Lords Sitting of 9 May 2003

Preamble
The House met at eleven of the clock: The CHAIRMAN OF COMMITTEES on the Woolsack.
Prayers—Read by the Lord Bishop of Chelmsford.

Equality Bill [H.L.]
Read a third time; an amendment (privilege) made.
Lord Lester of Herne Hill: My Lords, I beg to move that this Bill do now pass. I want to express my gratitude for the widespread support there has been for the Bill. I look forward to seeing what happens in another place.
Moved, That the Bill do now pass.—(Lord Lester of Herne Hill.)
On Question, Bill passed, and sent to the Commons.

Scrutiny of European Legislation (EUC Report)
11.7 a.m.
Lord Grenfell Lord Grenfell rose to move, That this House takes note of the Report of the European Union Committee on the Review of Scrutiny of European Legislation (First Report, HL Paper 15).
The noble Lord said: My Lords, the European Union affects the lives of every one of us. Whatever our individual views of it, I am sure that no one here will doubt the need for effective parliamentary scrutiny of the Union's activities. For that reason, I hope that the whole House will find something of value in our report, in the Government's response and in this debate today.
Some might nevertheless wonder why such a report and debate are necessary. Surely, they might say, the House has a well-developed and long-established system of EU scrutiny, and one moreover which attracts a considerable amount of praise, in particular from other national parliaments. So why do we need a review?
There are three reasons. First, the European Union is changing. It is about to be enlarged, and constitutional changes are being promoted by the Convention on the Future of Europe for discussion by governments at an IGC within the year. A review by this House of how it carries out EU scrutiny is therefore timely.
Secondly, I hope that no one in this House would take the view that a system of scrutiny to which so many of your Lordships—over 70, in fact—devote so much of your time is not capable of continuing improvement.
The third reason why the debate is necessary is a formal one. The Leader's Group on Working Practices recommended just over a year ago that there should be
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a review of the House's scrutiny of EU legislation. Once that report had been endorsed by the Procedure Committee and the House itself, the European Union Committee was tasked with conducting a review. This we did during the spill-over last year and published our report just before Christmas.
Without pre-empting my later remarks on the process for debating reports in this House, I should say that, although I am sorry that it has taken a while to find the time for this debate, neither the Committee nor the Government has been sitting idle. We have all made good use of the wait to begin to implement some of the practical recommendations of this report, of which I shall give a flavour in a moment.
Before turning to matters of substance, I pay tribute to my predecessor as chair of the committee, the noble Lord, Lord Brabazon of Tara, who started the review before moving on to higher responsibilities. I am pleased to see the noble Lord in his place today. I want also to express my sincerest thanks to the current members of the committee and those who left us at the end of the last Session for their many stimulating contributions to this report, and my very special thanks to our Clerk, Simon Burton, who worked the hardest of all and whose contribution was outstanding. The range of recommendations, all of which were unanimously agreed, reflects the range of experience among the members of the committee which I am privileged to chair. We took oral evidence from the three parties, which was invaluable. Our staff have worked hard both to produce this report and to begin to oversee the changes in working methods to which we have agreed, and I am deeply grateful to all of them.
Turning to the report itself, let me comment on five particular areas: scrutiny issues; issues for the Government; issues for the House; issues for the committee; and the role of national parliaments in the future of the EU.
I start by reminding the House what our current system of scrutiny is. EU documents are deposited in Parliament along with an explanatory memorandum from the Government. Our committee and our sister committee in the Commons separately examine these documents and where necessary comment on them by way of a report to the House or a letter to the Minister. The key to the system is the scrutiny reserve resolution agreed by the House in 1999, whose effect is to bar Ministers from giving agreement in the Council to any proposal which is not cleared from scrutiny—in other words, which we are still considering. The committee clears documents from scrutiny either by way of the Chairman's weekly sift of documents, or by a decision of the committee or one of its six subcommittees, or by a report or letter. Where a report is made for debate, only the debate itself clears the document from scrutiny.
Hence the key to our system is that the committee, on behalf of the House, is given sufficient time to scrutinise documents. The power we have is not to require the Government to change their mind but to make the Government think through what they are

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being asked to agree to in the Council. That function is certainly familiar to us Members of a revising Chamber devoted to making the Government "think again" on legislation.
Your Lordships will see set out in paragraphs 12 and 13 of the report our conclusions on the function of scrutiny. Significantly, we underlined the "constitutional importance of scrutiny" of EU legislation in draft or in the form of proposals at the earliest possible stage, given that our national Parliament has no direct legislative powers over EU law other than the all-or-nothing opportunity to accept a treaty for ratification, for example, or pass or reject an instrument implementing an EU law in this country.
I will mention today four areas under the heading of scrutiny: first, the case for a mandatory scrutiny reserve; secondly, the case for a nuclear option; thirdly, the problem of provisional agreements; and fourthly, the Government's proposal for a fast track.
First, I turn to the case for a mandatory scrutiny reserve. Some have argued that scrutiny ought to be binding on the Government. We heard evidence from the chair of the Danish Parliament's European Affairs Committee, Mr Larsen-Jensen, about the system whereby his parliament mandates Ministers in advance of Council meetings. We concluded that such a system would not work in the United Kingdom. Paragraph 70 of our report says:
"There are dangers in giving so much power to our Committee or indeed to its Chairman. This could lead to the Government wishing to secure both the majority on the Committee, and that the chair was filled by somebody amenable. There are also dangers in taking power away from the House as a whole. Furthermore, a mandatory system would only work if a new mechanism were found to allow all the relevant UK parliamentary bodies to come to a single view. Overall, in a system such as the European Union, requiring agreement in negotiation between representatives of the Member States, there must always be flexibility and room for manoeuvre".
We were, nevertheless, very anxious to recommend a procedure to allow this House, exceptionally, to require the Government to secure a positive resolution in order to lift a scrutiny reserve. The Government oppose that recommendation on the grounds that it is a form of mandatory scrutiny, which we have rejected. I stand by our proposal, which is in effect for a "nuclear option" and accordingly one intended to be rarely invoked.
We believe that such a system would give practical effect to our strong emphasis on the constitutional importance of parliamentary scrutiny and would strengthen the hand of Parliament in its holding of the executive to account. Subject to what may be said in this debate today, it is my intention to invite the Select Committee to put a detailed proposal along these lines to the Procedure Committee for that committee and the House to consider. The Procedure Committee could be invited to consider whether our proposal would best be given effect by a new form of resolution procedure for the House, or by amending the scrutiny reserve resolution.
I turn now to the problem of provisional agreements, where once again we and the Government are not of one mind. The Government reject our proposals for amending the scrutiny reserve resolution to take account of provisional agreements. The House has debated this before and others will say more later today, so I shall confine myself to saying that the committee intends to press the Government to avoid allowing the impression to be formed that the Council has agreed matters before parliamentary scrutiny is complete. Perhaps the Council might adopt language such as "being party to a general approach" to avoid giving any sense of "agreement". The committee will need to consider whether that, too, is a matter on which the scrutiny reserve resolution requires amendment.
Our fourth and final concern on the subject of scrutiny is the Government's suggestion that our subcommittees might establish a fast-track procedure to allow scrutiny to be completed in days rather than weeks. We of course commend the Government for having this discussion with us rather than just choosing to override scrutiny regardless.
The committee considers, however, that a formal fast track is not a good idea, and is, in any case, unnecessary. We already have procedures to speed things up: both the sift and the agendas of subcommittees are flexible, and items get taken with very little notice. We do have the power to meet in recesses if Members wish, and the new September sittings will provide an opportunity for meetings as necessary. In addition there can be problems of delay which are not of our making: if departments sit on documents, time can be wasted, whereas if government officials are available to give sub-committees clarification, items can be cleared in a single meeting. I know that scrutiny is not always convenient for the executive, but a proposal for a fast track procedure does not, in our view, sit at all well with the Amsterdam Protocol's very clear provision of six weeks for that scrutiny.
For all those reasons, we wish to retain our current flexible procedures and we will continue to work closely with government departments to avoid unnecessary delays. A formal fast track for clearance might unhelpfully impose undue rigidity on all of us.
To conclude my remarks on scrutiny, our report did propose requiring Ministers to make a Statement in the House when overriding scrutiny. The Government have instead offered to furnish a Written Answer, rather than the current procedure of a letter to the committee. We accept that for now, but we might in due course press further that this House adopts the Commons practice of written ministerial Statements for this purpose.
I turn now from scrutiny to the second of my main areas for comment; namely, matters where the committee has made recommendations to the Government. I shall be selective here and mention briefly only four of them: the implementation of EU law; the form of explanatory memoranda; the deposit of documents; and some administrative matters.
With regard to implementation, the committee will wish to press Ministers to offer a satisfactory analysis of their implementation strategy for all proposals. I look forward to the remarks of others today. However, I for one can well understand that the Government cannot necessarily always say whether a particular EU proposal is to be subject to primary or secondary legislation when implemented. What is important is that the Government are clear in their explanatory memorandum about the consequences of implementation and can satisfy us that those have been thought through.
On the form of explanatory memoranda, our report recommends that the Government offer a preliminary view in each EM on the compatibility of a proposal with the Human Rights Act. The Government have agreed. We have also pressed the Government to offer more information on devolution, comitology issues and the policy implications of a proposal for the United Kingdom. We will continue to press on all those matters.
The committee will also press for ministerial signature on all explanatory memoranda. The Government have offered a private secretary's signature in certain cases. It has been noted that Ministers sign considerably more Parliamentary Questions than they do explanatory memoranda; so we find the logic of their position hard to follow. Furthermore, the committee is both proposing to remove certain categories of document from scrutiny, and happy to accept a short EM in certain cases. The trade-off must be that Ministers are prepared to sign what is, after all, their evidence to Parliament.
The third point is on the deposit of documents. To enhance the effectiveness of scrutiny, we have proposed, and the Commons and the Government have agreed, that certain categories of documents be no longer deposited for scrutiny but that, where necessary, consolidated lists are provided to the committee so that we can exercise a right to scrutinise any document as necessary. I should remind the House that the current procedures only require a proportion of EU documents to be deposited anyway—so we are not doing anything too radical. The point here is that scrutiny is weakened if we are all overwhelmed with volumes of paper or e-mails which obscure the significant issues in a cloud of irrelevance. To quote my opposite number, the chair of the Commons European Scrutiny Committee, Jimmy Hood, we have to be selective to be effective.
Since our report was published, Sub-Committee A has agreed to take a similar approach to budget documents, and further helpful suggestions in this regard have been made by the Home Office and the Department for International Development. Doubtless others will be forthcoming.
I intend to ask the committee to review how we might best manage the procedures for determining which documents are to be deposited and we may, if necessary, seek to amend the scrutiny reserve resolution in that regard. The Government might be willing to consider some of the procedural
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amendments to the reserve that we are seeking (on which I say more below) in conjunction with further amendments designed to simplify and streamline the scrutiny system. In this context I want to commend the Government for their proposed new procedures to minimise the risk of overriding the scrutiny reserve, including six-monthly reports to the committee.
On the administrative side, we note that the Government intend to move to more electronic distribution of EU documents and EMs and to do more to provide early warning about proposals to committee clerks. All of this we unreservedly welcome.
We await more detailed proposals from the Government concerning the formal deposit of documents during the conciliation procedure: the issue is of significance, particularly where regulatory impact assessments are involved.
I turn now to the third area, issues for the House. Here I shall mention briefly: debates on our committee's work; working with the Commons; and the number of our sub-committees and our resources.
The question of debates on committee reports—and not just those of this committee—is a significant one. I know that the noble Baroness, Lady Harris, will refer to that a little later. It is clear that, given the way the House currently divides up its time, there is insufficient prime time for all those committees seeking debates. By "prime time" I mean time during daylight hours on Mondays to Thursdays. This issue is going to come into a sharper focus only as the number of committees increases. The number of reports awaiting debate listed in "No Day Named" in the Minute of Proceedings gives a clear flavour of what I refer to.
The present lack of any "prime time" for committee debates is clearly not acceptable although the reasons for the problems that occur are complex and sometimes political in origin. So the real question is: what is to be done about this?
At one level, and given the existing procedures of the House, committees can help themselves by being flexible about the timing of debates. Our committee is being as flexible and reasonable as we can be about the kind of debate we seek: for example, this debate, and another debate on Russia, are scheduled for Fridays; and debates on Europol and the civilian aspects of ESDP are scheduled as Unstarred Questions in the dinner break. We can also help ourselves by not recommending reports for debate that do not warrant it.
That said, our committee remains concerned that proper time be found to debate our reports, and within an appropriate timescale. I should remind the House that it is sometimes in the interests of Ministers too that an early debate is secured, as such a debate lifts the scrutiny reserve on a proposal. Furthermore, if the House really values the work of the committees to which it devotes such a proportion of its resources there is a duty on the House to make proper time available for debates on that work.
I accordingly urge the House to reflect deeply on whether all the issues to which it currently devotes its prime time are the right ones. Is there not a case for

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more Bills to be considered in Grand Committee to free up some prime time for debates? Is there also not a case for revisiting the use made of Wednesdays? When party debates and balloted Back-Bench debates are guaranteed regular prime time, should not committee reports be treated no less favourably? These are complex matters and I intend to invite my committee to put a paper into the Procedure Committee to explore the details more thoroughly than we can do today.
The committee does not, however, support the proposal for debates on our reports to be held in Grand Committee. It is hard enough as it is to secure the interest of the public and indeed of the majority of Members of the House in our work. I believe instead that we should thoroughly explore all options for making better use of the time in the Chamber before we consider that option.
I wish to say a few words now on relations with the House of Commons. The committee remains opposed to the idea of a Joint EU scrutiny committee on the grounds that that would weaken the effect of parliamentary scrutiny which is currently complementary between the Houses. It might also reduce the accountability of Ministers to Parliament. But we are continuing to examine ideas for joint working with another place where appropriate, and the Government have welcomed our proposals. We have held a joint session with the Commons to discuss matters with MEPS on which I hope the noble Baroness, Lady Billingham, will have something to say later. We have also invited the Commons EU Committee to join us in joint scrutiny of the Commission's Annual Work Programme, although they were not on that first occasion able to do so. And, of course, we work closely with them in COSAC.
The third and last point that I wish to make under this heading concerns the number of our subcommittees, currently six. The committee has asked the Liaison Committee for two extra sub-committees but a decision is on hold pending this debate. The committee's case is set out in the Liaison Committee's report. The key element is that the present division of policy responsibilities means that each sub-committee is examining too wide a range of policy areas and cannot always give proper attention to them all. This is supported by the relentless increase in the number of documents deposited for scrutiny. Since the Jellicoe review of our work in 1992 the number of documents deposited each year for scrutiny has increased from around 800 to about 1,400. I hope that other Members who have experienced what this means at the sharp end, working in the sub-committees, will make this point strongly today.
I turn now to the fourth area of matters for the committee to take forward. Some of these we have already implemented, others we are continuing to follow through. I shall confine myself to a few examples.
Overall, our review has proposed new areas of activity designed to enhance and strengthen the House's scrutiny of European legislation. These will
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mean increased responsibilities for sub-committees including: more regular scrutiny in advance of Council meetings, including of government officials; more short studies to complement major inquiries; more emphasis on the follow-up of work; more analysis of cost impact assessments; more scrutiny of comitology decisions; a greater effort to disseminate our work in the outside world, to which end we have agreed a press and publicity action plan which the sub-committees are about to begin to implement; and finally, more emphasis on ensuring that our work is of use to the House, including making our work more readily available using procedures such as Unstarred Questions to follow up unsatisfactory responses in debates and Starred Questions to raise significant matters in advance of Council meetings and to follow up significant breaches of the scrutiny reserve.
In addition to these matters which affect all the subcommittees, Sub-Committee A is taking forward our proposals for scrutiny of budgetary matters, and this the Government have welcomed.
These new functions will, overall, mean an increased workload for sub-committees. This, too, contributes to the case for more sub-committees to spread the load more evenly. We shall also seek the necessary resources to implement our ideas, both if new sub-committees are appointed and in existing areas of work where more resources are clearly required.
My fifth and final area, and the briefest, concerns the role of national parliaments in the future of the EU. There are clearly outside pressures for change which we believe will lead to an increase in our workload. It is a significant theme in the convention that there should be an enhanced role for national parliaments in the European Union to help redress the disconnection between the citizen and those governing the Union.
We have reported separately on proposals in the convention which would give national parliaments a welcome power to comment on and, on occasion, block EU proposals which do not accord with the subsidiarity principle. We are also looking at the implications for national parliamentary scrutiny of proposals for a President of the European Council. How would that post be accountable and to whom?
We shall continue to monitor the Commission's Annual Work Programme and, if adopted, the Council's strategic agenda. In addition, suggestions that matters of justice and home affairs might be brought under the Community method, requiring an enhanced scrutiny of an increased number of documents, and enlargement may mean more legislation for us to consider.
To assist such scrutiny we shall continue to work to enhance collective co-operation of national parliaments, most likely through COSAC (which we have had some limited success in reforming), and we shall involve MEPs where appropriate. Both our report and the Government's response propose some practical suggestions for enhancing co-operation with MEPs and other national parliaments. We have agreed to look into this matter before the Summer Recess.
I have exceeded the time I allotted myself and now risk trespassing on eternity so I shall say no more. I look forward to the rest of the debate, and I beg to move.
Moved, That this House takes note of the Report of the European Union Committee on the Review of Scrutiny of European Legislation (First Report, HL Paper 15).—(Lord Grenfell.)
11.29 a.m.
Baroness Park of Monmouth: My Lords, that is a hard act to follow.
Before I proceed I should like to say how deeply honoured I am to be on the Select Committee and, indeed, on the sub-committee on defence and foreign affairs. I do not propose to speak about those subjects but chiefly about the scrutiny reserve with some references to the role of national parliaments.
As long ago as July 1997, the Select Committee on the European Communities said, in discussing third pillar proposals:
"Earlier access to documents remains the key to better scrutiny, and the government's record still contains far too many failures in this area".
During the debate it emerged that although the principle of a mandatory six-week period for scrutiny was agreed, in practice it was difficult to get hold of documents in time, there was a culture of secrecy in Brussels, and there was often pressure on Ministers to make decisions before there had been time or opportunity for any proper scrutiny to take place.
Six years on, we are faced with very similar problems, and today we are reiterating the paramount need for time for scrutiny, for early access to the relevant documents and for time to question Ministers and officials if necessary before the decisions have to be taken in Council.
The scrutiny reserve is one of the very few means at the disposal of national parliaments to make Ministers accountable in the European dimension, and to ensure that they do not present their own countries with an insufficiently considered fait accompli under the pressure of having to get through the agenda and/or not wishing to be the awkward, dissenting country. When, as happened two years ago with the European arrest warrant, Britain signed the framework decision before the document was cleared for scrutiny, the time available for scrutiny was not six weeks but a few days, and some of the documents were not at first available in English. That framework decision is now being translated into British legislation nearly 18 months later, and I believe that it is not required or expected to become European law before 2004. Where was the hurry?
I believe very strongly that scrutiny of proposed European legislation is the first and vital step in ensuring that we are not effectively forced into alien legislation that is not necessary or appropriate to the needs of our country, and whose cost is sometimes not properly quantified before we commit ourselves to it. That is, alas, even more true of the mass of legislation
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applied at county council and regional level, such as the nonsense over old refrigerators and expensive abattoirs.
Although the Local Government International Bureau estimates that,
"around 70 per cent of EU legislation is ultimately implemented by local authorities, who must bear the financial and administrative consequences",
they have no say in the framing of such legislation. Issues such as subsidiarity, EU competence and consultative rights are all matters of concern to UK local authorities. Important though it is, however, that our scrutiny procedures—when scrutiny takes place—should recognise that, there are constitutional dangers if the Committee of the Regions as proposed in the convention should acquire a legal personality, as it is trying to do, and a right of suspensive veto.
It would be absurd and dangerous if Parliament were to be expected to yield decision-making on local issues to the new Committee of the Regions, and allow those regions to negotiate directly through it with the EU. I hope that, at some stage before the IGC, we shall consider how scrutiny should work to ensure sensible internal national consultation with local authorities to the early stages of formulating policy, rather than with an extra and unnecessary tier of government in the regional assemblies.
To my mind, six weeks is not nearly long enough for effective scrutiny of decisions whose repercussions are so significant in our daily lives. We must have a clear policy for ensuring that there is no delegation of power to the regions. That is where our scrutiny of what goes on under the convention comes in. However, I believe that our representatives have been robust on the issue so far, recognising that there are serious constitutional consequences.
The most careful scrutiny of the committee's proposals in the area will be necessary. Concern is beginning to be felt by local councils, some of whom see in the proposed regional assemblies another layer of government which will further weaken local government. That is just what will devalue both local and central government with the electorate, and it will be wrong. In exercising our scrutiny over whatever comes out of the convention, I hope that we shall remember that. That point is a diversion from the main plot of the debate, but I felt that it should be made.
Scrutiny is not a luxury but a vital necessity, and one of the most important functions of the House. Every year, the Brussels bureaucracy is churning out ever more directives, framework decisions, common strategies, road maps and accession partnerships, all requiring ever more bureaucrats to devise, enforce and extend them. Some at least are unnecessary for us.
One reason why there is so often pressure on Ministers and officials to deliver decisions quickly in Brussels, and consequently to find scrutiny a thorough nuisance, has been the system of six-monthly EU presidencies. The country in the driving seat wishes to leave its mark and push through a series of favourite projects. I hope that that can be changed, for it seems to me that we should be looking, as we have now begun

