Sitting of 25 March 2004

Preamble
The House met at half-past Eleven o'clock
PRAYERS
[MR. SPEAKER in the Chair]
Oral Answers to Questions
  TRADE AND INDUSTRY
  The Secretary of State was asked—
  TRADE AND INDUSTRY

    Broadband
    Mr. David Cameron: What steps are being taken to increase the take-up rates of broadband in the UK. [163433]
    Mr. Jonathan Djanogly: What steps she is taking to increase the availability of broadband in rural areas. [163439]
    The Minister for Industry and the Regions (Jacqui Smith): We are making good progress towards ensuring that the UK has the most extensive and competitive broadband market in the G7 by 2005. Work across Government through the regional development agencies, local authorities, industry and community groups means that broadband is now available to more than 85 per cent. of homes and businesses, and use by small and medium-sized enterprises has doubled in the past 12 months. The joint Department of Trade and Industry/Department for Environment, Food and Rural Affairs rural broadband unit is working to ensure a specific focus on the needs of rural areas.
    Mr. Cameron: Does the Minister agree that access to broadband is vital for our rural communities? Will she join me in congratulating British Telecom on setting trigger levels for all areas throughout Oxfordshire; and more to the point, will she congratulate local campaigners—heroes and heroines in our communities—who have campaigned to meet those trigger levels? Does the Minister accept, though, that in rural areas like mine, there are still many farms, businesses and sometimes whole hamlets that will not get broadband because they are too far from the exchange? Will she work with the development agencies and others to learn from the best practice round the country, and make sure that the Government lead the process of finding good solutions to make broadband available to all who currently cannot get it?
    Jacqui Smith: I very much agree with the hon. Gentleman. Of course it is important that we maximise the number of exchanges that are enabled, but BT's
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    ADSL technology is not the only solution, particularly—as the hon. Gentleman points out—for communities that want broadband services and are more remote from those exchanges. That is why I commend, for example, the activity of the Oxford rural broadband project funded with a grant from the South East England Development Agency and from Europe. That provides a good example in the hon. Gentleman's constituency of how community organisations can take the lead in partnership with RDAs, local authorities and, in this case, the co-operative movement, to make sure the benefits are shared more broadly. I know that he has also welcomed that initiative.
    Mr. Djanogly: By the end of this summer all the exchanges in my constituency should be enabled, which is good news. As my hon. Friend the Member for Witney (Mr. Cameron) described, people who live more than 6 km away from an exchange will probably not be able to receive a broadband service. The Minister gave an example of a community getting together in rural Oxfordshire. However, I shall be interested to hear what the Government intend to do to ensure that access is available to people living in remoter rural areas, such as my constituency. Have the Government ascertained the extent of the problem in terms of numbers?
    Jacqui Smith: It was Government investment in the regional development agencies that enabled the action in the constituency of the hon. Member for Witney (Mr. Cameron), and through the East of England Development Agency in the hon. Gentleman's constituency as well—a £30 million investment that has led, for example, to a £3.8 million connecting communities project which impacts on the hon. Gentleman's constituency, an awareness campaign, confirmation from BT that the take-up of broadband services in the eastern region is the highest in the UK, and funding for technology trials so that, for example, the interestingly named Rabbit project across rural parts of the region is ensuring that those which previously had no hope of broadband connection by any other means are having the technology trialled. This is, of course, funding from the Government through regional development agencies—funding and agencies that Conservative Members opposed.
    John Robertson: The Government should be commended for the work they have done on broadband, and it would be churlish to blame them for the fact that the technology has not yet reached remoter areas. However, in the rural areas of Scotland—the highlands and islands—there is a genuine problem of access to the service for businesses. Will my right hon. Friend look into that and consider subsidies for such areas for broadband and telecommunications in general?
    Jacqui Smith: My hon. Friend makes an important point. As I outlined, it is the considerable additional investment being made available through the devolved Administrations as well as the development agencies that is enabling other technology—wireless technology and the development of other means of connecting businesses and homes to broadband—which allows us to make such progress. I share my hon. Friend's

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    concern. As my hon. Friend the Minister for Energy, E-Commerce and Postal Services has outlined, we will do all we can in Government to ensure that we meet the target of having the most extensive and competitive broadband market, and of access in every community to the benefits that broadband can bring to households, communities and businesses.
    Mr. Stephen O'Brien: The Minister knows that the UN-affiliated International Telecommunication Union ranks the UK only 25th in digital take-up. Will she accept that that is because, even where broadband is available, the digital speeds offered by some so-called broadband packages are so slow that they have disappointed users, particularly businesses seeking to improve their productivity? The Government's definition of "broadband" is deliberately wider than it should be. Will the Minister adopt the ITU definition of broadband, or is she a victim of the Government's habit of relying on a looser, easier definition to try to meet their self-proclaimed targets—she used the word "target" earlier?
    Jacqui Smith: I am sorry that the hon. Gentleman feels it necessary to talk down the considerable progress in developing both availability and take-up of broadband, which has been achieved in partnership with regional development agencies, local authorities and devolved Administrations. Take-up has more than tripled because of Government action, and although the hon. Gentleman can bicker about definitions, the progress is obvious. The progress would be undermined by Opposition policies not only to cut investment, but to do away with RDAs, which have contributed so much.

    Doha Trade Round
    Hugh Bayley: What recent discussions she has had with other countries' Trade Ministers about the Doha trade round. [163434]
    The Secretary of State for Trade and Industry (Ms Patricia Hewitt):Since the ministerial meeting in Cancun last September, I have met or spoken to a wide variety of Trade Ministers about how we can more forward on the Doha round, including Commissioner Lamy, colleagues in other European Union member states, Minister Amorim from Brazil, Minister Erwin from South Africa, Minister Jaitley from India and Minister Zhang from China.
    Hugh Bayley: Does my right hon. Friend agree that one way to restart the stalled World Trade Organisation negotiations on trade and agriculture would be to revive the proposal to eliminate export subsidies? Our Government have made that proposal on many occasions, and even President Chirac of France floated it when he held his Africa summit one year ago. Might that not provide a way to put energy back into the talks and get people moving towards agreement once again?
    Ms Hewitt: My hon. Friend is absolutely right. The point is enormously important because part of the European Commission's negotiating mandate, which we helped to construct, is an offer to end export subsidies on all products of interest to developing
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    countries, which have not started negotiations. I have recently written to Trade Ministers in a number of developing countries, and reinforced the point in discussion, to say that the offer is not a negotiating trick from the European Commission. If those developing countries produce a list of products on which they want an end to export subsidies, it will be negotiated. I am delighted that Agriculture Commissioner Fischler said in public on Monday that it is up to developing countries to say which products they are interested in, and that if they say "all products", we must discuss that too. That is how to abolish those appalling export subsidies, which are so damaging to developing countries.
    Tony Baldry: In their response to the Select Committee report on Cancun, the Government said:
    "We agree the EU needs to work harder to explain to many countries the longer term impact of the CAP reforms agreed last year".
    Is it the Secretary of State;s view that the European Union has done enough on agriculture and common agricultural policy reform, and that it is simply a matter for others—notably, the United States—to reform; or do the Government take the view that there is more work to be done in the EU on CAP reform if we are to have a successful development round?
    Ms Hewitt: Much has been done since December, when the European Union agreed its position post-Cancun. I welcome the fact that Commissioner Lamy has gone to so many countries and talked to so many Trade Ministers around the world to set out in detail the implications of the CAP reform package that we agreed last year, and the offer on export subsidies to which I have just referred. There is, however, more to do. I know that the hon. Gentleman takes a close interest in those issues, and he will know that we are already engaged in discussions within the Agriculture Council on further reforms on cotton and, in particular, sugar, which are crucial to developing countries and which must form part not only of Europe's reform programme, but of a successful conclusion to the Doha round.
    Mr. Martin O'Neill: Is my right hon. Friend aware that the stalling of the Doha agenda has led not only to problems for developing countries, but to a number of countries entering into free trade agreements, almost as an expression of frustration? Last week, when I was in south-east Asia with my colleagues on the Select Committee on Trade and Industry, we visited Malaysia, Thailand and Singapore, which have entered into such agreements. There is a worry that the EU's trade agenda is being lost in respect of such countries. Moreover, there is a danger that the bigger Europe created by the accession process will have a "fortress Europe" tendency that ignores certain countries that are not developing countries, but mature economies from which we could benefit a great deal through improved trade relations.
    Ms Hewitt: My hon. Friend makes a series of extremely important points. I pay tribute to his work on this issue as Chairman of the Select Committee. I told the House in the wake of Cancun that there was a real

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    danger of bilateral agreements taking the place of making the right efforts on the Doha round. That has happened to some extent, although not as much as many of us feared. In reality, it is only through the World Trade Organisation that we can deal with some of the most difficult issues, including agriculture, which was exempted from the recent free trade agreement between the United States and Australia because they simply could not reach agreement on it.
    I welcome the fact that Commissioner Lamy is focusing his efforts on reviving the Doha round. That will be difficult, but I share the view expressed by Commissioner Lamy, Ambassador Zoellick and several Ministers in developing countries—that we can move the talks forward and agree by July the framework that we should ideally have reached at Cancun last September.
    Malcolm Bruce: I congratulate the Secretary of State on her recent robust Mansion House speech in which she warned of the dangers of US protectionism. In the spirit of her remarks about the Doha round, will she do more to end the intransigence over cotton that is having such severe consequences in west Africa? Will she press for greater flexibility on, or indeed the abandonment of, the Singapore conditions, which are causing great concern among G77 countries? On agriculture, will she insist that, in ensuring that the United States and Europe have viable farming economies, we do not do so at the expense of destroying the livelihoods of subsistence farmers in developing countries through unfair and devastating export subsidies?
    Ms Hewitt: I agree with the hon. Gentleman and thank him for his opening comments. On cotton, we are in the process of negotiating with our European partners a significant decoupling of income support to farmers from production subsidies. That will make a great difference. However, I share the hon. Gentleman's view that the real challenge is to the United States, which has enormous cotton subsidies. More generally, if the European Union is to deliver its share of the phasing out of export subsidies, the United States, too, must deal with the food aid and export credits that fulfil the same damaging purpose.
    I made it plain last year that the Singapore conditions were not UK priorities, but I welcome the fact that the European Commission wants to decouple the four issues. There is general agreement that we should proceed with discussions on trade facilitation, and some, but a little less, agreement on transparency in Government procurement, investment and competition. My view is that those matters should be put to one side for the moment while we get on with the really important issues in this round.
    Ms Julia Drown: I have received letters from constituents who are worried that one result of the trade talks will be that developing countries have to privatise water services. The Government deny that, but non-governmental organisations keep campaigning on it. Can my right hon. Friend tell the House whether informal pressure on developing countries is making them privatise water to
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    the detriment of poor people? Will she support any developing country that is under pressure to do that but does not want to?
    Ms Hewitt: I have repeatedly tried to make it clear in this House, and in correspondence with my hon. Friend and other hon. Members, that there is nothing whatever in the general agreement on trade in services—GATS—that would require any country to privatise its water industry or anything else. The same non-governmental organisations that make that accusation also say that GATS would require the privatisation of the national health service, which is also nonsense. When we speak to Ministers in developing countries, we hear that they welcome the opportunity that GATS gives, because it gives them the power to decide which sectors to open up and which not to open up.
    The reality is that in some developing countries, it is the judgment of their Government that the only way to get the massive investment that they need to provide clean, affordable water and decent sanitation is to bring in private capital. That is a judgment for those countries to make, not for us and, frankly, not for the NGOs. Our advice to developing countries, however, is that if they seek to open up water industries in that way, they need a strong framework of regulation to make sure that they protect affordable water for their poorest communities. We stand ready to assist with that process, particularly through the Department for International Development.
    Mr. James Arbuthnot: Does the Secretary of State agree that there is nothing more important for lifting poorer countries out of poverty than a successful conclusion of the Doha round? Does she agree that it is not just the elimination of export subsidies in the developed world that is important for that, but the elimination of domestic subsidies, and that while free trade is important for rich countries, it is often a matter of life and death for poorer countries? What prospect does she see of completing the development round, a very important round indeed, by the target date of 1 January next year?
    Ms Hewitt: I welcome the right hon. Gentleman's support for all our efforts to get the round and the negotiations back on track. The potential gains for developing countries are enormous. An ambitious round could boost the incomes of developing countries alone by some £150 billion, dwarfing the amount that they receive in aid and bringing hundreds of millions of people out of abject poverty. The prize is enormous.
    This of course requires progress not only on agriculture but on market opening and the tariff escalation that prevents developing countries from moving into much higher value-added production. It also requires the larger developing countries to open their markets to the smaller developing countries—in the way, to be fair, the European Union has done for the least developed countries with the "Everything but Arms" agreement. The timetable has clearly slipped, and the crucial issue now is to agree, I hope by July—before the United States moves into its election campaign—a framework for the round so that we can make the necessary progress to move forward to completion next year. Our Government, holding both

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    the presidency of the G8 and the presidency of the European Union next year, will make that a very high priority.

    North Sea Drilling
    3. Miss Anne Begg: If she will make a statement on her Department's initiatives to stimulate levels of North sea exploration drilling. [163435]
    The Minister for Energy, E-Commerce and Postal Services (Mr. Stephen Timms): We have taken a number of important steps to help, including introducing new types of licence to increase exploration levels, and increasing the data available to the industry. Through PILOT, the Government/industry oil and gas forum, we have been working to ensure activity in previously fallow areas, and we are making good progress on that. In addition, my right hon. Friend the Chancellor of the Exchequer is introducing an exploration expenditure supplement to stimulate exploration by new entrants to the North sea.
    Miss Begg: I welcome the announcement in last week's Budget on encouraging exploration, but I am sure that my hon. Friend is well aware that there is nervousness in the North sea area that there is not enough exploration. If exploration does not happen, either on known reserves or to find new reserves, the future of the oil and gas industry in the North sea will not be as rosy as we all hope. Will my hon. Friend make sure that the Government, either through the Treasury or through his Department, do everything that they can to ensure that extra exploration is encouraged, whether through the exchanging of licences or changing the nature of licences, to make sure that new entrants and existing operators have the chance to explore as much as they can?
    Mr. Timms: I certainly agree with my hon. Friend, and as she knows, there could easily still be as much oil and gas in the North sea as we have extracted in the past few decades. It is essential that we fully exploit those resources not only to benefit her constituents, but to benefit the economy as a whole. We are working very hard in that regard and there are some very encouraging signs. However, I am aware of the concerns that exist in the industry, and I met the United Kingdom Offshore Operators Association recently to discuss them.
    My hon. Friend may have seen this morning's report by 3i, which shows sharply increased asset disposals from the big oil companies that create major new opportunities for drilling. That is expected to make a very important contribution over the next few years. Moreover, my Department's latest survey of drilling intentions, which was also published today, shows that drilling expectations for the coming year are 30 per cent. higher than a year ago. So there are encouraging signs, but I agree with my hon. Friend that we need to work very hard with the industry to make sure that those positive signs become full grown.
    Sir Robert Smith: Do the figures for drilling intentions relate to development drilling—the expanding of
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    existing reserves—or to the new frontier exploration that will unlock the other half of the oil reserves that the Minister says we have yet to extract? There is real nervousness in the north-east of Scotland because, despite a long and sustained run of high oil prices, we are still not seeing the activity that we would expect. We urge the Government to look again at how to incentivise the exploration that would unlock the key to those reserves.
    Mr. Timms: Again, I agree that this issue is important, and the figures that I gave cover drilling of all kinds. The hon. Gentleman will doubtless have heard the announcement concerning the frontier licence in the current 22nd offshore round, which will encourage drilling in areas west of Shetland in particular. It is a long time since there has been much exploration in those areas, and we certainly want to see more.
    On fiscal incentives, I should point out to the hon. Gentleman that the Treasury works very closely with us through PILOT, the oil and gas industry taskforce, and that there have been big improvements, such as the abolition of royalties and the ending of petroleum revenue tax on new third-party tariff business relating to pipelines and other infrastructure. However, all these matters will be kept closely under review.

    Spin-out Companies
    4. Mrs. Anne Campbell: How many jobs have been created by spin-out companies from universities in the last five years. [163436]
    The Secretary of State for Trade and Industry (Ms Patricia Hewitt): The Government have overseen a huge cultural change in the attitude of our universities towards business in the past five years. In 2001—02 alone, 213 spin-out companies from universities created a total of more than 12,000 jobs, compared with an average of 70 a year in the first half of the 1990s. The steps that we have taken to encourage universities to commercialise good ideas have contributed directly to this record.
    Mrs. Campbell: There are many successful spin-out companies in Cambridge, such as Astex Technology, which is involved in discovering novel cancer drugs, so it is not just jobs that are being created but real opportunities. But how does my right hon. Friend intend to ensure that Government investment in the UK's science and research base will be maintained in the long term and not fall prey to short-termism?
    Ms Hewitt: I certainly congratulate Astex Technology and all the other companies in my hon. Friend's constituency that are doing such extraordinary work, particularly in the field of new medicines and bioscience. Through the 10-year framework for science and innovation that my right hon. Friend the Chancellor and I announced before last week's Budget, we will ensure that there is a stable and strong funding foundation for the basic science in which our country is a world leader, but which was so appallingly neglected—if I may say so—during the years in which the Conservatives were in power. We will couple that investment with a continuing increase in investment in

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    innovation, to ensure that businesses exploit the wealth of ideas and technology coming from our wonderful universities.
    Mr. George Osborne: How many jobs and spin-out companies have been created by the Cambridge-MIT Institute, the joint venture of Cambridge university and the Massachusetts Institute of Technology which is costing the taxpayer £65 million? Will the right hon. Lady confirm the National Audit Office's finding that the money was allocated in breach of the Treasury's own rules? And will she further confirm that up to half that money—British taxpayers' money—is being given to MIT, which is an extremely well endowed American institution?
    Ms Hewitt: The Cambridge-MIT partnership is a wonderful partnership between two world-class institutions, which we secured against a great deal of competition from universities all over the world that wanted the partnership for their countries. We won it not just for Cambridge, but for Britain, and that partnership is delivering benefits to universities and businesses throughout our country. The NAO report was generally favourable and positive about the partnership, and on the 29th there will be a hearing of the Public Accounts Committee on the subject. I do not have the figures to hand, but I will write to the hon. Gentleman about them.
    Mr. Barry Sheerman: Does my right hon. Friend agree that we have made some steady progress, but that we cannot afford to rest on our laurels? We need an evaluation of how well each of our 123 universities is doing annually, to establish where the strengths and weaknesses lie and how we can spread best practice. Will the Secretary of State talk to people such as Professor Boucher, the vice-chancellor of the university of Sheffield, who is very concerned about what the Treasury did in last year's Finance Act, which is inhibiting spin-out companies and interesting innovative partnerships?
    Ms Hewitt: My hon. Friend makes an important point about the need to maintain progress and ensure that all universities, whether research intensive or not, are contributing to improving the economic performance of the regions and the country as a whole. I am aware of concerns about schedule 22 of the Finance Act 2003, and I am happy to be able to tell my hon. Friend that the universities and the Inland Revenue have discussed the problem; and that the Inland Revenue has been able to agree on a model for a standard spin-out company that will provide the certainty about the tax position that the universities are quite properly looking for.
    Mr. Julian Brazier: Will the right hon. Lady join me in commending the remarkable work carried out at the university of Kent in the bio-sciences and medicine—in respect of both spin-out companies and established majors such as Pfizer's? Indeed, two young scientists were at the display exhibited in the House a fortnight ago. Does the Secretary of State agree that her Cabinet colleagues should reflect carefully on
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    that before they decide on whether to grant Canterbury university's application for a medical school, currently under consideration?
    Ms Hewitt: I am sure that the university and the companies to which the hon. Gentleman refers are doing wonderful work, and I shall certainly draw his point to the attention of my right hon. Friend the Secretary of State for Health. I hope that the hon. Gentleman will join me in welcoming the recent announcement in the Budget that the Department of Health will in future ensure that its significant R and D budget for health developments will be used in a way that not only maximises the benefits to patients of new medicines, but increases the chances of getting new innovative and successful companies here in Britain to produce those new medicines.

    Fair Trade (Belize)
    Mr. Tam Dalyell: What action her Department is taking in relation to the objectives of the Fairtrade movement, with particular reference to Belize. [163437]
    The Minister for Trade and Investment (Mr. Mike O'Brien): The Government are committed to supporting the objectives of the Fairtrade movement. Fairtrade fortnight was a great success. Some 6,000 events took place across the UK raising awareness of the issue. In broader terms, the Government have provided £500,000 to assist the Fairtrade objectives.
    As to Belize, the Government have provided £225,000 to support cocoa farmers from the Toledo region, one of the poorest areas of the country. It has enabled the Toledo cocoa growers association to expand the production of its cocoa products and increase its exports overseas.
    Mr. Dalyell: Deeply impressed as I have been by inaugural meetings of small groups such as the one in the Linlithgow borough or larger groups such as the one at the university of Edinburgh, I still want to ask what the Department of Trade and Industry can do to enlarge the Fairtrade market. I am grateful to the Minister for what he said about Belize.
    Mr. O'Brien: Fairtrade is an enormously important way of enabling disadvantaged producer groups in developing countries to receive a minimum price above that offered by mainstream markets. The price includes a premium to be used for community development projects. We have been trying to work with the Fairtrade movement to increase awareness of the benefits that that brings. Stimulating awareness of the wider problems is also important.
    We can welcome the fact that Fairtrade coffee producers have about 8 per cent. of the market; but frankly, if we really want to resolve the trading problems of developing countries, the Doha development agenda is crucial. Fairtrade is an important initiative: we strongly support it and have invested some resources in it, but the most effective way of helping developing countries must be through the World Trade Organisation and proper international agreements.
    Dr. Vincent Cable: Is Belize one of the countries covered by the extraordinary suggestion by the European Trade Commissioner that import controls should be imposed on countries that he says have different cultural values? When such nonsensical protectionist stuff comes out of the European Commission, why do the Government not condemn it?
    Mr. O'Brien: We have always made it clear that we want markets to be open and fair. Throughout the WTO process and the Doha development agenda, Pascal Lamy has always made it clear that the aim is to achieve an agreement that progressively opens markets, encourages trade and lifts people out poverty. Both he and the British Government have made it very clear that we will promote those open markets.
    Mr. Peter Pike: My hon. Friend will know that there is widespread public support for the Government's policy in respect of Doha, but he will recognise also that Belize and many other countries benefit from fair trade. Should we not congratulate the co-operative movement, which has played such a key part in this country in promoting Fairtrade products?
    Mr. O'Brien: I entirely agree. We welcome the Coop's recently announced initiative to double the size of its range of Fairtrade products by the end of 2004. That is a great initiative, and the Co-op is leading the way. We hope that other supermarket chains and businesses will follow suit.

    Renewable Energy
    Mr. Alistair Carmichael: If she will make a statement on the level of transmission access charges levied on renewable energy providers in the north of Scotland. [163438]
    The Minister for Energy, E-Commerce and Postal Services (Mr. Stephen Timms): Scottish and Southern Energy currently levies charges for all generators to access the transmission system, through its subsidiary Scottish Hydro-Electricity Transmission Ltd. The new BETTA arrangements in the Energy Bill will create a Great Britain-wide market, in which transmission charges will be the responsibility of the National Grid Company.
    Mr. Carmichael: I thank the Minister for that answer, and commend him for some of the Government amendments to the Energy Bill in the other place. They will clip Ofgem's wings in respect of charging for transmission and access, and that is very welcome. What assessment has he made of the proposals by many members of the Scottish renewables forum that access charges should be capped instead of being subject to a rebate system? Does he agree that that would have the benefit of being much simpler and much less bureaucratic?
    Mr. Timms: I agree that there is huge opportunity for renewable energy in the north of Scotland and the highlands and islands, and I have also been very impressed by the very strong public support for it. Our clear view is that we should not put that potential at
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    risk with a charging scheme that would make electricity generation uneconomic, or which would threaten it. That is why we have tabled the amendments to the Energy Bill to which the hon. Gentleman referred. The scheme sets a threshold, above which we will be able to apply a discount. That leaves open the possibility that a cap could be imposed if there is a 100 per cent. discount on the portion above the threshold. However, that will depend on the analysis that we will carry out to determine what is needed to ensure that we retain and realise the potential offered by the north of Scotland.
    Dr. Ashok Kumar: Given the importance that the Government attach to renewable energy, does my hon. Friend agree that we need to spend a lot more on research and development to meet our targets in the future? Recently, Sir David King has floated the idea of establishing a UK research centre to demonstrate our strong commitment to renewables in the future. Does he agree with that?
    Mr. Timms: I agree very much with my hon. Friend about the importance of R and D in achieving our targets. We aim to get 10 per cent. of our electricity from renewable sources by 2010, and we want to double that by 2020. I am sure that my hon. Friend was encouraged, as was I, by what my right hon. Friend the Chancellor said in the Budget about the 10-year strategy and about public support for the centrality of science and innovation in the nation's economic strategy. I shall certainly be very keen to talk to Sir David King about his proposals, and my Department works very closely with the Government's chief scientist. However, there is no doubt that publicly supported R and D is one of the major keys to bringing about the changes that we need.
    Miss Anne McIntosh: The Minister said that there were huge opportunities for renewable energy in the north of Scotland. Can he justify the Governments complete obsession with wind farms? They are a danger not only to birds, but to human health and the environment generally. Will he confirm that there is an estimated cost of £2 billion for each wind farm to enter into the grid and that the electricity cannot enter the grid and be transmitted without ghastly, dangerous, overhead lines?
    Mr. Timms: The hon. Lady is wrong on a number of points. Certainly wind is currently the most cost effective of the renewable energy technologies available, so the current renewables obligation mechanism is bringing forward a welcome increase in wind energy capacity. However, we are also supporting the development of other technologies. It is important that every proposal should be put through a proper planning process, as each of them is. The hon. Lady will know that there is a serious threat to birds and wildlife generally from the development of climate change. We need to ensure that we change our energy economy to address that. That is why the World Wildlife Fund recently called on the Government to increase their targets for renewable energy.

    Wind Turbine Farms
    Dr. Alan Whitehead: What discussions she has held with other Government Departments concerning the allocation of sites for the development of offshore wind turbine farms. [163440]
    The Minister for Energy, E-Commerce and Postal Services (Mr. Stephen Timms): The recent award of site leases for offshore wind farms was made by the Crown Estate working with the Department for Trade and Industry. The lease awards exercise closely involved other Departments, including the Department for the Environment, Food and Rural Affairs and the Department for Transport.
    Dr. Whitehead: I am sure that my hon. Friend will agree about the importance of the development of offshore wind farms in ensuring that our renewable targets are achieved. Has he entered into a dialogue with the Ministry of Defence about its concerns about radar and wind turbines at sea? If so, is he willing to ask the Ministry of Defence for an open exchange of information so that those issues can be resolved, rather than the guessing game which appears to be going on now concerning whether MOD radar is a problem for offshore wind farms? Is he willing to resolve those issues speedily so that the developments can proceed?
    Mr. Timms: I agree with my hon. Friend and welcome his strong support in this House and elsewhere for the development of renewable energy. I certainly am in dialogue with the MOD about its concerns, which I understand and which are proper. I agree that it is important that those concerns should be addressed and I am confident that they can be. This morning the MOD laid some objections to the offshore wind farms in round two. We shall certainly work closely with it to resolve those issues. I agree also with my hon. Friends point about the need for openness so that everyone can see the way forward.
    Mr. Stephen O'Brien: Against the background of the increasing resistance, of which I know the Minister is aware, by local communities, environmentalists, animal and bird welfare organisations and our armed forces to wind farms in some of our most treasured natural environments, both onshore and offshore where the Chamber of Shipping continues to raise serious concerns; and given the intermittent nature of wind-derived energy, however desirable as a renewable source but which will only ever be a relatively small contributory element to the United Kingdom's overall energy supplies, will the Minister who carries the ultimate responsibility for keeping the lights on now give an undertaking to the House that his Government's taxpayer-subsidised push for wind is not at the expense of the UK's medium to long-term safe, secure, competitively affordable mix of energy supplies from gas, oil and coal, or as the Minister has said, at the expense of ruling out new nuclear power?
    Mr. Timms: The development of a substantial renewable energy generating sector will make an important contribution to security of supply. A diverse range of sources is needed and renewable electricity can only help.
    Mr. Kevin Hughes: When the Minister considers the many offshore sites, will he encourage the applicants at Tween bridges in my constituency to move to an offshore site so that Thorne moors, a site of special scientific interest, will be not blighted by huge, ugly structures that work only 30 per cent. of the time?
    Mr. Timms: I am aware of the concerns in my hon. Friend's area, which will be fully considered in the planning process. Development of onshore and offshore wind energy generating capacity is needed and there is clear evidence across the country of overwhelming public support for moving in that direction. We cannot go on burning more coal and oil; renewable energy is required as well.
    Mr. Nigel Evans: The Minister must recognise that not everybody loves those wretched, inefficient wind turbines. I prefer them offshore to onshore but when they are close to the coast, will the Minister ensure that discussions are held with local residents about the impact on tourism and water sports—and on birdlife? A Californian experiment showed that a considerable number of birds, including rare breeds, were dying. If a small part of the subsidy for wind energy were spent on energy conservation, more energy would be saved than is produced by the wretched wind turbines.
    Mr. Timms: As I have said, there is strong public support throughout the country for the development of renewable energy. The recent round two offshore wind energy announcement included a coastal exclusion zone from 8 km to 13 km—particularly to protect birds, inshore fishing and other interests. A careful assessment will be made of every project's impact. I am sure that the hon. Gentleman will recognise that wind power will make an important and substantial contribution to meeting the demand for electricity—not least in addressing the terrible problems and threats posed by climate change.

    Coal Industry
    Paddy Tipping: What steps she is taking to aid the United Kingdom coal industry. [163441]
    The Parliamentary Under-Secretary of State for Trade and Industry (Nigel Griffiths): Since 2000, the Government have provided £165 million under the coal operating scheme and a further £54 million is available under the coal investment scheme, to access coal reserves and help safeguard and create jobs in mining areas. I thank my hon. Friend and other right hon. and hon. Members for helping the Government to compensate 366,000 sick miners, their widows and families. At a cost of £1.9 billion, that is probably the largest public compensation scheme in the world.
    Paddy Tipping: The investment in compensation for former coal miners is extremely welcome—as is the £54 million of investment aid. Will the Minister act carefully when implementing the large combustion plant directive? A national plan approach could lead not to the coal industry's long-term sustainability but to its early demise.
    Nigel Griffiths: The Government are working hard to ensure that decisions are in the best long-term interests of the economy. British collieries are among the most efficient in the world. I am aware of the concerns voiced by my hon. Friend and I know that the Minister for Energy, E-Commerce and Postal Services, my hon. Friend the Member for East Ham (Mr. Timms), is meeting a number of colleagues and will listen carefully to their views.
    Mr. Laurence Robertson: As the son of a former miner and someone who has lived in coal areas, I am concerned about the industry's future. The emissions trading scheme plans to reduce carbon dioxide but—as was said by the hon. Member for Sherwood (Paddy Tipping)—the directive threatens not only the coal industry but coal-fired power stations. Does the Minister think that power stations can be helped to install flue gas desulphurisation, which will be needed for clean coal technology, or will coal have to be imported to survive in future? Or does the Minister see no future for the British coal industry?
    Nigel Griffiths: Far from it. It is nice to hear words of sympathy for the coal industry from the Opposition, but I can tell the hon. Gentleman—I am sure that the House will know—that Drax, one of the largest and most efficient plants in Europe, is already utilising flue gas desulphurisation. So we have a proven track record in that area and my hon. Friend the Minister for Energy, E-Commerce and Postal Services will this afternoon tell colleagues with genuine concerns on the issue about the steps that he intends to take to make further progress.

  MINISTER FOR WOMEN AND EQUALITY
  The Minister for Women and Equality was asked—
  12.31 pm
  Mr. Oliver Heald: Will the Leader of the House please give us the business for next week?
  The Leader of the House of Commons (Mr. Peter Hain): The business for next will be as follows:
  MONDAY 29 MARCH—If necessary, consideration of Lords message followed by remaining stages of the Employment Relations Bill.
  TUESDAY 30 MARCH—Opposition day [8th allotted day]. There will be a debate entitled "The Need for a Referendum on the Proposed EU Constitution" followed by a debate entitled "Failure of the Government to Prepare for Changes in Doctors' hours in the NHS". Both debates arise on an Opposition motion, followed by, if necessary, consideration of Lords message.
  WEDNESDAY 31 MARCH—Remaining stages of the Higher Education Bill.
  THURSDAY 1 APRIL—Motion on the Easter recess Adjournment.
  The provisional business for the week after the Easter recess will be:
  MONDAY 19 APRIL—Consideration of Lords amendments to the Planning and Compulsory Purchase Bill.
  TUESDAY 20 APRIL—Second Reading of the Finance Bill.
  WEDNESDAY 21 APRIL—Opposition day [9th allotted day]. There will be a debate on an Opposition motion, subject to be announced.
  THURSDAY 22 APRIL—A motion to approve the first joint report of the Accommodation and Works Committee and the Administration Committee on visitor facilities: access to Parliament.
  FRIDAY 23 APRIL—Private Members Bills.
  Mr. Heald: I thank the Leader of the House for the business. Has he any idea of when we will debate the aviation White Paper? He will know that I have raised that issue on other occasions, but it is of importance to hon. Members on both sides of the House and, indeed, to the country.
  With final council tax figures out today, does the right hon. Gentleman agree that the 6 per cent. increase is three times the rate of inflation and well above low single figures? Does he realise that council tax has gone up a whopping 70 per cent. under Labour? Does he realise how unpopular that is? Is not the reason for it the fact that the Government have laden councils with extra duties without providing adequate funding? As that is the Governments fault, will he assure the House that there will be a full debate in the Chamber before any capping takes place? Does it not all show that the old adage is true: dogs bark, cats miaow and Labour Governments put up taxes?[Interruption.]. I am glad that you enjoyed that, Mr. Speaker.
  Can we have a statement from the Prime Minister about his Spanish discussions on the European constitution? His spokesman said yesterday that the Prime Minister would continue to insist
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  "that anything essential for our"
  criminal
  "court system cannot be changed".
  Does that mean in reality that we will be able to veto only in a narrow area and that everything else will simply be decided by the European Union?
  In his discussions with the Libyan leader, Colonel Gaddafi, will the Prime Minister press for full information about the arms that have been sold to the IRA? Clearly, that would be helpful to the decommissioning process. Will he also ask the Libyan leader to use his special relationship with Robert Mugabe to improve the disgraceful civil rights situation in Zimbabwe? May we have a statement from the Prime Minister on both those issues, and can the Leader of the House tell us when the promised debate on Zimbabwe on the Floor of the House will take place?
  Finally, will the Leader of the House join me in congratulating the England cricket team on their triumphant tour of the West Indies? Can he tell us what plans the Prime Minister has to welcome the team back? Has he already booked the reception at No. 10?
  Mr. Hain: I know of no plans to book receptions, but I know that the English cricket teams performance has been magnificent. I am delighted to join the hon. Gentleman in congratulating the England team on those two brilliant victories.
  On the aviation White Paper, I cannot give the hon. Gentleman any further information than I have been able to give before.
  The council tax increases are very low by comparison not just with what they have been in recent years, but with what they were under the Conservative Government who introduced the council tax in the first place. I understand that, on average, Conservative local authorities have had higher council tax increases in this settlement than Labour ones. That is because they are not applying themselves to their work in the way that they should. As the hon. Gentleman well knows, the truth is that local government has had real-terms increases in funding of more than 25 per cent. since the Government came to power compared with what happened under the Conservatives—the party that he supports and is a member of—when there were often cuts or at least freezes in real terms in spending. That is the background against which we are operating.
  On tax, the hon. Gentleman knows full well that, in 1997–98, under the last Conservative Government, the tax burden was 36 per cent. of gross domestic product. This year, it is 35.7 per cent., so the overall tax burden is, in fact, lower than that applied by the Conservatives.
  On the European Union constitution, we have made it clear that we intend to stick by the negotiating red lines set out in the White Paper by the Foreign Secretary, including on key issues of criminal justice and law. It is interesting that, on tackling asylum problems and international terrorism and international crime, we have co-operated and been willing to introduce qualified majority voting—in other words, to give up the veto. We did that because back markers among other member states have dragged down our security. In the case of asylum, that led to asylum shopping where they have

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  passed the buck to us. The new arrangements will stop that happening and provide much better protection for Britains interests, which is what is at stake on this matter.
  I notice that the hon. Gentleman did not criticise the Prime Minister's visit to Libya. I welcome that, particularly because on 19 December the deputy leader of the parliamentary Conservative party welcomed the rapprochement with Libya. It is important and in the interests of Britain and the international community that countries such as Libya—which in the past have been rogue states and sponsored terrorism including, as the hon. Gentleman said, dealing with the IRA—renounce that tradition, as Libya has, and come into compliance with the international community, including on the issue of nuclear weapons. That has been an enormous benefit of the negotiation that the British Government, led by the Foreign Secretary and with the support of the Prime Minister, have been responsible for carrying out. The visit is important for taking that forward.
  Robert Mugabe is certainly one of the issues that has arisen in the negotiations that have taken place and in the relationship that is now developing. It may well be—we shall have to see—that the kind of support that Libya has so shamefully given to Mugabe over recent years in particular will come to an end. I hope so, because the hon. Gentleman and I share the view that the sooner Mugabes despotic rule in Zimbabwe ends, the better not just for the people of Zimbabwe but for the international community.
  On when there might be a debate on Zimbabwe, the hon. Gentleman knows that the Foreign Secretary has promised one. When I am in a position to tell him when it will be, I will do so.
  Mr. Paul Tyler: When does the Leader of the House intend to make a statement on security in and around this building? Can he tell us how many parliamentary security passes go missing each year? My hon. Friend the Member for Winchester (Mr. Oaten) extracted figures from Government Departments that show that 6,795 security passes have been lost from Government Departments in the past 12 months. Shockingly, the Ministry of Defence seems to have lost 3,007 passes in just 12 months. It scarcely gives us confidence in its response to terrorism.
  Will the Leader of the House make it clear that that is much more important than the problem that could be identified as people climbing over the railings into this building? Will he lay to rest once and for all the suggestion that appeared yesterday that we are to have a concrete prison wall around these buildings with razor wire along the top? Will he explain to the public as well as to Members of Parliament that it is important that we retain this place as a monument of open democracy, rather than creating a symbol of terrorist success?
  I think that the Leader of the House was here when the Solicitor-General made her statement in the House yesterday. Does he accept that there is a real problem about the contempt issue and that, if a constituent comes to our advice surgery and tells us about, say, a family court case in which they are involved, they may well be in contempt of court? In listening to them talk about that, we too could be in contempt of court. We
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  could refer to the matter in the House but not in the media. Will he undertake to examine the issue and look again at the recommendations of the Joint Committee on Parliamentary Privilege, on which I serve, which have still not been properly debated in the House?
  Mr. Hain: On the last matter, I realise the hon. Gentleman's concern, which I think that we all share. The Solicitor-General is looking into that matter, especially the position of Members of Parliament and constituents, who make contact with all of us every week, if not every day. Obviously, it is an important issue and we will monitor it closely. I will keep an eye on it on behalf of the House.
  On passes, I remind the hon. Gentleman and the House that it is a serious matter that must be dealt with. It is a problem principally for Government Departments, as he, to be fair to him, identified, but it is something that we must all be careful of. I hope that permanent secretaries and heads of security in Departments will take immediate action to ensure that the number of passes lost is kept to an absolute minimum and that proper procedures are in place to ensure that.
  On the wider question of Parliament security and access for constituents, I share the hon. Gentlemans view that there must be openness and accessibility for all our voters and citizens because this is their Parliament, not ours. We are Members of it. It is a privilege to be voted here by them. It is important to maintain that openness and accessibility, but a balance must be struck with the security of the Palace of Westminster.
  We are in a new era of threats from terrorists, including al-Qaeda and others, and we must take the proper security measures. That is what Mr. Speaker and I have been discussing with House officials and with others, including representatives of the Security Service and the Metropolitan Police Commissioner, to ensure that we achieve proper security and better security than we have now. It is an evolving matter. It changed after 11 September with the armed police around the building. Those security measures must be taken forward and we must ensure that Parliament is protected.
  To summarise, we need a proper balance between—
  Mr. Tyler: What about the wall?
  Mr. Hain: I have read in recent days the most amazing press reports, including some on the wall, which I know nothing about and by which I would be very surprised. Mr. Speaker asked, with my support and that of members of the House of Commons Commission, for a proper independent review by the security services and the Metropolitan Police Commissioner. We await that review. Mr. Speaker took that initiative, which I very much support, to ensure that proper security measures are recommended and put in place; but, specifically on the wall, I cannot confirm that, in common with a lot of the other reports this week, and I would be very surprised if we went down that road.
  Colin Burgon: Will the Leader of the House make sure his diary is free next Tuesday afternoon so that he can meet the Prospect trade union

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  members who are lobbying the House to oppose the Government's proposal to privatise the Forensic Science Service? Does he agree that although we have a good Government, that is an absolutely barmy policy?
  Mr. Hain: I do not agree with my hon. Friend, except on the fact that we have a very good Government—I am glad that he acknowledges that. On the Forensic Science Service, he will have the opportunity to make representations to the Home Secretary—he may well have done so already—and to question Ministers during Home Office questions.
  Sir Nicholas Winterton: The Leader of the House spoke earlier about the impact of the European Union on the United Kingdom. Is he aware that European employment directive 2000/78/EC could outlaw companies long-service awards to their long-serving employees? Is not that a ludicrous intrusion into the sovereign domestic policy of this country? Will he arrange for the appropriate Minister to come to the Dispatch Box and make statement on the matter? Does he agree with me—I am sure that most Members do—that long-service awards are a wonderful traditional way of recognising long, loyal service by an individual to a company or firm?
  Mr. Hain: I agree absolutely that long-service awards are a vital part of our culture and tradition of recognising long service. I would be astonished if that were the impact of the directive, about which I know nothing. If it were, it would be ludicrous. As for the wider picture, the hon. Gentleman knows that that is one of the reasons why I have undertaken—I know that I will have his support on the Modernisation Committee—
  Mr. Eric Forth: Oh!
  Mr. Hain: Aside from the former shadow Leader of the House. Whenever I say "Modernisation Committee", he falls into rage and general—
  Mr. Forth: Despair.
  Mr. Hain: Despair—well, there we go. The right hon. Gentleman is a perfectly preserved antiquated Member of Parliament, and I think that he should be kept that way—and given an award for his long service in that capacity.
  To return to the question asked by the hon. Member for Macclesfield (Sir Nicholas Winterton), he illustrates one of the reasons why we want European scrutiny to be shared more widely, rather than to remain confined—albeit effectively and admirably—in the European Scrutiny Committee. That Committee does a great job, but Members at large ought to be more involved.
  Jim Knight: Low pay is an issue in my constituency, especially among young people working in industries such as tourism and catering. When can we have a debate on low pay among young people, so that we can clarify the strategy to deal with it,
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  and make sure that both sides of the House are committed in the long term to resolving the problem of the exploitation of young people?
  Mr. Hain: I would very much like a debate on those lines. Perhaps the Opposition will do the House a great courtesy by calling such a debate, so that we can see what their policy is on low pay. The Governments policy is clear: we have just announced an increase in the minimum wage, including for the first time the minimum wage for young people—16 and 17-year-olds—after a recommendation from the Low Pay Commission. Low pay has been a curse of the British economy for far too long. It survived under the Conservatives, whose leader said that the introduction of the minimum wage would lead to 1 million job losses. In fact, there has been an increase of about 1.8 million jobs. We can have high pay standards, competitiveness and economic success—they should march together.
  Mr. Andrew Mackay: Further to the significant questions on security asked by the hon. Member for North Cornwall (Mr. Tyler), although the issue is sensitive, may we have an undertaking from the Leader of the House that before, for example, a screen is installed in the Strangers Gallery or a perimeter wall is erected, there will be a debate and a vote here in the Commons?
  Mr. Hain: I have made clear what would happen, as did Mr. Speaker in his letter to us all and his announcement after the February recess. After Easter, there will be a debate on security. I am grateful for the way in which the right hon. Gentleman prefaced his remarks: he understands that these are sensitive issues. The last thing that we want to do is alert potential terrorists or others to exactly what procedures we are introducing and the way in which we are coping with additional threats. He will want to join me in making sure that the House and the Chamber are free of threats from terrorists and others while preserving all the traditions and, indeed, the openness for which our democracy is renowned throughout the world.
  Mrs. Gwyneth Dunwoody: I am grateful to my right hon. Friend for that reply. The reality is that Parliament is a reflection of the electorate, so it is important that he give an undertaking that major security changes that can be openly debated are debated. Will he assure us that no decisions will be taken in the Easter recess without Parliament being offered an opportunity to express an opinion?
  Mr. Hain: We have already confirmed—indeed, Mr. Speaker's letter did so—that any permanent changes will be subject to decision by Parliament. I have a responsibility, as does the Speaker. Indeed, you have the primary responsibility, Mr. Speaker, along with the House authorities, the House of Commons Commission and the relevant Committees of the House, for ensuring that security arrangements are secure. We are in an entirely different era, and I do not think that my hon. Friend wants or expects us to debate every security change in the open before we decide whether to proceed with it. That would be virtually opening the door to the attacks or threats that would undoubtedly follow. Let us

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  approach this on the basis of consensus, but also with seriousness. I do not think that my hon. Friend or the House would want me as Leader of the House or those who are actually responsible for security—I myself am not—to take a casual attitude to this extremely important issue. The House has been under attack before from terrorists, and we want to make sure that it is not again.
  Pete Wishart: Will the Leader of the House confirm that, when the Finance Bill reaches the Committee of the whole House, we will have an opportunity to discuss the Chancellors job-destroying and fraud-prone suggestions for strip stamps on bottles of Scotch whisky? Does he, like me, look forward to Scottish Labour Members, some of whom have large whisky interests in their constituencies, explaining why they voted for this damaging measure?
  Mr. Hain: These matters were debated in the Budget debate, and the Budget's approach was overwhelmingly endorsed in a vote earlier this week. It is a travesty to say that those measures are job-destroying. I like a drop of malt whisky—no doubt the hon. Gentleman does too—but the Chancellor's measures are designed to stop fraud. The whisky industry, the economy and the Exchequer are the victims of widespread fraud at present. The measure is designed to stop that and protect the Scottish whisky industry in particular, so I would expect the hon. Gentleman to welcome it.
  Mr. Ian Davidson: When does the Leader of the House expect to find time to allow us to debate the appointment of the United Kingdom Commissioner to the European Union? Does he agree that that appointment is not a long-service award and that it is essential that whoever is appointed has the credibility that comes from the support of the House of Commons as a whole?
  Mr. Hain: That sounds like a job application to me.
  Mr. Eric Forth: Has the Leader of the House heard the outrageous suggestion that the House should no longer sit on Fridays, thus depriving it of a valuable part of its activities? Is he also aware of the even more ridiculous suggestion that if the House did not sit on Fridays, it would somehow improve security? If that were the case, is not the logical extension of the argument that the House should not sit at all?
  Mr. Hain: That suggestion appeared in reports either this morning or yesterday, and was one of the many press reports swirling around, very few of which have any connection with reality. The House has already decided to sit on 13 of the 36 days available, so we do not sit every Friday, as the right hon. Gentleman knows. He is nodding in agreement, so I assume that he approves.
  Mr. Forth: No.
  Mr. Hain: The right hon. Gentleman wants us to sit on Friday every week.
  Mr. Forth: Yes.
  Mr. Hain: I suggest that the right hon. Gentleman put that to a vote and see how many of his Conservative
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  colleagues support him. Fridays are often important days for constituency business, and allow us another day in addition to the weekend to be in our constituencies to meet and serve our constituents. He may be able to get back to Bromley on a Friday afternoon, but it is not possible for those of us who live far from London to get to our constituencies. I have seen an early-day motion to the effect that the House should not sit on Fridays, but it is only one of the many options that will no doubt be submitted to the Modernisation Committee after the review of the hours of the House conducted by the Procedure Committee.
  David Winnick: On security, does my right hon. Friend agree, especially in view of some newspaper reports, that it is not simply a matter of protecting Members of Parliament but the hundreds of people who work in the Commons and the Lords, who are as entitled to protection and security as ourselves? If certain measures are considered necessary in view of the acute terrorist threat, we should keep that very much in mind and not simply think about ourselves.
  Mr. Hain: I could not agree more with my hon. Friend. As he said, the matter affects the security not just of Members in the Chamber and elsewhere but the many staff who serve us so well and diligently. As he will recall, the assistant of the hon. Member for Cheltenham (Mr. Jones) was attacked and killed in his surgery. Such incidents cannot be dealt with by protection in the House, but we must be alert to the security threat to everyone who works in the House, not just Members.
  Mrs. Patsy Calton: What advice can the Leader of the House give to Members in whose areas post office closures have gone ahead without proper consultation or provision of information? What can we do, and is the only alternative to seek judicial review?
  Mr. Hain: Clearly, there have been instances of such closures. In my capacity as Secretary of State for Wales, I am aware of cases in which there has been a lack of proper consultation and proper involvement by local Members of Parliament, which is regrettable and deplorable. However, the hon. Lady will know that there was a debate on the subject yesterday, and she herself secured an Adjournment debate on it. The Government are well aware of people's concerns, as are senior managers in the Post Office.
  Tom Levitt: Next Wednesday, the House will have an opportunity further to improve the Higher Education Bill. Will my right hon. Friend do whatever he can to try to ensure that the principle of variability remains in the Bill, as it is important both for universities such as the university of Derby, with a fine tradition of encouraging young people from nontraditional backgrounds into higher education, and for universities wishing to attract additional students to minority courses? Does he also agree that the principles in the Bill of deferred fees, payment later in life and much more generous grants should be applied across the board and extended to further education where they will offer just as much, if not more, help as they will in higher education?
  Mr. Hain: I strongly agree with my hon. Friend that the principle of variability allows flexibility to, for

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  example, charge no fee for a physics course. We are short of physicists, chemists, electrical engineers and others, as there has been a long-term slide in the number of students doing such courses. An incentive through the fee structure for students to take such courses would be a big boost to the country and the economy. It is therefore imperative that the Bill go through unamended, and I hope that right hon. and hon. Members will bear that in mind. As the Secretary of State for Education and Skills made clear, any amendments could effectively kill the Bill and it is important that what the House voted for in Committee and on Second Reading goes through so that students, especially those from a low-income background, can be properly supported with new grants and other assistance, and so that universities can get the finance that they need to become world-class universities, which is essential to the future of the British economy.
  Sir George Young: When can we have a debate on the report of the Procedure Committee on Sessional Orders so the House can decide what it wants to do about the unsightly cacophony on Parliament square? The Leader of the House may remember that I asked last year for a debate on the matter, and he said it was important and that the debate should take place sooner rather than later. A fortnight ago he was asked about it, and he said that he hoped to be able to give some welcome news in the not-too-distant future. We have not had any. What is going on?
  Mr. Hain: I understand the right hon. Gentleman's concern. We are all concerned about the matter. The Home Secretary has been examining it, and when he is ready to present proposals, we will have a way forward to put to the House. The position remains that we will have a debate and a decision as soon as I am able to arrange it. I know, Mr. Speaker, that you are equally concerned about the matter, because you told me so. Members on both sides of the Chamber are concerned, but we need to proceed in the proper fashion.
  Mr. Speaker: The Leader of the House gives me an opportunity to say that I want the matter dealt with as quickly as possible.
  Jim Sheridan: My right hon. Friend will be aware of successful police raids this morning on unscrupulous gangmasters of the sort who operate throughout the United Kingdom. Will he congratulate the police on those successful raids? Does he agree that the police need the tools to do their job if they are to deal with the problem throughout the UK? For that, they need effective legislation. My right hon. Friend knows that a private Member's Bill is going through the House dealing with the licensing of gangmasters. Will he give the Bill not just a fair wind, but his full support by giving appropriate parliamentary time and resources so that it can become effective legislation, giving the police the tools to deal with unscrupulous gangmasters?
  Mr. Hain: My hon. Friend has done the country a service by introducing his Bill. The Government are
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  fully supportive of it. I understand that the Committee stage is lined up for next week, and my hon. Friend should then be in pole position for Report and Third Reading on one of the remaining Fridays—14 May, 21 May, 18 June or 16 July. He can be assured that we will give the Bill what support we can. I welcome the fact that there have been some 40 arrests this morning, including some senior figures in the gangmasters operation. I know that the House will also welcome that.
  Huw Irranca-Davies: May I first add my congratulations to the England cricket team, not least to Jones the bowler—a good Welshman?
  A week last Monday, I attended a celebration of the new deal in Pontypridd at one of the foremost schemes in the country, combining Jobcentre Plus activities with manpower services. Will my right hon. Friend find time for a debate on the new deal so that we can celebrate the successes of the staff and individuals involved and consider ways in which we can continue to improve it, to reach those parts and those people that other programmes have failed to reach?
  Mr. Hain: I join my hon. Friend in congratulating Simon Jones, or Jones the bowler, as he called him. That reminds the House that it is, in fact, an England and Wales cricket team and that there have been many brilliant Welsh bowlers and cricketers over the generations. We want that to continue. Simon Jones was the spearhead of the attack that destroyed the West Indies' defences. That shows what talent is coming out of Wales.
  On the new deal, my hon. Friend is right. It has done fantastic work in former coalmining communities such as those that he and I represent. In trial pilots that are going on in his area, it is tackling the problem of people who have been in a state of long-term economic inactivity and on incapacity benefit. That is one of the many reasons why it is imperative that the new deal stay in place. I see that the Liberal Democrats are joining the Tories in an extreme right-wing measure that would abolish the new deal, thereby barring many thousands of people across Britain, including those with disabilities, from getting the support and the personal advice that would enable them to get into the jobs market, which everyone should welcome.
  Mr. Nigel Evans: Is it possible to arrange for the Secretary of State for Health to make a statement to the House next week about the guidelines that his Department gives to national health service trusts about the suspension of members of staff? About 1,000 members of NHS staff are currently suspended, costing millions of pounds and no doubt resulting in operations being delayed. The issue was highlighted clearly and starkly by the absurd suspension of Dr. Hope, who, I understand, has now got his job back, but who is a neurosurgeon whose suspension delayed operations simply because he wanted more croutons in

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  his soup. That is ridiculous. There must be sufficiently sane guidelines in place to ensure that such insanity does not happen in the future.
  Mr. Hain: If those reports were true, I agree that that was pretty insane. I know that my right hon. Friend the Secretary of State for Health and his Ministers will have taken careful note of the hon. Gentleman's points.
  Tony Lloyd: Will my right hon. Friend reflect on the fact that one of the strengths of the ITV network in the past has been the regional system of broadcasting so that the English regions, Scotland and Wales have had proper reporting of events in their local areas. That has come under threat with the Carlton-Granada merger. There was a lobby of Parliament this week by the National Union of Journalists and BECTU, and concerns have been expressed that rationalisation taking place in the midlands presages future centralisation among the ITV companies. Will my right hon. Friend take on board the fact that when the Government passed the Communications Act 2003 they placed on Ofcom a duty to examine the regional distribution of broadcasting? Will he draw that to Ofcom's attention and call for more action from it?
  Mr. Hain: Ministers in the Department for Culture, Media and Sport will note my hon. Friends comments and take careful steps to ensure that the points he has made are looked into. I agree that it is imperative that regional and—in the case of Scotland and Wales—national broadcasting through the ITV network retains its distinctive flavour and makes sure that news, especially, and culture are reflected in its content and programming, and that the necessary resources are available. After the chaotic near-destruction of the ITV network under the Government of Margaret Thatcher, I hope we will see an ITV that is effectively a unified service providing quality national programming and allowing regional and national broadcasts to take place in the way that I described. But BECTUs concerns must be addressed as they are clearly important.
  Dr. Jenny Tonge: Does the Leader of the House agree that events during the past week in the middle east have made it more important for us to consider the subject, and that an hour-and-a-half debate in Westminster Hall—even if I managed to catch the Speaker's eye, or whatever the term is for gaining debates in Westminster Hall—would not be adequate to cover it? Will the right hon. Gentleman consider holding a full debate in the Chamber on the situation in the middle east as soon as possible, or do the Government just have nothing to say on the matter?
  Mr. Hain: The hon. Lady spoiled an important and effective point by that last comment, and I ask her to withdraw it or reflect on it. She, I, the Government and, I expect, the entire House take the same position on the matter and deplore the assassination of Sheikh Yassin. The Government work tirelessly to try to secure peace in the middle east, including on an independent Palestinian state, security for the state of Israel and recognition by surrounding Arab states that Israel's future must be secure. That is what we should work towards. If the hon.
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  Lady is successful in securing an hour-and-a-half debate on the subject, it would enable everybody to say pretty much the same thing—that we share in the condemnation of such attacks, and of suicide bombings, and that we want to work together to find the best way to solve an intractable problem.
  Lawrie Quinn: Does my right hon. Friend agree that the report by the Prime Minister's strategy unit about the future of the sea-fishing industry, published this morning, is deeply significant for coastal communities across the United Kingdom? The industry is vital for some of the most remote communities in the country. Will my right hon. Friend find time for a debate as soon as possible after Easter so that all right hon. and hon. Members who have an interest in the issue, which is a matter of life and death for those communities, can discuss it and the prospects for a sustainable future for many of our constituents?
  Mr. Hain: I shall certainly consider that request, because, as the Fisheries Minister has made clear, the Government share my hon. Friend's concerns and his support for the report, which points the way towards sustainable fishing. Sustainable fishing is at the heart of the issue because our seas have been depleted and fish stocks are being eradicated at an alarming rate. We must work towards a more sustainable future for fishing, because there will be no jobs if fish stocks are exhausted, and the report points the way towards achieving that future.
  Mr. Andrew Robathan: Will the Leader of the House make time for a debate on ethical foreign policy, which we do not hear much about these days? Such a debate would give us an opportunity to discuss Gaddafi's support for terrorism, and human rights, democracy and good governance—or otherwise—in Libya, and, in particular, overall responsibility for the murder of Yvonne Fletcher and for the mass murder of people at Lockerbie. Some of us fear that ethical foreign policy is being replaced by a culture of impunity for a dictator who may or may not bear overall responsibility for mass murder.
  Mr. Hain: It is not clear from the hon. Gentleman's question whether he supports the Government's initiative.
  Mr. Robathan: I asked for a debate.
  Mr. Hain: Indeed, but does the hon. Gentleman support the Government's policy of bringing Libya into the international community rather than its sitting outside as a rogue state? I should have thought that everybody would support the policy, and the Prime Minister's visit has been welcomed by the families of victims of the Lockerbie disaster and, indeed, by the family of WPC Fletcher. The problem goes back over many years, and my right hon. Friend the Member for Livingston (Mr. Cook) began to resolve it, a process that the Foreign Secretary has taken forward. The Prime Minister's visit symbolises the beginning of a new process by which Libya complies fully with international standards.

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  As for ethical foreign policy, the truth is that the Government, through an arms exports policy that bans the export of arms that could be used for internal repression or external aggression, have adopted a policy based on the highest possible standards and ethics, which stands scrutiny anywhere in the world. In many other respects, we promote human rights across the world.
  Mr. Robathan indicated dissent.
  Mr. Hain: The hon. Gentleman shakes his head, but the Conservative Government had a shabby record on arms exports and human rights. The Labour Government have established a good reputation as a result of the high standards that we have introduced.
  Mr. Mark Lazarowicz: Yesterday was an Opposition half day, and, once again, the subject matter was not revealed to the rest of the House until the morning of the debate. I understand why the official Opposition take some time to dream up a subject on which they can attack the Government, but whether that is a matter of tactics or incompetence, does my right hon. Friend agree that it is not right or fair to the rest of the House for the subject matter of Opposition debates to be brought up at the last minute, which happens frequently? Will he consider introducing a system whereby, if fair notice of the subject matter for Opposition day debates is not given, the time will be forfeit and awarded either to the other Opposition parties or, indeed, to the Government to focus on the consequences of Tory policies, if the Conservative party were elected.
  Hon. Members: Hear, hear.
  Mr. Hain: My hon. Friends shout, "Good idea" and, "Hear, hear" at that suggestion. My hon. Friend the Member for Edinburgh, North and Leith (Mr. Lazarowicz) makes an important point, which I have raised with the shadow Leader of the House on a number of occasions, although, to be fair, I know that advance notice has been given of next weeks Opposition topics, for which I am grateful. None the less, my hon. Friend cannot intervene in a debate on, for example, post offices, if he can only find out the topic on the morning of the debate, and that prevents hon. Members from organising their business. Advance notice is courteous to the House and is part of good procedure and process. I hope that the Opposition will bear that in mind, as they have done for next week.
  Dr. Andrew Murrison: This week, the National Institute for Clinical Excellence took the unusual step of recommending the withdrawal of disposable tonsillectomy instruments following a number of unfortunate post-operative haemorrhages and an audit by the university of Birmingham. Does the Leader of the House agree that the Secretary of State for
  1070
  Health should come to the House to explain why his Department advised the use of those instruments in the first place? Does he agree with the parents of deceased toddler Crawford Roney that an urgent investigation is needed into exactly what went wrong in Richmond house three or four years ago?
  Mr. Hain: That incident is obviously serious, which is why the Secretary of State has put in place stringent standards and inspection arrangements. I know that the Secretary of State for Health will take careful note of the hon. Gentleman's points and make sure that the appropriate procedures and policies are implemented.
  Dr. Alan Whitehead: In the light of the publication of final council tax levels from local authorities, will my right hon. Friend find time for a debate about the future of local taxation, so that we can compare and contrast various proposals, particularly local income tax? We could also consider the effect of the £100 to help pensioners with their council tax that the Chancellor recently announced.
  Mr. Hain: My hon. Friends suggestion is welcome, and business managers and the Deputy Prime Minister will want to examine it. The House would do well to reflect on the different solutions to the problems with council tax, which we inherited from the previous Government and have continued to operate. On the one hand, the Government are committed to low council tax increases, as evidenced by the general level of settlement this time; on the other hand, the shadow Chancellor has announced that a future Conservative Government would cut local government budgets by £2.4 billion in their first two years, which would result in sky-high council tax increases. That is the choice: it is between a Labour Government who continue to invest in high standards of public service and provide local government with the resources that it needs, or a Conservative Government committed to cutting local government budgets, which would put council tax increases through the roof.
  Kevin Brennan: May we have a debate on the music industry, which the National Music Council reports as contributing £3.6 billion per year to the UK economy? Does my right hon. Friend acknowledge that protecting copyright is important to the health of the industry, which loses £241 million a year through internet downloads? The key is to educate people about the importance of copyright protection, and can we therefore debate today's announcement by the British Phonographic Industry, which is launching a scheme to warn significant illegal uploaders of music on to the internet that they are breaching the law?
  Mr. Hain: My hon. Friend is an accomplished guitarist, and he therefore takes a personal interest in the matter. All music lovers want to know that our music industry is properly protected, and that the sort of practices to which he referred are not allowed to continue without restriction. I know that the Secretaries of State for Trade and Industry and for Culture, Media and Sport will study his remarks closely, and they are alive to the problem, which they are working on solving.
  Mr. David Amess: Will the Leader of the House find time for a debate on human rights and fair trials abroad following the sentencing of my constituent, Majid Narwaz, to five years in prison in Cairo? He has already been detained there for two years. His trial was a disgrace, and the charges were entirely trumped up. When the Leader of the House arranges such a debate, will he ask the Prime Minister to attend and to explain to the House why he has refused to get involved in that case?
  Mr. Hain: Such cases are sensitive. The hon. Gentleman has properly raised the case of his constituent on the Floor of the House, and the Foreign Secretary will want to study his remarks closely. However, there have been serious problems with terrorism in Egypt, and the Egyptian authorities have repeatedly made representations to us about British citizens whom they allege are involved. I do not know whether that is true, but the hon. Gentleman takes one view of that particular case, and the Foreign Office will want to study what he said closely.
  Hugh Robertson: I fully realise the sensitivities of this issue, but is the Leader of the House in a position to confirm that he has taken security advice on the type and scope of demonstrations in Parliament square? It clearly makes very little sense at the moment to allow the erection of a series of banners that form a barrier directly outside the main entrance to Parliament, restricting the field of view and the ability of the armed police to operate.
  Mr. Hain: I understand the hon. Gentleman's point. There is a balance to be struck between the right to protest, which is an ancient and honourable part of our democracy—the hon. Gentleman is nodding in agreement—and proper security for the House of Commons in an era of terrorism and threats from al-Qaeda directed specifically at Britain and at important institutions of the British state, including Westminster.

  MINISTER FOR WOMEN AND EQUALITY

    Pregnant Women (Discrimination)
    Julie Morgan: What plans she has to reduce discrimination against pregnant women in employment. [163453]
    The Deputy Minister for Women and Equality (Jacqui Smith): Employers who discriminate against pregnant women are breaking the law and could be liable to pay compensation. Furthermore, they are harming their own businesses by excluding talented women from the work force. The Government welcome new research in that area and, in particular, look forward to the results of the Equal Opportunities Commission's investigation.
    Julie Morgan: I thank my right hon. Friend for that response and I am pleased that she is aware of the EOC research. Is she aware that the initial findings show that more than 1,000 women a year bring cases of pregnancy
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    discrimination in the workplace and that the compensation they receive is £2,000 lower than for non-pregnancy discrimination dismissals? Will she take seriously the results of the EOC research and consider acting on them?
    Jacqui Smith: My hon. Friend is absolutely right. Although the final results of the EOC's investigation will not be available until 2005, we have already seen some important early information from its research. I am pleased that the investigation is focusing on the extent of the problem—how many women are affected by pregnancy discrimination—on the impact on their lives and families and on what can be done to make pregnancy a positive experience in the workplace. The EOC is also working with employers, many of whom have good practice in relation to pregnant women, so that we can learn from them what more we need to do to get rid of the few bad employers who discriminate against pregnant women, to the detriment of those women and their businesses.
    Mrs. Eleanor Laing: I am sure that the Minister will agree that the voters of Epping Forest deserve to be commended for showing no discrimination against pregnant women when they reelected me at the last general election with an increased majority exactly one week before the birth of my son. The Minister will therefore be in no doubt that I entirely share her aim, that of the hon. Member for Cardiff, North (Julie Morgan) and that of the EOC. However, I urge her to try to achieve that aim by changing attitudes so that it is generally recognised that a pregnant woman in employment is doing two important jobs. After all, the production of the next generation is just as important as the production of goods and services. However, I encourage the Minister not to introduce further regulation, because the more regulation we have, the more employers are likely to be dissuaded from employing and promoting good women who might bear children.
    Jacqui Smith: I welcome the hon. Lady to her new position on the Front Bench. I strongly agree with her that women can be both pregnant and extremely productive, as I also know from recent experience. However, I disagree with her recommended approach. Helping women to work more flexibly, and increasing statutory maternity pay and leave, will benefit women and enable them to combine the crucial job of producing children with remaining productive in their workplace. The hon. Lady cannot will the ends unless she is able to will the means. The changes introduced by the Government will improve the position of all women, and men, in sharing responsibilities in relation to the work-life balance. I hope that she will not take the approach—
    Mr. Speaker: Order.
    Vera Baird: Does my right hon. Friend agree that the worst employers use manifold legal devices to try to oust pregnant women? Despite the case in 1988, it is still frequently disguised as redundancy when a woman is, in fact, being sacked because she is pregnant. When the EOC finally reports, will my right

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    hon. Friend look carefully into all the implications to see whether there is a need to tighten up the law to give better protection for pregnant women? Will she also look into increasing the compensation, which, nowadays, is too low?
    Jacqui Smith: My hon. and learned Friend points to some important issues, and I am pleased that the EOC will be considering them. It is clear that case law and our current legislation make it illegal to discriminate against pregnant women, but the problem still exists, which is why we need to consider it through the investigation. We shall most certainly look at the recommendations and take action based on them. We need to ensure not only that the law is in place, but that employers—from the best to the worst—act according to both its letter and its spirit to protect and promote pregnant women.
    Sandra Gidley: The hon. Member for Cardiff, North (Julie Morgan) has already highlighted the fact that compensation for pregnant women is, on average, under £2,000 less; but is not the reality that for most employers the penalty for getting rid of a pregnant woman is only a fraction of her annual salary, so it is a quick and easy option? The fact that 21 per cent. of people know somebody who has experienced problems due to pregnancy shows that the problem is real and it should not be minimised by the Minister saying that only a minority of employers discriminate.
    Jacqui Smith: I am sorry if the hon. Lady thinks that I was minimising the problem. Actually, I started with the extremely strong statement that employers who discriminate against pregnant women are breaking the law and that they could be, and should be, liable to pay compensation. I also said that we support the Equal Opportunities Commission. The hon. Lady made a point about compensation in tribunals, but there is another important argument that we need to get over to employers: to replace a leaver, an employer will spend, on average, £4,000, so not only is it wrong to get rid of women because they are pregnant, it costs the business money, too. That is why we shall continue to take legal and other action to ensure that pregnancy discrimination is outlawed.

    Muslim Women (Working Practices)
    Mr. Gordon Prentice: What steps she is taking to encourage more Muslim women to enter the labour market. [163454]
    The Minister for Women and Equality (Ms Patricia Hewitt): We are helping all women, including women in Muslim communities, to enter and remain in employment—whether part-time or full-time. Increased maternity rights, new rights for working parents, better child care, the working tax credit and the new deals for lone parents and partners, together with our economic policy, have all helped to ensure that we have more women, as well as more men, in employment than ever before.
    Mr. Prentice: But does my right hon. Friend share my concern that only 17 per cent. of British Bangladeshi women aged between 16 and 59 are in the labour market
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    and that only 24 per cent. of British Pakistani women are in employment, compared with 71 per cent. of white women? When shall we see a narrowing of the gap, so that there is the same participation among parts of our ethnic minority communities as in the white community?
    Ms Hewitt: My hon. Friend makes an extremely important point and I share his concern about the many factors, which include, in some cases, cultural attitudes and in other cases language difficulties, that keep so many Pakistani and Bangladeshi women out of employment when they would like to be in employment—society as a whole would benefit from that. I have recently discussed that issue with a group of women from Muslim communities whom I meet regularly, and I am glad that the Womens National Commission will be holding its first meeting next week with women leaders from different Muslim communities to discuss those and other difficulties that face those groups.

    Pay Differentials
    Mr. Alistair Carmichael: What steps the Government are taking to reduce pay differences between men and women. [163455]
    The Deputy Minister for Women and Equality (Jacqui Smith): Since 1997, the difference in median hourly pay has fallen from 16.2 percentage points to 12.9 percentage points. That reflects, in part, increases in womens opportunities in the labour market due to increased flexible working, greater maternity pay and leave, and the help that we, together with the EOC, have provided employees with to tackle unequal pay where it exists. Last week, we launched plans to streamline equal value tribunal procedures in another step to improve the way that the Equal Pay Act 1970 works in practice.
    Mr. Carmichael: I thank the Minister for that answer. She may be aware that figures from the Office for National Statistics show that workers in part-time jobs are seven times more likely to be paid less than the minimum wage than workers in full-time jobs. As women form a higher proportion of the part-time work force, does she agree that dealing with that difference between part-time and full-time workers would do a lot to address the gender pay gap and that, in fact, a lot could be done by increasing awareness among women of their rights in relation to the minimum wage?
    Jacqui Smith: The hon. Gentleman is absolutely right about the national minimum wage, which has had the largest impact on low-paid women's pay since the Equal Pay Act 1970, and he is also right that we need to do everything that we can to ensure that those rights are made clear to women. Of course we also need to pursue our target to ensure that large companies carry out equal pay reviews, where the factors that cause pay differentials are often identified and action can then be taken. That is why, for example, we have again supported the Equal Opportunities Commission to produce guidance for companies and special guidance for small companies to carry out those equal pay reviews and to take the action that will help to ensure that people are fairly rewarded at work.

  Points of Order
  1.20 pm
  Mr. Oliver Heald: On a point of order, Mr. Speaker. In light of the remarks of the hon. Member for Edinburgh, North and Leith (Mr. Lazarowicz), it might be helpful if I indicate that the Opposition generally provide the topics for their Opposition days if they fall on a Monday or a Tuesday, but in the interests of topicality we do not do that in respect of Wednesdays and Thursdays.
  Mr. Speaker: That sounds more like putting the matter on the record than a point of order.
  Mr. Patrick McLoughlin: On a point of order, Mr. Speaker. I caught the tail end of the comments of the Leader of the House on council tax, when he talked about the policy of Her Majesty's Opposition. Will you confirm that it is still a rule of the House that Ministers are present to account for the actions of the Government? They are here to account for what they said in their manifesto, such as:
  "We will not introduce top-up fees and have legislated to prevent them";
  or saying, "We will reform the House of Lords." They are here to account for what the Government are doing, or not doing, not for what the Opposition may do in future.
  Mr. Speaker: I have repeated time and again that at Question Time, including during business questions, Ministers should not indulge in speaking about the policies of the Opposition or of the Liberal Democrats while attempting to answer the question—they should be accountable for their own portfolio. I make it clear that it is different in a debate on the Floor of the House, when everything is open to criticism, including the policies of Her Majesty's Opposition.

  Employment Relations Bill (Programme) (No. 3)
  1.22 pm
  The Parliamentary Under-Secretary of State for Trade and Industry (Mr. Gerry Sutcliffe): I beg to move,
  That the Programme Order of 14th January 2004 in relation to the Employment Relations Bill (as amended by the Order of 9th February 2004 (Employment Relations Bill (Programme) (No. 2)) be varied as follows—
  Consideration and Third Reading

  Paragraphs 4 and 5 of the Order of 14th January 2004 shall be omitted.

  Proceedings on consideration shall (so far as not previously concluded) be brought to a conclusion three hours after those proceedings are commenced.

  Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion four hours after the commencement of proceedings on consideration.

  The motion will allow full debate on the Government new clauses on intimidation during statutory recognition ballots and remaining important topics such as workplace bullying, information and consultation, and the union modernisation fund. The Bill has made good progress and I hope that this will be a short debate.
  1.23 pm
  Mr. Henry Bellingham: I listened carefully to what the Minister said. I gather that we will have three hours on Report and one hour on Third Reading. In normal circumstances, that might well have been perfectly adequate. Now, though, the Bill is substantially longer than it was when it went into Committee—it now runs to 49 pages, 50 clauses and two schedules. The Government have already added two important new clauses in Committee: new clause 28 on exclusion and expulsion from trade unions, and new clause 46, the union modernisation clause—the bung or bribe to trade unions, which we debated at some length. The problem is that when new clauses are tabled in Committee, we can debate them but not amend them. That is why we will need some time to discuss them on Report.
  The Bill is the product of an exercise involving discussions with several parties, including the TUC, the CBI, the Engineering Employers Federation, the Institute of Directors and British Chambers of Commerce. There was widespread consensus. Nevertheless, my hon. Friend the Member for Eddisbury (Mr. O'Brien) said on Second Reading that he feared that the Bill would be used by the Government as a sort of Christmas tree on which to hang other clauses, or so-called baubles. As I said, we have already debated two new clauses in Committee, including that on the modernisation fund for trade unions—an unlimited amount of money that is to be made available to trade unions for modernisation, which as we have said on several occasions, is simply a bung to the trade unions.
  When we complained on Second Reading that the Bill might be used as a Christmas tree for further new clauses, the Minister said, "You're scaremongering", "Calm down", "Relax", "Take it easy", "Don't get carried away." He said, "This Bill is the product of a consensus-building exercise and we're going to stick
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  very much to the original format." Imagine my amazement and disbelief when I heard yesterday that the Government have tabled not one new clause, but four, in addition to the one that they had already tabled. We have new clause 5,
  Additional duties on employers informed of ballots";
  new clause 6,
  "Unfair practices in relation to recognition ballots";
  new clause 7,
  "Unfair practices in relation to derecognition ballots";
  and new clause 8,
  "Unfair practices: power to make provision about periods before notice of ballot."
  Those may be excellent new clauses—I am sure that they are—but they were tabled only yesterday. We have two working days when the House is sitting to digest, analyse and try to understand them, yet they are highly complicated, and I put it to the Minister that each will require a great deal of time for discussion. For example, new clause 5 runs to nearly four pages and contains a lot of highly technical material. The Minister will have to explain to the House exactly what the "additional duties on employers" will be; what employers can and cannot do; what "inducing" means; and what "relevant meetings" are. Surely, he will require at least 10 minutes on each new clause, while Opposition Front Benchers will require five or six minutes, and many other hon. Members will have a few words to say.
  The Government are trying to rush through the Report stage. I am disappointed about that, because it will be difficult for us to get our heads around all the new clauses and other amendments in such a limited time. My hon. Friends and I have tabled two fairly simple new clauses on intimidation and on appeals, as well as an amendment on the information and consultation directive; and the Liberal Democrats have tabled a couple of amendments and a new clause.
  The key factor is that the Government have said all along that the Bill was the product of a consensus-building exercise involving the main employer and employee organisations, but they have departed from that script by using it to add to the Christmas tree a number of new clauses and additional measures. They have departed from the spirit that was the background to the Bill. I do not know how much time the Minister has spent talking to the trade unions, but has he spoken to the CBI, the Institute of Directors or the Engineering Employers Federation about the four new clauses? We have been given two working days to deal with them; how will they have a chance to analyse them, report back and explain the situation to interested members?
  Mr. Greg Knight: Has the Minister sought to reach an agreement with my hon. Friend on the extra time that might be necessary to discuss the Government new clauses? If the Minister is really interested in consensus, one would have thought that he would start out by trying to achieve it on this business matter.
  Mr. Bellingham: I thank my right hon. Friend. The Minister and I have got on very well recently. He has

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  taken me to one side to discuss the matter on several occasions. I have made it quite clear to him that, although we appreciate that type of discussion and liaison, we need more time. He has invited me and some other colleagues to the Department of Trade and Industry for a drink next week, but by then it will be far too late.
  Mr. Patrick McLoughlin: What explanation has been forthcoming from the Government about why so many new clauses are necessary at this late stage? If the Bill is well thought out, why were those new clauses not tabled some time ago, to enable consultation with the Opposition and employer organisations? It is not acceptable to table a huge chunk of new clauses without having time to consult the various interested bodies that will have to implement the regulations.
  Mr. Bellingham: I am grateful for that intervention, because on Second Reading the Secretary of State made great play of the fact that she had gone out of her way to talk to everyone and had achieved broad agreement on the Bill. She made it clear that the Bill was based on the information and consultation directive, which is an EU directive that we would normally expect to be introduced as a statutory instrument. In fact, it has come before us as a clause in primary legislation.
  The Secretary of State also made it clear that the Government had to respond to the Wilson and Palmer case and the Friction Dynamics case, and she said that she had had far-reaching discussions with all the organisations, particularly the employer organisations. She mentioned a close relationship with the IOD, the CBI, the EEF, the BCC and other organisations. I should think that they are staggered, flabbergasted and dismayed at this raft of new clauses, which are complicated and highly technical. How on earth can those organisations go through the new clauses, and provide proper briefings for their members and for Members of Parliament in such a limited amount of time?
  My party is very disappointed at the way in which the Government have behaved. I pay tribute to the Minister for keeping me in the loop, keeping me informed and being open, but we cannot get away from the fact that the Government have departed from their agreement with all parties in business and industry, and with the House, not to add a whole lot of highly technical, complicated new clauses to the Bill. They should have introduced the clauses well in advance, because the Bill has been around for a long time. The Conservatives are not happy campers, which is why we will ask the House—
  Mr. Greg Knight: I have to say that the more I listen to what my hon. Friend has to say, the more I feel that this whole situation is highly unsatisfactory. Has he suggested to the Minister that he consider withdrawing the motion and perhaps inviting us all round for a drink, to see whether that might produce an acceptable way forward?
  Mr. Bellingham: I am grateful to my right hon. Friend. The Minister has invited us—one or two select colleagues—to the DTI for a drink, although perhaps I
  1076
  should not mention that in public because I might destroy his reputation. It is possibly a little premature to go to the DTI to celebrate the completion of consideration of the Bill when we have not even agreed the programme motion. The motion will curtail debate, which is why we are very unhappy with it. I urge the House to vote against it.
  1.33 pm
  Malcolm Bruce: For personal reasons, I have not been able to be in the House this week until today, which might be why I have not received any notice of or been consulted on the programme motion—or received an invitation to a drink. The serious point is that although we support the Bill, as the Minister well knows, and have not moved from that principle, I concur with the hon. Member for North-West Norfolk (Mr. Bellingham) that it is not entirely adequate to allow what is in effect a half day to complete consideration of the Bill, given that it has been changed and there are various Opposition issues to be debated. It is not a question of wanting x or y hours, but we want enough time to ensure that the Government new clauses and amendments are properly discussed, and that Opposition concerns are properly addressed. For example, we had a heated debate on the money resolution for additional union funding, about which both main Opposition parties expressed concern. The House might want a fuller debate on that, on the basis of what we have heard.
  As the Government have said, the anti-discrimination clauses were difficult to draft. There is more or less universal support for them in principle, but some examination of how they will work in practice will clearly be relevant. As the hon. Member for North-West Norfolk pointed out, my hon. Friends and I have tabled amendments on issues that we continue to regard as important. I do not wish to detain the House by arguing in detail now which issues we think need to be expanded on, but I am a little surprised, given that the Bill has changed and there are important issues to resolve, that the Government feel justified in imposing such a tight timetable. On that basis, I concur with the hon. Gentleman in opposing the programme motion.
  1.35 pm
  Mr. Sutcliffe: I am shocked, saddened and surprised by this afternoons events, although we know that Opposition Members often oppose programme motions. To answer the points made by the hon. Member for North-West Norfolk (Mr. Bellingham), the Government have not deviated in any way from their consultation process, which is why we are in this situation. There is a full consultation process, which involves talking to the employer organisations and trade unions, and we have not deviated from that. The Bill's progress has been excellent, and there have been good, meaningful debates on many issues. I am sure that we can have more of those debates on Monday within the time allotted.
  This afternoons debate has been about the Opposition's problems with programme motions. We have heard about bungs and baubles, and about shock and amazement. There are serious issues to discuss, but there is adequate time for that. I hope that the House

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  supports the work that has been going on through the usual channels, and that hon. Members will support the programme motion.
  Question put:—
  The House divided: Ayes 234, Noes 128.
  Division No. 110] [1:36 pm
  Question accordingly agreed to.

  Defence Policy
  [Relevant documents: Delivering Security in a Changing World: Defence White Paper (Cm6041–I); Delivering Security in a Changing World: Supporting Essays (Cm6041–II); Uncorrected Oral Evidence taken before the Defence Committee on 24th March 2004, from General Sir Michael Walker GCB CMG CBE ADC Gen, Chief of Defence Staff, Admiral Sir Alan West GCB DSC ADC, First Sea Lord and Chief of the Naval Staff, General Sir Mike Jackson KCB CBE DSO ADC Gen, Chief of the General Staff and Air Chief Marshal Sir Jock Stirrup KCB AFC ADC, Chief of the Air Staff, on the Defence White Paper (HC465–i)]
  Motion made, and Question proposed, That this House do now adjourn.—[Jim Fitzpatrick.]
  1.50 pm
  The Secretary of State for Defence (Mr. Geoffrey Hoon): At the start of the debate, may I extend my condolences to the family of Brigadier Lord Vivian, who died recently? I had the privilege of meeting him on several occasions, and he was both knowledgeable and thoughtful, certainly when discussing defence issues.
  The publication last December of the Defence White Paper, "Delivering Security in a Changing World", generated significant interest, so I welcome this opportunity for the House to debate the issues with which it dealt.
  First of all, however, I would like to take this opportunity to condemn the appalling terrorist attacks in Madrid two weeks ago. I am sure that the House will join me in extending our sympathies to those who have lost loved ones—and, indeed, to the Spanish people. The appalling scale of those co-ordinated attacks, using devices deliberately set to detonate simultaneously on crowded trains at the height of rush hour, once again demonstrates the callous and barbarous nature of international terrorists. The attack was calculated to take as many innocent lives as possible. It was the latest in a series of such atrocities, going back well before 11 September to the bombings of the United States embassies in Kenya and Tanzania in 1998. The fanatics who are responsible will stop at nothing to cause death and destruction on a massive scale.
  It is therefore inevitable that there is increased anxiety about the prospect of similar attacks occurring here. I want to emphasise to the House that the threat of attack has been recognised across government. Since 11 September, in particular, a huge amount of work has been undertaken to prepare contingency plans. In the UK the civil authorities are responsible for crisis and consequence management, with the Home Office taking the lead for counter-terrorism policy at home. The Civil Contingencies Bill will provide an important and necessary enhancement to the civil authorities' ability to respond to emergencies and rightly places emphasis on civil resilience.
  Mr. Patrick McLoughlin: Does the Secretary of State share the view of the head of the Metropolitan police, Sir John Stevens, that an attack on London is inevitable?
  Mr. Hoon: I regret that, given the evidence that we have seen from elsewhere, the Government have consistently had to take that view and we obviously have to prepare and plan for it.

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  I was outlining where the civil responsibilities lie, but the armed forces clearly have the skills, training, command and control to provide valuable assistance to civilian capabilities when necessary. They will frequently have a role to play. Most recently, they were deployed to Heathrow airport in support of the police to act as a deterrent when intelligence warned of a potential attack.
  Following the strategic defence review new chapter, the Ministry of Defence introduced a number of measures to enhance our ability to respond to a crisis at home. Those measures include the development of command and control arrangements, the establishment of a network of joint regional liaison officers, and the introduction of communications equipment compatible with that used by the police.
  Across the country, we have also established 14 civil contingency reaction forces, which are now fully operational. They provide a pool of volunteer reserves available to deploy at short notice to assist the civil authorities at the scene of an incident—whether it is a terrorist attack, accident or natural disaster. But while we must be prepared to support the civil authorities here in the United Kingdom, it is vital that we address the threats to us before they even reach our shores.
  The White Paper sets out the requirement for this country to be ready, willing and able to deploy overseas to act against terrorists and the states that harbour them. It also sets out the threat posed by the proliferation of weapons of mass destruction and the consequence of failed and failing states. The proliferation of weapons of mass destruction is perhaps at its most chilling when it coincides with the desire of international terrorist groups to acquire and to use them. The law and order vacuum in failed states provides opportunities for those groups to flourish and a safe haven from which to operate.
  In addition, where possible, we will work together with the Foreign Office and the Department for International Development to tackle the root causes of terrorism. The Government's conflict prevention pool is made available to provide funding for measures such as security sector reform and post-conflict recovery, which help to tackle the underlying causes of instability in many of the world's potential flashpoints. In recent years, the armed forces have made a significant contribution to peace and support operations in Bosnia, Kosovo, Sierra Leone, East Timor and the Democratic Republic of the Congo. More widely, the Ministry of Defence has undertaken defence diplomacy activities to encourage the responsible development of military capabilities. Those commitments have been crucial in support of stability in numerous countries.
  Mr. Henry Bellingham: The Secretary of State mentioned various operations around the world. The last theatre of conflict was a very large operation, namely our contribution to the invasion of Iraq, which Conservative Members supported. If we had to launch another such large-scale operation—perhaps next year or the following year—would we be able to do so?
  Mr. Hoon: As the Chief of the Defence Staff made clear in his evidence to the Defence Committee
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  yesterday, it will take a number of years to recover properly in respect of exercises and the sort of training that is required. Obviously, however, if there were an immediate national reason for conducting a large-scale operation in a much shorter time scale, I know from my knowledge and experience of our armed forces that they would be able to mount it. It would necessarily mean that some of our existing commitments would have to be qualified in order to achieve that, but such operations would be undertaken, not least if this country were threatened.
  Bob Russell: The Secretary of State for Defence has rightly drawn attention to the excellent peacekeeping work that members of Her Majesty's armed forces are undertaking in various parts of the world—including in southern Iraq, where 500 troops from the Colchester garrison are based. Will he accept, however, that continued overseas commitments are putting a strain on our Army, and that the armed forces are still under strength? Although recruitment is going well, does he accept that there is a need for greater emphasis on retention; otherwise, the overstretch will become unbearable?
  Mr. Hoon: In fact, both recruitment and retention rates are extremely good at present, but I accept the hon. Gentleman's observation that we need to continue to augment the size of our armed forces and, indeed, to develop particular skills—a matter that I shall deal with in more detail later. It is clear that there are some strains on particular people in the armed forces—those in support and enabling positions, for example. That is inevitable if, as is the case, we are engaged in several different operations simultaneously.
  Mr. Crispin Blunt: I was very surprised to hear the Chief of the Defence Staff say yesterday that it would be another four years before we would be capable of carrying out a large-scale operation again. That seems an extremely long time, so could the Secretary of State offer the House some guidance about the precise thinking of the Chief of the Defence Staff in reaching that judgment about the four years that it would take for a large operation to be mounted again?
  Mr. Hoon: I am not sure that the hon. Gentleman's use of the term "capable" is fair in respect of what the Chief of the Defence Staff actually said. I have already answered the point in detail, but I am perfectly willing to repeat it: to prepare for a large-scale operation, it would be necessary to train, exercise and develop the necessary skills in the time frame set out by the Chief of the Defence Staff, but our forces would be "capable" of conducting a large operation before that, if it were necessary. As the Chief of the Defence Staff explained, however, that would necessarily have some implications for our existing commitments. The Minister of State has explained that position on previous occasions. I know from the hon. Gentleman's knowledge of the Department that none of that will come as a great surprise to him.
  Ms Dari Taylor: I would like some reassurance from my right hon. Friend. When I visited our troops in Bosnia in 1998, I was astounded by

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  the fact that they had to use mobile phones to ensure effective communication between each other. Mobile phones are, of course, easy to track and to listen into. Can my right hon. Friend assure me that that arrangement is not still the case today?
  Mr. Hoon: It is not the case today. I shall set out in greater detail the significant advances that have been made, and are about to be made, in the provision of enhanced communications equipment. That has been an absolute priority for the Government. I recognise the difficulties in delivering such programmes that previous Governments have encountered over a long period of time. However, the Bowman programme is on the verge of success. I welcome the efforts that have been made.
  I was outlining the commitments made by UK armed forces around the world. Only last week, in response to escalating levels of tension and violence between ethnic Albanians and Serbs in Kosovo, additional UK troops were deployed in support of KFOR. The Ready Battalion of NATO's operational reserve force and the 1st Battalion, the Royal Gloucestershire, Berkshire and Wiltshire Regiment had been earmarked precisely for such a rapid deployment. Their role, which I anticipate will be short term, is to assist KFOR in restoring calm to the province and preventing unrest from spreading to areas outside Kosovo. It is an example of the kind of rapid deployment capability that we will increasingly need to be able to call on.
  Clare Short: I am worried that, if we cannot settle Kosovo's final status, its economy will remain dreadful. Unemployment is enormous, which means that the atmosphere is tense and likely to be disorderly. The military situation will not be resolved unless we get political progress.
  Mr. Hoon: I agree. The events before last weekend illustrate the continuing difficulties between the two communities. A number of Serb families were forced to leave their homes, and Serb churches were burned. That suggests that the presence of our troops is still necessary, but it also shows that we must make progress on a constitutional and political settlement to avoid our military responsibility going on indefinitely.
  Mrs. Alice Mahon: Does the Secretary of State agree with the NATO Secretary-General and one of the senior members of UNMIK, who said that the unrest was almost certainly organised by Albanian separatists? Will he confirm that at least 3,000 Serbs and members of other ethnic minorities have lost their homes?
  Mr. Hoon: I have looked carefully at the evidence, and I am not sure that any of it points to an especially sophisticated organisation. As I said in response to my right hon. Friend the Member for Birmingham, Ladywood (Clare Short), there are such simmering tensions between the two communities that any incident—whether true or not—can set off the sort of violent and dangerous reaction that we have seen. Clearly, that has real implications for the presence there of troops from the UK and other countries.
  Mike Gapes: The Secretary of State will know that members of the Select
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  Committee on Defence were in Kosovo a few weeks ago and what we heard made all of us worried about what was happening there. Although it is important to resolve the status of Kosovo, will he assure the House that there will not be a final status agreement without guarantees about human rights and the rule of law? Also, does he agree that we must clamp down on the criminal, mafia society in Kosovo, and the leading Albanian politicians there who are behind it?
  Mr. Hoon: I certainly give that undertaking in respect of human rights. That was one of the reasons we went into Kosovo, and our other aim was to preserve a multiethnic society. We were right to go and protect the Albanian community against the appalling treatment by Milosevic's regime, but the recent events in Kosovo suggest that Albanians are perpetrating behaviour that is similar to what the Serb minority did. That is of great concern to us.
  The threats that we now face are ever more fluid, and less predictable than the monolithic Warsaw pact that dominated our defence planning and posture for two generations or more. However, they are no less real, and no less dangerous. Our armed forces have to adapt as a result.
  The strategic defence review set us in the right direction, with its emphasis on expeditionary force. The defence White Paper builds on this work to present the case for still more flexible forces, structured and equipped to perform a wide range of tasks, often concurrently, in simultaneous operations in different parts of the world. The success of the operations that we undertake will be measured more by our ability to exploit fleeting opportunities to engage an elusive enemy, and in deterring and disrupting future terrorist activity, than in any decisive pitched battle.
  The rebalancing of our armed forces is therefore required, with flexibility being the key. Experience has shown us that we should plan on structuring, equipping and supporting our armed forces to deploy rapidly on concurrent small and medium scale operations. That pattern has become the norm in recent years, and it is likely to remain the trend for the foreseeable future.
  Mr. John Smith: My right hon. Friend speaks of supporting our armed forces in this changed environment, so after yesterday's announcement by the Ministry of Defence, will he assure me that the MOD remains committed to the success of the Red Dragon project at RAF St. Athan?
  Mr. Hoon: I assure my hon. Friend that we remain absolutely committed to that project. We believe that the people engaged in it have a significant role to play in the future.
  Obviously, we need to ensure that our armed forces retain the ability to adapt themselves at longer notice for the much less frequent, but more demanding, large-scale operations. We must continue to keep up to date our approach to standing tasks and commitments. The White Paper seeks to strike the right balance.
  Where military action is used, it is clear that it is most effective when brought to bear through multinational coalitions and alliances. The ability to operate

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  seamlessly alongside other nations, particularly with our NATO and European Union allies and partners, is therefore at a premium.
  We plan to maintain a broad spectrum of capabilities to ensure that we are able to conduct national operations, or be the lead or framework nation for coalition operations, at small to medium scale. However, we do not envisage needing to generate large-scale capabilities across the same spectrum as, in the most demanding operations, it is highly unlikely that the US will not be involved, either leading a coalition or as part of NATO. For large-scale operations, our focus nationally must be on the retention and development of capabilities that ensure a seat at the political and military decision-making table, securing for the UK an appropriate level of influence in the planning and prosecution of operations. Therefore, the armed forces must be able to interoperate with US command and control structures, match their operational tempo, and provide credible and significant capabilities that provide the greatest impact.
  Mr. Ian Davidson: I am grateful to the Secretary of State for giving way. He is making an excellent speech and I am sure that he will be a first-class European Commissioner in due course. I am interested in the process of determining capacity in respect of building ships and aircraft carriers. Obviously, we want to obtain value for money in the order for aircraft carriers, but does he agree that it is also essential to take account of the totality of shipbuilding procurement? Would we not be able to secure much better value for money if the MARS—military afloat reach and sustainability—initiative orders and the orders for aircraft carriers and frigates were all taken together? In that way, the peaks and troughs in demand that would otherwise impact on the shipbuilding industry could be smoothed out.
  Mr. Hoon: I have always appreciated my hon. Friend's compliments, but I am somewhat disappointed that he is so anxious to get rid of me.
  Bob Russell: It is friendly fire.
  Mr. Hoon: I agree with my hon. Friend the Member for Glasgow, Pollok (Mr. Davidson) to the extent that it is necessary for the MOD to assist the shipbuilding industry in securing civil orders as well as military orders. The MOD has a tremendous order book for warships at the moment, but that will not sustain shipbuilding indefinitely. The MOD can make a significant contribution to shipbuilding, but the industry should not assume that those orders will keep it going indefinitely. My hon. Friend talks about smoothing out supply and demand, but that has to come from the civil orders. They supplement the military orders, and will provide a long-term future for UK shipbuilding.
  I was talking about the necessity of interoperating with the US. However, I emphasise that we are simply focusing on niche capabilities that the US is short of. We should not want to confine ourselves to only a supporting role in military operations. In order to meet
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  our own security objectives, we will need to continue to be at the forefront of operations. The changes that the White Paper sets out will enhance the UK's ability to conduct expeditionary operations, both nationally and, as is most likely to be the case, as part of a coalition of allies.
  Mr. Barry Gardiner: I am grateful to my right hon. Friend, who has been most generous in allowing interventions. On co-operation with the United States, does he agree with Robert Maggi, the head of defence trade controls at the US State Department, that in looking towards conflict prevention and the illicit transfer of conventional weapons to non-state actors, the ability to apply effective controls to such transfers, including extraterritorial controls, is critical?
  Mr. Hoon: We have certainly looked at that. By way of qualification, I should say that if we introduce such controls, it is important that they be introduced multilaterally. It is necessary that new nations should also be subject to the existing code of conduct, which could be reformed to take account of such particular illicit transfers, or to other international agreements. I would be concerned if the UK moved too far ahead of other countries that might then be tempted simply to step in and fill the trade void that we had left.
  Mr. Tam Dalyell: Before we leave the subject of expeditions, may I add, as chairman of the all-party Latin American group, that we, the European delegates, were warmly welcomed by Vicente Fox? May I ask about the strange business of the servicemen who are caving in Mexico? What are we to make of it? Surely it would have been courteous and tactful to tell the Mexicans that servicemen were going there.
  Mr. Hoon: I am always impressed by the range of my hon. Friend's interests and concerns and he has just added a new one to the long list with which I am familiar. I was referring to Latin America, not caving, but I am sure that my right hon. Friend the Minister will have noted those wise observations.
  NATO of course remains the cornerstone of our security policy. Lord Robertson, in his capacity as Secretary-General of NATO, worked tirelessly to adapt NATO to the challenges that it is likely to face. His successor, whose appointment I welcome, has promised to continue this work. As technology develops, it will become even more important that we and our NATO partners invest in the capabilities that enable us to operate at the same tempo as the United States. We are actively encouraging this approach through the Allied Command Transformation and the development of the NATO response force, with its emphasis on flexible, deployable and technologically advanced and interoperable forces.
  The Prague capabilities commitment is making progress. Our allies have committed themselves to improvements in key areas such as nuclear, biological and chemical capabilities, secure communications, strategic lift and air-to-air refuelling. Looking forward to this year's Istanbul NATO summit, we will try to ensure that our allies deliver these capability improvements. NATO needs to be leaner, more

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  responsive and fit for new challenges. We therefore support a broad review of NATO structures, processes and decision making.
  Where NATO as a whole chooses not to engage, it is likely that we will work with our European allies. Improving the military effectiveness of European nations therefore remains a key priority. Hence our proposal that EU member states should develop rapid response capabilities through the battle group initiative. Building on the progress towards achieving the Helsinki headline goal, member states, individually or on a multinational basis, will provide deployable and sustainable battle groups of around 1,500 troops, drawn from existing national forces. Having high readiness forces available will improve the ability of the European Union to respond effectively to emerging crises, particularly in support of the United Nations. We will ensure that this initiative is developed in a way that also strengthens NATO and the NATO response force.
  There is no conflict between aspiring to strengthen both NATO and European defence and security policy. We will not agree to ESDP developing in a way that impairs the security guarantee established through NATO. The security architecture that we have constructed over the past six years allows for flexible approaches to crises either through a NATO operation or the EU using NATO assets under Berlin-plus arrangements, or indeed through an autonomous EU operation.
  The EU and NATO have established a strategic partnership in crisis management that we want to see strengthened. The arrangements for EU-NATO consultation agreed last December were a significant step forward. Regular dialogue between the EU and NATO would be stepped up during a crisis. That ensures that the relationship between the two organisations is transparent and mutually reinforcing.
  In directing our finite resources at those capabilities that are best able to deliver the range of military effects that we require, we will inevitably have to make important choices. As we indicated in the White Paper, we will look to create the headroom for highest priority investments in network enabled capabilities and medium weight forces.
  Central to our thinking on network-enabled capabilities is the need to improve the collection of information on the battle space and enable those in charge of ships, tanks, aircraft and other combat systems to be able to share that information more quickly. The Watchkeeper unmanned aerial vehicle, for example, will provide a substantial increase in surveillance capability over the Phoenix system currently in service. The Bowman secure tactical voice and data communications system will markedly improve our ability to share information. Such improvements in equipment capability will enable those involved to understand the battle space more quickly, so that they can speed up the decision-making process.
  Mr. Gerald Howarth: On the Bowman issue, it has been put to me that there has been some difficulty in communicating across hilly terrain. I understand that in those circumstances a high frequency channel will be used. This is a technical question and the
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  Secretary of State may not have the answer at his fingertips, but, broadly speaking, is he satisfied that Bowman will deliver what he imagined it would?
  Mr. Hoon: Recently I had an update on the arrangements for Bowman. The progress on introducing the system is extremely good and I am confident that we will resolve any technical difficulties as they arise. I am confident that this will be an extremely successful operation for UK armed forces.
  To return to improvements provided by network-enabled capabilities, we need to match improved sensor performance and information exchange with a more decisive delivery of effect. During the Kosovo campaign, as recently as 1999, around 25 per cent. of munitions that the RAF used were precision-guided. Barely four years later, during Operation Telic, 85 per cent. of munitions used by the RAF were precision-guided. By taking advantage of such significant progress in the use of high technology, we will be better placed to ensure that our platforms are used to greatest effect and that the coherence of our military capabilities is enhanced.
  If we are to have truly expeditionary forces, able to deploy quickly to deliver effect at significant distance from the United Kingdom, we need to rebalance our force structures. We must ensure that we can move our armed forces quickly to where they are needed with equipment that enables them to carry out the tasks we expect of them. The introduction of the future rapid effects system group of vehicles will provide our armed forces with battle-winning equipment that can be moved quickly by strategic airlift. As part of this rebalancing process, we have already been able to announce plans for a new light brigade, and the reduction of one armoured brigade—from three to two. This will enhance our existing light forces by offering a third choice in addition to 3 Commando and 16 Air Assault Brigade. Whenever such advances have been made in modernising defence equipment or capability it has always been necessary to make adjustments in the number of older platforms. It is right that we do this to ensure that our armed forces are properly equipped to meet the challenges of the future.
  Mr. Blunt: In announcing the changes that will follow from, one hopes, the extra money that the Chancellor may make available in the comprehensive spending review and the extremely challenging long-term costings process or work strands process that is going on in the Department now, which appears to be on twice the scale of "Front Line First" of 10 years ago, there will plainly be some significant changes to follow the brigade changes that the Secretary of State has already indicated. How does he propose to announce the changes?
  Mr. Hoon: I was about to deal with that point in my speech. In my statement on the publication of the White Paper last December, I set out to the House that I had asked the Ministry of Defence to undertake a significant examination of our capabilities and overheads. I anticipate that we will be in a position to make some announcement on the results of this work in the summer through the usual channels.

