, and I heed what she said, given her knowledge and experience in this area.
In addition, I listened to the words of the noble Earl, Lord Rosslyn. He said that, to be effective, policing depends upon the consent of the community that it serves. I urge the Minister to consider what the noble Earl said. I first met the noble Earl in a very different environment to your Lordships' House and in a very different guise, when I was a parliamentary candidate for Slough and the noble Earl was chief superintendent of police in Slough. I well remember the enormous respect that the noble Lord commanded among those who served under him. He knows and understands how to achieve successful policing.
I turn to Part 6 and other matters relating to police organisation. As with every Bill that the Government have introduced, I am afraid that one does not have to look far to find a compromising controlling element that includes the refrain, "The Government know best". Let me quote the Association of Police Authorities, which has significant concerns about this part of the Bill, which will provide for more direct

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government influence over the operation of the two national policing squads. The Association of Police Authorities believes that the proposals,
"challenge the constitutional basis of policing and the checks and balances which maintain public consent for policing; and perhaps more importantly weaken the independence, skills and expertise of the service authorities established just three years ago to oversee and maintain high standards of integrity in the operation of these two national squads".
It has additional concerns, which were expressed by the noble Baroness, Lady Harris of Richmond. It has been stated that the provisions were not considered in another place. We must ensure that we consider them properly in Committee.
In conclusion, there is much to be discussed during the Bill's later stages. Can the Minister give an indication now about whether we, unlike another place, will have sufficient opportunity to scrutinise with care this mixed bag of a Bill? Perhaps most importantly, we should consider the practicalities of implementing its many provisions. The Minister should bear in mind the Bill's many potential consequences. It will in one way or another impinge on the lives of all of us.
In his opening speech, the Minister said that he would welcome debate in the House in order to ensure that the measures would be brought into effect to "full capacity". We have now begun that debate and already noble Lords have demonstrated that that full capacity may sometimes mean over-capacity. I look forward to the further consideration of what is thus far, as the noble Lord, Lord McNally, said, an ill-considered piece of legislation.
9.22 p.m.
Lord Bassam of Brighton: My Lords, our long debate this afternoon and this evening has demonstrated that the House is not going to be a pushover with regard to the Bill and that if ever the word "scrutiny" was designed to fit a purpose, it fits that relating to the Bill.
There have been many notable contributions during our three-and-a-half hours of debate and it is invidious to have to select any contributions for particular comment. There have been some high points. We have had a wide-ranging discussion, which I shall try to summarise. I shall also try to pick up some of the points of concern that have been raised.
The noble Lord, Lord Cope, called the Bill a hotchpotch and, to mix metaphors, something of a crazy-paving Bill with no theme. I refute that suggestion—the Bill does have a theme and it contains a variety measures, which will help the police in the conduct of their duty, strengthen the criminal justice system and provide better protection for the victims of crime. It contains elements of modernisation in so far as it concerns some of the national police agencies and the measures relating to police authorities have been welcomed. I therefore reject the noble Lord's attack on the Bill.
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As ever, the noble Lord, Lord McNally, made a spirited contribution. He was right to say that the House should exercise its duty and resist being bounced in relation to provisions. In general terms, there can be no argument about that, and it underlines the point that we need to give any measures which come before your Lordships' House active and full scrutiny.
The noble Lord, Lord Northbourne, touched on issues which he regularly raises in your Lordships' House with great distinction concerning the family and young people. He observed that this Bill did not deal necessarily with the underlying causes of youth criminality. That is right; this Bill is not specifically concerned with those matters. But the whole of Labour's programme in government is in a sense directed towards reducing social dislocation, alienation, and the unfortunate consequences of division in our society which are most manifest in criminal activity and in particular the criminal activity of young people.
My noble friend Lady Kennedy of The Shaws touched on the importance that we attach to curfews. She disagreed with our approach but, more importantly, she focused on her experience in relation to DNA and some of the legal implications of the proposals that we are bringing forward.
The noble Lord, Lord Windlesham, spent most of his time looking in detail at fixed penalty notices. The noble Baroness, Lady Harris of Richmond, praised the Bill in some respects and criticised it in others. But she brought her important and valid experience of involvement in policing matters both nationally and locally to bear on her contribution.
