Sitting of 7 February 2005

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

MRSA
Lord Rosser Lord Rosser asked Her Majesty's Government:
When they first became aware of the reported increase in methicillin resistant staphylococcus aureus (MRSA) in National Health Service hospitals; and when central reporting of MRSA became mandatory.
The Parliamentary Under-Secretary of State, Department of Health (Lord Warner): My Lords, under the voluntary reporting system then in existence it is clear that the proportion of MRSA isolates in bloodstream infections increased from 4 per cent to 30 per cent from 1993 to 1997. The full national picture became known only after this Government introduced mandatory surveillance of MRSA with effect from April 2001. The data from mandatory reporting have been published from the outset to assist the NHS in tackling this difficult problem.
Lord Rosser: My Lords, if my noble friend is saying that there was a rapid increase in MRSA in the years immediately prior to 1997 and that the then government did not demand to know the full picture, does he share my view that their recent attempts to blame others is a clear-cut case of the Official Opposition seeking to sweep their full responsibility for the increase in MRSA under the hospital bed?
Lord Warner: My Lords, it is a normal convention that governments are not allowed to see papers relating to previous administrations. However, it is very difficult to escape the conclusion that the Official Opposition did not have their eye on the ball on this issue before 1997. I think that my noble friend's comments are a fair summary of the position.
Lord Tebbit: My Lords, can the Minister say whether a general election is coming shortly?
Lord Warner: My Lords, I am very ill informed on the matter.
Baroness Pitkeathley: My Lords, does my noble friend agree that not only has there been a huge increase in the awareness of hospital staff of problems associated with MRSA, hut also a concentration on making visitors to wards aware of the necessity to take proper hygiene precautions? I have been very struck by that when visiting hospitals recently.
Lord Warner: My Lords, my noble friend is absolutely right. We have introduced the "Clean Your Hands" campaign which is improving hand hygiene. We have raised awareness by publishing information rather than, as my noble friend said, sweeping the problem under the bed. There is a rising public consciousness, and a consciousness among staff, of the importance of cleanliness and good cross-infection control.
Lord St John of Bletso: My Lords, what are the Government doing to control the misuse of antibiotics; and what are medical staff doing to ensure containment of the disease?
Lord Warner: My Lords, the Chief Medical Officer published his document Winning Ways in December 2003. That set out an action plan in this area, including better control of use of antibiotics so that we did not stimulate this very clever bacteria to modify itself further.
Earl Howe: My Lords, is the Minister aware that the Health Protection Agency has stated:
"Nearly three out of every four NHS Trusts with the worst rates of MRSA … have bed occupancy levels exceeding that deemed safe by the Health Protection Agency".?
Why does the Minister think that is? Could it possibly be because, as the National Audit Office recently put it,
"the increased throughput of patients to meet performance targets has resulted in considerable pressure towards higher bed occupancy, which is not always consistent with good infection control"?
Lord Warner: My Lords, this Government are proud that they have had some targets—which the Official Opposition wish to sweep away, I understand—which have reduced waiting lists and enabled people in pain, who are suffering and possibly dying, to get into hospital faster. We do not think that there is any conflict between good cross-infection control and good bed management. We have made it clear to trusts and chief executives that they are expected to control both those agendas in the interests of patients.
Lord Dixon-Smith: My Lords—
Baroness Gardner of Parkes: My Lords—
Baroness Barker: My Lords—
Lord Ashley of Stoke: My Lords—
The Lord President of the Council (Baroness Amos): My Lords, we have yet to hear from the Liberal Democrat Benches.
Baroness Barker: My Lords, given the Secretary of State's stated expectation that MRSA rates will halve by 2008, what resources have been given to NHS trusts to implement the new model cleaning contract that he announced in December 2004?
Lord Warner: My Lords, under this Government NHS allocations have increased over the past couple of years, and for another two to three years will continue to increase on average by about 7.1 per cent in real terms—an unprecedented level of extra funding. After the 2000 NHS Plan we also introduced an extra £68 million for cleaning. We accept that the cost-cutting measures on contracting out carried out by the Official Opposition in the 1980s have not helped hospital cleaning.
Lord Ashley of Stoke: My Lords, while the hand-washing campaign is very important, I have seen one report which indicates that even hospitals with the highest hygiene standards have some of the highest rates of MRSA. What conclusion does the Minister draw from that and what lessons can be learned?
Lord Warner: My Lords, it is true that we have a particularly difficult strain of MRSA in this country. However, healthcare-acquired infection rates in this country are not very different from those across Europe. We are continuing to battle against MRSA. The NHS is now responding to the lead given by the Government in this particular area.
Baroness Gardner of Parkes: My Lords, does the Minister recall our recent debate when, on that very day, the Secretary of State demonstrated a brand-new machine that was going to vacuum up MRSA and solve the problem? How many of those machines have now been introduced and into how many hospitals?
Lord Warner: My Lords, I obviously have the sort of collective amnesia that sometimes afflicts the Opposition on the NHS. I do not remember that particular event. I can tell the noble Baroness that we introduced the Rapid Review Panel, which has considered 58 products that have come forward from industry. We have announced the results of that review and are making the best and most effective products available to the NHS through framework contracts via the Purchasing and Supply Agency.
Lord Dixon-Smith: My Lords—
Lord Phillips of Sudbury: My Lords, as one who contracted MRSA in an excellent hospital years ago, is it possible—I was certainly given the impression there that it was the case—that there are far too many impositions and interferences in hospital management centrally—I am talking not just about this government but all governments—and that we might get further with fighting MRSA if the hospitals were left with more of the initiative?
Lord Warner: Well, my Lords, that is why the Government are shifting the balance of power. We have made guidance and money available and have given a clear lead in the area of cleanliness and MRSA.
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It is down to trust boards and chief executives, working with their staff, to ensure that those problems are addressed.
Lord Dixon-Smith: My Lords—
Baroness Amos: My Lords, next Question.

UN Convention on Refugees
2.45 p.m.
Lord Roberts of Llandudnoasked Her Majesty's Government:
Whether they intend to renegotiate or opt out of the 1951 United Nations Convention on Refugees.
The Minister of State, Office of the Deputy Prime Minister (Lord Rooker): My Lords, the answer is no. We have no plans to withdraw from or renegotiate the 1951 refugee convention. It is part of the legal and ethical framework that enshrines basic principles of human decency through which all countries meet their obligations. A better and more realistic way of addressing today's protection issues is to adopt effective domestic asylum procedures and to work with other governments and the United Nations High Commissioner for Refugees.
Lord Roberts of Llandudno: My Lords, I am relieved by and appreciate the Minister's reply. Bearing in mind the Statement to be made later this afternoon, may we have the Government's wholehearted commitment to upholding our place in the 1951 convention, which was approved at the time by all parties in this House and was introduced and ratified on 11 March 1954 by Sir Winston Churchill's Conservative government?
Lord Rooker: My Lords, bearing in mind the Statement to be made later this afternoon, I have to ask the noble Lord to wait for that Statement. The Home Secretary has a Statement that will be repeated in this House, so we shall have plenty of time to question it.
The broad answer to the noble Lord's question is yes, but I add something that people do not always accept: the 1951 convention is not open-ended, as anyone who reads Articles 1F and 33.2, both debated at length in this House, will see. People get the wrong impression about it. But we have no plans to renegotiate or opt-out.
Baroness Rawlings: My Lords, does the Minister agree that on the eve of the previous general election, weeks before the 50th anniversary of the 1951 United Nations Convention on Refugees, the Prime Minister wrote in the Times that he would make reform of the convention a priority, should the Labour Party win the

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election? Will the Minister set out what aspects of the convention the Government have sought to reform since the 2001 general election?
Lord Rooker: My Lords, we have accepted that there are problems with the convention and the language in which it is written.
Noble Lords: Oh.
Lord Rooker: No, my Lords, we have accepted that. That has nothing to do with the dates. The noble Baroness's party would withdraw from the convention, as has recently been made clear. We have no plans for that. We are seeking to tackle how the convention can be abused. We have a record of legislative change in the past four years, with others possibly to be announced today, to bring that about: to stop the abuse of the convention, not to opt out of it.
Lord Judd: My Lords, does my noble friend agree that, when he gives that immensely reassuring answer on our commitment to the convention, we should all remember that in our serious commitment to spreading democracy and human rights throughout world, how we perform toward the victims of tyranny is one way by which we shall be judged?
Lord Rooker: My Lords, I agree entirely with my noble friend.
Lord Dholakia: My Lords, has the Minister worked out the implications of the Opposition's statement about withdrawal from the UN Convention on Refugees for our European partners and the European Court?
Lord Rooker: No, my Lords, I have not and I do not think that the Government have. It is for the Opposition to work that out.
Lord Tebbit: My Lords, does the Minister recollect that my noble friend asked him a question? He did not give an answer. What exactly did the Prime Minister do to fulfil his undertaking in the article in the Times just before the previous election? He must surely have an answer in his briefing.
Lord Rooker: My Lords, I answered the question perfectly satisfactorily. I made it clear that, although the language of the convention is old, drafted a long time ago for a different period and, as I said, is not open-ended—although when one raises that, one may still be attacked for it—the problem from which we were suffering in this country was abuse of the convention. That is why we have sought, sometimes with the co-operation of our European partners and other countries, to close the loopholes and end the abuse of the convention.
Lord Avebury: My Lords, will the Minister remind the noble Lord, Lord Tebbit, that the UNHCR itself initiated a two-year consultation on the interpretation
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of the convention, which was extremely productive and led to widespread agreement among all signatory states?
Lord Rooker: Yes, my Lords, but we have also accepted that the convention itself, in some ways because of its age, cannot cope with all today's problems. We must deal with them in other ways, as we have sought to do. We have developed plans with the UN High Commissioner and our European partners because, by and large, although it is not the case with everybody, in order to arrive in the United Kingdom, people by definition have travelled through safe countries. That issue must be, and is being, addressed.
Earl Attlee: My Lords, will the Minister now answer my noble friend and say what the Prime Minister has done?
Lord Rooker: My Lords, he has promoted, guided and led umpteen legislative changes, which have cut by over a half the number of those reaching this country and claiming asylum.

Committee on Standards in Public Life: 10th Report
2.50 p.m.
Lord Goodhartasked Her Majesty's Government:
When they will respond to the 10th report of the Committee on Standards in Public Life, Getting the Balance Right: Implementing Standards of Conduct in Public Life.
Lord Bassam of Brighton: My Lords, the committee's 10th report was published on 19 January. We will give it careful and thorough consideration and respond in due course.
Lord Goodhart: My Lords, I am aware that the Government have two months in which to reply to the committee's report. In considering it, are the Government likely to accept the conclusion of the Committee on Standards in Public Life, in paragraph 2.5, that the public appointments system must be reformed,
"in a way which carries greater public confidence and reflects more accurately than at present the Seven Principles of Public Life"?
Having regard to previous reports of the committee, will the Government take on board also the recommendation in the report of the Public Administration Select Committee, published last Thursday, that allegations of misconduct by Ministers should be investigated by the Parliamentary Commissioner for Administration, the ombudsman, and not by a person chosen by the Prime Minister or the Government?
Lord Bassam of Brighton: My Lords, I am sure that the noble Lord will not be surprised to hear me say that it would be premature for me to comment on those matters. They will obviously be part of the Government's broad consideration of this very important, detailed report. We will make our response fully available and open for debate in due course.
Lord Sheldon: My Lords, the report points out the need for close alignment between the public appointments system as it stands now and the Civil Service appointments system. What action does the Minister propose to take to encourage that closer alignment?
Lord Bassam of Brighton: My Lords, we have been looking carefully at the matter. As I am sure the noble Lord will appreciate, it will be among the issues that come up for debate and will be part of our consideration of this report.
Baroness Howe of Idlicote: My Lords, can the Minister assure the House that, when coming to their conclusions on the matter, the Government will take full account of the need to avoid eroding public confidence in the independence of the Commissioner for Public Appointments, which the present holder of that office so successfully achieved?
Lord Bassam of Brighton: My Lords, Dame Rennie Fritchie has done a first-class job, as everybody in government acknowledges. We greatly respect her views on all those matters. We will all benefit a great deal if we think long and hard about her record and reputation. Of course we want to ensure the highest possible standards in public appointments.
Lord Borrie: My Lords, has the Minister noticed the statement made in the report that,
"only 50 per cent of the employees in … local government … were aware of the Public Interest Disclosure Act, and the protection this affords an employee",
who blows the whistle on fraud or corruption? Will the Minister endorse the committee's proposal that there should be a review of whistle-blowing procedures in the various organisations concerned to ensure that best practice, especially that of the Audit Commission, prevails?
Lord Bassam of Brighton: My Lords, the noble Lord makes a very good point in drawing attention to that part of the report. We will give it a great deal of thought. The noble Lord is right: much more will need to be done to ensure that people understand the importance of that protection; and, indeed, that much more knowledge about best practice is shared.
Lord Roberts of Conwy: My Lords, in considering the point made by the noble Lord, Lord Goodhart, will the Government take into account the views expressed by Sir Alan Budd on his appointment by the Home Secretary to look into that particular affair? His comments are very interesting.
Lord Bassam of Brighton: My Lords, we take very careful account of comments and views expressed, particularly from respected persons such as Sir Alan Budd. No doubt they will form an important part of our response.
Baroness Scott of Needham Market: My Lords, does the Minister agree with the committee's finding that the ability of local councillors to represent their constituents' interests in planning matters has been "unnecessarily curtailed"? Will the Government act on the recommendation to reform the code of conduct?
Lord Bassam of Brighton: My Lords, it would be premature of me to make a big comment on that, but—certainly from my own experience—I am rather drawn to agree with the noble Baroness's first set of observations. It will be part of an important debate and perhaps needs to be looked at again.

Iraq: Coalition Military Forces
2.56 p.m.
Lord Astor of Heverasked Her Majesty's Government:
What arrangements are being made to ensure that there are sufficient coalition military forces in Iraq following the withdrawal of contingents from the Netherlands, Poland and Ukraine.
The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Bach): My Lords, the coalition is committed to retaining a military presence in Iraq while the Iraqi Government request it and as Iraqi security forces develop both capacity and capability to assume the security of their country.
We announced on 27 January that the UK would replace the Dutch forces when they withdraw. Poland, the framework nation in Multinational Division (Centre South), has responsibility for planning for adjustments in Ukrainian and Polish force levels. We are consulting our partners and the Iraqi Government to determine how best to support the Iraqi security forces in providing security.
Lord Astor of Hever: My Lords, 1,400 Dutch troops are leaving. Is the Minister really satisfied that the 600 British troops required to backfill are enough, and that the important commitment to the training of the Iraqi security forces continues unaffected?
Lord Bach: Yes, my Lords, we are sure that the 600 troops are adequate; a very careful military examination has gone on to ensure that that is so. Of those that we are sending to Iraq for that purpose, the 220 that we are sending to go with the British troops who will move to that part of South-East Division are key enablers to ensure that we can do the job properly. Of those 220, 70 will leave in pretty short order. We would not have agreed to do that unless those figures were right.
Lord Redesdale: My Lords, considering the increase in British forces in Iraq, how many reservists are being called upon to act in Iraq? Future Use of the UK's Reserve Forces, which was published today, says that the role of the reserves will be:
"To augment the Regular Forces for enduring operations".
It also says:
"Whenever possible, mobilisation will be on a voluntary basis but compulsion may be used if necessary".
Is that a sustainable use of the Reserve Forces in the near future?
Lord Bach: My Lords, we believe that it is. Indeed, we have discussed on many occasions in this House the new role that the reserves now play. It is a crucial role in Iraq and other centres of operation. The announcement of the mobilisation of a further tranche of approximately 900 reservists to support continuing operations from May to June next year was made on 14 December, as the noble Lord will know. Around 9,000 reserves have served with great distinction in Iraq since conflict in 2003.
Lord Elton: My Lords, can the Minister assure us that the level of commitment in Iraq will not be maintained by means of reducing our commitment in Afghanistan?
Lord Bach: Yes, my Lords, I can assure the noble Lord of that very important point. We are absolutely committed to Afghanistan, as we are to Iraq, and to seeing through what has started. The noble Lord need not concern himself on that count.
Lord Garden: My Lords, will the Minister take us through the Statement of 27 January a little more? Various figures have been mentioned. There will be 1,400 Dutch forces going and a net change of 150 from the UK. Does that mean that the security situation has improved enormously or that one British serviceman can do the work of 10 Dutchmen?
Lord Bach: My Lords, it does not mean the latter. We are very grateful for what the Dutch have done in that part of the South-East Division. As we speak, the province from where the Dutch will withdraw in March is much quieter than other parts of the South-East Division. A very significant inquiry was undertaken to work out what numbers were needed to take their place. As I have outlined today and as was outlined in the Statement made by my right honourable friend the Secretary of State in January, those numbers remain the proper figures.
Lord Boyce: My Lords, does the Minister agree that it is important to have a wide spread of coalition forces in Iraq to lend greater weight to the international effort? We have mentioned three countries. What other countries are making significant contributions to the operation in Iraq?
Lord Bach: My Lords, I am grateful to the noble and gallant Lord for that question. There are still 27 states
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in the multinational force, which will be so when the Dutch and the Portuguese withdraw. As regards the other countries: MND South-East, our area, includes Italy, Japan, Romania and Denmark. Many other countries have contributed and continue to contribute to the coalition.
Earl Attlee: My Lords, I remind the House of my peripheral interest. For how many years have we been operating outside the defence planning assumptions?
Lord Bach: My Lords, none.
Lord Brooke of Sutton Mandeville: My Lords, of the coalition troops that are not American, what proportion are British?
Lord Bach: My Lords, I am not sure that I am up to the mathematical formula required for that answer. The overall coalition forces are currently around 160,000. The United States have approximately 135,000 forces. As of February 2005, we have just over 8,000. So one can assume that there are about 17,000, roughly speaking, who are neither US nor UK forces.

Business
Lord Grocott: My Lords, with permission, there will be a repeated Statement later, entitled Controlling Our Borders—a five-year asylum strategy. It will be repeated by my noble friend Lady Scotland. We shall take the Statement, with agreement, immediately following completion of Report stage of the International Organisations Bill.

International Organisations Bill [H.L.]
3.3 p.m.
Report received.
Clause 1 [Commonwealth Secretariat]:
Baroness Falkner of Margravinemoved Amendment No. 1:
Page 1, line 5, leave out paragraph (b).
The noble Baroness said: My Lords, Amendment No. 1 seeks to revert to the status quo ante in terms of the Commonwealth Secretariat Act 1966 and, thus, to leave the situation as it currently stands. Without going over the many concerns raised at Second Reading and in Committee, I will distil concerns to one or two issues only. These relate to human rights issues and access to justice relating to staff of the Commonwealth Secretariat.
The Joint Committee on Human Rights has considered the Bill. I am a member of the JCHR. I should like to put on record that I did not participate in the committee's discussion as I feared that there might be a conflict of interest as I had formerly been a member of the Commonwealth Secretariat Staff Association. I therefore had no part to play in the JCHR scrutiny function.

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Nevertheless, the JCHR report makes two important points, which have not been satisfactorily dealt with in the response of the Foreign and Commonwealth Office. Paragraph 3.10 of the interim report states:
"A number of immunities conferred do not appear to be required by international legal obligations, however. This appears to be the case in relation to the Commonwealth Secretariat and the Commonwealth Secretariat Arbitral Tribunal. Although the Explanatory Notes observe that conferring more extensive immunities on these bodies and persons connected with them would 'bring the Secretariat into line with a number of other international organisations based in the UK', it is not clear that there is any international legal obligation in this regard, or in regard to the immunity from suit of CSAT and its members".
The JCHR went on to ask two questions of the Foreign and Commonwealth Office. The first question that it put to the Minister concerned whether each of the immunities conferred by the Bill was required by international law. Bill Rammell, the Parliamentary Under-Secretary of State, in his response to the committee, tells us that,
"The UK accepts, in principle, that the Commonwealth Secretariat's jurisdictional immunity should be on the same level as that enjoyed by other organisations in the UK".
I do not believe that a general belief, in principle, is adequate to protect human rights in every particular case.
We are told repeatedly by the Government that good governance does not follow an approach where one size fits all. If one were to follow the logic of that approach, it would be obvious that different measures must be taken to deal with different problems.
The problem here is that an employee of the Commonwealth Secretariat contested a suit in the UK High Court, which held that United Kingdom courts did, indeed, have jurisdiction. So one court case has led to the Government seeking to extend a blanket immunity on the Commonwealth Secretariat.
The question put by the JCHR was whether those immunities were required, not whether they were preferable in principle. I do not believe that that question has been answered adequately in the case of the Commonwealth Secretariat.
The second question posed by the JCHR was:
"What alternative avenues of redress are available to satisfy Article 6 rights of effective access to court in respect of each of the organisations dealt with in the Bill, and how do these alternative mechanisms ensure that the very essence of the right of access to court is not impaired?".
That question goes to the very heart of the matter as regards human rights. Article 6 rights cover the right to a fair trial. It states that,
"everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law".
As the Government point out, it is correct that in Waite and Kennedy v Germany, the European Court of Human Rights held that the relevant German courts were indeed correct to grant immunity to the European Space Agency. But in making that judgment, the European Court noted two important caveats where such immunity applies.
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It recalled that the convention is intended to guarantee not theoretical or illusory rights, but rights that are practical and effective. That, it found, to be particularly true for the right of access to the courts in view of the prominent place held in a democratic society by the right to a fair trial.
Secondly, for the court, a material factor in determining whether granting ESA immunity from German jurisdiction is permissible under the convention is whether the applicants had available to them reasonable alternative means to protect effectively their rights under the convention.
In this landmark ruling, the test was proportionality and adequate alternative remedy. Both these tests would come under threat in the particular case of the Commonwealth Secretariat and CSAT if Clause 1 is in fact omitted.
It is important to look at the rights and protection available to CSAT applicants within the existing dispute resolution mechanism; that is, CSAT. Are there sufficient safeguards under the CSAT process? For example, under the existing CSAT system no protection is available in the event that a decision of CSAT gives rise to a question of error of law. The issues of independence and impartiality are critical to the operation of CSAT, and it is viewed that the removal of the limited but fundamental protection which is currently available to litigants—in other words, to members of staff in the secretariat—through extremely limited access to UK courts would appear to be reasonable and proportionate. Doing away with those rights to access UK courts in very stringent circumstances would, I argue, be disproportionate and would have a serious impact on rights of appeal by staff.
The granting of full immunities to the Commonwealth Secretariat would therefore have serious implications for anyone who enters into a written contract with the organisation. The tribunal, composed as it may be of senior judges, should not become the sole arbiter of justice without any other remedy available if Article 6 rights are to be practical and effective, in line with the court's ruling.
Finally, I shall deal with the impact of the Bill. It will affect not only UK nationals, who have become the subject of several questions as regards numbers; that is, how many are employed. The number of UK nationals is important, but it is the diminution of rights that will affect not only UK nationals, but also staff from a further 52 Commonwealth countries who should all be entitled to the protection of their human rights. I beg to move.
Baroness Crawley: My Lords, this amendment would remove from the Bill the proposed extension of immunity to be conferred on the Commonwealth Secretariat.
At the moment, under the Commonwealth Secretariat Act 1966, the Commonwealth Secretariat has immunity from the jurisdiction of the UK courts subject to three specific exceptions: first, cases in which the immunity is waived by the Secretary-General;

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secondly, cases concerning motor accidents or motor traffic offences; and, thirdly—addressing the point we are talking about—where arbitration proceedings are taken in respect of a written contract with the secretariat.
The last exception concerning arbitration proceedings has been interpreted by the courts in the UK as allowing our courts to exercise supervisory jurisdiction over the arbitration proceedings of the Commonwealth Secretariat Arbitral Tribunal (CSAT). The purpose of Clause 1(1)(b) is to remove this particular exception to immunity in order to bring the secretariat's immunity provisions in line with those enjoyed by many other international organisations based in the United Kingdom.
This new and extended immunity will not, however, apply to written contracts entered into by or on behalf of the secretariat before Clause 1 enters into force. For these contracts, the courts will continue to have supervisory jurisdiction.
The effect of the proposed amendment would be that the immunity currently enjoyed by the Commonwealth Secretariat could not be extended to bring it into line with that enjoyed by other international organisations based in the UK. Examples of other international organisations which already enjoy the immunity that we are seeking to extend to the Commonwealth Secretariat are the International Maritime Organisation, the International Seabed Authority, the Organisation for the Prohibition of Chemical Weapons and the Preparatory Commission for the Comprehensive Nuclear-Test-Ban Treaty Organisation.
The secretariat is the primary inter-governmental organisation of the Commonwealth. It facilitates consultations and co-operation between Commonwealth members and provides policy advice and technical assistance aimed at promoting the well-being and development of member countries. It is important that the UK does not treat the Commonwealth Secretariat unfavourably by conferring more limited immunity than that conferred on other international organisations. The Bill is doing nothing more than bringing the secretariat's immunity from jurisdiction into line with the treatment accorded to a number of international organisations based in the UK and abroad.
3.15 p.m.
The noble Baroness, Lady Falkner, asked whether the revised agreed memorandum of the Commonwealth Secretariat imposes international legal obligations to confer privileges and immunities. The UK Government consider themselves bound to implement the revised agreed memorandum which has been agreed between the Commonwealth governments and evidences a commitment by the United Kingdom that the Commonwealth Secretariat should be granted the privileges and immunities set out therein. We have always acted on this basis. To change our practice could be very damaging to our relations with Commonwealth governments.
The noble Baroness also raised her concerns about human rights issues. She referred to correspondence between the Joint Committee and the Minister. She
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spoke of concerns to do with an adequate alternative remedy to CSAT applicants. I would say in reply that the important point is that the statute of CSA T already makes provision for a fair and independent procedure which is consistent with fundamental human rights. Article 6.2 of the statute reads:
"The rules of the tribunal shall ensure that applicants are dealt with in a manner that is independent, impartial and consistent with the Commonwealth Harare principles relating to fundamental human rights and the independence of the judiciary".
I hope that that reassures the noble Baroness that human rights are very much at the forefront of the changes we are proposing to make.
Baroness Falkner of Margravine: My Lords, I thank the Minister for that reply. I would be more reassured if the independence and impartiality of the tribunal were guaranteed more rigorously by access to justice rather than by the Harare principles which, after all, are political principles and thus have no bearing in law.
However, I am somewhat reassured by what the Minister has said. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 2 [Commonwealth Secretariat Arbitral Panel]:
Baroness Rawlingsmoved Amendment No. 2:
Page 2, line 4, leave out subsections (4) and (5).
The noble Baroness said: My Lords, first, I should like to thank the noble Baroness, Lady Crawley, the noble Lord, Lord Triesman, and the Bill team for the detailed letters that I have received in the run-up to the Report stage.
I make no apology for tabling this amendment a second time. The noble Baroness, Lady Crawley, assured me that the,
"Commonwealth Secretariat has not indicated that it is considering setting up any successor bodies to CSAT"—[Official Report, 11/1/05; col. GC10.]
However, I am still not happy with the possible situation that may arise if and when such a decision is taken.
This amendment would effectively remove the ability of the Secretary of State to transfer the immunities and privileges that the Bill awards to the Commonwealth Secretariat Arbitral Tribunal to a successor organisation using a statutory instrument to alter the original 1966 Act. My concern is that a successor could be one with quite a different emphasis on what it does, albeit that it may include arbitral tribunal duties. Although Parliament would have the opportunity to discuss the potential successor by affirmative order, it would be denied the opportunity to amend any provisions for the new body unless it threw out the order altogether—something that we in this House rarely do.
The Minister argued in Committee that it was necessary to be able to confer the immunities and privileges in a speedy manner should a successor be established, suggesting that a failure to do so may act against our commitments under the agreed

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memorandum. First, can the Minister explain the time span she envisages as "speedy"? One of the first questions I asked at the start of the Bill was why it had taken so long to bring it about when it referred to international agreements signed up to five years ago. As the Minister implied, we have thus been contravening these agreements—or at least parts of them—until now. I am sure that similar leeway would be allowed should a problem of timetabling a Bill arise to award any immunities and privileges to a successor body.
Secondly, if there were to be a successor body, I am sure that it would take time to discuss, set up and implement, during which the government of the day could timetable primary legislation to award the privileges and immunities agreed while allowing Parliament to scrutinise and amend any new provisions for the new body. This would not break our commitments under the memorandum; nor would we have to ask the Commonwealth governments to change the agreed memorandum as the noble Baroness suggested. In that way we would have a check and balance on potential mission creep of a body which is awarded privileges and immunities. This is an important question regarding our right and powers to scrutinise such changes. I beg to move.
Baroness Crawley: My Lords, the result of the amendment would be to remove from the Bill the enabling provision to allow for the same immunity to be conferred on the members of any successor body to the Commonwealth Secretariat Arbitral Tribunal, should one be established in the future.
I am afraid that I am going to disappoint the noble Baroness by reiterating the arguments that I made at the Grand Committee stage of the Bill, when I said that the Commonwealth Secretariat has not indicated that it is considering setting-up any successor bodies to CSAT. However, the Government are of the view that it is important to include the possibility of conferring privileges and immunities on the president and members of any successor body because the agreed memorandum establishing the Commonwealth Secretariat and agreed, as the noble Baroness knows, at the Commonwealth Heads of Government Meeting in 1965, and revised in 2002, specifically contemplates the possibility of a successor body. So we have to be prepared.
It is important that the UK has the power to confer privileges and immunities speedily on any successor body should one ever be established. Failure to make provision for such an eventuality might one day result in the UK acting in a manner contrary to its commitments in the agreed memorandum. The most practical way to avoid this is to provide for immunities and privileges to be conferred on any successor body via secondary legislation. The Bill therefore includes an enabling provision for an affirmative order to be made by the Secretary of State.
As noble Lords will know, they will have an opportunity to consider and debate any such change proposed in the future because such an order, as the
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noble Baroness said, will have to be approved by resolution of each House. If we were very unhappy, for instance, with any new structure that should come before us in the future, we would, by that affirmative resolution, be able to throw out that new structure.
If the amendment were agreed, to prevent the risk of the UK perhaps having to act in a manner contrary to its commitments in the memorandum the UK might have to ask Commonwealth governments to change the agreed memorandum. Noble Lords will know that there is no guarantee that such agreement from 53 Commonwealth governments would be forthcoming. For those reasons we are opposed to the amendment.
The noble Baroness, Lady Rawlings, asked me what I meant by "speedy". This refers to the fact that finding time for primary legislation often means waiting months, perhaps years, for the right slot in the legislative timetable to appear, whereas if we are ready, waiting and prepared with secondary legislation available we would not fall outside our commitments to the Commonwealth in the agreed memorandum to which we have signed up.
Baroness Rawlings: My Lords, I thank the Minister for that reply. I am reassured. I take no issue with its content but the statutory instrument and the lack of scrutiny by Parliament still bothers us. We may well need to return to this issue. In the mean time, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 5 [Bodies established under Treaty on European Union]:
Baroness Rawlingsmoved Amendment No. 2A:
Page 3, line 38, at end insert—
"( ) This section comes into force the day after Her Majesty's Government have initiated a review within the Council of the European Union of the privileges and immunities which ought to be extended to the bodies and persons to which this section applies.""
The noble Baroness said: My Lords, this is a simple amendment that I hope will help someway satisfy those who were involved in the debate on Clause 5 in Committee—although I note that it does not go as far as the noble Lord, Lord Pearson of Rannoch, would like.
It is effectively a sunrise amendment. It states that this section of the Bill could not come into force until Her Majesty's Government have initiated a review with the Council of the European Union. With our country's forthcoming presidency of the Council, this is a simple undertaking. Indeed, I believe that legally the amendment would not require the completion of such a review, although I rather hope that Her Majesty's Government would be gentlemanly enough to do so.
I should like to remind the noble Lord, Lord Triesman, of the extremely sensible words he used in Grand Committee:
"When the occasion for a review arises, I have no doubt that it will be seized upon".—[Official Report, 11/1/05; col. GC53.]