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  The Government are committing significant extra financial resources to support changes envisaged in the White Paper. The 2002 spending review delivered the largest sustained increase in planned defence expenditure for more than 20 years—adding more than £3 billion over three years. Last week, my right hon. Friend the Chancellor of the Exchequer confirmed a further real-terms increase in the 2004 spending review. That does not mean we can afford to relax our efforts to use that money efficiently. In the challenging defence environment, we need to make every pound count.
  Labour's record contrasts markedly with that of the Conservatives. During 18 years of government, the Tories imposed swingeing cuts in defence without any long-term strategic rationale. Spending was cut by nearly one third in real terms during the Tories' last 10 years in government.
  There are always financial pressures on major Departments, especially during a demanding period. It is clear that the Conservative plan for a two-year freeze on defence spending would mean a £1.5 billion real terms cut in the unlikely event that the Tories returned to office. Members of the Opposition Front Bench need to come clean about how they plan to make that £1.5 billion cut. Will they withdraw British armed forces currently doing vital work in Iraq and Afghanistan? What part of the equipment programme would the Conservatives scrap—and what impact would that have on Britain's future defence capabilities and British industry?
  Does the hon. Member for Mid-Sussex (Mr. Soames) stand by his comments on the Radio 4 programme "Today" on 6 January, when he said:
  "You can't do defence on the cheap"?
  If so, why has the hon. Gentleman failed to explain that to his shadow Chancellor?
  Mr. Michael Jack: I am always suspicious when Ministers attack the Opposition. The Secretary of State said that the Chancellor had promised a real-terms increase. The right hon. Gentleman seeks specific answers from my hon. Friend, so will he tell the House what extra money the Chancellor has confirmed to him will be available?
  Mr. Hoon: That announcement will be made in due course, as the spending totals for all Departments are made known. That process will take some months but that is not unusual. The right hon. Member for Fylde (Mr. Jack) keenly questions spending on fast jets, for example. Conservatives talk about cuts in defence spending, while at the same time complaining about a series of projects that they want delivered. I challenge the right hon. Gentleman to ask those same searching questions of members of his own Front Bench. Recognising the difficulties that face all Departments in meeting their budgetary commitments, how is that Conservative spokesmen believe that they can cut £1.5 billion from defence?
  Mr. Nicholas Soames: Before the Secretary of State becomes more confused and tied up as he goes around in circles, I will clarify for the record that
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  no one in the Conservative Opposition—including myself and the shadow Chancellor—has ever said that there will be a cut in defence spending.
  Mr. Hoon: I do not believe everything that I read in the newspapers, but I read that the hon. Member for Mid-Sussex was less than enthusiastic about the shadow Chancellor's commitment. I will read out the words of the right hon. Member for West Dorset (Mr. Letwin), just in case he has not told his hon. Friend the Opposition's spending plans. He said:
  "I have agreed with my Shadow Cabinet colleagues that the baseline for spending across all of these departmental budgets will be 0 per cent growth for the first two years, followed by 2 per cent growth per year for the remaining four years of the period covered by the strategy."
  Everyone knows that zero per cent. growth is a cut in real terms of £1.5 billion—even before the extra money for defence committed by my right hon. Friend the Chancellor at the time of the Budget is taken into account. The Conservatives plan a real-terms cut in the existing defence budget and an even bigger cut in our planned defence spending.
  Mr. Paul Keetch: Given General Sir Michael Walker's comment yesterday that it might be several years before Britain could undertake a major war operation, will the Secretary of State speculate by how much that period would be extended if the Ministry's budget was frozen in real terms during the first two years of a hypothetical Conservative Government?
  Mr. Hoon: I look forward to the right hon. Member for Fylde asking that question of the shadow Cabinet spokesman for defence. We want to know where those cuts will be made. Will there be cuts in capability or in equipment? That is for the hon. Member for Mid-Sussex to explain.
  Mr. Kevan Jones: Does my right hon. Friend agree that the problems facing our armed forces today originate in decisions taken in 1992, 1993 and 1994 by the last Conservative Government? Does my right hon. Friend further agree with the comments of the First Sea Lord to the Defence Select Committee yesterday, who said that stopping recruitment had been a dreadful mistake and had led to a black hole—particularly in respect of leading hands. Does he agree that we are having to pick up those mistakes now?
  Mr. Hoon: The previous Government's lack of spending on public services had a dramatic effect on hospitals and schools. The dramatic effect on defence was not always appreciated. We had to make good many of the cuts and shortfalls that we inherited. Year by year, we are doing that by spending more on defence—so it is right to highlight the cuts proposed in the unlikely event of the Conservatives again achieving power.
  Mr. Jack: Given events at the time in eastern Europe, the Soviet Union and beyond, was it irresponsible of the last Conservative Government to react to the rapidly

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  changing defence scenario and to adjust Britain's defence capabilities to new threats and scenarios—as the Secretary of State is doing in the world of today?
  Mr. Hoon: Would the right hon. Gentleman say that it was irresponsible of members of his own Front Bench to announce a cut in defence expenditure at precisely the time more needs to be spent, to provide security against threats? I look forward to the right hon. Gentleman questioning his own Front Benchers about their commitments. The right hon. Gentleman regularly urges the Government to spend more on fast jets and military equipment. There ought to be some consistency. I would be delighted to know the right hon. Gentleman's position.
  Mr. Jack: I come to the House to ask the Secretary of State, on behalf of my constituents working in the aerospace industry, to honour the commitments and budgets that he has promised to programmes such as the Eurofighter and joint strike fighter.
  Mr. Hoon: I am delighted that in the context of the extra spending that we have promised, a range of successful military equipment will be available to support Britain's armed forces. I want to know the kinds of cuts and the equipment that the Conservatives will cancel in the event of the right hon. Gentleman supporting his own Front Benchers' efforts to reduce defence expenditure.
  Mr. John Smith: Will my right hon. Friend give way?
  Mr. Hoon: I had better carry on. There is a limit to how much fun one can have in one day.
  The campaign in Iraq began just over one year ago. It showed our armed forces and the Ministry of Defence at their best and demonstrated how far we have come in achieving truly expeditionary forces able to deliver a range of military attacks over long distances. I have acknowledged that there were some deficiencies, but I welcome the thorough investigations by the National Audit Office and the Defence Select Committee, which have helped to illuminate the issues.
  I have no doubt that Britain's intervention in Iraq has been and will continue to be beneficial to the Iraqi people. Earlier this month, members of Iraq's governing council signed a transitional administrative law for Iraq. That signing was a significant milestone.
  Given the uncertainties of the modern world, standing still on defence policy is not an option. We must not fail our armed forces. We must ensure that they are structured and equipped to carry out the tasks and challenges that we expect them to face. The White Paper provides the policy basis on which we will rebalance our armed forces, to ensure that they are best placed to meet the security challenges of the first part of the 21st century. The White Paper recognises that to be an effective and influential player in a changing world, the United Kingdom must be committed to working in partnership with our international friends and allies and be prepared to take action when needed. By doing so, we shall together confront the threats presented by international terrorism, weapons of mass destruction and the challenges posed by failed and failing states.
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  The White Paper recognises also that we cannot predict precisely where and when we will next have to deploy significant numbers of UK armed forces in support of our foreign policy and security aim. We must modernise our force structures and harness technology and information networks to enable the UK to act quickly, accurately and decisively anywhere in the world.
  2.29 pm
  Mr. Nicholas Soames: I wish first to apologise to the House, as I have already done to the Secretary of State and the Minister of State, because I will be unable to be present for the winding-up speeches. I have an important speaking engagement, and I apologise for my absence.
  I also thank the Secretary of State for his generous and warm tribute to my noble and gallant Friend Lord Vivian, who played such a distinguished part in defence debates in the other place for many years. He was extremely knowledgeable and very popular on both sides of the House. He was highly regarded and respected for his knowledge. We will miss his advice and considerable experience as a serving soldier—at the rank of Brigadier when he retired—and we extend our deepest sympathy to his wife and family.
  I also wish to pay a warm tribute to the men and women of the three armed services for the wonderful way in which they have carried out their duties in the past onerous year, and for the patience and fortitude of their families—qualities that are often over-tested at present. I also pay warm tribute to our reserve forces, which have played a distinguished and remarkable role in operations in the recent past, and continue to do so. We salute their efforts and are grateful to them, their families and their employers for their understanding. Finally, I pay warm tribute to the civilian staff of the Ministry of Defence, wherever they work, for the remarkable and important work that they do to support our armed forces.
  Even allowing for the Secretary of State for Defence having a bit of fun at my expense—which was entirely legitimate—it defies belief, as my right hon. Friend the Member for Fylde (Mr. Jack) pointed out, that the Secretary of State should think that the end of the cold war required no strategic reduction in the posture and shape of our armed forces: it was one of the biggest changes in military affairs for generations. However, it is a matter of common consent throughout the world that the peace dividend taken in many countries at the end of the cold war was probably overdone. It did represent a significant change from positional defence to the evolving policies that have found catharsis, in many ways, in the White Paper, including the creation of highly deployable forces, which was started in the last years of the Conservative Government and in which the present Government have made substantial and welcome investment.
  We generally accept the White Papers assessment of the strategic environment and the difficulties that flow from it. Indeed, it is clear that we have come to a decisive moment in history, when a new and diverse constellation of threats have appeared that are not nearly as obvious as their relatively certain predecessors. Today, we are confronted by an extra-national,

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  religiously self-defined entity with something ominously like a nation's power to wage war. Terrorist outrages in New York, Riyadh, Istanbul and Madrid—I join the Secretary of State in extending our condolences to the people of Spain following that dreadful atrocity—are a horrific reminder of the new challenges we face, and the clear duty that the Government have to ensure that we are fully prepared to cope with such a disaster.
  Mr. George Foulkes: The hon. Gentleman deals with the issue in a statesmanlike way, but does he not think that it was opportunistic of the shadow Foreign Secretary to criticise the Prime Minister for meeting Colonel Gaddafi in an attempt to reduce the threat to which refers? That is particularly true given that my right hon. Friend's intention in that regard was announced last December and welcomed by the Leader of the Opposition and the shadow Secretary of State for Defence. Was not that condemnation ridiculous political opportunism by the shadow Foreign Secretary?
  Mr. Soames: From one statesman to another, I must say that, unusually, I am in deep but respectful disagreement with the right hon. Gentleman. All of us welcome the developments taking place in Libya, but the meeting may turn out to be premature. We welcome those developments and it is right that recognition should be given to Libya for the steps that have been taken. However, as so often, some of the language is overdone and the visit may be premature. That was the point that my right hon. and learned Friend the Member for Devizes (Mr. Ancram) was trying to make.
  While that uniquely threatening form of terrorism must be effectively engaged, we must also address the deeper and abiding reasons for its very existence. That will be a major duty for the Government in years to come. In the new strategic environment, as the Secretary of State said, homeland defence is of the first importance. Traditionally, our armed forces focused on deterrence, stability, and war-fighting missions in overseas theatres. The home front was regarded as a rear area, not a front line, and the job of securing it was primarily a task for civilian agencies, with the exception of Northern Ireland. However, the new strategic environment reaffirms the role of the Government as protector of the country against foreign aggression, and so defence of our homeland represents one of the primary tasks of the MOD and must receive the level of attention and co-ordination that it deserves. Indeed, as the White Paper states, our forces are expected to
  "protect our citizens at home and counter international terrorism across the globe".
  It is clear that a fundamental shift in the mindset of the MOD decision makers will be required—a shift of which, incidentally, there was precious little evidence in the White Paper.
  An evolving national strategy for homeland security requires that the MOD may have to consider the employment of military forces in ways previously considered outside the scope of operations. What specific training are the armed forces undergoing in order to be able to respond to what the Metropolitan
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  Police Commissioner suggested would be an "inevitable" attack on London? Furthermore, can the Minister comment on the level of co-ordination established since 2001 between the MOD, the Home Office and other Departments?
  Mr. Kevan Jones: I agree with the emphasis that the hon. Gentleman places on the threat to the homeland and the need for extra vigilance and expenditure on that. Can he explain how a future Conservative Government would meet that threat when bound by the straitjacket imposed by the shadow Chancellor?
  Mr. Soames: I shall continue my speech, if I may.
  The tasks imposed on our armed forces will continue to be more and more onerous. It is clear from the Prime Minister's speech in Sedgefield that they could become even more so, but I have read the evidence that the Chief of the Defence Staff gave to the Defence Committee yesterday and it is difficult to see how the armed forces could cope.
  The Government's definition of Britain's interests has continued to widen over the past seven years. The Government have deployed our forces on major operations four times in the past five years, and we continue to have major obligations in Iraq and Afghanistan, as well as maintaining a considerable presence in the Balkans, which was recently reinforced by the Spearhead battalion as a theatre reserve force. As the Chief of the Defence Staff made plain yesterday, those operations are making near impossible demands on our troops.
  The White Paper states that
  "we must extend our ability to project force further afield than the SDR envisaged."
  Given the extraordinary demands being made on the services, the Government have a first duty to our servicemen and women to realise that it is they who will have to deliver success and that they will need to be reassured as to the direction of the Government's policies. I find that there exists at present a great sense of uncertainty and unease among our armed forces, who I am afraid feel very much taken for granted and increasingly believe that they are not properly supported, resourced or looked after. That is a serious message for the Government.
  Mike Gapes: Given the great pressures to which the hon. Gentleman has referred and in the context of a possible standstill budget, in which of the areas in the world where we are currently deploying forces to assist international peace and security would he make cuts?
  Mr. Soames: If the hon. Gentleman will contain himself, I shall come to that point later in my speech.
  In discussing the White Paper and the application of the new doctrines, especially the network-enabled capability, it is essential that we do not forget the need for balance between old and new concepts, a point that was powerfully made in a distinguished and important speech, which I commend to the Secretary of State, by General Lord Guthrie in the House of Lords yesterday.
  The lessons, from the Balkans to Basra, must be remembered. Infantry and armour on the ground can be augmented by technological wizardry but they cannot

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  be replaced by it. The peace in Basra and in the Balkans is being kept by thousands of soldiers on the ground, so can the Secretary of State confirm that, given the exceptional tempo of operations at present, he has no intention of cutting back the number of infantry regiments? In our judgment, those regiments are sorely needed.
  We welcome acknowledgement of the need to continue robust and collective military training at all levels. That is one of the lessons about which the Select Committee has raised concern. Its report states:
  "The high number of operations which UK service personnel have been involved in has had an adverse impact on their training."
  Reductions in training have a progressively damaging effect on fighting power, particularly at the highest level—joint combined arms collective training at formation level and above. It may indeed take years to recover fully standards and capabilities that have been lost.
  The problem is truly serious and the Government must rectify it. If they do not do so, sooner or later it will lead to disaster and to the creation of lesser, more ordinary, armed forces. It is becoming clear that many who went to fight in Iraq did not have adequate training; for example, during pre-conflict training there was a restriction on track mileage for armoured vehicles. That seems an unacceptable state of affairs.
  The Secretary of State must acknowledge that training saves lives. Many deployments involve considerable danger and it is unacceptable that our people do not have enough time to prepare for them properly and thoroughly. Such risks are unacceptable, but they are becoming frequent. I look to the Secretary of State to put that right.
  Mr. John Smith: I am not sure that the emphasis of the hon. Gentlemans point is clear. Is he saying that there is no need for additional investment in C4ISTAR—command, control, communications, computers and intelligence, surveillance, target acquisition and reconnaissance—without which we cannot operate as a modern force?
  Mr. Soames: I think a lot of things are unclear to the hon. Gentleman, but that was not the point I was making. I was saying that there is an absolute requirement for thorough and professional training before troops are committed.
  The services cannot buy in experience. Under the current pressures, individuals at more junior levels are unable to achieve the career progression to which they aspire. The result is that, over a period of time, technical standards slip. Can the Secretary of State comment on reports that about 50 per cent. of combat arms training has been cut back owing to funding problems? Can he assess the impact of that on the armed forces capabilities?
  Overstretch has been a recurring theme for the armed forces in recent years. When I was Minister of State for the Armed Forces, the then Labour Opposition chided me in relation to overstretch but at that time the Army was only about a quarter as committed as it is nowadays. With overseas deployments coming thick and fast and the overall size of the armed forces in
  1096
  decline, overstretch is a recurring and fundamentally important problem. Indeed, it is only a slight exaggeration to say that most of the UK Army is either on deployment, returning from deployment or getting ready to go.
  Last year, the MOD announced that 40,842 personnel were expected to be stationed abroad during 2004, representing about 40 per cent. of trained strength. That is, of course, leading to increasing problems with tour lengths. In February, the Secretary of State admitted that the Government had wholly failed to meet that target. What has been done to address that issue?
  The armed forces have recently become grossly overstretched by the number and scale of their deployments. That simply cannot go on, as the Chief of the Defence Staff implied when he appeared before the Select Committee yesterday. As the Defence Committee report rightly states:
  "The Government must recognise that the armed forces are simply not large enough to sustain the pattern of operational deployment since the Strategic Defence Review permanently without serious risk of damage to their widely admired professional standards."
  What is the Secretary of State's response to the evidence of the Chief of the Defence Staff to the Committee last night? He warned that a large operation of the size of Telic would not be practical until we approach the end of this decade. The Opposition believe that to be a sign of Labours fundamental lack of effective stewardship of the armed forces.
  Mr. Davidson: Does the hon. Gentleman agree that it is an odd juxtaposition of policy to say that the Government are committing the armed forces to too many duties while saying that his answer would be to cut expenditure to a lower level than the Government intend?
  Mr. Soames: I realise that the hon. Gentleman has the most serious difficulty in understanding even the simplest things; I have already told the House that neither I, nor the shadow Chancellor nor anyone else has talked of a cut in the defence budget.
  May I turn to equipment and procurement? Let us have a look at the state of the Government's procurement policy on new technology. Despite the much vaunted, and, in fairness, welcome, defence industrial policy set out by the Secretary of State in October 2002, the Government have failed to apply it coherently to their procurement programme. An uncertain and anxious defence industry has been given no strategic steer by the Government about the essential capabilities that they believe the UK must retain. The cornerstone of their policy, introduced under the SDR, was smart procurement. That lasted a couple of years before being reinvented as "smart acquisition". Smart acquisition? Tell that to the trade unions that joined us in fighting tooth and nail to persuade the Government to buy the British Hawk advanced jet trainer. It was so smart a process that they placed an order just hours before 500 employees of BAE Systems were due to be handed their redundancy notices. Tell that to the work force in Telford, who for the past two years have been anxiously awaiting a decision from the Government on the future rapid effects system battlefield vehicle that the Chief of the General Staff requires to be in service by

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  2009, but for which there is not yet even a drawing. Tell that to BAE and Thales who read about the MOD's intention to take command of the aircraft carrier programme. Tell that to the National Audit Office, which found that Ministers failed to order sufficient stocks of kit for the Iraq war to be delivered in time. "Just in time" became in too many cases "Just too late".
  Clare Short: This is not a popular position, but I think that we need to review our commitment to procure only from British defence companies. When there are procurement problems, there is less of a case for procuring only domestically. If we want our armed forces to have the best radios, the best rifles—the best equipment—we should move away from that absolute commitment to British Aerospace and the inefficiency in our procurement systems. What does the hon. Gentleman say to that?
  Mr. Soames: I say that procurement is indeed a difficult process. However, we have a magnificent defence industry, which employs hundreds of thousands of people and is an enormous export earner. Of course, we should support British industry, but at the end of the day there is no strategic vision as to how that should be done. We propose to develop a proper strategic vision and provide real leadership for an industrial policy on procurement that will make sense.
  The procurement budget is more than £3 billion overspent this year alone, and not just on the so-called legacy programmes for which the Government have been responsible for managing for the past seven years. There is a huge bow-wave of projects building up whose affordability is increasingly questioned. Programmes continue to slip, and worst of all, across the board significant gaps in capability are being actively planned for. Nothing better illustrates that than the maritime air cover problem, whereby the Government are gambling that we shall be able to get away with no such independent cover between 2006 and 2012 at the earliest.
  Most chilling of all is the Government's language on platforms—tanks, ships and aircraft to the British public. Last summer, we were told that platform numbers would not be so important in the brave new world of effects-based warfare. Now, we are told that platform numbers will be cut to make way for investment in network-enabled capability. The truth is that numbers remain critical. The White Paper refers to the increased frequency and duration of operations. The Prime Minister alluded to all those ideas in his very important speech in Sedgefield. I can tell the Secretary of State that we need those platforms to undertake the number and scale of operations envisaged by the Government's policy. Ships, planes, armour and men cannot be in two places at the same time.
  Mr. Jack: Did my hon. Friend notice that the Secretary of State did not comment once on any of the programmes to which my hon. Friend has referred? As a result, does he share my deep suspicion about precisely
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  what the future holds for many of the programmes about which the Secretary of State failed to make any remark in his address?
  Mr. Soames: I am grateful to my right hon. Friend for pointing that out—I intend to deal with some of those points in greater detail—and I share his anxiety. The Secretary of State started off with a dignified and an important speech on defence that degenerated into a rather futile and pointless knockabout.
  The White Paper is full of buzz words and phrases, but the truth comes out only in the following statement, which will interest my right hon. Friend:
  "We will not be able to hold on to platforms or force elements that do not have the flexibility to meet the demands of future operations."
  On the face of it, that is a sensible remark, but the Government make no effort to spell out which platforms or elements we will not be able to hold on to, even though if they have been identified, the cuts must have been identified, too. Can the Secretary of State clarify which platforms or force elements we will not be able to hold on to? If we are to have a proper discussion on the White Paper—the debate is meant to be about the White Paper—the Secretary of State will have to clarify the details of which platforms and force elements are involved, and we will want to debate that with him most vigorously. I note that he is to come to the House to announce the cuts that he intends to make in summer, and I hope that he will then be able to tell us which cuts he must make as a result of the new strategy in the White Paper.
  Specifically, I call on the Secretary of State to confirm the informed speculation that the Type 45 destroyer procurement will be cut by a third. Is it true that tranche 3 of the Eurofighter Typhoon project will be cut? It is clear that mismanagement and indecision by the Ministry of Defence about the future aircraft carrier programme is seriously delaying the project and leading to a substantial waste of funds. The right hon. Gentleman shakes his head, but it is well known already that the carriers will be one and a half years late. Is the objective of having two 65,000 tonne ships, each capable of carrying some 50 aircraft, to be met, and what is the new time scale? The MOD is wasting money and time through a lack of any strategic leadership on those projects and it must provide the House with urgent clarification on the management of those major procurement programmes.
  We welcome the intention to enhance the strategic enablers of communication, logistics and intelligence—that may be the point that the hon. Member for Vale of Glamorgan (Mr. Smith) was groping at through the fog that surrounds him—but as a former Chief of the Defence Staff, Lord Guthrie, rightly pointed out recently:
  "It is important that we do not concentrate our efforts to too great an extent on one emerging threat—a knee-jerk reaction—forgetting that there are other threats which have not gone away for which we should still be prepared."
  I hope that the right hon. Gentleman will pay the closest attention to what Lord Guthrie and Lord Boyce had to say in two very important speeches in the Lords

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  yesterday. We believe that such principles are of the first importance. Indeed, the most recent events in Kosovo furnish excellent lessons in that regard.
  Mr. Hoon: The implication of all that the hon. Gentleman has been setting out to the House is that, if the Conservatives were returned to power, they would retain all our existing equipment and buy all the equipment that we propose to buy and that they would do so on the basis of all the previous plans set out, presumably by Conservatives in government. Has it ever crossed his mind that, in the face of a cut in the amount that the Conservatives are planning to spend, his figures simply do not add up?
  Mr. Soames: For the record, the only people making cuts are the Government, and I am glad that I managed to get the right hon. Gentleman's head up so I could say that. I would like to say that he is like an old pike, but in fact he is like a rather fat trout, hiding in the weeds. It seems that I have to cast a particularly delectable fly over his nose before I can get him up, but I am glad I have done so. There are substantial cuts, and 14 separate strands of work are under way in the MOD to secure £1.5 billion in savings. That will do great harm to capabilities and to people's capacity to do their duty.
  Mr. Keetch rose—
  Mr. Blunt: While we are on the subject of money, it might be as well for the House to remember that the Government imposed a cut of £500 million a year in the defence budget in their first comprehensive spending review—cumulatively, that will now be £3 billion—and that the so-called increase in the subsequent defence review will be £2.5 billion at the end of that period, so the Government have been responsible for a net cut in defence expenditure on that which they inherited.
  Mr. Soames: Precisely. I suggest that the Secretary of State pay attention to what my hon. Friend says. He is a well-informed member of the Select Committee, and is absolutely right. Another issue that we must address is that of acquiring the technology necessary for the network-enabled capability. The baseline for Labours defence policy was the 1998 strategic defence review, which, as we all know, was never properly funded. Many of the funding problems that face defence today are a direct consequence of Labour's failure in that regard, as my hon. Friend pointed out.
  The Government have asked our armed forces to carry out more and more commitments, without adequate resources. At times, it has been extremely difficult for Parliament to discover the details that relate to the defence budget, as the Government have gone in for their usual practice of re-announcing old money. For the second year in succession, the Comptroller and Auditor General has refused to sign off the MOD's resources and accounts budget.
  When the Secretary of State published the defence White Paper in December last year, there were said to be no resource implications. Since then, we have discovered that the MOD is undertaking 14 work strands to identify capabilities to reduce or cut, which will provide savings of £1.5 billion. I understand that those cuts will be announced in the spring. The very underhand way in
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  which the Secretary of State is going around making those cuts is to be deplored, and we look forward to an opportunity becoming available for him to clarify and give us transparency about where he is looking and what the effects will be on the capabilities of the armed forces.
  Against the background of that failure adequately to fund defence while at the same time increasing commitments, the Conservative Party must plan for the future. We believe that our front-line armed forces must be, and will be, a fundamental priority and that they must have sufficient resources adequately to fulfil their duties and extensive commitments. When we announce our detailed spending plans later in the year, we will make clear how we intend to shift money to the front line to maintain and enhance our defence capabilities.
  Of course the consequences of more deployments and fewer resources are obvious in the serious deficiencies that have emerged during and after the completion of Operation Telic. The NAO and Select Committee reports have rightly highlighted the brilliant achievements of our troops and the great success that they achieved. However, both reports were also highly critical of equipment shortages that could have had disastrous consequences for the 46,000 British servicemen and women who were deployed.
  In the defence debate last year, the Secretary of State said:
  "I want to reassure the House and the country that British personnel deployed on operations will be properly equipped by the Ministry of Defence, and fully capable of fulfilling the tasks that may be required of them. They will be properly equipped to deal with the environmental conditions that they face. The Ministry of Defence has long had contracts in place to ensure that sufficient stocks of desert clothing and boots are available quickly."
  He went on:
  "The protection of our troops is an absolute priority. Contrary to press speculation, our ability to protect and operate in a nuclear, biological or chemical environment is second to none. Our training and equipment mean that we are prepared to meet this threat if necessary, and make a proportionately serious response should anyone use such weapons against us.—[Official Report, 22 January 2003; Vol. 398, c. 336—7.]
  That was far from the reality on the ground. The Defence Committee report has found that those assurances were fundamentally unreliable and wholly inaccurate.
  Mr. Keetch rose—
  Mr. Soames: Commanders were unaware of where equipment was stored; plates for enhanced ceramic body armour disappeared and never got to the right units; and vital biological and chemical equipment was deemed unserviceable. Not enough desert clothing and equipment was available on time, and many people did not even receive their desert combats until the war was over. There was not enough ammunition, nor were there enough chemical protection suits. The Secretary of State shakes his head, but these are very serious matters. As the Committee report states:
  "Given the potential threat posed by Iraqi armed forces, sufficient chemical warfare detection and protection were particularly important for this operation."
  I again urge the Secretary of State to reread the MOD account of the brilliant assault on the al-Faw peninsula by 3 Commando Brigade Royal Marines. It states that

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  "as final preparations were made on 20 March in the tactical assembly area to launch the assault, there had been attacks by Iraqi missiles. The Brigade fully expected to be subjected to chemical attack and the helicopters to be engaged by air defence artillery."
  The brigade was not subjected to a chemical attack. The report suggests:
  "It was fortuitous that service personnel did not suffer as a consequence, but had the Iraqis used chemical weapons systematically, as employed in the Iran-Iraq war the operational consequences would have been severe…the lack of armoured vehicle filters seems to us to be a matter of the utmost seriousness".
  For the information of the House, let me just say that the 7th Armoured Bridge fought through Iraq in a war allegedly to remove the threat of chemical and biological weapons without having on any one of its tanks the chemical weapons filters that were required. They did not arrive until after the war was over. That is a fundamental and deeply serious failing. It is not acceptable.
  In the Iraq campaign—I want the Secretary of State to listen to this—the Government came very close to breaking the bond of trust that they have with their soldiers. He should not underestimate the effect of those shortages on the morale of the soldiers. This must not happen again, and the Government stand guilty as charged of very grave deficiencies that should have been overcome long ago. For an Army that has deployed four times in five years not to have the ability effectively and efficiently to deliver the logistics supply chain to its troops in the front line is frankly unforgivable.
  I apologise for having spoken for so long, but I wish to say something about NATO. The White Paper rightly states:
  "The UK recognises the pre-eminence of NATO".
  We all agree with that, and I heard what the Secretary of State said. However, the security and stability of Europe and the maintenance of the transatlantic relationship are fundamental to our defence. The most logical way of responding to the 21st century threat would be through NATO as the primary military organisation. However, NATO's primacy has now been somewhat compromised. Since the St. Malo declaration, European government's have spent scarce defence funds and considerable political effort on developing the structures of the European security and defence policy while operational capabilities—which the British public are repeatedly told will be improved by European Union defence—have continued to decline inexorably. That has led to our having grave reservations about Europe's plans to undertake a new defence initiative that involves duplicating the planning and command structures of NATO.
  We do not need and we cannot afford to duplicate NATO's structure. There is nothing that Europe wants to do that cannot be done by using NATO's command and planning structures. The Conservative party supports greater co-operation between European countries on defence, but it should take place within the framework of NATO. Europe should not seek to create a defence structure as an alternative to NATO or as a counterweight to the United States.
  The Secretary of State needs to be aware that the Government are in grave danger of undermining the resilience, the morale and the good will of our armed
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  forces. These are the three cornerstones of all military success. The Government need to nurture them, and to nurture them with great care and attention through some very difficult times ahead.
  Several hon. Members rose—
  Madam Deputy Speaker: Order. I remind the House that Mr. Speaker has imposed a 15-minute limit on Back-Bench speeches.
  3.6 pm
  Rachel Squire: When I first heard that a defence White Paper was to be published, my immediate reaction was to ask why. What was the purpose? After all, we had the comprehensive strategic defence review five years ago, and the SDR new chapter in 2002. The issues that the White Paper deals with, such as network-enabled capability and security challenges, have been subject to widespread debate in defence circles for some time. Why did we need another paper? Was it, as the media speculated and Opposition Members said, to give a policy framework to a hidden agenda for drastic cuts in defence spending?
  I was certainly reassured by the Chancellor's Budget statement last week. He said:
  In the last spending review, we allocated the largest spending increase in 20 years to defence, and I can tell the House that I propose real terms increases in defence spending in the coming round.—[Official Report, 17 March 2004; Vol. 419, c. 333.]
  That statement provides a stark contrast to the Conservatives' plans to freeze and—whether they like to admit it or not—to cut defence spending in real terms by £1.5 billion from 2005–06 to 2007–08. Cuts were carried out during their 18 years in government and, although they can talk about the cold war and the need to meet new requirements and demands on our forces, I, as the Member of Parliament for Dunfermline, West, will never forget the way in which they blatantly wasted more than —300 million of public money when they took submarine refitting from Rosyth dockyard and awarded it to Devonport for what it seems clear were merely political, and not defence and security, interests.
  On defence spending, I am also reassured by the views expressed by the Chief of the Defence Staff, General Walker. In his lecture to the Royal United Services Institute in 2003, he made it clear that he welcomed the defence White Paper and considered that it was a long time coming. Yesterday, he said that, although he and his fellow Chiefs of Staff had not seen the details of future defence spending, they were enthusiastic about it. Many of us hope that we, too, will be enthusiastic when the details are revealed. My commitment, and that of my hon. Friends and other hon. Members, is to ensure that implementation of the White Paper does not in any way diminish the high standards and professionalism of the United Kingdom's armed forces, but maintains and builds on their considerable and internationally renowned achievements. I join others in paying tribute to our armed forces and their families.
  The defence White Paper raises issues that we could debate for at least a week, but in the time available I will raise just three, possibly four. The first is the importance of relevant training and adequate time off for it. There is the training required not only by individuals but by

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  companies and battalions. There is the training required to deliver jointery—effective operations by all three services. There is the training needed to operate effectively in multilateral alliances. There is the training demanded by network-enabled capabilities and the trend towards more frequent, small to medium-scale operations. Then there is the training needed for both war fighting and peacekeeping.
  When commitments are high, as they currently are, a balancing act is often required to ensure that people are available for relevant training, and even more so when it involves overseas training, such as exercise Saif Sareea, which everyone agrees was essential, in terms of the lessons learned and experience gained, for the success of our troops in Operation Telic. I want an assurance from the Minister that the White Paper will not seek to reduce either training or recruitment. My impression is that we need to maintain our current force numbers and indeed to reach our recruitment targets if we are to enable time to be available for proper training, as well as for the home and family, in between all the demands of operational commitments.
  I join in the sympathies that have been expressed to the family of Lord Vivian. I read his excellent contribution to the other place's defence debate on the White Paper in January, when he made the important point that 72 per cent. of the MOD's 350 planned exercises in a year were cancelled because of increased operational activity. I express my sympathy to his family. I hope that that demonstrates that his influence and knowledge will certainly long be remembered in this place.
  It concerns me that I have heard that recruitment, particularly the surge in interest from the general public in the past 12 months, has been held back because of the demand and extra cost of training. I hope to hear the Minister say, if that is the case, that it is being effectively tackled.
  I emphasise the importance of core training, of acquiring basic skills, of developing individual service identities, and of building loyalty and commitment to a band of brothers, to a regiment and to a service. They are a vital part of the standards and professionalism of our armed forces. However good the technology, it needs a strong team to make it work and to make it effective. Only a strong team can overcome the unforeseen and unpredictable nature of war fighting and peacekeeping.
  That leads me to the second issue: network-enabled capabilities and the full range of training needed for them. The White Paper sees them as crucial to the rapid delivery of military effect, yet I raise some notes of caution which I have picked up, particularly from an article in the RUSI Journal by General John McColl, which is linked to my concern that technology cannot be a substitute for people and their skills and training. He points out that the battlefield is already an information-rich environment where poor connectivity and bad management of information can confuse rather than assist the commander. Indeed, I, and I think other members of the Defence Committee, have heard some stories in respect of operations in Afghanistan involving our forces and US forces. General McColl says in respect of information:
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  knowing what is important and what is not, what is urgent and what is not, is essentially a human skill, unlikely to diminish in its importance, irrespective of the quality and quantity of information that NEC will deliver.
  I do not think that any of us wants the development of human skills to take second place to technology. I have a concern that at times our major allies, the US forces, tend towards over-reliance on technology, perhaps neglecting the basic skills that are such a core part of armed forces.
  In the time available, I will not carry on with what I was going to say on network-enabled capabilities, but will mention the third issue, which is my concern about what the defence White Paper says on naval and maritime capability and equipment. The House would be surprised if I did not mention Rosyth dockyard in my constituency at some point in a defence debate. Therefore, I declare a particular interest, which has been reinforced by taking part in the armed forces parliamentary scheme with the senior service, as it likes to be referred to.
  I am concerned by the blunt statement in the White Paper that reductions in the numbers of our naval fleet will be necessary. The future of the 1,800 people employed at Rosyth dockyard depends on work available from the naval fleet, particularly the future aircraft carrier. They have demonstrated time and again their ability to take on changes and challenges and to deliver on cost and on time.
  I cannot resist responding to the remark by my right hon. Friend the Member for Birmingham, Ladywood (Clare Short) earlier about looking to take some defence manufacturing work away from the UK. I have always argued and will continue to argue that all our royal naval ships and submarines should be built, refitted and repaired in the UK and nowhere else.
  Tribute is not always paid, as it should be, to the part that the Royal Navy plays. That was clearly demonstrated in Operation Telic. The Royal Fleet Auxiliary Service provided essential fuel, supplies, equipment and food. The navy provided support and transported our troops to shore. It cleared mines from the waters and channels around Um Qasr, so that not only troops and equipment but humanitarian food and relief could be provided. Whatever the changes in our security environment, an island nation needs a strong navy to deal with the terrorist threats that we face to our ports and harbours, and a strong navy that can go anywhere in the world to provide command and control, and to supply the troops who are required.
  I do not have time to talk about NATO and the European Union, but I am sure that they will be debated another day. Overall, I welcome the White Paper and the opportunity that it provides to discuss many issues that are key to our future defence and security. I pay tribute to the progress that has been made so far, but there is a long way to go, and I hope that we shall have many more opportunities to debate key aspects of the White Paper. It contains many right words, but it is short on detail and on the action to come, so we should have the chance to discuss them in coming months.
  Our armed forces have led the way in responding to the changes and challenges brought by the end of the cold war, the threats posed by international terrorism, and the proliferation of weapons of mass destruction.

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  Let us ensure that the White Paper and its implementation maintain their high standards and reward the armed forces and all who play a part in the defence and security of our country by setting an agenda that they and, in turn, the rest of the world are proud to follow.
  3.21 pm
  Mr. Paul Keetch: It is a pleasure to follow the hon. Member for Dunfermline, West (Rachel Squire), who speaks on defence matters, especially naval issues, with such skill. I shall write to her about my visit to Rosyth in a few weeks, to which I look forward eagerly. Like her, I pay tribute to the armed forces parliamentary scheme, in which I, too, participated with the senior service, albeit in a different year from her. I was with the hon. Member for St. Albans (Mr. Pollard), who was present in the Chamber until recently. The scheme is of great benefit to many people.
  I join the hon. Lady and the Secretary of State in paying tribute to the late Brigadier Lord Vivian, whom I met when I first entered Parliament. The then Secretary of State was keen to encourage new Back Benchers with defence interests to get involved, and I accompanied Lord Vivian on several trips with the Lords defence study group. I remember the hon. Member for Vale of Glamorgan (Mr. Smith) and me accompanying Lord Vivian to see warships in a base in the western isles. Lord Vivian was always courteous and generous in sharing his knowledge with members of other parties. He will be greatly missed.
  I associate myself with the Secretary of State's comments about the terrible events in Madrid. For all of us, they have reinforced the recognition that the main threat to the United Kingdom is now from international terrorism. We must commit ourselves to the campaign against that. On that issue, the Liberal Democrats concur 100 per cent. with the Government.
  I see the Under-Secretary of State for Defence on the Treasury Bench. Yesterday, he and I debated the reserve forces. It seems that defence debates are like London buses: there is none for ages, then two come along at once. The Government have been good, however, in scheduling regular defence debates, and I commend them on that. I also commend the White Paper, which contains much with which we agree.
  Britain enjoys a unique position in being able to project power to enhance the security of the United Kingdom and the world in troubled areas. We should guard that ability at all costs. I pay tribute to British forces—and their families—who are undertaking brave work in reconstruction in Iraq, Afghanistan and Kosovo. In recent weeks, we have seen the real threat that our soldiers face in Kosovo.
  I pay special tribute to the forces in Afghanistan. We hear little of what they are doing—indeed, a Territorial Army soldier in my constituency who returned from Afghanistan a couple of months ago told me that the forces there sometimes feel like a forgotten army. We should record our thanks for their service in the continued hunt for bin Laden and other terrorists. Such work is crucial to our defence. The threat from terrorism has never been far from our minds in recent days, and
  1106
  the armed forces have a significant role to play in tackling that threat. In Afghanistan, where, it is reported, the Taliban and al-Qaeda have enjoyed a resurgence this year, it is important to maintain our commitment.
  The international security assistance force now has a much wider mandate in that country, but lacks sufficient troops to stabilise it. Will the Minister tell us whether there is a timetable for the deployment of more UK forces as part of the NATO forces in Afghanistan; and will he give a commitment that those forces will be found if they are required? The Liberal Democrats have an underlying commitment to NATO, and we are grateful for its work in the difficult environment of Afghanistan.
  Mr. Dalyell: What number of troops would be sufficient? We are talking about the north-west frontier, whose history suggests that sufficient troops means tens of thousands.
  Mr. Keetch: The Father of the House is absolutely right. I was suggesting not that such troops be drawn solely from British forces, but that we play our part as part of NATO. I suspect that during the Iraq crisis, he and I were both concerned about the unfinished business of Afghanistan. We know from our own history how difficult that country is to deal with, and I believe—I suspect that he and others do, too—that sorting out Afghanistan ought to be our No. 1 priority. That concern formed part of the arguments that the Liberal Democrats advanced 12 months ago.
  Mr. Dai Havard: Does the hon. Gentleman agree that, although Afghanistan is a priority, it is part of a picture in which the middle east is also a priority? That picture runs from poppy growing in Afghanistan through to Turkey and Kosovo, where the shipments are split up and sent into the drug distribution networks. That is why the matter is becoming a strategic issue, rather than simply a frictional issue.
  Mr. Keetch: The hon. Gentleman is right. Events in Afghanistan—poppy growing and terrorism—have a far more profound impact on the security of the United Kingdom and our constituents than events in other countries in the region with which the Government chose to deal.
  Our forces in Iraq continue to perform sterling work. Let me make one thing absolutely clear: although my party and I voted against the war 12 months ago, we do not believe that it would be right now to withdraw British troops unilaterally from Iraq. Yes, we want greater United Nation involvement and greater internationalisation of forces in Iraq, but as the occupying power, we have a responsibility to support the people of Iraq, and pulling our troops out now would be catastrophic.
  However, I wish to raise a delicate issue relating to our forces in Iraq. One or two complaints have caused us concern, in particular, those regarding the death of Baha Musa and the alleged abuse of others in UK custody in Iraq. The Government have refused to hold an independent public inquiry into the matter, but holding some sort of inquiry might help to isolate the

  1107
  issue and reassure the Iraqis. In the face of continued Ministry of Defence intransigence, perhaps the Minister will at least undertake to make public the findings of any inquiry.
  The practice of paying the families of those who suffer death or injury as a result of UK actions is also problematic. Upon receipt of such compensation, families sign a declaration waiving their right to make any future claim relating to the incident. There is a risk that that will not help to enhance the UK's image abroad. If the families have a case, perhaps that case should be heard in a court of law, and if further compensation is due, it should be paid. The MOD must treat the citizens of Iraq as we would treat those of the United Kingdom.
  Hugh Robertson: If I understand the hon. Gentleman's position, it is that he opposed the war in the vote that was held in this House a year or so ago, but that he now supports the work that our forces are doing in Iraq. Does he or does he not believe that Iraq is a better place for the invasion?
  Mr. Keetch: Iraqis are certainly better placed after the removal of Saddam Hussein. My party and I never said that we would rule out military action in all circumstances, but we believed that it was inappropriate to take military action before the UN process was complete. We also made it clear that if troops were deployed to the Gulf we would support our forces in the field. The hon. Member for Mid-Sussex (Mr. Soames) criticised the kit given to British troops, but before the conflict it was the Liberal Democrats who raised the issue of kit for our servicemen. We, not Conservative Front Benchers, asked important questions about whether boots and equipment were suitable. At the time, it seemed that the Conservatives had signed up to military action long before the Government. They blindly supported President Bush in his endeavours regardless of the effect on our armed forces.
  Hugh Robertson: The hon. Gentleman has still not answered the critical question—is Iraq a better place now than it was 18 months ago, yes or no?
  Mr. Keetch: Of course, Iraq is a better place now that Saddam Hussein has been removed from power, but Liberal Democrat Members, like Conservative Members, Labour Members, nationalists and others who voted against the war never suggested that we supported his murderous regime. Is that what the hon. Gentleman is implying?
  Hugh Robertson indicated dissent.
  Mr. Keetch: I am glad that is not.
  Clare Short: If one looks carefully at the surveys of opinion in Iraq, one finds that the overwhelming majority of people are glad that Saddam Hussein is gone, but terribly worried about the disorder and chaos that, they say, make their life worse in many ways. A properly planned and organised action through the UN might have made Iraq a very much better place than it is now.
  Mr. Keetch: The right hon. Lady is right. I remember the debates that she had with my hon. Friend the
  1108
  Member for Richmond Park (Dr. Tonge), then a Front-Bench colleague of mine, about planning for the aftermath of the war. Many of us would have liked a full-scale independent inquiry into the war, including the question of whether we were preparing correctly for the aftermath. I certainly remember saying in debates in the House that winning a war would be easy but winning the peace would be much more difficult.
  Mr. Gerald Howarth: Will the hon. Gentleman give way?
  Mr. Keetch: I seem to recall that when the hon. Member for Mid-Sussex was speaking I inquired six times whether he would give way. He was not courteous enough to do so, but I shall of course be courteous enough to give way to his Front-Bench colleague.
  Mr. Howarth: I am grateful to the hon. Gentleman for his courtesy.
  Mr. Soames: And charm.
  Mr. Howarth: Indeed.
  May I point out to the hon. Member for Hereford (Mr. Keetch) that Conservative Members repeatedly asked the right hon. Member for Birmingham, Ladywood (Clare Short), then Secretary of State for International Development, to come to the House and tell us the plan for post-conflict reconstruction in Iraq? The Government's signal failure to share those plans with the House and the country had chaotic consequences after the war.
  Mr. Keetch: In the run-up to the war, history records, it was the Liberal Democrats arid very brave Members from other parties who asked those questions. The Conservatives appeared to support the endeavours of President Bush, whatever he wanted to do, and it was the Liberal Democrats, some brave Labour Back Benchers, a number of important Conservatives, and Members from other parties who provided the real opposition.
  Clare Short rose—
  Mr. Keetch: I shall accept one final intervention.
  Clare Short: There was a rather strange procedure, and I shall come to those matters if I catch your eye, Madam Deputy Speaker. For the record, I came to the House repeatedly and there was a Select Committee inquiry, so there were full preparations. A lie is being told now that the chaos in Iraq is all because I thought that we were rushing to war too rapidly. That is such a ridiculous proposition that it shames the mental capacities of anyone who seeks to make it.
  Mr. Keetch: The right hon. Lady is more than capable of defending herself. On her actions, all that I would say is that she resigned from the Government after the war had begun. In fairness, many of us believe that her position would be strengthened if she had followed the example of the right hon. Member for Livingston

  1109
  (Mr. Cook), who resigned before the war. Nevertheless, she did an honourable thing, and history will record that fact.
  Turning to the defence budget, I congratulate the Defence Secretary on the assurances that he has received from the Chancellor. I hope that the "real-terms increases" mentioned by the Chancellor are significant and not simply academic, and that any additional funds for operations in Iraq will come out of separate Treasury funds. Caveats attach to the Chancellor's commitments. How much of the cost of British forces' continuing commitments in Iraq will be funded by the MOD budget, and what extra resources will the Treasury make available? Estimates abound, some of them quite wild, about the cost of operations in Iraq, so I would be grateful if the Minister of State could quell the rumours and confirm the monthly cost of keeping forces on deployment in Iraq. If there are increased costs, will they be met from a separate Treasury fund or the existing MOD budget?
  The procurement budget is still over-committed, and adjustments need to be made at some stage. It would be preferable if the Secretary of State could make them sooner rather than later. Liberal Democrats believe that there are potential savings in the defence budget in the area of procurement. For example, speculation continues that the third tranche of Eurofighter Typhoon is already dead in the water and that the Government are simply waiting for the right time to cancel. Can the Minister give a commitment to the third tranche of Eurofighter?
  Some indiscriminate cost savings are proposed by the Conservatives. The shadow Defence Secretary says that there will be no cuts, but a two-year freeze in real terms is effectively a cut. In his speech, he gave commitments—I listed them—on infantry numbers, training, deployment and procurement. He will not be able to do that with a two-year effective freeze on defence spending. We have questioned the rather ridiculous approach to defence spending that seems to be the sole approach of the Conservative party.
  We understand that tough choices need to be made. The third tranche of the Eurofighter programme should be reviewed. That alone could amount to a one-off saving of several billion pounds.
  Mr. A. J. Beith: May I suggest another saving? The MOD should not to seek to recreate the facilities of RAF Bulmer at another base, which would require substantial capital to replace capital that has recently been invested there. I have made the point in detail to the Minister.[Interruption.]
  Mr. Keetch: I hear the Minister for the Armed Forces saying that that is being dealt with. I look forward to visiting Bulmer with my right hon. Friend the Member for Berwick-upon-Tweed (Mr. Beith) in a few weeks. I know that it is an important base that the Royal Air Force and other forces want to keep, and I know my right hon. Friends commitment to that part of his constituency.
  Mr. Jack: When the hon. Gentleman comments on the third tranche—the 155 Eurofighters that his party
  1110
  seems to advocate cutting—will he put on the record the work share implications and the costs to the United Kingdom industrial base if that policy were pursued?
  Mr. Keetch: We have asked detailed questions of the Government, some of which have not been answered. We want to know what the implications would be. Yes, we want to review the third tranche. That is a specific commitment from the Liberal Democrats. We would put some of the money that would be saved back into the defence budget to increase basic kit for our forces. That is in marked contrast to the swingeing cuts proposed by the Tories, who provide no details of the programmes that they would consider cutting and make bland commitments to our overall force plan.
  The Secretary of State said in his speech to the Royal United Services Institute last year that
  "measuring the capability of our Armed Forces by the number of units or platforms in their possession will no longer be significant."
  We understand that. We need to consider it in terms of the MOD budget. It is not a question of how much is spent, but how well it is spent. United States defence spending continues to soar far above that of the rest of the world. No matter what the Government's spending review eventually allocates to the MOD, the UK budget will always be a fraction of that of the US.
  Clearly, however, much of the MOD's planning revolves around the UK working in conjunction with the US. The White Paper stated:
  "The most demanding expeditionary operations, involving intervention against state adversaries, can only plausibly be conducted if US forces are engaged."
  It is difficult to argue with that analysis—indeed, we support it, but it could have an immense impact on our armed forces. We cannot match US defence spending, so we cannot keep pace with the US in defence developments. At the same time, we are seen as the partner of choice in the Pentagon, and the MOD's planning is clearly based on that assumption.
  The key to remaining fully interoperable, to remaining the partner of choice and to remaining able to link to US forces is what the Secretary of State calls network-enabled capability, or NEC. There is no doubt that NEC is a very important development in military planning and operations. The pre-eminence that it receives in the new chapter of the SDR and in the White Paper shows that it is at the forefront of MOD thinking. But there is also no doubt that it is expensive and that if we are to keep pace with the US, it will take an ever-increasing slice of the defence budget.
  I should like a much clearer indication than the Government have so far given of the limits of that approach and how it will affect our ability to contribute to peacekeeping, stabilisation operations and so on. Our forces are overstretched. We know that from the Defence Medical Services and others. There is a balance to be struck between money going into NEC and money going into the basics of our infantry units. We believe that the correct balance may not have been achieved. As regards our reserve forces, we know from the debate yesterday and from the comments of General Walker and General Jackson that they are concerned about overstretch evolving.

  1111
  The series of reports from the National Audit Office, the Ministry of Defence and, most recently, the Defence Committee, shows that a number of areas—for example, asset tracking—have improved as a result of operations in Iraq, and the Government must make a commitment on those areas and not blindly follow the US into ever-increasing technological warfare. Whatever the technology, one cannot keep the peace on the streets of Pristina or rebuild Iraq from satellites, so one must have troops on the ground.
  The White Paper discusses medium-weight troops that are well armoured but rapidly deployable, yet it does not dispute the continued need for some light and some heavy forces. We believe that tanks, fighter aircraft and several parts of the fleet are less important than they used to be, and that point is argued in the White Paper. However, the White Paper does not contain firm proposals for reshaping our armed forces, which is a recipe for instability and anxiety—it is an interesting pointer to the direction in which the armed forces may be heading, but it hardly charts their course. We believe that that deficiency should be addressed sooner rather than later in a spirit of consultation and consensus, and if the Government give us that, we will certainly participate in the process.
  3.41 pm
  Mike Gapes: Stan Laurel and Oliver Hardy—That's another fine mess you've got me into—came to mind when I listened to the Opposition spokesman, the hon. Member for Mid-Sussex (Mr. Soames). I know that the hon. Gentleman looks more like Oliver Hardy than Stan Laurel, but it is his friend Oliver who has got him into the right mess of trying to justify the Conservative Front-Bench view. The Conservative policy of cutting or freezing the armed forces budget while making massive commitments is untenable.
  Given what we had to do in Iraq, I wondered what policy the Liberal Democrats would have adopted if Lord Ashdown of Norton-sub-Hamdon had been their leader during last year's conflict. Whatever my views of Paddy Ashdown, I recognise that he adopts consistent views and would not flip-flop from one day to the next to try to fit in with perceived public opinion in either this country or Iraq.
  The Defence Committee, of which I am a member, was in Bosnia and Kosovo one month ago. We recently published an important report it has already been quoted—on the lessons of Iraq, and it made many recommendations, which I do not have time to refer to today. Some of those recommendations are extremely important, particularly those that point out that, given the armed forces' other operational requirements, Operation Telic placed demands on the armed forces that were close to the maximum that they could sustain. Whatever other lessons are learned—this point was confirmed by remarks made by the chiefs of staff in yesterdays Defence Committee hearing—this country's international commitments to NATO and the UN, our EU obligations, Operation Fresco during the firefighters dispute and the foot-and-mouth crisis placed enormous demands on our armed forces. We have an ongoing commitment in Northern Ireland, which unfortunately cannot be reduced significantly because of the current situation. On top of the deteriorating situation in
  1112
  Kosovo over the past week, difficulties may also arise in parts of the world that we are not even thinking about at the moment.
  I want to highlight the issue of Kosovo and the Balkans. I was quite impressed by what has been achieved in Bosnia. Paddy Ashdown is doing an excellent job, and, although the agreement was not ideal, a framework was laid down in the 1995 Dayton accords, so there is a basis for progress. Discussions are moving towards establishing a joint defence ministry and forming an association with NATO's partnership for peace. That is all to the good. It means that in its political institutions Bosnia can begin to build on the already established levels of security and normality, whereby people from different religions and ethnic groups can walk around without being stoned or kidnapped, instead of having to be bussed under Army protection.
  Sadly, one cannot say that about the situation in Kosovo, which has been frozen since 1999: almost no progress has been made in any of the major areas. Those who supported the 1999 bombing of Serbia without a UN resolution, believing that it would liberate the country and create a multi-ethnic, harmonious society, have to face the fact that that has not happened. Kosovo is a mafia society, where there is 60 to 70 per cent. unemployment and ongoing ethnic cleansing. The continual attacks on UN personnel have only recently been highlighted in the media again because of the appalling atrocities and outrages that were carried out last weekend. In the past few days, a church built in 1352 was burned to the ground, thousands of people were driven out of their homes, and between 28 and 31 people were killed. In the past two days, two UN police were killed. It is a society where criminality is dominant. My hon. Friend the Member for Merthyr Tydfil and Rhymney (Mr. Havard) referred to the smuggling of drugs through the Balkans.
  If we do not get Kosovo right, we will have a running sore at the heart of Europe. Europe and the European Union must take the greater responsibility, but we must handle the situation very carefully. It is easy for the EU to say, There can be no partition. On the other hand, we cannot suggest that we should allow an independent Kosovo on the basis of its current structures and its domination by one group—the largest group, comprising more than 90 per cent. of the population. Given the continuing policy of ethnic cleansing, we must take into account the plight of the minorities. There are Albanian minorities in the Presevo valley in Serbia; there is a substantial Albanian minority in Macedonia; and a right-wing, nationalist coalition Government have been elected in Serbia. There are significant political problems of instability. In thinking of a way forward, we must not foreclose any options, but be very sensitive to what might be required.
  Mrs. Mahon: I agree with everything that my hon. Friend has said, but does he think that it would have been better had NATO and UNMIK bitten the bullet and arrested people such as Agim Ceku—a wanted war criminal—and Hashim Thaci, who are now running Kosovo? Good people in Kosovo such as Dr. Rugova

  1113
  and Veton Surroi are being marginalised while these well known criminals and war criminals, who are involved in organised crime, are in charge.
  Mike Gapes: I do not wish to comment on particular individuals who should be arrested. However, it is clear that there is an active organised crime network that is linked to political godfathers and overseas funding from expatriate communities, and that there have been ongoing operations. When we visited, we were told, Being in the Kosovo police service is a tough business for an honest cop. That suggests that there are problems, and we need to be honest about them.
  On NATO's future involvement, it is absolutely essential that we do not weaken security in Kosovo. Fortunately, we, the French and the Germans sent extra forces in very quickly, which I hope will stabilise the situation so that we can make progress, but there are worries. Owing to the good progress that has been made in Bosnia, the military presence there has been reduced, and we are planning to move from the NATO stabilisation force, SFOR, to a European Union force, EUFOR, by the end of the year. That force in Bosnia is the reserve force for intervention in Kosovo, should events go badly there. I would like assurances from the Government that the transition to EUFOR—I do not oppose it—will be robust, that the national caveats with some of our EU partners will be removed so that the force can work effectively, not just on the military side but on the paramilitary and policing sides, and that intelligence work can continue. That would be good, but I do not want to end up weakening our capability to reinforce what could be a much more serious situation in Kosovo, because we have run down or changed the mandate in Bosnia.
  Another question is how we deal with the politics and dynamics for the future. Last December, the international bodies that oversee Kosovo agreed a document called Standards for Kosovo, which was published and presented on 10 December. It sets out as an aspiration:
  "A Kosovo where all—regardless of ethnic background, race or religion—are free to live, work and travel without fear, hostility or danger and where there is tolerance, justice and peace for everyone."
  In the space of one and a half years from the date of that document, Kosovo is meant to become such a society, and have independent status. It is supposed to have:
  "Functioning Democratic Institutions… Rule of Law… Freedom of Movement…Sustainable Returns and the Rights of Communities and their members."
  There should be an economy where:
  "Basic economic legislation is in place and enforced, relevant Government institutions and services are functioning, the budget process is functioning and meeting all legal requirements,"
  and so on. Property rights should be resolved, there should be political dialogue and the Kosovo protection corps should be functioning in full compliance with the rule of law.
  The Albanian-Kosovan community believes that it can sign up to that document, and that by the middle of 2005 Kosovo will become an independent state, within its existing borders. Is it realistic to pretend that all those
  1114
  things can happen in a society where there is no industry, where some of the institutions barely function, which has a Serb area in Mitrovica in the north that operates a parallel Administration—separately from the central Administration—and whose Parliament has banners, posters and symbols of one community only, not of all the communities in the state? We have underestimated the problems. We need to be robust about pushing forward the standards agenda, but we must be realistic. We will not secure investment to deal with unemployment in Kosovo until the legal basis is established. What pressures, then, does that put on our military and on our long-term commitment as a whole, through NATO and the EU?
  Mr. Dalyell: As a man who raised an urgent question on this subject, may I say that my hon. Friend is making a speech of such importance that I hope that it is read by the Foreign Secretary and the Prime Minister? Does he agree that something must be done about industry, particularly the repair of the nickel factory, which will be the engine of any economy that Kosovo might hope for?
  Mike Gapes: I saw that nickel factory from afar—in fact, I smelled it from afar. Standing at the top of the monument in Kosovo Polje—the Field of Blackbirds—and looking across, it was all that was visible on the horizon. The temperature was minus 16° and the smoke was lingering in the distance. On top of everything else, there is serious pollution; it is a very polluted society.[Interruption.] Other members of the Select Committee who are present are laughing, because they remember that scene as well.
  In the time remaining, I want to suggest a possible way forward politically and administratively. I was involved in the talks in Northern Ireland in 1997 and 1998, as Parliamentary Private Secretary to the Secretary of State for Northern Ireland, when he was Minister of State. One factor that made those talks successful was the involvement of the British and the Irish Government's, together with close support from the United States in the form of Senator George Mitchell, and financial and political support from the European Union.
  We need to look again at Kosovo, and to create a structure that will bring together the Albanian and Serbian Government's and enable discussion, and that will involve the European Union, NATO, the United States and the United Nations. We need to put everything on the table, and to try to find a way through without taking entrenched positions on status, cantons or partitions. The process needs to be intensive and we need to begin it now. If we do not, we will not succeed in eliminating this running sore, which constitutes a threat to the stability of the entire Balkans region and potentially, therefore, to western Europe.
  It is in our interests to take such action because we want a Europe that is harmonious. We do not want ethnic or religious conflict on this continent; we do not want Orthodox Christians pitted against Muslims; we do not want ethnic cleansing or any of the developments that have tragically occurred in the past week. We have

  1115
  got to act quickly and we need engagement. We have spent $8 billion in Kosovo since 1999, but one wonders where it has gone.
  Clare Short: I agree with my hon. Friend that this running sore must be dealt with and that we need to bring everyone together, but there is another dimension. One reason why the economy is not moving is the lack of final status. The World Bank cannot engage and no one will invest, which means that the economy is bad. We need to secure final status to get the economy moving, and to make the progress that my hon. Friend is calling for.
  Mike Gapes: I made that point earlier. I accept that until final status is achieved it is almost impossible to invest, but we cannot achieve that status without securing assurances about human rights and resolving the other issues. We are talking about a regional problem that requires a regional solution. The Albanian and Serbian government's must be partners in a process that must also involve Macedonia and the other countries in the region. That process must be backed up by European Union resources and a security guarantee from NATO, and be under the overall umbrella of the United Nations. Even then we might not succeed, as we saw in Northern Ireland, but we have to try.
  3.59 pm
  Mr. Crispin Blunt: I begin by drawing the House's attention to my entry in the Register of Members' Interests. It is a particular pleasure to follow the hon. Member for Ilford, South (Mike Gapes), who devoted much of his speech to Kosovo. The right hon. Member for Birmingham, Ladywood (Clare Short) made it clear in her repeated interventions that what is needed is final political status. It would have been a good idea to understand what that final political status was going to be before committing our armed forces in 1999. That lack of knowledge is precisely why we are in our current wretched position, which I, among others, predicted. We have ended up fighting the Albanians—the very people whom we went in to help in the first place.
  The wretched truth of our involvement in Kosovo is that we now have to deal with criminal gangs—the hon. Member for Halifax (Mrs. Mahon) mentioned them—who are responsible for the criminal behaviour taking place in that country. NATO and the UK—particularly our Prime Minister, who had a personal strategy—were manipulated by the Kosovo Liberation Army, which began a campaign of terror against the Serbian authorities in Kosovo. In turn, they reacted with all the brilliant strategic skill that might be expected of President Milosevic, triggering the intervention in his country. We should have been much clearer about what exactly we were intervening for, and what the political status would be at the end of the intervention. We still have to sort that out.
  I welcome the fact that the President of Serbia is now talking seriously about partition. It is difficult to see any other solution in Kosovo than to accept the reality of the ethnic cleansing there. There are now very few Serbian schoolchildren in Kosovo; people with families have effectively disappeared from the country and gone to
  1116
  Serbia. We have to accept the reality of that position, as we accepted the reality in Bosnia with the de facto acceptance of two political authorities there.
  I wish to deal briefly with the canard of the defence budget. Having been special adviser to the then Secretary of State for Defence between 1993 and 1995—not the easiest time for the defence budget—it is a little rich to hear the comments of Labour and Liberal Democrat Members today. Where were they in the days when the defence budget was under pressure? The Labour party was committed to a policy of a 30 per cent. cut to bring us down to average of EU member states, and the Liberal party trumped even that with a demand for a 50 per cent. cut.
  I listen to the reinvention of history in this afternoon's debate with the same interest as I listen to the Chairman of the Defence Committee, who likes to present the Labour party as riding to the country's rescue in the 1930s in support of Mr. Churchill. I have to point out that, until 1935, the party was led by Mr. Lansbury, who wanted to disarm the UK in its entirety.
  My confidence is the same as that expressed by Lord King in yesterday's defence debate in the other place. He said that whenever he had to go to a Conservative Chancellor or Chief Secretary to the Treasury to ask for money, he was satisfied that no Conservative Government would ever be found wanting in providing the defence resources that were required. At the same time, Conservative government's have a proper responsibility to ensure that the fiscal affairs of the country are kept in good order. We are not a party wedded to public expenditure and taxation: we want to spend the public's money wisely. I believe that that is exactly what we did in our last period of office, which also explains why the present Government enjoyed such a magnificent golden economic inheritance. The Chancellor's success has come from his first Budget of 1997, when he continued the public expenditure plans that he inherited.
  We should also remember that the strategic defence review of 1998 was accompanied by a budget cut in real terms of about £0.5 billion a year. By 2005–06, that will have rolled up into a cumulative cut of about £3 billion-worth of defence expenditure. The Government now tell us about budget increases, but by that time the sums allocated will have reached only £2.5 billion, so the truth is that the Government have cut defence expenditure during their period of office.
  The Secretary of State for Defence devoted a considerable proportion of his speech to attacking my hon. Friend the Member for Mid-Sussex (Mr. Soames) and my right hon. Friend the shadow Chancellor, but, as yet, the Conservative party has adopted no position on defence expenditure. The Secretary of State alleged that the shadow Chancellor had spoken about expenditure being limited within all Departments. As far as I am concerned, that is a wholly satisfactory state of affairs; I was not elected to the House to raise taxes or support overall increases in public expenditure. My responsibility is to ensure that my constituents' money is spent more wisely, so that they can choose where their private expenditure goes. The differing approaches to public and private expenditure represent the philosophical difference between the Opposition and the Government, and they are a proper subject for debate.

  1117
  At present, the defence budget and our armed forces are in considerable trouble. I draw the House's attention to the remarks made yesterday in the other place by Lord Guthrie, with whom I do not always agree, especially about Kosovo. He said:
  "My experience and instinct tells me that we are already in very difficult times, perhaps as difficult as any time since World War II. The only time of similar concern that I can recall was the late 1970s when it became necessary for a new government to rescue defence from ever increasing decline. But today I judge the situation to be far more serious than it was then."
  That is the background to the rumours emerging from the MOD about the work going on in the lead-up to the annual round of long-term costings for the defence budget. Yesterday, the Chief of the Defence Staff told the Defence Committee that it was all part of the normal annual process. If so, the scale of the challenge is greater than anything experienced in my time at the MOD.
  The 1993 public expenditure settlement called for a cut of £750 million in the defence budget, and we embarked on an exercise called Front Line First. Something like 23 or 24 cost studies were carried out across the MOD, and they found savings worth £1 billion in the way that the MOD did business. No frontline provision was cut, and in fact £250 million in additional annual expenditure was made available. That was used for additional flying training for the RAF, and the Tomahawk cruise missile was also a product of those savings.
  "Front Line First" was a serious and far-reaching study, covering the whole of the MOD. However, it had a deleterious effect on some areas, including recruitment and the Defence Medical Services. That is worth remembering: savings on that scale are very unlikely to produce a completely positive effect.
  The MOD is now being invited to achieve savings on twice the scale of Front Line First. The exercise is cloaked by the claim that it is merely the normal, annual process of balancing the budget and ensuring that everything fits the long-term costings that have been made. The challenge that we faced was only half as big, and our approach was to ask those members of the armed forces and MOD civil servants who would be affected for their ideas about delivering defence more efficiently.
  Statements were made to the House about the process and its conduct. It began after the public expenditure settlement of October and November 1993, and was completed in the summer of 1994, when a report was made to the House. No such detail is available today, either to the House or to members of the services. All we know is that quite high-level studies are being carried out into areas of capability such as anti-submarine warfare or ground-based air defence. Those studies deal with the choices being made in the defence White Paper.
  The White Paper is a terribly thin document, compared with its predecessors. They went into detail about where expenditure was being applied, and provided proper analyses of what the MOD was being invited to do and the defence tasks facing the armed forces. Of course, the nature of those defence tasks moves on with the times, but I counsel the Government to adopt a philosophical approach similar to that of the 1993 White Paper.
  1118
  That seminal document laid out three sets of defence tasks. The first was the defence of the United Kingdom, the second was NATO and the third defence task was in effect the rest of the world. The analysis meant that defence tasks one and two were delivered with the force structure that was being followed by the Government and defence task three was a free good delivered on the back of the forces being provided for mandatory tasks one and two.
  Times have moved on a little and we are faced with a different challenge, namely, the relationship between Europe and the United States. My concern is that we appear to be betting the shop on the US. Again I shall quote Lord King. Yesterday during the debate on defence the Under-Secretary, Lord Bach, said that it was inconceivable that there would be any major conflict in which the United States would not wish to be involved. My noble Friend replied:
  "The Minister said that it was inconceivable that we would find ourselves in certain circumstances where the United States would not be with us. I merely warn him that it was my experience when I had any responsibility for defence that the inconceivable usually happened—[Official Report, House of Lords, 24 March 2994; Vol. 659, c. 730, 745.]
  In trying to decide on the shape of the armed forces for the future, we should try to pursue a relationship with the United States that takes advantage of network-enabled capabilities and of making sure that our armed forces can co-operate with the United States in terms of command and control, and so on. In that way, and in what we expect to be the majority of circumstances where we shall deploy troops on large-scale operations, we can operate effectively alongside the States. If, in the process of doing that, we ignore the development of our European allies' defence capabilities and do not ensure that we can operate alongside the Germans, the French, the Italians and the other main European members of NATO, we do so at our peril.
  The Government are trying to cover both bases, but they must ensure that the UK Government have a choice about their future defence policy. It is the traditional geo-strategic position of the United Kingdom to have to try and cover both bases. If we end up becoming Robin to the United States Batman, we shall have neglected the ability to have properly organised, trained and equipped forces that can also operate with our European partners. Then we may be presented with what currently appears inconceivable: that the United States might lose the political will to intervene around the world. I suspect that we are seeing the high watermark of US willingness to intervene around the world, to bear the burden and to pay any price, to quote a President of 40 years ago. The United States may reach the stage where they are not prepared to pay that price. The United Kingdom, with our spread of interests around the world, is a global, international country, and it is absolutely in our interests to continue to make a contribution to global security as the greatest per capita trading nation in the world. We need to ensure that we can do that either with the US or with our immediate neighbours in Europe. The challenge facing the Ministry of Defence is to produce policies and equipment that enable us to do that.
  4.13 pm
  Mr. Dai Havard: I shall return to the broad swathe of the White Paper, although I was tempted to narrow it down and deal with particular areas. I should like to comment on how thin it is in terms of its physical structure. Clearly, it is a conceptual document and it is not meant to have the detail in it. It is trying to get people to buy into a general conceptual approach—the detail will come later. It stems from the important decision, made some time ago, to introduce expeditionary forces in peacetime—however one defines peace since the second world war. The White Paper reviews the type and periodicity of operations and raises questions about the range at which British forces will operate. In that sense it differs from the last strategic defence review and earlier documents. The report deals also with homeland security and the military interface with the civil authorities.
  Defence equipment is the sexy part of the document on which the press and others immediately pick up. As to air defence, there are questions about whether there will be single-role fast jets and if so, how many; training for multi-role tasking; and whether there will be 200 Typhoons or only 130 as rumoured. The Defence Select Committee will try to find answers from the appropriate individuals. Will there, for example, be a carrier version of certain aircraft? We hope to put flesh on the bones of the conceptual document. There have been welcome announcements about air tankers and refuelling but there are also issues about heavy lift capabilities.
  Legitimate questions are being asked also about carriers—such as the length of their decks, and whether there will be a short take-off and vertical landing version of the joint fighter. What will be the role of destroyers? The Defence Select Committee recently reported on Operation Telic, the use of helicopters, and where the land starts and the sea stops. There are questions to be asked also about defence both on the sea and from the sea. I ask my right hon. Friend to consider seriously the place of the merchant marine and whether British ships and British-registered ships should be involved.
  The hon. Member for Aldershot (Mr. Howarth) asked earlier whether the Bowman communications system works in the hills. I hope that it does. As that equipment is made in south Wales, there are plenty of opportunities to test whether it works in the hills. That massively important equipment is clearly having a disturbing effect in terms of integration, and I am sure that questions about Bowman training are being addressed, perhaps in some of the work strands to which Conservative Members have referred. We will wait to see.
  It is now generally acknowledged that the importance of our reserve forces has recently grown and that they will be fundamental to the operation of the armed services in future. Yesterday, the chiefs of staff seemed to indicate that they were not so concerned about the size of the regular forces. But even if told that they could increase numbers, how would recruitment and retention be achieved? It is therefore clear that reservists will play an increasingly important part and that they will serve alongside and be integrated with the regular forces. We welcome the fact that people are signing up for civil
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  contingency reserves but it will be interesting to see how that activity will be balanced against the work of expeditionary forces.
  Compulsory mobilisation will bear examination in future. That has become an issue particularly recently, and the relationship between the reservists, their families and employers, and the support mechanisms to sustain them when they are mobilised will be an important part of the detailed planning for the future. We must also address how reservists are to be used, in formed units or as specialists. Perhaps they might be used as a reconstruction force. It will be interesting to see whether the studies indicate a need for dedicated reconstruction forces, as some other countries have suggested. I have been warned about that, however, and it has been pointed out that reservists do not necessarily join up to do their day job in the reserves. A balance has to be struck.
  As for the regular services, there has long been a debate about how to support them and their families, and about their living conditions. Serious decisions will have to be made about where people are based, whether they belong to the RAF or, particularly, the Army. Some of our allies in Europe and the Americans will have to make decisions about how to use more agile forces that are capable of moving more quickly.
  One of the chiefs of staff pointed out to me yesterday that both the reservists and the regulars are war fighters and that is what we must train them to be. They can step back from that role, however, to take on the additional tasks that people now expect from British service personnel. Our forces are utility players. They are so capable of performing a range of tasks that they fit easily into the three-block war—in which fighting is taking place at one end of the town, security operations in the middle and reconstruction at the other end. Our forces can change quickly from one activity to another, and that utility comes from their training and experience.
  The detailed work on the White Paper should also examine the relationship between the MOD and other Departments engaged in relevant activity. That includes the Foreign and Commonwealth Office, and how defence and diplomacy knit together. As one senior officer said to me the other day, If you want to play brinkmanship, you can do it in several ways. You can give all sorts of indicators to be people, even when buying equipment. Perhaps the Treasury should also be involved, and planners in other Departments could suggest to its bean counters how to deal with decisions. The Department for International Development could also be included, as well as the non-governmental organisations. The Home Office is also involved in relation to homeland security. Arrangements to co-ordinate all those strands are needed, to make it work.
  I, too, was in the Balkans with the Defence Committee recently. The area is an example of what is needed for nation building. The heady mixture of crime, nationalism and terror is a strategic threat that raises questions about the sustainability of operations over time. It is not the case that all excursions in the future will be like Iraq. Our forces will have to undertake a range of activities, and some will last longer than originally expected. We have only a small number of personnel in the Balkans, but they punch significantly

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  above their weight. They do so because intelligence is crucial, whether it is military intelligence, defence intelligence, one of the various aspects of Secret Intelligence Service intelligence or police intelligence. All such intelligence has to be joined up. We have seen turf wars in the past, but they will have to stop. Perhaps we should have some special arrangements in the future for linking military intelligence with the other intelligence services to deal better with strategic threats. Human intelligence is crucial. It can involve only very simple things; for example, some of the Gurkhas in the Balkans told us that they wanted night vision equipment. We talk about the need for aircraft carriers and other things that cost millions or billions of pounds, but we can do very simple things that would effect a massive change.
  On money, there have been declarations that the defence budget will continue to increase in real terms, although we shall not know the figures until the comprehensive spending review. Obviously, the announcement of a real-terms increase is better than one that says the reverse, but I shall be interested in the amount. I have some questions about the way the Treasury deals with these matters under resource accounting and budgeting, as there are various rumours about the effectiveness of that tool. Keeping the shelves stocked means a lot for Sainsbury's, but the exercise is quite different for the Ministry of Defence. Although resource accounting and budgeting can be useful—it shines a light on many areas, and many members of the armed services will admit that that was necessary—it must be deployed intelligently in the future.
  Mr. Blunt: Like me, the hon. Gentleman was present when the Committee made its report on Iraq and he will have heard the presentation by Francis Tusa, supporting his thesis that small incremental enhancements to our current capabilities can make a huge difference for our soldiers on the ground. Francis Tusa referred to improvements to CVR(T)—combat vehicle reconnaissance (tracked)—while the hon. Gentleman referred to night vision goggles, but I hope that he will join me in commending to the Minister the work of Francis Tusa in identifying small increases in spending that could produce a huge capability change for our troops.
  Mr. Havard: I was about to say that the White Paper suggests that the whole process should be much more joined up and that many actors can contribute to the debate. I am concerned about the political pressures on us when we make statements about expeditionary forces—as we saw recently when we had to make decisions about going to Iraq. A declaration about an expeditionary force is fine, but that does not mean that I agree with George Bush's doctrine of pre-emptive action. We need to be clear about what we are doing in this place.
  We all need intelligence to make those decisions—that is crucial. However, as a member of the Defence Committee, I am sometimes disappointed about the degree of openness shown by the Ministry of Defence, even towards parliamentary institutions that are actually trying to help to ensure that Parliament has
  1122
  proper information to make those crucial decisions. I appeal to the Minister of State on that point, because the Select Committee will certainly want continual monitoring and debate on such issues. One debate in the Chamber will not do the trick—nor will two or three such debates. We need enduring mechanisms to undertake such monitoring; Obviously, the Select Committee has offered to do so. The process involves not only the Ministry of Defence but other Departments; for example, in relation to intelligence for the Select Committee on Foreign Affairs.
  We need to ensure that there are ways of doing and ways of seeing. Eternal vigilance is the price of freedom, as it says on the old trade union banner. Now and again, that is equally true in relation to the Ministry of Defence. Our decisions on the broader political questions are crucial, and we have to make them. What we cannot and must not do is abdicate that responsibility to those who do not want it, are not prepared for it and are the wrong people to undertake it—the military and the armed forces. Those decisions have to remain in this place and we must have mechanisms to ensure that they do so.
  4.28 pm
  Mr. Michael Jack: It is a pleasure to follow the thoughtful and interesting remarks of the hon. Member for Merthyr Tydfil and Rhymney (Mr. Havard) who, as a member of the Select Committee, speaks with great knowledge. However, I think that in stepping past the point of detail he let his Front-Bench colleagues off the hook. I would have expected the White Paper to deal in much more detail with our defence situation. The hon. Member for Dunfermline, West (Rachel Squire) asked whether it was worth producing the White Paper. My answer, which I hope to explain in a few moments, would be, Probably not.
  Mr. Havard: I was not trying to duck the issue. I appeal to the right hon. Gentleman to have a word with Conservative Front Benchers. If they did not take up so much time, perhaps we Back Benchers would have a bit more time, and the same might apply equally to members of the Government.
  Mr. Jack: As a Back Bencher, I have some sympathy with what the hon. Gentleman says, but the debate is about the Government's stewardship of our current defence capabilities. What surprises me is that the White Paper is like a menu without prices. There was no mention of resources; there were no costed programmes; there was no detailed information whatsoever about the defence budget. The Chancellor has cited what he terms a real-terms increase, but we do not know how far above the rate of inflation the forward funding of the defence budget will be. There is a clear indication that all sectors of the existing defence budget are under considerable pressure.
  Why does paragraph 4.14 of the defence White Paper, under the heading Air, state that there is an opportunity for
  reducing the need for single-role fast jets.?
  It continues:
  "Multi-role capability will also allow deployed force packages to be smaller where coverage of multiple roles has previously required additional aircraft."

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  There is then a sentence that I should have liked to be developed in more detail:
  "We are now considering how and when we should reduce the numbers of combat aircraft in order to reflect these developments."
  No one can make judgments about our future capabilities—whether in respect of purchasing future projects or in respect of sustaining the operation of current equipment—without that detail. The Government have left us dangling on a hook, wondering exactly what the detail will be.
  As the Member of Parliament for Fylde, where BAE Air Systems has a significant plant with some 6,000 employees at Warton, I know that such paragraphs in the White Paper do nothing but leave uncertainty in the minds of the employees, the company and, certainly, the RAF about exactly what their capability will be. It is evident both from the Secretary of State's remarks and from the White Paper that air superiority is a precursor to successful operations in all the conflicts in which we have been involved in recent years.
  Aircraft such as the Tornado and the Jaguar illustrate that we are capable of building systems to achieve that success, but those aircraft are now either reaching the mid-point or are towards the end of their service life—certainly, in the case of the Jaguar—and they need to be replaced. Eurofighter has been mentioned, but one must recognise that that aircraft was ordered in the first instance to replace many of the ageing types of aircraft to which I refer. The Conservatives can claim a proud part in ensuring that the Eurofighter project was not only started but sustained, particularly given the pressure from our German partners, who once wanted to pull the plug on it.
  I congratulate the Government on continuing with the programme, but I have been tabling parliamentary questions for months asking Ministers when they will make a decision on tranche 2. The ministerial rubber band has now been stretched almost to breaking point. It must now be five or six months since negotiations between the company and the MOD began. There are some important issues in relation to cost. The company's position on the price it is asking for the aircraft and the development of a ground attack capability are central issues, but does it really require such a long time to elapse to get those negotiations sorted out, allowing BAE Systems and its employees at least a degree of certainty?
  In answer to my last parliamentary question on the issue, the MOD assured me that moneys had been put in place to try to ensure a smooth flow between the existing activity on tranche 1 and the fact that tranche 2 is now late, but I have now completely lost sight of whether those programmes can sustain the work force or whether some of the rumours that are now sweeping Warton and Salmesbury will come to fruition and the company will start shedding labour. Some difficult decisions will have to be made.
  Taking at face value the Secretary of State's speech of October 2002, he made it clear that the United Kingdom had to maintain a strategic aerospace capability, to sustain our technological ability and our design and build capability. We need all those things if we are to maintain independence of action with our own
  1124
  equipment. Unless the decisions are made about tranche 2, we will not know whether that skilled work force can be sustained.
  Mention has been made of tranche 3, about which I would not expect the Minister to give a clear view from the Dispatch Box at this juncture: there are negotiations about the aircraft, and the capabilities of the plane may move on, just as tranche 2 is different from tranche 1. However, we need certainty about tranche 2.
  It was perceptive of the MOD to spend £3 million with BAE working up a configuration to determine what the naval version of such an aircraft would look like. If nothing else, it positions itself as an extremely useful negotiating chip in the discussions that the MOD will inevitably have on the final cost of the joint strike fighter. We are heavily involved in the project and the new factory at Salmesbury has begun work to make the 10 per cent. share that we have won in the joint strike fighter. The Americans understand competition if nothing else and, if we want to keep their minds concentrated on giving us good value for money for the aircraft, doing something about the marine version of the Eurofighter would be an extremely good way of going about that task.
  If the hon. Members for Chorley (Mr. Hoyle) and for Preston (Mr. Hendrick) and others had been in their places, I am sure they, too, would have wanted to echo the questions that are being asked in BAE Systems about the future of the project. However, I return to the White Paper, which is completely silent on those questions. The Government show a lack of responsibility in raising questions to which they do not supply answers.
  We are at the top table on the joint strike fighter because we have the capability in terms of skilled manufacturing ability and our knowledge of short take-off and vertical landing. However, in a parliamentary question to the Prime Minister, I asked what was being done about the findings of the Rand Europe report—which the MOD commissioned some time ago—about the possibility of the United Kingdom being responsible for the repair and maintenance of the joint strike fighter or even its final assembly and check-out. All that requires the United States to release to us, beyond its current agreements, the technologies that underpin the aircraft. I was reassured not only by what the Prime Minister said, but by the nodding of the Foreign Secretary and the Defence Secretary, that all these matters were actively under discussion with our partners in the United States. So far, we have had no word back at all from the Americans that they will release to their closest ally the detailed technologies that underpin the aircraft. So if somebody drops a hammer on and dents the plane that we ultimately buy, we will not have a clue how to repair it, because no one will have told us how it was put together. That raises an important point.
  If the United Kingdom, as Ministers have suggested, is to work more in parallel with and alongside the United States in terms of our war-fighting capability, the United States must stop being so selfish is in guarding these technologies. If our systems are to develop alongside each other, there must be compatibility and a genuine understanding that allies must work together on projects such as the joint strike fighter. If we were to go into repair and maintenance and, ultimately, the updating and upgrading of the

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  weapon system when it comes into service, that would provide continuity of employment for tens of thousands of very skilled aerospace workers.
  The White Paper is also silent about the Nimrod maritime patrol aircraft. This was a £1.8 billion project. Lots went wrong and BAE has worked hard to get it back under way. We hope that a prototype aircraft will soon fly and that the MOD will order another two maritime versions of it, but what about the other 18 fuselages that remain? There was no word from the MOD as to whether the capability of the aircraft was going to be developed, perhaps even as a bomb-carrying aircraft.
  We have heard about the new technologies. I remind the Minister of an article in the August 2003 edition of Aerospace International about unmanned aerial vehicles, which appeared under the heading, The UK—lagging behind?. The Secretary of State talked about Watchkeeper but said nothing about the UK's unmanned combat aerial vehicle or unmanned aerial vehicle demonstrators. The article simply asks, "Where are they?" We seem to have no work going on to develop our technology. New developments will be utterly central to supporting our troops on the ground, enhancing our war-fighting capability and possibly in future delivering weapons systems by UAVs. Where is the UK's position? I say all that against the background of the aviation innovation and growth team report.
  The Minister who is to reply to the debate will have read the Secretary of State's speech in October 2002, when he said:
  "But there is a wide range of defence industrial capabilities which we would like to retain in the UK industrial base for economic reasons."
  I hope that he meant defence reasons as well. He continued:
  "These bring valuable employment opportunities to particular regions of the country; they add high economic value; and they can contribute to defence exports to civil applications."

  He went on to say why we must sustain our military aerospace capability. Perhaps in his reply the Minister will tell us what comes next after Eurofighter and the joint strike fighter, because there is no vision in the White Paper about what our air-fighting capability will be over the next 20 or 25 years.
  In 1986, the experimental aircraft programme, the precursor to Eurofighter, flew, yet only now, in 2004, are Eurofighters being accepted into RAF service. Unless we have some indication about how that capability is to be sustained, companies such as BAE Systems will struggle to know what their future role will be. Should they amalgamate with United States companies? Should they form closer alliances with Europe? If we are to have an independent capability to maintain our air war-fighting capability, one thing is clear: we need an industry that has the technologies to form alliances, whether with European or with American companies, and to take part in joint projects. Without a clear steer from the Government and without guidance, the company and its work force will struggle to see their future.
  Some important issues have been raised. If I have one wish, it is that, at the end of the debate, the Minister will remove some of the uncertainties surrounding Britain's military aerospace capability.
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  Let me conclude on a positive note by putting on record my appreciation of the work that the Government have done in helping finally to bring to a successful conclusion the longest running saga in terms of overseas export orders: that involving the Hawk, the finest military training plane in the world. At last, the Indians have signed the piece of paper and the march you up to the top of the hill and march you down again scenario is over once and for all. I am delighted about that. The work started under a Conservative Government and was finished by this Government. I hope that the Government will show the same determination as they showed in securing the Hawk order to remove the uncertainties that surround many of our vital aerospace projects.
  4.44 pm
  Mr. Tam Dalyell: All of us who listen to him can easily understand the right hon. Member for Fylde (Mr. Jack), and I have considerable sympathy for his concerns about keeping together the skilled teams at Warton and elsewhere. Nevertheless, I have an unpleasant and unpalatable question. Some of the contracts to which he referred—not all, but some—are surely for systems that are as relevant to Britain's 21st century needs as a fleet of dreadnoughts.
  Let us take for our example the Eurofighter. As I understand it, 232 are on order, at about £80 million apiece. We have to ask whether we should give such financial priority to a cold war interceptor. What would be the consequences of reducing the number in terms of our relations with the German, Italian and Spanish partners? Some of us wonder whether such systems are suitable for any plausible 21st-century task, but before any decision can be made, we have to know the situation regarding contracts. What contracts have been signed, and what would be the cost of undoing a contract at a later stage? Ministers face an extremely difficult problem. The same sort of argument can be made in respect of Type 42 destroyers, at £1 billion apiece. Some of us have to ask at this stage what would be the military objective of such a sophisticated weapons system in a foreseeable task that our country may be called on to perform?
  Sometimes—not very often—a colleague makes a speech in this Chamber that states a problem more eloquently than one could have done oneself. As one who raised the issue of Kosovo and was granted a private notice question on the subject on Monday, I can only say that the speech made by my hon. Friend the Member for Ilford, South (Mike Gapes) should be read by all who have to make decisions on that desperately difficult problem in the Balkans. I am glad that he referred to the nickel factory.
  I shall simply relate a personal experience, and I hope to be forgiven for crudity. I went to stay for four days in Kosovo with my national service regiment, the Royal Scots Dragoon Guards, which was on duty there. In the presence of the then colonel, David Allfrey, and the then second in command, now colonel of the regiment, Ben Edwards, I was able to talk at length with some of the local Albanian leaders. I would not have had that conversation had not the guns of the British Army been behind me, because they were pretty rough customers. They were truculent, saying, to put it crudely, Of course we're going to win—we have the power of the

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  penis. By that, they meant that they were going to use population to achieve their objective—greater Albania. Some of us who opposed involvement in Kosovo from the beginning thought that we were being taken for a ride—twisted around the little finger of people whose agenda was very different from what Britain and the United States thought they wanted. The way in which we were manipulated by the Albanians must teach us a lesson.
  Last week, with the Inter-Parliamentary Union, some hon. Members had long and serious discussions with the incoming Serbian delegation. My hon. Friend the Member for Ilford, South was present and my hon. Friend the Member for Halifax (Mrs. Mahon) chaired the meeting, and they will bear out my account. The Serbs said, among other things, that it was all very well to talk about rebuilding Belgrade, but the old buildings were constructed under the Austro-Hungarian empire, so the centre of their capital city could not be rebuilt unless every stone was taken down and construction started again. Bitterness is mounting, and my impression, which my colleagues might share, was of a highly dangerous and explosive situation. People say that it will take between $30 billion and $100 billion to improve the position.
  Turning to Afghanistan, after two and a half years, it has been restored to the warlords without our achieving the stated objective of the Afghan bombing, namely the apprehension of al-Qaeda members responsible for 9/11. What exactly are our objectives, and what is the time scale? Having listened to the hon. Member for Hereford (Mr. Keetch), I believe that we are entitled to say that it is easier to put troops in than pull them out. I hope that in the winding-up speeches we will be told what the short and medium-term objective in Afghanistan is. Drug production has gone up 14 times since the Taliban were in power, but I do not think that was the objective of the military intervention.
  As for Basra, Brigadier Nick Clark said that there is a clear attack, not on the local community but on the coalition forces. We are seen more and more as an occupying army, and our presence is regarded as an extension of the crusades, which is highly dangerous. The Whips rightly asked me to be brief, so I shall ask one final question, which is not meant to imply, I told you so. At 5.6 am on 18 December 1979, with Jack Weatherill in the Chair, as part of the old Consolidated Fund debate, I raised at inordinate length—I spoke for three quarters of an hour—the case of a young research student in the university of Brussels who had gone to Urenco at Almelo and pinched nuclear information about centrifuges and, more to the point, addresses of locations where various parts for nuclear weapons could be found. I then tabled two questions to the Prime Minister, and in the Corridor told Mrs. Thatcher, with whom I was then on very good terms, I hope you don't think that I'm wasting your time with my concerns about this research student. She replied, Whatever anybody else thinks, I do not think—the hon. Member for Aldershot (Mr. Howarth) will know very well how she could emphasise I and say it in a way that no one else could—that you're wasting time at all. I deduced that the intelligence services were going to take a proper interest in the activities of that research student, whose name was Abel Qader Khan.
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  The debate started off with my saying that the Rosenbergs, Alan Nunn May, Klaus Fuchs and Bruno Pontecorvo combined may not have done as much damage as that research student. That is all history, but, as I have had rather succinct answers to my parliamentary questions, I want to know, once people were told that there was a problem, what effort was made in the past 10 years to follow it up and keep tabs on it. That man, who sold information to the Iranians, North Koreans and whomsoever has created mayhem, which even the atom spies did not achieve 20 years before. My question is, was that followed up, and have any lessons been learned?
  4.54 pm
  Mrs. Alice Mahon: I, too, will try to cut my speech down and keep it brief.
  We had to deploy an extra 750 troops to Kosovo last week. The entire violent episode exposed the character of the Albanian separatists, some with terrorist and criminal links, who are now in leading positions of power in that province. The Kosovo Liberation Army never disbanded. It simply became the Kosovo Protection Corps. Agim Ceku—I name him again—the man who ethnically cleansed the Krajina, is in charge of the Kosovo Protection Corps.
  I agree with my hon. Friend the Member for Ilford, South (Mike Gapes) that what we saw last week was a flagrant example of ethnic cleansing: 3,500 Serbs were burned out of their homes by well organised gangs and joined the 200,000 who have been expelled from the province during the past five years. Those people are scattered all around Serbia and Montenegro in camps. The hon. Member for Uxbridge (Mr. Randall) and I, as officers of the joint group on Yugoslavia, visited some of those camps. I wish other hon. Members would take the trouble to do so. I am pleased that the spotlight is again on those forgotten ethnically cleansed people. Maybe now note will be taken of them.
  The violent attacks against the Serbs and other minorities have gone on under the UN, KFOR and so-called protection force administration since the military campaign ended. It is inconceivable to me and many others in the House that thousands of troops from 30 countries are unable to protect the Serbs and other minorities living in the province. Between June 1999 and last week there were 6,923 attacks on the minorities by the Albanian separatists. I make a distinction between them, and people like Dr. Rugova and the men and women of peace in the Albanian community, but the separatists are in charge and they want an ethnically pure state and a greater Albania. Why else would they destroy 154 churches and monasteries? Why else would they want to wipe out a whole culture and eliminate diversity? Their aim is a greater Albania. I am old enough to remember another regime in Europe that sought to eliminate other races and cultures. The consequences for Europe and the world were disastrous.
  The latest outbreak of ethnic cleansing was well organised. The Secretary General of NATO, Jaap de Hoop Scheffer, accused the Kosovo Albanians and said:
  "What happened last week, orchestrated and organised by the extremist factions in the Albanian community, is unacceptable—it should be condemned and it's a shame."

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  The UN spokesman said that more than 50,000 people took part in the violence. Only 163 have been arrested. The mob also turned against KFOR and the UN. We know, too, of the tragic killing of two UN policemen.
  KFOR must take immediate steps to provide effective protection for the minority communities living under siege. The war criminals such as Agim Ceku and Hashim Thaci who give the Albanian community such a bad name should be arrested and taken to The Hague. UNMIK, which on several occasions has tried to overturn warrants and criminal proceedings against Ceku, should stop doing that.
  Let me say something about the links between the separatists and other extremist Islamic groups. On 15 October 2003, a GIS/Defence and Foreign Affairs report—there have been regular reports since the 1970s—indicated that Ceku was directly engaged in support of Albanian-trained Islamic terrorists, and noted:
  "During the first half of August 2003 300 Albanian-trained guerrillas including approximately 10 mujahedin (non-Balkan Muslims) were infiltrated across the Albanian border into Kosovo, where many have subsequently been seen in the company (and homes) of members of the so-called Kosovo Protection Corps. The guerrillas were trained in three camps inside the Albanian border at the towns Bajram Curi, Tropoja and Kuks where camps have been in operation since 1997".
  From visits to Interpol as a representative on the NATO Parliamentary Assembly, I know that some extremists in Albania and the Kosovo Liberation Army have links with al-Qaeda. Kosovo is in the hands of mafia extremists, organised crime is the main economic activity, and the sinister link to terrorism is definite. I agree with my hon. Friends, and, in particular, with my right hon. Friend the Member for Birmingham, Ladywood (Clare Short), that we must have a serious discussion about the final settlement in Kosovo, because the issue will not go away.
  I shall turn briefly to the most pressing and dangerous situation facing our armed forces today—Iraq. I wish the Secretary of State had updated us on the horrific pictures that we saw yesterday, in which our soldiers were fighting people who were throwing petrol bombs at them. I hope that the Minister will address that point when he sums up. I deeply regret that, just more than one year ago, we were unable to stop what I consider to be an illegal, immoral and extremely dangerous invasion of Iraq.
  We know that 600 coalition troops, including 60 British troops, have been killed, and thousands have been injured. It is deeply shaming to the Bush Administration that they take their dead and injured back to America in secret, and I congratulate our Government on honouring our dead, on making sure that the injured get the best possible treatment and on not trying to keep the public away.
  I want to say something about the civilians who have been killed in Iraq since the beginning of the war, because most of the people who have been killed are civilians and their deaths are rarely reported. Dr. John Sloboda, an academic with the Oxford Research Group, has set up a body called, Iraq Body Count, which is an independent count of media-reported civilian deaths as
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  a result of coalition military action and the occupation. His sources are published and are easily available on the internet for anyone to check or dispute, but, to the best of my knowledge, no one has done so up to now.
  Dr. Sloboda and his team should be congratulated, and I shall quote from Iraq Body Count, because, as part of the occupying force, my Government have a responsibility towards Iraqi civilians, and, at the very least, we should report and record the dead and injured:
  "An Iraqi family … lost 11 members when U.S. soldiers opened fire as their sport utility vehicle approached a checkpoint."
  The mother in that family kept saying this over and over again to the media:
  "'I saw the heads of my two little girls come off,' Hassan's wife, Lamea, 36, recalled numbly. She repeated herself in a flat, even voice: 'My girls—I watched their heads come off their bodies. My son is dead.'"
  Similarly, we were responsible for civilian deaths when we hit the wrong targets. At about 6 am, one family sheltering in a bunker, which had been constructed when the last American bombs fell, lost 10 members as the house collapsed around them. How can one compensate for that kind of tragedy?
  Killings are still taking place under the occupation, and even in UK-controlled areas such as Basra, public security is inadequate. We now know that up to 10,600 civilians have died since we invaded in March 2003, and the civilian death toll is the worst from a war waged by either the United States or the United Kingdom since the Vietnam war. We should all reflect on that point: we should certainly not try to hide from it, and we should record the figures. The US-UK coalition has repeatedly said that it will not record the figures, and now the US-appointed Baghdad authorities have refused to recognise the need and the duty to account for those civilian deaths. As Dr. John Slobodo says, Iraqi civilians are now relegated to the status of "non-people".
  Decisions have to be made about Iraq. With the death toll of American soldiers mounting and a presidential election in the offing, the United States is desperate to transfer powers by the end of June and wants to step back from the bubbling cauldron that it helped to create. That strategy of bringing democracy to Iraq stands little chance of success unless certain things happen. The temporary governing council, its ministers and their advisers all owe their allegiance to Mr. Bremer and the United States, and the Iraqi people know that. Many people in the interim Government are still based outside the country and show no signs of returning with their families to settle in Iraq, so they do not command much public confidence.
  The intercession of the United Nations is welcome, but we want it to be done in a proper manner, and only if Kofi Annan is able, and is seen to be able, to act as a genuinely independent element in resolving the impasse. If Iraqis perceive him as providing a fig leaf for United States intentions, he, too, will be rejected. The situation in Iraq is desperate, and requires much more discussion.
  5.6 pm
  Clare Short: I rise to set the record straight on the very important question of why there is such a disastrous lack of security in Iraq and why better arrangements were not put in place to help the people of Iraq to reconstruct their country. That

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  issue is obviously terribly important for the people of Iraq. As I said earlier, the current disorder is leading them to say that no matter how much they welcome the fact that Saddam Hussein is gone, the situation in which they are living is worse than that which preceded it. The question of how we are to bring them security is enormously urgent and difficult. It is important to learn how we got into this mess in order to find our way forward.
  More broadly, in the post-cold war world, the military phase of any conflict that arises from failed states and civil wars is quite short and relatively easy. The reconstruction of countries is the difficult and complex part, but it is crucial to ensuring future stability and security. We need to learn those skills more effectively and hone the international system for dealing with such situations.
  I have already drawn the House's attention on a point of order to the false claim made in the report by the Select Committee on Defence entitled, Lessons of Iraq, which was published on 3 March 2004. It states at paragraph 358:
  "It has also been suggested that"
  the Department for International Development's
  "role in post-conflict planning was constrained by the attitude of the then Secretary of State towards the prospect of military action. Although our witness from DfID denied that this was the case, we remain to be convinced."
  That assertion is completely untrue and is based on absolutely no evidence. I am enormously surprised that any Committee of this House should conduct itself in such a shoddy manner by making an assertion based on no evidence, not having taken evidence from the Member concerned.
  Following the publication of the report, I wrote to the Chairman of the Select Committee telling him that the claim was untrue and offering to give evidence to the Committee on the preparations that were made. He replied that the Committee stood by the false claim, and I was invited, along with anyone else who might be interested, to provide written evidence to rebut it. What a topsy-turvy world we appear to be living in. I hope that no one makes that suggestion to the Home Secretary in relation to our courts—he might even take it up.
  Mike Gapes: My right hon. Friend is attacking the Defence Committee. She should be aware that during our investigations over the past year many of us on the Committee had extensive discussions with many people about what was happening in Iraq. On that basis, we were not satisfied with the response that we received from officials in her former Department. The Chairman of the Committee is not here at the moment, so he cannot reply on his own behalf. I should like to place on the record that the Committee has written to my right hon. Friend the Member for Birmingham, Ladywood (Clare Short), and that if she has something to communicate to us, she can no doubt do so, and we can continue with it later.
  Clare Short: I am sorry, but obviously my hon. Friend was so busy getting up to rebut what I said that he did not listen to it. I just referred to the letter that I received—a letter that invites me not to give evidence but to rebut a false assertion, which was based on no
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  evidence whatever. This is a serious matter. It is an insult to me and an insult to my former Department. It also suggests that the Defence Committee is not interested in learning lessons and finding out the truth about why there is such chaos in Iraq. That is a serious matter for the government system.
  Rachel Squire rose—
  Clare Short: I will not give way, because I would like to get on and make my speech.
  From the very beginning, my view on Iraq was that it was right to threaten to use force to back up the UN's authority, because containment was crumbling and sanctions were hurting, but that there was no need to rush. That is where all the failure has come from. The Defence Committee failed to face up to the reasons for the lack of supplies for our troops and the lack of preparation for the possible use of chemical weapons. Defence intelligence had assessed that there was such a risk. Those reasons were that the date for war was fixed early on, that there was deceit about that date having been fixed, and that the preparations for military action came very late and were not fully made.
  Rachel Squire rose—
  Clare Short: No, I will not give way because I want to get on, if I may.
  Matters were different, however, over preparations for the reconstruction of Iraq. We prepared for reconstruction with international support. When I agreed to stay in the Government, having been pressed very hard to do so by the Prime Minister—I had intended to resign at the time of the war and to vote against the Government—I did so on an absolute promise that there would be a UN mandate for reconstruction, and that reconstruction would be internationalised. I decided to take the flak and the criticism for failing to resign because, knowing that the war was unstoppable, I wanted to try to ensure that reconstruction was carried out properly. That was the most crucial matter to the interests of Iraq and the people of the middle east.
  Various preparations were made. First, the military, as an occupying power, has a duty under the Geneva convention and The Hague regulations to keep order and to provide for any immediate humanitarian needs. We worked with our Ministry of Defence to purchase food and make preparations for the possible humanitarian crisis, giving our support and advice. Secondly, we provided funding and support for some British non-governmental organisations that have experience of working in Iraq. We gave much support to the Red Cross, which worked in Iraq through the war but, tragically, withdrew afterwards because of the disorder.
  We also supported the UN in preparing its intervention. The UN knew an awful lot about Iraq; it had been running the oil-for-food programme for a long time and had considerable numbers of Iraqi staff as well as international staff. Those staff were withdrawn during the conflict, but the UN had supplies in the region and was ready to go back in. The UN, through the office of Kofi Annan and his deputy Louise

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  Frechette, was fully prepared to move in, under the sort of mandate that it had been given in Afghanistan, to help the Iraqis to put in place an interim Government to start the reconstruction. If that had happened, the whole international community would have engaged with the process. I had discussions with my fellow Ministers across the international system, including in France, Germany, the Scandinavian countries and Canada, and had said to everyone that, whatever our differences over the route to war in Iraq, we must all come together to help Iraq to reconstruct. All that was in place, and ready to go.
  So what happened then? There was a big argument, which the Select Committee report alludes to, between the State Department and the Pentagon in the United States of America. The State Department had made full preparations for the situation after the conflict, but it was pushed to one side. The Pentagon took over, made it absolutely clear that it did not want any significant role for the UN, and set up ORHA—the Office for Reconstruction and Humanitarian Assistance in Iraq—which was assembled only weeks before the conflict began. Major-General Tim Cross, whom I had worked with in Kosovo in the support of refugees, became its deputy and found that the furniture was still being moved about and that there were no plans.
  That is what happened. The international system and all the international preparations were brushed to one side, and ORHA moved in with retired general Jay Garner in charge. That body was in Kuwait for a time, and it had been busy with Secretary Rumsfeld selecting which Iraqis would have significant positions. No proper preparations were made for keeping order or for giving the UN a proper role—which would, in turn, have brought in the international community. Members will remember the arguments. Will the Indians come in? Will the Pakistanis come in? It was a very good idea to have a substantial Muslim country supporting the keeping of peace and order in Iraq, but none of them would do so without a proper UN mandate and resolution.
  That is the shameful story. There were two great blunders, the first of which was to rush to war too fast, without first exhausting all possible means of disarming Iraq or proving that it had no weapons of mass destruction. Indeed, we should have tried to indict Saddam Hussein, while authorising armed support for the UN weapons inspectors if need be. We had to be willing always to contemplate force to back up the authority of the UN if necessary, but in my view we should have taken more time. The reason why we went to war when we did is that there was an unwillingness to rotate the troops through the hot weather. That is why we got into the mess that we did, and why our troops were subjected to such risks.
  The second failure was the arrogance of forcing other members of the Security Council to say yes to a war by a pre-ordained date. In doing so, the UN was completely brushed aside, and the international system's machinery for helping a country to reconstruct was not used. In addition, because the Office for Reconstruction and Humanitarian Assistance was so focused on its political tasks, the military moved away from their duty under the Geneva convention and The Hague regulations,
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  which is to keep order. There should have been military rule and an absolute focus on keeping order. The latter failure, which resulted from the closing down of the Iraqi army, explains the situation that we are in.
  We have to get out of this situation, which is a disaster for the middle east and for the people of Iraq. The answer is the same as that which should have been secured at the time: a proper UN mandate and lead; international engagement; getting more countries involved; greater legitimacy; and a proper interim Iraqi Government who are recognised as legitimate by the whole international community.
  That is the story. I and my Department made full preparations for the proper reconstruction of Iraq, but I am afraid that our country and Prime Minister did not stand up to the Americans when the Pentagon, in its full arrogance, brushed aside the preparations made in its own country through the State Department, and led us into the chaos that we now see.
  5.17 pm
  Mr. John Smith: I am grateful for the opportunity to speak in this debate, albeit briefly. I intend to focus my comments on a small but none the less important part of defence policy that is often neglected—defence logistics—but first I should like to make a couple of general comments. I congratulate my right hon. Friend the Secretary of State for Defence on producing an intelligent White Paper that leads the way for future defence policy. My hon. Friend the Member for Dunfermline, West (Rachel Squire) referred to the number of strategic reviews. Unfortunately, that is an indication of the times that we live in. The security environment is changing so rapidly that there will be an increasing number of reviews over time. I also congratulate the Secretary of State on securing from the Chancellor of the Exchequer a real-terms increase in the defence budget.
  I should also congratulate the shadow Defence Secretary on putting on such a brave face this afternoon, in the full knowledge of the impossibility of defending the policy that he will have to defend. I might disagree with him and his Front-Bench colleagues, but I recognise that they are committed to defence policy and to defending this country. I therefore understand the embarrassment that they must be experiencing, but it is not my intention to exploit it this afternoon.
  Mr. Blunt: Following the Chancellor's Budget statement, my noble Friend Lord King sought clarification from the Treasury concerning a real-terms increase in defence spending. However, he discovered no such undertaking, beyond what had already been announced in the previous comprehensive spending review. If that proves correct, I should imagine that the hon. Gentleman, like me, will regard it as something of a let-down.
  Mr. Smith: We await the Chancellor's statement with interest. My understanding is that a commitment to the defence of this country—something that I believe in strongly—has been given, and I look forward to hearing what the Chancellor says.
  I shall confine my remarks to defence logistics. It is often forgotten that nearly half the entire defence budget goes on logistics and not an awful lot of time is

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  spent debating the £15.2 billion—at 2003 out-turn prices—involved. About £11.4 billion of that expenditure is currently under review as part of an MOD end-to-end review of air and land logistics. I support that vital review, the general objective of which is to reduce the footprint of logistics to prevent duplication, to ensure faster response times and to secure the equipment and support where and when it is necessary.
  The National Audit Office report on Operation Telic identified the need to achieve those tasks and it concluded that the operation was a huge logistical success. It was the fastest deployment—within 10 weeks—of the largest British expeditionary force ever into a theatre, a very austere environment, nearly 4,000 miles away. There was even a change of location. We therefore deployed people even more quickly than the planning assumptions for the deployment would have suggested.
  The NAO rightly recognised some capability gaps within that deployment, but did not do so in respect of fixed-wing aircraft, which were deployed very successfully into the field. I am particularly interested in air support and the role of third-line reinforcement and support for operational aircraft that need to be put rapidly into the field and maintained there.
  Government policy in that respect has been incredibly innovative over the past few years and has created the so-called trading funds. The Defence Aviation Repair Agency whose headquarters are in my constituency is one example, and there are other bodies such as the Army Base Repair Organisation, ABRO, which play a vital strategic role in ensuring that we get our logistics act together.
  Ministers will be aware that yesterday's announcement of up to 550 redundancies at DARA at RAF St. Athan in the Vale of Glamorgan in the next 12 months was received with disappointment and dismay by my constituents and that work force. We should acknowledge the crucial role that these guys play in the logistical chain of depth air support. Indeed, they were somewhat taken aback. These are highly skilled workers, vital to support our front line—and I repeat that the NAO identified no faults whatever in the logistical support for our fixed-wing aircraft in Operation Telic in Iraq.
  About 360 of those jobs are to be lost as efficiency savings—that was the explanation given. The work force and I accept that some efficiency savings have to be made, but we do not agree that such a large loss of highly skilled workers is necessarily the best way of achieving them. Incidentally, the depletion of such an important skills base—in military aeronautical engineering—is a severe sting, especially given that the organisation will be expected, after 1 April this year, to compete in the marketplace with no vote money and not a penny from the taxpayer for its future work. Losing those skills is a worry.
  However, the second half of the decision is what worried me and many of the DARA workers at St. Athan. That was the announcement of 190 redundancies because the contract to upgrade the Harrier platform had been lost. The contract went to RAF Cottesmore, and that astonished many workers. They believed that the purpose behind the creation of
  1136
  DARA, the trading fund in the logistical chain of support, was to civilianise the crucial deep repair operations—the garage or depot operations inherent in the overhaul and maintenance of fighter aircraft.
  Civilianising that work, and taking it away from RAF personnel, was supposed to mean that it could be carried out in a commercial environment, and on a par with any player in the private sector. Workers were shocked to hear that the contract had gone back to the RAF because the work is now to be completed in-house, even though so much effort had gone into ensuring that DARA was competitive and in a strong position to enter the marketplace after 1 April.
  Another concern is the nature of the end-to-end review. I have said that it is important to carry out that review, as so much of defence expenditure goes on logistics. Freeing up some of that money would mean that it could go on front-line services. Our forces could then be released to do what they do best—war fighting, or preparing for war fighting or peacekeeping—and that they could perform those tasks unhindered.
  The suspicion at DARA about the end-to-end review has several causes. First, the trading funds were not originally included in the review. They were introduced after the review had begun, and it was not thought that they would be included in the MOD logistical chain, as a solution had been found. Creating a trading fund meant that the resulting commercial organisation could compete with other players in the market. Why has the work been returned to the MOD logistical chain? The people at DARA regard the decision as more or less an afterthought.
  The second cause of nervousness about the end-to-end review is that, although its team leader has a distinguished record in the armed forces, he is not noted for his support or sympathy for the newly created trading fund and its role in providing air support for the RAF. Another consideration is that the specialist teams that decide the contracts are predominantly made up of military representatives from the forces. There is therefore a belief that there could be a bias in the decision-making process. I do not say that I subscribe to that belief, but I have heard that view expressed by workers at DARA, where there is the prospect that 550 jobs will be lost.
  In future, there will be competition for major contracts, such as that for the Tornado GR9 structures. I know that my right hon. Friend the Minister of State will not be able to say how that will turn out, as the review is still under way and the decision has not been taken. However, I want to be able to reassure the highly skilled workers at DARA, who play an absolutely vital role in providing logistical support, that future contract allocations will be transparent. In that way, wherever a contract is eventually placed, those workers will be able to see whether the bid that they put in was strong and economical, or weak. That will be the difference between winning and losing any such contracts.
  The House will accept that we must not lose the skills that I am talking about, so it is possible that there could be a strategic reason to maintain them at military bases as a second-line reinforcement. If that is the case, a transparent contract allocation process would allow workers to understand the reasoning behind decisions. It is vital that any future decisions be transparent and seen to be transparent.

