HL Deb 08 November 2001 vol 628 cc307-26

3.30 p.m.

The Lord Chancellor (Lord Irvine of Lairg)

My Lords, I have it in command from Her Majesty the Queen and His Royal Highness the Prince of Wales to acquaint the House that they, having been informed of the purport of the Land Registration Bill [HL], have consented to place their prerogative and interest, so far as they are affected by the Bill, at the disposal of Parliament, for the purposes of the Bill.

Bill read a third time.

Clause 4 [When title must be registered]:

Baroness Buscombe moved Amendment No. 1: Page 3, line 13. leave out "seven" and insert "fourteen

The noble Baroness said: My Lords, in moving Amendment No. 1, I shall speak also to Amendments Nos. 2 to 8 and 10 to 13. I thank the Minister and her Bill team, together with the Land Registry, for taking the time to consider in some detail with us on these Benches a number of points which were unresolved to our satisfaction on Report.

I turn to the amendments. After much discussion and thought we have decided to revisit the term of leases that must be registered. It was raised both in Committee and on Report. The minimum term of lease that currently must be registered is 21 years. The Bill as currently drafted will reduce the term to seven years. It is our view that, in consideration of the adjustment required and the practical implications for both the Land Registry and for conveyancers, the Government should rethink that sharp reduction and strike a balance at 14 years, particularly given the contemporaneous introduction of the welcome feat of electronic conveyancing.

Much has been said by the Minister about the Land Registry's ability to deliver. We know from discussions that that confidence is shared by representatives of the Land Registry. However, we do not share that degree of confidence, given the reality that almost all new electronic systems of size—particularly of this magnitude—endure setbacks. Often they need readjustment and a rethink as the systems develop.

Therefore, limiting the number of leases which must be registered to those with a term of 14 years or more allows a more realistic chance for the Land Registry to implement electronic conveyancing and for conveyancers to adjust to it with minimal disruption and, it is to be hoped, a good deal of success.

It is not our intention to be intransigent, nor inflexible. We can envisage, once the electronic system is working satisfactorily and the conveyancing world has adjusted to the change, reducing the term significantly. That said, it would be remiss of me to ignore those reasons in principle for limiting the number of leases which will have to be registered to no good purpose. After all, registration is carried out at the tenant's expense. He pays both the Land Registry fees and the professional fees. Some of the leases in question will be of residential premises. That will therefore add to the cost of home ownership.

The majority will probably be of business premises. That cost will become an additional overhead which adds nothing to the profitability or productivity of a business. It is yet another burden, particularly on small businesses.

The Minister has informed us that the business community favours the proposed seven years. I must respond by saying that those in the business community whom I have contacted and spoken to within the past 24 hours, find that hard to fathom. Financial transparency of commercial transactions is suggested by the Government as a reason. However, I have yet to meet a businessman or woman, at least not one who remains in business, who is not capable and who does not make it a priority to know the commercial property marketplace. They do not need the helping hand of the Land Registry for that.

We have laboured this point at each stage of the Bill. I make no apology for that. It is an issue that matters very much to a great many people. I urge the Government to reconsider their position. I beg to move.

The Parliamentary Secretary, Lord Chancellor's Department (Baroness Scotland of Asthal)

My Lords, as the noble Baroness has rightly said, we have already discussed extensively similar amendments both in Committee and on Report.

In relation to e-conveyancing, the noble Baroness suggested that it will happen contemporaneously. It will not. The reduction in leases will take effect in all probability in 2003. Electronic conveyancing needs rather more discussion with the profession and would follow at least three or maybe four years after.

The advantages of registration for conveyancers and consumers are well known and, I think, to date have been unchallenged. Extending registration will make the market more transparent. The lack of reliable information on leases, and in particular on short leases, prompted the Government to be cautious about accepting the economic and commercial arguments for making all leases over three years registrable at once.

In the financial years 1999–2000 and 1998–1999, the Stamp Office stamped some 75,000 and 100,000 new leases respectively. The overwhelming majority are already registrable. But 9,000 and 12,000 were for between 14 and 20 years, and 11,000 and 17,000 for between seven and 13 years. So the Land Registry can expect between 20,000 and 40,000 or so new leases from the proposals in the Bill, plus assignments of extant unregistered leases where the unexpired residue exceeds the relevant minimum. Figures on lease length from the investment property databank are of the same order.

The figures should be seen in the context of the overall workload. In 1999, the Land Registry received over 3 million applications to change the register following a dealing with the whole or part of a registered estate, and 373,000 first registrations.

It is against that background that I have been assured by the chief land registrar that the Land Registry could, without detriment to its other services and without electronic conveyancing, be prepared to register all leases of seven years or more by the time the Bill is implemented.

The Stamp Office recorded some 4,000 leases of seven years or less in 1999–2000. The Land Registry currently believes that it would be able to accept these for registration within a comparatively short period of the Bill's implementation. That helpfully suggests that a further reduction in the length of registrable leases should be feasible relatively soon, although it is wise to be cautious about that. Early reduction would be desirable because it must be a nuisance and an inconvenience for conveyancers to have to deal with two streams on leases, involving registered and unregistered leases. The shorter that period of dual running is, the better.

In view of these figures, and the chief land registrar's unequivocal assurance, I invite the noble Baroness to withdraw her amendments. We understand the concerns that she has expressed, but regrettably we do not find them to be well founded.

Baroness Buscombe

My Lords, I thank the Minister for her response. The Minister knows that I am disappointed because, as she made clear in Committee, during consultation not one voice was heard as to where the dividing line should be. We have had a great deal of discussion with the Law Society. It has a very different view on this issue. It will be its members who will have to work with the Land Registry. As we all know, the Law Society represents the bulk of solicitors in this country. Therefore, it represents the vast majority of conveyancers. It should be stated that, although its working party, which was set up initially to consider the draft Bill, was made aware of the Government's proposals to reduce the term of years from 21, it was not at any time thereafter consulted as to the exact term, or the sort of term, that its members would think advisable or practicable. That is surprising and disappointing. We understand and appreciate the confidence that the Land Registry holds and I accept what the Minister has said about the time-frame within which the new arrangement will commence, before e-conveyancing is implemented. In the scheme of things, however, I think that three to four years is a fairly short term in relation to the enormity of the task ahead.