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The amendment would provide the aforesaid occasion. If we are not to continue to be remiss in our commitments under European treaties, I hope the Minister will seize the option. I beg to move.
Lord Wallace of Saltaire: My Lords, it may be helpful to intervene in support of this amendment, even though there are a number of things I wish to say on Amendments Nos. 4 and 5. It is not our intention to block the Bill or to make things difficult for the Government; it is our intention, both on the Conservative and Liberal Democrat Benches, to make sure that this extension of immunity does not go by unobserved.
With my academic as well as my political hat on, I am struck by the extent to which the extension of international organisations and international agencies escapes scrutiny by national parliaments. As we heard from the Government Front Bench today, the argument is always made that, "We cannot do anything on our own without renegotiating with another 52 governments"—or whatever number it may be, depending on which organisation is involved—"so, by and large, we have to let things go".
It is our intention, both in this amendment which relates to the European Union and in Amendments Nos. 4 and 5 which relate to other organisations, to raise the question of how far international immunities should be maintained and extended. We recognise the impossibility of unilateral change, as has been argued, so we urge the desirability of promoting multilateral reconsideration.
There should be a general bias in favour of fewer immunities rather than more, and of fewer beneficiaries of immunities rather than more. I really cannot see why. for example, the European Schools need any diplomatic immunities. I am not entirely sure why the European Space Agency needs all the immunities it has. As the number of agencies associated with the European Union continues to expand—and it will—this is a question that we ought to raise.
We very much hope that Her Majesty's Government will therefore be willing to say in response to both amendments that they will undertake to commission a broad multilateral review of what is needed. We were told in Committee that the protocol that governs EU immunities is the European Economic Community protocol of 1965. That is a short time ago, but I think that everyone would agree that the European Union has expanded not only its membership but its competences enormously since then.
We were told that immunities with regard to other international organisations were governed by the Vienna Convention 1961—even longer ago. It seems, therefore, entirely appropriate that Her Majesty's Government should promote and initiate some sort of multilateral review. I cannot resist suggesting, since I see the noble Lord, Lord Kerr of Kinlochard, in his place, that we have an excellent potential chairman of such a multilateral review sitting on the Cross Benches. I am sure that he would love to undertake the task and would rapidly accept the Government's review.
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We are looking for a commitment that the Government will not just let the Bill go by but will take the opportunity to ask how many diplomatic immunities do how many people need, for what purposes, and how far in future negotiations, in the European Union and other international organisations, we attempt to cut down the current extension.
3.30 p.m.
Lord Triesman: My Lords, I thank the noble Baroness, Lady Rawlings, for her kind remarks about me—to say that anything I said was wise was always going to tempt me. I should probably congratulate the noble Lord, Lord Wallace, on flattering the noble Lord, Lord Kerr. If the debate had gone on any longer, we could probably have included all noble Lords in the House. I should like to start by making a general comment about why we confer privileges and immunities on organisations and bodies, including the ones that we are discussing today, and then turn to the substance of the noble Baroness's amendment.
Privileges and immunities are conferred on organisations and bodies to ensure that they are able to carry out their functions without being impeded. All the bodies that have been mentioned—some of them will sound curious in this context—make important policy decisions, and all are capable of being leaned on if they have vulnerabilities that are not covered by such international arrangements. The general policy of the Government in this respect goes back some way, certainly through the 1980s. Privileges and immunities should be granted primarily on the basis of functional need. The scope of the privileges and immunities conferred, and the organisations and bodies on which they are conferred, are determined only by the international obligations into which the United Kingdom enters.
As regards the organisations and bodies covered by the Bill, we have signed international agreements committing us to confer privileges and immunities on them. They are commitments that this country has entered into in good faith. A number of those agreements are of long standing; those for the OSCE, the ECHR and ITLOS were signed in 1993, 1996 and 1997 respectively. Any further delay in implementing those agreements could be interpreted as a real lack of commitment to those organisations.
I understand the noble Baroness's point about a sunrise clause. She invites me to say that this is the occasion on which to trigger the mechanism. However, I am afraid that I do not think that it is the occasion to initiate the review within the Council of the European Union on the privileges and immunities that ought to be extended to bodies created under Titles 5 and 6 of the Treaty on European Union. That is because EU member state governments negotiate specific agreements covering privileges and immunities for each body. It is the Government's policy and was the previous government's policy—it goes back some way to ensure that the privileges and immunities are granted on the basis of a functional need. We had this discussion in Committee—it is specifically on the basis

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of a functional need. The Government are satisfied that the privileges and immunities granted to the bodies are necessary so that they can function properly and fully.
I suggest that noble Lords who have taken part in the debate, or other noble Lords who have a specific interest in the issue, might meet my noble friend Lady Symons of Vernham Dean to look through the issues involved in the amendment, see whether further clarification is required and have an exchange of views.
The general issue came up in Committee about whether we should always be prepared to review such matters, quite aside from whether this is the right moment to do so. I said on that occasion that people should not close their mind to thinking in fresh ways. We do not think that the mechanism proposed in the amendment would be right, but we believe that the kind of discussion I have offered on behalf of my noble friend Lady Symons would be very timely.
Lord Wallace of Saltaire: My Lords, I am disappointed by that rather wimpish response. I often regret that Her Majesty's Government do not pursue the more positive areas of our commitment to European co-operation more vigorously.
Baroness Crawley: My Lords, as this is Report stage, I think that the noble Lord should not reply after the Minister has spoken.
Lord Wallace of Saltaire: I apologise, my Lords.
Baroness Rawlings: My Lords, I thank the Minister for his detailed answer. I agree that it is important for the organisations to carry out their duties without being impeded and that the commitment was entered into in good faith, but I am sorry that the Minister cannot reassure us on this occasion. I look forward to meeting the noble Baroness, Lady Symons of Vernham Dean, at a later stage. However, the issue is so important, given that the British presidency is coming up and the possibility that this could be on the agenda, that I wish to test the opinion of the House.
8 p.m.
Question, Whether the said amendment (No. 2A) shall be agreed to?
Sir Lordships divided: Contents, 103; Not-Contents, 130.

Division No. 1

CONTENTS

Allenby of Megiddo, V.

Bledisloe, V.

Anelay of St Johns, B.

Bridgeman, V.

Astor of Hever, L.

Brooke of Sutton Mandeville, L.

Attlee, E.

Brougham and Vaux, L.

Avebury, L.

Caithness, E.

Baker of Dorking, L.

Campbell of Alloway, L.

Barker, B.

Carnegy of Lour, B.

Beaumont of Whitley, L.

Chadlington, L.

Blatch, B.

Chorley, L.

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Clement-Jones, L.

Neuberger, B.

Cope of Berkeley, L. [Teller]

Noakes, B.

Cuckney, L.

Northesk, E.

Denham, L.

O'Cathain, B.

Dholakia, L.

Onslow, E.

Dixon-Smith, L.

Palmer, L.

Dykes, L.

Park of Monmouth, B.

Elliott of Morpeth, L.

Pearson of Rannoch, L.

Ezra, L.

Perry of Southwark, B.

Falkland, V.

Phillips of Sudbury, L.

Falkner of Margravine, B.

Platt of Writtle, B.

Garden, L.

Plumb, L.

Gardner of Parkes, B.

Quinton, L.

Geddes, L.

Rawlings, B.

Goodhart, L.

Redesdale, L.

Goschen, V.

Rees-Mogg, L.

Harris of Richmond, B.

Roberts of Conwy, L.

Hayhoe, L.

Roberts of Llandudno, L.

Hodgson of Astley Abbotts, L.

Russell-Johnston, L.

Howe of Idlicote, B.

Ryder of Wensum, L.

Howell of Guildford, L.

Sandberg, L.

Jopling, L.

Scott of Needham Market, B.

Kalms, L.

Seccombe, B. [Teller]

Kimball, L.

Selsdon, L.

Kingsland, L.

Sharp of Guildford, B.

Laidlaw, L.

Skelmersdale, L.

Laird, L.

Smith of Clifton, L.

Livsey of Talgarth, L.

Soulsby of Swaffham Prior, L.

Lucas, L.

Stewartby, L.

Luke, L.

Stoddart of Swindon, L.

Lyell, L.

Swinfen, L.

McAlpine of West Green, L.

Thomas of Gresford, L.

Macfarlane of Bearsden, L.

Thomas of Walliswood, B.

Mackay of Clashfern, L.

Tope, L.

McNally, L.

Tordoff, L.

Mar, C.

Wade of Chorlton, L.

Molyneaux of Killead, L.

Wakeham, L.

Monson, L.

Wallace of Saltaire, L.

Morris of Bolton, B.

Walmsley, B.

Mowbray and Stourton, L.

Warnock, B.

Murton of Lindisfarne, L.

Wilcox, B

Naseby, L.

Windlesham, L.

NOT-CONTENTS

Acton, L.

Dean of Thornton-le-Fylde, B.

Ahmed, L.

Desai, L.

Alli, L.

Dixon, L.

Alton of Liverpool, L.

Drayson, L.

Amos, B. (Lord President of the Council)

Dubs, L.

Eatwell, L.

Ampthill, L.

Evans of Temple Guiting, L.

Andrews, B.

Falconer of Thoroton, L. (Lord Chancellor)

Ashton of Upholland, B.

Bach, L.

Falkender, B.

Barnett, L.

Farrington of Ribbleton, B.

Bassam of Brighton, L.

Faulkner of Worcester, L.

Berkeley, L.

Filkin, L.

Bhattacharyya, L.

Fyfe of Fairfield, L.

Blood, B.

Gale, B.

Borrie, L.

Gibson of Market Rasen, B.

Brett. L.

Giddens, L.

Brooke of Alverthorpe, L.

Goldsmith, L.

Brookeborough, V.

Goldsmith, L.

Brookman, L.

Gordon of Strathblane, L.

Burlison, L.

Graham of Edmonton, L.

Campbell-Savours, L.

Gregson, L.

Carter, L.

Griffiths of Burry Port, L.

Christopher, L.

Grocott, L.[Teller]

Clarke of Hampstead, L.

Harris of Haringey, L.

Corbett of Castle Vale, L.

Harrison, L.

Craigavon, V.

Hart of Chilton, L.

Crawley, B.

Haworth, L.

David, B.

Hayman, B.

Davies of Oldham, L. [Teller]

Hilton of Eggardon, B.

557

Hogg of Cumbernauld, L.

Pendry, L.

Hollis of Heigham, B.

Pitkeathley, B.

Howarth of Breckland, B.

Puttnam, L.

Howells of St. Davids, B.

Ramsay of Cartvale, B.

Howie of Troon, L.

Rendell of Babergh, B.

Hughes of Woodside, L.

Richard, L.

Hunt of Kings Heath, L.

Roll of Ipsden, L.

Irvine of Lairg, L.

Rooker, L.

Jay of Paddington, B.

Rosser, L.

Judd, L.

Sainsbury of Turville, L.

Kerr of Kinlochard, L.

St. John of Bletso, L.

Kilclooney, L.

Scotland of Asthal, B.

Kirkhill, L.

Sewel, L.

Laming, L.

Sheldon, L.

Lea of Crondall, L.

Simon, V.

Lipsey, L.

Stone of Blackheath, L.

Lofthouse of Pontefract, L.

Symons of Vernham Dean, B.

McDonagh, B.

Taylor of Blackburn, L.

Macdonald of Tradeston, L.

Temple-Morris, L.

McIntosh of Hudnall, B.

Tenby, V.

MacKenzie of Culkein, L.

Thornton, B.

Mackenzie of Framwellgate, L.

Triesman, L.

McKenzie of Luton. L.

Truscott, L.

Marsh, L.

Tunnicliffe, L.

Mason of Barnsley, L.

Turnberg, L.

Massey of Darwen, B.

Turner of Camden, B.

Maxton, L.

Wall of New Barnet, B.

Merlyn-Rees. L.

Warner, L.

Mitchell, L.

Warwick of Undercliffe, B.

Moore of Wolvercote, L.

Weatherill, L.

Morgan of Drefelin, B.

Whitaker, B.

Morris of Manchester, L.

Whitty, L.

Moser, L.

Wilkins, B.

Murphy, B.

Williams of Elvel, L.

Ouseley, L.

Williamson of Horton, L.

Patel of Blackburn, L.

Woolmer of Leeds, L.

Resolved in the negative, and amendment disagreed to accordingly.
3.48 p.m.
Lord Pearson of Rannochmoved Amendment No. 3:
Leave out Clause 5.
The noble Lord said: My Lords, I rise to move that Clause 5 do not stand part of the Bill. I imagine that your Lordships will not be surprised that I have chosen to exclude EU bodies from the immunities proposed by the Bill, given my antipathy to the whole project of European union. But there is also a perfectly good reason for singling out the EU and its various bodies—the other seven organisations covered by the Bill do not have such a substantial and growing influence on our daily life as does the European Union. That is not to say that I agree that the other bodies should have these immunities—I do not. I am not sure that I understand any longer why even foreign embassies should continue to enjoy them. Be that as it may, what is it that these bodies, their functionaries and their functionaries' families and households—not to mention their dogs and mistresses, as we see from col. GC 44 in Grand Committee on 11 January, when the Minister did not deny these extensions—have to do which sets them above our national law?
My amendment would leave new bodies under the EU umbrella out of the Bill. It is worth placing on record in these proceedings on Report a Written Answer that I received on 11 January, but which did not reach me in time for our Committee proceedings that day. I had asked Her Majesty's Government
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which EU institutions already qualified for immunities and tax privileges, what those immunities and tax privileges were and to which EU institutions they proposed to grant similar status under the Bill. The Answer was that the privileges and immunities include,
"immunity from jurisdiction, exemption from taxation, exemption from customs duties and prohibitions and restrictions on importation and exportation of articles for official use".
The Answer also revealed that, thanks to the European Communities Act 1972, which absorbed the 1965 protocol on the privileges and immunities of the European Communities, the immunities are already extended to,
"the European Parliament, the Council, the Commission, the Court of Justice, the Court of Auditors … the European Central Bank, the European Monetary Institute and the European Investment Bank; and … to certain representatives of member states and certain officials and servants of the Communities".
Could the Minister tell us who those last people are?
The Written Answer goes on, somewhat coyly, to say:
"The provisions of the protocol have also been applied to bodies created under the Community and to certain officials and staff engaged in the work of such bodies".—[Official Report, 11/1/05, col. WA 33.]
I am not entirely sure—and no doubt the noble Lord, Lord Triesman, will intervene if I am wrong—but I believe that those last bodies may be those revealed in the letter that he sent on 20 January to my noble friend Lady Rawlings, who also asked for their identity in Committee.
In Committee, the Minister said that there were 19 such bodies, but it seems that one had been counted twice, so we were left with 18. I appreciate that the letter has been placed in your Lordships' Library, but nevertheless I believe that it would be helpful if the 18 bodies were revealed in the Official Report. They are: the Agency for the Management of Operational Co-operation and the External Borders; the EU's Community Plant Variety Office; the European Agency for Safety and Health at Work; the European Aviation Safety Authority; the European Centre for the Development of Vocational Training; the European Environment Agency; the European Food Safety Authority; the European Foundation for the Improvement of Living and Working Conditions; the European Maritime Safety Authority; the European Agency for the Evaluation of Medicinal Products; the European Monitoring Centre for Drugs and Drug Addiction; our old friend, the European Monitoring Centre for Racism and Xenophobia; the European Network and Information Security Agency; the European Railways Agency; the European Reconstruction Agency; the European Training Foundation; the Office for Harmonisation in the Internal Market (Trade Marks and Designs); and the Translation Centre for the Bodies of the EU.
I hope that gives your Lordships some idea of the scope of existing EU activity in our daily lives and of the number and variety of new bodies that we may expect to receive these privileges and immunities in future under the Bill. One has to ask why any of those bodies need those immunities.

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I repeat a question that I put to the Government in Committee and to which I did not receive an answer. Why should any of those foreign bodies, particularly the EU bodies, be blessed with those immunities, when foreign companies working in the UK do not—or, for that matter, which our companies and representatives working abroad do not enjoy? What is it that these bodies do which qualifies them for these privileges which are not available to the people who make the money which pays the tax which pays for all of them?
I suppose that part of the Government's defence for their position on this Bill and for the immunities proposed by the Bill may be that they are part of a system that has been running for years—that they are nothing new. Indeed, the noble Lord, Lord Triesman, advanced that philosophy in his answer to the previous amendment. But that defence should not wash. If a system has been running for years, that does not necessarily justify its continuance, especially if it is increasingly out of date and unnecessary. The noble Lord said that the immunities were necessary for the function of these bodies; could we draw that out a bit? Why are they necessary for their function?
Finally, I am aware that the Government may repeat what they said in our earlier proceedings on the Bill—that they, the Executive, have already signed up to the Bill under various international treaties, so Parliament, the House of Commons and your Lordships' House, are honour-bound to rubber stamp the agreement reached in international forums. This is not the time for a general debate about our relationship with the European Union, but I trust that your Lordships will agree that this is the assumption that has already handed so much of our sovereignty to Brussels.
Thanks to successive EU treaties, vast swathes of our national life which used to be entirely controlled by Parliament have been handed over to Brussels. Under the treaty establishing the European Communities, for instance, our commerce and industry, social and labour policy, environment, agriculture, fish and foreign aid have become subject to the qualified majority vote in the Council of Ministers. The country faces unlimited fines in the Luxembourg Court if Parliament were to refuse to ratify a law thus passed in those areas.
I know that some noble Lords, led perhaps particularly by the noble Lord, Lord Wallace of Saltaire, would like EU integration to proceed apace to its logical conclusion. Indeed, he has been very interesting on the philosophy that underpins his approach to the subject. But I trust that that does not prevent him agreeing with me on the amendment. I trust that it is common ground that no more of the EU's servants should be given the immunities and privileges envisaged in the Bill. I beg to move.
Lord Stoddart of Swindon: My Lords, I feel bound to support the noble Lord, Lord Pearson, in his amendment and in the remarks that he has just made. He very often makes those remarks, because he
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believes very much in what he says. I suppose that I have been making those remarks for well over 40 years, and I continue to believe what I believed then—that we should not have joined the Common Market and that we should now leave the European Union. That declares my interest in the whole matter.
The noble Lord is right—and the noble Lord, Lord Wallace of Saltaire, is right. At Second Reading, in Committee and today, the noble Lord, Lord Wallace, has made it clear—although he and I are on different sides of the fence—that he is concerned about the growth of privileges given to certain elites. Those sorts of privileges are beginning to undermine the confidence of people in international bodies and international systems. He is right in believing that. I think that we all believe in that. That is why it is necessary—it is a pity that the previous amendment was not carried—for the amendments to be tabled, and
that includes this amendment.
4 p.m.
The European Union is increasingly becoming a unitary government. Therefore, as it is becoming a unitary government, it does not need the privileges that are extended to it. The Commission has privileges. If I am not mistaken, agents of the Commission sitting in London and in various cities and towns in our country also have those privileges. I should like confirmation of that. If that is so, the widespread privileges that those people have impinge not only on our national life but on our local life.
I should also like, at this point, to raise the question of British Commissioners serving in Brussels. They enjoy privileges, as far as I know. It appears that one of them wants privilege beyond the privilege that he already has, and that is the privilege to interfere in national affairs and indeed to criticize the BBC itself and individual members of the BBC. Perhaps noble Lords have not noticed it, but he has launched into an attack on John Humphrys, accusing him of being a Euro-sceptic. I do not know where he has been for the past 30 or 40 years, but he has also accused the BBC of being Euro-sceptic. Anyone with any knowledge at all knows that that simply cannot be true.
Mr Mandelson is enjoying privileges as a European Commissioner but still wants to intervene in the political life of this country and to libel—this is the question to which I am coming—individual members of an organisation. Does his privilege extend to immunity from being sued for libel? I should like the answer to that.
The Bill appears to be a small, minor Bill. However, as we have gone through Committee, and as we are going through Report stage, we are beginning to find that it has far more importance than even I thought right at the beginning. That so often happens. We had the European arrest warrants legislation before us, and the noble Lord, Lord Pearson, and I and others took part in that debate. We said that it was very dangerous for British citizens, and we consequently opposed it. Apparently, however, many Members of the Commons did not understand what was happening. I

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see from a report in the Daily Telegraph of Monday 31 January that a Committee of the House of Commons now says that EU warrants "undermine British law". That is precisely what many of us were saying when the legislation was going through this House.
I make that point simply to underline the fact that it is necessary for the House to scrutinise every Bill that goes through it and to do so in detail. If we do not, we might find that we are putting the British people in great jeopardy. Once we have done it in relation to the European Union, we cannot get out of it because of the acquis communautaire. Once we have agreed to something and once it has become law in the EU, we cannot undo it without the complete support of the European Council and the Council of Ministers.
So I hope that the House will consider the amendment very seriously. If there is a vote, I will, of course, support it in the Lobby.
Lord Monson: My Lords, I agree with the noble Lord, Lord Stoddart, that this House was the first to recognise the dangers of the European arrest warrant and that the House of Commons woke up to the dangers of that warrant late in the day. However, I should like briefly to ask the noble Lord, Lord Triesman, a question. Will the members of the bodies concerned and their families be exempt from parking restrictions and parking fines, in addition to the many tax and import duty privileges that are being afforded to them?
Lord Triesman: My Lords, I am afraid that 1 am liable to disappoint all three of the noble Lords who have spoken because I do not intend to debate the issue of European integration. I do not intend to reopen some of the questions that have been asked because they are nothing whatever to do with this Bill. It is not a discussion of whether Europe has effectively become a unitary government. The Government are absolutely clear—we have always been clear and could not be clearer—that the EU is an organisation made up of independent nation states. That will continue to be the case.
Some of the questions that have been asked, to which I shall try to reply briefly, seem if anything to perpetuate mythologies. Are people exempt from parking restrictions? I think that that question must have been asked and answered a dozen times in this House. No, they are not. Is Peter Mandelson exempt from any action if in a private capacity he libels people and they take action against him for libel? No, of course he is not.
Lord Stoddart of Swindon: My Lords, Mr Mandelson was speaking as a European Commissioner. That is the question I was asking. If he is speaking in his capacity as a European Commissioner, is he exempt from being sued for libel if he makes a libellous statement? That is the question, and I should like an answer to it.
Lord Triesman: My Lords, when European Commissioners comment on John Humphrys they do not do so as European Commissioners. No one is exempt in that way.
Perhaps I may deal with another point. Is it the case, as the noble Lord, Lord Pearson, suggests, that families are covered in the way that he describes? The current agreements conferring privileges and immunities for bodies under Title V and Title VI of the Treaty on European Union do not apply to families. That is another matter that has been cleared up on several occasions. The noble Lord suggested that it might apply to people's dogs. I can assure him that, by and large, dogs are not charged with offences under any national law and brought before courts. and nor do they have to plead immunities in those circumstances. We are really in the land of the wholly fanciful. I cannot believe that it helps the cause of arguing about the issues on the noble Lord's part, let alone mine, to deal with them in such ways.
I turn to matters of fact. The noble Lord, Lord Pearson, read out the names of a significant number of European Community bodies. However, they are not relevant to this Bill. They were listed because I was asked for a list of bodies in a particular context but they are not relevant to the Bill as it proposes conferring privileges and immunities on agencies established under the Treaty on European Union. Those bodies were not established on that basis. The bodies that were include the European Parliament, the Council, the Commission, the Court of Justice and the Court of Auditors. With the greatest of respect to the House, that is ground that we have all covered before. Covering it again will not change those facts.
I turn to matters of substance because that is where we ought to make our judgments. Deleting Clause 5 would mean that we would not be able to confer privileges and immunities or legal capacity on EU bodies established under the Treaty on European Union, or on persons connected with those bodies. There is no other existing legislation to allow the United Kingdom to implement its commitments to confer privileges and immunities under secondary legislation. Leaving such matters to he dealt with in primary legislation would make it extremely difficult and very long-winded for the United Kingdom to fulfil the obligations it has undertaken to confer privileges and immunities in the EU measures establishing the relevant EU bodies. These are not the only bodies with which we have these kinds of arrangements. Indeed, only some half an hour ago we discussed the arrangements that we have with our partners in the Commonwealth. Treaties exist in relation to many other nations. I am not espousing a philosophy here; these mutual obligations are a fact of life when making international treaties. It is not simply a characteristic of Europe.
These bodies need legal capacity and privileges and immunities in order to function fully. For each body, the EU member state governments have together negotiated a specific agreement covering privileges and immunities. As I said in the previous debate, it has

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been this Government's policy—as it was the previous government's policy—to ensure that privileges and immunities are granted on the basis of functional need.
The ATHENA financing mechanism, the EU Satellite Centre and the Institute for Security Studies are all bodies which the United Kingdom supports as important for the successful development of the European Security and Defence Policy. They need legal capacity in order to operate; without that these agencies could not enter into agreements, for example, to enter into leases, to rent buildings, or open bank accounts. They also need privileges and immunities related to the official work of the organisation to ensure that these agencies can operate freely in support of the foreign and security policy being developed by the EU's member states, including ourselves.
I do not wish to use an example from the European Union, but if anyone doubts that diplomats and others working in these bodies need these kinds of protections, I ask noble Lords to think how such people would be placed trying to operate in a country like Zimbabwe without such protections. These protections are fundamental to getting on with the job at hand.
We have made a commitment to confer legal capacity and privileges and immunities in the way that I have described. We intend that the bodies should be able to function freely, fully and appropriately. We need to fulfil that commitment and to do that we need the legislative powers which would be conferred by Clause 5.
For those reasons we cannot accept the amendment. I appeal to your Lordships' House to argue this case in terms of the facts and the realities rather than the things which apparently are supposed to scare us but which have no application at all in this context.
4.15 p.m.
Lord Pearson of Rannoch: My Lords, I am most grateful to noble Lords who supported this amendment and to the Minister for his very full reply, which will justify study in Hansard. The Minister said that some of the points I made had nothing to do with the Bill. I think that when your Lordships read Hansard they may not agree with that. I was trying to get out of the Minister what the present situation is with regard to the immunities we have granted to the European Union and its bodies. I went through the list of 18 bodies that he was kind enough to supply in writing to my noble friend Lady Rawlings because they show the scope of the present immunity and therefore what the scope of immunity is likely to be. That is very germane to this Bill. Therefore, I do not accept the Minister's reprimand on that account.
In response to my noble friend Lord Stoddart of Swindon, the Minister said that Mr Mandelson could be sued for libel if he was speaking in his private capacity but not if he was speaking in his capacity as a European Commissioner. He went on to say that obviously anything that Mr Mandelson says against John Humphrys will not attract immunity—at least I
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understood him to say that. I find that rather interesting. It is worth further study to see whether the noble Lord has that right.
The Minister pulled my leg about dogs but both in Committee and now he has not answered the question whether, if one of these people's dogs were to bite someone in the street here, those people would attract immunity. From what he said I assume that they would not. However, it seems a perfectly reasonable question to ask.
Further to the Minister's Written Answer of 11 January he still has not informed me who are the "other officials and servants of the Communities" who have these immunities. Perhaps the noble Lord will examine that question and write to me before we come to the next phase.
I do not accept that the remarks I made are not germane to this Bill. It would be helpful to be told what these people do which justifies these immunities when they are not given to other international bodies, commercial bodies and so on. The Minister says that they need it to fulfil their functions. I am afraid that does not answer the question. It is a case of, "Bang, bang, you are dead and we are not playing". Before we come to the next and final phase of the Bill it would be very helpful to be informed by the noble Lord in writing what these bodies do which requires this kind of immunity. On the assumption that the noble Lord will be good enough to answer the other questions that I have left with him, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Wallace of Saltairemoved Amendment No. 4:
After Clause 10, insert the following new clause—
"PRIVILEGES, IMMUNITIES AND FACILITIES REPORTS

(1) This Act shall not enter into force until a report has been published, setting out the current framework for granting diplomatic privileges and immunities, for assessing the appropriate level of such privileges and to whom they should apply.

(2) The report, as set out in subsection (1). shall be debated by both Houses of Parliament.

(3) Once the conditions of subsections (1) and (2) have been met, a report shall be published each year setting out the privileges, immunities and facilities conferred under this Act in the previous year."