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  If decisions are made on that basis, the Defence Aviation Repair Agency, which has shed half its work force in the past four to five years without a single compulsory redundancy, and is virtually doing the same volume of work with half the work force, will be fit, lean, mean and capable to compete successfully in the marketplace with any organisation in the world on military aviation. Given all that it has achieved, and in recent years it has jumped through hoops to become efficient and competitive, it needs those assurances. Finally, it would also like to know why it did not win the Harrier platform contract that was announced yesterday.
  5.31 pm
  Mr. Gerald Howarth: First I thank all the hon. and right hon. Members who have paid tribute to my late noble and gallant Friend Lord Vivian. He was a very splendid man indeed and the tributes paid to him today fully reflect that. I intend to send his widow a copy of today'sHansard, so that she may read for herself the tributes paid to him in this House.
  We have had a typically robust and interesting debate, sadly not as well attended as we would have wished. The usual groupies are here. We give a special welcome to the one or two new Friends who have joined us, and hope that they will come back and join us again. I say that much as they do at services in church on a Sunday. I hope that those who have not participated so enthusiastically in the past will come back. In particular I welcome the right hon. Member for Birmingham, Ladywood (Clare Short), the former Secretary of State for International Development. I do not always agree with her, but I have found her to be a personable friend across the Floor and it was interesting to hear from her.
  Time is marching on, so if the House will forgive me I will not go through all the speeches that were made. I put it on record once again that the deliberations of the Defence Committee have done credit to that Committee, to the House and to the parliamentary system. It was an extremely well-informed report that contributed significantly to all our understanding of the conduct of the Iraq war.
  A number of people, including my right hon. Friend the Member for Fylde (Mr. Jack), remarked on the lack of detail in the White Paper. My right hon. Friend rightly described it as a menu without prices. Like him, I too have a major BAE Systems operation in my constituency and my constituents are concerned about the uncertainties surrounding a number of programmes. The reasons for publishing the White Paper are encapsulated in supporting essay 2. Paragraph 2.9 states:
  "Since SDR our Armed Forces have conducted operations that have been more complex and greater in number than we had envisaged. We have effectively been conducting continual concurrent operations, deploying further afield, to more places, more frequently and with a greater variety of missions than set out in the SDR planning assumptions. We expect to see a similar pattern of operations in the future."
  1138
  In other words, the Government expect multiple, concurrent, small to medium-scale operations such as counter-terrorism, counter-proliferation operations and enduring peace support operations well beyond the assumptions of the strategic defence review to be the norm, without creating overstretch.
  The White Paper also recognises the need to retain the ability to undertake a large-scale operation such as Operation Telic, although in his statement to the House in December the Secretary of State accepted that expeditionary operations on that scale can be conducted effectively only if United States forces are engaged. That leads to the further essential requirement set out in the White Paper, of inter-operability with the United States.
  The blunt message of that policy was summed up by Bronwen Maddox in The Times:

  "Britain will never again fight a big war on its own, as it did in the Falklands."
  As my hon. Friend the Member for Reigate (Mr. Blunt) said, it is a matter of betting the shop on the United States.
  Notwithstanding that brutal assessment, the Government's ambitions are markedly greater than in 1998, and the White Paper must be judged against the revised range of assumptions. We have no reason to disagree with the threat assessments. We believe that the United Kingdom should be prepared to play an important role in the less stable, post-cold war world—but if the UK wants to play in that league, there is a price tag. We are not convinced that the solutions proposed meet the challenge that the Government have set themselves. Nor do we believe that the Government are prepared to pay the price that goes with effective application of the policy. Like the Chief of the Defence Staff, we look forward to the Chancellor's detailed announcements on spending in July.
  A widespread view shared at senior military level is that the strategic defence review was underfunded. The White Paper proposes an even more ambitious military posture, yet—despite the Chancellor's rhetoric—the additional resources do not meet the increased ambition.
  Taken together with the acceptance that high technology in the form of network-enabled capability must be an essential component of the new scenario, the Government's enhanced ambitions have put the screws on our conventional forces—the reason for talk of platform numbers being less relevant. If we are to be prepared for the envisaged increase in operations, something has to give. My hon. Friend the Member for Mid-Sussex (Mr. Soames), who was in such good form today, said in December:
  "We are concerned that a whole raft of decisions on cuts in both manpower and equipment will start to leach out later."—[Official Report, 11 December 2003; Vol. 414, c. 1213.]
  Since then, the press has been awash with speculation that whole aircraft types will be taken out of service, regiments axed and the maritime fleet reduced in size. The Government have already drunk the Territorial Army well dry, thanks to their ridiculous policy of cutting the TA down to about 18,000. Fortunately, the cut is not as much as the Secretary of State envisaged, and he was relieved—and said so publicly.

  1139
  We know that the Ministry of Defence is undertaking studies in 14 so-called work strands with a view to meeting the cost savings demanded by the Treasury. We were assisted by the Minister of State in the other place yesterday:
  "To manage the in-year pressures, we have had to scale back cash expenditure across the department, in particular in the Defence Logistics Organisation and the Defence Procurement Agency … It is clear that during both next year and the year after we shall continue to face financial pressures. We are conducting an assessment of where reductions in planned expenditure can be made in each of those years so that we can continue to live within our means…So I am not in a position to be able to tell noble and gallant Lords and the House generally what figures are being bandied about but I think that I have been fairly frank with the House in going as far as I have."—[Official Report, House of Lords, 24 March 2004; Vol. 659, c. 743–744.]
  The Minister, by admitting serious financial pressures, was probably too frank for some of his colleagues. For all the attacks directed at us, the Government are struggling to maintain their existing commitments—let alone the increased commitments envisaged in the White Paper.
  If our forces are to undertake the range of operations foreseen in the White Paper, platform numbers and boots on the ground will matter. The Government are engaged in a series of gambles in a desperate attempt to square the circle. They have taken a gamble with the early withdrawal of the Sea Harrier starting next week, thereby removing Britain's independent maritime air defence capability. On present projections, that capability gap will be at least six years—longer if the new carrier programme is delayed. We may be looking at 10 years without full fleet air defence. The Minister ought to say whether he agrees that aircraft could remain in service until 2012 without an engine upgrade.
  It has been reported that the Government are to cut the number of Type 45 destroyers from 12 to as few as nine or eight, vastly reducing Britain's maritime capability and reach. Numbers do count, as the Minister will understand when he recalls that the frigate deployed to Sierra Leone a few years ago was also on standby for the Falklands and the Caribbean. For those without a map, those areas are several thousand miles apart. Will the Government clarify their position on the Type 45s? Do they intend to procure the 12 vessels originally envisaged or will we have to wait until those work strands have reported?
  On the future rapid effects system—FRES—the Government are gambling on a programme that is central to achieving the aims set out in the White Paper. FRES is a clear example of the fact that the development of a medium-weight capability is essential to the expeditionary role envisaged in the White Paper. That was reflected in the early in-service date and high-priority status afforded to it. However, the Government have not yet even decided what they want from the programme, let alone how to procure it. By putting it out to a systems house, the Government could have added anything up to a year to the process, kicking a final decision ever further into the long grass and making the prospect of FRES reaching its early in-service date remote.
  There are other examples, with which Ministers will be only too familiar. Two of the six Astute submarines are said to be on the chopping block, which would reduce our maritime capability still further and deal
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  another blow to the Ministry's favourite contractor, BAE Systems. Up to 40 Challenger tanks may be mothballed, curtailing capabilities further. Ark Royal is to go into some kind of mothballing and the joint strike fighter—now called the joint combat aircraft—could be cut from 150 to 110. It is a key component for the carriers and it would helpful if Ministers could answer some of the concerns that have been expressed on both sides of the House about those programmes today.
  On a note of agreement, I can say that we support the carriers. The carrier programme that the Government have developed will be essential to the concept of expeditionary warfare that they advocate. I welcome the fact that the drumbeats in the jungle suggest that the carrier size has gone back up to 60,000 tonnes. That will result in serious carriers that are capable of delivering what we all want to see. However, there is uncertainty about the programme. We have heard reports that the MOD wants to take control of the programme, instead of making BAE Systems the prime contractor, or to hand it over to AMEC. Despite having the excellent Syd Gillibrand as its leading light, that company has not had great experience in running such a programme.
  The Government are also ransacking the cupboard for other savings. Earlier this week, the Under-Secretary smuggled out a written statement, blandly called Estate Rationalisation: Presentation Strategy, the key sentence of which reads:
  "The work now underway is looking at consolidating defence activity at a smaller number of more densely utilised locations in order to achieve the optimum use of land and facilities…it will take into account existing relocation studies that have already been announced."
  As the Member of Parliament for Aldershot, I hope that the Minister can tell me whether the review will apply to Aldershot and Tidworth, which are currently the subject of Project Connaught, which will see more than 25 per cent. of the Aldershot garrison sold for housing. If there is to be a further fire sale of military assets, where will the Government house the 8,000 troops they will bring back from Northern Ireland under that peace dividend? Where will the 20,000 troops presently in Germany be stationed if they are pulled back—as they will be at some point? Will not a policy of super garrisons substantially reduce the military footprint in the UK?
  The White Paper sets out the Government's projections for the next 15 years. Admittedly, the last White Paper lasted only six years, but it is still a basis for today's discussions. The projections anticipate a level of military action similar to the recent pattern, which is well in excess of the level envisaged by the SDR just six years ago, and they do not fully quantify the effect of Islamic fundamentalist terrorism on our country. The truth is that manpower has been cut, increasing pressure on young service families. Training has been cut. The TA is running out of people to support the regulars. Numbers of aircraft, ships and armour are being reduced and assets are being sold.
  Despite the dangerously uncertain world that we have entered, Ministers are taking gambles that capability gaps will not be exposed. They have failed to order essential battlefield equipment in time. The defence industrial policy, about which my right hon. Friend the Member for Fylde spoke so comprehensively, is, to quote a senior industrialist, a shambles. We have

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  received no tangible dividend for the Prime Minister's support for the United States. As my right hon. Friend said, there should at least be a technical access agreement on the joint strike fighter. Where is that? What answer can the Minister give us about control of the British defence industrial base if that control is moving inexorably into the hands of the Americans? As we know, they have done us no favours in the commercial field. Political correctness inhibits training and the development of risk awareness.
  All those points were summed up in the brutally frank admission made yesterday by the Prime Minister's personal adviser on defence, the Chief of the Defence Staff: the Army has been stretched to breaking point and cannot mount another Iraq-scale war for five years.
  Let us hope our enemies are not listening.
  5.46 pm
  The Minister of State, Ministry of Defence: In opening the debate, my right hon. Friend the Secretary of State drew the attention of the House to the key security challenges that we face. The hon. Member for Mid-Sussex (Mr. Soames) recognised that, and I think that he echoed both the analysis and some of the conclusions of the White Paper. The hon. Gentleman could not be in the Chamber for the wind-ups as he had a speaking engagement. My best guess is that he is speaking to the shadow Chancellor to try to find out some of the answers that he failed to give in response to contributions from the Labour Benches.
  The challenge that we face on defence is ensuring that we have the right military capabilities to meet the threats we are likely to face. The 1998 strategic defence review and the new chapter that we published in 2002 undoubtedly moved our armed forces in the right direction. But as others have recognised—in the debate and elsewhere—the world does not stand still; nor should our response.
  The Defence White Paper, Delivering Security in a Changing World sets out the case for the development of more flexible and agile armed forces, which are structured and equipped to deploy rapidly in the most likely small and medium-scale operations, from war fighting to giving enduring peace support. Much of the White Paper presages change for the armed forces and for defence. Painful as it may be, we must not shirk from making tough choices. As the hon. Member for Aldershot (Mr. Howarth) indicated, my noble Friend the Minister for Defence Procurement made that clear in his contribution to a debate in the other place yesterday.
  Mr. Blunt: Will the Minister give way?
  Mr. Ingram: I have to reply to a large number of contributions, but if there is time later, I shall give way to the hon. Gentleman.
  In the last spending review, we announced the largest sustained increase in planned defence spending for about 20 years, yet, however great the increase in the budget, we cannot do everything to the nth degree. Some contributions to the debate seemed to ask for everything; nothing should go, and nothing should be
  1142
  given in return. Those are not useful contributions to such a heavyweight and important debate. It is easy to ask for things, but it is vital to have balance in our thinking on investment in running the Ministry of Defence, as it is for every spending Department.
  When the Conservatives were in power, they had to make changes and choices that were similar to those that face us now. That had to be done in 1995, and I think that it was the hon. Member for Mid-Sussex who said that the Conservatives got some of those decisions wrong. He did not enumerate the decisions or point out where the Conservatives had gone wrong. I could certainly list a good number of things; we have had to recover from many of those decisions and find solutions.
  Mr. Blunt: In fact, I made those remarks. The errors that I identified were in recruiting and the Defence Medical Services.
  In a mature debate about defence, everyone must accept that tough choices have to be made. A better approach for the Ministry of Defence would be to ensure that the debate was much more transparent and that there was much more information. My experience was that Front Line First was a much more open exercise; it was much easier to manage politically because it was transparent. I hope that the Ministry of Defence will take that advice.
  Mr. Ingram: It is tempting to think in that way. However, as we know from some of the speculation that abounds, which is immediately latched on to by hon. Members and others, such arguments are not balanced. Those who use them simply consider one aspect and say, This is nonsense and cannot be sustained. Of course, something will not necessarily go simply because it has been part of the consideration. Military personnel themselves are the best analysts of all this, as the hon. Gentleman will know from his background as adviser to Malcolm Rifkind, the then Secretary of State for Defence. Some tough choices must be made, but the quality of their advice is very high. They know that judgments have to be made. They advise Ministers, and they respect Ministers when we stand our ground on some issues. It is tempting to say that the necessary debate must be open and transparent, but I am not sure whether that would add to the quality of the judgment that must be made; we would chase a lot of hares unnecessarily.
  We have a commitment to ensure that the quality of judgments taken is properly bottomed out and scrutinised. We then have to stand accountable for those judgments. My right hon. Friend the Secretary of State has shown time and again that he is more than prepared to take many of those tough decisions and to see them through against some strong criticism. We must ensure that we direct our finite resources at those capabilities that are best able to deliver the full range of military effects that we require. In doing so, we must be rigorous in dispensing with those capabilities that do not fit our requirements—to do otherwise is simply not an option.
  I shall deal with some of the various issues that right hon. and hon. Members have raised. I welcome all the contributions made by the hon. Members for Mid-Sussex, for Hereford (Mr. Keetch), for Reigate (Mr. Blunt) and for Aldershot and the right hon. Member for

  1143
  Fylde (Mr. Jack), as well as those made by my hon. Friends the Members for Dunfermline, West (Rachel Squire), for Ilford, South (Mike Gapes), for Merthyr Tydfil and Rhymney (Mr. Havard), for Halifax (Mrs. Mahon), for Vale of Glamorgan (Mr. Smith) and my right hon. Friend the Member for Birmingham, Ladywood (Clare Short). I do not agree with all the contributions that have been made, and I do not know whether I can deal with all of them in the time available.
  My hon. Friend the Member for Halifax asked about the status of troops injured in the incidents on Monday. Fourteen troops were hospitalised. Four may have to be returned to the United Kingdom, but the injuries were not as severe as the images suggest. The quality of the equipment that we use in dealing with such riot-control situations is high grade, and our troops are highly trained. Again, the images sometimes belie the reality on the ground. All hon. Members would wish those who have been injured a full recovery. We wish them well.
  Let me deal with the points made by the hon. Member for Mid-Sussex. I want to be kind to him. In a sense, he set out a shopping list: more expenditure on training, equipment and service personnel generally. He believes that deeply, but he has to match his dreams with reality. He had to do so when he held the job that I now hold. He had to make some tough choices, and we now have to recover from those very same choices. I believe that he is in denial about the Conservative party's expenditure planning. No one has rebutted the fact that there would be a £1.5 billion cut in defence spending. That is the implication of what the shadow Chancellor has said. He must face up to that realistically. He called for many things, but he has to set that against what his own party is saying about expenditure.
  I have always taken the view that the role of Her Majesty's loyal Opposition is to do one thing only: to train to become Her Majesty's Government. So the Opposition have to face up to the consequences of what they say. Our years in opposition certainly allowed the Labour party to go through that process. I wish the Conservative party a longer time in opposition because they have clearly not begun to deal with some of the hard issues that they must face.
  The hon. Member for Mid-Sussex asked about the capacity to deal with the terrorist threats facing this country. General Jackson, the Chief of the General Staff, outlined to the Defence Committee yesterday the arrangements for the forces to exercise with the emergency services. We must increasingly consider that issue and take into account what can be done in relation to the public's perception. Training and exercise does not necessarily mean that the scenario envisaged will happen the next day. We have to manage all this, and there is a strong commitment between the emergency services and MOD personnel to work through many of the difficult scenarios that we may have to face.
  The hon. Member for Mid-Sussex also alleged that there had been a 50 per cent. cut in combined arms training. Those claims are without foundation. We fully recognise the importance of combined arms training. An important element of recuperating and sustaining military capability rests on getting that right and ensuring that we are investing in that area. Let me give the assurance that we shall, of course, ensure that the issue is accorded the right priority in our future plans.
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  My hon. Friend the Member for Vale of Glamorgan is right that I made an announcement yesterday that had an effect on the Defence Aviation Repair Agency, which is in his constituency. I shall explain the background to that. I agreed that the Harrier air depth maintenance support work should roll forward to RAF Cottesmore as a centre of gravity for logistic support for the Harrier platform. This decision has been taken at this point, because of the need to protect the critical operation in-service date for the Harrier GR9. The decision is likely to affect, as my hon. Friend said, a further 190 posts in addition to those proposed as part of the Red Dragon efficiencies.
  The solution at RAF Cottesmore offered the best value for money for defence, providing savings of more than £30 million through the life of the programme. Any delay in the decision would also have cost £800,000 a month. That is the problem that I faced, alongside the other developments that were taking place relative to the ongoing end-to-end review. I do not accept my hon. Friend's view that the inclusion of DARA and ABRO's trading funds in the end-to-end review was an afterthought. They cannot be anywhere other than in that review.
  I make a commitment about Red Dragon and the review work. DARA has a future, but a future that is based on MOD expenditure and, increasingly and importantly, on what it can win in the private sector in terms of commercial business. That is the opportunity that the Red Dragon project affords DARA. There were those who said that we should not go ahead with that £70 million-plus investment. I made the decision because it gave the work force at DARA in St. Athan the best opportunity. I hear what my hon. Friend said about the other issues, but I am only too willing to meet him and local trade union representatives to talk the issue through to try to ease their fears. I am sure that he will welcome that invitation.
  As ever, my hon. Friend the Member for Dunfermline, West made a thoughtful contribution. She is fierce in her role as a constituency Member of Parliament and is similar to my hon. Friend the Member for Vale of Glamorgan. She never fails to mention Rosyth in the same way as he never fails to mention St. Athan. I recognise that Rosyth is important to her constituency, and I point out that Rosyth is mentioned in the future aircraft programme as one of the yards that will play a possible part in the process. However, it has to win its part of the contract. Free gifts are not being given to the shipyards. We must get best value and best price, so we say to all the yards that their future is also about winning the commercial business that is potentially out there for the British shipyard industry. The MOD's elements of that future are important, but the yards cannot survive on MOD work alone even with the largest warship-building programme for a generation.
  My hon. Friend the Member for Dunfermline, West also asked about recruitment. The whole Army's trained strength—
  It being Six o'clock, the motion for the Adjournment of the House lapsed, without Question put.

DELEGATED LEGISLATION
Motion made, and Question put forthwith, pursuant to Standing Order No. 118(6) (Standing Committees on Delegated Legislation),

SOCIAL SECURITY
That the draft Employment Zones (Allocation to Contractors) Pilot Regulations 2004, which were laid before this House on 16th March, be approved.—[Mr. Kemp.]
Question agreed to.

PETITION

  Flooding
  6 pm
  Mr. John Greenway: I wish to seek leave to present a petition on behalf of the residents of Pickering in north Yorkshire. It was organised by the Yorkshire Evening Press and local flood campaigners following the decision by the Yorkshire regional flood defence committee not to pursue a flood defence scheme in Pickering for the present time, which it is felt is likely to mean that no flood defences will be built. The petition states:
  To the House of Commons
  The Petition of the Residents of Pickering, North Yorkshire
  Declares that the town of Pickering experienced severe flooding on no less than three occasions in recent years, in March 1999, October 2000, and August 2002 with a devastating impact on residents, businesses and tourism; that following the October 2000 flood the Department of Environment. Food and Rural Affairs agreed with the Environment Agency and the Yorkshire Regional Flood Defence Committee that a flood alleviation scheme for Pickering should be given priority; notes with concern and disappointment that such a scheme has not been developed and that the priority status of Pickering will expire on 31st March;
  The petitioners therefore request that the House of Commons urges the Secretary of State for the Department of the Environment, Food and Rural Affairs to agree to extend the priority status of a Pickering flood alleviation scheme for a further two years and to request that the Regional Environment Agency for Yorkshire and the Humber and the Yorkshire Flood Defence Committee draw up revised plans for a flood alleviation scheme for Pickering without delay.
  And the petitioners remain.
  To lie upon the Table.

Economic Situation (Strangford)
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Kemp.]
6.2 pm
Mrs. Iris Robinson: I should like first to place on record my utter condemnation of the mindless thugs who were responsible for an arson attack in my constituency, which totally destroyed three businesses and left approximately 30 local people out of work. I am sure that the Minister will share my relief that no one was injured, encourage the shopkeepers to open their businesses again, and appeal to the public to come forward with any information that could assist the police in apprehending those vandals.
I am grateful for having had the opportunity to secure this Adjournment debate. I thank Ministers for their attendance in the Chamber. I want to touch on a number of points that will highlight my concerns for the future economic prospects of my Strangford constituency, although I cannot divorce that from the impact of closures of factories in East Belfast, which abuts my constituency.
During the past five years, the constituency of Strangford has witnessed a colossal downturn in its indigenous manufacturing industries. The peace that was promised over five years ago has not been delivered, while the peace dividend, which was hyped up, has never really materialised. Industries and businesses, which have formed the foundation of the local economy, are now declining and disappearing at an alarming rate. If one takes into consideration the repercussions of the demise of Harland and Wolff and the huge losses from Bombardier-Shorts alone, the number of manufacturing jobs that have been lost to my constituents easily runs into tens of thousands. In the past 18 months, in excess of 5,000 manufacturing jobs have been lost in the Strangford-East Belfast area, while the past 12 months show the figure of 1,500 for Strangford alone.
For ease of reference, I shall break up the constituency into the three council areas that cover Strangford. The Ards borough council district of my constituency has witnessed a constant decline in manufacturing in recent years. The loss of major employers such as the Crepe Weavers and the Lee factory means that the textile presence in the area has almost died out. Last year, Carpets International went to the wall, with the loss of 144 jobs at its Killinchy plant.
Through the fleet at Portavogie, we have witnessed the extreme problems faced by the fishing industry. In the past 10 years, the Northern Ireland fleet has shrunk by 30 per cent.; 84 vessels have been decommissioned since 1994. I am wholly convinced that our continued participation in the common fisheries policy will result in the industry's decline to a point from which it will be unable to recover. Only when the Faroese and Icelandic models are properly investigated and when this country once again commands authority over its national waters can we hope to see the resurgence of the fishing industry. In the meantime, fishermen participating in the voluntary tie-up scheme have failed to receive their compensation, despite being five weeks into this year's cod-recovery programme.

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There are two major plans in the pipeline that will be of huge economic benefit to the Newtownards area. The first is the multi-million pound Castlebawn development, which will bring hundreds of new jobs and much-needed economic investment to the area. In addition, as part of its planning approval, the development will extend the local road network and alleviate the traffic congestion in and around the town. The other major plan, which has not yet been approved, is in connection with the location of a B&Q superstore on the site of the former Scrabo high school. The scheme will bring approximately 250 jobs to the Ards area. The proposal is tied up at the planning stage; last week, along with retail unit officials, I had a meeting with the chief executive of the Department of the Environment planning service to try to resolve a number of outstanding issues. I urge the Minister of the Environment in Northern Ireland to look sympathetically on the application and to take account of the cross-party support that it enjoys, not least because of the 250 jobs that it will create.
One indirect measure that could be taken to assist the local economy is the provision of an adequate roads infrastructure. I thank the Department for Regional Development, under its former Minister, my hon. Friend the Member for Belfast, East (Mr. Robinson), for the completion of phase 2 of the Comber bypass, which has gone some way to easing the traffic burden on the town, which actively dissuaded inward investment. The priority now for Comber is the provision of phase 3 of its bypass. Completion of phase 3 will greatly improve Comber's ability to attract much needed investment to the area.
The latest jobs blow to the dwindling manufacturing base in the Down district council area of Strangford has brought the total number of lay-offs in the area to almost 400 in just five months. International Leathers, based outside Killyleagh, says that job losses are the result of a major slow-down in the worldwide leather market. Since Christmas 2003, the company has laid off 37 workers, and the remaining 20 employees are on short time.
Also in the Down district council area, Saintfield Yarns, with 20 years' experience in textiles, was regarded as a modern, progressive, forward-thinking company in which working conditions were so positive that there was no need for union involvement on the site. The company had been experiencing increasing financial difficulties owing to the rise in energy costs, but it was the failure of the insurance sector to provide adequate cover that sounded the death knell, leading to the firm's closure and the loss of 250 jobs. Other companies in the area, such as Northern Ireland Plastics and McCleery's Yarns have been hard-pressed to remain financially viable and have had to implement severe rationalising programmes within their company structures to remain in business.
The Under-Secretary of State for Northern Ireland, the hon. Member for Dudley, South (Mr. Pearson) will understand my shock and despair when I learned that the Department of the Environment planning service had refused permission for the exciting and imaginative Gocean development in Killyleagh. The developer would inject £35 million of investment into the area, and would ensure the town's economic future well into the 21st century.
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For decades, there has been a slow but constant decline in the manufacturing industries on which local communities depend, and Killyleagh is one such place. Industry prompted settlement in the area, but little has been done to attract new investment. The economic revitalisation of Killyleagh and its hinterland depends on the completion of the Gocean development. Construction jobs on the development would be assured for approximately nine years. The plan outlines a unique mix of social and private housing, as there is an overwhelming demand among local people to remain in Killyleagh. The proposed nursing home would provide about 100 jobs for the town, and the marine, restaurant and chandlery would attract the tourist interest that Killyleagh deserves.
The development has the backing of the overwhelming majority of people in Killyleagh, all political parties and all Members of the Northern Ireland Assembly. It also has my unreserved support as the Member of Parliament representing the constituency. The developer has spent considerable time and effort appealing against the decision to refuse permission, and the Under-Secretary of State for Northern Ireland, the hon. Member for Basildon (Angela Smith), who has ministerial responsibility for the environment, has now—I believe—passed the matter to the Secretary of State for Northern Ireland for a ruling. I appeal to him for a positive response in his deliberations. I cannot overemphasise the importance of the proposal to the future economic and social well-being of the Killyleagh area; it is fair to say that the Government will not invest £35 million over a number of years.
The people of Castlereagh borough have always been intimately connected to the industries of East Belfast. They have suffered equally from the demise of Harland and Wolff, which once employed 30,000 people. More recently, the downturn in fortunes at Bombardier-Shorts has resulted in the loss of thousands of jobs over the past few years. The latest bombshell came only a few weeks ago, when TK-ECC, the constituency's largest private employer, announced that it was closing, with the loss of almost 1,000 jobs in its final year. That has had a truly devastating effect on the wider community. In many cases, more than one member of the same family was employed at TK-ECC, and in one instance five members of a single extended family were affected.
Some TK-ECC employees came from industries that had closed down. Every time a factory closes, opportunities for employment decline, and if action is not taken to address the situation, our local manufacturing industry may simply disappear. To compound the trauma of redundancy, over a few weeks it has come to light that there is a £32 million hole in the TK-ECC pension fund, which only rubs salt into the wounds of a loyal and committed work force.
TK-ECC did not go bankrupt; it was simply axed by its parent company, Takata, which is now offering a paltry £6 million towards the deficit. There are major concerns about the disposal of land then owned by the industrial development board. In 1995, TK-ECC purchased 23 acres adjacent to its factory in Dundonald for £1.5 million on a freehold lease. In February 1996, that land was sold to a Netherlands-based sister company, TREK-VB, for the princely sum of £2.25

1149
million. Investigations by independent sources suggest that, with planning permission, that land is worth about £20 million.
A company has therefore come to Northern Ireland, taken advantage of generous Government grants and been sold 23 acres of Government land on the premise that it was for business development. It has then sold the land for a profit of £750,000 to a company in the same group, which has abandoned its Dundonald work force and is free to sell the land for its own financial gain. It is alleged that Takata will fulfil its pension obligations only if the land is re-zoned and sold for residential development.
So if we retain that precious land for future industrial use, 550 people will be robbed of their full pension entitlements. Alternatively, if it is re-zoned for housing development, the industrial land bank in Dundonald will disappear and there will be no prospect of attracting new industries to the area. That is astounding, and the Department of Enterprise, Trade and Investment must accept full responsibility for selling the land without any conditions or limitations on its future use. The onus is on the DETI to sort out the mess.
There is equal concern about the provision of industrial land throughout my constituency. Although I acknowledge the expansion that is due to take place at the Ballyharry business park in Newtownards, the Strangford constituency, not least in Castlereagh, has little land zoned for industrial use. That must be addressed if we are serious about encouraging inward investment.
Energy costs are another cause of major concern for Northern Ireland industry. A report carried out last year by the CBI confirmed that on average Northern Ireland business is paying 50 per cent. more than its mainland counterparts. For some companies the figure is more than 90 per cent. Reducing electricity prices to industry must be a priority and urgent action must be taken by Government to address the issue. Public service obligation and system security charges must therefore be minimised to ensure that Northern Ireland pays similar unit costs to mainland business. A transparent and pro-competitive restructuring of current long-term contracts must be completed urgently, and be assisted by Government finance to help deliver competitive indigenous generation. A review of how the costs of the Moyle interconnector are recovered must be undertaken to ensure that expenditure remains reasonable.
I challenge the Minister for Enterprise, Trade and Investment to explain why the remit of the integrated development fund has been restricted to West Belfast and Londonderry. To date, the DETI has shown little interest in pursuing any sort of strategic approach to the matter, or in exploring new innovative avenues to address the decline in Strangford. Neither the Minister nor his departmental officials displays any sense of urgency on addressing the decline of our manufacturing industry and the loss of so many thousands of jobs.
If 5,000 jobs had been lost in, say, West Belfast, Strabane or Londonderry, there would be a markedly different response from the DETI. Instead, there seems to be a fundamental unwillingness to develop a strategic approach to the crisis. The Department seems more
1150
concerned with re-routing investment to nationalist areas of the Province, at the continued expense of areas such as Strangford. I wish to make it clear that I have no difficulty with nationalist areas attracting new investment, but I do object to an uneven playing field and the needs of my constituency being ignored continually. One wonders what must happen in the area before the DETI sits up, takes notice and acts to deal with the crisis. The inherent danger associated with the continuing decline of our traditional industries is that we are not only losing jobs but witnessing the removal of opportunities for future employment and skills development and retention.
In conclusion, taking into account the extra financial burdens placed on Northern Ireland's manufacturing industry in comparison with the rest of the UK in areas such as insurance and energy costs, it is crucial that the Government adopt a long-term strategic view on these matters. I therefore take this opportunity to call for the development and implementation of a specialised Department-led initiative to tackle the crisis in the sector. If we fail to take action now, there is a real danger that the areas skills base will decline to the point where the local manufacturing industry could implode.
6.20 pm
The Parliamentary Under-Secretary of State for Northern Ireland (Mr. Ian Pearson): I congratulate the hon. Member for Strangford (Mrs Robinson) on securing this Adjournment debate. At the outset, I join her in condemning the arson attack in her constituency and the killing that took place in Newtownards yesterday.
I am grateful to the hon. Lady for her comments and for raising her concerns about the current economic situation in her constituency, and it is important that I respond to a number of those points. Although I accept that there have been a number of regrettable job losses in her constituency over the past few years—she mentioned some of them—I would not want her or anyone else in Northern Ireland to think for a moment that the Government do not care about them, and I reject entirely her view that the playing field is uneven. Invest Northern Ireland is active in her constituency, and, in the time available, I should like to explain some of the positive things that the Government are doing to help her constituents.
The hon. Lady mentions last month's announcement that TK-ECC is to close its Dundonald operation with the loss of 550 jobs. That is regrettable, and I share the hon. Lady's concerns about the effects on those who are losing their jobs and the impact on their families and the wider community. The difficulties facing the company had been evident for some time, and Invest Northern Ireland had worked closely with management to try to find a way to resolve those issues. However, despite that approach and the hard work done by the local management team and the work force to make TK-ECC more competitive, all those considerable efforts were not enough to prevent the German parent company deciding to close its Dundonald subsidiary and transfer production to Romania.
The Government's priority has been to provide immediate help and support to those being made redundant, and that facility is already providing a

1151
comprehensive range of advice and guidance to all those affected, including information on job vacancies, help in completing job applications and details of social security benefits. Comprehensive as that support structure is, however, it cannot substitute for actual jobs, and I assure the hon. Lady that everything possible is being done to assist TK-ECC's work force to find alternative employment.
The hon. Lady mentioned a number of specific issues, and she will know that a meeting has taken place. Officials in my Department are well aware of the pensions situation, and are in discussions with the trustees and the company, so it would be inappropriate for me to comment further.
On the disposal of the land, the hon. Lady knows that a decision was taken back in 1995 to sell the land. It was Government policy at that time to sell fully developed sites, which—I have checked the records—was done at fair market value. I have various criticisms of the previous Conservative Government, but they cannot be criticised for selling that property on the cheap.
Although that closure announcement and other closure announcements are a major blow, much positive progress has been made in the hon. Lady's constituency in recent years. In February 2004, unemployment in her constituency stood at 2.6 per cent. That is lower than the 3.2 per cent. average for Northern Ireland, and it ranks Strangford as the constituency with the joint-6th lowest claimant count rate out of Northern Ireland's 18 parliamentary constituencies.
Invest Northern Ireland is building on the growth that has taken place in the hon. Lady's constituency. The agency is very active, with around 110 client companies employing more than 5,000 people. Since it was set up in 2002, it has offered more than £3 million of assistance to companies in Strangford, which have brought forward projects with a total investment of more than £12 million. To date, it has assisted around 270 business start-ups in the area—an encouraging indication of the scope for supporting and developing a more entrepreneurial culture.
We have limited time in this debate, and it is not possible to refer to all the successful companies in Strangford, but let me single out one example to help to demonstrate the innovative and entrepreneurial culture that exists in the constituency. That company is Bridgedale Outdoor, which employs around 70 people in Newtownards. Bridgedale's innovative high-added-value technical socks for extreme sports have made the company a leading player in the outdoor clothing sector. Its products are sold across the world through a distribution network taking in more than 44 countries, from Australia to the Americas. The company is an excellent example of how a forward-thinking company can survive and thrive in the challenging textiles and clothing sector. Invest Northern Ireland has helped Bridgedale to become a key player in its field. The support that it offers to many companies in Strangford covers a broad range of measures aimed at helping businesses to increase their capability and to develop their international competitiveness.
Invest Northern Ireland's business improvement team helps companies in Strangford to enhance their competitiveness in the marketplace. The Compete programme provides support for innovative market-led
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products and manufacturing processes. Invest Northern Ireland actively works with councils in the constituency to help to achieve the most appropriate solutions for local needs. Its client companies in Strangford have recorded overall sales of £965 million over the past two years, of which £817 million represents external sales—goods sold outside Northern Ireland—and £512 million represents export goods sold outside the UK.
As a Government, we are directly enabling the provision of land for industrial development. Invest Northern Ireland's main holding is 4.6 acres at Newtownards, and around a further 24 acres are zoned for development at Comber. I assure the hon. Lady that the Government continue to be committed to the continuing economic development of the Strangford constituency, just as we are committed to the economic development and future prosperity of Northern Ireland as a region.
The hon. Lady raised several planning issues and mentioned roads in Comber. The Under-Secretary of State for Northern Ireland, my hon. Friend the Member for Basildon (Angela Smith), will have heard her comments on planning matters, for which she has direct ministerial responsibility.
The hon. Lady mentioned high electricity prices in Northern Ireland. I have been extremely concerned about that issue during my time as a Northern Ireland Minister. Last year, I announced a proposal whereby electricity prices for non-domestic users will fall by 10 per cent. I am optimistic that we will be able to make progress on implementing that proposal. Northern Ireland Electricity recently announced a freeze in non-domestic prices. That is the first instalment of the Government's action.
The hon. Lady mentioned the fishing industry. I am aware of the problems that the industry has faced in Portavogie, Kilkeel and Ardglass in her constituency. Those areas have come under significant pressure, which involves not just the fishing community but the wider community at the southern end of the Ards peninsula. As she will recall, I established a taskforce in January 2003 to address the socio-economic effects of some of the changes taking place in the fishing industry. The hon. Lady mentioned the integrated development fund and she might, perhaps, have forgotten that that fund also applies to the fishing villages taskforce. I have already indicated that money from the fund—up to £5 million—will be made available for a package of measures to support the fishing communities of County Down, including Portavogie.
The hon. Lady also mentioned the proposed tie-up scheme, which I am confident will be launched shortly. Our proposals are with the European Commission, from which we are awaiting final approval. The scheme is designed to provide some compensation to fishermen denied the opportunity to catch cod and other white fish in the Irish sea during the closure period, and it will inject up to £1.5 million into the Northern Ireland fishing industry. I know that several of the hon. Lady's constituents will be among those able to take advantage of the scheme, and we will implement it as quickly as possible once we have approval. That scheme is in addition to the most recent fishing vessels

1153
decommissioning scheme, for which I was able to provide £5 million last year and which has enabled a significant number of fishermen to leave the industry with dignity.
The hon. Lady will also be aware of the Cabinet Office strategy unit report on the fishing industry published today, which I welcome. I want to discuss its findings with the industry, and I need some time to study it, but it is a positive development, which shows the Government's commitment to a sustainable fishing industry for the long term.
1154
The Government are committed to working in close partnership with local councils and other key stakeholders to promote the sustained economic development of the Strangford constituency. I welcome the hon. Lady's close interest in what the Government are doing to support jobs in her constituency, and I want to close by reassuring her that we will continue to work to promote economic prosperity in Strangford and—
The motion having been made after Six o'clock, and the debate having continued for half an hour, MR. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
Adjourned at twenty-eight minutes to Seven o'clock.

Preamble
[MR. FRANK COOK in the Chair]

China
Motion made, and Question proposed, That the sitting be now adjourned.—[Paul Clark.]
2.30 pm
The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Bill Rammell): I am pleased that we are having a debate on the subject of our relations with China in Government time in this Chamber. I understand that this is the first time in two years that we have had such an opportunity. There is a series of reasons for that, and they will become clear during the debate, which is exceedingly timely.
I pay tribute to the all-party China group led by my hon. Friend the Member for Wirral, South (Mr. Chapman), who, I know, will take part in the debate, as will many other members of that group. It does exceedingly good work in building, at the parliamentary level, important links between the United Kingdom and China.
It goes without saying that China is an important world player and a fellow Security Council member. Bluntly, it is a country that we have to engage with. Whether the issue is climate change, economic prosperity and development or world security, if we are not engaging with China, we are seriously missing out. We have important interests to pursue, including promoting regional security, helping China to reform its economy and reduce poverty and fulfilling our obligations to the people of Hong Kong.
I am pleased to be able to say that the state of our relationship is good. Reflecting China's increasing economic weight and political influence, we are working to step up that engagement across the board. Building a strategic relationship with China is, I believe, key to our international interests. That is reflected in the four main themes of our Whitehall China strategy, which was agreed by Ministers and endorsed by the Prime Minister in June 2002. They are: first, encouraging greater Chinese engagement in international issues; secondly, supporting greater Chinese integration into the world economy—something that is both inevitable and important; thirdly, pushing forward the process of political and economic reform in China; and fourthly, promoting Britain as a partner for China.
This is a good opportunity to reflect on what has changed in China since we last had an opportunity to debate the subject. The new leadership that has been established there, led by President Hu Jintao, who visited the UK before his election, has made it clear that it will continue the policy priorities of economic growth, internal stability and steady opening up to the world. All of those are positive trends and developments.
We have seen the success of that, particularly with the Chinese Government's reaction to the severe acute respiratory syndrome crisis. After initial hesitancy, the
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Chinese Government rose to the challenge and co-operated with the World Health Organisation. I know that a number of Members agree with that view. Senior officials were sacked for non-co-operation and for covering up cases. The lessons that the Chinese learned during the SARS crisis have been put to good use during the more recent avian flu epidemic. China undoubtedly now has a more open approach to informing the public of public health crises and the measures that are being taken to address them. That is a particularly positive development.
The extent to which a one-party state can meet and embrace the challenges of a free-market economy is a recurring question that I have discussed with a number of Members in the Chamber, and with that in mind I followed the debate at China's recent National People's Congress with great interest. Three of the 13 changes to the constitution strike me as particularly significant. Those are, first, the enhanced recognition of the important role of the private sector, secondly, the strengthening and protection of private property rights and, thirdly—significantly—the amendment to safeguard and respect human rights. We will want to reflect on those changes during the debate.
To me, those seem to be positive examples of the effects of rapid and sustained economic change on both the state and the individual in China. Continuing development will undoubtedly raise many issues for China's leadership, with far-reaching implications for Chinese society and knock-on effects throughout the world. As one of China's friends, we will be looking with interest at whether China is able to manage its economic development evenly across the board. It is worth noting that one of the strong policy directions of the new leadership has been its determination to consider the consequences of economic development and, particularly, the way that an urban-rural split and an east-west split can be dealt with at the macro-economic policy level.
China is playing an increasingly active role in international affairs. Like us, it plays a leading role in the UN Security Council as one of the permanent five and it supports the international war against terrorism.
Mr. Michael Trend: The Minister is going to detail the four priorities that he identified earlier. In the last five minutes, he mentioned human rights briefly, but can he tell me whether the Foreign Office thinks that human rights should be one of the priorities. If it does not think that they are sufficiently important, why not?
Mr. Rammell: Human rights are an important element of our relationship and I will comment in detail on our view of human rights in China.
China is a key player on the international stage. In particular, the decision that it took at the Madrid conference to pledge $24.2 million bilateral aid for Iraq was an exceedingly positive step. In addition, the way in which China has taken the initiative in setting up and promoting the six-party talks about handling the difficult challenge of North Korea's nuclear ambitions, which in many senses may be seen as a new trend and development in the way in which China engages in international affairs, has been extremely positive.
Mr. David Drew: I am pleased to hear my hon. Friend mention North Korea. I accept that China has played an interesting role in trying to change the North Korean regime. At the same time, to link to the previous intervention on human rights, we measure not only what the Chinese say but what they do. It would help if they did not send back North Korean émigrés who have sought refuge in China because of the persecution in North Korea. Will my hon. Friend say what the Government are doing to take that up with the Chinese Government?
Mr. Rammell: There is a significant concern about the human rights situation in North Korea. As I am the Foreign Office Minister responsible for the human rights portfolio, some of the most appalling allegations about human rights come across my desk on a daily basis, and those in the recent BBC documentary on human rights in North Korea were among those that have shocked me the most in the 16 months that I have been a Foreign Office Minister dealing with that brief. There are, therefore, concerns about genuine refugees fleeing North Korea in fear of their lives. We have engaged with the Chinese Government. Indeed, I did so earlier this week, urging them to consider carefully the refugee claims coming from citizens crossing the North Korean border and, particularly, to involve the UN High Commissioner for Refugees in assessing those claims. We have made that case and we will continue to do so.
Relations with China are also developing at the level of the European Union, and in September 2003, both the European Union and China produced policy papers on strategies to enhance that relationship.
Mr. John Wilkinson: What will the attitude of the European Union be to a resolution proposed by the United States of America on human rights in Tibet at the Office of the UN High Commissioner for Human Rights? Many people are concerned that the EU has appeared to be at least ambivalent, if not disinterested, in human rights in Tibet.
Mr. Rammell: I shall comment later in greater detail about specific aspects of human rights policy, particularly, our stance on resolutions that are likely to be forthcoming from the UN High Commissioner for Human Rights. I assure the hon. Gentleman that if I do not specifically address his question at that stage, I will do so in the summing up.
As I am dealing with relations between the European Union and China, it is pertinent to take the opportunity to mention briefly the EU embargo on arms sales to China. The European Council agreed on 12 December to review the policy on the embargo, and the General Affairs and External Relations Council decided in January to remit the issue to a working group for detailed examination. Once that has happened, the matter will revert to the Council.
The subject is complex and needs careful consideration. We support the review and have encouraged our EU partners to conduct it rigorously and to take full account of the impact of lifting the embargo. We are still considering our position within that context, but I assure hon. Members that lifting the
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embargo would not remove our ability to control arms sales to China. Since the embargo was established, our own arms export criteria and code of conduct, and the EU code of conduct interpreted by the UK through the consolidated criteria, have been incorporated. Come what may, they will remain in place as a significant means of controlling exports to China.
I come now to the bilateral relationship, which has been stepped up vigorously in both directions by senior visits from many Ministers. Nine members of the present British Cabinet have visited China in the past year, and the Prime Minister visited last summer. We look forward to a visit by Premier Wen Jiabao later this year. There is a two-way exchange of ideas, discussion and information.
As an indication of the importance that the Prime Minister attaches to our links with China, after his visit last summer he charged the Deputy Prime Minister with leading a group to discuss with the Chinese authorities how to promote our relationship with China in new and dynamic ways. In preparation for the next meeting with the Chinese at prime ministerial level later this year, the task force is drawing up a list of innovative proposals for deepening the relationship. Initially, the task force is focusing on trade and investment, science and technology, education and the environment. It is an exceedingly important process.
We also have a significant trade relationship with China. UK trade with China has doubled in the past five years, growing faster than that of any of our G8 competitors. That shows that at government and business levels we are focusing on the opportunities that are available. The process is two-way, as approximately 150 companies from mainland China invest in the UK. China's accession to the World Trade Organisation in December 2001 has accelerated the opening up of its economy and improved the competitiveness of its industry. China is a priority market for UK Trade and Investment, and the UK is now the fourth largest EU exporter to China, behind only Germany, Italy and France. We want to build on that strong position. Many British companies are playing an active role in Beijing and in the development of China more generally.
It is worth commenting on the perceptions of the relationship between the two countries, particularly the perceptions that Chinese people have of this country. A recent Gallup poll highlighted the outdated perceptions of Britain among young educated Chinese people. We were concerned about those perceptions and rightly responded by mounting a major campaign to correct them and to project the UK as a partner of choice for China. As a result, the successful Think UK campaign took place throughout China from October 2002 through much of 2003 to promote the real face of Britain today. Its aim was to reach a young educated audience through the mass media and show them the creative and innovative sides of Britain and how they are relevant to China's aspirations and development needs. There has been enormous interest in the campaign, and on my visits I have been able to see some of the good initiatives that have resulted from it.
We also have significant relations with China through education. China is one of seven target countries identified in the Prime Minister's initiative to attract international students to this country. There has been a welcome and significant increase in the number of

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Chinese students studying in universities in the United Kingdom—currently about 35,000. It is a significant trend and development in virtually every university in the country.
Any debate about China would not be complete without reference to Hong Kong. It has a dynamic and positive part to play in our relationship with China. It is an integral part of the Pearl River Delta region, which is the fastest growing region of the fastest growing economy in the world. Many British companies continue to enter the Chinese market through Hong Kong. We should, and do, help them as much as we can with that process.
As we look forward politically and economically, we should not and we do not forget our responsibilities towards Hong Kong, emanating from the 1984 Sino-British joint declaration on Hong Kong. Given the importance of that, the Foreign Secretary reports to Parliament twice a year on the situation in Hong Kong. We are pleased that the handover went smoothly—to be blunt, better than many people had expected. It was a good example of Sino-British co-operation.
Some seven years on, our reports continue to assess that "one country, two systems" is generally working well in practice. We welcome the fact that the Chinese Government and the Hong Kong Special Administrative Regional Government have shown a commitment to making a success of "one country, two systems". The rule of law, an independent judiciary, a meritocratic civil service, respect for human rights and fundamental freedoms and the free flow of people and information are all rightly still intact.
It is worth noting that on a few occasions we have had particular concerns about certain developments in Hong Kong that might impact upon the workings of the joint declaration. On such occasions we have raised those concerns with the Special Administrative Regional Government or Beijing, as appropriate.
If necessary, we make those concerns public, and that is right. For example, as the Minister responsible I made five public statements during 2002–03 about the national security legislation that was mandated by article 23 of the Basic Law. I remember discussing that in the Foreign Affairs Committee with some of the Members present in the Chamber, because we shared the concerns of many in Hong Kong that the proposed legislation might undermine the rights and freedoms of the people of Hong Kong and lessen its autonomy from mainland China, as was properly provided for under the joint declaration and the Basic Law. We were very pleased that the Special Administrative Regional Government decided last year to withdraw the draft legislation and to consult the people of Hong Kong further. That has been welcomed within Hong Kong generally.
When examining Hong Kong, the current big political question is over constitutional reform. The Basic Law, Hong Kong's mini-constitution, to which we were not party, lays down the ultimate aims of selection of a Chief Executive and election of all members of the Legislative Council by universal suffrage. However, decisions must be made about the pace at which that happens. Inevitably, there are differences of opinion about it in Hong Kong, and recent press commentary has noted that. We are following the debate closely, and our views on the subject are clear and well known.
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We hope that there will be early progress towards the Basic Law's ultimate aim of the selection of a Chief Executive and all members of the Legislative Council by universal suffrage at a pace in line with the wishes of the people of Hong Kong. As the Prime Minister made clear when he visited there last July, it is vital that Hong Kong continues its advance towards universal suffrage but maintains the stability that is the bedrock of its success. Given our historical responsibilities, we will continue to follow events closely.
Several Members have raised the subject of human rights in China. Although bilateral relations are good and we are looking to develop them, we have areas of disagreement with China. It is a sign of a healthy and developing relationship that we can engage in a critical dialogue with China on such issues. Human rights and individual freedoms, particularly on the economic and social side, have undoubtedly increased greatly in the past 10 years, but we are still concerned about the human rights situation.
In 1997, we decided that a policy of critical engagement was the best way to help China to improve its human rights. Our main tool in that engagement has been the bi-annual UK-China human rights dialogue, at which we raise hosts of issues, including individual cases of concern. The fundamental aim of that process is both important and worthwhile: to bring about sustained and long-term improvements in Chinese human rights by engaging the Chinese authorities in direct discussions on issues of concern. Nevertheless, it is not always understood that that dialogue does not stop us from speaking out about abuses in China, or from pressing for improvements, which we do both publicly and privately.
We acknowledge China's progress in improving the economic lot of its people, and it would be churlish not to acknowledge the encouraging progress in areas such as legal reform, but there is no doubt that much more is needed. We want to see progress in the treatment of religious activists, Falun Gong adherents and political dissidents, and regarding the death penalty and North Korean border-crossers. We remain particularly concerned about Xinjiang and Tibet.
There have been calls for the UK to support a resolution on China at the Office of the United Nations High Commissioner for Human Rights in Geneva this year. We are likely to vote in favour of such a resolution, and will certainly vote against a no-action motion. When I spoke at the commission, last week, I clarified our position on the human rights situation in China.
One of the most encouraging developments since we began our human rights dialogue is the increased willingness of the Chinese to engage with international mechanisms, which will ultimately lead to sustained improvements in human rights. That brings to a head the debate about standing on the sidelines and criticising rather than engaging with a country. Examples of progress in China include the ratification of the international covenant on economic, social and cultural rights, and the submission of the first report in May 2003; serious consultations with us and the EU about ratifying the international covenant on civil and political rights; and the creation of a Chinese working group to study ratification. We will certainly help in whatever way we can. Progress is also demonstrated by the good levels of co-operation between China and the

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Office of the UN High Commissioner for Human Rights. They are all positive developments, which at least demonstrate an increased willingness on the part of the Chinese to engage with those issues.
Some people claim that we have allowed trade considerations to subvert our human rights concerns, but I, as a Minister at the centre of this issue, do not agree. Of course, it is important that we pursue trade links with China, but that does not, should not and will not stop us from speaking out on human rights concerns.
Mr. Drew: The Minister has not mentioned the policy of coercive population control and the fact that China continues to have a one-child policy, which involves forced abortion and sterilisation. Whatever one's view on the size of China's population, one cannot say that that is the behaviour of a developed country. What engagement do the British Government have on that most basic of human rights? Do they involve themselves with the way in which population is controlled?
Mr. Rammell: Any policy of forced abortion is wrong. We have discussed that subject, and I hope to comment further on that issue when I sum up.
I come now to illegal immigration, a subject that is of keen interest to both our countries. There is undoubtedly a growing Chinese community in the United Kingdom. It plays an increasing and welcome part in the life of this country, but we cannot, and should not, shut our eyes to the problem of illegal immigration. Illegal immigration and the associated trafficking are a problem for the UK and China. If anyone needed convincing of that, last month's events at Morecambe bay underlined the importance of ongoing co-operation between our two countries on illegal immigration.
We note with regret that China is a major source of illegal immigration into the UK and is one of the top five countries that produce asylum seekers. We are working with the Chinese Ministry of Public Security to stop would-be over-stayers and asylum seekers travelling to the UK, and to return to China those who succeed in reaching the UK. Our key objective in dealing with unjustified asylum claims is to increase the number of asylum seekers returned to China. We have asked China to post a permanent official to its embassy in London to assist in identifying failed Chinese asylum seekers, and we want to continue to work and co-operate with the Chinese authorities in this regard.
I shall comment briefly on the situation in Taiwan. The UK's position on Taiwan's status has not changed. We have no diplomatic ties with Taiwan, but we enjoy good bilateral relations in several areas such as trade, culture and education. Approximately 13,000 Taiwanese students are enrolled on courses of various lengths in the UK— an increase from only 300 about 10 years ago. Taiwanese investment in the UK has slowed from its peak in the late 1990s, but the UK is still the leading location for Taiwanese investment in Europe, which we welcome. That is significant.
We have also welcomed the continued development of democracy in Taiwan. In March 2000, we witnessed the first democratic transfer of political power in
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Taiwan. The fact that that transfer was smooth and peaceful shows once again Taiwan's impressive achievements in establishing a fully functioning democracy in recent years. I am sure that all Members will join me in applauding and welcoming that.
It was also good to see that more than 80 per cent. of the electorate voted in last Saturday's elections in Taiwan. Perhaps we could aspire to that in this country if we all got our act together. On Saturday, the central election commission announced provisionally that Chen Shui-bian had won. I understand that it will make a formal announcement tomorrow. I also understand that Opposition candidates have asked for a recount and a judicial review. Whatever happens, I hope that all parties will urge calm, and that the issue can be dealt with through the appropriate legal mechanisms.
I want to make it clear that we believe that Taiwan's future is a matter for people on both sides of the Taiwan straits to settle peacefully among themselves. We would he extremely concerned by any recourse to military action, and we take every suitable opportunity to convey to the Chinese Government and through informal channels to the Taiwanese that we strongly oppose the use of force.
Mr. Trend: I have a factual question for the Minister. Has a date been set for the visit of the Chinese Premier to London? I do not know if he has already mentioned that, as I was dozing.
Mr. Rammell: Plans are under way. I will check whether that visit has been publicly confirmed. If it has, I will let the hon. Gentleman know when I sum up.
In conclusion, this is an important opportunity to discuss our relations with one of the most significant countries in the world. I hope that as many Members as possible can contribute to the debate, and that we can have a really good discussion.
2.59 pm
Mr. Richard Spring(Con): I thank the Minister for securing the debate and for giving us such a comprehensive overview of our relationship with China. I also pay tribute to the hon. Member for Wirral, South (Mr. Chapman), who brings to the House a unique understanding of China. He has succeeded in building very strong links between parliamentarians in the United Kingdom and in China. I salute his efforts and all those who are associated with him.

I should like to apologise to the Minister, to you, Mr. Deputy Speaker, and to other hon. Members for the fact that I may have to leave a little early for an unavoidable appointment outside the House, away from London.
It is good to speak on a subject that is highly important, about a country that assumes ever greater economic and geopolitical importance. This debate is also topical, given the recent Taiwanese elections and the apparent breakdown in the talks with North Korea, in which China has played such a constructive role. China enjoys a good relationship with the United Kingdom and that is to be welcomed. Indeed, the Conservative party, perhaps to the surprise of some, enjoys an enduringly strong relationship with China, which dates back to the premiership of Sir Edward Heath.

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With its economic and political clout, China has the opportunity to become a major global force, a power that we would ignore at our peril and with which we must remain constructively engaged. Chinese civilisation and culture have of course contributed immeasurably to the world, just as the enterprise, value and work ethic of Chinese communities have enriched national life in the United Kingdom and in other countries throughout the world, with remarkable success. China is enjoying exceptionally high levels of economic growth and is still only beginning to realise its vast economic potential—a potential that is increasingly felt in the global economy. Although China took steps yesterday to cool the pace of loan growth and tighten monetary policy by announcing a series of interest and bank rate reforms, the boom continues.
China's foreign and domestic policies revolve round the key objective of economic growth, focusing on market liberalisation, privatisation and globalisation. China's recent economic growth has been impressive and consistent. She has a huge and growing appetite for raw materials to fuel that economic growth. Coupled with a harnessing of her vast supplies of human resources, the utilisation of communications advances and the undoubted political will to make things work, that should lead to continued advances and growth. Along with the US economy, her economic success has been a driving force for world economic growth.
In 2003, Chinese real GDP growth was estimated at 9.1 per cent. Production levels are rising year on year; for example, car production alone rose by 32.7 per cent. That is only one example, but it is symbolic of a pattern repeated across the Chinese economy. In 2002, China accounted for 4 per cent. of global GDP. She is currently the sixth largest economy in the world and is projected to be fourth largest by 2010. All that presents an impressive picture, which is complemented by China's participation in international trade. China's accession to the World Trade Organisation was welcome. Her membership will open up important new markets and act as an important encouragement to economic liberalisation. China had exports totalling a huge $438 billion in 2003 and imports of a similar range and quantity. China is a huge market, with tremendous potential for British, American and other firms. China's increased participation in the global trading system is to be welcomed, not feared.
Trade and economics are but one facet of China's complex and multifaceted geostrategic position, but they also have a direct impact upon China's domestic political development. One consequence of China's impressive economic growth, which I have seen for myself on a number of occasions, is a widening gap between rich and poor, between urban and rural communities, among regions and between the so-called elite and the mass of the population. Such differences as arise during a period of economic transition are perhaps inevitable, but they give rise to tensions and pressures in society for parallel political reform and social reform. Such pressures are evident in China. The challenge facing China's rulers is how best to address them and to ensure that all Chinese share in and benefit from economic success.
Under the leadership of Hu Jintao, small steps have been made towards greater participation in government at the village council level. It is progress, and is thus to be welcomed, but it is only a small step.
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I believe that there can be no doubt that the Chinese Communist party remains determined to preserve its hold on power. Economic growth must be sustained, runs the strategic equation in China, so that continued improvements in living standards can be delivered, thereby reducing social inequality and possible discontent and preserving at the least an acceptance of the continual rule of the Communist party and the current system. Whether such a calculation will be capable of satisfying aspirations for greater participation and empowerment for any length of time remains doubtful. However, it is to be hoped that China will look towards more long-term reforms designed to increase democratic participation and diversity.
We can rightly be proud of our relationship with China, but it is also right that we are honest with our friends. As China's influence and participation in international affairs grows, we would encourage her Government to take seriously the many documented human rights concerns of which she is accused. The latest Foreign and Commonwealth Office human rights report makes our concerns in that respect clear, and the US has spoken out particularly forcefully against China's human rights record, leading China to bring talks with the US on the subject to an end. To simply lecture and hector would serve little purpose, but I hope that the Government will reaffirm their commitment to remain actively engaged with the Chinese Government on the issue and will make clear the tremendous advantages to China, and to their international image and reputation, of taking an increasingly open and transparent approach. I hope that under the outward-looking leadership of Hu Jintao such considerations will increasingly feature in official thought.
A similar approach applies to Tibet. It would be wrong for me to seek to over-simplify that complex issue. However, in essence, China should seek to respect Tibetan culture fully, and I hope that the Chinese leadership will seek to build a successful direct dialogue with the Dalai Lama, given his standing in the world at large.
Hong Kong has also been a cause of some tension of late, with calls for increased democracy for the Special Administrative Region. The handover of Hong Kong in 1997 and the "one country, two systems" compromise that was reached was rightly regarded as a success, preserving much that was economically and politically successful about Hong Kong in the past. The expiry of Chief Executive Tung Chee-hwa's term of office in 2007 has led to calls from men such as Martin Lee for fuller democracy by that time and for the right directly to elect their next leader. However, Beijing appears unwilling to countenance that, although talks have been under way between Hong Kong's Chief Secretary and the Chinese Government in Beijing about the matter.
It is important—the Minister has alluded to this—for China to think seriously about the democratic aspiration that has been constitutionally incorporated in Hong Kong, and to continue the special status and feel of Hong Kong. It is a great tribute to the flexibility of the Chinese system that the handover has happened so successfully. China can be complimented on the way in which it has handled Hong Kong since the handover from the United Kingdom.

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The vexed question of Taiwan remains—one of the longest lasting and seemingly intractable disputes in the world. It is regrettable that the recent election results appear to be somewhat inconclusive and that Taiwan's voters appear split on the question of rapprochement with Beijing. We believe that a process of reconciliation can be carried out at all levels, even the most basic. Further useful and important steps could include the establishment of direct flights between Taipei and mainland China, for example, and improving communication and economic links in general. However, while encouraging such steps, it is right that we always bear in mind that Taiwan is now a functioning democracy. Its leaders must, in their own interest, approach relations with China in a way that minimises friction and maximises the potential for dialogue.
Of late, China has adopted a far more outward-looking approach internationally. She was a strong supporter of the fight against terrorism after 9/11 and has become increasingly engaged internationally through organisations such as the UN Security Council, the WTO and the Association of South East Asian Nations. Her increased participation in international multilateral diplomacy is encouraging.
I do not share the fear expressed by some that China's participation in international affairs is in some way threatening. Terrorism has proved a point of common concern between east and west, and China's overriding priority of economic growth means that she sees a stable international scene as important. China has no interest in raising the international temperature while economic growth remains its top priority. That is not to say that her self-image can be discounted, and she will doubtless react when she feels threatened or affronted. However, much of her current activity revolves round lowering the temperature in some parts of the world, including her relationships on the Indian subcontinent. More importantly, she is attempting to use her regional and global influence to address the threat posed by North Korea's nuclear activities, and Chinese diplomacy has been pivotal in getting talks under way. I look forward to a 21st century marked by increased co-operation and closer friendship with China and by the extension of current economic and political reforms. There can be no doubt that China will be a major global power in the 21st century.
A modern, well educated younger generation, many thousands of whose members are being educated in this country's universities, will undoubtedly want greater political plurality. China continues to debate reform and how to adapt to the changes wrought by economic liberalisation. That is no easy task, but the fact is that political liberalisation must go hand in hand with economic liberalisation. We can be confident that the reform process will grow and will, in time, deliver an increasingly successful, prosperous and internationally engaged China. That prospect is very much to be welcomed.
Mr. Deputy Speaker (Mr. Frank Cook): As hon. Members will know, this is a three-hour debate, but it might be helpful if I point out that we have already exhausted 42 minutes. If I choose to set aside 10 minutes
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for the winding-up speeches, we will be left with about 125 minutes. I hope that right hon. and hon. Members will take account of that when making their contributions and accepting or making interventions.
3.13 pm
Mr. Ben Chapman: I shall try to be as brief as I can. However, it would be remiss of me not to thank the hon. Member for West Suffolk (Mr. Spring) and the Minister for their kind remarks about the all-party group on China; I am delighted to see so many of its members and officers here today. It would also be remiss of me not to say how much I appreciate the fact that the Foreign Office has set aside time to debate this important issue. Members of the all-party group also appreciate the way in which the Minister has kept us, and parliamentarians generally, informed of Chinese matters.
There is always a juncture at which it is appropriate to debate China; indeed, such an occasion seems to recur regularly. This time, we are celebrating 50 years of our trading relationship with the People's Republic. As the Minister said, we also welcome the visit by the Chinese Premier.
Like the Minister, I wholeheartedly welcome the creation of the China taskforce chaired by the Deputy Prime Minister. That was important in itself, but the decision by the Chinese to reciprocate greatly enhances the initiative's potential as a tool for expanding existing spheres of co-operation. Like other members of the all-party group, I await with considerable interest the outcome of deliberations by both taskforces in the coming weeks.
I want to say a few words about the development of the group. It is a large group—one of the largest, I think, in the Palace of Westminster—and our membership has increased by 35 in the past two months alone. The main group now has 155 members, and its Hong Kong committee has, without duplication. 101 members, so we total 256. That makes us a significant group.
We recently receivdd a delegation from our counterpart organisation in China to discuss ways in which we could deepen and strengthen our relationship with the UK-China friendship group in the Chinese Parliament. We have many things in mind. We want to make more regular visits, not necessarily in formal delegations, but as individuals or in small, specialist groups interested in science, technology and other areas. We want to exchange information on a regular basis, to engage in discussions and to make it possible for our members to take lessons in Mandarin.
We want to invite officials from the National People's Congress to London for training and experience, as we did on a former occasion. We may even want to invite members of the Congress individually for such training and experience. In any event, we need to deepen and widen the relationship between us as parliamentary bodies.
We need to visit China regularly because change is a constant there, and we need to keep up to date—and just to touch on a domestic matter, we need money for the purpose. I greatly appreciate the efforts that went into raising the money that comes to us through the Inter-Parliamentary Union, and I know that the Minister was

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instrumental in securing that, but it is important that we examine the funding of such bodies if they are to contribute positively to our bilateral relationship.
The all-party group's role is important. China's long-term aim is to move towards democratisation, and our role in that process and the development of parliamentary processes with the Chinese is surely valuable. Although we, as the mother of Parliaments, may have something to teach China, let us take account of the fact that it will have something to teach us. It is for that purpose that frank, frequent and robust dialogue at parliamentary level must continue and develop.
Times are changing, and the times when countries could maintain a state of isolation are long gone. Politically, China has more than come in from the cold. It has become a positive force in the international community, seized of the necessity of exploring the problems that unite us, rather than dwelling on those that divide. The new leadership has heralded what I hope will be a period of openness, as the Minister commented. The experience of SARS has brought about change.
We have differences on human rights. That is the issue that attracts most attention from members of the parliamentary group and their constituents. We frequently press our case to the Chinese parliamentary delegations and others, in a forceful manner. It is not a softball game. Human rights are a serious and pressing problem. However, we must be careful to acknowledge the staggering social, political and economic change that China has undergone in the past 30 years, and its overwhelming imperative of stability.
China is on a continuum that will, I believe, take it from economic reform through political reform to social and civil reform. Although that progress is not a straight line, it is our job to assist China, in however modest a way, along it. I share the Minister's enthusiasm for the decision of the National People's Congress to amend the constitution to broadcast the state's respect for and guarantee of human rights. What that will mean in practice remains to be seen.
The current state of social and political rights in China still leaves something to be desired. There is real progress to be made on the ground. Much has been said, and I shall not repeat it here, about the detention of democratic activists, the death penalty, Tibet and Xingjiang, and on the ineffectiveness of megaphone diplomacy.
China is an economic leader in its region not only because it is a massive economy with a massive internal market, but also because of its policies and its new internationalism. It was a bedrock during the last Asian financial crisis. It is now the driver of the regional and wider economy. Products from Japan and its neighbours have triggered growth in other areas of the world.
I was talking last night to a Brazilian diplomat who told me that the Brazilian economy had been sustained in recent times by the export of commodities to China. China is now one of the biggest consumers in the world of copper, tin and zinc; it is a big consumer of coal and rubber; and it is the world's largest consumer of cement. It is the world's second largest importer of oil—a growth in demand that has been instrumental in keeping up the price of oil. It is the factory of the world, accounting for
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half the world's cameras and photocopiers, a third of the world's air conditioners and a quarter of the world's refrigerators.
The Prime Minister spoke earlier of the Chinese speaking economic language with a fluency and comfort equal to that of any first-world nation. I agree with the Prime Minister and with the Chinese ambassador, Zha Peixin, who last week spoke of his expectation that Chinese and English would be the major languages of business in the years to come. Last year the economy grew by 8.5 per cent. in China, despite the SARS outbreak, and it attracted more direct foreign investment than the United States. It has developed a new, young, middle class, and in 2006 China will be obliged by the WTO to open its financial sector to foreign competition, with all the free, rapid contact with the world that that requires.
It has been said that China represents an economic bubble. The Minister said something about that, as did the hon. Member for West Suffolk, and I think others will too, so I will not. The consensus view seems to be that although reform will be increasingly difficult, growth rates above the mid-point will continue for some years to come.
We are, as the Minister said, facing a big trade deficit with China. I learned long ago, when I was involved in trade diplomacy, to argue the benefits of free trade when the trade balance was in our favour, and the benefits of reciprocity when it was in others. I am arguing for reciprocity in this case because we have a lot of expertise, services and goods that match Chinese needs. I compliment the work of the China-Britain Business Council. which has been the principal vehicle in the UK for the development of business in China; its work is to be encouraged, as is the networking and standing of the 48 Group club, which also plays a major part.
I should also mention the Great Britain-China Centre, which has unparalleled expertise in running exchange projects with Chinese partners working with many different UK organisations. It was chosen by the UN High Commissioner for Human Rights to be an implementing partner in human rights training for the Chinese police. The work of the Department for International Development is no less important, but the hon. Member for Banbury (Tony Baldry) may say something about that so I shall leave it to one side. The British Council, as the Minister has said, is to be congratulated, not least in the context of Think UK. The council is instrumental in shaping the image of the UK abroad, and one look at the number of Chinese wishing to study here and experience British culture is testament to the remarkable job that it does in bringing perceptions of the UK up to date.
As China increasingly opens up to the global community, the links and understandings fostered at an early age among students through shared culture and experience can only contribute to a harmonious and empathetic future relationship. A truly successful relationship works both ways, of course, and although it is imperative that we do our utmost to encourage those in China to experience the finest that our education system has to offer, it is important that British students take advantage of the opportunities for study that exist in China. Astronomers at Liverpool John Moores university recently completed the manufacture

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of the world's largest robotic telescope, ordered by the Chinese Government to develop modern astronomical facilities in China. Nottingham university is to open a campus in Ningbo in partnership with the Chinese education authorities. That will be an exchange of research and expertise between academics and students in China and the UK. Liverpool's universities, which are close to my constituency, are closely engaged with these developments, as are universities across the UK.
I know that you wanted me to be brief, Mr. Deputy Speaker, but I would like to say a bit about Hong Kong. A major aspect of our bilateral relationship is quite properly apportioned to Hong Kong. Economically, the last couple of years have been stormy to say the least. The SARS virus impacted relatively severely and suddenly. However, growth has resumed and property prices have started to rise again.
I want to concentrate on democratisation. It may be thought that that is a matter for China, and not one on which external views should be expressed. However, Britain has a continuing interest in developments in Hong Kong and in the implementation of the joint declaration, so we have an interest in democratisation too.
Colleagues will be aware that the Special Administrative Region of Hong Kong is administered by a Chief Executive with the help of a Legislative Council and an Executive Council: LegCo and ExCo. The members of LegCo are elected on varying bases and by various constituencies. Under the Basic Law that has applied since 1997, provision is made for the gradual and orderly progress towards direct election, by universal suffrage, of the Chief Executive from 2007 and the LegCo members from 2008. Although the Chinese leadership is rightly concerned with protecting the stability of the giant nation with its varied, disparate and semi-autonomous regions, areas and provinces, it is also right that obligations vis-à-vis popular sovereignty in Hong Kong be honoured. That is not just a moral duty; it is a point of political and economic necessity.
To me, "legislative council" and "executive council" are terms that British administrators have traditionally used to describe legislatures in colonial territories. It may be just nomenclature, but to me a legislative council always seems to reflect a colonial concept. In any event, it is surely a form of government that is fundamentally transitory and has built-in obsolescence. It comes with and immediately after the plumed hats regime. Taken as a generic term, legislative councils have a tendency to be conservative bodies, for holding back rather than moving forward.
In Hong Kong, the concept of political appointees as so-called Ministers—the accountability system—seems to me equally transitory. The system seems to be wrongly described and is ultimately doomed to disappear if it has no Government party supporting it. A Government without a Government party lack credibility and strength. An Opposition without a Government party lack focus and cohesion. We need to move on to that sort of concept in Hong Kong.
If the "one nation, two systems" concept for Hong Kong is said to have been based on a template originally produced for Taiwan, how are the Taiwanese to view the
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matter if there is no progress towards normally understood forms of democratisation in Hong Kong? What the Basic Law does and does not allow may be a matter of debate, but the fact that more than 500,000 people marched in support of a democratic expression of views in Hong Kong suggests that progress on that has something of the imperative about it.
If the Hong Kong economy has improved, I would venture to suggest that that improvement lies in external factors, such as the strength of the Chinese economy and the number of tourists from the mainland coming to Hong Kong. It is not because of the strength of the Government. If, as I believe, Hong Kong will have to plan its strategy as it has not done before, it will require the strength of a Government backed by a Government party. The Chief Executive has announced a review and consultation, and I hope that that, and the work of nongovernmental organisations such as the Civic Exchange, will lead to the earliest possible election by universal suffrage of the Chief Executive and the LegCo.
Finally, I want to say a few words about the Chinese community. The hon. Member for West Suffolk beat me to the draw, but it is worth saying that although in this country Chinese has been virtually synonymous with Cantonese, that is changing. What were known as Chinese restaurants in this country were Cantonese restaurants. However, the people who represent the Chinese community are now from all parts of China, as are the restaurants. The 2001 census enumerated 247,000 people of Chinese ethnic origin in the UK.
Large-scale migration of the Chinese to Britain is fairly recent. At the end of the second world war there were a few thousand Chinese in Britain. The majority of today's Chinese came in the 1950s and '60s largely from Hong Kong, attracted by opportunities in the catering industry in the UK. Although that is the general picture, it is not true in Liverpool. which is close to my constituency and has a community going back many years coming substantially from Shanghai. Later waves include Vietnamese and Chinese coming in the '70s and students from mainland China who have remained in Britain after finishing their courses.
The profile of the Chinese in Britain is one of a successful ethnic minority: small in size, young in age and balanced in gender, and its arrival is one of the most recent on the British scene. The Chinese are well educated: the proportion of those educated to college level and above surpasses that of the white population. They have a low unemployment rate and they are disproportionately represented in professional and skilled occupations. In education and occupation they have outperformed the rest of the populace and present a socio-economic profile reminiscent of the Chinese in the United States. In short, historically, they are an integrated and hard-working community.
Yet in 2001 the tabloid media made the Chinese scapegoats for the foot and mouth epidemic. Restaurants suffered a 40 per cent. drop in takings and racial attacks took place on Chinese in rural areas. In Northern Ireland it is estimated that as many as two out of three members of the Chinese community have been subject to racial abuse. That industrious and otherwise unobtrusive group has been the subject of distorted tabloid media presentation, painted sometimes as illegal immigrants, asylum seekers, long-term stayers,

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snakeheads, triads and God knows what else. The fact is that they are a highly contributory and a greatly respected part of the community. My friends from the community are currently in the House of Lords, President of the Manchester chamber of commerce, deputy lords lieutenant of their counties and so on. Because of their cultural, economic and family links with the PRC, they are not only a highly valued part of the community, but vital to our bilateral relationship.
China is a colossus of global, political, economic, social and cultural importance. In these times we should do all that we can to help to plot the future course of that great nation. It is our duty to assist it in its navigation and to keep its course smooth in so far as we can. We have much to offer China and it has much to offer us. There is much to hope for in years to come and our bilateral relationship still needs a lot of development, but I look forward to working with hon. Friends, the Minister, his colleagues in the Foreign Office, members of the all-party parliamentary group on China and our friends in the Chinese embassy to maximise the potential of our already strong bilateral relationship.
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Brian Cotter: I thank the Minister for initiating the debate, and the hon. Member for Wirral, South (Mr. Chapman), who is the chairman of the all-party parliamentary group. It is a great pleasure for us to discuss China.
The importance of China is increasingly and rightly recognised for economic reasons and for the important role that it is playing in international diplomacy and affairs. It has suffered in the past from economic deprivation and can therefore bring an informed historical view to the world stage, which uniquely means that it has a leading role in representing third-world countries—something that is dear to my heart and to those of others in the Chamber. Although China is seen as a great power with an increasingly modern economy and a growth rate that many envy, it has that other role to play.
As a member of the all-party parliamentary group on China, I am fortunate to have many opportunities to meet members of the Chinese Government and the Chinese ambassador to this country. Through such contacts, we can learn from one another and open up various avenues. I spoke about the way in which China is a major player on the world stage and has the authority to represent an alternative view, such as that of third-world nations. At a recent meeting at the House, the ambassador legitimately spoke of the need for all peoples to be incorporated in the United Nations in a significant way that is based on regions, and the fact that many countries do not have the strength and power of this nation and, increasingly, of China.
The Liberal Democrats welcome the internationalist approach by which we engage with each other, talk to each other, learn from each other and respect each other. I am sure that many leaders in China will agree that there have been times when our relations have had an impenetrability that was based on circumstances and historical events. That is why our regular and open dialogue with our friends in China, between parliamentarians, our Governments, and increasingly our peoples, are so welcome.
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There are great problems on the world scene—the growth of terrorist activity is a particular problem—and the fact that the Chinese Government have played a leading role in working with us to find ways of combating terrorism has been very welcome, since all Governments are potentially at risk. Korea is often mentioned whenever the all-party group meets officials. Korea is of great concern to us as well as to China, and I was interested to see that the South Korean Deputy Foreign Minister, Mr. Lee, is currently in China to discuss the nuclear stand-off and other issues in the area. At a recent meeting, the ambassador said how important relations with the EU were. He also pointed out that of all the EU nations, the UK is the leading investor in China.
It is important that we engage with China bilaterally and through the EU. It is therefore encouraging that Javier Solana, the EU foreign policy chief who visited China after the Madrid bombing, agreed with the Chinese Government that international co-operation was key to combating terrorism—a view with which Liberal Democrats, and, I am sure, many others, would also agree.
Before we conclude our debate on international affairs, I should say that we are all very concerned about the recent Taiwanese presidential election, to which the Minister referred in passing, the resulting uncertainty, and the continuing stalemate between China and Taiwan. We hope that the issue will be resolved, as there is clearly uncertainty about the direction in which the Taiwanese want to go. They may have voted for the status quo, but that remains to be seen. We hope that the improved economic relations between China and Taiwan will increasingly provide their own solution.
I spoke earlier about respect. As we in this world get to know one another better, we can listen to one another and learn from one another. I have the highest respect for the Chinese nation, with its long history and fascinating culture, which I have had the wonderful opportunity to experience first hand on my two visits to China, and in this country through the recent visits by Chinese opera and ballet companies.
I also pay tribute to the importance of China's medicine. Seven or eight years ago, I went to a Chinese medical practitioner when I was feeling very unwell. People will judge whether the results were any good. I must report that, as far as I am concerned, the results were reasonably good. We can learn from Chinese medicine and use our knowledge in the health service. Increasingly, the large pharmaceutical companies are looking to the Chinese experience.
On the subject of human rights, the Minister said that he was addressing several issues. The Liberal Democrat approach could be seen as interfering, and it is accepted that we do have a different historical perspective, but we are candid friends and should be able to speak as we find. I note that our Prime Minister recently spoke about our interest in an
"ongoing dialogue with China over human rights issues",
as he frequently has in the past.
On Tibet, the Prime Minister said that he welcomed the recent contact between Chinese authorities and the Dalai Lama. Recently, the Foreign Secretary spoke about EU-Chinese human rights dialogues, which I

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believe take place twice a year. We will always be interested in those issues, and look to the Minister to continue to address them on our behalf.
Let me make some general points on economic matters, in which I have a particular interest because of my portfolio in the House. Clearly, with China's economy growing at a rate of 8 to 9 per cent., there are tremendous opportunities for the UK. One area of growth is consumer products. We spend an enormous amount on consumer goods such as DIY products to beautify or improve our homes. I could go on at length about the economic progress that we could make in China, but I shall highlight only a few areas of growth in the Chinese economy about which we should be aware.
The hon. Member for Wirral, South spoke about learning Chinese. I tried to learn Mandarin but failed abysmally. I know a bit of French, but my pronunciation is not good. I have no doubt that some hon. Members will be able to pronounce the name of the company Carrefour better than I can. I note that that French retailing giant has just opened its 43rd store in China. I hope that our foremost groups—Marks and Spencer is one among many—take note of that. There is a fantastic market in China, and I hope that we do not allow the French to get ahead of us in it.
In China, 10 million new computers are sold every year. I realise that the market is highly competitive, but I hope that our IT companies make gains there. This country can establish a niche market, as we have a great deal of expertise in innovative software. Progress could be made in that area.
In studying the media in China, I note that there is more than one television organisation but that CCTV—China Central Television—has a significant presence. There are two aspects to using the media to get over our message. The Minister can use the news reports of television companies such as that one to explain what Britain stands for—they are a tremendous resource. Some fantastic television programmes are made in this country, many of which could perhaps be sold to China. Publicity is important.
There are many types of businesses—banking, financial services, manufacturing—through which we can co-operate in many ways. Car ownership among the Chinese public is increasing greatly. There are problems in exporting cars, but there are many related products. I hope that the Minister will continue to ensure that British companies become acquainted with the opportunities in China. I know that he will do that, because I have engaged in several conversations with him on the matter.
The all-party group has frequently been told by the ambassador and others about the many Chinese students—currently 60,000—who come to this country. That is an important initiative. The Minister may or may not recall that I have made the point before that we should engage with students who come to this country from China as much as possible and give them opportunities to meet our people. The all-party group cannot do much, but I hope that the Government will support universities—I am not sure about funding—in encouraging local communities to meet the students and vice versa. Education is vital for everything in life, not
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least in understanding one another's countries. It is encouraging to learn that our universities propose to have campuses in China. When I was last in China I managed to twin three schools from my constituency with three schools in Beijing. That is part of the process of trying to relate to one another more closely.
We could talk endlessly about China, but I shall not. With these few words about our relationship, open dialogue, the economy, education and opening up relations with the Chinese people as well as with the Chinese Government, I end by saying again how welcome this debate is. It is a step in the right direction of building understanding in this country about what China represents for us and for the world. I congratulate the Minister and the chairman of the all-party group on China on promoting this debate.
Several hon. Members rose—
Mr. Deputy Speaker: Order. By my calculations we have about 93 minutes available and there appear to be seven hon. Members seeking to catch my eye. I offer that as a gentle reminder.
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Mr. John Wilkinson: Thank you, Mr. Deputy Speaker. I reiterate the expressions of appreciation that other hon. Members have made to the Minister and to the hon. Member for Wirral, South (Mr. Chapman). From the point of view of balance, I should like to make it well understood that not only does the all-party group on China do good work, but so do the all-party groups on Tibet, of which I have the honour of being chairman, and on Taiwan. We must keep our debate on China in that wider perspective. That I undertake briefly to do.
We are all pleased about the prospect of a visit to the United Kingdom by the Chinese Premier, Wen Jiabao. I gather that that is likely to take place in early May, although the Minister has promised us clarification. When Wen Jiabao comes, I am sure that he will understand that the British people have warm sentiments towards the People's Republic of China. The Government understandably regard China as a strategic force in the world and a power with which they must engage constructively. British business understands clearly the potential in the Chinese market. At the same time, the British people, who are lovers of democracy and freedom, are profoundly concerned by the lack of progress on human rights in the People's Republic. The failure, as yet, to embrace true multi-party democracy, the suppression of religion, and judicial practices that leave much to be desired all rightly cause anxiety. I hope that Her Majesty's Government can raise those anxieties face to face with the Chinese Premier when he arrives. It is quite appropriate that, as friends, we should be candid and not allow that opportunity to pass us by.
Mr. Drew: I am glad that the hon. Gentleman has raised the issue of religious freedom, because, as a committed Christian, I am interested in the rise of the Christian Church in China. The Chinese Government have done everything that they can to forestall that advance, including putting many people in prison and

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restricting the development of the Church. Is that not something that the British Government should take up formally?
Mr. Wilkinson: Indeed. The hon. Gentleman puts the matter eloquently. As people of a democracy, we believe in the right of people to exercise their religious faith, whatever it may be. We are also adamant that the people of Tibet are perfectly entitled to express their religious faith in the Buddhist tradition and that, for example, the Falun Gong movement should be permitted in the PRC. We hold such fundamental freedoms dear, not only in this country but in Europe as a whole.
We also look forward most earnestly to the visit by His Holiness the Dalai Lama from 27 May to 3 June. On a day when the Prime Minister is due to meet Colonel Gaddafi, it is sad to reflect that there seems to be no time in his schedule to meet the Dalai Lama. Colonel Gaddafi's background is one of violence, but he appears to be eschewing a violent path, for which we are all most grateful. The Dalai Lama has resolutely and consistently pursued the path of peace since he had to leave his homeland.
This year sees the 45th anniversary of the brutal suppression of moves by the people of Tibet towards self-determination and freedom from the PRC. It is noteworthy that His Holiness has consistently pursued the path of peace, even despite that atrocity, which caused a mass emigration from Tibet into northern India and elsewhere. We are supposed to have an ethical foreign policy, and we should warmly welcome a leader such as the Dalai Lama at a time when international terrorism and the pursuit of political objectives by violent means are all too prevalent. I hope that Her Majesty's Ministers, if not the Prime Minister, will give him that warm welcome.
I should make another point about the use of peaceful as against violent means. The PRC is now a formidable economic power, which is growing at the rate of 9 per cent. per annum and sucking in vast amounts of overseas capital. It is perhaps keeping the value of its currency artificially low by means of the link to the dollar, and it can therefore flood world markets with cheap goods, building itself an ever stronger position. We would like that determination to pursue growth and prosperity to be focused entirely domestically, on ameliorating living standards, rather than on the acquisition of armaments.
I cannot, therefore, comprehend why the European Union, at the behest of the Federal Republic of Germany and the French Republic, in particular, should be reviewing arms sales to the PRC. In July last year, the annual report to the United States Congress on the PRC's military power made some interesting observations. It claimed that China had more short-range ballistic missiles—about 450—than previously thought and that it was expected to increase the number by more than 75 per year for an unspecified period. The estimated annual rate of accumulation was previously thought to be about 50 missiles per year. The sophistication and accuracy of Chinese missiles has improved, with the People's Liberation Army developing longer range models of the CSS-6 with ranges of up to 3,000 km, and therefore capable of reaching Okinawa.
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The PRC is growing and sucking in foreign capital. As a result of its export drive, it is able to claim an ever bigger share of world markets. At the same time, however, it is pursuing a policy of modernising its armed forces. Although it is somewhat reducing manpower, it is also increasing the sophistication of its offensive capabilities. That comes at a time when its relationship with Taiwan is not easy. Taiwan is, as we see from its latest elections, an entirely democratic political entity. It has no aspirations to flex military muscles; it wants only to have a good relationship with its Chinese friends on the mainland and to allow its people to express their view of how their political destiny should be settled.
It is important to have a balanced policy on China and to seek every opportunity to maximise our trade without relinquishing our principled stand on human rights, and without diminishing our commitment to an arms sales policy whereby we sell armaments only to those countries that do not oppress their own people or pursue policies at home that violate human rights.
I ask the Government to use this and any other opportunity that arises to persuade the Government of the PRC to exercise clemency for Tenzin Deleg Rinpoche, who on 7 April 2004 will face the second anniversary of his arrest. You will remember, Mr. Deputy Speaker, that he was sentenced to death, with a two-year suspension, for allegedly plotting to split the country and cause explosions. His case was raised most recently by the European Union on 4 February 2004 when Chinese officials claimed that he was in good health. We were pleased to hear that, but we were anxious because the two-year suspension of his death sentence dates from his conviction in December 2002. I hope that the authorities of the People's Republic will, as evidence of their good will and preparedness to receive representations on human rights and humanitarian issues, exercise clemency and receive any further envoys from His Holiness the Dalai Lama. It has received two delegations from members of the Dalai Lama's Cabinet in north India, which is all to the good, but we want the process of engagement and dialogue to intensify. That is our hope and I am sure that the Government will take every opportunity to intensify that dialogue.
3.57 pm
Mr. Greg Pope: I am grateful to be able to make a brief contribution to what has so far been a wide-ranging and consensual debate. I want to speak on a narrow issue concerning human rights in China. In doing so, I pay tribute to the Minister, who is responsible for human rights more generally. I have served on the Foreign Affairs Committee and seen the Minister talking about human rights before the Committee, and it is refreshing to see a Minister so on top of his brief and taking the matter so seriously.
I associate myself with the comments of the hon. Member for Ruislip-Northwood (Mr. Wilkinson) about the Prime Minister finding time in his busy schedule to meet His Holiness the Dalai Lama at the end of May. That is incredibly important, and I hope that the Minister will convey the fact that hon. Members on both sides of the Chamber feel strongly about it.
The hon. Member for Ruislip-Northwood said that it is important to find a balance, and that is right. I agree with much of what has been said. China is, of course, an

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important partner on the Security Council of the United Nations and is a growing economic partner. I associate myself with the words of my hon. Friend the Member for Wirral, South (Mr. Chapman) about the positive contribution made by the Chinese community in this country. In passing, I pay tribute to my hon. Friend: hon. Members on both sides of the House recognise his fantastic contribution to Britain's relations with China.
I am not sure whether we have the balance right on how we engage with the People's Republic of China on human rights. The country is a serial abuser of human rights; for example, it carries out more judicial executions not only than any other nation, but than all other nations combined—about 6,000 last year. The Government control access to all forms of media. Although we would all welcome the fact that internet access appears to be growing in China, there has been a worrying crackdown on so-called cyber-dissidents. There is widespread concern at the situation in the Xingjiang region, where secessionists have been labelled as terrorists. That is part of a wider concern: countries such as the PRC—Russia springs to mind—are hiding under the cloak of joining the war on terror, using it as an excuse to oppress their own people who do not agree with the views of the Government.
It is reasonable to ask: are we doing enough in Britain to promote political and religious freedom in China? Looking at Tibet as an example, it seems to me that political activists are routinely harassed, arrested and imprisoned. I want to briefly raise the issue of one person—it may seem unfair to single out one person in a country that is so populous, but it is important because this is a symbolic case.
Jampel Changchub, a monk who lived in the Drepung monastery near Lhasa, was arrested 15 years ago and charged with participating in counter-revolutionary organisations, spreading counter-revolutionary propaganda and undermining national security. Along with other monks from that monastery, he was sentenced to 19 years' imprisonment in the notorious Drapchi prison in Lhasa. Some of the time that he has served there was in an isolation unit, where there was not really enough room to lie down and he was kept in total darkness. The fact is that he has committed no crime in the eyes of the international community. He attempted to exercise a basic, fundamental human right to freedom of speech and freedom of association, the kind of rights that we take for granted—not only in this Chamber but in this country as an everyday matter of fact. I understand that the Minister will be constrained by the diplomatic niceties, but I hope that he will consider joining me in calling for Mr. Changchub's unconditional release. If I write to the Minister, perhaps he will consider raising the case in the next round of the human rights dialogue.
It is against such a backdrop of human rights abuses that the Government of France—who else would think that it was a good idea?—proposed lifting the EU arms embargo in January. It is worth bearing it in mind that the arms embargo was put in place by the EU after the Tiananmen square massacre 15 years ago. The Minister was asked in a parliamentary question on 12 February whether he would oppose the lifting of the arms embargo. Given the catalogue of human rights
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abuses that we know about, I would not have thought that it was too hard to acquiesce to that request. Amnesty International says that China is engaged in a violent crackdown on cyber-dissidents and on the separatist movement in Xingjiang. It is engaged in the systematic use of torture, including beatings, electric shock torture, sleep and food deprivation, and the fairly routine execution of political prisoners. It is also involved in the repression of political and religious freedoms in Tibet.
Despite that, the Minister's answer to the parliamentary question about the lifting of the arms embargo was:
"We welcome the review and are currently considering the UK's position." —[Official Report, 12 February 2004; Vol. 417, c. 1653W.]
I started off by saying that I admire the Minister and that he is doing a good job, but I have to say that that response—I shall make my wording diplomatic—is disappointing, to say the least. I hope that the Minister will assure the Chamber today that the British Government will oppose the lifting of the EU arms embargo.
I have raised my final question with the Minister before in a different setting. Is the human rights dialogue worth while? I know that he could point out the countries with which we have no dialogue, and that would be fair. North Korea comes to mind; we are not making any impact there, and the situation is terrible and may be getting worse. The Minister could also say in his defence, as he has done before, that non-governmental organisations support the continuation of the dialogue. That is also a fair point, but it is reasonable for me to point out that their support for it is not unconditional. Human Rights Watch has said that it is concerned—and I share that concern—that the dialogue has become a formality; it is not a genuine dialogue at all. Human Rights Watch wants benchmarking, monitoring of progress and, crucially, an exit strategy if the dialogue does not show tangible benefits.
The fact is that we have no benchmark ing, we seem to have no monitoring, and we do not even appear to have an exit strategy. The Foreign Office human rights report, which I commend, and consider an extremely worthwhile document, contains a section on the People's Republic of China listing 11 UK Government objectives to encourage human rights improvements there. The truth is that for all our best efforts and warm words, we are not making a great deal of progress on any of them. I shall pick two examples. One of the objectives is a reduction in the use of the death penalty in judicial cases. I have already mentioned that the figure for last year was 6,000. Another British objective is obtaining a full response to cases of concern. The Government of the PRC did not even respond to 28 of the 44 cases of concern that were raised. It was not just that the response was inadequate—there was no response. It may be time for a rethink.
My last plea to the Minister is that if we are to conduct reviews, we should not review the EU arms embargo. Let us keep that. What needs reviewing is whether our human rights dialogue with China is paying dividends. I suggest that it is not paying as many as we would have hoped, and that the Government should think again.
4.7 pm
Tony Baldry: I am sure that there are human rights concerns, but before the hon. Member for Hyndburn (Mr. Pope) turns them into black and white issues, I suggest that he goes to the Library and gets out an excellent book called "Just Law" that has recently been published by Baroness Kennedy of the Shaws. He might like to reflect on the incursions into human rights that are occurring in this country; they are serious matters. For example, we have seen the first occasion of ouster of judicial review, for certain cases, since Magna Carta.
I suggest that matters are not quite as black and white as certain hon. Members would suggest. I commend Helena Kennedy's book to the Minister. It is a good book, and an interesting read. However, that is not really what I wanted to say. I have four brief points to make.
We must do much more, including more to engage positively with China. I am fortunate to be one of the vice-chairmen of the all-party group that is led by the hon. Member for Wirral, South (Mr. Chapman). He does an excellent job. As he said, we recently had a visit from the National People's Congress. It was a constructive visit and enabled Members to discuss just such issues as the hon. Member for Hyndburn has raised—Tibet, human rights and others. It was a considerable effort to get that meeting established.
This week, in the all-party Whip, the opportunity is advertised for hon. Members to go to the United States as part of the all-party group on America. That is an excellent all-party group. Last year I was fortunate to go to Washington as a member of the group. The delegation was led by a Cabinet Minister, supported by the then shadow Chancellor, who is now Leader of the Opposition. We met many members of the Congress and the Senate. That group has been funded by the Foreign Office for decades.
If we are to engage more meaningfully with China and members of the National People's Congress, we in the House must be consistent in that dialogue. We cannot just dip in and dip out, and have a dialogue one year, then pass on it for a couple of years. Given China's increasing importance in the world, I suggest to the Minister that, if we are to be serious about our dialogue with China, the House needs to improve the contact that we have with members of the National People's Congress.
That will require the Foreign Office to make some financial commitment to the all-party China group. Of course we can—and do—get a certain amount of money through sponsorship from the business community. However, I think that it sets an unhappy precedent if all-party groups in the House, particularly all-party country-related groups, have to rely increasingly on sponsorship from the business community to enable us to carry out our work effectively. The funding is not necessarily for Members to go to China, it is so that we can welcome members of the National People's Congress here and return to them the hospitality that they have given to us.
The Minister mentioned that there were concerns in China about the perceptions of the UK that were held there. I think that we can also be concerned about the perceptions in the UK of China. I conducted a survey a
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while ago. No school in the state system teaches Mandarin. Fifty schools in the private sector teach it up to GCSE. Level. My daughter was fortunate enough to be able to learn Mandarin up to GCSE level and she is now in Beijing teaching English. I was impressed that the first thing that she did was to acquire a Chinese mobile telephone. That generation cannot seem to live without a mobile telephone clasped to their ear. If we are to engage, develop and thicken a relationship with China, we need to examine how to promote and improve—really, to start—the teaching of Mandarin in this country. We cannot expect to understand Chinese people and their culture if we are entirely dependent on them speaking English.
Likewise, I suggest that we need to do much more with trade partners and to support the China-Britain Business Council in helping UK companies prepare for the Chinese markets. Sometimes there is a perception that, simply because the Chinese market is huge, a few of us should go there on a plane and find customers.The Economist had an interesting survey on China a couple of weeks ago, where it flagged up the considerable difficulties that can face companies. Foreigners tend to underestimate the eccentric nature of China's business environment. Perhaps it is not so much eccentric as different. I am fortunate enough to be invited to meetings of the 48 Group club, which gives awards for the exporter of the year to China. When I talk to the members, I am very often struck by the fact that it is a matter of luck that they happen to have found an appropriate niche. If we are to take advantage of the Chinese market and build up Chinese trading partnerships, I suspect that an enormous amount more needs to be done to prepare small and medium-sized companies in this country for the opportunities and the difficulties in China.
In other words, we need engage a lot more as parliamentarians, in our schools in learning more about Chinese culture and language and in business and regional business forums, such as the larger chambers of commerce, in trying to understand what makes China tick. I think that we need to up our game in those areas.
Finally, as Chair of the Select Committee on International Development, I would not wish to make a contribution without paying tribute to DFID for the work that it is doing in China. I know that many other Members want to speak in this debate, so I will not spell this out in detail, but it is important to remember that about a quarter of China's rural population live on less than $1 per day. They constitute about 20 per cent. of the world's total poor.
If we are to meet the millennium development goals, we and China must work in partnership to ensure that poverty in China is alleviated, as in other parts of the world. China is actually making significant strides with that, but it is important work and it would be remiss if tribute were not paid to DFID officials for the work that they are doing in poverty reduction and tackling HIV/ AIDS. It is estimated that about 12 million Chinese will have HIV/AIDS by 2020, so it is a significant problem.
I say to the Minister: great debate, fantastic that it is in Government time, but where is the chequebook? The treasurer of the all-party parliamentary group on China will be grateful for a cheque. If we have the resources, we as parliamentarians will do a great deal more to deepen and thicken relations with China. Can we please have

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encouragement from the Department for Education and Skills to promote Mandarin in schools and colleges? Can we also have some encouragement from the Department of Trade and Industry and Trade Partners UK to help UK companies understand more about Chinese culture so that we can make much greater and longer-lasting trade relationships with China?
4.16 pm
Mr. Michael Trend: I, too, would like to thank the Minister for providing the opportunity for this important debate. I begin by quoting from a statement made two weeks ago:
"China is undergoing a process of deep change. In order to effect this change smoothly and without chaos and violence I believe it is essential that there be more openness and greater freedom of information and proper awareness among the general public. We should seek truth from facts— facts that are not falsified. Without this China cannot hope to achieve genuine stability. How can there be stability if things must be hidden and people are not able to speak out their true feelings? China's emergence as a regional and global power is also accompanied by concerns, suspicion and fears about her power. Hosting the Olympic Games and World Exposition will not help to dispel these concerns. Unless Beijing addresses the lack of basic civil and political rights and freedoms of its citizens, especially with regard to minorities, China will continue to face difficulties in reassuring the world that she is a peaceful, responsible, constructive and forward-looking power."
That seems to be a commendable and astute analysis of China's current position, and it is very helpful to our debate. The author of those words is the Dalai Lama, speaking in characteristically open and generous terms —especially when one considers how the Chinese have treated him and his long-suffering people for more than half a century.
I welcome the opportunity to debate China's current position. I recognise the current enormous importance of China and the need for constructive dialogue. We have heard good examples of the work done by the all-party group, and its work should be commended. Like many in this House, including my hon. Friend the Member for Ruislip-Northwood (Mr. Wilkinson) and the hon. Member for Hyndburn (Mr. Pope), and many people in the country, however, I see the debate on China really as an opportunity to raise the subject of Tibet. Nobody should be surprised by that, and China in particular should not be surprised. It brings the situation on its own head.
All over the world there are countless people who will never be prepared to treat China on the terms it wishes until there is a proper resolution of the many human rights issues that exist there for its minorities and religious groups, and particularly until the question of Tibet is settled.
The British Government should not be surprised by the strength and depth of feeling about Tibet in this country either. That is partly because our country has had a particular historical relationship with Tibet, which meant, for a while, that we were responsible for that country and its future. However, it is also because of the widespread admiration in our country for the tormented people of Tibet and especially their leader, the Dalai Lama.
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China has an unenviable recent history of dealings with Tibet. The invasion of Tibet was met throughout the civilised world with disgust, and a series of resolutions at the United Nations condemned Chinese human rights abuses in Tibet and called on China to respect the fundamental freedoms of the Tibetan people, including their right to self-determination. China has done none of those things.
In preparing for the debate I thought it might be of benefit to the House if I went over the historical material documenting the relations of the British and Chinese Governments with Tibet. I found, however, that the hon. Member for Lewes (Norman Baker) had already done so in an excellent Adjournment debate on 19 March 1999. He showed that Britain has regarded Tibet as a de facto independent state for years. He also asked the question that UK parliamentarians should ask: what is the British Government's current view of Tibet's status as a nation? Sadly, he received the standard answer, which successive Governments have used for many years: the Government regard
"Tibet as autonomous, while recognising the special position of China there."—[Official Report, 19 March 1999; Vol. 327, c. 1463.]
What is so special about that "special position"? The word "special" can mean whatever one wants, which is why it is so beloved of the advertising industry. It means anything and nothing, and the Government should not hide beneath such weak and woolly language. Can the Minister explain what that "special position" is? What does it involve? What does it mean?
I will tell the Minister what is so special—in the real sense—about the Dalai Lama and Tibet. The Dalai Lama represents a country that has undergone the kind of suffering that has resulted in the violent uprising of the oppressed in other parts of the world, but does he look to us for weapons? No, he asks only for our good offices. Does he follow a policy of hatred and recrimination? No, he asks only to be allowed to negotiate in a peaceful and purposeful manner. The Dalai Lama is a rare phenomenon on the world stage: a true national leader who practises what other world leaders only preach—that progress should be made through peaceful negotiation rather than violent action. We are always being told that violence should not be rewarded, yet there are countless examples to the contrary.
Like my hon. Friend the Member for Ruislip-Northwood, I was struck by the fact that while we are here debating China, the Prime Minister is in Libya talking to President Gaddafi. I understand why he thinks that progress can best be made through dialogue with the Libyan leader, as opening doors must be better than keeping them closed, but surely there is a problem when the British Prime Minister makes an effort—many would say a commendable effort—to engage with former perpetrators of violence, but is not ready to talk to those who suffer from violence. It is good to reach out a cautious hand to those who have renounced violence, but should not we also stretch out our hands to those who have turned their faces away from violence from the start? That approach would make an important point in the war against terrorism.
I ask the Minister to consider how Tibetans will interpret the Prime Minister's visit to Libya, bearing it in mind that many Members have told us that the Prime

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Minister will not open his door to the Dalai Lama on his forthcoming visit to the UK at the end of May. I find it hard to believe that the Prime Minister simply will not have the time. Of course he should see the Dalai Lama, both as a point of principle and, especially, because of the expected visit of the Chinese Premier at around the same time.
Last July, I made a speech in the House in which I politely encouraged the Prime Minister to use his good offices on behalf of Tibet during a trip that he was about to make which included top-level meetings in China. I later wrote to him, asking whether he had been able to raise the subject of Tibet during his meetings in China and, if so, what response he had got. He replied that he had raised human rights with the Chinese Premier, and underlined our interest in an ongoing dialogue with China on human rights issues. He said that he had also discussed Tibet with the Chinese leadership and welcomed recent contact between the Chinese authorities and representatives of the Dalai Lama.
Well, that is something, but not much, although another opportunity will arise with the Chinese Premier's forthcoming visit. As my earlier polite approach did not seem to get very far, I believe that we should all increase the pressure on the Chinese, and on our Government. The Prime Minister should raise a number of matters when he sees the Chinese Premier, such as the talks between the Chinese and the Dalai Lama's representatives, which the Chinese have stalled. Those talks need to go ahead as soon as possible, without ridiculous preconditions on the Chinese side.
The Prime Minister should also—here I echo what my hon. Friend the Member for Ruislip-Northwood said—raise the position of the imprisoned Buddhist leader Tenzin Deleg Rinpoche. Why are the UK Government merely expressing concern about that case, rather than calling for it to be reopened with independent legal representation of Tenzin Deleg's choice, and for that trial to be held in the presence of international observers? That is what we routinely demanded during the show trials in the former Soviet Union, of which this case reminds us so powerfully.
There are many other cases of manifest injustice in Tibet—we heard one from the hon. Member for Hyndburn—that should be raised. Having done that, the Prime Minister should feel able to report to us that he has done so not just in general phrases but with some specific points that he raised and the responses that he received. In short, the Government should turn up the pressure and do so publicly. Surely we can do that without endangering our own national interests?
After all, we have many things that the Chinese are interested in and want. An opportunity was given to us by the review of the EU arms embargo on China which we have heard about. I was encouraged to hear the Minister say that he was considering joining the Americans in their current resolution at the Office of the UN High Commissioner on Human Rights in Geneva criticising Beijing's human rights record. The Chinese have got very upset about this. I can imagine some people at the Foreign Office saying, "No, no, no. That just goes to show that we shouldn't get involved in these things." I take the opposite view. To me it shows that we can get things moving with the Chinese only when we stand up for our principles. I also think, as others have
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said, that we should press the EU to think again about the appointment of a special representative on Tibetan issues.
The mistake in dealing with China is to believe, as some do, that the best place to be is somewhere just below the parapet. We have tried delicate diplomacy on human rights, but the Chinese interpret that as weakness. We did not deal with the former Soviet Union in this way: we did not go around apologising for bringing difficult matters up. We stuck to our guns and exposed where the real weaknesses lay.
To be frank, British Governments have largely kept their eyes shut on the question of China and human rights for a generation. During that time, the people of Tibet have been murdered, imprisoned and abused, and their religion, customs and culture have been fiercely attacked. Lhasa has been turned into a Chinese city and enormous ecological damage has been done to parts of the Tibetan landscape. Those are the fruits of keeping one's head below the parapet. China always interprets weak words as a cover for weak intentions. We should push our Government harder to be firmer and more precise about what they are doing.
I would like to conclude where I began, with the Dalai Lama's recent statement. He adds:
"The Tibetan issue represents both a challenge and an opportunity for a maturing China to act as an emerging global player with vision and values of openness, freedom, justice and truth. A constructive and flexible approach to the issue of Tibet will go a long way in creating a political climate of trust, confidence and openness, both domestically and internationally. A peaceful resolution of the Tibetan issue will have wide-ranging positive impacts on China's transition and transformation into a modern, open and free society. There is now a window of opportunity for the Chinese leadership to act with courage and farsightedness in resolving the Tibetan issue once and for all."
I say that we should do more for the Tibetan people and do it openly. Only in that way will progress be made. I look to our Government to follow the calm and measured approach of the Dalai Lama, and to act with greater courage and determination.
4.29 pm
Ian Stewart: I am pleased to have the opportunity to contribute to this important debate. First, I wish to congratulate the Minister and acknowledge his role. He is genuinely interested in the subject of China. He has worked closely with the all-party group on China and has helped to improve the circumstances that some of my colleagues have addressed today, and I hope that he continues to do that. He has been put under pressure by my colleagues, and perhaps he will act on some of the points that they raised.
It would be remiss of me not to pay tribute to my hon. Friend the Member for Wirral, South (Mr. Chapman). I claim the credit for engineering his election to the chair when we founded the all-party group, because I knew that he had deep experience of China and that, like my colleagues and me, he is a friend of the Chinese people. So I congratulate my hon. Friend, who is a true China hand.
I am one of the vice-chairmen of the all-party group and I have visited China twice under its auspices. My hon. Friend and I represent constituencies in the north-

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west, which has links with China and has seen vibrant Chinese communities develop, particularly in Manchester and Liverpool.
I commend the work of Mr. Lee Kai Hung and the north-west Chinese council, which has taken several significant steps to encourage the active involvement of Chinese communities in civic life in the north-west. I also commend the council for its work in setting up an online welfare network for Chinese students in Britain—a model that could be transferred to students of other nationalities in this country.
This is an omnibus debate, so I want to comment briefly on several issues. My personal interest in China developed not from 20th century politics or economics, but from a lifelong fascination with Chinese history, culture, philosophy, martial arts and traditional Chinese medicine. China is an enormous country that is in transition from a command economy to what it calls a socialist market economy, which resonates with me. Today's debate has been balanced. Concerns have been expressed, but there has also been praise. Most importantly, there has also been some understanding. Key achievements of the all-party group under the chairmanship of my hon. Friend have been to raise awareness and to increase understanding among all hon. Members of the real challenges that China faces.
China is a massive country that is moving into a modern world, and those of us who have been lucky enough to visit it have seen Shanghai and Beijing on the well developed east coast, which without doubt matches anywhere in the developed world. As the group's visits progress, however, the chairman has been increasingly keen to see the group members visit the centre of China and, hopefully, the west, because there is in one country a modern and well developed east coast, a centre that is some 50 years or so behind that, and a western area that is almost mediaeval. Any Government who are trying to develop the interests of the whole country and all its people face many challenges.
There is a downside to China moving to a market economy like ours, not the least being unemployment. Chinese people under the old system had employment, housing and health care that may not have been to western standards but was at least secure. They now face unemployment without a welfare safety net of the sort that we have in the west. This is one of the areas in which the partnership between the UK and China is having really positive effects. My colleagues have highlighted today the fact that this is a two-way process, but I hope that China can embrace some of the benefits of western experience so that it can design systems for its people without making some of the mistakes that were made in the past. We, in turn, will learn from the Chinese experience, and I hope that that will be of benefit.
Chinese medicine is a unique medical system, which has made a significant contribution to health care in China and the UK, and I hope that you will allow me to comment on practice in this country, Mr. Deputy Speaker. Extensive though the Minister's talents are, I realise that he is not responsible for this aspect of Government policy, but it relates to the work that almost all the Departments that have been mentioned are doing on health, education, and trade and industry.
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As far as we know, the introduction of traditional Chinese medicine into Europe dates back to about the 17th century. In the UK, interest in traditional Chinese medicine, and in acupuncture in particular, has largely developed since the 1970s. I am sure that Chinese medicine will become even more popular, and as it does, we will need to regulate it to ensure that it is safe and effective for patients.
I have established links with the Association of Traditional Chinese Medicine, which is campaigning for the introduction of a suitable regulatory framework. I had a meeting about the issue with the association and the Under-Secretary of State for Health, the hon. Member for Welwyn Hatfield (Miss Johnson). I should also tell hon. Members that the Shi Zen organisation of Manchester is organising an international conference on traditional Chinese medicine that will take place in Manchester from 9 to 11 June and will be attended by Ministers.
We in the north-west have a proud record of promoting trade and business co-operation with China, as well as cultural, educational and sporting exchanges. That helps to create trust and mutual understanding between the citizens of our two countries. The British Council in Manchester does invaluable work to promote education, science and technology in China, as well as our expertise on crucial issues such as the environment, which is a high priority in the UK and China. We also have strong links with China's consulate general, which is in Manchester.
China's entry into the World Trade Organisation in December 2001 further opened up the market for foreign investment and two-way trade, as well as creating a competitive environment from which British and Chinese companies can benefit. The recent creation of an international trade centre at Chamber Business Enterprises in Manchester is an important step towards raising the profile of the whole north-west. A variety of services is on offer to small and medium-sized businesses at the special China trade unit, which is an integral part of the centre.
In our joint desire to promote economic co-operation, peace and understanding, there is more to unite us and the Chinese people than to divide us. As has been highlighted, however, China is little studied in our schools. I fully appreciate the pressures on school curriculums, but I hope that Ministers and educationists will include China when they update courses to educate our children for their global future.
It is one of the privileges of membership of an all-party group that Members are sometimes asked to serve on expert bodies on associated subjects. My hon. Friend the Member for Wirral, South and I have been pleased to serve for several years now on the executive of the Great Britain-China Centre. I must admit that our attendance record would not merit a single star rating, but that is because of the nature of business in the House. Nevertheless, we try to keep up with the centre's work. It is developing and running high-quality exchanges on a number of issues, including criminal justice, human rights, judicial training, constitutional government and the rule of law.
The centre's work on trade union rights are a particular interest of mine. As you and other colleagues know, Mr. Deputy Speaker, I am a lifelong trade union

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activist. My interest in international work through my trade union, the Transport and General Workers Union, started when I was about 18. We have heard today of the awesome growth of the Chinese economy. I believe that it was about 9 per cent. last year and is predicted to be 7 per cent. this year. Such growth will bring the greatest benefit for Chinese workers if they are represented by effective, free and independent trade unions that can deal with the issues that the Chinese workers identify as important, such as excessive working hours, inadequate holidays and the need for better health and safety provision. It is clear that Chinese workers are no different from workers the world over; they have the same concerns.
The Great Britain-China Centre works with the All-China Federation of Trade Unions, which is not an independent body, but is currently the main game in town. The body has positive attributes on which we can build. That is not to say that I do not understand workers seeking independent forms of representation, such as we have in the UK, but as outsiders we must aim to promote reform through all the channels open to us.
Chinese trade unions want training and skills so that they can do the best for their members in terms of collective bargaining and representation, and in seeking legislative reform. We have a wealth of UK expertise on this matter. I am pleased that the ACFTU is expanding its international links. The Great Britain-China Centre has helped the ACFTU to develop training materials and has funding to set up and run the first labour tribunal in China to hear labour disputes. We should encourage the ACFTU to democratise and develop its independence, and we should also work with, and encourage the growth and development of, any new free, independent and democratic trade union.
The centre hopes to expand in another area dear to my heart: the promotion of civil society and citizenship. The assessment is that the centre, with its non-official status, is well placed to engage with Chinese organisations seeking to promote civil society. We all too often forget, because we are a developed democracy and society, about the democratising effect that free, independent and democratic trade unions, working with private employers, can have in a society, and we should applaud that effect.
Within any democratic civil society we expect respect for human rights, religious tolerance and toleration of diversity. I must raise two issues that I hope that the Chinese Government will act on. First, there is the issue of the Falun Gong, an organisation that was declared illegal by Chinese authorities in 1999. A constituent of mine, Mr. Terence Shanahan, is an active member of the Falun Gong UK. He is a powerful advocate for the stated Falun Gong ideals of truthfulness, compassion and forbearance. I take no view on the nature of Falun Gong, but I am concerned about repeated reports of human rights abuses against its followers. In turn, I make no judgment about the obvious concerns that the People's Republic has about the organisation. However, I urge the People's Republic to exercise tolerance in relation to organisations such as Falun Gong. Any organisation should quite properly be established within the rule of law and any abuse by members of an organisation would be punishable within that rule of law.
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The second issue that I should like to raise is Tibet, albeit briefly, as other hon. Members have talked about it at length. There has been some formal contact between the Chinese authorities and the representatives of the Dalai Lama. I welcome that and I hope that the time has come for sustained negotiations on Tibet without preconditions. There are hopes that the Prime Minister will be able to meet the Dalai Lama when he visits the UK in a few months. The Dalai Lama is a political and spiritual leader who seeks to resolve conflict through dialogue. That is something on which we can all reflect in these turbulent times. I urge the Prime Minister to raise the issue of Tibet with the Chinese Premier, when he, too, visits the UK this year. I hope that the Prime Minister will offer the Chinese Premier any assistance that the UK can give to help to resolve the issue.
When the Chinese Premier is here, I am sure that the Prime Minister will want to congratulate China on the important role that it has played in significantly easing tensions between Pakistan and India. For many years China has been seen to have close ties with Pakistan. However, in recent times it has sought co-operation with India in establishing joint infrastructure projects and focusing on energy and water resources and cooperation in science, technology and other areas. China is well placed to assist dialogue when relationships are strained and to point out the benefits of mutual cooperation, while acknowledging that differences need to be resolved, and it should be congratulated on its work towards world peace.
China is a major world player and has taken its place at the world table. It has exercised a mature and responsible attitude in its financial policies, which are designed to maintain economic stability in the south-east Asian region. When the south-east Asian crisis was abroad, China could have devalued its currency, but that would have had a destabilising effect in the regional and world economy. China chose not to do that and acted responsibly, and we should acknowledge that.
China is clearly developing a more open and transparent approach in its relations with other countries. That approach may not yet meet the standards that we expect in the west, but we should acknowledge that China is developing and improving. We should hold hands with our Chinese friends, work through our respective concerns and develop a positive partnership for the benefit of both the Chinese and the British people.
4.48 pm
Mr. Rammell: It is a common occurrence to start a ministerial summing up by saying that we have had a well informed debate, which is sometimes the case and sometimes not. I genuinely believe that this debate has been well informed. The level of knowledge of, commitment to and interest in Chinese affairs has been apparent during this short debate, which, as a number of hon. Members said, the Government initiated. We were pleased to do that.
The hon. Member for Windsor (Mr. Trend)started by asking for the date of the Chinese Premier's visit to this country. No announcement has been made, but one will be made in due course. I hope that that is the least full answer that I shall give to the various points that have been raised.