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to do, at the Commission's work proposals for the year, pruning the list drastically, and allocating priorities or even deleting some items.
Scrutiny is positively valuable in improving the sensible proposals and, where they are seriously contentious domestically, in enabling Ministers to learn that there will be very real opposition to consider when it comes to translating a framework decision into legislation. Moreover, when there has been no timely scrutiny and a decision has been taken in Council which could subsequently be rejected by Parliament when it is brought forward as legislation, we shall be up against the fact that we shall be in breach of EU law. As candidate countries are reminded:
"Community law takes precedence over any national provision which might conflict with it".
The other danger is that the Government will feel constrained, for that reason, to drive through measures which are wrong for us. I am sure that their intentions are excellent, and that they will want to respond to the wish of both Houses, but in practice it would be very difficult for them to do so.
Look at the terrifying mass of legislation and bureaucracy engendered by Brussels, both in the business of enlargement and its unremitting efforts to extend its power. The Franco-German proposals to the convention for a Minister for Europe who will be all-powerful in both Commission and Council and would speak for Europe in all international forums, including the UN, is an example. Without timely and effective scrutiny, which puts a grave burden on officials—I suspect that they are already overworked—in the appropriate Ministries here, we shall find ourselves drawn into expensive commitments which we would not otherwise have dreamt of, to the detriment of good government. I am glad to think that subsidiarity as a principle is there, but it has to be observed.
Effective scrutiny is our only protection. I hope that the House will give warm and effective support to the scrutiny process. One feature of it is the need for us to keep the House informed. I wonder whether—I hope that the Chairman will approve of this—the usual channels could be brought to agree to allocate regularly one Wednesday debate to EU issues every four weeks. Scrutiny should not involve only Ministers, officials and the committees. It should be a regular part of the business of this House.
Most of the action needed to make scrutiny effective can be taken with the good will of the House, including, for instance, more support in terms of research and speedy information both here and in Brussels; we are entitled to hope to get that support. However, one of the most important acts must be, whether through the Council, the Commission or the Parliament—we have many useful MEPs there—to reduce the amount of new legislation emanating from Brussels, to enforce subsidiarity rigorously, and to establish some priorities there.
That is almost as important as holding the executive to account. As it is we are being dragged along by something between an octopus and a juggernaut.
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There are better things that we could do with our national resources than to spend our lives reacting to what is often an extremely inefficient and secretive organisation.
11.38 a.m.
Baroness Harris of Richmond: My Lords, I wish to concentrate my remarks on the sensitive issue of the timing of debates on our reports. Everyone agrees that the value of a report is diminished if there is undue delay before it is debated. That applies particularly to EU reports, as they usually deal with topical issues of some immediacy arising from specific legislative or policy proposals. But far too often there is a lengthy delay between publication of a report and the relevant debate. In the case of my committee's report on labour mobility in the EU, almost a year elapsed between the two events.
How soon a debate can take place depends on several factors. The most critical is the timing of the Government's response to the report, because the House will want to have the Government's response before the report is debated. In our review we recommended that there should be a presumption that a government response is produced within six weeks of publication of a report and that reports are usually debated within eight weeks of publication, although we recognised that earlier or later debates might on occasion be required.
In their response, the Government acknowledge the importance of responding to reports in a timely fashion but reject the recommendation that they should be produced within six weeks. They propose retaining the existing time limit of two months, which they describe as,
"a demanding timescale, that compares favourably with the six month deadline for responding to reports from other committees of the House".
If replies cannot be produced within six weeks, then clearly debates cannot be held within eight weeks.
I have to say that the analogy that the Government draw with the six months' deadline—which is in itself excessive—for the response to other reports is a false one. The reports from other committees are usually the result of a lengthier period of inquiry and address long-term issues which may not have the same immediacy as most EU reports.
Our reports are usually conducted on a much shorter time-scale, often dealing with issues of some immediacy. They are unlikely to be issues on which the Government need to form a view from the beginning. For the general run of reports, six weeks seems to me a perfectly reasonable target and I would welcome a better explanation from the Minister as to why, as a general rule, the Government feel unable to put together a response within this time-scale. I also remind the House that in proposing this review of scrutiny, the Leader's Group specifically asked that it should look at the desirability of a greater number of shorter and more focused reports. If, as I would expect, we shall in future be producing more and shorter reports, that is all the more reason for quick responses and early debates.

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We do not, of course, wish to be inflexible. We did not recommend six weeks as a firm deadline in every case but only as a "presumption". We recognise that some reports may address complex, long-term issues to which the Government need longer to respond; they may involve consultation with a number of different departments. In such cases, we would always be flexible in accepting a reasonable extension of the six weeks' deadline.
Similar considerations apply to the timing of debates. There may be occasions when, for a variety of reasons, it is not possible to schedule a debate within eight weeks of publication of a report. But it would be a salutary discipline on all concerned to have that period in mind as a "presumption".
We accept entirely the need to be realistic and flexible about the timing and length of debates. So far as possible, the timing and length of the debate need to be tailored to the subject and the breadth of interest of the report. We recognise that we cannot expect all reports to be debated in "prime time" and that time will rarely be available on a Monday or Tuesday for a debate of any length. But that should not rule out prime time on, say, Thursday mornings.
We are certainly not opposed to debating reports on Fridays, as this debate itself demonstrates. Although I should have preferred it to take place on a different day of the week, I agreed to a Friday debate earlier this year on a substantial report on illegal immigration, which had attracted a great deal of publicity, because I thought it important that the debate should not be unduly delayed. Another possibility is to arrange a debate for short reports in the dinner break. I have myself put down an Unstarred Question on Europol—referred to by the noble Lord, Lord Grenfell—as a basis for debating our recent report on the subject; and the committee's report on the civilian aspects of ESDP is being handled in the same way. We should also explore whether the House might make somewhat different use of Wednesdays, and in particular whether the current provision for balloted debates makes the best use of a day's prime time. We should look for opportunities to "tag" reports to other relevant debates.
I am sure that if we, and the usual channels, are flexible and imaginative, an eight-week target need not be unrealistic. The crucial factor is to avoid a backlog building up, which results in a vicious circle, where every report gets delayed, with no saving of parliamentary time, since eventually they will all have to be debated. Given the increasing number of reports that the Select Committee produces, it is more important than ever to avoid a backlog by ensuring that reports are debated promptly.
The one option favoured by the Government that we would strongly resist—an option referred to by the noble Lord, Lord Grenfell—is to relegate debates on our reports to Grand Committees. It is generally recognised that our reports perform a valuable function in scrutinising proposals for EU legislation and analysing major policy issues. Their value is considerably diminished if they do not reach a wider
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audience than the membership of the committee itself and the Government. Holding debates on the Floor of the House helps to disseminate the content of the reports more widely; holding them in Grand Committee would, I fear, amount to little more than continuation of the dialogue between the parties already engaged in the preparation of the report.
I hope that I have shown that for our part we are prepared to be realistic and flexible about the timing of debates. I hope that the Government can be equally realistic and flexible and that they will think again about the speed of their response to our reports.
11.46 a.m.
Baroness Billingham: My Lords, as a member of both the Select Committee and Sub-Committee D, I know that the process of European scrutiny is a serious and vital part of our work. We rely heavily on our committee Clerks, and the sift system is designed to make the huge volume of European legislation more manageable. To an extent it works, but clearly we can do better. As other speakers have said, the volume of work and the lack of time available to members of committees, means that European legislation does not receive the scrutiny that it deserves and warrants.
Damagingly, if we believe everything that we read in some newspapers, we could be led to believe that Britain is constantly being "caught on the hop", deluged with obsolete fridges, buried under a mountain of cast-off electrical goods, with every piece of wasteland littered with old cars—and all this, apparently, without any prior knowledge, any notice or consultation, all the work of the fiendish Brussels bureaucracy.
But, of course, the reality is quite different. European legislation moves extremely slowly. It is a detailed, deliberate and lengthy process. It is played in a host of forums and debated in every country in the European Union. From the beginning of the process to the final legislation, months and often years have elapsed.
So how should we, as Members of the House of Lords, play a part in exposing these myths while at the same time raising public awareness and involvement in the process?
Dynamic and effective parliamentary scrutiny must hold the key. By debate, report and active publicity, detailed examination of EU business must become more transparent. That scrutiny has to be more than simply "taking stock"; it must be proactive and allow intervention at the earliest stage on matters of policy and principle.
Our report flags up a series of suggestions which could make the entire process more efficient. The earlier scrutiny takes place, the more opportunity is presented to exert influence on the outcome. For there to be a meaningful dialogue, national governments must be proactive and alert. We make the case in the report for much swifter distribution of EU documents. Electronic distribution is surely a solution to that problem. The call for an "early warning system" should be possible given the fact that the Commission

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and other institutions have readily accessible websites which provide direct access to information, both about what they have done and about what they are planning to do.
As reports form the basis of our contribution to European legislation, we feel most strongly that they should be debated within eight weeks of publication. The past has seen very patchy opportunity for such debate, and in some important cases the text is so out of date by the time the debate takes place that it becomes almost worthless. That, frankly, should not be allowed to happen.
It is as a former Member of the European Parliament that I want to speak of one specific area which I feel is being sorely neglected. I refer to our links—or lack of them—with our Members of the European Parliament. If we are serious about our quest for greater contact between the committee and the institutions, our liaison with MEPs ought to be fundamental. Links with MEPs would certainly alert us to early pre-legislative developments, and at the same time give an insider's view of the Commission's programme as laid out on an annual basis. As the European Parliament moves increasingly into a pattern of co-decision, those links could be even more productive.
There are very practical ways in which those exchanges of views could be improved, such as regular briefings from the chairs of committees of the European Parliament to the relevant committees of the House of Lords. Rapporteurs are extremely influential; they should share with us the outline of their reports, giving not only content evaluation but also an indication of timescale. As Dr Caroline Jackson, an MEP, stated in her submission to us:
"MEPs are as important as Ministers in determining the final text of legislation".
As such, MEPs would prove an invaluable ally.
We have already made some progress in that direction. MEPs are called to give evidence at subcommittees but, given their frenetic work pattern, timetabling of such meetings is often impossible. However, presence does not have to be "in person". Is it not time that we invested in the best possible technology for video conferencing? A priority for this House should be to equip a committee room to enable regular group meetings to take place.
In February of this year, there was an historic meeting: members of the House of Lords EU Committee took part in our first joint meeting with MEPs. The outcome was a series of what I believe were helpful proposals. The first was that there should be three meetings a year. The second was that meetings at Westminster should be held in the European Parliament's constituency week, which would enable their Members to be with us. Thirdly, some joint meetings should be held in Brussels. It is also important that meetings should concentrate on major co-decision areas, such as the environment, transport and structural funds. At all stages, the House of Lords EU Committee should be fully involved.
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I have no doubt that MEPs would welcome the opportunity of sharing their work with us. It can be dispiriting to feel that there is a gulf between European and national Parliaments, which makes both less effective. It may well be the case that the Convention will take up that issue. If it does, we should welcome that. At the same time as better dialogue with MEPs, we should also look to the Commission and in particular to our own two Commissioners and their cabinets to give insight into future legislation. The London offices of the Commission and the European Parliament appear to be a well-kept secret from my colleagues in the Lords. Linking us with them more directly would be extremely beneficial.
In conclusion, we are in a very lively phase of European scrutiny. The emphasis is clearly on being more dynamic and successful in the future and on shedding daylight on the process and the product of European legislation. It is an area in which this House can play the lead role as the bridge between Brussels and the British people. That is a stunning objective for the 21st century and a positive role for our future.
11.53 a.m.
Lord Marlesford: My Lords, this is an important debate because it involves such an important subject. There has probably never been a time when the House of Lords has been more crucial as a scrutiny body. That is partly because the Government—the noble Baroness, Lady Symons, knows that I support many of their key policies both at home and abroad—are in one respect sinners. I refer to their apparently deliberate policy of disarming Parliament, especially the House of Commons, by their virulent and deplorable use of the guillotine. I cannot think that even the most enthusiastic unicameralist—I know that there are distinguished members of the Government Front Bench who fall into that category, although they are not on the Front Bench today—who is also a democrat, fails to see the need for the House of Lords.
Today, we are concerned with the scrutiny of Europe and European legislation rather than purely domestic legislation. We have a huge asset in so doing. I refer not just to the 70 members of the various committees and sub-committees—I am a junior member of one of the sub-committees—but also to our Clerks, who show remarkable expertise and capability when producing cutting-edge documents at the end of the process.
Reading the Government's response to the Select Committee's excellent report, I cannot but detect a note of ambivalence to the work of the committee and its sub-committees. I believe that that ambivalence stems from two causes. First, Ministers' relations with the EU are, always have been, and probably always will be, a matter of deal- making. Thus, the logical and national interest solution to any particular aspect of EU policy or legislation will always be perceived at the level of the Council of Ministers as part of a bigger picture. Britain's interest is therefore a pawn in the chess game of Europe, although a better analogy might perhaps be a card in the game of European poker.

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The second cause of ambivalence is the natural propensity of civil servants to resent the interference of politicians, especially parliamentarians. "Yes, Minister" is a well-honed technique for dealing with members of the government. Parliamentarians can be more tiresome and unpredictable, and thus sometimes harder to deal with. That resentment stems partly from the desire to hold on to bureaucratic power and partly from the desire for as quiet a life as possible.
Some 30 years ago, when I was a temporary civil servant, I was lucky enough to work for a while for Lord Rothschild when he was running the Central Policy Review Staff. The then Secretary of the Cabinet. Burke Trend—who, incidentally, never managed to get the control over the CPRS that his successor did—dismissed its activities by referring to it,
"making extra work for already very busy people".
I fear that there are sometimes echoes of that in the way in which this House's scrutiny role is dealt with by Whitehall.
I want to refer briefly to three points. The first is the suggestion of a fast track. The Government all too often use a de facto fast track. I refer to the frequent occasions, which are well documented and frequently complained about, on which EU proposals are referred to the House of Lords only very late and well into the process of ministerial discussion at the Council. I therefore strongly support the noble Lord, Lord Gren fell, in his rejection of the fast track.
Secondly, I believe that we are being subjected to an avalanche from Europe. Having recently acquired a son-in-law who is an Alpine guide, I have learnt something about avalanches. There are various techniques for dealing with them. One approach is to stem them; sometimes, one can divert them; but most of all one must ensure that those for whom one is responsible are not overwhelmed by them. One method for doing that in the context we are discussing involves the concept of subsidiarity, which dates back to Maastricht, dealt with in paragraphs 83–85 of the Select Committee report. My noble friend Lady Park also referred to this. Subsidiarity very often seems not to operate properly. A recent example is that of DEFRA's proposals for fallen stock disposal—something that has occupied the House quite a bit recently. I wonder whether we should consider introducing an additional form of sifting at an early stage purely to check for the defence of subsidiarity. I am not quite sure how that should be done, but I have heard Ministers informally express surprise from time to time that subsidiarity has not halted some Brussels proposals.
I remember the noble Lord, Lord Williamson of Horton, from whom we shall hear shortly, as the director-general of Europe—I hope that that is the right title—saying that when subsidiarity was first introduced it was rather effective. Many proposals that would have been put forward without it were halted. I fear that bureaucracy has probably by now found techniques to circumvent that obstacle.
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Finally, I refer to the importance of making a greater effort to disseminate our work to the outside world. Here I must make a plug for, and of course declare an interest in, The Economist, a paper for which I worked for 16 years, a period which ended 11 years ago. There is no other British paper that is as well read in the smoke-free rooms of Brussels or indeed in the chancelleries of Europe. I believe that it would be in our interest, in the interest of the Government, and thus in Britain's interest, to alert the journalists of that paper, as well as those of other papers, as early as possible to the controversies that arise in relation to the European matters we scrutinise.
I believe that the House of Lords is uniquely placed to stem, to divert and, most of all, to avoid the effects of the European avalanche. If the people of this country were aware of what we are trying to do and what we can do, I believe that the House would have their wholehearted support.
12.1 p.m.
Lord Scott of Foscote: My Lords, my justification for addressing your Lordships in this debate is that for the past two years I have had the honour to be chairman of Sub-Committee E, which has responsibility for scrutinising proposed European legislation. Arising out of my experience in that capacity, I want to talk about three of the recommendations contained in the report, each of which has been rejected by the Government.
Those three recommendations and the Government's reasons for rejecting them agitate an issue that has been alive in this country for over 300 years—an issue that has led to a civil war and to the execution of a king. That is the striking of the balance between the executive, on the one hand, and Parliament, on the other hand, as to the control that can be exercised over the content of legislation that is to be imposed on the inhabitants of this country.
The constitutional principle underlying the issue is not one on which I need to spend any time as I believe it is well known to every one of your Lordships and there can be little doubt that every noble Lord here would support it. It is the primary constitutional responsibility of Parliament to supervise legislation. It is not the primary responsibility of the executive to do that; it is the primary responsibility of Parliament.
Clearly, with regard to primary legislation, Parliament is in control. It either passes an Act or it does not. With regard to secondary legislation, a well established feature of the way in which such matters are dealt with is that except in times of emergency, such as a time of war, subordinate legislation is made subject to either affirmative or negative resolution procedures, thereby giving Parliament the ability, if it wants to exercise it—or giving either House the ability if it wants to exercise it—to reject a particular piece of secondary legislation.
But what about European legislation? What is the nature of the control that Parliament, the body with the constitutional responsibility for legislation, should be able to exercise in regard to it? European legislation

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may be of various different kinds. There may be regulations that would be directly applicable and enforceable in this country, as in other member states, as soon as they emerge from Brussels. There may be types of legislation that require implementation—directives in the European Community area and framework decisions outside that area that require implementation. There will be some measure of flexibility allowed to member states as to the content of the implementing measure that they may introduce pursuant to their obligation to do so.
The content of a framework decision or a directive that has to be implemented will have been settled when it emerges finally from Brussels. How long that will continue we do not know, but at the moment the bulk of the legislation that emerges from the Council of Ministers is subject to the requirement of unanimity. Qualified majority voting is not yet the rule. Where unanimity is concerned, each and every member state can put a block on the proposed legislation and the executive—the Minister—will have the ability to assent, thereby allowing the item of legislation to come into effect—if all other member states assent—or to decline to assent, thereby preventing it from coming into effect. That is an executive act but, if it is a matter of assent, it has the result of bringing into effect legislation in this country.
What is the role of Parliament? The role of Parliament is to scrutinise a measure before the assent is given to try to ensure that it is satisfactory to the citizens of this country to be subjected to such a piece of legislation. The scrutiny process is not perfect—how could it ever be? I respectfully suggest that it needs to be looked at in the context of the constitutional responsibility of Parliament for legislation. As probably nearly every Member of the House knows, an item of proposed legislation, emerging as it does as a proposal from Brussels, is deposited via the member state government with the scrutiny organs of the particular member state. Here it is deposited in this House and in the House of Commons for scrutiny. It is accompanied by an explanatory memorandum from government explaining the particular features to which they believe that attention should be drawn.
Confining myself to what we do in this House, Sub-Committee E, with which I have been associated, looks at a measure and takes evidence from experts and from Ministers on it. I pay tribute to the co-operation that during my time with the committee we always had from Ministers in that regard. They are ready to appear at very short notice to assist us with our scrutiny process. There is then correspondence, criticism and suggestions about the item in question between the committee and the Minister. But eventually the decision is taken by government. No matter what the objections may be, no matter how they may be persevered in and pressed in a report, such as your Lordships will have seen on many occasions, or in a debate with views expressed by Members of the House, the Government, the executive, decide. Opinions to the contrary can be overridden.
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That is the background against which, I suggest, the recommendations to which I am about to refer must be viewed. The first of the recommendations is to be found in paragraph 185 of the report. It is a recommendation to which the noble Lord, Lord Grenfell, the chairman of the committee, has already adverted. The recommendation is that in exceptional cases—I underline the word "exceptional"—the scrutiny committee should have the right to require government, if they are to override persistent objections made by the scrutiny committee to the item of proposed legislation, to come to the House to obtain a positive resolution allowing them to give their assent.
If that were introduced it would help to narrow the gap between constitutional principle and practice. It would enable Parliament to have the control which, in my opinion, is a necessary constitutional control over the content of legislation that is to bind the citizens of this country. The Government have turned it down. They have turned it down for reasons that are expressed in the annexe to the letter from the noble and learned Lord, Lord Williams of Mostyn, in his reply to the report.
A number of reasons are given. The first reason which your Lordships will see in the annexe is that the suggestion is said to be incompatible with the purpose of scrutiny. The purpose of scrutiny is the constitutional purpose to which I have referred. It is spelled out in paragraph 12 of the report, to which paragraph 13—the paragraph which is said to be incompatible—then serves as a summary. There is no incompatibility. I would respectfully suggest that the Government look again at paragraph 12 and the constitutional purposes of zscrutiny in reconsidering the value of this objection.
Secondly, the point is taken that if this suggestion is accepted the result will be that governments will be fixed with the decision of this House if the resolution is not forthcoming. The Commons, the reasons say, have not asked for such a facility. They have not turned it down and I am sure would not if one were offered.
As to the impracticability of the Government being put into a position where they cannot give assent unless they obtain a positive resolution from this House, the position is no different from that which pertains anyway in relation to secondary legislation. It has not made the bringing into force of appropriate secondary legislation impracticable and there is really no reason to suppose that it would do so with European legislation. It would be a tool to be used only, I think, in exceptional circumstances.
An example might have been the European arrest warrant to which the noble Baroness, Lady Park, referred. The views expressed in the scrutiny committee about the proposed European arrest warrant framework decision were such that if there had been such a right available that is exactly the kind of legislation where the rights would have been exercised. And why not? Such a major piece of legislation, providing a framework which our own implementing legislation is obliged to follow, ought surely to have the assent of Parliament and not simply

