Sitting of 2 March 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 Derby.

Licensing Act 2003
Lord Phillips of Sudburyasked Her Majesty's Government:
Whether they propose amending the Licensing Act 2003 to allow those living in the vicinity of licensed premises to make representations with regard to the grant of 24-hour licences so as effectively to protect their amenity.
The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Lord McIntosh of Haringey): My Lords, as was explained in the House during the stages of the Licensing Bill, such an amendment is not necessary. From 7 February local residents have been able to make representations to their licensing authority about variations to existing licences and certificates and new applications for premises licences and club premises certificates on grounds relating to the four licensing objectives, including public nuisance.
Lord Phillips of Sudbury: My Lords, the Minister's reply, for which I thank him, refers to representations made in respect of public nuisance. Do not the Government realise that "public nuisance" is a crime and sets a legal threshold far above the comings and goings of the public in the early hours of the morning to a pub or club? Therefore, in practical terms, is it not the truth that ordinary residents in ordinary locations do not have a leg to stand on in the licensing procedures under the Act?
Lord McIntosh of Haringey: My Lords, I am in no position to quarrel with what the noble Lord, Lord Phillips, says about a legal application of "public nuisance". But the Government's position has always been that the prevention of public nuisance includes the prevention of—and I shall quote, for reasons that I will make clear—
"the reduction of the living and working amenity and environment of interested parties",
in the vicinity of licensed premises. That quote comes from the amendment of the noble Baroness, Lady Buscombe, at the time of the Licensing Bill. As we promised, those words are now in the guidance issued by the Secretary of State in July 2004.
So, whatever else "public nuisance" means, for the purpose of the guidance, it covers the points the noble Lord, Lord Phillips, wants to cover, and local residents are able to make representations.
Baroness Gardner of Parkes: My Lords, as this Question is about possible amendments to the Act, is
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there any possibility of making the fees more realistic? I know that there was a debate on this last week, but is the Minister aware that in areas of London such as Soho the council is allowed to charge hundreds of pounds, and the cost of policing and caring for the licensed premises is thousands of pounds? Council tax payers are going to bear a very heavy burden. Is there anything that can be done about that?
Lord McIntosh of Haringey: My Lords, I am reluctant to burden the House by going over ground which, as the noble Baroness, Lady Gardner, says, was debated in the House only last week. The thrust of that debate was that we revised the proposed charges; we increased them significantly. Generally, it is agreed that nearly all local authorities will find that the charges cover their costs. At the same time there were considerable complaints from potential licensees that the charges were too high. There was an attempt to make both those arguments against the Government at the same lime. It did not work very well.
Lord Avebury: My Lords, will the individual residents associations and local amenity societies be able to make representations to the licensing authority that a particular area should be declared one of cumulative impact? Will the DCMS advise local authorities in conducting the public meetings recommended in Section 2.7 of the guidance to ensure that an opportunity is given to local residents to make submissions on that matter? Will the collection of information which demonstrates cumulative impact as the evidential basis for the decision to have a special policy include crimes of violence against the person and call-outs for ambulances in the vicinity of licensed premises? If so, why cannot it also be used to assess the impact of the Act on crime and disorder, as I have suggested 15 times?
Lord McIntosh of Haringey: My Lords, those who represent residents will be able to make representations. I do not know whether all local residents associations will fall into that category. I assume that most will. Therefore, they will be able to make representations.
On the detailed points the noble Lord, Lord Avebury, makes about cumulative impact—I did not fully understand his point about ambulances—I do not think that it would be wise for me to seek to interpret the guidance at this Dispatch Box. I refer him back to that guidance, and if he has further questions I shall be happy to answer them.
Lord Campbell of Alloway: My Lords, returning to the Question, does the noble Lord agree that the present situation is far from satisfactory, for the reasons given by noble Lords, and that, at least, consideration should be given to whether something should be done about it?
Lord McIntosh of Haringey: My Lords, I am not at all clear what the noble Lord, Lord Campbell, means

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by "the present situation". Does he mean the existing licensing laws which will be overtaken by the Licensing Act later this year?
Lord Campbell of Alloway: Yes, my Lords.
Lord McIntosh of Haringey: My Lords, in that case I have to agree with the noble Lord. We would not otherwise have introduced the Licensing Act.
Baroness Buscombe: My Lords, will the Minister not accept that one of the problems with his response to the Question asked by the noble Lord, Lord Phillips of Sudbury, is that guidance notes cannot change the legal meaning of "public nuisance"?
As the Act now stands, there is a lack of clarity. One has to wade through the enormous set of guidance notes to have a clue about what is meant. Regarding "vicinity" and those who might make representations, there is a caveat whereby the initial decision on this issue could be subject to a legal challenge in the courts that could put off local authorities and those locally wanting to make representations. Will the Minister not accept that it would have been wise to accept the amendment proposed by the noble Lord, Lord Phillips of Sudbury, and fought for by noble Lords during the passage of the Bill, and that,
"unreasonable diminution of living and working amenity and environment of interested parties living in the vicinity of the premises",
would have made a lot more sense than simply making reference to "public nuisance"?
Lord McIntosh of Haringey: I must say, my Lords, I find that slightly ungrateful, since the words of the noble Baroness's own amendment are found in the guidance.
Not everybody has to wade through the guidance. The important thing is that local licensing authorities have to take account of it, and can be called to account if they do not. That is the protection she wanted when she moved those amendments.

Asian Tsunami
2.44 p.m.
Lord Nasebyasked Her Majesty's Government:
Whether they propose to take steps to ensure that the public are informed of the benefits provided to each country affected by the tsunami disaster by public donations and government aid.
The Lord President of the Council (Baroness Amos): My Lords, Ministers have made a number of statements to Parliament, the media and the public about the United Kingdom's response to the Indian Ocean earthquake tsunami disaster. The Department for International Development has regularly reported details of its response through its website. My right honourable friend the Secretary of State for International Development is
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meeting the Disasters Emergency Committee this month to consider how it and the Government will report fully to the British people on the unprecedented response.
Lord Naseby: My Lords, is the noble Baroness aware that her Answer goes halfway to answering the Question I asked? Is she further aware that the amount collected by the British public is now close to £400 million, and that, if I am correct, the Government agreed to match that figure? That being the case, do the British public not have a right to know to which country the money has gone, how much has gone to each country, that all the money raised will go to the countries affected, and, not least, that the smaller countries, such as the Maldives, will get their fair share?
Baroness Amos: My Lords, all the information that the noble Lord, Lord Naseby, is requesting with regard to the Government's contribution is on the website. It is also available to Members of Parliament through our regular updating. I recognise that members of the public may be interested in individual countries, which is part of the reason my right honourable friend and the Minister in the Department for International Development have been keeping members of the public from particular communities up to date with what is happening in Sri Lanka, Indonesia and elsewhere.
With regard to the Government's contribution, my understanding is that some £300 million has gone to the Disasters Emergency Committee. The Government have given their humanitarian response. We have not yet said how much we will give for longer-term reconstruction. The needs assessments will be completed over the next week or so and there will then be a reconstruction conference in Manila. I agree with the noble Lord that we have to ensure that all the countries affected are part of the reconstruction effort.
Baroness Northover: My Lords, what help is the UK now able to give to Indonesia, bearing in mind that many foreign aid workers are being turned away? In particular, is the noble Baroness aware that all the staff at the Banda Aceh hospital were killed in the disaster? Is there anything we can do to support distance learning to enable accelerated training at the Banda Aceh medical college?
Baroness Amos: My Lords, Indonesia's needs are enormous, but I am pleased to be able to tell the noble Baroness that immediate assistance has now reached most areas. Transitional and permanent shelters remain an issue of critical concern, but comprehensive food distribution and health surveillance systems have been established.
On the longer-term point raised by the noble Baroness, the needs assessments are currently being carried out. We anticipate that those assessments, including Indonesia, will be completed over the next week or so. We will then be able to look at the point raised by the noble Baroness with regard to support for distance learning and other areas of activity.
Lord Forsyth of Drumlean: My Lords, I am not clear from the Minister's answers whether she is saying that the Government will match the £300 million or £400 million. The Prime Minister and other Ministers gave a clear commitment at the time. Will the noble Baroness make it clear to the House that the Government will be providing at least £300 million?
Baroness Amos: My Lords, I shall repeat what I said, and it remains the case. The Government said at an earlier stage that we would match the amount. We have established new money for emergency relief and we have made it absolutely clear that, once the needs assessments are complete, we will look at the longer-term reconstruction efforts. That is in addition to, and completely separate from, the programmed budgets we already have in the affected countries. So I am not able to say from the Dispatch Box that we will simply match the amount, because we may well go beyond it.
Lord Swinfen: My Lords, will the Government remove any funds for development from countries that are not affected by the tsunami to boost funds in the affected region?
Baroness Amos: My Lords, as I said in response to the noble Lord, Lord Forsyth, we have not anticipated that we will be reprogramming any of the money that we have currently programmed to countries in southeast Asia. A number of countries have put out their response to the tsunami. They have not only said how much they have given in emergency relief but they have reprogrammed current budgets. We have not done that. That decision will not be taken until we see the needs assessment later this month and look again at what we think countries will need.
Baroness Byford: My Lords, how much money has been committed in existing schemes, and what proportion would that leave out of the £300 million that the Government have promised?
Baroness Amos: My Lords, I think that the noble Baroness does not understand the point that I am making. When the initial humanitarian needs were made clear, the UN, for example, had a flash appeal, which is now 95 per cent funded. We have given some £75 million to the humanitarian effort. We have not made any allocation for longer-term reconstruction efforts because, in our view, we need to wait for the result of the needs assessment being carried out by the World Bank and the IMF before making that kind of decision.
In addition to that, and completely separate from what we are giving to the tsunami-affected countries, we have made allocations to India, Sri Lanka and other countries, which are part of our ongoing development budget. That is the point that I am trying to make.
Lord Naseby: My Lords, will the noble Baroness lean on the Disasters Emergency Committee? The
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British public have given more than £350 million. Is it not their right to know to which countries the money has gone?
Baroness Amos: My Lords, that is absolutely right, but we must recognise that the amount of money given to the Disasters Emergency Committee is substantial, so it will take time to allocate it. As the noble Lord knows, the committee has made a very clear commitment that only 2 per cent of the resources will be spent on administration. It meets regularly; indeed, it meets colleagues in the Department for International Development fortnightly and will meet my right honourable friend the Secretary of State later this month to talk through those issues. I am absolutely confident that it will keep the British people involved and informed, given the unprecedented nature of the response.

Israel and Palestine: London Conference
2.53 p.m.
Lord Skidelskyasked Her Majesty's Government:
What steps they are taking at the London conference to promote a political settlement of the Israeli-Palestine conflict.
Baroness Crawley: My Lords, the focus of the London meeting was to help the Palestinian leadership to strengthen the institutions of the Palestinian Authority. The meeting is part of a longer-term process of international support for the Palestinians in helping both sides to return to the road map. The road map remains the international community's agreed path towards a lasting negotiated settlement to the Israel-Palestine conflict.
Lord Skidelsky: My Lords, I thank the noble Baroness for that reply. Like everyone else in this House, I welcome the Prime Minister's initiative in convening yesterday's London conference. But does she not agree that the best way to strengthen the Palestinian Authority is evidence of tangible progress towards the creation of a viable Palestinian state, free of Israeli occupation? What follow-up steps do the Government propose to take to realise that goal?
Baroness Crawley: My Lords, I thank the noble Lord, Lord Skidelsky, for his words of encouragement and congratulations to the Prime Minister, who, I believe, achieved a very important staging post yesterday in the Middle East peace process. The noble Lord asks how we will tackle what he sees as the key problems still outstanding. I agree that there have been many obstacles, put forward on both sides, to progress. I certainly agree that settlement expansion and heavy-handed Israeli defence force action make progress more difficult. We continue to make those points to the Israeli Government and to urge them to honour the settlements freeze to which they committed themselves in the road map.
However, we must not talk this moment down. We have an opportunity now to move forward; several

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factors contribute to that: Israel's disengagement plan, demonstration by the Palestinian authorities that they are serious about reform, and President Bush's explicit commitment to use America's capital to achieve progress.
Baroness Northover: My Lords, we, too, welcome the meeting on the Palestinian Authority. However, does the noble Baroness agree that we now need a full-scale peace conference including both Israelis and Palestinians? The Foreign Secretary seemed to indicate support for that. When might we expect such a conference?
Baroness Crawley: My Lords, as the noble Baroness, Lady Northover, will know, that international conference is very much part of the road map. I am sure that all noble Lords would agree that getting back to the road map, of which yesterday's conference was a part—through capacity building for the Palestinian Authority—is very important. We all want that international conference, but before that we want to see a pledging conference from yesterday's meeting in London so that we can assist the Palestinian Authority even further.
Lord Turnberg: My Lords, I, too, congratulate the Government on the initiative yesterday; it is much appreciated. Does the Minister agree with me that at this crucial time it is important to offer not criticism to either party but support and encouragement to both? At the end of the day it is the Israelis and the Palestinians who have to agree between them. Criticism of either is unlikely to be helpful in that process.
Baroness Crawley: My Lords, I absolutely agree. I hope that the noble Lord sees in yesterday's London meeting the efforts by the international community to be even-handed with both sides in the Middle East peace process. I take this opportunity at the Dispatch Box to welcome, for instance, the disengagement plans put forward by Israel.
Lord Howell of Guildford: My Lords, one of the outcomes of yesterday's meeting, which seemed, I agree, very positive and useful, was that the American Lieutenant General Ward is to be appointed to co-ordinate the security structures of the new Palestinian state to defeat terrorism—without which, of course, no state could be formed. Will his remit also cover dealing with the Syrian Government, and indeed the Lebanese government when there is one again, because the evidence is that a great deal of the terror, both in the Palestinian area and in Israel, is constructed in those territories? They must be dealt with if there is to be security in Palestine.
Baroness Crawley: My Lords, again, I thank noble Lords for their words of congratulation on yesterday's conference. Lieutenant General Ward's mandate covers forming a co-ordinating group to oversee the restructuring and retraining of the Palestinian security services. The noble Lord will
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know that at present the security services comprise about 13 different organisations. One of Lieutenant General Ward's main jobs will be to streamline that into two or three parts so that the security services in the Palestinian Authority can do an extremely good job and, therefore, fulfil their security-related obligations under phase I of the road map.
On Syria, I would simply say that the Government have concerns about recent allegations on Syria's involvement in activities in the region.
Lord Hylton: My Lords, the noble Baroness has described a major part of Lieutenant General Ward's role and function. Will she also comment on the need for very close security co-ordination as regards the withdrawal from Gaza?
Baroness Crawley: Yes, my Lords, the noble Lord, Lord Hylton, is absolutely right. Part of the conclusion of yesterday's meeting was a commitment to ensure that there would be, certainly from the Palestinian Authority's point of view, co-ordination with the Israeli Government during that period of disengagement from Gaza and the West Bank.
Lord Dykes: My Lords—
Lord Davies of Oldham: I am sorry, my Lords. We must move on to the next Question.

Sinn Fein: White House Invitation
3 p.m.
Lord Glentoranasked Her Majesty's Government:
What representations they have made to the United States State Department, or any other branch of the United States Administration, regarding invitations for Mr Martin McGuinness, Mr Gerry Adams or other members of Sinn Fein to the annual White House St Patrick's Day celebrations on 17 March.
Baroness Amos: My Lords, we have a regular dialogue with the United States Administration on a range of issues relating to Northern Ireland. During those exchanges, we have made it clear that the decision on who should attend the White House on 17 March is a matter for the US Administration alone.
Lord Glentoran: My Lords, I thank the noble Baroness for that reply, although I am somewhat less than happy with it. Given that both the Irish and the British Governments accept that Sinn Fein/IRA are indivisible and are an organised crime machine, is it not right for Her Majesty's Government to make representation at the highest level regarding possible White House invitations on St Patrick's Day to that organisation? Furthermore, what action are Her Majesty's Government taking to address the IRA/ Sinn Fein funding streams from the United States?
Baroness Amos: My Lords, the noble Lord, Lord Glentoran, is right. The Government have said on a number of occasions, as indeed have I, that the IRA and Sinn Fein are inextricably linked. But possible White House invitations are a matter for the US Administration, although, as I said in my opening Answer, we have a regular dialogue with the United States Administration on Northern Ireland at a range of levels.
The noble Lord will be aware that concern has been expressed about the funding of political parties in Northern Ireland. We continue to consult on that. One aspect of that consultation and of the review process is talking to our colleagues in the Irish Government and others about outside funding of political parties in Northern Ireland.
Lord Molyneaux of Killead: My Lords, in view of the fact that the Minister has not mentioned the origin of this controversy, does she not feel that Britain is in a very strong position in this matter, given that St Patrick was born an Englishman and not an Irishman?
Baroness Amos: My Lords, I think it would be much better—in the vernacular, as it were—for me not to go there.
Lord St John of Fawsley: My Lords, is the Minister aware that St Patrick is historically credited with having driven most of the snakes from Ireland? Is it not possible that the attendance of these gentlemen at this sacred function will enable him to continue his work?
Baroness Amos: My Lords, I think that that question also is probably best left unanswered. However, I repeat the point that I made earlier. It is our view that it is a matter for the United States Administration. I understand that they will make an announcement on it shortly. The noble Lord may wish to look at some of the reports in the Irish newspapers today which speculate about who may or may not be invited to the United States.
Lord Smith of Clifton: My Lords, does the Minister agree that, although the decision rests with the White House, it would be giving the right sort signal if it indicated that Sinn Fein would not be welcome on St Patrick's Day? I was reassured to hear her say that talks are ongoing about the outside funding of political parties in Northern Ireland. However, we need to put our foot on the gas as far as that matter is concerned, rather than allow it simply to drift along the normal diplomatic channels.
Baroness Amos: My Lords, I recognise the concerns of the noble Lord, Lord Smith of Clifton, about funding. The noble Lord has made his concerns known both informally and formally in the Chamber. On his
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first point, I am sure that, before issuing invitations, the American Administration will consider all the current circumstances.
Baroness Blood: My Lords, my understanding is that no political parties will be invited this year to the St Patrick's Day event in Washington. That is not at all a bad thing, because it leaves an opening for the real people from the community in Northern Ireland, who are making the real difference, to go to these events.
Baroness Amos: My Lords, that is certainly the speculation in the newspapers that I have read. I understand that the US Administration want to focus on civic duty and civic renewal.

Children (Contact) and Adoption
3.5 p.m.
The Chairman of Committees (Lord Brabazon of Tara): My Lords, I beg to move the first Motion standing in my name on the Order Paper.
Moved, That the Baroness Morgan of Drefelin be appointed a member of the Select Committee in place of the Baroness Massey of Darwen.—(The Chairman of Committees.)
On Question, Motion agreed to.

BBC Charter
The Chairman of Committees: My Lords, I beg to move the second Motion standing in my name on the Order Paper.
Moved, That a Select Committee be appointed to consider and report on the review of the BBC Charter;
That, as proposed by the Committee of Selection, the following Lords be named of the committee:

L. Armstrong of Ilminster,

B. Bonham-Carter of Yarnbury,

L. Fowler (Chairman),

B. Gibson of Market Rasen,

L. Holme of Cheltenham,

B. Howe of Idlicote,

L. Kalms,

L. King of Bridgwater,

Bp. Manchester,

L. Maxton,

L. Peston,

B. O'Neill of Bengarve;

That the committee have power to appoint specialist advisers;
That the committee have power to adjourn from place to place;

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That the minutes of evidence taken before the committee from time to time shall, if the committee think fit, be printed;
That the committee do meet on Tuesday, 8 March.—(The Chairman of Committees.)
On Question, Motion agreed to.

Industrial Training Levy (Construction Board) Order 2005
Lord Triesman: My Lords, I beg to move the Motion standing in the name of my noble friend Lord Filkin on the Order Paper.
Moved, That the draft order laid before the House on 10 January be approved [5th Report from the Joint Committee].—(Lord Triesman.)
On Question, Motion agreed to.

Pension Protection Fund (PPF Ombudsman) Order 2005
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Hollis of Heigham): My Lords, I beg to move the first Motion standing in my name on the Order Paper.
Moved, That the draft order laid before the House on 31 January be approved [8th Report from the Joint Committee].—(Baroness Hollis of Heigham.)
On Question, Motion agreed to.

Pension Protection Fund (Pension Compensation Cap) Order 2005
Baroness Hollis of Heigham: My Lords, I beg to move the second Motion standing in my name on the Order Paper.
Moved, That the draft order laid before the House on 31 January be approved [8th Report from the Joint Committee]—(Baroness Hollis of Heigham.).
On Question, Motion agreed to.

Occupational Pension Schemes (Modification of Pension Protection Provisions) Regulations 2005
Baroness Hollis of Heigham: My Lords, I beg to move the third Motion standing in my name on the Order Paper.
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Moved, That the draft regulations laid before the House on 9 February be approved [9th Report from the Joint Committee].—(Baroness Hollis of Heigham.)
On Question, Motion agreed to.

Occupational Pension Schemes (Levies) Regulations 2005
Baroness Hollis of Heigham: My Lords, I beg to move the fourth Motion standing in my name on the Order Paper.
Moved, That the draft regulations laid before the House on 9 February be approved [9th Report from the Joint Committee].—(Baroness Hollis of Heigham.)
On Question, Motion agreed to.

Public Services Ombudsman (Wales) Bill] [H.L.]
Read a third time; an amendment (privilege) made; Bill passed, and sent to the Commons.

BBC Charter
3.8 p.m.
Lord McIntosh of Haringey: My Lords, with the leave of the House, I shall repeat a Statement made in another place by the Secretary of State for Culture, Media and Sport. The Statement is as follows:
"With permission, Mr Speaker, I would like to make a Statement about the future of the BBC.
"I will set out for the House the background to the current review of its Royal Charter, and our proposals set out in a Green Paper on its funding, governance and purposes. Published today, its title is A strong BBC, independent of government.
"Alongside the NHS, the BBC is one of the two great institutions of British national life. For over 80 years, it has sought to represent the highest standards of broadcasting. Its archives are a record of our national collective memory, from the coronation to the 1966 World Cup; from 'Dixon of Dock Green' to 'The Office'.
"Since the corporation's foundation, its Royal Charter has been reviewed by the Government roughly every 10 years, the last in 1996.
"Like its predecessors, this review has examined the corporation's scale and scope, its funding and governance. But this one has been unique in the level of public consultation, and in tackling perhaps the greatest challenge that the BBC has ever faced—the challenges in TV technology that will soon result in a wholly digital Britain.
"The BBC, like any public institution, needs to adapt if is to serve its audiences and keep pace with change. But its values, its global reach, its standards and its editorial independence must be preserved

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and strengthened; for that is what the British people want. The results of our public consultation and research are very clear.
"Overwhelmingly, the people like and trust the BBC. They understand and support the principles of public service broadcasting. They want the BBC to have scale. They want it to have the highest standards. They want it to be independent of government, Parliament or any commercial influence, and they want it to listen.
"But they also have significant criticisms: that the BBC is not responsive enough to their interests; that there has been a decline in quality—particularly in television, a tendency towards copycat programming at the expense of real innovation. Some people worry about the value for money of the licence fee, and particularly those who want, but cannot get, Freeview. Some of the BBC's commercial competitors believe that it has too much freedom to expand into new markets and stifle competition.
"We have to find a balance between meeting those concerns while ensuring that public service broadcasting leaves a footprint in every medium, a guarantee of quality, impartiality and innovation. That balance is harder to strike as the media change.
"In 1988, Britain had four television channels. Today, there are more than 400. In a few years, we will become a fully digital nation when the switchover from analogue to digital TV is made. As technology changes, so do the public's expectations. The challenges facing the BBC are enormous, as it plays a leading role in guiding the nation through this period of change. To do so it needs certainty about its future. So, after closely considering the Select Committee's alternative recommendations in this area, we have decided that the BBC's charter should be renewed for a further 10 years.
"I should like to turn now to the question of funding. The review looked at the different options for funding the BBC, and consulted the public. Perhaps surprisingly, the licence fee retains a high degree of public support and, although not perfect, we believe it remains the fairest way to fund the BBC. So it will continue throughout the next charter. In the coming months, we will decide on the right level for the fee to take after 2007. But beyond that, we have to take account of the rapid advance in technology and media consumption.
"So, during the life of the next charter, we will review the case for alternative funding models, particularly subscription, to make a contribution after 2016. We will review the risk to plurality in public service broadcasting, encompassing Channel 4's longer-term position; whether any public funding, including licence fee income, should be distributed more widely beyond the BBC in order to sustain plurality; and, if so, how any such distribution might take place.
"The old definition of the BBC's purposes as being to educate, inform and entertain still holds true. But by itself that is no longer enough in a world of ever increasing choice. So we have identified five
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new purposes for the BBC, which I set out in the Green Paper. In addition, the BBC will play a leading role in the process of switching Britain from analogue to digital television. It will be at the forefront of public information campaigns. It will help to manage SwitchCo, the organisation that will co-ordinate the technical process. It will help to establish and will fund schemes that help the most vulnerable consumers.
"Honourable Members will know from their own postbags that there is disquiet that, in some cases, households are expected to pay the fee when they cannot receive the full range of BBC services. That is why we think it is important that the BBC should help to drive the switchover process.
"I should like now to move to the issue of governance, where we will introduce radical change: a BBC-specific model that gives expression to the values on which the BBC is built.
"There is widespread consensus that the current model of governance is unsustainable. The governors' dual role as cheerleader and regulator does not sit easily in a public organisation of the size and complexity of the BBC. It lacks clarity and accountability. Licence fee payers need to know who is speaking up for them, and they deserve to know how important decisions are made and what influence they can exert. So the Green Paper sets out the new model which we intend to introduce—one that reflects the public value approach of the current BBC model, but which also draws significantly on Lord Burns's work.
"The BBC governors, with their dual role of managing the BBC but also holding it to account, will be replaced by two bodies, each with a clearly defined role.
"A BBC trust will be the custodian of the BBC's purpose, the licence fee and the public interest. An executive board will be accountable to the trust for the delivery of the BBC's services. The functions of the two bodies will be clearly defined, enabling the trust to judge the management's performance clearly and authoritatively.
"So the trust will have the high-level powers of approval over BBC budgets and strategy. It will have the tools to hold the BBC to account, issuing new service licences for each BBC service, and applying a public value test to proposals for new services.
"Michael Grade, whose current appointment as chairman of the BBC continues until 2008, will be the first chairman of the trust. The trust will represent the licence fee payer. To do that, it will need to listen to them and to consult them. Ways of doing this might include webcasting trust meetings, publishing audience research or electing local representative councils.
"Day-to-day management will be carried out by the executive board, which will be strengthened by a significant minority of non-executive members, and whose chair will be appointed by the trust

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"Over the past months, we have examined closely the changes Michael Grade has made. We have also studied the model proposed by Lord Burns for an external public service broadcasting commission.
"Our trust model builds in the strongest elements of the BBC's proposals. These include the establishment of a separate governance unit; the introduction of service licences; and the application of public value tests to new services and any major changes to existing ones.
"The BBC's proposals are a step in the right direction. But as they stand, they fall short of the accountability test because they do not resolve the confusion of the governors' dual role, and depend too much on behavioural rather than structural reform. So the BBC trust incorporates the key recommendation from Lord Burns that there should be clear separation of different responsibilities, to avoid confusion or capture.
"However, we believe that the Burns proposals for a unitary BBC board, with a government-appointed chair and an external PSB commission, also with a government-appointed chair, would fail to provide sufficient authority, clarity or distance from government. Our proposal makes sure that there is only one clear sovereign body and only one government-appointed chair. That will make the trust a powerful advocate for the public interest, able to safeguard the BBC's independence.
"But 'strong' does not mean over-mighty, and we will have to ensure that the BBC deals fairly with the wider market. The BBC's competitors have become increasingly concerned about the impact a publicly funded BBC can have on their businesses. Successive governments have allowed the BBC to be, in effect, a desirable market intervention. But we also need it to be constrained when its interests collide with the commercial sector and threaten the choice and quality of programming from other broadcasters. It should not play copycat, or chase ratings for ratings' sake.
"We do want the corporation to maximise its income from commercial services, but we also want to see a clear link between those services and its public purposes. To achieve this, the BBC will be subject to tough new internal and external processes. Ofcom will be given powers to conduct market impact assessments for proposed new services. Ofcom will retain full Competition Act powers in relation to the BBC, and in addition we will consider giving it a new power of approval over the BBC's internal code on fair trading.
"Another area of debate is the BBC's use of independent production, the balance between in-house and externally commissioned programmes. I want to ensure that the licence fee truly becomes venture capital for creativity, that it is used to put the finest talent on the air.
"Twenty-five per cent of its television productions already have to be commissioned from the independent sector, but I believe there is scope to
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go further. We will consider a range of options for reform in this area, including the BBC's proposals for a new 'window of creative competition' and increases in the existing quotas. Either way, I expect to see substantial progress in this area. The BBC has exclusive access to the licence fee. In return, I want it used to encourage independent productions as well as in-house.
"For radio, the BBC has adopted a voluntary 10 per cent quota. We will consult on whether that is sufficient.
"To reflect the whole of the United Kingdom and its different communities, the BBC also needs to make sure that a significant slice of production takes place outside London and it needs to provide a range of specific services for the UK's nations and regions. People should see the full diversity of the United Kingdom and their local community reflected in mainstream as well as in regional broadcasting.
"In reaching these conclusions, I am immensely grateful to Terry Burns and his panel, to Michael Grade and the BBC, to Ofcom, and most of all to the members of the public who in their thousands made their voices heard. We have endeavoured to take the best of what they have told us.
"In a changing world, values still endure. In a changing world, trust becomes ever more important in people's lives. So in our changing world this Government will secure a BBC that belongs to its licence payers and embodies the values the British people want; a BBC that promotes citizenship and builds our civil society; a BBC that promotes education and learning; a BBC dedicated to creativity and cultural excellence; a BBC that celebrates our nations, regions and communities; a BBC that brings the world to the United Kingdom and the United Kingdom to the world; a BBC which is strong, independent and securely at the heart of British broadcasting for 10 more years.
"I commend this Statement and the Green Paper to the House".
My Lords, that concludes the Statement.
3.21 p.m.
Baroness Buscombe: My Lords, I thank the Minister for repeating the Statement and I welcome at long last the publication of the Green Paper reviewing the BBC's Royal Charter, entitled A Strong BBC, Independent of Government. I should say straightaway that we support entirely both of those sentiments.
While we welcome the Green Paper and the Statement, our view is that the Minister has not gone far enough. We are concerned that in wanting a strong and vibrant BBC, and in accepting that the BBC faces enormous challenges in the coming years, more should have been done and could be done than is proposed in the Green Paper. In a sense, it touches the edges of what might or could be achieved in relation to charter renewal. I say this while stressing that we very much want to support what the Minister called "this great institution".