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My hon. Friend the Member for Stroud (Mr. Drew) had to leave, but not before raising his concern about the one-child policy in China. The Government condemn coercive family planning programmes, wherever they occur. Through the Department for International Development, we have funded the UN family development programme, which works closely on the ground with the Chinese authorities to help turn coercive policies into policies of real choice. There has been significant cross-party concern about the issue. In 2002, a cross-party group of three Members undertook a visit to China to see at first hand the work that was being done. According to their reports, they came back much reassured by what they had seen. The then Secretary of State for International Development raised the issue with her counterpart in 2002, and the Chinese authorities gave assurances that China was working towards relaxing the one-child policy. We welcome that.
Tibet was discussed by several hon. Members, including the hon. Member for Ruislip-Northwood (Mr. Wilkinson). I pay tribute to the work that he and the all-party group on Tibet do on the issue. There are still particular concerns about the situation in Tibet, and the British Government are deeply worried about reports of arbitrary detention, torture and the re-education of monks and nuns. It is certainly not the case that we have ignored Tibet. Indeed, a few months ago I had a detailed discussion with the hon. Gentleman and his all-party group about it. We raise the matter, including specific individual cases, at every suitable opportunity right up to the highest level, and have urged, and will continue urge, the Chinese authorities to continue negotiations with representatives of the Dalai Lama to find a lasting solution that is acceptable to the people of Tibet.
The hon. Member for Windsor asked about the Government's view of the status of Tibet. He asked the question and gave the answer, but for the record I shall repeat it. He said that successive British Governments have regarded Tibet as autonomous, while recognising the special position of the Chinese authorities. That continues to be the Government's view. We believe that the Tibetans should have a greater say in the running of affairs in Tibet and that the best way to achieve that is through dialogue without preconditions between the Chinese Government and the Dalai Lama. That is what we have urged and will continue to urge publicly and privately.
My hon. Friend the Member for Wirral, South (Mr. Chapman) began his contribution by referring to the all-party group. I was aware of its considerable work and influence, but I did not appreciate that 256 MPs were members of it. That underlines the significant depth of interest in the issue throughout parties in the House.
My hon. Friend also obliquely raised an issue that other hon. Members followed up more succinctly and assertively about funding for all-party visits. It is a matter of real concern, and not easy to resolve. The Treasury certainly has a view about funding all-party visits from departmental programmes. Political considerations must also be taken into account. I ask gently whether it is really appropriate and whether we really want to advocate that the Government of the day
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should have an influential say on which all-party groups will be funded for which purposes in which particular countries.
Ian Stewart rose—
Mr. Wilkinson rose—
Mr. Rammell: Clearly, I have started something that I may regret. I shall take some interventions.
Mr. Wilkinson: I thank the Minister for his approachability and willingness to listen on many issues relating to his area of responsibility, including Tibet. I personally welcome his view about the proposed funding by the Executive branch of the activities of particular all-party country groups. I treasure very much the independence of parliamentary groups per se as representatives of the legislative branch.
Mr. Rammell: I welcome that comment and understand what the hon. Gentleman is saying. In a sense, that was my point, but a concern has been expressed and all of us in the Government and across parties in the House need to think about how we respond to it.
Ian Stewart: I, too, would defend the independence of the groups, but we also want the dosh. On a more serious note, the Minister alluded to political considerations—not least, perhaps, the views expressed by the media about Members enjoying junkets. How could anybody, listening to the depth and importance of the subjects raised in the debate and hearing how UK politicians interface with their counterparts in a country such as China, fail to see that it is genuine and necessary work?
Mr. Rammell: My hon. Friend makes an exceedingly good point. The media's characterisation of the work of Members in that regard and in many others is so wide of the mark that it is not true. We have all contributed to the current state of apathy—I can put it no stronger than that—over the conduct of government and politics in this country. However, media misrepresentation of the work and the role of Members does not help at all. The point about funding has been made and we will undoubtedly return to it.
The hon. Member for Weston-super-Mare (Brian Cotter) stated that he was pleased to have benefited from Chinese medicine. The matter was raised by my hon. Friend the Member for Eccles (Ian Stewart). I am not medically qualified but my hon. Friend the Member for Milton Keynes, South-West (Dr. Starkey) is—or at least I think she is. She is no longer present, however, so I will leave my remarks at that, although I am glad that the hon. Member for Weston-super-Mare benefited.
My hon. Friend the Member for Eccles raised the issue of student numbers. The latest figures from the Department for Education and Skills show that there are currently 35,000 students from mainland China in Britain; there are other Chinese students in further education and in schools, about 13,000 university students from Taiwan, and about 10,000 students from Hong Kong. The figures have increased significantly in

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recent years, which is partly because of the Chinese population's growing interest in this country, and partly because we have driven those numbers as a result of the Prime Minister's initiative.
My hon. Friend the Member for Stroud raised justifiably significant concerns about freedom of religion. Our serious concerns continue about the treatment of Christians and other religious practitioners in China who are not members of state-sanctioned religious organisations and about the Chinese Government's failure to allow full freedom of religious belief. We continue to take it up in human rights dialogue and at all other appropriate ministerial and official levels.
I have already paid tribute to the work done in the all-party group by the hon. Member for Ruislip-Northwood. He raised several significant human rights concerns, and I reiterate what I said at the start of the debate: we continually raise such issues publicly and privately, and we will continue to do so.
In parliamentary terms, the hon. Gentleman then took a sideswipe at the Prime Minister's visit to Libya today. I genuinely believe that the most serious threat we face is international terrorism and the proliferation of weapons of mass destruction. When a country such as Libya has committed itself to remove those weapons, it should be welcomed, and the Prime Minister's visit is part of that approach. The visit is widely understood and supported in all parts of the House, and I hope that that will be true of the media.
The hon. Gentleman also raised an issue about the Dalai Lama's visit this summer. I will be clear: the point is not one of principle; the Prime Minister has met the Dalai Lama before, but he cannot this time because of diary constraints. The Dalai Lama will, however, be met by the Foreign Secretary and other Government figures.
Along with other hon. Members, the hon. Gentleman also raised the case of Tenzin Deleg Rinpoche. We have regularly and persistently raised that case with the Chinese Government, and I have personally raised it in Beijing. We supported the three European Union démarches in February, and in their response to the most recent démarche in February, the Chinese said that the sentence is likely to be commuted to life imprisonment.
My hon. Friend the Member for Hyndburn (Mr. Pope) is no longer present, but I am grateful for his comments. He raised a number of exceedingly important points. He referred to the case of Jampel Changchub, which we have raised regularly through our own dialogue and while working for clemency. We believe that his sentence has recently been reduced slightly, but I shall continue to liaise on that in correspondence with my hon. Friend.
My hon. Friend referred to the EU arms embargo, which is a complicated issue. It is important that we return to the context in which the embargo was first established and the immediate aftermath of the events of Tiananmen square. I repeat what I said at the start of my contribution: the House should be reassured that even if the embargo were lifted, that would emphatically not remove our ability to control arms sales to China. The EU code of conduct, interpreted by the UK Government through the consolidated criteria, will remain in place as the means of controlling arms exports to China. That is important.
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My hon. Friend raised significant concerns about the use of the judicial death penalty in. China. We are deeply concerned about that and it is one of the main themes of the human rights dialogue. I had been a Minister for only a couple of weeks when I first attended the human rights dialogue, and I spent about 50 minutes discussing the specific issue of the death penalty with my interlocutor. Hon. Members will understand that some of the dialogue takes place through formal processes.
After a long discussion of 50 minutes, my opposite number responded by saying that we must understand that China is at a different stage of development. We oppose the death penalty, but I felt that through that process of engagement it was possible to put our views forward. We received that eventual response, which was not the Chinese Government's initial formal response. That indicates that we can make progress on such issues. I welcome the fact that China has said that abolition of the death penalty is a long-term goal. There is undoubtedly a long way to go—that was reinforced by the figures quoted by my hon. Friend—but we welcome the recent greater openness on statistics and we will continue to press the issue with the Chinese Government, just as we press for abolition of the death penalty throughout the world wherever it occurs.
My hon. Friend also referred to the importance of continuing to review the progress and merits of the human rights dialogue. We most definitely do that. He said specifically that many of the cases that we raise with the Chinese authorities individually are not taken seriously. I believe that the evidence of the progress that we are making points in the opposite direction. In November 2002, we raised 44 individual cases with the Chinese authorities and received a response on 16. In November 2003, we received a response on almost 100 per cent. of cases. That does not mean that we get everything that we ask for, or the response that we want in every case, but it suggests that there is a greater willingness on the part of the Chinese authorities to open up and to discuss the issues.
My hon. Friend rightly, acknowledged that, by and large, non-governmental human rights organisations, whatever criticism they may make of our progress, support and welcome the bi-annual human rights dialogue. They are right, and while we keep the matter under review we shall continue to proceed on that basis.
The hon. Member for Banbury (Tony Baldry) started by referring to the judicial ouster in the context of the Asylum and Immigration (Treatment of Claimants, etc.) Bill. I may have misunderstood—I apologise if I did—but I thought that he was trying to compare our human rights record with that of China. If that was his intention, I ask him to reflect on what he said and whether he seriously intended to put that point of view forward. I do not believe that that is sustainable.
Tony Baldry: Hon. Members should be careful not to see everything in black and white and seek to cast other countries as totally black and us as totally white. I commend Helena Kennedy's book to the hon. Gentleman. It shows that there are many grey areas and difficulties that we all face. What might look like a human rights abuse in one country may not be so. I think that we must be careful not to be totally sanctimonious on such matters.
Mr. Rammell: Sanctimoniousness is something that I try to avoid. The reasonable manner in which the hon. Gentleman has now made his point is far more comprehensible. We do not take the view that we have a perfect human rights record. I do not think that any country has such a record. However, I think that the particular concerns with the Chinese Government are ones that we are right to continue to pursue.
The hon. Gentleman also raised the issue of the teaching of Chinese in British schools. Clearly that is a matter for the Department for Education and Skills. I know that the DFES is interested in encouraging links between Chinese and UK schools. That is important. The fact that it is now possible to study Mandarin at GCSE level is welcome. I know that there have been some concerns, which we have considered in Government, about the development and expansion of the teaching of Chinese studies in higher education. In all probability, that is a matter to which we shall return.
The hon. Member for Windsor cut to the quick of the debate by asking the fundamental question: do we get anywhere with the issues that we raise with the Chinese authorities? I will not give a glib answer to that. Engaging with a huge superpower that has the largest population in the world and that will be the second biggest economy in the world in a relatively short period is complicated. I hope that it is reasonable to say that an ongoing judgment must be made about the rhetoric that we use and how that might either help or hinder us in terms of leverage with the Chinese Government. That is the judgment that we constantly have to make throughout the world, and we certainly have to make that judgment with China.
The hon. Gentleman also raised the issue of urging the appointment of a European Union special representative on Tibet. That is something that we have discussed with European Union partners. We honestly do not feel that such an appointment would help at the moment. Part of the rationale is that the US equivalent does not seem to have made any significant difference in that regard. The issue is something that we will continue to consider.
I also thank my hon. Friend the Member for Eccles for his kind remarks. I think that his contribution was genuinely well informed—as were many contributions—particularly from a constituency
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perspective and because of his links with the Chinese community. He also hit on the head one of the key issues in terms of the internal development of China, which is the split between the east, the centre and the west of China. There is a world of difference between those regions, as people who have travelled in the country will know. It is not only east and west, but urban and rural. One of the difficult issues that the Chinese authorities have to handle is the migration that takes place from rural to urban centres. I am reassured to know that the position of the new Chinese leadership marks one of the key changes of orientation and emphasis from that of the previous leadership. That is welcome.
My hon. Friend also raised the issues of his role in the Great Britain-China Centre and of trade unions. I think that the work that the Great Britain-China Centre does in employment law is very positive, particularly the good project that was run on collective bargaining two years ago. It is also a fact that the issue of labour rights and trade union rights featured strongly in the human rights dialogue that we held in November 2002, in which we involved the TUC, ACAS, Unison and others. We will continue to press the Chinese to lift their reservation to article 8.1a of the international covenant on economic, social and cultural rights, which concerns the right to join a trade union. We have long campaigned and argued for that in this country. I do not think that we should move away from that view in terms of what we advocate anywhere in the world. My hon. Friend He also raised the issue of adherence to Falun Gong. Like him, I do not take a view on the nature of Falun Gong and nor do the Government; nevertheless we urge that the rights of Falun Gong adherents be respected.
I genuinely believe that we have had a productive, well informed and constructive debate. China is a huge, developing global superpower with which, for the series of reasons that I listed at the beginning— climate change, economic opportunity and world security—we must continue to engage. That does not mean that there are not differences that we will air both publicly and privately. We need to keep working at the relationship. The contributions this afternoon, like the work of the all-party group, will continue to help us in that regard.
Question put and agreed to.
Adjourned accordingly at eleven minutes past Five o 'clock.

EDUCATION AND SKILLS
  Higher Education Bill
  Higher Education Bill
TREASURY
  Ouzo
  Ouzo
  Bicycles
  Bicycles
  Customs (Staffing)
  Customs (Staffing)
  EU Waste and Fraud
  EU Waste and Fraud
  Public Service Agreement Targets
  Public Service Agreement Targets
  Working Tax Credit
  Working Tax Credit
CULTURE, MEDIA AND SPORT
  Free Television Licences
  Free Television Licences
MINISTER FOR WOMEN
  Criminal Justice System (Women Professionals)
  Criminal Justice System (Women Professionals)
  Alcohol
  Alcohol
  Career Opportunities (South-east)
  Career Opportunities (South-east)
  Equal Opportunities
  Equal Opportunities
  Civil Service (Pension Entitlement)
  Civil Service (Pension Entitlement)
DEFENCE
  Afghanistan
  Afghanistan
  ALARM Missile
  ALARM Missile
  Armed Forces Postings
  Armed Forces Postings
  Army Personnel (Self-harm)
  Army Personnel (Self-harm)
  Climate Change
  Climate Change
  D-Day Commemoration
  D-Day Commemoration
  Data Protection
  Data Protection
  Deepcut and Catterick Barracks
  Deepcut and Catterick Barracks
  Defence Logistics Organisation
  Defence Logistics Organisation
  Fire Study 2000
  Fire Study 2000
  Fisheries Control Agency
  Fisheries Control Agency
  Haes Report
  Haes Report
  Interpreters
  Interpreters
  Iraq
  Iraq
  Manning Control
  Manning Control
  Marine Maddison
  Marine Maddison
  Project Funding
  Project Funding
  RAF Brampton and Wyton
  RAF Brampton and Wyton
  Richard King
  Richard King
  Royal Navy
  Royal Navy
  Single Entry System
  Single Entry System
  Type 23 Frigates
  Type 23 Frigates
  Unexploded Ordnance
  Unexploded Ordnance
  Warships
  Warships
SCOTLAND
  Censuses
  Censuses
  Energy Policy
  Energy Policy
NORTHERN IRELAND
  Assembly Ombudsman
  Assembly Ombudsman
  Assets Recovery Agency
  Assets Recovery Agency
  Further Education
  Further Education
  International Monitoring Commission
  International Monitoring Commission
  Mental Health Services
  Mental Health Services
  New Deal
  New Deal
  Pregnancy (Triple Test)
  Pregnancy (Triple Test)
  Serious Organised Crime Agency
  Serious Organised Crime Agency
  Ulster Scots
  Ulster Scots
INTERNATIONAL DEVELOPMENT
  Small Arms
  Small Arms
  CDC and Actis
  CDC and Actis
TRADE AND INDUSTRY
  Long-service Awards
  Long-service Awards
  National Minimum Wage
  National Minimum Wage
  Defective Products (Mandatory Recalls)
  Defective Products (Mandatory Recalls)
  Music Industry
  Music Industry
  Small Firms Legislation
  Small Firms Legislation
  Chemical Industry
  Chemical Industry
  European Union (Balance of Trade)
  European Union (Balance of Trade)
  Nuclear Power (Emissions)
  Nuclear Power (Emissions)
  West Africa (Export Control)
  West Africa (Export Control)
  Productivity (Yorkshire and the Humber)
  Productivity (Yorkshire and the Humber)
  Internet Access
  Internet Access
  Alcoholic Beverages
  Alcoholic Beverages
  BNFL
  BNFL
  Conferences and Seminars
  Conferences and Seminars
  Departmental Expenditure
  Departmental Expenditure
  Departmental Scientific Adviser
  Departmental Scientific Adviser
  Drug Treatments in Developing Countries
  Drug Treatments in Developing Countries
  E-Auctions
  E-Auctions
  Employment Rights Booklets
  Employment Rights Booklets
  Entrepreneurship
  Entrepreneurship
  Fireworks Act
  Fireworks Act
  Flexiclub
  Flexiclub
  Internet Service Providers
  Internet Service Providers
  Ministerial Visits
  Ministerial Visits
  Nirex
  Nirex
  Nuclear Decommissioning Authority
  Nuclear Decommissioning Authority
  Oil Reserves
  Oil Reserves
  Phoenix Development Fund
  Phoenix Development Fund
  Renewable Energy
  Renewable Energy
  Rural Post Offices (Scotland)
  Rural Post Offices (Scotland)
  Small Businesses
  Small Businesses
TRANSPORT
  10-year Plan
  10-year Plan
  Bus Services
  Bus Services
  Channel Tunnel
  Channel Tunnel
  Computer Misuse
  Computer Misuse
  Cycling Proficiency Tests
  Cycling Proficiency Tests
  Infrastructure Projects
  Infrastructure Projects
  London Transport (Grants)
  London Transport (Grants)
  M25
  M25
  Motorised Scooters/Wheelchairs
  Motorised Scooters/Wheelchairs
  Press Officers
  Press Officers
  Rail Services/Stations
  Rail Services/Stations
  Road Noise
  Road Noise
  Speed Cameras
  Speed Cameras
  Secondments
  Secondments
  Strategic Rail Authority
  Strategic Rail Authority
ENVIRONMENT, FOOD AND RURAL AFFAIRS
  Animal By-Products Regulations
  Animal By-Products Regulations
  Badgers
  Badgers
  Bovine TB
  Bovine TB
  Fallen Stock
  Fallen Stock
  Farm Incomes (Buckingham)
  Farm Incomes (Buckingham)
  GM Crops
  GM Crops
  M. bovis
  M. bovis
  Market Towns
  Market Towns
  Ministerial Travel
  Ministerial Travel
  National Farmers Union
  National Farmers Union
  Renewable Energy
  Renewable Energy
  Severely Disadvantaged Areas
  Severely Disadvantaged Areas
  Strategic Plant Breeding
  Strategic Plant Breeding
CONSTITUTIONAL AFFAIRS
  Supreme Court
  Supreme Court
HOME DEPARTMENT
  Carter Report
  Carter Report
  Bichard Inquiry
  Bichard Inquiry
  Care Homes
  Care Homes
  Crime Reporting
  Crime Reporting
  Firearms
  Firearms
  Hertfordshire Police Authority
  Hertfordshire Police Authority
  Home Detention Curfew Scheme
  Home Detention Curfew Scheme
  Human Embryos
  Human Embryos
  Internet Pornography (Children)
  Internet Pornography (Children)
  Mobile Cells
  Mobile Cells
  Licensing Act
  Licensing Act
  Misuse of Computers Act
  Misuse of Computers Act
  Offending Behaviour Courses
  Offending Behaviour Courses
  Operation Safeguard
  Operation Safeguard
  PACE Convictions
  PACE Convictions
  Prison Cells
  Prison Cells
  Prison Education
  Prison Education
  Prison Officers
  Prison Officers
  Prisons (Accommodation)
  Prisons (Accommodation)
  Prisons (Male Estate)
  Prisons (Male Estate)
  Private Security Act
  Private Security Act
  Probation Service
  Probation Service
  Resettlement Programmes
  Resettlement Programmes
  Secure Training Centres
  Secure Training Centres
  Suicide (Websites)
  Suicide (Websites)
  Winchester/Edmunds Hill Prisons
  Winchester/Edmunds Hill Prisons
  Wormwood Scrubs
  Wormwood Scrubs
  Young Offenders
  Young Offenders
  Prison Visiting
  Prison Visiting
  Youth Offending Teams
  Youth Offending Teams
WORK AND PENSIONS
  Association of British Insurers
  Association of British Insurers
  Benefits Reforms (Scotland)
  Benefits Reforms (Scotland)
  Company Stakeholder Pension Schemes
  Company Stakeholder Pension Schemes
  Departmental Policies (Hackney)
  Departmental Policies (Hackney)
  Employers' Liability Compulsory Insurance
  Employers' Liability Compulsory Insurance
  EU Accession Countries
  EU Accession Countries
  Health and Safety
  Health and Safety
  Pension Centre Staffing
  Pension Centre Staffing
  Pension Service (IT Facilities)
  Pension Service (IT Facilities)
  Pensions
  Pensions
  Unemployment (Wales)
  Unemployment (Wales)
FOREIGN AND COMMONWEALTH AFFAIRS
  Afghanistan
  Afghanistan
  Climate Change
  Climate Change
  Cyprus
  Cyprus
  Eritrea/Ethiopia
  Eritrea/Ethiopia
  EU Budget
  EU Budget
  European Court of Human Rights
  European Court of Human Rights
  Government Hospitality
  Government Hospitality
  Kosovo
  Kosovo
  Kurds (Iraq)
  Kurds (Iraq)
  Opinion Sampling
  Opinion Sampling
  Pakistan
  Pakistan
  Press Officers
  Press Officers
  Taiwan
  Taiwan
  Weapons of Mass Destruction
  Weapons of Mass Destruction
DEPUTY PRIME MINISTER
  Department-Funded Programmes
  Department-Funded Programmes
  Departmental Buildings
  Departmental Buildings
  Government Publicity
  Government Publicity
  Housing Bill Consultation
  Housing Bill Consultation
  Housing Management/Maintenance Allowance
  Housing Management/Maintenance Allowance
  Local Authority Standards Committees
  Local Authority Standards Committees
  Local Government Grants
  Local Government Grants
  Local Government Statutory Officers
  Local Government Statutory Officers
  Parliamentary Questions
  Parliamentary Questions
  Regional Policy
  Regional Policy
  South East England Development Agency
  South East England Development Agency
  Tetra
  Tetra
HEALTH
  Soya Contamination
  Soya Contamination
  Care Homes
  Care Homes
  Weil's Disease
  Weil's Disease
  Ashford (Middlesex) Hospital
  Ashford (Middlesex) Hospital
  Cancer Research
  Cancer Research
  Cardiac Care
  Cardiac Care
  Child Obesity
  Child Obesity
  Chlamydia
  Chlamydia
  Community Health Councils
  Community Health Councils
  Community Pharmacists
  Community Pharmacists
  Complementary Medicines
  Complementary Medicines
  Consultant Neurologists
  Consultant Neurologists
  Consultant Nurses
  Consultant Nurses
  Contraceptive Services
  Contraceptive Services
  Eye Tests (Crosby)
  Eye Tests (Crosby)
  General Practitioners
  General Practitioners
  Genetically Modified Foods
  Genetically Modified Foods
  Getting Ahead of the Game
  Getting Ahead of the Game
  Health Development Agency
  Health Development Agency
  Health Funding
  Health Funding
  Health Services
  Health Services
  Healthy Living Programmes
  Healthy Living Programmes
  Household Goods (Chemicals)
  Household Goods (Chemicals)
  Human Embryos
  Human Embryos
  Lymphoedema
  Lymphoedema
  Malnutrition
  Malnutrition
  Medicines and Health Care Products Regulatory Agency
  Medicines and Health Care Products Regulatory Agency
  Meningitis
  Meningitis
  Mercury Healthcare
  Mercury Healthcare
  Microsoft
  Microsoft
  National Programme for IT
  National Programme for IT
  NHS (Charges for Overseas Visitors) Regulations
  NHS (Charges for Overseas Visitors) Regulations
  NHS Funding (Crosby)
  NHS Funding (Crosby)
  NHS Recruitment
  NHS Recruitment
  NHS Trusts
  NHS Trusts
  Non-consultant Career Grade Doctors (Dermatology)
  Non-consultant Career Grade Doctors (Dermatology)
  Nursing Vacancies (Greater London)
  Nursing Vacancies (Greater London)
  Paddington Basin Private Finance Initiative
  Paddington Basin Private Finance Initiative
  Pathologists
  Pathologists
  Pharmaceutical Packaging
  Pharmaceutical Packaging
  Prisons (Mental Health)
  Prisons (Mental Health)
  Public Health
  Public Health
  Rapid Access Chest Pain Clinics (Crosby)
  Rapid Access Chest Pain Clinics (Crosby)
  Science Strategy
  Science Strategy
  Sexual Health
  Sexual Health
  Sport
  Sport
  St. Helens Hospitals
  St. Helens Hospitals
  Telecommunications Masts
  Telecommunications Masts
  Tuberculosis
  Tuberculosis
  Websites
  Websites
ENVIRONMENT, FOOD AND RURAL AFFAIRS

  Chemical, Biological, Radiological and Nuclear Decontamination
  The Minister for the Environment (Mr. Elliot Morley)
  The strategic national guidance for the decontamination of the open environment exposed to chemical, biological, radiological or nuclear substances or material has today been published on the DEFRA website www.defra.gov.uk and the UK resilience website www.ukresilience.info. The guidance may be downloaded from those sites and I am also placing a copy in the Library of the House.

  This guidance is designed to help local authorities, and others with responsibilities for protection of the public, to develop practical strategies for cleaning up the open environment in the event of the release of chemical, biological, radiological and nuclear (CBRN) substances or materials. It also provides an agreed set of basic recovery principles and a shared understanding of the key issues that may need to be addressed. The guidance was recently finalised and is not a response to any new or recent threat of an incident. It is sensible contingency planning and does not mean there is a further threat from CBRN terrorism. Up till now, guidance to local authorities was published in October 2001 and a revised version in August last year. Strategic national guidance on the decontamination of people was published in February 2003.

  The guidance is part of a suite of CBRN documents developed under the CBRN resilience programme and led by the Home Office. It also refers to the Government's active consideration of establishment of a new service to be ready to provide advice and assistance in decontamination and clean-up after a CBRN incident. Further details will be given as soon as practicable.

  This guidance will be updated periodically and updates will be available on the DEFRA and UK resilience websites. We welcome feedback on the guidance, which can be sent to cbrnenquiries@homeoffice.gsi.gov.uk.

  Fisheries
  The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Mr. Ben Bradshaw)
  The Prime Minister's Strategy Unit report"Net Benefits: A Sustainable and Profitable Future for UK Fishing" is published today.

  The report concludes that the UK fishing industry can be profitable and sustainable in the long term, provided that it modernises to meet global competition.

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  The report offers an extremely valuable and detached analysis of the situation in British fishing, which we believe offers the Government, the industry and everyone else with an interest the catalyst for moving forward. The report's broad conclusions are:
  The Government should clearly define its economic, social, environmental and safety goals for the fishing industry and fishing communities.
  The aim should be to foster and support a competitive, profitable and sustainable UK fleet.
  Compliance with the rules by the UK fishing industry and other member states should be improved.
  UK fisheries management should be further modernised and be more decentralised and flexible.
  The fishing industry must be more fully incorporated into the broader marine management process, with a balanced set of rights and responsibilities.
  We should actively encourage and support progressive regionalisation of EU management under the CFP.
  Government policies should recognise and support vulnerable fishing dependent communities.
  Fisheries management should play a full and equal role in wider systems of managing the marine environment.

  These are underpinned by a large number of more specific recommendations. They all demand a more developed partnership approach with the industry if implementation is to be successful.

  The Government welcome publication of the report, supports all the report's broad conclusions and will now explore and discuss the report in depth. It is important that this is a fully inclusive process. Our aim is for the fisheries departments in the UK to work closely in partnership with each other, and in collaboration with the industry and other stakeholders, to work up practicable and deliverable solutions, building on the proposals and recommendations in the report. Defra have already set up a team to take this process forward, which will be consulting actively with stakeholders over the coming months. A strategy, and a timetable for delivering it, will be agreed by the end of 2004.

  Landfill
  The Minister for the Environment (Mr. Elliot Morley)
  The landfill directive represents an important step change in the way we dispose of waste. It will encourage waste minimisation and increased levels of recycling and recovery.

  The council decision on waste acceptance criteria (WAC), agreed in Council in December 2002, sets out the standards that waste must meet to be accepted at one of the three classes of landfill—hazardous, non-hazardous or inert—prescribed by the landfill directive. It introduces criteria and sets limit values for a number of contaminants, so harmonising another aspect of landfill regulation across Europe. A consultation on how the WAC was to be implemented began on 24 September and closed on 17 December.

  Following consultation we have decided that the implementation date for the WAC will be 16 July 2005 with the "interim year" between July 2004–July 2005 being managed using a site specific approach based on loading rates of new wastes, the types of new waste and the types of waste already in the landfill. This site-specific approach will continue post-2005. The option of

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  opening separate cells in hazardous sites for waste deposited after July 2005, which has been subject to the full WAC, will not be pursued.

  The limit values for cadmium and mercury will remain those contained in the Council decision. However, this position will be reviewed two years after implementation following discussions between DEFRA and the Environment Agency to determine whether compliance with the groundwater directive requires adoption of limit values lower than those required by the landfill directive. Furthermore, the Government have decided to extend the ban on disposing gypsum-based wastes with biodegradable wastes to include any high sulphate wastes.

  The risk assessment option will be adopted but given the difficulties for the agency in its regulation, the potential for greater environmental risk and the resultant risk of having to store hazardous waste pending agency checks, Government will restrict the option to only individual waste streams destined for specific mono-fill sites. While there will be no initial time limit to this approach, Government reserve the right to re-visit the issue within two years of implementation.

  The consultation outcome is available in full on http://www.defra.gov.uk/corporate/consult/landfill-regs/index.htm

  The Landfill (England and Wales) (Amendment) Regulations to implement these decisions will be laid before Parliament in April. In addition, we expect the landfill directive interpretive guidance to be available to operators also in April.

  The Government recognise that implementation of the landfill directive will have a significant impact on the disposal of hazardous waste. They continue to work with the Environment Agency, waste producers and waste managers to ensure that the transition period is as smooth as possible and that the environment and human health are fully protected.

  Albatrosses and Petrels
  The Minister for the Environment (Mr. Elliot Morley)
  The agreement on the conservation of albatrosses and petrels (ACAP) is the key international treaty, concluded under the convention on migratory species, which deals with the conservation of albatrosses and petrels in the southern hemisphere. The UK played a leading role in drawing up the agreement and was amongst the first to sign it, in June 2001. The agreement entered into force on 1 February as a result of ratification by the fifth party, South Africa, in November 2003.

  In May 2003 I laid an explanatory memorandum before both Houses of Parliament relating to the ratification of ACAP (Command Paper no 5826) in respect of the UK and the British Antarctic territory.

  Some of the legal issues raised by the treaty have required further consideration and analysis and the Government did not in fact proceed to ratification last year. In the meantime I am pleased to say that more UK Overseas territories in the range of the species covered by the Agreement have indicated their wish to be included in the UK's ratification and have ensured that their legislation can meet the agreement's requirements.

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  The Government recognises the urgent need to ratify this agreement as quickly as possible. We have long indicated our strong commitment to the conservation of these species, which are at serious risk from a range of human influences, and wish to play our full part in international efforts.

  I am therefore tabling a revised explanatory memorandum today indicating that we propose to ratify the Agreement, without reservations and without further delay, for the UK and the British Antarctic territory, the Falkland Islands and South Georgia and the South Sandwich Islands. I intend that the instrument of ratification shall be deposited with the Australian Government on 2 April.

  As the Government takes these urgent steps, we are conscious that Parliament will have less time than convention normally allows to consider the revised memorandum. However, we believe this to be a special case on the grounds that the agreement itself has been available to both Houses since May 2003. In fact a number of hon. Members have urged the Government recently to take urgent steps to ratify the agreement in the light of the serious conservation issues it addresses. In these circumstances the Government considers that a shortening of the normal scrutiny period is reasonable.

HEALTH

  Standards Agency
  The Parliamentary Under-Secretary of State for Health (Miss Melanie Johnson)
  The Food Standards Agency's annual report and accounts 2002–03 were laid before Parliament today.

  Copies will be placed in the Library.

HOME DEPARTMENT

  Immigration and Nationality Directorate
  The Minister for Citizenship and Immigration (Beverley Hughes)
  I have today placed in the Library several important documents on immigration and asylum matters:a report of the investigation by Ken Sutton into how guidance was issued to staff in the Sheffield office of the Immigration and Nationality Directorate (IND) on the handling of applications under the European Communities Association Agreements (ECAA);
  a response to the Home Affairs Select Committee report on "Asylum Applications";
  the full text of last year's report of the independent review into the operation of the National Asylum Support Service (NASS).

  Investigation of ECAA guidance:

  Mr. Sutton's main findings are that:
  two sets of guidance were developed in Sheffield, to reduce the extent of checking of ECAA applications, one set in September/October 2003, the other in January/February 2004;
  the decision to proceed with the new guidance was taken by middle ranking managers in charge of the Sheffield team. It was not cleared with senior officials at IND head office in Croydon or with ministers;

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  together with the deployment of additional staff, the guidance was intended to clear a backlog of ECAA applications which had built up;
  the guidance had nothing to do with attempting to reduce the number of people from EU Accession States who might appear in published statistics after 1 May.

  The vast majority of those approved under this guidance were already lawfully in the country. From internal management information, we estimate that around 36,000 decisions in the ECAA category have been made in this financial year of which 29,000 were from people already in the UK.

  Mr. Sutton has also referred to the relevance of more general working guidance for staff on the clearance of backlogs of older cases. The volume of applications for extensions of stay means that all Governments at least as far back as the late 1980s. have had to address this problem. Over the years, it has been accepted that making decisions on the basis of the information already available to the caseworker can sometimes be justified as a means of tackling backlogs. This is because long backlogs make immigration controls less effective, as it becomes more difficult to take action against people whose applications have been stuck in the system. They are also unfair to legitimate applicants, most of whom are already in the country legally.

  Mr. Sutton has found that managers in Sheffield believed that the approach they took was consistent with general guidance on the clearance of backlogs, but he concludes that it went further in extending the procedure to a broader range of cases including new as well as old cases and that it led staff to going too far in easing the application of the checks.

  Mr. Sutton's report shows that mistakes were made. There is no suggestion that these were deliberate or the result of lack of effort. Rather there was an excess of zeal in pursuing the common objective of reducing backlogs. Mr. Sutton's inquiry was not a disciplinary investigation. The Director General of the Immigration and Nationality Directorate has therefore now initiated a disciplinary investigation (with all the safeguards necessary to ensure fairness to members of staff) which will decide what management action is required and whether the management in Sheffield needs further strengthening beyond that already announced.

  We are determined to learn from this episode. I have accepted all the recommendations made by Mr. Sutton to address the management and other weaknesses identified in his report. This will make it clear who is responsible for determining caseworking practice, their level in the organisation and the respective roles of Ministers and civil service managers. Staff have a right to expect such clarity and for managers to have a defined measure of authority to manage the business in a sensible way. As part of the follow-up to Mr. Sutton's report and as he has recommended, there will be a major effort to standardise guidance for staff in each operational area, ensure that appropriately senior managers are clearly responsible for authorising that guidance, and lay down clearly the circumstances in which Ministers must be consulted.

  I have also instructed the Director General to draw up proposals for an off-line audit and inspection unit, reporting directly to me and the Director General, to undertake inspections of working practices and performance in all parts of IND's business.

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  It is important that these events should not overshadow the great strides that have been made by IND in recent years, including through the excellent work of caseworking staff in Sheffield. The introduction of charging in August has enabled us to invest in additional general caseworking staff. The number of staff deployed on such work in Croydon and Sheffield has increased by 67 per cent., from 780 at the end of 2002 to around 1,300 now. As a result, we have set and are meeting service standards for charged work under which 70 per cent. of cases are decided within three weeks and virtually all of the rest within 13 weeks. Backlogs are low, and special measures to deal with them are no longer necessary.

  There are, however, other areas of IND's business where backlogs remain a problem, including a number of older cases where a decision has been taken, but other issues have been raised by the applicant. I have put in hand a full analysis of the extent of this and steps to be taken to deal with it. Mr. Moxon's actions raised the question of how employees can raise matters of concern within IND. Existing Home Office instructions say concerns should be raised either with the Head of the Department or confidentially with a nominated official outside their line management chain and if still unresolved can be raised with the Civil Service Commissioners. I have ordered these procedures should be re-published to every employee today so they can be clear of the avenues open to them if they are concerned about what they are being asked to do. Separately, the Permanent Secretary is taking steps to strengthen my Private Office to enable it to deal better with the large volume of correspondence it receives which includes around 2,000 e-mails a week.

  Response to the Home Affairs Committee report on asylum applications:

  Also published today is the Government's response to the Home Affairs Committee's recent report on asylum applications. Here too a history of applications exceeding the capacity to deal with them has been reversed, by reducing intake and investing in extra caseworkers about 2,000 more applications are now being decided each month than are being received. At the end of December 2003 the number of asylum applications awaiting an initial decision had fallen to 24,500, the lowest level for a decade.

  This has been achieved by the hard work of IND staff, underpinned by considerable Government investment and clear political leadership. As a result, the work is under control and IND is in a better shape than it has been for many years. I am determined to build on this by targeted, enhanced checks in areas that still concern us, such as the investigation of doubtful marriages, students and colleges. The Home Secretary and I have already been considering steps we should take in all these areas, and we will make a separate announcement soon.

  Confidence in the immigration system is important so we can recognise the huge contribution legitimate migrants make to our economic prosperity and society. Migrants make up 8 per cent. of our population but generate 10 per cent. of our total wealth. They are net contributors to the Exchequer, and in all walks of life bring skills and energy that our society needs. I am today laying regulations in the House to give effect to

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  the new workers registration scheme for nationals of eight EU accession countries. These will be debated in both Houses next month.

  Independent Review of the National Asylum Support Service:

  Also published today in response to a recommendation in the Home Affairs Committee's report is the Report of the independent review of the operation of the National Asylum Support Service (NASS). The review was established in March last year to consider the ways in which NASS operated at that time and provide me with recommendations to improve its performance. I have already published the review's key findings on 15 July last year, and provided the House with a further report on 9 February on the progress we are making in NASS. The review was established as an internal management tool to ensure improvements could be made but I have decided to also place a copy in the library of the House and on the Home Office website.

  In addition:

  Since last summer NASS has suspended processing of claims for back-payments of asylum support while we clarified the legal position. I can now confirm that we will only make back-payments where the missing payments result from an error on the part of NASS and the claimant is still supported by NASS. A dedicated team will work through the outstanding claims resulting from the suspension;

  I am abolishing single additional payments to asylum seekers;

  I am tightening up on processes for providing support to single failed asylum seekers under section 4 of the Immigration and Asylum Act 1999 which provides for exceptional help to those asylum applicants whose claims have failed;

  Iraqis will no longer be routinely eligible for section 4 support unless they are co-operating with voluntary returns. This is in line with our section 4 policy for other nationalities now that we will begin returning failed asylum seekers to Iraq from April, as previously announced;

  Our contract with Landmark was terminated on 23 March this year. I am grateful to all our local authority and voluntary sector partners for working with us so closely to make this possible; and

  I have laid draft Regulations to provide for routine annual increases in the levels of asylum support with effect from 12 April.

  Finally, the Home Secretary has also today laid draft regulations to establish a workers' registration scheme for nationals of eight accession countries as the Home Secretary announced in his statement of 23 February.

  Police Constable Gerald Walker
  The Parliamentary Under-Secretary of State for the Home Department (Paul Goggins)
  Today I am publishing and placing in the Library the report of the inquiry by Her Majesty's chief inspector of probation into the death of police constable Gerald Walker. In his report, the chief inspector makes a number of recommendations for changes to the way in which the probation, prison and police services manage the release on licence, supervision and revocation of licence of 62WS
  offenders who are serving part of their sentence under supervision in the community. The services have accepted those recommendations in full. I am therefore able to report that I am today also placing in the Library a copy of the detailed action plan which I have agreed with the key correctional services agencies to ensure that the lessons of PC Walker's tragic death are learned and appropriate changes are introduced.

  Police constable Walker was a serving officer of the Nottinghamshire constabulary at the time of his death at the hands of David Parfitt in Nottingham following the tragic events of 7 January last year. Parfitt had been convicted of robbery on 16 May 2002 and sentenced to two years imprisonment. He was released into the supervision of staff of the Nottinghamshire probation area on 11 September 2002. His licence, which in the normal way would have run until 13 March 2003 included among other conditions, a requirement that Parfitt undergo regular testing for the presence of class A drugs as arranged by the probation service. He was also subject for the first 60 days of his period in the community to an electronically monitored home detention curfew condition which required that he remain at his approved address between 7.15 pm and 7.15 am.

  At the time PC Walker was killed, Parfitt had completed his period of home detention curfew without breaking the conditions of that curfew, but had recorded a number of positive tests for the presence of class A drugs and had failed to attend a number of appointments with his supervising officer. As a consequence, his supervising officer had requested, and the Home Office approved, the revocation of Mr Parfitt's licence on 9 December 2002.

  Parfitt was unlawfully at large from that date until 8 January 2003, when he was arrested by the Nottinghamshire police. During that time, Parfitt caused the injuries to PC Walker from which he subsequently died when the officer fell from a vehicle in which Parfitt was seeking to escape. Parfitt was subsequently convicted of manslaughter for the death of PC Walker and was sentenced to 12 years imprisonment.

  PC Gerald Walker's attempts to arrest David Parfitt were the actions of a brave man and a dedicated police officer. They deserve the unreserved commendation of the House. His death as a consequence of Parfitt's actions was an irreparable loss to the Nottinghamshire police service and the people of Nottingham, but even more a personal tragedy for his wife and family. I know that I speak for the whole House in expressing my deepest sympathy and condolences to Mrs. Tracy Walker for her loss.

  Following PC Walker's death, Mrs Walker was not satisfied that the correctional services agencies had been as open with her about the circumstances of her husband's death as they were required to be. She was concerned that failures in the way in which Parfitt's case had been handled had actually contributed to the situation which led to the death of her husband. She formally complained to the national probation service and on 13 December last year I, together with my hon. Friend the Minister for Crime Reduction, Policing and Community Safety, asked HM Chief Inspector of Probation, Professor Rod Morgan, to carry out an

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  inquiry into the actions of the prison service, Nottinghamshire probation area and Nottinghamshire constabulary in relation to the events which culminated in and followed the death of PC Walker.

  I have now received the report of that inquiry. On behalf of myself and my hon. Friend I would like to take this opportunity to thank the chief inspector and his team for the scrupulous manner in which they have approached this important and sensitive inquiry.

  Professor Morgan's report covers issues at both the local, operational level and in respect of the national policy which informed local practice. He reports that he found a number of failings in the handling of Parfitt's case which, if carried out differently, could have resulted in the earlier revocation of his licence and the possibility of his earlier arrest. He makes a number of recommendations for changes affecting all three services which he believes will reduce the risk of similar failings arising in future and which will contribute to the greater safety of the public.

  Professor Morgan also identifies serious flaws in the way that the Probation Service dealt with Mrs Walker.

  Professor Morgan has identified a number of areas in which our present practice for the safe management of offenders in the community can and should be improved. The Government and services accept Professor Morgan's analysis and will implement the changes he proposes. The action plan I have today placed in the Library sets out how we propose to take forward the implementation of the key recommendations outlined by the inquiry report.

  Money Laundering Reporting System
  The Parliamentary Under-Secretary of State for the Home Department (Caroline Flint)
  An important asset in our fight against crime is the system under which businesses report money laundering to the National Criminal Intelligence Service (NCIS) and that information is analysed for use in investigations. I am therefore pleased to report that substantial improvements to that system have been achieved over recent months. The reforms must continue and be built on but it is clear that new arrangements are being developed which have the potential to have a greater impact on crime.

  The setting up of the Money Laundering Reporting Taskforce:
  In September 2003, my right hon. Friend the Home Secretary set up a Taskforce to follow up the findings of a review by the consultants KPMG, commissioned by the Home Office, on the regime for handling reports relating to money laundering. The Taskforce's membership is drawn from key interested parties in the public and private sectors and the Financial Services Authority. It has given me an interim report on the progress of follow-up and the key challenges which remain in delivering a better system.

  Summary of the key findings of the Taskforce:
  The view of the Taskforce is that the money laundering reporting regime has an important role to play in the fight against crime and terrorism, but equally that the burden the system places on reporting institutions and the public purse must be proportionate. This requires a system that delivers, and is seen to deliver, value to law enforcement, and which must be robust from end to end (from reporting institution via NCIS to law enforcement and the criminal justice system). Considerable progress has been nude since the publication in
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  July 2003 of the KPMG report, but these improvements must be sustained and much still remains to be done. The Taskforce believes the Government should keep the reporting regime under review to ensure it is, and remains, effective and proportionate and that better systems are needed to measure its costs and benefits.

  Key challenges identified by the Taskforce:

  The Taskforce considered that the key challenges over the system are:
  All those involved in the reporting regime need to turn the closer co-operation of recent months into effective action and the system must be developed, not in isolation, but as a key element of the UK's wider anti- money laundering policy;
  NCIS need to ensure they can respond to the further increase in reports expected with the widening from 1 March of the range of institutions covered by the Money Laundering Regulations and related reporting obligations. A key element in this is successful operation of the new, differential, reporting system just introduced by NCIS which covers activities that will be of little intelligence value;
  NCIS and law enforcement agencies need to provide more support to those institutions reporting on money laundering, so as to improve the quality of those reports;
  Disclosing institutions need to continue to work to improve their staffs awareness of reporting obligations, compliance with the law and the production of good quality reports;
  The public sector needs to communicate better with disclosing institutions about the reporting regime and to recognise the diverse nature of the businesses in the regulated sector and the money laundering risks they face. To address this issue, the Taskforce has been working on developing and implementing a short-term and long-term communications strategy;

  The Taskforce identified the limited capacity of police forces to follow up the intelligence derived from reports on money laundering as one of the main barriers to an effective system.

  The Government's response to the interim report:

  The Government welcome the improvements made to date to the reporting system to help fight crime. The Taskforce has found that information from reports on money laundering is now being analysed better and sent on to law enforcement agencies much more quickly; but also stressed that these improvements must be sustained and much still remains to be done. I have therefore asked for a further report in early summer, at which point I will consider how best we can continue to drive forward and monitor progress on this important task.

  The reporting system is a key element in the United Kingdom's defences against money laundering and an important source of intelligence on all types of acquisitive crime (drugs trafficking, theft, fraud, and all other types of crime committed for financial gain). So it is crucial to ensure that it is effective but that the costs it imposes on the private sector are proportionate.

  The Government recognise that the whole system is built on the work of the institutions making reports. It relies heavily on the part that the private sector play in this partnership to fight crime, and I would like here to pay tribute to the money laundering reporting officers and all the others in the private sector involved in the making of these reports.

  The fight against money laundering is one element in the Government's wider strategy to take the profit out of crime. As part of this strategy I was delighted to announce on 24 February a new incentive scheme for the police. The scheme will give the police a direct

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  financial incentive to recover even more criminally acquired wealth, by giving them a stake in the assets they recover. They will receive a third of all assets above £40 million recovered next year, increasing to 50 per cent. in 2005–06. The maximum benefit available to the police will be £43 million in 2004–05, rising to 65 million in 2005–06.

  I acknowledge that the Association of Chief Police Officers have expressly requested that money under the incentive scheme should not be ring-fenced for specific purposes and we have therefore not done that. However, at a time when police numbers in England and Wales have reached a record level and we are giving extra funding through the incentive scheme, I hope that the police will be investing more effort in working on intelligence derived from reports of money laundering. This would be in line with the National Policing Plan 2004–07, which encourages police forces to ensure that intelligence from the reporting system is used to the full.

  The intelligence from the money laundering reporting system can be of great value in fighting all manner of acquisitive crime. The reporting system is a key element in our strategy, and it is crucial to ensure that we use the information
  from reports as effectively as possible to detect and deter criminals.

INTERNATIONAL DEVELOPMENT

  Iraq (Reconstruction)
  The Secretary of State for International Development (Hilary Benn)
  I visited Iraq from 22–23 March. In Baghdad I met the Iraqi Governing Council, Ministers and representatives of non-Government organisations, as well as Ambassador Bremer and other staff from the Coalition Provisional Authority. In Basra I visited two development projects, met leaders of women's groups and held discussions with CPA South staff.

  Significant progress is being made. Iraq's economy is recovering with oil output now over 2.5 million barrels per day, and reconstruction projects are bringing results. I visited Al Faw, to see the installation of 5 x 2MW diesel generators, funded by DFID, which should provide the 45,000 citizens of Al Faw with 24 hours of electricity every day.

  In Basra I visited the Rzero Water Treatment Plant. This is part of a major programme to renew the Basra water supply. The USA is providing most of the capital investment, alongside some money provided by the Development Fund for Iraq, to extend new water mains to the poorest areas of Basra, and in doing so create up to 2,000 jobs. The DFID-financed team in CPA South helps to coordinate the whole programme. It should provide a good model for future collaboration.

  Successful reconstruction is bringing new challenges. Sustaining the improvements in infrastructure will require difficult political decisions by the new Iraqi Government about charging customers realistic rates for services such as electricity and water, and strengthening the Iraqi institutions that run these utilities. the public distribution system for food and Iraq's state owned enterprises will also need reform. The IMF and World Bank will have a significant role to play in this.

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  Security remains a major concern for the Iraqis and those who are helping them. But encouraging progress is being made in recruiting for the new Iraqi security forces, and training programmes are underway.

  The transitional administrative law is a significant development in the political process. At the Governing Council's invitation the UN has agreed to play a major role in facilitating the formation of the interim Government and the preparation for elections. The handover on 30 June will be a big step. From 1 July Iraqis will have to address their concerns to their own Government. However, donors will still have a significant role, and we are working to make the transition as smooth as possible and to ensure that donors coordinate their programmes effectively.

  The Minister for Municipalities and Public Works, Mrs Nasreen Berwari joined me in Baghdad to launch DFID's interim Country Assistance Plan for Iraq, which I announced to the House in a written statement on 23 February (Col: 7WS), Copies of the plan are in the Libraries of both Houses. At the same time I was able to confirm that DFID is making an initial contribution of £70 million to the International Reconstruction Fund Facility for Iraq: £40 million of this will be spent through the World Bank's Trust Fund and £30 million through the UN's, We are also providing £8.5 million to the International Finance Corporation for its programme for small and medium enterprises in Iraq, which will enable it to start promoting much needed business activity and employment.

  Recent events remind us to take nothing for granted in Iraq, but overall reconstruction is going better than many predicted. However, it will require a sustained effort from the Iraqis, with support from the international community, to ensure that it succeeds.

FOREIGN AND COMMONWEALTH AFFAIRS

  Liberia
  The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Bill Rammell)
  With the support of Her Majesty's Government, the United Nations Security Council on 12 March unanimously adopted UN Security Council Resolution 1532(2004). The resolution imposes an asset freeze against Charles Taylor former President of Liberia, his wife Jewell Howard Taylor and his son Charles Taylor Jr. The asset freeze will also target senior officials of the former Taylor regime, and other close allies and associates of Taylor, as designated by the Committee established by UN Security Council Resolution 1521 (2004). The legal basis for the asset freeze is that Charles Taylor and others continue to use misappropriated funds to undermine peace and stability in Liberia and the region. The resolution includes humanitarian and other exemptions to the freeze, and states the intention to consider whether and how to make frozen assets available to the Government of Liberia.

  Zimbabwe
  The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Bill Rammell)
  With the support of Her Majesty's Government, Common Position 2002/145/CFSP and EC Regulation
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  310/2002 imposing EU sanctions against Zimbabwe were renewed and replaced by Common Position 2004/161/CFSP and EC Regulation 314/2004 on 19 February 2004. The measures include an arms embargo and ban on related technical assistance, with specific exemptions; an embargo on equipment that might be used for internal repression; a travel ban on listed Zimbabwean officials, who are undermining democracy, human rights and the rule of law, preventing them from entering the EU, with standard criteria for exemptions; and an assets freeze against the listed officials, with certain specific exemptions. The list of officials (in the Annex to the Common Position) has been increased from 79 to 95. The measures in the new Common Position and Regulation follow the EU Guidelines on Implementation and Evaluation of Restrictive Measures (Sanctions) in the Framework of the EU Common Foreign and Security Policy, which were adopted on 8 December 2003. The measures apply for 12 months from 21 February 2004. Amendments or renewal of the measures will be made if their stated objective has not been met.

TRANSPORT

  Central Railway
  The Minister of State, Department for Transport (Dr. Kim Howells)
  I have today written to the Chairman of Central Railway declining the company's request for the Government to promote a Hybrid Bill to seek powers 68WS
  for Central Railway's proposal to build a wholly privately financed dedicated rail freight line from North-West England to the Channel Tunnel.

  The Government have carefully considered Central's proposals and has held extensive and constructive discussions with the company. While such a scheme could make a contribution to increasing the carriage of freight by rail, Central Railway has not substantiated the likely financeability of the proposals. The Government also have concerns about the operational effects on the existing rail network and on the capacity of the construction and financial markets, and the mitigation of the adverse environmental impacts.

  The promoters have received expressions of interest from a number of possible debt providers but these are generally substantially caveated. Neither have they demonstrated that the significant amount of equity finance would be forthcoming.

  Central Railway has claimed that no call would be made on the public purse. However, once the Government have agreed to promote a Bill, inescapably they would be taken to be backing the project. Should initial finance not be raised, or the project run into financial difficulty once work was under way, the Government of the day could not escape intense pressure to intervene. The Government have therefore concluded that it cannot promote a Bill against such risks.

  The Government are supporting investment in enhancing the rail network, including capacity for rail freight, through other projects. In particular, the west coast main line upgrade and the channel tunnel rail link, together costing over £12 billion, will provide substantial extra capacity, including for freight.

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

Hepatitis C
Lord Morris of Manchester: My Lords, I beg leave to ask the Question standing in my name on the Order Paper. In doing so, I declare an interest, not a financial one, as president of the Haemophilia Society.
The Question was as follows:
To ask Her Majesty's Government whether they will reconsider their decision to exclude the widows of patients infected with hepatitis C by contaminated National Health Service blood and blood products from help under the ex gratia Payments scheme.
The Parliamentary Under-Secretary of State, Department of Health (Lord Warner): My Lords, the Government have great sympathy for the pain and hardship suffered by the widows of those inadvertently infected with hepatitis C. However, it has always been clear that the ex gratia payments scheme known as the Skipton Fund is not designed to compensate for bereavement. As such, there are no plans to reconsider that decision.
Lord Morris of Manchester: My Lords, while again I acknowledge the breakthrough achieved by John Reid's announcement of the scheme, can my noble friend say what it will cost and from which budget or budgets? Meanwhile, how can any of us justify excluding widows? Is not theirs the cruellest loss, having seen a husband and father die what my noble friend Lord Winston describes as a,
"slow, agonising death from cirrhosis or liver cancer due entirely to contaminated NHS blood products"?
Infected with hepatitis C, they were denied life assurance, and the onset of liver disease forced many into early retirement, so impoverishing their families. Where is the natural justice in including widows in the existing ex gratia scheme for HIV infection, while excluding them from this scheme? And where is the morality in denying parity of treatment to widows in identically the same tragic position?
Lord Warner: My Lords, again I pay tribute to the work done by my noble friend and the Haemophilia Society in pursuing the issue. But the underlying principles of the scheme that has been announced is that it should be targeted to help to alleviate the suffering of people living with inadvertent—I stress, inadvertent—hepatitis C infection. The fund is not designed to compensate for refusal of cover, loss of earnings or bereavement. I understand the problems that my noble
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friend has outlined, but my understanding is that hepatitis C does not automatically preclude someone from gaining life assurance.
It is difficult to predict the cost of the scheme and the number of people who will benefit, but our best estimates are that between 6,000 and 7,000 people will benefit from the scheme. I can reassure my noble friend that the department will honour all valid claims.
Lord Addington: My Lords, does the Minister not agree that we have heard in the past a great deal of resistance to our making any payment to those infected with hepatitis C in very similar terms to the resistance we have heard about giving it to families of those who have died as a result of the infection? Under those circumstances, would it not be sensible to consider making a payment to those who are suffering financially in exactly the same way?
Lord Warner: My Lords, I am in danger of repeating myself. We have made absolutely clear the basis of the scheme: to alleviate suffering among those who are living and have suffered as a result of the infection. It is not a compensation scheme. All credit is due to my right honourable friend the Secretary of State for Health, who decided last summer to bring the scheme into operation.
Earl Howe: My Lords, when the noble Lord, Lord Morris, asked a similar Question some time ago, the Minister commented that the equivalent schemes for compensating haemophiliacs in Canada and the Irish Republic, which are much more generous than the scheme that the Government have now proposed, were based on the fact that the governments of those countries had accepted liability for the damage that took place. Can the Minister confirm the Answer that he gave before, because my information is different from his?
Lord Warner: My Lords, I am grateful to the noble Earl for giving me the opportunity to clarify the issue. My understanding of the position in Ireland, which has been corroborated by officials in the Department of Health and Children in Dublin since my last utterances on the subject in the House, is that the Irish Government set up their hepatitis C compensation scheme following evidence of negligence by the Irish Blood Transfusion Service. A judicial inquiry, the Finlay report, found that "wrongful acts were committed". It is important to stress that the blood services in the UK have not been found to be similarly at fault. Compensation is therefore being given in very different, specific circumstances in Ireland that do not apply in the UK. I do not believe that the Irish scheme creates any precedent for us.
The awards being made in Canada follow a class action brought against the Canadian Government. The compensation from the federal government is limited to those infected between 1986 and 1990. Subsequent inquiries found that wrongful practices had been employed, and criminal charges were made against organisations including the Canadian Red Cross Society. Those conditions in Ireland and Canada do not apply in the UK.
Lord Ackner: My Lords, firstly I appreciate that, whenever I hear the Government express sympathy, I irritate them by pointing to the millions of pounds a year spent on victims of violent crime for whom the Government have not the slightest responsibility, whereas in this case the Government actually injected the substance. But for the fact that negligence must be proved, they would be liable.
Secondly, will the Minister explain, not why damages for bereavement are not provided, but why no damages for loss of dependency are provided? That is a separate head of damage which, if there were liability, would have had to be accepted by the Government.
Lord Warner: My Lords, I always bow to the noble and learned Lord in his knowledge of the law, but it is not my responsibility to answer for criminal compensation schemes. I am sure that my noble friend Lady Scotland will read his comments with interest. A line must be drawn somewhere on eligibility for this scheme. As I said in answers to previous supplementary questions, there was no case of negligence by the National Blood Service. The lines have been drawn on the basis that I have explained, and there is nothing more that the Government can say on this issue.
Lord Denham: My Lords, the Minister cannot say that it is not his department that is concerned. The noble Lord answers in this House for Her Majesty's Government.
Lord Warner: My Lords, I confirm that I answer for Her Majesty's Government, but the subject of the criminal injuries compensation scheme is outside the remit of the Department of Health.
A noble Lord: My Lords—
Lord Warner: My Lords, may I finish? The subject is also wide of this Question.

Ofcom
11.14 a.m.
Baroness O'Neill of Bengarve Baroness O'Neill of Bengarve asked Her Majesty's Government:
Whether Ofcom's use of the hybrid term "citizen-consumer" fully accords with Section 3 of the Communications Act 2003 which sets out separate duties towards citizens and consumers.
The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Lord McIntosh of Haringey): My Lords, the separation of the two duties is deliberate, and the intention, as I said in the House on 16 July last year, is that,
"Ofcom must strive to further the interests of both consumers and citizens, as appropriate, and with equal vigour … We absolutely believe that the consumer interest is normally best served by competition, but in citizen interest issues, competition is not the only solution".—[Official Report, 16/7/03; col. 861.]
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I trust that Ofcom is fully aware of these points and will pay them due regard when carrying out its functions. How Ofcom expresses them in its public statements is a matter for Ofcom.
Baroness O'Neill of Bengarve: My Lords, I thank the Minister for his reply. Does he agree that although most citizens are consumers, and most consumers are citizens, duties to further the interests of citizens and consumers—which Parliament distinguished after long debate in this House—are distinct, should not be amalgamated and cannot be judged by a merged benchmark? Does he further agree that Ofcom's statement that its overall mission is:
"To further the interests of the citizen-consumer where appropriate by encouraging competition",
represents a risky amalgamation of duties that Parliament separated?
Lord McIntosh of Haringey: My Lords, the noble Baroness, Lady O'Neill, is expressing the view that was debated in the House at considerable length. The Government agreed with it then and agree with it now.
The Lord Bishop of Southwell: My Lords, do the Government think that it is in the citizens' best interests that Carlton-Granada prepares to close its Nottingham studios, given that the Communications Act 2003 is supposed to provide programmes of particular interest to people living in all parts of the region that it serves? Are the Government prepared to monitor the outcome of this proposal in relation to Ofcom regulations?
Lord McIntosh of Haringey: My Lords, that is substantially wide of the Question on the Order Paper. Much as I am tempted to give my views, I should not.
Baroness Buscombe: My Lords, is it not right that the right reverend Prelate the Bishop of Southwell has come up with a good practical example of the role that Ofcom must play as regulator? During the passage of the Communications Act 2003, it was suggested at some length that the term "citizen" reflects a long-term interest, while "consumer" invariably reflects a more short-term perspective. The importance of the future of these studios is surely something in which Ofcom should play a role, as looking after the interests of citizens.
Lord McIntosh of Haringey: My Lords, the Communications Act, as the noble Baroness. Lady Buscombe, will remember, contains provision for minimum quotas of regional production and of production designed for people in particular regions. I am sure that Ofcom has been monitoring that point when considering the issue of which studios should be open or closed. That is the context in which the opening or closing of studios must be considered.
Lord McNally: My Lords, I appreciate that the Minister is playing the ministerial straight bat on this, but does he agree that the noble Lord, Lord Currie,

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and his bright young men are extremely lucky not to be before the Bar of the House for contempt of Parliament? He knows well that these words were part of a specific deal that allowed this Bill to go through only after the special pleading of the noble Lord, Lord Currie, which removed reference to the citizen in the prime duty of Ofcom? This was a real betrayal of Parliament's intent, which an independent regulator should take on at its peril. I read from a quote from the noble Lord, Lord Puttnam, who unfortunately cannot be here today. In a letter to the noble Lord, Lord Currie, he wrote:
"This fundamental distinction can only be distorted by a continuing reference to this hybrid 'citizen-consumer'. I beg you to drop it, because by using it the only organization guilty of 'conflation' and 'artifice' is Ofcom!"
That is absolutely true. Ofcom should drop this immediately.
Lord McIntosh of Haringey: My Lords, I have explicitly and unequivocally confirmed the view of this House last summer and the Government's view on it at that time and now. I do not think that it helps to indulge in more flowery language. Our position has been made clear. Ofcom is independent, and we do not control what it says. If we do not like it, we are by corollary entitled to say so.

Police Service of Northern Ireland: Sinn Fein Claims
11.19 a.m.
Lord Brooke of Sutton Mandeville Lord Brooke of Sutton Mandeville asked Her Majesty's Government:
Whether they will place advertisements in the press in the United States refuting the claims against the Police Service of Northern Ireland by Sinn Fein.
The Lord President of the Council (Baroness Amos): No, my Lords. Ministers from the British and Irish Governments, the US Administration and Members of the SDLP have all refuted Sinn Fein's claims.
Lord Brooke of Sutton Mandeville: My Lords, I thank the noble Baroness for her Answer. Since Sinn Fein spent on this advertisement a sum that represented nearly half of what it spent on the last Assembly elections, it was clearly intended to be a significant statement. In past decades, the British Government have contested case after case in state after state in America to protect American investment in Northern Ireland jobs against the McBride principles.
I appreciate what has been said, including by Dr Reiss the President's envoy, but it is not the same thing as the British Government exposing in the United States the calumnies against the Police Service of Northern Ireland that the Sinn Fein advertisement represents. Why will the Government not put their head publicly above the parapet?
Baroness Amos: My Lords, I appreciate the concerns being raised by the noble Lord, Lord Brooke. He will be aware that there were a number of people in the United States last week, including my right honourable friend the Secretary of State for Northern Ireland, the Chief Constable of the PSNI, the chairman of the Policing Board and the Police Ombudsman. There was a very clear statement from the President of the United States who told a White House gathering:
"I want to thank Chief Constable Hugh Orde; he is implementing the policing reforms of the Good Friday Agreement; even the greatest sceptic of the Good Friday Agreement would admit that the policing reforms are working".
We made inquiries about making a statement refuting the Sinn Fein claims. That was not accepted by the New York Times, which said that that is not the way that it works. We felt very clearly that the public denouncement through the Secretary of Slate for Northern Ireland and others was enough at this point in time.
Lord Eden of Winton: My Lords, can the noble Baroness say whether there is any continuing financial support from North America for terrorism in Ireland?
Baroness Amos: My Lords, I would need more information from the noble Lord about what he had in mind when he asked me that question.
Lord Glentoran: My Lords, why is it that Her Majesty's Government are always so far behind the ball when they are dealing with terrorism that requires actions rather than rhetoric, particularly in Northern Ireland? When will they listen and hear what the noble Baroness's colleague, Harriet Harman, said on "Question Time" about appeasement? She was extremely strong. She said that appeasement must stop; there must be no appeasement. In Northern Ireland we have lived with this Government's appeasement of terrorism. When will that stop?
Baroness Amos: My Lords, I completely refute that allegation. The noble Lord knows that we have worked tirelessly. We have said very clearly that paramilitary activity must stop. Even as recently as this Tuesday, when my right honourable friend the Prime Minister was in Belfast with the Taoiseach, that was made absolutely clear.
Lord Smith of Clifton: My Lords, will the Lord President of the Council confirm that the British Embassy in Washington does its best through its information services to refute such allegations? Does she take comfort, as I do, that not merely Dr Reiss condemned the advertisement as untrue, but that the Friends of Ireland group led by Senator Edward Kennedy also refuted it? Does she agree that Sinn Fein is rapidly facing a crucial point of departure either to renounce all IRA violence and participate fully in the Policing Board or to jeopardise the devolution settlement in Northern Ireland?
Baroness Amos: My Lords, I totally agree with the noble Lord, Lord Smith, in respect of the roles played by our embassy in Washington, the Consulate General in New York and those in other parts of the United States where we make every effort to refute allegations. The noble Lord is right that others, including Senator Kennedy, have made their views on this well known. We have all said that it is important that Sinn Fein participates in the process. We need two different things. We need an end to paramilitary activity and we need a fully inclusive democratic process in Northern Ireland. That is what will deliver peace.
Baroness Park of Monmouth: My Lords, why could we not spend a little money on taking out an advertisement, as Sinn Fein did, since no one will publish our comments? An advertisement need point out only that there are still very few Catholics in the new Police Service simply because when Gerry Adams was asked how he would treat new Catholic entrants he said that they would be treated as they were before; and the first graduate was shot.
Baroness Amos: My Lords, the noble Baroness will be aware that there are different ways strategically in which we make decisions about how best to refute claims and allegations. We looked at a number of different options open to us. We felt strongly that the very public views being expressed by my right honourable friends the Secretary of State for Northern Ireland and the Prime Minister, the President of the United States and others were one way of dealing with this.
The change of the situation in Northern Ireland is complex. The noble Baroness will be aware that in terms of recruitment to the Police Service of Northern Ireland, we have seen an increase in recruitment from the Catholic community from 8 per cent to 14 per cent. Over time, that is changing slowly. These are messages that we need to get out in a variety of forms.
Lord Skelmersdale: My Lords, given that the IRA per se and not IRA/Sinn Fein and its successors is now seen by the Government to be a legal, reasonable and responsible organisation, who is getting extortion money from the vice rings and tax surcharges in Belfast?
Baroness Amos: My Lords, I do not know the answer to that question. The noble Lord will be aware that concerns have been expressed about the links between organised crime and various paramilitary organisations in Northern Ireland. I have no answer to the specific question raised by the noble Lord, but if I am able to glean any further information from the Police Service of Northern Ireland and others, of course I shall write to him.
Lord Kilclooney: My Lords, does the noble Baroness agree that the ever-increasing number of Roman Catholic members of the Police Service of Northern
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Ireland is welcomed by the large majority of people in Northern Ireland? It is the most direct answer to the Sinn Fein nonsense in the New York Times.
Baroness Amos: My Lords, the noble Lord is right. Of course, what the people of Northern Ireland want to see is a police service that reflects the community that it serves.

Africa: Prime Minister's Commission
11.27 a.m.
Lord Campbell-Savours Lord Campbell-Savours asked Her Majesty's Government:
What they hope to achieve through the Prime Minister's Commission for Africa.
Baroness Amos: My Lords, we are determined to achieve accelerated progress towards the millennium development goals in Africa. The commission will set out the facts on Africa and its assessment of past and present policy on Africa, where it has worked, where it has failed and where more could be done. On that basis, it will make policy recommendations to governments in Africa and internationally, and to other development actors.
Lord Campbell-Savours: My Lords, we all know that the Prime Minister is deeply committed to this initiative. However, we have already had the Brandt report. We have had a whole series of reports from the United Nations. We have had the work from the New Partnership for Africa's Development. A lot of work has been done already. How can we be sure that on this occasion, this partnership and these organisations will deliver and that this new initiative will make any difference?
Baroness Amos: My Lords, my noble friend is right to observe that there has been a great deal of analysis. The key issue here is what will change and what will be different. My noble friend rightly pointed out the commitment of my right honourable friend the Prime Minister to Africa and, of course, that of the Government as a whole. Things will be different. The Commission for Africa is a joint north/south collaboration, which is reflected in its membership, while the Brandt Commission was the north looking at the south. It very much keeps the political focus on Africa and we have made it clear that when we come to chair the G8 summit next year, Africa will be at the top of our agenda.
The commission seeks to take a genuine look at what more can be done, including considering the issue of economic development in Africa, which I fear has been excluded from much of the analysis.
Lord Avebury: My Lords, no one doubts the Prime Minister's commitment to Africa and we welcome the priority to be given to African issues at the forthcoming G8 summit. Can the noble Baroness say how this commission can make a specific contribution towards the solution of Africa's many internal conflicts, of which the latest is that in Darfur, where over 1 million people have been displaced? What does she think the commission will be able to do to stop multinationals and governments from colluding to hide revenues from their own people and allowing widespread embezzlement by corrupt officials and Ministers in states such as Zimbabwe and Equatorial Guinea?
Baroness Amos: My Lords, the noble Lord, Lord Avebury, is quite right. We all know that 20 per cent of the populations in African countries are living either in circumstances of direct conflict or in countries which have just come out of conflict. That is having a huge impact on economic development. One of the themes which we hope will be looked at by the commission, which holds its first meeting on 4 May, is the issue of conflict resolution and peace building. Of course, the particular lessons to be learnt from the conflicts in Sudan, the DRC and others will be investigated.
I turn to the issue of hidden revenues. The noble Lord, Lord Avebury, will know that we have pioneered the Extractive Industries Transparency Initiative. This is a voluntary initiative, but we hope that it will not stop there. The considerable wealth which a country like Angola could enjoy needs to be shared with its people rather than being siphoned off to companies and those at the top of the administration.
Lord Howell of Guildford: My Lords, I am sure that the commission is well intentioned and well meant in its aims. However, is it not worth noting, as the noble Lord, Lord Campbell-Savours, has already hinted, that there is already a UN commission on Africa, a European Union commission on Africa, a Commonwealth commission and countless other commissions and committees? If commissions and committees could solve development problems, Africa would be a rich and prosperous place. Is it not obvious that the most serious problems affecting Africa, over and above the short-term issues of starvation through food shortages caused by drought and so forth, lie in the lack of the rule of law and the lack of good governance? That is where we should concentrate our efforts. If we could do more—in a more resolute way—to bring good governance to Zimbabwe, we would be doing more for the people for Africa than these endless commissions.
Baroness Amos: My Lords, this commission is about more than being well intentioned. It concerns providing a political impetus and taking action. The themes on which we shall concentrate, which we hope will be decided at the 4 May meeting, will be the economy; human development; conflict resolution
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and peace building, which I have already mentioned; governance—mentioned by the noble Lord; natural resources, as well as culture, heritage and participation. While I agree that governance is important, we cannot look at it in isolation. Further, we have to work in a collaborative way between the north and the south if what is happening in Africa is to be reversed.
Lord Hughes of Woodside: My Lords, given that Africa's problems are serious and deep rooted, should we not welcome initiatives which look at ways of solving the matter instead of accepting this constant pessimism and downgrading of any initiatives? The negativity which greets new initiatives simply bears out the view that many people in this country and elsewhere are not really interested in Africa; they are only interested in making a fuss.
Baroness Amos: I totally agree with my noble friend. We must continue to focus on what is happening in Africa. It is a matter of grave concern that, in terms of the millennium development goals, Africa is the one continent where we seem to be going backwards rather than forwards. The Government's commitment to doing something about that should be welcomed. Indeed, it would be helpful if the Benches opposite would let us know whether the commitment that this Government have given to international development and the growing international development budget will be maintained.
Baroness Thomas of Walliswood: My Lords, while I welcome the Government's interest in Africa's problems, can the noble Baroness give a reassurance that the questions of reproductive health and the contribution that women can make to the economy of a country once they gain control over their own fertility will not be sidelined in favour of concentrating on HIV/AIDS issues, serious though those problems are?
Baroness Amos: My Lords, the noble Baroness is right to point out that we need to adopt a much more integrated approach: it is not just about reproductive health, HIV/AIDS or maternal and infant mortality, rather, it is about looking at the inter-connectedness between a range of issues and, in particular, focusing on the contribution that women can make to economic development.

Business of the House: Tuesday, 30 March and Thursday, 1 April
11.35 a.m.
Baroness Amos: My Lords, I beg to move the first Motion standing in my name on the Order Paper.
Moved, That leave be given to advance the Motions for approval of the Community Legal Services (Scope) Regulations 2004; the Courts Boards Areas Order 2004; and the Courts Boards (Appointments and Procedure) Regulations 2004 from Thursday 1 April to Tuesday 30 March.—(Baroness Amos.)
On Question, Motion agreed to.

Business of the House: Standing Order 41
Baroness Amos: My Lords, I beg to move the second Motion standing in my name on the Order Paper.
Moved, That Standing Order 41 (Arrangement of the Order Paper) be dispensed with on Thursday 1 April to allow the Motions standing in the names of the Lord Lucas and the Lord Shutt of Greetland to be taken immediately after the Public Audit (Wales) Bill [HL].—(Baroness Amos.)
On Question, Motion agreed to.

Public Audit (Wales) Bill [H.L.]
Lord Evans of Temple Guiting: My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That the amendments for the Report stage be marshalled and considered in the following order:

Clauses 1 to 50,

Schedule 1,

Clauses 51 to 64,

Schedule 2,

Clauses 65 and 66,

Schedule 3,

Clauses 67 to 70,

Schedule 4,

Clauses 71 to 73.—(Lord Evans of Temple Guiting.)

On Question, Motion agreed to.

National Minimum Wage Regulations 1999 (Amendment) Regulations 2004
Lord Davies of Oldham: My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That the draft regulations laid before the House on 18 March be approved [13th Report from the Joint Committee].—(Lord Davies of Oldham.)
On Question, Motion agreed to.

Domestic Violence, Crime and Victims Bill [H.L.]
11.36 a.m.
Read a third time.
Clause 5 [The offence]:
Lord Campbell of Alloway Lord Campbell of Alloway moved Amendment No. 1:
Page 3, line 20, at end insert ", but in the interests of natural justice—

(a) the prosecution shall have provided particulars of grounds and circumstances in support of allegations that either alternative applies to enable D to know the substance of the case to answer at the trial charged with this unitary offence having regard to the disparity of criminal conduct under the first alternative on which D committed the act which occasioned death as compared with the diverse quality of criminal complicity under the second alternative on which such act was committed by another of which D ought to have been aware foreseen and prevented; and

(b) on conviction a verdict which identifies the relevant alternative shall be returned so that the basis of the conviction shall be known."

The noble Lord said: My Lords, in moving this amendment I thank my noble friend Lady Anelay of St Johns for her support. This amendment in no way slights the general intendment of Part 1 of the Bill. The object is to introduce safeguards which ensure the implementation of Clause 5 in accordance with the due and fair administration of justice. To this end, and in the interests of natural justice, it is proposed in this amendment to require, under paragraph (a), that the accused should know the case he has to meet at trial, while under paragraph (b), that he should know the basis on which he was convicted.
This is a qualification to Clause 5(3) which, when read in context with Clause 5(1)(d), affords three distinct bases on which conviction for the offence may ensue. Clause 5 makes this a unitary offence which may be committed only by a member of the household against another member of the household in one of three ways, referred to in Clause 5(3) as the first and second alternative, there being no obligation on the Crown to prove on which of the alternatives conviction is sought.
The three bases are as follows. On the first alternative, the accused—named "D" in this drafting—did the unlawful act which caused the death. On the two limbs of the second alternative, the first asserts that the unlawful act was done by another and that the accused was aware of the risk, could foresee the kind of act, and failed to the steps he could reasonably have been expected to take to prevent it. The second limb of the second alternative is that he ought to have been aware of the risk; that he ought to have foreseen the kind of act and failed to take steps to prevent it.
It is a fundamental requirement of natural justice that the accused is entitled to know the case he will have to meet at the trial, as opened to the jury, and to have an opportunity to repair his reputation and prepare a defence to that case. The other fundamental concept is that he is assuredly entitled to know on what basis he has been convicted. At all events, the trial judge—before summing up, at least—must know on which basis the Crown seeks conviction; and, indeed, for the purpose of sentencing, on what basis the verdict was given. There is a disparate gravity of offence between the three bases, and the maximum sentence is 14 years.
There is a further reason why one should know the basis on which the accused was convicted. This applies, in particular, to the second alternative. The failure to take the steps which a person could reasonably have been expected to take is common to both limbs of the second alternative and is an essential ingredient for conviction. One could well ask if the jury should consider whether the steps that were taken by the accused were steps that he would reasonably expect to take or be expected to have taken, or whether they should consider the "reasonable man", who is not a member of the household, who does not have the characteristics of the accused and who would be ignorant of the domestic circumstances. Is it the test that the reasonable man would have taken steps which the accused himself did not take and would not have taken?
If the first limb does not apply because the accused was not aware of the risk and did not foresee the act—and the jury are so satisfied—how can he be convicted on the second limb of having taken no steps to prevent something of which he was not aware and did not foresee? It is of interest—although it is, in a sense, water under the bridge now that—the Law Society Amendments Nos. 12 and 13, which were moved at Committee stage by my noble friend Lady Anelay of St Johns and which have not been retabled—sought to remove the second limb.
Is it not apparent that, on appeal against either conviction or against sentence—and there is ample scope for appeal on this direction on the second alternative—the Court of Appeal (Criminal Division) must know on which of the three bases the appellant was convicted? Inevitably in regard to this singular offence—"singular" in the sense that it may be committed only by a member of the household against another member of the household—on the second alternative, matters of construction arise as to whether the guilty mind is actual or the hypothetical concept of objectivity has to be established. The ultimate resolution of this may not be made by your Lordships or even by a court of first instance. Inevitably it will be afforded by the Appellate Committee of your Lordships' House. But to enable resolution at first instance and on appeal, the basis on which the conviction was made has to be known.
I hope that the amendment will commend itself. It in no way slights the general intendment of the Bill, which is acceptable to the party to which I adhere and, I gather, to all other parties. But, as a matter of justice, ought not the accused know what he has to meet and why he was convicted? Should he not have that knowledge—certainly on matters of construction on the second alternative—and the facility to appeal? I beg to move.
11.45 a.m.
Baroness Anelay of St Johns: My Lords, I have attached my name to the amendment to signal my support for my noble friend in the way in which he has sought to take one stage further forward the debates
808
we had at previous stages of the Bill on this issue. I join with him, in particular, in making it clear that we support the objective of Clause 5.
Lord Thomas of Gresford: My Lords, I support the amendment. It is a perennial problem that the basis of a jury's verdict is not clear; the jury returns a verdict of guilty and the judge makes up his own mind, without any help from the jury, as to what has happened and sentences on his view. On many occasions these days, applications for a special verdict to be returned, so that the basis of the jury's verdict can be ascertained, are refused.
Let me give an illustration. I was involved in a drugs trial where the case against my client was that he was the "main man". After about an hour's retirement—and this was a case which had lasted for four months—the jury came back with the question, "Can we convict the defendant even though we do not think he is the main man?" It was a conspiracy case and the judge directed the jury, "Yes, you can". He was convicted. The judge in his sentencing said, "You are the main man" and gave him 25 years' imprisonment, which was significantly more than anyone else who had been convicted of that conspiracy. The judge had made up his own mind about the criminality of the particular defendant.
So in a case like this, where we are creating an offence which has two very clear bases—that the death was inflicted by one member of the family but the second member of the family is guilty because of a failure to prevent that death—it would be highly advisable that the judge should not be left to his own devices and that the jury should indicate, in one way or another, precisely the basis for their conclusion of guilty against a particular defendant.
It may be that I do not entirely go along with the wording of the noble Lord, Lord Campbell of Alloway, but I certainly go along with the spirit in which the amendment is brought forward. In an offence such as this, it is important that the jury, who have control of the case, should have the opportunity of expressing why they have come to the conclusion they have reached.
Lord Donaldson of Lymington: My Lords, I disagree with all three speakers. The noble Lord, Lord Campbell, suggested that there were three alternatives. Apart from the linguistic problem of that, there are not—there are only the two identified in the clause. However, my real objection is not to paragraph (a) in his amendment, but to paragraph (b). On paragraph (a), of course, it is highly desirable—so far as possible, I hope that this does occur—that the accused should know the factual basis of what is alleged against him. Perhaps I am not up to date, but I should have thought that that would be made clear by the prosecution as a matter of routine.
Where the noble Lord goes completely adrift in my estimation, however, is with paragraph (b). This is, as paragraph (a) says, a unitary offence. Furthermore, Clause 5 itself states that:
"The prosecution does not have to prove [which] alternative".

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Having done that, the noble Lord expects the jury to unpick the evidence and fit it into one box or the other. That is completely contrary to the approach of the clause.
Finally, there is an argument, although not one put forward by the noble Lord, about reasonableness. It is an interesting legal argument, but it will not be resolved, and certainly not by his amendment. Whether it can be resolved by a different amendment is different matter. We would have to consider whether it was the man on the Clapham omnibus or the member of the household whose reasonableness had to be judged. Leaving that aside, I cannot see anything wrong with the historic function of the judge as the person who fixes the sentence rather than the jury. He has heard the whole case and he is in at least as good a position as the jury to know what is the seriousness of the case in the context of many other similar cases of which the jury will be wholly ignorant.
It is quite wrong that the jury should be expected to give a verdict that unscrambles the unitary offence. The prosecution do not themselves have to opt for one or the other—or both. Also, I add a criticism of paragraph (a) of the amendment, which seems to assume that there is a necessary disparity between the first alternative, which involves being directly concerned with the death of the vulnerable child or adult, and the idea that the second alternative is necessarily much less heinous. If it is straightforward wilful murder, then yes, but if it is manslaughter, the heinousness of the two offences may well come close to each other. Certainly, I would not wish to try to split one from the other.
The Minister of State, Home Office (Baroness Scotland of Asthal): My Lords, I respectfully agree with the noble and learned Lord, Lord Donaldson of Lymington. In doing so, however, I wish to tell the noble Lords, Lord Campbell and Lord Thomas of Gresford, that I understand the concerns that they have expressed. Both in Committee and at Report, we discussed at great length why the new Clause 5 offence had been crafted in this way. The mischief that we seek to address is the very situation when it is not known which of the participants committed the offence. We crafted this offence to right a wrong that has been incapable of being addressed for some time.
I respectfully adopt the analysis of the noble and learned Lord, Lord Donaldson. Although I empathise with the sentiments expressed by both the other noble Lords, I cannot agree with them. To insist that the basis of the conviction must be known would defeat one of the main purposes of the offence. It would render prosecution and conviction impossible and would not enable us to crack the "which of you did it?" cases—the very ones involving such closed groups that we are determined to crack. Indeed, we believe that we have a duty to the victim to close this gap as far as possible.
I am sure that I need not remind noble Lords that we began by trying to create a package of measures to help us deal with the very same "which of you did it?"
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problem. We are dealing with a small group of people who must have committed manslaughter or murder, but there is insufficient evidence to confirm which one committed the act that caused the death. Sadly, in many of these cases, a young child has died and the family choose, for their own reasons, to remain silent or blame each other. That is not acceptable.
We had a very long debate about this matter on Report. I remind your Lordships that all the arguments are set out very fully in cols. 1048 onwards of the Official Report for 9 March. This amendment, although well intentioned, does nothing other than wreck new Clause 5. If this amendment were passed, Clause 5 would fall. I hear what the noble Baroness, Lady Anelay, says about accepting the need for the provision, but if one accepts the need for Clause 5 one cannot support the amendment. The amendment would be fatal to Clause 5, which would fall.
Lord Campbell of Alloway: My Lords, I thank all noble Lords who have spoken in this debate. So far as the Minister is concerned, this is not the first occasion on which it has been said that the clause was crafted—not drafted—so the amendment is not acceptable, as if the crafting involved the cutting of a fine jewel with minimal fault and was a sort of apogee of artistry. This Bill is not like that. We accept its general intent but the drafting—not the crafting—has already suffered a series of government and opposition amendments, including amendments to the Long Title.
This amendment is said to have been put forward on the Floor of the House as a wrecking amendment, but it is no such thing. It may render it a little more difficult to achieve what could well be an unjust objective. There is a presumption of innocence. Even the householders have a presumption of innocence. The Crown still has to prove its case even if it does not have to say which case it wants to prove. This is a totally one-off, novel situation.
In answer to the noble and learned Lord, Lord Donaldson of Lymington, I cannot remember winning any case in which I appeared before him. I always had to go to Lord Denning in the Court of Appeal, and lost on only one occasion. I understand his analysis, but I have never been very comfortable with it.
We remain friends of course, but we simply do not agree on legal analysis and never have done. So nothing which should emanate from the eminence of the Cross Benches on this occasion from the noble and learned Lord surprises me. However, when he stuck on the interpretation of the two alternatives, the noble and learned Lord totally missed the essential point of my argument, which was that there were three bases for conviction. That was seized on by the noble Lord, Lord Thomas of Gresford. I am grateful to him because I have not sought, and I never do, the support of anybody for this amendment. I am very heartened that he should have seen the fundamental problem for the judge, which has been totally ignored by the noble and learned Lord.

811
This is not a time for further argument; it is certainly no occasion for that. However, there is no assurance that the accused shall know the case he has to meet; there is no assurance that he shall know of what he is being convicted. In my book, that is contrary to the fundamental principles of natural justice and I wish to take the opinion of the House—win, lose or draw—because I believe that that is the right way to go about it.
12.02 pm
On Question, Whether the said amendment (No. 1) shall be agreed to?
Their Lordships divided: Contents, 34; Not-Contents, 145.

Division No. 1

CONTENTS

Allenby of Megiddo, V.

Northesk, E.

Anelay of St Johns, B.

Palmer, L.

Biffen, L.

Park of Monmouth, B.

Brougham and Vaux, L.

Pilkington of Oxenford, L.

Campbell of Alloway, L.[Teller]

Plumb, L.

Carrington, L.

Powell of Bayswater, L.

Cope of Berkeley, L.

Renton, L.

Eden of Winton, L.

Saltoun of Abernethy, Ly.

Feldman, L.

Seccombe, B. [Teller]

Geddes, L.

Sharples, B.

Gilmour of Craigmillar, L.

Shaw of Northstead, L.

Hayhoe, L.

Stoddart of Swindon, L.

Hylton, L.

Thatcher, B.

Jopling, L.

Waddington, L.

Laird, L.

Wade of Chorlton, L.

Lang of Monkton, L.

Windlesham, L.

Mowbray and Stourton, L.

Wolfson, L.

NOT-CONTENTS

Acton, L.

Dixon, L.

Addington, L.

Donaldson of Lymington, L.

Ahmed, L.

Donoughue, L.

Amos, B. (Lord President of the Council)

Dubs, L.

Elder, L.

Andrews, B.

Evans of Parkside, L.

Ashton of Upholland, B.

Evans of Temple Guiting, L.

Avebury, L.

Ezra, L.

Bach, L.

Falconer of Thoroton, L. (Lord Chancellor)

Barnett, L.

Bassam of Brighton, L.

Falkland, V.

Bernstein of Craigweil, L.

Farrington of Ribbleton, B.

Billingham, B.

Faulkner of Worcester, L.

Blackstone, B.

Filkin, L.

Boothroyd, B.

Fyfe of Fairfield, L.

Boston of Faversham, L.

Gale, B.

Bradshaw, L.

Gibson of Market Rasen, B.

Bridges, L.

Golding, B.

Brookman, L.

Goldsmith, L.

Burlison, L.

Goodhart, L.

Campbell-Savours, L.

Goudie, B.

Carter, L.

Greaves, L.

Chan, L.

Greenway, L.

Christopher, L.

Grocott, L. [Teller]

Clarke of Hampstead, L.

Hamwee, B.

Clinton-Davis, L.

Harris of Richmond, B.

Corbett of Castle Vale, L.

Harrison, L.

Craig of Radley, L.

Haskel, L.

Crawley, B.

Hayman, B.

Dahrendorf, L.

Hogg of Cumbernauld, L.

Davies of Oldham, L. [Teller]

Hollis of Heigham, B.

Dean of Thornton-le-Fylde, B.

Hooson, L.

812

Howarth of Breckland, B.

Rendell of Babergh, B

Howe of Idlicote, B.

Richard, L.

Hoyle, L.

Rodgers of Quarry Bank, L.

Hughes of Woodside, L.

Rooker, L.

Hunt of Kings Heath, L.

Roper, L.

Irvine of Lairg, L.

Sainsbury of Turville, L.

Janner of Braunstone, L.

Sawyer, L.

Jay of Paddington, B.

Scotland of Asthal, B.

Jones, L.

Scott of Needham Market, B.

Jordan, L.

Sharman, L.

King of West Bromwich, L.

Sheldon, L.

Lea of Crondall, L.

Shutt of Greetland, L.

Lester of Herne Hill, L.

Simon, V.

Lipsey, L.

Smith of Clifton, L.

Listowel, E.

Smith of Gilmorehill, B.

Livsey of Talgarth, L.

Stone of Blackheath, L.

Lofthouse of Pontefract, L.

Strabolgi, L.

McIntosh of Haringey, L.

Strange, B.

MacKenzie of Culkein, L.

Symons of Vernham Dean, B.

Mackenzie of Framwellgate, L.

Temple-Morris, L.

Maclennan of Rogart, L.

Tenby, V.

McNally, L.

Thomas of Walliswood, B.

Maddock, B.

Thomson of Monifieth, L.

Maginnis of Drumglass, L.

Tomlinson, L.

Mar and Kellie, E.

Marsh, L.

Tordoff, L.

Masham of Ilton, B.

Triesman, L.

Massey of Darwen, B.

Turner of Camden, B.

Methuen, L.

Wallace of Saltaire, L.

Miller of Chilthorne Domer, B.

Walmsley, B.

Mitchell, L.

Walpole, L.

Morris of Aberavon, L.

Warner, L.

Morris of Manchester, L.

Warwick of Undercliffe, B.

Nicol, B.

Wedderburn of Charlton, L.

Northover, B.

Whitaker, B.

Oakeshott of Seagrove Bay, L.

Whitty, L.

Patel of Blackburn, L.

Wilkins, B.

Pitkeathley, B.