The noble Lord said: My Lords, Amendment No. 5 is consequential to Amendment No. 4 so I shall speak to the two together. This is the mildest and most modest of amendments that I hope—as we have heavily signalled our intentions to the Government—it will be possible for the Government to respond in such a generous way that we may not need to divide the House, but we shall see.
The background to the amendment is the difficulty that many of us had when we started to study this issue in discovering what the situation is regarding the current framework for granting diplomatic privileges and immunities, or for assessing which privileges and immunities go to which organisation under which conditions. Inquiry to the Lords Library, the law

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department of the London School of Economics and the Foreign Office legal advisers left me still extremely confused and very short on recent material on the subject. There are some rather heavy weight international legal treatises but most of them refer to cases from the 1950s or 1960s. It would therefore seem appropriate for the information of Parliament to ask Her Majesty's Government to draw up a report on where we now stand. One would hope that such a report would circulate to other governments and help to promote a broader series of discussions and negotiations. We were told on one of the previous amendments that we must address the "functional needs" of appropriate international organisations. In that case, the House is entitled to know what are such "functional needs".
We recognise that much of this proceeds through inertia. We give to each new agency, whether EU, global, or regional, the privileges and immunities that had been granted to their predecessors five years ago, 10 years ago, 15 years ago, 20 years ago, and longer. However, we are in a process of rapid change. Globalisation, as the noble Lord, Lord Giddens, has written about almost endlessly over the past 20 years, is now well upon us. New agencies and new intergovernmental organisations appear every year, and this is a process that is likely to continue. We also recognise that it is extremely difficult for national parliaments to get any handle at all on this process. Governments negotiate, they present to Parliament the treaties they have concluded, and the subordinate legislation follows from those treaties. Here is an opportunity for a national parliament—our Parliament—to ask: where are we, and why? Where do we think we are going? What principles do Her Majesty's Government think they are following as they move through these negotiations?
We recognise that many global intergovernmental organisations need such immunities. As I said in Committee, I was at one point this summer in the middle of a UN convoy in south Ossetia, and I felt desperately in need of all the privileges and immunities that one could possibly have under such circumstances, and about which the armed people surrounding our convoy did not seem to be at all concerned. Not all intergovernmental organisations need all of these privileges under all circumstances. I hope that we shall hear from the Government Front Bench that the Government are willing to inform Parliament of the current situation and background as they understand it of international law. Perhaps they will give us an opportunity—not of course before the election but in the foreseeable future—to debate the principles that they think they are following. I beg to move.
Lord Pearson of Rannoch: My Lords, I hope it does not embarrass the noble Lord, Lord Wallace, too much if I rise to support these amendments. I can see that, if accepted, this process might have the effect of getting some of the more unjustifiable of these immunities and privileges to wither on the vine over a period of time, which would he better than nothing.
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Certainly, as far as concerns the organisations that are not part of the European Union, this would he an excellent step in the right direction. If the Government are in good faith, which I am sure they are, when they say that they believe that such organisations need these immunities and privileges to function in the way that they do, I feel sure that they will want to issue the report that is asked for in this amendment.
Baroness Rawlings: My Lords, I support the noble Lord, Lord Wallace of Saltaire, and the noble Baroness, Lady Falkner, in this amendment. It goes much further than my amendment to Clause 5, and it addresses the wider issues of immunities and privileges with regard to all international organisations, not just those within the European Union.
I do not wish to take up the time of the House by reiterating too much of what noble Lords have said. As discussed in Committee, many of the original Acts to be amended date back to the 1960s and, as such, in a world that has developed increasingly complex international relations and levels of international bodies and organisations that mesh on regional and national levels. While the Minister informed the House that privileges and immunities are effectively awarded on a case-by-case and needs-must basis, we want some more information on how that is achieved in this modern day world and on how the duties that have yet to be awarded will be working.
The immunities awarded to UN workers for the oil for food programme were much in the news this weekend, and that prompts me to question them further. On the one hand:
"Even after the publication of the interim Volcker report. Mr Sevan's status with the UN remains strangely blurred, and UN officials seem to have remarkable trouble defining it. Does he still have diplomatic immunity? Yes. Has he retired? Yes, but he still has the status of a contract employee, at $1 per year, maintaining his immunity. Does he have a pension? Yes, but it is not yet being paid".
On the other hand:
"Mark Malloch Brown, the eloquent British official who Mr Annan recently promoted to be his chief of staff with a brief to 'renew' the organisation … said. 'But these are extremely serious charges of wrongdoing and no one will be shielded from prosecution. If there are criminal charges, the UN will fully co-operate and waive diplomatic immunity of staff members, whoever they are'".
Even the Secretary-General, who set up the Volcker inquiry, has expressed himself shocked at the behaviour, ordered disciplinary action, and promised to lift the diplomatic immunity of any UN official facing criminal prosecution. These waivered immunities were in the news twice last week. As the noble Lord, Lord Saltaire, spelt out so clearly, this illustrates the point that in this modern global world, with so much legislation around protecting the citizen, the treaty is clearly out of date and needs reviewing. That highlights why we need to look at the question of immunities and privileges again. In this vein, I hope that the Minister will consider the amendment carefully.
Lord Triesman: My Lords, I rise slowly because I know the enthusiasm of some noble Lords to take part in the debate. This amendment—I will deal with the second amendment in the group in a moment—would mean that the Government's ability to meet their international obligations and commitments would be seriously delayed. I will reflect shortly on the consequences of such a delay.
As it covers not only Europe but also Commonwealth (worldwide organisations), we are dealing with the level of privileges and immunities to be afforded to international organisations in a sensible way and on a case-by-case basis. The privileges and immunities granted to any organisation are also subject to parliamentary scrutiny before they are given effect in UK law.
Although I was told that it was a wimpish conclusion—I am probably going to be less than wimpish as I go through this speech—I repeat the offer made by my noble friend Lady Symons of Vernham Dean to meet the noble Lords proposing the amendments to discuss what clarifications are required. I make that offer recognising that there are officials at the UN and elsewhere who do enjoy immunities. It is not impossible in an international treaty, even if we all agree about the level of immunities and privileges, to find that some people may have abused them. Some people with full diplomatic cover have done so historically. I am thinking of Lord Home expelling a significant number of what were described as "Soviet diplomats" because they had exceeded by any measure the immunities that they plainly had in the time they were in this country.
The origins of the inviolability and immunities enjoyed by diplomatic missions, and more recently by international organisations, can be traced back a long way. I probably do not need to tell the noble Lord, Lord Wallace, this, as he is one of the country's acknowledged experts, but I am told that they probably started in ancient Greece, India and China. In the modern world, they are still considered by the international community to be essential to ensure that relations between states, bilateral or multilateral, through the medium of an international organisation, can be conducted without fear of intimidation or harassment of their representatives. It follows that international organisations and their staff—if they find themselves benefiting from those immunities to enable them to fulfil their roles effectively and independently and without fear of undue pressure from any quarter—will do those jobs properly, in a way that is of benefit to the international community.
4.30 p.m.
The Government's approach to questions of privileges and immunities for international organisations and their staff is long established. It is based on the fundamental principle that privileges and immunities are not for the benefit of individuals, and should be granted only where they are necessary to ensure that the organisation and its staff can perform their legitimate functions effectively. On the question of fiscal privileges, our policy adheres to
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the internationally accepted principles that one state should not tax another through the medium of an international organisation, and that states should not benefit financially from the presence of an organisation which happens to be located on their soil. The agreements setting up international organisations establish the level of privileges and immunities necessary for their efficient operation, and all are subject to separate negotiation.
When the Government consider their position on the level of privileges and immunities appropriate to each organisation, some factors are relevant. They were mentioned in our letter to the noble Lord, Lord Wallace, which has been more widely circulated. They deal with the range of functions which we are discussing and about which perfectly legitimate questions have been asked by the noble Lord, Lord Pearson, and others. The first factor is the area of activity—whether the organisation is of a political, commercial, social, cultural, technical, scientific or some other nature. Then there is the geographical scope—whether the organisations cover a wide area or are limited to a particular region, and whether they operate in the UK. For example, if an organisation has its headquarters in the UK, it may well be appropriate to confer a wider range of privileges and immunities on it.
The third factor is the power of decisions—whether an organisation's decisions are binding on member states and on individuals within them, or are recommendatory or only advisory. The fourth point is the role and purpose of the organisation—whether it serves limited interests, such as those of a few producers, or has wider aims, such as serving both producers and consumers; whether it is of a financial nature, aimed at the development and improvement of social conditions; or whether it is of considerable political or economic importance.
The fifth factor is financial considerations about functions—whether the organisation is non-profit-making and funded entirely by member states or has any commercial activities. The sixth is membership—whether it is composed entirely of sovereign states or extends to non-governmental entities, and which states are members. The final factor is size. A large multinational organisation will normally require more extensive privileges and immunities than a small one.
The Government believe that to test against that template is the right practical and flexible approach. We will therefore continue to look closely at privileges and immunities proposed for international organisations on an individual basis, judged against those criteria. It is important to note that the immunities granted to the staff of international organisations are in general very restricted. Of the 3,000 staff of international organisations based or with offices in the United Kingdom, only 20 high officers enjoy the equivalent of full diplomatic immunity. The remainder have no immunity entitlement beyond immunity for acts performed in the course of their official duties.
There have been very few cases where staff of international organisations in the UK have abused their privileges or immunities. I acknowledged to the

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noble Baroness, Lady Rawlings, that in any human society it is not inconceivable that people will do so. However, all agreements on privileges and immunities to be afforded to international organisations do and must contain remedies—most importantly provision for immunity to be waived—which can be used where abuse does occur. While staff often enjoy exemption from national income tax on their official salary and emoluments, they are instead subject to an internal tax which is levied for the benefit of the body concerned.
It is at that point that I turn briefly away from the facts, to the philosophy that leads me to conclude that the amendment would not be appropriate at this time. I have discussed it with officials, and the scope of the work that would be involved in doing what is suggested in the amendment would be huge. If done, it would be a huge distraction from the international obligations that we will have as a nation over the next months.
There are obviously a number of things that we would like to do, given time to do so, and much that it might be beneficial to review and change. On occasion, we do so where it seems important. The change in European development aid, which we debated recently in this House, is a good example—we made change where it really counted. It would not be sensible to engage in a serious delay. During the two presidencies, we could not conceivably raise the matter as a priority and try to expedite it.
What would happen if we set our priorities during the presidencies as the elimination of the appalling conditions of famine and poverty in Africa and a major attempt to try to deal with the terrible consequences of carbon emissions on the world's environment, and said, "By the way, we'd like to review a vast number of treaties as well"? That would take vast amounts of time. It simply could not be taken as a serious proposition at that stage. There would then need to be an even more serious delay until after those presidencies were completed, so that we could then embark on this huge volume of work. It does not make much sense.
That leads us to the amendment to Clause 11, Amendment No. 5. It is linked to the proposal in Amendment No. 4 that the legislation should not enter into force until a report on the framework for granting privileges and immunities has been published and debated in Parliament. That is bound to be an international operation. It could not sensibly be done without talking to those with whom we have international relations. For those reasons, the Government oppose both amendments.
Lord Pearson of Rannoch: My Lords, in the context of the questions that I put to the noble Lord, would the Government find it easier to accept the amendment if, instead of stating:
"This Act shall not enter into force until a report has been published",
it read "Within one year" or a period of time from the passing of the Act, "a report shall be published" and so on? That might take some pressure off the Government and still meet the point of the amendment.
Lord Triesman: My Lords, my reply was about priorities. Even within the course of one year, it hardly seems the most vital thing that we could achieve in the international community. My noble friend offered a meeting in which the matter could be explored further. I urge noble Lords to take up that offer as a serious one that would certainly be relevant.
Lord Wallace of Saltaire: My Lords, I am not sure whether to be more amused or exasperated by that extraordinary response, in which we have been accused, as it were, of undermining the Government's efforts to abolish world poverty by suggesting the amendment. I had thought that the Minister was a signed-up member of new Labour. As I understand it, new Labour believes in modernisation and change—in challenging the conventional wisdom and attacking inherited and outdated privilege. What I heard was that the Government prefer a quiet life on this matter, and would like to carry on according to the accepted principles.
If there is not in Her Majesty's Foreign Office a basic document that sets out the current framework for granting diplomatic privileges and immunities, and assesses the appropriate level of such privileges and to whom they should apply, I am astonished. If there is no such document, I assume that the Government operate completely by the seat of their pants on the issue. My respect for the Foreign Office's legal advisers is greater than that.
I attempted to categorise which new agencies get what, and did not find it very easy because a large number of new agencies and organisations are being created. If Her Majesty's Foreign Office would care to offer, say, a grant of £10,000 to employ three research students from some British university to go through the detail, I am sure that it could be done extremely easily and quickly. It is not a huge enterprise.
In suggesting that delays to the Bill will be created by the amendment, the Minister was going enormously over the top. We have no desire to delay the Bill. Our desire is to put down a marker about the extent to which the continuing expansion of international agencies deserves the continuing expansion of diplomatic rights and immunities.
The Minister referred to the abuse of immunities and we are well aware of those. The noble Baroness, Lady Rawlings, referred to the extent to which immunities are granted and then waived when challenged. One has to ask then, "Why are we spending so much time granting all these immunities if they are waived when necessary?".
I have some sympathy with the positions taken by the noble Lords, Lord Stoddart and Lord Pearson of Rannoch, as regards the European Union. I believe that we should question the continuation of what were diplomatic privileges and immunities in what is now a confederation.
On this occasion, we do not intend to divide the House. We do not want to delay the Bill, but we shall pursue the issue further in the face of the Government's general wimpishness on this and many

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other issues. I have previously attempted to push Ministers to challenge other EU member governments on areas in which they do not apply EU law. I was recently having a go at a senior German politician about the German government's refusal, for example, to recognise degrees from British universities. That refusal is clearly in contravention of EU law, but the Department for Education and Skills refuses to take up the matter.
I would like to see the Government being a little more true to the principles of new Labour as I hear them proclaimed from time to time. I struggle to understand what they are, but I do my best in that respect. I assure the Government Front Bench that we shall return to the matter and push the Government further. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 11 [Short title, interpretation, commencement and extent]:
[Amendment No. 5 not moved.]

Immigration and Asylum
4.42 p.m.
The Minister of State, Home Office (Baroness Scotland of Asthal): My Lords, with the leave of the House, I shall now repeat a Statement made by my right honourable friend the Home Secretary in another place. The Statement is as follows:
"Mr Speaker, with permission, I would like to make a Statement about the five-year strategy which I am publishing today to take forward our reforms to the immigration and asylum system. The Government's approach to this important subject begins with the recognition that migration is vital for our economy and society.
"Visitors sustain a tourist industry which is worth £38 billion a year and employs more than 2 million people. Migrant workers—skilled and unskilled—do key jobs which cannot be filled from our domestic labour force. Overseas students make a major contribution—economic and intellectual—to our educational institutions and many as a result develop lifelong ties with this country.
"The positive effect of migrants is true throughout the United Kingdom. For example, in Scotland, the declining population presents a particular challenge which Scottish Ministers are addressing through their fresh talent policy to attract and integrate bright talented people. We will continue to support measures of this kind.
"Moreover, this country has always been among those first in the world to recognise our moral and legal duty to offer protection to those genuinely fleeing death or persecution at home. And it is a fact that those who have migrated to this country over centuries have made, and continue to make, a major contribution to all aspects of our national life. But I think that the House will agree that it is essential to
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enforce our rules rigorously and fairly to ensure that we admit only those who bring this country the benefits or meet the moral obligations I have described.
"The proposals I am publishing today are intended to build upon the major progress which we have made in recent years. We have strengthened our borders by operating our own controls in northern France and Belgium. supported by sophisticated new technology to detect illegal immigrants in freight vehicles. This has substantially cut illegal entry through the Channel Tunnel, Calais and other ports.
"We have tightened the asylum system against abuse, reducing applications by 67 per cent from their peak. Since 1997 we have doubled the number of removals of those not entitled to be here. We have made our legal routes for migration much more robust against abuse.
"But we must do more to clarify the basis upon which we admit people to the UK, whether temporarily or permanently. And we must do more to ensure that we operate an effective control to prevent those who do not meet our criteria from getting here and that they leave when they are no longer entitled to be in the United Kingdom. It is lack of confidence in our systems of control which can foster bigotry of whatever kind and it is our responsibility to build that confidence.
"The strategy sets out a major programme of measures to do just this. We will continue to welcome genuine economic migration within strict criteria. The system we have at present works well, but it is complex and difficult to understand. Therefore, we will bring all our current schemes for work and student migrants into a simple points-based system. This will ensure that we are taking migrants only for jobs that cannot be filled from our own workforce and focusing on the skilled workers we need most.
"We believe that the labour available from European Union member states—old and new —should over time meet our national needs for low-skilled work and so, in consultation with the industries and over time, we intend to phase out the current low-skilled quota schemes. We will of course review with the sectors how to fill any gaps which still remain, but any new schemes will be, as now, quota-based, temporary and tightly managed to ensure people return home at the end of their stay. And they will be open only to nationals of countries who agree to take back their citizens when they are no longer entitled to remain in the UK.
"This points system will be supported by new measures to ensure that it is not abused. Workers and students will be required to have sponsors such as employers or educational institutions who will share the responsibility of ensuring they leave at the end of their time in the UK. The costs of running the visa system will be recovered from those who benefit. I am making a Written Statement on this in the House today.

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"Where there has been clear evidence of abuse, we are ready to introduce financial bonds to guarantee that migrants return home when they should. We will set up an independent skills advisory body to advise us on labour market needs and skills shortages. The Government believe that a modern market-based economy such as ours requires a system which is flexible and employer-led rather than some kind of centrally determined, rigid and arbitrary quota.
"We will continue to welcome genuine refugees. Like all other developed countries and the rest of the 145 nations which are now signatories, we will honour our obligations under the 1951 Geneva Convention. It is part of the international legal and ethical framework that enshrines basic principles of human decency. The Government reject the idea of a fixed and arbitrary quota of refugees and withdrawal from the convention as unworkable, unjust and counterproductive and immoral. Withdrawal would deny to us the international co-operation that we need to deal with the real problems which cause asylum, such as resolving conflict, combating immigration crime and returning failed asylum seekers to their own countries.
"We will continue to root out abuse by rigorously implementing the measures we have taken to identify genuine refugees, by further strengthening our borders and by removing those whose claims fail.
"We will rationalise the appeals system to improve access to justice. From April we will implement the new streamlined single tier of appeal. We will abolish the right of appeal against refusal of leave to enter the United Kingdom for work or study and we will tighten up the operation of family visit appeals.
"We will continue to allow permanent settlement in this country where there is clear economic benefit and where migrants wish to integrate socially. We will tighten our conditions of settlement to reflect this by requiring those who want to settle to pass tests on English language and knowledge of the United Kingdom; restricting settlement for economic migrants to skilled workers only; and extending the period they need to have been here to five years before they get settlement.
"We will in future grant genuine refugees temporary status once their asylum claim has been granted, as happens in many comparable European countries. We will encourage them to work and participate in local communities. We will keep the situation in their home country under review and if there has been significant improvement, we will expect them to return. If there has been no improvement after five years they will be permitted to settle in the United Kingdom.
"Over the next five years we will transform our immigration control. Using new technology we will develop an integrated system dealing with people before they enter the United Kingdom, at our
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borders and while they are in the country. We will fingerprint everyone when they apply for a visa. These fingerprints and other personal travel information will be checked against our own watch lists of those who present an immigration or security threat. Airlines will not have authority to carry people until this check has been made.
"ID cards will provide a simple and secure way of verifying identity, helping us to tackle illegal working, organised crime, terrorist activity, identity theft, and fraudulent access to public services. The new borders technology will record people's departure from the country which will help us to target our immigration checks. We will back this up with fines for employers who take on illegal labour.
"We will continue to crack down hard on organised immigration crime, which targets the most vulnerable, the poorest and the young. We have introduced tough new penalties, gone after criminal assets and established the multi-agency Reflex task force to co-ordinate law enforcement and intelligence activity. This will be a major priority for the new Serious Organised Crime Agency.
"Swift removal of those not entitled to be in this country is central to the credibility of the whole system. Although we have removed many more failed asylum seekers and other immigration offenders than ever before, we intend substantially to increase the number in future. We will Introduce a new and faster process for asylum applications detaining more people and using other means of contact like tagging to prevent people absconding when they are ready to be removed. We will take new measures to prevent people concealing their identity by destroying their documents and thus making it much harder to get their own countries to take them back. We have already made it a criminal offence to arrive in the United Kingdom undocumented without good reason and we are asking airlines to copy travel documents on certain routes.
"But it will he most important to secure more effective returns arrangements with the countries from which most of our failed asylum seekers come. We will place migration at the centre of our relationship with these countries. We will give support to help with the reintegration of failed asylum seekers if they need it, but we will also make it clear to the relevant countries that failure to agree such a joint approach will have implications for our wider relationship, including access to some migration schemes.
"Migration is a consequence of the increasingly global world economy. Asylum is an international issue. We will best address and make progress on these issues through effective international co-operation, not through some kind of 'Fortress Britain' splendid isolation. The fact is that partnerships with other countries, the European Union and the United Nations High Commissioner for Refugees are essential to delivering our objectives.

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"Taken together, this is a major programme to build on the foundations we have laid by creating a system which will be, and will be seen to be, transparent and fair to all. It is a practical and systematic response to the real problems of asylum and immigration. It will provide a simple and robust system for economic migration. It will tighten our rules for permanent settlement to ensure that those who stay bring benefit to the United Kingdom. It represents real determination to eliminate illegal entry, illegal working, asylum abuse and the people-trafficking gangs who, through their heinous crimes, gain most from the failures of our system. I commend this strategy to the House".
My Lords, that concludes the Statement.
4.56 p.m.
Baroness Anelay of St Johns: My Lords, I thank the Minister for repeating the Statement made by her right honourable friend the Home Secretary a short while ago. The Statement repeats the substance of the Prime Minister's interview on television yesterday, of what the Home Secretary said on television yesterday and the article by the Prime Minister reproduced at length in the press this morning.
Eight years ago, the Labour Party manifesto stated that,
"every country should have firm control over immigration and Britain is no exception".
The Prime Minister promised to clamp down on the thousands of people who settled in Britain illegally. Four years later, the manifesto promised that,
"asylum seekers and their dependants whose claims are rejected will be removed from Britain with the aim of more than 30,000 in 2003–4".
Since 1999, the Government have pushed through three Bills on asylum and immigration. I bear the battle scars of two of them. In 2002, we had the last of those and Mr Blunkett, the then Home Secretary, said that it was the final stage in the Government's careful development of strategy to deal with the problems of asylum and immigration. But here we go again, another strategy at the eleventh hour before a general election.
Today, the Government say that they will introduce a points system for immigration. We welcome that—how could we fail to do so? After all, that proposal, like many of the proposals announced today, was called for some nine months ago by my right honourable friend David Davis.
Migration is part of a competitive, dynamic economy. But there is a clear economic case for limited migration of skilled people coming into and going out of Britain and a points system should manage that more effectively. We are in broad agreement with the Government on this. But can the Minister explain why a number of temporary labour schemes introduced under this Government have no departure controls? Do the Government know how many people remain in Britain having completed their employment under these schemes?
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Today, the Government propose to reintroduce embarkation controls. However, we know that the electronic system being proposed today has yet to complete its pilot stage. Furthermore, it is designed to work alongside an identity card for which legislation has yet to be passed. I eagerly await Second Reading in this place. The debates on that in another place have not yet covered the Government in glory.
Can the Minister tell the House what contingency plans the Government have in place if the e-borders pilot project—Project Semaphore—fails? Can the Minister explain why it is to be available only at the 10 ports and airports considered at the highest risk? Surely the danger is that illegal traffickers will simply smuggle people in through other uncontrolled points of entry. What do the Government plan to prevent that happening?
The Government claim that electronic embarkation controls will help with the removal of failed asylum seekers. Despite the Home Secretary's Statement today, the fact is that the Government's record to date on removals is dismal. In 2003, 17,985 people were removed compared with 60,045 applicants and dependants who arrived in Britain. Targets have been constantly missed, then dropped and missed again.
Yesterday, the Prime Minister told us that he had set new targets. At least that is what I assume he meant by the clear as mud statement that:
"Well, I mean I've set a target already which is a so-called sort of tipping target".
I would welcome that if it means what I think it might mean—that by the end of this year, the Government would aim to remove more people than are currently making asylum applications. But, even if they managed to achieve that modest target, how long will it take them to remove the 250,000 people who are estimated to be in the country illegally? That is in addition to those making applications in the current year and those who will do so next year and be turned down.
I am also intrigued by the announcement today in the accompanying booklet Controlling our Borders that the Government have made a welcome U-turn on their approach to those applying to come to this country who are found to be carrying tuberculosis. I understand that the Government now say that on high-risk routes they will screen visa applicants for TB and require those who are diagnosed to seek treatment before they would be allowed entry to the UK. Questions today must be: first, which are those high-risk routes; and, secondly, if the person is required to seek treatment before he gets entry to the UK, does that mean that he has to complete that treatment and prove that he is no longer carrying any disease of that nature?
The Government also say that they will abolish appeals against the refusal to grant student visas. I am intrigued by that. I assume that that was part of the proposal that went through in the Nationality, Immigration and Asylum Act 2002, so it seems rather old news.

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Does the Minister have any solution to the problems that are currently caused by the way in which these applications are processed overseas? Is the Minister aware, for example, that in places like Chennai year upon year applications are commonly screened by officers who are sent out as temporary officers to carry out judgments. They simply do not have the experience or training and knowledge of the conditions there to know how to reach the right decision. Therefore, a significant number of wrong decisions are made. How will the Government deal with that?
I recognise that at least we should now have a register of approved institutions to which students may apply. So I have to repeat a question I asked last summer. I got absolutely nowhere then, but I hope that I shall have more success now. Can the Minister confirm that the Home Office is now operating that approved list? Will the Government publish it? If not, why not? Surely, it would be sensible for everyone to know what an approved institution is for the purposes of student visas.
I am intrigued by the noble Baroness's extra comment that a Written Statement has been laid before the House with regard to recovering the full operating costs of applying for visas. Is that in the Government's response to the consultation that was launched at the end of last year about future increases in student visas, or is this in addition to what may still be a further response?
Finally, which of the measures announced today would require legislation, either primary or secondary? Some kind of legislation would at least require parliamentary scrutiny. Which of these measures can be achieved by behind-the-scenes administrative action, such as changing the Immigration Rules?
I regret that the announcement today has all the hallmarks of an eleventh-hour package. I mayand do—agree with some, perhaps even many, of the proposals. I shall look through the booklet with interest to see just how detailed those proposals may be. The fact remains that on past experience of at least two of the Bills in this House, I certainly do not trust the Government to put these proposals into practice in a way that is fast, firm or fair.
5.4 p.m.
Lord Dholakia: My Lords, we have had four attempts on immigration and asylum policy in the past 10 years, and we still do not have it right. It is not surprising. The constant emphasis on the numbers game clouds the real issues facing the Government. I say right away that the issues will not go away.
However, first I thank the Minister for repeating the Statement in your Lordships' House. There are many issues with which we disagree, but we welcome the positive economic case for immigration. Immigration has been a success story, and we should be proud of it. Every country has a right to determine its immigration policy, and the United Kingdom is no exception. Events of the past years have demonstrated total
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inconsistencies in the way immigration matters are handled. It is no good successive governments denying responsibility. The buck must stop with them.
Of course, a general election is in the air. What worries me is that at the highest political level we have failed to single out the benefits and have concentrated on the negative aspects of immigration and asylum policies. This is not the time for me to comment on the Conservative proposals; suffice to say that Michael Howard has been the architect of the present mess. During his time as Home Secretary, he reduced immigration staff by well over a thousand, and the mess has continued ever since.
I have no doubt that if we had a properly managed system only those who were entitled to be here would be. We would not need accommodation centres, detention centres or policies that take away basic human rights under the Geneva Convention. Effective policies on skilled managed migration and on the employment of economic migrants would establish different routes of admission into the United Kingdom without damaging those who genuinely are victims of torture and persecution. That is why it is necessary—there is public support for it—to design a system that helps refugees and deals effectively with those who have been rejected. We do not therefore object to that, with sufficient safeguards. We should deal with removals of those who have been rejected. We should never forget that immigration and asylum involves human rights. At the root of the problem is the concern about the poor quality of the initial decision-making process of the Home Office.
We have no objection to a points-based system. This is a technical change—nothing new. The Highly Skilled Migrant Programme (HSMP) has been running for three years and uses a points system that is similar to the Australian system. The HSMP allows people to enter the United Kingdom without a firm job offer to seek work.
As far as we can tell, at the moment the Government's proposal seems to extend a points system, similar to the one which operates under HSMP, to mainstream work permits and the sector-based scheme. Does the introduction of a points system across the board imply that more people will be able to enter the UK without a firm job offer as long as their skills are in demand?
The SBS is essential to low-skill sectors. My concern is that the Government will reduce the numbers coming in. That would have the undesirable effect of reducing: first, the ability of restaurants to fill vacancies, leading to closures and loss of income to the economy; and, secondly, increasing the temptation for those sectors to use illegal workers. Work permits are supposed to be granted only where a UK worker cannot be found for the job. So the introduction of a points system for measuring "desirability" raises the question of whether the system worked properly in the past. There has been a huge increase in the number of work permits granted since 1997, but we have always accepted the Government's explanation that that was in response to market demand.

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I pose some questions to the Minister. I welcome the e-borders initiative, but I am aware that biometric visas have been in the pipeline for a while and are actually an EU and not a UK initiative. I welcome the commitment to remove more failed asylum seekers, but, given that the previous target of removing 30,000 a year was dropped because it was unachievable, what will the new removals target be? Surely, the Government must have some idea of the impact of their policy.
I agree with the principle of a points-based system focusing on the skills that are most in demand, but can the Minister reassure us that provision will continue to be made for lower-skilled sectors, where there are just as many labour shortages? What will happen to the sector-based system that brings in low-skill workers for the hotel and restaurant trade? Does the Minister not accept that there is a case for expanding the scheme? Does she not agree that the abuse of the asylum system by economic migrants will continue, unless the Government offer legitimate routes of entry for low-skill workers?
Yesterday, the Home Secretary, Charles Clarke, said on the BBC:
"Migration for work, migration for study, is a good thing … What is wrong is when the system isn't properly policed, and people are coming here who are a burden on the society, and it is that which we intend to drive out".
Where are the abuses in the immigration system, in his judgment? Exactly which immigrants are a burden and how? Why were they not removed, if they failed to meet the criteria for admission to the United Kingdom? Does he not understand that that is an insult to the hundreds of thousands of people who have come to the United Kingdom legitimately, whose labour and dedication benefit our economy to the tune of £2.5 billion a year, the equivalent of 1p on income tax? If he is talking about people who come to the United Kingdom legitimately having abused the system, it is the Government who have been at fault.
Does the Home Secretary accept that workers who have been here for four years put down roots and that we offer them the right to permanent settlement for good reason? Is he not concerned that he is destroying an important incentive for people to come in the first place; and an important incentive for them to integrate into our society, rather than remaining apart from it? Will that restriction apply to applicants from the United States, Canada and Australia?
The proposed increase in fines for employers found to be employing illegal immigrants from £1,000 to £2,000 per head is laughable when there were only two prosecutions last year. Have not the Government tolerated illegal working and the payment of wages below the statutory minimum because that provides our industry with a competitive advantage?
Will the Minister confirm that there will be no further legislation to restrict asylum seekers' rights of appeal? Under the proposal he has outlined today, the Home Secretary has suggested an independent economic review to assess how many jobs are needed.
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That is the positive aspect of immigration and something for which we have argued since last summer. We will ensure that the findings will be used independently, rather than politically.
Can the Minister confirm that the Home Secretary has no plans to end the right to settlement after four years? Does she accept that workers who have been here for four years with their families put down roots in the community and that it would be wrong for them to lose that right?
On asylum, I am glad that the Minister has rejected the Tory idea of quotas. I should hate to be an asylum seeker who has been tortured but find that I am number 15,001 on the list. Will the Minister guarantee that no targets will be set for the number of asylum seekers coming to this country? Can the Minister also confirm that there will be no changes to asylum seekers' rights of appeal? Although we welcome plans to speed up the removal of failed asylum seekers, we hope that there is no target set for that purpose.
Finally, does the Minister share my frustration that a bidding war is taking place on immigration and asylum between the Government and the Official Opposition? Is it not important to speak up for the positive role that migrants play and to defend at all cost the principle of welcoming refugees to our country?
5.13 p.m.
Baroness Scotland of Asthal: My Lords, I say immediately to the noble Lord, Lord Dholakia, that if there is a bidding war, it is not a war in which the Government are engaged.
This strategy has been in production for some time. As the noble Lord said, it is right for us to look carefully at what needs to be done to ensure, first, that those who are entitled to asylum actually receive the succour that this country has traditionally given. I know that the noble Lord and the noble Baroness agree that it is also important that we have robust rules for those who would seek to abuse our system.
As the noble Lord, Lord Dholakia, said, it is a matter for celebration that migrants who have come to this country have made an enormous contribution to the wealth, development and richness that we all enjoy. It was therefore a pleasure to highlight that in the Statement. As the noble Lord, Lord Dholakia made plain, it is also important that we acknowledge the fact that migrants have made an enormous economic contribution to this country. It was therefore a delight to me that that was underscored in the Statement.
However, in order to ensure that the whole of the community—all our citizens—is able fully to rejoice in that, we must ensure that the migrants who come to this country through legitimate means are welcomed in a way that is appropriate and that the methodology that allows them in is clear. The points-based system that both the noble Baroness, Lady Anelay, and the noble Lord, Lord Dholakia, welcomed has, rightly, already been tested with the HSMP, as the noble Lord, Lord Dholakia, said. That allows people to enter the mainstream in a way that has proved very productive.