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We believe in a strong BBC, but the coming years will present a number of challenges, particularly in relation to technological change. The changes we have seen over the past 10 years have been fundamental to the whole broadcasting arena, and I believe that a similar breadth of change must be envisaged for the coming decade.
We congratulate the BBC on fighting off all proposals for substantial and immediate change—change that should recognise extremely rapid developments both in technology and in the number of new channels. I want also to stress my belief that charter renewal should be considered within the whole broadcasting arena, because in order to maintain a strong and vibrant BBC the corporation must endure strong and healthy competition.
The Minister said that the charter should be renewed for a period of 10 years. I know that the BBC would very much welcome that. However, it is strange that when the Government consider other organisations, particularly those in the private sector such as Camelot, a period of seven years has been seen as quite long enough to ensure certainty. We should bear that in mind.
Ten years is a long time given the pace of change, particularly in relation to digital switchover. The Minister accepts that more households are switching to digital reception every day and that people now choose to spend more of their money on what they want to see and hear. Indeed, with Ofcom proposing the start of digital switchover in 2008 and contemplating the programme being completed by 2012, it is somewhat surprising that the Government are content that the charter should be renewed for 10 years.
The process of digital switchover raises certain hugely important issues. Historically, commercial public service broadcasters have relied on their privileged access to viewers to maintain high advertising premiums and high levels of investment in public service content. Unlike the BBC, these channels do not enjoy direct public funding. They have to earn their money in the marketplace and, as the digital revolution spreads, so the privileges that have underpinned their historic investment in public service content have been eroded.
In fact, the strength of the BBC is very much dependent on the viability of these other broadcasters who inhabit the landscape. It is surprising, therefore, that the Government propose to delay a change in funding until what in effect will be 2017. In response to my honourable friend John Whittingdale in another place, the Secretary of State said that the Government would not even begin to consider new ways of funding the BBC until five or six years from now.
The income of £3 billion from the current licence fee is an enormous sum of money, and one that is increasing given that we expect 2 to 3 million homes to be built over the next decade. That factor should be taken into consideration. An income of over £3 billion, when compared with what all the other broadcasters achieve, is a very large amount. Does not the Minister accept that, given the importance of and need to sustain plurality of public service broadcasting provision, it would be much more courageous now to consider seriously how other
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public service broadcasting providers might be supported over the coming decade, alongside and together with the funding of the BBC? It is not right to consider charter renewal in isolation.
Does the Minister accept. in the light of all this, that it is now time to make it absolutely clear on the application form for a licence that the moneys are purely for the BBC? Let us be honest, most people assume that the fee they pay covers the television set and the provision of core services. Many do not appreciate that the licence fee is purely for the funding of the BBC.
I turn now to questions of standards and public service obligations. We believe that adherence to a strong public service obligation is crucial, and the BBC is under a duty to set high standards. A clear remit to set even higher standards for programming is needed and must be assured. In that case, does the Minister agree that such a clear remit for a stronger public service obligation is now required? It is not enough simply to object to copy-cat programming and ratings chasing.
In addition, why do the Government reject the powerful recommendation made by the Public Accounts Committee in another place that spending of the licence fee should be open to full scrutiny by the Audit Commission? If the Government are serious about improving accountability and transparency, surely that change should be made straightaway.
I listened with interest to the Minister's remarks on external regulation. He will be aware that the Conservative Party has stated on a number of occasions that proper sanctions can be enforced only by an external regulator entirely separate from the BBC. Given that, 1 welcome at long last the clear support expressed by the Government for something that we have been asking for over a long period; that is, a move to correct the system whereby the board of governors has been required to act both as the BBC's external regulator and as the top tier of management.
The governance of the BBC should be conducted by an independent board possessing the necessary levels of expertise arid experience. While we accept and are pleased that the chairman of the BBC, Michael Grade, has gone some way to distance himself from the present governors' role, will the Minister accept that that falls a long way short of having an external regulator for the BBC?
Will the Minister explain the difference between the proposed independent trustees and the new arrangements for the board of governors that Michael Grade is already putting in place? Surely those so-called independent trustees will still be a part of the BBC and will not be a truly independent body, as recommended by the noble Lord, Lord Burns, in his excellent report.
We believe that Ofcom should have the power to adjudicate on accuracy and impartiality, as it does for other broadcasters. For example, many in the commercial sector complain that there is no proper channel for dealing with abuses of the dominant position that the BBC currently enjoys, and that there continue to be a number of unfair competition practices. I should say that we know that the director-general is going some way towards correcting some of those practices.

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I welcome the Minister's remarks on the use of independent production. I like the term and the idea that independent production should be supported by moneys from the licence fee and will be seen as venture capital for creativity. We support that and the new initiative for creative competition.
There is much to commend what the Minister has said. The report gives all of us much to consider in the coming months, and I hope that we will take time to consider carefully all that might be achieved in having a new charter that allows the BBC to retain its strong position as a great institution.
3.32 p.m.
Lord McNally: My Lords, like the noble Baroness, Lady Buscombe, I welcome the commitment to a strong BBC that is independent of government. I suspect that tucked away in the Statement that has just been delivered, there are a few fundamental differences that will be teased out in the weeks and months ahead.
I hope that it will damage neither the Secretary of State nor the Minister too much to say that I found the Statement most encouraging. I shall certainly use the peroration on a BBC that promotes citizenship in my speeches in the future about the BBC that we are working for.
I congratulate the Minister, but will he acknowledge that this battle is only half won? There is some way to go before we have a BBC charter that is fit for purpose. Will he explain the timetable between the Green Paper and the charter? I welcome the appointment today of a House of Lords Select Committee under the chairmanship of the noble Lord, Lord Fowler, which has come on stream at just the right moment to do a good job of work.
Although I have confidence in the Secretary of State, and the Minister, there is a danger of a non-transparent Downing Street role being inserted into the process. What guarantees are there that the infamous Downing Street sofa that was so roundly condemned by the noble Lord, Lord Butler, in his report, will not be put to use in putting together the final part of the BBC's charter?
I do not share the enthusiasm for a wider role for Ofcom. I hope that the Minister will keep Ofcom to the task that Parliament gave it, which relates to competition. I have no objection to keeping the BBC up to standard on competition, but there have been constant signals from Ofcom that it yearns for a wider role and remit over the BBC. I want the Minister to confirm that the Government will resist that.
Like the noble Baroness, Lady Buscombe, I welcome the emphasis on roles for the independents and the regions. However, we need to keep a couple of points clearly in view. The statement that the public like and trust the BBC needs to be spelt out. I liked the Minister reminding us that successive governments have been committed to market intervention. We are not for a free market in broadcasting. For 80 years we have had the magnificent example of a public body that distorts the market massively in the public
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interest, and with public support. We want that distortion of the market in favour of quality and good public service broadcasting to continue.
We welcome the point about the exclusive use of the licence fee. I am suspicious of every one of the suggestions for top-slicing, bottom-slicing, or whatever. Unless we keep that unique role for the licence fee it will be undermined.
Although the points about governance are of interest, we should remember that for 80 years the governors of the BBC have not done a bad job in delivering to Britain high quality public service broadcasting. Let us be certain that what we are putting in its place will be fit for purpose, especially with the experience, which was covered by the report of the noble Lord, Lord Hutton, of systematic and sustained bullying of the BBC by Downing Street. We must ensure that the new system of governance is bully-proof.
I want to give the Minister time to respond to what I and colleagues have to say—we shall have to work out different time shares. He will have a chance to do so in the 20 minutes of general questioning.
Only in Britain could a body of such long-term success and world esteem be subject to such sustained attack. If, as the Green Paper indicates, the Government—if re-elected—will be robust in their defence of the BBC as an iron pole of the best of public service broadcasting and in setting standards for itself and others, they can rely on the full support of these Benches.
3.39 p.m.
Lord McIntosh of Haringey: My Lords, I am grateful to the noble Baroness, Lady Buscombe, and the noble Lord, Lord McNally, for their responses to the Statement and the Green Paper. I hope that the House accepts that I do not need to restrict myself to two minutes in responding to them. I crave the indulgence of your Lordships if I go beyond the 20 minutes that is supposed to be allowed.
I thank the noble Baroness, Lady Buscombe, particularly for her support for the BBC and for her agreement about the challenges of change.
I was surprised to hear her view that seven years was enough for a new charter. I thought that there had been general agreement in the consultation and research process that the BBC needed a long enough period, and 10 years seem to have worked to give it the stability and assurance it needs to operate effectively. I recognise that the world will be very different 10 years from 1 January 2007. That is why we are proposing two reviews—not threatening reviews to the BBC's 10-year period of stability, but reviews helping us to make decisions that have to be taken in the light of changes.
First, there will be a review of the future of the licence fee and whether it can be sustained by itself. That will be a review roughly half-way through the period of the licence fee, but it will take place only after the end of the charter period.

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Secondly, there will he a review of public service broadcasting, outwith the BBC itself. Here there are actions that may have to be taken before the end of the charter review period. It would be irresponsible not to carry out those reviews, but it would be irresponsible not to give the BBC 10 years of stability and security. People generally expect that. In any case, those two reviews will he preceded by an immediate review this year of the level of the licence fee. That is part of the consultation that will now take place.
The noble Baroness, Lady Buscombe, talked about funding being only for the BBC. As the Secretary of State said in the Statement, we have already indicated that the licence fee will take responsibility for some of the aspects of digital switchover. In other words, for the marketing and digital switchover, for its participation in SwitchCo—the vehicle for that—and for whatever is done to protect the needs of vulnerable people at the time of digital switchover. All of that is in addition to the existing functions of the BBC and it will come from the licence fee. Again, I think there will generally he public support for that.
The noble Baroness talked about a clearer remit for public service broadcasting in the BBC. She did not make any particular suggestions, but I have no doubt that she will participate in the subsequent consultation.
Finally, the noble Baroness talked about the view of the Public Accounts Committee. I did not think that the Public Accounts Committee was suggesting the Audit Commission would be involved. I thought it was the National Audit Office, but I may be wrong. In any case, we reached an agreement at the time of the passage of the Communications Bill, which I thought had satisfied both parties, that the National Audit Office does have a role, by agreement, in value-formoney reviews. That was enshrined in paragraph 2 of the subsequent agreement, with, I thought, all-party support. I think that we should see that through before we make any changes.
I was delighted to find the Conservative Party claiming credit for recognising that there is a conflict in governments. There is no finer form of flattery than claiming that we thought of it first. If that makes the noble Baroness, Lady Buscombe, happy, I am happy as well.
The noble Baroness asked what the difference is between the BBC trust, which we propose, and Michael Grade's proposals. First, there is no irreconcilable difference, because Michael Grade has indicated that what we are proposing is workable. We think that our proposals are significantly better than what was in Building Public Value last year. Our proposals are based on a formal separation of the two bodies, with total transparency of process between them. The changes that he proposed—not so much in the structure, but in the behaviour of governance—did not go far enough. The licence-fee payers will be clearer under our proposals that the trust represents their interests, holds ultimate power and is independent of BBC management. The functions and roles will be enshrined in the charter and agreement or their equivalents.
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I think that upon examination the noble Baroness will find that these are significant improvements on both the models proposed to us. I am pleased to see that she is grateful for the director-general's action on accuracy and impartiality. Generally I am reassured by her support, both for the BBC and for the Government's proposals.
I am even more grateful to the noble Lord, Lord McNally, who is less equivocal in his support. He rightly says that there is some way to go. He asked me about the timetable. The consultation on the Green Paper will carry on until 31 May. Then we will have a White Paper before the end of this year. On that basis, there will be parliamentary debate on a draft charter and agreement. We have undertaken that that parliamentary debate will be no less thorough than it has been on any previous occasion.
I join the noble Lord in welcoming the establishment of a committee under the noble Lord, Lord Fowler. I am glad for all the Members who have taken part. I am sorry that the noble Lord, Lord Fowler, is not able to be in his seat on this occasion—
Lord Crickhowell: He heard the Statement!
Lord McIntosh of Haringey: He heard the Statement, yes, my Lords. Anyway, that was not meant to be a recriminatory remark. I said that the noble Lord was,
"not able to be in his seat",
not that he was deliberately avoiding it.
I am puzzled by the reference of the noble Lord, Lord McNally, to a Downing Street role. He had a distinguished career in Downing Street himself. He is obviously determined never to be any part of any political party that has anything to do with Downing Street in the future. If he would care to give me details of bullying, I would be glad to respond.
The noble Lord is against a wider role for Ofcom. I can confirm that our proposed role for Ofcom is in accordance with the original basis on which Ofcom was established under the Communications Act. 2003. On his last point about the deliberate distortion of a free market in favour of the BBC and of quality and plurality, I can only agree with him.
3.48 p.m.
Lord Barnett: My Lords, perhaps I may declare an interest as a former vice-chairman of the BBC and welcome the Statement that my noble friend Lord McIntosh has repeated this afternoon. I welcome in particular the decision to renew the charter. Unlike the Opposition. I agree that 10 years seems to be—always has been and, I am sure, will be now—an appropriate time for that renewal.
Much of the Statement—and, indeed, of the Green Paper—covers complex areas, but now is not a time to debate them. I was glad to hear from my noble friend that we will have ample opportunity to do so. I look forward to participating in such debates.

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Could my noble friend confirm that the Statement that the Minister made does not consider allocating any of the licence fee elsewhere, until after 2016? In other words, the alleged statement of the noble Lord, Lord Birt, and his reported views—if they are his views—have not been accepted by the Government. Perhaps he could confirm that for us.
Would my noble friend also accept what I think was a compliment—for which I am grateful—from the noble Lord, Lord McNally, on the former work of the governors at the BBC? I believe that worked well when it was properly done. Indeed, there were two separate boards: the management board and the board of governors. Under the proposals as I understand them, the management board is effectively to be called an executive board. I am happy to see the idea of including on that board some independent members from outside the BBC. It makes a lot of sense to have non-executive members on that executive board.
I welcome what my noble friend has said today. I look forward to having an early opportunity to debate the detail.
Lord McIntosh of Haringey: My Lords, I am grateful for that welcome. The noble Lord, Lord Barnett, asked two questions. He asked, first, about the licence fee and whether I could give an assurance that it would not be used for other than the purposes of the BBC during the 10 years of the charter period. I cannot give that assurance. I thought I had made it clear that I was not giving such an assurance. I said in the Statement and repeated in response to noble Lords on the Opposition Front Benches that we expect the licence fee to make a contribution to the cost of digital switchover. That includes the marketing costs and what I call targeted assistance, and it includes participation in the costs of SwitchCo, the governing body.
I hope that I also made it clear that the review of the future funding of public service broadcasting which will take place towards the middle of the charter review period will look at the case for plurality, at Channel 4's longer-term position, and at whether any public funding including licence fee income should be distributed more widely beyond the BBC in order to sustain plurality and competition in public service broadcasting. I did not give any assurance that such a change would not take place before the end of the charter review period. I adhere to that position.
The noble Lord's second question was whether we had agreed with the noble Lord, Lord Birt. I know what the noble Lord, Lord Birt, said only from the newspapers. I have no indication that we agree or disagree with anything in particular that he is reported to have said.
Lord Crickhowell: My Lords, I welcome the Statement, particularly what was said about the trust model, which seems a sensible way forward, and about competition. However, in the course of her fairly long response, my noble friend Lady Buscombe made a particularly important point when she asked how we
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are to maintain the plurality of public service broadcasting. It was a little surprising that, in the Statement, when the Minister referred to measures to support the switch to digital, no reference was made to what I understand will be an important contribution by the BBC; that is, the provision of set-top boxes and satellites so that areas that cannot receive direct transmission will not be dependent on Sky and the existing satellite regime. That is an extremely important development, particularly in areas such as Wales where large parts are unable to receive direct transmission.
The Minister may have started to address my noble friend's concern in his last response on public service broadcasting and the licence fee. Unless there is some allocation of resources from the licence fee to the independent sector it is hard to see how that sector will maintain its position. I therefore hope that the Minister will be able to give some assurance that the review will take place sooner rather than later, and that we will not have to wait until the tail-end of the 10 years before we find ourselves with no competition to the BBC in public service broadcasting.
Lord McIntosh of Haringey: My Lords, on the noble Lord's first point, I do not think that I said anything about the provision of set-top boxes or aerials. If I did, I did not mean to. I have given no undertaking that anyone will give assistance in the provision of set-top boxes and aerials.
On the noble Lord's second point, I take it that he is agreeing with my response to the noble Lord, Lord Barnett. In other words, yes, we will carry out a review as the change-over of technology proceeds. What we have said is that we will start that review before the completion of the digital switch-over process—which for everywhere except the Channel Islands will be 2011. I made it clear that the outcome of the review could well involve changes in the use of the licence fee before the end of the 10-year charter period.
Lord Lipsey: My Lords, does my noble friend the Minister accept that, from the point of view of public service broadcasting, the licence fee is by far the best means of financing that activity? His announcement that it will stay for the full charter period is, therefore, extremely welcome.
However, does my noble friend also accept that, from a taxation point of view, it is a rather poor tax? It is a poll tax that bears very heavily on the poor. Therefore, when the Government consider what the level of increases in the licence fee should be, will he ensure that the most rigorous inquiries are made into the efficiency with which the BBC uses that money so that any increases can be kept as low as possible?
Lord McIntosh of Haringey: Yes, my Lords, I can give that assurance. I am grateful to the noble Lord, Lord Lipsey, for what he said about the necessity for a 10-year period. He is entirely right. It is important that the licence fee should achieve value for money for licence fee payers. We are pleased that the BBC is

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already undertaking a review of its activities to ensure that value for money is achieved. That will continue to be our concern in the future.
Baroness Bonham-Carter of Yarnbury: My Lords, I also welcome the Green Paper and what noble Lords on all sides of the House have said about the BBC being a great institution in British life. The BBC is quite correctly being told to ditch its obsession with TV ratings and focus on high-quality public service programming. Can the Minister assure the House that the Government will not subsequently listen to those who attack the BBC's right to the licence fee because it is no longer aggressively fighting for ratings, a consequence of which is that its viewing figures will fall?
Lord McIntosh of Haringey: My Lords, that is a very good point, but I rather think that this is a debate that will never end. There is always a conflict for the BBC between the need for high-quality and varied output and ratings. From time to time, the BBC regards it as a threat if it finds itself with falling ratings. It would find it difficult to maintain the requirement for the licence fee if, ultimately, taking it to the extreme, very few people were to watch the BBC. Fortunately that is not the case. Fortunately, the BBC has been able to combine a very reasonable preservation of ratings, even in a multichannel environment, with high quality.
The important principle to which we have to look is that public service broadcasting is not simply market failure; it is good programmes of all kinds, whether they are light entertainment or high drama. They just have to be the best, whatever they are.
Lord Roberts of Llandudno: My Lords, I remind the Minister that, over the years, the BBC board of governors has included the chairmen of the Broadcasting Councils for Wales, Scotland and Northern Ireland. Can the Minister assure me that the trust will also have representatives from the Northern Ireland, Welsh and Scottish areas?
Lord McIntosh of Haringey: My Lords, that is a detail of the trust which will be a matter for consultation in the coming months. Of course we accept, and would insist, that there will have to be people on the trust who are capable of reflecting the needs of the nations and regions of this country. How that is spelt out in the membership of the trust or in the provision of, for example, advisory committees is a matter on which we are seeking views and on which we will respond in due course.
Lord Macdonald of Tradeston: My Lords, I, too, welcome the Statement. Following the previous question about reflecting the UK's nations, regions and communities, I welcome the statement that people should see the full diversity of the UK and their local communities reflected in mainstream as well as regional programming and that a significant slice of programme production should take place outside London.
The real problem here is that, at present, although 17 per cent of the licence payers in the United Kingdom
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live outside England, only about 2 per cent of the programmes seen by the United Kingdom on its network television come from Northern Ireland, Wales or Scotland. It is hard to maintain that what we are watching is the "British" Broadcasting Corporation. How would the Minister propose to take this proportion—which I guess to be less than 2 per cent—up closer to the 17 per cent represented by population and by licence revenue? That is a considerable challenge for the BBC, which I hope the Minister will encourage the corporation to address.
Lord McIntosh of Haringey: My Lords, I am well aware of the issue raised by the noble Lord, Lord Macdonald of Tradeston. Last year, in the course of the public consultation on the charter review, I visited Belfast, Cardiff, Glasgow and Edinburgh. I heard that view being widely expressed, particularly by the broadcasters themselves—among both the commercial broadcasters and BBC Wales, BBC Scotland and BBC Northern Ireland—who produce marvellous stuff, but could not get that networked. I have much sympathy with that view. In part, this is a matter of ensuring that the quality is good enough to be networked and, therefore, to meet the requirements of the noble Lord. It would certainly be legitimate for the BBC trust to take a view on this matter and to say to the Executive that something more has to be done.
Lord Bragg: My Lords, I, too, welcome the Statement and the fact that the Government are proposing a strong and independent BBC. At the risk of repetition, could the Minister reassure the House that when the wider place of public service broadcasting is debated, it will not just be the BBC's public service broadcasting which is considered? For instance, 33 per cent of ITV's output at present is public service broadcasting. That is currently—not seven or 10 years ahead—under strain and, to some extent, under threat. Yet that is a massive part of public service broadcasting in this country.
Lord McIntosh of Haringey: My Lords, I entirely agree with the noble Lord, Lord Bragg. That is exactly why I have talked about "plurality" on numerous occasions in the last three-quarters of an hour. To me, public service broadcasting is not providing the service that the people of this country require unless it comes from a variety of sources. That clearly means not just the BBC, but ITV, Channel 4, Channel Five, and so on. Indeed, there are elements of public service broadcasting in Sky—and in other channels—which are not regulated in the same way.
That is exactly why we propose to hold a review of public service broadcasting in the course of the charter period, and why we still take very seriously the Ofcom public service broadcasting review—the third phase of which was published last month. These matters are still under consideration in the latter phases of the present charter review.
Lord Sheldon: My Lords, is it not clear that the standards and position of the BBC are pre-eminent in the whole world? It is the epitome of public service

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broadcasting; it sets the standards for other broadcasters, as we see regularly whenever we watch television or listen to the radio. Is it not also clear that the 75 per cent satisfaction rate mentioned in the Green Paper is very high, bearing in mind the amount of attention that listeners and viewers give to the works of the BBC? Therefore, must not the role of Ofcom be a limited one, because there is no reason for someone with outside interest to interfere excessively with the work of the BBC?
Lord McIntosh of Haringey: My Lords, I think the Statement fairly sets out the degree of public support for the BBC, which confirms what was said by the noble Lord, Lord Sheldon. The Statement also sets out areas of dissatisfaction with the BBC. I am sure that the noble Lord will recognise that there are areas where people are dissatisfied, and have some justification for being so. As for the role of Ofcom, I made clear that we are not proposing to extend that beyond what is allowed for within the Communications Act.

Education Bill [H.L.]
4.5 p.m.
Read a third time.
Clause 2 [Functions of Her Majesty's Chief Inspector of Schools in England]:
The Parliamentary Under-Secretary of State, Department for Education and Skills (Lord Filkin)The Parliamentary Under-Secretary of State, Department for Education and Skills (Lord Filkin) moved Amendment No. 1:
Page 2, line 25, leave out "degree to which" and insert "extent to which those"
The noble Lord said: My Lords, I am grateful to the opposition parties for their agreement to the tabling of this set of amendments to the Bill. As the House will appreciate, we have an opportunity to ensure that the Bill leaves here in the best possible shape.
Let me start by addressing the amendment relating to Clause 2 on self-evaluation, which is largely as moved on Report. At the suggestion of parliamentary counsel, we are seeking to make minor changes which do not impact on the effect of the amendment moved by the noble Baroness, Lady Sharp.
On behaviour, we have considered in detail the amendment moved by the noble Lord, Lord Hanningfield, and believe that the effect of the amendment could be improved with some minor changes. First, as "behaviour" will encompass "discipline", we have omitted that one word. Secondly, while acknowledging the importance of looking at levels of truancy, we do not want to limit this duty to looking at unauthorised absence alone. The chief inspector should report on all aspects of attendance.
On the quality of inspectors, the intention behind the amendment moved by the noble Baroness, Lady Perry, and accepted by the House, was to ensure that all additional inspectors satisfy the chief inspector that they
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have the necessary skills, expertise and experience to perform their functions. Our amendments, which inserted the new subparagraphs (3) and (4) in paragraph 2 to Schedule 1 were intended to cover this. As the Bill now stands, we therefore have a conflicting set of amendments.
The Bill as amended on Report requires the chief inspector to satisfy himself on every aspect of the additional inspectors' skills, before allowing them to conduct a school inspection. Our intention is that the inspection service providers will employ the additional inspectors and the performance management of these inspectors will fall to them. Were this provision to remain in its present form, it would have a detrimental affect on Ofsted's ability to deliver the inspection system within its agreed budget and significantly reduce the chief inspector's capacity to maintain a strategic leadership of the inspection system.
I therefore propose a similar amendment to be inserted before subparagraph (3) which, taken with (3) and (4), ties in the contractual arrangements while meeting the House's concern that strong emphasis be placed on the chief inspector being under a duty to ensure that additional inspectors have the necessary qualifications, experience and skills. He will do this in part by the mechanism in subparagraphs (3) and (4). Subparagraph (3), as it stands, and subparagraph (4) provide that the chief inspector shall publish a statement of the qualifications or experience required and the standards that additional inspectors are required to meet. Any arrangements that the chief inspector enters into must be made on terms that require compliance with this published statement.
On Report, the noble Baroness, Lady Perry, and the noble Lord, Lord Sutherland, emphasised the importance of inspectors having the necessary skills to deliver inspections in the appropriate manner. We agree the importance of this and therefore propose adding to sub-paragraph (3) the phrase,
"the skills that they are to be required to demonstrate in the exercise of those functions".
I turn to the matter of induction of inspectors. As it stands, the Bill does not, for technical reasons, meet the intentions as described by the noble Lord, Lord Sutherland, the noble Baroness, Lady Perry, and others on Report. We therefore propose a similar amendment which would place a new duty on the chief inspector, requiring him to ensure that all additional inspectors undergo an inspection to the satisfaction of an HMI before they can participate in an inspection without the supervision of an HMI.
The amendment does not specify a particular number of inspections. Ofsted is already committed to ensuring that all additional inspectors will have to undergo one or more inspections supervised by an HMI to their satisfaction. Our amendment secures that no additional inspector will be allowed to inspect unsupervised until HMI is satisfied. We believe it is right to leave to the discretion of the HMI how many supervised inspections should be required.
On publishing a list of inspectors, the Bill was to provide for a list of additional inspectors to be published annually. Again, for technical reasons, this would not

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meet the intentions of the House. We have therefore tabled an amendment which will ensure that the chief inspector would have to publish a list at intervals of no more than 12 months—and, indeed, he may publish this list more frequently—of the names of inspectors given to him by the inspection service providers that they intend using. I believe that the amendment fully meets the points that were raised on Report.
We hope we have demonstrated that we have listened seriously to the will of the House on all these issues. With the amendments tabled with the compliance of the opposition parties, we have sought to ensure that the Bill is in a legally sound form and can therefore move forward after Third Reading in the most efficient way possible. I thank the opposition parties for their co-operation.
Lord Hanningfield: My Lords, I thank the Minister for what he has said. From Second Reading onwards—certainly in Committee and on Report—we all agreed that the Ofsted inspection process should be speeded up, with a lighter touch and self-evaluation. However, we felt there were problems in the way it might operate, and my noble friend Lady Perry put those arguments very well. She sends her apologies for not being here, but is on her way to Korea, no doubt to sort out the inspection regime there. She thanks the Minister and the Government for taking a lot of the points on board. One or two matters have not been covered, such as the number of inspections in which new inspectors should participate before they become fully fledged. My noble friend said at the time that she was not sure whether three was the right figure and wanted the Government to come back with a suggestion.
I thank the Government, and accept that they have gone virtually all the way with this amendment. I realise that they had to put it in a form that makes the Bill acceptable to everyone else before it goes to the other place. I thank the Minister and the Government for reconsidering these matters and for accepting the will of the House. We support the amendment.
Baroness Sharp of Guildford: My Lords, we, too, feel that the Government have gone to some trouble to incorporate the spirit of the amendments that were passed on Report into their amendments. We have no objection to them and will be supporting them.
The Lord Bishop of Portsmouth: My Lords, I echo those sentiments, having sat through a number of debates on this issue. I am very pleased that the Government have listened and acted accordingly.
Lord Dearing: My Lords, had it been possible for him to have been present, my noble friend Lord Sutherland of Houndwood would have wished to thank the Government for these further amendments. As one who also spoke on them, I thought the ingenuity with which the Government, in Amendment No. 21, have replaced paragraph (2)(5) of Schedule I is the most practical and effective way of ensuring that additional inspectors are
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up to the job. It seems a very cost-effective, non-bureaucratic way of doing the job, and I congratulate the Government on it.
On Question, amendment agreed to.
Lord Filkin Lord Filkin moved Amendment No. 2:
Page 2, line 27, leave out from "the" to "those" and insert "behaviour and attendance of pupils at"
On Question, amendment agreed to.
Baroness Morris of Bolton Baroness Morris of Bolton moved Amendment No. 3:
After Clause 69, insert the following new clause—
"CLOSURE OF RURAL PRIMARY SCHOOLS
(1) No primary school located in a rural area in England or Wales, as defined by the Office of National Statistics under its Rural and Urban Area Classification 2004, may be closed without—

(a) full consultation with the registered parents of the school,

(b) full consultation with the relevant parish, borough and district council in England or the community council in Wales,

(c) consideration of transport implications, including the future welfare and safety of children living in the area served by the school, the recurrent transport cost likely to be incurred by the local education authority, the quality and availability of other transport links and the environmental impact of the closure, including traffic congestion,

(d) consideration of the overall and long-term impact on the local community of closure, including the loss of the building as a community facility, and

(e) consideration of alternatives to closure, including the potential for federation with other local schools and the scope for transforming the school into an extended school or children's or community centre to provide an extended range of local community services.