Williams of Crosby, B.

Ponsonby of Shulbrede, L.

Williams of Elvel, L.

Prys-Davies, L.

Williamson of Horton L.

Razzall, L.

Wilson of Tillyorn, L.

Redesdale, L.

Woolmer of Leeds, L.

Resolved in the negative, and amendment disagreed to accordingly.
12.12 p.m.
Lord Monson Lord Monson moved Amendment No. 2:
Page 3, line 24, leave out paragraph (b)
The noble Lord said: My Lords, when at Report stage we debated subsection (3) of Clause 4 as it then was, and subsection (4) of Clause 5 as it now is, I moved an amendment that would have slightly improved the grammar of the eccentrically worded paragraph (b), to make it at least a little more comprehensible to those who will have to interpret it in the future. However, it became evident in the course of that debate that the confusing paragraph (b) is not necessary, and that therefore by far the better course would be to delete it all together.
In the course of the Report stage debate, the Minister confirmed my tentative interpretation of the Explanatory Notes; namely, that unless the under-16s are the parents of the child, those under 16 at the time of the offence will be totally, unconditionally exempt from prosecution whatever the circumstances. In other words, even if the under-16s are physically strong enough and mentally tough enough to intervene to try to stop the crime, they will be under no legal obligation to do so and accordingly could never be prosecuted.
I suppose that it could be argued that paragraph (b) provides some sort of philosophical justification for paragraph (a), but it is not normal to pad out Acts of Parliament with philosophical explanations; otherwise the statute book would be three times as bloated as it already is. Those sorts of explanations are the job of the Minister in charge of the Bill, assuming the Bill is a government one, at Second Reading and as and when necessary at subsequent stages of the Bill, together of course with the aid of the Explanatory Notes accompanying the Bill.
Having said that, within the past three minutes, literally, I have received a letter from the Minister which seems to refute some of what I have to say. She argues that paragraph (b) is necessary, and no doubt she will come to that when she replies. She argues that despite the apparent wording of paragraph (a), there might be circumstances in which someone could be prosecuted once they are 16 for something that they did not do when they were not yet 16. That is not the way that I look at paragraph (a). However, I am not a lawyer and she is; she obviously has the upper hand here.
Anyhow, if the provision is indeed necessary to prevent an unjust prosecution then perhaps it had better stay in, although I should hope that the other place would tidy up the wording and the grammar to make it easier to understand and less confusing. However, if it is not necessary, it is surely in the public interest to remove anything that is redundant and possibly confusing. I beg to move.
12.15 p.m.
Lord Renton: My Lords, Clause 5, as I said at an earlier stage of the Bill, is unacceptably drafted. I do not like this method at all. I think that the way in which it is being used will cause confusion. Amendment No. 2 helps to simplify the drafting a little. I hope that the Government will regard it with sympathy.
Baroness Scotland of Asthal: My Lords, I am very sorry that the noble Lord, Lord Monson, has only just received my letter. I note from my copy that it was sent on 23 March. I know that it sometimes takes a little time. I am sorry that he has not had a longer opportunity to consider it.
The noble Lord has taken a particular interest in the provisions of subsection (4), which is a welcome reflection of his concern to ensure that we do not include anything in the Bill that is unnecessary or misleading. However, as I have previously explained, I am absolutely convinced that Clause 5(4)(b) is necessary. Perhaps I may set out why I believe that that is so.
The measure is important because the process of taking "reasonable steps" is not usually a single event but a course of conduct that takes place over a period of time. Clause 5(4)(a) ensures that a person is not charged with the offence if they are under 16, whereas Clause 5(4)(b) is intended as a safeguard to ensure
814
that, once they have turned 16, they are not held responsible for taking reasonable steps before they were 16.
We see a need to ensure the exclusion of any part of the course of conduct that may have taken place before the defendant's 16th birthday which leaves them in a position now, at age 16, of not having taken reasonable steps. It may be that, even without this clause, a court would not have convicted a person in this situation, but we need to be certain, which is why we have introduced this important safeguard. It was decided that one should have this responsibility at 16-plus, not 16-minus. This provision simply underscores that and puts it beyond doubt.
I hope that the noble Lord will recognise that this clause is not superfluous and that it provides an important and necessary protection within the offence for those who are perhaps under 16 when the course of conduct started, but over 16 by the time the event actually occurred. Those are the reasons. However, I understand why the clarification I have just given was perhaps necessary.
Lord Monson: My Lords, I am grateful to the noble Lord, Lord Renton, for his qualified support and very grateful to the Minister. I do not think there is any fault on the part of her department. I was not in the House yesterday and her letter was hidden among a huge pile of mail that I received only 15 minutes ago. I have only just come across it in the course of going through that.
Of course the Minister knows better than I do the interpretation of Clause 4. I think it is very important to ensure that no unjust prosecution takes place. Therefore, if paragraph (b) is necessary, so be it. I should like to reiterate, though, that I hope the other place might be able to tidy up the wording. It still could be improved, as I think the noble Lord, Lord Renton, suggested. With that, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 6 [Evidence and procedure: England and Wales]:
Lord Thomas of Gresford Lord Thomas of Gresford moved Amendment No. 3:
Leave out Clause 6
The noble Lord said: My Lords, when a juryman takes an oath at the beginning of a trial he swears that he will faithfully try the defendant and return a true verdict according to the evidence. I emphasise two aspects of that: that he is to act in good faith; and that he is to act upon the evidence. It is the duty of the judge to determine, according to our procedures, whether there is sufficient evidence upon which a jury can safely return a verdict. The presumption of innocence means that the juryman will not agree to a verdict of guilty unless he is sure of guilt.
That has given rise to the problems, which have been addressed in Clause 5, where a death occurs within a household and it is impossible for a juryman to say beyond reasonable doubt, to be sure on the evidence, which of two or more parties killed the child or vulnerable adult. We have supported Clause 5 throughout the passage of the Bill

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although we have attempted to improve the wording, and succeeded to some extent. Even so, in Clause 5 there is a considerable difference between being the person whose act caused the victim's death and being the person who should have been aware of the circumstances in which the death occurred. Either of those two wide apart positions can result in a conviction under Clause 5.
The new offence follows the Law Commission's report. What the Law Commission did not do in its report was attempt to extend the principles behind this offence, dealing with a specific problem, to the law of murder or manslaughter. That is what Clause 6 refers to. Although Clause 6 is headed, Evidence and procedure: England and Wales, in effect it extends evidential provisions which are suitable for dealing with the new offence under Clause 5 to the position where a jury is considering not only the new offence but also on the indictment murder or manslaughter.
What is so objectionable is that Clause 6 creates a new way in which murder or manslaughter can be proved. Even if there is no case for him to answer in relation to murder or manslaughter, under Clause 6(2) a person may be convicted simply by remaining silent. That means that a juryman who conscientiously applies himself to his oath will convict a person of murder or manslaughter, not on the evidence because by the terms of the definition there is no case to answer—there is no evidence upon which a jury could safely convict of murder or manslaughter—but on a hunch, a guess. That is contrary to centuries of history of the English criminal law. For a juryman to be asked to guess between, shall we say, two people which one is guilty of murder or manslaughter simply because that person does not give evidence or has failed to reply to questions put to them by the police, and to convict a person in that way, is contrary to that juryman's oath.
I pointed out on Report that when we are dealing with a death in a household and the police are met with silence it is not the same as other cases where there is silence. Silence from a person who is being questioned by the police or facing a trial in a domestic situation may well not indicate guilt. It may indicate his love and affection towards the person he knows has committed the offence. It may emanate for all kinds of reasons which are peculiar to that household. It may emanate from the fact that he or she fears the person whom they know to have committed the offence. Love, fear, loyalty, family solidarity are all reasons from which it would be unsafe to draw the inference of a person's guilt where there is no other evidence, as Clause 6(2) states, upon which the juryman in carrying out the burden of his oath could properly come to the conclusion that that person is guilty.
Someone somewhere, possibly within the Home Office—I doubt whether it is a Minister—has thought to himself, "We have read the Law Commission's report. We have read that there is a particular way of proving the new offence. What a good idea to see whether we can catch people for murder or manslaughter anyway". We hear a lot these days about the fact that this House is challenging the Government: that this House is preventing the Government carrying out their programme. We hear that it is an insult to their integrity if we come to a different
816
conclusion. The truth of the matter is that someone had a very bad idea. Someone who did not understand the processes of the criminal law in this country sought to extend these procedures, far beyond that which the Law Commission envisaged, to murder and manslaughter. It is unacceptable that there should be a different practice and procedure for proving the most serious criminal charge in the calendar in a particular circumstance where a household is involved as opposed to any other circumstance.
From Second Reading on, we have put all these objections to the Government and listened to their response. There was some response to the original proposal but not enough. The Government's supporters and their Back-Benchers may, out of loyalty to the party, follow them through the Lobby. But this is so contrary to the spirit and principles of the English criminal law that the provision must be thrown out today. I beg to move.
Baroness Anelay of St Johns: My Lords, as the only non-lawyer in the group who put their names to the amendment, I add my wholehearted support. The noble Lord has given such a forceful argument that there is nothing from the legal point of view that I could hope to add—even had I the ability.
I strongly support what the Government seek to do in redressing the mischief put forward because of the problems in the case of R v Lane and Lane.We have had full debates on the matter. I give my full support to Clause 5 as currently drafted after our recent Division today. I hope that another place may consider it again and seek to improve it in some measure. I realise how difficult it was for the Government to draft the clause in such a way as not only to be fair but also to catch those people whom we wish to see prosecuted. As my noble friends have pointed out in the past, if one is convicted of what we might now call a Clause 5 offence, one could face a maximum penalty of 14 years.
I believe that the response in Clause 5 is proportionate to the mischief—the evil—of those offences. However, Clauses 6 and 7 go beyond what can be acceptable in dealing with the offence that has occurred. We all want to see someone prosecuted who has either perpetrated the offence of causing the death of a child, or been involved in allowing the death of a child or vulnerable adult in circumstances where no one would excuse their behaviour. We want those people to be prosecuted and convicted, and certainly, where there is evidence so to do, that can happen under Clause 5. But I fully support the view put forward by the noble Lord, Lord Thomas of Gresford, that Clauses 6 and 7 risk overturning a vital principle of our justice system.
12.30 p.m.
Baroness Whitaker: My Lords, as another non-lawyer, I take part again in the debate on this clause because I think that law is not ultimately for lawyers, any more than water is for water engineers or health is for doctors. Law is for people to enable justice—the

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proper attribution of responsibility for serious and harmful acts. Even when people love or fear, everyone has a role in that process.
It seems to me essential to have the procedural measures in Clause 6 as well as the new offence under Clause 5 for, without them, it would not be possible in the "Which of you did it?" cases to get the right conviction. Where a child or vulnerable adult has been murdered or killed by some other unlawful act, the only conviction that would be right is murder or manslaughter. The new offence in Clause 5 on its own would prevent those responsible for those deaths escaping all justice, but it and the sentence that goes with it do not fully reflect the serious nature of the crime that has been committed. There is almost nothing more serious than killing a child.
Where at least one of a closed group of suspects must be responsible we ought, I submit, to do everything that we can while remaining fair—which, again to a non-lawyer, the proposals are—to bring that person to justice. It seems to me that we would be failing in our duties as legislators if we did not.
Lord Carlisle of Bucklow: My Lords, I support as strongly as possible every word that the noble Lord, Lord Thomas of Gresford, said on the issue. We have debated the clause at considerable length in Committee, on Report and now again at Third Reading. I have done my best to read and understand the arguments put forward by the Minister, but I cannot see her answer to the statement that the clause allows a person to be convicted of murder merely on his silence. In that way, it totally reverses the burden of proof in the case, and means that it is contrary to Article 6 of the European Convention on Human Rights.
The clause states in terms that if someone is charged with a Clause 5 offence he may also be charged with murder, and that if he is so charged inference can be made from his silence to answer,
"even if there would otherwise be no case for him to answer in relation to that offence".
The first strange anomaly is that if one charges a person with murder alone, the clause does not apply. Therefore, in the normal way, one could rise at the end of the prosecution case and say that the prosecution had failed to make its case in any way. The judge would direct the jury that there was not sufficient evidence on which it could convict. If, on the other hand, one adds to the charge of murder a charge under Clause 5, one cannot make that submission, because it is said that the jury can draw such inferences as it wishes from the silence of the accused, and can convict although there is no other evidence against him.
The clause also states that, if one wants to make a submission of no case to answer, one must wait until the end of the whole evidence, both for the prosecution and for the defence. At Report, I understood the Minister to be saying—it can be found at col. 1186 of Hansard for 9 March—that the case may change. I understand her argument to be that although there is
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at first no evidence that one person committed the murder rather than the Clause 5 offence, nevertheless, by their silence and other evidence that may be given, there may at the end of the case be a case to answer that did not exist at the halfway stage.
If that is the argument, surely all one need do in the clause is delay the time at which the submission can be made to the end of the whole of the evidence, as the clause does. There is absolutely no need whatever for anything else. I think that the Minister's argument is that at that stage a judge would be unlikely to allow a case to go to a jury merely on inference from silence, as he would wish to see other evidence. She may be saying that, if other evidence occurs in part of the defence case and the time at which the submission can be made is delayed, the judge may decide that there is evidence on which a person can be convicted, but that is not what the clause says. The clause says that whenever the submission is made, the jury can convict on an inference purely from silence.
For the reasons advanced by the noble Lord, Lord Thomas, and the noble Baroness, Lady Anelay, that seems totally contrary to the legal traditions of this country. It is unnecessary in that, if what the Minister is asking us to accept is that the case may change, that can be met, if it is right to meet it, merely by delaying the time at which the submission is made, without the provision that a jury could convict,
"even if there would … be no case … to answer in relation to that offence".
Lord Donaldson of Lymington: My Lords—
Lord Campbell of Alloway: My Lords—
Lord Donaldson of Lymington: I give way, my Lords.
Lord Campbell of Alloway: My Lords, now I have to be rather more careful in what I say, in view of our past exchanges. Perhaps all that I can say is that I put my name to the amendment having fired the first warning shot over the bows of the clause in Grand Committee. I have since been described by the noble Lord, Lord McNally, who is not in his place, as a barnacled old legal man-of-war. I shall make steam for dry dock in a moment or two.
The defensive smokescreen was wholly penetrated in Grand Committee, as explained by the noble Lord, Lord Thomas of Gresford, whom I congratulate on his speech, and by my noble friend Lord Carlisle. When the amendment was tabled, the hope was always that the final engagement would be under the joint command of both parties in opposition, with perhaps some support from the Cross Benches and a little from the Labour Back Benches. Today the salvos of the joint command have crippled the clause. Yet another shot from this locker would be not only otiose, but extremely tiresome.
Lord Donaldson of Lymington: My Lords, I am happy to say that, in relation to the amendment, I have rejoined the fold of the lawyers—I did so in earlier stages of the Bill. I am even happier to say, in the light of the remarks made

819
by the noble Lord, Lord Campbell, although I am not sure that he is right, but if this is the first occasion upon which he and I have ever agreed, that makes it a particularly important occasion. It possibly means that we are both right—although I am not so sure about that.
However, I shall turn to the merits of the amendment. Ever since I was called to the Bar, and for many years before that, it was the way in which the burden was kept on the prosecution that it had to prove a case to answer; it had to produce enough evidence so that the jury could properly convict simply on the evidence, if they were convinced by it. It is for that reason that it has always been possible at the end of the prosecution case to say to the judge, "Well, there isn't enough evidence" and the jury could not convict at that stage. That is an essential safeguard and I believe that—although it may not be wholly covered by the wording—it is wholly covered by Article 6, paragraph 2 of the European Convention, which says:
"Everyone charged with a criminal offence shall be presumed innocent until proved guilty according to law".
Of course, the let-out for the Minister would be to say, "We are altering the law". But, I do not believe that that was what was contemplated by the convention. So up to this moment, the clause would be contrary to law. A good deal of play was made earlier by the references that one sees in the clause to an ability to draw inferences, which is approved of and permitted by the Criminal Justice and Public Order Act of 1994. There is a new and sensible offence that addresses the real need of a "don't know" case, so that when the prosecution proves that the defendant or defendants failed to take such steps as were reasonably foreseeable in relation to the facts of the case, and that the act was caused by that failure, and that the accused ought to have foreseen the need for them, if the accused does not choose to say "Well, I did not foresee it and I could not have been expected to foresee it", or, "I did, in fact, try to take those actions but it did not work"—if the accused does none of those things, then of course there is a reasonable inference. It would not require the 1994 Act to produce that result. Any jury could then draw that inference.
However, we are now being asked, as noble Lords have described, to allow inferences to be drawn when, contrary to the system of justice as we have known it for a very long time, there is no evidence on which a jury could convict at the end of the prosecution case. It seems that this is trying, in an oblique way, to reverse the rule which gave rise to all the problems in the "don't know" cases, because it was in those cases that the counsel, on behalf of the accused, were standing up at the end of the prosecution case to say "There is no evidence as to which of these people committed the offence. You may well say that one or other must have done, but unless you can show who, you can't convict". No one has ever suggested that there is anything wrong with that. What they have said is that, "We cannot allow that situation to continue; we have to tackle it from a different angle". That is what Clause 5 does, and does very efficiently.
820
However, Clause 6—and Clause 7, in due course—is intended to reverse the problem, to get rid of the problem which existed, and which Clause 5 is meant to tackle; not by getting rid of the problem, but by riding around it in a perfectly straightforward way that is in accordance with all of the traditions of justice that have been known in this country for a very long time. Clause 6 is extraordinary. I think I can understand its genesis—someone thought that they were on to a good thing and could make the situation even better—but protests have been made on all sides of the House, not entirely from lawyers, although it is natural to hear more from lawyers as they have been brought up in that tradition of fairness, in accordance with the law. It is not an abstract concept, but has been honed by many years of experience. Faced with the protests, I am surprised that the Minister has resisted.
I shall make one more comment. In the course of the Bill, on many occasions there have been very well earned tributes paid to the noble Baroness for her expertise as a lawyer, her expertise in presenting cases and her willingness to enter into discussions with people. All of that is admirable, but the bottom line is the same line as has to be looked at in court. Counsel arrive in court and it is their job to make a case, even if they do not believe in it. I would never ask counsel in court whether he believed in his case and I do not ask the Minister whether she believes in her case here, but it would be a great mistake if it was admiration for the noble Baroness that led us to think that she was doing other than acting as an advocate in supporting the clause.
12.45 p.m.
Baroness Scotland of Asthal: My Lords, with silver-tongued flattery the noble and learned Lord wished, perhaps, to distract me, but he must know from the past that that would be difficult, even with his lures.
I know that the noble Lord, Lord Campbell of Alloway, says that I have the full battalions ranged against me on this clause. May I remind him that it is a long-held British tradition that when right is on our side and the balance appears to be against us, we still persevere? I am afraid that I have to tell the House that I intend to persevere on this occasion, but to reassure noble Lords that I am in agreement with those who say, as has the noble Lord, Lord Thomas of Gresford, that the juryman's oath should not be suborned and I would like to reassure noble Lords that in this clause we are not thinking to suborn that oath; neither are we trying to convict, or cause to be convicted, people on evidence which is a hunch or a guess. Neither are we asking anyone to guess, nor are we seeking to suggest, that some improper construction should be put on silence, which may derive from love, fear, loyalty or family solidarity—as has been suggested.
I take full responsibility if I have not been sufficiently clear, both in Committee and at Report, but I had hoped that the way in which we believe this clause hangs together with Clause 5 had been understood. The noble Lord, Lord Carlisle of Bucklow, addressed the issue of the postponement, because that is, in effect, what this clause and Clause 7

821
seek to do—the postponement of an argument of "no case to answer" from the close of the prosecution case to the end of the evidence. That is what this clause does. However, in the light of the debate that we have had, it is only right that I should explain, perhaps a little more clearly this time, why the combination of the agreement of the noble and learned Lord, Lord Donaldson, and the noble Lord, Lord Campbell of Alloway, on this one occasion proves that, with regret, they are both wrong.
We need to remind ourselves of the way in which the Law Commission was very clear in the way in which it summed up the problem. Your Lordships will remember that, in the form of two questions, it said at Command No. 282:
"(1) Must it be the case that a fair legal system is helpless to convict a parent who has murdered his or her own infant child, where it is clear that one, or other, or both parents has killed, or is complicit in the killing of the child, merely by the device of each parent refusing to respond to questions about the child's death?
"(2) More particularly, must it be the case that recommendations for reforming the rules of procedure and evidence which seek effectively to resolve, or respond to, this conundrum are doomed to failure either because they will be ineffectual in that they do not address the problem of the silent defendant, or will inevitably and unduly impact on the fundamental requirement of a fair trial by bringing the consequences of such silence to bear upon the question of guilt?"
Those two questions were correctly framed.
I should like to reassure the noble Baroness, Lady Anelay, that we do not believe that Clauses 6 and 7 go beyond that which is acceptable or risk our vital position on justice. We believe that it is absolutely incumbent on us to close the legal loophole that exists in these "Which of you did it?" cases. Where a child has been killed by a private individual, constituting a breach of his or her rights under Articles 2 and 3 of the European Convention on Human Rights, the Law Commission suggests that the Government have a duty to ensure that such deaths can be properly investigated and the perpetrators identified and punished appropriately.
That was echoed by the Joint Committee on Human Rights. We take seriously its view that the rights under Article 2 of the victim and his or her close relations may be violated if it is "systematically impossible to carry out an inquiry into the death which will establish the cause of death and allow the guilty party to be punished". I was interested that both on Report and at Third Reading none of those who spoke to these amendments dealt with the proper analysis of the provisions undertaken by the Joint Committee on Human Rights.
I accept that the new offence will provide for at least something to be done in future, whereas those who have caused these terrible deaths have until now been able to walk away scot-free. But we need to face the fact that a conviction only for the new offence is a second-best result. It does not provide for an effective means of securing a conviction that represents the gravamen of the crime that has been committed. The sentence that can be imposed for the new offence, severe though it is, is significantly lower than that
822
which Parliament has decided should apply in cases of murder or could apply in cases of manslaughter. Someone who has committed murder or manslaughter should be convicted as such and should be made liable to face the penalties that go with it, provided that the process we adopt is fair.
In order to do that, we need the new offence but also the procedural measures that we are proposing. The new offence will ensure that a case will come before the courts and be put to the jury. However, without the procedural measures, which would allow evidence to emerge during the course of the trial, even if the evidence that would support a higher charge emerged and the jury was able to determine beyond any reasonable doubt who killed that child or vulnerable adult, the higher charge may no longer be available. As a matter of justice to the dead victim and to his or her family, we need to be able to try the suspected killer for murder or manslaughter and sentence him or her appropriately. If we do not have Clause 6, we shall not be able to do that and we shall be left with a lesser charge and a lesser sentence. The Government do not feel that that is acceptable or justifiable by any standards.
The rules and procedures of our courts exist to protect the innocent from wrongful conviction; and may that always be the case. However, they also exist to reveal the truth and to convict the guilty. At present, in the cases about which we are talking, the rules and procedures work wholly in favour of the defendants. But they are not defendants entirely without responsibility. None of them is an innocent bystander who simply became erroneously caught up in the police investigation. Those on trial on charges under the new offence that we are debating today are a closed group of suspects, all of whom, the prosecution will show, were in some way responsible for the child's or vulnerable adult's death, and at least one among their number must actually have caused that death.
We must not ride roughshod over our legal traditions in attempting to get at the truth and secure convictions. For all of us, that is unpalatable and something that we would not tolerate. However, the tradition of our common law prides itself on its flexibility in satisfying the requirements of justice.
In failing to provide an effective mechanism for bringing to justice those who have killed in these circumstances, our current law does a grave disservice to the victims and families in such cases—families such as that of John Anthony Smith, whose aunt graciously wrote to me this week with her support for what we are trying to do today. What happened in that family was truly terrible, and I want to pay tribute to the courage shown by Linda Terry in her campaign for justice in such cases. The experience of that family is by no means unique, and that is a great tragedy indeed. We are talking about people who are responsible for sometimes committing grave offences against children, often their own, or against other vulnerable members of the household. We find it totally unacceptable that, through the simple expedient of determinedly remaining silent, it

823
should be possible to render the system powerless where, for obvious reasons, the victim is unavailable to give evidence, even when it is known that one or more of a very limited number of suspects must have committed the offence.
Our proposals do not offend the common law, and I reject the contention that they do. Furthermore, we believe that they are fully compatible with the right to a fair trial under Article 6 of the ECHR. In its 4th report this Session (House of Lords Paper 34), the Joint Committee on Human Rights has supported that view. Noble Lords have on many occasions praised the Joint Committee for its vigour, its attachment to fairness, its rigour in considering each and every clause fearlessly, and its ability to tell the Government exactly what it thinks about the provisions that we have tabled; and that Committee has given this proposal a clean bill of health.
1 p.m.
Lord Campbell of Alloway: My Lords, I declare an interest as a member of that committee. Its remit is to examine only whether a provision is contrary to the convention. We are not concerned whether it is contrary to the convention; we are concerned with whether it is contrary to our concept of criminal law. The two are totally different concepts, unless there is a collision and a conflict.
Baroness Scotland of Asthal: My Lords, I hope that I have made it clear that I am arguing strongly that it is not contrary to our common law or to the ECHR. That is an embodiment of the principles relating to fairness and probity and the standard which we have commonly used to test whether the procedures are fair. Fairness is very much part of this debate. Therefore, we say that our proposals do not offend the common law and neither do they offend against the ECHR.
In relation to the drawing of adverse influences, we are proposing only one—only one—significant change from the current regime under Section 35 of the Criminal Justice and Public Order Act 1994. That is, following the recommendation of the Law Commission, to remove what is called the "highly technical and artificial" approach in the Cowan judgment to the question of what is a situation which clearly calls for an explanation from the defendant. In these cases, under our scheme, it will not be necessary for the jury, before being able to draw an inference, to have first to find that the defendant could be found guilty on consideration of the evidence alone.
The Law Commission set out its reasons for coming to the conclusion that a technical approach to the principle which underlies Cowan is flawed. We debated the issue previously, but your Lordships will find it at paragraphs 6.90 to 6.95 of its report. We entirely agree with its arguments. After deep reflection—and we have given the matter deep reflection—I can assure noble Lords, in particular the noble Baroness, Lady Anelay of St Johns, that this is not a concerning breach of long-held principles in respect of inferences
824
from silence. She was anxious about that matter in our previous debate. Furthermore, the clause is not broader or more improper than is acceptable.
I agree with my noble friend Lady Whitaker. These are cases which cry out for an appropriate response. It is simply not the case that a person may be convicted of murder or manslaughter solely on the basis of his or her silence. That simply is not correct and it is not our intention. The law as currently drafted in the Bill would not allow it. Under our scheme, a conviction that rested wholly or mainly on the basis of silence would be proscribed by virtue of Section 38(3) of the 1994 Act, in the same way as that section currently proscribes adverse inferences that may be drawn on that basis. This Bill does not change that position one jot.
Under this clause, the principle that an inference may be drawn only where it is proper to do so remains intact. It also leaves intact that approach to what is proper which requires the evidence to be such that it calls for an explanation from the defendant. Although under our scheme the point in the trial at which the question of whether a case to answer exists or not is determined later than ordinarily is the case, it remains the case that, before an adverse inference from silence can be drawn, the evidence will still have to be such as to establish, first, that the victim was unlawfully killed; and, secondly, that the defendant is within the closed group of people, at least one of whom must have committed the offence.
In addition, there must also be established against the defendant a case to answer in respect of the new offence under Clause 5—that he or she caused the death or was in a position wherein he or she ought to have taken reasonable steps to protect the victim from the risk of the harm that ultimately caused it. These three things together constitute circumstances which, as the Law Commission has argued, it may, in appropriate cases, be proper to characterise, in a non-technical sense, as "calling for an explanation" or even as "establishing a case to answer".
But yet involvement in the new offence will on its own still not be sufficient to be found a conviction for murder or manslaughter. For a safe conviction on that charge, the court or jury must be convinced beyond reasonable doubt that the ingredients for the offence of murder or manslaughter are present and that they can be applied in respect of the defendant. For this to happen, either the jury must have heard some evidence—either from the prosecution or during the defence cases—that the defendant did commit, or may have committed, the act that caused the death, or they must be in a position in relation to all the evidence properly to conclude that the defendant is maintaining what the Law Commission called an "eloquent silence" and be able to draw such inferences from that as are proper.
If neither of these is the case, the judge would be duty bound not to put the charge of murder or manslaughter to the jury. Delaying the point at which the decision on a submission of no case to answer is determined allows the possibility that the trial itself

825
will create the circumstances such that the case may be left to the jury to decide by allowing more evidence to emerge. We do not believe that that is improper.
Lord Lester of Herne Hill: My Lords, I am grateful to the noble Baroness for giving way. I intervene only as a member of the Joint Select Committee on Human Rights and not in any party sense. On behalf of the committee, I confirm that, as the Minister said, after questioning the Minister we unanimously concluded that this legislation would not conflict with articles of the convention. It is right that I should put that on the record.
Baroness Scotland of Asthal: My Lords, I am grateful. So, we believe that what we are doing is proportionate, fair and will not improperly lead to improper convictions and unjustly find those who are innocent guilty of this offence. It enables the judge and the jury to exercise their proper function and, as was said in opening by the noble Lord, Lord Thomas of Gresford, each juryman, and/or woman, will be able to discharge his duty of faithfully trying the defendant according to the evidence. Only if he is sure that one or other of the defendants is guilty of murder will he or she be so convicted. We believe that that is the right and proper position.
The spectre of a person being discharged at half time and there then being evidence that came from the defence identifying which of them was responsible for the killing, and then being impotent to find that person so by the jury and/or by the judge in sentencing, is not a conclusion with which anyone in this House would be happy. I therefore invite your Lordships, notwithstanding the strength of feeling, to consider the issue again and not to divide the House. If there is a Division on the matter, I regret to say that on this occasion I would anxiously urge everyone to go into the "Not Content" Lobby.
Lord Thomas of Gresford: My Lords, as the noble and learned Lord, Lord Donaldson, warned us, there was admirable advocacy from the Minister in relation to her point of view. However, it cannot be justice for a person to be convicted of murder if there is no case to answer against that person simply because he or she is silent out of loyalty, love, intimidation, fear, family responsibility or any other emotion which may require his or her silence. That cannot be justice.
We agree that there has been a problem. We agree that the Government have properly addressed it in Clause 5 with the new offence. What we do not agree is that you can go beyond that and ask a jury to guess which of two or three people killed the child. When you boil it down, what the Minister said is that the only evidence that must be produced is that the child—if it was a child—was unlawfully killed and that the defendant comes within a closed group of the family. That is all. That is the case to answer.
826
Beyond that, it is guesswork. Although the noble Baroness says, "Well, the jury cannot convict unless it is sure", this is a highly emotive area. Those of us who have been involved in cases of this sort, as I have, where the question arises of which of two people—father or mother—killed the child, know that it cannot be left to a jury to decide, supposing that there are cutthroat defences between two defendants. The jury cannot be left to say, "Well, I like him, but I do not like her", or, "She is the sort of person who would do it, not him". It becomes guesswork by the very terms of the clause, even though there is no case to answer.
We cannot base justice—whether to the victim or to the family, as the noble Baroness said—on hunches or guesswork of that sort. The clause is entirely unacceptable, as is Clause 7, and I beg to test the opinion of the House.
1.11 p.m.
On Question, Whether the said amendment (No. 3) shall be agreed to?
Their Lordships divided: Contents, 128; Not-Contents, 110.

Division No. 2

CONTENTS

Addington, L.

Harris of Richmond, B.

Anelay of St Johns, B.

Hayhoe, L.

Astor of Hever, L.

Higgins, L.

Avebury, L.

Hodgson of Astley Abbotts, L.

Beaumont of Whitley, L.

Hooson, L.

Biffen, L.

Howe of Aberavon, L.

Blatch, B.

Howe of Idlicote, B.

Bowness, L.

Hurd of Westwell, L.

Bradshaw, L.

Jenkin of Roding, L.

Bridgeman, V.

Jopling, L.

Brigstocke, B.

Kimball, L.

Brooke of Sutton Mandeville, L.

Laird, L.

Brougham and Vaux, L.

Lang of Monkton, L.

Buscombe, B.

Lawson of Blaby, L.

Byford, B.

Linklater of Butterstone, B.

Caithness, E.

Listowel, E.

Campbell of Alloway, L.

Liverpool, E.

Carlisle of Bucklow, L.

Livsey of Talgarth, L.

Carnegy of Lour, B.

Lucas, L.

Carrington, L.

Luke, L.

Chorley, L.

Lyell, L.

Clement-Jones, L.

McColl of Dulwich, L.

Cope of Berkeley, L.

MacLaurin of Knebworth, L.

Craigavon, V.

McNally, L.

Crickhowell, L.

Maddock, B.

Denham, L.

Mar and Kellie, E.

Dholakia, L.

Marsh, L.

Donaldson of Lymington, L.

Masham of Ilton, B.

Dundee, E.

Methuen, L.

Eden of Winton, L.

Miller of Chilthorne Domer, B.

Elles, B.

Miller of Hendon, B.

Ezra, L.

Molyneaux of Killead, L.

Feldman, L.

Monro of Langholm, L.

Ferrers, E.

Montrose, D.

Gardner of Parkes, B.

Mowbray and Stourton, L.

Geddes, L.

Moynihan, L.

Glentoran, L.

Newby, L.

Goodhart, L.

Newton of Braintree, L.

Greaves, L.

Northbrook, L.

Hamwee, B.

Northesk, E.

Hanham, B.

Northover, B.

Hanningfield, L.

Onslow, E.

827

Park of Monmouth, B.

Simon of Glaisdale, L.

Peel, E.

Skelmersdale, L.

Peyton of Yeovil, L.

Smith of Clifton, L.

Phillips of Sudbury, L.

Stern, B.

Pilkington of Oxenford, L.

Stoddart of Swindon, L.

Plumb, L.

Strathclyde, L.

Plummer of St. Marylebone, L.

Swinfen, L.

Rawlings, B.

Taverne, L.

Reay, L.

Thatcher, B.

Redesdale, L.

Thomas of Gresford, L.

Renton, L.

Thomas of Walliswood, B.

Rodgers of Quarry Bank, L.

Thomson of Monifieth, L.

Roper, L. [Teller]

Tordoff, L.

Rotherwick, L.

Ullswater, V.

Sanderson of Bowden, L.

Waddington, L.

Seccombe, B.

Wallace of Saltaire, L.

Selsdon, L.

Walmsley, B.

Sharman, L.

Walpole, L.

Sharp of Guildford, B.

Wilcox, B.

Sharples, B.

Williams of Crosby, B.

Shaw of Northstead, L.

Windlesham, L.

Shutt of Greetland, L. [Teller]

Wolfson, L.

NOT-CONTENTS

Acton, L.

Haskel, L.

Ahmed, L.

Hayman, B.

Amos, B. (Lord President of the Council)

Hogg of Cumbernauld, L.

Hollis of Heigham, B.

Andrews, B.

Howarth of Breckland, B.

Archer of Sandwell, L.

Hoyle, L.

Ashley of Stoke, L.

Hughes of Woodside, L.

Ashton of Upholland, B.

Hunt of Kings Heath, L.

Bach, L.

Irvine of Lairg, L.

Barnett, L.

Janner of Braunstone, L.

Bassam of Brighton, L.

Jay of Paddington, B.

Berkeley, L.

Jones, L.

Bernstein of Craigweil, L.

Jordan, L.

Billingham, B.

Judd, L.

Boothroyd, B.

Kilclooney, L.

Boston of Faversham, L.

King of West Bromwich, L.

Bragg, L.

Lea of Crondall, L.

Brookman, L.

Lipsey, L.

Burlison, L.

Lofthouse of Pontefract, L.

Campbell-Savours, L.

MacKenzie of Culkein, L.

Carter, L.

Mackenzie of Framwellgate, L.

Christopher. L.

Massey of Darwen, B.

Clarke of Hampstead, L.

Merlyn-Rees, L.

Clinton-Davis, L.

Morris of Aberavon, L.

Cohen of Pimlico, B.

Morris of Manchester, L.

Colville of Culross, V.

Nicol, B.

Condon, L.

Ouseley, L.

Corbett of Castle Vale, L.

Patel of Blackburn, L.

Crawley, B.

Pitkeathley, B.

Davies of Oldham, L. [Teller]

Ponsonby of Shulbrede, L.

Dean of Thornton-le-Fylde, B.

Prys-Davies, L.

Dixon, L.

Randall of St. Budeaux, L.

Donoughue, L.

Rendell of Babergh, B.

Dubs, L.

Rogers of Riverside, L.

Elder, L.

Rooker, L.

Evans of Parkside, L.

Sainsbury of Turville, L.

Evans of Temple Guiting, L.

Sandwich, E.

Falconer of Thoroton, L.(Lord Chancellor)

Sawyer, L.

Scotland of Asthal, B.

Farrington of Ribbleton, B.

Sewel, L.

Faulkner of Worcester, L.

Sheldon, L.

Filkin, L.

Simon, V.

Fitt, L.

Stone of Blackheath, L.

Fyfe of Fairfield, L.

Strabolgi, L.

Gale, B.

Symons of Vernham Dean, B.

Gibson of Market Rasen, B.

Temple-Morris, L.

Goldsmith, L.

Tenby, V.

Gordon of Strathblane, L.

Tomlinson, L.

Goudie, B.

Triesman, L.

Grocott, L.[Teller]

Turnberg, L.

Harrison, L.

Turner of Camden, B.

828

Warner, L.

Whitty, L.

Warwick of Undercliffe, B.

Wilkins, B.

Weatherill, L.

Williams of Elvel, L.

Wedderbum of Charlton, L.

Williamson of Horton, L.

Whitaker, B.

Woolmer of Leeds, L.

Resolved in the affirmative, and amendment agreed to accordingly
1.22 p.m.
Clause 7 [Evidence and procedure: Northern Ireland]
Lord Thomas of Gresford Lord Thomas of Gresford moved Amemdment No. 4:
Leave out Clause 7
On Question, amendment agreed to.
Baroness Scotland of Asthal Baroness Scotland of Asthal moved amendment No. 5:
After Clause 10, insert the following new clause—
"Common assault etc as alternative verdict
In section 6 of the Criminal Law Act 1967 (c. 58) (trial of offences), after subsection (3) (alternative verdicts on trial on indictment) insert—

"(3A) For the purposes of subsection (3) above an offence falls within the jurisdiction of the court of trial if it is an offence to which section 40 of the Criminal Justice Act 1988 applies (power to join in indictment count for common assault etc), even if a count charging the offence is not included in the indictment.

(3B) A person convicted of an offence by virtue of subsection (3A) may only be dealt with for it in a manner in which a magistrates' court could have dealt with him.""

The noble Baroness said: My Lords, I hope that this amendment will find favour with your Lordships, notwithstanding the fact that its genesis comes from the Benches opposite.
The amendment goes slightly wider in relation to common assault than that which came before the House on the previous occasion. My noble and learned friend the Attorney-General indicated on Report that we were favourably disposed towards the amendment tabled by the noble Baroness, Lady Anelay, and we undertook to return to it at Third Reading.
Your Lordships will notice that our new clause is somewhat different from the amendment tabled in the name of the noble Baroness. The reason for this is that there is no reason in logic to distinguish between common assault and the other summary offences which, by virtue of Section 40 of the 1988 Act, are capable of being added to an indictment in the Crown Court.
We therefore concluded that the best solution would be a general provision that enables an alternative verdict to be returned under Section 6(3) of the Criminal Law Act 1967 in respect of all the summary offences listed in Section 40(3). This amendment requires a consequential amendment to the Long Title. On this occasion I believe that the noble Baroness will not object to any such amendment.
Whether there will be any practical value in the extension of Section 6(3) beyond common assault is not clear; there is a chance that cases might arise where it will be beneficial. But we are confident that this

829
amendment will do what the amendment tabled by the noble Baroness, Lady Anelay, would have done for assault cases, which is its main purpose.
The amendment to Schedule 7 limits the power of the Crown Court in dealing with one of these summary offences where an alternative verdict has been returned, in the same way as it is limited where the offence has been added as a count in the indictment. I beg to move.
Baroness Anelay of St Johns: My Lords, the old saying about not looking a gift horse in the mouth comes immediately to mind. I am enormously grateful to the Minister for putting forward this new clause which has within it the kernel of the offer that I made to the Government on previous occasions.
I would like to put on record one or two reasons why I am puzzled about the government amendment, although I have no intention of opposing it in any way. I brought forward my amendment in the first instance on the basis of some remarks that were passed in the course of the Court of Appeal case by Lord Justice Rose. I would not wish him—or others in the Court of Appeal—to think that I had misunderstood what he was proposing as a solution to an existing problem.
My amendment was an attempt to provide for the position where the jury are not sure that the offence charged on the indictment has been proved, but are sure that an alternative offence, which is expressly or impliedly included in the unproved allegation, has been proved. At the moment on a charge of ABH, the jury cannot convict of common assault as an alternative, unless there is a specific count on the indictment. I am grateful that the Government have accepted that this should be remedied.
The Government want to extend my original amendment. The Minister said that there is no reason in logic to differentiate between that and the other offences which are the subject of this clause. The new offences to be added in are those of assaulting a prison custody officer, assaulting a secure training centre custody officer, taking and driving away, driving while disqualified and low-value criminal damage under £5,000.
All of these offences were made summary by the Criminal Justice Act 1988. Notwithstanding that, Section 40 enabled them to be added as a specific count on an indictment if they were factually linked with an indictable offence which was charged on the indictment. On conviction the penalty can be one available only on summary conviction. The section was intended to avoid the need for a separate trial in the magistrates' courts after a Crown Court trial of the indicted charge.
It will be apparent that some of the offences listed in Section 40 are unlikely to be alternative to an indictable offence charged on an indictment. That is what puzzles me. In those circumstances they would not be expressly or impliedly included in the unproved allegation. In order for there to be a conviction, such offences would have to be included in a specific count.
830
As an ex-magistrate, the obvious example to me is the charge of driving while disqualified; it does not seem to be an alternative to any other offence. I find a difficulty in the fact that the "blue pencil test" cannot be applied. I explained that term in detail in Grand Committee on 2 February, as reported in Hansard at col. GC 233, and I shall not test the patience of noble Lords by referring to the details of that at Third Reading. The lawyers among us will understand it; I have learned what it means.
To return to the text of the Government's amendment, it is surely unnecessary to make separate provision for taking and driving away and low-value criminal damage. TDA can be an alternative only to theft of a motor vehicle or aggravated vehicle taking. Under Section 12(4) of the Theft Act 1968, TDA is an alternative to theft. The penalty is that available on summary conviction.
I could speak further on the other offences of criminal damage, but I think I have made my point. I do not object to the Government's clause. I am a little puzzled because the new offences added do not appear to follow the blue pencil test criteria. It seems that the Government have complicated matters; I hope that is not the case. I hope that no mischief has been created because I know that neither of us has that intent in mind. Otherwise I am glad to see this gift horse canter on to the statute book.
1.30 p.m.
Baroness Scotland of Asthal: My Lords, I assure the noble Baroness that we looked at the matter very carefully and, for a number of technical reasons, we thought that it made sense. I have certainly listened to the noble Baroness's comments. I know that numbers are fairly light on all our Benches. I assure the noble Baroness that it was done in what was felt to be the most appropriate and convenient way, in a tidy and proper manner. I shall write to her with the detail so that other noble Lords do not have to go to sleep while I explain how it works.
On Question, amendment agreed to.
Clause 11 [Restraining orders: England and Wales]:
Baroness Scotland of Asthal Baroness Scotland of Asthal moved Amendment No. 6:
Page 7, line 10, at end insert—
"( ) After subsection (6) of that section insert—
"(7) A court dealing with a person for an offence under this section may vary or discharge the order in question by a further order.""
The noble Baroness said: My Lords, these amendments respond to an amendment also tabled by the noble Baroness, Lady Anelay, the noble Viscount, Lord Bridgeman, and the noble Lord, Lord Campbell of Alloway, on Report on 9 March. The amendment would have given any court, when sentencing or otherwise dealing with a defendant for breach of a restraining order, the power to revoke the original order and to replace it with a new order. In response, my noble and learned friend Lord Goldsmith said that we would consider the issue further and return to the House.
Amendment No. 6 would amend Section 5 of the Protection from Harassment Act 1997 to achieve essentially the same result as intended by the amendment tabled on Report but with slightly different wording to fit with the structure of the 1997 Act. It would allow a court, when dealing with a person for the offence of breach of a restraining order, to vary or discharge the order in question by making a further order. The amendment will help to ensure that a restraining order continues to reflect the risk of harassment by the defendant towards the victim and will allow the court to change or to end the original restraining order as necessary. We hope that it will also help victims of harassment when a restraining order has been breached, in that it will reduce the need for them to apply to the court that made the original order for the order to be varied or for further protection—that is the current position under the Protection from Harassment Act 1997.
Amendment No. 8 would achieve the same result for Northern Ireland by amending Article 7 of the Protection from Harassment (Northern Ireland) Order 1997. I beg to move.
Baroness Anelay of St Johns: My Lords, unlike on the previous amendment, I am not at all puzzled; I am just grateful. I support the amendments.
On Question, amendment agreed to.
Baroness Scotland of Asthal Baroness Scotland of Asthal moved Amendments No. 7:
Page 7, line 20, leave out "(6)" and insert "(7)"
On Question, amendment agreed to.
Clause 12 [Restraining orders: Northern Ireland]:
Baroness Scotland of Asthal Baroness Scotland of Asthal moved Amendments Nos. 8 and 9:
Page 7, line 42, at end insert—
"( ) After paragraph (6) of that Article insert—
"(7) A court dealing with a person for an offence under this Article may vary or discharge the order in question by a further order.""
Page 8, line 10, leave out "(6)" and insert "(7)"
On Question, amendments agreed to.
Clause 13 [Application by prosecution for certain counts to be tried without a jury]:
Lord Thomas of Gresford Lord Thomas of Gresford moved Amendment No. 10:
Page 9, line 11, after "person" insert—
"( ) evidence in respect of each count is admissible at the trial of the sample count,"
The noble Lord said: My Lords, Clause 13 introduces an entirely new concept to criminal law procedure: counts can be tried without a jury although they are those that can be tried on indictment only. The circumstance in which that can be done is when the judge determines that a particular group of counts are samples of other counts. The judge must be satisfied of three conditions: first, that a trial by jury involving all the counts would be impracticable; secondly, that each count or group of counts to be tried is a sample of counts; and, thirdly, that it is in the interests of justice.
The Government could have left it at that but they decided to define the sample count in subsection (9) of Clause 13. My purpose is simply to clarify that it is indeed a sample count by the way in which we normally recognise a count to be a sample: that evidence in respect of each count is admissible at the trial of the second count.
When I raised the matter in Grand Committee the Minister was inclined to say yes but did not go that far. I do not know why I could not persuade her to say yes. On Report, the matter was dealt with more sternly by the noble and learned Lord the Attorney-General, who said that it would not be helpful to use the concept of admissibility as a condition for sample counts to be tried without a jury. The reason, he said, was that the judge would have to make a pre-assessment, in relation to the counts and the subsidiary counts, that that condition would be met. I do not seek to make it a condition; I have already referred to the three conditions. I seek to assist the Government in defining with clarity a sample count. As I have said, we have always understood it to be a count on which the evidence is admissible.
It is a simple matter. It puts the question of what is a sample count within certain well known, well defined boundaries and limits. When we are dealing with an entirely new and almost experimental procedure of trial, without a jury, of indictable-only offences, it is a sensible provision. I beg to move.
Baroness Anelay of St Johns: My Lords, I rise briefly, but the brevity of my comments should not lead one to underestimate the strength of my support for the amendment. It clarifies appropriately the definition of "sample count". In Committee and on Report, I demonstrated our general support for the changes that the Government seek to make. Although it might appear to others that we seek to weaken the role of the jury, we agree with the Government that we are not doing so. But some parts of the clause need to be strengthened in making the necessary changes. This amendment achieves just such an objective.
Baroness Scotland of Asthal: My Lords, of course I understand that the noble Lord, Lord Thomas of Gresford, wishes to assist the Government in defining clearly a sample count, and I hear the warm support given by the noble Baroness, Lady Anelay. However, I cannot usefully add much to what my noble and learned friend Lord Goldsmith, the Attorney-General, said on Report.
Evidence admissible in respect of sample counts is likely to be admissible in respect of the subsidiary counts because they will be extremely similar. It is important that the prosecution should be able to rely on evidence adduced in that part of the trial that was heard by a jury. However, it would not be appropriate to use admissibility, as this amendment does, as a criterion for whether counts were similar enough for one to be a sample of another. The question as to what can be regarded as a sample count is best left to judicial discretion.

833
There is also the practical problem that it may not be clear at the time of the preparatory hearing whether evidence in respect of a count is admissible in respect of another count. We believe that in cases of this type, where a judge is considering whether a count is a sample of another, the judge can be relied upon to know what a sample count is. In essence, that is why we have not adopted the commission's proposal for cross-admissibility.
I hope that what I have said is helpful. I am sorry if my noble and learned friend was harder than I was in Committee, but as in all things I defer to his firmness.
Lord Thomas of Gresford: My Lords, with the institution of a new procedure such as this, it is important that there be bounds to it. If it is simply left to the judge's discretion, that discretion may be taken in a way beyond that which Parliament envisages and it may be supported in the Court of Appeal. Therefore, it seems right that this definition should be clearly before the judge when he makes his pre-assessment. If, at that stage, he cannot say whether the evidence is admissible between counts—whether there is crossadmissibility—the procedure should not be adopted; it is as simple as that. I feel strongly enough about the matter as to test the opinion of the House.
1.39 p.m.
On Question, Whether the said amendment (No. 10) shall be agreed to?
Their Lordships divided: Contents, 117; Not-Contents, 107.

Division No. 3

CONTENTS

Addington, L.

Dundee, E.

Allenby of Megiddo, V.

Eden of Winton, L.

Anelay of St Johns, B.

Elles, B.

Astor, V.

Ezra, L.

Astor of Hever, L.

Feldman, L.

Avebury, L.

Ferrers, E.

Beaumont of Whitley, L.

Gardner of Parkes, B.

Biffen, L.

Geddes, L.

Blaker, L.

Glentoran, L.

Blatch, B.

Goodhart, L.

Bowness, L.

Greaves, L.

Bradshaw, L.

Greengross, B.

Bridgeman, V.

Hamwee, B.

Brigstocke, B.

Hanham, B.

Brooke of Sutton Mandeville, L.

Harris of Richmond, B. [Teller]

Brougham and Vaux, L.

Hayhoe, L.

Byford, B.

Hodgson of Astley Abbotts, L.

Caithness, E.

Hooson, L.

Campbell of Alloway, L.

Howe of Aberavon, L.

Carlisle of Bucklow, L.

Jenkin of Roding, L.

Carnegy of Lour, B.

Jopling, L.

Clement-Jones, L.

Kimball, L.

Cobbold, L.

King of Bridgwater, L.

Colwyn, L.

Laird, L.

Cope of Berkeley, L.

Lang of Monkton, L.

Craigavon, V.

Lawson of Blaby, L.

Crickhowell, L.

Lester of Herne Hill, L.

Denham, L.

Linklater of Butterstone, B.

Dholakia, L.

Liverpool, E.

Donaldson of Lymington, L.

Livsey of Talgarth, L.

834

Lyell, L.

Rodgers of Quarry Bank, L.

McColl of Dulwich, L.

Roper, L.

MacLaurin of Knebworth, L.

Rotherwick, L.

McNally, L.

Sanderson of Bowden, L.

Maddock, B.

Seccombe, B.[Teller]

Mar and Kellie, E.

Selsdon, L.

Methuen, L.

Sharman, L.

Miller of Chilthorne Domer, B.

Sharp of Guildford, B.

Miller of Hendon, B.

Shaw of Northstead, L.

Molyneaux of Killead, L.

Shutt of Greetland, L.

Montagu of Beaulieu, L.

Skelmersdale, L.

Montrose, D.

Skidelsky, L.

Mowbray and Stourton, L.

Smith of Clifton, L.

Stern, B.

Newby, L.

Stoddart of Swindon, L.

Northbrook, L.

Strathclyde, L.

Northesk, E.

Swinfen, L.

Northover, B.

Taverne, L.

Park of Monmouth, B.

Tenby, V.

Peel, E.

Thomas of Gresford, L.

Perry of Southwark, B.

Thomas of Walliswood, B.

Phillips of Sudbury, L.

Tordoff, L.

Pilkington of Oxenford, L.

Ullswater, V.

Plumb, L.

Wallace of Saltaire, L.

Plummer of St. Marylebone, L.

Walmsley, B.

Rawlings, B.

Wilcox, B.

Reay, L.

Williams of Crosby, B.

Redesdale, L.

Williamson of Horton, L.

Renton, L.

Windlesham, L.

NOT-CONTENTS

Acton, L.

Gale, B.

Ahmed, L.

Gibson of Market Rasen, B.

Amos, B. (Lord President of the Council

Goldsmith, L.

Gordon of Strathblane, L.

Andrews, B.

Goudie, B.

Archer of Sandwell, L.

Grenfell, L.

Ashley of Stoke, L.

Grocott, L. [Teller]

Ashton of Upholland, B.

Harrison, L.

Bach, L.

Haskel, L.

Barnett, L.

Hayman, B.

Bassam of Brighton, L.

Hogg of Cumbernauld, L.

Berkeley, L.

Hollis of Heigham, B.

Bernstein of Craigweil, L.

Howarth of Breckland, B.

Bledisloe, V.

Hoyle, L.

Boothroyd, B.

Hughes of Woodside, L.

Boston of Faversham, L.

Hunt of Kings Heath, L.

Bragg, L

Irvine of Lairg, L.

Brightman, L.

Janner of Braunstone, L.

Brookman, L.

Jay of Paddington, B.

Burlison, L.

Jordan, L.

Campbell-Savours, L.

Judd, L.

Carter, L.

King of West Bromwich, L.

Chan, L.

Lea of Crondall, L.

Christopher, L.

Lipsey, L

Clarke of Hampstead, L.

Lofthouse of Pontefract, L.

Cohen of Pimlico, B.

Macdonald of Tradeston, L.

Corbett of Castle Vale, L.

MacKenzie of Culkein, L.

Crawley, B.

Mackenzie of Framwellgate, L.

David, B.

Marsh, L.

Davies of Oldham, L. [Teller]>

Masham of Ilton, B.

Dean of Thornton-le-Fylde, B.

Massey of Darwen, B.

Dixon, L.

Merlyn-Rees, L.

Donoughue, L.

Morris of Aberavon, L

Dubs, L.

Morris of Manchester, L.

Elder, L.

Nicol, B.

Evans of Parkside, L.

Pitkeathley, B.

Evans of Temple Guiting, L.

Ponsonby of Shulbrede, L.

Falconer of Thoroton, L. (Lord Chancellor)

Randall of St. Budeaux, L.

Rendell of Babergh, B.

Farrington of Ribbleton, B.

Rogers of Riverside, L.

Faulkner of Worcester, L.

Rooker, L.

Filkin, L.

Sainsbury of Turville, L.

Fitt, L.

Sawyer, L.

Fyfe of Fairfield, L.

Scotland of Asthal, B.

835

Sewel, L.

Turner of Camden, B.

Sheldon, L.

Warner, L.

Simon, V.

Warwick of Undercliffe, B.

Stone of Blackheath, L.

Weatherill, L.

Strabolgi, L.

Wedderburn of Charlton L.

Symons of Vernham Dean, B.

Whitaker, B.

Tanlaw, L.

Temple-Morris, L.

Whitty, L.

Tomlinson, L.

Wilkins, B.

Triesman, L.

Williams of Elvel, L.

Turnberg, L.

Woolmer of Leeds, L.

Resolved in the affirmative, and amendment agreed to accordingly.
1.50 p.m.
Clause 18 [Unfitness to plead: procedure]:
Baroness Anelay of St Johns Baroness Anelay of St Johns moved Amendment No. 11:
Leave out Clause 18.
The noble Baroness said: My Lords, in speaking to Amendment No. 11, I shall speak also to Amendments Nos. 12 and 13, which are consequential. These clauses were inserted by the Government at Report stage. They remove from the jury the decision as to whether the defendant is fit to be tried, and give that decision to the judge alone. I made it clear at Report that I was somewhat sceptical about the Government's proposal. I said that I would carefully consider the arguments put forward and return to the matter at Third Reading if I was not convinced that the removal of this decision from the jury was necessary and appropriate.
I listened carefully to the Minister's reasons for removing that decision from the jury. I looked at the Auld report, which had been prayed in aid by the Government as the reason for the proposal. Of course, I accept that this is one of many recommendations made by Lord Justice Auld. The Government have not accepted all of his proposals and I agree with them on that. This is one more proposal that should, for the moment, be allowed to lie quietly unadopted.
Since 1997, the Government have been working assiduously to remove lay people from the judicial system. I call to mind lay members of the Social Security Appeal Tribunal and now the proposed unified Asylum and Immigration Tribunal, let alone the original proposals in the Criminal Justice Act and its Mode of Trial predecessors.
The layman has a vital role to play in our judicial system, which should not be reduced unless there is a strong reason to do so. We have accepted that there are occasions when that role should be reduced. We accepted that in the clauses that have transferred to judge alone the trial of sample counts.
In the matter of unfitness to plead it is right that the decision should remain with the jury. It is a matter of public interest and a jury has the competence to make the decision appropriately. The result of a decision that someone is unfit to plead can be draconian. It can be a hospital order without restriction as to time. At this stage, I believe that the decision should remain in the hands of the jury. I beg to move.
Lord Thomas of Gresford: My Lords, we support the amendment. As the noble Baroness, Lady Anelay, said,
836
it is very important that the public should have confidence in the system. In these cases, the position is that they are usually determined on the basis of medical reports, which very often are agreed but sometimes are conflicting, in which case evidence is called. The tribunal that determines whether the unfitness to plead is made out should be the jury. As the noble Baroness, Lady Anelay, said, the consequences of such a decision can be that a person can be locked up under a hospital order without any restriction as to time and is thereby deprived of his freedom.
Baroness Scotland of Asthal: My Lords, I am disappointed that the noble Baroness and noble Lord take that view. I am particularly disappointed that the noble Baroness should suggest that this clause seeks to remove lay people from the system. The clause has the effect of transferring responsibility to the judge to make the decision. However, noble Lords will note that the lay judgment remains in being because the jury still has a very powerful role.
Amendment No. 18 would remove a clause inserted during Report stage that would "streamline" the court process for vulnerable defendants who may be unfit to stand trial. The clause challenged makes changes to the Criminal Procedure (Insanity) Act 1964. The changes provide that the decision on whether a defendant is fit to plead to a charge should be taken by the judge and not by a jury.
I notice that the noble Baroness spoke only to the issue of jury trial and not to Clauses 19 and 20. The change is important to the efficiency of the court hearing where fitness is an issue. It is wasteful of court time and resources to have to convene two juries; that is, one jury to determine the issue of whether the defendant is fit to stand trial and, if not, another jury to determine whether he did the act or made the omission as charged.
It is not in the interest of vulnerable defendants to have to undergo a lengthy process involving two separate juries with the first having to hear evidence from at least two medical practitioners. The provision does not detract from the defendant's right to be tried by a jury. In the event that the defendant is found unfit to plead, a jury must still consider the facts of the case and acquit if not satisfied that the defendant did the act as charged. A finding that he did the act cannot lead to a conviction or punitive disposal.
I respectfully suggest that a jury is unlikely to be as well qualified as a judge to interpret the complex evidence of a professional nature. Moreover, under the new regime, if the defendant subsequently wishes to challenge a finding as to whether he is unfit to plead, he will have a judge's reasons for the conclusion under the new clause. That will help him to decide whether there is any basis for a successful appeal. Under the 1964 Act provision, which this amendment would restore, the jury has to give no reasons for its finding.
As the noble Baroness, Lady Anelay, has seen and read, the provision is a recommendation made by Lord Justice Auld. We do not think that it should stay on the shelf gathering dust. It has merit. It has been subject to

837
consultation in the published consultation document accompanying the mental health Bill where it attracted support. It is too important to the courts and to vulnerable defendants to be delayed further. At best, it must be subject to considerable further delay if removed from the Bill.
Amendment No. 12 seeks to remove Clause 19, which was inserted at Report stage. I have grouped Clauses 19 and 20 with Clause 18. I do not know whether the noble Baroness is content with Clauses 19 and 20 and simply discontent with Clause 18. If I can assume that that is her position, I shall not deal with the other two clauses.
The time has come to deal with this issue. We do not think that it will be unjust. It is proper. As I said at Report, and I reiterate today, there are some real benefits. There would be a reasoned decision that is capable, in the interests of' the defendant, of being challenged. He would still get the benefit of a jury to make the determination of fact, which is proper.
I know that the history of this House should have taught me otherwise, but I had hoped that this might have been a clause on which we would all gleefully agree. I have to express my disappointment.
Baroness Anelay of St Johns: My Lords, I am always sad to disappoint the Minister; naturally, nothing could be further from my objective.
However, I also do not want to disappoint those who seek to maintain a fair judicial system. I know that the Minister's objective is to ensure that there is a fair judicial system, but where we part company is on the question of whether a satisfactory case has yet been made as regards Clause 18. I should add that I am not addressing Clauses 19 and 20; my fire is directed towards Clause 18.
The Minister says that this will "streamline" the process for vulnerable people. There is also an argument that streamlining processes may prove to be a disadvantage in some circumstances. I hear what the noble Baroness says about the fact that a judge will be able to give reasons whereas a jury would not, but one could cite other circumstances where a jury trial might be thought inappropriate because reasons are not given. While I know that that is not what the Minister intends to imply, one has to consider the whole of the judicial system when seeking to assault one part of it.
As she did at the previous stage, the noble Baroness said that the jury might not be best placed properly to be able to deal with the evidence that might be adduced from medical reports. However, the great strength of a jury is that it is able to bring to its adjudication an understanding of what is right and wrong, and whether what it has been told is the truth. Members of juries are able to come to their decisions in such cases.
The noble Baroness also referred to the fact that this provision might have been included in the mental health Bill. As soon as we had sight of the first amendments tabled by the Government on this proposal, I took every opportunity to contact organisations that one would expect to have a direct interest in it. I know that the Minister has observed in
838
the past that silence is consent, but I am not persuaded of that. I like to be sure that when serious changes are made, people are content. Despite my best efforts, I have still not heard whether people are content with the proposals. Since, despite repeated efforts, I have not directly received that response—it would have to come to me as the mover of the amendment—I am not in a position to agree that this particular clause should be put on the face of the Bill. As it stands today, therefore, I am not able to say whether Clause 18 should be included in the Bill.
If the House agrees that Clause 18 should not be added to the Bill and it is further discussed in another place, it may well be that further evidence comes to light. But I have to say that the scepticism I expressed when we considered this on Report has since hardened. Therefore, I seek to test the opinion of the House.
Baroness Scotland of Asthal: My Lords, I wish to rise before the noble Baroness resumes her place. On this occasion it is not a question of silence. I hope that I made it clear that the consultation document accompanying the draft mental health Bill contained these provisions. I understand that, within that consultation, they attracted support. This is not a question of silence; the consultation document indicated that there was positive support for these provisions.
Baroness Anelay of St Johns: My Lords, I shall not trespass too much on the rules at Third Reading, but I should say that I looked at that consultation document. A fleeting, passing reference was made to this proposal. As it was so fleeting and passing, I sought assiduously to find out what the major organisations—I named them on the previous occasion—felt about it. However, at this point I do not have the evidence to hand to allow me properly to accept that this proposal should go forward. I wish to test the opinion of the House on whether to leave out Clause 18.
2.2 p.m.
On Question, Whether the said amendment (No. 11) shall be agreed to?
*Their Lordships divided: Contents, 115; Not-Contents, 103.

Division No. 4

CONTENTS

Addington, L.

Campbell of Alloway, L.

Allenby of Megiddo, V.

Carlisle of Bucklow, L.

Anelay of St Johns, B.

Carnegy of Lour, B.

Astor of Hever, L.

Carrington, L.

Avebury, L.

Clement-Jones, L.

Beaumont of Whitley, L.

Cobbold, L.

Belstead, L.

Colwyn, L.

Blatch, B.

Cope of Berkeley, L.

Bowness, L.

Crickhowell, L.

Bradshaw, L.

Denham, L.

Bridgeman, V.

Dholakia, L.

Brooke of Sutton Mandeville, L.

Dundee, E.

Brougham and Vaux, L.

Eden of Winton, L.

Byford, B.

Elles, B.

Caithness, E.

Ezra, L.

839

Falkland, V.

Northesk, E.

Feldman, L.

Northover, B.

Ferrers, E.

Oakeshott of Seagrove Bay, L.

Gardner of Parkes, B.

O'Cathain, B.

Geddes, L.

Park of Monmouth, B.

Glentoran, L.

Peel, E.

Goodhart, L.

Perry of Southwark, B.

Greaves, L.

Phillips of Sudbury, L.

Greenway, L.

Pilkington of Oxenford, L.

Hamwee, B.

Plumb, L.

Hanningfield, L.

Plummer of St. Marylebone, L

Harris of Richmond, B. [Teller]

Rawlings, B.

Hayhoe, L.

Reay, L.

Hodgson of Astley Abbotts, L.

Hooson, L.

Redesdale, L

Howe of Aberavon, L.

Renton, L.

Hunt of Wirral, L.

Rodgers of Quarry Bank, L.

Jacobs, L.

Roper, L.

Jellicoe, E.

Rotherwick, L.

Jenkin of Roding, L.

Saltoun of Abernethy, Ly.

Jopling, L

Sanderson of Bowden, L.

Kimball, L.

Seccombe, B.[Teller]

King of Bridgwater, L.

Sharman, L.

Laird, L.

Sharp of Guildford, B.

Lang of Monkton, L

Shaw of Northstead, L.

Lang of Monkton, L.

Shutt of Greetland, L.

Lawson of Blaby, L.

Skelmersdale, L.

Lester of Herne Hill, L.

Smith of Clifton, L.

Linklater of Butterstone, B.

Stern, B.

Liverpool, E.

Stoddart of Swindon, L.

Livsey of Talgarth, L.

Swinfen, L.

McColl of Dulwich, L.

Taverne, L.

MacLaurin of Knebworth, L.

Thomas of Gresford, L.

McNally, L.

Thomas of Walliswood, B.

Maddock, B.

Thomson of Monifieth, L.

Mar and Kellie, E.

Tope, L.

Methuen, L.

Tordoff, L.

Miller of Chilthorne Domer, B.

Ullswater, V.

Miller of Hendon, B.

Wade of Chorlton, L.

Montrose, D.

Wallace of Saltaire, L.

Mowbray and Stourton, L.

Walmsley, B.

Newby, L.

Wilcox, B,

Northbrook, L.

Williams of Crosby, B.

NOT-CONTENTS

Acton, L.

Dixon, L.

Ahmed, L.

Dubs, L.

Amos, B. (Lord President of the Council)

Elder, L.

Evans of Parkside, L.

Andrews, B.

Evans of Temple Guiting, L.

Archer of Sandwell, L.

Falconer of Thoroton, L. (Lord Chancellor)

Ashley of Stoke, L.

Ashton of Upholland, B.

Farrington of Ribbleton, B.

Bach, L.

Faulkner of Worcester, L.

Barnett, L.

Filkin, L.

Bassam of Brighton, L.

Fitt, L.

Berkeley, L.

Fyfe of Fairfield, L.

Bernstein of Craigweil, L.

Gale, B.

Blackstone, B.

Gibson of Market Rasen, B.

Bledisloe, V.

Goldsmith, L.

Boothroyd, B.

Gordon of Strathblane, L.

Bragg, L.

Goudie, B.

Brookman, L.

Grocott, L. [Teller]

Burlison, L.

Harris of Haringey, L.

Campbell-Savours, L.

Harrison, L.

Carter, L.

Haskel, L.

Christopher, L.

Hayman, B.

Clarke of Hampstead, L.

Hogg of Cumbernauld, L.

Clinton-Davis, L.

Hollis of Heigham, B.

Cohen of Pimlico, B.

Howarth of Breckland, B.

Corbett of Castle Vale, L.

Howells of St. Davids, B.

Crawley, B.

Hoyle, L.

David, B.

Hughes of Woodside, L.

Davies of Oldham, L. [Teller]

Hunt of Kings Heath, L.

Dean of Thornton-le-Fylde, B.

Irvine of Lairg, L.

840

Jannerof Braunstone, L.

Sawyer, L.

Jay of Paddington, B.

Scotland of Asthal, B.

Jordan, L.

Sewel, L.

Judd, L.

Sheldon, L.

King of West Bromwich, L.

Simon, V.

Lea of Crondall, L.

Stallard, L.

Lipsey, L.

Stone of Blackheath, L

Lofthouse of Pontefract, L.

Strabolgi, L.

Macdonald of Tradeston, L.

Symons of Vernham Dean, B.

MacKenzie of Culkein, L.

Temple-Morris, L.

Mackenzie of Framwellgate, L.

Tomlinson, L.

Massey of Darwen, B.

Triesman, L.

Merlyn-Rees, L.

Turnberg, L.

Mitchell, L.

Turner of Camden, B.

Morris of Manchester, L.

Warner, L.

Nicol, B.

Warwick of Undercliffe, B.

Pitkeathley, B.

Wedderburn of Charlton, L.

Ponsonby of Shulbrede, L.

Whitaker, B.

Randall of St. Budeaux, L.

Whitty, L.

Rendell of Babergh, B.

Wilkins, B.

Rogers of Riverside, L.

Williams of Elvel, L.

Rooker, L.

Williamson of Horton, L.

Sainsbury of Turville, L.

Woolmer of Leeds, L.

*[See co1.866]
Resolved in the affirmative, and amendment agreed to accordingly.
2.12 p.m.
Clause 19 [Powers of court on finding of insanity or unfitness to plead etc]:
[Amendment No. 12 not moved.]
Clause 20 [Appeal against order made on finding of insanity or unfitness to plead etc]:
[Amendment No. 13 not moved.]
Viscount Bridgeman Viscount Bridgeman moved Amendment No. 14:
After Clause 25, insert the following new clause—
"AMENDMENTS TO THE YOUTH JUSTICE AND CRIMINAL EVIDENCE ACT 1999 TO EXTEND THE CATEGORY OF WITNESSES ELIGIBLE FOR ASSISTANCE ON GROUNDS OF FEAR OR DISTRESS ABOUT TESTIFYING
(1) Section 17 of the Youth Justice and Criminal Evidence Act 1999 (c. 23) (witnesses eligible for assistance on grounds of fear or distress about testifying) is amended as follows.
(2) After subsection (4) insert—

"(4A) Where the complainant in respect of proceedings relating to any form of molestation, including violence, involving the complainant, a cohabitant, a relevant child or associated persons, is a witness in such proceedings, the witness is eligible for assistance in relation to those proceedings by virtue of this subsection unless the witness has informed the court of the witness's wish not to be so eligible by virtue of this subsection.

(4B) For the purposes of this subsection, "cohabitant", "relevant child" and "associated persons" mean a person as defined by section 62 of the Family Law Act 1996 (c. 27) (meaning of "cohabitants", "relevant child" and "associated person") as amended by sections 2 and 3 of this Act.""

The noble Viscount said: My Lords, Amendment No. 14 stands in my name and in the names of my noble friend Lady Anelay, the noble Lord, Lord McNally, and the noble Baroness, Lady Walmsley. May I first thank the Minister for agreeing to meet Victim Support. as we suggested, after the Report stage?
This is the same amendment as the one we moved on Report, when I gave notice to the Minister that we would not divide the House at that stage. The point at issue remains—that is, the concept that one size does not fit all, as the Minister put it so succinctly at earlier stages of the Bill. As an example, the Minister painted the scenario of a complainant who, in effect, wants maximum publicity by saying,
"'I am going to stand up for myself, and I am not going to allow you to see that you have obliged me to take special measures to hide from you"'.—[Official Report, 15/3/04; col. 32.]
The Minister quite rightly said that some cases go one way and some go the other.
But, in my amendment, the proposed new subsection (4A) expressly provides for the witness to opt out of the right to special measures,
"unless the witness has informed the court of the witness's wish not to be so eligible by virtue of this subsection".
This exactly follows the wording of Section 17(4) of the existing Act, which relates to sexual offences. So the victims will be able to opt out of the special measures provided for under our amendment.
The Minister reminded us on Report that as the Bill now stands the victims have the right to special measures under Sections 16 and 17 of the Youth Justice and Criminal Evidence Act, but the difference between us remains. The statutes at present give the protection at the discretion of the court; our amendment gives it as an absolute right. At the risk of repeating what I said on Report, we think this is of fundamental psychological importance to the witness. If the provision draws in some trivial cases which are not in themselves deserving of special measures, so be it. The opt-out provision to which I have referred is there.
I hope that the Minister will, at this late stage of the Bill's passage through your Lordships' House, be able to agree what we on these Benches regard as a fundamentally important modification of the Bill. I beg to move.
Baroness Walmsley: My Lords, in rising to support the amendment I would like very much to reiterate the words of the noble Viscount, Lord Bridgeman, in regard to the opt out provided in the proposed new clause, which counters the arguments made by the Minister at Report stage.
The noble Baroness also argued that Sections 16 and 17 of the Youth Justice and Criminal Evidence Act 1999 already enable victims of domestic violence to have access to special measures where a court decides that it is appropriate. That is the sticking point and the reason that we are being so tenacious in again bringing forward the amendment. We feel that it is always appropriate at least to offer these measures to victims of domestic violence. As we have heard, the victim may reject the measures for his or her own reasons; he or she would have a right to do that.
We are concerned that there may be situations where the court may not allow special measures when it would be appropriate to do so. The nature of the
842
power relationship is not always reflected by the seriousness of the particular assault that brought the parties to court on the day. That means that the court may not feel that the assault is serious enough to require the special measures to be made available to the victim. But the court cannot see into the mind of the victim; it cannot know how demoralised is the victim of the assault.
We want vigorous, good-quality evidence, given with the kind of conviction that will convince the court. A woman who is cowering in fear of her assailant will not be in a position to give that good-quality evidence—and on that good-quality evidence depends the justice that will result from the hearing on the day.
It is for that reason that we vigorously support the amendment. We hope that it will find favour with the Minister. We all want exactly the same thing; that is, that genuine perpetrators are brought to book and that women are given the courage to come forward and complain about domestic violence.
Baroness Scotland of Asthal: My Lords, I absolutely agree with the last statement of the noble Baroness, Lady Walmsley. We all agree about that. There has never been a murmur of dissent among any of us in terms of our aspirations in regard to what we wish to make available to victims.
The noble Viscount, Lord Bridgeman, referred to the comments that I made on Report. I am grateful to him for that. It is right that we should look at each case on its merits. We agreed during the Report stage that where there is clear evidence of the victim being too frightened or distressed to give evidence, special measures are available; and that Section 17 of the Youth Justice and Criminal Evidence Act 1999 already enables victims of domestic violence to have access to special measures where the court decides it is appropriate. So we think the amendment is unnecessary. However, I understand the difference in emphasis that the noble Lord and the noble Baroness, Lady Walmsley, seek to make.
As the noble Viscount, Lord Bridgeman, said, Section 17 states that the court must take into account, among other things, such factors as the domestic circumstances of the witness, any behaviour towards the witness on the part of the accused and the nature and alleged circumstances of the offence. The noble Lord said at Report that he was aware of magistrates who were unwilling to give special measures because they had been applied for only on the day of the trial, and representatives from Victim Support, who met my officials this week, were concerned that the courts were not always willing to allow victims of domestic violence access to special measures. The organisation did not say on how many occasions that happened, but even one occasion is one too many.
Of course, leaving an application for special measures until the day of the trial cannot be good practice. The way that we set these things up now is that there should be good preparation for these hearings and such applications should be made at an early stage. It would indicate, perhaps unfairly, a lack

843
of preparation of the case, and would take up valuable court time. Applications should be made at the pretrial hearing because, if nothing else, that would provide a greater degree of certainty to the victim about how they will give their evidence at the trial.
We should all accept that these measures are still relatively new, and access in the magistrates' courts has so far been limited to child witnesses. It is important that we do not act hastily but instead wait for the findings of the independent evaluation of special measures which will report in the summer, which is quite soon. We would aim to address any teething problems through training and guidance, rather than automatically consider the legislative route. The Government do not believe that legislation is the cure to all ills. Some people say that legislation can be the opposite. I will be meeting Victim Support shortly to discuss the Bill as a whole and I hope we can reach a common understanding about how it will support vulnerable and intimidated witnesses, victims in general and domestic violence victims in particular.
As I said in the debate last time, I expect courts to be sensitive to the needs of victims of domestic violence and grant special measures when appropriate. I also hope that the rules of court that we are putting in place make it clear that proper applications should be made to prepare for these cases so that when the vulnerable person comes to give evidence they know that they will be properly accommodated during the proceedings, and will be best able to describe what happened to them.
For those reasons, I hope that noble Lords will understand that I cannot accept the amendment and that they will not press this matter today. I hope that they will accept the assurance that we will do all that we can to ensure that these issues are accommodated in a proper way.
Viscount Bridgeman: My Lords, I am grateful to the noble Baroness, Lady Walmsley, for supporting this amendment and to the Minister for the limited assurances that she has given us. Only this morning I received further brief from Victim Support that paints an unsatisfactory picture of the working of the special measures in the courts, probably largely through ignorance. I have not had time to digest it all, but I will read two comments from its members. The first says:
"Victims are often terrified at the thought of seeing their abuser. It would be helpful if they knew that they would be protected from view by screens".
The second is:
"I believe that a number of clients who refuse to give evidence would be willing to go ahead with cases if they have a screen or video link. Many get here and then refuse to give evidence. It is important that the witness knows"—
I repeat knows—
"what to expect before they arrive".
We will take up this point in another place during the passage of the Bill there, so I shall not divide the House today. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 31 ["Victims"and "witnesses'']:
Baroness Anelay of St Johns Baroness Anelay of St Johns moved Amendment No. 15:
Page 18, line 23, at end insert—
"(c) the offence was one of trafficking people into the United Kingdom for exploitation."
The noble Baroness said: My Lords, this is a probing amendment. I am very grateful to the noble Lord, Lord Hylton, for adding his support to the amendment. It would make it clear on the face of the Bill that the clauses relating to the functions of the Commissioner for Victims and Witnesses should apply as much to the victims of illegal trafficking as to anyone else in this country. I tabled the amendment to ask the Government to clarify the position of those people who are trafficked illegally into the UK for either sexual or non-sexual exploitation.
We have welcomed the measures both in the Sexual Offences Act and in the current Asylum and Immigration (Treatment of Claimants, etc.) Bill with regard to closing down any opportunity for such illegal trafficking. However, will the Commissioner for Victims and Witnesses be under an explicit duty to promote the interests of these victims? During Second Reading of the asylum Bill last week, I pointed out that the victims Bill before us today makes no specific reference to support for victims of trafficking. I am trying to ensure that they are included within its protection. I beg to move.
Lord Hylton: My Lords, I was happy to agree to add my name to the amendment. We ought not to be in any doubt at all that people who have been trafficked into this country are definitely victims. They have normally suffered from fraud, deceit, coercion and so forth, and they do not arrive here with their full consent. They may have been transported by various means over hundreds or thousands of miles before they arrived here. I hope that the Government will look with some sympathy on this amendment. I have drafted an amendment to the recently published asylum Bill that is intended to secure proper treatment and protection of victims of trafficking once they are here.
Baroness Scotland of Asthal: My Lords, I thank the noble Baroness, Lady Anelay, and the noble Lord, Lord Hylton, for indicating that this is a probing amendment which seeks to add to Clause 31 (3) so that the needs of the victims of human trafficking are brought within the remit of the Commissioner for Victims and Witnesses.
Given the already substantial scope of the commissioner to consider the needs of various victims, I will resist this amendment on the basis that it is already part of his powers to make recommendations to the Government about this group of victims. But I welcome this opportunity to associate myself with the comments made by both the noble Baroness, Lady Anelay, and the noble Lord, Lord Hylton, and to inform the House of the steps that we have already taken to offer support to such a vulnerable and exploited group of victims. I assure the noble Lord, Lord Hylton, that we do indeed see this category of people as victims.

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Since 2002, the Home Office has been working in partnership with the voluntary sector to put in place provision for those who have been trafficked for the purposes of sexual exploitation. In March 2003, we launched a pilot project to provide safe accommodation and access to health and other support services for female victims who have been trafficked into prostitution. The victims were given the opportunity to make informed choices about whether, and to what extent, they were able actively to assist the authorities. An additional aim of the pilot, therefore, was to enable UK enforcement authorities to gather information on and take action against the traffickers. It became apparent towards the end of the initial six-month pilot period that further time was required to ensure that robust evaluation evidence on its impact could be gathered.
The pilot period was therefore extended for a further three months to December 2003. The formal pilot phase has now concluded but feedback from key stakeholders such as the police, local healthcare professionals, the immigration service and non-government organisations has been very positive.
Early evaluation findings also support the continuation of the project and, pending full evaluation and to ensure continuity of service provision for this extremely vulnerable group of victims, we will maintain the project at its current level. We are continuing to monitor the numbers of and outcomes for victims entering the scheme. This information will also feed into the evidence base for future service developments. We expect the final evaluation report on the pilot phase to be available during the summer of 2004. We will use the period up to April 2005 to consider in detail the evaluation evidence and to take decisions as to the type and extent of support needed in the future.
At the same time, we are currently looking at the issue of provision for victims of people-trafficking for the purposes of labour exploitation—another issue in which I know noble Lords have been interested. We want to gauge the scale of the problem and to see what scope there might be for identifying and providing support also to victims of this form of exploitation. The needs of victims of all types of trafficking are likely to be firmly within the vision of the new Commissioner. The Bill as currently drafted allows him or her to make recommendations to Government on what other or further action we need to take.
I therefore very much welcome this opportunity to outline what we have achieved so far. I am very grateful for the support that the House has given in the past and for the implicit support given by the noble Baroness, Lady Anelay, and the noble Lord, Lord Hylton, to these efforts. I hope that the noble Baroness and the noble Lord will not be surprised to hear that I will nonetheless be resisting their amendment. However, I hope that they will fully understand why the amendment is not necessary.
2.30 p.m.
Baroness Anelay of St Johns: My Lords, I am indeed grateful to the Minister and I accept her argument. I
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am pleased to hear that her opening remarks were firmly that such a concern for the victims of trafficking would be part of the Commissioner's powers. It would be good to have that on the record.
I was also very grateful to her for putting on the record in a fair amount of detail the work that has been carried out with regard to trafficking and those who are subject to sexual exploitation. We certainly await with interest the further evaluation of that pilot as it is maintained. We would also welcome any work that could be done to look at those who are exploited for non-sexual reasons.
I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Schedule 7 [Minor and consequential amendments]:
Baroness Scotland of Asthal Baroness Scotland of Asthal moved Amendment No. 16:
Page 42, line 10, at end insert—
"Criminal Justice Act 1988 (c. 33)
In section 41 of the Criminal Justice Act 1988 (power of Crown Court to deal with summary offence where person committed for either way offence), after subsection (4) insert—
"(4A) The committal of a person under this section in respect of an offence to which section 40 above applies shall not prevent him being found guilty of that offence under section 6(3) of the Criminal Law Act 1967 (alternative verdicts on trial on indictment); but where he is convicted under that provision of such an offence, the functions of the Crown Court under this section in relation to the offence shall cease.""
On Question, amendment agreed to.
In the Title
Baroness Scotland of Asthal Baroness Scotland of Asthal moved Amendment No. 17:
Line 4, after "offence:" insert "to make provision about alternative verdicts;"
On Question, amendment agreed to.
An amendment (privilege) made.
Baroness Scotland of Asthal: My Lords, I beg to move that this Bill do now pass.
Moved, That the Bill do now pass.—(Baroness Scotland of Asthal.)
On Question, Bill passed, and sent to the Commons.

European Parliamentary and Local Elections (Pilots) Bill
2.33 p.m.
The Parliamentary Under-Secretary of State, Department for Constitutional Affairs (Lord Filkin): My Lords, I beg to move that the Commons reason be now considered.
Moved accordingly, and, on Question, Motion agreed to.
COMMONS REASON FOR DISAGREEING TO A CERTAIN LORDS AMENDMENT
[The page and line references are to HL Bill 14 as first printed for the Lords.]
LORDS AMENDMENT
1 Leave out Clause 1 and insert the following new clause—
"Piloting conduct at European and local elections
(1) An election to which this section applies (a pilot election) must be held—

(a) only by postal voting, and (for that purpose)

(b) in accordance with provision made by the Secretary of State by order (a pilot order).

(2) These are the elections to which this section applies—

(a) the European Parliamentary general election of 2004 in a pilot region;

(b) a local government election in England and Wales if the poll at such an election is combined with the poll at an election mentioned in paragraph (a).

(3) These are the pilot regions—

(a) North East;

(b) East Midlands.

(4) Postal voting is voting where no polling station is used and a person entitled to vote in person or by proxy must deliver the ballot paper by post or by such other means as is specified in a pilot order.
(5) A pilot order—

(a) may modify or disapply any provision made by or under a relevant enactment;

(b) may contain such consequential, incidental, supplementary or transitional provision or savings (including provision amending, replacing, suspending or revoking provision made by or under any enactment) as the Secretary of State thinks appropriate;

(c) may make different provision for different purposes."

The Commons agree to this amendment with the following amendment—
1A Line 15, at end insert—

"(c) Yorkshire and the Humber;

(d) North West."

The Lords disagree to Commons Amendment No. 1A to Lords Amendment No. 1, for the following reason—
1B Because it is appropriate to make provision for no more than two pilot regions, as recommended by the Electoral Commission.
The Commons do not insist on their Amendment No. 1A to which the Lords have disagreed, but propose the following amendment to the Bill in lieu of that amendment—
1C Leave out lines 16 to 18 and insert—

'(c) Yorkshire and the Humber;

(d) North West.

( ) Postal voting is voting where no polling station is used and a person entitled to vote in person or by proxy must deliver by post or by such other means as is specified in a pilot order—

(a) the ballot paper, and

(b) the completed declaration of identity form.

( ) The declaration of identity form is a form which is delivered along with the ballot paper and which is completed by being signed—

(a) by the person to whom the ballot paper is addressed, and

(b) by a witness to that signing whose name and address are clearly marked on the form.'

The Lords agree with the Commons in their Amendment No. 1C in lieu of Commons Amendment No. 1A, but propose the following amendment thereto—
1D Line 3, at end insert—
"but, in the case of either region specified in paragraph (c) or (d) above, a pilot may only lake place if it is specifically recommended by the Electoral Commission in a report which is laid before both Houses of Parliament after the coming into force of this Act."
The Commons disagree to Lords Amendment No. 1D to Commons Amendment No. 1C, for the following reason—
Because it is not necessary to seek further advice from the Electoral Commission.
Lord Filkin: My Lords, I beg to move that the House do not insist on its Amendment No. 1D to Commons Amendment No. 1C, to which the Commons have disagreed for their reason numbered 1E.
We are in an unusual situation. This is the fourth time that this issue is being considered by this House, and I hope that it will be the last.
With regard to Amendment No. 1D, it is clearly not appropriate to delegate decision-making on this issue to the Electoral Commission. In response to the Deputy Prime Minister's request for clarification, the Electoral Commission has made its position clear. It said:
"We very much recognise that the choice of pilot regions for all-postal voting is for Government and Parliament to decide. The Commission's role is advisory and it is not for us to say yes or no to pilots in particular areas. However, it is imperative that a decision is not further delayed".
The Electoral Commission has therefore given a clear view that it is this House and another place that should make these decisions: it is not for us to hide behind it.
We are therefore back where we were when we last debated this—which, I suggest to the House, essentially turns around two questions: which regions and how many regions? However, I think that the position has moved on somewhat. It is now clearer that the Electoral Commission has accepted the Government's position that Yorkshire and Humberside is suitable for a pilot in the combined elections in June. The debate, therefore, is about the north-west.
As I sought to set out in our previous discussion on this matter, after the Commission had indicated that the north-west was potentially suitable for a pilot in the combined elections in June, the Commission also made it clear that it was open to the Government to have further discussions with the relevant authorities, to see if the concerns that they had identified about the complexity in the north-west could be met. As I have indicated, the Government have done just that, as is their responsibility, and the regional returning officer and the returning officers in those authorities have made a clear statement to the Government that they believe that they can carry out all-postal ballots in the June European and local elections, and do so soundly, securely and safely. The Government's view, therefore, is that there is no good reason not to have the north-west included as a pilot region.

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We see that there are four regions suitable for carrying out pilots of all-postal ballots, and it is important to deepen our understanding of piloting. If we needed any reminder of why this is important—I promise the House that I will not repeat the argumentation that I made, and already hear sighs of relief in the Chamber—I would draw the attention of the House to the publication by the Electoral Commission this week of its Audit of Political Engagement.
This is not a party political issue but one which binds us all in concern, given the appallingly low level of public engagement with politics and voting in our society. I will say no more on that for now. It is perhaps an issue for reflection and discussion, to which we should return at another time in this House on a non-partisan basis, because we do share these concerns.
I mention it only in order to emphasise that it is for no trivial reason that we are exploring and learning as much as we can about whether it is safe, sound and beneficial to change our voting system to all-postal balloting. We are doing so because it is important to address this issue of increasing turnout and political participation in our society.
I suggest to the House, therefore, that there is clearly an emerging consensus from the Government and the Electoral Commission—if I have read the thrust of the amendment by the Liberal Democrats correctly—that Yorkshire and Humberside now look safe and sound for an all-postal ballot. The issue is whether we are talking about three regions or four regions in relation to these ballots in June.
Why four? If anything, there is a shade of difference between, on the one hand, the Government and the Commons who share a view and, on the other, the Electoral Commission. If I understand the Electoral Commission's position clearly—and I think I do, because it has been straightforward both in correspondence and in discussion—it believes, first, that we can learn most of what we need to know about piloting from three regions, and therefore one does not need to go to four to do so. Secondly, it has an anxiety about moving through a process of incremental drift from pilots, to what it thought might effectively be all-out postal balloting, without having put in place some of the security arrangements that we discussed in our earlier consideration of the Bill.
These issues are judged ultimately by Parliament and the public rather than by the Electoral Commission. As I have said before, I have respect for Sam Younger and the Electoral Commission. However, this is an issue of judgment, not a black and white issue. The judgment turns on whether we will learn anything more from piloting the arrangements in four regions. From my perspective, and that of the Government and the Commons, it is self-evident that we would learn more by doing that. As we have discussed in previous debates on the Bill, the north west is different. It has specific issues that are interesting and important and potentially challenging. Learning from piloting in that context will be beneficial for us all in making measured judgments
850
about when we should move to all-postal balloting for local elections. So we will learn more if the north west is included in this process.
The second reason the Government are clear that on balance it is sensible to pilot in four regions is a different one. I do not think that the commission and the Government are at all at odds on it. Both the commission and the Government agree that it is desirable that we carry out all-postal balloting in the three regions, which of course include the north west, that will have regional referenda in October. That is clearly the Electoral Commission's position. It has supported the Government's statement of intent.
Therefore, from my previous comments and what is clear in the recent correspondence from the Electoral Commission, there is no issue about the north east, Yorkshire and Humberside, which will have regional referenda. The debate is whether it is sensible to expect the north west—where many of the local authorities will have carried out their previous local authority elections on an all-postal ballot basis—to move in the June elections to traditional arrangements and then to revert back, in October, to all-postal ballots. The Electoral Commission is entitled to its view. The Government are entitled to their view as well. We think that we will learn more from piloting in four regions rather than three. We do not want the slightly bizarre position in which, if this House sustains its view, some local authorities in the north west will move from postal ballots for local elections to traditional ballots for the elections in June, and then move back to postal ballots in October.
I ask the House whether that seems sensible. Does that seem an issue of fundamental principle on which this House would want to take a constitutional stand in the face of the will of the House of Commons? That is the final issue that we have to look at.
This House, of which I am privileged to be a Member, has a duty and a right to scrutinise legislation. I have a respect for the way in which it goes about that. I think that the House, while not doing that perfectly, does it well. However, we know that the constitutional settlement is that this House scrutinises legislation and gives its view and its advice to another place. It is the duty of the other place to consider that view and advice and then to make its decision. The conventions of our place are that, ultimately, after this House has been assured—sometimes, if necessary, by a process including more than one testing—that the other place has come to a considered assessment, in the round, of the reasons for its view and that it has considered this House's opinion, the Commons have their way and we grant them their way.
That is not for a trivial or petty reason. While this House has great merits, it is not elected. The constitutional settlement in this society is that, after this House has done its job and drawn the attention of the other place to areas of concern, ultimately it bends to the will of the other place. The Commons have expressed their view on this issue three times after they have considered our opinions. I do not think that it is right or proper for us to resist their will any more. We

851
have done our job. They have considered our views. They have come to an opinion—not once, not twice, but thrice.
I will say no more on that, but I will remind the House of the view of the Wakeham report. While the report did not find fulfilment in every respect, it did largely capture the view, on a cross-party basis, on the constitutional settlement of this place. The report said:
"It is right that the House of Commons should be the principal political forum and have the final say in respect of all major public policy issues, including those expressed in the form of proposed legislation".
It continued:
"More generally, the second chamber should be cautious about challenging the clearly expressed views of the House of Commons on any public policy issue".
This House has given its view and advice three times, and the Commons have now clearly expressed their wish in this respect. The Commons must have their way, not simply because that is our settlement, but because the argument that divides this House and the other place turns essentially on a judgment on one region—on whether we will learn more or less by its inclusion, and whether this is a drift towards roll-out. I have clearly said that it is not a drift towards roll-out. We do not intend to move in that direction without proper processes and safeguards.
The Commons must have its way. I beg to move.
Moved, That the House do not insist on its Amendment No. 1D to Commons Amendment No. 1C, to which the Commons have disagreed for their reason numbered 1E.—(Lord Filkin.)—
2.45 p.m.
Lord Rennard Lord Rennard rose to move, as an amendment to the Motion that this House do not insist on its Amendment No. 1D to Commons Amendment No. 1C to which the Commons have disagreed for their reason numbered 1E, at end insert "but do make the following Amendment to Commons Amendment No. 1C in lieu of Lords Amendment No. 1D"—
1F Clause 1, Line 3, leave out—
"(d) North West."
The noble Lord said: My Lords, this amendment is a new proposal not previously considered in the other place, to allow for three postal pilots to take place, in the hope that it is a way in which to resolve this matter. I will argue that this is a compromise—splitting the difference between the view of one House and one political party that there should be four pilots, and the view of our House and all other parties that there should be two. We in this House, and everyone but the Labour Party, have sustained a view that the independent Electoral Commission's opinion on the scale and places for piloting should be pivotal in our considerations. This is not a technical issue on which there could be a variety of opinions worth debating. It is, I think, a very principled one—that no one party should choose different voting mechanisms for different places according to its own interest, based in this case on fears that the electorate will not turn out to support it.
Perhaps a different way of resolving the matter of testing postal pilots might have been to allow each of the parties to nominate one region for polling. That would have been rather more democratic than the Government's proposal that there should be all-postal voting in the northern half of England—where the Labour party wants it most, where Labour support is most concentrated, and where most Labour councillors are fearful of re-election—and none in the south, where Labour support is at its weakest.
The majority of Members in another place say that it is up to them to decide on methods of voting as they represent the party that received most votes at the previous election—albeit just over four in 10 of those voting, representing only about one in four of those entitled to vote. An opinion poll today suggests that only about four in 10 people know who their Member of Parliament is and only about three in 10 say that MPs are doing a good job. Reading yesterday's debate, one can see why.
One reason that they should not decide this issue alone, without consensus and in opposition to the Electoral Commission, is that they have a vested interest in the decision. That is why the issue regarding where the line should be drawn between electoral experimentation and simply rolling out a different voting system should be left not to one party to decide to its own advantage but to an independent body charged with helping to avoid the kind of dispute between the parties that we now have.
Parliament—which to some people means only one House—should decide, it is argued, on the fundamental issue of whether or not to do away with ballot boxes and have all postal voting. But we cannot have the Government picking and choosing which regions should have which voting mechanism according to their own electoral advantage. The Government say that they are not effectively changing the voting system; they are experimenting with it only through pilots. However, the question of what is a limited number of experiments and what is simply rolling out a different way of voting is an issue on which most parties and the independent Electoral Commission cannot agree with the Labour Government.
The Government asked Parliament to agree to postpone the local and London elections until 10 June so that they coincided with the European elections. At that stage, they did not want all postal pilots; or, if they did, they were not at that stage being honest about it. That would have been a major factor in considering whether or not to agree to the rare measure of postponing local elections. That matter was agreed on these Benches but on the basis of a false prospectus about how those elections were to be conducted.
The Government then surprised everyone by asking for there to be three all-postal pilots although at this stage they accepted the role of the Electoral Commission in deciding which three might be suitable. When the commission said that only two regions were in a position for them positively to recommend the idea, the Government maintained that they wanted three pilots. The Electoral Commission now says that

853
three pilots, including Yorkshire and the Humber, can be carried out according to the agreed criteria of balancing logistical problems, fears of fraud and acceptance of the principle. It states in a letter yesterday that its objections to the idea of all-postal pilots in the north-west remain today just as they were last December.
This amendment offers the Government what they say they have wanted throughout most of a lengthy process of consideration of the issue. I believe that it would be churlish of them to reject it. I beg to move.
Moved, as an amendment to the Motion that this House do not insist on its Amendment No. 1D to Commons Amendment No. 1C to which the Commons have disagreed for their reason numbered 1E, at end insert "but do make Amendment No. 1F to Commons Amendment No. 1C in lieu of Lords Amendment No. 1D".—(Lord Rennard.)
Lord Campbell-Savours: My Lords, I wish to intervene and perhaps lay on the record for students of proceedings on these matters what the position is in relation to votes in the House of Commons. What is clear to me is that in the past month a decision has been taken among groups of Opposition Peers to exert considerably more pressure on the Floor of the House by calling votes at inconvenient times and insisting on voting on issues which are clearly in contradiction to the position taken by Members of the elected House. In so far as I believe that the inevitable course we are on is one of crisis in the relationship between the two Houses, I should like to set down for students of these issues where we are on this Bill.
Lord Tordoff: My Lords, perhaps I may—
Lord Campbell-Savours: My Lords, I shall give way in a few moments. Perhaps at this stage I could refer to an Early Day Motion tabled in the House of Commons two and a half weeks ago which refers to similar attempts to sabotage government legislation on the Criminal Justice Bill. Students of these issues may wish to know that it is EDM 847 in the Official Report of the House of Commons. It deals with Clauses 41 and 42 of the Criminal Justice Bill. The Motion concludes that it,
"condemns unreservedly those Peers who pay lip service to the primacy of this House;"—
that is the Commons—
"believes the issue to be considered in this case is not the merit of the clauses"——
on that occasion it was dealing with jury trial—
"on which honourable Members are entitled to have differing views but the abuse of the constitutional relationship between Lords and Commons and questions the commitment to democracy of unelected Opposition Peers who reject the primacy of the elected House".
On this occasion there have been four votes—
Lord Tordoff: My Lords, the noble Lord referred to the fact that somehow the timetable was being dictated by the Opposition in your Lordships' House. That is
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clearly not true. The timetable of this House is in the hands of the Government, certainly with the support of the other parties. The idea that somehow the timetabling that brings issues into this House at times that are unacceptable to Members of the Government is clearly wrong.
Lord Campbell-Savours: My Lords, the timetabling of the debate today inevitably must be in the hands of the Opposition whose decisions on these issues have led to this debate.
Lord Tordoff: My Lords, the timetabling of this debate today is not in the hands of the Opposition. The fact that this matter has come back from the Commons at this time today is not a matter for the opposition parties. It is a matter for the Government. If the noble Lord does not accept that, he should talk to his Front Bench about it.
Lord Campbell-Savours: My Lords, the noble Lord should talk to his own Front Bench in the House of Commons. Those Members will tell him that the Government have won in another place on four separate occasions. I am arguing that if this repeated defeating of the Government on this important issue had not taken place, we should not be sitting here today. Therefore, the responsibility for the debate taking place today falls precisely to those who have placed the Government in this position.
Let me set out the figures so that students of these matters will know. The Government's position in the Commons was carried on 16 December with a vote of 357 to 135. It was then taken for a second time in the Commons on 8 March. The Government's position was upheld by a vote of 269 to 166. It was then taken on a third occasion in the House of Commons and was carried by a vote of 312 to 115. It was then taken yesterday in the House of Commons and was carried by 308 to 185. The noble Baroness may look frustrated by the use of these figures but the reality is that these are elected Members of Parliament expressing their view in the Division Lobbies of the House of Commons.
The noble Baroness and noble Lords opposite might like to know what they are saying about these matters in the House of Commons. Mr Winnick said:
"Is it not an outright impertinence for those in the unelected Chamber to try to set down voting procedures when the House of Commons has made its decisions? Should we not tell them so now?".—[Official Report, Commons, 24/3/04: col. 956.]
Mr Lindsay Hoyle said:
"It has quite rightly been stated that the matter before us is for the House to decide, because we are the elected House, we represent the people and we represent the electorate out there. Therefore, does my hon. Friend agree that this decision should be taken here, not by an unelected House".—[Official Report, Commons, 24/3/04; col. 956.]
Mr Leslie, the Minister, replied:
"My hon Friend hits the nail on the head. An important constitutional principle is at stake. The House of Commons has made its views known on a number of occasions, yet the second Chamber has been acting not in a revising capacity, but perhaps in a blocking capacity".—[Official Report, Commons, 24/3/04; col. 956.]