I listened with particular interest to the comments of the noble Lord, Lord Brennan, with his three notes of congratulation and one of caution. I welcomed in particular his observations on DNA and his remarks as to the practical way in which we, as a government, are approaching matters of criminality. His observations on fixed penalty notices I shall read with care.
I pay tribute to the noble Lord, Lord Jenkin of Roding, for his observations in relation to the problems confronting Huntingdon Life Sciences. I welcomed his support for our measures, though I noted some of his concerns. I shall of course address some of them tonight.
I thank my noble friend Lady David for her observations on curfews. That will obviously be a major issue when we go through Committee. The noble Baroness, Lady Noakes, touched effectively on some of the issues relating to taxation and the collection of evidence. I shall deal with those points in as much detail as I have time for.
I thank the noble Earl, Lord Rosslyn, for his welcome and support for the parts of the Bill which address national policing agencies and the development of NCIS. I listened with interest to the warnings of the noble Lord, Lord Elton, who twice had to take through the Police and Criminal Evidence Act. That was a ground-breaking piece of legislation,

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often criticised at the time for being illiberal, ill-considered and a fetter on our civil rights. I was one of those who put forward some of those arguments; I now believe I was wrong. But that is probably the product of becoming a Minister in the Home Office.
I shall pay particular attention to the comments of the noble Lord, Lord Dholakia, and the noble Baroness, Lady Buscombe. In working through some of the questions raised—there were many—perhaps I can say at the outset that I have a massive sheaf of notes here and some of the replies will be by correspondence rather than over the Dispatch Box. However, I shall work through as many questions as I can in the time available to us.
The noble Lord, Lord Cope, asked whether fixed penalty notices would be recorded. It is likely that they will be recorded for enforcement purposes in a similar way to existing fixed penalties. We shall be discussing the operation of the scheme with fixed penalty officers to ensure that it works efficiently. We have also said that we intend, subject to the agreement of the Information Commissioner, to use the data on the administrative system to enable the police to check whether an offender has other disorder penalty notices made against him in recent times to aid them in deciding whether or not to issue a further notice.
The recording of penalty notices has a "naming and shaming" aspect to it. Offenders who pay the penalties will not have their names made public; that is true. But part of the purpose of the new scheme is to provide a simple and immediate response to minor offending which will save court and police time, though there will have to be some bureaucracy.
The noble Lord, Lord Cope of Berkeley, asked whether new penalty offences would cover things like urinating on the street and prostitutes' cards. That was as point on which in a sense the noble Baroness, Lady Buscombe, touched. if the experience of the scheme shows that other offences should be penalty offences, they can be added to the list at a later stage. The procedure will be subject to the affirmative resolution process.
The noble Lord, Lord Cope, also asked why no criminal record exists on the issue of a fixed penalty notice. We say that they should not because they formally involve neither an admission nor a judicial finding of guilt. The recipient of a penalty notice would be very likely to choose to go to court if he or she were to receive a conviction as well as the penalty. That would undermine a primary purpose of the scheme, which is to enable the police to dispose of and deal with such matters more swiftly. The noble Lord wondered whether it might finish as an essay written on the notice. I can tell the noble Lord that that is not our intention. The Bill requires only sufficient information to given to provide reasonable information about the offence to the offender. He also asked why should it be made available only to those aged 18 years and over.
The explanation here is longer. Currently, juveniles are subject to a rigid and tailor-made hierarchy of reprimands and final warnings. For minor criminal behaviour under Sections 65 and 66 of the Crime and
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Disorder Act 1998, crudely put, for the first offence it is a reprimand; for the second offence a final warning and for the third offence, prosecution. Adding the possibility of fixed penalties as another element could undermine a scheme which in our experience is working very well and provides a youngster with a youth offending team intervention, which is often very positive. In any event, financial penalties are usually met by parents and they are not well suited to dealing with children. Our figures for 1999 show that most instances of the type of offending described in Clause 1 relate to perpetrators aged 18 years and over, so there is reason for having that age cut-off.