(2) The relevant parish, borough and district council for the purposes of this section are those parish, borough and district councils having competence in the geographical area in which the school is located."
The noble Baroness said: My Lords, rural schools have an importance far beyond the simple costs of bricks and mortar. They are, in many cases, the lifeblood and focus of community life, and we remain passionately convinced of their worth. That sentiment has been shared equally in your Lordships' House during the two excellent debates we have had on this subject in Committee and on Report.
On Report I acknowledged that we needed to reflect further on the points made by the Minister and other noble Lords. In moving Amendment No. 3 we have sought to answer the valid criticisms of our earlier amendments. In her answer to me at Report, the noble Baroness, Lady Andrews, spoke of the interests of children being paramount. She also explained that the interests of parents are a key consideration and that the Government had clear and widespread protocols for informing and consulting them about all proposals.
So when I was thinking about how we could amend our amendment, I took a tour through the DfES website. I had a most enjoyable time. Eventually, I found the decision-makers' guidance, section 1. I could not find section 2, but it did not matter, because no. 52 in section 1 is the guidance on rural schools and sites. Although I

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read this section several times, I could find no mention of a requirement to consult with parents. This may happen in best practice but it certainly is not, as far as I could see, a necessity in the guidelines. However, under this section there were a number of excellent criteria that decision-makers must have carefully considered before closure of a rural school.
Your Lordships may remember that on Second Reading I extended a warm welcome to a number of clauses that had been copied straight from the Conservative Acts of 1994 and 1996. In this amendment, we thought we would repay the compliment, so if a good deal of it is familiar to Ministers, it is because, from paragraph (c) to paragraph (e), it comes almost word for word from the decision-makers' guidance. We have added the requirement to consult parents and democratically elected local councillors.
Throughout the Bill's proceedings, we have been struggling to find something that goes a little further than presumption against closure but does not leave the decision in the hands of too few people. We hope that with this amendment we have the balance right. There can be no doubt that the issue of the closure of rural schools is as important as it is sensitive. I beg to move.
4.15 p.m.
Baroness Walmsley: My Lords, we on these Benches support the amendment. My very first political campaign, before I was really political, was to try to keep a small rural school open, not because my children went there but because they might go there. The only improvement I might have wanted for this amendment is to consider the parents of children who are not quite old enough to go to the school but might choose to go there in a couple of years. However, that might seem a little excessive to your Lordships.
We were very happy to work closely with the Conservative Front Bench on putting this amendment together. Indeed, I believe it was we who suggested consultation with individual democratically elected councillors. I think it was clear that we were not keen on supporting the previous version of this amendment; despite the fact that we very much agreed with the spirit and the principle, we could not live with the wording. This we can live with, and we support it enthusiastically.
Baroness Warnock: My Lords, I support this amendment, but I hope very much that it will not be assumed that it has been put forward entirely with parents and rural communities in mind. I entirely agree with what has been said about the importance of the school in a village or rural community. However, I emphasise how tremendously important it is for the local children as well. The argument in respect of the best interests of the children is also supported by the amendment.
A school that has the enthusiastic support of parents and the whole community is the best possible environment in which to learn. It is extremely important
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that primary school children in particular have continuity. Schools should, on the whole, be small, so that children know their neighbours and contemporaries in the community.
I support the amendment not only because such schools are central to their community but because they are best for the children.
The Lord Bishop of Portsmouth: My Lords, before I speak to the amendment, I should like, without erring and straying like a lost shepherd too much, to avoid letting this week pass without noting the impending retirement of my noble friend the right reverend Prelate the Bishop of Derby. He has been a good friend of education in his diocese and beyond. His quiet, wise and business-like way of bishoping—which is in stark contrast to anything that could be said about me—has been appreciated here and elsewhere.
The amendment has been doing the rounds and there has been an engaging relentlessness about the particular issue of rural schools and how their future should be determined. The House will have heard my agnosticism in Committee and that of my noble friend the right reverend Prelate the Bishop of Coventry on Report. Now we have before us an extended version. But I fear that for my money it is not sufficiently extended to everyone who could be consulted to be listed—except, in my own case, the local diocese; and, by further extension, other ecclesiastical and religious authorities.
There is some irony here in view of the sheer number of Church of England primary schools: they form one quarter of the total. However, in our politically correct age the last thing we must ever do is mention what the established Church gets up to—but I do not want to labour that point. Lest it be said that the Bishops were not in their place, I assure your Lordships that I have been assured that either I or one of my colleagues have been in the House for every stage of the Bill. However, I do not want any kind of edge to be read into what I have just said.
The point that my noble friend raised from these Benches on Report should be paramount—namely, the educational viability of a school. I have clergy in the Portsmouth diocese who help to run schools of various shapes and sizes. Nearly all of them are strongly community oriented. As your Lordships can tell from the way in which I am speaking, I am in something of a dilemma. However, at the end of the day, I do not think that the amendment is in the best interests of the children concerned. On balance the safeguards already in the Bill, although perhaps not quite enough, are better than those in the amendment. Therefore, I reluctantly and respectfully would resist it.
Baroness Andrews: My Lords, I am grateful to noble Lords who have spoken. We had thoughtful, even passionate, debates about the issue at every stage. The noble Baroness, Lady Morris, began by saying that she was passionately convinced about the worth of rural schools. Amen, my Lords—we are all passionately convinced of the worth of rural schools; we are absolutely at one.

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We have established that there is widespread agreement between us on their importance and that there is support across the House for what has been done in policy and practice across England and Wales to secure what we can. I am grateful to the right reverend Prelate for reminding us that this is all about the interests of the children and getting right the balance of those interests. That ethical concern inspired not least the changes brought forward in the amendment. We are grateful for the assiduous way in which the noble Baroness has tried to reconcile some of our concerns and to table an amendment that we can discuss further.
We have some sympathy with the revised amendment. It identifies one area where we can certainly strengthen guidance and points to other areas. On the latter, I hope I can reassure all noble Lords that not only does very recent guidance, to which the noble Baroness referred, match their concerns; it is better, more appropriate and more effective to have those requirements in guidance rather than pinned on to the Bill, as the amendment seeks. Perhaps I may explain why. There are issues of principle and of practice. We are deliberately moving towards a more light-touch regulatory regime. Throughout the debate on the Bill my noble friend and I have referred many times to why we think that it is important. I believe that we have the House's support on that point. We all want to let schools and authorities get on with what they have to do.
To that end, while the amendment sets out a list of specific persons to be consulted, we believe that it is more appropriate to keep that in guidance than in legislation, not least where it can be easily amended and extended. The right reverend Prelate just gave us the example that the diocesan authorities have been left out of the list. It is possible to amend the provision in guidance; it would be a much greater and slower task if we had to introduce primary legislation to do so. That is an instance of why we have to be careful of not why but how we do things in legislation.
We have a robust legislative framework for the requirement on the consideration on closures. Section 29(4) of the School Standards and Framework Act 1998 states:
"Before publishing any proposals under this section, the relevant body shall consult such persons as appear to them to be appropriate; and in discharging their duty under this subsection the relevant body shall have regard to any guidance given from time to time".
The noble Baroness has been assiduous in checking on the website. I understand some of the difficulties in manoeuvring and negotiating through it. She may have found—it was probably tucked away at the back—the additional specific guidance on consultation that is appended to the guidance for decision makers, which looks at those who must be consulted about statutory proposals. I will certainly give her the full hard copy. Among a long list in paragraph (13), it includes parents of pupils at feeder primary schools and those who live or have children attending a school in the area of an adjoining education authority. The statutory guidance makes it clear that all those who bring forward proposals have to consult parents and teachers.
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We want this provision in guidance because guidance works. As I mentioned on Report, the average number of closures of rural schools in England has been reduced from 30 per year to only 5 per year. In Wales, which has a far greater proportion of rural schools, we are getting parents signed up to the reasons for closures for the reasons outlined by the right reverend Prelate.
The guidance is working because it is being observed. I t does not have the force of statute, but local authorities and decision-makers know that if they ignore it their decisions are much more susceptible to successful legal action. That is a major deterrent. They are not bound by guidance, but they must have an extremely good reason to act otherwise. We have found that local authorities and decision-makers are almost always keen to abide by guidance.
What the guidance does not do—this is where the noble Baroness has hit on a gap towards which the amendment directs us—is specifically mention parish, borough and district councils. Although I know that many local authorities consult minor authorities—and of course they can make their views known—we are very happy to give an undertaking that we will fill the gap and amend the statutory guidance to include specific consultation of parish, borough and district councils and community councils in Wales.
Other aspects of the amendment refer to consultation and consideration, which, as the noble Baroness said, is set out in our guidance. We strengthened the statutory guidance in respect of rural primary schools as recently as last October and made reference to the need for careful consideration of transport implications, including welfare and safety; the recurrent cost to LEAs of transporting pupils to schools further away; the quality and availability of transport links; the effect on road traffic congestion; and the environmental costs.
In relation to proposed new paragraphs (d) and (e), we also insisted that decision-makers must consider the overall and long-term impact on local people and the community of closure of the village school and of the loss of the building as a community facility; and, in paragraph (e), alternatives to closure including the potential for federation with other schools; and the scope for extended schools or children's centres. There is a lot of detail in guidance. That is why this should be dealt with in guidance. It has to be kept under review and bed down. It has been in place for only three or four months and has to be tested in practice.
The guidance is under constant review. I hope that the noble Baroness will take this in the spirit in which it is meant. We are happy to give a commitment to look again carefully and consider whether other aspects could be strengthened. As I said, we will certainly amend it in relation to the minor authority.
I have to draw two problem areas to your Lordships' attention. I have to return to Wales because the amendment sweeps up Wales. Education in Wales is a devolved matter. We must think long and hard before imposing any changes on Wales, no matter how

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benign we think they are, especially when they relate to challenges that are different in terms of educational choice that are more marked in Wales than in England.
I know that noble Lords would agree that when Parliament passed the Government of Wales Act 1998 devolving functions in relation to education and other matters to the National Assembly, the intention was that the devolved Administration should be able to chart its own course in these matters, to arrange and conduct its affairs in Wales in ways that reflect the needs of its people and communities. This is the essence of the settlement; this is the nature of devolution. It would be against this principle for us to legislate in such a detailed manner, here at Westminster, for the people of Wales. That would he the effect of the amendment: it would override regulations and guidance made and issued in Cardiff. I shall not rehearse my comments about Wales and why it was different, because that stands on the record in detail.
I have to say that the amendment is seriously flawed in several respects. The right reverend Prelate drew attention to one of these. I shall point out a few more problems that would be created if it were incorporated. First, Section 29 of the School Standards and Framework Act 1998 deals with closures, so the amendment should relate to the provisions of that section.
Secondly, and more seriously, it is not clear on whom the duty is placed to consult and consider the various implications. Is it placed on those bringing forward the proposals or on the local decision maker? That ambiguity could cause serious difficulty.
Thirdly, another area of potential confusion is over the term "full" which adds nothing to the concept of consultation, but which might lead to extremely lively arguments about whether there has indeed been "full consultation". It is different from the simple reference to "consultation" used elsewhere in school organisation legislation.
Finally, any such changes to legislation would have to involve transitional arrangements so that proposals that had been properly consulted on and considered under current legislation would not have to start again under the new arrangements.
I hope that I have stressed the positive spirit in which we have received this debate at various stages of the Bill. We are sympathetic to all the concerns raised. We have addressed them in policy and in practice. I hope, however, that what I have proposed meets with the good will of the House and that it will also take into consideration the difficulties with which the amendment will present us. The noble Baroness has been a most assiduous champion, but I hope that she will now feel able to withdraw her amendment.
Baroness Morris of Bolton: My Lords, I am most grateful to the Minister for, as always, her thoughtful
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and full reply. I apologise to the right reverend Prelate the Bishop of Portsmouth for having missed out the need to consult the Churches.
The Lord Bishop of Portsmouth: My Lords, no apology is needed. There was no edge in what I said.
Baroness Morris of Bolton: My Lords, anyway, it was a huge oversight and I still proffer my apologies. The right reverend Prelate also said in Committee that he would resist the temptation to support it and I am sorry that we have not been able even to tempt him that little bit more.
I have a great deal of sympathy with what the Minister said about strengthening the guidance. However, I had difficulty wading my way through and trying to find the guidance and I do think that it would be better to have it on the face of the Bill. I accept that the amendment might not be technically perfect. I accept that it might not be in the right place; but, undoubtedly, the Government could take it away, as they did with the Ofsted amendments, tidy it up, make it look pretty and put it in the right place. On that basis, I would like to test the will of the House.
4.33 p.m.
On Question, Whether the said amendment (No. 3) shall be agreed to?
Their Lordships divided: Contents, 138; Not-Contents, 136.

Division No. 1

CONTENTS

Addington, L.

Forsyth of Drumlean, L.

Alderdice, L.

Garden, L.

Ashcroft, L.

Gardner of Parkes, B.

Attlee, E.

Geddes, L.

Avebury, L.

Glenarthur, L.

Baker of Dorking, L.

Glentoran, L.

Barker, B.

Goodhart, L.

Bonham-Carter of Yarnbury, B.

Greengross, B.

Bradshaw, L.

Hamwee, B.

Bramall, L.

Hanningfield, L.

Bridgeman, V.

Harris of Richmond, B.

Brougham and Vaux, L.

Henley, L.

Buscombe, B.

Hodgson of Astley Abbotts, L.

Byford, B.

Holme of Cheltenham, L.

Campbell of Alloway, L.

Hooper, B.

Carlisle of Bucklow, L.

Howard of Rising, L.

Colwyn, L.

Howarth of Breckland. B.

Cope of Berkeley, L.[Teller]

Howe, E.

Cox, B.

Howe of Aberavon, L.

Crickhowell, L.

Howell of Guildford, L.

Darcy de Knayth, B.

Hunt of Wirral, L.

Dean of Harptree, L.

Hurd of Westwell, L.

Denham, L.

Hylton, L.

Dholakia, L.

Kimball, L.

Dixon-Smith, L.

Kingsland, L.

Dundee, E.

Knight of Collingtree, B.

Dykes, L.

Laird, L.

Eccles of Moulton, B.

Lang of Monkton, L.

Elliott of Morpeth, L.

Lester of Herne Hill, L.

Elton, L.

Linklater of Butterstone, B.

Erroll, E.

Liverpool, E.

Falkland, V.

Livsey of Talgarth, L.

Falkner of Margravine, B.

Luke, L.

Fookes, B.

Lyell, L.

259

McColl of Dulwich, L.

Redesdale, L.

MacGregor of Pulliam Market,

Rees, L.

L.

Roberts of Conwy, L.

Mackay of Clashfern, L.

Roberts of Llandudno, L.

Mackie of Benshie, L.

Rodgers of Quarry Bank, L.

McNally, L.

Roper, L.

Maddock, B.

Rotherwick, L.

Mar and Kellie, E. [Teller]

Russell-Johnston, L.

Masham of Ilton, B.

Ryder of Wensum, L.

Mayhew of Twysden, L.

Sandberg, L.

Methuen, L.

Sandwich, E.

Michie of Gallanach, B.

Seccombe, B.

Miller of Chilthorne Domer, B.

Selsdon, L.

Miller of Hendon, B.

Sharp of Guildford, B.

Molyneaux of Killead, L.

Shaw of Northstead, L.

Monson, L.

Shutt of Greetland, L.

Montrose, D.

Skelmersdale, L.

Morris of Bolton, B.

Smith of Clifton, L.

Mowbray and Stourton, L.

Steel of Aikwood, L.

Murton of Lindisfarne, L.

Swinfen, L.

Neuberger, B.

Taverne, L.

Newby, L.

Thomas of Gresford, L.

Noakes, B.

Thomas of Walliswood, B.

Northesk, E.

Thomson of Monifieth, L.

Northover, B.

Tope, L.

Norton of Louth, L.

Tordoff, L.

O'Cathain, B.

Ullswater, V.

Onslow, E.

Waddington, L.

Park of Monmouth, B.

Wade of Chorlton, L.

Pearson of Rannoch, L.

Wallace of Saltaire, L.

Peyton of Yeovil, L.

Walmsley, B.

Phillips of Sudbury, L.

Warnock, B.

Pilkington of Oxenford, L.

Wilcox, B.

Platt of Writtle, B.

Willoughby de Broke, L.

Razall, L.

Windlesham, L.

NOT-CONTENTS

Acton, L.

Desai, L.

Amos, B. (Lord President of the

Dixon, L.

Council)

Donoughue, L.

Andrews, B.

Drayson, L.

Archer of Sandwell, L.

Dubs, L.

Ashton of Upholland, B.

Evans of Parkside, L.

Bach, L.

Evans of Temple Guiting, L.

Barnett, L.

Falconer of Thoroton, L. (Lord

Bassam of Brighton, L.

Chancellor)

Berkeley, L.

Falkender, B.

Bernstein of Craigweil, L.

Farrington of Ribbleton, B.

Billingham, B.

Faulkner of Worcester, L.

Bledisloe, V.

Filkin, L.

Blood, B.

Fyfe of Fairfield, L.

Borrie, L.

Gale, B.

Boston of Faversham, L.

Gibson of Market Rasen, B.

Bragg, L.

Giddens, L.

Brooke of Alverthorpe, L.

Gilbert, L.

Brookman, L.

Golding, B.

Brooks of Tremorfa, L.

Goldsmith, L.

Burlison, L.

Goudie, B.

Campbell-Savours, L.

Gould of Potternewton, B.

Carter, L.

Grenfell, L.

Chorley, L.

Grocott, L. [Teller]

Christopher, L.

Harrison, L.

Clark of Windermere, L.

Hart of Chilton, L.

Clarke of Hampstead, L.

Haskel, L.

Clinton-Davis, L.

Haworth, L.

Cohen of Pimlico, B.

Hayman, B.

Colville of Culross, V.

Henig, B.

Corbett of Castle Vale, L.

Hogg of Cumbernauld, L.

Crawley, B.

Hollis of Heigham, B.

David, B.

Howells of St. Davids, B.

Davies of Oldham, L. [Teller]

Howie of Troon, L.

Dean of Thornton-le-Fylde, B.

Hoyle, L.

Dearing, L.

Hughes of Woodside, L.

Derby, Bp.

Hunt of Kings Heath, L.

260

Janner of Braunstone, L.

Portsmouth, Bp.

Jones, L.

Prys-Davies, L.

Jordan, L.

Rea, L.

Judd, L.

Rendell of Babergh, B.

King of West Bromwich, L.

Rosser, L.

Kirkhill, L.

Rowlands, L.

Layard, L.

Royall of Blaisdon, B.

Lea of Crondall, L.

Sainsbury of Turville, L.

Leitch, L.

St. John of Bletso, L.

Lipsey, L.

Sheldon, L.

Listowel, E.

Simon, V.

Lockwood, B.

Slim, V.

Lofthouse of Pontefract, L.

Snape, L.

McDonagh, B.

Stone of Blackheath, L.

Macdonald of Tradeston, L.

Taylor of Blackburn, L.

McIntosh of Haringey, L.

Tenby, V.

McIntosh of Hudnall, B.

Tomlinson, L.

MacKenzie of Culkein, L.

Triesman, L.

Mackenzie of Framwellgate, L.

Truscott, L.

McKenzie of Luton, L.

Tunnicliffe, L.

Marsh, L.

Turnberg, L.

Massey of Darwen, B.

Turner of Camden, B.

Maxton, L.

Wall of New Barnet, B.

Mitchell, L.

Walpole, L.

Morris of Aberavon, L.

Warner, L.

Morns of Manchester, L.

Warwick of Undercliffe, B.

Moser, L.

Weatherill, L.

Parekh, L.

Whitaker, B.

Paul, L.

Wilkins, B.

Pendry, L.

Williams of Elvel, L.

Pitkeathley, B.

Woolmer of Leeds, L.

Plant of Highfield, L.

Young of Norwood Green, L.

Resolved in the affirmative, and amendment agreed to accordingly.
4.44 p.m.
Lord Hanningfield Lord Hanningfield moved Amendment No. 4:
After Clause 70, insert the following new clause—
"CLOSURE OF SPECIAL SCHOOLS: STATUTORY CONSULTATION
No local authority in England or Wales shall close a special school without first consulting—

(a) all local authorities that send pupils to the special school in question, and

(b) all registered parents of registered pupils in attendance at the special school in question."

The noble Lord said: My Lords, with Amendment No. 4 we return to the emotive and sensitive issue of the closure of special schools. We discussed this issue at considerable length in Committee and on Report. The debate showed that there is widespread support for the work undertaken by such schools and they are valued and held in regard by parents and pupils alike. I pay tribute to the outstanding, and often challenging, work undertaken by many dedicated professionals who work in such schools. Without such individuals and their skills and commitment, it would not be possible for any of these schools to exist.
Throughout the stages of the Bill, we have stressed that the most important factor in the debate is the education and welfare of these young people. None of us disagree with that. We cannot afford to get this issue wrong. Despite the support in Committee on this issue, we still have serious reservations about the Government's existing policy. We feel that it could be flawed. There is a danger that the policy of inclusion has gone too far and too fast. We on these Benches want to

261
ensure that children with disabilities or learning problems are not suffering educationally from that policy. We believe that every child deserves to be treated in the most appropriate learning environment, whatever that might be, and should expect it.
There is concern because in 1983 there were 1,562 special schools in England but that figure has deceased by more than 400 in the past few years. Yet the number of children with the most severe needs in mainstream schools has gone up by 49 per cent in the past decade. I am sure that noble Lords are aware that about a quarter of pupils will suffer from some form of special needs—whether a passing behavioural problem or severe permanent disability—during the course of their schooling. Teachers in mainstream schools are often finding it difficult to cope with an increasing number of pupils with special needs.
We are under no illusion about the sensitivity of this question, but we all have an obligation to do everything we possibly can to make certain that children with special needs receive the best possible care and education. However, it must be realised that some children with very severe conditions will never be able to be incorporated in mainstream schools and that that should not be attempted. That is why we must protect the variety of special schools and the excellent work that they do.
I thank the Minister for his contribution to the debate. As he said several times, it is his day job. I am sure that he will have something to say a little later. He has brought clarity to a difficult area.
There is some way to go before we are content to let this issue pass. That is why we restructured our amendment after the last debate. Many schools are multi-authority. As we heard in the last debate, many schools are multi-authority and a local authority could close a school serving several local authorities. That would deprive those local authorities which could be short of placements. We are also concerned about the consultation of parents when children come to such schools from a wide area. I have recent experience of that: my own authority did not consult widely enough and did not consult all the parents of pupils in one of its schools.
So, we should like serious consideration to be given to a relatively mild amendment, which provides that, before any potential closure of a special school takes place, all local authorities that send children to that school should be involved and consulted and all the parents should be involved in that consultation.
On Report I said that I was in the middle of a difficult problem relating to the consultation of parents. In fact, I spent much of this morning on that. The parents at these schools receive tremendous support from the schools, but they have often had to fight to get what they have. A mistake in our system is that many of these parents feel that they have to fight and fight again to get the school they want for their child. Somehow we must get over that. I have been trying to wrestle with that this morning, so I shall be interested to hear what the Minister says. Somehow we
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have got the matter slightly wrong. We do not put parents high enough on the agenda. That is why I tabled the amendment.
Even if the amendment is not technically correct, I hope that the Government will accept that we should involve the parents and all the local authorities, and that we should be more reluctant than we have been to go down the road of closing special schools. Provision and needs change, but I see no necessity to reduce the number of special schools even if some of the requirements are different. So, I hope that the House will accept the amendment. I beg to move.
Baroness Sharp of Guildford: My Lords, these Benches would like to support the Conservatives on this amendment. We had a number of reservations about earlier amendments that they put forward because we felt they placed too much emphasis on referring closures to the Secretary of State. We were unhappy with that. The new amendment, which, as the noble Lord, Lord Hanningfield, said, is a very mild amendment, merely asks that any closure should be discussed with all parents and all local authorities who send pupils to that school.
We argue that that is merely good practice and that we would expect any proposed closure to be discussed with those two partners. So the amendment is really only a prompt for good practice. I have no doubt whatever that, as with the previous amendment, the Minister will tell us that we have no need to have this prompt in the Bill because the provision is already in guidance and that the guidance is adequate and more flexible.
The amendment is sufficiently broad in asking for all parents of children registered at the school and all local authorities involved with sending pupils to the school to be consulted. It does not need any extra flexibility.
The case for having the prompt on the face of the Bill is, first, that not all local authorities adhere to good practice. When local authorities' budgets are being squeezed as much as they are, many local authorities are only too anxious to find economies where they can.
We all know that providing facilities for those with special educational needs, particularly for those with both physical and learning difficulties, can be extremely expensive. Some authorities look at the money they spend on special schools and at the amount spent on each pupil and say, "Surely, we can find economies here?". Sometimes they can find economies, and sometimes that is right.
These Benches supported the Government throughout the debates on the Special Educational Needs and Disabilities Bill on their inclusion agenda because we agree that, by and large, where possible it is better to include children within daily school routines rather than to put them in special schools.
There are some occasions when special schools are necessary. The noble Baroness, Lady Linklater, sits behind me. She uses the term "fragile" children. These children may not have major disabilities but they

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cannot cope with the rough and tumble of an ordinary school environment. They are not the only ones. There are some children whose disabilities are so great that they need a special school.
The Government have never really provided the money necessary to carry out that inclusion agenda. So one sympathises with local authorities when they want to close these facilities, but nevertheless it is necessary that they should carry out a very careful consultation and analysis of whether they really should keep the facility open.
Secondly, it is also true that local authorities which run special schools do not always recognise that other local authorities are involved. Many special schools have been closed. The schools are often run for a group of local authorities. Yet when such decisions are made, it is a matter for one local authority's budget. Therefore, they forget that others are involved. We feel this prompt on the face of the Bill is worth while and we therefore support the Conservatives on the amendment.
Lord Dearing: My Lords, perhaps I may intervene briefly. When we previously discussed the matter, the noble Lord, Lord Filkin, argued against the amendment because it placed the responsibility on the Secretary of State. He argued convincingly that it was unrealistic to expect the Secretary of State to be able to take good decisions for the whole country from his office.
The amendment struck me as being no more than you would expect should be done as a matter of course. I was particularly moved by the description of these children as "fragile" children. I think that it is right sometimes to raise the banner for some particular vulnerable groups. The amendment does just that.
Baroness Howe of Idlicote: My Lords, I also support the amendment. The Minister has introduced a general clause into the Bill which requires that looked-after children—another very special group of children—are given preference over other pupils because they are moved around to such an extent. This is another example of a very special, fragile group of children, where there is a feeling that, perhaps for very good reasons, the Government have gone a little too far in wishing to close the schools and have special units within mainstream schools. It is for that reason that I hope they will consider accepting the amendment.
The Lord Bishop of Portsmouth: My Lords, I rise to support what the noble Lord, Lord Dearing, and others have said in favour of the amendment.
Baroness Masham of Ilton: My Lords, I too would like to support the amendment. Wherever possible, disabled children should be in mainstream schools. But there are some children, as has been said—and I think particularly of those who are deaf and blind—who are extraordinarily disabled. The teachers are marvellous.
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They say that the children can always learn something, and they have the special skills needed to deal with very disabled children. Parents need choice.
Lord Filkin: My Lords, I am almost tempted to shock the House by saying that I also would want to support the amendment, given the chorus. That is except for the rather good reason that it is already the current system. I do not want us to over-excite ourselves and think that were we so unpersuaded by my arguments, the world would change much if the provision was passed.
I start by addressing a few misapprehensions because it is important that our debates are informed by facts rather than perhaps by misunderstanding. There has not been a substantial reduction in maintained special schools. They have reduced by about 90 since 1997. Much more significantly, the number of places in maintained special schools has hardly reduced at all since 1997.
The implication that the Government have an agenda to close special schools is untrue. We are clear that special schools in the maintained, non-maintained and independent sectors form an important part of the overall provision available for children with special educational needs. We firmly believe that special schools have an important ongoing role within the overarching framework of inclusion, educating pupils with severe and complex educational needs. They also provide outreach support to maintained schools using their expertise in SEN to support the development of good SEN teaching in mainstream schools. We are clear about this issue and we are strong on it. It is what Removing Barriers makes clear.
5 p.m.
I will turn to the specifics of the amendment, and then return to some of the points that were made in our previous debate and touched upon again this time—good points, I thought, about regional planning and how we ensure that there is proper provision that spans needs wider than the individual local authority.
The amendment is unnecessary because there is already a statutory requirement for local authorities to consult widely when they propose to discontinue a maintained special school; more widely, in fact, than the amendment would require. They must do this both before publication of a decision—in other words, when they are thinking about whether they should close a school—and after they have decided to do so. The requirement to consult is already in primary legislation—Section 31 of the School Standards and Framework Act 1998.
The guidance in England containing DfES circular 15/99 specifies who should be consulted prior to the decision to close, including the parents of pupils at the school, wherever they come from, and any local authority that maintains a statement in relation to a child attending the school—exactly the point that the noble Lord, Lord Hanningfield, rightly draws attention to. Other local authorities could be affected by the decision. That is already covered. Local authorities are obliged to consult others but I will not weary the House by setting those out.