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The reality is that we are blocking. We have blocked with votes of 169 to 110, 174 to 130, 135 to 106, and no doubt the intention of Members of this House is once again to block the measure today, or basically the principle of the four pilots. All I say to the House is that we cannot go on like that. At some stage, someone has to consider what primacy means. It seems a pointless exercise if people argue in this Chamber that they believe in primacy—I have heard it repeatedly, certainly over the past six to nine months—and set out deliberately to defeat the Government, having voted on three separate occasions and the fourth occasion is coming up today. My case stands on the fact that we are now taking on the other House in a way that it finds unacceptable.
Furthermore, what we are doing will have major implications for the relationship between the Houses. There is deep frustration in the House of Commons about what is going on in the House of Lords. When I came down here, I was advised that it was not a particularly political place—that people set out to revise legislation, argued passionately, and had extremely good debating arrangements. I have heard some of the finest debates in all my 23 years in the Palace of Westminster in the House of Lords. But the reality is that we are moving on from revisory debates into the area of blocking the Government on issues that are of vital importance. On this occasion, on the basis of the amendment, we are blocking on the question of whether people in the north-west of England should have the right to vote in the elections by way of post—I mean, whether there should be a postal vote.
3 p.m.
Lord Greaves: My Lords, the noble Lord has not taken part in our debates until today, so it is entirely understandable that he might not have a complete grasp on what we are talking about. The amendment is not about whether people have a right to vote by post, but the reverse—whether postal voting is compulsory, with people not having the right to go to a polling station.
Lord Campbell-Savours: My Lords, I qualified what I said. If the noble Lord reads Hansard, he will see that I made a change and mentioned the right to an election by postal vote, which means that everyone would vote with a postal vote.
I have sat through previous proceedings on the Bill and heard the noble Lord's contributions, which have been very interesting. He obviously feels quite strongly that there is a problem of fraud in his part of the country; he referred to it on a number of occasions. The Electoral Commission set out in its report another explanation of why it has taken the view that it has, although it makes reference to fraud in parts of that report. I have difficulty understanding why people in Cumbria should be punished for the actions of a small minority of people somewhere else in the north-west of England. That is really what is happening. The case that the noble Lord has always put has essentially been about fraud. He has probably been the motivating
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force behind much of the debate for the exclusion of the north-west of England. I presume that he gave evidence to the Electoral Commission. Do I presume correctly that he protested to it about problems going on in his part of the country?
Lord Greaves: My Lords, if the noble Lord is inviting an intervention, I cannot resist. I did as he said in the past, when the fraud took place. My concerns are not about one small part of the north-west, but about a very large part of it.
Lord Campbell-Savours: My Lords, all I suggest is that the noble Lord's statements of evidence to the commission will certainly have influenced it in the judgment that it made, despite the fact that the report in December states that that is not necessarily the case. Should other people in the north-west of England be punished? If there is a problem in small localities in the country, sort out those localities. Do not let everyone suffer because of a problem in a small number of localities. That is at the heart of my objections today, in terms of the recommendation before the House.
I am sorry to speak to the House in such a way this afternoon, but I believe that there is a developing crisis in the relationship between the two Houses. It stems from the fact that we are moving from a revisory role into something much more sinister, and we are going to pay the price for it.
Baroness Hanham: My Lords, I have not been in this House very long but, in the time that I have and the time that I have spent on the Front Bench, I have not heard such a threatening speech from a Labour Member, nor one that was probably so misjudged.
We have spent a long time on the Bill. I remind the House that the Bill is about promoting all-postal piloting in two or three European areas. It is designed precisely to extend all-postal piloting to European elections. It is not about denying people votes or an all-postal vote, but asking whether all-postal balloting in a less limited pilot than has yet been tried—they have been in local elections—is sustainable on a larger basis.
The Government have had the benefit of the advice of their own commission. The Opposition did not set up the Electoral Commission—the Government did. They had a long report from it, part of which said that it thought that it would be suitable for two European electoral regions to be part of the electoral pilot, and that four others might be able to take part. For each of those, however, there was a problem. That is the situation. We have discussed the processes and the anxieties that we have all had about all-postal balloting. We discussed the really practical issues; the noble Lord may have sat in on those debates but certainly did not take part in Committee, on Report or at Third Reading.
We now have a situation in which we have to decide whether Parliament agrees with the Government that there should be four regions. Initially the Government never asked for four regions. They initially asked the Electoral Commission to promote three regions and then, quite suddenly, announced that there would be

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four. I chided the Minister in our previous debate because he suddenly let the cat out of the bag on why there should be four regions. We had a small contretemps on whether he had said something or not. However, it has been confirmed today that, of those four regions, three would be those involved in referendums for the regional assemblies in October. We now have a bigger canvas than we had before. We are talking about not simply European pilots, but the referendums in October.
I do not really want to get stuck on constitutional issues, but my understanding when I came to this place—I was extremely proud of it—was that I was a Member of Parliament. I believe that this House has a right to ask our Parliament to consider further matters as and when it believes, in the majority, that that is correct. We have now reached a stage where the amendment would enable the Government not only to have their Bill, but to have three electoral regions. That was where they first started. The argument has not really been about three; we discussed two and have now moved to see that there could be three.
Let us think on the matter a bit further. When we discussed it last week, we said that the Government should seek the views of the Electoral Commission about a third pilot area, and that those views should be brought forward after it had consulted all those whom it had previously consulted in the electoral regions—it could go and talk to both the Yorkshire and Humber and north-west regions.
I do not know whether noble Lords opposite have seen the letter from the chairman, who now accepts that the electoral administrators in Yorkshire and Humberside are more positive about the process. The Deputy Prime Minister's letter to the commission, which generated that response, was apparently written on 22 March—although we have not seen a copy of it. The chairman of the Electoral Commission's response was on 23 March. That was not long enough for him to have consulted more widely than the electoral officers, if that, and certainly not to have looked again at the previous consultations.
Lord Hoyle: But, My Lords, the noble Baroness keeps referring to electoral returning officers in the north west.
A noble Lord: Yorkshire and Humberside.
Lord Hoyle: My Lords, Yorkshire and Humberside. Instead of that I understand that the noble Baroness said that they were more definite about such matters in Yorkshire and Humberside compared with the north west.
Noble Lords: No!
Lord Hoyle: My Lords, if the noble Baroness did not say that, I withdraw.
Baroness Hanham: My Lords, when last we debated this issue we suggested that the commission's views
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would be helpful, but that there should be no question of the chairman being "duffed up"—my words—by the Deputy Prime Minister in order to form those views.
An additional interesting facet in the interchange between the Deputy Prime Minister and the commission is a Written Answer given today in the other place to my honourable friend Philip Hammond. It says that at a meeting between the Deputy Prime Minister and the commission both parties agreed that all four of the regions announced by the Deputy Prime Minister were capable of running a successful pilot. In the light of what we know, and in the light of what has been said by the chairman of the commission in his most recent letter, dated 23 March, we know that that is, if not disingenuous, certainly not quite as accurate as has been put forward in this reply.
I must accept that the commission, despite the fact that I do not believe that it has had time to undertake further consultation, has given its view that Yorkshire and Humberside would be capable of conducting a pilot. But the Government ought to recognise that in that letter the chairman, who has been very robust and consistent about the matter, has stood firm on his original decision that the north west was not a suitable area for an all-postal vote and said that there were no merits in piloting in four regions. I have the letter with me and if noble Lords wish to see it they may do so.
The Government will recall that if all four regions were involved, it would mean, on the commission's assessment, that over a third of the electorate would be taking part in a pilot. That is a situation that is clearly untenable—my words not theirs. The Government should now give up their absurd determination to proceed to four regions. Today they will have the opportunity to take forward the proposals in three regions because, however reluctant I am, we will support the Liberal Democrats in their amendment. There is, and should be, no connection between the European pilots and the referendum in October. What is important is that there is a limited pilot of a scale of a region, so that any lessons that need to be learned about all-postal voting on a slightly larger canvass can be learned.
The pilots do not need to be in the same regions as the referendums, but they do need to be held and assessed before there is any question of them being translated forward. While we all rant on about the constitution, it would be fair to remind the House that what we are doing in the pilots is disconnecting the voter from the ballot box and, by and large, disconnecting the voters from the candidates. This is not a matter to be taken lightly. It is an extremely serious decision for the House and Parliament to be making. I have given the reasons why we will support the Liberal Democrat amendment, but I reject any suggestion that my party has in any way been behaving improperly in trying to ensure that the pilots take place in a rational way, as supported by the Government's own advisers.
Lord Davies of Coity: My Lords, like the noble Baroness opposite, I have not been in the House all that long. I know that I am a Member of Parliament, but, perhaps differently from her, I accept that I am a

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Member of Parliament with very limited powers. My noble friend Lord Campbell-Savours made a case. It may have been a touch abrasive for noble Lords opposite, but I think he was saying that this House has to recognise its constitutional responsibilities. I am not going to talk about the substantive element of the amendment. I shall talk about the fact that we, not only in word, but in deed, must recognise and acknowledge the supremacy of an elected House, and that we have a stewardship which is answerable to the people.
The Government have taken their decision and at some stage this House must recognise that the political decision has been taken. It has been taken not by the Electoral Commission but by the Government. It is not a conscience issue; it is not a moral issue; it is a political issue. This House does scrutinise and revise but we must reach a stage when we acknowledge in deed the supremacy of the elected Government.
Earl Russell: My Lords, will the noble Lord read the Acts of 1911 and 1949—one from our party and one from his? He is saying a good deal more than is said by those Acts.
Lord Davies of Coity: My Lords, I am certainly not given to reading the historical circumstances which have just been described by the noble Earl, Lord Russell, but I am concerned with practical politics and with the British people being represented by elected Members of Parliament.
If we want a future and if we want to be able to advise the government of the day—not only a Labour government but perhaps a Conservative government again one day—we have to recognise our limitations. As far as I am concerned, we should now support the Government's wish—because they are the elected body.
Baroness Park of Monmouth: My Lords, I had always understood that as well as being a revising Chamber, we have a duty to cause the Commons to stop and think again. I had understood that that was an accepted procedure at least twice. The third time we have to accept the inevitable, but before that, we have not only a right but a duty to delay and to cause them to think again.
3.15 p.m.
Lord Filkin: My Lords, perhaps I may say a few words in response to the points raised in this debate. I will seek to keep them succinct, because I am not optimistic that I will necessarily turn the debate on what I say.
I acknowledge that the noble Lord, Lord Rennard, opened his speech by signalling that this was an attempt to move towards the position of the Government and the Commons. What I shall now say does not detract from that in any way. I am slightly confused about the stance of the opposition party on this issue, because the honourable Member for Somerton and Frome, David Heath, yesterday made clear in the other place that if we had been moving to
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universal postal ballots at this point he would perhaps have supported that. I refer to col. 966 of the Commons Official Report. He set out why he took that view. That was a bold statement but it is considerably at variance with the nicety of debate that we are having here about whether four is too many, but three is enough. In another place, the Liberal Democrat Front Bench was clearly saying that a universal postal ballot in these elections would be worth having a go. Be that as it may.
The noble Lord, Lord Rennard, also said—this is not the first occasion on which it has been mentioned—that potentially these issues may be rooted in evil party political hopes and fears. All I would say on that is that I have asked officials for what evidence there is that postal balloting will affect one party to the advantage of another, and they have failed to provide me with any. There is much party political rhetoric and excitement among political activists on this point, but there is not much evidence to support it either way.
There is one further point that I should bring to the attention of the House, because it matters to all of us. It is clear that the delay consequent on the Commons and the Lords not being able to agree damages the process and the prospects of these elections. In a worrying way, it damages them whether or not they are carried out by postal ballots or by the conventional electoral mechanisms. I would not make such a statement without having evidence for it, because that would risk alarming the House. I have such evidence from officials who have had discussions with returning officers. These matters are never black and white. One never moves from a position in which everything is line to the following day when suddenly everything is disastrous. It is simply that the risk rises as the delay continues.
I was absolutely clear when I said that I share the expression of respect for the revising and scrutinising function of the House. I believe that the House is absolutely right, even when it is against the Government, to mark the issues that concern it and to bring them to the attention of the Commons. But we have done that three times on this issue, and three times the Commons have said, "We disagree. This is our view". Therefore, that is why, without making more of it than one should, we should reflect on this issue at this stage over and above the merits of the issue. As your Lordships will know from what I have said on several occasions, for the reasons that we have set out, I believe that there are sounds merits in terms of moving to four.
With regard to the Deputy Prime Minister's letter to Sam Younger, it is available for inspection in the Library of the House.
The issues with regard to the north west have always been essentially about whether elections could be carried out effectively. The view of the Government and of the regional returning officers is that elections can be carried out there successfully.
Finally, if I understood her correctly, the noble Baroness, Lady Hanham, spoke about disconnecting the elector from the ballot paper and from the ballot

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box. We are experimenting with moving on from the traditional way of voting. We seek to do so for a good reason, which would benefit all parties and democracy. I will repeat the figures. If, as I believe we should, we pilot all-postal ballots in the four regions in the June European and local elections, 2 million more people will vote in those elections. We should take note of that, because I believe that that is earnestly desired by anyone who holds democracy in this country to be important. For all those reasons, therefore, I urge the House to support the position of the Commons on this issue.
Lord Rennard: My Lords, we could and perhaps should have had a wholly different debate about the conduct of the European elections, perhaps with an all-postal ballot system being tried across the entire country in the European elections. However, the Government's proposal was to have the local elections postponed from May until June to coincide with those elections. Because in those local elections a handful of votes in a handful of wards may be determined by different voting mechanisms, it is inappropriate to suggest that we should have such widespread all-postal voting this time round. That view is entirely consistent with what I and my friend in the other place, Mr David Heath, have argued; namely, that we could perhaps have had all-postal voting for the whole of Europe. However, we cannot have the Government, for their own interests in those important European and local elections, picking and choosing which regions should have all-postal voting.
If I may paraphrase the Minister's arguments throughout the debate—I am sure that he will correct me if I am wrong—he has told us repeatedly that although the Electoral Commission in its report dated 8 December originally recognised that only two regions were suitable for all-postal balloting, it was open to the Government to hold further discussions to discover whether or not the barriers suggested by the Electoral Commission could be overcome. If that is the case, I would refer noble Lords to the letter from the Electoral Commission dated 23 March 2004, in which it is said:
"We note that the electoral administrators in Yorkshire and the Humber, the next in ranking, are now more positive about running pilots than when we discussed them at the end of last year. The considerations as set out in our December report regarding the North West have not changed".
The Government's case has been based on whether the considerations taken by the Electoral Commission in December could change. The independent Electoral Commission now says that, in its view, those considerations, based on fears of fraud, lack of acceptance and logical difficulties, have not changed. I therefore believe that it would not be right for the Government to try to proceed with all-postal pilots in the north west.
Throughout these debates, and today, the Minister has repeatedly used the phrase, "The Minister, the Government and the other place", as though three
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separate bodies were arguing for this measure. In fact, only one body is arguing for it, that being the Labour Party—
Lord Hoyle: My Lords, I thank the noble Lord for giving way. What he says about the commission's view is quite correct. However, the electoral returning officers, with the exception of two who were guided by their authorities, decided in October that they were in favour of postal balloting in the north west, and they fully expected the Electoral Commission to endorse that.
Lord Rennard: My Lords, the independent Electoral Commission's report of 8 December reported that there was widespread opposition among returning officers in many parts of the north west to the idea of all-postal balloting, and the independent commission said that it did not want that. The Government then said, "Things have changed and now they do want it". Yesterday we had the categoric word of the chairman of the independent Electoral Commission that nothing had changed since the publication of its report on 8 December. It seems to me that one party is arguing for this proposal and that every other party and this House and the independent commission are in favour of the other side of the argument. When there is an issue of dispute between the parties and the two Houses, it seems to me logical to allow the view of the independent Electoral Commission to prevail. Its very clear view is that perhaps to—
Lord Filkin: My Lords, on that point, the Electoral Commissioner himself—and I respect him for the clarity with which he expressed the constitutional position—was explicitly clear that the decision as to which regions should be piloted was not for him. Although he would give his opinion, it was for Parliament to decide.
Noble Lords: Hear, hear!
Lord Rennard: My Lords, the vote must indeed be taken by Parliament, but it seems that Parliament cannot decide and that the parties cannot agree between themselves. When between the two Houses Parliament cannot decide, when the parties cannot agree on the basis of consensus, and when not a single Member of Parliament of another party, other than the Labour Party in another place, has supported this proposal—
Lord Davies of Coity: My Lords, I thank the noble Lord for giving way. When he says that Parliament cannot agree, he seems to be saying that the House of Lords has the same level of supremacy as the House of Commons. I remind noble Lords opposite that Lloyd George once did something to ensure that the Government had supremacy in the Lords.
Lord Rennard: My Lords, there must be few occasions on which an unelected Chamber may challenge an elected one, but things to do with

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electoral mechanisms must be those sorts of things; for example, if a government with a majority in the other place decided that we should not have an election within live years of the last one but that we should wait six, seven or eight years.
When governments decide to use their majority in another place on electoral issues, perhaps we should think more carefully about whether one party with a majority in one place should change our electoral rules or whether we should do what we said we would do four years ago. When we established the Electoral Commission, we established a body to avoid such arguments between the parties. That is what I think we should now be doing.
Earl Russell: My Lords, it might help my noble friend if I pointed out to noble Lords opposite that Parliament took the decision to put off a general election in June 1940. I have read the debate on it in this House, and the House agreed that as it could stop it at any moment it liked, it did not therefore need to.
Lord Rennard: My Lords, I thank my noble friend for that intervention and, as ever, helpful historical lesson.
In conclusion, the issue of whether there should be three postal pilots has not yet been put to the other place. I believe that it should be put as a fair and honourable compromise. On that basis, I would like to test the opinion of the House.
3.30 p.m.
On Question, Whether the said amendment (No. 1F) shall be agreed to?
Their Lordships divided: Contents, 159; Not-Contents, 122.

Division No. 5

CONTENTS

Addington, L.

Carnegy of Lour, B.

Alderdice, L.

Carrington, L.

Allenby of Megiddo, V.

Chalfont, L.

Alton of Liverpool, L.

Clement-Jones, L.

Ampthill, L.

Colville of Culross, V.

Anelay of St Johns, B.

Colwyn, L.

Astor, V.

Cope of Berkeley, L.

Astor of Hever, L.

Crickhowell, L.

Avebury, L.

Deedes, L.

Barker, B.

Denham, L.

Beaumont of Whitley, L.

Dholakia, L.

Biffen, L.

Dixon-Smith, L.

Blatch, B.

Dundee, E.

Bradshaw, L.

Eden of Winton, L.

Bridgeman, V.

Elles, B.

Bridges, L.

Elton, L.

Brigstocke, B.

Ezra, L.

Brittan of Spennithorne, L.

Falkland, V.

Brooke of Sutton Mandeville, L.

Ferrers, E.

Brougham and Vaux, L.

Fraser of Carmyllie, L.

Burnham, L.

Geddes, L.

Buscombe, B.

Gilmour of Craigmillar, L.

Byford, B.

Glentoran, L.

Caithness, E.

Goodhart, L.

Campbell of Alloway, L.

Greaves, L.

Carlisle of Bucklow, L.

Hamwee, B.

864

Hanham, B.

Northesk, E.

Hanningfield, L.

Northover, B.

Harris of Richmond, B.

Oakeshott of Seagrove Bay, L.

Hayhoe, L.

O'Cathain, B.

Higgins, L.

Onslow, E.

Hodgson of Astley Abbotts, L.

Park of Monmouth, B.

Holme of Cheltenham, L.

Peel, E.

Howarth of Breckland, B.

Perry of Southwark, B.

Howe, E.

Phillips of Sudbury, L.

Howe of Aberavon, L.

Pilkington of Oxenford, L.

Howe of Idlicote, B.

Platt of Writtle, B.

Howell of Guildford, L.

Plumb, L.

Hunt of Wirral, L.

Plummer of St. Marylebone, L.

Hurd of Westwell, L.

Quinton, L.

Jacobs, L.

Rawlings, B.

Jellicoe, E.

Razzall, L.

Jenkin of Roding, L.

Reay, L.

Jopling, L.

Redesdale, L.

Kimball, L.

Rennard, L.

King of Bridgwater, L.

Renton, L.

Kingsland, L.

Rodgers of Quarry Bank, L.

Kirkham, L.

Roper, L. [Teller]

Laing of Dunphail, L.

Rotherwick, L.

Laird, L.

Russell, E.

Lamont of Lerwick, L.

Sandberg, L.

Lester of Herne Hill, L.

Sanderson of Bowden, L.

Linklater of Butterstone, B.

Scott of Needham Market, B.

Liverpool, E.

Seccombe, B.

Livsey of Talgarth, L.

Selsdon, L.

Lucas, L.

Sharman, L.

Luke, L.

Sharp of Guildford, B.

McColl of Dulwich, L.

Shaw of Northstead. L.

Maclennan of Rogart, L.

Shrewsbury, E.

McNally, L.

Shutt of Greetland, L. [Teller]

Maddock, B.

Skelmersdale, L.

Slim, V.

Maginnis of Drumglass, L.

Smith of Clifton, L.

Mancroft, L.

Soulsby of Swaffham Prior, L.

Mar and Kellie, E.

Stewartby, L.

Marlesford, L.

Stoddart of Swindon, L.

Mayhew of Twysden, L.

Strathclyde, L.

Methuen, L.

Swinfen, L.

Miller of Chilthorne Domer, B.

Taverne, L.

Miller of Hendon, B.

Tebbit, L.

Molyneaux of Killead, L.

Thomas of Gresford, L.

Monson, L.

Thomas of Gwydir, L.

Montagu of Beaulieu, L.

Thomas of Walliswood, B.

Montrose, D.

Thomson of Monifieth, L.

Mowbray and Stourton. L.

Tope, L.

Murton of Lindisfarne, L.

Wallace of Saltaire, L.

Naseby, L.

Walmsley, B.

Newby, L.

Wigoder, L.

Newton of Braintree, L.

Wilcox, B.

Northbrook, L

Williams of Crosby, B.

NOT-CONTENTS

Acton, L.

Burlison, L.

Ahmed, L.

Campbell-Savours, L.

Alli, L.

Carter, L.

Amos, B. (Lord President of the Council)

Chorley, L.

Christopher, L.

Andrews, B.

Clarke of Hampstead, L.

Archer of Sandwell, L.

Clinton-Davis, L.

Ashley of Stoke, L.

Cobbold, L.

Ashton of Upholland, B.

Cohen of Pimlico, B.

Bach, L.

Corbett of Castle Vale, L.

Barnett, L.

Craig of Radley, L.

Bassam of Brighton, L.

Crawley, B.

Berkeley, L.

Davies of Coity, L.

Bernstein of Craigweil, L.

Davies of Oldham, L [Teller]

Blackstone, B.

Dealing, L.

Bledisloe, V.

Desai, L.

Bragg, L.

Dixon, L.

Bramall, L.

Donoughue, L.

Brookman, L.

Dubs, L.

865

Elder, L.

Mackenzie of Framwellgate, L.

Evans of Parkside, L.

Massey of Darwen, B.

Evans of Temple Guiting, L.

Merlyn-Rees, L.

Falconer of Thoroton, L. (Lord Chancellor)

Mitchell, L.

Morris of Aberavon, L.

Falkender, B.

Morris of Manchester, L.

Farrington of Ribbleton, B.

Pitkeathley, B.

Faulkner of Worcester, L.

Plant of Highfield, L.

Filkin, L.

Ponsonby of Shulbrede, L.

Fitt, L.

Rendell of Babergh, B.

Fyfe of Fairfield, L.

Richard, L.

Gale, B.

Richardson of Calow, B.

Gibson of Market Rasen, B.

Goldsmith, L.

Rogers of Riverside, L.

Gordon of Strathblane, L.

Roll of Ipsden, L.

Goudie, B.

Rooker, L.

Greengross, B.

Sainsbury of Turville, L.

Grenfell, L.

Sawyer, L.

Grocott, L. [Teller]

Scotland of Asthal, B.

Hannay of Chiswick, L.

Sewel, L.

Harris of Haringey, L.

Sheldon, L.

Harrison, L.

Simon, V.

Haskel, L.

Stone of Blackheath, L.

Hayman, B.

Strabolgi, L.

Hogg of Cumbernauld, L.

Sutherland of Houndwood, L.

Hollis of Heigham, B.

Symons of Vernham Dean, B.

Howells of St. Davids, B.

Tanlaw, L.

Howie of Troon, L.

Temple-Morris, L.

Hoyle, L.

Tenby, V.

Hughes of Woodside, L.

Tomlinson, L.

Hunt of Kings Heath, L.

Triesman, L.

Hylton, L.

Irvine of Lairg, L.

Turnberg, L.

Janner of Braunstone, L.

Turner of Camden, B.

Jay of Paddington, B.

Walpole, L.

Jordan, L.

Warner, L.

Judd, L.

Warwick of Undercliffe, B.

Layard, L.

Weatherill, L.

Lea of Crondall, L.

Wedderbum of Charlton, L.

Lipsey, L.

Whitaker, B.

Lofthouse of Pontefract, L.

Wilkins, B.

Macdonald of Tradeston, L.

Williams of Elvel, L.

McIntosh of Haringey, L.

Williamson of Horton, L.

MacKenzie of Culkein, L.

Woolmer of Leeds, L.

Resolved in the affirmative, and amendment agreed to accordingly.
Motion, as amended, agreed to.

Planning and Compulsory Purchase Bill
3.42 p.m.
Read a third time.
Clause 2 [Regional Spatial Strategy]:
Baroness Maddock Baroness Maddock moved Amendment No. 1:
Page 1, line 11, at end insert—
"( ) The RSS will set the spatial framework for the strategies of the regional development agency in its region."
The noble Baroness said: My Lords, I beg to move Amendment No. 1. I feel like I am playing ping-pong with my noble friend Baroness Hamwee, because I dealt with this in Committee, she dealt with it on Report, and we are back to it here on Third Reading. I hope that the Government will be persuaded to move today at our third time of asking.
This is a very simple amendment. It would ensure that the regional spatial strategy sets the overarching spatial framework for all other regional strategies
866
within a region. I emphasise the word "spatial". If the regional spatial strategy is to be a truly spatial framework, it should, by definition, integrate all regional level strategies and set the framework within which those strategies can operate.
The Bill fails to do this. It would perpetuate an unhelpful tension between the narrow pursuit of economic growth by the regional development agencies—which often do not regard environmental consequences—and the wider spatial planning objectives such as urban renewal.
On Report, the Minister indicated that the Government were very supportive of the amendment. There was some discussion about whether we were setting a hierarchy. I do not think that we are. Not all strategies are spatial strategies, but we need a spatial strategy at the head. I would not interpret it in that way.
As we have heard many times during the debates on the Bill, the Government might agree with us but they do not think that it is the right place to put it, or they do not want to include it in the Bill. That is what the Government said last time.
I repeat, draft planning policy statement 11, which deals with regional planning, is not clear on this point. It needs to be made clear on the face of the Bill. If we are serious about people working together and the strategies feeding into each other at regional level, this is vitally important. I beg to move.
The Deputy Speaker (Baroness Thomas of Walliswood): My Lords, with the permission of the House, before I continue the process, I have to notify the House of a mistake in the figures announced for those voting Not-Content in Division No. 4. The correct figure is 104, not 103, but that of course does not affect the result.
The Minister of State, Office of the Deputy Prime Minister (Lord Rooker): My Lords, as the noble Baroness says, we have been round this course not once, but twice. I have no objection to doing it a third time, but I do not think we need to spend much time on it because there is not a great division between us.
We have covered this ground before, and on the basis of what I have said previously, I am clear that the amendment does not seek to create a hierarchy of regional strategies with the regional spatial strategy at the top. I agree that the regional spatial strategy should set the spatial framework for other regional strategies in the region, including the regional economic strategy. Draft planning policy statement 11 says that.
The document also makes it clear that this is an iterative relationship, with the regional spatial strategy reviews needing to take account of these other strategies. This is not an easy model to prescribe in legislation. The issue is whether amending the Bill is necessary and would help achieve what we are agreed

867
is the policy aim. I genuinely do not think that we need any additional provisions in the Bill to secure this, as it is already an intrinsic part of the system.
Baroness Maddock: My Lords, I thank the Minister for that clear and precise answer. There is obviously a difference of opinion between the Minister and ourselves—and a number of people outside the House. I hope that what the Minister says is right, and that this works out as we would all like it to.
I am conscious of the time—and the time that we have spent on this matter—and I hope that the Minister's statements will back up what is in planning policy statement 11 when it is eventually finalised. For the present, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 5 [Assistance from certain local authorities]:
Baroness Hamwee Baroness Hamwee moved Amendment No. 2:
Page 2, line 39, at end insert—
"( ) The RPB shall publish its response to advice given in accordance with subsection (2), and in the case of advice from an authority relating to the preparation of a draft revision of the RSS which it does not accept, the RPB shall discuss the matter with the authority before a examination in public of the draft revision of the RSS is held."
The noble Baroness said: My Lords, I moved a similar, though not identical, amendment at Report, building on the government amendment that we had at that stage, setting out a role for the counties and unitary authorities in their dealings with the regional planning body.
At that time I proposed that the regional planning body should not proceed for a period of four months if it did not accept the advice given by any of those authorities. That period of four months was for the regional planning body and the authority to discuss the matter.
I have not been so prescriptive in this amendment. We propose simply that the two entities should discuss the matter before any examination in public. I did not regard the four months that I proposed before as being likely to lead to a delay on such a disastrous scale as has been suggested.
The noble Lord, Lord Bassam, said that the previous amendment was overly prescriptive. As it is late I shall not trade arguments about who has been the more prescriptive in their proposals over the past two or three months. He said that our proposal was onerous, unwieldy and bureaucratic and was concerned that I sought a requirement to publish and to respond in detail to all the responses and advice from the counties and unitary bodies.
I did not think then, and, now that I have thought further about the matter, I do not think now, that my amendment suggests an item-by-item listing or such an approach for each authority. It proposes that the regional planning body should be clear and say in terms on a given issue, "Some authorities thought this, but because of (set out the reason) we have decided thus". In other words, it would be a mechanism to aid the transparency of the whole process. Of course no one would expect that every authority in a region
868
would take exactly the same view on any given matter. But the regional planning body's submission of its spatial strategy, assessment and reasoning to the Secretary of State is out of the public eye. A requirement for the regional planning body to articulate why it is doing something would be a helpful prompt that would avoid what one might call sloppy thinking and would focus everyone's mind.
I wish to pre-empt the suggestion that the Minister has made previously that, knowing that the material would go to the Secretary of State, I am again showing distrust of his right honourable friend: I reiterate the point that nobody knows whose right honourable friend will hold that position in the future. I have thought seriously about the Government's points and have sought to build on them. I hope that my amendment will be regarded as reasonable. I beg to move.
Lord Rooker: My Lords, on the noble Baroness's previous point, I promise not to say that. However, on later groups of amendments, she will see that we are amending the Bill so that the Secretary of State and everybody else must give reasons for virtually everything that they decide to do. I understand why the amendment is made but we do not think that it is necessary. It implies a much less open and collaborative approach to preparing a draft revision of the regional spatial strategy than is actually the case, and which would be supported by regulations and guidance.
Regional planning bodies in county councils and other authorities with strategic planning expertise will not only deal with each other through formal requests and responses, they share many of the same members. There will be ongoing informal discussion and opportunities to discuss advice given and what the regional planning body will do with it.
The final version of planning policy guidance 11 on regional planning will make clear that each regional planning body should be proactive about making information available in line with the Freedom of Information Act. The regional planning body is under an overriding duty to act reasonably in considering advice that it receives from county councils and other authorities with strategic planning expertise. Ultimately, if it fails to take proper account of that advice, it could find itself subject to legal challenge. But in practice the regional planning body and other authorities will discuss their differences. They will not take them through the courts every day of the week. That is the common-sense approach, which, the noble Baroness will know, will be the overwhelming thrust. We do not feel that we need to legislate for that.
Baroness Hamwee: My Lords, let me be the first to congratulate the Government on taking up the point to which the Minister has just referred. I am very glad that they have written in the requirement to give reasons. We shall come to that shortly.
For the record, I am unclear how our proposal could mean a less open regime. I hear what the Minister says about guidance; it is becoming like a record that is

869
stuck. He says that guidance is not the same as primary legislation, not even secondary legislation; it might be changed. But guidance that we have not even seen in draft—I think that I am right in saying that, but the point would apply in any case—is not the same commitment as we had hoped to see in a Bill that is very detailed in parts.
I hear what the Minister says. We shall probably want to get on with business. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 6 [RSS: revision]
Baroness Hamwee Baroness Hamwee moved Amendment No. 3:
Page 3, line 35, at end insert—
"( ) In preparing a draft revision the RPB shall consult persons who appear to the RPB to have an interest in matters relating to the development and use of land within the region."
The noble Baroness said: My Lords, I beg to move Amendment No. 3, which is grouped with government Amendments Nos. 4 and 7. The amendment relates to consultation by the regional planning body on the spatial strategy. Before I saw the government amendments, I made a note that, although the Minister had always accepted that consultation was important, he relied on regulations to deal with those matters. When we discussed the matter previously, I felt that, if local authorities are bound by the legislation as regards consultation, the regional bodies should also be bound. Otherwise, it might be suggested that what the region does in that regard is less important.
I welcome the Government's amendments. I am sure that the Minister will have noticed that we had given up on the statement of community involvement, so I am particularly pleased to see its inclusion. The cynical among the Members of this House might say that our short amendment was more effective because the statement that is the subject of the government amendment might be inadequate. In other words, the regional planning body is to prepare a statement and stick by it; we say that it should actually consult, so we have spelt out some of the content of the statement. I would not be so cynical. I beg to move, but I foresee that I shall have to withdraw the amendment.
Lord Hanningfield: My Lords, my name was attached to the amendment. I welcome the Government's decision to include in the Bill a requirement for regional planning bodies to prepare, publish, revise and comply with the standard of community involvement with regard to the revision of the regional spatial strategy. The requirement is all the more important because the recent publication of the Barker report, which seems to advocate that the whole planning system should be driven by the requirements of the housing market, illustrates all too clearly just how important it is that people have a voice in planning decisions that affect their communities.
We have argued for a statement of community involvement from the beginning, so it is heartening that the Government have listened and, ultimately,
870
improved the Bill. Statements of community involvement will be a difficult but necessary challenge for regional planning bodies to meet.
Lord Bassam of Brighton: My Lords, government Amendments Nos. 4 and 7 follow on from commitments that we gave on Report to bring forward amendments on the issue. I am grateful that the noble Baroness, Lady Hamwee, acknowledges that we have gone further, at least in one respect, than she had earnestly anticipated. I am glad that that is the case. We gave that commitment; it has always been our intention that regional planning bodies would involve people in the process and that they would consult widely. We intended to put that into regulations. Our amendment includes that requirement in the Bill.
Consultation and involvement are covered in draft regulations and draft PPS 11. The new duty does not change that; it merely brings thinking to the forefront and includes it in the legislation.
It is perhaps worth giving a clue to our thinking on this. At this stage, we think that we should require the regional planning body to prepare a document setting out how it has complied with its statement, building on what the regulations already require. We intend also in the final version of PPS11 to make clear that the regional planning body should seek views on a draft of its statement and take them into account before deciding on its final version.
I am grateful for the acknowledgement, and I am grateful for the noble Baroness saying that she welcomes this and intends to withdraw her amendment. I would like to think that ours fits the bill.
4 p.m.
Baroness Hamwee: My Lords, I do not know whether that is a lower case or upper case "b". With all the graciousness that I can muster, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Rooker Lord Rooker moved Amendment No. 4
After Clause 6, insert the following new clause—
"RSS: COMMUNITY INVOLVEMENT
(1) For the purposes of the exercise of its functions under section 6, the RPB must prepare and publish a statement of its policies as to the involvement of persons who appear to the RPB to have an interest in the exercise of those functions.
(2) The RPB must keep the policies under review and from time to time must—

(a) revise the statement;

(b) publish the revised statement.

(3) The RPB must comply with the statement or revised statement (as the case may be) in the exercise of its functions under section 6.
(4) The documents mentioned in section 6(5)(b) and (c) include the statement and revised statement."
On Question, amendment agreed to.
Clause 9 [RSS: further procedure]
Lord Bassarn of Brighton Lord Bassarn of Brighton moved Amendment No. 5:
Page 5, line 14, after "publish" insert "—
(a)"
The noble Lord said: My Lords, I can be extremely brief here, because again this is an issue on which we had extensive discussions at an earlier stage. This group of amendments creates a number of additional express duties to give reasons that will rest with the Secretary of State or the National Assembly for Wales. These commitments have now been matched.
I could go through each amendment, but I do not think that there is much point in doing that because they are almost standard in their effect. They simply place requirements on the Secretary of State to give reasons. I beg to move.
On Question, amendment agreed to.
Lord Rooker Lord Rooker moved Amendment No. 6:
Page 5, line 15, at end insert ", and
his reasons for making the changes.".
On Question, amendment agreed to.
Clause 11 [Regulations]
Lord Rooker Lord Rooker moved Amendment No. 7:
Page 6, line 12, at end insert—
"( ) the procedure to be followed by the RPB in connection with its functions under section (RSS: Community involvement);"
On Question, amendment agreed to.
Clause 12 [Supplementary]:
Lord Bridges Lord Bridges moved Amendment No. 8:
Page 6, line 35, at end insert—
"( ) In all ordinary circumstances, planning authorities shall pay heed to the existing statutes which confer protection on landscapes in the National Parks, in this case section 62 of the Environment Act 1995 (c. 25) (duty of certain bodies and persons to have regard to the purposes for which National Parks are designated) and in the case of areas of outstanding natural beauty, section 86 of the Countryside and Rights of Way Act 2000 (c. 37) (establishment of conservation boards)."
The noble Lord said: My Lords, I raised this issue at earlier stages, and it concerns the relationship between this Bill and existing legislation regarding the status of areas of outstanding natural beauty and national parks. It still concerns me that the powers entrusted to the new regional planning bodies clash with the status and protection conferred on the national parks and the AONBs in laws still on the statute book. I quoted the statutes concerned in the earlier debate on 24 February at column 173 of the Official Report, and I do not need to cite them again.
The noble Lord, Lord Rooker, kindly wrote to me on 6 March explaining his view that it was a question of finding a balance between environmental, social and economic considerations. I regret to say that I find this formula seriously misleading. You cannot balance contrary principles; in this case economic development
872
and nature protection. This seems to have been recognised by Mr Alun Michael, whose official Defra press release attributes to him these words:
"Conservation is not enough…We cannot say that we have achieved sustainability unless the parks are viable, economically and socially as well as environmentally".
This is in direct conflict with the words in the statute in the Environment Act 1995 which clearly states:
"If it appears that there is a conflict between these purposes, the authority shall give greater weight to the purpose of conserving and enhancing the natural beauty … of the areas comprised in the national park".
This is the heart of my case. Ministers are seeking to alter the provisions of earlier legislation not directly by amendment to the statute, but by public statement and administrative means. Another example may be found in the text of the new draft guidance of PPS7 circulated for consultation last September. Paragraph 25 states:
"The Government does not believe that local countryside designations are necessary. Planning authorities should remove any existing designations and instead adopt criteria-based policies in development plans".
It is not clear to me whether this is intended to apply to existing national designations such as those of the national parks and AONBs, or to local classifications only, such as special landscape areas. Even if the latter only is intended, and the circular is ambiguously drafted—I trust not with deliberate intent—the local designations are extremely important in some cases and allow the planning authorities some degree of control over the more rapacious developers.
As regards Mr Michael's speech, which causes me grave anxiety, I remind the House of another matter that I raised at an earlier stage in the debate, namely the references in the Bill to the wishes of the Secretary of State, "however expressed". I suggested then that these words might have undesirable and unforeseen consequences and could lead to policy making in speeches or public remarks made on the hoof or off the cuff, what I called at the time "legislation by mouth". Ministers indignantly denied this possibility, saying that the phrase "however expressed" frequently occurred in statutes, although they did not quote me an example. It appears to me that legislation by mouth is exactly what Mr Michael has been doing.
The conclusion is clear. If the Government want to alter the priority given by existing law to environmental considerations, they should proceed legally, by seeking to alter the current statutes. We could then debate the merits of their proposals in the usual way. Meanwhile, we can protect the natural environment by inserting into this Bill the words suggested in the amendment. It is deliberately phrased in moderate terms, speaking of all ordinary circumstances, which leaves scope for some debate and discussion about particularly difficult cases that may arise.
I hope that the Minister will feel able to agree to the amendment. It should not cause him any serious anxiety. He can, if he wishes, undertake to suggest an improvement to the Bill when it returns to another place. If he is unable to help me, I expect to find it necessary to seek the opinion of the House. I beg to move.
Lord Chorley: My Lords, I was glad to add my name to my noble friend's amendment, especially as I was unable to be present on the earlier occasion to which he referred. The central point is that throughout this Bill national parks are treated as just another authority. They are not just another authority. I tried to emphasise that at Second Reading.
National parks are national and have their own legislation; notably, the 1949 Act and the 1995 Act. My noble friend quoted at Report stage and again today from Section 62 of the 1995 Act, in particular subsection (2). I shall not go over that again.
Time and again governments—I say governments because this has happened over the years—and other agencies make statements which suggest that they are barely aware of, or would like to ignore, Section 62. The 2002 Defra review of national parks in England felt constrained to make the same point; namely, that Section 62 needed to be more widely publicised and that there should be more effective monitoring to ensure compliance with the statute.
My noble friend chided Mr Alun Michael. Equally, he could have chided the Planning Minister over PPS7—the draft paper on sustainable development in rural areas. On the whole, that is a good document, but it completely ignores Section 62, especially subsection (2). I shall go no further into that issue because my noble friend did so in some detail.
This is a planning Bill. I suggest that it is necessary to remind planners and others of Section 62. It is important to ensure that national park purposes are properly integrated into the land use planning system. This is not a criticism of just this Government. I could go on at some length about some of the dubious planning decisions made over the years, particularly before the 1995 Act.
I shall confine myself to one anecdote that is historical but relevant today. In the late 1940s, shortly after the passing of the 1947 planning Act, the National Trust consulted Mr Hugh Dalton. It wondered whether it needed to acquire any more land since landscapes were now capable of being protected by statute. Mr Dalton—well known as a great outdoor man and a Chancellor of the Exchequer—is alleged to have replied in the immortal words:
"Put not your trust in Princes and still less in Ministers of the Crown. Go for acquisition and inalienability".
Luckily, the National Trust followed those wise words.
That is why we need this amendment. That is why my noble friend has wisely included AONBs. If we forget about national parks, we are even more likely to forget about those Cinderellas of landscape, notwithstanding that by statute they are deemed to be of equal landscape quality to national parks.
I therefore hope that the Minister will agree to this modest amendment. In doing so, perhaps he will also commit the Government to fleshing out or buttressing
874
it by providing guidance in the proposed PPS11 on regional planning bodies and PPS12 on strategic and local planning authorities. I support the amendment.
Baroness Hamwee: My Lords, I hope that what I shall say will not be taken as unsympathetic to noble Lords who have spoken. Their concerns are very much to the point. We shall come to a debate on sustainability. To take those words a little further, recognise the importance of AONBs and national parks as part of our country that we need to sustain. Certainly, on these Benches, we recognise that.
However, I have some difficulty with the amendment. As regards legislation, above all, Ministers of the Crown should comply with it, as should planning authorities. But saying that again does not make the original legislation any stronger. Indeed, it may weaken it. The amendment starts with the words, "In all ordinary circumstances". The two sections that are referred to do not have that sort of exception within them, which seems to beg some questions. I would prefer to rely on, if you like, the parent legislation. If that legislation is not good enough, it ought to be changed rather than adopting a "let's say it louder, let's say it again" approach.
I hope that the Minister can reassure noble Lords on the points that have been raised because they are of concern.
Lord Marlesford: My Lords, I rise to speak in support of the amendment moved by the noble Lord, Lord Bridges, because it covers perhaps one of the most important aspects of the whole of the conservation of England, enshrined as part of it is in the 1949 Act, one of the great achievements of the post-war Labour government. The noble Lord, Lord Chorley, was so right to quote Hugh Dalton. I do not feel confident, although not so much in the case of the present Government. We all read the piece in the Times by Simon Jenkins, which I thought was rather unfair about the noble Lord, Lord Rooker. On amendment after amendment he has shown that, on the whole, his heart is in the right place.
However, the article was certainly not unfair about what the Government are trying to do. I think that the time has come to reinforce the earlier legislation. Unless the Minister can use words that would enable Hansard to be used in place of legislation in a court hearing, I shall certainly support the noble Lord, Lord Bridges, if he chooses to seek the opinion of the House.
This is a very important issue. The National Trust has had to continue to acquire land such as, for example, coastal land in Cornwall. Had it not been acquired, we would not have the coastline we have today. Anything which threatens or appears to threaten the integrity of the most designated areas—national parks and AONBs—such as the speeches by the Minister quoted by the noble Lord, Lord Bridges, must set alarm bells ringing loudly in those of us who see it as part of our wish in life to protect our countryside, which is under great pressure.
Lord Hanningfield: My Lords, I rise to express our support for the thrust of this amendment. We hope that the Minister will be able to give some assurances to the noble Lord, Lord Bridges, in his response.
4.15 p.m.
Lord Rooker: My Lords, I certainly hope that I can do so. The noble Lord, Lord Marlesford, just referred to what I thought was a quite ignorant and mischievous piece in the Times yesterday, notwithstanding that I took personal offence at the description of myself as the,
"ermined friend of the construction industry".
The article was written in ignorance by someone who has never read the updated communities plan; has not read any of the debates; has not read our further annual report and has not paid even scant attention to anything either I or my right honourable friend have said about protecting the countryside, higher densities and other matters. Therefore the article is based on ignorance and is not worthy of a response.
This amendment is worthy of a response and I hope that I shall be able to satisfy all noble Lords who have spoken. The underlying thrust of the amendment is to ensure that the statutory protection already in place is not undermined by anything in this Bill. I hope that I will be able to show that it is not.
I shall set out briefly the existing legislation and add a few remarks. Section 62 of the Environment Act 1995 requires relevant authorities, when exercising their functions, to have regard to the purposes of national parks as defined in Section 61. These are, first,
"of conserving and enhancing the natural beauty, wildlife and cultural heritage of the areas",
and, secondly,
"of promoting opportunities for the understanding and enjoyment of the special qualities of those areas by the public".
I declare an interest here because with my stick, boots and wet weather gear I use those areas, in particular the Lake District.
If it appears that there is a conflict between those two purposes, Section 62 requires relevant authorities to attach greater weight to the conservation and enhancement of,
"the natural beauty, wildlife and cultural heritage".
Section 85 of the Countryside and Rights of Way Act 2000 requires relevant authorities when exercising their functions to,
"have regard to the purpose of conserving and enhancing the natural beauty of the area of outstanding natural beauty".
Section 87 makes it clear that an area of outstanding natural beauty conservation board must attach greater weight to,
"the purpose of conserving and enhancing the natural beauty of the area of outstanding natural beauty",
if it appears that there is a conflict between this and,
"the purpose of increasing the understanding and enjoyment by the public of the … area".
That is the law. We would argue that nothing in the Bill, or anything that has been said, would change that.
I was surprised by the reference to my right honourable friend Alun Michael. I can assure the noble Lord that if Alun had said anything, he would certainly send a letter to follow it up. He is a great letter
876
writer. I do not accept the criticism that this is legislation by mouth. The fact is, nothing that is said or written by a Minister would change those parts of the statute—the law—that I have just mentioned. I can also assure the House that the regional planning bodies will have regard to the statutory purposes of national parks and areas of outstanding natural beauty in preparing draft revisions of their regional spatial strategies. Local planning authorities arc specifically given this duty in the Acts referred to in the original speeches. As I have made clear to the noble Lord previously, the Government attach great weight to the preservation of the landscape in national parks and areas of outstanding natural beauty. The draft of new planning policy statement 7 on sustainable development in rural areas make this clear.
I should add that officials of the Office of the Deputy Prime Minister have had positive discussions with national park representatives about their role under the new planning arrangements. Indeed, we will strengthen the references to national parks in the final version of planning policy statement 11. We are also exploring with the Department for Environment, Food and Rural Affairs whether there is scope for producing a joint best practice guidance note on the involvement of national park authorities in regional spatial strategy reviews and revisions.
I wish to make progress and so, in case I am asked why we do not extend the good practice to areas of outstanding natural beauty, I should indicate that we shall consider the issue. But the national parks are local planning authorities in their own right and therefore, for that reason, they are particularly critical to the delivery of the regional spatial strategies.
I hope that I have said enough to convince the House that we are serious in our intent not to undermine the existing statutory framework governing the national parks and areas of outstanding natural beauty. I would not be a party to it.
Lord Bridges: My Lords, I am extremely grateful to the noble Lord, Lord Rooker, for his helpful tone and remarks. I do not entirely follow the logic of what he said but it is encouraging to know that he supports the existing legislation. However, it seems to me that, in setting up this completely new framework of planning, it would be desirable to have some cross-reference to the earlier statutes. That is all I am seeking to do. I do not seek to alter anything; merely to have that in the text which will be so important for the future.
I, of course, do not agree with the unkind remarks made in the Times newspaper about the Minister. I am sorry to hear about that.
The Minister made some friendly remarks about his colleague, the Minister, Mr Alun Michael. I sent to Mr Michael a copy of the letter I sent to the noble Lord, Lord Rooker, a week or so ago, hoping that this whole intervention in the debate would be unnecessary. But Mr Michael certainly has not replied to me.

877
One should perhaps look at this issue in a slightly broader context. There are wider interests than the precise wording of government circulars or even ministerial speeches. I refer to the interest of the British public in the protection of environmentally precious places, including beautiful landscape. It matters a great deal to public opinion, in my judgment.
I do not often get on to a high horse when addressing your Lordships, but I regret that I find it necessary to do so on this occasion. If the Government think that they will attract public support by encouraging economic development in national parks—which is what Mr Michael is proposing, in his own words—they are facing a grave political shock. I believe that the opposition—indeed hostility—they will provoke will surprise them.
Let us not forget that the conservation of these beautiful places began with some of our great 19th century cultural innovators, people such as William Morris and Ruskin, to name only two.
There are places which are important to us as individuals. The best expression I know of this in literature is contained in the poem by Gerard Manley Hopkins entitled Binsey Poplars, in which he describes with sorrow the destruction of his favourite trees. Let me quote some lines which refer to the destruction of nature. Hopkins wrote:

"Where we, even where we mean

To mend her we end her,

When we hew or delve:

After-corners cannot guess the beauty been"

.
That is the kernel of the case. I fully share Hopkins's sentiments.
Let me give a brief illustration from my own life. I have had a particular affection since childhood for North Yorkshire, which I visited regularly as a boy and which sustained me in moments of difficulty. On my mantelpiece at home there are two photographs. The first is a picture of me and our eldest son on the summit of Pen-y-Ghent in the 1960s. We had just returned from a difficult and unsatisfactory assignment in Latin America, where circumstances had not worked in our favour. On returning home after two and a half years of unhappy and unrewarding toil, I knew that I needed a few days in North Yorkshire to recover my balance. It worked. The photograph records that moment. The second picture next to it, taken 20 years later in exactly the same place, shows the same son, this time accompanied by his eldest child on the summit of Pen-y-Ghent. I am sure that many of our citizens have similar bonds with particular beautiful places that enjoy the protection of the law at present. We should not connive at their development for the sake of currently fashionable causes.
I am grateful to the Minister for what he said in a reassuring speech, but one of his colleagues is speaking in a very different way. As we are setting up an entirely new arrangement for regional planning, it would help to insert these words into the Bill. I therefore wish to seek the opinion of the House.
4.25 p.m.
On Question, Whether the said amendment (No. 8) shall be agreed to?
Their Lordships divided: Contents, 50; Not-Contents, 100.

Division No. 6

CONTENTS

Alton of Liverpool, L.

Hodgson of Astley Abbotts, L.

Bridges, L. [Teller]

Howe of Idlicote, B.

Brittan of Spennithorne, L.

Hunt of Wirral, L.

Brougham and Vaux, L.

Kingsland, L.

Byford, B.

Kirkham, L.

Caithness, E.

Lamont of Lerwick, L.

Campbell of Alloway, L.

Listowel, E.

Carnegy of Lour, B.

Marlesford, L.

Chorley, L.[Teller]

Molyneaux of Killead, L.

Clement-Jones, L.

Murton of Lindisfarne, L.

Cobbold, L.

Naseby, L.

Craig of Radley, L.

O'Neill of Bengarve, B.

Crickhowell, L.

Patten, L.

Dearing, L.

Pilkington of Oxenford, L.

Deedes, L.

Platt of Writtle, B.

Denham, L.

Rees, L.

Eccles of Moulton, B.

Renton, L.

Eden of Winton, L.

Sanderson of Bowden, L.

Elles, B.

Sandwich, E.

Elton, L.

Shaw of Northstead, L.

Fookes, B.

Slim, V.

Geddes, L.

Soulsby of Swaffham Prior, L.

Glentoran, L.

Swinfen, L.

Hanham, B.

Tebbit, L.

Hanningfield. L.

Tenby, V.

NOT-CONTENTS

Acton, L.

Falconer of Thoroton, L. (Lord Chancellor)

Ahmed, L.

Alli, L.

Farrington of Ribbleton, B.

Amos, B. (Lord President of the Council)

Faulkner of Worcester, L.

Filkin, L.

Andrews, B.

Finlay of Llandaff, B.

Archer of Sand well, L.

Fitt, L.

Ashley of Stoke, L.

Fyfe of Fairfield, L.

Ashton of Upholland, B.

Gale, B.

Bach, L.

Gibson of Market Rasen, B.

Bassam of Brighton, L.

Golding, B.

Berkeley, L.

Goldsmith, L.

Bernstein of Craigweil, L.

Grenfell, L.

Bhatia, L.

Grocott, L. [Teller]

Blackstone, B.

Harrison, L.

Haskel, L.

Bragg, L.

Hayman, B.

Brooke of Alverthorpe, L.

Hogg of Cumbernauld, L.

Brookman, L.

Hollis of Heigham, B.

Burlison, L.

Howells of St. Davids, B.

Campbell-Savours, L.

Howie of Troon, L.

Carter, L.

Hoyle, L.

Christopher, L.

Hughes of Woodside, L.

Clarke of Hampstead, L.

Hunt of Kings Heath, L.

Clinton-Davis, L.

Irvine of Lairg, L.

Corbett of Castle Vale, L.

Janner of Braunstone, L.

Crawley, B.

Layard, L.

Davies of Coity, L.

Lea of Crondall, L.

Davies of Oldham, L. [Teller]

Lipsey, L.

Desai, L.

Lucas, L.

Dixon, L.

McIntosh of Haringey, L.

Donoughue, L.

MacKenzie of Culkein, L.

Dubs, L.

Mackenzie of Framwellgate, L.

Elder, L.

Massey of Darwen, B.

Evans of Parkside, L.

Merlyn-Rees, L.

Evans of Temple Guiting, L.

Mishcon, L.

879

Mitchell, L.

Stone of Blackheath, L.

Morris of Aberavon, L.

Strabolgi, L.

Parekh, L.

Symons of Vernham Dean, B.

Pitkeathley, B.

Temple-Morris, L.

Plant of Highfield, L.

Tomlinson, L.

Rea, L.

Triesman, L.

Rendell of Babergh, B.

Turnberg, L.

Richard, L.

Turner of Camden, B.

Rogers of Riverside, L.

Rooker, L.

Walpole, L.

Sainsbury of Turville, L.

Warner, L.

Sawyer, L.

Warwick of Undercliffe, B.

Scotland of Asthal, B.

Whitaker, B.

Sewel, L.

Wilkins, B.

Sheldon, L.

Williams of Elvel, L.

Simon, V.

Woolmer of Leeds, L.

Resolved in the negative, and amendment disagreed to accordingly.
4.36 p.m.
Lord Rooker Lord Rooker moved Amendment No. 9:
Page 6, line 40, at end insert—
"( ) Subsection (4) does not apply for the purposes of section 6(3)(a)."
The noble Lord said: My Lords, this is a small technical amendment. Its purpose is to ensure that in preparing the draft regional spatial strategy revisions a regional planning body has regard to relevant national policy issued by any Secretary of State. Examples of such policy include the air quality strategy for England, Scotland, Wales and Northern Ireland; the waste strategy; and the UK sustainable development strategy on modern ports—a UK policy. I beg to move.
On Question, amendment agreed to.
Clause 13 [Survey of urea]:
Lord Lucas Lord Lucas moved Amendment No. 10:
Page 7, line 15, at end insert—
"( ) the type and extent of demand for housing and commercial property;"
The noble Lord said: My Lords, I am not going to earn myself any brownie points with Mr Jenkins or the CPRE for moving this amendment. This is very much in response to the Barker review, which I view with enormous positivism. I think that it is a great step forward in our view of development and property. At last we are looking at giving a voice to the have-nots as well as to the haves. For far too long the whole planning system has leant in the direction of protecting the interests of those who already own or have interests in property while paying far too little attention to those who wish to have interests in property, by which I mean mostly those who would like houses of the kind they wish to live in.
This is not the time or the place—I hope that we will have a time and place—for an extensive conversation on the Barker review. I should very much look forward to a debate on that. One of the things that she calls for on several occasions in her report is a better evidence base. What she most wants evidence on is evidence of demand—what kind of houses people want, where they want them, what the trend of house prices and
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other indicators has been—so that planning authorities can take decisions with a proper view of what it is their public are expecting them to provide.
I know that this amendment is not necessary—the Government can achieve this under current provisions of the Bill—but I very much hope that I can get from the Minister an assurance that, in response to the Barker review, steps will be taken to gather the evidence that she wants to see. I beg to move.
Lord Marlesford: My Lords, I really cannot allow my noble friend's total distortion of the purpose of the planning system to stand unchallenged. The planning system is intended to allow everyone to enjoy a countryside that is unspoiled. It is about the public good and about public access, and that dates right back to the 1920s. For my noble friend to say something like that is in accord neither with the founding fathers who gave us the means of protecting our countryside as it is today, nor, I would suggest, in the spirit of the Tory party to which I belong.
Lord Rooker: My Lords, at the risk of falling foul of the noble Lord, Lord Marlesford, notwithstanding what Kate Barker said in her report about producing more homes, if we deliver on the growth areas of the south-east in the sustainable communities plan it will alter the amount of land used for urbanisation in this country by a little above 1 per cent, from about 12 to 13 per cent. That is the scale. We do not have to go to the barricades to defend the countryside. We have to be mindful and watchful, as the previous debate demonstrated. That is crucial and fundamental.
The Government are grateful for Kate Barker's analysis. I can give the commitment to the noble Lord, Lord Lucas, that we are considering it in a sympathetic way. There is no doubt that we want to be guided by the evidence. We are taking forward these issues in the way I have deployed during debate. I do not wish to curtail the debate. I am more than happy to come to the House to debate in a general way, without being tied to amendments and nuances of words, what underlies the sustainable communities plan published in February of last year and the two updated plans. The House has not had the opportunity to do so.
Housing supply and demand are firmly on the Government's agenda. On the four growth areas, we have designated half the growth over the next 15 years or so. It can then be managed so that it is not urban sprawl or despoliation of the countryside and we can ensure that the best use is made of the brownfield sites and buildings spread across the country, although unevenly. For historic reasons, there are more in some regions than others.
Some of the measures referred to by Kate Barker in her useful report last week form part of the Bill. I refer to the speeding up of the process. While the planning delivery grant is not part of the Bill, it is part of the operation seeking to put more resources into planning to improve its quality and other factors. We shall consult on how planning policy on housing should be revised to include guidance on the application of market information and signals into the system and a

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presumption in favour of granting planning permissions which conform to local plans. In the future, those will be the development plan documents. We shall consult with stakeholders. The Government are not rushing forward without consulting and operating the proper processes.
We take on board the reason why the noble Lord tabled the amendment. In answer to the noble Lord, Lord Marlesford, I hope that I have indicated that the countryside is not under threat in the way that some extremists using extravagant language would have people believe. Of course, I do not refer to the noble Lord. Notwithstanding that, I am more than happy to come to the House on a general debate on the issue because that would be helpful for the wider public debate.
Lord Lucas: My Lords, I hope that such a debate can be arranged. It should be enjoyable for the Minister. With a broad smile on his face, he can sit back and watch the noble Lord, Lord Marlesford, and I harass each other. I do not think my noble friend and I are that far apart. We share a great appreciation of the great joys of the countryside. I wish that a small part of the debate could be devoted to the cause of the 95 per cent of the people who do not live in the countryside and who do not want to live in little rabbit hutches which are increasing in price and decreasing in size at the rate they have been over the past 20 years.
I am encouraged by what my noble friend says and to know that the CPRE will be voluble in its defence of the countryside. The countryside will need such allies if we are going to make progress on the Barker review. I am also delighted by what the Minister said, and I hope that the matter will be in front of us soon. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
4.45 p.m.
Clause 18 [Statement of community involvement]:
Baroness Hamwee Baroness Hamwee moved Amendment No. 11:
Page 10, line 20, at end insert "and use of land"
The noble Baroness said: My Lords, on Report, I thanked the Minister for his letter to me explaining the difference between "development", "use" and "development and use". Development requires planning permission. As he explained, references to development alone refer to development control matters. I shall take this opportunity to correct what Hansard referred to as "development and control"; I am not surprised that those who do not live with such terms find difficulty with them. However, that may have added to the confusion, which I hope that we are on the way to sorting out. References to "development and use" extend to the continuing use of land without necessarily any change in that use.
Clause 18 deals with the statement of community involvement. That statement should recognise that, among the community, there may well be interests in the use of land within the authority's area without development. To pre-empt the Minister, who has
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made clear his view of the nimby brigade—I wonder if that is one acronym that we can keep in—we can be concerned about use without development for altruistic reasons, and not only for selfish reasons. In any event, even if the motives are those which some of us might deplore, that does not mean to say that people who hold them should not be consulted.
The Minister said that he would triple-check the position. As we are now at Third Reading, it might be the moment to say what the outcome of that triple-check is. I beg to move.
Lord Bassam of Brighton: My Lords, when the matter was debated on Report, my noble friend Lord Rooker indeed said that he would triple-check. Everyone knows that he is extremely diligent, and he did exactly that. My speaking note confirms that he would have reported to the House, were I not doing so, that the current wording was fully inclusive. Clause 18(2) mentions those who,
"have an interest in matters relating to development".
So far as we are concerned, that would inevitably include those whose interest was in the preservation of the use of land.
The phrase "matters relating to development" is broad and captures not only those interested in promoting development, but those interested in preventing it. Both are covered—the provision is all-inclusive and does the job. The Bill as it stands ensures that people whose interest is in there being no development will fall very much within the ambit of a local authority's statement of community involvement; after all, they are part of the same community. I understand the noble Baroness's insistence on the point but, with that explanation, I hope that she will feel able to withdraw her very well intended amendment.
Baroness Hamwee: My Lords, I will not insist on it. I understand that explanation. A few years ago, there was a fashion in teenage lingo for saying, "I think so—not". The issue is really about development—not. It is helpful to have the explanation on record, and I am grateful to the Government for that. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 20 [Independent examination]:
Lord Rooker Lord Rooker moved Amendment No. 12:
Page 21, line 26, leave out "a view to" and insert "the objective of"
On Question, amendment agreed to.
Clause 21 [Intervention by Secretary of State]:
Lord Rooker Lord Rooker moved Amendments Nos. 13 to 15:
Page 12, line 10, after "unsatisfactory" insert "—
(a)"
Page 12, line 12, at end insert—
"(b) if he gives such a direction he must state his reasons for doing so."
Page 12, line 37, at end insert "and the reasons of the person making the recommendations"
On Question, amendments agreed to.
Clause 24 [Conformity with regional strategy]:
[Amendment No. 16 not moved.]
Clause 27 [Secretary of State's default power]:
Lord Rooker Lord Rooker moved Amendments Nos. 17 and 18:
Page 15, line 15, after "recommendations" insert "and reasons"
Page 15, line 19, at end insert—
"( ) The Secretary of State must give reasons for anything he does in pursuance of subsection (4)."
On Question, amendments agreed to.
Clause 38 [Development plan]:
Baroness Wilkins Baroness Wilkins moved Amendment No. 19:
Page 21, line 16, at end insert—
"( ) Planning authorities may set targets in their development plans in respect of the proportion of new housing to be constructed to Lifetime Homes standards and wheelchair access standards respectively."
The noble Baroness said: My Lords, Amendment No. 19 is supported, as are all the disability access amendments, by the Disability Rights Commission, RADAR, RNIB, the Town and Country Planning Association, Habinteg Housing Association, the JMU Access Partnership, the New Economics Foundation and John Grooms.
I raised the need for concerted action on lifetime homes and wheelchair-accessible homes at Report. My noble friend the Minister then promised a Government announcement on the subject before Third Reading and he was true to his word. I congratulate him on the decision to bring forward a review of the building regulations with a view to strengthening accessibility requirements through adoption of the Lifetime Homes standards which provide a standard for the design of new homes to ensure that they are accessible and adaptable as the needs of the occupants change. That would be a considerable improvement on the current building regulations, especially regarding issues such as parking, lighting, access around new homes and future adaptability. All new social housing is now developed to this standard in Wales and Northern Ireland. There will be huge benefits to disabled people, to older people and to every family as their needs change. There will also be huge savings to the taxpayer.
I also warmly welcome the commitment to consider how best to meet the need for more wheelchair accessible homes where there is now a real crisis. I understand that the new standards are unlikely to be in place for two years—I hope that the proposed timetable can be speeded up, because disabled people have waited a long time already.
The purpose of my amendment, however, is to invite the Government to acknowledge that the Lifetime Homes standards and wheelchair access standards cannot be successfully achieved at the detailed design stage unless the issue is raised and the principles and overall design concept agreed at the earliest possible stage in the planning process. In any case we need to plan to meet the current shortfall of 300,000 wheelchair accessible homes and to meet the needs of our ageing, diverse population for homes that can be
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easily adapted. I urge my noble friend to give a clear statement that the Government understand that this is a planning issue.
Can he give me an assurance that planning authorities will be encouraged in revised planning policy statements to follow the example of the GLA by setting appropriate targets for lifetime homes and wheelchair-accessible homes? I beg to move.
Baroness Maddock: My Lords, I rise briefly to support the noble Baroness, Lady Wilkins. She has explained precisely why we need the amendment. If we are serious about sustainability and good design, the amendment fits into that. At a meeting this week I was somewhat surprised by someone, who I thought should know better, who thought that good design was simply about what things looked like. It is not. The amendment is part of good design and I hope that the Minister will be helpful. I fully support the noble Baroness.
Lord Rooker: My Lords, I hope that I can say something helpful, because we are very sympathetic to what is behind the amendment. However, I cannot be helpful in the sense that I can accept it.
The amendment is discretionary, not mandatory. Local authorities already have a discretion to introduce planning policies within the national policy framework, provided that they can be justified and relate to the use and development of land, because that is how the system works. The amendment states what can already happen. Therefore, we believe that we do not need to amend the Bill.
On the other hand, I am very grateful for what the noble Baroness said about the announcement by my honourable friend in the other place, Phil Hope, on 10 March. I understand that groups such as the Disability Rights Commission have welcomed the announcement in respect of the building regulations. My honourable friend made clear our commitment to ensuring that the building regulations encourage accessibility and design features that make the home sufficiently flexible to meet the changing needs of a family. In other words, as the noble Baroness, Lady Maddock, said, it is not just about looking nice but also about practicalities. Of course, we shall consult on possible amendments in due course.
It is envisaged that new standards could be in place in two years. I have to say—I do not want to mislead people—that that is very speedy. My experience of changing building regulations is not good. It takes a while. On the other hand, the noble Baroness is quite right that people have waited long enough for new standards. We in this country fall miles behind the standard of housing that was built and designed for people with disabilities in Sweden in the mid-1980s, and I suspect that we shall not achieve anything like that standard that I saw almost 20 years ago. We have much to overcome, partly because we do not replace our stock at anything like the rate of our continental partners.

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They replace their stock at a rate of about 1 per cent per year; we replace ours at a rate of about 0.1 per cent per year, although there have been opportunities for us to do so.
With regard to the London plan, the Government Office is in dialogue with the Mayor about the implementation of the Mayor's policy. Some points need to be cleared up. The Government Office has drawn the Mayor's attention to the draft planning policy statement 1, the review of the building regulations, which I have already mentioned, and has pointed out that the Mayor's policy would need to be reviewed and revised in the light of the new building standards.
In principle, local plan policies can include provisions for a proportion of accessible homes, provided that they are justified by need. However, any specific standards for accessibility should not cut across the building regulations. Local authorities already have an enormous amount of discretion. If the will is there, it is very easy for them to identify the need, which then conforms with the overall policies. The fact that we have given it a push, by a review of the regulations as well, is no excuse for them not to do anything in the intervening period where there is an identified need.
I regret that I cannot be more positive on this. However, I can assure the House that I shall be much more positive on the amendments to be tabled by the noble Baroness later today.
Baroness Wilkins: My Lords, I thank the Minister for his encouragement and beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 39 [Sustainable development]:
Lord Rooker Lord Rooker moved Amendment No. 20:
Page 21, line 26, leave out "a view to" and insert "the objective of"
The noble Lord said: My Lords, I undertook to look further at the issue of the application particularly of Clause 39(2).
At Report, the noble Baroness, Lady Hamwee, said:
"I would like to think that every objective is automatically achieved but I do not believe that that is the case in life … I make sustainable development the objective with the hope, though not necessarily the confidence, that by doing so it will always be achieved".—[Official Report, 1/3/04; col. 482.]
As I have previously explained, the original drafting of the clause, with a view to contributing to the achievement of sustainable development, sought to avoid placing too great a weight on regional planning bodies and local authorities by recognising that the plan-making system cannot alone be held responsible for sustainable development. It is one of a number of factors or actions that bear on sustainable development.
I hope that the noble Baroness will agree that this amendment is a sensible compromise. Contributing to the achievement of sustainable development is a clear objective for regional planning bodies and local authorities in their regional spatial strategies and local developments, but it does not open up every planning policy to challenge. That is crucial. I remember saying that as long ago as Second Reading.
We have always looked at and been careful about the kind of amendments we could table. We wanted to be positive—no one will claim that we have the perfect wording in the Bill—but I said that opening up the issue was fraught with danger. I hope that the Government's amendment will be accepted. It is almost in lieu of Amendment No. 21. I beg to move.
5 p.m.
Baroness Hamwee: My Lords, my Amendment No. 21 is grouped with the government amendment. I did a dangerous thing last night by looking up the definition of "objective" in the Shorter Oxford English Dictionary. It was dangerous because I was diverted and spent a lot of time on more interesting questions. It was defined in part as,
"Expressing, designating, or referring to the object of an action … Sought or aimed at".
In other words, I do not believe that the wording of my amendment tabled at the previous stage or now puts sole responsibility on a person or body exercising the relevant function. However, it does provide that the objective of that person or body in creating the regional spatial strategy or local development documents, and the objective of the strategy as a document itself, is to achieve sustainable development. There are no ifs or buts about that.
I have been discourteous because I should have started by thanking the Minister for moving down the road with the compromise he described. It is welcome. Will we now have in place the provision that the planning system must not endorse unsustainable development—or at any rate the regional spatial strategy and the local development documents? This is more than just semantics. If I had thought quickly enough, I would have asked the question before I made my other point in order to give time for thought. I am asking the Minister to confirm that the plans—the spatial strategy and the local development documents—must not directly or indirectly endorse unsustainable development.
Lord Rooker: My Lords, off the top of my head, given the weight we have put on this matter, that the clause is in the Bill and that the new strapline of the Office of the Deputy Prime Minister is "creating sustainable communities"—and at no cost to the taxpayer because we invented it ourselves—it is taken extremely seriously. Therefore, I would concur and expect that planning authorities and regional spatial strategies will not go around endorsing unsustainable developments.
On Question, amendment agreed to.
[Amendment No. 21 not moved.]
Lord Rogers of Riverside Lord Rogers of Riverside moved Amendment No. 22:
Page 21, line 27, at end insert "through high quality design"
The noble Lord said: My Lords, in moving Amendment No. 22 and speaking to Amendment No. 23, I rise to add my wholehearted support for the Government in seeking to strengthen the sustainability duties on planners in Clause 39. Throughout the passage of the Bill, the Minister has listened to

887
arguments put forward by myself and other noble Lords that design policy and sustainable development must go hand in hand. Whenever he has had the opportunity, he has made the point himself, but the spirit of the law is quite clear. Planners must consider design as part of their objective of contributing towards achieving sustainable development. We have been assured that planning policy statement I will be sufficiently robust in terms of design. That is excellent news.
But what about the letter of the law? Throughout your Lordships' consideration of the Bill, I have called for the word "design" to be included alongside the duty contained in Clause 39. Other noble Lords from all sides of the House have added their support, including the noble Lord, Lord Lucas, my noble friends Lady Blackstone and Lord Alli, and the noble Baroness, Lady Maddock. I am grateful for their support.
The Government have listened to our arguments carefully. They have concluded that a strengthened Clause 39—taken together with a robust planning policy statement 1—is sufficient to ensure that design is taken fully in to account in planning decisions. Later government amendments, which I shall be delighted to support, place design at the heart of the planning application process.
If we are to have sustainable development—if we are to have the urban renaissance—we must ensure quality design. High quality design is the means to that end. Either amendment would make that absolutely clear on the face of the Bill. It would send out a message loud and clear to planning authorities and developers alike.
I know that my noble friend the Minister understands this perfectly well, and I expect him to be reassuring in his response. I expect him to say that if we include design, then should we not include access and a whole range of other issues? I would argue that "high quality design" by definition means inclusive design, and therefore includes such important issues.
I urge the Government to consider the amendments. I am relaxed about which one they should accept, although on balance Amendment No. 22 is clearer, as it makes explicit the causal link between quality design and sustainable development. I beg to move.
Baroness Maddock: My Lords, I rise to support the amendment which has my name attached to it.
The point that I wish to emphasise is that, if we are serious about sustainability, then good design is part of that. Good design is functional, and therefore fulfils its purpose. Good design uses environmentally friendly materials. All this leads to homes, buildings and other infrastructures which stand the test of time and are much more sustainable in the widest sense. That is why I support the noble Lords, Lord Rogers
888
and Lord Lucas, in their attempt to attach this to the Bill. I look forward to hearing what the Minister has to say.
Lord Lucas: My Lords, my name is attached to this amendment too. I suspect that I support the second amendment more than the first, but I wait to hear what the Minister says.
Design is a crucial part of making something out of sustainable development which the rest of us can appreciate. Getting a thing right in terms of our enjoyment and use of an urban space, in particular, is very much a matter of good design.
Design is not curlicues on doorknobs, it is the way the whole space works, the way in which people interact with it, the way that the new bit of the city interacts with the old. It is putting effort into getting things right for the long term, rather than hoping that they will work out for themselves. It is doing what we did not do in Docklands, though that has worked out well in the end. It could have come better and faster if we had put a bit of effort into planning and designing the area properly. It still might be a better place to live than it is now.
This is an important part of producing sustainability. As the noble Lord, Lord Rogers, has said, the Minister has gone a long way in bringing design into the Bill. This last bit is necessary.
Lord Cobbold: My Lords, my views on sustainable development have been expressed in earlier stages of the Bill, so I shall not go into them.
I support this group of amendments. I particularly support Amendment No. 23, which, as the noble Lord, Lord Lucas, has said, combines the important concept of good quality design in this strange concept of sustainable development.
Lord Rooker: My Lords, if it were up to me, I would certainly prefer Amendment No. 23 to Amendment No. 22. In some ways, it is not up to me; it is almost not up to the Government. Earlier I gave the commitment that, one way or another, I would talk to the planning Minister and the Deputy Prime Minister about the need to include the word "design" in the Bill, but our problem has always been to find a suitable location for it. In some ways, that is the real difficulty. In instructing parliamentary counsel, we have taxed to the limit efforts to find the right place to insert the word without causing untoward problems. That has been our difficulty.
I have said throughout that the clause on sustainable development was extremely difficult. The previous amendment is about as far as we dare go in touching that clause. As the House knows, I will move a government amendment to include the word "design" on the face of the Bill. Having said that, I would be more than happy, if it were up to me, to include Amendment No. 23. I have been unable to do that. I have tried but failed in that sense simply because I have had to accept the advice that we muck around more with Clause 39 at our peril later. I do not want to

889
have on the statute book something that looked okay as a quick fix; I would much rather have the amendment that the Government will bring forward to Clause 43. It gets the thrust of what we want but does not cause problems later. That is the advice that I have received.
We fully agree that, without proper attention to design, we will not deliver sustainable development. We remain of the view that the case for referring specifically to design in this clause gives us such difficulty that we cannot accept it. We want to ensure that both design and access are established as fundamental planning issues. The key is a strong planning policy statement 1, which makes clear that good design and consideration of access issues are crucial to the delivery of sustainable development. They are not separate from it; yet they recognise the importance of sound design and access policies in local development frameworks.
To further underpin that, we will require in the secondary legislation that is to be made under Part 2 of the Bill that local authorities must include design and access within their portfolio of local development documents. That reinforces the strong statements on both areas already made in the consultation draft of planning policy statement 1. We will also work with the Royal Institute of British Architects and the Commission for Architecture & the Built Environment, on the coverage of design issues in planning policy statement 1, and with the Disability Rights Commission and the Disabled Persons Transport Advisory Committee, on the coverage of access issues. We consider that the policy is already clear and strong, but we are more than willing to consider ways of further improving it.
I know from looking at the document that it mentions design and access throughout in a number of different contexts. We may need to consider whether what we mean in each different context is clear enough for policymakers, but we are more than ready to listen. That approach will mean that design and access issues are properly considered in the plan-making process and will encourage local planning authorities to take them seriously. This House is sending to planning authorities a powerful message, with this short debate and the later one on the amendments concerned, that Parliament is taking the issue extremely seriously and we expect to see it put into practice.
Lord Rogers of Riverside: My Lords, I thank my noble friend the Minister for his response. I can understand the Government's reluctance to reopen Clause 39. It is very delicately worded and has been the subject of much discussion in your Lordships' House. However, we may be missing an important opportunity to make the vital connection between sustainable development and design quality absolutely clear on the face of the Bill. Today we may have given less confidential local planning authorities an important tool in order to reject applications on design grounds.
890
I can see, however, that the Government can offer no further ground. I do not want to go against my Government. With a little reluctance, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Lucas Lord Lucas moved Amendment No. 23:
Page 21, line 27, at end insert "with an emphasis on high quality design"
The noble Lord said: My Lords, the Minister's heart is in the right place, but not yet his pen. I would like to give him another opportunity to have a go at writing this into the Bill. I beg to move.
5.15 p.m.
On Question, Whether the said amendment (No. 23) shall be agreed to?
Their Lordships divided: Contents, 43; Not-Contents, 87.

Division No. 7

CONTENTS

Addington, L.

Lucas, L. [Teller]

Alderdice, L.

McNally, L.

Alton of Liverpool, L.

Maddock, B. [Teller]

Barker, B.

Northover, B.

Beaumont of Whitley, L.

Park of Monmouth, B.

Biffen, L.

Phillips of Sudbury, L.

Bradshaw, L.

Quinton, L.

Chorley, L.

Redesdale, L.

Cobbold, L.

Rodgers of Quarry Bank, L.

Roper, L.

Dholakia, L.

Sandberg, L.

Falkland, V.

Selsdon, L.

Finlay of Llandaff, B.

Sharp of Guildford, B.

Fowler, L.

Shutt of Greetland, L.

Greaves, L.

Smith of Clifton, L.

Hamwee, B.

Thomas of Gresford, L.

Harris of Richmond, B.

Thomas of Walliswood, B.

Holme of Cheltenham, L.

Tope, L.

Howe of Idlicote, B.

Tugendhat, L.

Laird, L.

Walmsley, B.

Lester of Herne Hill, L.

Weatherill, L.

Linklater of Butterstone, B.

Williams of Crosby, B.

NOT-CONTENTS

Acton, L.

Currie of Marylebone, L.

Ahmed, L.

Davies of Oldham, L. [Teller]

Amos, B. (Lord President of the Council)

Desai, L.

Dixon, L.

Andrews, B.

Donoughue, L.

Archer of Sandwell, L.

Dubs, L.

Ashley of Stoke, L.

Elder, L.

Ashton of Upholland, B.

Evans of Parkside, L.

Bach, L.

Evans of Temple Guiting, L.

Bassam of Brighton, L.

Falconer of Thoroton, L. (Lord Chancellor)

Berkeley, L.

Bernstein of Craigweil, L.

Farrington of Ribbleton, B.

Bragg, L.

Faulkner of Worcester, L.

Brooke of Alverthorpe, L.

Filkin, L.

Brookman, L.

Fyfe of Fairfield, L.

Campbell-Savours, L.

Gale, B.

Carter, L.

Gibson of Market Rasen, B.

Christopher, L.

Golding, B.

Clarke of Hampstead, L.

Goldsmith, L.

Clinton-Davis, L.

Grenfell, L.

Corbett of Castle Vale, L.

Grocott, L. [Teller]

Crawley, B.

Harris of Haringey, L.

891

Harrison, L.

Rea, L.

Haskel, L.

Rendell of Babergh, B.

Hayman, B.

Richard, L.

Hogg of Cumbernauld, L.

Rooker, L.

Hollis of Heigham, B.

Sainsbury of Turville, L.

Howells of St. Davids, B.

Sawyer, L.

Hoyle, L.

Scotland of Asthal, B.

Hughes of Woodside, L.

Sewel, L.

Hunt of Chesterton, L.

Sheldon, L.

Hunt of Kings Heath, L.

Simon, V.

Irvine of Lairg, L.

Slim, V.

Janner of Braunstone, L.

Stoddart of Swindon, L.

Judd, L.

Stone of Blackheath, L.

Layard, L.

Symons of Vernham Dean, B.

Lea of Crondall, L.

Lipsey, L.

Temple-Morris, L.

McIntosh of Haringey, L.

Tomlinson, L.

MacKenzie of Culkein, L.

Triesman, L.

Mackenzie of Framwellgate, L.

Turner of Camden, B.

Massey of Darwen, B.

Warner, L.

Mishcon, L.

Wilkins, B.

Mitchell, L.

Williams of Elvel, L.

Pitkeathley, B.

Woolmer of Leeds, L.

Resolved in the negative, and amendment disagreed to accordingly.
5.25 p.m.
Clause 40 [Local development orders]:
Lord Rooker Lord Rooker moved Amendments Nos. 24 to 27:
Page 23, line 5, after "unsatisfactory" insert "—
(a)"
Page 23, line 7, at end insert—
"(b) if it gives such a direction it must state its reasons for doing so.".
Page 23, line 13, after "authority" insert "—
(a)"
Page 23, line 14, at end insert—
"(b) must, if it revokes a local development order, state its reasons for doing so."
On Question, amendments agreed to.
Clause 42 [Statement of development principles]:
Baroness Hamwee Baroness Hamwee moved Amendment No. 28:
Page 25, line 16, at end insert—
"( ) whether sufficient information has been provided by the applicant to enable a decision to be made;"
The noble Baroness said: My Lords, Amendment No. 28 seeks to amend Clause 42, which provides for a new section after Section 61 D of the Town and Country Planning Act 1990. It is grouped with the amendment tabled by the noble Baroness, Lady Hanham, which seeks to remove the clause altogether.
The clause concerns statements of development principle which, in our eyes, go hand in hand with how the Government intend to deal with outline planning permission. I am glad to see that the Government are not now proposing to use this Bill to give themselves the option of repealing outline planning permissions. However, we remain concerned that this part, along with other elements in the Bill, despite the time that the Bill has taken to chunter through its parliamentary progress, has still not been adequately developed—I intend no pun in that.
I turn to my amendment. The Minister has said that, as a matter of common sense, when a local planning authority is asked by a prospective developer to supply a statement of development principles it would, if it did not have enough information, ask for it. But that is not the end of the story because, as the clause is drafted, the local planning authority "must issue a statement". In our view, the local planning authority must be able to say, "We are not saying 'yes' or 'no' because you have not told us enough". Further, the local planning authority must be able to say, "Give us the information so that we can deal sensibly with the matter".
The authority may not want to say "no" to a development on the site. All noble Lords can envisage the problems that that could give rise to in the complex and technical world of town and country planning. It must be able to require the information.
The Minister said on Report that the Government were still considering the matter. He stated:
"Some work remains to be done on the nature of the information that would need to be provided with applications for outline planning permission. The Government still need to be satisfied that the information will meet our objectives".—[Official Report, 1/3/04; col. 513.]
He ends by saying that he hopes to "comment further soon". The Minister went on to tell the House that discussions with "interested parties" were continuing. I hope that the Minister can tell us what progress has been made and who are the interested parties involved.
We support making outline permissions more useful, more precise, more able to achieve certainty for everyone, without allowing the outline permission to be morphed or distorted into something that was not originally anticipated by the planning authority. So, all power to the Government's elbow, let them get on with that and produce a solution—but not this solution; not statements of development principles and alternatives.
We are concerned about the workload this will cause for local planning authorities; we know the strains under which planning departments work. And for what? Not to produce anything that a developer can take to a bank and say, "Please will you finance this?" It is not a fundable permission; it is only a statement. If the Government had changed the "must" issue a statement to "may" issue a statement, I would have had more sympathy in considering whether the idea is a useful one.
It is clear from the Barker review that we shall have to come back very soon to many of the issues surrounding planning and the achievement of sustainable developments and sustainable communities. As the Government now concede that they are not going to use the Bill as an opportunity, to be exercised at some time in the future, to repeal outline planning consents and take them off the agenda, they will have to return to Parliament to deal with that matter. Both issues should be brought back together.
My short amendment seeks to make this a more workable provision. However, I would prefer to see the back of the idea, for the time being at any rate, until we have a proper and complete package together. I beg to move.
5.30 p.m.
Lord Hanningfield: My Lords, I wish to speak to my Amendment No. 29, which is grouped with Amendment No. 28.
Amendment No. 29 seeks to remove Clause 42 from the Bill and thus the Government's provisions for statements of development principles. I wish to add to the comments of the noble Baroness, Lady Hamwee, with which I agree. Clearly the amendment would represent a significant change to the Bill. Nevertheless, we feel that it is crucial, for the fundamental reason that it will make the legislation better.
I should like to say a little about our previous debates before I outline our opposition 'to statements of development principles because it may help explain why we now seek to remove Clause 42. On previous occasions, in Committee and on Report, when we tabled amendments concerning statements of development principles I expected there to be some debate and discussion. More importantly, I thought that the Government would take those opportunities to elucidate the reasoning behind statements of development principles. I did not expect necessarily a compelling justification, but certainly I expected more in the way of how statements of development principles were envisaged as improving the planning system.
I am disappointed that the Government did not really engage with the basic questions of how and why statements of development principles would add value to the planning system. To some extent, that may have been due to the way in which my previous amendments addressed the specific problems we saw in the detail of Clause 42. However, one usually expects clarity and justification to flow from the general discussion that follows. This did not happen. That means that we are left to choose between getting rid of statements of development principles altogether, or leaving them as they are.
Let me explain why I think we must remove Clause 42. As I said at Report, statements of development principles are an exercise in ivory-tower thinking. For the planners on the ground and organisations such as CPRE there is no evidence that statements of development principles will help meet the Government's objectives for the planning system. There is very little support for them, partly because there is precious little information available that justifies their introduction.
On top of all the structural changes that will flow from this Bill, we have an anomalous new process which developers and planners alike do not understand and do not support. Anyone can apply for a statement of planning principles, although no one has any idea how many applications there will be. There is considerable scope for them to be exploited as spoiling tactics for legitimate development, which I am sure the Government do not want to happen. There is even more scope for them to clog up the system, as the noble Baroness, Lady Hamwee, said by overburdening planning departments' work loads, because statements of development principles will effectively subsidise the applicant's preparatory work with no discernible benefit for the local planning authority or the public.
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These negative features are compounded by the fact that the Government have not decided a way forward on the retention of outline planning permission, as the noble Baroness, Lady Hamwee, said. We think that the statements of development principles cannot be considered in isolation from the future of outline planning permission. We have the Statement by the planning Minister, Keith Hill, on 15 December, 2003 which helps a little, but I do not think that primary legislation on statements of development principles is appropriate when so much related work remains outstanding.
As I said before, the Government should have listened earlier to those who actually use and manage the outline planning provision process in order to improve the level of information and community involvement in that process. Outline planning permission is key to securing funding for development. Statements of development principles, when they seem so unworkable, cannot replace outline planning permission. If they have to run in parallel, why add more bureaucracy to the system? It certainly will not help speed up the planning process.
If we introduce statements of development principles, we will shift the burden of planning applications from the applicant to the local authority at a time of severe staffing problems and in times of great operational and structural change. It seems that they can be issued on the basis of very little information to anyone who wants them. As I said before, they could be used to hold up development against the wishes of the Government. The Government can help improve the pre-application process of the planning system, but they should start by dropping statements of development principles. Planners, developers and other interested organisations do not support their introduction, and they have the potential to be an expensive and confusing failure. They are no way forward. I beg to move.
Lord Lucas: My Lords, I entirely support what my noble friend said. I ask one additional question: if the Bill goes through as it is, although the Government said that they want to keep outline planning permission, will the Bill give them the ability to abolish it at any time by secondary legislation?
Lord Marlesford: My Lords, I strongly support this amendment. If the clause remains the whole planning system will be much woollier. Any planning application should be much more specific than is allowed for in this provision. It is quite wrong to allow people to require the local authority to do the work and fill in the gaps. Frankly, if the local authority is swamped with planning applications on which it has a lot of work to do it will be much less able to devote the proper care and attention to specific planning applications.
Lord Rooker: My Lords, there have been some changes in this part of the Bill. The Government have already announced that they have decided to retain outline planning permission. Subject to other moves and discussions, it may be that one would not go to the wall over this matter. In keeping outline planning permission, we consider that statements of development principles could

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provide a valuable addition to the tools available in the planning process. They would enable anyone to obtain an early indication from a local planning authority whether a proposed development would be accepted in principle. They will also identify the kind of issues a developer would need to consider before submitting an application. The developer would then have a clearer idea whether to think about making the planning application. The statement of development principles is not a planning application: hence the need not to provide the kind of detail needed for a planning application. That is why we do not consider that these other details should be mandatory, where the local authority can pile in for a list of other information it wants from a developer. The idea of this statement is that it would be flexible enough for simple and complex questions to be asked, to get an answer back, and to decide whether to proceed with the application. There would be a fee system anyway, so it would not be a question of a gumming-up of the system. We said that we would consult on the issue later this year, if this issue remains in the Bill at the end of the day when it becomes an Act.
If the amendment to leave out the clause is carried, then outline planning would be kept anyway. We are not going to proceed down the route of abolishing outline planning permission. I hope that the general thrust of the question by the noble Lord, Lord Lucas, is answered, because we are keeping outline planning and therefore the status quo is maintained.
Weaponry is the wrong word. This is another tool that the planning authorities may wish to use, but they may not wish to use it. In due course, it is not something over which we would go to the stake.
Lord Marlesford: My Lords, before the noble Lord sits down, am I not right in saying that the provision for informal consultation on a planning proposal already exists, and has existed for a long time? Does that not do the job?
Lord Rooker: My Lords, indeed that may beg the question why, now that we are keeping outline planning permission, anyone would want to use this tool. It may be that local authorities say, "Outline planning is maintained. We can already undergo early discussions". That would probably be behind closed doors, of course. The statement of development principles must be a much more open and transparent issue, about giving detailed, principled answers about a piece of land.
Baroness Hamwee: My Lords, I would describe the Minister's description of his own clause in the words of W.S. Gilbert, as "modified rapture". I was being consulted by my Chief Whip, but my noble friend told me that he said that we would consult on all of this if this provision remains in the Bill.
The Minister said that local authorities could "pile in for a list of information" but, as we have discovered on many other subjects, they would have to be reasonable in doing so. I do not think, therefore, that the point is one which goes very far.
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The Government have now decided not to go ahead with repealing outline permissions. I must say that those two amendments towards the end of today's list are the first time in many years when my name heads the amendment and that of the Minister is tacked on afterwards: not even parliamentary counsel could find fault with "leave out line so-and-so". Now that they are not going ahead at this point in that way, it must be right to put the whole lot into a pot and to consider it all together.
The Minister has convinced me that I should beg leave to withdraw my amendment, in order that the clause can be removed from the Bill. I hope that the noble Lord will be moving that in a moment, so I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Hanningfield Lord Hanningfield moved Amendment No. 29:
Leave out Clause 42.
The noble Lord said: My Lords, I was very grateful for the Minister's reply. He has given me the very reason why we should take the view of the House on removing the entire clause. I think that everyone has said that the provision should be considered later when we consider the future of outline planning permissions. I beg to move.
5.45 p.m.
On Question, Whether the said amendment (No. 29) shall be agreed to?
Their Lordships divided: Contents, 107; Not-Contents, 87.

Division No.8

CONTENTS

Addington, L.

Dholakia, L.

Alderdice, L.

Dixon-Smith, L.

Anelay of St Johns, B.

Dundee, E.

Astor of Hever, L.

Eccles of Moulton, B.

Attlee, E.

Eden of Winton, L.

Avebury, L.

Elles, B.

Baker of Dorking, L.

Elton, L.

Barker, B.

Beaumont of Whitley, L.

Falkland, V.

Belstead, L.

Finlay of Llandaff, B.

Biffen, L.

Fookes, B.

Blatch, B.

Fowler, L.

Bradshaw, L.

Geddes, L.

Bridgeman, V.

Glentoran, L.

Brittan of Spennithorne, L.

Hamwee, B.

Brooke of Sutton Mandeville, L.

Hanham, B.

Burnham, L.

Hanningfield, L.

Byford, B.

Harris of Richmond, B.

Caithness, E.

Higgins, L.

Campbell of Alloway, L.

Hodgson of Astley Abbotts, L.

Carlisle of Bucklow, L.

Carnegy of Lour, B.

Howe, E.

Chorley, L.

Hunt of Wirral, L.

Clement-Jones, L.

Jenkin of Roding, L.

Cobbold, L.

Jopling, L.

Colwyn, L.

King of Bridgwater, L.

Cope of Berkeley, L. [Teller]

Kingsland, L.

Craigavon, V.

Lester of Herne Hill, L.

Cumberlege, B.

Liverpool, E.

Deedes, L.

Lucas, L.

Denham, L.

Luke, L.

897

Lyell, L.

St John of Fawsley, L.

McColl of Dulwich, L.

Sanderson of Bowden, L.

Maddock, B.

Seccombe, B. [Teller]

Mancroft, L.

Selsdon, L.

Marlesford, L.

Sharp of Guildford, B.

Miller of Hendon, B.

Shaw of Northstead, L.

Mowbray and Stourton, L.

Shrewsbury, E.

Newton of Braintree, L.

Shutt of Greetland, L.

Northbrook, L.

Skelmersdale, L.

Smith of Clifton, L.

Northesk, E.

Stewartby, L.

Northover, B.

Stoddart of Swindon, L.

O'Cathain, B.

Swinfen, L.

Park of Monmouth, B.

Taylor of Warwick, L.

Peel, E.

Tebbit, L.

Phillips of Sudbury, L.

Thomas of Gresford, L.

Rawllings, B.

Thomas of Walliswood, B.

Reay, L.

Tope, L.

Redesdale, L.

Tugendhat, L.

Rees, L.

Walmsley, B.

Renton, L.

Weatherill, L.

Rodgers of Quarry Bank, L.

Wilcox, B.

Roper, L.

Williams of Crosby, B.

Rotherwick, L.

Windlesham, L.

NOT-CONTENTS

Acton, L.

Haskel, L.

Alton of Liverpool, L.

Hayman, B.

Amos, B. (Lord President of the Council)

Hogg of Cumbernauld, L.

Hollis of Heigham, B.

Andrews, B.

Howells of St. Davids, B.

Archer of Sandwell, L.

Hughes of Woodside, L.

Ash ton of Upholland, B.

Hunt of Chesterton, L.

Bach, L.

Hunt of Kings Heath, L.

Bassam of Brighton, L.

Irvine of Lairg, L.

Berkeley, L.

Janner of Braunstone, L.

Bernstein of Craigwell, L.

Judd, L.

Blackstone, B.

Layard, L.

Bragg, L.

Lea of Crondall, L.

Brooke of Alverthorpe, L.

Lipsey, L.

Brookman, L.

McIntosh of Haringey, L.

Campbell-Savours, L.

MacKenzie of Culkein, L.

Carter, L.

Mackenzie of Framwellgate, L.

Chandos, V.

Massey of Darwen, B.

Christopher, L.

Mitchell, L.

Clarke of Hampstead, L.

Pitkeathley, B.

Clinton-Davis, L.

Rea, L.

Corbett of Castle Vale, L.

Rendell of Babergh, B.

Crawley, B.

Rogers of Riverside, L.

Davies of Coity, L.

Rooker, L.

Davies of Oldham, L. [Teller]

Desai, L.

Sainsbury of Turville, L.

Donoughue, L.

Sawyer, L.

Dubs, L.

Scotland of Asthal, B.

Elder, L.

Sewel, L.

Evans of Parkside, L.

Sheldon, L.

Evans of Temple Guiting, L.

Simon, V.

Falconer of Thoroton, L. (Lord Chancellor)

Slim, V.

Stone of Blackheath, L.

Farrington of Ribbleton, B.

Symons of Vernham Dean, B.

Faulkner of Worcester, L.

Temple-Morris, L.

Filkin, L.

Thornton, B.

Fyfe of Fairfield, L.

Tomlinson, L.

Gale, B.

Triesman, L.

Gibson of Market Rasen, B.

Turner of Camden, B.

Golding, B.

Warner, L.

Goldsmith, L.

Whitaker, B.

Grenfell, L.

Whitty, L.

Grocott, L. [Teller]

Wilkins, B.

Harris of Haringey, L.

Williams of Elvel, L.

Harrison, L.

Woolmer of Leeds, L.

Resolved in the affirmative, and amendment agreed to accordingly.
5.56 p.m.
Clause 43 [Applications for planning permission and certain consents]:
Lord Rooker Lord Rooker moved Amendment No. 30:
Page 26, line 29, at end insert—
"(5) A development order must require that an application for planning permission of such description as is specified in the order must be accompanied by such of the following as is so specified—

(a) a statement about the design principles and concepts that have been applied to the development;

(b) a statement about how issues relating to access to the development have been dealt with.

(6) The form and content of a statement mentioned in subsection (5) is such as is required by the development order."
The noble Lord said: My Lords, this is not a concession but, having just pocketed one concession well in advance of when it may have been offered, I am mortified—it was not supposed to be that way.
In moving the amendment, and speaking also to government amendments Nos. 31 and 32, I will not repeat what I said earlier. However, the thrust of the amendments is to require applications for planning permission for development to be accompanied by a design statement, an access statement or both. The contents of the statements and the types of development to which they apply would be prescribed by regulations or in a development order.
Previous discussions, at this stage and earlier, have highlighted the importance of providing the right framework to promote design and access, including the ability to stand up to developers where necessary. Along with Clause 39 and planning policy statement 1, that means ensuring proper attention to design and access at all stages of the planning process. If the development does not address those issues, I do not see how it can be regarded as truly sustainable. I beg to move.
Lord Rogers of Riverside: My Lords, I add my wholehearted support to the Government for Amendment No. 30. Noble Lords will remember that I first raised the subject of design statements at Second Reading on 6 January. I am grateful to the noble Lord, Lord Lucas, my noble friend Lady Blackstone, and the noble Baroness, Lady Maddock, for their support for amendments in our names calling for applications for planning permission to be accompanied by design statements. I am also grateful to the Royal Institute of British Architects for supporting me and others in our efforts.
Perhaps most of all, I am grateful to the Minister and his colleagues. The Government have listened and responded well. One need only read the debates that we had on design in Committee and on Report to see how well they understand the key argument: that without

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ensuring design quality there is no urban renaissance. In Committee, my noble friend Lord Rooker said:
"If we deliver poor design, we know that we will not deliver sustainable development".—[Official Report, 22/1/04; col. 1253.]
He also undertook to take the Bill back to his department and insist that design be included in it. He has kept to his word and the Bill—which until today did not feature the word "design" at all—is now all the stronger for it.
In speaking to Amendment No. 34, which is in my name and those of other noble Lords, I seek only clarification from the Minister that "planning permission" in Clause 43 embraces outline planning permission. I am aware of the Written Statement made in the other place by the Minister for Housing and Planning, Keith Hill, on 23 March. The Minister announced that applications for outline planning permission will have to be accompanied by design statements. Will Clause 43 have that effect or do the Government envisage another legislative route?
The Government's amendment places design at the heart of the planning process and that is where it should be. I am delighted and I urge noble Lords to support the amendment.
6 p.m.
Baroness Maddock: My Lords, I thank the Minister for bringing forward the amendment at this stage. There has been cross-party support for it all around the House. We have discussed in some detail what we mean by "design". I have two questions for the Minster.
In his letter to us explaining what the amendment does, he said that,
"The amendments require that in appropriate circumstances. "
Will the Minister clarify what he thinks those circumstances are? I would hate to think that we were talking about only a few large projects.
He also told us that,
"The detail of the information, and the circumstances in which it should be provided would still be for secondary legislation and guidance, on which we will consult further".
Will the Minister explain that a little more and give us some extra detail about how that might happen? Having said that, I welcome the amendment and hope that the Minister can clarify those points.
Lord Lucas: My Lords, the Minister has achieved a great deal with the amendments in the group and I am extremely grateful to him.
Baroness Blackstone: My Lords, I wish to add my thanks to my noble friend the Minister and endorse what my noble friend Lord Rogers of Riverside said. We are enormously grateful to the Minister. As a result of his intervention, there will be many more better designed buildings all over the country, and he will have a place in heaven.
Lord Cobbold: My Lords, I, too, echo the words of the noble Baroness on the matter of design. I wish to ask the Minister a question in respect of Amendment No. 32, which relates to listed building consent and
900
which is, presumably, consent to alter an existing building. What implication will that have as a statement after issues relating to access to a listed building have been dealt with?
Lord Rooker: My Lords, I am grateful for what has been said, but it is the Minister for planning and the Deputy Prime Minister who have agreed to this, but I have pointed out the strength of feeling in your Lordships' House, on all sides. Then I had to point out why there are four sides in your Lordships' House, of course.
I regret that I am not in a position to answer the detailed questions. As I have said earlier, there has to be consultation. I do not take the phrase "in appropriate circumstances" as a get-out or anything like that. I assure the noble Baroness, Lady Maddock, that it is not put there to undermine the thrust of what we are saying. There may be other circumstances, although I cannot imagine what they might be. The issue of "in appropriate circumstances" is for consultation and secondary legislation, but my notes say it refers to the difference between a domestic application and other applications. In other words, "domestic" might be work that someone wishes to carry out to their home, but that would be slightly different in relation to a new development.
Regarding her question on consultation—there is ongoing consultation on, for example, the standard form provisions in preparation for the powers of Clause 43. The Office of the Deputy Prime Minister has commissioned consultants to consider the design and content of the standard form for planning permission, listed building and conservation area consent applications, statement of development principle applications—which might now be a waste of time—tree preservation order applications, advertisement consent applications, applications for lawful development certificates; and the consultants have been asked to produce guidance to help applicants complete the forms.
Emerging work from the review suggests that rather than having separate forms for each type of application it would be more efficient to have a basic form for general details, with additional sheets covering different regimes—much like the design of a tax form, it says here.
Noble Lords: Oh!
Lord Rooker: My Lords, no, I have to say that the design of the Inland Revenue tax forms is fantastic, compared to what it has been. It is incredibly user-friendly, one does not need an accountant to fill it in and, with separate sheets, it works extremely well. The consultants' reports that are nearing completion should be available on the ODPM website by the end of March. Before prescribing any form, we vv ill consult on the standard form and its associated guidance. I am informed that we should be in a position to undertake the consultation by the summer, which to me is June, July and August.
On Question, amendment agreed to.
Lord Rooker Lord Rooker moved Amendments Nos. 31 and 32:
Page 27, line 19, at end insert—
"(b) the form or content of any document or other matter which accompanies the application."
Page 27, line 30, at end insert—
"( ) In section 10 of that Act after subsection (3) there are inserted the following subsections—
"(4) The regulations must require that an application for listed building consent of such description as is prescribed must be accompanied by such of the following as is prescribed—

(a) a statement about the design principles and concepts that have been applied to the works;

(b) a statement about how issues relating to access to the building have been dealt with.

(5) The form and content of a statement mentioned in subsection (4) is such as is prescribed.""
On Question, amendments agreed to.
Baroness Hamwee Baroness Hamwee moved Amendment No. 33:
After Clause 43, insert the following new clause—
"DUTY TO HAVE DUE REGARD TO NEED FOR ACCESSIBLE BUILDINGS
(1) In dealing with an application to which this section applies, the local planning authority, or as the case may be, the Secretary of State must have due regard to the need to ensure reasonable access and ease of use for people, regardless of disability, age or gender is provided in the context of the works in question.
(2) This section applies to—

(a) an application under section 62 or 73 of the principal Act for planning permission;

(b) an application under section 92 of the principal Act for the approval of reserved matters;

(c) an application for the approval of details required under a condition of a grant of planning permission (including a permission granted by a development order);

(d) an application under section 10 of the listed buildings Act 1990; and

(e) an application under section 2 of the Ancient Monuments and Archaeological Areas Act 1979 (c. 46).

(3) For the purposes of subsection (1), the local planning authority or the Secretary of State must have regard to national policies and advice contained in guidelines issued by the appropriate authority.
(4) The appropriate authority is—

(a) the Secretary of State in relation to England;

(b) the National Assembly for Wales in relation to Wales."