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Contrary to the noble Baroness's suggestion, it is not an llth-hour package; it has been, like all good pregnancies, in gestation. Eventually, they come to an end and the baby is delivered, but one has to go through that period of gestation before one gives birth.
The noble Lord, Lord Dholakia, was right to say that Michael Howard was indeed the architect of many of the things that went wrong. It is right that we acknowledge that we inherited a poor situation. We had a backlog—
The Countess of Mar: My Lords, I am sorry to interrupt the noble Baroness, but we have had 20 minutes, which is the time allowed for the two opposition Front Benches and for her to reply before Back-Benchers have a chance to speak.
Baroness Scotland of Asthal: My Lords, 1 think that I am entitled to reply, bearing in mind that the noble Lord and the noble Baroness asked—
The Countess of Mar: No, my Lords, it is an absolute.
Baroness Scotland of Asthal: Well, my Lords, then I look forward to replying more fully in due course.
5.17 p.m.
Lord Desai: My Lords, first, I welcome the Government's commitment not to derogate from the Geneva Convention. That is an important announcement, which my noble friend has reiterated.
Is there any thought of adopting the American green card system, which is much more certain about the rights of skilled immigrants? I myself went to America in 1961 on a student visa, which stated that, after finishing my degree, I could work for 18 months, after which I was entitled to apply for a green card. That was a clear rule, and I knew what I was going to do, although I did not apply for a green card. Would it not be better if that sequence of opportunities were offered to immigrants?
Baroness Scotland of Asthal: My Lords, I know that the green card system has proved attractive to a number of people. We have decided on the points system because we think that it best reflects our ability to monitor the needs of the economy as it changes. The points system can be adapted as we receive advice from the advisory group on the needs of the market at any given time. We can adjust the points system to allow for market flows. To take up the point made by the noble Lord, Lord Dholakia, it would ensure that if there was a need for less-skilled and tier 3 workers, we could make those visas and opportunities available.
Baroness Carnegy of Lour: My Lords, perhaps in answer to me the noble Baroness could find time to reply to my noble friend's question. At the moment, about 250,000 people have come here to claim asylum and been refused asylum but are still in the country. What are the Government's plans to reduce that number?
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The First Minister of Scotland wants many more immigrant workers in Scotland. He has said that on a number of occasions. Will the Government's points system, should it be implemented, limit the number in Scotland? Will it apply to Scotland, and will abolishing the low-skilled quota apply to Scotland? That is of great interest in Scotland. As the policy has been in development for some time, no doubt consultation has taken place.
My third question is: what will be the cost of student visas to stay on under the new arrangements?
Baroness Scotland of Asthal: My Lords, the noble Baroness will know that we have made a trenchant attempt to increase the number of returns of failed asylum seekers. We now return many more than were returned under the previous administration. We have removed 46,000, including illegal workers and those refused entry at the port. In 1996, the number of failed asylum seekers removed was equivalent to only 20 per cent of new unsuccessful claims. In the first six months of 2004, the proportion was estimated to be around 50 per cent. Much has been done about the returns procedure.
Scotland will have its own fresh talent scheme from later this year—the needs will be catered for in that scheme. We think that Scotland is an exemplar; it demonstrates what can be done to invigorate the community and promote activity by increasing and welcoming the number of migrant workers.
Lord Judd: My Lords, does my noble friend accept that it is very encouraging to hear her heavy emphasis in the Statement on the positive contribution made by migration, and that the ascendancy of positive over negative language in that context is crucial to the success of migration policy and good race relations policy in this country? Does she not agree that a transparently fair migration system is crucial in the age of global terrorism so that increasing numbers of alienated, disillusioned people do not become recruiting fodder for extremist manipulators?
Does my noble friend agree that we must take care in our emphasis on the importance of the contribution of skilled migrants, and ensure that we are not robbing economies that are desperately dependent upon those people at the very time when we are putting so much emphasis in our policy internationally on the importance of development? Does the Minister agree that we do not recognise honestly enough the tremendous contribution made to our way of life and economy by unskilled migrant labourers? A terrible aspect of that is all the abuse taking place in that context. Should we not hear more about that?
Finally, does my noble friend agree that, if we are to get it right, the priorities so imaginatively furthered and embraced by the Chancellor of the Exchequer for a fairer world economy and fairer world trade are fundamentally relevant to reducing the pressures for migration in the international community?
Baroness Scotland of Asthal: My Lords, I very much agree with my noble friend on those matters. I wish to reassure him and the noble Lord, Lord Dholakia, that we value the contribution made by unskilled workers to our economy. For that reason, we propose a fourtier system: tiers one and two, for highly skilled and skilled workers; tier three, for low-skilled workers, taking into account the additional labour from the new EU countries—that will be phased out; and tier four, for students and specialists. We understand that there is a breadth of need to be met; we hope to be able to encourage that in a way that is proportionate and appropriate for our economic development and skills base. I wish to make clear that my noble friend's comments are rightly made.
The Lord Bishop of Oxford: My Lords, I thank the Minister for her Statement, but, as someone who was involved in the passage of the Nationality, Immigration and Asylum Act 2002, I am puzzled why, if the situation is as serious as the Government suggest, it was not brought before the House in 2002. The noble Baroness used the analogy of a long period of gestation; we can certainly understand that, but perhaps now we are talking not about the birth of a first child but about the birth of a fourth child.
During the passage of the 2002 Act we were very concerned to safeguard certain rights of appeal. Will the Minister assure the House that those rights of appeal, which were safeguarded in the end after a long struggle during the passage of the 2002 Act, have not been lost in the present government policy? Will the government policy now being put forward require further legislation?
Baroness Scotland of Asthal: My Lords, as the 10th child of my mother and father, perhaps I may say that each child has its own value. If my parents had given up, I would not be standing before noble Lords today.
We have not undervalued that aspect. We will look very carefully at any statutory change that may be needed to implement the five-year strategy. But it is a strategy; it is our way forward. Some issues will require new legislation. I assure noble Lords that any changes to the appeals structure—not that I am aware that any current changes are anticipated —as with all changes, would have to come back before this House, any new construct would be looked at and it would be properly debated. I cannot tell noble Lords that any change is contemplated but this is a five-year strategy.
The Countess of Mar: My Lords, I apologise to the House, particularly to the noble Baroness for having misled her. I took the advice of the Clerk and was told that the limit was 20 minutes. But the Companion is ambivalent; it says that the Minister may go on to answer questions, if necessary, afterwards. However, perhaps I may suggest that noble Lords on the two Front Benches should be a little more economical with
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the number of questions that they ask. I fear that if the noble Baroness had had to answer all their questions we would have been standing here until midnight.
Baroness Scotland of Asthal: My Lords, I thank the noble Countess for her gracious apology. I also thank her because her intervention meant that I was not able to weary the House with the answer to each and every question, which of course I would have been delighted to do.
Lord Avebury: My Lords, will the noble Baroness confirm that we need to operate within the limits set out by the qualification directive of the European Council and of the Hague programme, on which Caroline Flint, her colleague in the Home Office, answered questions only a couple of weeks ago? Bearing that in mind, do any of the proposals require us to seek a variation or amendment of the qualification directive or the Hague programme, or is everything that the Minister said today within the limits of what the Government have already done? On a quick reading, it looked as though the report was simply a summary of measures taken by the Government over the past few years and not an announcement of anything new, but I am open to correction if that is wrong.
The last item in a series of points that have been recapitulated by the Government in this document was what happens to people who destroy their documents on or before arrival. Since that provision came into effect, has there been any significant reduction in the number of people arriving without documents? Has the threat of prosecution been effective in deterring that practice?
Baroness Scotland of Asthal: My Lords, the Government are very enthusiastic supporters of the Hague programme, which has very much honed the programme for the European Union regarding what we will seek to develop together. The contents of this five-year programme complement very well that which we are going to do. The five-year strategy is not simply a recitation of what has already been done. In the proposed changes, noble Lords will see many new things, such as the points system, the advisory group, the ability to monitor the flows of migration, the issues of the skills base, what we need and how we can amplify that.
Nothing in the strategy will result in changes to asylum appeals. We have said that we will remove student and work entry clearance appeals and appeals against refusal at ports under these routes. But those do not impinge on asylum issues. I have already said that the qualification directive and the Hague programme are consistent. So we have the points system, the chain of migration, the end of appeals, the English language test, the programmes in relation to skilled workers and the fixed-penalty fines. There are new issues in that strategy.
Lord Corbett of Castle Vale: My Lords, can my noble friend confirm that with about 200,000 people a

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year leaving this city for other parts of the country or to move abroad migrants with the necessary skills are needed to keep this capital working? On the matter of the single tier of appeal, will she confirm that there is no such thing as 100 per cent success with initial appeals? Perhaps I may ask her to think again about removing the right to at least one appeal for those who are refused leave to enter for work or study.
Baroness Scotland of Asthal: My Lords, we have looked at that issue very carefully. Of course, if legislation is brought forward there will be an opportunity for us to debate it. But our hope and aspiration is to make the procedure clear and understandable by all, so that those who are entitled to have those permissions given to them will get them. On that basis, if the procedure is simple, clear and straightforward, we hope that there will be no need for appeals.
Lord Marlesford: My Lords, I suspect that I am speaking for the whole House when I say that if all of the noble Baroness's nine siblings are or were in this country, it is or would be a better place. How can it be that after eight years of this Government they are able now to announce electronic control methods for our ports for exit and entry? The Minister will be aware that I have asked many questions over the years on that subject.
I would suggest that the Home Office is guilty of incompetence and that the Government are guilty of negligence in allowing the Home Office to be incompetent. Will the noble Baroness also kindly answer the question asked by my noble friend Lady Anelay: if the new methods are merely to be introduced in some ports, what is there to stop those who wish to avoid them from using the other ports?
Baroness Scotland of Asthal: My Lords, the noble Lord and your Lordships will know that those things take time. Perhaps I may thank him for his very kind comments about myself and my family. There are in fact 12 of us—I was just the 10th child.
As your Lordships will know, the previous Government changed the rules in relation to embarkation countries, recognising that they were expensive and insufficient. We estimated that we could not simply return those. It has taken time to put in place the e-border initiative. We want to make sure that it works well. This will be an opportunity for us to consolidate the position so that we know how many people are leaving and how many are coming in in a way that we have not been able to do before.
The noble Lord, Lord Dholakia, is right. This is not just a UK initiative; it is very much something that is happening in the EU, which is also an important development. There has not been incompetence, but it has taken time. We celebrate the fact that we are now able to take advantage of it.
Lord Beaumont of Whitley: My Lords, do the Government accept that asylum policy as opposed to immigration policy should be centred on the needs of
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the seekers for asylum, regardless of the benefits that they bring to this country? The most in need are often the ones who will be less able to produce a benefit for this country and who will need our compassion and our help.
Baroness Scotland of Asthal: My Lords, the noble Lord is right. There is a difference between those who seek asylum because they are subjected to persecution and threats of death and those who wish to come to our country as economic migrants to better their life chances. One of the difficulties has been that in the past, many people have conflated those two issues.
In the strategy, we wish to make clear that there are legitimate ways of coming to this country through a well honed, well targeted points system. People do not have to cloak themselves in a myth of being an asylum seeker in order safely to reach these shores. We hope that we will deny the people traffickers their vile produce as a result of the suffering that they produce.
Baroness Falkner of Margravine: My Lords, it is a very important paper. I share the remarks made by the noble Lord, Lord Beaumont. To a great extent, the importance of this paper will lie in how it affects the lives of the most vulnerable people who will have very few other options, unlike most of the professional classes.
I am concerned that, in the Statement, the noble Baroness said that genuine refugees will be granted temporary status once their asylum claims have been granted, but that the situation in their home countries will be kept under review. If there is significant improvement, they will be expected to return.
My question is related to an example. This is a very subjective test in international political terms. For example, in Iran in the 1990s, there was significant improvement, although its previous human rights record had been appalling. There was significant improvement under President Khatami who will be leaving office in three months' time. We expect there to be a reversion to hard-line governance again. An asylum seeker who came to this country and was reviewed under what I think these proposals mean could have been repatriated to Iran only to discover that it had gone full circle.
Can the Minister reassure us that in developing the strategy, the monitoring of international situations to determine whether they have improved could be taken over a longer period than 10 years or, if not, at the very minimum they will be reviewed extremely rigorously and with great care?
Baroness Scotland of Asthal: My Lords, I can certainly assure the noble Baroness that that will be done extremely rigorously and with great care. Your Lordships will know that for a while there has been a policy that we are able to return asylum seekers to safe parts of countries, particularly where a country is very large. It is something that must be done cautiously, appropriately and in a way that ensures we are making the right judgments.

Commissioners for Revenue and Customs Bill
5.37 p.m.
The Attorney-General (Lord Goldsmith): My Lords, I beg to move that this Bill be now read a second time.
The Bill creates two new organisations. First, it brings together the Inland Revenue and Customs and Excise to create a single new department called Her Majesty's Revenue and Customs. That was the key recommendation of the O'Donnell review which considered the best organisational arrangements for delivery of the Government's tax agenda.
Secondly, the Bill establishes a fully independent Revenue and Customs Prosecutions Office to conduct prosecutions on behalf of HMRC where appropriate. That was an important recommendation of the Butterfield review and introduces a new layer of independent scrutiny in relation to HMRC criminal prosecutions. The office will also have the power, alongside the Crown Prosecution Service, to prosecute cases generated by the new Serious Organised Crime Agency.
Perhaps I may consider first the creation of HMRC. When we talk about forming HMRC, we talk about "integration". Integration is not the same as a merger: it is a more fundamental change that brings services together to produce new and better solutions. But the goal is not integration for its own sake. Integration in parts of the business that share customers or functions—such as Customs' work on VAT and Inland Revenue's work on direct taxes —can deliver real benefits, and here it will be pursued with vigour.
But some Customs' social protection and border functions may have little obvious overlap with Inland Revenue functions. Here, too, however, there are opportunities for improved working, as they link into the HMRC structure and develop wider opportunities to enhance co-operation with other agencies at the frontier.
The integration of Customs and the Revenue is a huge job, and it will take time to deliver it. It will be an ongoing process of improvement, dependent on the introduction of new technologies and working methods to support a more coherent and consistent approach across HMRC. This Bill cannot of itself deliver that, but it establishes HMRC and thereby allows it to make some changes now and to begin working towards more substantial reforms.
There are clear benefits from integration. One of the most important is the improved customer focus that an integrated department can deliver. That will flow from a better understanding of taxpayers as a result of looking across their affairs, allowing the delivery of more joined-up services that better meet taxpayers' needs.
Integration will also improve the effectiveness of revenue administration. For example, better use of information will allow more effective targeting of resources to areas of risk, improving fairness by making it harder for the dishonest to avoid their
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obligations and reducing unnecessary interventions in the affairs of honest taxpayers. Integration will also produce efficiency savings of 3,200 full time equivalent posts by 2007-–08.
I turn to the content of the Bill. On its structure, the Bill establishes HMRC as a non-ministerial department with the statutory functions of the two existing departments. Commissioners, acting under the general directions of Treasury Ministers, will be responsible for the management of the department and its functions. This non-ministerial status maintains the arm's-length relationship between Ministers and revenue administration, continuing the existing principle that Ministers do not intervene in individual cases.
The Bill creates a new framework, with enhanced parliamentary scrutiny, for managing and accounting for the revenues and other moneys that HMRC collects and pays out.
This Bill allows HMRC to be treated on the same basis as ministerial departments for the purpose of transferring functions into or out of the department. These arrangements, in the Ministers of the Crown Act, allow routine machinery of government transfers of functions between departments without the need for primary legislation. They work effectively for ministerial departments and, subject to certain exceptions that I will outline in a moment, it is sensible to apply them to HMRC. HMRC will be a large department with a wide range of functions, and it would be unnecessarily inflexible to exclude all of them from the transfer provisions that apply across the rest of government.
I mentioned certain exceptions to the transfer arrangements. The Bill ensures that these arrangements do not permit the transfer out from HMRC of its tax, duties, national insurance or tax credit functions. These functions are those where the O'Donnell review saw synergies in administration in one department. This restriction therefore maintains the integrity of the tax system and underlines the principle that the administration of revenues is held at arm's length from Ministers.
The provision in the Bill is sensible and allows for the effective use of parliamentary time. At this point I want to say that my right honourable friend in the other place, the Paymaster General, has listened to the concerns expressed in debate and has talked to the trade union representatives of staff who will be working in HM Revenue and Customs. We want to put on the record that this transfer provision will not be used to circumvent proper consultation with the recognised unions of the effects on their members of transfers of functions out of HM Revenue and Customs to another government department or agency. I understand that talks are due to take place between the management of the Inland Revenue, HM Customs and Excise and the recognised union representatives of Revenue and Customs staff on a Memorandum of Understanding, which will set out certain agreed forms of consultation on such transfers.

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I turn to the question of powers. This Bill deliberately makes only those changes necessary to establish HMRC. It therefore transfers the powers of the two existing departments to HMRC, but ring fences them to prevent their inadvertent extension within HMRC. There are therefore no changes in the way that powers can be used as a result of this Bill.
Of course, some reform may be necessary to deliver integration and ensure that HMRC has powers suitable for a high performing, 21st century revenue and customs administration. To that end, on 8 December in the other place, the Paymaster General announced a consultation exercise to consider issues around powers and linked matters such as rights of appeal.
The Bill confirms that HMRC may pool information internally, so that, subject to the usual rules about appropriateness and proportionality, information supplied for one of its functions can be used for any of its other functions. That enables HMRC to develop joined-up services and to realise the improvements to effectiveness that will arise from making better use of information.
Of course, taxpayer confidentiality will be just as important in HMRC as in the predecessor departments: there will be no let-up in the commitment of HMRC to safeguarding taxpayer confidentiality. The Bill therefore introduces a statutory duty for all officers to maintain the confidentiality of information that they acquire in the course of their duties. And all new HMRC staff will be required to sign a written acknowledgement of this duty when they join the department, emphasising the serious nature of this obligation. The duty is reinforced in the Bill by a criminal offence of unlawful disclosure of confidential information about an identifiable person by an HMRC officer. This extends the existing offence for Inland Revenue and HM Customs and Excise staff to all functions of the new department.
Underlining this high regard for taxpayer confidentiality, the Bill makes explicit the occasions when it is considered appropriate for officials of HMRC to disclose information held; for example, where permitted by another enactment and for the purposes of its functions, ranging from advice to Ministers on policy matters to day-to-day operational activities. Noble Lords will be familiar with many of these "disclosures" that provide information such as bulletins for employers and tax practitioners.
The Bill also introduces a provision that restricts the Commissioners to authorising disclosures of information in limited circumstances, defined in regulations, where there is a public interest case for doing so. The power will be used only to permit disclosures in accordance with the Human Rights Act. In particular, it will not be used unless necessary for the purposes of public health or safety, for the prevention of crime or for the prevention of fraudulent conduct. This much tighter provision replaces an existing authority for the Commissioners in either department to authorise disclosure of information without restricting the circumstances in which they can do so.
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I refer now to the issue of external scrutiny. The Bill introduces new arrangements for ensuring the highest possible criminal investigation standards within HMRC. It provides for Her Majesty's Inspectors of Constabulary to inspect HMRC's compliance with the requirements of the criminal justice system. It also gives the Independent Police Complaints Commission a key role in monitoring and reviewing HMRC's procedures for handling complaints of criminal or gross misconduct by HMRC officers. The Independent Police Complaints Commission will have responsibility for investigating the more serious of these matters.
These two measures implement the Butterfield review recommendation that Customs identify how additional external scrutiny can be introduced into investigation work. They will provide valuable external validation of the standards of conduct which are rightly expected of HMRC.
The Bill also provides for criminal offences of obstruction, assault or impersonation of HMRC officers. These consolidated offences replace provisions relating to the predecessor departments and align their penalties with their police equivalents in order to deliver consistency across the criminal justice system. The Bill stipulates that only officers authorised by the Commissioners to exercise the power of arrest for these offences will be able to do so. This gives statutory effect to existing administrative arrangements under which officers who do not need to use powers of arrest in their current jobs are administratively barred from using them.
I turn now, briefly, to the second important function of the Bill. The Bill establishes a fully independent Revenue and Customs Prosecutions Office. By advising HMRC investigators and conducting any subsequent criminal proceedings, the office will provide independent scrutiny of criminal cases investigated by HMRC. This was a key recommendation of the Butterfield review. I have referred already to the power to conduct prosecution cases generated by the new Serious Organised Crime Agency.
The director of the prosecutions office will be accountable to me rather than to Treasury Ministers. This important change ensures a clear separation of responsibilities from HMRC. This independence of the prosecutor from the investigator in cases requiring criminal proceedings helps maintain public confidence in the criminal justice system as it will ensure that the decision to prosecute is based on an entirely impartial assessment of the merits of a case.
The constructive relationship between HMRC and RCPO, the new prosecution office, will provide clearly defined and distinct roles for the investigator and prosecutor, allowing the prosecutor's expert and independent advice to be brought to bear on cases at all times. This independent involvement, ensuring the highest possible standard of work. is a development I strongly welcome.
The Bill places a duty of confidentiality upon RCPO staff that is comparable with that for HMRC staff, and backs this up with a criminal sanction for unlawful

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disclosure of information. These measures ensure that confidentiality will be taken just as seriously in the prosecution office as in HMRC.
The Bill also provides for the Crown Prosecution Service Inspectorate to inspect RCPO to provide independent assurance of the professional standards of prosecutors. I welcome this external scrutiny of the office. Like the creation of the RCPO itself, this provides public assurance of high standards throughout the criminal justice system.
Noble Lords will appreciate the scale of the challenge we are embarking upon. The Bill begins a lengthy process of change that will, over time, deliver real improvements to the administration of Revenue and Customs functions. The Bill is a crucial first step on that path and I commend it to the House. I beg to move.
Moved, That the Bill be now read a second time.—(Lord Goldsmith.)
5.52 p.m.
Lord Thomas of Gresford: My Lords, there are clear advantages in having a single body responsible for the administration of the tax system. This merger—or integration, as the noble and learned Lord put it—should be taken as an opportunity to rationalise and harmonise the different procedures of both departments.
One of the concerns which we propose to address is the extent to which the Bill permits the disclosure of confidential information. Confidentiality is certainly stated as a principle in Clause 18(1) but subsection (2) appears to give the widest powers of disclosure to various people. Similarly, Clause 20 gives wide disclosure powers under the guise of public interest. We shall need to look at these clauses very closely. My noble friend Lord Newby will address other issues that arise under the creation of HMRC.
I turn to the Revenue and Customs Prosecutions Office, which we welcome. The creation of that office under the direction of a director responsible to the Attorney-General is something that we have sought for some years.
The report of Mr Justice Butterfield, to which the noble and learned Lord referred, into the collapse of the London City Bond prosecutions in November 2002 highlighted how the existing system of prosecution had imploded. There were 13 separate prosecutions in which 109 defendants faced charges. Of these, 52 either pleaded guilty or were convicted, 16 were acquitted and the prosecution offered no evidence in respect of another 40. But, following the result of an abuse of process hearing in Liverpool, all the convictions, both of those who had pleaded guilty and who were found guilty, were quashed by the Court of Appeal, so that, ultimately, no one was convicted.
The public purse was allowed to lose up to £688 million according to the National Audit Office. The fees of prosecuting counsel alone amounted to £3.5 million, while legal aid for the defendants cost £14.3 million. They have not even begun to work out
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the compensation for the defendants who were successful in their appeals against conviction. Such was the state of the prosecution service that no defence lawyer would ever advise his client to plead guilty.
What went wrong? Mr Justice Butterfield found muddle, confusion and uncertainty, mostly stemming from a lack of systems to ensure co-ordination between the various investigations at any stage. This resulted in the prosecution failing to comply with its obligation to make full and proper disclosure to the defence of relevant documents. Fair trials were impossible.
The learned judge identified in particular with regard to Customs investigators, first, a culture of excessive secrecy, with information closely guarded and disseminated only on a need-to-know basis; and, secondly, a culture where the need to fulfil the requirements of the criminal justice system was not accepted as an essential part of the investigation process.
Those findings cause me to welcome very much the provisions of this Bill which permit Her Majesty's Inspector of Constabulary to oversee the work of investigators. I also welcome the fact that the Police Complaints Commission can be involved in matters of abuse that may arise in the course of an investigation.
Such a culture is nothing new. I recall a case of alleged heroin importation being thrown out by a trial judge as long ago as 1983 as a result of oppressive questioning by investigators over many days. The prosecution service of Customs and Excise lost the confidence not only of the lawyers involved in the case but of the judges as well.
The Gower/Hammond review, set up in 2002, recommended that the Customs and Excise Solicitors Office should retain its prosecution function but that the solicitor should be responsible to the Attorney-General. That was the beginning of the move to what we have in the Bill, which is a great improvement on that. Even so, the Gower/Hammond review led to significant progress. A report by the Crown Prosecution Service Inspectorate in December 2004 found that the lawyers in the service were beginning to think much more as independent prosecutors and not merely as an arm of the Treasury, and that the problems of disclosure which had caused the collapse of the Liverpool case were being addressed.
However, the report found that the additional demands made on the organisation and the increase in the size and complexity of the cases had not resulted in additional resources being made available to it by the Government. The report found that lawyers often did not appear to be in control of their cases, largely because they did not attend all court appearances to instruct counsel, either in the magistrates' court or at the Crown Court, and counsel was left to its own devices.
A further specific criticism of the inspectorate's report was that local Customs and Excise staff still prosecute cases, a practice which has long ceased where the CPS are involved. I ask the noble and learned Lord the Attorney-General whether the

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practice of using investigators to prosecute will cease. It takes me back 50 or 60 years ago to the days when my father, who was an inspector in the police, a town inspector, was prosecuting in the magistrates' court.
Despite progress, therefore, the inspectorate concluded that some aspects of the work and organisation constrain the prosecutors. There is a need to improve staffing levels and case coverage; there is still inadequate accommodation; there is a lack of some basic equipment and services; and there are cumbersome IT systems to support management information requirements. That is as the office now is.
So it all comes back to resources. The CPS was under-resourced for many years, to the extent that one began to wonder whether the Government replaced cash with the rebalancing of the criminal justice system in favour of the prosecution to which the noble Lord, Lord Kingsland, has referred in recent days. It may be better to introduce evidential presumptions of dubious legality in sexual offences and the previous convictions of the accused. Better to abolish jury trial in an attempt to secure more guilty verdicts and to risk wrongful convictions and improve the statistics than to invest in a thoroughly modern and competent investigatory and prosecution system.
Things have greatly improved with the CPS. I hope some new money will be put into the new organisation to ensure that it has the competent staff and technical resources so that it can be a first-class and, above all, a fair and responsible prosecuting authority, which commands the confidence of the judiciary, the legal profession and, of course, the public. The appointment of Mr David Green, QC, as the director, is an excellent beginning.
The essential element is that this new prosecuting authority is seen to be wholly independent of Her Majesty's Revenue and Customs, just as the CPS is independent of the police, making its own decisions and protecting not just the Revenue but the individual citizens against whom allegations are made.
We welcome these provisions; we hope that the resources will be available to back them, and we look forward to seeing an improvement in what has been a very difficult and unhappy area of prosecutions.
6.1 p.m.
Lord Barnett: My Lords, I welcome my noble and learned friend the Attorney-General to our debate on the Inland Revenue and Customs and Excise. As we normally say after maiden speeches, we look forward to hearing him again often in our debates on these matters.
I hope that my noble and learned friend will forgive me if I do not reflect upon the legal parts of the Bill but deal rather with what I thought was the major part of the Bill— namely, merger. We are told by my noble and learned friend that it is integration rather than merger. I do not know whether that is a legalistic phrase. He sought to spell out for us why it was integration rather than merger; perhaps we will debate that further on another occasion.
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Much as I am delighted to see my noble and learned friend here, I wonder why he opened this debate. On Second Reading in another place, they managed to find two Treasury Ministers to speak; they did not bother with any legal Ministers. Despite that, I am delighted to see my noble and learned friend. Of course, the Bill is not party political; even the noble Baroness, Lady Noakes, will find it difficult to take a party political view of the Bill.
Initially, my main concern was whether the department and the Government were ready to implement the Bill. Reading Gus O'Donnell's excellent report, I am even less certain about the benefits that will accrue from this integration. Introducing the Bill in another place, the Paymaster General said that it was, as my noble and learned friend the Attorney-General said, a huge task, and she explained why. It is worth repeating what she said:
"The new department will have more than 30 million taxpayers and stakeholders, of which 4 million are businesses. HMRC will collect more than £400 billion a year in receipts and pay out over £25 billion in tax credits and child benefit. The costs of running HMRC will amount to some £4.8 billion a year, and the department will have nearly 100,000 staff; 20 per cent of the civil service".—[Official Report, Commons, 8/12/04; col. 1171.]
To put it mildly, it is, as my noble and learned friend said, a huge task.
We were told that the integration could not start until after Second Reading in the other place, which was on 8 December. The new chairman is David Varney, a businessman whom we wish well in his task. We were told that he could not do anything until 8 December, but he was appointed, and took up his post on 1 September. Presumably, all he could do in the interim period was think about the task. I hope his thinking took him well on the way to understanding what is going on here.
Despite having a comparatively short time in which the new chairman will have to work, paragraph 30 of the Explanatory Notes states that the Government hope to implement this huge task "shortly after Royal Assent". I find that hard to understand, but will come back in a moment to what my noble and learned friend the Attorney-General said about it. Do we not need to worry about whether we are ready to have this integration in the timescale set out? In practice—this seems to flow from what my noble and learned friend was saying—little will happen initially. The two departments may be called HMRC but, in practice, they will simply carry on as before. Nothing will happen when the new chairman takes over, except that he will start on integration. I should be glad to know whether I am right in assuming that.
I have a few questions on the Bill. Paragraph 9 of the Explanatory Notes states:
"The Bill identifies all of the functions previously carried out by the Inland Revenue" —
as set out in Schedule 1. It goes on:
"It provides that powers previously available to the Commissioners of Customs and Excise and their officers may not be used for these former Inland Revenue functions, while powers previously available to the Commissioners of Inland Revenue and

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their officers may only be used for these functions. This is to prevent any inadvertent widening of powers in the new department".
I suppose it is all right if it is advertent, and that this is only to prevent inadvertency. I hope that I am not being too legalistic.
Paragraph 12 of the Explanatory Notes says that Clause 17 and Schedule 2,
"enable information acquired by HMRC in connection with a function to be used for any of its other functions … Management controls ensure that the use of the information will be appropriate and proportionate".
What are the management controls? I am sorry to trouble my noble and learned friend the Attorney-General with these little matters, but perhaps he will tell us.
Paragraph 14 says:
"Clause 18 sets out the statutory duty of officers. Commissioners (and others acting on their behalf …) not to disclose information held by HMRC unless authorised to do so".
I should like a little more information about who will authorise them to do so.
We are told that Clause 19 widens the current criminal offence of unauthorised disclosure. Why is it necessary to widen it? Paragraph 16 of the Explanatory Notes says that Clause 20 will introduce a provision enabling the commissioners to instruct officers to disclose confidential information where it is in the "public interest" to do so. What is the reason for the change, and what is the public interest referred to?
Finally, we are told in the Explanatory Notes to Clauses 24 and 26 that rewards may be paid by the commissioners. That is very interesting, and I think we need to know a little more about it. What size are the rewards likely to be—large, small or medium? Perhaps my noble and learned friend could give us some idea of the level of reward. Would the size of the reward relate to the amount of revenue saved or tax obtained? It is an interesting new idea, and I look forward to hearing my noble and learned friend's answers to those questions.
On the question of benefits, we are told that there will be staff savings—apart from the Gershon review, which we have all heard about. We are told that there will be some 3,200 staff savings or cuts by 2007–08. That is out of 100,000 staff, so I do not think that my noble friend Lord Brooke need worry too much. Then we are told that that is only a working assumption and that the cut is not definite. There will not be huge cuts so my noble friend can leave the room now.
My main concern remains that this is a huge task. Has the solution to this huge task been properly thought through? I still have my doubts. On page 8 of his excellent report, Gus O'Donnell told us that the initial costs were likely to be about £75 million. Clearly, we do not know whether that is a working assumption, because the costs of £75 million could be spread over two years. We are told that, above all, the benefits will be long term, so we cannot expect to see benefits in the short term, in the next few weeks or months. When will we see the benefits? I am sorry to
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intrude on my noble friend's Inland Revenue and Customs experience in these matters, but perhaps he could tell us when we can expect see the whole of these benefits in the "long term".
Finally, the implementation of this Bill, when it becomes an Act shortly after Royal Assent, remains a concern to me. I hope that the Government will not seek to rush it through. We are told already that it will initially be only a start of the proceedings. Assuming that there is an election on 5 May, if we have to wait until after that, I hope that the Government will not try to wash it all up together with other Bills in agreement with the usual channels. There are important matters to be resolved. It would remove the concerns that I have—and I imagine that others have—if the Government do not rush to put the Bill on the statute book and try to implement it very soon thereafter.
6.12 p.m.
Lord Sheldon: My Lords, my noble friend commented on the important speech made by the Attorney-General and I welcome what he said, especially when he mentioned that there was a change in the approach to this matter from what we thought were the main financial aspects to some of the legal consequences, which I had not gone into. He said that it was a huge job; it is an ongoing job. I can see that there are a number of matters to be dealt with over a long period of time, but I had not realised quite how long that time was likely to be. The implication of my noble and learned friend the Attorney-General was that it was rather longer than we had heard from Dawn Primarolo in the debate in the House of Commons on 8 December.
The task of bringing together Customs and Excise and the Inland Revenue is a major undertaking. It must not be underestimated and my noble and learned friend the Attorney-General certainly did not do that. The savings of staff— whether the 16,000 to which my noble friend Lord Barnett referred arising from the Gershon proposals or the 3,200 through efficiency saving—are important, but they are by no means the main consideration. The main consideration of this merger, coming together or whatever we like to call it, must be the revenue collection and the maintaining of the standards of honesty. Those are the crucial issues.
These revenue departments have been called,
"the least corrupt revenue service of any major country in the world",—[Official Report, Commons, 8/12/04; col. 1181.]
which is absolutely right. This is an enormous advantage that we have had over so long a period. When one considers the vast amount of money handled by these departments, it is a wonderful tribute to our Civil Service and the consequence of the invaluable reforms introduced by the Northcote-Trevelyan report in the middle of the 19th century.
Looking at these two large departments with so long a history I would have expected that some coming together would have resulted in an increase of staff at the outset. There are problems and one does not normally deal with problems by reducing one's staff. I would have thought that that increase of staff would