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be based on a situation where views have been expressed and turned down, as was the case with that piece of legislation.
Finally, it is said that to accept the recommendation would make agreement of the Council of Ministers impossible. It would allow a part of Parliament—namely, this House—to put a block on the proceedings in the Council of Ministers. I would not suppose that if this recommendation were to be accepted it would be confined to this House. As I have said, I am sure that the Commons would be delighted to have a similar facility.
However, the position at the moment where unanimity prevails is that the Government are entitled to put a block on agreement to legislation in the Council of Ministers. The existence of a power to place the block cannot he an objection because it is exactly what Government have. The question is: who should be in a position to impose the block in relation to legislation? Should it be the executive or should it be the legislature, with the constitutional responsibility for legislation? That is the first of the recommendations that I wanted to mention.
The second recommendation, which has also been referred to, relates to the so-called "provisional agreement"—agreement on a general approach facility which the Government maintain they can exercise, notwithstanding the scrutiny resolution of this House passed on 6th December 1999. It is worth reminding oneself what that reserve resolution states. Paragraph (1) states:
"No Minister of the Crown should give agreement in the Council to any proposal for European Community legislation or for a common strategy, joint action or common position under Title V or a common position, framework decision … under Title VI of the Treaty on European Union".
It goes on to state in the second paragraph that,
"any reference to agreement … includes … agreement to a programme, plan or recommendation … political agreement … agreement to a common position, to an act in the form of a common position".
All of that is covered by the existing resolution.
What is the size of the step necessary to make clear that that should cover also a so-called "provisional agreement"—an agreement on a general approach? How does one distinguish between an agreement on a general approach and an agreement on a common position? Angels may dance on the point of a pin, but the difference between the two is as indiscernible.
The Government's main objection to this recommendation is set out in the document which they sent to the noble Lord the chairman. They state that,
"the ability to reach a general approach is a vital negotiating tool".
Of course Government must have flexibility to negotiate. They may negotiate treaties without impediment from Parliament, but negotiating on legislation that is to bind this country is to negotiate on a matter where the responsibility is with Parliament. I would respectfully suggest that their insistence on retaining the negotiating position is problematic if viewed as a matter of constitutional propriety. If the first of the recommendations, to which I have referred,
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were to be accepted, this one would not matter: they could negotiate, provided they could not bind. At the moment, they can negotiate; they can agree general approaches, thereby accepting principles on which proposed legislation is based in advance of the scrutiny process being completed; and they can bind.
The third recommendation relates to implementation. That applies not to regulations which need no implementing but to framework decisions and to directives. The Explanatory Memorandum which accompanied the deposited documents do not tell the scrutiny committee what means of implementation is intended. We asked whether that might not be done. We were told that it would not be practicable for the Government to tie themselves down to implementing by primary legislation or by secondary legislation at the time at which the question was being put and at the time at which the Explanatory Memorandum was being prepared.
That may be right: I do not know enough about the practicalities of these things. The committee has sought to discover from Ministers what actually are the criteria which determine whether primary or secondary legislation will be needed. I am sorry; I am overrunning time. We have not been able to discover that. We ought at least to know what criteria there will be for that purpose.
In conclusion, I simply ask the Government to look again at these recommendations and to consider them in the light of their constitutional context and perhaps, one might hope, come to a different conclusion on them.
12.18 p.m.
Lord Lester of Herne Hill: My Lords, as we have just been reminded by the noble and learned Lord, Lord Scott of Foscote, this report and the Government's response to it raise issues of great constitutional importance about the role of Parliament in supervising the conduct of the executive branch of government in preparing European legislation and in scrutinising European legislation. That is especially so because under our unwritten constitutional arrangements the flexibility and permeability of our constitution when dealing with the incoming tide of European legislation make it very easy indeed for the tide to flow in with inadequate parliamentary scrutiny or control.
As I am sure the Minister will emphasise when she replies to the debate, the Government accept that a purposeful and effective system of parliamentary scrutiny of EU business would, in their words, need to be,
"a process of rigorous examination with a view to ensuring that those responsible are accountable to Parliament for their actions".
One key question is whether the Government's response will provide the necessary means to permit such an effective process to be undertaken. I am especially interested because of my experience as a member of two parliamentary scrutiny committees: Sub-Committee E, formidably chaired by the noble and learned Lord, Lord Scott of Foscote, and the Joint Committee on Human Rights. I shall concentrate on

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practical aspects of parliamentary scrutiny of European Union legislation raised in paragraphs 170–2 of the Select Committee report, to which the noble Lord, Lord Grenfell, referred in a powerful and an important speech.
In paragraph 171, the Select Committee recommends that the explanatory memorandum,
"should as a matter of course state whether primary or secondary legislation is envisaged and, if the latter, under which power".
The committee suggests:
"An indication should be given of the factors which lay behind the decision. Furthermore, where the powers in Section 2(2) of the European Communities Act 1972 are intended to be used, the Government should indicate whether the affirmative or negative procedure is envisaged and the reasons why".
The Government's response to those entirely sensible proposals is vague and disappointing. They simply state that,
"the Government will give as much indication of how it intends to transpose legislation as it is possible to do at the time of sending an EM. But it is not possible to provide a definitive description. We can only provide our best assessment on the basis of the proposal as it stands at the time".
I hope that in her reply the Minister will be able to assure the House that, except for good reason to the contrary explained to the Select Committee at the time of the initial EM, the Government will do as the Select Committee recommends in paragraphs 170 and 171. If she is unable or unwilling to give the House that assurance, I should be grateful if she can explain in detail exactly why the Government are unwilling to do so.
As the noble Lord, Lord Grenfell, also mentioned, in paragraph 172 the Select Committee recommends that explanatory memoranda should contain a section on any potential human rights issues and that the Government should consider whether the Minister signing the EM should make a statement of compatibility with the Human Rights Act 1998, as happens with primary legislation—that is, stating that, in the Minister's view, the EU proposal is or is not compatible. That is a significant proposal because it creates a new working link between EU proposals and the international legal obligations imposed on the member states both as contracting parties to the European Convention on Human Rights and as parties to the Treaty of Amsterdam and, for that matter, to the European Charter of Fundamental Rights.
The Government's response states:
"Where human rights issues arise, the EM will of course draw attention to them in the section on legal implications. The Government will in future offer a preliminary view on the compatibility of the proposal with the 1998 Human Rights Act. The EU is in any case, by virtue of Article 6(2) of the TEU, committed to respect fundamental rights as guaranteed by the European Convention on Human Rights".
The Government's acceptance of the Select Committee's proposal is welcome, but the practical implications need to be fully considered. I shall deal with those in the remainder of my remarks.
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If scrutiny is to be real and effective, and if there is to be a process of "rigorous examination", in the Government's words, and analysis, significant resources will need to be allocated both by government and by Parliament—comparable to those available for the scrutiny work performed by the Joint Committee on Human Rights. To understand what that means, it may be useful if I sum up the work done by the Joint Select Committee when scrutinising legislation, because that provides a standard against which to measure what needs to be done.
As the House will know, Section 19 of the Human Rights Act 1998 provides that a Minister in charge of a Bill has before Second Reading to sign a compatibility statement that is printed on the face of the Bill. The Joint Committee's working methods are similar to those of Sub-Committee E in its scrutiny work. We examine every government Bill at as early a stage as possible to establish whether significant questions of human rights appear to be raised by any of its provisions.
When such questions appear to arise, written ministerial responses to specific enquiries from the committee are sought. When it seems appropriate, written commentary from non-governmental sources on those questions is sought at the same time. Ministerial and other responses are considered, pursued and published alongside any report of the committee's opinion. Oral evidence will only exceptionally be taken.
In practice, Section 19 of the Human Rights Act 1998 requires Ministers and their respective departments specifically to consider the impact on convention rights of each new Bill they seek to introduce. In that way the Minister responsible for the Bill assumes individual responsibility for convention compliance.
Although Section 19 refers only to the European convention, in practice the Joint Committee considers legislative measures for compatibility with all of the international human rights treaties by which the United Kingdom is bound. I assume—but should be grateful for confirmation by the Minister in her reply—that the same is intended for parliamentary scrutiny of EU legislation. That is to say that it will not be confined to compatibility with the convention rights but with the body of international human rights treaties by which the member states of the European Union are bound, and which are now enshrined in the European Charter of Fundamental Rights. It would surely be unsatisfactory if scrutiny did not extend to all the European charter rights.
Crucially, the Joint Committee is supported in its scrutiny work not only by two excellent parliamentary Clerks but also by a specialist legal adviser, Professor David Feldman. We scrutinise all primary and some delegated legislation for compatibility in a way similar to the approach adopted by the courts in assessing claims of human rights violations. We consider first whether the legislation interferes potentially with any of the convention rights. If a potential interference is apparent, we consider and scrutinise the reasons

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advanced by the Minister. As I said, we may question Ministers orally as well as in writing. We act speedily and try to produce our reports in a timely manner so as not to miss the legislative train. Our reports are increasingly referred to by our courts in interpreting and applying legislation. In due course advocates and judges in the two European courts may do so as well.
If parliamentary scrutiny is to be real and effective, it must he of the highest possible professional quality and timely. That is why it is essential to have legal advisers with the expertise and dedication of Professor David Feldman, and of Dr Christopher Kerse for Sub-Committee E. If Parliament is now to undertake real and effective scrutiny on a systematic basis, we must consider how best to match the work done for the scrutiny of domestic legislation by the Joint Select Committee with that new, vital task. As I said, we have good resources for both the sub-committee and the Joint Committee.
The question for the proper authorities, which I am not competent to answer, is how best to deal with the matter. It is a matter of what the European lexicographers would call "comitology"—which committee should be dealing with it; Sub-Committee E, a further sub-committee of it, a sub-committee of the Joint Committee on Human Rights or some new committee. All I know is that the task of performing effective scrutiny work is onerous and requires a great deal of professional expertise and dedication on the part of those who have the privilege and burden of performing the scrutiny work.
My only concern is that, the Government having accepted an important proposal in a welcome way, it is now absolutely essential that the Government and Parliament should will the means of securing that important end. I therefore hope that the Minister can assure the House that the Government will soon consult on the best way of creating an effective system of parliamentary scrutiny of EU legislation in the context of human rights. I suggest that the matter deserves to be tackled with energy and political commitment.
12.30 p.m.
Lord Woolmer of Leeds: My Lords, I apologise to the Principal Deputy Chairman of Committees, the noble Lord, Lord Grenfell, and other noble Lords that I was not in my place during the opening speech. I had forewarned the noble Lord, Lord Grenfell, that my Sub-Committee published its latest report at one minute past midnight last night. I had to deal with certain press matters arising from the report just as I was about to enter the Chamber. No discourtesy was intended.
Given that so many points have been made with great eloquence by other noble Lords today, I shall confine my remarks to just one area. It has been a pleasure for me to be involved in the work of the European Union Committee and one of its Sub-Committees. People outside the Chamber do not always realise the amount of time and attention that Members of this House give generously to the issues.
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They bring an enormous breadth of experience to the scrutiny process. In carrying out that work, Members have other matters to address inside and outside the House.
The staff of the Select Committee and its Sub-Committees are equally dedicated and their work is equally impressive. The workload is substantial for members but truly enormous for staff. In addition, new thinking, new ideas, improved processes and improved communication have been generated by the chairman and staff of the parent committee in recent months.
The report of the Select Committee is an important, reflective but positive contribution to an understanding of the work of the House in scrutinising European legislation. Our committees are active in pursuit of their duties. I shall speak only of the work of the Sub-Committee that I know best, and which I currently have the honour to chair, following in the footsteps of my noble friend Lord Brooke of Alverthorpe, who, I am delighted to see, will speak in the debate today.
Sub-Committees vary in the range of their remit. Sub-Committee B has quite a wide remit covering energy, transport, telecommunications, industry, the single market, competitiveness and research. In the current Session, since December 2002, it has considered 179 documents. I shall give the House and the outside world a feel for just some of the variety of its work. It has considered government responses to our previous inquiry on drinking and driving, and on the recycling and recovery of packaging waste. It has commissioned Green Papers on European space policy and is carrying out an inquiry on the latest Green Paper on entrepreneurship. The committee has looked at proposals from Brussels on security of supply of petroleum products and gas, the trans-European energy network, co-generation of energy, the development of the trans-European transport network, the promotion of bio-fuels for transport, and safety at sea following the "Prestige" oil spill accident. It has also considered proposals relating to the deregulation of sales promotion in the internal market, safety issues in the manufacturing of cement, the reuse, exploitation and charging for the use of public sector documents, the European research area momentum, the European network and information security agency, and many more.
Some of those matters may appear minor compared with large, vital issues such as the written constitution for the European Union, human rights and others mentioned today. But it is precisely in the detail as well as the sweep of policy that an impact is made on industry and consumers. At the heart of much of the work of Sub-Committee B is scrutinising the basis and the risk impact assessments put forward to justify measures. It has conducted and concluded a major inquiry into air traffic agreements, especially EU/USA aviation relations, the subject of the report that we published last night. It is conducting an inquiry into

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the Green Paper on entrepreneurship. The Sub-Committee has already agreed that the next inquiry will be on the liberalisation of financial services in Europe
Therefore, I was particularly interested that the European Union Committee had suggested additional responsibilities to enhance and strengthen the House's scrutiny of European legislation. I remind the House of the report's suggestions: more regular scrutiny in advance of Council meetings, more short studies to complement major inquiries, more emphasis on follow-up work, more analysis of cost-impact assessments, more scrutiny of comitology decisions and more emphasis on ensuring our work is of use to the House. In our enthusiasm, we want to ensure that greater effort is made to disseminate our work outside the House. We have adopted an ambitious programme for developing external relations through the media and a range of other avenues.
Our work already poses considerable demands on committee members and staff. I do not believe that we can do all that we aspire to do without additional resources or looking very carefully at what we already do. My reflections on the work of Sub-Committee B have led me to conclude that we need to look very carefully at what we currently do and how we do it. Do we need to re-prioritise our work as well as any proposals for new work? Can we make room for other areas and types of activity by reducing it elsewhere? What resources are needed and how much time is required from noble Lords and staff to increase our workload still further? Are the current staff optimally used? Having asked all those right and proper questions, I have no doubt that the House is understaffed to perform the duties expected of us, certainly for a more ambitious agenda. We should not be fearful of saying so.
I hope that, in considering all our work, we can impress upon the Government and the usual channels that it would be valuable to consider increasing the number of committees that we have. But, even having done that, if we are further to improve the work that we do so well, resources will lie at the heart of the matter.
12.37 p.m.
Lord Lyell: My Lords, I rise with some humility and possibly hubris—a Greek word that I learned 50 years ago, perhaps in conjunction with the noble Lord, Lord Grenfell. I hope that I am not too cocky, but I seem to be the only speaker in the debate who is neither a member of the committee, nor otherwise intricately connected with committees. I speak as a humble BackBencher but with enormous gratitude to the noble Lord, Lord Grenfell, the chairman, and every member of the committee that has produced this superbly succinct, readable and helpful report. Occasions such as this, when we discuss what are known technically as House of Lords papers, are very important. The little bookcase in my office contains an entire shelf of House of Lords papers, dating far back, on all kinds of matters such as potatoes, eggs, traffic and railways.
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Today's debate is one of the most important to take place. I look forward to hearing the Minister's response. The debate deals with scrutiny and, above all, watching the enormous mountain of papers that comes from Brussels, and around Brussels. That is why I was particularly taken with the definition of "scrutiny" so far as concerns the House of Lords in paragraph 11 of the report. Then, as regards paragraph 55, I found the marvellous concept of "the sift". I became worried that it might refer to a television programme rather than a theme that we should be looking at. It lies at the heart of the report and, above all, of today's debate. At paragraph 55, I think, it produced the interesting figure that only 15 to 25 per cent of Community documents can be sifted, arranged or passed on by the noble Lord, Lord Grenfell, and his admirable staff—I do not know how many he has—to the sub-committees of your Lordships' House for further essential scrutiny. I was taken with the definitions in paragraph 127, narrowing down what the main Committee and the subcommittees do.
This week, I met my noble friend Lord Inglewood, who is unable to be present, probably for a very good reason. In what he technically terms his "paper", at paragraph 12, he referred to the lack of debates such as this in what he called "prime time". That has been a constant thread running through many of the comments made so far today and for the usual channels, in the attempt to provide prime time.
I recall how, a week or 10 days ago, when we discussed various aspects of the Procedure Committee, the noble and learned Lord the Leader of the House—with a lovely smile on his face, as always—wondered why your Lordships' House was able, one Wednesday afternoon, to discuss the fate of the Atlantic salmon, when, he thought, enormous issues of European importance could, otherwise, have been discussed. My noble friend Lord Howell of Guildford trod quietly on my little toe and said that I or somebody else might find out how much of the torrent of paper that comes to the chairman of the committee—the regulations and all the other tiny ordinances—covered the issue of Atlantic salmon. The number of documents might be well into four figures, but, all the same, the noble and learned Lord the Leader of the House might have got it right.
I stress to your Lordships that the plight of the Atlantic salmon has considerable importance in Scotland and Northern Ireland. It is in that context that I deal with subsidiarity. In our debate, we are enjoying the wisdom and expert comment of your Lordships, but subsidiarity brings the whole concept of European legislation and our scrutiny of it to the area in which I live. I live in the Glens of Angus, so well known to the noble Lord, Lord Tordoff, and to my noble friend Lady Elles and the noble Lord, Lord Thomson of Monifieth, who were in their place at the start of the debate but have flown the coop, perhaps when they heard that I was going to speak. It is essential that we have scrutiny and that Back-Benchers such as myself understand the enormous efforts made

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by your Lordships on the committee and the subcommittee dealing with European legislation. There is a good story to be told, but it is of no value, unless it can be explained by persons such as Ito the colleagues that we see when we go home at the weekend.
A Minister in another place recently made a wonderful comment about a group of people who had left the planet Zog 20 years ago but sometimes went hack for day-trips. Many of my colleagues in Angus believe that I visit the planet Zog—this Parliament—every week. When they consider a debate such as today's or discuss things from Brussels or Strasbourg, to many of them it feels like a different galaxy. I do not believe that it is, but part of what I ought to do is try to explain how what we are discussing and the enormous amount of paper—of which the noble Lord, Lord Grenfell, deals with 15 to 25 per cent—is relevant to their plight. Yet, the gap in perception can be and has been closed by the enormous amount of work done by your Lordships' committees and sub-committees, which can be discussed in the Chamber.
I shall begin to conclude by referring to paragraph 16 of the report. It points out the enormous amount of work done not just by the committees but by the chairman, the noble Lord, Lord Grenfell. Each week, he examines all documents, of which only 25 per cent can be sifted to sub-committees. The report points out that the tide of paper comes in not just when we are sitting but even during the Recess. As a humble Back-Bencher. I convey my gratitude and admiration to the noble Lord, Lord Grenfell. I noticed that he virtually had to be restrained from leaping with joy, when my noble friend Lord Marlesford suggested that there might be just a little extra sifting. I noticed a gleam in the noble Lord's eye. Such sifting might be available, and the noble Lord, Lord Woolmer of Leeds, suggested that we might obtain additional facilities.
I must express my admiration—and that of all of us—of the members of the committee and, above all, of the chairman. He is a proper European. He and I go back 50 years. We learnt French and German together at a well known college at Eton, beside Windsor. I have also tried to polish up my Italian. On Wednesday night, I spoke to somebody, now retired, who is well known to your Lordships and lives in Igea Marina. That colleague said that, when the noble Lord, Lord Grenfell, spoke, we had a proper European, a true leader of your Lordships' House and somebody who is discussed considerably in that region of Italy.
I make my humble comments as a Back-Bencher, not as a member of the committee. I thank the noble Lord, Lord Grenfell, and everybody who has contributed. I apologise for taking up the time of the House and look forward to hearing what the Minister says in reply to the points made.
12.46 p.m.
Lord Lea of Crondall: My Lords, the main thrust of my remarks will be about the overall question of what we do best and how we can decide on what, in normal parlance, is called "horses for courses". On what should we concentrate our limited resources? This
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excellent debate gives us the opportunity to ponder that. Many of us are perplexed that there is a European big picture and that we may fall between some of the different stools in our scrutiny. How do we combine all the different aspects?
There is also the problem of time and the availability of the main Chamber, as opposed to Grand Committees. We have all realised that there is no easy answer to that question. The number of reports is daunting, and I am, reluctantly—maybe not so reluctantly—coming round to the view that we need a different procedure for considering reports.
The other day, I read a rather good report from one of the sub-committees about the common agricultural policy. It was the first time that I had had in my hands an overall report on the CAP that I could understand. I suspect that, if that report is debated on a Friday evening in November, the only people who will be present for the debate will the members of the subcommittee who wrote it. That is par for the course. Is that a sensible use of our time? I am not particularly an iconoclast by instinct but why do we not group these reports? To put the matter quite brutally, at least some others will be obliged to attend when the CAP is discussed. I think that that is the situation today and there is some support for that point.
Furthermore, I would abolish the party slots on Wednesday afternoons. They are a total waste of space. We have desultory discussions in our group; I am sure that others do too. The only question asked is: how can we ensure that we shall bat on a good wicket if we choose this topic? What a ridiculous way to run a railroad. As far as I am concerned, that is for the chop. I have been lucky enough to win a debate on Africa on 21st May, so I had better not say that it is a stupid idea to have a ballot. Therefore, after 21st May, let us get rid of the ballot as well.
I do not think that there is much to distinguish between the Chamber and Grand Committee. What are we talking about'? The size of the room! The question is: who will attend?
I should like to consider the substance of this issue and the big picture. First, the noble Baroness, Lady Park of Monmouth, made a point which struck me. I think I am right in saying that local authorities are not consulted about the implementation of secondary legislation which emerges from Europe. I should like to remind the noble Baroness—she can hop up and disagree if she thinks that I am wrong—that local authorities are not consulted about secondary legislation, full stop. There is a question in that, but it is not for today.
I attend meetings of the Joint Committee on Statutory Instruments, of which there are a great number. There is resistance to obtaining feedback from the user community—whether local authorities, trade unions or anyone else—as to whether they are written in English that can be understood, never mind French. Often we think that there is something rather conceited about the notion that Parliament decides and that other people had better just get on with it. That is not a party point at all.