The Minister has endeavoured to persuade and reassure us that the amendment is not necessary. However, I am afraid that I am not persuaded and would like to test the opinion of the House.

3.41 p.m.

On Question, Whether the said amendment (No. 1) shall be agreed to?

Their Lordships divided: Contents, 82; Not-Contents, 132.

Division No. 1
CONTENTS
Alton of Liverpool, L. Hussey of North Bradley, I
Anelay of St Johns. B. Jenkin of Roding, L.
Astor of Hever, L. Jopling, L.
Blatch,B. King of Bridgwater, L.
Boardman, L. Knight of Collingtree, B.
Bridgeman, V. Laing of Dunphail, L.
Brooke of Sutton Mandeville, L. Liverpool. E.
Brougham and Vaux, L. Luke, L.
Burnham, L. Mancroft, L.
Buscombe, B. Mayhew of Twysden, L.
Butterworth, L. Miller of Hendon, B.
Byford, B. Molyneaux of Killead, L.
Campbell of Alloway, L. Monro of Langholm, L.
Carnegy of Lour, B. Monson, L.
Chadlington, L. Montrose, D.
Coe, L. Mowbray and Stourton, L
Colwyn, L. Naseby. L.
Cope of Berkeley, L. [Teller] Nicholson of Winterbourne, B.
Cumberlege, B. Noakes, B.
Dean of Harptree, L. Northesk, E.
Denham, L. Norton of Louth, L.
Dixon-Smith, L. O'Cathain, B.
Eccles of Moulton, B. Oxfuird, V.
Eden of Winton, L. Pilkington of Oxenford, L.
Elliott of Morpeth, L. Rawlings, B. [Teller]
Elton, L. Reay, L.
Feldman, L. Renton, L.
Flather, B. Roberts of Conwy, L.
Fookes, B. Saltoun of Abernethy, Ly.
Freeman, L. Sanderson of Bowden, L.
Gardner of Parkes, B. Seccombe, B.
Glentoran, L. Skelmersdale, L.
Hanham, B. Slim, V.
Hayhoe, L. Soulsby of Swaffham Prior, L.
Henley, L. Strathclyde, L.
Higgins, L. Swinfen, L.
Hodgson of Astley Abbotts, L. Thomas of Gwydir, L.
Hooper, B. Trumpington, B.
Howe, E. Tugendhat, L.
Howe of Aberavon, L. Vivian, L.
Howell of Guildford, L. Waddington. L.
NOT-CONTENTS
Acton, L. Christopher, L.
Addington, L. Clark of Windermere, L.
Ahmed, L. Clement- Jones, L.
Alderdice, L. Clinton-Davis, L.
Amos, B. Craig of Radley, L.
Archer of Sandwell, L. Crawley, B.
Ashley of Stoke, L. Davies of Coity, L.
Ashton of Upholland, B. Davies of Oldham, L.
Bach, L. Dholakia, L.
Bassam of Brighton, L. Donoughue, L.
Berkeley, L. Dormand of Easington, L.
Billingham, B. Dubs, L.
Borrie, L. Evans of Temple Guiting, L
Bradshaw, L. Evans of Watford, L.
Brookman, L. Falkender, B.
Bruce of Donington, L. Falkland, V.
Burlison, L. Farrington of Ribbleton, B
Campbell-Savours, L. Faulkner of Worcester. L.
Carter. L. [Teller] Filkin, L.
Chan, L. Fyfe of Fairfield, L.
Gale, B. Mishcon, L.
Gibson of Market Rasen, B. Mitchell, L.
Goodhart, L. Morgan of Huyton, B.
Goudie, B. Morris of Aberavon, L.
Gould of Potternewton, B. Newby, L.
Grabiner, L. Nicol, B.
Graham of Edmonton, L. Northover, B.
Grenfell, L. Oakeshott of Seagrove Bay, L.
Grocott, L. Parekh, L.
Hamwee, B. Pendry, L.
Harris of Haringey, L. Phillips of Sudbury, L.
Harris of Richmond, B. Pitkeathley, B.
Harrison, L. Plant of Highfield, L.
Haskel, L. Prys-Davies, L.
Hayman. B. Ramsay of Cartvale, B.
Razzall, L.
Healey, L. Redesdale, L.
Hilton of Eggardon, B. Rendell of Babergh, B.
Hollis of Heigham, B. Rennard, L.
Hooson, L. Richard, L.
Howells of St. Davids, B. Rodgers of Quarry Bank, L.
Howie of Troon, L. Rogers of Riverside, L.
Hoyle, L. Rooker, L.
Hughes of Woodside, L. Russell, E.
Hunt of Chesterton, L. Sawyer, L.
Hunt of Kings Heath, L. Scotland of Asthal, B.
Irvine of Lairg, L.(Lord Serota, B.
Chancellor) Sharman, L.
Janner of Braunstone, L. Sheldon, L.
Kilclooney, L. Simon, V.
Laird, L. Stallard, L.
Layard, L. Stone of Blackheath, L.
Lea of Crondall, L. Strabolgi, L.
Linklater of Butterstone, B. Temple-Morris, L.
Lipsey, L. Thomas of Walliswood, B.
Lockwood, B. Thomson of Monifieth, L.
Macdonald of Tradeston, L. Tomlinson, L.
McIntosh of Haringey, L. Turner of Camden, B.
[Teller] Uddin, B.
McIntosh of Hudnall, B. Wallace of Saltaire, L.
MacKenzie of Culkein, L. Whitaker, B.
Mackenzie of Framwellgate, L. Whitty, L.
Maclennan of Rogart, L. Wigoder, L.
McNally, L. Wilkins, B.
Mallalieu, B. Williams of Elvel, L.
Mar and Kellie, E. Williams of Mostyn, L. (Lord
Methuen, L. Privy Seal)
Milner of Leeds, L. Young of Dartington, L.