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If the local authority then decides that it wishes to close a special school, again, it must consult such other persons as prescribed in regulations and send them a copy of the proposals. Those to be consulted include each authority that maintains a statement in respect of a registered pupil in the school. It also covers the registered parents of each registered pupil at the school. These points are already covered in statute and in regulations.
The decision on closure of a special school cannot be made by a local authority in this country. It can be made only by the school organisation committee, which is again required by regulations to consider the views that have been made to it by anyone as part of the consultation process, or anyone who makes representations to it, as part of its decision. The committee must take account of the views of parents and other local residents, and the views of any local education authority affected by the proposals. So what the House is debating is already there in statute, regulation and guidance.
There is an extensive list of people who are required to be consulted, as your Lordships would expect. It is common sense that this is what should happen. The requirement to consult is statutory and goes further than the need to consult parents. If a school organisation committee's decision then goes to an adjudicator, the adjudicator also has to consider all the representations made by people affected by that decision. There is a hearing at that point as well.
On the second day of Report important points were made about the need for a regional overview of special school provision. I agree with that; it is right and necessary. Let me put to the House for the first time what we are doing on that.
I have asked the special educational needs advisers to support a more consistent application by local authorities of the approaches set out in Removing Barriers to Achievement, published last year. They send out clear messages to local authorities on their strategy to meet special educational needs. As part of the initial discussions, they have already visited all the local authorities in England. I have asked them to establish the position in each local authority regarding the development of special schools—in other words, the current provision of special schools in their areas, any present plans for changing the provision in their areas, and whether they have any future plans to change. I will be meeting with those advisers in about a month's time, before Easter, to discuss with them the picture that they tell me, so that I am sure I have my finger on exactly what is happening across England in total and can therefore take a clear view of the situation nationwide.
We are going further than that. We have already set in motion a national audit of specialist provision of support on a region-by-region basis. It is an audit of low-incidence special educational needs. The House will understand why. If the incidence is high, we can expect it to be dealt with locally. We should be concerned about low incidence. Again, the specialist advisers are tracking this. They are looking at provision nationwide and I
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expect them to report back to me by September 2005. That audit will establish how local authorities meet the needs of children in an area with low-incidence SEN. It will explore gaps in service support and provision, and how those gaps are being addressed. I will then be meeting them to discuss what that says in terms of whether local authorities are planning sensibly for how provision in their area might meet with regional needs.
If I find issues that cause me concern in either of the two reviews I have indicated, I will be seeking, both through my SEN advisers and through direct ministerial discussions, to talk to local authorities to ensure that we stimulate sensible planning for provision of special schools generally, and for low-incidence needs in particular.
I hope that is helpful. I thought that the noble Baroness, Lady Walmsley, raised good questions earlier and she deserved a proper answer. That is the process that is under way.
I would be delighted to support the amendment were it not for the fact that what it seeks is already in statute, regulations and guidance. I do not believe we should legislate twice.
Lord Hanningfield: My Lords, I am afraid I do not quite agree with the Minister on the way that the guidance is currently worded. It is not firm enough on consultation with parents. One could get away with simply calling a meeting of parents, which is what happens. Therefore all the parents are not consulted fully.
We have had an interesting debate. I support what the noble Lord, Lord Dearing, said. It is important that we fly the flag for these schools, for these young people and, as I said earlier, for the parental support that they get. As the noble Baroness, Lady Howe, said, we have looked at other parts of this legislation, and there is not really anything in it about special educational needs. Whether the Minister knows it or not, there is fear among parents. We saw one accost the Prime Minister only two weeks ago—that was about a special school in my local authority that is not likely to close.
Lord Filkin: My Lords, I am grateful to the noble Lord, Lord Hanningfield, for giving way.
I am well aware that there is anxiety, which is why I was as clear as I possibly could be in putting on the record the Government's policy in this respect. The policy is not to say to local authorities "You are expected to close your special schools", but to meet best the needs of children with special educational needs. That is why I also laboured the point about how thorough the process of consultation is, and how I intend to ensure that there is thoughtfulness in local authorities in how they plan their provision in the future.
Lord Hanningfield: My Lords, I thank the Minister for that. I was going to thank him for the latter part of his contribution, where he set out some of the things he is doing to raise awareness of the issue, so that parents are more assured about the Government's intentions regarding the education and support of their children.

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I do not think the parent consultation part of the legislation is strong enough at present, and I should like the Government to strengthen it. Therefore, I should like to test the feeling of the House.
5.10 p.m.
On Question, Whether the said amendment (No. 4) shall be agreed to?
Their Lordships divided: Contents, 148; Not-Contents, 126.

Division No. 2

CONTENTS

Addington, L.

Howe of Idlicote, B.

Ashcroft, L.

Howell of Guildford, L.

Astor of Hever, L.

Hunt of Wirral, L.

Attlee, E.

Hurd of Westwell, L.

Avebury, L.

Hylton, L.

Barker, B.

Jenkin of Roding, L.

Bledisloe, V.

Kimball, L.

Bonham-Carter of Yarnbury, B.

King of Bridgwater, L.

Bradshaw, L.

Knight of Collingtree, B.

Bridgeman, V.

Lang of Monkton, L.

Brougham and Vaux, L.

Lester of Herne Hill, L.

Buscombe, B.

Linklater of Butterstone, B.

Byford, B.

Listowel, E.

Campbell of Alloway, L.

Liverpool, E.

Carlile of Berriew, L.

Livsey of Talgarth, L.

Carlisle of Bucklow, L.

Luke, L.

Clement-Jones, L.

Lyell, L.

Colville of Culross, V.

McColl of Dulwich, L.

Colwyn, L.

MacGregor of Pulham Market,

Cope of Berkeley, L.

L.

Cox, B.

Mackay of Clashfern, L.

Craigavon, V.

Mackie of Benshie, L.

Crickhowell, L.

McNally, L.

Darcy de Knayth, B.

Maddock, B.

Dean of Harptree, L.

Mar and Kellie, E.

Dearing, L.

Marlesford, L.

Denham, L.

Marsh, L.

Dholakia, L.

Masham of Ilton, B.

Dixon-Smith, L.

Mayhew of Twysden, L.

Dundee, E.

Methuen, L.

Dykes, L.

Michie of Gallanach, B.

Eccles of Moulton, B.

Miller of Chilthorne Domer, B.

Elliott of Morpeth, L.

Miller of Hendon, B.

Elton, L.

Monson, L.

Erroll, E.

Montrose, D.

Falkland, V.

Morris of Bolton, B.

Falkner of Margravine, B.

Murton of Lindisfarne, L.

Flather, B.

Neuberger, B.

Fookes, B.

Newby, L.

Forsyth of Drumlean, L.

Noakes, B.

Freeman, L.

Northesk, E.

Garden, L.

Northover, B.

Gardner of Parkes, B.

Norton of Louth, L.

Geddes, L.

O'Cathain, B.

Glenarthur, L.

Onslow, E.

Glentoran, L.

Park of Monmouth, B.

Goodhart, L.

Pearson of Rannoch, L.

Greengross, B.

Peyton of Yeovil, L.

Greenway, L.

Pilkington of Oxenford, L.

Hamwee, B.

Platt of Writtle, B.

Hanningfield, L.

Razzall, L.

Harris of Richmond, B.

Redesdale, L.

Henley, L.

Rees, L.

Holme of Cheltenham, L.

Renton, L.

Howard of Rising, L.

Roberts of Conwy, L.

Howarth of Breckland, B.

Roberts of Llandudno, L.

Howe, E.

Rodgers of Quarry Bank, L.

Howe of Aberavon, L.

Roper, L.

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Rotherwick, L.

Tenby, V.

Russell-Johnston, L.

Thomas of Gresford, L.

Sandberg, L.

Thomas of Walliswood, B.

Sandwich, E.

Thomson of Monifieth, L.

Seccombe, B. [Teller]

Tope, L.

Selsdon, L.

Tordoff, L.

Sharp of Guildford, B. [Teller]

Ullswater, V.

Shaw of Northstead, L.

Vallance of Tummel, L.

Shutt of Greetland. L.

Waddington, L.

Skelmersdale, L.

Wallace of Saltaire, L.

Slim, V.

Walmsley, B.

Smith of Clifton, L.

Walpole, L.

Stewartby, L.

Warnock, B.

Strathclyde, L.

Weatherill, L.

Swinfen, L.

Wilcox, B.

Taverne, L.

Williamson of Horton, L.

Windlesham, L.

NOT-CONTENTS

Acton, L.

Gould of Potternewton, B.

Ahmed, L.

Grantchester, L.

Alli, L.

Grocott, L. [Teller]

Amos, B. (Lord President of the

Harris of Haringey, L.

Council)

Harrison, L.

Andrews, B.

Hart of Chilton, L.

Ancher of Sandwell, L.

Haskel, L.

Ashton of Upholland, B.

Haworth, L.

Bach, L.

Hayman, B.

Barnett, L.

Hilton of Eggardon, B.

Bassam of Brighton, L.

Hogg of Cumbernauld, L.

Berkeley, L.

Howells of St. Davids, B.

Bernstein of Craigweil, L.

Howie of Troon, L.

Billingham, B.

Hoyle, L.

Blood, B.

Hughes of woodside, L.

Borrie, L.

Hunt of Kings Heath, L.

Boston of Faversham, L.

Jones, L.

Bragg, L.

Judd, L.

Brooke of Alverthorpe, L.

King of West Bromwich, L.

Brookman, L.

Kirkhill, L.

Burlison, L.

Lea of Crondall, L.

Campbell-Savours, L.

Leitch, L.

Carter, L.

Levy, L.

Chorley, L.

Lipsey, L.

Christopher, L.

Lockwood, B.

Clark of Windermere, L.

Lofthouse of Pontefract, L.

Clarke of Hampstead, L.

McDonagh, B.

Clinton-Davis, L.

Macdonald of Tradeston, L.

Cohen of Pimlico, B.

McIntosh of Hudnall, B.

Corbett of Castle Vale, L.

MacKenzie of Culkein, L.

Crawley, B.

McKenzie of Luton, L.

David, B.

Massey of Darwen, B.

Davies of Coity, L.

Maxton, L.

Davies of Oldham, L. [Teller]

Mitchell, L.

Dean of Thornton-le-Fylde, B.

Morris of Aberavon, L.

Derby, Bp.

Morris of Manchester, L.

Desai, L.

Moser, L.

Dixon, L.

Parekh, L.

Drayson, L.

Paul, L.

Dubs, L.

Pendry, L.

Evans of Parkside, L.

Pitkeathley, B.

Evans of Temple Guiting, L.

Plant of Highfield, L.

Falconer of Thoroton, L. (Lord

Portsmouth, Bp.

Chancellor)

Prys- Davies, L.

Falkender, B.

Randall of St. Budeaux, L.

Farrington of Ribbleton, B.

Rea, L.

Faulkner of Worcester, L.

Rendell of Babergh, B.

Filkin, L.

Rosser, L.

Fyfe of Fairfield, L.

Rowlands, L.

Gale, B.

Royall of Blaisdon, B.

Gibson of Market Rasen, B.

Sainsbury of Turville, L.

Giddens, L.

Sheldon, L.

Gilbert, L.

Simon, V.

Golding, B.

Snape, L.

Goldsmith, L.

Stone of Blackheath, L.

Goudie, B.

Taylor of Blackburn, L.

269

Thornton, B.

Wall of New Barnet, B.

Tomlinson, L.

Warner, L.

Triesman, L.

Warwick of Undercliffe, B.

Truscott, L.

Whitaker, B.

Tunnicliffe, L.

Whitty, L.

Turnberg, L.

Williams of Elvel, L.

Turner of Camden, B.

Woolmer of Leeds, L.

Uddin, B.

Young of Norwood Green, L.

Resolved in the affirmative, and amendment agreed to accordingly.
5.19 p.m.
Clause 73 [Functions of Agency]:
Lord Filkin Lord Filkin moved Amendment No. 5:
Page 42, leave out lines 21 to 24 and insert—
"(a) to promote the spiritual, moral, behavioural, social, cultural, mental and physical development of children and young people,
(b) to contribute to their well-being, and
(c) to prepare them for the opportunities, responsibilities and experiences of later life."
The noble Lord said: My Lords, Amendments Nos. 5 and 6 add the well-being of children and young people to the list of considerations to which the Training and Development Agency for Schools must have regard in exercising its function. I undertook on Report to table amendments to that effect in response to representations from the noble Baroness, Lady Walmsley, and the noble Lord, Lord Dearing, and other noble Lords, and I hope that the House will agree that the amendments meet that commitment. I beg to move.
Baroness Walmsley: My Lords, I and the NSPCC, with which I have a voluntary association, are very pleased to thank the Government sincerely for tabling the amendment, as they promised on Report.
I have two questions for the Minister. First, will he confirm that the word "well-being" in the amendment includes "safeguarding and promoting welfare", as it appears in the Children Act 2004? Secondly, why have the Government used the word "contribute" in subsection (b) of the amendment? The Children Act refers to "improving" children's well-being. Why has "contribute" been used instead of "improve"? Apart from asking those minor questions, I welcome the amendments and will support them.
Lord Dearing: My Lords, the Minister referred to my intervention on the matter. I am truly grateful for the amendments.
Lord Hanningfield: My Lords, I add my thanks to the Government for tabling the amendments after due consideration in Committee and on Report.
The Lord Bishop of Portsmouth: My Lords, I rise to support the amendments and gently to disagree with the right reverend Prelate the Bishop of Manchester.
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The word "moral" sits better before "behavioural". He thought that "behavioural" should come before "moral". It is a very good list.
Lord Filkin: My Lords, I thank the House for its support for the amendments. I confirm that the definition of "well-being" has been arrived at by reference to Section 10 of the Children Act. This is the same definition that is employed elsewhere in the Bill. I think that that is the assurance that the noble Baroness, Lady Walmsley, was seeking. She asked why we had written,
"contribute to their well-being"
as opposed to "improve their well-being". The TDA is not alone in the delivery of well-being, and it is right, in legal terms, that it contributes rather than carries the sole burden. I hope that is helpful.
On Question, amendment agreed to.
Lord Filkin Lord Filkin moved Amendment No. 6:
Page 42, line 24, at end insert—
"(3A) In subsection (3)(b) "well-being", in relation to children and young people, is a reference to their well-being having regard to the matters mentioned in section 10(2) of the Children Act 2004."
On Question, amendment agreed to.
Lord Hanningfield Lord Hanningfield moved Amendment No. 7:
After Clause 97, insert the following new clause—
"REDUCING THE BURDEN OF BUREAUCRACY ON SCHOOLS
The Secretary of State shall exercise his functions with regard to the desirability of avoiding excessive administrative burdens on governing bodies, head teachers, teachers and other school staff of all maintained schools, special schools, pupil referral units and local education authorities in England and—

(a) shall lay before Parliament for approval an annual report detailing the general level of administration within all types of maintained schools and local education authorities and the steps both taken and planned to reduce such burdens, and

(b) the report shall include an evaluation of the effectiveness of such measures."

The noble Lord said: My Lords, as I explained on Report, the amendment would introduce a new clause to place a duty on the Secretary of State, in everything that her department does, to reduce the level of needless paperwork and bureaucracy with which schools and teachers must contend. It would compel the Secretary of State to report to Parliament once a year on what measures she had taken and how effective they had been in reducing unnecessary bureaucracy for our schools and teachers.
The Minister said on Report that he was not opposed to the amendment in principle, but that he could not agree to it in practice. I hope to have one final go at persuading him that such an amendment is required even more in practice than it is in principle.
The Minister stated that Section 38 of the Education Act 2002 already placed duties on the Secretary of State to consider the desirability of sending materials to schools. He stated that he was strongly committed to reducing the burdens and bureaucracy placed on schools and LEAs. He mentioned also that the Government had

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established in 2003 a body to look at, and report on, the level of bureaucracy. We obviously fully support all those actions and measures. However, in our view and, more importantly, in the view of thousands of teachers up and down the country, it is clear that such steps neither go far enough nor have any serious and sustained impact on bureaucracy. The noble Lord, Lord Dearing, hit the nail on the head when he said on Report that steps were taken 10 years ago to address red tape and bureaucracy and that here we were, 10 years later, still addressing the same issues and discussing the same problems.
The Government have quite failed to get to grips with the issue. Any teacher will say that the problem has become considerably worse over the past few years. We believe that teachers' first priority must be to deliver quality education and not to please officialdom in Whitehall or in local authorities. We all know that one of the biggest reasons why teachers are disillusioned with their jobs and are leaving the profession is that they often face too much red tape.
As I mentioned on Report, teachers whom I meet express concerns about workload, not always in the context of time spent teaching but in the time spent on the unnecessary diversions of filling in forms et cetera.
We have a duty to control the volume of paper and red tape pumped in the direction of schools. I challenge the Government once again to say that they support the amendment. Those involved in education throughout the country will want to see solid evidence that the Government really want to do something about the problem.
Teachers want the freedom to teach and to have a breathing space from the torrent of regulations placed on them. They want an explicit statutory requirement that will give some relief from the Government's overregulation and centralisation of education, even as they claim that their objective is to deregulate, decentralise and allow greater autonomy. I hope that the Minister will reflect on the matter again and support this type of amendment. I beg to move.
Lord Filkin: My Lords, I am sometimes advised by my noble friends behind me not to waste too much time on days like today trying to persuade the House, because sometimes it feels as if people have already made up their mind before we have had a debate and because the audience for the debates is perhaps wider than just the Chamber. I do not take their advice of course, because I know that noble Lords listen attentively to every word that we say and are persuaded by the debate rather than by preconceptions.
As the noble Lord, Lord Hanningfield, signalled, I agree with him that it is the responsibility of government, local education authorities and schools constantly to strive to reduce bureaucracy and any cost that does not help to attain better outcomes for children. I do not agree that putting another bureaucratic burden on the Secretary of State to produce another report for Parliament would do anything whatever apart from increase costs.
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I yet again make clear the measures that the department has taken to monitor, challenge and reduce the burden of bureaucracy. Section 38 of the Education Act 2002 already places a duty on the Secretary of State to have regard to the desirability of avoiding the sending of excessive material to governing bodies or to head teachers and the imposition of excessive administrative burdens on governing bodies or head teachers. It is already in statute. By way of illustration, the department has now stopped "the batch"—the automatic mailing of a small mountain of paper to schools—and replaced it with an online system.
Furthermore, we have put in place a sequence of measures constantly to challenge the tendency of any organisation, perhaps including the Conservative Party, to move towards the generation of bureaucracy almost by nature of its existence. The implementation review unit, which is a group of people outside the department, looks at policies. It has a serious work programme to challenge whether some functions or actions are necessary. It has already had a significant impact, and it has identified means of delivering the kind of progress that we expect.
In addition, we have established a panel of senior officials which must assess and authorise any policy that impacts on 10 or more schools. We have established also a star chamber of senior DIES officials, the QCA, Ofsted, the TTA, the LGA, the Audit Commission and two head teachers. All requests made by the department for information from schools and local authorities require the prior approval of the star chamber. We cannot ask for information unless that body, which is much wider than the department, agrees that it is desirable and necessary to do so.
The implementation review unit has the task of overseeing the implementation of the 2003 Cabinet Office report, Making a Difference: Reducing School Paperwork. It identified 125 actions to reduce burdens; 97 have been completed and the rest are on target to be completed.
5.30 p.m.
We have also included in this Bill a number of changes to reduce the burden of Ofsted inspection. The Bill sits on the platform of a new relationship with schools, which is fundamentally about giving space to schools, freeing them from burdens, unnecessary controls and bureaucracy, and giving them the power and resources and do the job of raising attainment. The whole Bill is fundamentally about allowing them to focus their resources on getting real value rather than producing paper.
The noble Lord, Lord Dearing, said that there should be a ministerial champion. He is right. There is one. It could not be higher and more powerful. She is called the Secretary of State for Education. She has explicit responsibility for reducing bureaucracy. The Secretary of State takes a wide view of burdens—it is not just a question of looking at what the department does, but also at what local authorities might do.
Could Ofsted do more? In a sense, of course, the whole Bill—or parts of the Bill—is about reducing the burden of Ofsted on schools while keeping the

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benefits. I am glad that there is a consensus around the House that that is right and proper. That is where we are going.
Perhaps HMCI could play a role in keeping the Secretary of State informed about this wider view of the burdens. In practice, the thematic studies that HMCI undertakes look at those things, and it is open to us to ask HMCI to carry out a specific thematic study of burdens on schools when we think that is necessary and appropriate. We will bear that in mind.
I do not think that now is the time to do that, however, because we already have such a study underway, looking at the impact of the new relationship on schools in reducing burdens upon them. The National Foundation for Educational Research is to make an independent evaluation of the new relationship with schools trials, including the effectiveness with which it reduced bureaucracy for schools. It will report in July 2005. Let us not have another review set on top of another review. We would be barking if we behaved in that way.
We agree with the objective. We agree that one needs to be relentless and to have senior political leadership to achieve it, and involvement from those who suffer from bureaucracy as well as those who believe that their little measure is not too bad.
I will not go into detail about why the amendment is technically flawed. I do not think that will necessarily persuade the House one way or the other. I hope that the House accepts that we are committed to this objective, however. We have a range of strong measures in place, the statutory obligation to reduce bureaucracy and some powerful processes. We are seeing signs of early and significant success in this respect.
I hope that that has been helpful to the noble Lord, Lord Hanningfield, and that he does not feel minded to press his amendment to a Division.
Lord Dearing: My Lords, I welcome that indication that HMCI might be invited to undertake a thematic review. In my view, that is the right way to go about it. Yes, there is a massive problem. There needs to be action. This approach, however, looks a bit bureaucratic. I much prefer the independent thematic review by the inspector.
Lord Hanningfield: My Lords, this is an issue which is not going to go away. We are all concerned about it, and I am grateful to the Minister because he has expressed his views and is obviously concerned about it.
I do not want to add to the bureaucratic nature of reviews of reviews of reviews. One could shoot oneself in the foot by continually asking for another review. I am inclined, therefore, to note what the Minister says. Of course, it will be a different government looking at the issue in July. We might then get the chance really to reduce the level of bureaucracy.
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I will not press the amendment today. I am concerned about the issue, and I hope everyone here continues to be. With that, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 101 [Removal of requirements for governors' reports and parents' meetings]:
Baroness Sharp of Guildford Baroness Sharp of Guildford moved Amendment No. 8:
Page 54, line 19, leave out subsection (2).
The noble Baroness said: My Lords, in moving this amendment I should like to say that I shall not be moving Amendment No. 9.
This amendment has the effect of removing subsection (2) of Clause 101, which is about annual parents' meetings. Subsection (2) effectively means that only in Wales do annual parents' meetings have to be held. As noble Lords who look it up wondering what subsection (2) does will find, it amends Section 33 of the 2002 Act.
Some noble Lords may remember that we spent a good deal of time in 2002 debating an Education Bill which contained a lot about the new system of governance in schools—what boards of governors should be doing. One of the duties it imposed on boards of governors was to hold an annual parents' meeting. I shall refresh noble Lords' memories about what the obligations were under Clause 33 of the 2002 Act.
Clause 33 states:
"(1) Once in every school year the governing body of a maintained school shall hold a meeting (an 'annual parents' meeting') which is open to—

(a) all parents of registered pupils at the school,

(b) the head teacher, and

(c) other such persons as the governing body may invite.