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On that point I have a number of pilot projects as regards the downstream—to use the jargon upstream/ downstream. The noble Baroness, Lady Park, also made the point that there is support for the report by my noble friend Lord Grenfell on looking at matters upstream; namely, before matters are decided in Brussels. That would be very nice, but under my test of horses for courses, it is not particularly our métier to have national parliaments involved on a day-to-day basis with multilateral negotiations before matters gel in Brussels. I do not understand how the role of the European Parliament can be our job. I think that applies to the European budget too, but I say that with some reluctance because I am a member of Sub-Committee A.
A Noble Lord: Hear, hear.
Lord Lea of Crondall: I am not sure whether the noble Lord heard what I said because on a priori grounds he would disagree. Maybe he did hear what I said: but I shall say it again. It is not sensible for us to try to obtain detailed scrutiny of the process of the annual round of creating the European budget. That is not a valid way of using our time. The European Parliament is in the lead on that. Following the intricacies of all the budget lines, the European budget is difficult enough for the European Parliament to understand. There is no way in which that can be our job.
However, this is related to the problem of how do we look at what I shamelessly call the "big picture"? In this respect, we are not getting our act together in a sensible way. The noble Baroness, Lady Park, referred to the convention. On Wednesday, I attended a meeting of the convention committee—a House of Commons committee which others can attend. The meeting was adjourned for lack of a quorum and later returned. The previous meeting was adjourned for lack of a quorum. The paradox is that the next day the Sun and the Daily Mail newspapers had a splash, entitled, "A Blueprint for Tyranny". Noble Lords will understand from the tone of my remarks that I believe that to be gross hyperbole. It would be rather strange if we were agreeing a blueprint for tyranny and not achieving a quorum. Probably, that has occurred once or twice in the past 1,000 years, but not generally. How do we correct that?
Our representatives on the convention have made the point that it is the Select Committee under the distinguished chairmanship of my noble friend Lord Grenfell that is producing the running commentary on the convention. But we do not really get a handle on the big picture. Just to cheer up some noble Lords opposite, I could say the same about the euro. But in respect of the convention, we must reflect on the time spent on every statement that comes back here, which takes one hour and 20 minutes. That is excellent, but it is question mode. We can only ask a question. Some of us think that we should be thinking more systematically on a number of issues. Do we have one person instead of Patten and Solana? How does that
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relate to the present? How does that relate to enlargement? How much of the convention is codification of what exists, which is fairly substantial?
A great many people who criticise the step-by-step approach in European legislation, describing it as a type of stealth approach, say that we should define the framework—the football pitch—of Europe. Without using the word constitution, that is what a lot of people have been asking for; that we get the big picture sorted out with a little codification and some latitude to deal with enlargement. That is largely what is happening.
We should have an update on the big picture every couple of months. There should be either a government or a House report—I do not know which. It would not make any difference whether it was in the Moses Room or in the Chamber. Why that should make a difference I have never understood. I know that one cannot vote unless in the Chamber, but that would not be an obstacle because we are not voting. Against that background, we would have a more secure context of ideas in which to be better able to judge on the problems of scrutiny.
I am also something of an iconoclast on scrutiny. It is very mechanistic and I would undertake some sampling. To that end, I sympathise with the noble Lord, Lord Lyell, who said that he did not know whether the "sift" was the name of a horse race—I am told that it is the name of a television programme. However, I think that even the scrutiny that we do undertake is extraordinarily mechanistic and seems to consist largely of making complaints to the Government, saying that they have not replied to a letter that should have been replied to last Friday, and that we are outraged that the response arrived only this Monday. Is that an exercise for grown-up human beings, when we ought to be considering the big picture?
Perhaps we should follow the example of auditors, which is to take what is almost a random sample of explanatory memoranda for detailed scrutiny. We should produce many more shorter reports. We should group the larger reports. We should consider at two-monthly intervals the big picture—again, I do not mind which room we use to do that. Finally, I wish to add the little nugget that I like the proposal that all the sub-committees should be asked to report back on whether they have looked at the amount of press attention they received on their last reports. That is the kind of practical detail which, although it may be a twinkle in the eye of my noble friend Lord Grenfell, is nonetheless a good example of the kind of detail that we should be picking up on.
In most walks of life nowadays, people try to ensure that their reports are marketable. I know that the reports on asylum and the amnesty proposal were very good, although I must say that the report in question was written in such obscure language that, when I came to look for it, I could not find the recommendation. The page number did not correspond with the contents page.
As regards the whole question of communication and dissemination, I welcome the short note sent round to all the committees by my noble friend Lord

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Grenfell. It asks us to ensure that we test ourselves—as would happen in the business world—on whether we have marketed our product properly.
1.2 p.m.
Lord Williamson of Horton: My Lords, I welcome this opportunity to debate the report of the Select Committee on the European Union, of which I am a member, on the review of scrutiny of European legislation. I do not comment on the timing of these debates, except to say that in my family I am now known as "Man Friday".
It was high time to hold such a review, for three main reasons. First, this House has a central role in the scrutiny of proposals for EU legislation and other important EU documents. That has been running for many years and needed to be evaluated. We have to ask whether we are significantly influencing the Government and, more generally, are we making a sufficient impact, given the large amount of work that is put into scrutiny both by the Select Committee itself and by the detailed inquiries of the sub-committees?
Secondly, the noble and learned Lord the Leader of the House has been actively persuading the House to look at some of its procedures; for example, on the pre-legislative examination of draft UK legislation. It would be odd if one of the most important and prized roles of this House—namely, the scrutiny of EU proposals for legislation—should not be examined at the same time.
Thirdly, important changes have been made to the way in which the European Union works, with a wider use of consultative documents and programmes which, while not in themselves proposals for legislation, certainly can pre-judge it. In my view, scrutiny should begin earlier in the chain leading up to decisions. Additionally, over a recent period, the largest number of new initiatives, including legislative initiatives, have been in pillars 2 and 3, the areas of justice and home affairs, and the common foreign and security policy. We should remember the rapid reaction force and the European arrest warrant—indeed, we shall never forget that.
It is vital to keep up with those developments and to be aware that, in some cases, proposals for legislation can go directly into the Council without the Commission's proposal. It is also worth noting that the most significant changes in the Convention on the Future of Europe lie in the areas of justice and home affairs and the common foreign and security policy, with a proposal for a new EU minister for foreign affairs and, eventually, the greater use of qualified majority voting. I think it is most important for the scrutiny operated by this House to look at and comment not only on Commission proposals in the traditional areas; we need to scrutinise and consider what is going on in the Council on the newer areas of EU competence.
The Select Committee report published last December contains a number of practical proposals and comments on questions such as the length of reports, the effectiveness of correspondence with
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Ministers, the operation of the sub-committees and cooperation with the House of Commons committee. I support the conclusions but, as I would be surprised if they were contested, I do not comment on them at length. However, while welcoming the Government's generally positive reaction to the Select Committee's report, I wish to comment on a number of new points dealt with under the heading of "Effective Scrutiny" in Part 3. Other noble Lords have commented on those points, but if more than a few noble Lords do so, then ill my view that demonstrates the fact that they are important, and that is why I shall come back to them.
First, even in the short time that I have been dealing with these matters as a Member of your Lordships' House, I believe that we have made good progress in extending scrutiny some way back up the chain which leads to legislative proposals and decisions. We are doing this by new scrutiny of the Commission's annual work programme and by the proposal to scrutinise the Council's strategic agenda. Experience has taught me that it is possible to influence legislation at the stage of preparation and potential inclusion in a work programme. Under the Union's legislative system, it is far more difficult to remedy defects at the stage where a proposal has been set in concrete. That is particularly the case because not only the Commission but also the other member states may be most unwilling to change what they see as favourable elements of a formal proposal. What I have said about the change in the balance towards justice and home affairs and the common foreign and security policy means that it is vitally important for us to look at the Council's future programme.
Secondly, just as we need to look back behind the tabling of formal proposals, it would also be helpful to look forward from the decisions taken in Brussels to their implementation in the UK. This is the recommendation set out in paragraph 171 of the Select Committee's report. It refers specifically to the value of information in the explanatory memoranda on the way in which the Government intend to implement European Union legislation—by primary or subsidiary legislation, and subject to the affirmative or the negative procedure.
Unless the Minister has travelled to the House today by way of the road to Damascus, I do not think that the Government will agree to the recommendation in this form, but nonetheless I want to take the noble Baroness back to the motivation behind the recommendation, and to the statement set out in paragraph 47 where the Select Committee requests that,
"the Government's proposals to implement a particular piece of legislation be set out in more detail in the initial [explanatory memorandum]".
What I have in mind is that, even if the Government do not want to commit themselves within the explanatory memorandum to the legislative procedure which they propose to follow for implementation, there are other matters relevant to implementation which it would be helpful to know about at the scrutiny stage.

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The noble Baroness may recall that we had a fridge mountain—or, at least, a fridge molehill—as a result of changes in European Union legislation. It was desirable on environmental grounds, but the implementation at the local level was not sufficiently well prepared. That is only one example where the potential consequences for local or other public authorities, or for business, of the implementation of EU legislation could perhaps helpfully be signalled to the Select Committee at the time of scrutiny. I hope, therefore, that the Minister, while probably maintaining the Government's position on the form of legislative implementation, will confirm that we shall have other, possibly useful, information in the explanatory memoranda on implementation where practicable.
Thirdly, the recommendation in paragraph 184—which has been referred to by a number of noble Lords, particularly the noble and learned Lord, Lord Scott of Foscote—raises an important point which I do not hesitate to stress. The recommendation would establish a new power for the House requiring the Government to secure an affirmative resolution in order to lift a scrutiny reserve in exceptional cases.
It is understandable, of course, that the Government object to this recommendation because it represents a strengthening of this House's power of scrutiny—although applicable only in exceptional cases—and a weakening of the Government's room for manoeuvre. But it is not sufficient for the Government to reject the recommendation on the general argument that it is a form of mandatory scrutiny.
There is a big difference between the new proposal and a general requirement that in all cases the Government should have obtained a scrutiny mandate before negotiation and decision on a proposition. A general system of mandatory scrutiny would be a serious restriction on government action—the Select Committee has rejected it—but the recommendation in paragraph 184 is a much more limited proposal and the conditions for its exceptional use could be determined. I hope that the Minister will not be closed to this proposal from the Select Committee, despite what is said at the moment in the Government's response.
Finally, I turn to the question of European Union subsidiary legislation, which is covered in the recommendation in paragraph 176. As I have, by general acclaim in the Select Committee, been handed the poisoned chalice labelled "comitology", let me say that much of the European Union's subsidiary legislation is of very little importance. But a few points are significant and certainly sensitive for public opinion. So I hope that the Government will not rule out inviting scrutiny of such significant issues, where practicable, before they go to a committee in Brussels on their way to adoption. It would be a new approach, but it corresponds to the reality of where decisions are taken, and at what level, in Brussels. We need to bear that in mind.
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To sum up, there are 70 useful conclusions in the Select Committee's report and the Government's response has been generally positive. While the House could probably improve its own procedures for the timing of debates, I have tried to concentrate on four points: the vital need to scrutinise programmes at an early stage in the legislative process; the importance of at least some information on implementation in the explanatory memoranda; the proposal that in exceptional circumstances an affirmative resolution of the House would be required from the Government to lift a scrutiny reserve; and, where practicable, information on significant issues going to committees in Brussels with a view to EU subsidiary legislation.
If the Minister agrees with all that, I shall consider this to have been a good morning's work.
1.13 p.m.
Lord Brooke of Alverthorpe: My Lords, as a former member of the Select Committee who was serving when it embarked on this review, I, too, express my appreciation to the noble Lord, Lord Grenfell, to present members of the Select Committee, and to the Clerk, Simon Burton, for the excellent report it has produced.
I was a member of the Leader of the House's group on working practices which asked the Select Committee to undertake an examination of the way in which we scrutinise EU legislation. I sensed at the beginning that the Select Committee did not exactly fall over itself with a great deal of enthusiasm during the early stages but, as it started to get to grips with the task, it certainly showed that enthusiasm. I look across at the Opposition and at the noble Lord, Lord Howell of Guildford, who gave the matter a great deal of stimuli in debates in the Chamber. He gave us many ideas to consider, which led to much hard work being done within the Select Committee. Since I left the committee in November it has kept hard at it and has done an enormous amount of work in producing a thorough analysis and a wide-ranging set of recommendations of which it can be proud.
I am in agreement with most of the recommendations before us. The Select Committee has carried out a job of work not only for the House but for the country at large. As has been said, so much of our legislation now emanates from Europe, and has such an impact on all our lives, that it is more important now than ever before to ensure that what comes from Brussels is needed, and, if it is, that it is in the best possible form for legislation.
Most of the Select Committee recommendations take us in that direction. There is little with which I disagree, although, from the way that the debate was opened and has developed, I may take a different line on the way in which the Committee seeks to extend or maintain the scrutiny reserve described in paragraph 184.
When the House took its decisions on the options before it on the future of the House of Lords, had it decided that it wanted to become an elected Chamber rather than continue to be solely an appointed

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Chamber, the case would have been stronger for it to argue that powers should be extended possibly beyond those within the Commons. Indeed, if we had persuaded the Commons to follow the same line, that would have been needed. For a non-elected Chamber to seek to extend its powers in this way is somewhat questionable.
In any case, the arguments advanced by the Government are worthy of deep consideration. In particular, there is an implied threat that if the power was introduced, if it was secured, the Government could start to take a greater interest in the composition of the Select Committee from a party political point of view. I do not believe that that would necessarily be in the best interests of this House and the way in which we carry out scrutiny overall.
So it is important that we do not over-egg the pudding on that issue and I counsel a little caution. I hope that we will accept what the Government have to say and that we do not get ourselves into a running battle on this front but instead concentrate on the many positive responses outlined in the report. The Government's responses in the report are as good as any I have seen for quite some time. A great deal can be built on within the context of the recommendations and the Government's comments, much of it on a joint basis.
Let me be a little provocative and suggest that the Select Committee should consider whether or not it can devise a fast-track scrutiny system. I speak from my experience as chairman of Sub-Committee B, to which the noble Lord, Lord Woolmer of Leeds, so kindly referred, and set out the wide range of topics that the committee seeks to handle.
We do so at two levels: a weekly scrutiny of pilot papers and, alongside that, longer-term, more detailed inquiries. Only a smallish number of the members of Sub-Committee B focus on a weekly basis on the detailed examination of scrutiny documents. I suspect that it is not a great deal different on most other committees. I am supported in that view, to some extent, by what the noble Lord, Lord Lea, said about what happens on Sub-Committee A. Could not such members who voluntarily focus on these issues—it is a small number—be brought together, at least on a trial basis, in an endeavour to create a fast-track mechanism? It may not work, but at least some consideration might be given to it.
If it did work, many other committee members would be greatly relieved because they find some of the work quite a chore. There could be a beneficial knock-on effect in consequence in that more Peers might be interested in putting their names forward to join EU sub-committees. It is important work, some of which could be done more rapidly, but it is not liked by most Peers because it does not deal with the kind of issues that attract them. As the Leader of the Liberal Democrats, the noble Baroness, Lady Williams, said, it is a grind.
The Commons European Scrutiny Committee does much of the work, of course, as we know from the reports it produces. Their members do more of it than
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we do. But most of us have never seen how effectively they scrutinise the European documents that go before them when they select those of great political and legal significance for further scrutiny and possible debate. This is because they still do it in private. Technically, I believe, our scrutiny work can be open to the public but in practice the scrutiny of these documents is, in the main, still done in private. I think it should be open and transparent. Similarly, I believe it is high time that the Commons committees were open and transparent in their approach to the examination of European documents.
There is a wider implication beyond legal applications and political interests in looking at those documents. As mentioned, the effects run right across society and affect industry in particular, as we found in Sub-Committee B. It is important that people know right from the beginning what is happening in Parliament.
It is also interesting to note that a Commons review of its scrutiny work last year sought an increase in the number of committees. But the Government rejected the proposal on the basis that the Commons had difficulty already in finding sufficient MPs to undertake the work for the existing structure, let alone for an increased number of subcommittees. In paragraph 188 of our report we seek extra committees. I believe that this is justifiable on the basis of the way in which we do the work and also the number of people whom we can provide to do it. Given that, as has been demonstrated with statistics, the work coming to Parliament from Europe continues to grow, we need at least one extra committee to deal with the public health issues and consumer affairs presently encompassed by a very hard-pressed Sub-Committee D. The Government's response states that this is a matter for the Liaison Committee. However, they go on to give their views which are, to my mind, not too encouraging or supportive. Given that the Minister embraces several functions for the Government and within the House structures, I wonder whether she might he prepared to offer what assistance she can to try to help us get at least one extra sub-committee, especially if the Select Committee were prepared to offer some movement in meeting the Government's point on ensuring a faster-track scrutiny system than at present.
I still do not believe that we have our relationships right with the Commons. Neither, for that matter, have we sufficiently progressed our relationships with MEPs, although I was heartened to hear that work is being done on that front. We hear plenty of fine words about the nature of our relationship with the people at the other end and about how we work together on EU scrutiny. But in my opinion the sum of the two Houses' efforts still does not produce the added value in scrutiny of EU issues that it should. I trust and I am sure that the Committee will continue to maintain its efforts on this front and hope that the Government will continue to give their assistance to changes in whatever way they can.