Resolved in the negative, and amendment disagreed to accordingly.

3.52 p.m.

[Amendment No. 2 not moved. ]

Clause 15 [Right to lodge]:

[Amendment No. 3 not moved. ]

Clause 27 [Dispositions required to be registered]:

[Amendment No. 4 not moved. ]

Clause 80 [Compulsory registration of grants out of demesne land]:

[Amendment No. 5 not moved.]

Clause 82 [Escheat etc]:

Baroness Scotland of Asthal moved Amendment No. 6: Page 29, line 28, leave out "the effect of

The noble Baroness said: My Lords, in moving Amendment No. 6, I shall speak also to Amendments Nos. 15 and 17 to 20. They are all drafting amendments.

Amendments Nos. 6 and 15 correct Clause 82 and paragraph 6 of Schedule 6 respectively. The intention is that the rules to be made under Clause 82(1) may provide for determination of a freehold estate to be dependent on the meeting of registration requirements rather than for the effect of determination to be so dependent. The remaining four government amendments are of greater substance and bring the procedures for restraint orders in four criminal statutes into line with the Bill.

Where a restraint order is made under the Criminal Justice Act 1988, the Drug Trafficking Act 1994, the Terrorism Act 2000 or the International Criminal Courts Act 2001, and it affects registered land, it can currently be protected by means of a caution against dealings or, if the situation warrants, an inhibition. The Bill abolishes cautions against dealings and inhibitions. As restraint orders under the statutes affected prohibit dealings with the land, the appropriate mechanism under the Bill will be a restriction. I beg to move.

On Question, amendment agreed to.

Clause 91 [Electronic dispositions: formalities]:

Baroness Buscombe moved Amendment No. 7: Page 33, line 15. after "certified," insert— ( ) each electronic signature was made by, or with the authority of, the person whose signature it purports to be,

The noble Baroness said: My Lords, the amendment is designed to encourage the Minister to reassure conveyancers of their position in regard to electronic signatures where the signature is misused.

The system needs to be secure to retain the confidence not only of the public in their house-buying processes but of commercial enterprises and inward investors buying factories and offices in England and Wales. Therefore, individuals, firms and companies should not be liable where authority was not given.

There are no available secure operating systems for personal computers, and the security risks to which they are vulnerable are notorious. The risk of surreptitious copying of security information from a personal computer, or its subversion to carry out transactions other than those apparent to, and intended by, the user, are risks which firms of solicitors are in no position either to eliminate or to bear.

For these reasons, we would regard it as unacceptable for conveyancers to carry the risk of their electronic signature keys being obtained and misused by third parties. The use of presumptions in statutory terms and their contractual equivalents should, in our view, be ruled out by clear statutory language, as we have proposed, the effect of which should be that it is for the relying party to prove that a disputed signature was made by, or with the authority of, the purported signatory.

If technology is developed which can effectively eliminate the risk of the user being impersonated, then relying parties will find their burden of proof easy to discharge. We believe that currently available technology is very far from succeeding in this objective, even having regard to proposals for the use of smart cards or biometric identifiers. Relying parties face real risks in accepting electronic signatures, which may amount to undetectable forgeries, but it would be wrong as a matter of policy to allow them to solve the problem by transferring the risk to purported signatories.

Where relying parties are major institutions, such as the Land Registry, other government agencies or financial institutions, they are far better placed than firms of solicitors and licensed conveyancers to promote the development of technology to eliminate the risks. That is a further reason for ensuring that they continue to carry those risks.

In essence, will the Government reassure us today that, in the event there is a mistake on the Land Registry as a result of the misuse of an electronic signature, the Land Registry will indemnify the solicitor or licensed conveyancer against the losses incurred as a result of that mistake, and that the right to recourse will not be pursued by the Land Registry against the solicitor or licensed conveyancer concerned unless they are at fault? Further, can the Minister confirm that the onus of proof would be on the Land Registry to show fault? I beg to move.

Baroness Scotland of Asthal

My Lords, I understand and sympathise with the concerns expressed about the possible consequences of unauthorised misuse of electronic signatures, which is the issue that lies behind the amendment.

Two aspects need to be considered. First, if a transaction were completed and registered on the basis of an unauthorised electronic document, there could be grounds for rectification of the register and for indemnity from the Land Registry for the victim. Secondly, a conveyancer who has acted in accordance with the arrangements for access to the network, and who has taken the sensible steps needed to preserve the system's security, should not bear the liability for harm caused by careless, malicious or criminal action taken by others. I am very happy to give the reassurance that the noble Baroness seeks.

These practices are no more than the application to electronic transactions of established principles that already apply to transactions in paper form. Under the present law and under this Bill, where indemnity is paid, the Land Registry has rights of recourse analogous to rights of subrogation against the wrongdoer. When the then Land Registration Bill was passing through the House in November 1996, the noble Baroness, Lady Trumpington—who, regrettably, is no longer in her place—said on behalf of the then government that, it is neither the practice nor the intention of HM Land Registry to resort to its rights of recourse against those who are neither fraudulent nor negligent. It"— that is the power of recourse— is a power that will continue to be used only in bad cases".— [Official Report, 18/11/96; col. 1166.] This practice will continue.

That Bill became the Land Registration Act 1997. I am happy to confirm that the principles which have guided the Land Registry in relation to the paper system will continue to operate in the new world of electronic conveyancing.