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continue for a very considerable time until the eventual efficiencies—if they are to be there—were introduced over a longer period. I am surprised and a little sceptical that efficiencies that may be obtained in the long term are expected so early.
Both departments have a long and successful past. The Inland Revenue, dealing with income tax and other matters, dates from 1842 and the customs part of the collection of these monies dates from the 13th century. They are two great historic departments with quite different patterns of working. On the one hand, the Inland Revenue deals with financial matters after they have taken place. There are records that can be examined and the time to deal with them is not a problem. On the other hand, Customs and Excise deals with actions as they take place—the transfer of goods in particular—and the department as it now is follows that precedent.
Another important difference between the two departments is the kind of expertise that they have of necessity acquired in the course of so many years with their very long pasts. The history of Customs and Excise, which comes from intercepting smugglers and dealing with criminals, is something that we know and is well recorded in so much of our history. Although the present day approach has over the years altered the attitude of that department, it is still rigorous; more rigorous than the Inland Revenue. The Inland Revenue's history comes from dealing with mostly honest but certainly unwilling taxpayers. It is not easy to see how these two different kinds of expertise will survive, still less be transferred with success from one part of a new department to another. It is still more difficult, given the present level of work by each of these two departments which are under considerable strain at the present time.
As Financial Secretary to the Treasury, I remember seeing the volumes of Inland Revenue legislation in Somerset House. There was one volume, which was enough for a large chunk of the 1840s. By the time we came to the 1970s, volume after volume was required for each year. Since then, the changes have not been slow. Indeed, in many ways, they have accelerated. Bringing about this coming together with profound and fundamental changes at such a time will lead to a great upheaval in government administration and we must not underestimate the importance of that.
David Varney, the chief executive designate to the merged departments, told the House of Commons Treasury Select Committee that he was not able to commit himself to the financial benefits of the merger because he thought that the details were not known. I would have thought that a full investigation, however difficult it would have been to undertake, would have preceded a decision to merge, let alone to produce a Bill to lay before Parliament. I would have thought that, like Andrew Tyrie, who commented in the Second Reading debate in the House of Commons, we should have had,
"a quantitative analysis of the costs and benefits".—[ Official Report, Commons, 8/12/04; Col. 1186.]
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I do not understand the pressure to act with such haste. After all, the House of Commons Treasury Sub-Committee recommended this merger in April 2000 and it was rejected by the Government. The sudden change of mind now is not easy to understand. But even if one understands it, the speed at which the change is taking place is more difficult to comprehend. Given such a reversal, much work might have been expected to have been done to justify coming to a completely opposite conclusion in such a short time on so important a matter as this.
The work that is only now proposed could have been undertaken with a longer time-scale. As David Varney, the new chairman, has said. there is much work yet to be done. The very size of the new department will present problems, with 30 million taxpayers and £400 billion of revenue. We have never seen anything like this in this country and we are not likely to see anything like it again—such a merger, or "coming together", as we see here. We must look at the matter in a rather different way from the way we usually look at the alteration of government departments.
Efficiency savings by collecting taxes across both Customs and Excise as well as the Inland Revenue arc expected to save 3,200 posts by 2007–08. If a coming together of departments led to such a reduction in the posts required, there would be much more of this sort of thing happening. But there is a danger— that the great control that government can obtain over such a large department can be perhaps too great. But there will be a saving of 3,200 posts expected by 2007–08, with other departments pooling information and decision-making, among a number of other activities. There is a danger, too, to confidentiality. The more the sort of information that we are talking about crosses these larger departments, the more danger there is to confidentiality.
The strongest case for coming together would be if it could be shown that the large sums of money escaping the Revenue through evasion could be substantially reduced. The present estimate—subject, of course, to great uncertainty—is that 8 per cent to 10 per cent of revenues are uncollected. Following the coming together, much of the avoidance would remain, but the merger could in theory have an effect in reducing the amount of evasion. The estimate on the other side, from the other part of the department, for the uncollected VAT—again, subject to great uncertainty—is 12 per cent. It is difficult to see whether the coming together will have much effect on the VAT figure.
The savings estimate comes from the 3,200 posts. The Paymaster General suggested that it would represent a saving of £500 million, although that was later altered by the Economic Secretary to £100 million, in the debate on 8 December. The idea of cost reduction at a time of momentous change appears surprisingly optimistic; surely such changes will discover unforeseen problems that can be helped only by spending more money. When you have unforeseen problems, you do not save money: you have to spend money and employ staff to deal with them. A serious

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danger is that, in the effort to save money and jobs in administering the service, there could be very considerable losses to the Revenue. You are dealing here with two very complex departments. In joining them together, you are not going to get more money out of it immediately, because the changes will create loopholes and all kinds of problems that can be exploited. Like many others who have commented on the net saving of the merger, I share their doubts about what will be gained, certainly in the short term.
The Revenue and Customs department is to be a non-ministerial department. It is proposed that the VAT inspectors will retain all powers and corporation tax inspectors will retain theirs, with no access by the one to the other. When speaking in the House of Commons on 8 December (Hansard, col. 1175), the Paymaster General said that powers will remain as they are, but that this was only a "temporary position". She then added that there would be a "thorough review" leading to legislation in the 2006 Finance Bill.
As my noble and learned friend Lord Goldsmith said, we have an incremental timetable of fundamental legislation, with at least two bites foreseen and possibly more to come. He suggested that there may be quite a number more to come and that there would be a rather slower move to creating the one department than we heard from the speeches in the House of Commons. I know that frequently legislation has to take into account matters that cannot be known at the time of legislating, but to leave such large gaps is rather surprising.
Another aspect is that the Bill pools information internally. What are the limitations? Any removal of the barriers between departments of state will always help to collect more revenue, but where do we stop? If all departments of state were to join together to provide information, no doubt the Revenue might gain; but taxpayers' confidentiality would be the first loss, with an over-centralised administration at the end of the road and consequent inefficiencies.
There is one change that I do not fully understand: that there is to be a statutory duty to maintain that confidentiality, and an individual statutory declaration will replace the Inland Revenue oath. I do not see the advantage of replacing that oath. There is something about tradition in all these matters; tradition plays an important part in keeping the flow of ideas and standards over a long period. The long history of the two departments has been an enormous advantage, not a disadvantage. We must retain those advantages while bringing them up to date, and we do not want to lose the one while we get the other. Surely the oath has had the advantage of tradition: it has worked well. At a time of major changes, financial weaknesses may be revealed, leading to disclosures and to a decline in standards.
The new department will have 250 major information technology systems, and 3,000 people working them. There will be 100,000 desk computers and an integration of computer systems. That is a long-term and large-scale undertaking, as John Healey, the
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Economic Secretary, accepted (at col. 1231 of Hansard) in the debate in the House of Commons on 8 December. There are real dangers here. The Government's record on innovations in IT systems has had some spectacular failures, which I have seen. I shall not list them, but there are a very large number. To assume that all these changes will work satisfactorily and will save money in the time-scale envisaged is surprisingly optimistic.
We know that the House of Commons Treasury Select Committee is going to monitor the coming together. I welcome that, as it is important that the effects on the rights of taxpayers as well as the revenue stream and the operation of the department have some outside observation. I look forward to an interim report arising from this valuable initiative.
What disappoints me most in this exercise is the failure to quantify the benefits and their cost. There was the surprising statement that the Government do not have the legal authority to spend money to analyse options in sufficient detail. Not possible to quantify costs! Sir Peter Gershon was quoted as saying:
"No government initiative (including legislation) dependent on IT to be announced before analysis of risks'".—[Official Report, Commons, 8/12/04; col. 1233.]
Surely that is of fundamental importance. We have to look at all the risks—these are the dangers of which account must be taken.
I am not talking about precise calculations, but some quantification should surely have been made prior to the decision to bring the two revenue departments together. The taking of so momentous a decision may be the right one; but, without a proper analysis of the costs and benefit, it is surely not a decision that fits with our conception of the Treasury, which has rightly exercised rigorous scrutiny before embarking on any project of this kind. We may be right to proceed, but as the preparatory work has not been done we need to proceed with quite exceptional caution.
6.29 p.m.
Lord Brooke of Alverthorpe: My Lords, it is with some trepidation that I follow two former Treasury Ministers. I have been a long-term advocate of merging the Inland Revenue and the Customs department and I welcome the Gus O'Donnell report. I point out to the noble Lord, Lord Barnett, that Mr David Varney provided an additional submission to the O'Donnell review, which can be found in the appendix, when he had already given his ideas of how he saw the merger going forward. He gave a good deal of thought to what is likely to happen even before he was formally appointed in December.
I believe that over time the integration will produce a better and more efficient service for taxpayers and especially for businesses. I think that we should be able to look forward sometime in the future to one-stop tax shops. We should be getting away from businesses having to cope with separate visits from Revenue officials and Customs officials dealing with VAT or pay-as-you-earn or national insurance contribution

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audits, or indeed with tax collectors coming to collect separate general taxes. That is what life has been like in the past for many businesses. Often they have been faced with visits from three or four different people within a couple of months. That should come to an end under an integrated process. I know that it will not happen overnight, but that is what we should be looking for in due course.
The merger also presents opportunities for simplification of tax and VAT collection systems. Without the two departments coming together, that could never have been contemplated. You could never get them into the same room to sit down and do the forward planning and the necessary risk analysis and costing. It is only under the umbrella which is being created that we will be able to move forward and do this kind of work. For example, we currently have three separate systems for submitting and collecting taxes. VAT is paid on a quarterly basis, but pay-as-you-earn and national insurance contributions are paid monthly. As everyone who has submitted a self-assessment return will know, the self-employed pay one-half at the end of January each year, followed by a second payment in July. There is scope within all of that. Work has been done over a number of years on integrating some of those systems, but on each occasion no steps have been taken forward. I believe that it has not happened for the very simple reason that you could not get the two departments to work constructively together.
For both departments' employees—and this is where I pick up the point made by the noble Lord, Lord Barnett, as he anticipated—there will initially and understandably be concerns about the changes in prospects. However, if the issues are handled sensitively —and I believe that the staff as well as the unions are directly involved—I think that the integration will create opportunities for better career development and better job satisfaction for the staff.
Both departments have many talented staff of a high intellectual calibre. The challenge for the new management is to find ways of liberating them and inspiring them to participate in building the new organisation. I know from past experience that that will not be easy: Revenue staff are trained to be suspicious. However, again in my experience, I know that once that suspicion is overcome, they can be extraordinarily productive.
I know from briefings and the debates in the other place that an early obstacle arises from the projected staff savings from the merger and the Government's general efficiency drive under Gershon. I will probably surprise the noble Lord, Lord Barnett, with this point. While the figures might look daunting, in the light of my experience as a former general-secretary of the Inland Revenue Staff Federation and later as joint general-secretary of the union that represented both Revenue and Customs staff before the present Public and Commercial Services Union—PCS—was founded, I have to say that the changes proposed, while still worrying, are less fierce than those that confronted us during the 1990s.
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In that decade, more than 20,000 staff were taken out of both the Revenue and Customs, and against a backcloth of 3 million unemployed in the economy generally. Let us contrast that with the situation today. Not only are the figures lower, but, if we look at the background economic position, we find that unemployment is now down to 1 million and still falling. There are skill shortages in many places where people can be accommodated. There are thousands of unfilled jobs, especially in the public sector and particularly in London and the south-east.
Perhaps most importantly—and here I will be political; it is important that someone stands up and speaks for the Government—we have a Labour Government: an employer who are pro-public service, who are investing at the highest levels for years and who are prepared to retrain and redeploy staff into frontline public service jobs. I hope that everyone will join in putting that message to understandably worried Revenue and Customs staff.
I would not, of course, expect noble Lords opposite to do that. But what I would welcome from them is a statement on how many staff they would take out of the new department as its contribution towards £35 million public expenditure savings if they were elected. I have not been able to find that in the Commons Hansard reports, which I have gone through carefully. So elucidation on that point would help us considerably in dealing with our relationships with staff and encouraging them to participate in the integration process.
Incidentally, I thought that the other place, contrary to what many noble Lords often believe, has given the legislation a reasonably good detailed scrutiny in the first instance. As a result, I do not think that our task here will be quite as onerous in addressing the general issues of integration, although I suspect we may spend more time dealing with the legal side. I, too, welcome the presence of the Attorney-General for our consideration of the Bill. I am glad to see that he is handling it. That will ensure that we have a most detailed examination of the aspects relating 10 the proposed new Revenue and Customs Prosecutions Office.
Returning to the different cultures between the two departments, I have a question for the Attorney-General. The Inland Revenue has always been seen as having a somewhat lighter touch than Customs. I wonder whether that will continue or whether there will be a harmonisation of approaches. If so, which culture is likely to prevail? As the Attorney-General has given further information on the point, I now understand that there will be further consultations on the merger, and I gather that that will be primarily on the issue of powers.
When will there be an opportunity for debate on the broader issues of the merger rather than simply on the powers? As previous speakers have very pointedly expressed, this is a major change. It will not be effective in a short timescale but will probably run for a decade. I think that it is important that people at all points have an opportunity to express views on where they see the integrated department going in the future.

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A bit like the noble Lord, Lord Sheldon, I believe that a fundamental aspect of the matter is the steps that need to be taken to address the growing tax gap: the difference between tax assessed, and what is finally paid and when it is paid. I have noted in the Inland Revenue's performance report for 2004, published only in December, that the department is sponsoring research to understand the payment and filing behaviour of new taxpayers. Statistically, they are less liable to be compliant than are the older-fashioned and existing taxpayers. I believe that that is an issue of concern to all of us. I suspect that it may have something to do with the changing morality and social responsibility that we see in society, and that we increasingly find ourselves tackling in Home Office legislation. However, I have no firm evidence of that. I should be interested to know what transpires in the research work that is undertaken and whether we will have opportunities to spend time debating that.
I hear from a fairly large number of people after their first dealings with the Inland Revenue and indeed with other government departments, that they feel that central government are failing to keep abreast with modern payment methods, notably the use of credit cards. It is much easier now dealing with local authorities in many respects. One can pay parking fines, congestion charges and a whole host of other issues that arise with local authorities simply by using credit cards. However, when it comes to central government or their agencies or indeed the BBC, this is entirely a no-go area. Charges associated with credit cards create problems and there are other complications too. The Revenue has looked at this matter in the past and has decided not to proceed with introducing these changes. However, as we start to look for a reformed department this kind of issue should be revisited, possibly on an experimental basis. I wonder whether it will be opened up for wider consultation.
I also believe that—I make a plea here as an unpaid ambassador for the Yorkshire Regional Development Agency—the merger should provide a chance to take a fresh strategic look at the devolution of HMRC's functions. I was particularly pleased to see that the Revenue and Customs Prosecutions Office will not all be located in London. It is good to see that part of it will be located in Manchester. However, I must confess that having stopped working closely with the Revenue nearly a decade ago I find it perplexing that most of its back office functions, with more than 1,000 staff, are still located on the south coast in impoverished Worthing. There is a massive site there that would be ideal for meeting some of the Deputy Prime Minister's search for land for new housing in the south-east. I also hear that even more work is to be transferred to the south coast in the case of Customs back office work in Southend. If that is to happen, it is amazing. As regards back office functions and human relations staffing, fairly substantial savings in staff could be made in the not too distant future that are broadly in line with the figures which have been quoted, and without causing too much disruption to staff.
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Given the good example that the Attorney-General set with the RCPO in Manchester, will my noble and learned friend bring all the influence he can to bear to ensure that we get proper devolution in other parts of this new department and the opportunity to have wider debates on where the department is going in the future?
6.42 p.m.
Lord Newby: My Lords, as my noble friend Lord Thomas of Gresford has already said, we on these Benches broadly welcome this Bill. We also welcome the decision to have two bites at the legislative cherry and to have a period of consultation on many of the issues that will need to be resolved as the new department is established, not least the question of powers.
In theory it clearly makes sense to have one body collecting all the taxes. If you were starting with a blank sheet of paper, that is what you would do. That is why in virtually every other country in the world that is what already happens. However, the question that we have to address, and which noble Lords have addressed this afternoon, is whether it will be successful in practice in this country. We need to be clear from the start what the merger is seeking to achieve. It seems to me that you would expect a successful merger to achieve three things: first, it should achieve greater efficiency; secondly, it should be more effective in getting in the revenue and closing the tax gap; and, thirdly, it should—to quote the noble and learned Lord the Attorney-General—lead to improved customer focus, or, to use the wonderful phrase used in debates in another place, improving taxpayer experience.
A number of arguments have been put forward in another place regarding which of those three broad priorities should be the most important. However, it seems to me that unless the merged department is more efficient and more effective in collecting the revenue, and makes it easier for taxpayers to relate to it, it will fail.
I should like to consider briefly some of the issues that the merger raises in achieving those three priorities. First, as regards improving efficiency, a number of noble Lords, notably the noble Lord, Lord Sheldon, talked about the different cultures that exist in the two departments. Certainly the two types of taxes that they have traditionally collected have led to a very different mindset. Dealing with income tax returns or corporation tax as a tax official looking retrospectively at what taxpayers have put in is very different from being on a coast and dealing with smugglers who are literally in front of you.
My own experience as a Customs and Excise officer for seven years is that the historic background and memory of dealing with 17th, or rather 18th and 19th-century, smugglers enthused Customs, so much so that when VAT was introduced and new members of staff had to be recruited from the Revenue and from what were dismissively known as OGDs, other government departments, the traditional Customs and Excise

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officer looked down on those lesser mortals with a very considerable degree of scorn. There was a tremendous esprit de corps in Customs, which may or may not have been desirable in every last respect as regards an ebullient way of dealing with taxpayers, but it certainly existed and was certainly a different culture from that which obtained in the Revenue. Putting those two cultures together will not immediately lead to efficiency savings. In my view there will be a period of tension as that is done.
Secondly, I refer to the problem of the different IT systems. As noble Lords have pointed out, 250 major IT systems are in operation across the two departments at the moment, many of which stand alone. While it is great to talk about integration, in reality integration between taxes means integration of IT systems in large measure. Unless a lot of investment is made in those IT systems, I fear that the integration which everyone hopes will occur will prove rather elusive. There is considerable vagueness about the short-term costs and the longer term benefits of putting the two departments together. On the one hand we are told that there will be savings of 3,200 staff—a £100 million saving by 2007–08—but on the other that there will be at least £75 million worth of costs. I absolutely agree with the noble Lord, Lord Sheldon—I believe that the noble Lord, Lord Barnett, also made this point—that in the short term you are more likely to be dealing with problems and costs than immediate short-term efficiency savings.
I refer to the wider question that staffing levels raise in these departments of the trade-off between the tax raised and the number of staff collecting it. Of course, any Customs Officer or Inland Revenue inspector will say, "If only there were more of us, we would collect many more times our income in taxes". Obviously, there comes a point where if you took that principle to its logical conclusion, virtually everyone in the country would be a tax inspector, and no one is suggesting that. However, I absolutely agree with the new chairman of the merged department, David Varney, who wrote in the O'Donnell report:
"It will be a challenge to keep a long-term focus on the effectiveness prizes and not fall prey to the temptation to substitute short-term cost reduction objectives".
I heartily agree with that.
A further question that arises on the efficiency front and moves into the effectiveness front is the parallel decision, which has not been discussed at all today, regarding giving the Treasury greater responsibility for setting tax policy. It used to be the case that the staff in the Treasury dealing with tax policy were very small in number and traditionally far too grand to get involved in the details of the tax changes they expected people like myself when I worked there, and my equivalents in the Revenue, to deal with. I can see considerable advantage in forcing Treasury officials to look at the detailed consequences of what is proposed rather than having a grand sweep and making the poor people in the Revenue departments implement it. It will be interesting to see how having to grapple with
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those details might lead to fewer ineffective tax changes, although I fear that the main motor for those changes has been Ministers rather than officials.
Will what is proposed be more successful in getting in the revenue? We have been told about the tax gap of some £30 billion to £40 billion. How will the merger affect our ability to reduce that? As my noble friend Lord Thomas said, if the new prosecutions office is more effective in its work than its predecessors, that will make a difference. It will affect the climate in which people look at tax paying. More generally in getting in the revenue, it will be effective only if there is a really integrated department. While the suggestion of one inspector and one inspection per firm is tremendous, there will be difficulties in making that effective.
My experience of understanding taxes was limited to a week on a training course on VAT in Southend. I rapidly discovered that once you got below the surface of a tax, it became very complicated. The hope that is widely expressed—that a single inspector will be able to go into a small firm and advise with authority on national insurance, Inland Revenue, VAT and all the other taxes—is an interesting prospect that at the very least will require significantly more training of large numbers of tax inspectors than is currently the case. While it may liberate staff, as the noble Lord, Lord Brooke, said—in one sense you can see how it might, bearing in mind that you are dealing with a work force not all of whom are in the first flush of youth—you may find that the prospect of having to learn a lot of detail about a significant number of new taxes to be able to realise this Utopia will be daunting. That will be a challenge to management. It is equally difficult to see how all this improvement can be achieved during a process and period of significant staff cuts. It will be possible to have effective single inspectors only if they are dealing with a significantly simpler tax system.
That brings me to the final area, which is improving the taxpayer experience. The vision of having a single inspector is tremendous. The idea for small firms of filling in a single form sounds tremendous, but in circumstances where you fill in a monthly forrn for some taxes, a quarterly form for other taxes, and an annual form for yet other taxes, I am not absolutely sure how a single form will be devised without spatchcock-ing together a number of others, or how effective it will be. It is a noble aspiration, but it will take quite a time to evolve. I wonder whether the merging departments have yet contemplated what the timetable for introducing such a form might be.
This improved taxpayer experience will be possible only when the IT is working in an integrated fashion across the departments, when the tax system is simpler, and when the tax inspectors have broader training. It is a big task to reach the goals that the Government have set for the merger, certainly in the short-to-medium term. How then might they best achieve it? There are a myriad of things to be done, and I will mention a couple of them. First, the recruitment of a chief information officer and giving higher priority to IT are hugely important. As I have already said, making taxes work in a simplified way and in an

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integrated manner depends crucially on the IT. Having a cadre of really experienced and high-quality IT professionals in the new department will be crucial.
Secondly, the idea of using the merger to reduce compliance costs to taxpayers will happen only if some people are charged specifically with that task and it is not left as a vague aspiration. I understand that in Holland there is a unit in the finance ministry whose goal is specifically to reduce the compliance costs to taxpayers against targets over a set period. That is something to which we should give consideration as part of this merger.
I hope that the Treasury Committee in another place will also keep a regular review of the way in which the merger takes place. I am not sure whether our own Select Committee on Economic Affairs is quite the body to keep such a regular review, but a lot of vague things are currently being said about the way in which this will bring benefits. Unless there is a clear reporting system, and unless the department is probed by Parliament on a regular basis, there is a real danger that the aspirations of the merger will either not be realised at all, or will be realised much more slowly than we would hope. There are big challenges for this new department.
I wish to make a final plea. Treasury Ministers need to be thoughtful about the effect of making this change in terms of their responsibilities as changers of the tax system on an annual basis. The noble Lord, Lord Sheldon, talked about the relative thickness of Bills, but if there is to be an integration of the departments in the way that we hope, on a timetable that makes sense, senior management need to be able to focus largely on it, rather than having to concern themselves each year with a huge volume of new tax legislation. A period of relative calm on the legislative front is a major prerequisite of this merger taking place quickly and effectively.
It is the nature of these debates that one raises queries and worries, rather than spend all one's time gazing at the sunlit uplands. Subject to all those caveats, we look forward to seeing the Bill through all its stages here and to a successful new department.
6.56 p.m.
Baroness Noakes: My Lords, I thank the noble and learned Lord the Attorney General for introducing the Bill, and like the noble Lord, Lord Barnett, I welcome him to the relatively small band that is accustomed to debating Treasury matters.
When I heard that the noble and learned Lord was to handle this Bill, I feared that the Bill would be full of tricky legal points, particularly concerning the new Revenue and Customs Prosecutions Office, which will be part of the noble and learned Lord's empire. To that end, my noble friend Lord Kingsland will assist me in the remaining stages of the Bill. It may help the noble and learned Lord if I say that we support the proposals to create the new Revenue and Customs Prosecutions Office. We also support the new role of Her Majesty's
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Inspectors of Constabulary and the Independent Police Complaints Commission in relation to Revenue and Customs investigations.
There is an issue in relation to the coercive investigatory powers of the new Revenue and Customs Prosecutions Office, which are, in fact, contained in the Serious Organised Crime and Police Bill. Some, including the Law Society, consider that the range of offences to which the coercive investigative powers will apply is too broad. For example, Clause 55 of that Bill would allow coercive investigation of an offence of fraudulent evasion of duty or VAT, whatever the value of the alleged offence. There should be a threshold value below which the powers will not apply, so that the use of such a draconian power is proportionate and limited to offences involving serious organised crime only. I hope that the noble and learned Lord will say something about the interaction between the two Bills when he replies.
We shall not oppose this Bill, and as far as I am aware, we shall not be making many party political points. We support the principle of integrating the Inland Revenue and HM Customs and Excise, because a joint operation has the capacity to be more efficient and to provide a better service to what are euphemistically called "customers". Importantly, it also has the potential to produce a more effective organisation for tackling the tax gap, which may be worth as much as £50 billion a year. I agree with the noble Lords, Lord Sheldon and Lord Brooke, that that is an important area to tackle.
However, that does not mean that we have an uncritical acceptance of the Bill or of the processes that led to it. In particular, we have concerns that the practical aspects of the integration of the two departments have not been properly worked through and that there is no proper provision for scrutiny of the progress of the integration. Perhaps more fundamentally, we are concerned that the Bill rushes ahead to create the new organisation without pausing to establish what its powers should be. In saying that, I echo what a number of noble Lords have said this evening.
The integration of the Inland Revenue and Customs and Excise might seem to have a modernising, new Labour ring to it, but the idea has been around a very long time. It was first rejected in 1862 and has been on and off the agenda many times subsequently, most recently in 2000, when the Treasury Committee of another place continued doggedly to pursue the matter. In rejecting that committee's recommendations at the time, the Government said that their solution of "closer working" gave the benefits of merger,
"without the risks. upfront and opportunity costs and structural upheaval which merger would inevitably entail".
Somewhere between 2000 and last year, Mr Gus O'Donnell, the Permanent Secretary to the Treasury, found himself on the road to Damascus and ended up recommending the integration of the two departments. We all know that Mr O'Donnell is a pretty clever man, and his conclusions will be worth close inspection. His report states, at paragraph 1.17, that:
"The case for organisational change rests on potential improvements in customer service, effectiveness and efficiency".

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It also notes, at paragraphs 1.22 and 1.23, that there would be upfront costs and risks in implementation—so far, so unremarkable.
The concerning aspect of the policy development is the almost complete absence of quantification of the benefits or costs in the report. The figure for savings in jobs related to the merger is around 3,200, as we have heard. If we compare that with the combined work force of around 106,000, we are talking about merger savings of only 3 per cent. As has been said, that could be worth aroun£100 million a year, which is welcome in any Chancellor's budgetary arithmetic, but that is not a level of saving that would excite anyone in the mergers world in the private sector. I should explain that, in the private sector, we still call them mergers; we have not yet caught up with the new term, "integration".
The full costs of completing the integration have not been spelled out; nor have the implementation risks. We believe that the implementation risks are high because, as has been pointed out, it involves two organisations of very different cultures, with different IT platforms and different though partially overlapping customer bases.
When Mr Varney was challenged on the lack of specificity about costs and savings in the O'Donnell report, he responded to the Treasury Committee that the matter was very complex. He was challenged several months after the O'Donnell report, and even then had no clearer idea of the costs and benefits. It was still a case of, "Complexity rules". Perhaps even more surprisingly, last month, when the Bill was considered in another place, Treasury Ministers were unable to give any better account of the costs and benefits. By then, a new excuse had been invented— that of not being able to progress integration plans in advance of the legal cover of a Second Reading. That probably stretches that excuse about as far as it could ever be stretched.
What is missing from the analysis in particular is any information about what the Government believe to be the real potential benefits in increasing yield and diminishing the tax gap. It is not the £100 million of cost savings that should drive the integration, but the ability to increase yield. We find it astonishing that the Government have said nothing concrete about that. Would the Treasury ever let another government department get away with such a lightweight analysis?
This is a murky area. As I said before, we agree with the principle of integration, but we believe that it is incumbent on the Government to explain their case clearly and comprehensively. In the absence of a fully worked-up business case available for proper scrutiny—in Parliament and by the public—before the integration goes ahead, there is an absolute requirement for clear and comprehensive reporting to Parliament on the progress of the integration. We shall table amendments to ensure that proper scrutiny takes place.
The rush with which the Government are pursuing the integration means that they have not sat down to contemplate in any detail what the powers of the new
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organisation should be. We know that, in general, the powers of Customs and Excise are more draconian than those of the Inland Revenue. For example, it has powers of entry into premises that the Inland Revenue simply does not have.
The Bill seeks to confine the existing powers to existing uses in Clauses 6 and 7.I am sure that we will discuss those in more detail in Committee. However, the plain fact is that the Government have no plans—or at least no revealed plans—for the way in which the new organisation will operate. In his opening speech, the noble and learned Lord referred to the consultation document promised by the Paymaster General during the passage of the Bill in another place. She promised that it would be out by the end of last month. It did not appear. I hope that the noble and learned Lord is able to say something today about when we will see it.
I will now speak about the rather arcane area of governance. The Bill is silent on several important matters. It does not say anything about the number of commissioners or how they are to be selected for appointment. It makes no provision for the selection or appointment of a chairman, executive or otherwise, even though it seems clear that Mr Varney thinks that he will be the executive chairman of the new organisation. There is nothing in the Bill about non-executive members—they exist in both the Inland Revenue and Customs and Excise and in particular about their employment status and roles and responsibilities. The Bill is silent on the need for an audit committee, which is an absolutely essential element of any modern organisation, whether in the public or the private sector.
We want to explore governance issues fully in Committee. I should say for the record. although it is not a declaration of interest as such, that my noble friend Lady Wilcox and I were the first two non-executives taken on by the Inland Revenue. Indeed, we may have been the first non-executives in the whole of Whitehall, so we have a little experience to offer.
We need to examine some areas of the Bill further in Committee and other later stages. Those include: the need for restrictions on the Treasury's power of direction; parliamentary scrutiny of the transfer of functions out of the Revenue and Customs under Clause 8; the scope of the public interest disclosure provisions of Clause 19; and the specific offences involving Revenue and Customs officers. We want to look at accountability for payments to informants, a subject raised by the noble Lord, Lord Barnett. Last, but not least, we want to consider the name of the organisation. We will table amendments on all those areas. Unfortunately, my noble friend Lord Campbell of Alloway was not able to stay with us this evening when the timing of the debate slipped back. He has signalled to me his interest in a number of areas relating to the disclosure of confidential information and the related human rights considerations. I hope that he will join us in Committee to debate those.