(2) The purpose of the meeting is to provide an opportunity for discussion of the manner in which the school has been, and is to be, conducted, and of any other matters relating to the school raised by parents of registered pupils.
(3) Regulations may make provision as to circumstances in which a governing body are to be exempt from the obligation imposed by subsection (1)."
In other words, regulations may set out some reasons why a meeting should not be held.
In Committee and on Report we had substantial discussion of the relationships with parents, annual meetings and annual reports and the concept of the profile which is replacing the annual report. I think there was agreement all round the House that it is important that schools should have good communication between the head teacher, the body of the teaching staff in the school and the parents. We know that the Government are actively developing ideas to encourage schools to develop such relationships. We are sensitive to the fact that they are working on these issues.
We also know that research has shown time and again that pupils benefit when their parents are involved in the workings of the school and understand its aims and objectives. There are many schools in the country that are exemplars of good practice, where

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there is an extremely good relationship between the parents and the staff, and the parents are not only welcomed but frequently work with the staff to enhance what the school offers and the well-being of the children. One sees this very often in infant and primary schools. It is, perhaps, sometimes less true of secondary schools, but there are nevertheless many which apply good practice. Equally, there are some schools which are less good at making contact with the parents and where the relationship is somewhat difficult.
For that reason, we on these Benches—and this is a hesitation which I know is shared by the Conservative Benches and others in the Chamber—have been uneasy about abandoning completely the commitment to the annual meeting. We feel there should be an opportunity for parents to get together with the staff if they want to if there are no other opportunities to do so. Therefore we welcome the concept of the annual meeting because it provides at least once a year an opportunity for the governors, the head teacher and usually other members of staff to meet parents and listen to their worries, if they have them.
We would have preferred to table an amendment giving the head and the governing body a measure of discretion over holding an annual meeting, with the proviso that a note should be sent out with the compulsory annual profile explaining why they feel that the meeting is unnecessary. It may be that lots of other meetings with parents are held and we recognise that an annual meeting could be superfluous. However, if no meetings are held, such a provision would put pressure on schools to do so.
We also wanted to suggest that if 20 parents put forward a request in writing for an annual meeting, the school should hold one. Unfortunately we did not get our act together on the drafting. When we came to table it, the Public Bill Office objected, saying that it was too close to the one on which we voted in Committee. The amendment before us is effectively a fallback position.
This amendment would ensure that the provisions set out in the 2002 Act remain on the statute book. However, some flexibility is provided in Section 33(3) of that Act, which states:
"Regulations may make provision as to the circumstances in which the governing body are exempt from the obligation imposed by subsection (1)",
which obliges the governing body to hold an annual meeting. I would argue, therefore, that the 2002 Act already provides a degree of flexibility. A school does not have to hold an annual meeting, but essentially it is required to do so unless it already meets the requirements of the regulations.
The regulations make it clear that if there is a good reason not to hold an annual meeting because the governing body is already meeting with parents on many other occasions, it need not be held. We accept that. Good practice may make the annual meeting unnecessary.
I have said already that this amendment is not our first choice, but I believe it would cover the situation. Behind the Members on these Benches is a good number of parent bodies which are uneasy about the loss of the right to an annual meeting for parents. So I speak not only for the Opposition Benches, but also for a somewhat wider audience around the country. I beg to move.
Lord Hanningfield: My Lords, I support the noble Baroness in her amendment. When we debated this issue on Report, I agreed with virtually everything the Minister said. He stressed that the Government are seeking greater parental involvement and that events have moved on. But I agree with the noble Baroness, Lady Sharp, that removing the signal that it is a good idea to hold a parents' meeting is a mistake.
The legislation before us will not reflect the Minister's wish that in future parents should he more closely involved in schools. Therefore it is a retrograde step to take away the likelihood of holding an annual meeting, or at least the desire to do so. While such meetings are not always well attended, as least they are held. At some schools the meetings are very well supported, while for other schools tackling big issues, it provides an opportunity for parents to debate them.
This is an unnecessary step and I do not know why the Government want to take it. We can think of other ways of supporting parents' involvement in schools. I support the amendment.
5.45 p.m.
The Lord Bishop of Portsmouth: My Lords, I apologise for not being in my place at the start of the remarks of the noble Baroness, Lady Sharp, in support of her amendment. I am afraid that my agnostic hesitation about Amendment No. 3 now gives way to a deeper scepticism about this amendment. That is not born out of a sense of looking at this from an ivory tower, but from experience as serving both as the chair of governors of a school and, shall we say, serving as a parent of children in other schools at the time when the legislation specifying a meeting was brought in. I hasten to add that those are two different kinds of service.
This is not the time to be anecdotal, rather I shall make a general point. We are facing the need to find new ways of being a society that is just, sustainable and participatory. The parents' meeting is one example of that simply not working. I acknowledge the pressure to keep it, but I should like a little more detail about where that pressure is coming from. I am facing a profound disaffection with them. We need to find other ways of achieving our aims. Indeed, we may have to debate how to find people to serve on school governing bodies. I hear stories that parents do not attend annual meetings because they are scared of being dragooned into serving as school governors. That shows the profound scepticism that needs to balance well intentioned amendments.

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Because something does not work, it does not mean that one should persist in doing it. I am sufficiently sceptical to oppose this amendment.
Baroness Howe of Idlicote: My Lords, I am afraid that I must disagree with the right reverend Prelate. It is a great pity that this annual event is not to be proceeded with. It is argued that only those who are interested attend, while the rest of the parents feel even more excluded. While I am not against efforts to find new methods of involving parents—of course teachers and governors should find new ways and means of communicating with parents—it must be said that we have not yet found them. Given that, why, for goodness' sake, are we destroying a provision which enables some parents to attend the sort of meeting that they find valuable? They can learn about areas which perhaps they have not thought about, which in turn may influence their own approach to the school.
While I am sorry that the amendment before us may not be perfect, I certainly feel that we should take the opportunity to air the reasons why Members on the Opposition Benches and other groups think that the provision of an annual meeting is important. Perhaps it is now a tradition, even though it has existed for only a certain length of time. I have served on many governing bodies and I have a rather different view of the annual meeting from that of the right reverend Prelate. I support the amendment.
Lord Hunt of Kings Heath: My Lords, I raised a number of issues in relation to the annual meeting of the governing body at Second Reading because of my experience at a school where there was a lack of communication between the governing body and the parents. I posed the question of whether the annual meeting, notwithstanding the frequent problem of lack of attendance, provided a way of giving parents at least one opportunity to raise issues.
I would be grateful for clarification from my noble friend because we have made considerable progress with the Bill since Second Reading, in particular on new Clause 7 covering Ofsted inspections. It now provides a,
"Duty to have regard to views of certain persons".
That provides a great deal of comfort for those concerned about whether parents' concerns are being listened to.
The point of clarification I seek is this. Given that we are to have more frequent Ofsted inspections, I take it that one of the questions to be asked by the inspection team is whether the school has a satisfactory record of maintaining good links with parents. That being so, it might be the best way to ensure that there is good communication between parents and the school. If my noble friend can assure me of that, I shall be greatly comforted. The amendment would not then be necessary.
Lord Filkin: My Lords, I shall not speak for excessively long as it is probably one of those afternoons.
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The noble Baroness, Lady Sharp, is right that there is a strong measure of agreement on the objective. The debate is more about the detail and how to get there.
We have spoken at length about the importance of involving parents in their children's education for very good reasons. We have discussed schools behaving to parents as if their involvement in their child's education fundamentally matters and seeing them as partners rather than problems and best left out of the school. We have talked about the importance of parents feeling that they are active stakeholders in the governance, values and leadership of schools. We have referred to opportunities and said that the school must consult, inform, listen, govern and manage its corporate affairs in partnership with parents.
There is no debate between us on what the future should be, or about how schools behave at present. The debate is how to do it, and I am slightly hamstrung in that I cannot outline the conclusion of all the government work that we talked about previously.
Let me make it clear that we do not think that schools will fulfil their duties to parents just by holding an annual meeting. We all know that if schools behave only in that way, they are not listening to us or understanding the shift that this House wants.
The Education Select Committee strongly recommended in 1999 that the annual parents meeting should be abolished and that processes should be put in place to ensure that the school engaged much more creatively in the variety of ways that I described, rather than just having an annual meeting with its parents.
Levers are in place in the Bill and elsewhere to ensure that that happens without having a statutory obligation to hold an annual meeting. The anxiety of the Liberal Democrats and others at heart is that if we get away with not having a statutory obligation, we may throw everything away and have nothing in its place to ensure that parents are treated seriously.
I shall summarise a number of issues. First, as my noble friend Lord Hunt said, the importance of parents will be attached to Ofsted inspections. I shall not second guess what Ofsted will do about schools that do not relate well to, communicate with, consult, listen to or are influenced by parents. but it will consider such issues. That is on the inspection agenda and we know how powerful that lever is.
Secondly, the school improvement partner will be a lever for change and will discuss with schools how they relate to parents. Thirdly, there is a new statutory complaints procedure. Fourthly, there are procedures through local authorities and their leadership in working with schools and partnership arrangements at local level.
I shall go further in signalling to the House that these are not mere words. In response to the concerns of the House we intend to amend the regulations in force under Section 21 of the Education Act 2002 which deals with the roles and responsibilities of school governing bodies. I propose to add to the regulations a specific reference to the role of parents in the school. I cannot put the final wording of that before the House but it is likely to be something like,

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"We believe that the duty of the governing body should he to have regard to the views of parents". It will he in that territory. The school will have a statutory obligation that is put into force through regulation.
For a school to respond properly to the term, "have regard to the views of parents", it is self-evident that it will have to then think about the processes by which it engages with parents. Are there processes in place so that they can listen to, consult, inform, allow for dialogue with or involvement in the governance, thereby affirming the importance of the parent in the child's education? What are the schools doing in those respects?
I commit that we shall amend regulations to put such a duty on governing bodies. Off that will hang the sort of reviews that we discussed, which will then be inspected by Ofsted every three years or less when it comes to look at what is happening in practice.
In response to debates in the House, we are moving significantly to ensure that there is a shift. That is better than doing what the amendment suggests, which would leave the annual parents meeting in place and allow those in sleepy hollows who think that staying there and doing nothing else complies with their obligation. We shall remove that and put in its place through regulation a much wider challenge to governing bodies that will be respected by Ofsted.
I hope that that is helpful to the Opposition and all who have spoken in the debate.
Baroness Sharp of Guildford: My Lords, I thank the Minister for that reply. I recognise that he has moved in this direction, and he will be delighted to hear that that movement is sufficient for us not to wish to test the opinion of the House.
I acknowledge that the governing body shall "have regard to" the views of parents. I take that as being more than just consultation with parents. I also accept the degree to which the annual meeting is a totem. In a sense on the face of the Bill there is an element of a totem of good parental relationships that could be abused.
In the light of what the Minister has said today, and the debates that we have had in Committee and on Report, I beg leave to withdraw the amendment.
Amendment. by leave, withdrawn.
[Amendment No. 9 not moved.]
Clause 108 [Supply of information: free school lunches etc.]:
Baroness Andrews Baroness Andrews moved Amendment No. 10:
Page 59, line 9, leave out "that Act" and insert "the Education Act 1996"
The noble Baroness said: My Lords, this is a purely technical amendment that is designed to correct a
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drafting inaccuracy that was left as a result of this House agreeing to previous government amendments on Report. I beg to move.
On Question, amendment agreed to.
Baroness Walmsley Baroness Walmsley moved Amendment No. 11:
After Clause 114, insert the following new clause—
"REQUIREMENTS TO BE REGISTERED
In section 134 of the 2002 Act (requirement upon teachers to be registered), in subsection (5)(a) leave out "or" at the end of the paragraph and after paragraph (b) insert—
"(c) an Academy,
(d) a city technology college, or
(e) a city college for the technology of the arts.""
The noble Baroness said: My Lords, I shall also speak to Amendment No. 12, which is grouped with this.
The purpose of the two amendments is to ensure that all teachers, including those in academies and CTCs are to be registered and regulated by the General Teaching Council in line with other teachers in the maintained sector. The amendments are similar to those tabled on Report, apart from removing the reference to pupil referral units, because we listened to the Minister when he said they were not necessary.
Under Section 134 of the Education Act 2002 the Secretary of State or the National Assembly for Wales may by regulation provide that a specified activity may be carried out in an LEA-maintained school or a non-maintained special school by a qualified teacher only when that teacher is fully registered with the General Teaching Council for England or for Wales. A trainee teacher may undertake a specified course of training leading to qualified teacher status only if he or she is provisionally registered with the GTC. In addition provisional registration may be required of unqualified teachers undertaking specified work in schools.
The regulations do not apply to teachers working in schools such as academies, which are legally defined as independent and often referred to by the Government as independent state schools. I believe that professional registration is a vital safeguard for pupils and the public. The procedures for regulating teachers need to be transparent and open for scrutiny. To operate effectively teachers must have the trust and respect of pupils, parents and society as a whole. Public confidence in the system for regulating teachers is a prerequisite.
That was the guiding principle behind the creation of the General Teaching Council in 2001, putting teachers on a par with doctors and lawyers in having a self-regulatory body. As I mentioned on Report, at its January council meeting the members of the GTC for England expressed grave concern that currently the Government do not plan to bring teachers covered by my amendment within the scope of professional regulation. Stephen Twigg has offered to review the matter if it becomes "a significant issue".
6 p.m.
Organisations representing parents, governors, diocesan authorities and the teaching, head teacher

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and lecturer unions jointly signed a letter to the schools Minister urging him to bring teachers in academies into the scope of professional regulations. I have rarely seen an amendment supported by so many reputable organisations led by the NUT and the General Teaching Council.
In response to the GTC the schools Minister argued that many academies may require their teachers to register and that individual teachers may choose to register, even if not required to do so. In his response to the amendment tabled on Report, the Minister said something very similar. He also argued that,
"Children who attend academies should be taught by staff with at least the same level of qualifications as those who do not. That is precisely why the funding agreements between the Secretary of State and academies set requirements as to the qualifications and health standards of the teachers they employ".—[Official Report, 24/2/05; col. 1454.]
Funding agreements with private hospitals that carry out operations for the NHS may well also set standards, but they do not allow doctors to opt out of GMC registration. The GTC has worked very hard in developing its regulatory function to set standards for the whole profession, akin to that of, say, the Law Society and the General Medical Council. Every solicitor, whether in private practice, in industry or in the public sector, is subject to the same statutory regulatory system of standards. It would not be suggested that that should apply selectively by reference to who happened to be the employer of such a solicitor. None of your Lordships would like to be treated by a doctor who is not registered with the General Medical Council. As we speak, all social workers are also registering or they will not be allowed to work. I really wonder whether the Government were serious when they set up the GTC if they are not now prepared to support it.
The GTC regulatory role is not simply one of disciplining teachers. Discipline is a response to a fault and that is a matter for the employer at the time when a teacher does something wrong. The GTC regulates by deciding whether, in consequence of conduct or lack of competence, a teacher is fit to continue working as a teacher in a state school. During the debate, the Minister also said,
"The GTCE register is, however, only one of the available means of checking the standards of a teacher's past performance".—[Official Report, 24/2/05; col. 1454.]
I really must ask him why he supports multiple processes to achieve the same object. The GTC regulatory function is not to provide a means of checking the standards of a teacher's past performance—that is Ofsted's job—but it is to consider whether a teacher should continue to have the essential benefit of registration for the future. The issue of registration leads to a number of unhelpful anomalies.
So questions arise. Does a newly qualified teacher, working in an academy, need to be registered with the GTC while undertaking induction? Does a teacher undergoing induction in an academy have a right of appeal to the GTC if he or she is deemed to have failed? If, following an appeal, the GTC judges that a teacher should not pass the induction, is that teacher able to continue to work at the academy?
The fact that there is no obligation to register raises all kinds of anomalies and questions and certainly indicates a lack of confidence and support for the General Teaching Council. The supporting organisations were dismayed by the Government's attitude to this amendment on Report. The GTC and its partners want to see a consistent approach to registration so that teachers moving between schools—maintained schools, the academies and the CTCs—do not slip out of the net of professional regulation, which, in the light of the Children Act 2004, is even more important than it was before. I beg to move.
The Lord Bishop of Portsmouth: My Lords, the sentiments behind the amendment are worthy, timely and just, but should it find a place in the Bill? My view is that it should because these academies are a new breed of school and the more they are seen to show the same collective disciplines as every other kind of school—in this case professional discipline regarding the teaching profession—the better.
The noble Baroness has alluded to the organisations that support this move. The Church of England education division is on record as taking this line in relation to Church of England academies. It would be consistent to extend such a move further. Therefore, I hope that the amendment will find support in your Lordships' House. I am very grateful to the noble Baroness, Lady Walmsley, for riding the hobby horse of our academies in such a creative way here.
Lord Filkin: My Lords, as we know from previous discussions on various parts of the Bill, academies are registered independent schools. Like all independent schools, they are not bound by the legislative framework that applies to maintained schools. Instead they have their own legislative framework, which includes inspection by Ofsted to obtain registration, which ensures a high standard of professionalism and propriety within the independent sector.
Seeking to bring academies back into all the regulatory constraints, burdens and bureaucracy of the maintained sector is, as we have said previously, to fetter a crucial experiment before it has had the chance and freedom to demonstrate whether it can succeed where so many others have failed before: that is, in turning around some of the most seriously failing schools in our society, which, as a consequence, has meant that very many children have suffered. Therefore, for the reasons that I have given now and before, we do not believe that it is right to change in this respect.

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The existence of legally independent schools within the state sector requires the right balance to be struck between safeguards in the form of conditions set by central Government and the freedoms from red tape needed to tackle deep-seated problems of deprivation and underachievement. The Government believe that they have struck the right balance and do not believe that there are the risks or harm that the noble Baroness, Lady Walmsley is right to probe.
I shall try to illustrate that point. Paragraph 17 of the model funding agreement between the Secretary of State and an academy reads:
"The Academy Trust shall employ as teachers persons who meet the health standards set out in the Education (Health Standards) (England) Regulations 2003 and who are also qualified teachers within the meaning of the Education (School Teachers' Qualifications) (England) Regulations 2003".
Not only does that require academies to employ as teachers only persons with qualified teacher status, but it also backs up that requirement with a very powerful enforcement mechanism, in the form of the contractual agreement, which was mentioned earlier, and the sanctions that are embedded in that.
On Report, the noble Baroness, Lady Walmsley, described registration with the GTCE as "probably the best" mechanism that we have for ensuring the quality of a member of the teaching staff. Reflecting on that, earlier this week my officials took the trouble to seek the advice of a number of head teachers of maintained schools about what happens in the real world and how they would assure themselves of the suitability and competence of a prospective member of staff. That has considerable relevance to this debate.
Head teachers confirm, as one might expect, that they would insist on the usual Criminal Records Bureau check. They would also insist on checking List 99, which has sometimes loosely been called the register of barred teachers who are found, as a result of disciplinary action, to be unsuitable to have care of children; for example, because they have committed child abuse of one dreadful form or another. That is how head teachers behave.
They were then asked how they would verify a candidate's professional competence as a teacher. The noble Baroness, Lady Walmsley, implied that the primary source of that information would be the GTCE, a source of information that would not be open to the head of an academy. But that is not what the heads of maintained schools told us. In every case, they said they would rely first and foremost on the reference they would seek from a candidate's previous employer.
That is for good reason. A teacher would normally be referred to the GTCE on competence grounds only as a result of having already been disciplined by their employer. That would catch only a very small proportion of cases that would be seen as warranting a referral to the GTCE. Therefore, a head is utterly sensible not to have multiple sources but to go to the reference from the previous school or schools and to ask them. It would capture what would have been registered with the GTCE if the teacher was so registered, but, more importantly, would also capture the far wider range of circumstances where aspects of that teacher's behaviour might be
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germane to an honest reference on whether they were suitable. Heads are not daft in seeing the reference, rather than the GTCE, as their source of information.
I could buttress that by indicating, for example, that on List 99 there are some 3,000-plus teachers registered. Since June 2001 the GTCE has issued only two prohibition orders on the grounds of incompetence. I am not having a poke at the GTCE, but we must not kid ourselves that this is the central way in which a head—whether of an academy or not—validates whether they should employ someone.
The GTCE has a function, a role, but the risks of not forcing academies to say that everybody must be with the GTCE have been talked up. Some trust governing bodies do so, but the risks are not there, for the reasons I have given.
The Criminal Records Bureau, List 99 and the reference cover all these issues. There is no need to add additional burdens. For fundamental reasons, we should minimise the burdens on academies, otherwise they will not have the scope to deliver the improvement that we need of them.
I hope that that has been helpful, if not totally comforting, to the noble Baroness, Lady Walmsley.
Baroness Walmsley: My Lords, I thank the Minister for that response. I would like to respond to a few of his points.
He said that academies are independent schools, but they were substantially paid for by government money and will be maintained by the state. The state has enormous interest in their standards.
The Minister seemed to think that the amendment would be an unwarranted fettering of the freedom of the academies. The academies are expected to co-operate, for example, with the duties imposed by the Children Act 2004. I wonder whether the Minister thinks that that is an unwarranted fettering of their freedom. We are talking about basic teaching standards. It is very important.
I wonder whether the Minister thinks of registration as no more than red tape. I would point out that the red tape is more on the teacher than on the academies. It is the teacher who has to get registered. All the academy has to do is check that they have done it.
The Minister mentioned head teachers, but two of the organisations that back this amendment are the Secondary Heads Association and the National Association of Head Teachers. I also suggest that he remembers that head teachers often have to bring in teachers at very short notice. Yes, of course they have to check police records and List 99. Of course the GTCE registration is not the only way by which a head teacher would satisfy him or herself of the standard of a new teacher coming into the school. However, it is a basic that can be added to the armoury to make sure that a teacher coming in, even at short notice, is of appropriate standard, both for the academies and CTCs, as well as maintained schools.

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I wonder why the Government bothered setting up the General Teaching Council for England if they are now about to undermine it by saying "Oh, these wonderful best schools that are going to be do not have to bother with that". It does not seem logical. I beg to test the opinion of the House.
6.14 p.m.
On Question, Whether the said amendment (No. 11) shall be agreed to?
Their Lordships divided: Contents, 119; Not-Contents, 125.

Division No.3

CONTENTS

Addington, L.

Linklater of Butterstone, B.

Alderdice, L.

Livsey of Talgarth, L.

Ashcroft, L.

Lyell, L.

Astor of Hever, L.

McColl of Dulwich, L.

Attlee, E.

MacGregor of Pulham Market,

Avebury, L.

L.

Bonham-Carter of Yarnbury, B.

Mackay of Clashfern, L.

Bradshaw, L.

Mackie of Benshie, L.

Brougham and Vaux, L.

Maclennan of Rogart, L.

Buscombe, B.

McNally, L.

Byford, B.

Maddock, B.

Campbell of Alloway, L.

Mar and Kellie, E.

Carlile of Berriew, L.

Marlesford, L.

Carlisle of Bucklow, L.

Mayhew of Twysden, L.

Clement-Jones, L.

Miller of Chilthorne Domer, B.

Colwyn, L.

Miller of Hendon, B.

Cope of Berkeley, L.

Montrose, D.

Craigavon, V.

Morris of Bolton, B.

Crickhowell, L.

Neuberger, B.

Dean of Harptree, L.

Newby, L.

Denham, L.

Newton of Braintree, L.

Dholakia, L.

Noakes, B.

Dixon-Smith, L.

Northesk, E.

Dundee, E.

Northover, B.

Dykes, L.

Norton of Louth, L.

Elton, L.

O'Cathain, B.

Falkland, V.

Palmer, L.

Falkner of Margravine, B.

Park of Monmouth, B.

Ferrers, E.

Patten, L.

Flather, B.

Peyton of Yeovil, L.

Fookes, B.

Pilkington of Oxenford, L.

Forsyth of Drumlean, L.

Portsmouth, Bp.

Garden, L.

Razzall, L.

Geddes, L.

Redesdale, L.

Glenarthur, L.

Rees, L.

Glentoran, L.

Renton, L.

Goodhart, L.

Roberts of Conwy, L.

Hamwee, B.

Roberts of Llandudno, L.

Hanningfield, L.

Rodgers of Quarry Bank, L.

Harris of Richmond, B.

Roper, L. [Teller]

Henley, L.

Rotherwick, L.

Holme of Cheltenham, L.

Russell-Johnston, L.

Howard of Rising, L.

Sandberg, L.

Howe of Aberavon, L.

Seccombe, B.

Howe of Idlicote, B.

Selsdon, L.

Hunt of Wirral, L.

Sharp of Guildford, B.

Jenkin of Roding, L.

Shaw of Northstead, L.

Kimball, L.

Shutt of Greetland, L.

King of Bridgwater, L.

Skelmersdale, L.

Kingsland, L.

Smith of Clifton, L.

Knight of Collingtree, B.

Steel of Aikwood, L.

Laird, L.

Stewartby, L.

Lang of Monkton, L.

Stewartby, L.

Lester of Herne Hill, L.

Thomas of Swynnerton, L.

286

Thomas of Walliswood, B.

Vallance of Tummel, L.

Thomson of Monifieth, L.

Waddington, L.

Tope, L.

Wallace of Saltaire, L.

Tordoff, L.

Walmsley, B. [Teller]

Trenchard, V.

Walpole, L.

Ullswater, V.

Wilcox, B.

NOT-CONTENTS

Acton, L.

Haworth, L.

Ahmed, L.

Hayman, B.

Amos, B. (Lord President of the

Hilton of Eggardon, B.

Council)

Hogg of Cumbernauld, L.

Andrews, B.

Hollis of Heigham, B.

Archer of Sandwell, L.

Howells of St. Davids, B.

Ashton of Upholland, B.

Howie of Troon, L.

Bach, L.

Hoyle, L.

Bassam of Brighton, L.

Hughes of Woodside, L.

Bernstein of Craigweil, L.

Hunt of Kings Heath, L.

Billingham, B.

Jones, L.

Blackstone, B.

Kilclooney, L.

Blood, B.

King of West Bromwich, L.

Boothroyd, B.

Kirkhill, L.

Borrie, L.

Layard, L.

Boston of Faversham, L.

Lea of Crondall, L.

Bragg, L.

Levy, L.

Brooke of Alverthorpe, L.

Lockwood, B.

Brookman, L.

Lofthouse of Pontefract, L.

Burlison, L.

McDonagh, B.

Campbell-Savours, L.

Macdonald of Tradeston, L.

Carter, L.

McIntosh of Haringey, L.

Carter of Coles, L.

McIntosh of Hudnall, B.

Chandos, V.

MacKenzie of Culkein, L.

Clark of Windermere, L.

Mackenzie of Framwellgate, L.

Clarke of Hampstead, L.

McKenzie of Luton, L.

Clinton-Davis, L.

Massey of Darwen, B.

Cohen of Pimlico, B.

Maxton, L.

Corbett of Castle Vale, L.

Mitchell, L.

Crawley, B.

Morris of Aberavon, L.

David, B.

Moser, L.

Davies of Coity, L.

Parekh, L.

Davies of Oldham, L. [Teller]

Paul, L.

Dean of Thornton-le-Fylde, B.

Pendry, L.

Dearing, L.

Pirkeathley, B.

Derby, Bp.

Plant of Highfield, L.

Desai, L.

Powell of Bayswater, L.

Dixon, L.

Radice, L.

Drayson, L.

Randall of St. Budeaux, L.

Dubs, L.

Randell of Babergh, B.

Erroll, E.

Rosser, L.

Evans of Parkside, L.

Rowlands, L.

Evans of Temple Guiting, L.

Royall of Blaisdon, B.

Falconer of Thoroton. L. (Lord

Sawyer, L.

Chancellor)

Sheldon, L.

Farrington of Ribbleton, B.

Simon, V.

Faulkner of Worcester, L.

Snape, L.

Filkin, L.

Stone of Blackheath, L.

Fyfe of Fairfield, L.

Taylor of Blackburn, L.

Gale, B.

Tomlinson, L.

Gibson of Market Rasen, B.

Triesman, L.

Gilbert, L.

Truscott, L.

Golding, B.

Tunnicliffe, L.

Goldsmith, L.

Turner of Camden, B.

Goudie, B.

Uddin, B.

Gould of Potternewton, B.

Wall of New Barnet, B.

Graham of Edmonton, L.

Warner, L.

Grantchester, L.

Warwick of Undercliffe, B.

Greenway, L.

Whitaker, B.

Grocott, L. [Teller]

Whitty, L.

Harrison, L.

Wilkins, B.

Hart of Chilton, L.

Williamson of Horton, L.

Haskel, L.

Woolmer of Leeds, L.

Young of Norwood Green, L.

Resolved in the negative, and amendment disagreed to accordingly.
6.24 p.m.
[Amendment No. 12 not moved.]
Clause 117 [Functions to be exercisable by National Assembly for Wales]:
Lord Filkin Lord Filkin moved Amendment No. 13:
Page 64, line 14, at end insert—
"Schedule 18 (further amendments related to Part 4)."
The noble Lord said: My Lords, this is a purely technical amendment consequential on the amendments to Schedule 18 which were approved in Committee. Its purpose is to ensure that the new powers can be exercised by the Assembly. I beg to move.
On Question, amendment agreed to.
Clause 124 [The appropriate authority by whom commencement order is made]:
Lord Hanningfield Lord Hanningfield moved Amendment No. 14:
Page 67, line 13, at end insert—
"paragraph 8 of Schedule 16 (and section 99 so far as relating to that paragraph)"
The noble Lord said: My Lords, as we have discussed several times, the changes to the funding system proposed under Clause 98 amount to a complex piece of legislation. As we said in Committee and on Report, we very much welcome the idea of a three-year funding cycle, and yet we have a number of continuing concerns about the Government's proposals for implementing it and for making certain that it works.
Given the importance of the funding issue and the desire of the whole House to get it right, we feel that it is imperative that the Bill and subsequent regulations or guidance relating to the future of schools' funding receive proper parliamentary scrutiny and are not rushed through in undue haste.
These amendments would ensure that the first set of regulations which bring in Clause 98 and the reformed funding system would have to be debated and agreed by Parliament first. This is a sensible and rational way to proceed. I believe the Government support the intent behind the amendments. I beg to move.
Lord Filkin: My Lords, we did indeed have a discussion in Committee about regulations on school funding being subject to the affirmative procedure. In fact, debating "affirmative or negative" is one of the leitmotivs of this House. I do not mean to be flippant. We signalled that it was excessively burdensome always to have the affirmative procedure, but, recognising the feeling of the House, I accept that the introduction of three-year budgets based on the academic year is an important and significant change and that the House has a legitimate interest in scrutinising the detail of the proposals.
I remain of the view that we do not need this to be done every year, but the amendment does not require that. I am happy therefore to signal that the Government will
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not resist the amendment proposed by the noble Lord, Lord Hanningfield. I thank him for his measured thoughtfulness in this respect.
Lord Hanningfield: My Lords, this is an example of how this place can work. I am grateful to the Minister for accepting the amendment. Given, as I said, that this is complex legislation, this amendment is the right way forward.
On Question, amendment agreed to.
Schedule 1 [Her Majesty's Chief Inspector of Schools In England]:
Lord Filkin Lord Filkin moved Amendments Nos. 15 to 22:
Page 68, line 12, leave out from "inspector" to end of line 13.
Page 68, line 13, at end insert—
"(2A) The Chief Inspector must ensure that additional inspectors have the necessary qualifications, experience and skills to assist him in the effective discharge of his functions.
Page 68, line 14, at beginning insert "In pursuance of the duty imposed by sub-paragraph (2A),"
Page 68, line 19, at end insert "and the skills that they are to be required to demonstrate in the exercise of those functions"
Page 68, line 24, at end insert—
"(4A) If the Chief Inspector has entered into arrangements with persons who are not themselves additional inspectors ("inspection service providers") for the provision by the inspection service providers of the services of inspectors, the Chief Inspector must publish, at intervals of not more than 12 months, a list of the names of those persons who, as at a specified date, are currently notified to him by any inspection service provider as persons with whom the inspection service provider proposes to make arrangements for the carrying out of inspections or behalf of the Chief Inspector."
Page 68, line 25, leave out sub-paragraph (5).
Page 68, line 30, leave out from "England" to end of line 32 and insert—
"(7) The Chief Inspector may not authorise an additional inspector to conduct an inspection of a school under section 5 unless—

(a) the inspection is to be supervised by one of Her Majesty's Inspectors of Schools in England, or

(b) the additional inspector has previously conducted an inspection under that section under the supervision of one of Her Majesty's Inspectors of Schools in England ("the supervising inspector") to the satisfaction of the supervising inspector."