In particular, the Land Registry also accepts that the burden lies with it to satisfy itself that there has indeed been a "bad case" of fraud or negligence before seeking recourse against a conveyancer. The proper security precautions that will be needed when electronic conveyancing is introduced will have to be discussed with conveyancers and their professional bodies when drafting the network access agreements, which will also have to be approved by Parliament.

I have repeatedly made it clear that the Government are determined to work with stakeholders to develop robust and secure electronic conveyancing systems. But having said that, I do not believe that the amendment is either timely or necessary. It is untimely because the details of electronic conveyancing and electronic signatures have not yet been worked out. Only the most generic conditions should be included in Clause 91(3). It is unnecessary because, if such a condition were to prove necessary—which I doubt it could be added under the rule-making power in Clause 91(3)(d). I hope that in the light of my reassurance and the comments that I have made the noble Baroness will feel able to withdraw the amendment.

Baroness Buscombe

My Lords, I thank the Minister for her very full and reassuring response. I have pleasure in withdrawing the amendment. I beg leave to do so.

Amendment, by leave, withdrawn.

[Amendment No. 8 not moved.]

4 p.m.

Baroness Buscombe moved Amendment No. 9: Page 46, line 10, leave out from "occupation" to end of line 11.

The noble Baroness said: My Lords, in moving this amendment, I shall speak also to Amendment No. 14.

These amendments were debated at some length in Committee and again on Report. Again, after much thought and discussion, we want to urge the Minister to reconsider this point.

A person in actual occupation of land who possesses an interest under a trust of land is entitled by virtue of his occupation to protection in respect of that interest. Paragraph 2 of Schedule 1 and paragraph 2(a) of Schedule 3 withhold that protection if the person in actual occupation is entitled to an interest under a strict settlement. When we moved the amendment in Committee and on Report, we saw no justification for the discriminatory treatment of the beneficiary under the strict settlement, and we see none now.

We accept that under the existing legislation interests under strict settlements do not constitute overriding interests. But, as the Law Commission points out in paragraph 2.69 of its Third Report on Land Registration of 1987, the distinction in the treatment of beneficiaries under strict settlements and beneficiaries under trusts for sale—now trusts of land—was probably unintended and was in principle unjustifiable. In the recent consultative document (at paragraph 5.63) the Law Commission and the Land Registry both "readily accept" that rights under strict settlement should be capable of existing as overriding interests. We agree wholeheartedly with that view.

As I said on Report, there is a further important consideration to which the Law Commission adverts in its 1987 report. The strict settlement was the classical type of landed settlement designed to preserve family estates from generation to generation, and in this context the need to protect the beneficial interest of persons in actual occupation will seldom, if ever, arise.

However, one of the consequences of the 1925 legislation—one that was not appreciated at the time—has been the unintentional and informal creation of strict settlements in circumstances where the machinery of the Settled Land Act 1925 is inappropriate and often not properly implemented. It is in this context that the exclusion of beneficiaries under strict settlements who are in actual occupation of land is capable of operating unjustly.

I make no apology for adopting an example similar to the one that I used on Report. A widow entitled to a life interest in the former matrimonial home under the will of her husband will be entitled to protection if in actual occupation only if the property was subject to a "trust for sale". In the absence of this magic formula—which may well have been omitted in a home-made or informal will—the widow will be entitled to no protection. When she is evicted, it will be cold comfort to her to know that she is one of the "comparatively few people" who will be affected by the abandonment of the Law Commission's recommendation to extend the protection to persons in her position. The fact that a widow under a strict settlement unintentionally created by a home-made will is one of a diminishing band is not a good reason for depriving her of the protection that the law accords to someone with almost identical rights under a trust of land.

At the risk of detaining the House further, perhaps I may offer a second example to amplify the point. A man of modest means whose main asset is an ex-council house bought under the right-to-buy legislation makes a home-made will stating: "I will give my house to my wife for her lifetime and after her death to my son and I appoint my son my executor". He dies before 1997, so there is an accidental strict settlement, and the son, without legal advice, and therefore without the error being spotted, takes a grant of probate and gets himself registered as proprietor without any restriction on his powers of disposition being entered. After the new land registration legislation comes into force, the son, living with his mother following a divorce, mortgages the property for an advance to start up a business. He tells the bank, "My father left me the house, but of course I let my mother stay there", and the bank accepts that—unwisely perhaps, but such things happen.

Let us suppose that the son's business then goes bust, as so often happens, and the bank seeks possession with a view to selling the property. The mother would have been safe if the land had been held on trust for sale/trust of land, but as the Bill stands she has no defence to the possession claim, because her interest is under a Settled Land Act settlement, and her occupation of the property does not suffice to make it binding on the bank. A mortgage is more likely to create a serious problem than a sale, because even if the mother is not actually consulted on a proposal to sell, she will find out about it on completion and be able to do something then; whereas a mortgage may well not come to light until after the money has been lost and/or the son has absconded. I beg to move.

Lord Goodhart

My Lords, I rise to make two brief points. First, I entirely agree with the noble Baroness, Lady Buscombe, on the substance of this matter. It seems to me that it is anomalous to treat beneficiaries under strict settlements governed by the Settled Land Act in a different way from beneficiaries under the trust for sale or, since 1997, the trust for land. I can see no justification for that. It would have been better if these passages had been omitted from the Bill.

Secondly, I hope that the noble Baroness will not on this occasion divide the House. This is a Law Commission Bill and will undoubtedly improve land ownership and conveyancing. The problem that has arisen here is a fairly minor one. Although I hope that the Government will reconsider the point in the light of the arguments justifiably advanced the —Government will have an opportunity to do so before the Bill goes to another place—it does not seem appropriate for the Bill to be made the subject, on this particular issue, of a ping-pong between the two Houses. That is a view that I shall consistently take when we come to debate my own amendment.

Baroness Scotland of Asthal

My Lords, first, I thank the noble Lord, Lord Goodhart, and the noble Baroness for their comments. I under-stand the basis on which the amendment has been proposed. However, as the noble Lord rightly said, we had a good and full debate on the same amendment both in Committee and on Report.