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I hope that I have conveyed to the noble and learned Lord the fact that we will approach the Bill in a constructive spirit, but that we shall be committed to the full process of scrutiny of the Bill in your Lordships' House.
7.10 p.m.
Lord Goldsmith: My Lords, I begin by expressing appreciation to all noble Lords who have spoken for their thoughtful contributions and, generally speaking, for their support of the Bill and its principal elements. The support from my noble friends Lord Sheldon and Lord Barnett was somewhat more cautious, but the fact that noble Lords with so much experience from all sides have spoken—from the staff side, my noble friend Lord Brooke; from the perspective of employment within the organisation, the noble Lord, Lord Newby; from the prosecution and criminal justice side, the noble Lord, Lord Thomas of Gresford; and from particular responsibilities within the Inland Revenue, the noble Baroness, Lady Noakes—has left me somewhat humbled at being invited into this small and select group. I am looking forward to piloting the Bill to the successful conclusion referred to by the noble Lord, Lord Newby. That is my overriding concern.
Before turning to the issues raised, I want to recognise an important point made by my noble friend Lord Sheldon. Both departments have a long and proud history. The new department will not want to lose the best of the culture and tradition. They already have an overlap in culture and tradition and reference was made to their enviable reputation for honesty and integrity. There is a clear determination to build on those important qualities.
By having the incremental approach which the Bill represents—a first stage—and having strong leadership, unified communications and the involvement of staff, to which reference has been made, I and Treasury Ministers believe that this project will prove successful. I want to pay tribute to the staff of the two departments. Throughout their histories, they have delivered services of the highest standard of professionalism, integrity and commitment. We have no doubt that the staff are up to the challenges that integration presents and that they will build on those achievements to create a new, world-class, integrated department.
I turn to the new prosecuting office. I am grateful for the support from the noble Baroness, Lady Noakes, and the noble Lord, Lord Thomas of Gresford, who spoke specifically on it. The noble Lord, Lord Thomas, rightly referred to the report of Mr Justice Butterfield and to some elements of the history of Customs prosecutions. I will not take time today to go into those, but as the noble Lord will know, the Butterfield report contained a number of recommendations both for the investigators and the conduct of prosecutions.
All of those recommendations have been or are being implemented as a matter of priority: for example, improved procedures for handling human
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sources of information; heavy investment in training; internal assurance systems reviewed; and in this Bill, proposals for procedures for external validation both in relation to investigations and the prosecution office. That is particularly important in the field for which I normally have responsibility; that is, prosecutions and the creation of the independent prosecutions office. I welcome the support for that.
The noble Lord, Lord Thomas of Gresford, asked specifically whether the existing powers for rights of audience which Customs' investigators have will remain or disappear. They will disappear under Schedule 4 to the Bill. It is right to note that the director will in due course, and once suitable training has been given, be able to designate certain persons under Clause 39 to conduct particular hearings in the magistrates' courts. That mirrors what happens with the Crown Prosecution Service and I am confident that it will be a proper way to proceed.
The noble Lord also referred to the need for resources. I am conscious of the need for all my departments which are involved in criminal justice to be adequately resourced to carry out their heavy responsibilities. That is therefore a matter of importance. However, I also welcome the noble Lord's support for the appointment I announced before Christmas of David Green as director of the new prosecuting office. When the Bill becomes law, it is my intention to appoint him formally to the statutory post of director of RCPO.
A number of noble Lords raised the issue of confidentiality. As the Bill progresses, I hope to be able to reassure noble Lords that the provisions on confidentiality are absolutely adequate and fitting. As I said in my opening speech, there is no intention to water down the importance which is presently given to the confidentiality of taxpayers' affairs. So, for example, the Bill now includes in Clause 3 a declaration to be entered into by new staff. That clause was inserted as a result of the questions raised about the existing oath, to which my noble friend Lord Sheldon referred. No doubt we will return to the issue of confidentiality.
My noble friend Lord Barnett raised a number of questions with which I shall deal before turning to the broader question, raised by a number of noble Lords, on the benefits of integration. In relation to powers, he asked whether, because the Explanatory Notes refer to the risk of inadvertent widening of powers, there was an intention for there to be advertent widening of powers. No, we did not want to make changes to the powers without allowing time for consultation before lessons have been learnt from early integration activity. The provisions therefore transfer the existing powers, but they are to be used in the same way as the existing powers are ring fenced to the particular functions.
My right honourable friend in another place, the Paymaster General, referred to a consultation on that and the noble Baroness, Lady Noakes, asked whether I can say more about the date. I cannot give a firm date at the moment. Treasury Ministers are still considering

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what form the consultation will take to ensure that the most appropriate approach is adopted. But as soon as a consultation document is published, it will be available on the Revenue and Customs websites and copies will be placed in the Library of the House. Of course, I will ensure that once a firm date is available noble Lords are made aware of it.
The noble Lord, Lord Barnett, also asked about the payment of rewards and he looked hopeful about those. The legislation does not change the existing practice in relation to rewards—it consolidates the existing powers which are available in each department. Publication of too much detailed information about the rewards would not be prudent. It would risk inviting attempts to exploit or defraud the system. However, I can tell my noble friend that in 2003–04, Customs and Excise spent a total of £946,300 on rewards—payments ranging between £50 and £100,000—while the Inland Revenue made only one payment of £100. Annual payments fluctuate of course. My noble friend can see from that where he should be concentrating his efforts.
My noble friend Lord Barnett also asked why we were widening the offence of unauthorised disclosure. That is because in the past criminal sanctions have not applied to information about Customs' non-tax functions. Those will therefore be brought in by the widening that is taking place. He also asked about the management controls, or administrative safeguards, which would inhibit staff access to information. A number of those are in place already: for example, provision to staff of a unique identification number; password to access computers; access to IT systems only where they need access to do their jobs; reminders; disciplinary action; appropriate training; and guidance.
A number of noble Lords have expressed scepticism about the benefits. We have no doubt at all about the benefits of this proposed integration. Of course, such changes must be based on evidence, but that is why the O'Donnell review was commissioned. It examined in detail all the possibilities for the organisation of the revenue departments, including doing nothing, to see how it would be possible to improve service delivery to taxpayers, effective tax collection, coherent and efficient use of resources. That picks up some of the points raised by the noble Lord, Lord Newby.
The review found clear reasons of principle, supported by evidence, to consider an integrated department, in particular, the fact that well over 1.5 million businesses are customers of both departments. There is strong international evidence in favour of administering direct and indirect taxes together. The conclusion was supported by independent leading figures from business, whose views can be found as annexes to the O'Donnell review.
Of course, it is right to recognise that there are risks in major changes, as the noble Lord, Lord Sheldon, said. Therefore, we recognise the importance of proceeding on an incremental basis and of considering carefully the changes that need to be made. I hope that noble Lords will see that our approach recognises precisely that.
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On the costs and benefits that will occur, the management designate of HMRC is committed to assessing those costs and benefits as the necessary changes are developed. As noble Lords have said, work has already commenced and today has produced the current known costs of integration, to which reference has been made, and the reduction of staff detailed in the efficiency technical note.
Let me dispel one suggestion: nothing in what I have said has indicated anything different from the timetable that my right honourable friend the Paymaster General indicated in another place. We have both recognised that integration is a huge challenge and that it will take time to deliver. It is right that integration will develop over time; it will be incremental; and some of the changes such as the formation of a single large business service can be made from the inception of HMRC, but others will take longer. Both the Paymaster General and I are convinced that this incremental approach is the right one and we are in full agreement that the momentum must be maintained throughout the process. Staff savings from the integration will be realised by April 2008 and other changes will be realised as the incremental process continues.
The noble Lord, Lord Barnett, asked when integration will start. The creation of HMRC will start realising some benefits from the outset. I have already referred, for example, to the creation of a large business service, so there will be immediate benefits for such customers as the new organisation begins taking a more joined-up approach to their affairs. However, more will need to be done and work to consider changes needed to deliver further integration is under way.
I shall deal with one or two other points that were raised. I hope that my noble friend Lord Brooke will find helpful what I have said about transfers and about consultations on the effects on staff. He asked about the impact of proposals for moving jobs out of London. I am grateful for what he said about the Manchester office of the Customs and Excise Prosecutions Service, which I have visited several times. We have committed to moving 1,950 posts out by April 2008 and a further 2,300 posts by April 2010, but it is too early to say more about the specific locations. Work is under way. The noble Lord also raised other interesting questions, such as the payment of tax liabilities by credit cards, which is one matter that the new department will no doubt be able to consider in due course.
The noble Lord, Lord Newby, welcomed the decision to transfer tax policy to HM Treasury and I welcome what he said in that regard. He was concerned about staff suddenly having to learn about a number of different taxes with which they were unfamiliar. I can assure him that there will not be a sudden move to train all VAT officers, for example, in PAYE and because of the differences in powers for the different regimes, HMRC is likely to be quite cautious in transferring sets of powers to any individual officer.

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After the consultation, when we rationalise the powers, it may be easier for a single team to deal with different functions.
I was also asked about the extension of the powers that the Serious Organised Crime and Police Bill will provide for the revenue and Customs prosecuting officers. Those will not be exercised for tax offences, pending the outcome of the wider review of HMRC powers. That was announced during the passage of the Bill in another place. In addition, the use of those powers will be subject to guidance which I shall issue to ensure that they are used only where necessary and proportionate.
The noble Baroness, Lady Noakes, has indicated that there are a number of areas that may be the subject of further discussion during subsequent stages of the Bill. I look forward to debating those and I look forward to the passage of the Bill through this House.
On Question, Bill read a second time, and committed to a Grand Committee.

Inquiries Bill [H.L.]
7.27 p.m.
Report received.
Lord Ackner: My Lords, due to the start time of this Report stage, may I inquire whether there is any truth in the rumour that, essentially, it is to be treated as dinner-hour business?
The Parliamentary Under-Secretary of State, Department for Constitutional Affairs (Baroness Ashton of Upholland): My Lords, I can assure the noble and learned Lord that there is no truth in the rumour. We shall continue with Report stage and do as well as we can.
Clause 1 [Power to establish inquiry]:
Lord Kingslandmoved Amendment No. 1:
Page 1, line 3, at beginning insert "Subject to subsections (1A) and (1B),"
The noble Lord said: My Lords, in moving Amendment No. 1, I shall speak also to Amendments Nos. 2, 3, 4 and 5.
Your Lordships will recall that, when seeking to promote these amendments at Committee stage, I stated that I had two objectives in mind. The first was to reverse the decision of the Government, clearly reflected in the Bill, to expunge the role of Parliament from the decision to establish public inquiries; and the second was to revitalise the role of Parliament, either in the form of its existing Select Committee system or in some other form, in conducting inquiries which involve allegations concerning ministerial misdemeanours.
Since the Committee stage of the Bill, the Public Administration Select Committee of another place has published a report entitled Government by Inquiry. Among other things, the report makes specific recommendations about both these issues. I apologise
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in advance to your Lordships for quoting certain passages from the report. I justify that by saying that, in my submission, they are germane to these two matters, which I trust the noble Baroness regards as fundamental to the debate on the Bill.
Paragraph 178 is the core paragraph. I should like to quote it more or less in full. The committee states:
"We are deeply concerned that the Government's Inquiries Bill threatens the last remaining role for Parliament in the inquiry process. Nonetheless it also provides an opportunity to update the current provision contained in the 1921 Act to reflect our recommendations for parliamentary involvement. To achieve this we propose that Clause 1 should be amended by means of an additional sub-clause to provide that, where the public concern relates to the conduct, actions or inactions of government—Ministers or officials, the Minister will cause an inquiry to be called on the basis of a Resolution of both Houses of Parliament".
I pause there to say that that refers to the first of those matters with which we are concerned under this group of amendments; that is to say, whether or not Parliament should retain the initiative in this class of inquiries.
The paragraph goes on to discuss the character of individual Motions for a resolution in respect of the particular matter into which it is sought to inquire. Paragraph 178 continues:
"This procedural framework should itself ideally be enshrined in a Resolution, which would contain a presumption in favour of a parliamentary commission … as the most appropriate form for an inquiry of this kind. Accordingly we recommend that Clause 1 should be amended to provide for parliamentary resolutions where the events causing public concern which may have occurred involve the conduct of Ministers. We further recommend that the procedural framework for an inquiry called under this new sub-clause which we have described should be the subject of a Parliamentary Resolution once the Bill has passed into law".
That aspect refers to the second issue to which this group of amendments gives rise; that is to say, the desirability or otherwise of Parliament being directly involved in the investigation of the Minister. Here the committee recommends that a form of inquiry, which it calls a "parliamentary commission", should be established and that the shape of that parliamentary commission should be developed immediately the Inquiries Bill becomes law.
So the sequence of events would be that the Inquiries Bill becomes the Inquiries Act. Next there is immediately a general resolution of both Houses of Parliament to establish the framework of something called "a parliamentary commission". Thereafter, individual inquiries into ministerial misdemeanours would follow the general shape of that parliamentary commission.
The Minister may recall that, in Committee, my ideas as to what a parliamentary commission should look like developed, as it were, on the hoof. I started by suggesting that the right shape for a parliamentary investigation of a ministerial misdemeanour in the future should be based on, first, your Lordship's House, and, secondly, the Cross-Bench component of it.
Quite rightly, a number of your Lordships suggested that that might be rather overambitious in view of the likely reaction of another place. Therefore, in winding up my own amendment later in the afternoon, my idea

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became to have a joint commission, consisting perhaps of three Members of another place—one from each political party—and two Cross-Benchers from your Lordships' House.
I can place my hand on my heart and say that, in all honesty, I had no idea when I said that, that the notion of a parliamentary commission, as suggested by the committee of another place, was in the offing. As it turns out, the proposed shape of this new parliamentary commission should look not unlike a mixture of three Members of another place and two Members of your Lordships' House.
The committee report goes on to look at the political feasibility of establishing such a parliamentary commission. It starts off by reminding us that not all those who gave evidence to the committee were instinctively enthusiastic about the idea. However, in its first paragraph it tells us something of which I was not aware. It is presented in the form of an extract from a submission made by the noble and learned Lord, Lord Scott, to the Public Services Committee in 1996, following his own legendary report into certain matters. The noble and learned Lord said at that time that he believed:
"It would be a remedy to a number of the problems that there arc, as it seems to me, at the moment in regard to Ministerial accountability, if Select Committees were treated in the same way as my own Inquiry was treated…If it had been the case that Select Committees had been able to obtain all the advantages of documents and evidence and witnesses who had it to give that I was able to obtain, I do think a Select Committee might have been a better form for the Inquiry to have taken".
The report then goes on to remind us of the Osmotherly rules and how they have limited the ability of Select Committees in both another place and in your Lordships' House to obtain adequate documentary and oral evidence during an investigation. A number of distinguished Members of Parliament and Members of your Lordships' House also expressed views which might be described as somewhat sceptical. My noble friend Lord Heseltine, for example, is quoted in paragraph 200. He said:
"Parliament is actually run by a government and the whips are very powerful and Members of Parliament arc very ambitious. If you tell me how to turn human nature on its head—I have no way of coping with that".
So, clearly my noble friend Lord Heseltine was really saying that the Select Committee system has serious structural difficulties that would be hard to overcome.
The noble and learned Lord, Lord Howe, also offered a word of caution, which is quoted in paragraph 202. The noble and learned Lord said that,
"the other problem about Parliament is that—parliamentarians are not accustomed to truth-seeking interrogation, they are more inclined to grand-standing as interrogators".
Despite that, the committee concluded in paragraph 214 that there are activities in which another place engages that demonstrate that it is perfectly capable, if it puts its mind to it, of conducting the kind of inquiry envisaged by a parliamentary commission. That paragraph states:
"Members also participate in supervisory committees based on statute such as the Intelligence and Security Committee and the Privy Counsellors required to review the Anti-terrorism, Crime
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and Security Act 2001. A number of successful chairs of inquiries are also parliamentarians themselves. Specialist advisers can and are recruited to provide expertise and support and the House is of course accustomed to the Comptroller and Auditor General, the Parliamentary Ombudsman and the Parliamentary Commissioner for Standards undertaking investigations on its behalf and reporting to it. Parliament itself has unfettered powers to summon persons, papers and records which it can delegate at will. It is entirely possible therefore for Parliament to put together an investigatory mechanism which meets the requirements that we identify in paragraph 207 above".
Having gone on to discuss how the recently established Butler committee, which, although it was a committee of Privy Counsellors, consisted of five members, two of whom were Members of another place and two were from your Lordships' House, operates, the report concludes:
"The similarity in form of the Franks and Butler Committees with that of a Joint Committee is striking but, as committees of Privy Counsellors, their nature is fundamentally different and, from a constitutional point of view less satisfactory. We recommend that in future inquiries into the conduct and actions of government should exercise their authority through the legitimacy of Parliament in the form of a Parliamentary Commission of Inquiry composed of parliamentarians and others, rather than by the exercise of the prerogative power of the Executive".
I submit that that is a clear endorsement of and adds weight to what we said in Committee.
In the light of all that, and after discussions with the noble Lord, Lord Goodhart, we have tabled as Amendment No. 5 the precise terms of the amendment contained in the report which is intended to achieve the objectives that I have outlined. It differs in some respects from my Amendment No. 1. For example, the events that would trigger such a parliamentary commission are cast rather more narrowly than in my amendment. My amendment refers to events in a ministerial department as well as those affecting the Minister personally. I sense that the committee was considering ministerial behaviour more specifically, rather than behaviour in the department for which he was politically but not personally responsible. There are other differences between the two; but essentially Amendment No. 5, which is contained in the parliamentary report, reflects exactly the principles that we were trying to establish.
I apologise to your Lordships for taking so long to introduce this line of amendments; but the report plainly adds important new material and expresses important views. In the light of that, I thought it essential that your Lordships should be made aware of it. I beg to move.
Lord Goodhart: My Lords, I rise because my name is attached to Amendments Nos. 3, 5, 111 and 112 in this group.
We supported amendments in Grand Committee to maintain the Tribunals of Inquiry (Evidence) Act 1921. However, following debate in Grand Committee, I see no particular merit in keeping that Act in existence as it stands. Whenever it has been used, it has always been on the initiative of the Government and the main purpose of using it has been to give the inquiry power to summon witnesses and obtain documents.

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The parliamentary procedure in recent cases has been a formality. Since I became a Member of your Lordships' House in 1997, the 1921 Act has been initiated twice—in the Bloody Sunday and Shipman inquiries. I cannot remember a significant debate on the relevant resolution in either of those cases. The last time that Parliament seems to have been seriously involved concerned the proposal to set up a special commission of inquiry to investigate the failure of Rhodesian oil sanctions policy in 1978. That proposal failed because it was rejected by your Lordships' House—perhaps not one of the wiser decisions that we have taken.
7.45 p.m.
The Public Administration Select Committee, in its valuable report published only last Thursday has, as the noble Lord, Lord Kingsland, said, recommended that inquiries into the conduct of Ministers set up under the Bill should have a special procedure retaining some degree of parliamentary involvement. We have therefore put our names to the draft amendment published as Annexe 2 to the Select Committee's report. The Select Committee's arguments are persuasive and we support them.
That will still require the Government to initiate the inquiry procedure. There is no existing procedure by which a government who do not want to set up an inquiry can be impelled to hold one. The situation is therefore very different from that in the United States of America, where the Senate and the House of Representatives can set up inquiries without the consent of the Executive. Of course, Select Committees can carry out inquiries but, for reasons explained in the report with which I agree—in particular, as a result of my experience in considering the operation of the Committee of Standards and Privileges in the House of Commons when I was a member of the Committee on Standards in Public Life—Select Committees are not suitable bodies for conducting what might be described as forensic inquiries involving cross-examination of witnesses, as opposed to inquiries into policy.
The Public Administration Select Committee proposed a procedure to allow the Liaison Committee of the House of Commons to put a resolution before that House proposing that a matter of public concern should be the subject of a formal inquiry. That would involve a change in the Standing Orders of the House of Commons, but not statutory powers, so no relevant amendments can be tabled to the Bill. However, subject to the proposal for a Select Committee having to be approved by your Lordships'House as well as by the House of Commons, I would welcome that. It would provide an opportunity to involve both Houses of Parliament in setting up an inquiry, whether or not the Government approved it. Of course, it would always be subject to a vote of the House of Commons, where a government with a substantial majority would have a strong probability of succeeding, so that might
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not necessarily take the matter a great deal forward, but it would at least provide one channel by which that could be done.
I must say that I am less attracted than the noble Lord, Lord Kingsland, by the report's proposal of the setting up of a parliamentary commission of inquiry. I fear that that could take us back to a commission divided on party lines, as happened in the Marconi inquiry, which is perhaps one of the less reputable occurrences in the history of my party, and other inquiries that took place before 1921. Indeed, there has in the past, although less so in recent years, been a problem with the Committee on Standards and Privileges in the House of Commons. However, the question of whether we should have a parliamentary commission of inquiry is not relevant to this group of amendments. Therefore, I give our strong support to Amendments Nos. 3, 5, 111 and 112.
Lord Kingsland: My Lords, perhaps I may seek clarification. The parliamentary commission as defined in the report would not involve any party being in the majority or even party politicians having dominance. Perhaps the noble Lord might wish to reflect on that in the context.
Lord Goodhart: My Lords, I saw that the report included lay people, or those who are not Members of either House of Parliament, as well as those who were. There is no rule in the recommendation about the number in each category. I said that I was hesitant about it; I have concerns. I would not reject it entirely, but I am not convinced that it is an improvement on having a wholly independent, non-parliamentary inquiry.
Lord Borrie: My Lords, we have all had some opportunity to look at the important Public Administration Select Committee report, published last week, entitled Government by Inquiry. It is most helpful and deals with lots of issues that are the subject of our debates. In an ideal world, it would have been better if the report had been available to us before the Government started Second Reading and Committee stages. But we are where we are; we have the benefit of the report now.
I have the highest admiration for the committee chairman, my honourable friend Dr Tony Wright. The committee has done a great deal of work. As in Committee, I share somewhat the doubts of the noble Lord, Lord Goodhart, about previous parliamentary inquiries, such as the Marconi inquiry. In any case, that inquiry is supposed to have been the reason why Parliament thought it preferable to have "tribunals of inquiry", as they were called under the 1921 Act. I can see that, when Ministers' conduct is involved from the very beginning and not just as an incident to the course of investigating events, a commission of inquiry into politically sensitive issues held by parliamentarians, with or without other members, could be most valuable.
It is proposed that an amendment along the lines of appendix 2 of the report should be agreed so that Parliament could engage in such investigatory

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inquiries. However, the more I listened to the noble Lord, Lord Goodhart—as distinct from the noble Lord, Lord Kingsland—the more I began to think that legislative provision, through an amendment to the Bill or otherwise, was not needed, because at several points the report confirms what I understood to be the position. Parliament has inherent powers to make inquiries, to conduct investigations—by the House of Commons on its own, the House of Lords on its own or the two Houses jointly—and can invite other members to join it if it so wishes.
Paragraph 214, from which the noble Lord, Lord Kingsland, quoted, makes the point—I thought that it was well understood anyway—that,
"Parliament itself has unfettered powers to summon persons papers and records which it can delegate at will".
There is therefore the power to make any investigatory inquiry effective. As to why legislative powers to that effect are needed, I studied the appendix that sets out what is intended and has now been repeated in the amendments. The noble Lord, Lord Goodhart, has pointed out that it is not in practice feasible or possible for an Order in Council to establish any such inquiry to be presented unless the Government agree. If the Government agree, it is not the House of Commons in the driving seat. That lies behind many of the points made in this otherwise excellent report.
The report examines over several paragraphs the government's attempt in 1978 to get the House of Commons and the House of Lords to agree to a parliamentary commission on a joint resolution to deal with matters relating to Rhodesia. They succeeded up to a point in the Commons but did not in the House of Lords.
The amendment would require that an Order in Council be laid before Parliament and that it should have the approval of both Houses. If that is the position, what extra is achieved, apart from the presence of Members of Parliament in the committee, beyond what is provided in the Inquiries Bill? There is little to be gained beyond what Parliament and the individual Houses already have: powers to conduct investigations, if they wish. Nothing prevents that at present.
Lord Goodhart: My Lords, I am grateful to the noble Lord, Lord Borrie. Given that he claims to rely on my arguments, perhaps I may ask him whether the following would not be an answer to his point: if a parliamentary process is involved, Parliament has a potential input. If it does not like the terms on which the inquiry is to be set up, Parliament could say to the Government, "This is not the form of inquiry that we want. We welcome your proposal for an inquiry but we will approve it only if you are prepared to take this away and come back with a different form".
Lord Borrie: My Lords, I believe that that is perfectly true. It brings us to what we have to discuss on other amendments, and which we discussed to some extent in Grand Committee: what the Government have to do, if anything, to inform Parliament of their proposal to set up an inquiry. Since Committee, the
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Government have tabled amendments. I have received a copy of the letter to the noble Lord, Lord Kingsland, and others explaining why certain government amendments answer points made by the noble Lords, Lord Goodhart, Lord Kingsland and others, so that Parliament is kept informed.
If Parliament is kept informed and has to be by statutory requirement in the Bill, which we may amend, it is up to the House of Commons and the House of Lords, through their normal procedures, to ensure that that information—keeping Parliament informed—is questioned or debated in accordance with normal ministerial accountability to Parliament. That does not need to be legislated for, as it exists in any case.
8 p.m.
Lord Ackner: My Lords, I should like to support the submissions made by the noble Lord, Lord Kingsland. Before I do so, I should confess that my credentials for speaking on inquiries are now somewhat moth-eaten. In the two or three years before I was elevated to the High Court, I appeared in three inquiries, as a result of which I was known by my alleged friends as the "disaster QC".
The inquiries were the Aberfan inquiry, at which the noble and learned Lord, Lord Howe of Aberavon, was one of my opponents. I appeared for the parents and children of those who were killed in the disaster. I also appeared in front of the noble and learned Lord, Lord Lane, in the Vanguard air crash inquiry. I last appeared in the Seagem inquiry, which was the first of the oil rigs that were overturned. I had the great advantage of having as my second junior the present Master of the Rolls who managed to massage into a tired forensic mind all that I needed to know about metal fatigue, for which I gave him the then conventional red bag.
I should like briefly to refer to the report of the House of Commons Administration Select Committee in support of what the noble Lord. Lord Kingsland, has said. Paragraph 175 states: "However, the Bill"—that is, the Bill before us—
"as it stands raises a number of serious concerns:

(a) By abolishing the 1921 Act it finally removes the opportunity for formal parliamentary involvement in inquiries.

(b) It strengthens the Executive's position by enabling ministers not just to decide on the form and personnel of an inquiry before it has begun but also influence its operation. For example in creating powers to end or suspend inquiries (clauses 12 and 13), as well as to withdraw funding in cases where ministers believe an inquiry is going beyond its terms of reference, it calls into question the independence of inquiries and means that ministers rather than chairs, as now, are interpreters of the terms of reference. In so doing the new legislation subverts the safeguards which were introduced when the original 1921 Act was debated.

(c) The legislation does not address the wider questions we posed at the beginning of this report about the purpose and nature of inquiries.

(d) As a result it does nothing to address the broader, more constitutional, issues about the circumstances in which Ministers should call an inquiry and determine its terms of reference and form. There is an assumption that one size fits all despite the acknowledgment of the wide variety of circumstances which apply.

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It was therefore not surprising to find a little later, at paragraph 229, the following stated as part of its conclusion. The end of that paragraph states:
"Parliament now has to decide whether it wants to reclaim territory it has lost as far as inquiries of this kind are concerned, becoming once again the Grand Inquest of the Nation, or whether it is content to abandon the field to others, and to the executive. If it chooses the former, then this report offers a means of doing so".
Lord Donaldson of Lymington: My Lords, I do not want to take up much time, but in terms of mothballed or moth-eaten experience, probably I can do better than my noble and learned friend Lord Ackner. I was Crown Counsel, albeit in a very junior capacity, in the bank rate tribunal—I do not have any idea when that took place, except that it was a very long time ago—and the Vassall inquiry.
Even if it is right, as has been suggested, that we do not need Amendment No. 5, which concerns laying down procedure, because Parliament can lay it down itself, Amendment No. 3 will still be needed to stop the Minister or a colleague being able to set up an inquiry under this Act in its unamended form. Surely, that is one of the objects of the exercise for the noble Lords, Lord Kingsland and Lord Goodhart.
Lord Laming: My Lords, I will be very brief. I—and I am sure every Member of the House—have listened very carefully to the noble Lords, Lord Kingsland and Lord Goodhart. As ever, they have presented their views in a thoughtful and constructive way, but I am far from convinced about these amendments.
At Second Reading and in Committee, I and others expressed concerns about the Bill before us. First, it excluded Parliament from too many areas in which I and other noble Lords think that it should have a proper and distinctive role. Secondly, it gave far too much power to a government Minister. Those points have been extremely well made in the report before us today.
I hope that other noble Lords will agree that the Minister listened very carefully to those concerns and has now come back with a series of amendments that we will consider later. From my point of view, they address fully both of those concerns. I congratulate the Minister on those achievements, because they will not have been easily won.
That said, although I have great respect for parliamentary processes, particularly for the work of Select Committees, it is illusory to think that any part of the work of Parliament in this day and age can operate without the influence of party politics. The noble Lord, Lord Goodhart, was very wise in his comments on the subject.
If I have one belief more than any other, it is that if inquiries are to command the confidence of the public, they must be seen to be independent and operating apart from the influences that are all too pervasive in Parliament. I agree with the contributions to the report of the noble Lord, Lord Heseltine, and Mr Dobson.
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For that reason, my concerns about the amendments are so great that, despite what they seek to achieve, I do not feel able to support them.
Baroness Ashton of Upholland: My Lords, I am grateful to the noble Lord, Lord Laming, for his kind comments. I shall start what I hope will be a relatively brief response by saying how much I welcome the report of the Public Administration Select Committee. It makes an important contribution and endorses quite a lot of what the Government have been doing. Of course, not all of the total of 22 recommendations are specifically relevant to the Bill, but the report does cover some of the important issues that we discussed during our deliberations in Grand Committee and which the Government have brought forward amendments to address. Perhaps I may say particularly to the noble and learned Lord, Lord Ackner, that some of the issues of concern to him are addressed specifically and dealt with in later amendments.
I want also to say that the Government will make a full response to the Select Committee report. In view of the fact that we recognise the need to ensure that we have responded fully by the time the Bill reaches another place, we intend to curtail the normal length of time, which I believe is up to two months, that a government can take to make their response to enable the full response to be considered before Second Reading in another place. That will enable my honourable friend Chris Leslie and Members of the Select Committee to have a proper debate at Second Reading based on both the report and our full response to it. I hope that noble Lords will feel that that goes some way to acknowledging the importance we attach to this. The Government are committed to ensuring that the Bill is given a full and proper debate in another place.
I shall make a series of initial responses both to the amendments before us and to the points made by noble Lords in speaking to them. In Grand Committee I talked about the role of Parliament in the 1921 Act and the misunderstanding of the relationship between the passing of resolutions and the setting up of inquiries. Noble Lords who were present in Committee will recall that the passing of a resolution did not require a Minister to set up an inquiry, rather it enabled an inquiry to hold certain powers. Noble Lords will recognise from later amendments that I have sought to deal with the issue of parliamentary involvement in inquiries in an appropriate manner—one that reflects the reality of the position in 1921 rather than the misunderstanding that has arisen around it.
Noble Lords referred to the proposed commission that was considered in 1978 and the difficulties which arose when the proposal was approved in one House but not in the other. Noble Lords are also correct to assume that, if it so wished, Parliament could set up such a commission now. Nothing in law would prevent it. I look forward to a meeting scheduled with the honourable Dr Tony Wright to debate and discuss these issues. I agree with all that has been said about his excellent chairmanship of the Select Committee.