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Finally, with reference to the points made by the noble Baroness, Lady Park of Monmouth, and the noble Lord, Lord Lea, I think there is an omission in the report in not seeking to establish formally, on a monthly basis, more time in our programme for dealing with European Union issues. The noble Baroness suggested there should be a debate on a monthly basis; the noble Lord suggested alternative approaches. Mine was a fairly modest suggestion—as, indeed, are most of my contributions to the Select Committee. I suggested that we have a quarter of an hour report back from the chairman of the European Union Select Committee at least once a month in this Chamber, with an opportunity for Back-Benchers to question the chairman of the committee on its work and where it is going. I hope that the Select Committee may be persuaded to go back to that and have the appropriate consultations in the House. This would be another way in which we could raise the profile of the committee's work and give it the attention which I believe it so richly deserves.
1.24 p.m.
Lord Pearson of Rannoch: My Lords, the report rightly says that our scrutiny of European legislation is of constitutional importance, and most noble Lords seem to agree. But thanks to Sections 2 and 3 of the European Communities Act 1972 and to the fraud of subsidiarity, as set out in the European treaties, our scrutiny has been and, indeed, must be, incapable of preserving the heart of our constitution. As I have suggested before in your Lordships' House, the heart of our constitution, of our sovereignty, of our democracy, is the right of the British people to elect and dismiss those who make their laws and who levy their taxes.
The noble and learned Lord, Lord Scott, put it very well today, in what struck me as a seminal contribution, when he reminded your Lordships that it is the primary responsibility of Parliament, not the executive, to supervise the passing of our legislation. So we must face up to the fact that the 1972 Act threw away much of that duty of Parliament, that right of the British people, so hard won over the centuries. Subsequently, the Single European Act and the Maastricht, Amsterdam and Nice treaties have merely compounded the felony.
I have quoted the relevant words of the 1972 Act before and doubtless I shall do so again as we move towards consideration of the new constitutional treaty which will emerge from Mr Giscard d'Estaing's Convention on the Future of Europe. Those words are so fundamental to this debate that I fear they should be put on the record again. The crucial bit of Section 2 reads as follows:
"All such rights, powers, liabilities, obligations and restrictions from time to time created or arising by or under the Treaties … are without further enactment to be given legal effect … and be enforced … accordingly".
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The rest of Section 2 says that Ministers may implement EU obligations by regulations. Section 3 makes the Luxembourg court the sole arbiter of the meaning and effect of EU law.
We can debate the niceties of the scrutiny reserve for all eternity, and perhaps your Lordships will persuade the Government to allow us a little more influence. But the House of Commons and your Lordships' House are, in reality, powerless against the treaty-making power of the Royal prerogative while those words in the 1972 Act remain in force. Once the executive, or the Government of the day, have agreed or been outvoted on a new law in the Council of Ministers, Parliament must enact that law, on pain of unlimited fines in the Luxembourg court. It is worth remembering that qualified majority voting, where we have only 14 per cent of the votes in the Council, already applies to all our commerce and industry, to our social and labour policy and to our agriculture, fishing and environment. Those are huge areas of our national life, and the list is due to expand under the Giscard convention.
Subsidiarity has proved entirely useless, as I believe is now generally acknowledged. Indeed, it merely confirms the supremacy of the Luxembourg court, and that once a power has been ceded to Brussels, it is never given back. Any noble Lord who still doubts that should study Article 5 and Protocol 30 of the treaty establishing the European Community.
The noble Lord, Lord Grenfell, my noble friend Lady Park and others have held out some hope for the future of subsidiarity. But I fear those hopes are dashed by the Giscard convention, which merely proposes that national parliaments should be able to ask the Commission to think again but proposes no change in the treaties to ensure that it does so.
I hope your Lordships do not think I am being unnecessarily ungracious about your efforts in scrutinising European legislation. It now amounts to more than half of all our legislation, all of it dreamt up and proposed by the EU bureaucracy, the Commission. I have no doubt that your Lordships' wisdom over the years has made the diktats of the corrupt octopus in Brussels slightly less obfuscatory and even, on rare occasions, less awful, but not much, my Lords, not much.
I have only one question for the Minister. Is there any chance that the 1972 Act might he amended to allow Parliament the powers which many of your Lordships, and no doubt the British people, clearly believe it should have? I fear the noble Baroness will say that that would be a very bad idea anyway, because the Government take their obligations to Brussels so seriously and think the results are wonderful. If that is to be her line, I remind her that whatever treaty emerges from the Giscard convention, it will give Brussels—
Noble Lords: Order.
Lord Evans of Temple Guiting: My Lords, with all due respect to the noble Lord, Lord Pearson, if he

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chooses to speak in the gap he must limit his remarks to four minutes. He has now spoken for over four minutes.
Lord Pearson of Rannoch: My Lords, I see four minutes on the clock.
I shall conclude. How much more of our sovereignty will be allowed to disappear before Parliament is restored to its rightful place in legislation proposed by Brussels and the executive?
1.30 p.m.
Lord Tordoff: My Lords, I do not intend to follow the noble Lord, Lord Pearson, in any direction, which will not surprise him. It would be useful for the House if, in future, instead of speaking in the gap, as he frequently does, he would put his name down on the list with other people.
Lord Pearson of Rannoch: My Lords—
Lord Tordoff: My Lords, I am not going to give way.
This has been an excellent debate, and we are grateful to the noble Lord, Lord Grenfell, and the Committee for producing a most excellent report. I find myself in a curious position, as this is the first speech that I have made from these Benches in about nine years. I feel like a maiden speaker. I do not expect anyone not to walk out, but I do not expect anyone to walk in.
We have had a wide-ranging discussion; we have had two octopuses, a juggernaut and an avalanche. It has been a well illustrated debate, but it has been good and people have generally made positive comments. The main complaint against the Government is that they have not accepted one or two of the recommendations. However, as the noble Lord, Lord Brooke, said, they have accepted a wide range of them. They are to be congratulated on that.
I am pleased that Sub-Committee A is getting involved in the budgetary situation. Clearly, it cannot usurp the role of the European Parliament, but there was a gap and the noble Lord, Lord Bruce of Donington, has for many years pressed the Select Committee to spend more time considering budgetary arrangements, which are clearly very important for this country. What we have now may be as far as we are likely to get, but it is a big step forward.
I have always resisted the idea of joint meetings with the Commons, because I have always seen our job as complementary and we should be careful not to do each other's jobs. There are good contacts with the Commons, at the level of the Clerks and through the Chairman. Those who have been to COSAC—Conference of European Affairs Committees—know how closely we work in that strange body. My relations with Jimmy Hood, which have been carried on by the noble Lords, Lord Brabazon of Tara and Lord Grenfell, have been excellent. That is a useful contact point.
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My noble friend Lady Harris spent some time on the question of timing of responses, as did many noble Lords. Clearly, it is still a problem. What are we doing in that regard, given that we spend so much time asking expert witnesses to come and give evidence to us? They are expert witnesses, and one reason why the Select Committee is so good is that expert witnesses are prepared to give of their time, because of the quality of the members of the Select Committee. They know that they will not endure the disgraceful treatment that sometimes happens in Commons committees, when party-political issues are bandied backwards and forwards. They know that, as expert witnesses, they will be asked questions to which we want an answer, rather than from which we want to make a point.
We must consider timing. A six-week target is very reasonable. The question then is when we can have debates. That point has come up several times in the discussion. The Select Committee does not like the idea of going into Grand Committee, and I understand why. It should be a last resort, and perhaps there should be a trial last resort at some stage, but we should consider other ways of dealing with reports before we get to that stage. I agree that Wednesday is the obvious slot, but I am not sure whether one should go as far as the noble Lord, Lord Lea of Crondall, and abolish Back-Bench debates on a Wednesday. I do not believe that would get much support in the House; I hope not, at any rate. But I wish his balloted debate well when it comes.
The noble Baroness, Lady Billingham, mentioned some of the myths that are around. I felt that one or two of those myths might have been floated by the noble Baroness, Lady Park of Monmouth, at an earlier stage. The noble Lord, Lord Williamson, clarified our minds with regard to secondary legislation in particular. There is a great myth that the sifting process in the House is deficient. However, as he pointed out, there is an awful lot of dross in the papers that come through and an awful lot of stuff in secondary legislation relating to farm prices, and that sort of thing, that cannot be the proper subject of a discussion for this House. COREPER—Committee of Permanent Representatives—is the place for such discussions. If there are instances when we feel that something has been decided that is incorrect, we can always return to the question.
The fact is that secondary legislation is often not properly handled when it comes from Whitehall. An awful lot of legislation that affects the people of this country is secondary legislation from our own primary legislation, which gets through without ever really having proper scrutiny in either Chamber.
The noble Lord, Lord Marlesford, was right to make reference to the quality of the Clerks who support these Select Committee activities. They are absolutely superb, although I do not know how they keep their sense of humour at times. However, they manage to do so and have produced some excellent prose; they deserve tremendous support from this House. The noble Lord, Lord Marlesford, got us on to

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European poker, which was another interesting suggestion. I do not know what European poker is, but perhaps he will tell us afterwards.
The speech by the noble and learned Lord, Lord Scott, was definitive. He set out clearly the importance of the balance between the executive and the legislature, the dangers that we have experienced in the past and the battles that have been fought. That is at the bottom of what we are trying to do; we are trying as a legislature to keep the Government under some sort of control. On the whole, dare I say it, we succeed. Ministers actually take a bit of notice of what is said in this House and in the reports from the Select Committee, or that is my experience at least. They run ragged occasionally, and then one has to write rude letters to them.
One of the best things that we have instituted is the publication of letters to Ministers. To get those into the public domain was a big step forward. To publish them as we do makes civil servants, at least, feel that they should watch their backs a bit, which is no bad thing.
My noble friend Lord Lester of Herne Hill makes a good point in relation to the compatibility with human rights legislation—not only the European Convention, but a wide range of things. I do not know whether one could set up a separate committee. When we talk about setting up new structures, we are treading on the edge of the void, as it were. There is a tremendous amount of activity going into the European Union Select Committee. It represents a huge commitment, both by Peers and by staff. When I was Chairman I was worried that we would run short of Peer resource, more than anything else. We may not be at that stage, but we are not far off it. The amount of time and effort that members of sub-committees must put in to the pile of paper that they receive weekly is really asking an awful lot. To ask much more may be to strain credulity. So I think that we have to be a bit careful about adding on ever more committees from the point of view of Members and of staff—and, incidentally, because of accommodation. In my previous job as Chairman of Committees the question of where we were going to put some of these committees exercised our minds quite a bit.
The noble Lord, Lord Williamson of Horton, as always—because he knows where all the bodies are buried—comes up with many useful suggestions. He is quite right, of course, that the emphasis of this House really should begin to start tilting towards the second and third pillars. I realise that it is a very jagged edge, but that is the area which is the responsibility of the national parliaments more than of the European Parliament. This is where the responsibility finally lies. It was to that end that we originally established Sub-Committee F and re-jigged the job of Sub-Committee C. I think that that has worked very well.
The noble Lord, Lord Williamson, is right in saying that we have tried to go upstream. The only hesitation I have about that is that we can go too far upstream and find that, by the time the legislation gets to the point where decisions are going to be made, it has
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changed completely. It is a very difficult equation. If we leave it too long we cannot change it; if we get it too soon, it may have changed beyond recognition and we have to come back and do it all over again. Getting that balance right is the difficulty.
As to the timing of debates, I was interested by the evidence of the noble and learned Lord the Leader of the House, who on 3rd October said to the committee:
"If I were on a Committee of this sort and then the debate was debated in the long wastes of Friday afternoon. I do not think I would be enormously pleased".
Well, it is 20 minutes to two on a Friday afternoon. Perhaps we should remind him of what he said.
Lord Roper: Oh!
Lord Tordoff: My Lords, it is a dangerous thing to do with Leaders of the House.
I have an enormous soft spot for the select committee. I think that this report, although in a sense navel gazing, is very important indeed. The time was right to have a really good look at the way in which we do scrutiny. I know that, given more resources, there are important things that could be done, but I think that it works quite well. Several noble Lords have mentioned the sift. Actually, the sift is a very efficient mechanism. The chairman does not have an easy job, but—thanks to the activities of the Clerks and of the legal adviser—it is not too difficult on a Monday to filter out those things which are obviously of no interest to the House as a whole and which cannot be changed. The derogation of tax on left-handed Chinese screwdrivers coming in from Indonesia is not a matter that need detain this House for very long. There is quite a large amount of that sort of thing. Provided we can filter out the things which really are important and where we can have some influence, then I believe we are doing a good job.
As to publicity outside, I do not think that we should attempt to get headlines in the Sun. The idea of the noble Lord, Lord Lea of Crondall, doing a full monty in order to get on the front page of the Sun is not a happy thought. However, occasionally we could perhaps do better at getting reports into the serious press. They are also very lax. I remember a remarkably good report by Sub-Committee D on GM foods where the Guardian writer did not bother to turn up to the press conference and had not had a copy of the report but wrote several column inches telling the world at large that the committee had done exactly the opposite of what it had done. However, matters have moved on from there. The activities of Mary Morgan and the expertise that she has brought in have been a great help.
This system is the crown jewel of your Lordships' House. I think that the Select Committee has excelled itself once again. I am grateful to it.
1.44 p.m.
Lord Howell of Guildford: My Lords, we have been debating an extremely interesting report which obviously involved a huge amount of work and raises

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issues of constitutional importance. I say straightaway that I think the various encomiums placed upon the noble Lord, Lord Grenfell, extremely well deserved. Indeed, there have been some very profound speeches, not least the one we have just heard from the noble Lord, Lord Tordoff, who served in the chairmanship role two or three periods ago in an equally distinguished way. Nor should we forget that the whole operation rightly runs alongside, and I think complements very well, the scrutiny work of another place. Actually—and this is a very minor quibble—it is not correct that the House of Commons model has no sift, as paragraph 20 says. It does have a sift. I remember, in a past existence, agonised debates in the Scrutiny Committee and other committees of another place about the nature of the sift. I think that it is a different one, but it does have a sift. So that statement is not correct.
The central administrative problem is, of course, the sheer volume of documentation. We read that, in 2002, the last year for which I have figures, more than 1,400 documents to do with various EU proposals, directives, regulations and other initiatives were deposited. On top of that, our committee system undertakes in depth all the studies, the hearings, the visits and the questioning of Ministers and experts. The more they go upstream, the more important is the need to find out what Ministers are thinking before decisions are made. All of that comes on top of the amazingly up-to-date flow of reports from the European Union Committee on the goings-on of the very fractious convention and the draft constitution documents that are floating around. It bodes all sorts of prospects of a great deal more work. All that is done, as the noble Lord, Lord Grenfell, reminded us, by about 70 Peers, six sub-committees and an overworked but absolutely brilliant staff. My own contact with the staff and experience of working with them certainly justifies the adjective "brilliant". They do an amazing amount of work.
Our colleagues in another place have one Scrutiny Committee, but their approach is different. They pore over hundreds and hundreds of documents to see which are worthy of further debate in the Standing Committees or on the Floor of another place. The picture, in other words, is of an unceasing blizzard of documents, regulations and directives which have direct force in law in this country. Parliament is left out of it except for those that require UK legislation in the form of statutory instruments, some affirmative and some negative.
As the noble Lord, Lord Lester, acutely questioned, it would be nice to have a clearer idea from the Government of how they decide which procedure to follow. We have regulations and directions from the Commission and we have them from the Council. Some come via the European Parliament, but some do not. It is no wonder that people get so confused about the direction these documents are coming from. In 2001 there were 1,496 such documents in all. So about 1,500 documents are coming through annually.
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On top of that, as the report mentions and as the Government's reply elaborates, there is the whole comitology procedure. We read, I think in the Government's reply to the committee, that the Commission last year put 3,490 draft decisions into the comitology maze—where the noble Lord" Lord Williamson, trod delicately, and rightly so, because I suspect that he is one of the few people on earth who understands the full pattern and implications of the comitology process. I note the committee's view that some of it should occasionally be exposed to scrutiny as well.
If the principle is that law should be made by Parliament and that those who make it should be held to account, then that is plainly being flouted in the picture I have painted. The proposal of the Foster committee in 1973 was to ensure that Parliament was not bypassed once we were members of the European Community. Inevitably, because of the volume of legislation and documents, we are being bypassed. Even if we only look at the documents that are scrutinised, I read that in 2002 Ministers in 71 cases simply overrode scrutiny and carried on regardless. That figure is much too high and raises questions that I shall discuss in a moment about the scrutiny reserve process.
First, I am afraid I want to say something even more negative; namely, that all this will get very, very much worse, and the load will get very much bigger, under the sort of proposals now being aired at the European Convention. The powers of the Commission to make laws, which are to be called non-legislative acts, will increase. The exclusive and the shared EU competencies and powers will be enlarged right against the hope we had that powers would be diminished and returned to nation states. As the noble Lord, Lord Pearson of Rannoch, rightly reminded us, already over 50 per cent of all legislation governing this country is EU originated. That figure could rise much higher. It is estimated in convention documents that 70 per cent of all this flood of legislation is based on decisions reached by junior officials in Brussels and 15 per cent by senior diplomats in COREPER. Presumably the remainder are decided in the Council of Ministers. However, as your Lordships have often pointed out, that Council is a closed parliament of the nations and is not transparent. Therefore, in a sense, it is not a parliament at all.
It does not even stop there, because on top of that along comes the subsidiarity question, mentioned in paragraph 85 of the report. That is a very important question. The convention will clearly make new proposals. Indeed, the committee says in the report we are studying that it will produce a further report and comment on the whole subsidiarity question. It is right to do so. The noble Lord, Lord Pearson, said that the suggestion in the convention for giving national parliaments a role in deciding where the competencies of the EU institutions reach and where they stop is a weak one. Some Members of another place, including Gisela Stuart, tried very hard to get some serious powers devolved to national parliaments to put a halt on the intrusion of the EU institutions into areas where

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they have no business to be. But all that looks like emerging is the opportunity for national parliaments as it were to clear their throats and remark that things are not as they should be and the whole matter then goes back to the Commission for review where presumably it will be discarded or accepted at will by the Commission. That is not a delegation of powers of the kind we need. I hope that we fight that matter before it becomes finally settled in the concrete of the intergovernmental conference.
I go even further. On top of that there is now the question of reopening the acquis. People said that that was impossible and unthinkable but even now the President of the Commission, Signor Prodi, has said that the acquis is an impossibly large and complex string of powers and documents and should be slimmed down and revised. That, too, will involve huge new examination of a whole range of existing powers.
Finally, on top of that is the issue of gold plating and monitoring the implementation of this flood of regulations from Brussels. As we know, in some departments and ministries in Whitehall there has always been a tendency to make unnecessary additions and to overload regulations which become unnecessarily intrusive in British life. Who will monitor all that? Setting out a workload—
Lord Lea of Crondall: My Lords, it is often said—and has now been said by the noble Lord—that it is well known that Whitehall gold plates everything from Brussels. Is the noble Lord aware of any objective examination of whether that is the case? It may be a good idea, but has it been done?
Lord Howell of Guildford: My Lords, I do not believe that there has been an overall study. That is one thing that I should like to see, although I am not at all sure who would take on such an onerous task. Perhaps it is an ongoing task. I rely on endless anecdotes, endless complaints, endless debates in another place and a good many questions in your Lordships' House on the matter. Various regulations that appear to be applied in a mild form in other member states are applied in this country with ferocious, padded ingenuity and vigour. Many people feel that we are being overloaded and are doing more than Brussels originally intended. That is a view I have also heard often in the European Parliament.
I turn to the question, which many noble Lords have asked, about where we go from here. How can the scrutiny process and scrutiny reserve be toughened up? Should it be statutory as the Norton committee suggested? I made such a suggestion when I had the privilege of giving evidence to the committee. Perhaps that is going too far. But if we do not have that, can we at least press for the whole scrutiny procedure to be officially incorporated in EU procedures and given a formal standing, which I do not believe it has at the moment'? Should there be—as the committee proposes in paragraph 71—a requirement for an affirmative resolution before a reserve is lifted? I warm to that.
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Obviously, as an Opposition Front Bench spokesman I am in favour of anything that makes life more difficult for the Government. But I have to confess that I believe the warnings of the noble Lord, Lord Brooke of Alverthorpe, have some validity. We are not an elected House. We have to be careful about taking too much on our plate. If one could think of a way in which a warning from the Lords could trigger in another place a procedure for halting the lifting of a scrutiny reserve until there had been an affirmative resolution, that would be a different matter. The noble Lord, Lord Brooke, is right. We must proceed carefully.
How on earth do we get a grip on the comitology issue? The committee talks of "vast amounts of legislation" passing "unseen and unscrutinised" into our law. It may be unimportant, but who knows? Of course the Government say that it is not controversial but that in itself is a political view.
Then there is the question of how we get a better entrée to texts being passed straight from the Commission to the various committees of the European Parliament under the co-decision procedure. Again, much of the bargaining and negotiation take place behind closed doors. I do not think that we get an adequate opportunity to see all of that.
I refer to the question that your Lordships have raised again and again with regard to how to bring all this superb work by the committees to the Floor of the House. My noble friend Lady Park said that we should have one EU debate every four weeks. That is a very good and simple idea. We should do that. We are governed by this huge range of legislation and it is quite improper that we do not have regular opportunities to look at the whole range of EU activity.
All this is part of an age-old battle—to which the noble and learned Lord, Lord Scott, rightly referred in his learned summing-up—between bureaucratic efficiency, or governmental efficiency, if you like, and democratic accountability. As my noble friend Lord Marlesford rightly reminded us, we know where the instincts of a high servant of a state naturally lie. That must be in favour of getting business through and efficiency. The instincts of parliamentary bodies lie in a different place. That age old battle is carrying on. I refer also to the battle between those who say, "Democracy can be centralised in some continental body" and those who say, "Nearer to the people really means not just passing commentary but bringing more power and influence back to the national parliaments". It also incidentally is part of the ever growing battle between those who are happy to see more and more political decisions settled in the courts and those who want those matters kept in the parliamentary environment. I do not see an end to that battle. It will go on.
I sum up this excellent debate by saying that I know which side I am on and which view really fits the kind of future that is now shaping before us.
1.59 p.m.
The Minister for Trade (Baroness Symons of Vernham Dean): My Lords, noble Lords have participated once again enthusiastically in an informed and very valuable debate. There have been many insightful and well-informed contributions, as many noble Lords have noted. I too would like to pay particular tribute to the hard work and commitment of the noble Lord, Lord Grenfell, who opened the debate so very persuasively and comprehensively on behalf of his committee. His extraordinarily well-crafted speech set the scene for what has been a very thoughtful and interesting debate.
The noble Lord was right: scrutiny is vital, on two levels. First, all of us—the House, the European Union Committee and the Government—have an interest in scrutiny procedures that work efficiently and can adapt to changing circumstances, such as the enlarged EU or the practices of this House. Secondly, we all have an interest in a scrutiny system that is purposeful and effective, and that can hold to account before Parliament those responsible for negotiating in the Council of Ministers on behalf of the UK.
The rigorous examination and analysis of EU legislative proposals undertaken by the noble Lord's committee is one way of addressing the so-called democratic deficit which is so often referred to when discussing the European Union. It is in the Government's interests to have an efficient and effective system for scrutinising European legislation. As the noble Lord, Lord Lyell, pointed out, that is no easy task given the huge flow of documents—there were more than 1,200 last year alone—which the noble Lord, Lord Howell of Guildford, referred to as an unceasing blizzard. Our objective is to give full scrutiny to those documents.
My noble and learned friend the Leader of House, who very much regrets his unavoidable absence today, responded in writing in early March to the far-reaching report produced by the European Union Committee. I thank the committee for producing such a comprehensive report, which included no fewer than 70 focused and pertinent conclusions. I want to say to the noble Lord, Lord Marlesford, that I do not think that the Government are ambivalent or resentful about the committee. We may not always agree with its conclusions, but we believe that our committee—and indeed that in the other House—undertakes vital work, work that is very valuable to the Government themselves.
Let me pay tribute, as did the noble Lord, Lord Grenfell, to the personal commitment of his distinguished predecessor, the noble Lord, Lord Brabazon, for initiating the lengthy inquiry on scrutiny procedures. I strongly endorse the remarks of the noble Lord, Lord Marlesford, about the excellence of the House of Lords committees, as exemplified in the work that they have undertaken on the matter.
The Government are grateful to the committee for the innovative way in which it has responded to the growing volume of documents deposited for scrutiny. I agree with the noble Lord, Lord Tordoff, that the
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Chairman's sift is a good example of that. The Government and, no doubt, those of your Lordships who serve on the committee, are very much indebted to the noble Lord, Lord Grenfell, for his commitment to that procedure, which I know places huge demands on his time.
The Government welcome the committee's decision to introduce streamlined procedures for reporting budget transfers and budget developments. That is linked to the committee's recognition that certain categories of documents need not be deposited individually, but can instead he reported through consolidated lists.
Many of the report's conclusions are addressed primarily to the House, to the House authorities or to the committee itself. The Government broadly support those conclusions, and wish to encourage moves towards more efficient procedures and a higher profile for the committee's work. My thanks go to the noble Lord, Lord Tordoff, for acknowledging that the Government have indeed tried very hard to be positive in our response to the report.
Some of the report's recommendations bear directly on issues under discussion in the Convention on the Future of Europe. Of course, the House has its own representatives on the convention. I thank again the noble Lords, Lord Tomlinson and Lord Maclennan of Rogart, for the valuable work that they do in that respect. However, the largest chunk of the report's conclusions addresses directly various aspects of the Government's role in the scrutiny process. It is those elements of the report on which I, like many noble Lords, would like to focus. I shall of course try to deal with some of the other issues that noble Lords have raised, particularly in relation to debates in the House.
The noble Lord, Lord Lester of Herne Hill, was right in that there is much on which the Government and the committee agree in relation to scrutiny. We agree on the need for the committee to be involved as early as possible in considering EU legislative proposals. I agree with the points made on the importance of that by my noble friend Lady Billingham. The earlier your Lordships are able to get involved, the more chance there is of being able to influence the consultations and discussions, as is self-evident.
The Government take their scrutiny commitments very seriously indeed, so we agree wholeheartedly with the committee on the need to avoid overriding the scrutiny reserve, except where absolutely necessary. It is also desirable for explanatory memorandums to draw attention to any human rights implications to proposals for EU legislation, a point to which I shall return shortly. Naturally, many of your Lordships, including the noble Lords, Lord Grenfell, Lord Marlesford, Lord Williamson of Horton and Lord Howell of Guildford, the noble Baroness, Lady Park, and the noble and learned Lord, Lord Scott of Foscote, concentrated on the scrutiny procedures.
Let me deal with the fast-track procedure raised by the noble Lords, Lord Marlesford, Lord Brooke and Lord Grenfell. I accept the argument that the