Our reasons for opposing the amendment may be summarised as follows. The Bill proceeds on the basis that there should be as few overriding interests as possible. The Law Commission and the Land Registry were prepared to consider an exception for such settlements. They put the proposal to consultation, and they received a large response. Many expert lawyers expressed their views. I believe I am correct in saying that, without exception, those who responded told us, quite sharply, that there was no purpose in making such an exception. The Bill as drafted reflects the outcome of that consultation. We took the consultative process very seriously. There is little point in having proper consultation if you do not listen to those with whom you consult. That is the first reason. One of the other aims of the Bill was to keep matters simple. The responses were acted upon.

Thirdly, there appears to be no evidence that the present provision has ever caused any hardship in practice. We believe that this is a theoretical and not a practical or real problem. Our reasons are recorded in more detail at cols. 1328 and 1329 of Hansard of 30th October. I hope that the noble Baroness will feel able to withdraw the amendment.

Baroness Buscombe

My Lords, I thank the Minister for her response. In essence, while we accept that this would affect only a few people and a diminishing group of people, we believe that nothing is to be lost by agreeing to the amendment. It is an anomaly which should be dealt with and we prefer it to be dealt with here and now. Far from anything being lost, there is something to be gained. There is no justification for discriminating against any person who may be affected by the proposal. Taking our first example, if it came to litigation the widow would have to demonstrate her title to the interest. The fact that she was in occupation under a strict settlement would then emerge. In other words, the fact that it is a strict settlement is bound to emerge in litigation.

I understand that the Government have been in consultation on this and all other points. However, we on these Benches have also consulted extensively and have been given a very different point of view. There is a purpose in making an exception in this case. I hear what the noble Lord, Lord Goodhart, says in supporting the amendment in spirit. I cannot understand why the Bill being drafted by the Law Commission makes it different from any other Bill which needs amendment. I should like to test the opinion of the House.

4.12 p.m.

On Question, Whether the said amendment (No. 9) shall be agreed to?

Their Lordships divided: Contents, 77; Not-Contents, 112.

Division No. 2
CONTENTS
Allenby of Megiddo, V. Crathorne, L.
Alton of Liverpool, L. Cumberlege, B.
Anelay of St Johns, B. Dean of Harptree, L.
Astor of Hever, L. Denham, L.
Biffen, L. Dixon-Smith, L.
Blaker, L. Eccles of Moulton, B.
Blatch, B. Eden of Winton, L.
Boardman, L. Elton, L.
Bowness, L. Flather, B.
Bridgeman, V. Fookes, B.
Brooke of Sutton Mandeville, L. Freeman, L.
Brougham and Vaux, L. Gardner of Parkes, B.
Burnham, L. Glentoran, L.
Buscombe, B. Hanham, B.
Byford, B. Hayhoe, L.
Caithness, E. Henley, L.
Campbell of Alloway, L. Higgins, L.
Campbell of Croy, L. Howe, E.
Carnegy of Lour, B. Howe of Aberavon, L.
Chadlington, L. Hunt of Wirral, L.
Colwyn. L. Jenkin of Roding, L.
Cope of Berkeley, L. [Teller] Jopling, L.
King of Bridgwater, L. Pilkington of Oxenford, L.
Knight of Collingtree, B. Rawlings, B.
Liverpool, E. Reay, L.
Renton, L.
Luke, L. Roberts of Conwy, L.
Mancroft, L. Saltoun of Abernethy, Ly.
Miller of Hendon, B. Sanderson of Bowden, L.
Monro of Langholm, L. Seccombe, B. [Teller]
Montagu of Beaulieu, L. Skelmersdale, L.
Montrose, D. Stewartby, L.
Mowbray and Stourton, L. Strathclyde. L.
Naseby, L. Tenby, V.
Noakes, B. Thomas of Gwydir, L.
Northesk, E. Trumpington, B.
Norton of Louth, L. Tugendhat, L.
O'Cathain, B. Vivian, L.
Oxfuird,V. Waddington, L.
NOT-CONTENTS
Acton, L. Hughes of Woodside, L.
Ahmed, L. Hunt of Chesterton, L.
Amos, B. Hunt of Kings Heath, L.
Archer of Sandwell, L. Irvine of Lairg, L. (Lord
Ashley of Stoke, L. Chancellor)
Ashton of Upholland, B. Janner of Braunstone, L.
Bach, L. Jay of Paddington, B.
Bassam of Brighton, L.
Berkeley, L. King of West Bromwich, L
Billingham, B. Laird, L.
Blackstone, B. Layard, L.
Borrie, L. Lea of Crondall, L.
Brookman, L. Lipsey, L.
Bruce of Donington, L. Lockwood, B.
Burlison, L. McIntosh of Haringey, L.
Campbell-Savours, L. [Teller]
Carter, L.[Teller] McIntosh of Hudnall, B.
Chan, L. MacKenzie of Culkein, L.
Chandos, V. Mackenzie of Framwellgate, L.
Christopher, L. Mallalieu, B.
Clark of Windermere, L. Milner of Leeds, L.
Clinton-Davis, L.
Craig of Radley, L. Mishcon, L.
Crawley, B. Mitchell, L.
Davies of Coity, L. Morgan of Huyton, B.
Davies of Oldham, L. Morris of Aberavon, L.
Desai, L. Murray of Epping Forest, L
Dormand of Easington, L.
Dubs, L. Nicol, B.
Eatwell, L. Parekh, L.
Evans of Temple Guiting, L. Pendry, L.
Evans of Watford, L. Pitkeathley, B.
Falkender, B. Plant of Highfield, L.
Farrington of Ribbleton, B. Prys-Davies, L.
Faulkner of Worcester, L. Ramsay of Cartvale, B.
Filkin, L. Rendell of Babergh, B.
Fyfe of Fairfield, L. Richard, L.
Gale, B. Rogers of Riverside, L.
Gibson of Market Rasen, B.
Gladwin of Clee, L. Rooker, L.
Goudie, B. Sainsbury of Turville, L.
Gould of Potternewton, B. Sawyer, L.
Grabiner, L. Scotland of Asthal, B.
Graham of Edmonton, L. Serota, B.
Grenfell, L. Sheldon, L.
Grocott, L. Simon, V.
Harris of Haringey, L. Slim, V.
Harrison, L. Stallard, L.
Haskel, L.
Hayman, B. Stone of Blackheath, L.
Healey, L. Strabolgi, L.
Hilton of Eggardon, B. Temple-Morris, L.
Hollis of Heigham, B. Thornton, B
Howells of St. Davids, B. Tomlinson, L.
Howie of Troon, L. Turner of Camden, B.
Hoyle, L. Uddin, B.
Weatherill, L. Williams of Elvel, L.
Whitaker, B. Williams of Mostyn, L. (Lord
Whitty, L. Privy Seal)
Wilkins, B. Young of Dartington, L.