The noble Baroness said: My Lords, in moving Amendment No. 33, I shall speak also to government Amendments Nos. 94 and 97.
The purpose of this amendment is to place a new duty on planning authorities to have due regard to the need to ensure that reasonable provision is made so that buildings and their approaches are accessible to and usable by people, regardless of disability, age or gender, when considering planning applications. Amendments Nos. 30 and 32, to which your Lordships have just agreed, are perhaps more pertinent to developments that are the subject of particular applications.
It is widely accepted that the current system is failing. I very much welcome the repeal of Section 76, which is the subject of the two government amendments in this group. However, having warmly welcomed the amendments that the Government have
902
agreed, I look forward to whatever news the Minister has for the noble Baroness, Lady Wilkins, about the Disability Rights Commission and the other organisations that she mentioned. Nevertheless, I felt that it was still worth discovering whether your Lordships would agree to this additional amendment.
The Minister did not comment on the matter when it was before the House at the last stage. However, as I understand it, in mainstreaming inclusive design and access, the Government would prefer to rely on planning policy statements, saying that those would be material considerations in planning decisions. If the development plan fails to set clear policies on access, the planning authorities will need to look at the relevant planning policy statement.
The Disability Rights Commission—I am grateful for its briefing, with which I agree—and others say that that is not good enough, for the following reasons. First, access for disabled people is already a material consideration but experience shows that the system is not delivering. I remember that at Second Reading the noble Baroness, Lady Wilkins, gave a number of examples of ways in which the system is failing, relating some personal stories of how individuals had come up against the system and quite literally banged their heads against problems.
Secondly, the guidance does not end the enormous variances in the ways in which different local planning authorities address access to the built environment.
Thirdly, of course, the courts are the ultimate arbiters of what is a material consideration, and they do not always quite go along with government guidance. We know as regards Section 106 agreements that the courts have to some extent rewritten the rules. In any event, the courts attach more importance to statutory duties than to guidance, and so they should.
Finally, unless and until there are clear duties in planning law on inclusive environment—it is probably human nature but it is part of our role to try to change the culture—too many planning officers and inspectors will continue to overlook access issues in determining planning applications. I beg to move.
Lord Rooker: My Lords, I have a considerable degree of sympathy with what the noble Baroness said. It applies to other parts of the Bill and to what is currently happening. The Bill will change the culture and the process. One could argue that her example relates to the idea that the Bill is designed to change the present system. We recognise that it has failed properly to address access and inclusion. There is no doubt about that—the present system has failed and we plead guilty.
We want a new system and the provision is intended to ensure that local authorities promote an inclusive environment and fully consider the needs of those with disabilities throughout the planning system. That means that issues such as level access are considered at the earliest possible stage. Access is considered by developers before we reach the application process. Therefore, Amendment No. 33 is unnecessary because the new system makes access just as important as other

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planning considerations. Furthermore—and I know that this is a little niggly—we are advised that legally speaking the amendment would not add anything. If the need to ensure reasonable access and the ease of use is a material consideration in relation to a particular application, the Secretary of State would have to have regard to it regardless of the amendment. The new planning system which is part of the Bill will produce more effective and focused results and clearer consideration of access issues throughout the process.
That is not a criticism of the amendment far from it. It is merely a question of the amendments and the debates catching up with what is now in the body of the Bill.
Baroness Hamwee: My Lords, I know not necessarily when I am beaten but when I have to withdraw. I beg leave to do so.
Amendment, by leave, withdrawn.
[Amendment No. 34 not moved.]
Clause 44 [Power to decline to determine applications]:
Lord Rooker Lord Rooker moved Amendment No. 35:
Page 28, line 10, leave out "a" and insert "more than one"
The noble Lord said: My Lords, in moving Amendment No. 35, I shall speak also to Amendments Nos. 36 to 38. We propose in Clause 44 to inhibit the use of repeat applications to wear down the opposition to controversial developments. Clause 44 provides for an amended Section 70A in the principal Act. The substituted Section 70A enables a local planning authority to refuse to determine a planning application where any of the conditions set out in subsections (2) to (4) of that section are satisfied and the authority considers that there has been no significant change in the relevant considerations in the period of two years since a previous application was determined. The applicant cannot engage the right of appeal under Section 78 of the principal Act because that section does not allow an appeal in these circumstances.
If the applicant wishes to challenge the decision of the authority, he or she must do so by way of judicial review. The conditions set out in subsection (4) provide that where in a two-year period preceding the receipt of a planning application the authority has refused a similar application and there has been no appeal to the Secretary of State against refusal, the authority may refuse to determine the current application.
The Government have received representations from house builders who want a right of appeal against the planning authority declining to determine a repeat application. They consider that without this, it would be unfair to developers who genuinely attempt to resolve issues that are of concern to the local authority. We have been persuaded of the merit of this proposal.
We consider that there should be a right of appeal on grounds of non-determination, but that it should be limited to a second application only. That is the general thrust of these amendments. I beg to move.
On Question, amendment agreed to.
Lord Rooker Lord Rooker moved Amendments Nos. 36 to 38:
Page 28, line 12, leave out "that refusal" and insert "any such refusal"
Page 29, line 32, leave out "a" and insert "more than one"
Page 29, line 34, leave out "that refusal" and insert "any such refusal"
On Question, amendments agreed to.
Clause 45: [Major infrastructure projects]:
Lord Hanningfield Lord Hanningfield moved Amendment No. 39:
Page 31, line 14, at end insert—
"( ) Any planning application that the Secretary of State declares is of national or regional importance, as designated through subsection (1), must be subject to an economic impact report.
( ) Any planning application for a major infrastructure project based on a site-specific proposal in a national policy statement White Paper shall be considered by an inspector who shall be able to question the need for a specific development."
The noble Lord said: My Lords, we now come to this extremely important amendment to the Government's proposals for major infrastructure projects. We did not discuss the amendment in great detail on Report because of the lateness of the hour. However, we had a useful exchange of views, which has been supplemented by a letter from the noble Lord, Lord Rooker, reiterating the points that he made in this House on 1 March. I thank him for that letter.
The amendment is intended to ensure that major infrastructure projects are subject to an economic impact report and to exclude site-specific proposals from White Paper national policy statements, to prevent them from reducing the scope of a public inquiry. The two provisions in the amendment are crucial to enhancing the democratic element of the Government's proposals in this part. I shall speak to each in turn.
The first paragraph of the amendment would require the Secretary of State to conduct an economic impact report on any planning matter that he deems to fall within this part of the Bill. Major infrastructure projects that may cause great damage to the environment are usually promoted on the basis that they will deliver economic regeneration benefits. Thus, a robust appraisal of whether demonstrable economic benefits will accrue must take place.
The noble Lord, Lord Rooker, may say that the first paragraph of the amendment is unnecessary because the Government expect the promoter of a development of a type such that the Secretary of State is likely to declare a major infrastructure project to engage with all parties concerned at as an early stage as possible. Apparently, that would be well in advance of the stage at which the amendment proposes an economic impact assessment. However, as important as is the sequence concerning when an economic impact report is produced, it is more important that there is a guaranteed mechanism in the Bill by which the economic logic and justification for any development is subject to rigorous scrutiny. Statutory economic impact reports would comprehensively probe new infrastructure proposals for their genuine economic implications—both positive and negative. They would provide a firm, realistic basis for discussion of a project's likely economic consequences.
I agree with the noble Lord, Lord Rooker, that the arguments about the economic impact should be in the public domain at an early stage. However, perhaps if the Secretary of State made it clear earlier in the process whether the proposed development was a major infrastructure project, a statutory economic impact report would then be in the right part of the sequence to maintain the scrutiny required to ensure that the economic assumptions of the development were fully tested.
Local people affected by major proposals will not wait until an inquiry to make their voices heard. They want to confront the issues head on. By the time that the inquiry comes round—perhaps one or two years later—positions will have hardened and there will be little chance of persuading people of the merits of a particular development. That is all right if we are not too concerned about taking the local community with us, but I believe that that is wrong. We should make every effort to ensure that local people fully understand the rationale behind such planning proposals.
For those people in favour of a development, getting strong economic arguments into the public domain as early as possible should be welcome. I should have thought that the Government would seek to reshape local debate in that way. Robust economic documents and their potential to win over critics will be crucial for the processes of planning major infrastructure projects in future—Stansted Airport, bridges across the Thames and so on. Only impartial statutory economic impact reports can guarantee people's trust in the system.
The second paragraph of the amendment is equally important. It would enable an inspector to examine the justification for site-specific proposals in a White Paper. Planning by White Paper is simply unacceptable. Of course, we support the use of White Papers to provide a framework for guiding the planning of major infrastructure. However, bypassing the checks and balances in the planning system by making site-specific recommendations is another matter entirely. As I said on Report, that is what has happened at Stansted.
The noble Lord, Lord Rooker, has said that a national policy White Paper should help reduce the argument at planning inquiries about the need for specific development of a site. Although a White Paper does not authorise or preclude any development, it sets out clear national policies that are designed to speed up the process of major infrastructure projects.
The Minister is walking an impossible tightrope, while trying to leave the theoretical possibility of an inquiry. At an inquiry, the need for a site-specific development could be subject to challenge. The logic of that argument is clearly that the White Paper would pre-empt such questions from being asked.
Major infrastructure projects rarely enjoy all-round support, but they must have public legitimacy. A White Paper consultation does not adhere to the same checks and balances as a planning application. Even if a White Paper has gone through the Houses of
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Parliament, the planning system has not been nationalised yet. I mention that because the Minister mentioned the weight that should be attached to White Papers.
White Papers are very important, and I strongly believe that they should not undermine the democratic and local conventions of the planning system in this country. It is essential that democratic safeguards in the planning system, which help protect the environment and enhance the quality of life of local communities, are not bypassed. This is an important amendment. I beg to move.
Baroness Hamwee: My Lords, I was struck by what the noble Lord, Lord Hanningfield, said at the last stage. He has more or less repeated that.
On 1 March he talked about people not wanting to,
"wait until an inquiry to make their voices heard".
I was particularly struck by his suggestion that:
"By the time the inquiry takes place, positions will have hardened".—[Official Report, 1/3/04; col. 535.]
The Campaign to Protect Rural England has been a vigorous supporter of this amendment. That organisation might be thought to be less concerned with economic impact assessments than with pinning down every last detail of environmental appraisal. The fact that it is not—and I do not think there is anybody in the Chamber whom I will provoke too much by stating this view—is probably a major achievement of the EU.
At the last stage the Minister spoke at length on this amendment, but he did not say why he opposed it. He suggested that it was unnecessary—he says that in his letter.
On the second limb, the EU environmental impact assessment directive requires consideration of the alternatives to many major projects. The Minister said that the inspectors should not have to spend inquiry time on an alternative. That either means that the amendment is otiose, or it is necessary because of the confusion. But neither way is it wrong. We support the amendment.
Lord Bassam of Brighton: My Lords, as the noble Lord, Lord Hanningfield, has said, this is an issue that has been debated many times, and at least twice in your Lordships' House. Although the debate was not as full as the noble Lord would have liked, we recognise that it was an important debate.
The noble Baroness, Lady Hamwee, has anticipated some of the arguments that we intend to deploy this evening. At an earlier stage, we said that we thought that the amendment was unnecessary because a promoter of the type of development which the Secretary of State is likely to declare a major infrastructure project—either of national or regional importance—would engage with all parties concerned as early as possible. Intelligent developers will do that, whatever the nature of the development, particularly if they want to be successful.

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We would expect some form of economic impact assessment or report to have been completed in preparation for the application, in much the same way that we would expect an environmental impact assessment or statement to have been prepared. This should be—would be—well in advance of the stage at which the amendment envisages it happening. Any major developer will look at those issues right at the outset, to understand the opportunities and options—and the likelihood of the application's success. We would expect the promoter of a development of the type that we are discussing to engage at an early stage with all concerned. That would mean that, by the time an application for planning permission was made to the local planning authority, the community would have already been actively engaged in the processes.
It puzzles us slightly why the noble Lord, Lord Hanningfield, feels that only an economic impact report should be a statutory requirement for a major infrastructure project inquiry. What about all the other important impacts, such as those on transport, highways, amenity value and loss, and social, environmental and cultural factors? All those seem highly relevant, so why just focus on the narrow concern of economic impact?
On the second subsection of the amendment, I shall repeat what was said both in Committee and on Report. Clearly, where there is a national policy statement, or White Paper, it will help to reduce argument at a planning inquiry about the need for a specific development of a particular type at a particular site. Where need is established by a national policy statement, the inspector should not have to spend lots of inquiry time considering whether a need for the development exists. He should instead consider whether the need identified is outweighed by other factors. That does not rule out the possibility that the inspector will spend some time looking at need, but it will be in the context of what is said about need in the national policy statement. I do not think that we can say more than that. The Government do not want to require through primary legislation that an inspector considers need. There may be circumstances where there is agreement on the issue of need and when inquiry time could be more usefully spent considering other issues specific to the proposed development.
I recognise the importance of the amendment and understand why the noble Lord, Lord Hanningfield, tabled it, particularly given his experienced background and knowledge of major development proposals in and around Essex. However, it is too narrowly concerned and too narrowly crafted. In the circumstances, we do not wish to see the amendment pushed forward. We do not think that it adds anything further to the legislation, so I hope that the noble Lord will withdraw it.
Lord Hanningfield: My Lords, I thank the Minister for that response. We have debated the matter but not as fully as one would have liked, and it has normally been at a late hour. I thank the noble Lord, Lord Bassam, for his comments today. Major infrastructure developments are normally put forward for economic benefit and need—I do not like to return to Stansted,
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but it is in the context of economic benefits and need. That is why we are suggesting an economic impact assessment first, rather than all the other impact assessments. I agree that they must take place, but they should come as part of the inquiry and the debate on the whole issue. That is why it is important that the inquiry should have the opportunity to discuss all the issues relating to a major project.
I agree totally that inquiries should not last three or five years, for example, and that we should speed up the processes. But there must be the opportunity at an inquiry to question the need and the positioning of a runway or a bridge, for example. Later we will have bridges along the Thames, which will involve another big debate. I am not saying that those projects should not happen; governments have a right to put in White Papers that they should happen. But there must be local debate and a proper inquiry to ascertain the positioning, potential need and the reasoning behind projects.
I do not think that the Government have fully allayed people's fears that there will be enough freedom and democratic input to those major national decisions, which affect so many people's lives and affect our country for ever. Therefore, I feel that I need to test the opinion of the House.
6.29 p.m.
On Question, Whether the said amendment (No. 39) shall be agreed to?
Their Lordships divided: Contents, 91; Not-Contents, 80.

Division No. 9

CONTENTS

Addington, L.

Glentoran, L.

Alderdice, L.

Greaves, L.

Anelay of St Johns, B.

Hamwee, B.

Astor of Hever, L.

Hanham, B.

Attlee, E.

Hanningfield, L.

Avebury, L.

Harris of Richmond, B.

Barker, B.

Higgins, L.

Beaumont of Whitley, L.

Hodgson of Astley Abbotts, L.

Biffen, L.

Howe, E.

Blatch, B.

Hunt of Wirral, L.

Bradshaw, L.

Jenkin of Roding, L.

Bridgeman, V.

Jopling, L.

Brittan of Spennithorne, L.

Kingsland, L.

Burnham, L.

Lester of Herne Hill, L.

Byford, B.

Liverpool, E.

Caithness, E.

Lucas, L.

Carlisle of Bucklow, L.

Luke, L.

Colwyn, L.

Lyell, L.

Cope of Berkeley, L. [Teller]

McColl of Dulwich, L

Craigavon, V.

Maddock, B.

Deedes, L.

Mancroft, L.

Denham, L.

Marlesford, L.

Dixon-Smith, L.

Miller of Hendon, B.

Eccles of Moulton, B.

Monson, L.

Eden of Winton, L.

Mowbray and Stourton, L.

Elton, L.

Newby, L.

Falkland, V.

Newton of Braintree L.

Finlay of Llandaff, B.

Northbrook, L.

Fookes, B.

Northesk, E.

Fowler, L.

O'Cathain, B.

Geddes, L.

Park of Monmouth, B.

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Peel, E.

Seccombe, B. [Teller]

Phillips of Sudbury, L.

Selsdon, L.

Pilkington of Oxenford, L.

Shaw of Northstead, L.

Rawlings, B.

Shrewsbury, E.

Razzall, L.

Shutt of Greetland, L.

Reay, L.

Skelmersdale, L.

Redesdale, L.

Smith of Clifton, L.

Stewartby, L.

Rees, L.

Swinfen, L.

Rennard, L.

Taylor of Warwick, L.

Renton, L.

Thomas of Walliswood, B.

Roper, L.

Tope, L.

Rotherwick, L.

Tugendhat, L.

St. John of Bletso, L.

Wilcox, B.

Sanderson of Bowden, L.

Williams of Crosby, B.

NOT-CONTENTS

Acton, L.

Hayman, B.

Ahmed, L.

Hogg of Cumbernauld, L.

Alton of Liverpool, L.

Hollis of Heigham, B.

Amos, B. (Lord Privy Seal)

Howells of St. Davids, B.

Andrews, B.

Hughes of Woodside, L.

Archer of Sandwell, L.

Hunt of Chesterton, L.

Ashton of Upholland, B.

Hunt of Kings Heath, L.

Bach, L.

Irvine of Lairg, L.

Bassam of Brighton, L.

Janner of Braunstone, L.

Bernstein of Craigweil, L.

Judd, L.

Blackstone, B.

Lea of Crondall, L.

Bragg, L.

Lipsey, L.

Brooke of Alverthorpe, L.

McIntosh of Haringey, L.

Brookman, L.

MacKenzie of Culkein, L.

Campbell-Savours, L.

Mackenzie of Framwellgate, L.

Carter, L.

Massey of Darwen, B.

Christopher, L.

Mitchell, L.

Clarke of Hampstead, L.

Pitkeathley, B.

Clinton-Davis, L.

Rendell of Babergh, B.

Corbett of Castle Vale, L.

Robertson of Port Ellen, L.

Crawley, B.

Rogers of Riverside, L.

Davies of Coity, L.

Rooker, L.

Davies of Oldham, L. [Teller]

Desai, L.

Sainsbury of Turville, L.

Donoughue, L.

Sawyer, L.

Dubs, L.

Scotland of Asthal, B.

Elder, L.

Sewel, L.

Erroll, E.

Simon, V.

Evans of Parkside, L.

Stone of Blackheath, L.

Evans of Temple Guiting, L.

Symons of Vernham Dean, B.

Falconer of Thoroton, L. (Lord Chancellor)

Temple-Morris, L.

Thornton, B.

Farrington of Ribbleton, B.

Tomlinson, L.

Faulkner of Worcester, L.

Triesman, L.

Filkin, L.

Turner of Camden, B.

Gale, B.

Warner, L.

Gibson of Market Rasen, B.

Whitaker, B.

Golding, B.

Whitty, L.

Goldsmith, L.

Wilkins, B.

Grocott, L. [Teller]

Williams of Elvel, L.

Harris of Haringey, L.

Woolmer of Leeds, L.

Resolved in the affirmative, and amendment agreed to accordingly.
6.40 p.m.
Clause 46 [Planning contribution]:
Lord Lucas Lord Lucas moved Amendment No. 40:
Page 33, line 9, at end insert ", or
( ) by agreement or otherwise"
The noble Lord said: My Lords, in moving Amendment No. 40 I shall speak also to Amendment No. 41. I shall be extremely brief and I hope that the Minister will be able to give me the comforts I am
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looking for. The purpose behind these amendments is to ensure that after all the changes to and arguments over this Bill, it will still be possible for developers to make unilateral undertakings and for someone with an interest in land to enter into a planning obligation. I am not clear that this will be possible given the way the Bill is now set out. I have written to the Minister at length and I now look forward to his response. I beg to move.
Baroness Hanham: My Lords, I wish to speak to the five further amendments in the group, Amendments Nos. 42, 44, 45, 96 and 99. They all concern Section 106 and the proposed planning contributions to be made in the form of a tariff.
On Report the Minister gave a firm indication that Section 106 of the Town and Country Planning Act would not be repealed, rather it would be included in regulations. Of course the Bill does repeal it in Schedule 6. We discussed at length the question whether, if it was repealed in this Bill, it could then be resurrected in regulations at a later stage. In speaking to Amendment No. 96, I want to put on the record that I think this is a very strange way of proceeding. Although the Minister is shaking his head, it is odd to repeal a section and then bring it back in regulations which may or may not come before Parliament again. However, we accept that Section 106 is going to continue in some form.
I turn to the tariff system. Again, on the last occasion that we discussed this, it had been decided, as the result of an intervention by the noble Lord, Lord Best, that tariffs needed to be looked at because of the impact they might have on affordable housing. I understood that a ministerial task force was being set up to look at the whole question of tariffs and decide how best to put them together. Again, this is a very strange way of proceeding at such a late stage of a Bill that has been meandering through Parliament for almost a year and a half. When the Bill was first introduced the tariffs were not included in it. They appeared at the end of the Bill's consideration in the other place.
I understand that the task force has been set up. It is due to report by September 2004. However, it has not had an auspicious start. An initial scoping meeting was held and a provisional date of 23 March was agreed for its first meeting. That did not take place and no subsequent date has been set. That does not set a good precedent for the importance that the Government attach to the task force. Perhaps the Minister can tell us why the meeting did not take place and whether it is envisaged that the six-month programme, which will not be completed until September, is still on target.
There is an added complication to the question of tariffs. We have touched on the Kate Barker housing review many times today. It states that the tariffs are "second best". What Kate Barker wants is a proper planning development tax, which of course is not what is provided in this Bill.

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In the letter sent by the noble Lord to the noble Baroness, Lady Maddock, earlier this week, he stated:
"The Government has a clear view of the broad shape of the tariff system, but has no details".
That really sums it up.
The only part about which I am dubious is whether the "broad vision" is correct because, despite the matter being discussed on many occasions in the House, we still have no idea what the tariff will involve. The only saving grace is that the Government have made no case for hanging a sword over Section 106, which appears to be widely accepted by developers, and that section will be maintained.
We need a little more explanation of what is going on in regard to planning contributions. What are the proposals for ensuring that Parliament will have an opportunity to consider how the tariff system, if it comes into being, will operate? I understand that Section 106 is due to be reviewed as part of the work of the task force. We will need to consider the implications of that.
This is a serious matter and I hope that the Minister will be able to give satisfactory answers.
Baroness Maddock: My Lords, I support very much what the noble Baroness, Lady Hanham, has said. Indeed, I am grateful to the Minister for sending me a detailed letter about primary and secondary legislation in the area of Section 106 agreements and tariffs.
We have made it quite clear that we would prefer to see an improved Section 106 system, not another new tariff system. As other noble Lords have said, the Barker review was published this week and contains, perhaps, a third method of dealing with the issue. Perhaps the Minister will explain today how this all fits together.
Like the noble Baroness, Lady Hanham, and others, we are concerned that at the previous stage we were given reassurances about the consultation on this matter. In particular, the noble Lord, Lord Best, raised issues in regard to affordable housing. Since then, the National Housing Federation and the British Property Federation have written to me and have expressed great concern, as the noble Baroness, Lady Hanham, said, about the progress of the consultations that were supposed to take place.
In the letter, the Government query our wish to retain Section 106 and state that other people have been very critical of it. That is true, but we want to keep a reformed version of it. Even some of the people who are critical of it want to see it reformed. We were given a summary of the consultation on the tariff system but there was not a single number in it quantifying any of the decisions. As I said at the time, if anyone undertaking a GCSE project had handed a summary like that in, they would not have been allowed to get away with it. But we are supposed to use it as a basis for moving forward on this important issue.
The Barker review will make a difference. I hope that the Minister will explain how the Government intend to deal with it. Again, I know that the British Property Federation is concerned about this and that it feels that if the Government press ahead with their
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current proposals we will end up with another change in a couple of years' time. I hope the Minister will be able to answer that point.
We have discussed this matter at some length—and I think the Minister knows where we all stand on it—but, because of the lack of clarification and the fact that all the detail will be in secondary legislation, it will be extremely difficult for this House to scrutinise the legislation properly and have a proper input. The Minister often refers to consultation and so on. If I had an office with three or five people researching for me, I could perhaps respond in detail to all the consultations. I cannot do that, but if matters are in primary legislation I have an opportunity to debate them on the Floor of the House.
This is a very serious matter. I am disappointed in the way it has been dealt with and I hope that the Minister will explain how it will be taken forward. Perhaps he will say how the Government intend to ensure that it works and that someone approves of it. Having seen all the planning proposals coming out of the Kate Barker review, I think I now understand why so much of what we have been discussing has to be in secondary legislation. It is so that the Government can bring in whatever they want from what has been said. That is not the right way to carry forward such an important issue. I look forward to hearing what the Minister has to say.
Lord Rooker: My Lords, I will first deal with the bones of the amendment and then say something about Barker. I can say to the noble Lord, Lord Lucas, that the Government sympathise with the intent of Amendments Nos. 40 and 41, but believe that they are unnecessary. The amendments appear to be aimed at ensuring that planning contributions can be made by unilateral undertakings. Unilateral undertakings are most often made when a local planning authority refuses a planning application and the applicant then appeals to the Secretary of State. The applicant can offer a planning obligation at that stage, even if he has not been able to agree the terms of an obligation with the local planning authority.
The Secretary of State is able to take the unilateral undertaking into account when deciding whether to grant planning permission on appeal if he is satisfied that the undertaking is sufficient to make the application acceptable in planning terms. I give a clear assurance to the House that under the new system, the Government fully intend that developers will be able to make contributions by unilateral undertakings. Clause 46(2)(b) contains sufficient power to enable the Secretary of State to do that. I hope that that is sufficient response for the noble Lord.
On Section 106, I know that it is late and I do not want to wind anybody up, but I have to say that there is an unreasonable degree of impatience about the tariffs. It is not a function of Parliament to write all the details. That is not our role. I am not teaching my aunt to suck eggs, but I am asking for patience. There will be ample opportunity for this House and the other place to fully scrutinise the proposals that the Government bring forward, which will, after all, involve money. There will

913
be full opportunity and bags of time, but it should not happen now. That is all. I am asking for a little patience. It is wholly unreasonable to expect the information now in view of all the detail. This issue was originally in the White Paper, taken out of the Bill and then it returned 18 months later. I fully accept all that, but it had not been on the back burner; it had been off the agenda altogether until we had another look at Section 106 in the light of the Bill being carried over from one Session to the next.
We are abolishing Section 106 from primary legislation, but there is nothing unusual about moving blocks of legislation around. It is sometimes necessary. As I said at an earlier stage, it would be much better to have the legislation on the planning applications in the round, effectively in one document. The new optional charge will be introduced alongside the negotiated or unilateral undertaking route. It will be an optional charge. Obviously, there will be substantial consultation on that. It is no good people outside setting up aunt sallies and talking about red herrings. I apologise if the detail is not there, but that is the way of the world. It is too soon.
The advisory group was due to have its first meeting this week, but that has been postponed until April to give time to reflect on the implications of the Barker proposals. It is easy for me to say this, but I genuinely ask the House to bear with us. Although it was known what was in Barker as it came to the end of its deliberations, it was not possible to go around talking to the relevant parties to find out what was involved until it was published as part of the Budget day operation. We needed time to have a look at it. The stakeholders are quite content with the arrangements for taking on board what Barker has said and having the first meeting in April. There has been no problem and no complaint from any of the stakeholders. I mean that genuinely, because we are dealing with a practical point of view.
Baroness Hanham: My Lords, both the noble Baroness, Lady Maddock, and I have received letters from major stakeholders saying that the meeting has not taken place and that they are very concerned.
Lord Rooker: My Lords, I have given them an explanation. My note says that the stakeholders were content with the change in the arrangements. The change was because Barker was published only last week on 17 March. It is a very substantial document, not a few pages of A4. It is a major document, notwithstanding the fact that there had been an earlier interim report.
We want people to use Barker and to get the best out of it, so that we can get as much of a consensus as possible. I am not aware of people complaining about it. There is no secret, no ulterior motive or problem, other than to allow the Barker report fully to sink in with people.
I have more than a few paragraphs on Barker here, and I will not go through them all. However, there are a few points in respect of the planning obligations
914
reform which are worth putting on record. It is an initial response to the Barker recommendations. That is all it is: an initial response. Please do not complain that it is not full and detailed. It is an initial response by the Government to the Barker review, because this is very substantial and cuts across many departments.
First, we have to be clear about the context of the recommendations. Barker gives broad support to the direction of the Government's reforms to planning obligations, in particular the increase in certainty, clarity and transparency, and the reduction in negotiation costs for both local authorities and developers.
The Barker report proposes a new planning gain supplement. This would be a charge levied at the point of planning permission and related in size to the increase in the land value caused by the grant of planning permission. The grant of planning permission would depend on a payment of the planning gain supplement. The aim of this supplement would be to ensure that a proportion of landowner development gains are recycled back into the community. It is the community that grants the planning permission in the first place.
The report goes on to recommend that, if the Government were to introduce this new supplement, first, planning obligation should be scaled back to the aim of direct impact mitigation, and the Office of the Deputy Prime Minister should issue guidance or new legislation to this end. It is Parliament that issues legislation, of course, but that is the thrust of it.
Secondly, planning obligation should retain its current affordable and/or social housing requirements, as set out in circular 698. Thirdly, local authorities should receive a direct share of the receipts from planning gain supplement generated in their area, which local authorities should be free to spend as they wish.
The question is, how do the Government respond to these recommendations? I have already written to all the noble Lords who have spoken in these debates on planning obligations, setting out our response, and I will take this opportunity to state the views to the House.
First, we welcome Barker's support for the direction we are taking in planning obligation reform. These issues that is, certainty, clarity and transparency—have consistently been identified in criticism of the current system, and it is right that we focus on them.
Secondly, the Chancellor of the Exchequer has proposed a national debate on the basis of the Barker report and has said that he will consider this particular proposal over the next 18 months. That is a reasonable point for the Chancellor of the Exchequer to make. He is not going to rush to judgment on this substantial issue. We do not think that the Barker conclusions or the Chancellor's proposal cause us to change our policy approach. We regard the reform of planning obligations as urgent, in view of the widespread criticism there has been of the present arrangements. On the other hand, I freely admit that, listening to the debate in this House, anyone would think that everything is hunky-dory and perfect. We did start off

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by saying that there were major problems with the way Section 106 had operated, and that remains our position.
We continue to believe that developers should have the choice of a charge or a negotiated agreement, depending on which seems to be the best and speediest option for them in the particular circumstances of their development. We want the new arrangements to be provided for at local level in the new development plans.
I am coming to the end of this. It is only an interim response. We should also note that Kate Barker says that if the Government decide not to proceed with her suggestion of a planning gain supplement, we should proceed with our present package of reforms, offering the choice of a charge or negotiation.
Were the Chancellor to decide in due course to proceed with a planning gain supplement, the provisions in the Bill would allow us to adjust our proposals to make them, if need be, complementary to the planning gain supplement.
Some might suggest that in the event of the Government accepting Barker's recommendations they might move to a framework for planning obligations using only the negotiated route. That would present a reason for deleting the clauses and the provision for an optional charge. However, that overlooks a significant point. An important advantage of reconstituting Section 106 in regulations is that it would allow us to ensure that planning contributions that are negotiated or contained in unilateral undertakings could be limited in future to direct impacts and affordable housing—that is, the Barker approach—if that is the route we decide to follow in due course. Under the present law we do not have that flexibility. Therefore, maintaining this approach and proceeding with the Bill as it is gives us the flexibility of converting Section 106 into the regulations.
7 p.m.
Baroness Hanham: My Lords, it is not for me to reply on this amendment, but I am so shocked that I think I have to say something before the noble Lord, Lord Lucas, replies. I am almost speechless. Here we are at the end of the Bill, in its dying days, and we are suddenly told that Section 106 is in the melting pot along with Kate Barker's report. The Government should withdraw all these clauses and put them into different legislation that everyone can examine. It is not as though we have not consistently been asking for details about the planning contribution. The Minister says that it is not possible to give details.
It is outrageous that legislation should go through in this hibbledy-hobbledy way. One minute we are told that the clauses are included, but the next we are told that the whole thing is effectively going to be reviewed on the back of Kate Barker. If it was not so late I would be very tempted to test the opinion of the House. I will not do that, but I do think there is a big mess here. It is very serious that this should arise at this
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late stage of the Bill, which—with the White Paper—has been in, around and through Parliament for jolly nearly two years.
Lord Lucas: My Lords, I cannot but say I agree with my noble friend. However, I am grateful for the reply to my amendments. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 41 and 42 not moved.]
Clause 47 [Planning contribution: regulations]
Lord Bassam of Brighton Lord Bassam of Brighton moved Amendment No. 43:
Page 34, line 17, at end insert—
"( ) for a person obstructing the taking of such steps as are prescribed to be guilty of an offence punishable by a fine not exceeding level 3 on the standard scale;"
The noble Lord said: My Lords, this amendment supplements the Secretary of State's power to make regulations to provide for planning contributions. The amendment enables the Secretary of State to provide in regulations that where a person instructs a person authorised by the local planning authority to carry out steps to enforce a planning contribution, it shall be an offence punishable by a fine not exceeding level 3 on the standard scale.
As we have made clear, the Government intend to reconstitute the current Section 106 provisions in the regulations to be made under Clauses 46 and 47 which we will be publishing for consultation in due course. We therefore also intend to recreate the existing offence at Section 106(8), making it an offence to obstruct the enforcement of a planning obligation. However, for the avoidance of doubt about the power to make such a provision in the regulations, we have decided that this particular element of the current Section 106 should be explicitly provided for. For that reason we are seeking to make this amendment to Clause 47(6). I beg to move.
Baroness Maddock: My Lords, I listened with some amazement and wondered precisely what level 3 was. I discovered that, actually, it is £400. It does not seem a very large fine or likely to put off people not doing the right thing. However, I am pleased that it is the same as Section 106. And for the record, perhaps I can say that we did not say that Section 106 was perfect. We said that it should be reformed.
Lord Lucas: My Lords, I was a little disturbed by the noble Lord's use of the phrase "for the avoidance of doubt". Does he mean that it is generally accepted but not totally accepted wisdom now that you can create criminal offences by secondary legislation with no mention of them in the primary legislation, or did he actually mean that there is no doubt at all that you cannot do it?
Lord Bassam of Brighton: My Lords, I probably meant "so that it was generally understood".
On Question, Motion agreed to.
[Amendment No. 44 not moved.]
[LORD BASSAM OF BRIGHTON]
Clause 48 [Planning contribution: Wales]:
[Amendment No. 45 not moved.
Lord Rooker Lord Rooker moved Amendment No. 46:
Before Clause 49, insert the following new clause—
"DEVELOPMENT TO INCLUDE CERTAIN INTERNAL OPERATIONS
(1) In the principal Act in section 55 (meaning of development) after subsection (2) there are inserted the following subsections—

"(2A) The Secretary of State may in a development order specify any circumstances or description of circumstances in which subsection (2) does not apply to operations mentioned in paragraph (a) of that subsection which have the effect of increasing the gross floor space of the building by such amount or percentage amount as is so specified.

(2B) The development order may make different provision for different purposes."

(2) This subsection applies if—

(a) section 55(2) of the principal Act is disapplied in respect of any operations by virtue of a development order under section 55(2A) of that Act,

(b) at the date the development order comes into force a certificate under section 192 of the principal Act (certificate of lawfulness of proposed use or development) is in force in respect of the operations, and

(c) before that date no such operations have been begun.

(3) If subsection (2) applies the certificate under section 192 of the principal Act is of no effect.
(4) A development order made for the purposes of section 55(2A) of the principal Act does not affect any operations begun before it is made."
The noble Lord said: My Lords, on the last two occasions that we have discussed the issue—perhaps I may call it the mezzanine issue I promised the House that I would come back with a proposal when we had fully considered how to deal with proposals for additional floor space in buildings. I hope that the Government's new clause meets that commitment and will satisfy the concerns of the noble Baroness who initiated the debate and has pressed for change.
The new clause would have the effect of bringing within planning control the creation of additional floor space within existing buildings. At present Section 55(2)(a) of the Town and Country Planning Act excludes from the definition of development,
"the carrying out for maintenance, improvement or other alteration of any building of works which … do not materially affect the external appearance of the building".
This means that additional floors can be built within a building, even very large ones, without needing planning consent. But, unless this potential growth in floor space is brought within planning control, there is a risk that our wider retail planning policies could be undermined.
The new clause provides for Section 55 to be amended so as to enable the Secretary of State by a development order to bring specified proposals for the provision of extra floor space in existing buildings within the definition of "development". In future, a planning application will be required for those proposals to create additional floor space above the limit to be specified in the order.
We envisage that the development order will specify the type of floor space to which it applies and the scale of additional floor space which will require permission. It could, for example, specify that additional retail floor space above a certain threshold would be defined as "development". Our aim is to bring forward draft secondary legislation as soon as possible. Naturally, as a listening Government, we will consult widely before finalising the order. I hope that the provision meets with the satisfaction of the House. It is not an instant knee-jerk reaction but a considered view on what is identified as a serious problem. I beg to move.
Baroness Maddock: My Lords, I thank the Minister. It was not a knee-jerk reaction. He probably had to fight hard for it within his department. I and others are grateful for his efforts. My amendment, Amendment No. 48, which is grouped with the amendment, would put the matter on the face of the Bill. The Minister is providing for it through secondary legislation. I recognise that that is probably the best we shall get but I am pleased and thank the Minister.
Perhaps I may quote from a briefing I received from the CBI. It states:
"It should be accepted that mezzanine accommodation is a particularly effective way of meeting the need for further floorspace, within the context of sustainable development".
Part of the problem is that what we mean by sustainable development is not understood. When I met with Asda, this was part of my argument. If one seeks to control expansion in particular in out-of-town shopping, while seeking a sustainable traffic policy, with town centres as part of the sustainable package, such an argument drives a coach and horses through the proposal. I thought it an extremely poor argument. I do not agree. It is sad that many businesses do not understand what we mean by sustainable development. They would gain for their customers if they did understand its meaning.
Having said that I am sure that the provisions are the best that we can get and that I am grateful for them, I am a little concerned that there are changes in proposed planning policy statement 6 from planning policy guideline 6. I have concerns that it appears to favour big stores. There is a problem with privileged individual applicants' business muddles being taken into account, and that acts a little against what we are trying to do on the mezzanine floors. Also, the Government have withdrawn the need to apply the sequential approach to extensions.
Although I welcome the provisions, I hope that the Minister will look carefully at planning policy statement 6 and make sure that it does not undermine what he has obviously worked very hard to get into the Bill. Lots of people outside the House will also welcome the Minister's hard work.
Lord Lucas: My Lords, I add my voice to the welcome for the clause. Some careful drafting of the secondary legislation will be needed to make the provisions work fairly and simply for the vast majority of shopkeepers. What concerns me about my reading

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of the Bill is that there seems to be some long period in which the noble Lord's favourite retailers will be calling in the builders to get something started, so that they do not come under the ambit of the clause. Am I reading it right, or will that start when the Bill receives Royal Assent?
Lord Rooker: My Lords, as I said, the change in the law proposed would be in secondary legislation, so we would have to consult on that. It would not come in now. obviously, because the details would have to be made in the regulations about how one measures the floor area. Some planning permissions have been given on the basis of floor area; that is the basis on which they were given, and one cannot go along putting in other floors. However, some have not. We have done enough checking on the matter, to make sure that there is a need. However, it is true that the provisions cannot be brought in overnight. We accept that; there is not much that we can do about it.
People talk about certain key retailers, but one also has to remember the existing policy. Our approach of putting town centres first remains the case; town centres first is the order of the day. PPG6 and PPS6, as it will be, do not change that. We have not gone soft on that at all. The sustainability of the town centres is crucial. One has to take that on board. There is another case, which is that some major players have made their investment decisions on the basis of PPG6—they have stuck to town-centre developments and have not gone out of town. We do not hear the CBI or others championing those. No one champions the individual shops in a town centre, because they are not a collective group; they are all diffused and small.
If one supports out-of-town development without looking at sustainability, one is attacking town-centre development, the very thing that we want to make vibrant, mixed and cohesive so that we do not have such pressure on the countryside and the green fields nearer the town centres. It works both ways; people are silent on one side and proactive on the other. To that extent, it is a one-sided approach from the large representatives of business and employers.
The town-centre approach stays first. Draft planning policy statement 6 is a draft—it is not the end. Quite clearly, we have received comments both for and against the changes, and they will be considered very carefully before we finalise the statement. I assure the House that the Deputy Prime Minister is absolutely adamant that we get sustainability and development in town centres as a first priority. That is existing policy; there is no change on that.
On the other hand, we need to look at some aspects of the drafting. We want to ensure that policy can cope better with some of the inevitable tensions, so that we are being fair. But we want to be fair to town centres and to those retailers and developers who have stood by sustainable town centres and have made multimillion pound investments on the basis of that policy remaining. The CBI will not be opening the door to work with them, because they are not asking for a change. I suspect that the CBI will be looking at the subs of its representatives, who are speaking just for
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one section of developers. We have here a sensible change. It is practical; it cannot be brought in overnight, but it sends a clear signal that we are not happy about exploitation of existing loopholes.
On Question, amendment agreed to.
7.15 p.m.
Baroness Hanham Baroness Hanham moved Amendment No. 47:
After Clause 51, insert the following new clause—
"PREVENTION OF ACTIVITIES REQUIRED TO CEASE BY ENFORCEMENT NOTICES AND STOP NOTICES
(1) In section 184(6) of the principal Act (stop notices: supplementary provisions) for "section 187" there is substituted "sections 186A and 187".
(2) After section 186 (compensation for loss due to stop notice) there is inserted the following section—
"186A ENFORCEMENT OF STOP NOTICE
(1) Where any activities required by a stop notice to cease have not ceased before the notice takes effect, the local planning authority may—

(a) enter the land and remove any moveable objects which appear to them to be used for the activities, and

(b) recover from the person who is then the owner or occupier of the land any expenses reasonably incurred by them in doing so.

(2) Where a stop notice has been served or a site notice displayed in respect of any breach of planning control—

(a) any expenses incurred by the owner or occupier or any land for the purpose of complying with the notice, and

(b) any sums paid by the owner or occupier of any land under subsection (1) in respect of expenses incurred by the local planning authority in removing objects,
shall be deemed to be incurred or paid for the use and at the request of the person by whom the breach of planning control was committed.

(3) Regulations made under this Act may provide that—

(a) section 276 of the Public Health Act 1936 (power of local authorities to sell materials removed in executing works under that Act subject to accounting for the proceeds of sale) and

(b) section 294 of that Act (limit on liability of persons holding premises as agents or trustees in respect of the expenses recoverable under that Act),
shall apply, subject to such adaptations and modifications as may be specified in the regulations, in relation to any activities required by a stop notice to cease.

(4) Regulations under subsection (3) applying section 289 of the Public Health Act 1936 may include adaptations and modifications for the purpose of giving the owner of land to which a stop notice relates the right, as against all other persons interested in the land, to comply with the requirements of the stop notice.
(5) Regulations under subsection (3) may also provide for the charging on the land of any expenses recoverable by a local planning authority under subsection (1).
(6) Any person who wilfully obstructs a person acting in the exercise of powers under subsection (1) shall be guilty of an offence and liable on summary conviction to a fine not exceeding level 3 on the standard scale.""
The noble Baroness said: I shall return briefly to a long amendment that I introduced last time, following which I had a discussion with the Minister, and I thank him for that courtesy, because it was helpful in clarifying my mind as to whether we should continue with the amendment.
Its purpose is to try to ensure that an illegal or unlawful planning process can be stopped, with the powers that are available once an enforcement notice has been issued, in the same way as for a stop notice. Part of the discussion last time related to whether the effect of my amendment could also to the temporary stop notice. Once a stop notice has been issued, as the Minister rightly said to me when we met, it becomes a fact and that stop notice means that people immediately become in breach of the law.
However much the Minister waxes lyrical about the matter, people do not always stop the breach, however much we would like to think so. The Minister asked me to give some examples. In fact, I will refer to Hansard, where the Minister himself gave me some good examples to justify the need for the temporary stop notice. They are exactly the same sort of examples that I would have given. I shall read from Hansard:
"These might include the inappropriate change of use of someone's backyard to a car paint-spraying business or the construction of an extension without planning permission".—[Official Report, 16/3/04; col. 201.]
I talked about the use of a barn for musical entertainment that was causing a nuisance. There are many good examples where a temporary stop notice is effective, where an enforcement notice could well follow, but where the process of the enforcement notice takes a great deal of time. As part of the enforcement notice, one could go on to the land and take possession of whatever is causing the problem, or take down the building. However, one cannot do that on either a temporary, or a full scale, stop notice. The trouble is that if one cannot do that and one cannot use Section 178, which allows the enforcement action, then the problem will carry on potentially for months—during the enforcement action and the appeal—before anything much can be done.
The temporary stop notice would be ideal if we also were able to introduce the provisions proposed in the amendment, because it would mean that the temporary stop notice of 28 days would allow the use of section 178 provisions immediately. One would probably end the enforcement problem within a very short time, instead of the months that can now follow.
That is the burden of my long amendment, which has been shortened substantially to the matters I have just mentioned and I hope that, as a result, the Minister will feel able to take the amendment on hoard, so that we have the means to prevent people who have been committing an offence from carrying on with that offence. I beg to move.
Lord Bassam of Brighton: My Lords, I am grateful to the noble Baroness, Lady Hanham, for her amendment. Although I was not a party to her discussions with my noble friend Lord Rooker, I understand the kinds of cases to which she referred. I can joyously remember, as a local authority leader, having to deal with such matters, having to ensure that residents were leaned on to prevent nuisances continuing and having endlessly to chase officers to do
922
the best that they could in difficult circumstances in which they did not have adequate powers. I therefore understand the frustrations.
We have previously rehearsed the arguments relating to this matter. We believe that the powers sought by the amendment are unnecessary. Local planning authorities already have the enforcement notice, which requires activities to stop and remedial action to be taken, including entering and restoring the land. They also have the stop notice, which stops development, but can be served only after or at the same time as the enforcement notice and must relate to the activity prohibited by the enforcement notice.
Local planning authorities will soon have the temporary stop notice to which the noble Baroness referred. That will stop development at once, so that there will be no need to enter land to remove equipment. It is an offence not to comply with a stop notice and will be an offence not to comply with a temporary stop notice. We therefore believe that we have achieved a solution to the problem.
We can argue endlessly about this matter. I believe that we have to give it a go, use what we have put in and ensure that it works well. I hope that will mean that some of the nuisances to which the noble Baroness referred by back-referencing Hansard will be dealt with much more swiftly in the future.
Baroness Hanham: My Lords, will the Minister accept from me that the provisions of the temporary stop notice are exactly the same as those of the stop notice? I do not know what the penalties are for breaching those provisions—I have not looked at them—but the penalties exist. If someone carries on and refuses to stop the breach, then nothing more can be done until the enforcement exercise takes place. I know that injunctions can be taken out. So far as I am aware, the temporary stop notice has no powers different from those of the stop notice. If someone chooses to commit a criminal act in breach of a temporary stop notice, our amendment seeks to give power to have that breach stopped and the equipment dismantled and removed.
Lord Bassam of Brighton: My Lords, I do not believe that the noble Baroness has yet understood exactly how the temporary stop notice process will work. I understand that it will provide the immediate remedy that the noble Baroness seeks and that there will be no need to make enforcements in the way in which she envisages. I believe that it will work in the way that she deems it necessary. That is why we think that her amendment is not required in the circumstances.
Obviously, the noble Baroness is not satisfied. There may be cause for some debate, not on this Bill but in the future. I believe that the Bill provides the remedy that is being sought. I had hoped that my explanations and those of my noble friend Lord Rooker would have satisfied the noble Baroness. We think that the present proposal deals with the problem.
Baroness Hanham: My Lords, I can only say that I do not believe that it will. It seems to me—I have

923
discussed this with the Minister—that the terms of the temporary stop notice are not much different from those of the stop notice, in which case it will not have the effect of permitting entry on to land and the taking away of equipment. If I am incorrect about that, I shall be very glad to hear it, because that would also put at ease the minds of those in the other place who also wanted to see this amendment tabled.
I do not believe that I can take the matter further and I therefore beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 48 not moved.]
Clause 52 [Temporary stop notice]:
Lord Avebury Lord Avebury moved Amendment No. 49:
Page 38, line 11, at end insert—
"(aa) the use of any caravan for residential purposes;"
The noble Lord said: My Lords, I had understood that a temporary stop notice was fundamentally different from the stop notices in the original Act, by reason of the fact that under this provision one does not need an enforcement to accompany the temporary stop notice.
The delays to which the noble Baroness referred arise from the fact that if someone appeals against the enforcement proceedings, the stop notice is suspended until those proceedings are disposed of. That is how people managed to delay use of the stop notice under the parent Act.
I want to turn to a different point; that is, the discussion on Report when the Minister said that the regulations which were to be made on temporary stop notices would protect Gypsies and caravan dwellers presumably in the same way as they already protect people who live in houses. A temporary stop notice cannot prohibit the use of a building as a dwelling house. If I have correctly understood the Minister's undertaking, it would not prohibit the use of a caravan for residential purposes on the land that it occupied at the time of any notice. That notice could prohibit ancillary works such as the provision of additional hard standing, amenity blocks and so on, but if the owners of the caravan had to be compelled to move off the land, either enforcement proceedings would have to be taken or the powers of the Criminal Justice and Public Order Act would have to be used.
The temporary stop notice is not intended—and I hope that the Minister will confirm this—as an additional weapon in the armoury available to local authorities for dealing with unauthorised encampments by Gypsies or other Travellers who have nowhere they can lawfully go. Those people are homeless by virtue of Section 126 of the Housing Act 1996. It is already the duty of local authorities under Section 3(1)(b) of the Homelessness Act 2002 to develop a strategy for,
"securing that sufficient accommodation is and will be available for people in their district who are or may become homeless".
Perhaps the Minister is aware that hardly any of the 157 local authorities with unauthorised encampments in their area have complied with that requirement or allocated land in their development plans for the
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provision of the additional site that is so obviously needed. It would have been perverse to reward them by conferring extra powers on them to shuffle off the responsibility for dealing with unauthorised encampments on to neighbouring authorities., where the process would then continue.
Rather than leaving this to be dealt with in regulations, I would like to see it on the face of the Bill where the process would continue. This morning, I spoke to members of the Commission for Racial Equality who told me that they were still awaiting their lawyers' opinion, but they clearly feel that there are doubts about the lawfulness of this provision and, equally, about the provision in the parent Act.
Their doubts have been reinforced by the Joint Select Committee on Human Rights, whose comments were published the day before our discussion on Report. I missed it at the time, but we have a duty now to consider the advice it gave. I draw your Lordships' attention to the committee's conclusion:
"As at present advised, we have serious doubts as to the compatibility of the provisions"—
that is to say the temporary stop notice—
"with the Convention right to peaceful enjoyment of possessions under Article 1 of Protocol 1 to the ECHR, and with the Convention right to be free of discrimination in relation to the right to possessions under Article 14 of the ECHR taken together with Article 1".
The temporary stop notices were introduced to the Bill on Report—without vast notice either to the JCHR or to your Lordships, or any explanation or how the Government arrived at their conclusion regarding the compatibility of the provisions with the convention rights, as the JCHR pointed out. At that stage, the Minister simply asserted that advice had been given, without disclosing the reasons why those conclusions had been reached.
The Government should now address the argument to the contrary set out in detail on three pages of the report to which I referred. If the Government are now saying that to bring the legislation into conformity with the convention, it is necessary to exclude the possibility of a stop notice being used against a person living in a caravan—although it may, as I have explained, be applied to other, connected developments of the land that have taken place without permission—why should that not be plainly stated in the Bill, as is the exclusion of a dwelling house?
Parliament has the responsibility of ensuring that the Bill complies with the convention. The right way to do that is to make the wording as nearly identical in the two cases as possible, showing that we intend that there should be equality of treatment between Gypsies and everyone else. It follows that if the Government now undertake that the regulations will achieve equality between Gypsies and others regarding the application of stop notices to their respective residences, they are obliged to read that principle of equality back into the parent Act and the stop notices that are already available to local authorities under it.
In a letter that the Minister kindly wrote to me the day before yesterday, he said that it is not intended that the regulations will apply back into the parent Act because,
"Local authorities already have advice on the use of stop notices in PPG 18, Circular 10/97 and the Good Practice Guide".
He continued by stating that he was not aware of stop notices causing any problems for Gypsy and Traveller groups, and that the Government had ascertained that in 2002, only three stop notices of a total of 180 had been used against caravans.
It so happens that only yesterday, the Court of Appeal heard a case—Chichester Borough Council v First Secretary of State and Doe, Eames and Yates, in which the local authority had issued a stop notice but had not yet prosecuted because there had been an appeal against the enforcement proceedings and the stop notice was suspended pending the hearing. When Lord Justice Auld granted the appeal, the stop notice automatically lapsed. In the three cases that he mentioned, the Minister may not have taken into consideration the use of stop notices in conjunction with enforcement proceedings where the stop notice was not ultimately proceeded with because the enforcement proceedings were unsuccessful.
In another case, Lewes District Council issued a stop notice against a Gypsy, Mr Silas Lee, but has not yet prosecuted him. I draw your Lordships' attention to the fact that Lewes is an authority in which the chair of the planning committee set fire to a mock-up Gypsy caravan with model people inside it in the recent notorious Thirle bonfire incident. I suspect that if the council takes Mr Lee to court, it may face Human Rights Act arguments. It is better that we resolve that here and now.
I also remind your Lordships that another reason why the matter needs to be resolved by Parliament is that, in the case of Wrexham County Borough Council v Berry in the House of Lords, it was found that Mr Berry, having relinquished his nomadic habit of life by reason of serious ill-health, had thereupon ceased to be a Gypsy and was not entitled to the considerations mentioned by the inspector as sufficient to override national and statutory development policies. Local authorities may well have been waiting for the Berry judgment before deciding how to proceed in other cases in which a Gypsy occupies land that belongs to him but for which he has not been granted planning permission. So in future there may be more cases of stop notices being issued, if local authorities are encouraged down that route by the Bill.
We need to see what the Government are going to do about the provision of Gypsy sites generally when they have considered the results of their recent seminars. I congratulate them on holding those seminars, which were an extremely useful exercise, and their promise that they will announce their findings on the Niner report in April or, at the latest, May.
It would be wrong to precede the measures to be announced to solve the problem of Traveller accommodation with yet another tightening of the
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screw against the unauthorised encampments that are the very result of the Government's failure to address the problem earlier. I beg to move.
Lord Rooker: My Lords, I am grateful to the noble Lord for bringing back this amendment. I shall respond to him initially, and then make a couple of comments on the points that he raised about the letter and the report from the Joint Committee.
As the noble Lord said, Amendment No. 49 seeks to place on the face of the Bill a provision that would prevent local planning authorities from using temporary stop notices against those who reside in caravans. I recognise that the noble Lord is trying to achieve equal treatment for a minority who choose to have caravans as their homes. I have repeatedly said in this House—and I said this when I was at the Home Office—it is not illegal to have a nomadic life, and those people should not therefore be penalised and discriminated against.
In introducing the temporary stop notice amendment last week, we have already recognised that Gypsies and Travellers who choose to lead an alternative lifestyle should be protected in a similar way to those who choose to live in bricks and mortar.
The distinction is made between buildings and caravans because of the nature of the development. The effect of caravans moving onto land and being lived in will be greater than an existing building already situated on land being used for residential purposes. This is because there is an opportunity with buildings for local planning authorities to take enforcement action at any stage when the building is being built, before it is occupied as a residence; whereas, with caravans, this initial opportunity for enforcement will not be available.
The Government's approach of restricting the use of temporary stop notices by local planning authorities with conditions to be set out in regulations is more effective and sensible. The noble Lord has spoken before on the need to consult with affected groups and this is what we intend to do.
The regulations will also provide us with the flexibility to change the provisions for caravans as further details of the policy on Gypsy and Traveller accommodation develops, and as local authorities make greater site provision in their area. I can assure the House that the temporary stop notice provisions will not commence until the regulations to protect Gypsies and Travellers are in place.
The noble Lord's second amendment seeks to reintroduce the 1990 Act's provision that would prevent a stop notice being used when those residing in caravans were on a site and were in breach of planning controls.
We do not believe that the amendment is necessary. A stop notice as set out in the 1990 Act can be used against caravans; however, the service of the stop notice—as the noble Lord said in his initial remarks—is parasitic upon the service of an enforcement notice. Further, there is a liability to pay compensation in certain circumstances for loss flowing from the service

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of the stop notice. Those circumstances are where the enforcement notice does not take effect, because it is quashed, varied or withdrawn, or the stop notice itself is withdrawn.
My honourable friend Yvette Cooper has written a long letter to Sarah Spencer, the Deputy Chair of the Commission for Racial Equality on policy issues. I think that it has been copied, and if not it can be made available. I hope that it will satisfy the issues raised in the letter that we had from the CRE on 15 March.
The Joint Committee on Human Rights provided a detailed report setting out its concerns, and we take this extremely seriously. I provided a response in a detailed letter, which I shall come to in a moment.
My response has been available to the noble Lords opposite. I hope it has been received; the chances are that it has not been. That is unfortunate. It could have been put on the internal notice board but it was not. I regret that it has not been received. I would have delivered it in person had I known that was going to happen.
That brings me to an error in the letter. My response is very detailed. It is a four or five page letter, and it is difficult to set out here. We explained that, although the temporary stop notices interfere with a person's use of their land, this is necessarily the case with planning enforcement matters. We believe that the power is proportionate and reasonable. We would expect the planning authorities to use this power in a reasonable and responsible manner—indeed, they are not allowed to use it in any other manner. The commitment that the power would not take effect until the regulations are in place is important. I shall not go over the details because we debated temporary stop notices when they were introduced. I have always said that, if a local planning authority used its power unreasonably or incorrectly, its decision would be subject to judicial review.
After three instructions from me, the whizzes who drafted the letter have still produced an error. I was out all day yesterday, visiting pathfinders in the north, so I gave instructions from the train. It is a minor point but it annoys because it worries me about the rest of the letter. On three separate occasions I gave instructions that the word "House" in the penultimate sentence of the final paragraph should be changed to "committee". It is a small point. The fact that the five-page letter was put together by a committee is no excuse. I was writing to the chair of the Joint Committee on Human Rights to apologise because it had not been fully informed of the amendment. The sentence reads:
"It was certainly not my intention not to inform the House of the amendment".
Given that one must bring amendments to the House anyway to get them through, clearly the word "committee" should have been used. I told the whizzes three times that there was a mistake, including
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yesterday, and just two minutes ago I saw the final letter that was sent out. I am pretty annoyed about it, to say the least.
Lord Avebury: My Lords, my noble friend received the letter, although I did not. The sentence that he mentions has been corrected; it says "committee".
Lord Rooker: My Lords, then I withdraw everything that I have just said. I asked for a copy of the letter that I had sent to noble Lords; that is the one that I was given. I am not blaming anybody, but I was given the wrong letter. As a result, I am not coming armed with all the letters that I have written. On that basis. I think that I have given a brilliant reply to the amendment.
Lord Avebury: My Lords, I did not receive the letter and have only just been handed it by my noble friend, but I can see that the Minister's reply to the Joint Committee is six pages long. It would be impossible for me to make any sensible comments about the contents. We are in some difficulty here. The Joint Committee complained that it was given inadequate time to look at the provisions introduced at the very last minute on Report. It exerted itself to produce a thorough report the day before we met, and the Minister's reply to the committee was sent on 24 March and has just been handed to one or two noble Lords now.
The same applies to the letter to Sarah Spencer. I have not seen a copy of that letter, so it would be useless for me to comment on the adequacy or otherwise of the response to the Commission for Racial Equality. All that I can say is that, whatever Sarah Spencer has said to the ODPM, it was not the commission's final word because it told me this morning that it still awaited legal advice on the lawfulness of the proposals.
Perhaps I could sweeten my complaints by saying that I am grateful to the noble Lord for the further assurance that he gave today that the regulations would not come into effect until adequate provision was made to ensure that persons living in caravans, whether Gypsies or others, are not displaced from the homes that they occupy, which, to them, are just as important as the homes already dealt with under the Bill. I would have much preferred it if we could have had proper time to consider all the matters.
I have no alternative at this late stage but to withdraw the amendment, but I hope that when the regulations finally appear, they will be fully informed by the further comments that I expect that the Commission for Racial Equality will make. The Traveller Law Reform Group has also expressed great concern not only about the effect of stop notices under this Bill, but at the possibility of increased use of stop notices under the parent Act. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
7.45 p.m.
Lord Rooker Lord Rooker moved Amendment No. 50:
Page 39, line 15, leave out from "certificate" to end of line 16 and insert "in respect of the activity is issued under section 191 or granted under that section by virtue of section 195"
The noble Lord said: My Lords, this is in response to points made during the Report stage of the Bill. The amendment seeks to amend the new provisions for the temporary stop notice compensation by allowing compensation to be paid in cases where lawful development certificates have been issued not only by the local planning authority, but by the Secretary of State. I beg to move.
On Question, amendment agreed to.
[Amendment No. 51 not moved.]
Clause 53 [Fees and charges]:
Lord Lucas Lord Lucas moved Amendment No. 52:
Page 40, line 16, after "exceed" insert "by more than a specified percentage"
The noble Lord said: My Lords, this is rather ungrateful of me, since at the last stage the noble Lord, Lord Rooker, was very kind in producing something that went nine tenths of the way to what I want, and here I am trying to get some more. As I have said before in this House, all the developers that I have spoken to say that planning fees are far too low, they would much rather that they were much higher, and they got a really good service out of local authorities.
To my mind, for that to happen, a local authority has to be sure, in these straitened days, that the planning service will not lose money for it. One of the earliest things that I learnt about consumer law is that if you specify 500 grams on a tin of beans, you have to put 505 grams in, to make sure that you never make a mistake. If we set the law that a local authority can never make a profit on its planning division, the only way that it can do that is by always making a loss. That seems to be the wrong way round. I would like there to be a small margin, just 5 to 10 per cent, something like that, so that the local authority can be sure that this will not be a loss-making division, and that it will recoup the money it spends on planning, and the money that it spends on giving a good service. I beg to move.
Lord Bassam of Brighton: My Lords, I am almost beginning to wish that I had my previous reincarnation as a politician. Having listened to the noble Lord, Lord Lucas, on this, I would be rubbing my hands with glee if that were the case. I have a deal of sympathy with what he is saying. I suspect that local authorities will find ways to achieve his objective.
Our view is that there is no necessity to prescribe further the powers of authorities in the manner in which the noble Lord, Lord Lucas, has suggested. We are committed to the policy that fees charged should not be in excess of the functions provided. The longstanding policy of this Administration, and the previous Administration, has been to set fees at a cost recovery level to ensure against local taxation. While this means that authorities may make a loss in one year, prescribed function is taken on a year-on-year
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basis. I suspect that year-on-year the local authority will be able to raise fees in such a way as to ensure that they do not make a loss and that they more than cover, or at least cover, their costs.
The provision that we have outlined in Clause 53 is in line with Section 93 of the Local Government Act 2003, which we all enjoyed debating at length last Session. What the noble Lord is after is achievable, probably not in a single year of accounting, but over time. The full detail of the fee system will be subject to consultation with stakeholders, and that should be completed this summer. No doubt some of the issues raised by the noble Lord during debates on fees will surface then. My notes say that your Lordships will therefore have further opportunity to debate any scheme of fees and charges that we propose. I therefore hope that the noble Lord is satisfied with that and feels able to withdraw his amendment.
Lord Lucas: No, my Lords. He is not satisfied but he is resigned to it. It is extraordinary. On looking at previous debates that we have had over the past few months in this House, we have been conscious of how close to the limit council tax has been. We have talked about different ways of raising money for local authorities. Here is a group of people who want to contribute money to local authorities to enable them to have more money to spend, but they are being denied the chance to give it to them.
At the same time, in the next week or two, we shall debate the Traffic Management Bill, which proposes an additional tax for local authorities to allow them to make a profit out of those who want to provide services to the rest of us so that they will get all their road mending done at the expense of the gas, electricity and telephone companies.
We are doing it. We need to do it. We know we need to do it. We are doing it in other aspects. But here, where we have a willing group of taxpayers—people who want to be taxed—we will not let them pay. That seems extraordinary. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 58 [Effect of correction]
Lord Rooker Lord Rooker moved Amendment No. 53:
Page 42, line 36, leave out from "in" to end of line and insert—

"(a) paragraph (a) of section 59(4) below, or

(b) paragraph (b) of that section, if it is a decision mentioned in section 177 of the principal Act (grant or modification of planning permission on appeal against enforcement notice)."

The noble Lord said: My Lords, Amendments Nos. 53 and 54 are purely technical amendments which rectify an oversight in drafting. They correct the position so that Clause 58 will apply also to decisions issued under Section 289 of the Town and Country Planning Act 1990. I beg to move.
On Question, amendment agreed to.
Lord Rooker Lord Rooker moved Amendment No. 54:
Page 42, line 36, at end insert—
"( ) Section 289 of the principal Act (appeals to the High Court relating to enforcement notices and notices under section 207 of that Act) applies to the correction notice as if it were a decision of the Secretary of State mentioned in—

(a) subsection (1) of that section, if the decision document in respect of which the correction notice is given records a decision mentioned in paragraph (b) of section 59(4) below (not being a decision mentioned in section 177 of the principal Act), or

(b) subsection (2) of that section, if the decision document in respect of which the correction notice is given records a decision mentioned in paragraph (c) of section 59(4) below."

On Question, amendment agreed to.
Clause 65 [Intervention by Assembly]:
Lord Rooker Lord Rooker moved Amendments Nos. 55 to 57:
Page 47, line 19, after "unsatisfactory" insert "—
(a)"
Page 47, line 21, at end insert—
"(b) if it gives such a direction it must state its reasons for doing so."
Page 47, line 42, at end insert "and the reasons of the person making the recommendations"
On Question, amendments agreed to.
Clause 71 [Assembly's default power]:
Lord Rooker Lord Rooker moved Amendment No. 58:
Page 49, line 20, at end insert—
"( ) The Assembly must give reasons for anything it does in pursuance of subsection (4)."
On Question, amendment agreed to.
Clause 80 [Special provision relating to national security]:
Lord Rooker Lord Rooker moved Amendment No. 59:
Page 54, line 34, leave out first "person" and insert "representative"
The noble Lord said: My Lords, Amendment No. 59 is the first of a group of 27 amendments on the topic of national security. I could stop there and say that therefore I cannot say any more, which is not really on. The first 25 amendments, which apply to Clauses 80, 81 and 91, make further provisions for special advocates. I shall speak mainly to Amendment No. 63, which has got most of the meat in it. A lot of them are consequential and minor technical amendments.
Although Amendment No. 63 is very long, the substance can be found in the first new subsection, which introduces new Section 321 A into the principal 1990 Act. Noble Lords will recall from Report stage that we introduced new provisions to enable the Secretary of State to direct the "responsible person" to pay the fees of the special advocate. Those provisions were added to Section 321 of the principal Act. The new problem that we have identified is that Section 321 applies only when there is an inquiry, so the provisions added at Report stage would also apply only when an inquiry takes place.
They do not cover the situation when an inquiry is in prospect, the special advocate is appointed and does some work, but the inquiry is then cancelled. Without Amendment No. 63, the Secretary of State would have no power to direct the "responsible person" to pay the
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fees. Indeed, there would be no "responsible person". Therefore, we need to say that when no inquiry is held, the payment provisions will nevertheless apply.
One element that may not be clear from reading is new Section 321(4), which states that this section does not affect Section 322A. Section 322A of the principal Act makes supplementary provision for costs orders at planning inquiries so that costs can be awarded when an inquiry has been arranged but does not take place. We therefore want to make it quite clear that the provisions for paying special advocates' fees when an inquiry does not take place are separate from the normal provisions for costs in these circumstances, which apply when one of the parties has been at fault.
The second and third new subsections in Amendment No. 63 amend the respective schedules to the listed buildings Act and the hazardous substances Act in identical fashion. They combine the material already in the Bill with new material equivalent to new Section 321A of the principal Act in a new paragraph for ease of reference.
There is one other change, in that the special advocate is now to be called the "appointed representative" instead of the "appointed person". Noble Lords might like to refer to new paragraph 6A(4) for an example. The reason for this is that the term "appointed person" is already used in the schedules to mean the planning inspector who conducts an inquiry. I am sure the House will agree that having the same expression meaning two different things in the same schedule would be somewhat unwise. This accounts for Amendments Nos. 59 to 62 which change the references to the "appointed person" in Section 321 to "appointed representative" for consistency. The following amendments are consequential and make minor technical changes. I beg to move.
On Question, amendment agreed to.
Lord Rooker Lord Rooker moved Amendments Nos. 60 to 63:
Page 55, line 2, leave out "person" and insert "representative"
Page 55, line 3, leave out first "person" and insert "representative"
Page 55, line 7, leave out first "person" and insert "representative"
Page 55, line 11, leave out subsections (2) and (3) and insert—
"( ) After section 321 of the principal Act (planning inquiries to be held in public subject to certain exceptions) there is inserted the following section
"321A APPOINTED REPRESENTATIVE: NO INQUIRY
(1) This section applies if—

(a) a person is appointed under subsection (5) or (6) of section 321, but

(b) no inquiry is held as mentioned in subsection (1) of that section.

(2) Subsections (9) to (12) of section 321 apply in respect of the fees and expenses of the person appointed as if the inquiry had been held.
(3) For the purposes of subsection (2) the responsible person is the person to whom the Secretary of State thinks he would have given a direction under section 321(9) if an inquiry had been held.
(4) This section does not affect section 322A."

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( ) In Schedule 3 to the listed buildings Act (determination of certain appeals by person appointed by the Secretary of State) after paragraph 6 there is inserted the following paragraph—
"6A (1) If the Secretary of State is considering giving a direction under paragraph 6(6) the Attorney General may appoint a person to represent the interests of any person who will be prevented from hearing or inspecting any evidence at a local inquiry if the direction is given
(2) If before the Secretary of State gives a direction under paragraph 6(6) no person is appointed under sub-paragraph (1), the Attorney General may at any time appoint a person as mentioned in sub-paragraph (1) for the purposes of the inquiry.
(3) The Lord Chancellor may by rules make provision—

(a) as to the procedure to be followed by the Secretary of State before he gives a direction under paragraph 6(6) in a case where a person has been appointed under subparagraph (1);

(b) as to the functions of a person appointed under subparagraph (1) or (2).

(4) If a person is appointed under sub-paragraph (1) or (2) (the appointed representative) the Secretary of State may direct any person who he thinks is interested in the inquiry in relation to a matter mentioned in paragraph 6(7) (the responsible person) to pay the fees and expenses of the appointed representative.
(5) If the appointed representative and the responsible person are unable to agree the amount of the fees and expenses, the amount must be determined by the Secretary of State.
(6) The Secretary of State must cause the amount agreed between the appointed representative and the responsible person or determined by him to be certified.
(7) An amount so certified is recoverable from the responsible person as a civil debt.
(8) Rules made under sub-paragraph (3) must be contained in a statutory instrument subject to annulment in pursuance of a resolution of either House of Parliament.
(9) Sub-paragraph (10) applies if—

(a) a person is appointed under sub-paragraph (1) or (2), but

(b) no inquiry is held as mentioned in paragraph 6(1).

(10) Sub-paragraphs (4) to (7) above apply in respect of the fees and expenses of the person appointed as if the inquiry had been held.
(11) For the purposes of sub-paragraph (10) the responsible person is the person to whom the Secretary of State thinks he would have given a direction under sub-paragraph (4) if an inquiry had been held.
(12) Sub-paragraphs (9) to (11) do not affect paragraph 6(8)."
( ) In the Schedule to the hazardous substances Act (determination of certain appeals by person appointed by the Secretary of State) after paragraph 6 there is inserted the following paragraph—
"6A (1) If the Secretary of State is considering giving a direction under paragraph 6(6) the Attorney General may appoint a person to represent the interests of any person who will be prevented from hearing or inspecting any evidence at a local inquiry if the direction is given.
(2) If before the Secretary of State gives a direction under paragraph 6(6) no person is appointed under sub-paragraph (1 ), the Attorney General may at any time appoint a person as mentioned in sub-paragraph (1) for the purposes of the inquiry.
(3) The Lord Chancellor may by rules make provision—

(a) as to the procedure to be followed by the Secretary of State before he gives a direction under paragraph 6(6) in a case where a person has been appointed under subparagraph (1);

(b) as to the functions of a person appointed under subparagraph (1) or (2).

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(4) If a person is appointed under sub-paragraph (1) or (2) (the appointed representative) the Secretary of State may direct any person who he thinks is interested in the inquiry in relation to a matter mentioned in paragraph 6(7) (the responsible person) to pay the fees and expenses of the appointed representative.
(5) If the appointed representative and the responsible person are unable to agree the amount of the fees and expenses, the amount must be determined by the Secretary of State.
(6) The Secretary of State must cause the amount agreed between the appointed representative and the responsible person or determined by him to be certified.
(7) An amount so certified is recoverable from the responsible person as a civil debt.
(8) Rules made under sub-paragraph (3) must be contained in a statutory instrument subject to annulment in pursuance of a resolution of either House of Parliament.
(9) Sub-paragraph (10) applies if—

(a) a person is appointed under sub-paragraph (1) or (2), but

(b) no inquiry is held as mentioned in paragraph 6(1).

(10) Sub-paragraphs (4) to (7) above apply in respect of the fees and expenses of the person appointed as if the inquiry had been held.
(11) For the purposes of sub-paragraph (10) the responsible person is the person to whom the Secretary of State thinks he would have given a direction under sub-paragraph (4) if an inquiry had been held.
(12) Sub-paragraphs (9) to (11) do not affect paragraph 6(8)."
On Question, amendments agreed to.
Clause 81 [Special provision relating to national security: Wales]
Lord Rooker Lord Rooker moved Amendments Nos. 64 to 71:
Page 56, line 35, leave out from "section" to "there" in line 36 and insert "321A of the principal Act (inserted by section 80 above)"
Page 56, line 40, leave out "reference in section 321(5)" and insert "references in section 321(5) and (6)"
Page 57, line 16, leave out "reference in paragraph 6(7A)" and insert "references in paragraph 6A(1) and (2)"
Page 57, line 20, leave out "6(7C)" and insert "6A(3)"
Page 57, line 23, leave out "6(7C)" and insert "6A(3)"
Page 57, line 36, leave out "reference in paragraph 6(7A)" and insert "references in paragraph 6A(1) and (2)"
Page 57, line 40, leave out "6(7C)" and insert "6A(3)"
Page 57, line 43, leave out "6(7C)" and insert "6A(3)"
On Question, amendments agreed to.
Clause 91 [Special provision for certain circumstances where disclosure of information as to national security may occur: Scotland]
Lord Rooker Lord Rooker moved Amendments Nos. 72 to 75:
Page 65, line 27, leave out "to any inquiry held" and insert "in relation to the holding of inquiries"
Page 66, line 10, leave out "a local" and insert "any such"
Page 66, line 22, leave out "appointed person" and insert "representative"
Page 66, line 37, after "inquiry" insert ", or prospective inquiry,"
On Question, amendments agreed to.
Lord Rooker Lord Rooker moved Amendment No. 76:
Page 66, line 40, leave out "appointed person" and insert "representative"
The noble Lord said: My Lords, I have a problem in that I think that these amendments are covered by what I said when speaking to the first group.
The Chairman of Committees (Lord Brabazon of Tara): My Lords, on my list these amendments are grouped separately. Nevertheless, we will take them en bloc.
On Question, amendment agreed to.
Lord Rooker Lord Rooker moved Amendments Nos. 77 to 83:
Page 66, line 41, leave out "appointed person" and insert "representative"
Page 67, line 1, leave out "appointed person" and insert "representative"
Page 67, line 7, at end insert—
"( ) Subsections (7) to (11) apply even if the inquiry does not take place."
Page 67, line 19, leave out "an inquiry held" and insert "the holding of an inquiry"
Page 67, line 20, leave out "an inquiry held" and insert "the holding of an inquiry"
Page 67, line 26, leave out "an inquiry held" and insert "the holding of an inquiry"
Page 67, line 27, leave out "an inquiry held" and insert "the holding of an inquiry"
On Question, amendments agreed to.
Clause 92 [Urgent Crown development: Scotland]:
Lord Rooker Lord Rooker moved Amendment No. 84:
Page 68, line 30, leave out "Subsections (7) and (8) above are" and insert "Subsection (7) above does not apply to the extent that the document or other matter is"
On Question, amendment agreed to.
Clause 93 [Urgent works relating to Crown land: Scotland]
Lord Rooker Lord Rooker moved Amendment No. 85:
Page 69, line 33, leave out "Subsections (7) and (8) above are" and insert "Subsection (7) above does not apply to the extent that the document or other matter is"
On Question, amendment agreed to.
Clause 99 [Compulsory acquisition of land for development etc]
Lord Hanningfield Lord Hanningfield moved Amendment No. 86:
Page 74, line 16, leave out "think" and insert "have reasonable grounds to believe"
The noble Lord said: My Lords, with these amendments we return to the subject of local authorities' powers of compulsory purchase. On Report I said that we welcome the provisions of Clause 99 to the extent that they clarify and widen the powers of local authorities. Clause 99 will assist local authorities to fulfil their duties under Section 2 of the Local Government Act 2000 to promote the economic, social and environmental wellbeing of their areas. However, we remain concerned that, although the Minister gave a substantial response at the previous stage, he has not engaged with the causes of unease expressed by the Country Landowners' Association and the National Farmers Union, bodies representing those sectors of the community most likely to be affected by Clause 99.
Clearly it is important that when compulsory purchase orders are made as a final resort, the Country Landowners' Association and the National Farmers Union are signed up to the legitimacy of this process. Although the Minister outlined extensively the safeguards within the current system, a pragmatic solution would be to adopt these amendments as a way of reassuring the concerned parties that their substantial interests in the compulsory purchase regime are being taken into account.
These amendments would not make substantial changes to the legislation, but they usefully emphasise the delicate balance that local authorities must strike between the rights of private individuals and the public interest. As such, they reiterate the nature of compulsory purchase as an avenue of last resort, while not in any way undermining the Government's objectives. I believe that, in the long run, local authorities will want a robust system that is broadly supported by the communities affected. I beg to move.
8 p.m.
Earl Peel: My Lords, I apologise to the House for intervening at this rather late stage, but I have been following the debate on this issue with some interest. I also declare an interest as an owner of land. I have come to the conclusion that the Government's proposals under these new compulsory purchase powers are far too wide and impinge on fundamental property rights.
Having read what the Minister said in response to the same amendment on Report, I confess that I am no wiser as to why the Government feel it necessary to turn the existing legislation on its head and provide local authorities with such wide-ranging powers for compulsory purchase. What baffles me is the fact that the Government invited the Compulsory Purchase Policy Review Advisory Group to investigate the effectiveness of the existing law. To the best of my knowledge, its findings from the various case studies that it undertook were that everything was working perfectly well. Furthermore, when the advisory group invited local authorities to provide examples of where the present law had proved inadequate, there were no responses.
So I think it is perfectly reasonable to say to the Minister that it is incumbent on him, given the magnitude of the proposed changes, to give the House compelling reasons, or even examples, of why he feels that the existing system has failed so badly that he has to introduce these draconian measures simply to allow an authority to enter into the compulsory purchase process because it thinks that the land in question is likely to contribute to the promotion of the economic, social or environmental wellbeing of that area.
As the law stands, there are a number of clearly defined tests by which local authorities must abide before such rights can be compulsorily acquired. Ideally, I would like to see the status quo retained but I appreciate that the Bill will change matters sufficiently for a compromise to be necessary. I believe

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that the amendments are sufficiently robust to reintroduce a proper degree of equity into the proceedings.
In his response to my noble friend Lord Hanningfield on Report, the noble Lord, Lord Rooker, stated that a local authority, when considering acquiring lands through compulsory purchase powers, would be obliged to have regard to its planning proposals, and that these may be found in either the community strategy or the pathfinder area prospectus. The point is, as I see it, that the community strategy is no more than an aspiration and does not have the same legal status as the local development plan to which the local authority must have regard under existing law before entering into compulsory purchase negotiations. Furthermore, there is nothing in the Bill, as far as I can see, which requires the local authority to have regard to the community strategy, which rather undermines the Minister's argument.
As I said, the Minister also made reference to the pathfinder area prospectus in the context of it being a part of a local authority's planning proposals. I am not aware of such a term, so I invited someone to look it up on the website of the Office of the Deputy Prime Minister. Much to my surprise, it revealed no results at all; there was no reference to it. I then got my contact to refer to the Google website. The only reference to it was in the Minister's speech at Report. So I am none the wiser. No doubt the Minister will give an explanation for that when he replies.
The Minister—and, indeed, the Minister in another place, Barbara Roche—suggested that these new wide-ranging compulsory purchase powers granted to local authorities should not be of concern to those who might be affected as they could always challenge the local authority in the courts. The noble Lord, Lord Rooker, described judicial review as a "perfectly adequate safeguard". I regard that as being a rather cavalier attitude. A reference to courts is surely a blanket cover for bad legislation. Given that the right of the owner to challenge the decision would arise only after the decision had been made, it would inevitably result in very considerable expense. Surely it must be preferable to have a properly worded Bill that requires the local authority to consider at the outset whether it was necessary to acquire the land in the first place.
I will briefly say a few words about human rights. Two of the convention rights refer to the compulsory acquisition of someone's property Article 8 and Article 1 of the first protocol. Without going into details, both articles lay down conditions that must be satisfied if the acquisition of property is to be human rights compliant. Among them is the requirement for necessity. Clearly, Amendment No. 87 would comply with both articles.
The Minister stated that the whole purpose of Clause 98 was to clarify the existing compulsory purchase powers. I strongly suggest that the Government are deliberately extending them and that there is no justification for that. The compulsory purchase of private land should be a matter of last
938
resort and anything that compromises that fundamental right represents a dangerous shift of power from the individual to the state.
I conclude by quoting the late Lord Denning, in the case of Colleen Properties Ltd v Minister of Housing and Local Government (1971). He said:
"When seeking to deprive the subject of his property and cause him to move himself, his belongings and perhaps his business to another area, the onus lies squarely on the local authority to show by clear and unambiguous evidence that the order sought for should be granted".
The local authority may think that the acquisition of private land is appropriate, but that falls a long way short of showing clear and unambiguous evidence. I hope that the House will support my noble friend's amendment.
The Earl of Liverpool: My Lords, I do not wish to detain the House at this late hour, but I would like to say that I wholeheartedly support the comprehensive remarks of my noble friend Lord Peel. I want to place on record my wholehearted support for the amendments.
Baroness Hamwee: My Lords, I am persuaded that Amendments Nos. 86 and 88 are not necessary. I anticipated the "reasonableness" point that the Minister explained to the House at the last stage. On Amendment No. 87, I asked then whether there was a problem in applying Section 226 of the current Act, which uses the term "required". We have heard that inquiries have been made about whether there is a problem with local authorities pursuing regeneration proposals and whether the CPO powers are inadequate. However, I am confused. If the current "required" is not working properly, how can the Minister ask the House to assess "necessity", which was his response to this amendment at the last stage?
I have a problem with the terminology. I assume that the Government are looking for something different from "required", but they have not explained why, and they should be able to explain their own terminology.
Lord Bassam of Brighton: My Lords, I am grateful to the noble Lord, Lord Hanningfield, for moving these amendments and to the noble Earl, Lord Peel, for coming to the House to explain his interest in these matters so clearly. I want to go very carefully over the issues that they raise.
Amendment Nos. 86 and 88 to Clause 99 seek essentially to redraft the conditions under which a local authority may compulsorily acquire land for planning purposes under Section 226(1)(a) of the Town and Country Planning Act 1990, and they substitute "have reasonable grounds" for "think". On previous occasions my noble friend has explained that the purpose of Clause 99 is to clarify and to put in simpler terms the existing planning compulsory purchase power. I suppose the noble Baroness, Lady Hamwee, has challenged us to clarify further some of our terminology.

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By referring to the acquiring authority thinking that the necessary circumstances apply, the authority is required to have a belief in what it is doing. We consider that thesis right and we think that the word "think" should remain. As has been said before, we cannot see what distinction the noble Lord is seeking by amending "think" to "have reasonable grounds to believe", and we remain firmly of the view that it does not express what is required.
Local authorities are subject to the overriding requirement that their decisions are justifiable as reasonable in all circumstances. In our view, it is superfluous and unnecessarily complicated to state this explicitly. Also, the point has been made that "think" has been used extensively in other parts of this Bill and is used in numerous other examples of modern legislation.
The noble Baroness, Lady Hamwee, shared some concerns about Amendment No. 87, which seeks to replace "will facilitate" by "is necessary for". We have made the point previously that, while seeking to impose a more onerous requirement on the local authority, this proposed amendment would in fact introduce less certainty by imposing a requirement to determine whether the acquisition is necessary. What is meant by "necessary"? It may be that it is trying to suggest that there has to be an absolute necessity, but having regard to what? How would that in any event be assessed?
Perhaps the noble Lord is concerned that acquiring authorities will exercise their compulsory purchase power in an unreasonable manner. We have explained that there are already perfectly adequate safeguards—an expression which the noble Lord repeated—by way of judicial review and challenge, to ensure that authorities act reasonably and cannot acquire land compulsorily unless it is in the public interest to do so. For an authority to be able to demonstrate conclusively that acquisition is justified in the public interest to secure the well-being of its area, it will need to be able to show that it is in accordance with its up-to-date policy proposals, prepared in full consultation with those living and working in the area.
The noble Lord made light of the community strategy, saying that it was just an aspiration and I thought that he also made light of pathfinder area prospectuses. They are important documents; they have great value; and I think that they are now becoming increasingly understood.
Earl Peel: My Lords, perhaps the noble Lord would be kind enough to explain to me and to the House what they are. I tried to explain that there was no evidence that they existed on the website. It would be a fascinating revelation to know whether they play a genuine part in local planning procedure.
Lord Bassam of Brighton: My Lords, perhaps the noble Lord did not instruct his researcher to make as good a use of Google as he or she could have done. Had they done so, they would have discovered that these are part of the Community Plan thinking. They
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set out the basis on which funding is to be made in line with those plans, and they are important documents for that.
Perhaps there has not been time to update the authority's development plan to reflect the current proposals for which the land is required. It does not make sense to delay the acquisition of land until such time as it has happened. The main safeguard is that a compulsory purchase order is subject to confirmation by the Secretary of State. He has not only to be satisfied as to the statutory grounds for making the order: he also has a discretion as to whether or not to confirm. In this way, the Secretary of State acts as an impartial adjudicator on whether the compulsory acquisition of an owner's land is genuinely justified and in the public interest.
In exercising his discretion the Secretary of State must have regard in particular to whether the public interest in compulsorily acquiring land outweigh the interests of the owners and occupiers in retaining their land. Such owners and occupiers who object will have an opportunity to make representations at a public inquiry. Then, if the Secretary of State does not have proper grounds for confirming a compulsory purchase order, an aggrieved party may challenge its validity in the High Court, which has the power to quash it. This provides a safeguard to ensure that decisions are not taken frivolously.
It may be too much to hope that I will have persuaded noble Lords opposite that their fears—which have inspired their repeated attempts to amend Clause 99—are groundless. The Government took great care in putting the set of propositions in Clause 99 into legislation. We had rounds of consultation on the Green Paper and the White Paper. The Bill, as the noble Baroness, Lady Hanham, has said on many occasions, has been long in the making. We think that we have these clauses about right. I hope that noble Lords opposite will feel confident in not pressing their amendments.
8.15 p.m.
Baroness Hamwee: My Lords, before the Minister sits down, perhaps I can say that I speak as one who is familiar with the community strategy and with pathfinders and so on. I have no problem with that. Perhaps, with the leave of the House, I can say that I ask this question as one who might be better persuaded if the Government were clear about the difference between facilitating and the provisions they are changing. I think that facilitating is much less than the provisions of Section 226(1). I would find it much easier if we had a more straightforward debate about accepting it. What I am saying is perhaps legalistic, but it is not politically inspired.
The Minister challenged noble Lords on how necessity could be assessed. There were two or three challenges around that. How is that different from the current Section 226(1), which says that a local authority has power to acquire land that is,
"suitable for and required … to secure … development … or required for a purpose which it is necessary to achieve in the interests of the proper planning of an area"?

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The Government are being completely opaque about why the change is necessary. What the Minister said in challenging Amendment No. 87 could apply equally to Section 226(1). If there is a problem with Section 226(1), which to my mind there must be if there is going to be a problem with changing "facilitating" to "necessary"—
Lord Elton: Will the noble Baroness give way?
Baroness Hamwee: Perhaps I may just finish the sentence.
If so, I hope they will be able to explain what the problem is and why they need to change the provision.
Lord Elton: My Lords, I do not know whether the noble Baroness has finished. I just wanted to suggest that she might do so in view of the Standing Order on how we conduct business at Third Reading.
Baroness Hamwee: My Lords, I beg your Lordships' pardon. I asked the question before the Minister sat down, to try to clarify something.
Lord Bassam of Brighton: My Lords, I am reluctant at this late stage to be drawn further into a debate about this wording. The noble Baroness may have touched on a point about "facilitate", which I think she interpreted as being rather weaker than "necessary". I was almost wishing there was a further stage of the Bill so that I could come back and usefully clarify the issue; but there is not. For further elucidation and reflection, I am inclined to offer to write. I know that that is an unsatisfactory answer to the noble Baroness's point, but I think it would be wisest. I do not want to have to make this up as we go along and speculate about the wording. This is the wrong time to do that.
Lord Hanningfield: My Lords, it has been a valuable debate. It is unfortunate that it has come at a somewhat late stage of the Bill. Previous debate on this issue has always been late in the evening. There is considerable concern in sections of the community about the changes in the legislation on compulsory purchase. The noble Lord, Lord Bassam, referred to the word "think" which several noble Lords have questioned. The word appears several times in the legislation. The noble Lord has justified its use by saying that "think" does not necessarily mean what outside people might assume. There is concern in the outside world about authorities being able simply to "think" that they need land rather than having real reason compulsorily to purchase it.
As my noble friend Lord Peel said, the compulsory purchase of land is fundamental to human rights. It is important that people understand clearly their rights, and the rights of local authorities to purchase land. There is concern and confusion over Amendment No. 87. Our wording may be more satisfactory than the wording of the Government.
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I shall not repeat my noble friend's arguments. He set them out carefully and clearly. We may have to test the opinion of the House on Amendment No. 87. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Hanningfield Lord Hanningfield moved Amendment No. 87:
Page 74, line 16, leave out "will facilitate" and insert "is necessary for"
The noble Lord said: My Lords, I beg to move.
8.22 p.m.
On Question, Whether the said amendment (No. 87) shall be agreed to?
Their Lordships divided: Contents, 26; Not-Contents, 39.

Division No. 10

CONTENTS

Alderdice, L.

Howe, E.

Attlee, E.

Jenkin of Roding, L.

Byford, B.

Liverpool, E.

Carlisle of Bucklow, L.

Luke, L.

Cobbold, L.

Maddock, B.

Cope of Berkeley, L. [Teller]

Mancroft, L.

Craigavon, V.

Monson, L.

Elton, L.

Northesk, E.

Fookes, B.

Peel, E.

Hamwee, B.

Seccombe, B.

Hanham, B.

Shrewsbury, E.

Hanningfield, L. [Teller]

Thomas of Walliswood, B.

Harris of Richmond, B.

Wilcox, B.

NOT-CONTENTS

Acton, L.

Grocott, L. [Teller]

Ahmed, L.

Hayman, B.

Amos, B. (Lord President of the Council)

Hogg of Cumbernauld, L.

Howells of St. Davids, B.

Andrews, B.

Archer of Sandwell, L.

Irvine of Lairg, L.

Bach, L.

Lea of Crondall, L.

Bassam of Brighton, L.

McIntosh of Haringey, L.

Brooke of Alverthorpe, L.

Mackenzie of Framwellgate, L.

Campbell-Savours, L.

Mitchell, L.

Carter, L.

Robertson of Port Ellen, L.

Corbett of Castle Vale, L.

Rooker, L.

Crawley, B.

Sawyer, L.

Davies of Oldham, L. [Teller]

Sewel, L.

Desai, L.

Simon, V.

Dubs, L.

Elder, L.

Stone of Blackheath, L.

Evans of Parkside, L.

Triesman, L.

Farrington of Ribbleton, B.

Turner of Camden, B.

Gibson of Market Rasen, B.

Wilkins, B.

Golding, B.

Woolmer of Leeds, L.

Resolved in the negative, and amendment disagreed to accordingly.
8.30 p.m.
[Amendment No. 88 not moved.]
[Amendment No. 89 not moved.]
Clause 115 [Grants for advice and assistance]:
Baroness Wilkins Baroness Wilkins moved Amendment No. 90:
Page 100, line 15, leave out "to the public"
The noble Baroness said: My Lords, the purpose of Amendment 90 is to enable the Government to make grants available to local access groups of disabled people. I shall be brief and will not detain the House on the case for funding which I set out at length in Committee and at Report stage. I again invite my noble friend to consider reinstating government funding for local access groups, which was withdrawn in 1998. Core funding used to be provided to the Access Committee for England which successfully nurtured and supported the network of access groups.
We desperately need this national umbrella or framework to build anew in both England and Wales. The Disability Rights Commission has now completed its research into access groups in England and Wales and is ready with recommendations which I would urge Ministers to heed. With hopes of favourable news, I beg to move.
Lord Rooker: My Lords, I shall not beat about the bush—we are happy to accept the amendment. We would be interested to see the forthcoming research report from the Disability Rights Commission on the work of local access groups in England and Wales and will give serious consideration to the recommendations, in particular any underfunding of resources.
I have to say that we do not have a fund set aside for assisting local access groups. Nevertheless, we wish to hold discussions with the noble Baroness, Lady Wilkins, the Disability Rights Commission and others, to see how we may take the issue forward. In the mean time, I am happy to accept the amendment.
Baroness Wilkins: My Lords, I am extremely grateful to the Minister for the way he has listened. His decision will greatly benefit developers and local authorities alike in creating an inclusive environment for disabled people. I also add my thanks for the Government amendment to Clause 43.
On Question, amendment agreed to.
Schedule 3 [Crown application]
Baroness Hanham Baroness Hanham moved Amendment No. 91:
Page 117, line 19, at beginning insert "For"
The noble Baroness said: My Lords, I want to return briefly to the matter of Crown immunity, which I raised on the last occasion. At that stage I declared an interest, in that this amendment, if agreed, would have an effect on the Royal Borough of Kensington and Chelsea, which asked me to table it. The amendment is different from the one that I introduced on Report. It arises as a result of having read Hansard and the reply of the noble Lord, Lord Rooker, which stimulated everyone into thinking again about it.
The Minister objected to the previous amendment on the grounds that it would mean that planning permission would have to be obtained for all disposals of Crown land if the use was to continue, as he said, even in the most trivial cases. He considered that the
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amendment would place an unnecessary and disproportionate burden on both the Crown and local planning authorities.
This amendment relates to the attachment. of a planning permission as Crown land is turned into private ownership. The purpose of this amendment is not to seek to control those uses where the impact of that use is trivial, but to control those uses where the use causes a great deal of disturbance to local residents or has other adverse impact on the local community.
As the amendment as originally proposed was not acceptable, the suggested way forward that this amendment produces is to give to local planning authorities the power to take enforcement action when there is a disposal of Crown land to a private owner. Local planning authorities would therefore be able to take enforcement action only when it is expedient to do so. The normal sanction of an award of costs for an unreasonable exercise of the power by a local planning authority will apply. The amendment also proposes that the time for taking such enforcement action, rather than the usual 10-year period, is a more limited period of five years from the date of the disposal of the land, and residential users would be excluded.
The kinds of uses that we have in mind are major fairs and tented events that take place on Crown land, where enormous lorries cause great difficulty for residents. There are many uses of fringe Crown land, which would not require planning permission as a result of being transferred to private owners where the Crown had immunity in the past.
I hope that the Minister will be able to consider this matter a little further and that I do not receive quite such a brush off as I did last time. Although the amendment affects my own borough, it also affects any local authority's Crown land that passes or is sold into private ownership. I beg to move.
Lord Rooker: My Lords, having been accused of a cursory reply on Report and a brush-off reply now, I do not feel obliged to apologise for the length of my reply at this time of the day. I had intended to use the first and last paragraph, but clearly that is not sufficient.
The noble Baroness has returned to the issue of Section 301 of the principal Act, as she indicated she might when we debated this matter on Report. We have heard that a new approach has been adopted by giving local planning authorities up to five years to serve an enforcement notice on the purchaser of Crown land if the use instituted by the Crown is continued after disposal. Although the noble Baroness's proposals have changed, we still believe that these amendments represent a disproportionate attempt to solve a problem that should not arise very often.
It appears that the requirement for planning permission arises only after the Crown has disposed of the land. Until that date, the Crown may have a notice, which is to be treated as though it were planning permission, under paragraph 3 of Schedule 4. In any event, the requirement for planning permission

945
appears to bite only when the land is sold. If that is right, the Crown could not apply for planning permission in anticipation of disposal and the purchaser could not be sure that he would be able to obtain planning permission after disposal. If he failed to obtain permission, the local planning authority would be able to commence enforcement action within Five years. That would put the Crown in a worse position than it is now in, because it can now apply for planning permission in anticipation of disposal.
This procedure would cut across the transitional provisions of Part 1 of Schedule 4, which will have effect after commencement. Where a proposed change of use has been through the Circular 1884 procedure and has been found acceptable, paragraph 3 of that schedule will apply. The effect will be that the notice of the acceptability of the development will be treated as if it is planning permission, subject to any conditions stated in it. This is directly contradictory to the noble Baroness's amendment.
The noble Baroness's amendment seems to me to go even further into overkill. Its effect is that any use instigated by the Crown will be vulnerable to enforcement if the land is sold into private use. This will be so even if the local planning authority itself has agreed to the change of use through the Circular 1884 procedure without suggesting discontinuance on disposal by the Crown.
The provision is not expressly limited to recent changes of use and its effect in this respect is not clear. It may be that changes of use instituted by the Crown many centuries ago could be caught by this amendment. The effect will be that disposal programmes will be thrown into uncertainty, which is an unsatisfactory outcome for all parties.
In short, the amendment exceeds what is necessary to cure the evil at which it is aimed. If a problem exists in a particular case, the local planning authority has a remedy. It can make an order requiring the discontinuance of the offending use, and pay compensation in the normal way. The noble Baroness's amendment is therefore a disproportionate means of resolving the problem, which should be small if local planning authorities, particularly her own, approach the Crown with sensible proposals. Her local authority is a sensible authority. It can use the remedy which already exists and therefore I urge her to withdraw her amendment.
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I hope that that reply will be considered fulsome and wholesome. It is certainly not cursory or intended as a brush-off.
Baroness Hanham: My Lords, with those stirring words, I thank the Minister for his full reply. Unfortunately, it does not get me anywhere but it is all there and I take note of it. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 92 and 93 not moved.]
Schedule 6 [Amendments of the planning Acts]
Lord Rooker Lord Rooker moved Amendment No. 94:
Page 130, line 11, at end insert—
"Section 76 (Duty to draw attention to certain provisions for benefit of disabled) is omitted."
On Question, amendment agreed to.
Baroness Hamwee Baroness Hamwee moved Amendment No. 95:
Page 130, line 14, leave out paragraph 5.
The noble Baroness said: My Lords, I am delighted to have this starry list of proponents of the amendment. Amendments Nos. 95 and 98 take out of the Bill the prospective repeal of outline planning permission. We have more than touched on the matter earlier today and at this hour of the night I do not believe that I need to persuade the House of their benefits. I beg to move.
On Question, amendment agreed to.
[Amendment No. 96 not moved.]
Schedule 9 [Repeals]
Lord Rooker Lord Rooker moved Amendment No. 97:
Page 150, line 22, at end insert—
"Section 76."
On Question, amendment agreed to.
Baroness Hamwee Baroness Hamwee moved Amendment No. 98:
Page 150, leave out line 23.
On Question, amendment agreed to.
[Amendment No. 99 not moved.]
Lord Bassam of Brighton: My Lords, I beg to move that this Bill do now pass.
Moved, That the Bill do now pass.—(Lord Bassam of Brighton.)
On Question, Bill passed and sent to the Commons.
House adjourned at a quarter before nine o'clock.