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Chairman's sift offers advantages in expediting documents swiftly. In the normal course of business, close and effective co-ordination between departments and the committee ensures that the scrutiny process works well. However, let me put another point of view to noble Lords, whom I hope will be mindful of those times when the House is in Recess or when a subcommittee is not intending to convene for a short period. Unfortunately, the timetable in Brussels does not take those matters into account.
I thank my noble friend Lord Brooke of Alverthorpe for his remarks on the fast-track procedure. Our suggestion for such a procedure is intended for those very rare occasions—I stress that it would be rare—when the House was in Recess and negotiations on important dossiers were proceeding at a rapid pace. Such a procedure would be used for genuinely deserving cases, to avoid the Government being forced to override the scrutiny reserve to secure agreement in the UK's best interests. My noble friend put forward one idea on the matter; let me put forward another. Perhaps for a procedure, the chairman of the relevant sub-committee would be able to clear a matter on behalf of his or her committee without requiring the full membership to meet and discuss the matter. We could examine that.
Let me turn to another issue that has caused noble Lords some concern, which is the resolution on the Floor to clear scrutiny, touched on by the noble Lords, Lord Grenfell and Lord Williamson of Horton, the noble Baroness, Lady Park, and the noble and learned Lord, Lord Scott. The committee's recommendation that the Government should be required to secure a positive resolution in this respect is indeed a difficult one for us. In pointing out the undoubted virtues of such a procedure most of your Lordships did not deal with what we regard as the disadvantages of the system.
Most of your Lordships have acknowledged that the purpose of scrutiny is to inform and explain. It is to analyse, to bring matters to parliamentary and public attention as well as to influence Ministers and to hold Ministers to account. It is not the purpose of scrutiny to hold Ministers to ransom until they accept the views of the committee. I am sure that all noble Lords would agree with that.
I did not feel that noble Lords who discussed this point gave sufficient weight to the effect that this would have on the Government's negotiating position in Europe. That is a real problem. The Government are not convinced that such a procedure would achieve anything other than weakening the United Kingdom's position in the Union. If the dossier in question were agreed by qualified majority voting, for example, then requiring a resolution in the House would not delay or prevent agreement. But it would damage the United Kingdom's negotiating hand in Brussels. For issues agreed by unanimity, such a requirement on the Government could well delay a decision in Brussels. But if, after listening carefully to the views of the committee, the Government remained convinced that their legislation was the right way to proceed, it could
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be very damaging indeed. I was grateful for the realistic approach taken by my noble friend Lord Brooke of Alverthorpe, and for the rather courageous remarks of the noble Lord, Lord Howell of Guildford. In a system requiring agreement between representatives and member states, there always has to be flexibility and room for manoeuvre when one is negotiating. There has to come a point when the Government and the committee, after debating issues, can agree to differ.
I turn to the issues relating to subsidiarity raised by the noble Lords, Lord Marlesford, Lord Pearson of Rannoch and Lord Howell of Guildford. We all agree that national parliaments must play a greater role in shaping EU decisions. I do not think that there has been any substantive agreement on the Floor of the House on the principle embodied thereby. This will help to address those who call for the enhancing of the Union's democratic legitimacy and transparency. So I have sympathy with some of the points made by the noble Lord, Lord Marlesford, on subsidiarity.
The Government fully support the establishment of a mechanism for national parliaments to monitor the subsidiarity principle. Securing a new mechanism for national parliaments to enforce this principle would be a major achievement. For the first time, national parliaments would have the right directly to influence the European legislator.
I turn to another point which caused your Lordships some concern. I refer to the issues around what has been called the general approach—other noble Lords referred to it as the provisional agreement. The point was made by the noble Lord, Lord Grenfell, and by the noble and learned Lord, Lord Scott. This remains an important negotiating tool. Without it, presidencies and member states would be severely constrained in making any progress in negotiations in the Council of Ministers.
The Government have repeatedly made clear that all member states, including the United Kingdom, reserve the right to return to any text on which a general approach or a provisional agreement has been reached if new and significant points need to be raised. We have also sought to ensure that the Council uses consistent terminology when reporting the outcome of negotiations. As I understand it, the committee's concern relates to the language that is used in the Council—the committee does not like the terms "agree" or "adopt", as they imply that a point of final agreement has been reached. I understand the committee's concerns on this point.
In recent correspondence at official level, all departments agreed to press the Council to use the terms "reach" or "conclude" a general approach in the Council of Ministers. The Government have made it clear in their exchanges with the committee that the reaching of a general approach describes the position of a text before the EU's legislative preconditions for a vote in the Council have been concluded. This generally happens when a presidency is keen to claim credit for whatever consensus may have been reached but where the European Parliament's opinion has not

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been received and/or when member states still have some reserves in place on parts of the text. So the United Kingdom has maintained in the Council that it would be prepared to revisit a text if significant new concerns were raised. I hope that that language point will go some way towards satisfying what I understand are the very real concerns of the committee in this respect.
Lord Tordoff: My Lords, I am grateful to the Minister for giving way. Part of the problem is the six months' presidency, which has not been touched on. The fact is that there is pressure on parliaments to agree matters because the presidency wants to get its agenda through at the last minute. The combination of that and the general agreement is dangerous.
Baroness Symons of Vernham Dean: My Lords, that may well be the case. None of your Lordships has addressed the six months' presidency, but we shall have a chance to do so when we discuss the issues relating to the convention later.
The noble Lords, Lord Grenfell, Lord Lester of Herne Hill and Lord Williamson, raised points about the implementation of EU legislation. As my noble and learned friend Lord Williams noted in his reply to the noble Lord, Lord Brabazon, on 18th November 2002, the Government are keen to provide the committee with information on how they intend to implement a particular legislative proposal.
It is clearly right that the means and implications of implementation should be considered by our negotiators at the earliest possible stage, and that the Government's views are provided to the committee. That is already reflected in the guidance that we give to departments.
But the noble Lord, Lord Williamson, was right. The Government's view remains that it would be impossible for them to commit to giving a definitive view on implementation issues while a dossier is still under negotiation. It is only during negotiation that all the implications are teased out. Moreover, implementation in the UK is not solely the responsibility of Her Majesty's Government; the devolved Administrations, as some noble Lords acknowledged, will sometimes be responsible in their areas for that.
I turn to the way in which the Government will take forward the recommendations—
Lord Lester of Herne Hill: My Lords, I apologise for intervening. Does the Minister at least agree that, from the point of view of scrutiny, it is important to know as far as possible how that will be implemented, so that the scrutiny committee can know whether to leave the matter to Parliament through legislation—I refer, for example, to the affirmative procedure—or to engage in deeper scrutiny because the negative procedure is involved? Are not those factors involved?
Baroness Symons of Vernham Dean: Yes, my Lords, and that is why the Government have sent guidance to
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departments asking them to ensure that information is given as early as possible. I am unable to reassure noble Lords on the detailed implementation plan. I sympathise with much of what has been said—that is reflected in the Government's response.
I turn to another point about which I know the noble Lord, Lord Lester of Herne Hill, is concerned; that is, the inclusion of the human rights implications in explanatory memorandums. I want to get through as many points as I can. The Government responded favourably to the recommendation from the committee that explanatory memorandums should provide a statement that a proposal is compatible with the Human Rights Act 1998. That is very important, as the noble Lord pointed out. The Government will issue guidance to departments on how to do that. That guidance will be issued as soon as officials have reached agreement with committee Clerks on the way in which that should be done. In addition, we will keep in touch with committee staff to monitor how the arrangements work over time and to decide whether any further adjustments might need to be made to the arrangements. I hope that that satisfies at least some of the noble Lord's points.
I turn to the signing of explanatory memorandums. I do not believe that there is anything very revolutionary in the Government's proposals in this regard. We seek no more than to re-establish what has for a long time been an informal and pragmatic approach to explanatory memorandums that are produced in certain limited circumstances. It remains a working method with which the European scrutiny committee in another place is very happy. The Government acknowledge and welcome the fact that, following the committee's agreement that certain unimportant categories of documents can be dropped from formal scrutiny, there are still some routine documents that will continue to be deposited for scrutiny. In the narrowly defined area in which there are genuinely no policy implications arising for the UK, it should be possible for a department to produce a factual statement to the relevant effect on behalf of their Minister. That approach has previously been accepted by the committee and in each case it would require a decision of the committee for an unsigned explanatory memorandum to be submitted. The important point is that in such circumstances it should always remain open to the committee to challenge a statement to that effect. The Minister would then be required to respond in the usual way.
There might also be occasions on which a private secretary might sign on behalf of a Minister. I know that that causes concern. It is not unusual to do so in relation to other government business and the practice is governed by very tight departmental rules. The important point is that of accountability. Ministers will continue to be fully answerable to the committee for the content of the explanatory memorandum.
I turn to the points raised by the noble Baroness, Lady Billingham, about the importance of improving links with MEPs. I could not agree more with her comments. We must harness the expertise, knowledge and contacts of MEPs and we need the opportunity to

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convince legislators in the European Parliament of the strength of our arguments before they reach their decisions. As she said, they are an invaluable asset. We all benefit from that; it is "win, win" territory and we should embrace it, not least by making our MEPs, some of whom are also Members of your Lordships' House, welcome in this Parliament and by involving them in the work of our committees. Like my noble friend, I very much welcome the joint meeting with MEPs that was held on 25th February. I hope that such informal meetings will be placed on a regular footing. I was very taken with her point about video links; it deserves further thought.
Many noble Lords raised questions about timetabling government responses to committee reports. The Government agree that it is important to respond as quickly as possible to committee reports and to do so certainly no later than within two months of the publication of the report. However, the speed with which the Government respond must depend on a number of complex recommendations and the ways in which those turn up in different reports. It must also reflect the need to reach collective agreement on the terms of the government response, which can take a long time when one must consult many different departments. I know that that is a matter of concern to the noble Lords, Lord Grenfell and Lord Tordoff, and the noble Baronesses, Lady Harris and Lady Park.
Perhaps I can be more helpful on this point. We are happy to aim to respond to the committee's view about short reports within the six-week period. I agree that we must react to the point of the noble Baroness, Lady Harris; that is, that we should respond within a time frame that allows scrutiny while there is still a real opportunity to affect negotiations. She made a very powerful point and I agree that it is the important issue. To help with that the Government, with the committee Clerks, will look at co-ordinating closely to ensure that immediately the committee's reports are sent to the printers, the process is activated.
On the issue of increasing the number of subcommittees, raised by my noble friends Lord Woolmer and Lord Brooke, on 17th February the noble Lord, Lord Grenfell, put to the Liaison Committee a proposal for two extra sub-committees. I believe that the committee declined to make a decision until after today's debate, which was sensible. The Leader of the House and I see a case for one further sub-committee. However, I stress to your Lordships that that is a matter for the Liaison Committee and for the House. The exact structure or the responsibilities of subcommittees is a matter for the EU Committee.
The holding of debates in prime time was raised by the noble Lords, Lord Grenfell, Lord Lyell, and the noble Baroness, Lady Harris. It is still too early to draw conclusions about the whole package of changes in our working practices. We know that slow progress has been made on a number of Bills on the Floor of the House and we had hoped that that would have been expedited somewhat by references to Grand Committees. However, flexibility of approach is at the heart of the issue. The noble Baroness, Lady Harris,
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said that today's experience shows that debates on a Friday can be interesting and reasonably well attended. It is also important that we do not overlook the powerful machinery of Unstarred Questions.
Points were raised about Wednesday debates. A specific suggestion was made by the noble Baroness, Lady Park, to use every fourth Wednesday to discuss European business. I note that when my noble and learned friend the Leader of the House answered the Starred Question posed by the noble Lord, Lord Barnett, about Select Committee debates, the noble Lord, Lord Peston, suggested a similar idea about the use of Wednesday debates. It is a simple point. If the House wants to debate those matters every four weeks it is in the hands of the House so to do.
Other important points were raised about Grand Committees. I could not agree more with my noble friend Lord Lea of Crondall. There is no difference in any substantive way between debating matters in your Lordships' House in the Chamber or in Grand Committee. I believe that we should give greater thought to that.
I have my eye on the time. I want to mention comitology. The noble Lords, Lord Williamson and Lord Howell of Guildford, raised the matter. The noble Lord, Lord Williamson, is right to be concerned about the lack of democratic oversight of measures adopted under comitology. He will know that the European Parliament has been campaigning on that issue for years and that the convention is looking at ways of achieving greater oversight of delegated legislation by the European Parliament. The Government are receptive to that and to ways of opening up the comitology process more generally. I shall write to the noble Lord about some of those details, as I believe that there is more that can be said that will be helpful and I shall copy those points to the noble Lord, Lord Howell of Guildford, who has some similar concerns.
Our parliamentary system of scrutinising European legislation is important. It matters. It matters not only to us, but it also matters, whether they acknowledge it openly or not, to the people of this country and it matters to our democracy. Our system is admired in many member states of the European Union, as the steady stream of visitors from the 10 new member states testifies. Many seek to emulate what we are doing.
The scrutiny system has, albeit, rather belatedly, come to be accepted, and even appreciated by the European institutions—that is quite a feat—first, in the Amsterdam protocol and now in some of the proposals that emerge from the Convention on the Future of Europe.
I thank all noble Lords whose commitment and forbearance enables the system to work as well as it does. As the committee report indicates, there are ways in which we can further improve the system to make it more effective and more efficient. The Government fully support those efforts. I am confident that the wisdom contained in the committee's report will make a genuine and lasting contribution to ensure just that.
2.24 p.m.
Lord Grenfell: My Lords, this has been an excellent and an extremely helpful debate. I thank everyone who has participated in it for their valuable contributions. I particularly thank the Minister for her very thoughtful reply which was often very encouraging. That reflects the broad areas in which we find agreement. We shall study her speech with great care, particularly on those areas where we are not yet, and may never be, in agreement. But we shall certainly devote all the attention to it that it clearly deserves.
I want to make one brief comment on the point raised by the noble Lord, Lord Brooke, and then taken up and referred to by the noble Lord, Lord Howell of Guildford, which relates to the powers of this Chamber in relation to the scrutiny reserve. This is a personal opinion, but one that is, I think, held by a number of members of our committee. My comment is that this is not so much a question of an unelected Chamber trying to abrogate more powers to itself, but of a scrutinising Chamber, fully using the powers that it constitutionally enjoys already as a body that holds the Government to account. So, I think that there is a different approach and a difference of opinion on that.
I now look forward very much indeed to working with my colleagues to implement the changes. I shall be working with a wonderful group of sub-committee chairmen with their excellent staffs. Our task now is to implement this review. I think that together we can enhance the House's scrutiny of the European Union and, at the same time, provide an important constitutional service. We can also show the world exactly what a House is capable of doing when it devotes the energy, the expertise and the resources to scrutiny of what are, after all, very significant areas of public policy. This has been an excellent debate. Once again, I thank all noble Lords who have participated.
On Question, Motion agreed to.

Co-operatives and Community Benefit Societies Bill
2.28 p.m.
Lord Carter: My Lords, I beg to move that this Bill be now read a second time.
The Bill deals with a specific sector of the cooperative movement. Community benefit societies are known handily as combens. They are enterprises that benefit the community. They are not suitable for registration as companies but exist only for the benefit of their own shareholders as investors.
The Bill has three main parts. The asset lock-in provisions permanently prevent the use of or dealing in the assets of combens, except for the benefit of the community. There are technical provisions which bring combens into line with companies when they enter into transactions. There are further technical provisions when combens execute deeds and documents and enter into contracts.
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I was particularly pleased when Mr Mark Todd, the Member for South Derbyshire who took the Bill through the Commons, asked me to steer it through the Lords. The Bill is part of an ongoing process. Between the election victory on 1st May 1997 and my entry into government as Chief Whip on 5th May, in my role as chairman of the United Kingdom Cooperative Council (UKCC), I presented the incoming government with a draft co-operatives Bill. I am delighted that my successor, the chairman of the UKCC, my good and noble friend Lord Graham of Edmonton, is speaking in the debate.
Before I deal briefly with the main clause in the Bill, perhaps I may summarise the background. The cooperative movement has argued for many years that the law relating to co-operatives should be updated. The draft co-operatives Bill that I presented to the Government was a part of that process. A community benefit society, or comben is an industrial and provident society—an I & P society—in a corporate form which is used by co-operatives as organisations that provide a benefit to the community. These will include a number of housing associations and clubs as well as a number of members of VRSA, the Village Retail Services Association. The noble Baroness, Lady Byford, the noble Lord, Lord Phillips, and I are the three patrons of the Village Retail Services Association. Football supporters' trusts are also combens.
Registration under the Industrial and Provident Societies Act 1965 gives such organisations legal status, continuing existence and limited liability, while allowing their governance structure to reflect the mutual and the community ethos, which is distinct from convention and corporate principles. This form is increasingly suggested as the model for securing community assets by delivering public services which are based on those assets.
However, the feeling is that the governing legislation, the Industrial and Provident Societies Act 1965, is now outdated in comparison with company law, and it is argued that that acts as a disincentive to the wider use of the I & P form. Initial reforms were made in the Industrial and Provident Societies Act 2002, a Private Member's Bill promoted by Mr Gareth Thomas, the Member for Harrow West. Perhaps I should mention that my last appearance on the Front Bench at the Government Dispatch Box was to reply for the Government to the Second Reading debate on that Bill.
The present Bill will allow members of community benefit societies to alter their rules to prevent their assets being distributed, except to other bodies with equivalent purposes. The provisions for such an asset lock, as it has been called, were withdrawn from Mr Gareth Thomas's Bill in 2002 in the face of government concern about the wider effects of such a lock, and because, sensibly, the Government wanted to wait until the autumn of 2002—September—for the Strategy Unit report, Private Action, Public Benefit, which recommended that community benefit societies should be permitted to protect their assets in perpetuity for a public purpose.