Resolved in the negative, and amendment disagreed to accordingly.

4.22 p.m.

Schedule 2 [Registrable dispositions: registration requirements]:

[Amendments Nos. 10 to 12 not moved.]

Schedule 3 [Unregistered interests which override registered dispositions]:

[Amendments Nos. 13 and 14 not moved.]

Schedule 6 [Registration of adverse possessor]:

Baroness Scotland of Asthal moved Amendment No. 15: Page 57, line 20, leave out "pursuance" and insert "pursuant

On Question, amendment agreed to.

Lord Goodhart moved Amendment No. 16: Page 59, line 10, leave out paragraph 12.

The noble Lord said: My Lords, the point I am making was, like some of the earlier ones, raised in Committee and again on Report. It was discussed again at a meeting with the noble Baroness, Lady Scotland, yesterday which I attended. I am afraid that that meeting convinced me more than ever that the Government had got this issue wrong. Mr Charles Harpum, the former Law Commissioner who was responsible for the Bill, is almost infallible on these issues. However, I believe that on this particular point even he, like Homer, has for once nodded.

Let us assume that the owner of a house—let us call him Mr X—has a garden at the bottom of which there is a patch of derelict land. It lies derelict for some time and Mr X thinks that it would make a nice addition to his garden. Therefore, he takes it over. He knows that it is not his but no one else claims it. He plants up the land and after a few years he thinks that it would be nice to own it.

Under the existing law, Mr X has the right to be registered as the owner of that formerly derelict land which he has incorporated into his garden if he has been in unchallenged adverse possession of it for 12 years. Under the existing law there is one exception to that situation; that is, where there is a trust of land. Under the present law that is quite appropriate as the person who owns the house to which the derelict land is properly attached may be a life beneficiary who perhaps does not even know that the land is his and does not want to do anything with it anyway and cannot be bothered to challenge the matter. Therefore, he takes no steps to end the adverse possession.

Equally, the trustees, who are the legal owners of the formerly derelict land, may well not know of adverse possession of the derelict land by Mr X as they have no reason to look at the land and find out whether anyone has trespassed on it. In those circumstances I can see that it is unfair that a future beneficiary under the trust should lose the derelict land because of the failure of an earlier beneficiary to take action.

However, under the Bill, the situation has now changed. Under the Bill, if X wants to get on the register as owner of the derelict land, he must give notice to the trustees. But he gets on to the register only if they fail to take action within two years, so that there can be no adverse possession against land which is owned by trustees without the knowledge of the trustees and without giving them an opportunity to challenge the claim by the person in possession. However, if paragraph 12 of Schedule 6 stands, the adverse possession may be excluded for a period of 80 years or more as trusts can and do last a long time. Indeed, in the case of a few statutory entails, they may last for ever. There is no reason that I can see why adverse possession should be deferred for a very long time when the trustee must be given notice of any claim by the adverse possessor. If the trustees are given notice and do not respond, and if paragraph 12 is allowed to stand, a difficult situation will arise. Does the Land Registry have to investigate the evidence of the beneficial interests before admitting the trespasser, Mr X, to the register, or does Mr X get registered only to find that the registration is a mistake and it is rectified against him simply because the property is held on trust?

It was suggested in the discussion yesterday that the trustees might fail to oppose the application but might do so without being negligent or, alternatively, might be unable to pay damages to their beneficiary for failing to do their duty to oppose the application for registration. I do not believe that is an adequate excuse. There are extremely few cases where that will apply.

In Committee the noble Baroness, Lady Scotland, recounted what might be described as a "sob story" based on a child beneficiary who lost out because his or her mother, who was also the trustee of the estate that owns the asset, suffered from a severe mental breakdown. However, I think we are agreed that that particular story will not help the situation as such circumstances would be covered perfectly adequately by paragraph 8 of Schedule 6 which prevents adverse possession being claimed against a legal owner who is under a disability.

Of course, adverse possession is not something to be encouraged, but I believe that paragraph 12 creates an unjustifiable anomaly. In the light of the change in the law of adverse possession in the Bill, which will perfectly properly make adverse possession more difficult to achieve, I can see no possible logical reason why the right to acquire title against the legal owner should depend on the nature of the beneficial interests on which a legal owner holds a property.

I should say in conclusion that those who are most likely to benefit from paragraph 12 are the owners of large landed estates, because it is they who most often find that the property is held in trusts. I beg to move.

Baroness Buscombe

My Lords, I entirely agree with everything that the noble Lord, Lord Goodhart, has said.

Baroness Scotland of Asthal

My Lords, it is refreshing to see such unanimity between noble Lords opposite. We have already discussed the amendment extensively in Committee and on Report and I am very sorry that the noble Lord has not been persuaded, not least because of the strenuous efforts made by Mr Harpum, the Land Registry and the Bill team, as well as my meagre efforts on this issue. My powers of advocacy and theirs are not sufficiently great to persuade the noble Lord.