The noble Lord, Lord Cope, along with other noble Lords, raised the issue of protection of directors from animal rights activists. In raising it, he made the point that the legislation would not be retrospective in the sense that existing records would not be expunged. However, directors may apply for and gain the protection of a confidentiality order. But it is the case that all subsequent filings will refer to the service address for the public record. I think the noble Lord raised specifically the question of shareholders. They are not required by law to file their home address. They can give a service address, an accommodation address or the name and address of a nominee; for example, their solicitor or accountant. I hope that goes some way towards answering that particular point.
The noble Lord, Lord Cope, also raised questions about DNA fingerprinting and made the point that the keeping of samples from intelligence screens might discourage the public from coming forward. We will keep the samples only if the volunteer—and this is the key point—gives his or her consent entirely voluntarily. We do not wish to discourage anyone from participating in a DNA intelligence screen or from giving fingerprints or samples for any other elimination purposes. It is made clear that if consent is given the individual is consenting to the fingerprints, or to the information derived from the sample, being speculatively searched. But consent will have to be given in writing so that those matters are matters of record.
The noble Lord, Lord Cope, also raised an interesting question about video conferencing facilities for custody decisions. It is the intention of the proposals that where custody decisions are made via video link the officer concerned, the detained person and any legal representative will all be able to see and hear each other. The officer will be able to speak to both the detainee and the lawyer. They will he able to make representations to him. The provisions will harness available technology to make the most effective use of police resources. I say on that point in particular that when I visited the North Yorkshire police, with whom the noble Baroness, Lady Harris of Richmond, is very familiar from her role as chair there, that force welcomed these proposals forming part of the legislation not least because one inspector told me of a 120-mile round journey to authorise a further period of time in custody for someone who had been detained. In forces with remote stations and where

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someone is well away from where an arrest and custody has been arranged, that is a valuable tool that would create considerable savings of police time.
The noble Lord, Lord McNally, made a point that is worth picking up in relation to the need to draft legislation to be brought forward so that it can be given additional scrutiny. I happen to believe that that is an excellent initiative. We have had some good experience of that with the Freedom of Information Act and with some local government legislation on which I sat on a Joint Committee. We believe that that is an innovation within the lifetime of this Government and something on which we shall draw in the future.
I turn to the age limit in relation to child curfews. I believe both the noble Lord, Lord McNally, and the noble Baroness, Lady Kennedy, raised that point. The allegation was that it was a quick populist fix to the lack of use of the existing provisions and was without a philosophical base. The Government's approach is determined by something that is often described as "what works". I believe that what works within the criminal justice system is a good and guiding philosophical point. Clearly, child curfews, as currently described in legislation, have not been effective. We try to pilot innovative new measures. From time to time we may not get it exactly right, and that can be said to be the case with child curfews as they are currently. We need to learn from the mistakes and to improve on the legislation that we have put in place over time. Local child curfew schemes are one example of that.
Experience suggested that the practical value of such schemes is likely to be in the context of slightly older children than is provided for in the 1998 legislation. Hence, the provision in Clause 45 for new curfew schemes is potentially to cover, subject to local need, those aged up to 15 years old.
The philosophy behind child curfew schemes is set out in the Home Office evidence to the Joint Committee on Human Rights. In short, child curfew schemes allow a mechanism for keeping children away from certain trouble spots during night-time hours. Such trouble spots are often areas where children and those who prey on them have been congregating to engage in criminal and, perhaps more particularly, anti-social behaviour. In those circumstances, I am sure that all noble Lords know of situations where everyone suffers: local residents, the children's families and the children themselves.
I believe that we have a duty to try to use those measures innovatively and proportionately. It is a proportionate response to a particular local problem. Crucially, no criminal sanction for a child found in breach of a curfew exists and he or she is simply taken home to his or her family, save where there are profound concerns as to the safety of that home. That is an important point and one that was raised validly by the noble Baroness, Lady David.
The noble Baroness, Lady Kennedy, raised the key issue relating to DNA samples. Why keep samples from those who have been acquitted? The Government
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do not claim that those acquitted necessarily have a propensity for crime or that they are, in reality, guilty. I believe that that was her assertion. Keeping samples and fingerprints does not mean that those people are under suspicion. Just as the police keep witness statements and records of interviews as a historical record of an investigation of an offence, the Government believe that the police should be able to retain fingerprints and samples. That information can only be used in the investigation of other crimes; it cannot be used for medical or any other sinister purposes. The innocent have absolutely nothing to fear. I suggest to noble Lords that if DNA samples conclusively prove involvement of crimes such as rape and murder, as in the cases of Weir and B to which I referred earlier, I do not believe that the police should be obliged to throw them away. It would be hampering their investigations.