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I want to deal with a few of the points that have arisen in speaking to the amendments, thus enabling noble Lords to reflect even further on these issues. I turn briefly to the issue of misconduct. I understand what noble Lords are seeking to achieve, but in legislation we have to be crystal clear and say what we mean. There is an issue as regards determining or defining what "misconduct" means. We have sought to ensure in the Bill that inquiries are set up to look into events in order to identify what happened and what were the causes. That exercise might well identify misconduct, but we recognise that that should not be prejudged. I am concerned that we need to be clear about precisely what is being described and I would ask noble Lords to reflect on that point a little further.
I have already indicated that Amendments Nos. 1 and 2 in the name of the noble Lord, Lord Kingsland, do not give Parliament the power to force an inquiry to be held because Ministers would still initiate inquiries, appoint the panel members and set the terms of reference. Rather, the amendments would allow Parliament to delay or prevent inquiries being held by refusing to pass the relevant resolutions. I repeat what I said earlier: the 1921 Act did not do what some noble Lords who considered this in Grand Committee felt it might.
There are some technical issues with the amendments, but I shall not address those because the noble Lord, Lord Kingsland, has rightly asked us to focus on the amendment suggested in the report. I have indicated already that it would be possible for a parliamentary commission of inquiry to be set up without the need for primary legislation, but I also recognise the points made by both my noble friend Lord Borrie and the noble Lord, Lord Goodhart, on the particular example of the Rhodesian oil sanctions special commission and the difficulties it ran into.
A couple of other issues are also worthy of consideration. The committee itself acknowledged the difficulty of distinguishing between politically sensitive inquiries and others. Of course, "involving the conduct of Ministers" is a very broad definition.
There have been a great many inquiries beyond those referred to within the report where it could be relevant to suggest that there was ministerial involvement. When I looked at the report, two that sprang to mind were the BSE inquiry and the North Wales child abuse inquiry. In both instances there were questions and issues about the behaviour, on the one hand, of the Department of Health and, on the other, the reorganisation of local government in the 1970s, where it was felt in the North Wales child abuse inquiry that it had become easier for abuse to go undetected.
I was struck by the evidence given to the committee by Sir Michael Bichard on 9 December. He referred to inquiries falling along points on a continuum. In the proposed amendment there is an issue about where one would draw the line on that continuum.
I have already indicated that I am concerned not to pre-judge inquiries. We are specifically considering inquiries to investigate the causes of events, not to pre-judge whether there has been misconduct by either
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Ministers or departments. I am not entirely sure about how we would deal with an inquiry that was established under one framework but then discovered that there were issues of ministerial conduct. I am concerned about how we would ensure that such issues were properly investigated.
As my noble friend Lord Borrie said, Ministers provide advice about Orders in Council to ensure that they are initiated. Effectively, that would simply set up another route for the Government to initiate inquiries.
There is also the issue of what the noble Lord, Lord Laming, described as the political reality of divisions along party lines. Indeed, in the report there is some criticism of the Select Committee process in regard to that very issue. So there are particular concerns there.
I have deliberately tried quickly to raise some of the issues that I shall be keen to discuss with the chairman of the Public Administration Select Committee, Dr Wright, when I meet him, and also the questions that we will be addressing in our full response.
I understand what noble Lords are seeking to do. I also understand that the Select Committee is concerned to ensure a role for Parliament and to consider how best to deal with particular kinds of inquiries. I have difficulty with the amendments around the issues I have raised: about the fact that one can already set up a commission—it is available—if Parliament so wishes; about ensuring that the partisanship the committee had concerns about in the Select Committee process is dealt with differently; about prejudging what has happened in an inquiry before it begins; and about the other questions I have raised.
I hope that noble Lords will further consider these issues. I shall be very happy to discuss some of these concerns in more detail. As I have said, I very much look forward to discussing the issue with Dr Wright. On the basis of what I have said so far, I hope the noble Lord will feel able to withdraw his amendment.
8.15 p.m.
Lord Kingsland: My Lords, I am most grateful to the Minister for her response and to all noble and noble and learned Lords who have spoken.
As I said at the outset, two quite distinct issues are raised by this group of amendments. The first issue is to what extent Parliament should be involved in the establishment of a committee, including its membership, its terms of reference and so on. The second, quite distinct, issue is what form the committee of inquiry should take, whether it should be a parliamentary commission as suggested by the report or of some other character, perhaps chaired by a judge.
Your Lordships have several options: your Lordships can reject both aims that lie behind this line of amendments; your Lordships can accept both aims; or your Lordships can accept one aim and refuse the other. The noble Lord, Lord Goodhart, seemed to be suggesting that he accepted entirely the need for Parliament to be involved in the setting up of a committee which sought to investigate a potential ministerial misdemeanour; but that he had

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reservations about the second aim and whether or not the committee should be composed of Members of Parliament. The noble Lord, Lord Goodhart, I like to think, is out to the jury on the second point, and not entirely determined one way or the other. So I entirely accept that there may well be a variety of views that emerge from your Lordships' House when we come to consider the matter again at Third Reading.
I remain a firm adherent of both aims that are implied by this line of amendments. I must confess to being somewhat surprised by those of your Lordships who are worried about the role that Parliament might play in what is, after all, one of the fundamental conventions of our constitution—the responsibility of a Minister to Parliament. If we do not make that convention work, then one of the two core tasks of Parliament will simply cease to function. We can continue making legislation but we will have no influence over the conduct of the Executive. I simply cannot believe that that is what your Lordships want.
The point was extremely well illustrated by the final quotation from the noble and learned Lord, Lord Ackner, when he took us to the conclusions and recommendations of the report and read out the last part of paragraph 229. I make no apologies for quoting it again:
"Parliament now has to decide whether it wants to reclaim territory it has lost as far as inquiries of this kind are concerned, becoming once again the Grand Inquest of the Nation, or whether it is content to abandon the field to others, and to the executive. If it chooses the former. then this report offers a means of doing so".
I find it very hard to believe that Parliament would want to abandon this central field to others; because it is one of the two main purposes for the existence of Parliament. So leaving your Lordships to reflect on that, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 2 to 5 not moved.]
Clause 3 [The inquiry panel]:
Lord Howe of Aberavonmoved Amendment No. 6:
Page 2, line 3, leave out paragraphs (a) and (b) and insert—
"(a) by a chairman with one or more other members, or
(b) by a chairman alone.
( ) In deciding whether or not an inquiry can acceptably be conducted by a chairman alone, the Minister must have regard to the considerations specified in section 7."
The noble and learned Lord said: My Lords, Amendments Nos. 6, 7 and 8 to some extent contain alternatives or cumulatives. The essence of them is to press the case for a broadly based panel of inquiry, more than a chairman sitting on his own, flanked by wingmen or wingwomen—as we must take care to say—of sufficient expertise and sufficiently balanced to equip the inquiry to do its task.
Before I embark on the arguments in support of that proposition, I should like, with great respect to the Minister, for whom we all have respect in her conduct of these and other proceedings, to echo the concern expressed by noble Lords on both sides of the House at the somewhat ridiculous position in which we find
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ourselves. Legislation of this importance, effecting far-reaching changes and sweeping up decades of piecemeal, but not too badly workable, history, is being considered and has almost reached the point of departure from your Lordships' House at the moment when the Public Administration Committee in the other place has concluded a formidably effective inquiry. I echo the admiration expressed by a number of colleagues already for the diligence, zeal and effectiveness of that committee, particularly of its chairman, Mr Tony Wright.
For us to be assured by the Minister that even if we catch only a fleeting glimpse of her exchanges with the committee report, it will hasten its response so that the Commons will have a chance to glance at it before the Bill completes its proceedings in that House is an extraordinary situation. I do not want to sound too harshly critical, but it does no credit to the Government, Parliament or the Department for Constitutional Affairs. The department itself has been conducting a long-running and meticulous inquiry, but it has not run on a parallel course. Different evidence has been heard in different ways and we have not had the opportunity of, rather than knocking heads together, rubbing wise heads together and distilling a greater degree of wisdom than has so far been available to us. I am sorry to start on that critical note, but it makes nonsense of any real achievement of good administration—or joined-up government to use the fashionable phrase.
Making the best of that, this group of amendments is concerned with anxiety about the appointment of solo inquiries and the absence of wingmen. That is not founded on the proposition that solo inquiries are bound to go wrong—far from it—nor that joint inquiries are bound to be right. We can think of many examples of solo inquiries conducted with distinction by learned judges, Members of this House and other judges. Shortly after the tragic death of Lord Scarman one recollected a number of inquiries that he conducted in this country and in Northern Ireland which certainly got it right as far as it is possible to do so.
However, even if that is the case, in our Committee proceedings the noble and learned Lord, Lord Hutton, drew our attention to the extent to which the judiciary on its own, conducting politically charged inquiries, is obliged to follow what can be a high-risk course when one considers the respect with which the judiciary is entitled to be held. That is particularly so in today's media environment when the outcome of such inquiries is all too likely to provoke an outburst of whitewash throwing to try to conceal and obscure the wisdom of the conclusion. That can be rapidly followed—this can even be used as an alternative—by mud throwing to challenge the integrity of the inquiry in a different way. In those circumstances, one reason for believing that one should have more than a single judge in charge of an inquiry in the ordinary way is to protect the judiciary from that kind of hazard.

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However, that is not my only reason for advancing this case and the judiciary, notwithstanding those hazards, is well able to look after itself. Again with respect to the judiciary, I also wish to broaden the basis of judgment of such panels of inquiry when they are investigating fields with which, by definition, traditional figures may not be familiar. The noble and learned Lord, Lord Scott, told the noble Lord, Lord Garel-Jones, at some stage when giving evidence to the inquiry that the noble Lord conducted that his first acquaintance with the machinery of government had come solely from his experience in the conduct of that inquiry. It is not surprising, but it was a hazard to which he ought not to have been exposed.
I think that I am right in quoting the noble and learned Lord, Lord Hutton, in his evidence to the Public Administration Committee saying that there was no discussion in that case—and there was none in the case of the noble and learned Lord, Lord Scott, about whether wingmen might be desirable. Be that as it may, as I told the Grand Committee, in my modest experience when I sat with great hesitation as a deputy chairman of quarter sessions, not having been a prolific practitioner in the criminal courts, I was enormously fortified by having the presence of magistrates alongside me, especially when it came to sentencing.
I well remember, as will the noble and learned Lord, Lord Donaldson, the care that we took in the initial construction of the National Industrial Relations Court which he launched with such distinction. It is now better known as the Employment Appeals Tribunal although it is in much the same state. There was enormous value in that tribunal of having wingmen there—representatives in the old-fashioned phrase from both sides of industry. However, it is beyond the substance of the issue that one sees the need for support in that form. The noble and learned Lord, Lord Bingham, a Member of this House and a senior Law Lord, paid specific tribute to that after his conduct of the BCCI inquiry. I quoted him in Grand Committee. He referred to the benefit of,
"'drawing on their experience and expertise. They have contributed invaluable insights and guidance'.
But, almost more importantly, he said:
'I have also found their judgments on more mundane factual issues consistently shrewd and realistic"'.—[Official Report, 18/1/05; col. GC 212.]
That judgment was endorsed by the Council on Tribunals in its report of 1996, when it praised not only the breadth of experience that can be brought to bear on the subject of an inquiry. It said that wingmen can also,
"enhance public confidence in the fairness of the process and in the inquiry's conclusions. They can afford the inquiry chairman helpful support and some protection against errors of judgment, in matters of both substance and procedure".
The council concluded that, if the inquiry involved consideration of broad policy issues,
"a spread of expertise will almost always be desirable".
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8.30 p.m.
Since then, we have of course received the report of the Public Administration Committee. On this issue, its judgment is if anything even clearer than that of the Council on Tribunals. Paragraph 73 of the committee's report said:
"We agree with and endorse the view that the use of 'wing members' brings expertise, reassurance, support and protection to inquiry chairs. We particularly recommend the use of panels in politically sensitive cases as a non-statutory means of enhancing the perception of fairness and impartiality in the inquiry process. We also recommend that where judges are seen as the most appropriate chair, they should usually be appointed as part of the panel or be assisted by expert assessors or wing members"
When the Minister replied to the debate in Grand Committee, she sought to rely on the references in Clause 7 on the need to have regard to expertise and the need for balance. She said that those provisions provided an answer to the question, covered by my previous amendment, that there should be a preference for a panel rather than a single individual. Some noble Lords, particularly the noble Viscount, Lord Bledisloe, said that I had argued in favour of an irrebuttable presumption in that direction. I had not—but if it looked as if it had, I take it back.
I return to the central point. The Public Administration Committee in another place endorsed without qualification the central proposition of what I seek to embody in this amendment. I beg to move.
Lord Donaldson of Lymington: My Lords, I strongly support Amendments Nos. 7 and 8, in particular, proposed by my noble and learned friend Lord Howe. It is a long time ago and he may have forgotten this but, although Lord Denning's report into the Profumo problem was widely acclaimed by the public and was indeed a bestseller, some people said that it might have been rather better if he had had wingmen of one form or another.
I have myself been involved in four inquiries for government since I retired from the Bench. In each case, I told the Minister that I was not prepared to undertake the inquiry unless I had two wingmen. I said that because I would then have someone to put my tentative inquiries to and see how he reacted. Also, to a greater or lesser extent in the cases with which I was concerned, they added expertise, or different angles of expertise, that I did not possess. I have no doubt at all that that they improved the quality of the ultimate product.
Of course, I imagine that there will in the case of those of us who are married—I have been married when doing these inquiries—always be a shadow wingwoman. There certainly has been in my case. She looked at most of the things I did, whether judicially or not, to see whether it was intelligible to members of the public. If my wife said, "I do not understand it", I rewrote it. I do not suggest that that should be a statutory requirement, but it has to be remembered.
I have one word about the NIRC. I was involved in the sense that I was asked to comment on the Industrial Relations Bill, as it then was. I said to government, "It is all very fine, but you have a clause

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in here that says that the tribunal is three—myself and two legally unqualified but otherwise very highly qualified wingmen—and that any question of law should be decided by a majority. That does not seem very sensible". They said, "It is not very sensible, and we are sorry, but it was taken from the restrictive practices Bill. We really cannot alter it now because any amendment at this stage will lead to at least a day's discussion in one House or the other". But they added, not unkindly I am sure, "If you cannot persuade your two laymen to agree with your view, you are not fit to be president". I was not sure that I agreed about that.
I agreed even less when, on one occasion, my two wingmen declared unequivocally that they did not accept my view. I thought that I was going to have to put my pride in my pocket and perhaps hope that the Court of Appeal or someone would put it right from my point of view. Happily, my noble and learned friend Lord Griffiths was another judge. I was moaning to him about this. He said, "Leave it for a moment". When we adjourned for tea, he went and had tea with my two laymen and came back and told me that their objections had been withdrawn.
We need to be a little bit careful on what powers we give to the wingmen, but not very.
Lord Hutton: My Lords, the Public Administration Select Committee, in a very interesting and thoughtful report, has made recommendations which, as the noble and learned Lord, Lord Howe, has remarked, gives support to this amendment. I should like to make some comments on the amendment and on the recommendations in the committee's report.
I do not doubt that there will be inquiries where a judge should sit with other members of the panel or with expert assessors; as my noble and learned friend Lord Donaldson has remarked, they will often be of great assistance. But I do have reservations about the committee's recommendation that a judge should usually not sit alone. I think it should depend on the nature of the inquiry.
The committee refers in paragraph 41 of its report to the reasons which can be advanced in favour of a judge chairing an inquiry and sitting alone. They are, very briefly stated, first, that a judge has a great deal of experience in conducting hearings, in defining issues, in assessing evidence and in determining facts. Secondly, judges are viewed as independent and impartial. They are apolitical and not concerned to advance the interests of one political party over another. Thirdly, they can be transferred relatively easily from their ordinary judicial duties to the conduct of an inquiry.
However, the committee states in paragraph 44 of its report that none of those reasons seems to it to be totally compelling. It takes the view that a judge should not sit alone to conduct an inquiry where the matter is politically sensitive or politically contentious—its reason being that in such cases because of the political context the report may be
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criticised, the standing of the judiciary may be undermined and the reputation of the individual judge may be harmed.
As I have said, I have some reservations about the recommendation that usually a judge should not sit alone because I think, with respect, that the committee's view fails to take account of a distinction which should be drawn. On the one hand when the need for an inquiry arises there may be issues that are politically sensitive or politically contentious because they relate to questions which are themselves political, for example, whether public funds should have been used for one public purpose or another. Clearly a judge, particularly a judge sitting alone, should not embark on such an inquiry because that would take him into the political arena.
However, there may be other issues that involve questions of fact which a judge is well qualified to hear and determine, but where there would be very serious consequences for a Minister or for the government as a whole if the questions were answered in a particular way. I believe that the Minister referred to that point a short time ago. Such an inquiry can, of course, be termed politically sensitive because of its possible political consequences. However, I think that is not necessarily a reason why a judge sitting alone should not conduct such an inquiry. Judges sitting alone frequently have to decide cases that are politically sensitive. Many judicial review cases in the Administrative Court are politically sensitive because if the judge rules that a government department has acted unlawfully, that may give rise to criticism of the Minister in charge of the department. However, that is not a reason why the judge should not hear the case and give his ruling.
I regarded the inquiry into the circumstances surrounding the death of Dr David Kelly as such a case. It gave rise to largely factual questions that I considered a single judge was qualified to inquire into. Briefly they were, first, how did Dr Kelly come to die; secondly, did the Government probably know that the 45 minutes figure in relation to weapons of mass destruction was wrong before it was put in the dossier, as the BBC "Today" programme reported; and, thirdly, was there an underhand and dishonourable strategy on the part of the Government to leak covertly Dr Kelly's name to the press without appearing to do so? These were questions that were politically sensitive and politically contentious in a very high degree because if either the second or the third question had been answered in the affirmative, there is little doubt that the Prime Minister would have had to resign. However, in my opinion they were questions that a judge could properly consider and give a ruling on.
The Public Administration Select Committee is concerned about the risk in a politically sensitive case that the report of a judge who chairs an inquiry without other panel members or assessors may be criticised, with harmful consequences for the judiciary as a whole or for the individual judge. However, it is the duty of a judge to decide issues before him fairly and properly on the evidence without fear or favour

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and without being swayed by pressure from sections of the media or by concern that he will be criticised if he decides in a particular way. The risk of being criticised for the discharge of his duty is simply a burden that a judge has to accept.
Before I published my report I expected that on publication I would be criticised by some newspapers and some commentators who had been predicting that the Prime Minister would be compelled to resign. That is why I set out at considerable length in the report the evidence which had led me to the conclusions to which I had come.
I also doubt whether the criticism which may be levelled from some quarters at a report which is politically sensitive will be greatly reduced if the report comes from a panel of three or more as opposed to a single chairman. I was criticised for my conclusion that the BBC report was unfounded that the Government probably knew that the 45 minutes figure was wrong. The committee of five Privy Counsellors chaired by the noble Lord, Lord Butler, came to the same conclusion. Paragraph 310 of their report referred to,
"allegations that the intelligence in the September dossier had knowingly been embellished, and hence over the good faith of the Government. Lord Hutton dismissed those allegations. We should record that we, too, have seen no evidence that would support any such allegations".
Yet that finding by the committee chaired by the noble Lord, Lord Butler, did not result in any diminution of the criticism directed at that section of my report.
There is little doubt that a judge sitting alone can conduct an inquiry with greater expedition and efficiency than if he is one of a panel. If there is a panel, there will have to be adjournments to enable the panel to discuss issues that arise as to the admissibility or relevance of evidence, and the flow of the evidence will be interfered with. In the future there will be inquiries, even if they are politically contentious, where it will be beneficial to have a legal chairman sitting alone. It will depend on the nature of the issues that fall to be considered, and it is preferable that there should not be a presumption set out in the clause. Therefore, with respect, I am unable to support the amendment.
8.45 p.m.
Lord Laming: My Lords, lest there be any misunderstanding, will the Minister, and maybe the noble and learned Lord, Lord Howe, who moved the amendment, make it plain that if in future a chairman is appointed to chair an inquiry and he is accompanied by assessors, the conduct of the inquiry, and the report of the inquiry, is solely the responsibility of the chair?
Baroness Ashton of Upholland: My Lords, the noble Lord, Lord Laming, is correct. I was much taken by the statutory requirement proposed by the noble and learned Lord, Lord Donaldson, for women to determine the eligibility or intelligibility of contributions from men. I might sign up to that, if the noble and learned Lord would care to put an amendment down to that effect. I will be brief, which is
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no disrespect to the important contributions that have been made, but I might be able to deal with this quite quickly.
I say to the noble and learned Lord, Lord Howe of Aberavon, that in my statement about the Select Committee I was in no way suggesting that we should only be offered the opportunity to—the noble and learned Lord said—glance at the report. Rather, I was ensuring that as it is a committee of another place, and as I would expect the members of the committee to wish to debate in full, and rightly so, the issues as the Bill reaches them, that I would curtail the normal length of time to ensure that that could take place. I was attempting to he helpful, and I was rather sad that it was interpreted in that way—but what can I do?
This reflects much of what the noble and learned Lord, Lord Hutton, said. We should not make general rules, or presumptions, about what would work best in future. It depends on the nature of the inquiry, and I accept what the Select Committee said about the value of contributions from wingmen. I accept what the noble and learned Lord, Lord Howe of Aberavon, said about the importance of a panel operating in the appropriate circumstances. All that we are saying in the Bill is that different constitutions of panels are appropriate to different sets of circumstances. On occasion, it is right for a chairman to sit alone, and in the clauses referred to in these amendments we talk about the role of assessors.
The noble Viscount, Lord Bledisloe, made an important alternative suggestion. I am sorry that he is not in his place to hear me say this. The statement to Parliament on terms of reference would be an appropriate place to set out proposals about panel membership. Indeed, we have incorporated that idea in government Amendment No. 18, which we will debate shortly. It is important for the appropriate chairman and/or panel to be appointed; we want to retain that flexibility, and we accept much of what has been said about the value of panels, the value of assessors, and the value of wingmen. I hope that the noble Lord will feel able to withdraw his amendment.
Lord Howe of Aberavon: My Lords, I am grateful to all those Members of the House who have contributed to the debate. I shall respond first of all to the noble Lord, Lord Laming. Where a panel consists of the chairman alone, it is clear that, however many assessors he may have, the panel report is his responsibility beyond doubt. That was the case for the noble and learned Lord, Lord Hutton. I well understand the case that was made, and do not intend any disrespect by putting my proposition in a slightly different light.
However skilful the judicial approach—heaven knows that the noble and learned Lord has had a mountain of experience with which to equip himself in that way—public confidence in some cases, notwithstanding the respect for the judicial figure, may be broadened by the input of a further group of people. In a sense, that is the reason in the very special case of the input of jurors, where juries are involved. It is possible to hold all sorts of different views about that.

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The case for solitary judicial inquiries must be treated with great respect and caution. However, I take the point made by the Minister and the noble and learned Lord, Lord Hutton, about "presumption". I confess that the word was not in my original version of Amendment No. 7; this is one of alternatives. Perhaps I should have taken it out, as it requires too heavy a burden of proof in the other direction. However, I still think that there should be an inclination towards a panel-equipped chairman, be he a judge, lawyer or layman. On the whole, a broader grouping is more likely to be accepted by the wider public, and even by the media. A broader grouping is more likely to avoid the risk of reaching a conclusion that, given a little more time, might have been differently expressed. Having said that, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 7 and 8 not moved.]
Lord Goodhartmoved Amendment No. 9:
After Clause 3, insert the following new clause—
"FREEDOM OF INFORMATION

(1) An inquiry panel is not a public authority for the purposes of the Freedom of Information Act 2000 (c. 36).

(2) But at the end of an inquiry all recorded information given to or created by the inquiry shall be transferred to and kept by the Minister and shall be subject to the right to information under that Act.

(3) Section 32 of the Freedom of Information Act 2000 (court records etc.) is amended as follows.

(4) In subsection (2) omit the words "inquiry or" in each place.

(5) In subsection (4) omit paragraph (c)."

The noble Lord said: My Lords, in speaking to Amendment No. 9, I shall speak also to Amendments Nos. 80 and 87. This important group of amendments deals with some, though not all, of the freedom of information issues raised by the Bill. I have to say that the Bill appears to have been originally drafted in apparent ignorance of the existence of the Freedom of Information Act.
Our original amendment proposed that the inquiry panel be treated as a public authority for the purposes of that Act. I was persuaded by the Government's argument in Grand Committee that the inquiry panel should not be treated as a public authority, because it was said to be inappropriate for the panel—a small body set up for a particular purpose—to have to deal with requests for information under the Act while the inquiry was continuing; I agree. Instead, we now propose in Amendment No. 9 that recorded information be handed over to a Minister at the end of the inquiry and be accessible under the Act, subject of course to the exemptions contained in it. Amendment No. 9 also proposes that Section 32 of the Freedom of Information Act, which gives absolute exemption to inquiry documents, be disapplied.
I am glad to say that the Government have responded helpfully to the amendments that we moved in Grand Committee. In Amendment No. 107, they have provided for rules to be made about dealing with
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documents given to or created by an inquiry. I understand that the provision is intended to provide for the inquiry documents to be handed over to the sponsoring department—if I can call it that—which will be a public authority, of course. I hope that the Minister will confirm that.
Subsections (3) and (4) of government Amendment No. 52 disapplies Section 32(2) of the Freedom of Information Act to documents which are handed over to the sponsoring department. The result will be that the documents will be accessible under the Freedom of Information Act subject to the exemptions in that Act, other than those in Section 32(2). That is a satisfactory result.
A similar problem which arose under the Bill as drafted was the publication of inquiry reports. Clause 23(4) gives power to a person whose duty it is to publish the report—either the Minister or the chairman—to withhold such material as the publisher considers necessary in the public interest. The decision to withhold as now in the Bill could be challenged by judicial review, but otherwise it is a matter of discretion for the publisher. It could be interpreted, as it now stands, as overriding the Freedom of Information Act. Our Amendments Nos. 80 and 87 provide that information cannot be withheld from a report if it is information which could be accessible under the Freedom of Information Act.
The Government have responded with their Amendment No. 86, which makes it clear that the power to withhold material from the report does not override the Freedom of Information Act. Again, this appears to us to be acceptable and if material is withheld from the report, the media, individuals or political parties can probe for that material. If exemption is claimed, the decision whether it should be withheld is taken by the Information Commissioner or the Information Tribunal and not by the Minister or chairman.
We are grateful to the Government for listening to our arguments. We accept their amendments in this group. I beg to move Amendment No. 9 but I shall not press our other amendments in the group.
Lord Dubs: My Lords, I broadly welcome Amendment No. 52 relating to public access to inquiry proceedings and information. It represents a step forward, although I am concerned that it is constrained by Section 17, some of whose provisions can be applied onerously and broadly. However, it depends on the spirit within which these things happen.
I notice in the much-quoted House of Commons Public Administration Select Committee report at paragraph 99:
"Although the 1921 Act provides for a presumption of openness we are concerned that the Government's new Inquiries Bill creates wide powers for ministers to restrict access to inquiries, making public accessibility subject to restriction notices. This subverts accepted presumptions of openness and public interest and we recommend it should be reversed".

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Possibly the Select Committee report preceded Amendment No. 52 tabled by the Government. Can my noble friend clarify that point?
Be that as it may, there must be concern about whether the effect of Clause 17 would not to some extent negate the presumption of openness in government Amendment No. 52. It depends on how the Government do it. I am aware that there are concerns in Northern Ireland about the Finucane inquiry and clearly it would be helpful if the Government—perhaps not today but at some point—made clear how open such inquiries would be. If the Government act in the spirit of subsections (1)(a) and (b) of Amendment No. 52, that will be fine. If they seek to allow the more restrictive parts of Clause 17 to have too much effect, that will not be fine. However, the government amendment represents progress and I welcome it.
Lord Laming: My Lords, my speaking notes were compiled before the noble Lord, Lord Dubs, made his contribution. I welcome Amendment No. 52 for its greater clarity and because it emphasises the responsibilities and powers of the chair of an inquiry.
9 p.m.
Baroness Ashton of Upholland: My Lords, I am grateful for the welcome that has been given to the government amendments. They accept in principle what the noble Lord, Lord Goodhart, proposes. I agree that inquiry panels are not public authorities for the purpose of the Freedom of Information Act. There is no need to set that out explicitly in the Bill because it is a provision of the Bill as drafted. As the noble Lord, Lord Goodhart, realises, subsection (2) of Amendment No. 9 contains a matter that we intend to deal with in procedural rules, as government Amendment No. 107 makes clear. I can assure the noble Lord that our intention is that at the end of an inquiry the records that are retained will pass to a public authority, usually a government department or the National Archives.
The noble Lord, Lord Goodhart, has convinced me that there is no need for the absolute exemption conferred by Section 32 to apply to the records of inquiries under the Bill once those inquiries are over. Amendments Nos. 52 and 62 address that point. Amendments Nos. 108 and 110 are consequential definitions.
I do not believe that it would be right for a Minister to use the powers in Clause 23 to withhold information from a report that a person would have the right to see under the Freedom of Information Act. We are happy to make provision in the Bill to that effect.
As the noble Lord, Lord Goodhart, knows, there are difficulties regarding how his amendments would work in practice, not least because we are concerned that the sensitivity of information changes all the time. Information that may be exempt today may not be exempt in six months' time. So we believe that it is better to ensure that any actual request received must be complied with in accordance with the Freedom of
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Information Act and that Clause 23 cannot override any rights of access. We have tabled Amendment No. 86 to that effect.
The noble Lord, Lord Goodhart, said to me before that he wished to see a right of appeal to the Information Commissioner on materials withheld from reports. I am not sure that the amendment tabled by the noble Lord would introduce that right, but I believe that Amendment No. 86 would.
Scotland has a separate Freedom of Information Act. The Scottish Ministers are happy to make parallel provisions for that Act, and those are included in the government amendments.
I am grateful to my noble friend Lord Dubs for raising the issues, but we shall have opportunities to discuss Clause 17 specifically when we get there. It clarifies the rules. I look forward to that debate and hope that my noble friend will participate in it. On the basis that the Government have achieved what 1 hope the noble Lord, Lord Goodhart, was looking for, and—dare I say—added to it, not least in the case of Scotland, I hope that the noble Lord will feel able to withdraw his amendment. I shall move the government amendments at the appropriate time.
Lord Goodhart: My Lords, I say in response to the noble Lord, Lord Dubs, that the issue will be raised when we reach the group of amendments starting with Amendment No. 65. As I have already said, I am happy to ask leave to withdraw my amendment.
Amendment, by leave, withdrawn.
Clause 4 [Appointment of inquiry panel]:
Lord Kingslandmoved Amendment No. 10:
Page 2, line 9, at end insert ", after consultation with the chairman"
The noble Lord said: My Lords, I can deal with this point very briefly. The amendment would ensure that the Minister consults the chairman before appointing anyone else to the inquiry panel. In Committee, there was a discussion, and the Minister very kindly agreed to think about it. The Government have tabled an amendment which, essentially, would achieve the same objective as mine. In those circumstances, depending on what the Government say about it of course, I am happy to accept their version. I beg to move.
Lord Evans of Temple Guiting: My Lords, I hope I shall be able to satisfy the noble Lord, Lord Kingsland. The amendment that the Government propose would compel the Minister to consult the chairman or the person he wishes to appoint as chairman before appointing a member, or a further member, of the inquiry panel. We had a full discussion of that point in Committee and, having considered what noble Lords have said about the need for a statutory requirement, we have tabled Amendment No. 11 to address the point.
That amendment will introduce a requirement for consultation for all appointments of panel members other than the chairman, including any further appointments made under Clause 6. It allows for the

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consultation to take place before the formal appointment of the chairman if the whole panel is being appointed at the same time.
As before, if the Minister proposes to increase the number of panel members during the inquiry, without having set out his proposal before the start under Clause 5(b)(ii), the chairman's consent is required.
I hope that we have satisfied noble Lords. We had a very long discussion about this in Grand Committee.
Lord Kingsland: My Lords, I am most grateful to the Minister for his response. In those circumstances, I am happy to beg leave to withdraw my amendment.
Amendment, by leave, withdrawn.
Lord Evans of Temple Guitingmoved Amendment No. 11:
Page 2, line 11, at end insert—
"( ) Before appointing a member to the inquiry panel (otherwise than as chairman) the Minister must consult the person he has appointed, or proposes to appoint, as chairman."
On Question, amendment agreed to.
Clause 5 [Setting-up date and terms of reference]:
Lord Goodhartmoved Amendment No. 12:
Page 2, line 20, at end insert—
"( ) Before establishing the terms of reference the Minister shall consult the chairman."
The noble Lord said: My Lords, in speaking to Amendment No. 12 I shall speak also to Amendment No. 14. Amendment No. 12 requires a Minister to consult the chairman of the inquiry on the terms of reference. Amendment No. 14 permits the terms of reference to be modified without having to terminate the inquiry and reboot it—to use computer-speak—subject to the agreement of the panel to the modification.
Amendment No. 16, in the name of the noble Lord, Lord Kingsland, is to the same effect as our Amendment No. 14, but requires the agreement of the chairman rather than that of the panel as a whole.
Government Amendment No. 15 accepts these amendments, except that in the case of the modification of the terms of reference it requires only consultation with the chairman, not consent. I can see that the chairman has the ultimate weapon of resignation if a Minister tries to force an unwelcome change to the terms of reference on him or her, but I would still prefer the requirement to be consent. I would suggest that there is a need for the whole panel at least to be consulted on the matter.
I can well imagine the furious reaction of a panel member if he or she finds that the terms of reference have been altered without anyone consulting him or her. I should like to hear further the views of the Minister on these points. I beg to move.
Lord Kingsland: My Lords, I have nothing to add to what the noble Lord, Lord Goodhart, has said.
Lord Evans of Temple Guiting: My Lords, I hope again that I shall be able to satisfy the noble Lord,
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Lord Goodhart. As I said in Grand Committee, in practice the Minister will invariably consult the chairman before setting out the terms of reference. However, I was persuaded by the arguments that the noble Lord made for having a specific provision.
During debate in Grand Committee, it was clear that there were strong feelings for a provision to enable the terms of reference to be amended during the course of an inquiry. I think it is very important not to encourage such changes unless they are absolutely necessary and have been very carefully thought through. However, we were attracted by the idea put forward by the noble Lord, Lord Goodhart, in Grand Committee that a power to change the terms of reference should be limited to situations in which a change was in the public interest. We thank him for that idea. I therefore support in principle Amendments Nos. 12, 14 and 16 but I ask noble Lords not to press them and instead to accept government Amendment No. 15 which the parliamentary draftsman has provided.
I also ask noble Lords to accept government Amendment No. 43, which would allow the same provisions to apply to the conversion of an inquiry, and government Amendments Nos. 91, 92 and 93, which reflect the changes that would be caused by introducing a power to modify the terms of reference. I beg to move.
Lord Goodhart: My Lords, I do not think that the noble Lord does beg to move the amendment. I accept what he says. I am happy with government Amendments Nos. 43, 91, 92 and 93. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Goodhartmoved Amendment No. 13:
Page 2, line 20, at end insert—
"( ) The Minister shall lay the terms of reference before each House of Parliament."
The noble Lord said: My Lords, since this amendment is fully covered by government Amendment No. 18, the simplest thing would be for me to move it formally and leave the Minister to get on with it. I beg to move.
Viscount Goschen: My Lords, my Amendment No. 19 is included in this group; it is an amendment to government Amendment No. 18. It relates to costs, on which we had extensive deliberations in Committee. I attempted to press the Minister for an explanation of what budgeting process goes into the setting up of inquiries. I note that there are provisions in the Bill to get a grip on costs. I note the new provision introducing a requirement for the chairman to have regard to costs and a requirement in Clause 36 to publish final costs. Those are all well and good, but the fact that we now know, more or less, how much the Bloody Sunday inquiry will cost when it is finished does not alter the fact that a very disproportionate sum has been spent.