Page 69, line 15, after "sub-paragraph (3)" insert "and paragraph 2(7)"
On Question, amendments agreed to.
Schedule 16 [Funding of maintained schools]:
Lord Hanningfield Lord Hanningfield moved Amendment No. 23:
Page 136, line 35, at end insert—
"(c) following the initial allocation of its schools budget to a local education authority in England, there shall be a 30 day period of consultation and clarification in regard to the amount referred to in subsection (2)."
The noble Lord said: My Lords, I have tabled Amendment No. 23 at this late stage in an attempt to clarify further and to help with regard to the complex issues referred to in previous amendments.
With most funding systems, such as local authority grant settlements, the Government announce a provisional settlement and people are able to make representations and comment on it. A little later, the Government will announce a final settlement. In view of the discussion we had previously about the muddle between Bromley and Buckinghamshire—even if it concerned only capital—I believe that there should be some mechanism to enable schools and local authorities to comment on government settlement arrangements in case there are any anomalies.
Therefore, even at this late stage, I hope that the Government will reflect on this amendment and assure us that something like this will be done. The process should be transparent and schools and local authorities should be able to spot any problems. Given that modern technology does not always work, there could be loops in the system that prevent the delivery of what is expected. Thus, at this late stage of the Bill, I am proposing this amendment in the hope that the Government will give us an assurance about how the process will work. I beg to move.
6.30 p.m.
Lord Filkin: My Lords, I thank the noble Lord, Lord Hanningfield, for what I heard as an important probing amendment. The noble Lord is seeking to get on to the record some clarification of the detail of these mechanisms. I will do my best to be as helpful as I can. If there are further points of detail, I will seek to buttress it with further correspondence—copied, of course, to both opposition parties—if that would be helpful.
I should explain that under the new system of three-year budgets, initial allocations of the dedicated schools grant will be based primarily on estimates of future pupil numbers rather than actual data. Those estimates will be used to determine a unit of resource per pupil for each authority, which will then be guaranteed. There will then come a point, of course, when allocations will be finalised based on actual data. I accept entirely the need to consult local authorities at that point to ensure that the underlying data are accurate. That would, for example, parallel the existing system for the local government finance settlement as a whole, under which a provisional settlement is issued for consultation and that is then followed by a final settlement. I am happy to give the House an undertaking that this kind of consultation will take place.
I do not think that it is necessary to put on the face of primary legislation a requirement to consult, because it is in everybody's interest that such consultation takes place. If there were to be a mistake in the underlying data then it is in the Government's interest, as well as in the authorities' interest, to be alerted to that as soon as possible. These are, however, broad framework powers and including detail about exactly how and when consultation should take place would be unnecessarily prescriptive and could get things wrong.
I fully sympathise with the underlying purpose of the amendment but, for the reasons I have explained, it is not necessary to have this requirement on the face
290
of primary legislation. I should also add that, for various technical reasons, the amendment would not achieve its intended effect. I also understand the desire of the noble Lord to see full consultation on the distribution formula as well as on the data underlying the distribution. Of course, any such consultation would in practice have to take place well before allocations were issued to authorities rather than after—as implied by the amendment.
We have made clear that we do not intend to make any significant changes to the existing SFSS formula in the short term. There will be some minor technical changes, and we will consult all interested parties on those in due course, just as we have in recent years. If, in the future, we were proposing to make more fundamental changes to the formula, we would again consult interested parties fully on those. Again, however, it does not make sense to tie such consultations to the determination of the authorities' schools' budget, because, as I have said, the formula will have to be determined well before the DSG is allocated. Nor will there necessarily need to be a consultation every year, since allocations will cover more than one year at a time.
As I have said, I do not think it is necessary to have such a requirement on the face of the Bill. I hope that what I have said is helpful. I shall be happy to amplify anything that is not clear and I hope that I have set, at least partly, the mind of the noble Lord, Lord Hanningfield, at rest.
Lord Hanningfield: My Lord, I thank the Minister for that reply. It does set my mind partly at rest. I was also reassured that he might set out some further thoughts in writing. As we are now probably moving to this legislation becoming law, we want to make certain that three-year funding, which we all support, will work. We want to make certain that the Government have all the procedures in place and the arrangements for consultation.
I thank the Minister for his comments today. I shall certainly read in Hansard what he has said. If he can amplify it further, I would be grateful. With that, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Hanningfield Lord Hanningfield moved Amendment No. 24:
Page 141, line 6, at end insert—
"8 In section 138 of the 1998 Act (orders and regulations), in subsection (5) (orders and regulations that are subject to affirmative procedure) after paragraph (b) insert "or
(c) the first regulations to be made under section 45AA, or
(d) the first regulations to be made under section 47 in relation to England after the coming into force of paragraph 6 of Schedule 16 to the Education Act 2005,".
On Question, amendment agreed to.
An amendment (privilege) made.
Lord Filkin: My Lords, before finally moving that the Bill do now pass, I want to thank the House. The

291
Bill has been well scrutinised. Sometimes, it has felt too well scrutinised—but that is life. It is really important that the measures in the Bill are enacted as soon as possible, as they bring substantial benefits to schools and pupils. We are well on course to doing that with the good support across the House on the fundamentals of the Bill. I thank the House for that.
In conclusion, I should like to thank the officials, who have been resolute in their response to my unreasonable and demanding request that on this Bill we should seek to be highly responsive to the House. I thank them most warmly for that.
My Lords, I beg to move that this Bill do now pass.
Moved, That the Bill do now pass.—(Lord Filkin.)
On Question, Bill passed, and sent to the Commons.

Electoral Law (Northern Ireland) Act 1962 (Amendment) Order 2005
6.36 p.m.
Baroness Farrington of Ribbletonrose to move, That the draft order laid before the House on 20 January be approved [7th Report from the Joint Committee].
The noble Baroness said: My Lords, this short order amends Article 11(1A) of the Electoral Law (Northern Ireland) Act 1962 to change the date of the local elections in Northern Ireland from the third Wednesday in May to the first Thursday in May, on a permanent basis. If this measure is accepted, it will mean that the Northern Ireland local elections due on Wednesday, 18 May 2005 will now take place on Thursday, 5 May.
This measure is a purely administrative one and simply brings local election dates in Northern Ireland into line with the rest of the United Kingdom. It has been discussed in advance with the chief electoral officer and the Electoral Commission and has the broad support of parties in Northern Ireland. The order is compatible with the European Convention on Human Rights. It is being made by the Secretary of State in exercise of the powers conferred on him by Section 84(1) of the Northern Ireland Act 1998.
I commend the Order to the House. I beg to move.
Moved, That the draft order laid before the House on 20 January be approved [7th Report from the Joint Committee].—(Baroness Farrington of Ribbleton.)
Lord Smith of Cliftonrose to move, as an amendment to the Motion, at end to insert "but this House regrets that Her Majesty's Government did not take full account of the concerns expressed by the Electoral Commission about polling for more than one election using different voting systems taking place on the same day."
The noble Lord said: My Lords, I thank the Minister for briefly pointing out the rationale behind this order. We find it very difficult to accept the Government's reasoning for moving the date of the local elections in Northern Ireland. Why is it suddenly so necessary to
292
move the date of the local elections, when Northern Ireland has coped perfectly well with voting on the third Wednesday in May since at least 1973? Why are the Government suddenly so keen to bring Northern Ireland into line with the rest of the UK?
Elections in Northern Ireland are carried out by the Chief Electoral Officer for Northern Ireland, and the electoral office there. Administratively, it makes no difference whether local elections in Northern Ireland take place on the same day as the rest of the UK. The change will bring Northern Ireland into line only with the English shire practice. The Scottish Parliament legislates for local government there—and in no other aspect of local government are the Government proposing to bring Northern Ireland into line with Great Britain.
There is not the consistency in government policy that the Minister implied. We should recall that in 2003 the Government were not so keen to keep Northern Ireland in line with the rest of the UK. It was intended to have elections to the Northern Ireland Assembly, the Welsh Assembly and the Scottish Parliament on the same day. However, the Government postponed elections to the Northern Ireland Assembly twice before finally holding them in November 2003.
Further, Northern Ireland is not averse to holding elections on days other than Thursday. As I have said before, local elections are traditionally held on a Wednesday; the postponed Assembly election in 2003 was held on 26 November, a Wednesday.
A major problem is that the Government have not had any formal consultation on this proposal. It has only been made public at a very late stage, which raises suspicions about the Government's real motivation. We suspect that it is to ensure that the local elections in Northern Ireland coincide with the general election—hence our amendment to the Motion—and this will do nothing but create problems.
In 2001, two elections in one day using two different voting systems—first past the post and single transferable vote—led to significant confusion. Under STV, the candidates are numbered 1,2,3; this is very different from the additional member system, for example, under which a candidate and a list both get a single cross. This created extra work for polling station staff who had to remind voters which papers were to be used for which system. From evidence at counts, there would have been a massive number of spoilt papers if the usual UK rules on the interpretation of marks other than a cross had been applied. In a number of polling stations, electors were deterred by lengthy queues. In at least one, at Garrison in County Fermanagh, the poll remained open illegally late, with consequent allegations of intimidation of staff by party workers to achieve this.
The report of the Electoral Commission into the 2001 general election—Election 2001: The Official Results—said:
"This year, for the first time, the election in Northern Ireland consisted of a synchronised poll, combining the Westminster general election with elections to the 26 district councils. Local elections held under the single transferable vote (STV) system, have traditionally taken place on a different day than a

293
Westminster poll and concern was expressed that the combination would place undue pressure on the resources of the Electoral Office. Almost inevitably, the process of completing two ballot papers with separate voting systems took more time than anticipated and in some areas substantial queues built up outside polling stations. A number of spoilt ballot papers may also indicate that the combination of the two electoral systems led to confusion among voters.
"Despite extensive publicity, including television advertising aimed at encouraging people to vote early in the day, some Presiding Officers reported having to turn voters away at the close of poll. Frustration with these delays led to reported irregularities, where voters were allowed to cast their votes after the official closing time of 10pm. In one such case, in the constituency of Fermanagh and South Tyrone, an election petition has now been brought by the defeated Ulster Unionist candidate. Concerns were also raised over the safety of staff and security of polling stations after two police officers and an elector were injured … in a polling station shortly before it closed".
Northern Ireland is different; it has different election systems, and it will, we believe, lead to further confusion if the local elections are held at the same time as the general election. I beg to move.
Moved, as an amendment to the Motion, at end to insert "but this House regrets that Her Majesty's Government did not take full account of the concerns expressed by the Electoral Commission about polling for more than one election using different voting systems taking place on the same day".—(Lord Smith of Clifton.)
Lord Glentoran: My Lords, I have listened to what the noble Lord, Lord Smith, has said about his amendment. Your Lordships will not be surprised to know that I had discussions and thoughts about this before coming in today.
The noble Lord makes many good points. However, we have other major problems with elections in Northern Ireland which he did not mention. Perhaps one of the most serious is that of turnout, which is also relevant in this country. Turnout at elections in Northern Ireland has been falling: the figures used to be in the seventies and are now in the low fifties. Figures for the turnout of young people are also falling.
Coming into line with the remainder of the UK has pluses and minuses. I can see from the Government's point of view and an administrative point of view why this seems sensible. As a rule, the more that Northern Ireland's processes come into line with those of the UK, the happier I am and the better it is for all. That is what I believe. However, I accept that there is a balance between the risk of confusion, with two different voting systems, and the extra time it will take to operate the polls should the electorate turn out late in the day in majority numbers.
The noble Lord mentioned what happened in 2001. The officials responsible for the election should have learnt from that experience and put adequate staffing and polling booths into the polling stations. On balance, I believe that for the political parties to be able to kill two birds with one stone—or one shot—by having one day for polling, albeit with two different systems, is probably easier and has a greater possibility of getting more people to the polls than to have poll A on day one and a second poll a week or two later. I do
294
not believe that there is sufficient interest in politics in Northern Ireland for the electorate to turn out on what might be chilly, rainy, early spring days and vote twice when, with some sensible organisation, such as the order provides, it could be done on one day.
I do not support the noble Lord's amendment. I support the order unamended.
Lord Shutt of Greetland: My Lords, I think that the order is absolutely wrong. Here we are, on 2 March, discussing bringing forward an election two months to 5 May. If it really were a matter of synchronising local government elections in England and local government elections in Northern Ireland, it would be thoroughly and properly discussed as a synchronising measure and would not be rushed in at this stage. We all know what this is about—it is about the unannounced general election.
I have three questions for the noble Baroness. I believe that whatever is done, there will be an element of confusion because two electoral systems will be used on the same day. People will be given two ballot papers—on one you are requested to put a cross next to one candidate's name and on the other you have to put 1,2,3 until you have exhausted your choice.
If the local government ballot paper is marked with one X at the count, is that counted as a first preference? Secondly, if, at the national election, people mark the ballot paper 1,2,3, is that No. 1 regarded as an X? Those are two fundamental questions. I am concerned that the vote should have real value.
My third question might be seen as a little more esoteric. Paragraph 8.1 of the Explanatory Memorandum says:
"A Regulatory Impact Assessment has not been prepared for this instrument as it has no impact on the public sector, business, charities or voluntary bodies".
Surely the result of an election could have all sorts of impact on those bodies. I should have thought that there was one particular impact from the local government point of view, if I get an affirmative answer to my questions about the X and the 1,2,3. Supposing the person who is given an X on the local government ballot paper gets well beyond the quota. The fact that there is no 2,3,4,5 on the ballot paper so marked will affect the election.
I would have thought that there should have been a regulatory impact assessment for us to know what was going to happen. As my noble friend Lord Smith explained, we have been in the situation before with two elections on one day, so we know that there will be confusion; we just do not know how much. I would have thought that that would have an impact on a result, which could have an important impact on the way in which local government is conducted in Northern Ireland.
Baroness Farrington of Ribbleton: My Lords, I would like to thank noble Lords who have spoken. I begin with the last point raised by the noble Lord, Lord Shutt. My understanding of the terms of reference on regulatory impact assessment does not

295
tally with his. I do not think that a regulatory impact assessment would achieve what he seeks, but I would like to clarify that in writing.
On the other point, based on my understanding of electoral law—I will confirm in writing whether I am correct—it would be unwise for me to offer an opinion from the Dispatch Box on whether particular ballot papers are accepted as valid because the procedure followed to determine that is enshrined in law.
The noble Lord, Lord Shutt, has such long experience of elections that he will understand my hesitation in trespassing into that area. I am sure that the point that he raised will be borne in mind when those judgments are made properly by the right person in the right place.
I shall clarify one point. This has nothing to do with a general election; it is an administrative move to bring Northern Ireland permanently into line with the rest of the UK. If a general election were to be called for 5 May, there would be practical difficulties and financial implications in running two elections within 13 days of each other—a point which noble Lords will recognise could lead to a different form of confusion than the one they appear to fear.
It would also place a heavy financial burden on the resources of the Northern Ireland parties if there were two separate elections, and a great strain on the machinery. I take the point made by the noble Lord, Lord Smith of Clifton, that there was not formal consultation. However, we consulted with Northern Ireland parties, a number of which have been actively lobbying Ministers to move the date of the local elections.
The noble Lord, Lord Glentoran, made it clear that he was aware of that point. It was discussed in advance with the chief electoral officer and the Electoral Commission, who supported the measure.
The noble Lord, Lord Smith, and the noble Lord, Lord Glentoran, referred to previous experience and the need to ensure that previous problems did not recur. Since the combined poll in 2001 the number of available polling stations has increased by nearly 25 per cent; and proper training is to be provided for the staff who work in them. That is being carefully planned and thought through and I hope that this will allay some of the concerns of the noble Lord, Lord Smith.
In addition, the Electoral Commission will be running a high profile publicity campaign telling electors about different voting systems were there to be a combined poll.
I hope that I have allayed some of the fears of the noble Lord, Lord Smith of Clifton, and that with those assurances and the promise of a letter confirming whether my reply to the noble Lord, Lord Shutt, was correct in every detail, he will not press his amendment.
Lord Smith of Clifton: My Lords, as always the Minister is charm itself and I congratulate her. However, I am not wholly convinced by her assurances; nor do I think that she has answered satisfactorily my noble
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friend Lord Shutt's analysis. He was talking not about the law but behaviour, which is something we cannot legislate for easily. We think that problems will arise.
I was glad to know that there will be more polling stations, because otherwise we have the ridiculous situation of the noble Lord, Lord Glentoran, complaining about reduced turnout; and the poor devils being locked out because they cannot vote due to the complications of the system. While I do not necessarily accept the logic behind the brief that the Minister has been given, I will nevertheless withdraw the amendment.
Amendment, by leave, withdrawn.
On Question, Motion agreed to.

Northern Ireland Act 2000 (Modification) Order 2005
6.56 p.m.
Baroness Farrington of Ribbletonrose to move, That the draft order laid before the House on 3 February be approved [9th Report from the Joint Committee].
The noble Baroness said: My Lords, the order's effect is to extend the power to legislate on Northern Ireland matters by Order in Council for a further six months; that is, until 14 October 2005. Your Lordships have already agreed four times to the extension of this power originally set out in the Northern Ireland Act 2000 since the suspension of devolution in October 2002. Many of your Lordships will recognise such a debate being a familiar feature of the annual direct rule renewal debates prior to 1999. I am sure that we will deeply regret that such debates are not consigned to history.
As noble Lords will recall, when the Government last renewed this power, there was a sense of optimism among those involved in the peace process. There had been significant progress in intensive negotiations at Leeds Castle. The momentum continued through the following months, culminating in the publication in December of the package of proposals for a comprehensive agreement.
The proposals demonstrated substantial progress and agreement on a wide range of issues. As noble Lords are aware, the significant progress made last year has been deeply damaged by the Northern Bank raid at the end of December. Both the Chief Constable and the Independent Monitoring Commission have said that it was carried out by the Provisional IRA. The commission's fourth report, published earlier this month, concluded that Sinn Fein must bear its share of responsibility.
I recognise the strength of feeling across the House on these issues. I am sure that noble Lords will join me in condemning the continued paramilitary and criminal activity that is the obstacle now to a lasting and durable settlement in Northern Ireland. I can assure the House that we will continue to work closely with the Irish Government and the Northern Ireland parties to do everything we can to restore stable and inclusive devolved government to Northern Ireland based on exclusively peaceful and democratic means.

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I realise that governing Northern Ireland by Order in Council is not where any of us would wish to be, but until such time as devolution is restored it is a necessity. I beg to move.
Moved, That the draft order laid before the House on 3 February be approved [9th Report from the Joint Committee].—(Baroness Farrington of Ribbleton.)
Lord Glentoran: My Lords, I thank the noble Baroness for bringing forward the order. She is right that we are all sad and sorry that it is necessary and the number of times that it has had to be renewed. I wonder optimistically if perhaps the reason that we are where we are now will evolve into being the bursting of the abscess that has been the core of evil hidden under a cloak of parliamentary and pseudo-politics. We can only hope that from this low point we can move forward to better things. I support the order.
Lord Smith of Clifton: I thank the Minister for explaining the purposes of the order, which is becoming a tedious and monotonous regular feature of the business of your Lordships' House. We are frustrated that two and a half years after the Assembly was suspended, there is still no prospect of restoring devolution to Northern Ireland and I am afraid that we are in for a protracted period of direct rule.
The current situation of putting through significant and substantial legislation for Northern Ireland by order in a couple of hours is not sustainable. Tonight is symptomatic of that. We are considering four orders, time is getting on, there is tremendous pressure to speed things up and it is a bad way of treating Northern Ireland business. As I have said before, particularly in the light of this protracted period of direct rule, we must have a better and different system of doing things. The Government must apply their minds to making alternative arrangements.
The noble Baroness said, "We have no alternative but to do this by order". I said recently in your Lordships' House that orders are unsatisfactory because they are basically anti-democratic. You have to let the Government have their way. I have given notice before and I give it again: we will start opposing orders because, if they are not amenable to amendment, there will be occasions when it may be necessary to oppose them.
Will the Government provide more notice before such orders are discussed? It is unrealistic to expect everyone involved in Northern Ireland business to get their heads around complex legislation such as the budget in a couple of days. After all, much of the legislation that comes to us by order is not secondary legislation or short regulations; they are, to all intents and purposes, Bills.
Do the Government accept, therefore, that this is an unacceptable way to keep legislating for Northern Ireland? Frankly, it is insulting to the people of Northern Ireland that this House decides on important matters of public policy, on the real bread and butter issues of
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Northern Ireland that hold society together, with perhaps only an hour's discussion. It is lucky to have even that in many cases.
Will the Government agree that legislating for Northern Ireland is not a part-time job? Would the Government consider providing a dedicated Northern Ireland Minister for the House of Lords, as we had before devolution? It would go some way to assist the workings of this House if we had someone operating in the way that the noble Lord, Lord Dubs, did before devolution.
What talks are the Government having with political parties in Northern Ireland to move the process forward? What options are the Government discussing with them? I accept that inevitably, with yet another election and in the marching season, there are few windows of opportunity of, dare I say it, normalcy in Northern Ireland to have such discussions. It is not a normal type of place. But are they giving any consideration to restoring the scrutiny committees of the Assembly to allow them to look at legislation and make recommendations and amendments before they come to Parliament? It would be extremely helpful if your Lordships had some guidance from the local leaders in Northern Ireland on the various orders that come before us.
Are the Government considering whether it would be possible to restore the Assembly and devolve power to it without including Sinn Fein in the executive? That may become an option—the longer that Sinn Fein makes no public declaration that it is divorcing itself from its paramilitary wing, the longer it will exclude itself. We hope that that does not happen and that it can make such a declaration, but, as has been said, why should the other political parties be put in baulk as a result of Sinn Fein's current position?
The current situation is unacceptable and has been going on for far too long. The Government must apply their minds to putting in place an effective method of scrutinising legislation for the good of everyone in Northern Ireland.
Lord Laird: My Lords, I thank the Minister for outlining the order. We have reached a turning point in Northern Ireland's political process and if the situation is not urgently addressed, the great momentum for democratic government that the signing of the Belfast agreement epitomised may be lost.
We have heard such rhetoric before. The two governments, however, are at a fork in the road where they must now take the necessary decisions and painful steps to ensure that the integrity of the process is not irreparably damaged. The vacuum at the heart of the process is a direct result of the actions of one political party and the two governments' refusal to treat it in accordance with democratic standards. I am, of course, speaking of Sinn Fein. The Government must now decide, finally, what measures they will bring to bear on Sinn Fein to ensure an end to the duality of its paramilitary/political existence that has strangled the atmosphere for peaceful coexistence over the past six years.

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That transition period is well and truly over. The crux of the matter is that the vast majority of people in Northern Ireland expect a level playing field in political life. They expect parties to be treated equally, but certainly do not expect parties that are up to their necks in criminality and brutal murder to be given a set of rules to play because of their special needs.
The recent sickening murder of Robert McCartney was reminiscent of the acts of savagery carried out by the Shankill butchers in the 1970s. Gerry Adams informs us that Mr McCartney's murderers will face IRA expulsion. The Secretary of State, Paul Murphy, announced yesterday that that was not good enough. Perhaps Sinn Fein will heed his advice and hand them over to the police. However, I doubt it. Today, Mr Adams's colleagues in Belfast City Council would not support a motion calling on the public to go forward with information to the police.
My colleagues and I have been calling for the exclusion of Sinn Fein from any prospective executive should the Government recall the Assembly not because we do not want a political process that includes republicans to succeed. Our conduct to date indicates the exact opposite. We have called for their exclusion simply because it is untenable for the Government to limp on through the elections, dragging the republican movement behind it, in the hope that the same paradoxical political fix between the DUP and Sinn Fein that failed last Christmas will work again next autumn. The premise of such thinking can only be that any short-term formula can acceptably be enforced on the people of Northern Ireland to keep the Belfast agreement alive and Sinn Fein included. This will not work.
It strikes me as extremely ironic when I hear people in Britain talk about the continuing intolerance of the two communities in Northern Ireland. Yet the two Governments have repeatedly asked the people in Northern Ireland to tolerate a political formula that they would never dream of accepting themselves, never mind imposing on the people of Great Britain or the Republic of Ireland. Sharing power with a party that robs banks, murders people, runs international crime syndicates and rules its own community through intimidation is not an acceptable option for the democratic population of Northern Ireland.
Last week the Prime Minister said that:
"The overwhelming view now in the whole of the island of Ireland, north and south, is there cannot be a place for Sinn Fein in an inclusive government in Northern Ireland unless there is a complete end to all forms of paramilitary activity and criminality by the IRA".
This has been the overwhelming view of the vast majority of people, north and south, since the beginning of the process. In response to a question from my colleague, the honourable Member for South Antrim, during Prime Minister's Questions last Wednesday, the Prime Minister said:
"Unified pressure from north and south is now necessary to ensure that we either manage to get a way forward involving all political parties, or find a different way forward".—[Official Report, Commons, 23/2/05; col. 307.]
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Can the Government enlighten us about what that united pressure will amount to? How will it differ from the Government's strategy to date? What form will the different way forward take? My fear is the two Governments will continue to do what they have done since 1998, and that is to punish the democrats collectively with Sinn Fein for fear that those who threaten the democratic process with violence might slip out of the political loop. That is again a formula that has borne no fruit. It simply suggests that the two Governments have little faith in the political process in Northern Ireland. This is a message that has clearly not been lost on Sinn Fein/IRA.
Tonight we are discussing the continuation of direct rule. That is fine, but there are some issues that we must consider as well. One is the failure of the cross-border bodies to be of any assistance to the general community in Northern Ireland. They simply act on behalf of the Irish Government. In effect, we have joint authority in the areas where there is cross-border activity.
In the case of Waterways Ireland—which I have raised in this Chamber before—the post of director of marketing and communications was not filled by open competition and is not made amenable to the law of the United Kingdom, although the post is located in Enniskillen in County Fermanagh. This issue has been covered up time and again at the behest of the Dublin Government through the North/South Ministerial Council.
I asked a Written Question recently about the employment law to which the posts of directors of Waterways Ireland are subject if they are based at the headquarters in County Fermanagh. I received the most unacceptable Answer, which stated:
"Employment in the post of directors of Waterways Ireland is likely to be subject to the law of the United Kingdom".—[Official Report, 24/2/05; col. WA 218.]
It is "likely" to be subject to the law of the United Kingdom.
These posts are in a part of the United Kingdom, but there is no open competition for them, nor for promotion. A director of marketing and communications was appointed. Now, I have been in that industry for more than 30 years. I am one of two visiting professors of that subject in the United Kingdom. I was denied the right to apply for a job in Waterways Ireland. That is not the sort of legislation that we have in Northern Ireland. It is not the sort of legislation we want in Northern Ireland. We have legislation that covers open competition and allows for no discrimination in employment on any basis. Yet these practices, which may be acceptable in the Irish Republic, are now taking place as a result of the cross-border bodies.
It has been covered up by the North/South Ministerial Council, which has wiped its hands clean of this appointment. Yet, for example, on 14 April 2003, it confirmed the appointment of the chief executive of the Ulster-Scots Agency. But I could find no such confirmation for the director of marketing and communications for Waterways Ireland, who was appointed from a shortlist of one, with no experience of