The comments made by my noble friend Lord Brennan on particular issues relating to crimes of violence were most welcome. The public would think it most odd if we did not have access to that potentially important evidence. DNA is an objective form of evidence. The DNA database is not a list of suspects and the database will show only a hit of the DNA profile of an individual which matches that from DNA recovered from a crime scene.
My noble friend Lady Kennedy raised the issue of consultation. I have asked the question a couple of times and it is my understanding that the Human Genetics Commission was consulted on earlier measures as regards the retention of volunteer DNA samples from intelligence screens. But I concede that we were unable to find time to consult on the retention of DNA from suspects. That was because it arose specifically in the two criminal cases to which I have already referred. I am sorry that we did not have sufficient time to carry out that stage of the consultation, but we shall continue to consult on all these matters, believing that it is extremely important.
I turn to some of the questions raised by the noble Lord, Lord Windlesham, about fixed penalty notices. They will be available for criminal behaviour as set out in Clause 1. In our view, there is no blurring between civil and criminal conduct or process in the way in which we have set out the legislation. Fixed penalty notices for criminal behaviour are not new. A similar scheme exists under the Road Traffic Offenders Act 1988. Crucially, the fixed penalty scheme in Part 1 preserves all the criminal and due process rights of the accused. It merely grants the accused the option of paying a fixed sum and avoiding any criminal liability.
The noble Lord, Lord Windlesham, asked about consultation on fixed penalties. A consultation paper was published in September 2000 and we received many responses from criminal justice practitioners. They informed the way in which the provision has been introduced. The noble Lord suggested that there might be a lower standard of proof where a penalty notice is issued. Penalty notices will be issued where the constable believes that a criminal offence has been committed. There must be sufficient evidence to prove the offence to the criminal standard in case the

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offender chooses to take that route and to have the matter raised in court. I hope that that reply deals with the points raised by the noble Lord in respect of fixed penalty notices.
The noble Baroness, Lady Harris, during her welcome speech. raised the issue of the Humberside judgment and I ought to cover some of the points she raised. She pointed out that it in some way restricted access to police authority membership for those with an independent point of view. I and the Government generally do not believe that the judgment will prevent police authorities discharging their responsibilities effectively. That is an important point. Non-party political input to the business of police authorities will continue to be provided by magistrates and the appointment of independent members. We are well aware of the concerns of the Association of Police Authorities and I note that my right honourable friend the Secretary of State has written to the chair of the APA making it clear that although we do not think it appropriate to use this Bill to address the particular issue, we are prepared to consider other opportunities for addressing the APA's concerns. Therefore, we have certainly taken careful note of the issue that has been raised.
The noble Baroness referred to the reduced membership of the NCIS and NCS service authorities. We believe that police membership should be reduced with the removal of the levy on police authorities, but there will still be appointees from both the APA and ACPO on both service authorities, with greater numbers on the NCS authority, which is predominantly a policing organisation. That is our rationale for those changes.
Changes to the service authority membership provide the opportunity to include members from agencies that work closely with NCIS and NCS and thereby improve partnership working and better reflect the multi-agency nature of much of the work of those organisations. The NCIS service authority already includes a member from HMCE. The Bill provides for an HMCE core member to sit on both service authorities so that the NCS authority will include HMCE, and for a member of the security service to sit on the NCIS authority.
We believe that we can ensure the maintenance of accountability, which was the key point raised by the noble Baroness. We do not believe that central funding means the loss of APA and ACPO presence on the service authorities, although there will be a reduction in the number of their members. The presence of both APA and ACPO is essential because of the services that are provided by NCIS and NCS through different forces.
My noble friend Lord Brennan raised a concern about racial motivation in relation to public order offences which he saw as perhaps one of the downsides of fixed penalty notices. I believe that my noble friend raises a very valid point. We have considered this matter. We believe that that is a matter which is appropriately covered in guidance to the police. We should like to suggest to the police that fixed penalties
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are not appropriate when clearly the offences have a racial motivation. We fully recognise that point, and that is a matter which we must take carefully into consideration when drawing up the guidance.