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My amendment attempts to focus minds on the question of costs before money is spent. The noble Baroness's amendment sets down duties for the Minister to inform the Parliament or the Assembly. My amendment adds to the end of her amendment:
"(d) an estimate of the likely cost of the inquiry".
I fully accept that that may be very difficult to do, as inquiries by their very nature deal with uncertainties. The chairman or the Minister will not know for sure where the developments will go. But that is the same with many other areas of public interest; for example, rehabilitation of London Underground's infrastructure. One does not know the condition of the assets, yet assumptions are made and estimates produced.
Estimates are currently made. In her letter to me of 31 January, the Minister said:
"it is up to each Department whose minister sets up an inquiry to discuss with the chairman matters such as estimated duration of the inquiry and estimated costs".
On the specific point of the Bloody Sunday inquiry, she further said:
"I understand that estimates were prepared at the outset".
However, tellingly, she does not say what those estimates were.
Much reference has been made to the report of the House of Commons Select Committee on Public Administration. In paragraph 127, the committee concludes:
"We recommend that Ministers should announce a broad budget figure early on at the start of an inquiry. Any increases over the announced limits would then need to be publicly explained at the end of the inquiry when final costs are published".
I agree entirely with that. I hope that the Minister will feel able to accept my amendment.
Lord Fraser of Carmyllie: My Lords, I support my noble friend's proposal. I hope that the Government think that it is a useful provision because, although there is often a terrific demand out there for inquiries into this or that, possibly enthusiasm for such inquiries would he modified if people appreciated that it would cost them a significant sum and that public funds might be better spent elsewhere.
Of course my noble friend is right; it is very difficult to give an absolutely accurate forecast of the cost of an inquiry, not least because those who have to chair it will not yet have decided whether they will allow any particular party to be represented. So I appreciate that there are difficulties. But I have no doubt that when the Minister has decided to set up an inquiry and has discussed it with the chairman, there must be at least some appreciation, understanding or calculation of who will be allowed to attend. However, ultimately, it will be for the chairman of that inquiry to decide who should or should not be allowed to put forward their representations and be present at the inquiry. But Parliament should be given the opportunity to know what the inquiry will cost at the outset. If there can be only an estimate, that is the best that can be done.
Baroness Ashton of Upholland: My Lords, as the noble Lord, Lord Goodhart, said, I promised in
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Grand Committee to give further thought to the involvement of Parliament and how that could be strengthened. Indeed, I welcomed the idea of a requirement to inform Parliament of the terms of reference.
Government Amendment No. 18 goes even further than the amendment in the names of the noble Lords. It requires the Minister to make a statement to Parliament on the establishment of an inquiry, its terms of reference, its chairman and the form of the panel. Amendment No. 44 makes similar provision for inquiries that could be converted. Amendment No. 109 defines how they would work for the different administrations in the United Kingdom.
9.15 p.m.
As the noble Viscount, Lord Goschen, has indicated, his Amendment No. 19 attempts to deal with costs by having the requirement to provide "an estimate". I fully appreciate what the noble Viscount seeks to do, but my difficulty is that the chairman should be in the driving seat in terms of planning the inquiry. I would be nervous about a Minister setting the parameters of the inquiry ahead of any assessment that the chairman might make.
We have spoken to former inquiry chairmen and to the secretaries of those inquiries. Of course, noble Lords will not be surprised that they indicated that it can be quite hard to estimate the budgets before there is a clear idea of the scale of the task and the amount of evidence. It is argued that budgeting should be done with the chairman during an inquiry, in dialogue with the sponsor department. We will look at the procedure rules that could assist with that and may go some way to addressing the point made by the noble Viscount.
Viscount Goschen: My Lords, would the noble Baroness therefore be willing to give an undertaking that that budgeting process—whether it occurs under my amendment at the beginning, or shortly after the beginning, of the inquiry, as the Public Accounts Committee recommends—and figure would be published?
Baroness Ashton of Upholland: My Lords, I am certainly willing to consider that. I shall speak to colleagues to determine what we might be able to do. Publishing the figure does not necessarily control the cost per se. I would be nervous about any lack of public confidence because we published a figure, but then an inquiry, for perfectly legitimate and good reasons, exceeded that figure.
There are issues that we will come to. Certainly, the noble and learned Lord, Lord Howe of Aberavon, has concerns about representation. I think that I am right in saying that the noble and learned Lord is concerned about how the cost issues will play with those questions. Perhaps I may take that issue away and think about it.
My immediate concern is that we need to ensure that the chairman, in planning the inquiry in conjunction with the sponsor department, is looking at the issues of

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cost, as we have indicated. But I will come back to the noble and learned Lord on that point. On the basis of what I have said, I hope that the noble Lord, Lord Goodhart, will feel able to withdraw his amendment.
Lord Goodhart: My Lords, I welcome what the Minister said. I agree that her formulation goes somewhat further than ours and, to that extent, is an improvement on it. I have some sympathy with the noble Viscount, Lord Goschen, although I am not sure that my sympathy goes quite as far as wishing to press this amendment to see it in the Bill. I would have been interested to see the initial proposed budget for the Bloody Sunday inquiry. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Deputy Speaker (Baroness Hooper): My Lords, Amendments Nos. 14 and 15 have been incorrectly marshalled. I must therefore call Amendment No. 15 first.
Baroness Ashton of Uphollandmoved Amendment No. 15:
Page 2, line 21, at end insert—
"(3) The Minister may at any time after setting out the terms of reference under this section amend them if he considers that the public interest so requires.
(4) Before setting out or amending the terms of reference the Minister must consult the person he proposes to appoint, or has appointed, as chairman."
On Question, amendment agreed to.
[Amendment No. 14 not moved.]
[Amendment No. 16 not moved.]
Lord Acknermoved Amendment No. 17:
Leave out Clause 5.
The noble and learned Lord said: My Lords, in the interests of not testing to destruction the tolerance of a much-valued carer, perhaps I may be allowed to refer to this amendment together with other amendments tabled solely in my name that take a similar course in subsequent clauses. I refer, among others, to Amendments Nos. 17,22,26 and 37.
I have tabled the amendments as the result of reading a detailed memorandum from the Association of the Bar of the City of New York. The association has set out, in so far as it relates to this Bill, its concern that two fundamental tenets of democratic governance, transparency and accountability, seem to be eroded. It goes on to point out that, as drafted, the Bill takes away from Parliament,
"the ability to establish inquiries into matters of public concern and hands over all power over such inquiries to the Executive".
The memorandum continues by saying that a,
"Government Minister would have complete authority over the scope of an inquiry, the selection of panel members, public access to the inquiry and whether any resultant findings would be made public".
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It says in terms that, as drafted, the Inquiries Bill represents a retreat from meaningful, independent and transparent public inquiries in the United Kingdom. It goes on to state:
"By concentrating power in a single government official who will have control over the terms of reference and disclosure of information related to the inquiry, there is a loss of the accountability necessary to a successful inquiry".
The memorandum continues in that vein.
The noble Baroness, who has been unstinting in her assistance in regard to my problems, was interested to see the document. I provided her with copies. Thereafter, she sent me copies of the amendments that she has proposed and most helpfully dealt fully and point by point with the points made by the Association of the Bar of the City of New York, which did not have the benefit of the amendments being proposed by the Government.
I am now content not to press this amendment or move the other amendments standing solely in my name. As a point of courtesy to the House, I can indicate now that I shall not move the remaining amendments. I beg to move.
Baroness Ashton of Upholland: My Lords, I am grateful to the noble and learned Lord, Lord Ackner. I did indeed write to him in some detail to deal with all the issues raised in the paper from the Association of the Bar of the City of New York. I understand that the noble and learned Lord now accepts that the issues have been dealt with either in my letter or by the amendments now before your Lordships' House. Again, I am most grateful to the noble and learned Lord.
Lord Ackner: My Lords, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Ashton of Uphollandmoved Amendment No. 18:
After Clause 5, insert the following new clause—
"MINISTER'S DUTY TO INFORM PARLIAMENT OR ASSEMBLY

(1) A Minister who proposes to cause an inquiry to be held, or who has already done so without making a statement under this section, must as soon as is reasonably practicable make a statement to that effect to the relevant Parliament or Assembly.

(2) A statement under subsection (1) must state—

(a) who is to be, or has been, appointed as chairman of the inquiry;

(b) whether the Minister has appointed, or proposes to appoint, any other members to the inquiry panel, and if so how many;

(c) what are to be, or are, the inquiry's terms of reference.

(3) Where the terms of reference of an inquiry are amended under section 5(2A), the Minister must, as soon as is reasonably practicable, make a statement to the relevant Parliament or Assembly setting out the amended terms of reference.

(4) A statement under this section may be oral or written."

[Amendment No. 19, as an Amendment to No. 18, not moved.]
On Question, Amendment No. 18 agreed to.
[Amendment No. 20 not moved.]
Clause 6 [Further appointments to inquiry panel]:
[Amendments Nos. 21 and 22 not moved.]
Clause 8 [Requirement of impartiality]:
Lord Kingslandmoved Amendment No. 23:
Page 3, line 14, leave out subsection (1).
The noble Lord said: My Lords, the amendment was the subject of a long and illuminating debate in Committee. I stated at the time that it was intended to be of a probing nature. The Minister engaged most helpfully in the discussion and has emerged from it with Amendment No. 24, with which I am content. I beg to move.
Baroness Ashton of Upholland: My Lords, I am grateful to the noble Lord for being entirely content with what I sought to do. The credit must go to the noble Lord. I have also tabled Amendment No. 31 to ensure that there is consistency between Clause 11(3)(c) and Clause 8(1) as amended by Amendment No. 24.1 hope these changes will help to promote public confidence, which is what we are seeking to do. I am very grateful for what the noble Lord said and I hope that he will withdraw his amendment in favour of mine.
Lord Kingsland: My Lords, it follows ineluctably from what I said earlier that I shall, indeed, beg leave to withdraw my amendment.
Amendment, by leave, withdrawn.
Baroness Ashton of Uphollandmoved Amendment No. 24:
Page 3, leave out lines 18 and 19 and insert—
"unless, despite the person's interest or association, his appointment could not reasonably be regarded as affecting the impartiality of the inquiry panel"
On Question, amendment agreed to.
Clause 9 [Appointment of judge as panel member]:
Lord Goodhartmoved Amendment No. 25:
Page 3, line 33, leave out "consult" and insert "obtain the consent of"
The noble Lord said: My Lords, the purpose of this amendment and Amendment No. 26, tabled by the noble Lord, Lord Kingsland, is to require the consent of the relevant senior judge to the appointment of a judge as chairman or member of a panel. The relevant senior judge would be the senior Law Lord in the case of the proposed appointment of a Law Lord, the Lord Chief Justice in the case of a judge in England and Wales, the Lord President of the Court of Session in the case of the appointment of a Scottish judge, and the Lord Chief Justice of Northern Ireland in the case of the appointment of a Northern Irish judge. At present the Bill requires only consultation, not the consent of the relevant senior judge.
As anything I would say would be based on the views of the noble and learned Lord the Lord Chief Justice, as expressed in his evidence to the Public Administration Select Committee, and as both the noble and learned Lords, Lord Woolf and Lord
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Cullen, are in their places and intend to speak, I shall simply move the amendment in order that they may be heard as soon as possible. I beg to move.
Lord Cullen of Whitekirk: My Lords, whatever once upon a time was the position, it is nowadays common for judges to he asked to conduct public inquiries. However, it cannot simply be taken for granted that there is a ready availability of judges. Taking, a judge away from his normal work for a public inquiry has important implications for his work as a judge and for the work of the court of which he is a member. This is particularly the case with smaller jurisdictions. I must, of course, declare my interest as the Lord President of the Court of Session. Judges have been called upon from that court in recent years to conduct inquiries not only in Scotland but also in England.
No doubt judges are sought as chairmen because of the qualities which they bring to their work as judges. In their natural setting, they have independence and authority. However, it is not inconceivable that the involvement of a judge in an inquiry which is concerned with the conduct of the Executive might damage those very qualities which he otherwise possesses—that high-risk strategy which was referred to earlier. If he is asked to deal with matters which are sensitive in political terms, he may run the risk of being depicted either as favouring the Executive or as becoming embroiled in a confrontation with the Executive.
So there is much to be said for enacting that before a judge is appointed to chair a public inquiry, the Minister should obtain the consent or the agreement of the senior judge. I support what was said on this score by the Lord Chief Justice in his evidence last year to the Public Administration Committee in another place.
This matter should be in the hands of the senior judge; it should not be left to the judge who is the target of the Minister's attentions. From my own experience as an inquiry chairman, I think that most judges would feel very diffident about turning down an invitation to take an appointment which was seen as being for the public good.
In this Bill, as in the Constitutional Reform Bill, we are witnessing a process of transition from convention to prescription by the letter of the law. I am concerned that if the statute merely were to require consultation with the senior judge, that would place him under pressure to agree to the abstracting of a judge for a public inquiry when he did not consider that this was in the interests of the administration of justice.
9.30 p.m.
Lord Woolf: My Lords, you will not be surprised to hear that I endorse every word that my noble and learned friend, the Lord President of the Court of Session, has uttered. His view coincides entirely with my own feelings on the matter.
I see the issue as having two limbs: one is now an issue—for me, at any rate—of principle. I know that principles are unwieldy and dangerous steeds to mount. However, we have recently agreed a

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concordat, thanks to the consensus that was reached between the Secretary of State for Constitutional Affairs—the noble and learned Lord the Lord Chancellor—and myself. It appears that what is now being resisted is inconsistent with the concordat. For good reason, the concordat, which is now reflected in the Constitutional Reform Bill, states:
"The Lord Chief Justice will be responsible for the posting and roles of individual judges, within the framework set by the Secretary of State".
It seems that the deployment of a judge as an inspector of an inquiry falls readily within those words.
This view was supported by the Public Administration Committee in the other place which, as your Lordships know, concluded that the appointment of a judge to a public inquiry should be a decision taken jointly by the Lord Chancellor and the Lord Chief Justice. It is also, I suggest, a matter of plain English. If a judge is being deployed to conduct an inquiry, that is deployment of that judge, so the concordat applies. It could be said that the concordat deals with deployment in the courts, but I would not so understand it. That I am right in taking that view is reflected in paragraph 47 of the concordat which states that the appointment of judges to committees, boards or similar bodies is the responsibility of the Lord Chief Justice.
I also ask that these amendments receive the support of the House because of the merits of what is proposed, which I understand are the merits that the noble Lord, Lord Kingsland, had in mind when drafting his amendment. There will be occasions when it is inappropriate, because of the intensely political nature of the issue at stake, for a judge to be asked to conduct an inquiry. The judge that the Government wish to invite may not be qualified to perform an assessment on that. The Lord Chief Justice, on the other hand, should be.
Even if the judge is qualified, as the noble and learned Lord, Lord Cullen, indicated, it is very difficult if he is approached by a Minister or even the Prime Minister to say no. The Lord Chief Justice is in a much better position to say no. Further, the Lord Chief Justice knows the intentions surrounding the employment of that judge and whether the appointment would interfere with the administration of justice.
Finally, in recent history there have been incidents where the question of the impartiality of the judge has been unfairly impugned. Such allegations could of course still be made if the consent of the Lord Chief Justice is obtained. However, I suggest that the allegations would have less force if it were known that the Lord Chief Justice was primarily responsible for agreeing to that appointment. I suggest that the desirability of that being the position is particularly important if the Government's activities are involved in the inquiry.
The involvement of the Lord Chief Justice would ensure that the right judge is appointed for the right reasons. That is something that is also supported by
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the committee. I accept that the Minister would also have an interest and that is why I suggest that the joint consent of the Lord Chief Justice and the Minister should be sought.
No doubt, the noble Lords, Lord Goodhart and Lord Kingsland, will consider which amendment is the appropriate one. I am bound to say that I find both proposals equally attractive and I hope that the amendments are successful.
Lord Ackner: My Lords, just before I leave, I would like to say that it is astonishing that this issue has been raised at all. A judge is contemplated being removed from the strength of the judiciary yet the Lord Chief Justice is only to be consulted and his consent is not being required. It is he who can make a balanced assessment of what may be the effect of the decision, especially where the judge who will deal with the case is likely to be attacked whichever way he decides. Such criticism would not only reflect on the judge when he returns to get on with his ordinary judicial duties, but it can erode confidence in the whole system and that is not a matter on which the Minister should have a total monopoly in decision. It is quite unarguable to say that the Minister can override the views of the Lord Chief Justice. His concurrence must be obtained. If it is not obtained, there should be no appointment.
Lord Fraser of Carmyllie: My Lords, in the Grand Committee I supported a comparable amendment. At that time, I knew the views of neither of the noble and learned Lords, Lord Cullen and Lord Woolf, or whether they would agree to the desirability of their consent being obtained. I once again wish to support the amendment. Like the noble and learned Lord, Lord Woolf, I am not particularly bothered which amendment is preferred, as they both seem to secure the same result.
The one concern with which I came out of Grand Committee relates to the powerful point made by the noble and learned Lord, Lord Cullen. It is very difficult. If they are approached by a Minister of the Crown who says that it is in the public interest that an inquiry should be held into such a matter, it is not in the tradition or background of judges or even senior lawyers to say no to such a request. In such circumstances—and the point is well made in my view—it is much easier for whoever is the head of the court to make that point on their behalf. For that reason, I strongly urge the Minister to accept one or other of the amendments.
Lord Hutton: My Lords, I know that before the noble and learned Lord the Lord Chancellor asked me to conduct the inquiry into the death of Dr Kelly, his permanent secretary told the senior Law Lord, the noble and learned Lord, Lord Bingham, that he was proposing to do so, and the noble and learned Lord raised no objection. In addition—and on this point I am perhaps slightly differing from the noble and learned Lord, Lord Fraser—I believe that there is a practical consideration, in that a judge is unlikely to accept an appointment if he knows that the Lord Chief

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Justice or the senior Law Lord is opposed to it, notwithstanding his wish to carry out a public duty and his readiness to do so.
Lord Kingsland: My Lords, the Public Administration Committee report, Government by Inquiry, has a great deal to say on this issue, and it is worth your Lordships' while to glance at the assessment that it has made in chapter 3.
It begins by observing that, since 1990, some 65 per cent of inquiries have been chaired by a serving judge. It also observes that there are a number of reasons why judges make an attractive option to chair committees. They are plainly valued for their skills; they are appreciated for their independence and impartiality; and, more than perhaps any other single profession, they are more likely to be available to serve on a public inquiry.
However, the balance of chapter 3 cautions us on the use of judges. Mr Justice Beatson, giving evidence, is recorded in paragraph 44 as stating that the skills argument for judges is,
"strongest where the task of the inquiry is solely to find facts. It is less compelling where issues of social or economic policy with political implications are involved'".
In paragraph 46 he is further quoted as saying:
"Given the political nature of the British constitution, judicial skills may not necessarily be the most appropriate where an inquiry concerns the relationship between the government and Parliament".
The committee went on to make a judgment, in paragraph 47, that:
"The notion of judges as above the political process has also begun to be challenged…Cases such as Pinochet, the conjoined twins and the anti-terrorism legislation have also resulted in the media seeking to position the judges along conservative-liberal and activist-deference spectrums and discussing their religious, educational and ethnic backgrounds".
It adds, moreover, in paragraph 48:
"The authority of the judiciary, itself seen as a valuable import into an inquiry, risks being damaged by its aftermath. Those who do not agree with an inquiry's conclusions may not perceive it as independent and objective, regardless of whether the chair is a member of the judiciary…If their reports fail to conclude that ministers and senior officials are to blame, they may be heralded as a 'whitewash' by political opponents and the media and the judge criticised, as Lord Hutton was, for interpreting his terms of reference too narrowly, for being too establishment-minded and for showing a lack of understanding of the political context. If they are critical of ministers and senior officials, they may, like Lord Scott, be accused by government supporters of being antigovernment and having a lack of understanding of how government and the political process work".
9.45 p.m.
In paragraph 54, the report goes on to look at this matter from another angle. It says:
"There is, additionally, an important argument against judges chairing inquiries, based on the separation of powers and closely allied to judicial independence—The expansion of judicial review, the incorporation of the European Convention on Human Rights…through the Human Rights Act 1998, and the devolution legislation…are likely to increase the number of constitutional issues that come before the courts".
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In paragraph 56, Professor Robert Stevens is quoted to some effect. It states:
"Professor Robert Stevens highlighted the irony of a government arguing, on the one hand, for the establishment of a Supreme Court and Judicial Appointments Commission and the abolition of the office of Lord Chancellor, on the grounds that 'the judiciary and politics live in totally different systems and never the twain shall meet', while, on the other, continuing to 'offer the judges on the sacrificial alter of public inquiries, which inevitably have a greater or lesser political content'".
Finally, in paragraph 58, the report concludes:
"We agree with Lord Woolf's concerns over the current provisions in the Inquiries Bill and recommend that decisions about the appointment of judges to undertake inquiries should be taken co-equally by the Government and the Lord Chief Justice or senior law lord".
In the course of its investigations the committee travelled to the United States. When the issue of the chairing of inquiries by judges was discussed with American legislators and American judges, they were aghast at the thought. In paragraph 30 of the report, the committee's conclusion on the American approach is expressed as follows:
"The legitimacy of the judicial branch ultimately depends upon a reputation of impartiality and non-partisanship. That reputation may not be borrowed by the political branches to cloak their work in the neutral colours of judicial action".
Lord Lester of Herne Hill: My Lords, I happened to be in the House, in another part, when the noble and learned Lord, Lord Hutton, was giving the report of his important inquiry. Many senior judges from the supreme court of Israel were present, including the president. I remember that as the noble and learned Lord was giving his important report, they said that they were quite astonished that we allowed judges to be used in such politically sensitive matters and that it was inconceivable that that would happen in the state of Israel.
That reflects very much my own feeling, which is that we are far too ready to use overworked and over-employed judges to deal with problems that would perhaps be better dealt with in other ways. But that has been part of our tradition. I certainly recall some of the great judgments that have been given in reports, including, for example, the report of the noble and learned Lord, Lord Woolf, on prisons, Lord Scarman on Red Lion, and now the report of the noble and learned Lord, Lord Hutton, himself.
In the 11 or 12 years I have been a Member of your Lordships' House, I have never heard the senior judges from the three jurisdictions of England and Wales, Scotland and Northern Ireland speaking in the same way, coming together in their own concordat, together with support from advocates across the House. I have to say that, as a great supporter of what the Government are doing in the Constitutional Reform Bill, I agree with the part of the report that the noble Lord, Lord Kingsland, did not mention in paragraph 58, when, before the committee comes to its conclusion in support of this amendment, it said:
"With developments in public law, Human Rights Act considerations about impartiality, and the proposed establishment of a Supreme Court, which involves the institutional separation of the judges from the House of Lords,

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care needs to be exercised in the future use of judges for such work, particularly those from the highest court, and especially in relation to politically sensitive inquiries".
We all remember that two Law Lords dealt with inquiries at the same time in the House of Lords, which gave rise to serious practical problems over which the senior Law Lord probably had little control. I very much hope that these sensible amendments, whichever is selected in the end, will meet with the favour of the Government.
Baroness Ashton of Upholland: My Lords, I am grateful to all noble Lords who have spoken. I fear that I will be in a minority as regards what I have to say to your Lordships. I do not suspect that will come as any surprise to noble and learned Lords. I begin by recognising the huge respect in which we hold the noble and learned Lords, Lord Woolf and Lord Cullen, in particular. I am grateful that they shared their thoughts with your Lordships this evening.
I take on board what the noble and learned Lord, Lord Hutton, said about the relevance of knowing the views of the Lord Chief Justice to a judge who was considering whether to accept the request of a Minister to chair an inquiry. Indeed, if a judge believed that the Lord Chief Justice—if that were the appropriate judge in the case—or a colleague felt that such a course was inappropriate, that would weigh very heavily on the judge in question. However, we begin from the principle that it is right and proper for individual judges to make their own decisions about whether they wish to take up an appointment that is offered to them to chair an inquiry. I am afraid that is where we differ from the noble and learned Lord the Lord Chief Justice.
We believe that it is a question not only of whether resources are available but of the public interest and the level of public concern that may be expressed about an event. It is conceivable—I cast no aspersions on anyone in my example—that a Minister would believe that an event had occurred that was of such a serious nature and of such great public concern that the only appropriate person to deal with it in the circumstances might be a judge. In Committee the noble Lord, Lord Kingsland, said that judges were often ideal people to chair inquiries. There are many good examples of that.
In my theoretical example, the Lord Chief Justice of the day might well consider that resources were an issue. However, the Minister might consider that the issue that was raised was of such great concern that a judge should none the less be approached. It is because we believe that ultimately the responsibility for approaching a judge and inviting him or her to chair an inquiry should rest with the Minister that we do not support the amendment. At one level, it is a matter of nuance, as I expect full consultation to take place. I recognise that judges will take note of what was felt by either the senior Law Lord or the Lord Chief Justice. However, we think it is right and proper that at the end of the day the Minister, having regard to public concern and to who might best lead an inquiry, should be able to say, regardless of resources—I accept that
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there are other considerations that the noble and learned Lord, Lord Woolf, considered were important—that he or she wishes to approach a judge.
That is why we do not support the amendment, notwithstanding all that has been said about the positive relationships that exist and the need to ensure that there is full consultation. However, at the end of the day our premise is that the buck stops with the Minister and he should make the decision to approach a judge. At the end of the day, the individual judge should have the right to say "Yes" or "No". On that basis, I hope that the noble Lord will feel able to withdraw the amendment.
Lord Goodhart: My Lords, we have had an interesting debate, with noble Lords on all sides speaking from great experience. Perhaps greatest of all is that of the noble and learned Lord, Lord Cullen, who has presided over three public inquiries of great importance and has done so with enormous ability and skill.
It is obvious that judges do sometimes make particularly suitable and good chairmen of inquiries; there are also cases of judges who have done not so well. I am not suggesting that we should go as far as the American or Israeli judges to say that no judge should ever be involved in chairing an inquiry. However, we must consider the effect on judicial manpower. For example, it is unfortunate that the Appellate Committee of your Lordships' House has been deprived for some seven years of the services of the noble and learned Lord, Lord Saville, who is potentially one of the most outstanding judges in this country.
We also must take into account the effect of the forthcoming Constitutional Reform Bill, which means that the role of the head of the judiciary will be passing from the Lord Chancellor to the Lord Chief Justice in England and Wales and also to the senior Law Lord in respect of the House of Lords. In those circumstances, it seems to me entirely right and proper that the senior Law Lord, or the Lord Chief Justice, or the Lord President, or the Lord Chief Justice of Northern Ireland, should have the right to be consulted and to agree to the appointment of any particular judge to head a particular inquiry. I see no reason to suppose that consent would not be forthcoming in a case where it was appropriate. Indeed, I see the noble and learned Lord the Lord Chief Justice nodding at that. As head of the judiciary in England and Wales, the Lord Chief Justice should have the right to say, "I am afraid that I cannot spare this particular judge for this particular inquiry".
While of course I shall ask the leave of the House to withdraw the amendment, in one or other of its versions it will be returning for Third Reading. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 26 not moved.]
Clause 10 [Assessors]:
Lord Kingslandmoved Amendment No. 27:
Page 4, line 13, at end insert "after consultation with the chairman"
The noble Lord said: My Lords, this is another occasion on which the Government have most helpfully responded to the tenor of our debate in Committee, and they have furnished your Lordships' House with an amendment that is wholly satisfactory. I beg to move.
Baroness Ashton of Upholland: My Lords, I am grateful to the noble Lord, Lord Kingsland, and also to the noble Lord, Lord Laming, who is no longer in his place. Noble Lords will recall that the noble Lord, Lord Laming, spoke about the relationship that can exist between the chairman of an inquiry and an assessor. He spoke too of how success can depend on close teamwork and mutual confidence.
While it is highly unlikely that a Minister would ever appoint an assessor without consultation with, or against the wishes of, a chairman, I have been persuaded by the arguments for a specific provision. I have catered for such provision in my Amendment No. 28. On that basis, I think that the noble Lord has indicated that he will withdraw his amendment in favour of mine.
Lord Kingsland: My Lords, I am most grateful to the noble Baroness. In those circumstances, I beg leave to withdraw my amendment.
Amendment, by leave, withdrawn.
Baroness Ashton of Uphollandmoved Amendment No. 28:
Page 4, line 15, at end insert—
"( ) Before exercising his powers under subsection (2)(a) the Minister must consult the person he proposes to appoint, or has appointed, as chairman."
On Question, amendment agreed to.
10 p.m.
Baroness Ashton of Uphollandmoved Amendment No. 29:
Page 4, line 19, leave out subsection (4).
The noble Baroness said: My Lords, one of the main aims of the Bill is to enable inquiries to reach conclusions and make recommendations in reasonable
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time and at a reasonable cost. I noted the concerns expressed in Grand Committee about the specific requirement obliging the chairman to have,
"regard in particular to the cost",
when appointing an assessor. Noble Lords will recall that it was felt that too much emphasis was placed on cost at the expense of other factors, and that current drafting was too restrictive to the chairman if he decided to appoint an assessor.
After further consideration, we have proposed an amendment that will remove Clause 10(4). The chairman will still have to make a decision taking into account all the relevant factors, but cost will not be highlighted in particular. I hope that that addresses noble Lords' concerns. I beg to move.
Lord Howe of Aberavon: My Lords, when I saw the pair of amendments coupled together, I thought for a moment that the noble Baroness had shot my fox—God forbid the thought. In fact, she has done exactly the opposite; she has enabled the principle for which I argued to be put into its proper perspective. I am most grateful to her for achieving this ingenious way of shooting the fox but enabling its resurrection.
On Question, amendment agreed to.
[Amendment No. 30 not moved]
Clause 11 [Duration of appointment of members of inquiry panel]:
Baroness Ashton of Uphollandmoved Amendment No. 31:
Page 4, leave out lines 41 and 42 and insert—
"such that his membership of the inquiry panel could reasonably be regarded as affecting its impartiality;"
On Question, amendment agreed to.
Lord Kingsland: My Lords, my understanding was that the House would now rise, it being ten o'clock. Perhaps I was misinformed.
Baroness Ashton of Upholland: My Lords, we shall endeavour to find out the current situation for the noble Lord and report back as soon as possible.
Lord Grocott: My Lords, I beg to move that consideration on Report be now adjourned.
Moved accordingly, and, on Question, Motion agreed to.
House adjourned at three minutes past ten o'clock.

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