I regret to say that the Government have rather less sympathy with Mr X in the example than does the noble Lord. The aim of the Bill is to reduce the scope for deliberate land theft, which is what the noble Lord has described. The Government do not believe that it should be made easier than it is under the current law.

The Bill is a work of root and branch modernisation. The Government would not willingly pass up any opportunity to make the law simpler or more up to date, but we consider that the amendment would be unfair to beneficiaries who are not entitled to possession. The reasons are fully explained at cols. 1381–82 of Hansard of 30th October. I cannot usefully add anything to what I said last time, save to express regret that in my example I thought to say that the mother in that distressing situation was suffering from some disability. If she had not been, my example would have been impenetrable.

In the light of what I have said, I urge the noble Lord to withdraw his amendment. I egged the pudding in my example and, with the greatest respect, I think that the noble Lord may be engaging in the same today.

Lord Goodhart

My Lords, I am sorry that, even at the last gasp, I have been unable to persuade the Government to change their mind. I propose to ask the leave of the House to withdraw the amendment, not because I am in any way convinced that I was wrong, but for the reasons that I gave when speaking to the previous amendment moved by the noble Baroness, Lady Buscombe. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Schedule 11 [Minor and consequential amendments]:

Baroness Scotland of Asthal moved Amendments Nos. 17 to 20: Page 73, line 21. at end insert ", and (b) in paragraph (a), at the end there is inserted ", except that no notice may be entered in the register of title under the Land Registration Act 2001 in respect of such orders". Page 77, line 33, at end insert ", and (b) in paragraph (a), at the end there is inserted ", except that no notice may be entered in the register of title under the Land Registration Act 2001 in respect of such orders". Page 78, line 39, at end insert ", and (b) in paragraph (a), at the end there is inserted ", except that no notice may be entered in the register of title under the Land Registration Act 2001 in respect of such orders". Page 79, line 11, at end insert ", and (b) in paragraph (a), at the end there is inserted ", except that no notice may be entered in the register of title under the Land Registration Act 2001 in respect of such orders".

On Question, amendments agreed to.

An amendment (privilege) made.

On Question, Bill passed, and sent to the Commons.

European Communities (Definition of Treaties) (Partnership Agreement between the Members of the African, Caribbean and Pacific Group of States and the European Community and its Member States (The Cotonou Agreement)) Order 2001

4.35 p.m.

The Parliamentary Under-Secretary of State, Foreign and Commonwealth Office (Baroness Amos) rose to move, That the draft order laid before the House on 15th October be approved [6th Report from the Joint Committee].

The noble Baroness said: My Lords, I beg to move that the draft European Communities (Definition of Treaties) (Partnership Agreement between the Members of the African, Caribbean and Pacific Group of States and the European Community and its Member States (The Cotonou Agreement)) Order 2001, which was laid before this house on 15th October 2001, be approved.

The European Community, as the world's largest multilateral grant provider, the world's largest single market and the main trading partner of most developing countries, can potentially make a huge contribution to eradicating global poverty. In the past, the EC has not fulfilled that potential, but the new Cotonou agreement between the European Union and the countries of Africa, the Caribbean and the Pacific—the ACP—is a landmark.

The EU's negotiating mandate for Cotonou was agreed during the British EU presidency in 1998. Negotiations with the ACP started in the same year and were concluded in 2000. Negotiations were hard, but the Government have been successful in ensuring that the Cotonou agreement is a good agreement for the ACP. The main points of the agreement are: an over-riding objective of poverty elimination; improved and simplified development assistance under the European Development Fund; good governance underpinning the new agreement and the possibility of taking action in cases of severe corruption; a new trade deal, which maximises ACP access to the EU market while promoting those countries' gradual integration into the global economy; and, in exchange for these improvements, an ample replenishment of the EDF.

The trade aspects are important because, in many cases, the impact of the EU's trade relations exceeds that of its development assistance. Under Cotonou, the ACP's current preferential arrangements will be maintained until 2008, after which new WTO-compatible arrangements will come into effect. These will be free trade agreements between groups of ACP countries and the EU. However, to allow ACP countries time to adjust, fully reciprocal free trade would not be expected until up to 20 years from now.

One of the Government's main concerns in the negotiations was those countries that will not be able to join free trade areas in 2008. Here the Government secured two important objectives. First, least developed countries will benefit from the commitment to allow duty free access for essentially all their products. This has now been implemented with the "Everything But Arms" decision this year. Secondly, there is a safety net for other developing countries, with the EU undertaking to do what it can to provide a new, WTO-compatible trading framework with benefits equivalent to Lomé.

While the improvements to the Community's development assistance under Cotonou are welcome, they need to be accompanied by substantial reform. The Commission has started to tackle many of the institutional weaknesses of the past. Since Cotonou was signed last year some important improvements have been made. The challenge now is to ensure that the reforms are fully implemented, while also continuing to press for wider positive change.

Together with the Commission reforms, Cotonou is an important step towards ensuring that the European Community can meet its potential contribution to the millennium development goals. I therefore commend the order to the House.

Moved, That the draft order laid before the House on 15th October be approved [6th Report from the Joint Committee].—(Baroness Amos.)

Lord Bruce of Donington

My Lords, will my noble friend give the House some estimate of the costs to the various Community secretariats that are bound at some stage to be involved in taking further legal advice, establishing a budget line and determining how the expenditure should be apportioned? It would be most helpful if we could be satisfied that all those precautions have been taken care of and that any transactions that arise from it are thoroughly transparent, not buried away in some obscure section of the European budget, which very few people read.

Baroness Rawlings

My Lords, I thank the Minister for bringing the order before the House today. We on these Benches welcome the principle of extending the Lomé Convention to the Cotonou agreement and have no serious concerns about the content of the order. Much of its content is to be welcomed.