My noble friend also raised a very important point about legally privileged material. He expressed concern about new powers to seize and retain such material. At the outset, we fully appreciate the difficulties raised by legally privileged material and the concerns that have been expressed in this area. Part 3 is concerned with two matters: the power to seize and the power to retain such material. However, it gives the power to seize such material only if it is not reasonably practicable to determine on the premises that it is legally privileged and cannot be separated from other material that is capable of being seized. It is necessary to have such a provision; otherwise, the new powers would be fundamentally undermined by any claim that legally privileged material was found within the bulk of material to be seized and, therefore, that none of the material, be it on computer or otherwise, should be seized. That matter was also raised by the noble Lord, Lord Cope. We understand the point, and no doubt it is one to which we shall return in detail in Committee.
My noble friend Lady David raised the question of local child curfews and human rights. In our response to the Joint Committee on Human Rights we made clear that we believed that the legislation conformed with Article 37B of the CRC and Article 9 of the ICCPR. The curfew scheme and the limited police powers thereunder are clearly prescribed by way of the 1998 Act. To return to a point that I made earlier, a child will be taken home against his or her will only as a last resort. By definition, any deprivation of liberty will be for the shortest appropriate period because no incarceration will be permitted.
The noble Lord, Lord Jenkin, raised key issues in regard to aiding and abetting where there was a series of incidents of harassment. As I have said in the past in your Lordships' House when questioned, I believe that this package of measures will deal with most of the instances of criminality and extreme activity which the noble Lord described very eloquently and as set out in the Home Office consultation document. Anyone who incites the commission of an offence or conspires with others to commit an offence or aids and abets the commission of offences by others will be caught by the existing law. In the example given by the noble Lord, where a group encourages others to commit acts of violence, vandalism, criminal damage and so on, those who encourage as well as those who carry out these appalling acts will be guilty of a criminal offence.
The purpose of Clause 43 is rather different. It amends the Protection from Harassment Act. That Act makes a course of conduct directed against an individual an offence even though the individual acts making up that course of conduct are not in themselves necessarily criminal. That sounds rather complex but I am sure that the noble Lord will understand It when he studies Hansard. Clause 43 makes those who aid, abet, counsel or procure such acts criminally liable for them in the same way as those who actually carry out

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the acts. I hope that that is sufficient reassurance to the noble Lord. It is certainly intended to be so. We want the legislation to be as effective as possible.
The noble Lord also asked how much more can be done. The consultation paper shows how much is already being done. I am most grateful to the noble Baroness, Lady David, for her observations in support of the Government. We have committed extra resources and extra support to Cambridgeshire and we will happily continue to do so.
The noble Baroness, Lady Noakes, asked a series of stunning questions that could have come only from an experienced person in the world of accountancy and, more particularly, KPMG. Flattery! I shall try to pick up some of those observations. The noble Baroness asked whether the provisions will wreck the willingness of people to be frank with tax authorities. We do not think that they will. That is certainly not our intention. Revenue departments already disclose information in a carefully regulated way through an increasing number of existing information gateways to other public authorities and bodies. For example, the Inland Revenue already discloses information in police investigations on receipt of an order from a judge.
The noble Baroness asked whether disclosure under Clause 49 will be prohibited to a country that does not comply with the standards as set out in the ECHR. The Inland Revenue and Customs are public authorities within the meaning of the Human Rights Act. That means that they will have to exercise their disclosure powers in a way that is compatible with the ECHR. That means that a balancing act has to be carried out and that the disclosure should be made only where the circumstances make the disclosure necessary and—my favourite word—proportionate.
The noble Baroness also asked whether disclosure should be limited to cases where an investigation is ongoing. The disclosure provisions are designed to permit disclosures in cases where an information holder has evidence of an offence. In such cases, the information itself may be the trigger for bringing an investigation in the first place.