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The Bill will also bring I & P law into line with modern company law on the effects on the third parties or actions taken by the company that are beyond its capacity, the ultra vires rule, and the role of the corporate seal. The Bill applies to England and Wales.
As I said, combens are a particular category of I & P society that operate for the benefit of a wider community compared with the normal co-operative society, which acts for the mutual benefit of its own members as users of the society, rather than as investors in the company. The Bill received all-party support in the Commons and was amended to deal with several technical aspects. It was drafted by the Treasury and therefore unsurprisingly has the support of the Government.
I shall now deal briefly with the Bill's main clauses. Clause 1, the asset lock, as it is known, enables the Treasury to bring forward under secondary legislation provisions under which community benefit societies could prevent any use of or dealing in their assets, except for the benefit of the community or some other specific defined purpose. The aim is not to restrict societies from buying, selling or trading in their assets. The purpose is to develop a regime that will enable a society to ensure that its assets are permanently dedicated, in whatever form, to the intended use set out in the society's rules or for some similar beneficial purpose.
The aim is to create a regime under which the members of a society could vote irrevocably to prohibit the distribution of assets to members or the conversion, amalgamation or transfer of a society with or to a company or other body, unless that body were also subject to a regime including an irrevocable restriction on the use of and dealing in its assets.
Clauses 2 and 3 are highly technical. Currently, there is a burden on a party to a contract with a society to verify that the society's rules permit it to enter into such a contract and to check that the committee is acting within its powers. Those clauses will make clear that where a transaction is outside a society's rules and was conducted by the society in good faith, the transaction will remain valid and in place. That should facilitate societies' ability to enter into transactions and bring IPS legislation into line with company legislation in the area.
Clauses 4 and 5 deal with the use of the seal. Those clauses propose that a society can execute documents in the same way as companies. At present, the method is old-fashioned and cumbersome, requiring the application of the society's seal to documents. In my time as secretary of an agricultural co-operative society, the first task was to find the seal. However, societies will not be forced to adopt those new ways of working. Those that still place more value on current practices can continue to trade using those procedures if they wish. The clauses also clarify the legality of contracts made prior to official registration of a co-operative or community benefit society.
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Clause 6 is an interpretation clause. Clause 7 is the commencement clause, which proposes commencement by Treasury order. Clause 8 deals with the Channel Islands and Clause 9 contains the short title and extent of the Bill.
The Explanatory Notes to the Bill prepared by the Treasury set out in much greater detail the technical aspects of each clause—if your Lordships are interested in those aspects, I suggest that you read those notes.
Before I conclude, I should mention the report of the Delegated Powers and Regulatory Reform Committee, which was published only yesterday. I have clearly had no time to take advice or consider its recommendations on the Bill. I shall obviously need a little time to reflect on the report.
In conclusion, I cannot do better than cite the Prime Minister, who, in his foreword to Private Action, Public Benefit, drew attention to the insufficient recognition of the particular needs of social enterprises, a rapidly growing group of businesses that are carrying out a wide range of activities for the benefit of society rather than of the individual. The Bill helps to redress that situation. I commend the Bill to the House.
Moved, That the Bill be now read a second time.—(Lord Carter.)
2.35 p.m.
Lord McNally: My Lords, I declare an interest as a trustee of St Albans Liberal Club. I put my name down to speak on the matter because I thought that the noble Lord, Lord Carter, might be lonely on a Friday afternoon, but I see a number of distinguished Co-operators around the Chamber. The presence of the noble Lord, Lord Skelmersdale, on the Conservative Front Bench brings to mind a link with the Cooperative movement involving his name, if not his person. When I worked for the noble Lord, Lord Callaghan, he used his not inconsiderable influence to persuade the Co-operative Bank to locate a quite important function in Skelmersdale. Once it was established, we visited Skelmersdale and were received by several hundred militant supporters shouting "Callaghan out, Callaghan out!". The noble Lord, Lord Callaghan, said "I sometimes wonder why I bother".
I do not put that at the feet of the Co-operative movement. My first duty is to congratulate Mark Todd on introducing the legislation. At Second Reading in another place he mentioned that his grandfather was a Member of Parliament in the 1930s. Hope against hope, I asked his office whether his grandfather was a Liberal, but he was a Tory—another of their lost sheep. At Second Reading, Mark Todd warned against "sepia-tinged nostalgia" when dealing with Co-op matters. He is right; my generation certainly has sepia-tinged nostalgia.
Mr Bert Glynn, the manager of the Fleetwood Coop, was a figure of some substance in our local community. Every Friday night, the Co-op insurance agent called to collect my mother's contribution to her policies. At age seven, I thought she was showing

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undue pessimism in taking out a penny a week on my life. That was the kind of role the Co-op played in many communities.
Later, as a student, I went with four others to the annual general meeting of Fulham Co-op to oust four elderly, and probably very worthy, members of the local Communist Party who were the controlling majority on the Co-op. In fact, from what I could see, they were the only members until we joined to overthrow them. The Co-op has not always benefited from such political infighting.
In the mid-80s, I was the director-general of the Retail Consortium. I well remember a lunch attended, not by the Co-op, but the chief executives of the major supermarkets. When guests reached the time for coffee and brandy, someone lifted his glass and said "Let's toast the Co-op. Long may it sleep!" There has been a tendency to think of the Co-op as a sleeping giant. That may be so, but it is still a giant. In retail, its turnover is nearly £10 billion. It has over 5,000 shops and over 115,000 staff. It is Britain's biggest farmer and—this will be of particular interest to your Lordships—Britain's biggest undertaker. It is a big organisation.
As the Bill makes clear, legislation in this area affects over 500,000 charitable and non-profit organisations, over 300,000 allotments, and 6,500 registered clubs, including the political clubs, which is why I made my declaration of interest. This is not a trip down memory lane; we are talking about organisations that are very relevant, even more relevant—I will argue—to our present age.
The solutions with which co-operation and mutualism provide our society are increasingly relevant. Morrisonian nationalisation has had its day, and, as we begin to learn about some of the limitations of privatisation, it may be that the third way for which the Prime Minister is searching desperately is staring him in the face—co-operation and mutualisation. It is certainly the solution in some areas. We already see it in operation, in services to rural areas and deprived inner-city areas. There are inner-city social enterprises, and credit unions are of great importance in keeping hard-pressed poor people out of the hands of loan sharks. There are the after-hours medical services, the schoolkids' clubs, the country markets and village retailers, to which the noble Lord, Lord Carter, referred, and housing associations. Those organisations are at the sharpest of sharp ends, dealing with the problems of everyday life, and we must ensure that they are not open to hijack and asset stripping.
There are other areas of interest. Mutualism can be applied to football, rugby and other sports clubs. We all get worried when sports clubs, which are community assets and belong to the fans, are taken over and used as the playthings of rich men or become simply commercial organisations. It is probably too late for the mutualisation of Manchester United, but, at the other end of football, there is a great deal to be said for bringing the fans into soccer clubs, rugby clubs and other sporting ventures, so that they become protected, community-based assets.
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Noble Lords will know that I am involved with the Communications Bill. I see that the noble Lord, Lord McIntosh of Haringey, is on the Front Bench. When reading this Bill, I thought that access radio might find a solution in mutualisation. It would be interesting to see genuinely local radio stations run by such organisations. I fear that access radio, if it becomes really popular, will, like local radio, be hoovered up by big organisations.
The point is that, wherever we look, co-operation and mutualism are pertinent to today's needs. As the noble Lord, Lord Carter, said, we need an asset lock, to keep the assets in the community, and we need to modernise the law to protect organisations from two threats. There is the threat of the asset stripper and the threat of fossilisation when social change on narrowing of membership base means that organisations should be able to change but where the present law is cumbersome.
As the noble Lord, Lord Carter, said, this has been an ongoing process since 1997. We welcome these government measures and that they have acted, not just with the co-operatives but previously with the building societies, to prevent carpetbaggers and asset strippers moving in. The Government are to be congratulated on this legislation.
I am glad that the noble Lord said what he said about the scrutiny committee. My noble friend Lord Wigoder drew attention to three quite powerful recommendations in its report. We shall have to examine those closely in Committee, particularly the concerns about Henry VIII powers in the Bill. However, I know that the noble Lord will do so.
The Government should move on, as it were, from fulfilling the manifesto commitment to a much more confident promotion of the ideas of co-operation and mutualisation. In a wide range of areas—rural, inner city and elsewhere—it is a solution which should commend itself to a Government with their roots. Personal responsibility, community involvement, local accountability and democracy, and a commitment to quality and service are as relevant today in the 21st century as when those pioneers first met in Toad Lane, Rochdale, nearly 160 years ago. Therefore, I have much pleasure in commending this Bill to the House.
2.47 p.m.
Baroness Thornton: My Lords, I am delighted to speak at Second Reading in support of my noble friend Lord Carter on the Co-operatives and Community Benefit Societies Bill. I congratulate my honourable friend Mark Todd on choosing this Bill and on skilfully steering it through another place. I declare several interests. I am a life-long co-operator and I work with the Co-operative Group. In an unpaid capacity, I am chair of the national organisation, Coalition for Social Enterprise, which is an umbrella organisation for the whole co-operative and social enterprise movement. Finally, recently I was fortunate enough to be elected to the chair of the newly formed All-Party Parliamentary Group for Social Enterprise.

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I am pleased that the noble Lord, Lord McNally, ended his remarks on that upbeat note because I feared that at the beginning he was sinking into his own sepia-tinged tale of co-operation. The modern co-operative movement is supporting many new kinds of social enterprise and social ownership. This Bill is part of that process. I also regard this Bill as yet another stage in the process of updating and modernising the law as it relates to I&PS companies. It is the third Private Member's Bill that we have seen in the past two years seeking to bring legislation that governs co-operatives and mutuals into the 21st century. I fear that we are not quite there yet but we have travelled a long way down that road. I was delighted to take through your Lordships' House a Private Member's Bill sponsored by my honourable friend Mark Lazarowicz.
This Bill builds on the Industrial and Provident Societies Act 2002, steered through another place by Gareth 'Thomas. It will benefit a large number of organisations, including consumer co-operatives, worker co-operatives, housing associations, credit unions and a variety of social clubs. The proposed reforms are welcome in that they seek to provide a level playing field for companies and secure the benefit of assets for the community that the co-operative seeks to serve and thus deter carpetbaggers.
In many ways, I am particularly interested in the potential that this Bill offers to those who are seeking to establish new forms of social enterprise and cooperatives today. The Bill needs to be seen in the context of the Government's overall commitment to extending new forms of enterprise into British economic life and their determination to reform public services by offering a range of alternatives to either public or private ownership. That range of alternatives seeks to look at the provision of—dare I say?—health services, nurseries, library services, leisure services and care of the elderly. I believe that there are no barriers to the enterprises that could serve and trade for a social purpose in our communities.
The Government recently launched a consultation process seeking views on the proposal to introduce a community interest company Bill. The fact that it was launched by three—or was it four?—Cabinet Ministers and several of their junior Ministers sent a fairly strong signal that the Government want to take that Bill forward. The genesis for the community interest company Bill was the work done by the Government's Strategy Unit, already referred to by my noble friend Lord Carter, in its report entitled Private Action, Public Benefit, which was discussed in this House on 6th February last. It made two recommendations on social ownership and the legal framework that would encourage its future growth.
The report recommended, first, the creation of a new legal entity—the community interest company—and, secondly, that the industrial and provident society legislation,
"should be strengthened and updated by enabling Societies to opt for protection from demutualisation, and by renaming them as either Co-operatives or Community Benefit Societies".
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It is this second proposal that we are discussing today.
Noble Lords will be aware that it can take as little as 24 hours to set up a company in the United Kingdom and that it can cost as little as £90. We should be proud of that. However, if one wants to establish a cooperative, a mutual or a social enterprise, the I&PS legislation used is still based in the 19th century and is very outdated. Therefore it should be no surprise to learn that only 200 such companies were registered last year, compared with 6,000 charities, over 5,000 companies limited by guarantee and well over 200,000 companies limited by shares. Thus I&PS companies are still expensive, complicated to establish and not straightforward to administer. A fundamental overhaul of the structure has been recommended in the report.
As has been said, this is about creating a level playing field. I believe that it is important that it should be easy to create a co-operative model for an enterprise as a community interest company and that a range of legal structures should be available, accessible, reasonably priced and appropriately regulated. This Bill marks another step along that road and its passing will make it easier when we come to consider the community interest company.
Many of us are very committed to the legal reforms that will offer a range of structures, because the enterprises we seek to encourage are constantly seeking new and innovative ways to run their businesses and serve their communities. That is why this is such an exciting sector of the economy.
I close by saying how much I welcome the Bill and I hope that it will receive an easy and constructive journey through your Lordships' House.
2.53 p.m.
Lord Graham of Edmonton: My Lords, it is always a pleasure and a privilege to speak in these debates. Like the noble Lord, Lord McNally, I put my name down to speak in order to ensure that my noble friend Lord Carter was not lonely. However, the noble Lord, Lord McNally, referred to a remark made many years ago by my noble friend Lord Callaghan. After an event he was heard to say, "I don't know why I bother". Frankly, I do not know why I have bothered today because the case has been so well made by my noble friends Lord Carter and Lady Thornton, and the noble Lord, Lord McNally.
This has been a good week for the co-operative idea. On Wednesday, the noble Lord, Lord Naseby, brought before the House a debate on the future of friendly societies. That was a little gem of a debate, in that it served to remind the Government that there are other enterprises aside from the industrial giants and global players; there are the comparatively little people who also need government protection. However, I am bound to say that my noble friend Lord McIntosh, the Minister who responded to the debate, gave a friendly nod to the future of friendly societies.

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The noble Lord, Lord McNally, referred to a period when he helped my noble friend Lord Callaghan. Before the 1974 election, the great prize for the Cooperative movement was to get accepted a body called the Co-operative Development Agency. Mr Terry Pitt, the research officer at Transport House, played a great part in it, as did the noble Lord, Lord McNally.
In 1978–25 years ago, but only 25 years ago—the Labour government under the noble Lord, Lord Callaghan, introduced the Co-operative Development Agency. It was not the be all and end all of the future of the Co-operative movement—that has always been in its own hands—but it was the creation of a structure which endeavoured, nationally and regionally, to promote co-operatives. Sadly, during the 1980s and into the 1990s that ideal fell by the wayside.
But the Co-operative movement picked up the challenge and the United Kingdom Co-operative Council was created. Its second, and illustrious, chairman was my noble friend Lord Carter, and I followed him.
From the days when it fought itself into existence the Co-operative movement has had to survive very bleak conditions. At one time it deserved the description of the noble Lord, Lord McNally, as a "sleeping giant". The "sleeping giant" then illustrated on the front page of the People newspaper was the Maldon Co-operative, which was represented by the noble Lord, Lord Wakeham. So we have been through the troughs.
My noble friend Lord Carter quite rightly pointed out why we are here at the moment. At one time the solution was seen to be the Government's endorsement of a co-operative Act. Everything went into it. Rut it was so comprehensive that we quickly recognised that the difficulty of finding time for it was beyond us.
I wish to put on record my gratitude to the civil servants of the Co-operative movement outside the House who may be listening. We are indebted for their hard work in helping our good friend Mr Gareth Thomas—the chairman of the Co-operative Party as well as a Member of another place—to produce his amendment to the Industrial and Providence Societies Act. The Bill represents another bite at the cherry.
When we talk about the beneficiaries of the Bill, we of course include the existing co-operatives. Today we have the benefit of reading the debates in another place and reading about enjoyable facts and situations; we can see the opportunities that are available for ordinary people to benefit. But a co-operative is an organisation designed for the benefit of its members and the Bill is designed for the benefit of the communities in which those people live. I hope that the Minister will be helpful, if not strictly correct, when he refers to the significance of the information we received yesterday.
I declare an interest as a consultant to the Cooperative Group, which used to be called the CWS and which was well known, respected and successful.
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The Co-operative movement recognises that its future is in its own hands, but it needs assistance. I can recall from my time in both this House and another place—which is not considerable but is somewhat lengthy—that, arising out of the Victorian ethos, the banking movement, the insurance movement, credit unions and building societies have all had a modern Act framed in accordance with the conditions appertaining to them in 2000 and beyond.
I am grateful to the noble Lord, Lord McNally, for outlining the strength of the Co-operative movement and to my noble friend Lady Thornton for pointing out the possibilities for the application of the cooperative ideal. We all know about Co-ops—shops on the corner, dividends, and all the rest of it. But lots of people like the idea of co-operative organisation; they do not necessarily approach it in the same way as I do, or anyone else. The beauty of the co-operative idea is in democracy, self-help and self-reliance. It is open to all, democratically controlled, and is of benefit not just to individuals but to communities.
We are indebted to the noble Lord, Lord Carter, for bringing the Bill forward. The noble Baroness, Lady Thornton, referred to a Bill from the same stable, which she ran through the House last year. I had the same privilege with the Bill introduced by Gareth Thomas. This is a good time for the idea of mutuality to be kept alive in the minds of legislators, whether it is in the form of co-ops, friendly societies, building societies or those who do not wish to be demutualised but to continue the sound practices of our Victorian forebears. The Rochdale pioneers got off their knees, stood up proud, and gave the country and the world the Co-operative movement. When we realise their struggle and what they did, it is surely not beyond our wit to do even better in the next century.
3.1 p.m.
Lord Newby: My Lords, I, too, declare an interest as vice-chair of the all-party group on social enterprise. Having listened to the eloquent speeches already made, I am very aware of the old political adage that everything has already been said but not everybody has said it. I shall try not to repeat too much of what has already been said.
There has been some discussion of the extent to which co-operatives and community benefit societies are viewed with sepia-tinged nostalgia. My view has been expressed by a number of noble Lords: I think we are entering an era of renaissance for the mutual sector. It is very different from the original impetus for the Co-operative movement in that I do not think that the renaissance will find itself in the retail sector. But there is a lot of thought and a lot of work on mutuality in the provision of public services and elsewhere.
When the Liberal Democrats looked at the future of the delivery of public services under the Huhne Commission, one of the principal strands was the need to investigate the scope for mutuality as the basis of provision in healthcare, education and elsewhere. One interesting thing has been the extent to which the framework of mutuality has been able to adapt to new