We are delighted, too, to hear the Minister acknowledge that a great deal of work still needs to be done to reform the common agricultural policy and the common fisheries policy. This is all the more important as we come to the legislation regarding the enlargement of the European Union. We have pressed for such work for a long time, and we hope that the Government will make greater efforts to speed up the necessary reforms.

We have one or two specific worries on which I wonder whether the Government could comment. I am pleased that the Minister applauded the incorporation in the agreement of anti-corruption measures given that, despite our repeated efforts on these Benches, the Government have consistently failed to incorporate such measures into the International Development Bill. Could the Minister comment on the inconsistency between the praise for Article 33(2), which states, The Parties shall work together in the fight against bribery and corruption in all their societies", and the Government's consistent refusal to accept our amendments to the International Development Bill to introduce anti-corruption provisions? Perhaps it will be incorporated when the Bill goes through the other place. I wonder whether that is possible.

The decisions that the Doha World Trade Organisation meeting will take later this week will have profound implications for the well-being of the poorest people on earth. Trade is the engine of economic growth. Cotonou on its own is not enough. We need to reduce trade barriers. It is often said that both the European Union and the United States are the main stumbling blocks; the United States with their anti-dumping laws and the European Union with their environmental demands. Both are detrimental for the developing countries. Many even call it protectionism through the back door.

One of the main ways out of poverty, however, for these countries still remains—and I repeat it yet again—and that is to give the children a chance of better education.

As regards the effect of trading arrangements on the least developed countries—the Government's "Everything But Arms" initiative had advanced the timing of certain proposals—is the Minister aware that the proposals have caused enormous concern in relation to sugar, particularly in the least developed countries of the Caribbean? Many of the proposals which the Government intended to agree to could destroy the economies of several Caribbean islands.

I do not want my comments to be interpreted as an overall criticism of this worthwhile agreement. The very important work of my noble friend Lady Chalker of Wallasey on Lomé some 10 years ago, needs to be updated, especially as one-third of our aid to these areas is through the European Union.

There has been a great deal of cross-party agreement on the need to improve relations between the European Union and the ACP countries. We hope that the work will continue. As long as our concerns for the reforms of the CAP and the CFP are taken into account and the needs of Caribbean countries in relation to sugar and issues such as the recent problem with bananas, which the Minister mentioned in the other place, the agreement should provide a worthwhile framework for future relations. We therefore support this order.

4.45 p.m.

Lord Redesdale

My Lords, we also support this order and welcome the focus of Cotonou on the alleviation and elimination of poverty. A great many of the issues which have been raise by Cotonou will be directly affected by what takes place at Doha. One area which is causing some degree of concern has been mentioned in the press. It is that developing countries believe that they are being excluded from some of the decision making that is taking place. They believe that the developing countries are forming a club which will further the position of the developed world rather than that of the developing countries.

I have one question concerning the order. Have the Government looked closely at how to develop one of the issues raised by Cotonou, which is the non-state sectors, and have the Government thought about how NGOs, for example, can be included in future negotiations?

Baroness Amos

My Lords, I thank the noble Baroness and the noble Lord, Lord Redesdale, for their support for this order. I believe that the focus on poverty in the Cotonou Agreement is particularly important. I shall try to address each of the questions raised in turn.

My noble friend Lord Bruce of Donington asked about cost estimates. I can assure him that Cotonou is not funded from the budget, but it will be administered using normal Commission procedures and capacities. In that regard I am sure that my noble friend will be pleased to learn that we have been working very hard to improve the procedures in respect of EU aid. A streamlined implementation structure has been established in Brussels. But completing the reorganisation overseas will take several years. We have also been looking at management systems and procedures which have begun to improve. For example, a new framework for country strategies and simplified procurement procedures have been put in place. I know that my noble friend is often very concerned about bureaucracy within Brussels.

The noble Baroness, Lady Rawlings, asked me in particular about corruption. That matter was raised in our discussions on the International Development Bill and again yesterday in another place at the Bill's Second Reading. My right honourable friend the Secretary of State for International Development said, in response to a question from the Opposition, The hon Lady will know that the Queen's Speech contained a commitment to legislate to ensure that British law does not put implementation of the convention [on corruption] in doubt".—[Official Report, Commons,7/11/01; col. 288.] That remains our position.

The noble Baroness also asked about the CAP. I confirm that the Government are working to secure fundamental reform of that policy so that it moves away from subsidies which encourage excessive production and towards those that support rural development and the environment. It is especially important for the development objectives of the United Kingdom that reform is achieved as soon as possible.

The noble Baroness also asked about the "Everything But Arms" initiative. The Government believe that that is important to help the world's poorest countries. But we also recognise that non-LDC ACP countries will need to adjust to the change, as the noble Baroness so rightly said, particularly in their production of sugar and rice. We shall work to ensure that the multilateral and other bilateral donors assist with the costs of adjustment including through the Cotonou arrangements.

As regards the points made by the noble Lord. Lord Redesdale, and the WTO, we continue to believe that the launch of a new multilateral round would result in significant benefits for developing countries. The noble Lord may be aware that my right honourable friend the Secretary of State for International Development announced a package of £20 million in assistance to developing countries to help them to use the round to negotiate effectively as part of our commitment to the development round. We are working very hard to improve the participation of LDCs in the WTO through our capacity building projects.

The final question from the noble Lord, Lord Redesdale, concerned the role of non-state actors. As the noble Lord said, the new agreement provides an enhanced role for non-state actors. They should be consulted on the EC's country support strategies and involved in their implementation. They should also receive capacity-building support. We are committed to ensuring that that happens, because it is vital if non-state actors from the ACP who represent all of society are to play a full role.

I hope that, with those explanations, we may proceed with the order. I commend it to the House.

On Question, Motion agreed to.