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waterways and very little experience of marketing and communications. He was, as I have told this House before, a fixer for Charlie Haughey in the Fianna Fail office in Dublin. Do we want that sort of southern Irish governance creeping into Northern Ireland, as we saw in the cross-border bodies? That is not what I signed up for.
On the subject of cross-border bodies, I shall make a point about an activity that has gone on in Middletown, where it is proposed that there should be a centre for autistic children. I totally accept that it is required and, as I am dyslexic, I am very interested in extra teaching resources for disabled kids. But in Middletown, at the behest of the southern Government working through the North/South Ministerial Council, Her Majesty's Government have provided money to buy a convent and a chapel. Part of the area will be used for a special needs school and the convent and the chapel will be leased back to the church at a nominal rent. I am not against the convent, the chapel or schools for autistic children. But there must be a lot of public property in Northern Ireland that is not currently being used for education. What was the selection process for Middletown? What was the selection process for this cross-border body?
It is time that we looked at these cross-border bodies, which should not exist without devolution. Tonight, we are discussing direct rule and we should be looking at these bodies, which should not exist with direct rule. I want to know why Her Majesty's Government bailed out a religious order in Middletown with government money, why they bought property that they did not need and are now seeking to let back to a church. None of this is what I voted for when I voted for the Belfast agreement.
7.15 p.m.
Lord Kilclooney: My Lords, this order extends the Order in Council for another six months, for the obvious reason that devolution has not taken place on the basis of the Belfast agreement, nor is it likely to. That is the problem. I agree with the spokesman for the Liberal Democrats that direct rule will be required for a very long period in the present circumstances.
The situation on the ground in Northern Ireland is deteriorating. One can sense that as one moves around Northern Ireland. Bitterness is increasing. Sinn Fein/IRA are active on the ground in criminality and terrorism. Only 10 days ago, the leader of Sinn Fein/IRA, Mr Gerry Adams, led a paramilitary parade through the town of Strabane with republican flags and men in party uniform and black caps. No one took any action. The Government did not condemn it; the police did not take any action. That kind of flaunting of republicanism by Mr Gerry Adams, supported by his paramilitaries, is damaging the good atmosphere that had been developed in Northern Ireland since the signing of the Belfast agreement.
When this order states that the Order in Council will be extended until October this year, does that means that the Assembly will remain in existence for another
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six months? People will reach that conclusion. As one who negotiated and signed the Belfast agreement, I do not believe that it is possible any longer to have a fully inclusive executive at Stormont. Such damage has been done in the past few months that the idea of unionists joining with Mr Gerry Adams in an executive is beyond my imagination.
We had a very promising interview last weekend by the leader of the Democratic Unionist Party, Mr Paisley, on Dublin radio, of all places, in which he said that he would share in government with Sinn Fein/IRA, irrespective of what had taken place in the past, if it abandoned criminality and carried out decommissioning that is visible to the public. Well, we live in hope, but I doubt whether that will happen.
I have to join with the Liberal Democrats in saying that the Government must come forward with new proposals for legislation in Northern Ireland.
I am a little surprised at the explanatory document which says that there will not be much public interest in this particular measure. There is a lot of public criticism in Northern Ireland at the lack of ability to amend legislation affecting Northern Ireland that is pushed through by Order in Council and cannot be amended. I think that the Official Opposition should take the issue more seriously. They should begin to say, "We are going to oppose this strongly if it comes up again".
Lord Glentoran: My Lords, I thank the noble Lord for giving way. Other noble Lords and Government Ministers will know that the Official Opposition, at times with the Liberal Democrats and at times on our own, have worked extremely hard with whatever means we know to try to improve the situation that the noble Lord, Lord Kilclooney, is talking about. I ask him to think about maybe correcting his last statement.
Lord Kilclooney: My Lords, I am interested in the explanation given, but I am comforted more by what the Liberal Democrats said—that in future they will actually oppose these Orders in Council and not simply criticise them and then not oppose them. I believe that the time has come when Orders in Council must be opposed in Parliament.
My final point is that the Assembly has now been elected for 18 months. You cannot go on for ever retaining an Assembly, Members of the Legislative Assembly and heads, with salaries and expenses. The Assembly has been heavily criticised by the public in Northern Ireland. I have defended it up to now. But the time is running out, I have to say, if you do not use the elected Assembly for some purpose in, for example, scrutinising the legislation before it is approved in this Parliament, because it will not have legislative powers. Some formula must be developed over the next six months whereby the elected MLAs will scrutinise legislation and then come here with their

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recommendation. If that does not happen I fear that in six months' time the Assembly itself will have to be closed down as well.
Baroness Farrington of Ribbleton: My Lords, I first place on record that there is no pressure on any noble Lord to speed things up tonight. It has just gone 20 past 7. I am sorry if the noble Lord, Lord Smith of Clifton, perceived that there was. It most certainly is not the case.
My right honourable friend the Secretary of State is fully aware and shares the concerns about the process that we use for accountability and detailed scrutiny of issues. Our ultimate goal remains the restoration of the Assembly, so that Ministers in their power-sharing executive can take responsibility for local issues, being held to account by locally elected politicians.
Equally, we are committed to looking at how best to configure arrangements in Northern Ireland to provide an effective and efficient means of delivering and accounting for local services. The review of public administration aims to do that.
We recognise and share the view all noble Lords expressed on the need to look at how local accountability under the present system of direct rule can be strengthened. My right honourable friend the Secretary of State is currently doing that. I urge noble Lords with detailed views to write to my right honourable friend expressing them. We take very seriously the need to think creatively and imaginatively about how to configure arrangements in Northern Ireland to provide an effective and efficient means of providing that local accountability.
The noble Lord, Lord Kilclooney, asked about the period over which the order is provided for. The period provided for in the order is six months. Therefore, the period will expire, as the noble Lord recognised, on 14 October 2005, or earlier if devolved government is restored.
The noble Lord raised the issue of how much longer. We recognise that we were close to a political deal last December, although not close enough. The present arrangements, including for MLAs' salaries and allowances, were appropriate while progress was being made. We are now reviewing these and other issues with the political parties. We will not make any snap decision on salaries until this process has been completed.
In response to the noble Lord, Lord Laird, the Chief Constable has stated that PIRA currently retains the capability to return to terrorism. He has also said that he thinks it is unlikely that it will actually return to that point. But we shall keep the level of threat under review, as we do with all terrorist organisations, and will respond appropriately to any change. We sincerely hope that no terrorist group currently on ceasefire will increase the level of violence in which it is involved. That is in no one's interest.
The noble Lord, Lord Smith of Clifton, referred to how much longer can we go on and asked why we cannot look at a different way of setting up the Assembly. We know that all noble Lords appreciate
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that we really must ensure that any Assembly is representative and is cross-community. Therefore, we will work towards that.
The Secretary of State made it clear in his Statement that long-term stability in Northern Ireland could not come about if we focus on exclusion. That objective requires inclusion. Dialogue with Sinn Fein must continue to see how that long-term goal can be achieved. Nothing is ruled in or out at this point.
I echo the statement made by the Reverend Ian Paisley—which the noble Lord, Lord Kilclooney, recognised-that when we are in a situation where people are committed to exclusively peaceful and democratic means and they have a mandate, then we must be prepared to talk to them.
Following the suspension of the Assembly in October 2002, the North/South Ministerial Council agreed that policies and actions relating to the implementation bodies and Tourism Ireland would be taken by the two governments. These policies and actions were confined to those already agreed by the North/South Ministerial Council.
The noble Lord, Lord Laird, asked me many detailed questions regarding the waterways. As he acknowledged, he has had a great deal of correspondence from the Lord President. who unfortunately is not able to be here tonight. The decision to locate the headquarters for Waterways Ireland in Enniskillen was made by the North/South Ministerial Council on 13 December 1999. The staff at Waterways Ireland have been in inappropriate accommodation for four years in the expectation that the council's decision to create a new headquarters in Enniskillen would relieve accommodation problems.
In July 2004 the Secretary of State concluded that giving effect to the council's decision is a matter of care and maintenance. That project is now proceeding.
The noble Lord puts me in some difficulty. I shall answer in as detailed a way as is appropriate in dealing with an individual in an individual appointment. The post of director of corporate services designate was filled by an officer on secondment from the Department of Culture, Arts and Leisure. His period of secondment has now ended. He has returned to his parent department. He was not removed from his post in Waterways Ireland. While he was offered and accepted the post of director of corporate services following open competition, he did not take up the post.
Lord Laird: My Lords, I thank the Minister for giving way. I am not sure what has happened here. I did not raise the issue of the location of Waterways Ireland in Enniskillen. I said it was a fact that the headquarters is in Enniskillen, so therefore, as part of the United Kingdom, one has to assume that the legislation for people who work in Enniskillen is UK legislation. Will the Minister confirm that?
I did not talk about the director of corporate services, but about the director of marketing and communications—a totally different post. I will deal

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with the question of the director of corporate services on another day. With respect to your Lordships' House, this is not the issue I raised.
Baroness Farrington of Ribbleton: My Lords, the sum total of the comments of the noble Lord, Lord Laird, create an impression that positions were not being filled correctly in that organisation.
Lord Kilclooney: My Lords, I wonder if I could be helpful on this matter, without concentrating on the individual involved. We do not simply use the United Kingdom's employment legislation—there is separate legislation for Northern Ireland, which includes fair employment legislation. I will not ask the Minister for a reply now, but perhaps she could let me know in writing if the fair employment legislation in Northern Ireland applies to all employees within these north-south bodies.
Baroness Farrington of Ribbleton: My Lords, I would be delighted to do exactly what the noble Lord, Lord Kilclooney, asked.
The noble Lord, Lord Laird, also referred to the issue of witnesses assisting the police with the McCartney investigation. We emphasise the Government's commitment to ensuring that witnesses should be able to give evidence without fear, and we encourage those with any information to come forward and give it to the police. I do not want to get involved in commenting on the specifics of the investigation, for reasons I know noble Lords will find self-evident.
The Secretary of State has been meeting with Northern Ireland parties to find out their views. Our goal remains the restoration of an inclusive power-sharing executive in Northern Ireland, and we shall not abandon our commitment to that.
I conclude by echoing the words referred to by the noble Lord. Lord Kilclooney. The reverend Ian Paisley said,
"I have made it clear that, as a democrat, if people turn up with a mandate, and if that mandate does not depend on criminality, does not depend on armed revolt and rebellion … I would face up to the fact that I would have to do business with them."
That is an unexceptionable position to be in. I am sure that in approving this order tonight, as I hope noble Lords will, we can work together to try and find a better way to work until we are in a position where the order is not essential.
I am conscious that the noble Lord, Lord Laird, has asked me detailed questions with regard to a particular post. I am aware of the fact, and I have copies of the copious responses to the detailed questions put by the noble Lord. I am not in any way seeking to tell the noble Lord, Lord Smith of Clifton, that I want to be hasty about this, but I suspect that noble Lords would prefer that I wrote rather than read out all that correspondence. I commend the order to the House.
On Question, Motion agreed to.

District Policing Partnerships (Northern Ireland) Order 2005
7.34 p.m.
Baroness Farrington of Ribbletonrose to move, That the draft order laid before the House on 21 February be approved.
The noble Baroness said: My Lords, your Lordships might find it helpful if I briefly set out the basis of the proposals.
The main purpose of the order is to ensure that district policing partnerships in Northern Ireland continue to function without interruption. As the legislation currently stands, these bodies would cease to operate at the date of the next local government election until reconstituted. The next such election is scheduled for May. Due to the appointment process for independent DPP members, which is the responsibility of the Northern Ireland Policing Board, the reconstitution of the DPPs will not occur for at least six months after the local government election. During that period there will be no DPPs in operation, which is of course unacceptable given their important role.
To deal with that, on this occasion and each time there is a local government election, the order proposes to extend temporarily the office of both currently elected and independent members until the new DPPs are established. The order is a permanent solution to that provision.
The order also proposes to make two amendments to current legislation that are deemed beneficial to the practical workings of DPPs. First, holding the position as chair and vice-chair of DPPs is currently open to elected members only. The order provides that the position of vice-chair would, for reconstituted DPPs, be open to independent members only. The proposal is seen as integrating independent members further into the role of DPPs and acknowledges the important contribution they make to monitoring policing in Northern Ireland.
Secondly, the order amends a "removal from office" clause to include a conviction for a criminal offence after appointment, whether committed before or after the date of appointment. It is intended that the provisions of the order will be brought into force on 1 April 2005 to allow them to be in place prior to the local government election scheduled for May.
There has been a wide consultation process with all the relevant parties, including those directly affected by the changes—namely, the 26 DPPs—and addresses concerns raised by those bodies and others. Overall, the proposals have been welcomed and are considered appropriate.
It might be helpful to remind the House of the role of the DPPs. The functions of these bodies are set out in Section 16 of the Police (Northern Ireland) Act 2000. Their role is to consult the public on policing issues, generate local-level dialogue and provide views to the police district commander and the policing board. They also monitor the performance of police locally in carrying out the local policing plan, and the wider annual policing plan.

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I take this opportunity also to acknowledge that many of those participating in this role have done so at the expense of their own personal safety, for which we thank them and pay tribute to them. I commend this order to your Lordships.
Moved. That the draft Order laid before the House on 21 February he approved.—(Baroness Farrington of Ribbleton.)
Lord Glentoran: My Lords, once again I thank the noble Baroness for such a clear explanation of what the Government are proposing to do with this order. I should like first to associate myself with her comments about members who, in certain parts, have served on DPPs at considerable risk to themselves, and who indeed have been threatened and attacked.
I am the first to admit that I was critical of the process of setting up DPPs when the Act was being debated. At the end of the day, I believe that we got the pro forma about right. I regularly read the reports from the Northern Ireland Policing Board, and it would appear from them that the DPPs are doing an excellent job and playing a very proactive part in the linkages between the Policing Board, the Chief Constable. the PSNI and local communities.
The noble Baroness said that the role of vice-chairman was open to independent members of DPPs. As I understand it, the position of vice-chairman must be held by an independent member.
Baroness Farrington of Ribbleton: I am sorry, my Lords; if I did not say "only" clearly enough, I should have done. I correct the noble Lord.
Lord Glentoran: My Lords, I thank the noble Baroness for that. The order does a lot of good administrative tidying up. I am not an expert on policing but it seems that the DPPs at this stage are a great success. I believe that there are difficulties in filling all the places on DPPs. That is not altogether surprising, for reasons that I have already given. Extending the life of DPPs to allow a six-month gap between the election and reappointment of the next DPP is eminently sensible. I support the order.
Baroness Harris of Richmond: My Lords, I, too, thank the noble Baroness for bringing forward the order. I associate these Benches with the remarks made about DPP members and their bravery in the very difficult times in the past. We hope that in the future they will continue to flourish. We welcome the order; its provisions are very sensible and right.
I had to turn to the Explanatory Notes to gain an understanding of why the consultation period has been shortened from 12 to four weeks. However, we understand the circumstances and hope that such an occurrence will be an exception rather than the rule in the future.
Article 3, on the effects of local government elections on membership of DPPs, makes a very sensible change. It would be unfortunate to lose the good work that the DPPs are doing, even if only for a short period. due to a technical fault in the legislation.
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I am also glad to see the amended wording in Article 4, on the removal of members of a DPP from office. It is to be hoped that such a situation will not arise, but it is better to prevent the situation of a member being able to remain on a DPP following a conviction just because the offence was committed before his or her appointment. That would go entirely against the spirit of the purpose of the DPPs.
We also welcome the amendment in Article 5 regarding the vice-chairman of DPPs. It is important that we should not prevent or preclude independent members from that position. We very much support the order.
Lord Kilclooney: My Lords, I particularly welcome the order; it is common sense. I thank the Minister and the spokespersons for both Her Majesty's Opposition and the Liberal Democrats for their tributes to the members of the district policing partnerships. I am a member of the Northern Ireland Policing Board. We have heard today that, yet again, another member has been intimidated, in the Newry area. That goes on almost regularly. Some members are showing great courage and making a genuine effort to make policing work in Northern Ireland in a manner acceptable to all communities there. They should be supported; the Government's support is much appreciated.
I can confirm that the DPPs are now working throughout every district council area in Northern Ireland. We had one problem, which went on for some time, but it has been resolved. All are working effectively and are very useful.
On the restriction of the vice-chairmanship to independents, is the chairmanship restricted 1 o elected members or is it possible to have an independent both as a chairman and a vice-chairman? Given that local elections are about to be held in Northern Ireland, and since district policing partnerships comprise independents and elected district councillors, will DPP members who are district councillors but who lose their seats in the forthcoming local government election immediately cease to be members of the district policy partnership, or will they continue until the new DPI' is reconstructed?
Baroness Blood: My Lords, I want to associate myself with the Minister and other noble Lords who have paid tribute to the setting up of the DPPs. When I first came to this House, there were community liaison police committees in Northern Ireland. I could not understand why the Government wanted to change them as they worked so well, but I now see the value of DPPs. I add my name to the tributes to members. I know personally a few members who work under great stress and threat. In a strange way the threat seems to make them all the more determined; that is good for Northern Ireland.
The Minister talked about a six-month gap before the renewal of the DPP. Could a provision be included to ensure that the change did not happen all at once, and that it was staggered? DPP members have to learn a lot of things and keep that information in their head. If there were a complete renewal of DPPs, we would

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lose that experience in some areas. Staggering renewal or bringing members in at different times would help the situation.
7.45 p.m.
Lord Laird: My Lords, I thank the Minister for outlining the order. Like other noble Lords I welcome this order, which is designed to extend the lifespan of existing district policing partnerships beyond the forthcoming election period, although the long-term beneficial impact of DPPs is yet to be totally evaluated.
It is, however, extremely important that for whatever benefits the DPPs can deliver the Government maximise the continuity of service of those members already sitting. Given the time that it would take to interview people and the disruption of the holiday period following elections, it would probably be optimistic to imagine that the new DPPs would be operational before January 2006. As such, it makes sense that the current DPPs should operate as they are until that time. Continuity in this matter is essential.
Another important point is that councillors who are already serving should be allowed to maintain their positions until the end of the session, regardless of whether they are returned in the forthcoming local elections. That again will reinforce that sense of continuity.
Where it has not been possible to form a DPP as quickly as would have been wished, or where a DPP has functioned for less than two years, there should be, as far as possible, reappointment of independent members so that, again, maximum use is made of the experience of those members sitting.
I join other noble Lords in paying tribute to the gallant members of DPPs. People on this side of the water may not fully appreciate their courage but we who wish to operate the system back in Northern Ireland fully appreciate it. I identify myself with the remarks about their courage.
Baroness Farrington of Ribbleton: My Lords, I thank noble Lords on all sides. A very constructive approach has been taken all round the House to the debate on this order. I apologise if my voice was not clear enough; I shall confirm, so that nobody is in any doubt, that the position of chairman is restricted to elected members. Elected members will continue to serve during the transition period. The Northern Ireland Office intends to publish a code on completion of the order's parliamentary process and prior to the launch of the appointment competition for the independent DPP members. The timing of the launch of the competition is a matter for the board but it is likely to take place in the next couple of months.
Lord Kilclooney: My Lords, the noble Baroness says that elected members will continue to serve on DPPs.
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Does that include elected members who lose their seats in the forthcoming local elections? Will they continue to serve on DPPs?
Baroness Farrington of Ribbleton: My Lords, my understanding, from the information in front of me, is that that is the position. Were I wrong, I would of course want to correct that immediately.
The reconstitution of DPPs and the appointment of independent members are the responsibility of the Northern Ireland Policing Board. It is the biggest public appointment exercise across all 22 district councils in Northern Ireland.
In response to the query from my noble friend Lady Blood and the noble Lord, Lord Laird, I understand that the policing board—the noble Lord would know this probably better than I—is considering the process, which will include reappointments where suitable to ensure that continuity, knowledge and experience that have been built up are not lost.
I confirm that the answer that I gave earlier to the noble Lord, Lord Kilclooney, was correct.
On Question. Motion agreed to.

Special Educational Needs and Disability (Northern Ireland) Order 2005
7.50 p.m.
Baroness Farrington of Ribbletonrose to move, That the draft order laid before the House on 9 February be approved.
The noble Baroness said: My Lords, I am delighted to take forward this important legislation. It represents a positive step forward in fulfilling the Government's policy on inclusion, giving children, young people and adults with disabilities in Northern Ireland the same rights as their counterparts in England, Scotland and Wales.
The order will achieve two things: it will strengthen the rights of children with special educational needs to be educated in mainstream schools, and it will introduce enforceable disability discrimination legislation into the education sector in Northern Ireland for the first time.
The draft order was the subject of extensive consultation during April, May and June 2004. It attracted significant interest, with more than 250 responses received, and involved direct consultations with children and parents. In May last year, the Northern Ireland Orders Grand Committee debated the proposed draft order. That important debate, along with the consultation responses, the direct consultation with children and parents, and meetings with the Equality Commission and the Northern Ireland Human Rights Commission, has helped to shape the draft order. The outcome is that the SEND order is generally welcomed by all sectors. It is viewed as having a beneficial effect on the education and lives of children with special educational needs and on children and adults with disabilities.

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Many of the issues that were raised during the consultation are not directly relevant to the draft order, but they are appropriate to the codes of practice which will support the order and which, in turn, will be consulted on. Some complex issues were raised: how to balance the best interests of the child against parental choice and the efficient education of others. It is tempting to add a third test to the question of whether the education provision is in the child's interests. We agonised for some time over the question of the best interests of the child. We sought advice from many quarters and listened to proposals from the Equality Commission and the Northern Ireland Human Rights Commission. On reflection, we concluded that applying a third test would not be in the interests of children with special educational needs. The order already has the best interests of the child at heart. It already offers in many places the protection that is needed. To alter that protection in a simplistic way could have a negative effect. In fact, it could act as a barrier to children with special educational needs accessing mainstream education.
A concern was expressed from all sectors that children's voices should be heard, and we agree. That is no less the case for a child with special educational needs, particularly so when a case is brought before the special needs tribunal. Therefore, the regulations that control that body will be revised. In addition, the SEN code of practice will place greater emphasis on the needs of the child.
The order contains four elements: it builds on and strengthens our existing special educational needs framework; it introduces enforceable disability discrimination legislation in schools in Northern Ireland; it does the same for further and higher education providers; and it makes it unlawful for general qualifications bodies to discriminate on the ground of disability.
The second element, the disability discrimination provision in schools, removes the exemption of the education sector in Northern Ireland from the Disability Discrimination Act 1995. For the first time, school children in Northern Ireland will benefit from the same rights that, until now, have been available only to staff and visitors to schools. Schools will not be able in their admission, expulsion and suspension arrangements to discriminate against children who have disabilities. They will have to take reasonable steps to ensure that children who have a disability are not placed at a disadvantage to other children. Schools and education and library boards too will have additional duties to improve the accessibility of buildings, the curriculum and the provision of information to pupils with disability.
Disability discrimination provisions relate also to further and higher education. The third element of the order deals with potential disability discrimination in institutions of further and higher education. The Department for Employment and Learning is seeking to promote the inclusion of students with disability in further and higher education and will ensure that they are not singled out for discrimination.
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While schools will be required to plan to enhance accessibility for pupils with disabilities over time, colleges and universities will have a duty to ensure the physical accessibility of their premises and to ensure that students with disabilities have access to the curriculum. As with schools, those provisions will be supplemented by a code of practice to he produced by the Equality Commission, which will also provide further information.
The disability discrimination provision relates also to the general qualifications bodies. That is the fourth element of the order. It makes it unlawful for general qualifications bodies to discriminate against people with disabilities in awarding prescribed qualifications.
I am pleased to announce funding from the Department of Education and the Department for Employment and Learning of £57·8 million for the implementation of the new law. That is in addition to funds already spent in anticipation of the legislation and funds already in place to support the inclusion of people with special educational needs and disabilities in education in Northern Ireland.
I am conscious that the noble Lord, Lord Laird, raised an issue during discussion of an earlier order which is more appropriately answered here. It dealt with special provision for children in Northern Ireland with disability. I understand that the centre to which he referred deals with children who have problems with autism. I assure the noble Lord that I will scrutinise carefully the large number of questions that he has put to my noble friend the Lord President and see whether any of the points he has raised today have not already been answered by her. Were that to be the case, I would of course write to him. I beg to move.
Moved, That the draft order laid before the House on 9 February be approved.—(Baroness Farrington of Ribbleton.)
8 p.m.
Lord Glentoran: My Lords, I again thank the noble Baroness, Lady Farrington of Ribbleton, for that clear explanation.
We are being asked to pass a sizeable Bill as an order tonight. My briefing discussions and what the noble Baroness has told us makes me believe that it is all good news for children who have special educational needs. I am sure that is true, and that it is moving things forward in Northern Ireland.
I am not an expert in this field, however, and this is the sort of thing that worries me about the way we are governing Northern Ireland. A lot of law is involved and there are many references to discrimination. These issues are normally debated in the usual processes of Committee and Report, when a number of people in your Lordships' House—and there is a lot of expertise in this House or this sort of legislation—or the other place, or both, have a chance to comment on whether the legislation could be improved, and whether it will make carers or teachers more vulnerable to wrongdoing.

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I shall not say anything further against the order. I support it, because I believe it is all good news on the face of it. However, the process of passing this sort of legislation does seriously worry me.
Baroness Harris of Richmond: My Lords, the noble Baroness, Lady Farrington of Ribbleton, urged us to look at striking a balance and getting it right. I believe that these proposals go some way towards that, but of course each situation is different. The implementation needs to be carefully monitored. It obviously depends on the individual child's specific and special educational needs. Let us hope that this legislation will help those with and without statements, as well as other children, to realise their full potential.
Of course, I wholeheartedly support the objective of the order—to give school pupils and students in Northern Ireland the same rights in regard to access to schools and further and higher education institutions as exists in England, Scotland and Wales. While I do not share the concerns of the noble Lord, Lord Glentoran, about this particular order, I nevertheless agree with him about the difficulty in dealing with such lengthy and specific legislation, on which we are perhaps not specialists ourselves. Nevertheless, having made those comments earlier—as did my noble friend Lord Smith of Clifton—I certainly support this order.
Baroness Blood: My Lords, I had not intended to speak. I just want to say how delighted I am that at last we have got something for the children of Northern Ireland. Back in Northern Ireland, we struggled to get ourselves included in the legislation going through this House. Currently there are a number of issues I am trying to get our Ministers at home to move on, so I am thoroughly delighted with this. I was at a meeting on Monday morning with folk from south-east Belfast who were talking about special needs. They could not wait to have this.
I certainly support the noble Lord, Lord Glentoran. It is a very difficult just to take it and read it. Obviously, however, the people involved in this knew what they were talking about. I am delighted that we are doing something tonight for the children of Northern Ireland.
Lord Laird: My Lords, while acknowledging the words of the noble Lord, Lord Glentoran, and the noble Baroness, Lady Blood, and accepting that it is a very lengthy document and there may be a lot of stuff in it that we perhaps do not fully understand, I too would wish to welcome the existence of this order and support it wholeheartedly.
Any concerns I have about the Centre for Excellence in Middletown have nothing whatsoever to do with the Centre for Excellence. They are to do with the choice of Middletown; the way the property was purchased; the way the two companies were set up; the way it is
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run through the North/South Ministerial Council;, and the expression of nervousness in a document from the Department of Education on 21 May 2004.
Baroness Farrington of Ribbleton: My Lords, I am grateful to noble Lords who have given their support. I take on board the concern that it is the sort of issue that needs very careful consideration. I reiterate that there was a great deal of consultation.
I am pleased by the endorsement of the order by my noble friend Lady Blood. Of course I wholeheartedly accept that the concerns of the noble Lord, Lord Laird, were not about the quality of the provision for children with autism, but the procedure and the processes.
On Question, Motion agreed to.

Gangmasters (Licensing Authority) Regulations 2005
8.6 p.m.
The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Whitty)rose to move, That the draft order laid before the House on 26 January be approved [7th Report from the Joint Committee and 9th Report from the Merits Committee].
The noble Lord said: My Lords, the Gangmasters Licensing Bill was introduced into this House last summer by my noble friend Lord Carter. It had received all-party support in this House and another place. It marked a significant step in the effort to curb the illegal and exploitative activities of some gangmasters in agriculture and related sectors. Some of the experiences and stories of what goes on in that rather murky part of the labour market are indeed horrendous. It was necessary for us to step in.
The Act provides for a gangmasters licensing authority to be established. It covers labour providers operating in agriculture, shellfish gathering and associated processing and packaging sectors. Once the licensing arrangements are in place, it will be a criminal offence for a person to operate as a gangmaster without a licence or to enter into an arrangement with an unlicensed gangmaster.
Throughout the process, from the beginning of Jim Sheridan's Private Member's Bill in another place, there has been considerable co-operation with key industrial stakeholders. In particular, the Bill was in part sponsored by the Transport and General Workers Union, who worked very closely with the National Farmers Union, the Fresh Produce Consortium, the Association of Labour Providers—which provides a positive front for the trade—and other elements within the food chain. Agriculture will always need a seasonal and irregular supply of labour. It is very important that that labour is provided on legal terms. We know that there have been far too many instances of breaches of a number of different rules, from immigration through to taxation and health and safety.