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areas of activity which were far removed from the pioneers in this sector. For example, I have been particularly struck by the work of Greenwich Leisure in producing much more innovative and efficient leisure facilities than the local borough was able to do under the previous rules or regime, and in selling its services outwith Greenwich and, indeed, London. The noble Lord, Lord McNally, mentioned the work being done to see how football clubs, which are very much community clubs at the other end of the scale from Manchester United, might be run on a mutual basis.
This is an area and a form of organisation whose time has come. We look forward to discussing the community interest company Bill in due course because that is another building block to enable this sector to move forward more quickly.
This Bill is part of that process and, as everyone has said, it is very useful. Clause 1, which is the heart of the Bill, deals with locking in. When I first read the Bill and the briefing notes, I was somewhat surprised to contemplate members of a community benefit society turning themselves into a company and dissipating the assets on some other area of activity. I was still not sure how often that has happened, but then I was reminded of the recent history of the major building societies, so I could immediately see the relevance of it.
The Bill also brings out how much legislation in this area has fallen behind that elsewhere. In the Finance Bill, we discussed a provision under which large companies will have to pay all their tax electronically, yet in the same year we are just abolishing the need for a common seal to be applied to every document that must be verified in this sector. That is a stark indication of how far there is to go before the legislation in this sector is brought up to date. Everything in the Bill is very welcome.
I have two questions for the Minister. First, the noble Lords, Lord Carter and Lord McNally, referred to the report of the Select Committee on Delegated Powers, which suggests that in three areas the powers in the Bill may be slightly too wide. In two cases, it suggests how that might be rectified. If amendments that deal with the issues raised in the Select Committee report are introduced in Committee and passed, can the Government give any assurance that the Bill, being then an amended Bill, will be given a fair wind when it goes back to the Commons? I notice the noble Lord, Lord McIntosh, smiling, so I suspect that I know what his answer will be. It would be a great pity if technical amendments dealing with valid concerns ended up scuppering the Bill.
Secondly, will the Minister give a commitment that any secondary legislation that the Bill will introduce, on the assumption that the Bill is passed, will be published in draft form and commented on? In that way, when it is passed, it will have had proper pre-legislative scrutiny and will be in the most appropriate form.
With those caveats, I have pleasure in supporting the noble Lord, Lord Carter, and all those who have spoken on the Bill.
3.7 p.m.
Lord Skelmersdale: My Lords, I can tell the noble Lord, Lord McNally, that today I am not in a militant mood, despite my name. Rather, it is my great pleasure to congratulate the noble Lord, Lord Carter, on what his noble friend Lord Graham called achieving a part of his original intention.
That intention was to legislate on a promise by the Government, in last September's Strategy Unit report, Private Action, Public Benefit. Paragraph 8.10 of the report states:
"Reform of Industrial and Provident Societies is likely to require separate legislation".
What, if any, more legislation can we expect in that area? That is essentially what the noble Baroness, Lady Thornton, was asking.
I am coming new to the subject, and it seems to me that the title of the report applies aptly to the noble Lord, Lord Carter, and to his Bill. It aims to reduce the time that the mutual and community benefit societies spend in dealing with regulations and allows them to enlarge the scope of their activities. Specific clauses will give them the right to safeguard the societies' assets in their constitutions, thereby protecting them from asset-stripping. The noble Lord, Lord Newby, made that point. Clearly the noble Lord, Lord Carter, feels that the current lack of that protection prevents mutuals and co-operatives from controlling public services. It seems that the Government agree with him.
In another place, we signalled our support for this Bill, while raising some concerns, including querying the reference to industrial and provident societies in the Short Title as hardly fitting in the 21st century. Be that as it may, the Bill as it is now is far better than it was when introduced in another place. Indeed, the Bill has undergone a huge metamorphosis since Mr Todd introduced it in another place. It will now be greatly welcomed by co-operative and community benefit societies. They play an important role in the voluntary sector which, as all today's speakers have proved, is supported by Members of this House as being integral to the way in which we in this country live our lives and as part of the essential culture of a civilised society. The initiative of the honourable Member to whom I have just referred has allowed the Government to focus their energy on addressing the matter seriously with all the professional resources at their disposal, resulting in the almost total redrafting to which I alluded.
The noble Lord, Lord Carter, will be relieved to hear that we still support the Bill's passage to the statute hook. It is a permissive Bill and is consequently enabling legislation. Producing such legislation rather than measures which curtail and restrict freedom is a proper role that this House has taken upon itself in recent years and is, of course, an essential element of our democracy.
There is no doubt that co-operatives and community benefit societies comprise a very important sector of the economy, not least because, at the end of 2000, the 8,382 industrial and provident societies on the register held assets of £61 billion. That amount of loot simply proves the point. The register is

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divided between retail societies including the small cooperative stores and the wholesale and productive societies. The register also includes not only the agricultural societies which have been dear to me, and I am sure also to the noble Lord, Lord Carter, and which are so important to our rural economy given the challenge that it currently faces, but also the fishing societies which provide for the supply of fishing equipment to members and marketing facilities to each other. It also includes clubs, general service societies and housing societies.
I agree with the noble Lord, Lord Newby, that the opportunities to provide services to the public sector are enormous and growing by the moment. Given the great importance of those organisations to what is taking place in so many of our communities, the Strategy Unit report correctly puts its finger on this important area for review.
In regard to the regulatory impact assessment's finding on the power to restrict the use of assets—the so-called asset lock—in Clause 1, the letter from the Minister, Ruth Kelly, in March suggests that without an asset-locking regime in place, there would be,
"a serious deterrent to funders".
I note that that was not clear from the Bill's introduction and that the point was seized on during deliberations in another place. That was important not only because we have looked at a number of the processes by which these entities are able to commit themselves and to be bound to the outside world as well as ensuring that they have modern procedures, but because in the modern competitive world they must have the opportunity to gain the confidence of those who would seek to fund them so that they can be competitive while maintaining the mutuality of interest of their members.
As with public limited companies, provisions also allow for the possibility of a reduction in transaction costs and the facilitating of business transactions, which we welcome as potentially deregulatory.
I should like to raise a practical point; namely, that in relation to the sealing of documents there is an added benefit which is not highlighted in the Minister's letter of 25th March. These days, commercial deals are often done quickly to capture the opportunity, and cooperative or community benefit societies equally need to try to ensure that they do not lose out by being unable to act swiftly when it is in their interests and the interests of their members so to do. In plcs the seal is no longer needed. Here, although it has to be considered in jurisdictions other than England and Wales, it is appropriate that we have that benefit, which is also necessary given that, these days, company executives as well as those of co-operatives and community benefit societies have to travel extensively, despite the fact that their jobs are focused within their community. They are often not in the right place to be able to sign against the seal. The point is very practical, but all those who have been involved in commerce realise that such factors can often be a serious deterrent to getting deals done quickly and giving confidence to the other party.
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The Bill is highly desirable and, unlike another piece of legislation that begun its passage through another place on Wednesday, likely to be effective. The point on the question of the name has been considered but it would be helpful if the Government reiterated their assurance that the legislation is not intended as a blank cheque but as a process by which secondary legislation is clearly itemised and dealt with by statutory instrument. Mostly these would be negative but I am glad to see that Clause 1 on the power to restrict the use of assets is to be done by affirmative instrument. Indeed, I note the report of your Lordships. Select Committee on Delegated Powers and Regulatory Reform that the Bill already goes over the top in this respect. I trust and believe that the noble Lord, Lord McIntosh, will take this criticism on the chin and do something about it.
I should like to pay tribute to all that the cooperatives and community benefit societies do. This is a well deserved measure that will assist them in going forward in the 21st century. We hope that it builds on the legacy of past generations which made available assets as well as their time, skills, endeavour and good will. I hope that this House will acknowledge them by doing the same and adding to their good work. I again congratulate the noble Lord, Lord Carter.
3.16 p.m.
Lord McIntosh of Haringey: My Lords, I start by congratulating my noble friend Lord Carter on the way he introduced the Bill and, indeed, on not being too lonely in doing so. It has certainly freed me from the responsibility of going through the detail of the Bill other than, as the House would expect, analysing Clause 1 in some detail as that is the most controversial part.
It is clear from the debate on Wednesday, referred to by the noble Lord, Lord Graham, that the Government are, in his phrase, "friendly about friendly societies". I hope that I can be co-operative about co-operative and community benefit societies.
I do not want to repeat what I said in support of the principles of mutuality but I want it to be known that the Government's support for the mutuality principle has not disappeared in the past 48 hours. We remain committed to the concept of mutuality with its focus on member participation and service to the community. The mutual sector is made up of a wide range of organisations including building societies, friendly societies and credit unions in addition to industrial and provident societies. That is why we supported last year's Private Member's Bill brought forward by Gareth Thomas MP which initiated reform in a number of key areas of industrial and provident society legislation.
The Government also initiated a review of the voluntary and not for profit sector by the Strategy Unit in July 2001, which has already been referred to. The final report, Private Action, Public Benefit was published in September 2002 and contained a number of recommendations for reform of the industrial and provident society sector. The noble Lord, Lord

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Skelmersdale, asked what further legislation will be required. Certainly, the report indicates the need for reform of the legal framework for industrial and provident societies. We shall shortly respond to the recommendations in the report. There will then be an answer to the question posed by the noble Lord, Lord Skelmersdale, as to what, if any, legislation is required.
The most important recommendation so far as we are concerned is the asset lock-in regime for community benefit societies, which Clause I would enable. The Bill before us has three main objectives: first, to allow a community benefit society to adopt an asset lock-in, ensuring that its assets can be used only for the benefit of the community; and, secondly, to enact changes to the powers and capacities of societies to facilitate their ability to enter into business transactions. I note the helpful comments of the noble Lord, Lord Skelmersdale, about the use of a common seal. When I ran companies I always had to search for the common seal on the rare occasions when it was required for business transactions. The Bill's third objective is to amend industrial and provident society legislation to make it easier for societies to enter into contracts and execute documents.
Clause 1—the asset lock-in clause—would allow the Treasury to bring forward in secondary legislation provisions to permit community benefit societies to ensure that their assets can be used only to the benefit of the community. The aim is not to restrict societies from buying, selling or trading in their assets. The purpose is to develop a regime that enables the society to ensure that its assets are permanently dedicated, in whatever form, for a business purpose for the benefit of the community.
Although the Financial Services Authority, which of course is the regulatory authority, will not register a community benefit society unless it has an asset lock-in rule in its constitution, that does not give the societies the security that they might need. For example, a society could convert into a company, and some time later reverse the asset lock-in rule in its company constitution. Asset lock-in for community benefit societies emerged as one of the key recommendations of the Strategy Unit report on the voluntary and not-for-profit sector, and has received firm support in the public consultation that has now ended on that Strategy Unit report.
The report noted that the current situation, with no unalterable or irreversible asset lock-in provision available, was a "serious deterrent to funders" of those societies. The Government support the principle of asset lock-in. We can see the benefits that it could bring to the community benefit society sector. However, we are in a complicated policy area, and it is important that the principle is implemented in a manner that maximises the benefits for the sector and the economy as a whole.
It is vital that any asset lock-in regime does not decrease the efficiency of the sector or create inappropriate restrictions on the societies' ability to merge or consolidate. The Strategy Unit identified a
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number of detailed points where we need to consult further. For example, the report referred to "robust mechanisms" that,
"would have to be put in place to ensure that takeovers, mergers and dissolutions are conducted in a fair and transparent way".
The report also makes it clear that the lock on assets may not be appropriate for all societies.
The clause provides the framework for what we believe is necessary to set up an appropriate asset lock-in regime. If the Bill becomes law, we will undertake further work to consult on the details of how such a regime might function, and bring forward secondary legislation if such a regime continues to be sensible and feasible. In order to ensure that any asset lock-in regime receives the benefit of appropriate parliamentary scrutiny, it is already clear that the secondary legislation would be subject to affirmative resolution in both Houses.
I note, however, the report of the Select Committee on Delegated Powers and Regulatory Reform and its three recommendations. Clearly, my noble friend Lord Carter will have to talk to the Select Committee and his advisers who have been promoting the Bill. I know that he will do so, because I know from my experience of working with him that he shares the respect that the Government have for the judgment of the Select Committee.
It is not clear to me yet—it cannot be, because we have not had a chance to look at the report in detail—whether the committee's recommendations will make amendments necessary. I say that because the noble Lord, Lord Newby, asked a consequential question about whether we could give a fair wind to the Bill if it went back to the House of Commons with amendments. He will know that I cannot commit government time to a Private Member's Bill. However, he will also wish to know that we have considered the possibility. I cannot go any further than that.
The noble Lord also asked whether regulations would be available in draft. I have already made it clear that any regulations would have to be subject to consultation, and therefore they certainly will be available in draft. I think that I have answered the point made by the noble Lord, Lord Skelmersdale, about further legislation for industrial and provident societies.
I shall not go into the detail of the subsequent clauses. They were more than adequately presented by the noble Lord, Lord Carter. I believe that these proposals represent a welcome move towards the modernisation of industrial and provident society legislation by increasing the societies' operational flexibility. On that basis, we support the Bill.
3.25 p.m.
Lord Carter: My Lords, I am grateful to all noble Lords who have spoken. Far from being lonely, I thought that the debate was more of a "love in" than anything else.
I am extremely grateful to the noble Lord, Lord McNally, who reminded me about the collection of the Co-operative insurance society premiums. The chap

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who collected our premiums used to collect a sub for the Labour Party at the same time. I am not sure whether the Financial Services Authority would allow that now. I am also grateful to the noble Lord for illustrating the very wide range of community benefit societies. I did not have the time to do so.
The noble Lord, Lord Newby, referred to the "renaissance" in mutuality. The whole co-operative movement missed a trick when, under the previous Conservative government, organisations were in the throes of privatisation. Although that government would not have accepted the idea of mutuality for the nationalised corporations, as it were, I think that we should at least have started to get this matter on to the agenda, where it is now.
There have been a number of references to the Delegated Powers and Regulatory Reform Committee. I shall take advice and decide how best to deal with that.
My noble friend Lady Thornton referred to CICs. I am surprised that my noble friend Lord Graham, with his fondness for punning, did not link CICs to football supporters' trusts. He confirmed what is now the incremental progress in the reform of Co-op law. Although I did not think so in 1997 when I presented a Bill containing 137 clauses to the incoming government, this Bill perhaps provides a better way to proceed than a "big bang" Act.
My noble friend the Minister dealt with the reference to the Delegated Powers and Regulatory Reform Committee and the fact that there will be a widespread and lengthy consultation process. Then the Bill will be taken forward.
Perhaps I may say a brief word to the noble Lord, Lord Skelmersdale, on the history of the need for lock-in. He referred to the demutualisation of building societies. We should not forget the attempt a few years ago to break up the CWS. There has always been a fear—which lay behind the draft Bill that I presented—that the assets of a society that was constructed for the benefit of the community could be stripped away.
I certainly agree with the noble Lord that we need a more up-to-date name than "industrial and provident societies". It is an old-fashioned terminology. I hope that there will be a final overhaul of the 1965 "I&P" Act, as we all know it—which is itself based on 19th century legislation. I hope that more modern terminology can be found.
I think that I have answered all the points made. I have pleasure in commending the Bill to the House.
On Question, Bill read a second time, and committed to a Committee of the Whole House.

Road Traffic (Amendment) Bill [H.L.]
3.28 p.m.
Lord Beaumont of Whitley: My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
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Moved, That the House do now resolve itself into Committee.—(Lord Beaumont of Whitley.)
On Question, Motion agreed to.
House in Committee accordingly.
[THE DEPUTY CHAIRMAN OF COMMITTEES (Baroness Turner of Camden) in the Chair.]
Lord Beaumont of Whitley Lord Beaumont of Whitley moved Amendment No. 1:
Before Clause 1, insert the following new clause—
"PROMOTION OF ROAD SAFETY CODE OF PRACTICE FOR HORSE-DRAWN VEHICLES
After section 38 of the Road Traffic Act 1988 (c. 52) there shall be inserted the following section—
"38A CODE OF PRACTICE FOR HORSE-DRAWN VEHICLES
(1) Subject to the following provisions of this section, the Secretary of State—

(a) shall make a Code of Practice for Horse-drawn Vehicles; and

(b) may from time to time revise such a Code of Practice by revoking, amending or adding to its provisions in such manner as he thinks fit.

(2) Before making or revising a Code of Practice for Horse-drawn Vehicles, the Secretary of State must consult with such representative organisations as he thinks fit.
(3) Where the Secretary of State—

(a) has made a Code of Practice for Horse-drawn Vehicles; or

(b) has made any alterations in the provisions of such a Code (other than merely consequential on the passing, amendment or repeal of any statutory provision), he must lay the alterations before both Houses of Parliament.

(4) A Code of Practice for Horse-drawn Vehicles, and any alterations to such a Code, laid in accordance with subsection (3), shall be subject to annulment in pursuance of a resolution of either House before a period of forty days has expired beginning with the day on which the Code or alterations were so laid.
(5) The Secretary of State must cause any Code of Practice for Horse-drawn Vehicles to be printed and copies to be made available to the public either free of charge or at such price as he may determine.
(6) A failure on the part of a person to observe a provision of a Code of Practice for Horse-drawn Vehicles shall not of itself render that person liable to criminal proceedings of any kind but any such failure may in any proceedings (whether civil or criminal, and including proceedings for an offence under this Act) be relied upon by any party to the proceedings as tending to establish or negative any liability which is in question in those proceedings.
(7) Until a Code of Practice for Horse-drawn Vehicles is made under this section, the Code of Practice for Horse Drawn Vehicles published in 2000 by the Department of the Environment, Transport and the Regions shall have effect as if it had been so made, and may be revised accordingly.
(8) Paragraphs (a) and (c) of section 38(9) apply for the purposes of subsections (3) and (4) as they apply for the purposes of section 38(3).""
The noble Lord said: Noble Lords will remember that this Bill was given a Second Reading. The Bill is designed to fill a gap in the law that resulted in accidents to people and which seemed to call for statutory reinforcement. It was received with reasonable approbation by the Back Benches and the

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Liberal Democrat Front Bench; with the usual reserve by the Government; and with slight criticism—surprising criticism—by the Conservative Front Bench. I say "surprising" because the Conservatives had been in favour of the legislation at an earlier stage. Perhaps they have thought better of it since Second Reading.
I apologise that the Bill needs to be amended—all the amendments are in my name. Obviously, some of the amendments could have been in the previous draft, but things do not always go as one plans. I shall do my best to put the case for the amendments as briefly as possible. Knowing that there is no major dispute about the worthiness of the cause that the Bill proposes, I hope that we need not detain noble Lords from their gardens or whatever any longer than is necessary.
Amendment No. 1 would add a new clause to the Bill. It is the biggest of the amendments. Its purpose is twofold. First, it would give transitional effect to the non-statutory Code of Practice for Horse-Drawn Vehicles, which was published by the DETR in 2000. Secondly, because it would be wrong to give continuing effect to a non-statutory document, the new clause goes on to provide for the code's replacement in the course of time by a statutory code.
The present code of practice, which is available from the DETR, sets out guidance for persons driving horse-drawn vehicles. It reflects a persuasive approach, is at best patchy in its effect and provides no sanction for those who choose to disregard its advice. Being a take-it-or-leave-it affair, it is less effective than if it had statutory backing.
Consequently, the clause would back up the code—and, in due course, its replacements—in two ways. First, subsection (6) provides that any failure of observance may, in proceedings for an offence,
"be relied upon … to establish or negative any liability".
The second way involves the range of offences set out in the Bill.
Unlike the Highway Code, which provides guidance generally for road users, the code and its alteration or replacement will be subject to the negative resolution procedure rather than the affirmative one. Otherwise, the two would have an analogous effect.
It may be averred that the clause is unnecessary because its effect could well be achieved by incorporating the provisions of the horse-drawn vehicles code into the Highway Code. That is true, but we are faced with two separate documents, and it seems sensible to keep them that way instead of expanding the Highway Code—which is for the public at large and voluminous enough already—with provisions that would apply only to a relatively small number of road users.
My conviction is that the clause and the horse-drawn vehicles code would sit well together. A code with statutory backing in the proposed manner is likely to have a more marked deterrence than simply exhortatory advice without it. I beg to move.
On Question, amendment agreed to.
Clause 1 agreed to.
Clause 2 [Further amendment of the Road Traffic Act 1988]:
Lord Beaumont of Whitley Lord Beaumont of Whitley moved Amendment No. 2:
Page 4, line 8, leave out "of this Act"
The noble Lord said: Amendments Nos. 2 and 3 are grouped together with Amendment No. 4, which is of slightly greater import. Amendments Nos. 2 and 3 are in keeping with contemporary drafting practice, whereby references to provisions of the Bill, as read with the Act it amends, do not require the words which are the subject of the amendments. Amendment No. 4 states that,
"In this section 'owner', in relation to a vehicle which is the subject of a hiring agreement, includes each party to the agreement".
In seeking to expand the reference to "owner", the amendment is self-explanatory. It makes identical provision to that contained in subsection (3) of Clause 2, which in turn is modelled on Section 165(7) of the Road Traffic Act 1988. I beg to move.
On Question, amendment agreed to.
Lord Beaumont of Whitley Lord Beaumont of Whitley moved Amendments Nos. 3 and 4:
Page 4, line 15, leave out "of this Act"
Page 4, line 46, at end insert—
"(6) In this section "owner", in relation to a vehicle which is the subject of a hiring agreement, includes each party to the agreement.""
On Question, amendments agreed to.
Clause 2, as amended, agreed to.
Clauses 3 to 9 agreed to.
Schedule 1 [Amendment of Schedule 2 to the Road Traffic Offenders Act 1988]:
Lord Beaumont of Whitley Lord Beaumont of Whitley moved Amendment No. 5:
Page 7, line 6, after "(c. 52)," insert "in columns 1 to 4"
The noble Lord said: The amendment is grouped with Amendments Nos. 6 and 7. Schedule 1 to the Bill is almost entirely concerned with inserting new entries relating to the prosecution and punishment of offences created by the Bill into Schedule 2 to the Road Traffic Offenders Act 1988. Given that Schedule 2 to that Act consists of seven columns, the purpose of the amendments is to make clear that the new entries are to be inserted in columns 1 to 4. Columns 5 to 7, which deal with disqualification, endorsement and penalty points, will not apply, as they relate entirely to the misdriving of mechanically propelled vehicles. I beg to move.
On Question, amendment agreed to.
Lord Beaumont of Whitley Lord Beaumont of Whitley moved Amendments Nos. 6 and 7:
Page 8, line 4, after "Act" insert "in columns 1 to 4"
Page 8, line 14, after "Act" insert "in columns 1 to 4"
On Question, amendments agreed to.
Schedule 1, as amended, agreed to.
Schedule 2 [Minor and consequential amendments]:
Lord Beaumont of Whitley Lord Beaumont of Whitley moved Amendment No. 8:
Page 8, line 34, at end insert—
"1A In paragraph 17 of Schedule 1A to the Police and Criminal Evidence Act 1984 (c. 60) (arrestable offences), after the words "section 170" there shall be inserted the words "or section 170A"."
On Question, amendment agreed to.
Schedule 2, as amended, agreed to.
Schedule 3 agreed to.
House resumed: Bill reported with amendments.
House adjourned at twenty minutes before four o'clock.