Official Report of the Grand Committee on the Companies (Audit, Investigations and Community Enterprise) Bill [H.L.]
(Fourth Day)
Thursday, 25 March 2004.
The Committee met at a quarter past three of the clock.
[The Deputy Chairman of Committees (Baroness Turner of Camden) in the Chair.]
Clause 23 [Community interest companies]:
Lord Phillips of Sudbury moved Amendment No. 100:
Page 26, line 18, at end insert "which shall be subject to all relevant provisions of the Companies Acts as affected by the provisions of this enactment"
The noble Lord said: First, I welcome this part of the Bill, which is, in effect, a separate Bill, into the debate, and I hope that on these Benches we shall be able to deal with the amendments with practicality and dispatch.
In this probing amendment, which I hope is helpful, I simply seek to put in the Bill at the beginning of the community interest companies section the statement that community interest companies—or CICs, if I may call them that—are part of the Companies Act structure. That will be of immense utility to the many people who will struggle through this legislation, when it is enacted. Given that we are referring to community interest companies, many lay people will try to make head or tail of it. I accept that to a parliamentary draftsman these are redundant words, but I believe that occasionally friendliness towards the potential consumer is not a bad thing. I beg to move.
The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Sainsbury of Turville): It is difficult to know how to proceed, when the person who proposes an amendment admits at the start that the words are redundant. However, I believe that I can deal with it with practicality and dispatch.
We do not believe that the amendment is necessary, as it would do something which the Bill already does. Subsection (1) provides that the CIC is to be a new type of company. Clause 60 provides that the words used in this part of the Bill will have the same meaning as they have in the Companies Act 1985. That means that the word "company" in this clause means a company registered under the Companies Act 1985 or an earlier Companies Act. As a result, the Companies Act 1985 will apply to all CICs, as modified by the provisions of the Bill.
That reflects the policy stated in the Explanatory Notes on the Bill that CICs are to be subject to the general framework of company law. They will be
GC 316
registered as companies with the Registrar of Companies and will be subject to the usual regulatory constraints and powers that are associated with company status. The opportunity which the CIC will provide to use the well established and familiar framework of company law, combined with special features of the CIC, such as a statutory asset lock, is one of the major attractions of this new legal vehicle.
I agree that that does not totally deal with the noble Lord's point, which I think is one of presentation, but I believe that that is best taken care of in Explanatory Notes and other documents rather than the law itself.
Lord Glentoran: Having heard the noble Lord move the amendment and the Minister reply to it, it may be worth my while to make a general point about our approach to the Bill in this Grand Committee stage. I found the Bill far from straightforward and easy to understand, and I found it short on detail. The aim of most of our amendments will be to elicit clarity about the Government's thinking and to attempt to have more of the Bill clearly defined, either in the Bill, or, at least, in the schedules to it.
As I understand the Government's purpose in the Bill, the CIC is for people who are interested in community work and in doing good in the community. It is not for massive corporations which have bags of lawyers, company secretaries and goodness knows what else in a large organisation. This type of company needs to be understood by any group of people in a community who wish to form a community interest company. As I read the Bill at present, that is not the case. The Bill has schedules, regulations and schedules to the regulations. Some of the regulations are not there, and there are regulations about how people may do this or do that, and so on. The wording is far from clear or complete.
It will certainly be our objective to ensure that, by the time we finish with this part of the Bill, it will be in such a shape that the people to whom I have just referred who might want to form a CIC will be able to take something off the shelf, read it, perhaps obtain a little help from someone who knows about setting up a company and go ahead with it. If throughout the Bill I sound adverse, knocking or disapproving, it is not of the concept but of the detail in the small print.
Lord Phillips of Sudbury: I am grateful for the Minister's comments. None the less, I would ask him to give a second thought to this point. There is no difference between us as to effect of the words. At the end of his remarks, he said that people will have access to the Explanatory Notes and the Bill as a whole, and later in the Bill they will find reference to the Companies Act framework. That is true, except that in practical terms people will not have access to the Explanatory Notes or much else. I simply suggest that he keeps an open mind about bringing into Clause 23 the reference which comes later in the Bill, so that there is a convenient reference there right at the start of the Bill to make life easier. However, on that basis I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Deputy Chairman of Committees (Baroness Turner of Camden): I have to inform the Committee that if Amendment No. 101 is agreed to I cannot call Amendment No. 102 because of pre-emption.
Lord Phillips of Sudbury moved Amendment No. 101:
Page 26, line 25, leave out from "company" to end of line 29 and insert "may also be a charity"
The noble Lord said: This is the only amendment on which I feel it necessary to speak at any length. It is a point which I covered in my speech at Second Reading and, indeed, others referred to it. There has been quite a bit of consultation in the voluntary sector since Second Reading. Certainly, all the feedback of which I am aware is in favour of the amendment or of something like it.
If the amendment is accepted by the Government, it will mean that subsection (3) reads:
"A community interest company may also be a charity".
Very briefly, the reasons for the amendment and, I maintain, its wisdom, are, first, that it would allow what would be an eighth choice for charities of the best format. There has to be a strong reason for denying them that choice. Secondly, there has to be a powerful reason to abandon the age-old tradition of charity law in this country, where charity is judged by objects not by legal form.
I have discussed this with the two Law Lords who probably have the most experience of charities; that is, the noble and learned Lords, Lord Browne-Wilkinson and Lord Hoffmann. They both support the point and think that it is not a trivial one. The third point is that the argument that there may be confusion if CICs can also register as charities seems to me to be not only unproven but unsupported by the status quo, which is that there are these existing seven types, any one of which can be a charity. Indeed, there is no legal form that cannot be a charity. There can even be an oral charity. There is no confusion. For example, a company limited by shares which is also a charity does not cause any confusion, neither does a company limited by guarantee, and so forth.
The next point I make is that organisations which have large memberships, regional structures and/or large scale activities are unlikely to choose the proposed new corporate charity, which, as we understand it and as the Minister confirmed in a letter he kindly wrote me, is to be introduced in the forthcoming charities Bill. The proposed new corporate animal in the charities Bill is to be a light and easy structure, precisely so that charities without much, if any, professional support, can readily use the same. That is the point of the new "animal", if I can call it that.
Lawyers and accountants are very familiar with Companies Act entities and advise their business clientele on day-to-day issues relating to that type of corporate status. That familiarity will feed over into their advice to CICs, if they can be corporate charities
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as well as CICs. That, in turn, will lead to quicker, cheaper and more assured advice that would be much more readily available. If the amendment is carried, the sort of questions that sometimes crop up vis-à-vis the purely Companies Act aspect of running a corporate charity will be within the purview and ability of a non-charity law solicitor to advise upon.
At present, the big and complex charities have to select between a company limited by shares and a company limited by guarantee. If the CIC was the third option within the Companies Act framework, we would advise our clients—I have talked to many solicitors and to the Charity Law Association, which has the same view—to use the CIC format. That is because it is specifically for community benefit. It is a natural fit with charitable status, unlike the company limited by shares and unlike, to a lesser extent, the company limited by guarantee. It will mean that if a CIC is also a charity there will be extra constraints on its constitution and functioning, for example, prohibiting dividends being paid to members or prohibiting board members being remunerated without the express consent of the Charity Commissioners.
Grant-giving charities will find life much easier if CICs can register as charities because they will then have no inhibitions in being able to make grants to them. I believe that the Minister has received a letter from Nigel Siederer, dated 5 February, which he wrote on behalf of the Community Development Finance Association and the Association of Charitable Foundations, making this point very strongly, and another such letter directly from the Community Development Finance Association.
Making this change will considerably simplify and shorten the Bill. I have not made all the consequential amendments that would flow right through the Bill and clutter up Committee Stage because they will only be relevant if this amendment is accepted by the Government or if we have to fight it through at the next stage.
This is an issue that seems to have crept under the wire in the earlier consultation that was carried out by the Department of Trade and Industry. Although a few people did refer to it, it was not one of the proposals on which comment was invited—I refer to pages 24 and 25 of the DTI consultation paper of March of last year. It also escaped the Charity Law Association when it first looked at the Bill. It has now reconsidered and sent a memorandum to the Minister on 30 January, broadly but firmly supporting the point. I am reliably informed that the Social Enterprise Coalition, which receives significant government funding and is comprised of non-profit bodies of all kind, from co-ops to charities, also favours the option that this amendment will give. One example of bodies that would favour CIC status for their charitable spin-offs is local authorities. Over 100 local authorities have already hived off their leisure facilities into freestanding charities, which are currently either industrial and provident societies or companies limited by guarantee. But this is a much more appropriate format.
Finally, it would surely be bizarre if an entity that, but for Clause 23, would have to register as a charity cannot do so but can, in its publicity, go on saying that

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it has charitable objects. For all those reasons, I recommend this amendment to the Committee. I beg to move.
3.30 p.m.
Lord Glentoran: I support Amendment No. 101 in the name of the noble Lord, Lord Phillips. I wish to speak also to Amendment No. 102, which stands in my name, and to discuss the inclusion of Clauses 36, 37, 51 and 52.
I shall not embark at the moment on a general debate concerning our thoughts on CICs, as that will form the basis of my comments when speaking to the Question whether Clause 23 shall stand part of the Bill. For now, I wish to focus on one particular aspect of Clause 23 and the proposals for CICs; namely, that they should be prohibited from having charitable status. These amendments are put forward to probe what I see as a fundamental element of the new CICs.
As the noble Lord, Lord Phillips, has already pointed out, it is something of an anomaly for CICs to be denied charitable status. That is particularly so when subsection (3) of Clause 23 reads:
"A community interest company established for charitable purposes—
(a) is to be treated as not being a charity".
That is almost a paradoxical statement.
[The Sitting was suspended for a Division in the House from 3.31 p.m. to 3.40 p.m.]
Lord Glentoran: My Lords, I was referring to subsection (3), which says:
"A community interest company established for charitable purposes … is to be treated as not being a charity".
That is almost a paradoxical statement. We know that, under the current definition of charitable status, an organisation must fulfil two conditions to be charitable. It must have purposes that are recognised as exclusively charitable, and it must be established for the public benefit. A CIC, due to its community interest tests, as defined in regulations, must be able to show that the activities that it carries out are, as Clause 32(4) has it,
"for the benefit of the community".
Would that not be near enough in definition to the "public benefit" of charity law, which is enshrined in case law? If so, why should a CIC with charitable purposes as envisaged under Clause 23(3)(a) not be able to apply for charitable status? The situation appears nonsensical.
In paragraph 15.14 of the report on the public consultation, the Government conclude:
"It has been agreed with the Charity Commission and the Attorney General that where a CIC's objects are entirely charitable, it should nonetheless be deemed not to be a charity for legal purposes".
We are full of contradictions. I am not convinced by the arguments behind the decision and would welcome clarification from the Minister. Why not allow a CIC to choose whether it wishes, in addition, to have charitable status, which would mean that it had to abide by the added regulations of charity law? Why
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should such a company have to adopt the greater flexibility of being a CIC but bypass the tax breaks that charitable status brings? That point was made clearly in the sound argument advanced by the noble Lord. Lord Phillips of Sudbury, at Second Reading:
"This is the first time in English history that a body established for exclusively charitable purposes, with a constitution entirely in accordance with the requirements of charity law and which operates exclusively as a charity, is to be prohibited from registering as such".—[Official Report, 8/1/04; col. 276]
I turn to another point. I am concerned that, if the two are to be kept as separate entities and a company can be either a charity or a CIC, there will not be sufficient demands for a company to disregard the obvious benefits in tax breaks that come with charitable status in favour of forming a CIC. On page 12 of the government consultation document proposing CICs, it is made clear that,
"Whatever their legal form—company, IPS or unincorporated—social enterprises with exclusively charitable objects and which cannot distribute their assets to their members will have charitable status".
Why then would a CIC, which might be a company limited by guarantee and might not intend to have a share capital, choose CIC over charitable status? I revert to the previous argument: why, if it wanted to set up as a CIC and had no intention of distributing assets, should it be denied charitable status?
The Government make an attempt to answer those questions in their consultation document. Paragraph 11, on page 13, states:
"The CIC is an alternative to charitable status. If an enterprise has charitable objects but wishes to become a CIC, it will forego the benefits and obligations of charitable status. Both options will provide a lock on purposes, assets and profits, with regulatory supervision, but CICs will not be eligible for the tax relief available to charities. In choosing between charitable status and becoming a CIC, enterprises will weigh the relative benefits of charitable tax status and regulation on the one hand, and the flexibility of the CIC on the other".
I am not sure how, in the case of a company limited by guarantee which does not intend to trade shares, the CIC would seem a more beneficial model than the charitable status. What added flexibilities would induce a company to choose CIC status?
In the Explanatory Notes to the draft regulations under Regulation 9, it states:
"A CIC may wish to take advantage of the provision [to amend the provision in its memorandum and articles] if it wishes to establish itself with wholly charitable purposes, since the ability to transfer assets to another CIC would not necessarily be consistent with charitable purposes".
All the more reason, I would argue, to allow CICs to have charitable purposes if they so choose.
I have one further point, which deals with changing status between charity and CIC. When a company is setting up, it is faced with a range of models. We are aware that we are expecting an overhaul of charity law, including the setting up of a new form of incorporation for charities—the charitable incorporated organisation. There has also been talk of the reform of industrial and provident societies. With little to differentiate between these various models, companies or enterprises may well want to change status. I am not convinced that the

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current proposals in the Bill make such a change in status easy—I think it will make it difficult. I fear that the process will be costly, administratively time-consuming and overly bureaucratic.
I fail to see where the Government are coming from in denying charitable status to CICs. I beg to move.
3.45 p.m.
Lord Sainsbury of Turville: Both these amendments oppose the policy that CICs which have charitable purposes should not be treated as charities. The various clause stand part debates relate to clauses which enable conversion from CIC to charity and vice versa. Clauses 36 and 37 would be redundant if either of the amendments were to succeed, but a modified version of Clauses 51 and 52 would still be necessary if a charitable CIC wanted to drop its CIC status.
The noble Lord, Lord Phillips of Sudbury, raised the issue of CICs and charitable status on Second Reading. Since then, he and I have corresponded and met to discuss the matter. I and my colleagues have considered very carefully the arguments that he has raised, but we have concluded that the policy expressed in the Bill is the right one. This is a very important issue and I will address the main arguments that the noble Lord, Lord Phillips, has raised in a moment. First, however, I should restate the reasons why we have adopted this policy and why we think, on reflection, that it is right to stick to it.
In a nutshell, the provision on CICs and charitable status in Clause 23 is intended to ensure that there will be a clear distinction between this new type of company on the one hand, and charities on the other. I should emphasise that the CIC is not designed for use by charities, and it is not a part of the revision of the charity law which our colleagues in the Home Office are preparing. However, it is part of the same overall process of modernising the legal environment for the voluntary and social enterprise sectors. It will certainly not remove any of the existing options for charities, which will of course be updated and improved in the forthcoming draft charities Bill.
The key point here is that the CIC has been designed as an alternative to charitable status. We expect that CICs will wish to use the freedom of company law to pursue a wide variety of purposes, some of which may be charitable, while others will not. CICs will certainly wish to trade and to behave as enterprises, in a way that is difficult for charities. They will have the freedom to pay their directors and to change the nature of their activities, subject to the requirements of this part of the Bill.
As we made clear in the consultation paper published last year, the Government intend organisations with charitable objects, which want to operate for the benefit of the community and with an asset lock, to have a new choice. They may adopt charitable status, which brings with it significant benefits, including favourable tax treatment, or they may opt to be a CIC, and so forego the benefits but also the obligations of charitable status. In practice, we believe that the large majority will opt to
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be charities, not least because of the financial benefits. But some may well find CIC status more appropriate to the way in which they want to operate—for instance, if they want to trade freely, or want to be able to change the way in which they benefit the community in future.
The consultation indicated that a clear distinction between CICs and charities was important. Indeed, there were some comments that the distinction between the two needed to be as firm as possible, to avoid any risk of inadvertently confusing the public understanding of what "charity" means. In that context, it is I hope clear why Clauses 36 and 37, and also Clauses 51 and 52, are needed. The last two permit the conversion of a CIC into a charity, under controlled conditions. We think it is quite possible that some organisations that begin life as CICs may, in time, find it desirable to become a charity instead. For instance, they may find that their activities fit entirely within the sphere of charity, and that the restrictions which charitable status imposes on their freedom to act commercially—to trade, or to pay their directors—are not a problem for them. In such cases, they will probably find it financially beneficial to become a charity.
It may be that far fewer organisations will consider a conversion the other way, from charity to CIC. The benefits of a move to a more lightly regulated form are likely to be outweighed by the requirement that their assets, at the time of conversion, will remain subject to charity regulation. Nonetheless, Clause 36 makes conversion possible should it be desired. Scottish charities are in any case presently unable to lose their charitable status, hence the need for special provision in Clause 37.
Let me return to the main issue. As I said just now, we have thought carefully about the arguments made by the noble Lord, Lord Phillips, and about their practical implications. We fully understand the view that charity should be judged by objects and activities, rather than legal form. But we believe that CICs will have only a limited impact on that principle and that there are good practical arguments for modifying the principle in this case. We have concluded that a change of policy, to allow CICs to have charitable status, would not be of benefit to the charitable sector. Nor would it carry any benefit for social enterprises which are not charitable, who are the intended users of the CIC. However, it could adversely affect the value of the CIC to that latter group. It would also be likely to raise increased concerns about confusion between CICs and charities.
That seems to me the nub of the argument—that in practice it is very difficult to see what the advantages of the amendment would be to charities. They have perfectly good forms in which to do what is needed, and it would require quite a distortion to the CIC form to make it charitable. Against that, one has to weigh the unpredictable, which is where confusion might come in. For those charities that wish to use the company form to incorporate—and the noble Lord, Lord Phillips, has said that there are many charities which welcome the certainty of company law—the CIC will offer no practical advantage over existing

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forms of company. The fact that it offers a statutory asset lock backed up by regulation will be of no value to charities, because charitable status already provides that.
The only practical difference that being a CIC would make is the new "badge" or "brand" of having the name CIC. But at the outset, that badge will of course be less established than, and in some important respects quite different from, the charity brand. I understand that there may be some charities, working in fields such as the arts or education, that do not feel that being a charity is their defining characteristic. Such organisations may in principle find some attraction in using the CIC name. However, we and the Home Office believe strongly that any change in the way in which such charities incorporate and describe themselves needs to be considered in the wider context of the forthcoming revisions to charity law.
The point was made that larger charities would want to be companies, so would not use the forthcoming charitable incorporated organisation, and that CIC was a better option for charities than normal companies. Developments in the legal form of charities are a matter for the forthcoming charities Bill, but I understand that the Home Office intends the new charitable incorporate organisation to be a suitable vehicle for all types of charity, not only small organisations with limited resources.
In practice, of course, a charity that wanted to use CIC status would face the prospect of meeting three new sets of requirements: first, the reporting and accounting requirements of being a company; secondly, the requirements of CIC status; and, finally, the charity regulation regime.
The CIC proposals are designed to avoid unnecessary or overlapping regulation. But surely all these requirements, coupled with a lack of practical benefit to a charity from being a CIC, will deter any charity that might find the CIC brand of interest.
The question was raised of local authorities which have set up charities to look after their leisure facilities. It is difficult to see what value such an organisation would get by the additional requirements that CIC status would bring. So, if we are talking about this from a pragmatic point of view, it is very difficult to see what benefit would come.
Set against the very limited benefits of a change of policy, we think there are clear risks. In particular, allowing CICs to be charitable would inevitably reduce the distinctiveness of this new vehicle as a clear new alternative for those who wish to operate in a commercial and enterprising way in order to benefit the community.
Finally, the noble Lord, Lord Phillips, raised the question of the fundamental principle that charitable status is determined by the purpose not the legal form, and said that to change that was unacceptable. While it may be unusual for legislation to prevent an organisation with charitable purposes being a charity, it is not unique. For example, Section 23 of the School Standards and Framework Act 1998 provides that the governing body of a community or community special
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school shall not be a charity. It also provides that the governing bodies of certain other types of school shall be charities even if they would not otherwise have been charitable.
So one again has the situation of very limited benefits for a change of policy and we think that there are clear risks. For all those reasons we cannot accept the amendment and would therefore ask the noble Lord to withdraw it.
Lord Phillips of Sudbury: I am grateful for the Minister's detailed rebuttal of the arguments put forward by the noble Lord, Lord Glentoran, and myself on this. In the politest way I have to say that they do not persuade me individually or collectively. As far as I am aware, the only representations that have been made since the Bill entered the House have been all one way. Although I accept that the number of charities wanting to adopt CIC status may be relatively small, they should not be denied that prospect. Although the Minister says that the benefits appear to be modest—I do not think that was his word, but it was the equivalent—why should not they have them.
I do not believe that the confusion argument is made. I do not think there will be any loss of distinctive status for CICs, not least because a charity that is also a CIC will go under the badge of charity, not CIC. It is the charitable status that will be the dominant and public face of any charity which adopts a CIC format.
I think that we may need to return to this issue at the next stage of the Bill.
4 p.m.
Lord Glentoran: I should like to pick up on one or two points the Minister made. First, established charities becoming CICs may have difficulties. I can see no difficulty with new companies on setting up becoming charities. I did not find any strength to the noble Lord's argument about choice, which I mentioned as part of my argument. Why not allow the management or whoever the promoters are of a CIC to have the choice whether they want to have charitable status?
I shall digress for a moment with personal experience. I am not an accountant or a lawyer, but I have had a significant amount of experience with companies that might have been CICs, had they been around—particularly those associated with the Millennium Commission. One of the positive things that I see about a CIC—perhaps it is the only positive thing, but it is certainly one of them—is the fact that there is a regulator. Those who put funds into a community interest company will undoubtedly get some comfort from the regulator.
Through the Millennium Commission we have funded a number of sizeable companies that have clearly been companies limited by guarantee and owned by trusts. However, often the biggest problem that we have is being able to sort out the management when things go wrong when the company has started from a smaller base and has grown. We are still

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pouring millions in and things need to be changed. Outside this Committee I could give people chapter and verse on the matter but I shall not do so now. Serious loss of revenue would result if those companies were unable to benefit from having charitable status. There is a sound case for social companies—trusts that are running organisations and companies for the public good—to be charities, to come within charities law and to do all the things that charities law expects them to do. They would also, to some extent, come under the auspices of the CIC because, as a funder—in my case public money has been involved going back to 1991 in Northern Ireland—the problem has always been to manage the business at arm's length.
I see tremendous advantages flowing from the involvement of the regulator. I still believe that CICs have a good role to play but I think it is wrong to debar them from charitable status—the argument that is made for that is weak—should they choose to seek that status. I do not wish to promote the idea that all CICs should be charities, but I believe that they should have the choice.
Lord Sainsbury of Turville: I just make the point that charities are not unregulated bodies. They are tightly regulated under the Charity Commission. The main burden of our argument is as follows. First, why confuse the issue? Secondly, what is there to be gained by subjecting an organisation to two sets of regulations? That is the argument in a nutshell.
Lord Phillips of Sudbury: I hope that I may return to the point as we are in Committee. The matter is up to the body concerned that wants to be a CIC as well as a charity. The Minister may be right. Many people may consider the matter and decide that they do not want three regulators—company regulator, CIC regulator and Charity Commission. But some will. Frankly, the CIC regulation will not add anything at all to the Charity Commission regulation. Therefore, if I may say so, the argument does not run very far.
Lord Sainsbury of Turville: It has to be a question of balance. I return to this fundamental point. If one could show that there was real advantage to having the option that we are discussing, one could override the issue of confusion. I am perfectly happy to admit that it is rather difficult to establish whether or not there will be confusion. In a situation where there appears to be virtually no benefit to having this option, it seems to me that it is better to stick with the clarity of having the two different forms.
Lord Phillips of Sudbury: I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 102 not moved.]
On Question, Whether Clause 23 shall stand part of the Bill?
Lord Glentoran: I rise to speak on a probing basis to our amendment that Clause 23 should not stand part. Part 2 of the Bill deals with a complete different aspect
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of company law. We move from the intricacies of the auditing and accountancy profession to the proposals for a new type of company, the community interest company.
I think it is important to preface my concerns about the proposal for CICs by emphasising that we on these Benches wholeheartedly support social enterprise. I think that I have done that. CICs are just one product of the consultation that has taken place. While we support the aim of establishing a new model of company intended to support social enterprise, our job here is to look at the detail of the proposals and to make sure that they are workable.
With this in mind, my first reaction upon seeing the proposals for CICs, was to question whether there really is a need for a new model. I have touched on this subject when speaking to the previous amendments. I commented that we are waiting for the reform of charity law, which, we understand, is intended to be a serious overhaul. It would have been much more sensible to have kept these proposals on CICs until we see how they will fit in to the whole picture of the new company law reform. However, we do not know what other new models will be proposed under charity law and we have already heard of the new charitable incorporated organisations that are anticipated.
The question here is one of take-up. We have spoken to the Bill team on this issue when they kindly agreed to talk through the proposals for CICs with us. One of my prime concerns was that, in setting up the administration for a new type of company, we should first be sure of the number of CICs likely to be created. Putting these proposals into place will be costly, financially and administratively. According to page 34 of their consultation document, the Government estimate a take-up of 100 to 300 CICs registering each year. On what basis has this estimate been made? If we are likely to have a reform of IPSs and an overhaul of charity law, including the introduction of CICs, not to mention the current models of company—BenComs, friendly societies, mutual, co-operatives and others—how can we predict the take-up in years to come?
We will have a number of different models from which a small organisation, which is looking to start up, will have to choose. I imagine that it will be a bewildering process. Can the Minister tell us what guidance on which model they should choose can be offered to those embarking on a new venture? Responses to the consultation documents included comments that there is scope for confusion between IPSs and CICs and suggestions that CICs should be introduced in parallel with the current updating and/ or the planned revision of charity law.
As we have discussed, CICs and charities will be able to swap from one status to the other under the Bill. I think that that will be rather more difficult than some people imagine. I have mentioned that it looks like an administrative nightmare, and the Government admit that they think it is unlikely to happen—see paragraphs 15 and 16 of the report on the consultation document.
We feel that there are still many problems inherent in this multitude of different forms. What proof is there that another corporate vehicle is really

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necessary? The primary issue is whether projects would wish to seek CIC status. It is not possible to discern clear advantages for such status from the Bill. What is in it for the recipients? At present, those organisations that currently have charitable status can establish trading companies. Such companies are not subject to the level of control that CICs would be, unless there are significant other incentives. It is difficult to see why such a company would seek CIC status.
I do not mean to sound negative, but implementing the proposals will be expensive and I am, frankly, not convinced that a need for CICs has been proven. The Government talk about the CIC as a trading company that has an asset lock which prevents assets being distributed for further profit and has a strict community interest test which must be fulfilled from the start and reported on in the community interest company report—see draft Regulation 24. It is quite possible for a company limited by guarantee, for example, to have not-for-profit shares which are locked into being used for public benefit by the constitution of the company itself. Asset locks can be prescribed in any company. I do not fully understand the need to have an "off the shelf" new company model if the only added benefit is to have an asset lock which could otherwise simply be written in to the constitution of the company. Furthermore, charities can still have trading companies as subsidiaries, while capitalising on tax breaks via the parent company and also having an asset lock directed by the trustees of the parent company.
The details of CICs are very much withheld from the Bill and relegated to regulations. I sincerely thank the Bill team for making a draft copy of the regulations available to us before Committee stage. As I understand it, they are not published publicly yet. However, there is much in the regulations, which we shall wish to probe during the course of our discussions on Part 2. I look forward to scrutinising the detail, but first it will be helpful to hear some justification from the Minister for introducing legislation on CICs, especially as this is being done in isolation from the reform of charity law. If charity law had been reformed first and CICs had fitted it, it would have made a great deal more sense and logic.
Lord Phillips of Sudbury: I hate to break ranks with the noble Lord, Lord Glentoran, especially after the Minister was so unresponsive to the last amendment. But truth will out: I believe that there is virtue to this part of the Bill and that CICs will add something of use in a number of important circumstances.
The fact is that no other watertight legal protection exists for the defence of public assets held within a private corporation. For non-charitable assets, there is no absolute bar against their subsequent privatisation, and any company or industrial or provident society or co-op can be converted or its assets transferred into a private shareholder company by the required resolution of its members, ordinarily by way of a 75 per cent majority of those voting. However high-minded the original concept behind the formation of a
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company that was designed to be, as a CIC must be, for community benefit, it is possible to break out in the manner that I have indicated. I have had examples in my own professional experience of a first-generation entity with a pure "CIC" character which, not long after the founders who had built it up had disappeared, was cashed in for private benefit.
The provision could have very useful applications, within the private sector, if I can call it that, the local government sector and the central government sector. Therefore, I am unable to support the noble Lord.
Lord Sainsbury of Turville: Clause 23 introduces the concept of the community interest company. or CIC. The CIC will be a company with additional features to ensure that it will work for the community benefit. We have developed this legislation in the light of substantial consultation: first, on the strategy unit's initial proposal for the CIC in 2002 and, subsequently, on more detailed proposals set out by the Government in March last year.
Consultation responses demonstrated that the CIC proposal will answer a real need. Current arrangements are not satisfactory for the many social enterprises that do not want to be charities but wish to use the company form as a vehicle for benefiting the community. It can be expensive to set up a company with a watertight asset lock, and such asset locks are not transparent to the users and funders of social enterprises.
As I said at Second Reading, many companies have expressed an interest in setting up CICs. For example, only last week it was announced in the London Social Enterprise Network newsletter that ECT—the Ealing Community Transport Group—which responded favourably to the consultation, has announced its intention to become one of the first CICs. The ECT Group is a well established social enterprise which, among other activities, runs recycling projects and bus services, and provides community transport. This week, we received a letter from a new company, Get Well UK, which intends to use the CIC form when the option becomes available. Throughout the consultation process and since, our officials have received correspondence from a wide range of organisations that have shown interest in using the CIC form.
Subsection (2) sets out how CICs may be created. It will be possible to incorporate as a CIC from scratch, using the company limited by guarantee or company limited by share forms. Existing companies may also become CICs, including companies limited by guarantee with share capital. This last company form has been unavailable as a form for new companies since 1980 but any existing company having this form will be able to become a CIC.
Subsection (3) prevents CICs being treated as charities in England and Wales and being recognised as charities in Scotland, even where their purposes are charitable. We have discussed this provision in the context of amendments Nos. 101 and 102, and I do not propose to detail the Government's position again. I simply repeat that we have carefully considered whether CICs should have access to charitable status. We have concluded that the value of the CIC is that it

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offers a clear alternative to charitable status, offering greater flexibility and freedom to trade, and, in return, forgoing tax relief available to charities.
Perhaps I may say that I thought the noble Lord, Lord Glentoran, wanted to have things both ways. He found the array of institutions confusing, but put forward a proposal in the last amendment to make it more confusing by having CICs which also have charitable status. He also said that there will be many charities that want CIC status, then queried under clause stand part whether anyone wants CIC status.
One has to choose between these two situations. We think that there will be a definable number of people who want CIC status, and the evidence suggests that they will do so. At the same time, we want to keep the situation as simple as possible so that there is no confusion.
As I said, many consultation responses indicate that many charities might find the CIC form attractive as a trading arm for some of their more commercial activities. There will be no barrier to charities using CICs for this purpose.
Clause 23 lays the foundations for Part 2 of the Bill and for the creation of the CIC. I hope that I have explained clearly our thinking behind the clause.
Clause 23 agreed to.
4.15 p.m.
Clause 24 [Regulator]:
Lord Glentoran moved Amendment No. 103:
Page 26, line 33, leave out subsection (2).
The noble Lord said: In moving Amendment No. 103, I shall also speak to Amendments Nos. 107 and 108. Amendment No. 103 is purely a probing amendment. Clause 24 introduces the role of the regulator and some further details contained in Schedule 3. The regulator has a highly important role within the framework of the new CIC model. I hope noble Lords will forgive me if I list the possible functions of a regulator, as set out in the Bill. I will go through these quickly—they will be in Hansard.
The functions include: the provision of guidance and assistance; the setting of caps and limits on distributions and interest—although the Secretary of State appears to have quite broad powers to intervene; the determination of the eligibility of bodies to become, or cease to be, CICs; investigating the affairs of a CIC or appointing another to do so on his behalf; requiring a CIC to submit its accounts to an auditor appointed by the regulator; bringing civil proceedings in the name and on behalf of the CIC, for which he must indemnify the CIC against costs; appointing a director of a CIC by order, which cannot be removed by the company; removing or suspending a director of a CIC; appointing a manager of a CIC and supervising him; transferring CIC property to the official property holder or requiring a CIC to do so; preventing disposals of CIC assets; preventing debtors making payments to CICs; restricting by order the transactions which may be entered into by a CIC and
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the nature and amount of payments they may make, including the ability to inhibit any payment or transaction made without the consent of the regulator; transferring shares in a CIC by order; removing members of a CIC company limited by guarantee, or appointing new ones; petitioning for the winding up of a CIC; applying to have a dissolution or striking-off in relation to a CIC withdrawn; and releasing any information received to any other public authority for use in connection with its duties. That is 18, which we have listed. The exercise of powers 4 to 18 is limited by the requirement that the regulator should make use of them,
"only to the extent necessary to maintain confidence in CICs".
There is an additional restriction on the use of powers 7 to 13, which can be used only when the CIC has met "the company default condition". That is, first, that there has been misconduct or mismanagement; secondly, the CIC's property, or its proper application, must be secured; thirdly, the CIC is not satisfying community interest tests, or if the company has community interest objects but is not carrying them out; and, finally, powers 14 and 15 may be used only when the CIC appears to the regulator to be an excluded company, ie ineligible for the status of CIC.
I borrowed this synopsis of the regulator's role from a briefing I received from the Millennium Commission. I declared an interest, before Second Reading, as a member of the Millennium Commission.
That is a massive amount of responsibility and involvement. I might even go so far as to say that the success or failure of CICs is based on the competence of the regulator in steering the right course between light-touch regulation and unwarranted interference. There may be reference to good regulatory practice under Clause 24(4) when describing how the regulator should discharge his functions, but there is no mention of the sort of proportionality which I believe is at the heart of the regulator's role.
I turn to the exercise of the regulator's power under Clauses 39 to 48. Under Clause 38(1) there is the provision that the regulator must exercise his powers,
"only to the extent necessary to maintain confidence in community interest companies".
That is a particularly vague provision. I do not think that one could call it a safeguard. I am sure that the regulator could very easily claim that he was interfering in order to "maintain confidence" in a CIC. It is a subjective statement that is open to interpretation of many kinds.
I tabled the amendment because I was seriously concerned about the failure in the Bill to provide criteria by which the Secretary of State should appoint someone to the role of regulator. We do not even have regulations which will set out such criteria. As the Bill is currently drafted, anyone could be appointed at the discretion of the Secretary of State. They do not have to have any particular experience or qualification. Can the Minister give some guidance on how the person to be appointed regulator will be chosen and what sort of selection process there will be? Can the Minister give details of what the salary bracket will be for the

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regulator? If it is too low it will not attract the type of candidates we would expect. Given the responsibility of the role, that is a real worry. If it is intended to be quite substantial, has that been worked into the cost of the regulator as estimated in the Explanatory Notes?
My other two amendments in this group deal with the two specific areas of detail in Schedule 2. First, there is no provision for how long the terms of office will be for the regulator; it is left to the discretion of the Secretary of State. The Government claim that it will be in line with Nolan requirements; that is, one three-year period with one additional further term as the norm, not two. If that is the case, why not state that explicitly on the face of the Bill as our amendment would? That would allay many of our concerns.
There is a precedent for putting the details in Schedule 1 of the Children Bill, which states explicitly the length of the term for which the children's commissioner will be appointed and his eligibility for reappointment.
We have a few problems with paragraph 1(2) of Schedule 3. That makes provision for the resignation and removal of the regulator. Paragraph 1(2)(a) states that he may resign by writing to the Secretary of State. Paragraph 1(2)(b) states:
"the Secretary of State may at any time remove the Regulator on the ground of incapacity or misbehaviour".
How would the Minister define misbehaviour? It is important to know the grounds on which the regulator could be ejected from office. I can understand "incapacity", but "misbehaviour" is open to many interpretations. It is a subjective term that relies on the discretion of the Secretary of State. I am not accusing the Secretary of State of being unable to exercise such discretion wisely; I merely think that we might benefit from some examples of the sort of misbehaviour that would warrant the regulator's removal by the Secretary of State. I beg to move.
Lord Phillips of Sudbury: I hope that the Minister will tell us what precedents there are in respect of comparable offices for the length of appointment and for leaving some power to remove a senior official for misbehaviour. I shall await what he says on that before proffering any further thoughts.
[The Sitting was suspended for a Division in the House from 4.26 to 4.36 p.m.]
Lord Evans of Temple Guiting: We are delighted that the noble Lord, Lord Glentoran, welcomes the role and appointment of the regulator. The proposal was outlined in the consultation document of March last year. As my noble friend Lord Sainsbury of Turville said at Second Reading, the Government, having explored a number of alternatives, decided to create a new regulator. We have concluded and the public consultation has confirmed that a small independent regulator of CICs would be the most effective way of ensuring that CICs continued to operate for the public benefit and of building public confidence in that new type of company.
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The Bill provides for the Secretary of State to appoint the regulator, and the appointment will, of course, be conducted in accordance with the code of practice for ministerial appointments to public bodies published by the Commissioner for Public Appointments. Perhaps I should declare an interest, in that I am on the panel of interviewers for the Commissioner for Public Appointments. I might find myself interviewing the new regulator. There are various issues related to the appointment, and I will come to them in a moment.
The provisions of subsection (2) are sufficient to ensure that the regulator will be appointed under the proper procedure. There are many precedents in legislation for the provision, including, quite recently, the independent regulator of NHS foundation trusts. Similar provision is made for the appointment of members of the Housing Corporation and the appointment of the Charity Commissioners.
For the avoidance of doubt, I should say that the regulator will be independent of government. The Secretary of State will have no power to direct the regulator on the performance of his functions, save as permitted or provided for in the Bill. It is for that reason, for instance, that subsection (5) of Clause 24 has to make express provision empowering the Secretary to State to require the regulator to issue guidance.
The fact that the code of practice on ministerial appointments will apply makes Amendment No. 107 redundant. The code provides that appointees should serve for no more than two terms of office, which must not exceed 10 years in total. The amendment would be incompatible with the code.
The noble Lord, Lord Phillips of Sudbury, asked about the period for such an appointment. The most common period is three years. However, a statutory requirement for a fixed period of office for a regulator may limit negotiations with candidates, with the result that the Government will not be able to recruit the best candidate. For instance, it may reduce the scope for flexibility in appointing an appropriate candidate for a shorter term by mutual agreement. In view of those points, the Government believe that paragraph 1(1) of Schedule 3, as currently drafted, is the appropriate way of providing for the regulator's appointment.
I should say a few words about the fact that Amendment No. 108 would prevent the Secretary of State removing the regulator on the grounds of misbehaviour, leaving incapacity as the only ground on which the regulator could be dismissed.
I am a little puzzled by the suggestion that misbehaviour should not be a ground for removing the regulator from office, as suggested by the amendment but as not suggested by the speech of the noble Lord, Lord Glentoran.
Lord Glentoran: I thank the Minister for giving way. I missed the last part of what he said. I wanted some clarification on what "misbehaviour" might mean.
Lord Evans of Temple Guiting: So I am not a little puzzled; I know exactly what the situation is

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It is a well used legislative basis for removal from office. For instance, the Courts Act 2003 enables the Lord Chancellor to remove a lay justice from office on the ground of incapacity or misbehaviour. Likewise, the independent regulator of NHS foundation trusts may be removed by the Secretary of State on those grounds.
What counts as misbehaviour justifying removal will of course depend on the particular circumstances of any situation. Its ordinary meaning is to behave badly, or to conduct oneself improperly. It has been said in this House that "misbehaviour" could include, for example, a conviction for drink-driving; any offence involving violence, dishonesty or moral turpitude; or behaviour likely to cause offence on religious or racial grounds or that amounts to sexual harassment.
It should cover any misbehaviour which threatens confidence in the regulator. It is sensible to give the Secretary of State the power to act in the event of such misbehaviour on the part of the regulator. That would be important, to maintain confidence in the position and therefore in CICs in general. If a regulator who had lost credibility as a result of misbehaviour were able to remain in office, that would undermine his or her authority and that of the office.
Finally, I should like to advise the Committee that following discussions with the National Audit Office, the Government are considering an amendment to Schedule 3. That will allow the Secretary of State to require the regulator to produce accounts as well as reports. The regulator will initially be accounted for through the department's accounts, but it seems sensible to provide for separate accounts to be required if necessary. We intend to table an amendment before Report.
A number of additional questions were asked which I should attempt to answer. On the question of proportionality, common law already provides for powers to be exercised in a way that is procedurally fair and not unreasonable or irrational. The requirement for decisions not to be excessively onerous, harsh or oppressive when less restrictive measures are available is part of the general requirement for reasonableness in decision making. That, with the other provisions in the Bill on how powers are to be exercised, should provide reassurance that the regulator's actions will be proportionate.
The noble Lord, Lord Glentoran, asked about the regulator's proposed salary. We have not decided that at this point, but we are taking soundings with recruitment specialists. Our current thinking is that the post should be remunerated at around the same level as senior—but not the most senior—civil servants. I have no idea what that figure may be, but we can find out.
The noble Lord asked about the selection process. I think I have said that it will be handled in the Nolan way. We have already committed ourselves to involving the social enterprise sector in the establishment of a
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regulator. It is in everybody's interest for the selection process to be as professional as possible so that we get the best person.
The noble Lord, Lord Glentoran, was also interested in the onerous powers that the regulator would have. It is our view that the regulator will operate with a light touch. We will set up a small-scale operation that will primarily register CICs, receive copies of the community interest company reports and investigate where there are stakeholder concerns.
The manner in which the regulator can discharge his functions and exercise his powers is restricted by the requirements set out in subsection (4) and by the general principles of administrative law. The supervisory powers are further restricted by the requirements in Clause 38, in particular the requirement that the regulator must only exercise those powers to the extent necessary to maintain confidence in CICs. The powers available to the regulator are necessary to ensure that the asset lock has integrity and that CICs can be made to comply with their obligations under the Bill. This is vital to ensure confidence in CICs and the protection of the community interest.
I think that that answers all the questions, with the exception of why the regulator does not have statutory objectives relating to transparency, accountability and consistency. The regulator has an overarching obligation to discharge his functions in a manner that is based on good regulatory practice. In addition, the regulator will be accountable to Parliament and to the courts. The publication of guidance will ensure that the regulator's processes are transparent to users and his consistency will be contestable in court. All those who exercise public functions are required to do so in a manner that is not unreasonable and that is procedurally fair. This is a general principle of administrative law and includes a requirement for consistency and impartiality.
4.45 p.m.
Lord Glentoran: I thank the Minister for that detailed response. It is certainly, to some extent, comforting. However, I shall probably come back on Report and attempt to get some of what he has said onto the face of the Bill, probably in a schedule. I think that there are some significant gaps that would not be difficult to fill in. The Minister has filled most of them in now and, with thought and careful drafting, they could usefully be included in a schedule to the Bill. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Phillips of Sudbury moved Amendment No. 104:
Page 27, line 3, leave out "most efficient and economic way" and insert "way which best advances the community interest objects of the companies."
The noble Lord said: This amendment is designed to provide a better set of objectives for the regulator under Clause 24(4), given that the provisions of that subjection will control and inform the way in which he

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carries out his function. The third yardstick by which he must operate is the desirability of using resources in the:
"most efficient and economic way".
My amendment would change that to the:
"way which best advances the community interest objects of the companies".
I hope that this commends itself to the Government. The words "efficient" and "economic" are quite limited in scope. One overloads "efficient" and "economic" if one tries to say that all virtue can we found within them. I would have hoped to have seen "effectiveness" here. It is a more variable and three-dimensional concept that would embrace some of the things that the regulator ought to take account of. For example, I believe one could imagine a CIC which was certainly efficient and economic but which was fairly ineffective and unadventurous in the way that it carried on its affairs, missing opportunities to promote its community interest objects—for example, by recruiting volunteers or involving the community. I believe that my formulation will cover the concept of efficiency and economy and that it will deal also with those wider aspects. I beg to move.
Lord Hodgson of Astley Abbotts: The noble Lord, Lord Phillips, has made a very interesting and, in some ways, a powerful case. As I understand it, the heart of his argument is that the words "efficient and economic" are too narrow in the circumstances of the Bill. I see the force of that argument but, equally, I believe that narrowness does not necessarily mean "irrelevant". We should be more attracted to the amendment if his wider drafting about advancing the community interest objects of the companies nevertheless encompassed some "efficient and economic" test.
I do not believe that CICs should be a non-economic, non-efficient free-for-all. Therefore, while I consider that the noble Lord's amendment has much to commend it, it would be a pity if some of the underlying purposes that I read into the current drafting in the words "efficient and economic" were lost.
Lord Evans of Temple Guiting: I start by clearing up a small misunderstanding. The words "efficient and economic" refer to the regulator and not to the CICs.
Lord Phillips of Sudbury: Really?
Lord Evans of Temple Guiting: Yes. The Government do not welcome the removal of the wording deleted by the amendment. It seems wholly desirable for the new regulator to be required to use his resources in an efficient and effective way. Similar statutory requirements have been imposed on other independent regulators, such as the Financial Services Authority, and I cannot see any reason why the CIC regulator should be under less of an obligation to behave efficiently, even though the budget at his disposal will of course be very much smaller than that of the FSA.
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The requirement for efficiency and economy is intended to influence the way in which the regulator allocates and deploys his resources. When addressing a specific risk or carrying out a particular function, the regulator should consider which of the options are most efficient and economic. But, of course, that is not the only factor that the regulator must keep in mind. He must balance that with the need to consider the likely impact on those who may be affected and the outcome of consultations. He must also properly fulfil his obligations under the Bill and perform his functions in a manner which complies with the common law.
Over time, we expect the regulator's fee income to move towards covering his costs. It would not be in the interests of either the taxpayer or the social enterprise sector for the regulator to be unconstrained in his use of the resources that are available to him.
Nor do we see the need for the alternative wording proposed by the amendment. The functions of the regulator fall into two broad categories: the giving of the routine approvals and consents necessary for the formation and operation of CICs envisaged by the Bill and regulations made under it; and the exercise of the supervisory powers which will help to build and maintain public confidence in CICs. It will not be his job to devote his own resources to pursuing the purposes of individual CICs. For those reasons, I ask the noble Lord to withdraw the amendment.
Lord Phillips of Sudbury: I shall not say that I was thunderstruck to hear that subsection (4)(c) referred only to the use by the regulator of his or her resources because it reads perfectly ambiguously. I read it as referring to the use of resources by community interest companies. That ambiguity should be dealt with, and it can easily be dealt with.
In addition, in relation to the regulator, I take the point that efficiency and an economic way of dealing is important. I take the point made by the noble Lord, Lord Hodgson of Astley Abbotts, on that matter, too. However, I still believe that it is worth the Minister contemplating the question of effectiveness. It would be an important additional yardstick against which the regulator should operate—largely for the reasons that I advanced when considering that word in relation to the operations of community interest companies themselves. If the Minister will consider those two points, I am happy to beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Glentoran moved Amendment No. 105:
Page 27, line 4, at end insert ", and
(d) the need to provide advice when requested o any community interest company as to the permissibility of an action."
The noble Lord said: The amendment looks at the statutory requirements of the regulator for carrying out his functions as prescribed in the Bill in subsection (4), specifically in relation to the regulator giving free advice. Our amendment would add a further

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paragraph to the subsection, with the effect that in carrying out his functions based on good regulatory practice, the regulator must have regard to,
"the need to provide advice when requested to any community interest company as to the permissibility of an action"—
yes or no.
This is one further important issue with which we believe the regulator should always comply when exercising his powers under the Bill. As the Bill is currently drafted, he must think about the impact on CICs and others affected by the exercise of his power, he must consult and he must be economical with his resources. We want to include the obligation for the free provision of advice to any CIC when requested. That scope would clearly be limited to straight, objective yes-or-no answers and interpretation of the rules.
Noble Lords may ask why this is important. I have had several discussions with my noble friend Lord Hodgson, on the matter. He has a great deal of experience in working for a regulatory body, as he was on the board of the SIB for many years. His advice to me was that it was enormously frustrating to be unable to provide advice to businesses that came within the SIB's scope for regulation. It was not possible to point companies along the right track, only to admonish and criticise them when things went wrong and they failed to comply.
It looks to me as if we have a similar situation here. The regulator is designed as a check on CICs. The Minister and the Bill team have already remarked to me that the regulator will undoubtedly, due to the numbers of CICs that start up, have a reactive rather than proactive role. That is all well and good except that, as I have mentioned before, take-up on CICs is likely to be predominantly by small social enterprises. This is a new company vehicle and the Bill is a framework Bill; the regulations are complex, particularly in terms of caps on assets and payments on debts, debentures and interest.
We believe that it is perfectly reasonable for a small company, when applying to become a CIC, to be able to seek advice from the regulator. However, we have put some limit on this advice: companies can only query whether an action is permissible or not. That would help to anticipate any infringement of the compliance that the regulator has to monitor. Companies would be less likely to break the rules because they would be better informed of their obligations as CICs. We believe that the regulator should be more of an overseer than simply a figure to chastise CICs that run into problems. In the interests of transparency and efficiency, and with the hope of having a new model of company which is successful and has a significant take-up, we think that the provision of advice about permissibility should be mandatory. It might encourage more companies to apply to be CICs and it would be a sure sign of a more light touch regulation, which is what the Minister promised all along.
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I shall finish by briefly commenting on Amendment No. 106 tabled by the noble Lord, Lord Phillips, which is grouped with our Amendment No. 105. Amendment No. 106 focuses on subsection (5) which states:
"The Secretary of State may require the Regulator to issue guidance, or otherwise provide assistance, about any matter relating to community interest companies which is specified by the Secretary of State; and the Regulator may provide guidance, or otherwise provide assistance, about any other matter relating to community interest companies".
It would insert at the end of the subsection the words,
"in all cases without charge".
We certainly agree with the amendment as far as it goes. The regulator will not be able to charge for the provision of guidance or assistance as Clause 54(3) might suggest. We shall focus on that when speaking to a later amendment. However, our amendment puts the provision of advice and assistance as a compulsory factor for the regulator when discharging his functions.
The problem with subsection (5) on guidance and assistance is that it is too permissive. The Secretary of State "may" ask the regulator to issue guidance and provide assistance or he may not. The regulator may provide guidance or assistance or he may not. That is not good enough. CICs which are just starting out need more support from the regulator and it should be his statutory duty to provide it. I beg to move.
5 p.m.
Lord Phillips of Sudbury: I shall speak to Amendment No. 106 in this group. As I look again at Clause 24(5) I am not sure that I am certain of its effect. The first part of that subsection, which the noble Lord, Lord Glentoran, just read out, states that the Secretary of State may require the regulator to issue guidance or otherwise provide assistance. The second part states that the regulator may provide guidance or otherwise provide assistance. If he is required to do so, is he then left only in a discretionary position, and may provide assistance? Either way, if this is a requirement emanating from the Secretary of State, I fail to see why those to whom that guidance or assistance refers should have to pay for it, but no doubt we shall soon hear.
I should have added that the Minister said in response to the last group of amendments that the function of the regulator was to become selffinancing—I think that is what I heard him say. If that is correct, that will be bad news for those who are contemplating CIC status. It will be a major role with a significant staff, the official property holder and the appeal officer. If all that will have to be paid for out of fees, one begins to wonder just how much damage that will do to the concept which the Government are promoting.
Lord Hodgson of Astley Abbotts: I urge the Government to listen carefully to what my noble friend Lord Glentoran said on this occasion. I promise the Minister I shall intervene rarely, if again, this afternoon. He has had to listen to me for three solid afternoons. I shall not go on for long.

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The Securities and Investments Board, of which I was a member, was a product of the Financial Services Act, which took investment firms under the law for the first time. They were mostly small firms. Many had perfectly good intentions. They sought to do their best and to follow the law. Here, we are all M25-centric but many smaller firms operate well away from London and the sophistication of the metropolis. They would go and see their solicitor, who would say, "Well, it's a very new piece of law and it is not very clear what the position is. There are no precedents. Why don't you go and ask the Securities and Investments Board? They should tell you. They are administering the law". We were always told that we could not do that; that we were a regulator and that our powers did not include the ability to give advice. I am concerned that we shall have a similar situation here. We have a new legal framework and relatively unsophisticated quite small bodies, corporations and companies, operating well away from London. There will be no precedents. It will be difficult for them in the early days to see exactly how the floor will bed down and to get advice from provincial solicitors. If we are going to make this thing a success—and I assume that the Government do want to make it a success—some midwifery is needed.
The purpose behind the amendment is to provide a midwifery service. I am sure that over time the midwifery service will die away because there will be precedents; practice will become established; people will know where to go; and solicitors will become familiar with the legislation.
Therefore, I hope that the Government will consider my noble friend's amendment and, indeed, the additional amendment of the noble Lord, Lord Phillips. I hope that they will not fall back on subsection (5). As my noble friend has pointed out, "may" is permissive and if we want to be successful with this issue we need a bit of compulsion in the provision of the midwifery service.
Lord Evans of Temple Guiting: The noble Lord, Lord Hodgson, urges me to listen to his noble friend Lord Glentoran. I have listened with enormous interest to the noble Lord, Lord Hodgson, for three days—I mean that—and I shall continue to listen to his colleague.
We want to see high-quality guidance and help being made available to CICs and to those who wish to set up CICs. This will of course help to encourage take-up of this new kind of company, which is what the Government want, and will make it easier for people to comply with their legal obligations. Good information is obviously very important so that people set up a CIC only if that is the right solution for them because when they do so they will be putting a permanent lock on their assets and profits. The noble Lord, Lord Hodgson, made that point during the Second Reading debate.
There will be several sources of this advice. They range from the regulator himself, through other information sources supported by the Government, such as Business Link, to the various social enterprise groups and professional advisers who specialise in this field. The Government are also engaged in wider work
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to improve access to good-quality advice and signposting towards specialist information providers for social enterprises generally, through the Business Link operator network, and of course CICs will benefit from this.
On the first day of Grand Committee I made a point about non-executive directors. The noble Baroness, Lady Noakes, said I was completely out-of-date and that things had changed a great deal over the past few years. At this stage I should like to quote from an article in today's Daily Telegraph. The timing is perfect and I think it is reassuring. The headline is:
"There's nothing woolly about a social conscience. A growing band of social entrepreneurs are lending business brains to social aims … Oxford's Said Business School is launching its Skoll Centre of Social Entrepreneurship with a grand-sounding world forum … Hyperbole, perhaps. But social entrepreuneurship is in danger of becoming business flavour of the month".
That suggests that perhaps the notion that people setting up CICs will have nowhere to go for advice is wrong. If this kind of initiative is becoming part of the academic establishment that should be tremendously reassuring to noble Lords who are worried about the matter.
Lord Phillips of Sudbury: I am most grateful to the noble Lord. I am interested: does the noble Lord go to academics for advice? I go to them for all sorts of things, but not for advice on new pieces of legislation.
Lord Evans of Temple Guiting: I know a little about the Said Business School. A great part of it is nonacademic and is aimed very specifically at giving practical advice to people who wish to set up businesses, both businesses that make profits and those which do not, which is what we are talking about today.
Clause 24 specifically recognises the role that the regulator will play in providing guidance. It empowers him to provide such assistance—
Lord Glentoran: I want to correct something. The noble Lord said that we were talking about businesses that were not set up to make profits. As I understand it, CICs are set up to make profits but it is a question of how the profits are to be used.
Lord Evans of Temple Guiting: That is a perfectly fair correction. I am grateful to the noble Lord, Lord Glentoran, for making that clear.
As I said, Clause 24 specifically recognises the role that the regulator will play in providing guidance. It empowers him to provide such assistance and guidance about CICs as he wishes. It also gives the Secretary of State a power to require him to provide guidance about any matter relating to CICs that she might specify.
During the consultation last year, we proposed that the regulator should issue advice on a range of topics, including the legal requirements of CIC status, such as the registration and annual reporting processes, and on good practice in areas such as working with stakeholders. That remains the Government's intention. In particular, the power in Clause 24 to

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require the regulator to provide guidance will be used, if necessary, to ensure that all the appropriate advice and guidance is produced.
Except where he is directed to provide advice or assistance by the Secretary of State, we believe that the regulator should be able to exercise discretion over the assistance that he provides. Amendment No. 105 would make that impossible. A requirement to advise on the permissibility of any action would, in effect, require the regulator to provide free legal advice not only on the special requirements of CIC status but on all aspects of the law and the proposed action. It would be bound to generate large numbers of queries, including many that were merely speculative, irrelevant or simply over-cautious. In all probability the regulator would find it very difficult to respond to such queries without investigating the precise circumstances in detail. It is noteworthy that, for example, the Charity Commission retains a discretion as to whether or not it provides that kind of advice to charities.
Such a requirement would, of course, require a larger regulator's office with an increased staff and budget, perhaps particularly for lawyers. The scope for additional costs would increase hugely if the number of CICs increased substantially. A small but effective regulator is a key factor in keeping costs low for CIC registration initially and in the future.
Amendment No. 106 would aggravate those difficulties. The Government intend that, over time, the regulator should move towards covering its own costs from its fee income, although we fully appreciate that it will be some while before the take-up of the CIC form is high enough to make that possible. But, if this is ever to work, and if we want the regulator to be able to provide advice and related services to CICs, it will not be realistic to provide that he may never charge for doing so. It will be important that the core guidance is made freely available. That is the practice of many existing bodies. We expect the regulator to adopt the same approach. But why should we prevent the regulator from developing other services, and charging for them, if people would find them valuable and would be willing to pay for them?
The regulator will be given sufficient resources to carry out the various functions that we have set out in the Bill. As I said, we expect him to use those resources to provide appropriate and useful guidance to CICs and those dealing with them as an important part of those functions. The Bill provides for him to do that.
The point was made that, by not providing advice on the permissibility of actions, we may deter the formation of CICs. They will be very small entities and will need help from the regulator such as guidance in all kinds of forms. We fully intend that the regulator will give guidance on all the major issues and that will be a very important function. We do not see the need for a general obligation on the regulator to provide individual advice on the permissibility of specific actions. As I said, the Charity Commission does not
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give advice on everything. It is highly selective and our consultation process did not suggest that the sector needs a regulator to provide advice at every level.
5.15 p.m.
Lord Glentoran: I thank the Minster for that lengthy and detailed explanation. We will certainly wish to read carefully what he said in Hansard. One thing was omitted. I can see where the sort of advice for which I was looking, which is whether something is permissible or not, would be extremely helpful. I also support the points about midwifery made by my noble friend Lord Hodgson. It seems very selective and I would like to see something on the face of the Bill in relation to that selection.
[The Sitting was suspended for a Division in the House from 5.16 to 5.26 p.m.]
Lord Glentoran: The noble Lord, Lord Phillips, has not returned yet. I shall resume the remarks that I cut short when responding to the Minister on the last point. Much of what he said was very helpful. However, I believe that there is room for clarification. One of the most important points in the debate was that raised by my noble friend Lord Hodgson concerning the midwifery role for perhaps the first three years. I shall read Hansard and shall give considerable thought to returning to this subject on Report. Even following discussions that I have had recently with officials, it would be helpful if, perhaps in a schedule, further clarification were provided on how those who wish to set up a CIC can obtain answers to questions about legal rights and wrongs.
Lord Phillips of Sudbury: I thank the Minister for his reply. Before the next stage of the Bill, I should like him to consider an amendment that would at least require what he called "core guidance", or what might be called "general guidance", to be provided without charge. I shall leave it at that and communicate with the Minister later.
Lord Glentoran: I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Fyfe of Fairfield moved Amendment No. 105A:
Page 27, line 4, at end insert—
"( ) The regulator must make or maintain effective arrangements for consulting practitioners and consumers on the extent to which its practices are consistent with its general duties under this section."
The noble Lord said: In moving Amendment No. 105A, I shall speak also to Amendment No. 106A because they are of a piece. At this point, I declare an interest in that I am chairman of the Unity Trust Bank, which is jointly owned by the Co-operative Bank and the trade union movement and does extensive business with the voluntary and mutual sectors. I also take the opportunity to apologise for the absence of my noble friend Lady Thornton, who has a long-standing Co-operative engagement in Manchester today which she could not avoid.

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These amendments concern how best to provide an input from consumers and practitioners both into the establishment of the community interest companies regulator and into the way in which the regulator undertakes the necessary work.
The genesis of the Bill was, in many ways, the model of how a consultation process leading to legislation should work. I believe that the DTI is to be congratulated on its accessibility and openness to the social, co-operative and community enterprise sector in the drafting of the Bill. Indeed, the Bill has benefited from the consultation process, which involved practitioners and other experts. Therefore, the amendments seek to find an expression of that practitioner expertise in the Bill itself.
Amendment No. 105A seeks to ensure that the regulator of the CIC makes practical arrangements to consult practitioners and consumers. The amendment does not seek to be prescriptive about how that should be done. The details would be required to be laid out in the regulations that accompany the Bill, but it could give great credibility to the regulator among his customers, so to speak, and be a very valuable and useful resource in his work.
Amendment No. 106A seeks to ensure the establishment and maintenance of a panel that, in many ways, could be used by the regulator as his reality check. This is not a new idea. The FSA has a financial services practitioners panel whose remit is to provide input to the FSA from the industry, in order to help it to meet its statutory objectives and comply with the seven principles of good regulation and to represent the interests of practitioners. The panel received statutory status under the Financial Services and Markets Act 2000. The goal was to create a high-level body that would represent the views and interests of regulated firms and monitor the regulator's effectiveness. While the aim of creating the community interest company is to have a vehicle that is easy to sue and has light regulation, the principle of practitioner advice still holds good. I beg to move.
5.30 p.m.
Lord Phillips of Sudbury: I simply add to what the noble Lord, Lord Fyfe of Fairfield, said regarding the possibility that if Amendment No. 106A—the appointment of the practitioners panel—does not appeal to the Government as a requirement, it might be a matter that could be placed within the discretion of the Secretary of State, in the light of experience, to set up. It could be that, two or three years downstream, it is felt by all concerned to be a helpful addition to the armoury of provisions in the Bill in rather the same way that, somewhat late in the day, the charity world decided that an appeals body should be set up vis-à-vis the work of the Charity Commission.
Lord Sainsbury of Turville: Clause 24 provides that when deciding what approach to adopt to his functions, the regulator must have regard to the outcome of consultations with CICs and with others with relevant experience. This is one of a number of statutory obligations that Clause 24 imposes on the regulator. We think it is an important one.
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In order to develop his role effectively and to help to make the CIC form a success, the regulator will clearly need to be able to draw on the understanding and expertise of those who are familiar with social enterprise. It is also worth observing that there is a specific requirement in Clause 27 for the regulator to consult before setting limits on distributions.
In practice, the regulator will need to take some steps to enable this consultation to take place effectively. We have no doubt that that will involve the use of some sort of group or panel of experts from the sector—perhaps more than one, given the range of issues that the regulator will need to consider. The need for advice and assistance from the sector will perhaps be greatest in the initial stages, as the regulator will certainly want to obtain expert input into aspects of his role, such as the production of guidance material. Over time, it may be appropriate for the consultation process to become more of a means of providing feedback on issues arising in the course of the regulator's work.
The Bill does not provide for a formal structure for these consultation processes, because it does not need to. The regulator will be able to assemble whatever structures he regards as necessary to help in his work. If it seems appropriate to do so, it would certainly be possible for one or more groups or panels to be given formal recognition, perhaps as advisory non-departmental public bodies. But in the Bill itself we have been concerned to maintain proportionality and flexibility. That is why we have gone down the route of requiring the regulator to have regard to the outcome of consultations with CICs and experts in the sector, without specifying how he should do so.
The first amendment runs the risk of formalising the consultation process too much. We fully intend that the regulator should consult, but in keeping with the small size of the regulator's operations, the arrangements should be kept as flexible and informal as possible. The second amendment, by requiring one particular panel to be established, reduces that flexibility even further, and perhaps raises more questions than it answers. For instance, what is a "practitioner" in this context? Any attempt to specify possible ways of organising the regulator's consultation processes in primary legislation is likely to suffer from similar problems.
My noble friend also raised the FSA precedent—if it is good enough for the FSA, why not for the CIC regulator? The consultation arrangements applying to the FSA reflect the very complex sectors within which it operates and its wide range of technical responsibilities. The FSA is also, of course, a very large organisation compared with our proposed regulator, so is able to support highly formalised consultation.
We would like to keep the provision as flexible and proportional as possible. On that basis, I ask my noble friend to withdraw the amendment.
Lord Fyfe of Fairfield: That is a very helpful reply from my noble friend. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 106 not moved.]
[Amendment No. 106A not moved.]
Clause 24 agreed to.
Schedule 3 [Regulator of Community Interest Companies]:
[Amendments Nos. 107 and 108 not moved.]
Schedule 3 agreed to.
Clause 25 [Appeal Officer]:
Lord Glentoran moved Amendment No. 109:
Page 27, line 25, at end insert "or there has been a change in the facts"
The noble Lord said: Amendment No. 109 focuses on the role of the appeal officer, as set out in Clause 25. The appeal officer occupies a vital role. It is his responsibility to determine appeals against decisions and orders of the regulator. Since we know that the regulator is to have a significant power to intervene in CICs at his discretion, it is surely of fundamental importance to have an appeal officer to hear any challenges against decisions taken by the regulator.
However, Clause 25 is currently limited in relation to circumstances when an appeal can be made against the regulator's decision. Subsection (4) reads:
"An appeal to the Appeal Officer against a decision or order of the Regulator may be brought only on the ground that the Regulator made a material error as to the facts".
This means that decisions by the regulator cannot be challenged except where he was in error as to the facts—in other words, where he made a mistake. However, in many of the circumstances where it is envisaged that the regulator might step in, we are not talking about hard facts, I suggest. Rather, the regulator has to weigh up the situation and decide whether things have got sufficiently serious to merit his involvement.
From the list of 18 powers of the regulator that I referred to when speaking to the previous amendment, the Committee will remember that I made it clear that the exercise of powers 4 to 18 was limited by the requirement that the regulator should make use of them,
"only to the extent necessary to maintain confidence in CICs".
This suggests a company whose affairs are fluctuating.
Our amendment would insert the words,
"or there has been a change in the facts"
at the end of subsection (4). It reflects a scenario in which the CIC in question sorts itself out and therefore believes that its affairs are not in sufficient jeopardy to warrant the continued involvement of the regulator. In such a case, the facts will have changed and the intervention of the regulator would no longer be necessary.
It seems that the noble Lord, Lord Phillips, is of the same mind on this matter, although his amendment is drafted slightly differently. Nevertheless, it is certainly worth looking at this clause in more detail.
We have had important representations from the Law Society on this point. It has gone further than us in its criticism. It comments:
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"Clause 25(4) restricts the grounds on which an appeal to the Appeal Officer against a decision or order of the Regulator to a material error on the part of the Regulator as to the facts: we query whether such a restriction is justified given the likely circumstances of any appeal by (for example) a subscriber under clause 33(10) or the CIC under clause 35(10), when matters of law (such as the interpretation of the Bill or regulations made under it) may be highly relevant".
I look forward to hearing the response of the Minister on these points, which seem to me to be entirely pertinent, especially when we are dealing with a wholly new company model. I beg to move.
Lord Phillips of Sudbury: I shall speak to Amendment No. 110, which would add to Clause 25(4) the right to appeal, not only on the ground that the regulator had made a material error of fact, but on the ground that the regulator has acted erroneously as to law or circumstances.
The Charity Law Association is also in favour of an extension of the grounds of appeal if, as that association puts it, the regulator has acted unreasonably or made a mistake as to the law. It seems to me, as the noble Lord, Lord Glentoran said, that this is too narrowly drawn. I shall be interested to hear from the Minister whether the Government believe that the situation vis-à-vis a mistake of law is adequately dealt with by reference to remedy by judicial review, for example.
What is beyond doubt is that, as the Bill is drafted, there is a conflict between the provisions of Clause 25(4) and those of Clause 33(10) and Clause 42(13). I apologise for not giving notice of these points, so that the Minister could take advice. I shall briefly refer to those subsections. Clause 33(10) states:
"If the Regulator decides that the company is not eligible to be formed as a community interest company, any subscriber to the memorandum may appeal to the Appeal Officer against the decision".
There is no restriction in subsection (10) on the grounds of appeal. That is one inconsistency.
The second appears in Clause 42(13). Clause 42 gives the regulator power to appoint a director of a community interest company against the wishes of the company. Subsection (13) states:
"The company may appeal to the Appeal Officer against an order under this section".
Again, there is no inhibition on the grounds of that appeal. Indeed, both subsections to which I have referred could not be practically operated if they are to be confined by Clause 25(4) to circumstances where there is a material error of fact. One need not be a soothsayer, let alone a lawyer, to see that if one is appealing against the discretion exercised by the regulator to appoint a director of a CIC, there are many issues which would be relevant to the rightness and wrongness of that appeal way beyond a material error of fact. Indeed, facts may not be the relevant ground of the appointment.

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I should be interested to hear what the Minister says. I apologise again for not giving advance notice of my argument. At least, there may be some correspondence and/or communication before the next stage.
Lord Sainsbury of Turville: I do not believe these amendments are necessary, as the law provides more appropriate ways of dealing with the situations that they seek to address.
Amendment No. 109 is concerned with changes in the facts. In most instances where the facts of the case change after the regulator has taken a decision, the CIC will be able to resubmit its case to the regulator for a new decision to be made, based on the new set of facts.
For decisions on applications to form a CIC, change objects or cease being a CIC, this would naturally take the form of a fresh application to the regulator, updated to reflect the change in the facts. This is quite consistent with what currently happens on a failed application to form a company. Companies House returns the application papers and the application fee can be used against the later resubmitted application. In other cases, such as those relating to supervisory action, the CIC could inform the regulator of the changed facts and ask him to review the decision. Following the exercise of certain supervisory powers, the Bill provides for such reviews to be carried out by the regulator from time to time in any case.
5.45 p.m.
The Deputy Chairman of Committees (Viscount Simon): A Division has been called.
Lord Phillips of Sudbury: Might I humbly suggest that, if the Minister can finish what he has to say in the next two minutes we might hear him out, given that we have eight minutes in which to vote?
The Deputy Chairman of Committees: No, I am sorry, the Committee must adjourn. The Committee stands adjourned until 5.55 p.m.
[The Sitting was suspended for a Division in the House from 5.45 p.m. to 5.55 p.m.]
Lord Sainsbury of Turville: As I was saying, a provision for changes of fact to be considered by the appeal officer would add no value to these processes. All that the appeal officer would be able to do under this amendment would be to report to the regulator that the facts had changed, and that is something that it will be open to CICs to do themselves.
Amendment No. 110 is rather wider, in that it would allow an appeal to the appeal officer on the grounds that the regulator had been wrong about the law. The Government's intention, in creating the role of the appeal officer, is to provide a simple and quick procedure for finding the facts. The appeal officer is not intended to hear appeals on matters of law. The courts are the appropriate forum for settling disputes on the law. In instances where the legal basis of the regulator's decisions is disputed, a judicial review should be sought. Giving the appeal officer the right to
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hear appeals on matters of law would simply acid an additional layer of appeal or review on questions of law, because the appeal officer's decisions would be as susceptible to judicial review as the regulator's.
The noble Lord, Lord Phillips, asked about the appeal provisions in Clauses 33(10) and 42(13). They are governed by the grounds of appeal set out in Clause 25(4). It is not correct that the appeals under Clauses 33 and 42 are not subject to the limitations in Clause 25; they are subject to those limitations, so the appeal officer in those cases may consider only matters of fact. In different ways, matters of law and fact may both be concerned, but that would happen within that framework, ensuring that there was not an additional layer of appeal. On the basis of that reassurance, I hope that the noble Lord is happy to withdraw the amendment.
Lord Phillips of Sudbury: I do not believe that the Minister's apprehension of the effect of Clauses 42(13) and 33(10) is right. Clause 42(13) relates to the right of the company to appeal to the appeal officer against an order for the appointment of a director of a CIC. I cannot see how a mistake just of fact can ever be the basis on which an appeal would be made. I do not see in Clause 42 the requirement for the regulator, when appointing a director, to give a factual background of the basis on which he has done it. He has to give details of the terms on which the director is to hold office—that is in Clause 42(4). But I cannot see that there is any obligation on the regulator when exercising his discretion to give a justification, so I cannot see how subsection (13) has any effect whatever.
The other point that I draw to the Minister's attention is that the following clause, Clause 43, deals with the removal of the director. The remedy there is not an appeal to the appeal officer but, specifically, an appeal to the High Court. The way in which the Bill is constructed treats the removal of the director, rightly, as a more profound and important matter than the appointment of a director. If one is chucking someone out on his ear, it has all sorts of implications for the individual. In that case, one goes to the High Court, whereas under Clause 42 one goes to the appeal officer—but on the Minister's assessment the grounds on which one can go to the appeal officer are not likely to be relevant. That means that one is then cast back into the High Court on a judicial review. Since one does not have the background against which the decision of the regulator was made, I do not know how one would mount a judicial review. Normally judicial review takes place where one has the factual basis—the circumstances in which and on which a decision is made which you can assess against judicial review criteria. So I am a little bamboozled by this. Unless the Minister is totally sure of his ground, I would recommend further thought. If he is sure of his ground, I should be most grateful if he could write to me and answer the points I have perhaps fallaciously raised, but points which seem to me to be good.
6 p.m.
Lord Sainsbury of Turville: We are certain that appeals would be subject to Clause 25(4). Obviously, we have not had time to consider this issue in depth. I would very much like to take it away. We shall look at the matter in depth and come back with a carefully reasoned argument for the noble Lord.
Lord Glentoran: I accept the Minister's agreement to take the matter away. We are certainly very unhappy with it. The noble Lord, Lord Phillips, is much more able than I am to enunciate our discomfort. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 110 not moved.]
Clause 25 agreed to.
Schedule 4 [Appeal Officer for Community Interest Companies]:
Lord Glentoran moved Amendment No. 110A:
Page 64, line 16, leave out paragraph 4.
The noble Lord said: Amendment No. 110A is a brief point, but it is a point of principle which I need not spend too long outlining. In the previous group of amendments we talked about the role of the appeal officer. Further details are contained in Schedule 4. However, when one turns to Schedule 4, there is a paragraph entitled "Procedure". It states:
"4(1) Regulations may make provision about the practice and procedure to be followed by the Appeal Officer.
(2) Regulations under this paragraph may in particular impose time limits for bringing appeals".
Your Lordships will not be surprised to hear that I continue to be frustrated when told that I must turn to regulations to disclose the actual technicalities of how a provision on the face of a Bill will work. Why can we not have the details upfront rather than having to search them out in regulations?
However, in this case, what has frustrated me most about paragraph 4 of Schedule 4 is that there is no mention of regulations covering this point in the draft set of regulations to which we have all had access. I finally managed to track down a mention of them on the front page of the Explanatory Notes, which accompany the regulations. They tell me that,
"powers to set the procedures to be followed by the Appeal Officer (Schedule 4 to the Bill), will be drafted at a later stage, again in discussion with the social enterprise sector".
Frankly, I do not think that is good enough. It makes the Bill incomplete. It is bad enough if we are to be faced with a framework Bill where we have to turn to draft regulations for detail, but I take affront to finding that some of the regulations supporting the Bill have not even been drafted. We need to have some idea of how the procedure for the appeal officer will work and especially what time limits will be imposed. This is a seriously important point. We need to be convinced that the time limits will be fair and reasonable and procedures up to scratch.
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I have to ask the Minister whether by the Report stage we could have a complete Bill that we can read, understand and debate. I beg to move.
Lord Sainsbury of Turville: When the Government published draft regulations in February, setting out the sort of provisions we expect to introduce under the powers in this part of the Bill, we did not include any provisions relating to this power. We admitted as much in the notes that accompanied the draft, and said that suitable provisions would be prepared at a later stage in discussion with the social enterprise sector.
I can reassure the Committee that the absence of draft provisions under this power, to date, does not mean that we think the power is redundant. It simply reflected our view that this is one of the simpler delegated powers in this part of the Bill, at least for the purposes of your Lordships' consideration of the Bill. The department's memorandum to the Delegated Powers and Regulatory Reform Committee commented that the procedures to be set out using this power will be technical and should not be contentious.
In view of the amendment, I should like to set out briefly what we think those procedures will cover, and why the power is needed. Our intention is that the appeal officer will be free to establish his own procedures within the parameters laid down by regulations. In other words, this power will enable a degree of statutory control over the practice and procedure to be followed by the appeal officer.
Such a power is not an attack on the independence of the appeal officer. The power cannot be used to influence or direct the appeal officer as to what his findings should be. Instead, the power exists to ensure that the appeal process is subject to rules and properly established procedures. This will help to ensure that it is consistent and fair for everyone who makes use of it.
The Bill specifically refers to the power to impose time limits for appeals. That is obviously an important area because in a sense deadlines have a limiting effect on the right to appeal itself. It is important that it is possible to set a time limit as otherwise there would always remain a degree of uncertainty over the status of the regulator's decisions and orders. The more time that passes, the more impracticable a rehearing of the facts becomes.
It therefore seems appropriate to make provision for appeal time limits, but as the appropriate deadline will depend on several factors, including the type of decision or order that is being appealed, this is too detailed and technical a topic for the Bill. Leaving it to regulations will also allow flexibility for the time limits to be adjusted in the light of experience. The time limits should not be too short to cause injustice to those who wish to appeal by making it difficult to meet the deadline or to prepare for the appeal, but they should not be so long as to cause intolerable uncertainty and difficulty for CICs and those who deal with them.
At this point I am not in a position to hazard a guess at what the finalised regulations will say on these points—that is, what the time limits might be, and so on. As I have said, we intend that the detail will be

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finalised in discussion with the social enterprise sector. We shall want also to look at precedents under other appeal procedures so that the procedures of the appeal officer are based on what is regarded as good practice.
I cannot see any reason why these procedures should not be in the regulations. It seems to me entirely right to have that flexibility in regulations, which will obviously be considered when they come before the House. On that basis, I ask the noble Lord to withdraw the amendment.
Lord Glentoran: I thank the noble Lord for that explanation. However, it is not right that we should pass regulations that do not exist. I shall certainly return to the matter on Report. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Schedule 4 agreed to.
Clause 26 [Official Property Holder]:
On Question, Whether Clause 26 shall stand part of the Bill?
Lord Glentoran: I wish to speak to Clause 26 and Amendment No. 111, which stands in my name and pertains to Schedule 5.
I am bemused by this new role of the official property holder. We already have a regulator and an appeal officer. Now we are to have a third official who is designated as a "property holder". I fail to see what the role of this "property holder" is.
I understand correctly that if a CIC is winding up or has become insolvent there is a statutory requirement for any residual assets to be transferred to another charity or CIC. I presumed that this would be a matter of having the assets frozen so that they could not be distributed by an unscrupulous director or cashed in for personal profit. This would be one of the conditions or obligations for any company signed up as a CIC. I fail to see, then, why there needs to be an actual position of official property holder to oversee that. This seems to me to be needless bureaucracy.
Can the Minister clarify what the actual role of the official property holder is? Why can the regulator not simply hold property on behalf of a CIC? That would seem only logical given paragraph 4(1) of Schedule 5 which reads:
"The Official Property Holder holds property vested in or transferred to him on trust for the community interest company by which (or in trust for which) the property was held before it was vested or transferred.
(2) But he may not release or deal with the property except in accordance with directions given by the Regulator".
If he cannot act without the authority of the regulator, why cannot the regulator himself simply hold the property?
This paragraph is also extremely vague. We are given no circumstances under which property will be vested in, or transferred to, the official property holder. Can the noble Lord provide us with some examples? I am not certain that the measure is intended solely for situations where a CIC is winding up or going insolvent.
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I seem to remember the Bill team explaining to me—I am not entirely sure and therefore I hope that I shall be forgiven if I am wrong—that property can be transferred to the official property holder in other circumstances; for example, where a dodgy director of the CIC is accused of misconduct, perhaps in the appropriation of assets. The Bill gives no clue as to how the practicalities of such a case would work, how long the property would be held in trust by the official property holder, at what stage it is envisaged that it would be returned, and so on. It was my understanding that a CIC could simply ensure that its assets were safeguarded in the event of mismanagement by having a lock on assets in-built within the constitution of a company.
Our Amendment No. 111 focuses on one final issue. We have grave concerns that, due to the lock on assets, there may be circumstances where, when a CIC goes insolvent, its assets cannot be used to pay back debts or to satisfy creditors but can be appropriated by another CIC or charity. That would be highly unsatisfactory. In terms of community interest, the special circumstances of a CIC which constrain the distribution of its assets must not, under any circumstances, overcome the mandatory obligation of a CIC to satisfy its creditors before handing over its remaining assets to another CIC. We have received some assurances that that goes without saying, but it is nowhere on the face of the Bill and we would feel happier if it were made explicit.
Lord Phillips of Sudbury: I support the opposition to Clause 26 standing part of the Bill—again, on a speculative basis. It is interesting and important that the Charity Law Association, which, after all, represents virtually all the lawyers who will have a mainstream practice in dealing with these entities, is firmly against the whole institution of the official property holder.
It follows that if Clause 26 goes, so will Clause 45. Clause 45 spells out what the regulator may ask or require the official property holder to do. That amounts to a draconian set of powers. The main reasons for the Charity Law Association being sceptical about this set of provisions—as, indeed, am I—are as follows: it hugely complicates the whole regime without a worthwhile return, so to speak, in terms of improvement to the regime; it will possibly, if not probably, deter investors if they have to confront the powers given to the regulator vis-à-vis the property holder; and it is also, in my view, egging the already wide powers of the regulator to an unnecessary degree. The regulator will have powers to carry out formal investigations, to control dividend interest, and so on, to appoint and remove directors, and to appoint a manager. The regulator will have the power, as will the members, to institute civil proceedings against the directors. All in all, unless there is some justification that has not yet been understood, I am sympathetic to the opposition to the clause.
6.15 p.m.
Lord Sainsbury of Turville: Clause 26 creates the office of the official property holder, who will be a member of the regulator's staff. It also introduces Schedule 5, which contains detailed provisions about the official property holder.
I shall deal with a basic point, which is why we need an official property holder. The noble Lord, Lord Glentoran, asked why that could not be vested in the regulator. The reason for that is that the official property holder is a corporation sole, which means that there is no need to transfer the property held by the official property holder when the office holder changes. In addition, the corporation continues to exist and hold property, even if the office if not continuously occupied.
The regulator is not a corporation sole, so there may be situations where there is no regulator in place, for example where the regulator has resigned, and a replacement has not yet been appointed. In such cases, the absence of the regulator would mean that vested property is not properly protected.
The second question on which the noble Lord, Lord Glentoran, focused is what that would be used for. The answer is that the appointment of a manager or director, or the removal of a director, will not always be appropriate to protect property, particularly if there is an immediate risk to CIC property. In such circumstances the regulator can use his powers under Clause 45 to protect the property until management changes are in place.
Where the regulator wishes only to protect specific items, the appointment of a manager or director or the removal of a director may be an excessive reaction to what can be achieved more simply by temporarily vesting the property in the official property holder.
The function of that person is to protect the property of CICs where it is at risk of abuse, in accordance with the powers to vest property that the regulator is given by Clause 45.
Where the regulator maintains that it is necessary to maintain confidence in CICs, perhaps because the property of a CIC is at risk, and where the company default condition set out in Clause 38 is satisfied, he will be able to make an order vesting the property in the official property holder. That will enable the regulator to take immediate action to safeguard assets for the community interest.
It will be appropriate for the regulator to use this power where other powers, such as appointing a director, may not fully ensure that the property is quickly or sufficiently protected. Property which belonged to the CIC before it was transferred to the official property holder will continue to belong to the CIC. The official property holder will hold the property on behalf of the CIC as trustee.
The regulator will use the different supervisory powers where appropriate. The power to vest property in the official property holder allows the regulator to take immediate action to secure the assets. That enables the regulator to take quicker action to
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safeguard the property for the community interest than would be the case in removing directors or appointing a manager. That is vital to maintain public confidence in CICs where there is the risk of abuse of assets.
At this point I need to say a few words about how the official property holder will interact with the company insolvency regime. This is a point which Amendment No. 111 addresses. One of the principles underlying this part of the Bill is that CICs should resemble other companies as far as possible in terms of the way in which company law applies to them. In the particular case of insolvency, the Government intend that company insolvency law should apply to CICs in exactly the same way as it does to other companies, except in the case of the treatment of residual assets, which is governed by Clause 28. This parity of treatment is important, because it is vital that third parties feel confident that they can trade with CICs with the full protection that company law provides to creditors in the event of insolvency.
Amendment No. 111 seeks to ensure that the regulator's ability to transfer property to the official property holder and to give him instructions does not undermine the normal processes that take place on insolvency. I am grateful to the proposers of the amendment for identifying the possible need for a refinement to the drafting in this area, which has also been identified by others including the Charity Law Association.
However, the amendment does not appear to us to address all the issues. In particular, on insolvency, it is the liquidator rather than the CIC or its directors, who is responsible for winding up the company's affairs and distributing its assets.
It is our intention that, in the event of the insolvency of a CIC, the regulator will direct that any assets that the official property holder is holding on trust for the CIC should be released so that they can be used to satisfy the CIC's liabilities. Indeed, the assets could not be used in any other way as no one else would have a right to them. However, there is currently no express obligation in the Bill requiring the official property holder to release such assets in that situation. We are actively considering whether that point needs to be clarified in the Bill.
I should add that we are also considering whether it would be helpful to clarify the relationship between the company insolvency regime and the power that Clause 44 gives the regulator to appoint a manager to a CIC. I shall touch on that when we discuss Clause 44.
Finally, I should like to advise the Committee that, after discussions with the National Audit Office, we are considering an amendment to Schedule 5 in order to make it clear that the official property holder must provide the regulator with reports on the exercise of his functions. Those reports will be laid before Parliament.

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To summarise, Clause 26 and its associated schedule help to give effect to one of the supervisory powers that will ensure that the property of CICs is used for the community rather than for private gain.
Lord Glentoran: I thank the Minister for what he has said. Some of it is encouraging. I am particularly interested in what he said about the relationship between the assets of a CIC, the official property holder and the potential liquidator at the time of liquidation. I shall read that carefully. I am sure that the Government have tidied that up. There are still some details that I should like to take another look at when I have read Hansard. I am encouraged to hear the Minister talking about further clarification of a number of points in this area. That is very necessary. I look forward to seeing amendments coming forward and to giving further consideration to certain issues.
Clause 26 agreed to.
Schedule 5 [Official Property Holder for Community Interest Companies]:
[Amendment No. 111 not moved.]
Schedule 5 agreed to.
Clause 27 [Cap on distributions and interest]:
Lord Glentoran moved Amendment No. 112:
Page 28. line 3, leave out "may" and insert "must"
The noble Lord said: In moving Amendment No. 112, I shall speak also to Amendments Nos. 117 and 119 and Clause 27. The Government's proposals for a community interest company, published as a consultation document in March 2003, identified certain key features of the proposed community interest company. One feature was that there should be an asset lock. On page 18 of the document at paragraph 3, it was suggested that:
"It would be critical to acceptance by charitable and ethical investors that those who set up CICs should commit to lock profits and assets into the company irrevocably, and that they should be seen to do so".
Related to this feature were certain other elements, such as the proposal for there to be a cap on dividends, mentioned in paragraph 28 of the consultation document; a restriction on the return to be made to investor shareholders on a liquidation, mentioned in paragraph 29; a requirement for approval from the regulator for changes to the CIC's purposes, mentioned in paragraph 21; and a permission for surplus assets to be gifted to other suitable organisations, such as CICs or charities, mentioned in paragraph 40. As CICs are designed for community interest and public benefit, a cap on the distribution of assets is fundamental to their purposes.
Clause 27 gives us only the outline of the legislation. The technical details appear, once again, in regulations. The relevant regulations relating to Clause 27 are numbers 17 to 20 and 22 to 23. These are complex and require detailed scrutiny. Regulations 17 to 20 provide for a cap to be placed on dividend payments and on certain interest payments related to the performance of the CIC. Regulations 22 and 23
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place limits on payments made by a CIC on the redemption or purchase of its own shares and on payments made by way of a reduction of share capital.
We have no problem with the concept of having an asset lock, but we need to ensure that the detail of the regulations is tightly drafted enough. At the moment, the drafting of Clause 27 is loose. I am not sure whether this is merely a semantic point or whether it is significant, but the clause uses the formula that "regulations may" do x, y and z. We have seen the regulations but they are only in draft format.
We do not want to hear what might or might not be contained in regulation; we want certainty that the regulations will prohibit or impose limits on the distribution of assets, and so on. To this end, we have tabled amendments to remove "may" and insert "must"—an old chestnut for the Opposition. I am sure the Minister will assure me that "may" has the necessary degree of certainty but, to be honest, it is no guarantee. It is almost as if, when the Bill was being drafted, the actual details of how regulations would work to lock assets was unclear, so the use of "may" gave some flexibility. We now have draft regulations, and it might be good to tighten up the drafting to reflect the content of these regulations more closely.
I know that officials love the use of "may"; Opposition politicians love the use of "must" and hate the use of "may". I beg to move.
Lord Phillips of Sudbury: I simply wish to support the old chestnut—by which I do not mean the noble Lord, Lord Glentoran. In this instance, he has a good point.
Lord Evans of Temple Guiting: These amendments, as we have been told by the noble Lord, Lord Glentoran, are concerned with the asset lock for community interest companies, which is one of the most important features of this part of the Bill. Clause 27 provides powers to use regulations to set various caps on distributions and interest, and the draft regulations published on 12 February, mentioned by the noble Lord—in particular, draft regulations 17 to 20, 22 and 23—show how the Government in tend to use those powers. I shall therefore describe why the Government are resisting the amendments in the context of the draft regulations.
All these amendments turn the word "may" to "must" in different parts of the clause. This change would require—rather than allow—various limits to be set. First, let me assure the Committee that it is our intention that there should be limits on the distribution of assets by community interest companies. We fully intend to use this power, as the draft regulations demonstrate. However, it is necessary to frame the powers in this clause in discretionary rather than mandatory terms. This is because we do not intend to impose limits on everything.
For instance, we do not intend that there should be limits on the interest payable on the debts of community interest companies, except in special circumstances where the rate of return on the debt is

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linked to the performance of the company. That is why draft regulation 18 provides for a cap on such payments, but not on debt payments generally.
Other types of interest payments might be limited in the future if it was found that they were being used to evade the restrictions on distributions to members. That is why the detail of what is limited is left to regulations. It retains that flexibility so that the caps can be targeted at just those transactions that damage the asset lock. The amendments would harm the current ability to leave it for regulations to determine what should be limited, what should be prohibited, and how. This flexibility, we believe, is important if community interest companies are to remain an up-to-date and adaptable form.
[The Sitting was suspended for a Division in the House from 6.30 to 6.40 p.m.]
Lord Evans of Temple Guiting: I thought that I had dealt with Amendment No. 112 and was moving on to Amendment No. 117, which has the particular effect of requiring the regulator, rather than anyone else, to set the limits. Again, this is a limitation of flexibility. The draft regulations show that it is our intention that the level of all limits imposed by regulations under this clause should be set by the regulator. However, in time it may be more appropriate for certain limits for certain community interest companies to be set by someone other than the regulator. For example, it might be better for those community interest companies in England and Wales that are housing associations to have their limits set by the Housing Corporation. Any such change in regulations would be subject to the affirmative procedure in both Houses.
Amendment No. 119 will remove the ability to develop the limits regime in a way that responds to the needs of the social enterprise sector. Clause 27(3)(a) allows limits to be set by reference to a rate set by a third party, such as the Bank of England base rate. Our consultation confirmed that the ability to link the limits on CIC dividend payments to such a rate would be a useful additional flexibility. However, Amendment No. 119 would require the regulator to set all limits by reference to such an ambulatory rate. This may be inappropriate in some circumstances. For example, community interest companies in certain sectors may prefer the simplicity and certainty of a limit that remains fixed, rather than one that is regularly changed. We therefore think that this clause currently strikes the right balance by allowing the regulator to set limits by reference to rates determined by others, but not requiring him to do so. With that explanation, I hope that the noble Lords will feel able to withdraw their amendments.
Lord Glentoran: With all respect to the Minister, I do not accept the explanation. My concern in Clause 27 is where "may" is used in lines 3, 8 and 10. As I understand it, if "may" was taken away there would be no regulations at all. If "they may prohibit" was not there, there would be nothing. What I want is that "regulations must prohibit". The regulator "may set a limit". He may not. I want to be sure that he will set a limit. The regulations,
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"may include power for the Secretary of State".
That may be debatable but I would still like to feel that they must. It is terribly woolly. Nothing might happen at all. There might not be a cap set; there might not be a limit set; there might not be any power given for the regulator to review limits. It is there. "May" means "may", which, I suggest, means "may not" as well. However, as we are unable to divide in Committee, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Glentoran moved Amendment No. 113:
Page 28, line 4, after "assets" insert "or other transactions"
The noble Lord said: Amendments Nos. 113 and 114 were suggested to us by a senior company law barrister who saw a potential loophole in the drafting of Clause 27. The problem is that the consultation paper did not specifically address the question of the extent to which the asset lock should be structured so as to preclude the removal of profits or surplus assets from CICs by transfer-pricing or other devices short of the making of distributions to members. It is suggested that the rule-making power to be given by Clause 27 of the Bill—a power that will authorise the regulations to be made that will provide the asset lock—limits the scope of the regulations in a way that may prevent the regulations from being able to impose an effective asset lock. Not only should there be regulation of the distribution of assets to members, but there should be regulation of the class of persons who may receive benefit from CICs and of the type of benefits which may be received. I beg to move.
6.45 p.m.
Lord Evans of Temple Guiting: Amendments Nos. 113 and 114 seek to widen the scope of this clause so that the regulations to be made under it can prohibit or impose limits on transactions other than simple distributions of assets to members of the company. The wider protection that the amendments aim to provide is already provided by the powers contained in Clause 29, which allow for restrictions on transactions and distributions to be placed in the memorandum and articles of each community interest company.
The restrictions that the Government intend to impose under Clause 29 are indicated by draft Regulations 7 to 10 in the set of draft regulations, published in February, and their associated schedules. The restrictions include a bar on community interest companies making a distribution or transfer except for full consideration, other than in the narrow circumstances set out in the draft regulations. Therefore, regulations under Clause 29 will implement most of the key provisions of the asset lock by placing restrictions on transactions and distributions into the memorandum and articles of each community interest company. We believe that that is the most effective way of creating the asset lock.
The fact that the restrictions will be set out in the constitution of each CIC and not just in the small print of legislation will make it easier for CICs, and for those who deal with them, to be aware of and to understand

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what the asset lock means. It is particularly important that the asset lock should be transparent and easily understood.
Clause 27 is also an important part of the asset lock but is intended to cover only those matters where a complete prohibition is intended or where limits are to be set by the regulator or some other person. Subsection (1) already sets out a complete list of the matters that we wish to prohibit or limit in that way.
I was asked whether there were potential loopholes, such as transfer pricing. When there is any concern that a CIC is breaching prohibitions on distributions that are set out in regulations, the regulator will be able to investigate. If he concludes that the company default condition set out in Clause 38 is satisfied, he can take supervisory action. I hope that, with those reassurances, the noble Lord will withdraw his amendment.
Lord Glentoran: I thank the Minister for that response. The purpose of the amendment was to point out a legal loophole. I do not pretend to be an "eagle beagle" legal man, and I leave it with the Government to decide whether or not my legal adviser had occasion to give his advice. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 114 not moved.]
Lord Phillips of Sudbury moved Amendment No. 115:
Page 28, line 7, at end insert
"( ) impose limits on the payment of remuneration or other benefits to members and directors of community interest companies"
The noble Lord said: The amendment would entitle regulations to be made with regard to the imposition of limits on the payment of remuneration or other benefits to members and directors of CICs. The second amendment in the group in my name—Amendment No. 117—would add a subsection to the end of Clause 29(4), which in turn sets out provisions that can be promulgated under Clause 29 and included in the memorandum and articles of a CIC.
Both amendments are designed to control what seems to me a gaping gap—I suppose that gaps are, of necessity, gaping—or a hole through which a coach and horses might go. As the Government have said, rightly and at length on many occasions, the central purpose of the CIC is to constrain the prospect that accumulated assets and profits should be got out for private benefit, so to speak. Hence the provisions of Clause 27 vis-à-vis caps. However, they do not extend to remuneration. I raised this on Second Reading. The fact that at no time, then or since, have the Government pretended that the prohibition on distributions of assets is intended to include remuneration levels makes me confident that Amendments Nos. 115 and 117 are necessary.
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When Roger Warren Evans and Stephen Lloyd, the two architects of the CIC, produced their first working paper, they proposed,
"that statutory provision should be made for barring another manifestation of the improper disbursement of public assets, namely the payment of excessive Board or management remuneration. Without a statutory mechanism for the containment of this loophole, widely seen as a defect of prevailing company law, the credibility of the PIC sector could be rapidly eroded".
They also said:
"Competitive salaries and fees will have to be paid".
Given the extent to which private companies these days utilise remuneration levels as the most common means of withdrawing profit from their companies, I hope that the Government will listen to this and, if they find these amendments unacceptable, they will put forward others in their place. They are not covered, either, by the provisions of Clause 29(4)(a), which refers to the transfer and distribution of the company's assets. Nor, indeed, is the situation remotely satisfactorily dealt with by the publicity requirements vis-a-vis salaries. There will be CICs, just as there are charities, with a sort of closed membership, where members of the CIC and members of the board of directors will be coterminous. It is written into the memorandum and articles that you cannot be a director unless you are a member and you cannot be a member unless you are a director. In those circumstances, it is extremely dangerous not to have any ability on the part of the regulator to take direct action.
Amendment No. 115 is quite adept, in that it does not say what the limits shall be. It can then be built on, or utilised, in the context of Clause 27(2), which makes provision for limits to be set by the regulator and, in subsection (3), allows the regulator to set a limit. That would then include my limit on remuneration for different types of cases. Although I was unhappy with the notion that the regulator could impose different limits for different cases, and still am, none the less, I suspect that will find its way into the Act.
We have here a mechanism that does not force the regulator to do anything, but at least gives him or her the power, where there is serious public discontent at an abuse, to do something about it. Without such an amendment, I do not believe he or she has that power, and it could undermine the very purpose and integrity of CICs. I beg to move.
The Deputy Chairman of Committees (Lord Geddes): It might be helpful for the Committee and, more particularly, for the official record, if I say that I think the noble Lord, Lord Phillips, meant to refer to Amendment No. 127 rather than Amendment No. 117.
Lord Phillips of Sudbury: He did, and how grateful I am.
Lord Glentoran: I would like to speak to Amendment No. 124, which is included in this group. I support the noble Lord, Lord Phillips, in his amendments. I, like the noble Lord, have grave concerns that the failure to mention directors'

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remuneration in the Bill would undermine the asset lock which Clause 27 hopes to achieve. I tabled this amendment without the benefit of having seen the draft regulations and in reference to what should be included on the face of the Bill under Clause 29(4) as a likely requirement for the regulations detailing the constitution of CICs as contained in their memorandum and articles. We have already said that the memorandum and articles of a CIC are meant to reinforce the principle of an asset lock by filling in the technical details. Our concerns were that there was no mention of directors' remuneration. There would be no good in having a lock on the distribution of assets, payment of interest to members, and so forth, if there was no regulation which put a limit or constraint on the amount directors were paid.
In such a situation directors could receive inflated salaries to get round the interest cap in Clause 27 and the lock on assets except for community interest. We felt that directors' remuneration should be included as an obligatory requirement in the memorandum and articles of a CIC. CICs are designed for public benefit. Profits which should be ploughed into public benefit and community interest projects could get siphoned off to line the pockets of directors. In the interests of transparency we believe that the memorandum and articles of every CIC should give details about all directors' remuneration. Our amendment would guarantee such a provision.
However, having looked at the regulations, I notice that there is a requirement for details of directors' remuneration to be disclosed. That is to be contained in the CIC annual report in regulations under Clause 31(3). Details of those regulations are contained in draft regulation 24 at paragraph 1(e).
The Explanatory Notes make clear that the inclusion of information on directors' remuneration was newly inserted under regulations for the CIC report as a direct result of responses to the consultation process. That is an encouraging sign. It shows that those who responded to the consultation were on the same wavelength as us; that is, they appreciated that there might be a conflict between the lack of constraint on directors' pay and the public benefit asset lock.
The regulations make clear that the information required under the draft regulation is the same as that which the Companies Act 1985 already requires medium and large unlisted companies to include in the accounts they deliver to the registrar of companies, but will apply to all CICs whatever their size. That means that all CICs will be required to make public information including the total aggregate pay of their directors; the details of the highest paid director if the total aggregate pay of their directors exceeds £200,000; and the number of directors who have received share benefits.
I am happy that that information is to be disclosed. However, I wonder whether the Minister has any thoughts about where that should be included. The noble Lord, Lord Phillips, would prefer it to come in under Clause 27, while our proposal includes a
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constraint into the constitution of each CIC within their memorandum and articles rather than as information which must be provided for the annual report.
Lord Phillips of Sudbury: Before the Minister replies, perhaps I may add in response to the last point made by the noble Lord, Lord Glentoran, that the advantage of putting this in Clause 27 is that it gives discretion to the regulator to act on this matter if there is abuse which is causing problems. It gives that flexibility.
7 p.m.
Lord Sainsbury of Turville: These three amendments would provide the power to make regulations setting limits on what CICs could pay to their directors. Some of the amendments go even further by providing for regulations to limit the remuneration that could be paid to people who are members of the company, or any other benefits that the members or directors could receive from the company.
We debated the principles underlying these amendments at Second Reading, at which I explained the reasoning behind the Government's approach. In short, we recognise the need for transparency on the level of remuneration paid to the directors of CICs, particularly given the long tradition of voluntary service in some parts of the social enterprise sector. It is for that reason that we propose to require the annual community interest company report to provide information on this subject, which will be made available to the public via the companies register. So, there is already a mechanism for making that information available. It does not provide information just to the members; it provides information generally. The draft regulations published in February contain a provision which deals with this in draft Regulation 24.
Where there are concerns that the scale of payment is inappropriate, the regulator will be able to investigate. If the concerns are well founded, for instance, because directors have colluded to pay themselves deliberately excessive remuneration, the regulator may have a number of courses of action open to him. What he does will depend on the circumstances of the case. For instance, that kind of behaviour by directors will be a breach of their duties to the company, which could leave the company with a claim against the directors. The regulator will have powers under Clause 41 to take action to enforce that claim.
Alternatively, if the regulator concludes that there has been misconduct in the CIC, abuse of the company's property or failure to satisfy the community interest test, sufficient to trigger the conditions for the use of the supervisory powers under Clause 38, he will be able to use those powers to address the problem. For instance, he could remove the directors concerned. Those directors would still be able to enforce their contractual rights against the company but only if the exercising of those rights was consistent with their duties to the company.
The amendments clearly envisage a more prescriptive approach in which the Government would lay down in regulations what it is appropriate for CICs

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to pay their directors. As I said at Second Reading, the Government do not think that that is the right approach. CICs will be companies, not arms of the state. They will be in competition with commercial companies, and that will include competing for the best staff. It is not for government to dictate to companies in general what they should pay their directors. That is the position we take uniformly whenever the issue of directors' salaries is raised. If you depart from that principle, you get into very difficult and dangerous waters. Of course, if we were to try, and got it wrong, we could hamstring the ability of CICs to grow, thrive and compete. That is a matter of principle.
There is also the practical matter of how limits might be set. The range of activities of potential CICs is very wide indeed, and so, therefore, is the range of abilities that their directors may require. How will any government be in a position to draw up meaningful limits?
I do not mean to dismiss the concerns that underlie these amendments. As I have said, the Government take the risk of abuse of the asset lock through directors' pay and benefits seriously, and are open to ideas about how best to address that risk within the framework we have proposed.
As I have said, some of the amendments would also impose limits on the remuneration of people who are members of the company, even though they are not directors. We consider that this is a matter best left for the directors of the company to determine. Clause 27 already contains a power to limit the distribution of assets to members. The payment of remuneration is a different matter, and where an employee happens also to be a member of the company, we do not think that he should be singled out for different treatment from all the other employees of the company.
Some of the amendments provide for limits to be imposed on the benefits that may be paid to directors or members of the company. We consider that directors and members of the company should be able to be beneficiaries of the CIC as well. Sometimes it might be coincidental that a director or member also derives a benefit from the community interest activities of the CIC, and we see no problem with this. But it is also possible that a CIC might be set up to benefit its members, which may include its directors. This is acceptable provided that a reasonable person would consider that the activities of the CIC are being carried on for the benefit of the community.
The draft regulations published in February make some additional provision in this area by providing that where the benefits are restricted to the members or employees of the CIC, the activities of the CIC must not be carried on solely for reasons of private gain. We have indicated that this is a particular area where we are seeking the views of the social enterprise sector. However, we think it is right that, for example, a company set up to provide employment for the disabled or a company set up to provide social housing or care for its members should be able to become a CIC. Therefore, it is not appropriate to impose limits
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on the benefits that may be paid to members or directors. This is a matter for the CICs themselves, provided they continue to satisfy the community interest test.
I hope I have reassured the Committee that we also perceive a potential gap but that we have taken action to enable the regulator to deal with such a situation without getting into the very dangerous area of trying to set a limit on salaries.
Lord Phillips of Sudbury: I am grateful to the Minister for that careful consideration of these amendments. These are difficult matters; let us make no bones about it. On the other hand, it is a red herring to talk of problems with housing charities or charities for the disabled where a member is also a beneficiary. Plainly, under my amendment the regulator would not begin to interfere with bona fide arrangements of that kind. I drafted the amendment in terms of exceptional circumstances where the regulator would need to take action to reassure the public and to maintain the integrity of the sector.
I refer to a second matter that I am not convinced about although I shall obviously study carefully what the Minister said. He referred to Clause 41 as a potential weapon that the regulator could utilise to bring civil proceedings in the name of, and on behalf of, the community interest company. I just do not see that. On what basis would the regulator do that? As the Minister said, the issue of remuneration is extremely contentious in the private sector. He went on to say that, in that respect, he wants CICs to be no different from the private sector and that he wants them to be able to operate on the same basis as the private sector. I put it to him that I do not consider that to be a real remedy.
Lord Sainsbury of Turville: I hoped that I had explained that there were exceptions where a breach of the duties of the company was involved. In extreme cases where that occurs, the regulator can take action. I agree that that is different from saying that if a certain level is breached, by definition, the regulator should take action. However, I believe that the only way that it makes sense is if, in terms, the directors of a company have a very general responsibility. Otherwise, the regulator and, indeed, the state will determine precisely what level of salaries should be paid to which directors.
Lord Phillips of Sudbury: Again, I thank the Minister for that. In the view of an old lawyer like me who has seen the way that the world works in reality, it is improbable that the remedies referred to by the Minister would be activated because of the huge difficulties of a regulator—who, as has been indicated, will have a tiny staff—managing an action which is based on highly speculative grounds with no rock or foundation to it but only grounds of excess.
I was merely trying to give some practical leverage to the regulator so that he could go to a company that was, so far as any normal person was concerned, paying over the odds and say, "Look, either you give me an explanation that is acceptable or I may be forced

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to use the powers that I have to set remuneration levels in a specific case". That is what the clause currently allows. I am looking at this matter from a practical standpoint. I want this regime to succeed. However, if there is to be—as there will be, as is the case now with charities—a coterminous board and membership, the membership will cease to be constrained by the board and, because the members are the same as the board, the only interest in the functioning of the company will be destroyed in terms of public accountability.
I believe that, by relying on these vague remedies in appointing a manager or civil proceedings, the Government are undermining their own case. I emphasise that the powers given by the first of my amendments would be discretionary. The nature of regulation is such that there are so many other things to do that one will not act unless there is a strong and sound case. I shall leave it at that and ask the Minister kindly to give the matter further consideration.
Lord Glentoran: My amendment is somewhat different, although it is in the same group as those of the noble Lord, Lord Phillips. We are suggesting that in Clause 29—on page 29, line 5 of the Bill—we should change the wording of paragraph (e) from,
"provisions about the appointment and removal of directors",
so that the words "and removal" are substituted with the words "removal and remuneration". That would then bring the whole business of directors'
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remuneration into the world of the community interest companies' memorandum and articles, and the matter would be up for grabs and easily transparent.
Lord Sainsbury of Turville: That is a different issue. We come back to the question of whether we want to put in a limit of some sort. If it is in general terms, it will not add anything.
Lord Glentoran: We are not recommending a limit. We are recommending a situation in which the salary or remuneration package is transparent. We hope that that will look after itself, as those involved will know and the public will know.
Lord Sainsbury of Turville: I hoped that I had made it clear that that situation already exists. As the noble Lord explained, it will be in the company's report.
Lord Phillips of Sudbury: I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Evans of Temple Guiting: This may be a convenient moment for the Committee to adjourn until Monday at 3.30 p.m.
The Deputy Chairman of Committees: The Committee stands adjourned until Monday 29th March at 3.30 p.m.
The Committee adjourned at twelve minutes past seven o'clock.

  Law Officers' Advice to Government: Disclosure
  Law Officers' Advice to Government: Disclosure
  Northern Ireland Department of Culture, Arts and Leisure: Cultural and Linguistic Diversity Funding
  Northern Ireland Department of Culture, Arts and Leisure: Cultural and Linguistic Diversity Funding
  Belfast Education and Library Board: School Funding Formula
  Belfast Education and Library Board: School Funding Formula
  Government and Judiciary
  Government and Judiciary
  Iraq: Legal Advice
  Iraq: Legal Advice
  Afghanistan: Prisoners
  Afghanistan: Prisoners
  Small Arms
  Small Arms
  Iraq: Basra Airport
  Iraq: Basra Airport
  Literacy
  Literacy
  Parole
  Parole
  Iraq: Unexploded Ordnance
  Iraq: Unexploded Ordnance
  Iraq: UK and US Counter-insurgency and Counter-terrorism Training
  Iraq: UK and US Counter-insurgency and Counter-terrorism Training
  Ministry of Defence Police: Aggravated Trespass
  Ministry of Defence Police: Aggravated Trespass
  RAF Harrier GR7 Aircraft
  RAF Harrier GR7 Aircraft
  Iraq: Khamisiyah
  Iraq: Khamisiyah
  Watchkeeper Project
  Watchkeeper Project
  NHS: Paediatric Services
  NHS: Paediatric Services
  Smoking and Women
  Smoking and Women
  MMR Vaccine
  MMR Vaccine
  Fatigue and Neurological Disorders
  Fatigue and Neurological Disorders
  Disabled People: Local Authority Services
  Disabled People: Local Authority Services
  School Sport
  School Sport
  Child Trust Funds Bill
  Child Trust Funds Bill
  Private Finance Initiative
  Private Finance Initiative
  Sport: Lottery Funding
  Sport: Lottery Funding
  Community Amateur Sports Clubs
  Community Amateur Sports Clubs
  Pesticides
  Pesticides
  Wild Birds
  Wild Birds
  Pig Swill
  Pig Swill
  Common Agricultural Policy: Cross-compliance
  Common Agricultural Policy: Cross-compliance

  Liberia
  The Minister of State, Foreign and Commonwealth Office (Baroness Symons of Vernham Dean)
  With the support of Her Majesty's Government the United Nations Security Council on 12 March unanimously adopted UN Security Council Resolution 1532 (2004). The resolution imposes an asset freeze against Charles Taylor, former President of Liberia, his wife Jewell Howard Taylor and his son Charles Taylor Jr. The asset freeze will also target senior officials of the former Taylor regime, and other close allies and associates of Taylor, as designated by the committee established by UN Security Council Resolution 1521 (2004). The legal basis for the asset freeze is that Charles Taylor and others continue to use misappropriated funds to undermine peace and stability in Liberia and the region. The resolution includes humanitarian and other exemptions to the freeze, and states the intention to consider whether and how to make frozen assets available to the Government of Liberia.

  Zimbabwe
  Baroness Symons of Vernham Dean
  With the support of Her Majesty's government, Common Position 2002/145/CFSP and EC Regulation 310/2002 imposing EU sanctions against Zimbabwe were renewed and replaced by Common Position 2004/161/CFSP and EC Regulation 314/2004 on 19 February 2004. The measures include an arms embargo and ban on related technical assistance, with specific exemptions; an embargo on equipment that might be used for internal repression; a travel ban on listed Zimbabwean officials, who are undermining democracy, human rights and the rule of law, preventing them from entering the EU, with standard criteria for exemptions; and an assets freeze against the listed officials, with certain specific exemptions. The list of officials (in the annex to the common position) has been increased from 79 to 95. The measures in the new common position and regulation follow the EU Guidelines on Implementation and Evaluation of Restrictive Measures (Sanctions) in the Framework of the EU Common Foreign and Security Policy, which were adopted on 8 December 2003. The measures apply for 12 months from 21 February 2004. Amendments or renewal of the measures will be made if their stated objective has not been met.

  Food Standards Agency: Annual Report and Accounts 2002–03
  The Parliamentary Under-Secretary of State, Department of Health (Lord Warner)
  My honourable friend the Parliamentary Under-Secretary of State for Public Health (Miss Johnson) has made the following Written Ministerial Statement today.

  The Food Standards Agency's Annual Report and Accounts 2002–03 was laid before Parliament today. Copies will be placed in the Library.

  Gulf Veterans' Illnesses: Research into Reproductive Health
  The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Bach)
  My honourable friend the Parliamentary Under-Secretary of State for Defence (Mr Ivor Caplin) has made the following Written Ministerial Statement.

  A key principle of the Government's approach to addressing the health concerns of veterans of the 1990–91 Gulf conflict is that there should be appropriate research into veterans' illnesses and factors that may have a bearing on these. Our current research programme is expected to cost at least £8.5 million.

  As part of this research effort, the Ministry of Defence funded an independent study of the reproductive health of UK veterans of the 1990–91 Gulf conflict through the Medical Research Council (MRC). The main findings of this research have today been published in a paper entitled "Miscarriage, stillbirth and congenital malformation in the offspring of UK veterans of the first Gulf war" in the International Journal of Epidemiology.

  The researchers have reported that for male veterans of the 1990–91 Gulf conflict, they found no evidence for increased risk of stillbirth, chromosomal malformations or congenital syndromes. Some associations were reported between fathers' service and increased risk of miscarriage and other less well defined malformations. For female veterans, the number of stillbirths and malformations were too small to allow meaningful analysis and there was no effect on the risk of miscarriage.

  The MoD welcomes publication of this important research. The MRC's Military Health Research Advisory Group (MHRAG) has considered the paper. It agrees with the researchers that, overall, the lack of evidence to link reproductive health problems with Gulf service should be reassuring to veterans and that the apparent increased risk identified should be interpreted with caution. The MHRAG does not intend to recommend any additional research into this aspect of Gulf veterans' health at this time.

  Iraq: Reconstruction
  The Lord President of the Council (Baroness Amos)
  My right honourable friend the Secretary of State for International Development has made the following Written Ministerial Statement.

  I visited Iraq from 22 to 23 March. In Baghdad I met the Iraqi Governing Council, Ministers and representatives of non-governmental organisations, as well as Ambassador Bremer and other staff from the Coalition Provisional Authority. In Basra I visited two development projects, met leaders of women's groups and held discussions with CPA South staff.

  Significant progress is being made. Iraq's economy is recovering with oil output now over 2.5 million barrels per day, and reconstruction projects are bringing results. I visited Al Faw to see the installation of five 2MW diesel generators, funded by DfID, which should provide the 45,000 citizens of Al Faw with 24 hours of electricity every day.

  In Basra I visited the Rzero water treatment plant. This is part of a major programme to renew the Basra water supply. The USA is providing most of the capital investment, alongside some money provided by the Development Fund for Iraq, to extend new water mains to the poorest areas of Basra, and in doing so create up to 2,000 jobs. The DfID-financed team in CPA South helps to co-ordinate the whole programme. It should provide a good model for future collaboration.

  Successful reconstruction is bringing new challenges. Sustaining the improvements in infrastructure will require difficult political decisions by the new Iraqi Government about charging customers realistic rates for services such as electricity and water and strengthening the Iraqi institutions that run these utilities. The public distribution system for
  WS 46
  food and Iraq's state-owned enterprises will also need reform. The IMF and World Bank will have a significant role to play in this.

  Security remains a major concern for the Iraqis and those who are helping them. But encouraging progress is being made in recruiting for the new Iraqi security forces, and training programmes are under way.

  The transitional administrative law is a significant development in the political process. At the Iraqi Governing Council's invitation the UN has agreed to play a major role in facilitating the formation of the interim government and the preparation for elections. The handover on 30 June will be a big step. From 1 July Iraqis will have to address their concerns to their own government. However, donors will still have a significant role, and we are working to make the transition as smooth as possible and to ensure that donors co-ordinate their programmes effectively.

  The Minister for Municipalities and Public Works, Mrs Nasreen Berwari, joined me in Baghdad to launch DfID's interim country assistance plan for Iraq, which I announced to the House in a Written Statement on 23 February (col. 7WS). Copies of the plan are in the Libraries of both Houses. At the same time I was able to confirm that DIID is making an initial contribution of £70 million to the International Reconstruction Fund Facility for Iraq: £40 million of this will be spent through the World Bank's trust fund and £30 million through the UN's. We are also providing £8.5 million to the International Finance Corporation for its programme for small and medium enterprises in Iraq, which will enable it to start promoting much needed business activity and employment.

  Recent events remind us to take nothing for granted in Iraq, but overall reconstruction is going better than many predicted. However, it will require a sustained effort from the Iraqis, with support from the international community, to ensure that it succeeds.