The final point raised by the noble Baroness on disclosure related to overseas matters. She said that disclosure overseas should be permitted under Clause 49 only if it is in relation to conduct which is a criminal offence in the UK. If that were to be the case, it would prevent government bodies from making a disclosure overseas in cases where the United Kingdom had decided not to criminalise the behaviour. That would prevent disclosure in cases where we have made a policy choice to provide civil penalties because of the desirability of avoiding the higher burden of proof rather than because the activities were considered to be less serious. If I have missed any of the noble Baroness's points on disclosure, I shall pick them up in correspondence. The noble Baroness made some very important points.
I come to the observations made by the noble Lord, Lord Dholakia. The noble Lord asked whether the fixed penalty notice scheme will be monitored to
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ensure that it is not being operated in a discriminatory manner. In a sense that picks up part of the point made by the noble Lord, Lord Brennan. As I said to the noble Lord, that issue will be dealt with in guidance. It would certainly not be our intention that it should be abused in that way. It is an important issue.
I hope that I dealt with the issues raised by the noble Lord on DNA when I addressed some of my comments to questions raised by the noble Baroness, Lady Kennedy of The Shaws. It is worth pointing out—because the noble Lord raised this issue in particular—that these matters were put out for general consultation as far back as July 1999 when we published our proposals to revise legislative measures covering fingerprints, footprints and DNA samples. That consultation document formed the basis of many of the measures included in the Bill, but since then we have added the measure covering the retention of all fingerprints, footprints and DNA samples for reasons which I explained earlier.
The noble Baroness, Lady Buscombe, made a number of useful points on fixed penalty notices. She referred to criminal damages and whether the victim might lose the possibility of winning court-awarded compensation. We do not intend that individuals should lose their opportunity to be awarded compensation for damage that they have suffered. The police will retain the right to charge in all cases where they feel that that is appropriate. Guidance will be issued to reinforce the importance of keeping in mind the expectations of the victim that a court might consider compensation when deciding the case. I hope that that will reassure the noble Baroness.
The noble Baroness also referred to issuing fixed penalty notices to people who might be drunk. The police will not issue such notices on the street to people who are drunk or incapable of understanding what they have been given. That would be a worthless action. Guidance will suggest that the officer should arrest the individual and take that individual to a police station where a decision on how best to deal with the case will be taken when the individual is sober.
The noble Baroness also asked whether the legislation on drinking in public places prevent her having a drink with her family. I am alive to this issue. The answer to that is no. On hearing that the noble Baroness loves Rock as much as I do for my family holidays, I promise to buy her a drink in a very public place should we bump into each other down there. I can also confirm to the noble Baroness that the Bill does not create a blanket offence of drinking in designated areas, but it does give the police a discretionary power to direct someone to stop drinking in those areas and to confiscate the alcohol. The noble Baroness would not be committing an offence simply by drinking a glass of wine in a designated area. I believe that this power will be very valuable and one which, if used properly and proportionately, could serve to relieve many areas where appalling scenes take place related to the abuse of alcohol. Certainly the experience of my home city

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suggests that the measure will be extremely welcome. The authorities have been pressing for the introduction of such measures for a long time.
My responses have taken some time. I know that I shall not have satisfied the questions put by all noble Lords, but I have tried to be thorough—in the best Home Office tradition.
Lord Elton: My Lords, on a point of order. Not wishing to be discourteous and not being at all ungrateful for the generosity shown by the Minister as regards the time he has taken, the Companion suggests that Members opening or winding up from either side are expected to keep within 20 minutes. Perhaps on the next occasion when we examine a Bill from the Home Office, we shall, God willing, have a slightly shorter reply.
Lord Bassam of Brighton: My Lords, I apologise for the length of my remarks, but noble Lords put so many interesting questions to me that I thought it
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would be remiss if I did not cover as many points as possible, in particular so as to lighten the burden of correspondence for noble Lords.
We have had an interesting and constructive debate in which I have covered as many points as I could. On the next occasion, I shall pay closer attention to the instructions in the Companion.
Lord Windlesham: My Lords, can the Minister say whether the initial case study of the Bill by the Joint Select Committee on Human Rights will be available in time for the later stages of our deliberations?
Lord Bassam of Brighton: My Lords, I cannot give an absolute response to that. My understanding is that it should be available around the time that noble Lords begin their detailed consideration in Committee,
On Question, Bill read a second time, and committed to a Committee of the Whole House.
House adjourned at ten o'clock.