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When the Act was passed, we set ourselves the ambitious target of establishing the authority by 1 April this year, and we are on track to achieve that. The regulations before the House tonight relate only to the establishment of the authority, but further regulations will be required before licensing can start. Defra itself will be responsible for the Gangmasters (Exclusions) Regulations, which will be used to fine tune the scope of licensing by specifying the circumstances, such as where workers are loaned by one farmer to another or where there are established practices which do not raise the same kind of problems encountered as those where a gangmaster is used, in which a licence is not required. The background and drafts of those further regulations are now out for consultation.
We shall also need the Gangmasters (Appeals) Regulations and, in the longer term, regulations to set out the "reasonable steps"—the exercise of due diligence—that an employer of such labour must take to satisfy himself that a gangmaster has a valid licence. Beyond that, the authority will be responsible for making orders setting out the licence conditions. We expect that the authority will make early progress on this as soon as it is legally established. If this is the case, we anticipate that gangmasters will be invited to apply for licences in the late autumn of this year.
The regulations before the House today deal solely with the establishment of the authority. They set out the framework within which the authority will operate and give it its constitution and structure. They also deal with a few operational matters.
I am aware that the major comment on these regulations has been about the unusually large size of the board which we are establishing to oversee the operation of the authority. The reason for the large size of the board at this stage is that it builds on the coalition that was so important in ensuring a wide consensus on this issue within the industry. The board includes 19 representatives from the stakeholder organisations specified in Schedule 1. They include trade unions, farmers, labour providers and retailers. That will help ensure that the authority starts up with a wide range of people who are fully informed on what will be required to make the new licensing system work, while ensuring that the system contributes to the prosperity of the agriculture and related sectors.
Nine ex officio members of the board will be government officials drawn largely from the range of departments involved in enforcement. They will encompass a broad range of authorities dealing with immigration issues, the minimum wage, health and safety, taxation and Customs and Excise. Their presence will be needed to ensure a co-ordinated approach to compliance and enforcement activities and, even more important, to ensure that intelligence is shared between the different agencies. Representative and ex officio members will have the same voting rights and must act in the best interests of the authority at all times.
We believe that a large board is necessary at the outset, but that this requirement may change over time. In view of this, we have decided that the structure
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and working of the board will be reviewed after three years. At that point we shall consider the size of the board, probably with a view to reducing it, and to reviewing the respective role of the board and the liaison groups required by the Act. At this stage, however, it is our view that the board needs to be of the size specified in the regulations.
I hope that the House will approve these important regulations so that the authority can be set up and start work on addressing this very serious problem. I beg to move.
Moved, That the draft regulations laid before the House on 26 January be approved [7th Report from the Joint Committee and 9th Report from the Merits Committee].—(Lord Whitty.)
Baroness Byford: My Lords, I thank the Minister for introducing so fully these draft regulations. Before I comment any further, perhaps I may remind the House of my interest as president of Concordia, a charity which places thousands of young people and students in placements both in the UK and internationally. In the past the students have usually studied farming-related topics, which is why they seek to come here. These students are well recognised and are certainly not the kind of workers which these regulations seek to address. However, as the Minister pointed out, some gangmasters take their responsibilities very seriously and ensure that their employees are well looked after. I appreciate that the Act and these regulations in no way seek to do them down.
We welcome this important step forward and we thank the noble Lord, Lord Carter, for bringing forward his Bill, which received our full support as it was taken through this House. In my opinion it addresses the longstanding problem of rogue gangmasters who misbehave in relation to their workers. Noble Lords on all sides of the House have expressed their abhorrence of those practices.
Having said that, I want to put on the record a reflection of what the Minister has already indicated. Farming in general, and horticultural businesses in particular, could not operate successfully without employing seasonal workers. Given that the season is being extended at both ends of the year, the working period is now much longer. Our task is to ensure that everyone employed is dealt with in a fair and responsible manner. There is no disagreement between us on that.
The Minister rightly referred to the Merits Committee, which drew the House's attention to the regulations. Its main focus was the number of board members—some 28—to which the Minister has referred.
Perhaps in the first instance that is not a had thing. We need to have a good understanding between unions and employers, and crucially, the nine officials and departments that enforce the regulations—or who have done so in the past.
In another place further questions were raised that were not answered fully, so perhaps the Minister can clarify the position tonight. I am sure that he will agree

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that consensus is much better than confrontation. Will he confirm that a further review of the numbers of board members will be undertaken? I think that a suggestion of three years was made. Will the Minister say whether the Government accepted that the number of board members would be reviewed after three years?
Under regulation 8(2), to be quorate the board must have,
"at least one half of the representative members",
plus the chairman or his deputy. I have worked that out at 11 persons in total. However, regulation 8(3) allows that quorum to be reduced to only five persons. I wonder why. It is not clear whether that would be for one meeting only or for all meetings thereafter. Will the Minister clarify the position?
On Monday my honourable friend Michael Jack asked the Minister what would happen if someone had breached the law as an employment gangmaster but subsequently decided to go "legit"—that sounds strange for me to be saying—and made an application to the new authority. What would be his position? In other words, would someone who was considered not to be of a suitable standard be barred? If he wished to fall in with the new standards would he be considered as a suitable gangmaster in the future?
In response, Alun Michael said that the board would have to consider that, but I wonder whether it is our responsibility to clarify that issue rather than leaving it to the board. I am not sure whether that falls within the scope of the statutory instrument.
Another matter that was not clarified was whether non-registered UK companies are covered by the same regulations. In other words, if someone from outside wants to become a gangmaster but he is not registered here, will he have to conform in the same way?
Will the Minister also say whether the new body will be required to carry out a Criminal Records Bureau check on those who apply for licences? How will it go about its job?
What about the anticipated cost of financing the agency? I understand that in setting it up, Defra will bear the costs. But we have not been told what those are, or whether the fees will cover the long-term costs of running the agency.
Lastly, will the Minister comment on an issue raised by my honourable friend Owen Paterson who said that currently there are about 14 existing pieces of legislation that were relevant to gangmasters which, had they been enforced properly, could have prevented the horrors of Morecambe Bay? Once the agency is established, will those people's roles be redundant, or will they continue alongside the new agency? Their role is not quite clear, and I should be grateful for clarification.
Having said that, we welcome regulations that were supported by colleagues in the other place—anything to raise the standards required of UK employers, especially for those who come from overseas. They are long overdue and we support them.
Lord Greaves: My Lords, we on the Liberal Democrat Benches welcome the regulations, which are
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a necessary step towards introducing the new regime set out in the Gangmasters (Licensing) Act 2004. Like the noble Baroness, Lady Byford, I thank the Minister for explaining in his usual cogent way what the regulations mean. I also thank the noble Baroness for asking one or two of the questions that I would have asked. I will now not do so because they are superfluous.
I was slightly fascinated by the interest expressed by the noble Baroness in whether criminal gangmasters can reform themselves and become licensed under the new system. It is very pleasing that the Conservatives are interested in the reform and restitution of criminals. It is an interesting matter and we look forward to the answer.
Most comment during the consultation on the regulations related to the size and structure of the proposed authority, the number of members and so on. Like the noble Baroness, we are content to go along with what the Government propose and see how it works. I understand why they propose a large board and why they want the different parts of the system to be represented, but I am not sure that we should use the phrase "key stakeholders", which appears to be a clumsy New Labour kind of phrase. I do not like it but I think we understand what the Minister means by it.
In many ways, the word "gangmasters" is unfortunate because it suggests that everyone is tarred with the same brush. Clearly that is not the case. We are talking about labour providers or employment agencies, or whatever they might be, that provide a very necessary service in certain industries. Many industries in this country could not exist without flexible, seasonal labour. Agriculture and the food preparation industry are perhaps the most important or the leading examples. I wonder what gangmistresses might be like, but perhaps we should not go into that.
The last question posed by the noble Baroness goes to the nub of the matter. That referred not to what is in these regulations but to how the system will work in future. We all know that throughout industry and throughout the world of employment in this country there are a large number of practices which sometimes are illegal or sometimes rather dubious and there are many people working for less than the national minimum wage, more hours than they should and so on. If these powers would have dealt with the tragedy that occurred in Morecambe Bay, will the situation in future be any better? Will licensing such people and organisations make any difference to inspection, monitoring, policing and enforcement?
We do not know the answers to those questions yet. The existence of a licensing system that provides people with an official status should help, but it will not be the whole answer. There is a question mark over whether this will work properly. We all hope that it will and we hope that it will contribute to a much better, fairer and less exploitative system than exists far too often now.
My final point is that if this works and if it is a success, it may be a model for other industries where the same kind of provision of labour takes place. So it

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is very important that it works. We fully support the regulations and offer the Government our best wishes in implementing them. We shall have more debates in the future about the outcome.
Lord Lea of Crondall: My Lords, I very much welcome this further step of establishing the board in implementing this major reform. I have some questions that bring the matter sharply into focus now that we see the modus operandi of the board. I have been associated with the campaign of the T&GWU, of which I am a member. We are very proud of the T&GWU campaign and the role of Jim Sheridan MP.
I further welcome the support. We knew that there would be support from the Liberal Democrats, but the noble Baroness, Lady Byford, has just made clear the support from the Conservative Party. I say gently that it is nice to see some pragmatic recognition that in some parts of the economy we need more regulation rather than less and this is a very good example. Not all labour market regulation is as redundant as the war-time ration book. I am sure I shall soon provoke the noble Baroness, Lady Byford, to say something.
Baroness Byford: My Lords, I thank the noble Lord for giving way. He is quite right. The sadness is that we should need regulation to curtail this sort of activity in the first place. It is a great sadness.
Lord Lea of Crondall: My Lords, there was a case in the press in just the past two or three weeks in which workers were picking flowers for Marks and Spencer, under a gangmaster, for net pay of 52 pence an hour. The report says that Marks and Spencer was shocked by the report and will be carrying out its own investigation, but it shows that there is a big issue of exploitation which we have to address.
I have a couple of questions. First, as and when gangmasters are registered, what will be the procedure for ensuring that some gangmasters cannot slip through the net—that is, remain unregistered?
Secondly, the Explanatory Notes say that the gangmaster has to demonstrate to the licensing authority,
"that his business is complying with … employment law (including immigration and taxation legislation)".
How will that translate into ensuring clarity for people as regards their rights and responsibilities both as employers and as workers?
Thirdly, can cases be referred to the licensing authority, or will the licensing authority simply be left to carry out inspections of the licensed as it considers necessary?
Fourthly, on the Inland Revenue front, will the board be able to evaluate, for example, a gangmaster's contention that the worker has freely entered into an agreement whereby the employer may make a range of reductions? I understand that the Inland Revenue polices the whole range of pay-packet deductions.
The last point—which is rather quickly creeping up the agenda; it has been touched on—is the whole European Union context in which this is happening. Is
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there not now a stronger case that, in such matters, we should have regulations on which we can all agree? All the stakeholders and political parties in Britain agree that such regulations are necessary to ensure decent minimum standards. We do not want to discover that a coach and horses has unintentionally been driven through Parliament's intention in these regulations because a gangmaster is licensed—or not licensed—outside the United Kingdom, elsewhere in the EU.
There is a strong case here. I know that my noble friend the Minister will not be able to give a definitive answer this evening, but I put these points clown for consideration because of the continuing discussions in Brussels on what I believe are two related sets of directives. Is there, first, not a strong case for getting on with a Europe-wide set of rights for contract workers? That has been on the table for some time. And how is that complementary to the debate currently under way on the services directive?
Clearly, there has to be some compatibility so that the left hand and the right hand are saying the same thing. There cannot suddenly be a regulation from the services directive on freedom to register anywhere. Whatever the ambiguity, we know that people will not be able to say, "I have a company in Poland. with workers on the Polish wage rate. I can bring those workers here to work for Polish wages". I take Poland as an illustration only because it is the biggest country to have recently joined the EU.
But there is a large grey area. Can people escape the need to register simply by saying, "I am registered in Poland"—or wherever—because there is no requirement which bites on the need for a registration equivalent to that required under the statutory instrument and its implementation in Britain? We shall have to discover quite quickly whether there is an EU-compatible system for the rules on contract workers and the rules on freedom of registration of services under the services directive.
I congratulate the Government on getting on with this legislation. As both other speakers have said, it covers a wider field, in one sense, than gangmasters as we might all have seen them—Morecambe Bay, and so on. Nevertheless, this authority is an important development. The fact that not only all the stakeholders but, interestingly, the Inland Revenue and the immigration authorities will be involved, augurs well for getting a real grip on these complex developments. I wish them well in implementing the regulations.
Lord Grantchester: My Lords, I join with others in paying tribute to my noble friend Lord Carter and Defra for the good work they have done in bringing forward this legislation. I declare an interest as a dairy farmer, although it is most unusual for dairy farmers to use labour of this kind. It is very encouraging to see that the momentum on the gangmasters' licensing front has been maintained and that the authority will soon be established. Can my noble friend say when he expects the first licences to be issued?
Bearing in mind the predominant position of the multiple retailers in the supply chain, can my noble friend confirm that all the major multiples have

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endorsed this licensing system, are committed to its success and are taking a positive role within the authority?
I underline the importance of farmers and that they are aware of their responsibilities. Will the licensing authority be writing to farmers notifying them of their responsibilities and making them aware of the due diligence to which they will be subject?
Lord Chan: My Lords, I add my congratulations to the Government and to the Minister on producing these regulations. In this regard, will the news of these regulations be sent to all embassies, given that the impetus for their introduction came from the tragedy in Morecambe Bay, which affected people from overseas? Will that be possible? Will the regulations also help to regulate in a better way the people who attempt to come here illegally?
Lord Whitty: My Lords, I am thankful for the support for the regulations, for the principle of the Act and the establishment of the authority that has been shown on all sides of the House. That consensus is appreciated—indeed, it is necessary to make the Act work—and reflects the view of all respectable elements within the industry.
There have been a number of questions and I shall try to answer the bulk of them. The noble Baroness, Lady Byford, and the noble Lord, Lord Greaves, asked whether the size of the authority will be reviewed after three years. Yes, it will. My presumption at this point is that we will look at reducing its size but the review will obviously consider all options for the structure of the board. Certainly the arguments for having a large board at the beginning are, to my mind, compelling. They will become less compelling if the board is working effectively as we go down the line.
The point made by the noble Baroness about a quorum is slightly complicated. The quorum is described with a reference to five people—the minimum required to propose a motion to change the quorum requirements. You would need five people to propose a motion to change the quorum requirements, but then half the board—or half of those present, under the old quorum arrangements—would have to vote for it. Thus you could, in certain circumstances, reduce the quorum on a temporary basis. I hope I have got that right; if not, I shall write to the noble Baroness.
The noble Baroness asked whether people who had previously operated somewhat dubiously could obtain a licence. Clearly, the authority will have to take a view on exactly what it takes into account. However, the requirements for the licence will be on behaviour from the point of having the licence. The sanction applies to behaviour after that, but there could be information which may make the board reluctant to give a licence initially. To some extent the authority, once established, will have to deal with that on a case-by-case basis. Certainly we hope that a number of operators, having operated at the fringe—in some senses, having been obliged to, because there were worse people undercutting
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them outside—will take advantage of the licensing system. The work that we intend to set up with the Association of Labour Providers—to put the enterprises of gangmasters and labour providers within a more businesslike operation, with proper information and legal requirements—would help them to operate as legitimate and legal labour providers thereafter.
The noble Baroness also asked about funding. Its basis is that, once operational, the authority will be self-financing through its licence fee income. Defra will meet initial start-up costs for the authority and cover any shortfall in revenue. The authority would be required to account for its use of funds, but we would also underwrite any shortfall in licence fee income. There will be significant expenditure—both in money and in kind—in setting up the authority. Some of that, largely in kind, will be provided by other departments besides Defra—because we will need their expertise to set it up.
On the issue about gangmasters not being registered, anyone who is a gangmaster/labour provider would be required to register under the Act—whatever their legal status. Therefore the provisions would apply to a person acting as a gangmaster in the UK, in relation to the work that the Act covers. It would mean an overseas gangmaster, if supplying or using workers in the UK, would have to have one of these licences. The slight complication raised by my noble friend Lord Lea is that, on certain readings of the proposals under the services directive, establishment in one country would count against another. We are in the early stages of discussing that directive. While it is clearly highly desirable—for single market purposes—to have the principles of that directive established, I do not believe it is the intention of the Commission, or of others supporting that directive, including the other measures of the UK Government, to see that effect. I suspect it will be redrafted—and clearly could, as my noble friend Lord Lea says, be related to other proposals from the Commission relating to the rights of contract workers. That would be a form of indirect enforcement.
The authority will also have to decide how it operates in other ways—whether, for example, they would in particular cases want to have reference to criminal records. The Act itself does, of course, allow access to all the information that is relevant—whichever public authority may be holding it, subject to certain provisos. If things need to be checked with the tax, police or immigration authorities then there can be cross-referencing. That was an important provision in the Act; on the enforcement side, probably the most important to make it work.
In response again to my noble friend Lord Lea, the authority will, of course, be able to check deductions from pay and be able to interview workers to help to establish how deductions were made. If those do not conform with the minimum wage requirements, they would obviously have to be taken into account in whether a sanction would need to be taken against that gangmaster.
The noble Lord, Lord Greaves, basically asked the big question: will it work? I believe that it will, but it will take a lot of effort from a lot of people, not just those on

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the Gangmasters Licensing Authority, its staff and its enforcers but those from a wide range of other enforcement agencies which will continue to do their job.
As I said in relation to access to records, the co-ordination between authorities and the sharing of intelligence is one vital means of getting the scheme to work. The other is enforcement through the food chain. My noble friend Lord Lea referred to Marks&Spencer. If Marks & Spencer knew which gangmasters were licensed and which were not, they would require their suppliers to use only licensed gangmaster labour. Therefore, the pressure from the top of the food chain down, to ensure that producers all the way down the line use only licensed gangmaster labour, is probably the biggest single enforcement, far greater than any individual enforcement through other regulations. The food chain's commitment to this, including the commitment of the retailers—to answer the question of my noble friend Lord Grantchester—is very important in making the scheme work. I assure him that the retailers have shown a very strong commitment to including this within their requirements on purchasing once it becomes law. In some cases, they are already setting up assurance schemes which relate to the ethical trading initiative which was a precursor to the establishment of this scheme and will run in parallel with it.
My noble friend Lord Lea also asked how to avoid having people slip through the net. One of the most effective ways is through food chain pressure. Again, that will be met by the combination of shared intelligence, shared enforcement and the pressure down the food chain. It is also important that both employees and users of casual labour know what their responsibilities and rights are—and, in particular, that farmers do. To answer my noble friend Lord Grantchester, farmers will have to know what is required of them in checking whether the labour coming to pick their fruit or flowers is supplied by a registered gangmaster. It needs to be very clear and simple to establish what they need to see and where they can raise queries and receive a quick answer. As the labour is frequently required for only a day or two, and very rarely for more than a few weeks, we need an instant way of checking whether that labour is supplied by a genuine and registered gangmaster.
My noble friend Lord Grantchester also asked when the licences were likely to be issued. If everything goes according to plan, it will take some time to set up the licensing scheme. If the authority is established from April this year, as intended, the scheme would not be up and running before the spring of next year. It is not an instant solution and requires all the various elements I have described to be in place by then to change the situation. What I think will help will be the anticipation of this measure and the offer we are making to labour providers and gangmasters to help them into the system when the licensing authority is established.
The noble Lord, Lord Chan, raised the point of whether to let nationals coming into the country know what their rights are. I certainly take the point that we
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should inform the embassies of those countries from which a lot of the labour is supplied. One of the main abuses has been the use of illegal labour. People whose immigration or work status is illegal have been easily exploited because of their situation. Once there is a requirement for gangmasters to be registered and to have records of whom they employ, this becomes much more difficult. We can establish much more effectively instant checks on the legal status of the workers concerned.
If I have missed any questions, I will write to noble Lords.
Baroness Byford: My Lords, before the Minister sits down, he has rightly indicated that the scheme will take some time to set up. Can he tell us what the Government are doing to ensure that no bad practices are continuing between now and then; and whose responsibility it is? If he cannot answer now, I am happy for him to write to me. My fear is that, as he indicated, it would be autumn before it was established and maybe into next year before the scheme was up and running. I would be grateful for some guidance.
Lord Whitty: My Lords, once the authority is established in April it will begin to send out information to labour providers and users of seasonal and casual labour, so the information will start to go out early. Clearly there is a big communications problem; we do not know precisely how many labour providers operate in the market and where they operate at a given time. There is a problem of communication as well as of setting up the administration. We should be able to set up the administration so that licences are issued within a year or so of the board being established and the system can start from there, but it will not catch everyone immediately.
There will be prosecutions for breach of licence or identification of people who have already broken the existing law. These provisions will make that easier. However, the pressure will be if the whole of the food chain co-operates in excluding non-licensed labour from its procurement of products. That is why it is so important to maintain the consensus in the board for which the regulations provide.
Lord Lea of Crondall: My Lords, before my noble friend sits down, would it be the position that when the authority is up and running it will have its own budget and make its own decisions about public information campaigns; but between now and then, I presume, some public information will have to be given, if only about the responsibilities of employers to prepare for the new regime? Could that help to fill the gap to which the noble Baroness, Lady Byford, referred?
Lord Whitty: My Lords, the information can go out on the Act's basic provisions, but it is the authority's job to decide exactly how the licensing system is going to work; for example, what kind of checks farmers and others using labour would have to go through. That detail would be for the authority to communicate.

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While some information can be communicated before the authority is up and running, most of the detail will be a package of the licensing scheme and the responsibility of the authority rather than the department. That is right because it also involves all the other parties to the authority.
On Question, Motion agreed to.

Common Agricultural Policy Single Payment Scheme (Set-aside) (England) Regulations 2004
8.48 p.m.
Baroness Byfordrose to move to resolve, That this House calls on Her Majesty's Government to revoke the regulations laid before the House on 21 December 2004 (SI 2004/3385) [6th Report from the Merits Committee].
The noble Baroness said: My Lords, in calling on Her Majesty's Government to revoke the regulation I bring to the attention of noble Lords the concerns expressed by the Merits Committee in their sixth report of Session 2004–05. The regulations are drawn to the special attention of the House on the grounds that they give rise to issues of public policy likely to be of interest to the House.
Before I go any further I would like to express my thanks to Paul Bristow, who has also brought to my attention two more statutory instruments that the Merits Committee considered yesterday on the common agricultural policy single payment and support schemes, which incorporated the IACS payment. I understand from him that the Merits Committee is not bringing any specific concerns to the House, but it is important that the House is aware that yet more regulations are coming. Some of the problem we have is that they are coming out piecemeal. I understand why, but it raises issues that we are addressing tonight.
I turn to the Merits Committee's report. Paragraph 2 states that many livestock farmers and horticultural crop producers have little or no experience of the previous set-aside provisions. Paragraph 4 states that a large number of farmers will have to set aside land for the first time, particularly dairy farmers and other livestock producers. I am sorry that the noble Lord, Lord Grantchester, has left us; I hope that he might return. The committee goes on to say that dairy farmers are under a great deal of economic pressure and that this new requirement could exacerbate the situation.
Paragraph 6 refers us to the third report of the current Session, when the committee drew to the special attention of the House the cross-compliance regulations. On that occasion the committee was concerned with the interaction of the economic health of the farming industry in general, the sustainable management of the countryside and the reform of the CAP. The question posed at that time was whether Defra had struck an appropriate balance in those
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regulations between the environmental concerns being expressed and the pressures that that put on farming practices—of which I know that the Minister is aware.
It is, therefore, against that background that I wish to ask the Minister one or two further questions. As the Minister will be well aware, farming incomes fell again last year and dairy farmers were among those most affected. With milk prices at an unacceptably low level and the quota systems still to be agreed, coupled with the ending of the headage payments, it is understandable that many dairy farmers are still apprehensive about the changes that they face and the future decisions that they have to make.
One should add to that the statement made by the Secretary of State that these new payments, originally planned for June 2005, would not be paid on time and have now been deferred to February 2006—and even that is still not written in concrete. The Minister cannot but be aware of the dire position of some dairy farmers. Both he and I were on the panel that attended the NFU conference only last week in Birmingham, where serious concerns about the state of the dairy industry were expressed.
To that dilemma should be added the continued spiralling out of control of bovine TB. That has not been helped by the Written Statement given on the 10-year bovine strategy document. Although I need to look at it in greater detail, looking at it quickly, it is full of words but lacks action. It will continue not to control the disease at all. When the Minister comes to comment, I am sure that he will accept that this disease is out of control, has seen the decimation of many milking herds and the restriction of many farmers to sell, move and trade in the normal way.
What a pity it is that the Government were not prepared to make an oral Statement on that 10-year strategy, which would have given the House an opportunity to debate it, but just issue a Written Statement, thus denying us the chance to have at least three-quarters of an hour of discussion on this crucial issue. So there is enormous pressure, particularly on the dairy sector. Raising this issue tonight has given the Minister a chance to explain how Defra envisages dairy farmers, for example, setting aside land to bring them under the requirements of the order, when so many of them use all their land for grazing in rotation.
In the light of the concerns that I and others have expressed, will the Minister think again about bringing forward an interim payment to help dairy farmers in particular, but beef and sheep farmers in the same way, who from the cessation of headage payments and through no fault of their own will find themselves in serious financial difficulties?
Will the Minister ensure that in future changes which affect the management of the countryside and wildlife will come through the House in the normal, respected way?
If I may, I shall refer to a matter which does not directly fall within this subject, but is of great importance and I seek clarification from the Minister. If he is not able to give it tonight, will he come back to me on it?

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The issue is the care and management of the countryside. Will the Minister comment on the announcement yesterday, on 1 March 2005, on the rule changes for legally controlling pest birds? I understand that the rules have changed—it has been in the news that they have changed—so why was there no information on the Defra website when the announcement was made? When inquiries were made, why were Defra press officers unaware of any of the changes? If changes are going to happen to regulations of whatever sort, surely those involved and other stakeholders should be aware of them before they are announced.
I am sure that I am not the only one who is concerned about the changes. Indeed, why were they introduced overnight, without warning stakeholders and individuals? If that happens on one issue, what assurances can the Minister give that it will not happen on other policy matters? If the Minister can assist us tonight, I shall be grateful. But, failing that. I hope that he will make a statement tomorrow. These are important regulations and I hope he will respond to the Merits Committee's concerns and to the questions that I have raised tonight.
Moved to resolve, That this House calls on Her Majesty's Government to revoke the regulations laid before the House on 21 December 2004 (S.I. 2004/3385.) [6th Report from the Merits Committee.]—(Baroness Byford.)
Lord Greaves: My Lords, the noble Baroness does the House a favour by raising this matter, bringing to the attention of the Minister the comments of the Merits Committee, particularly in relation to dairy farmers, and providing him with an opportunity to explain how he thinks the regulations will work.
As the noble Baroness said, these regulations are part of a wider group of regulations relating to the introduction of single farm payments. As the Minister will know, the Liberal Democrats have broadly supported the Government's general thrust in the way in which they are introducing single farm payments in this country and the way in which that is being implemented. Along with many people, we feel that the crunch will come when we see how cross-compliance will work and whether it will work as successfully as we want. It is at the heart of the change: putting money not just into producing things, but into other public benefits.
As the committee and the briefings pointed out, the dairy industry has serious concerns, particularly about small and medium-sized dairy farms that will be faced with a situation that they have never had before. Can the Minister explain how set-aside will work on a fairly small upland dairy farm where most of the land, as the noble Baroness said, is, to a layman, used for growing grass? That is what we used to call "permanent pasture" but nowadays it is pasture that is regularly scraped off and resown. It is not quite as permanent as it used to be, but it is basically pasture.
The maintenance regime for those fields very often depends on grazing by dairy cattle. A lot of people say that dairy farms are not terribly environmentally
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friendly, but that is the way in which the fields are kept in good condition and the land managed. I do not understand how set-aside applies to land such as that. On an arable farm, set-aside is fairly easy. Crops are not grown on the land, which can be managed in a fairly light way during the year to keep weeds down and so on, and at the end of that period it is put back into use. But if you have grassland which is not being properly managed, all kinds of weeds—thistles, docks and that dreadful ragwort stuff, and so on—will start to grow.
What are farmers supposed to do to manage these fields which are set aside? Are they expected to mow them, in which case they will have a crop of hay or silage? How does that satisfy set-aside? These are things I do not understand. Perhaps other people do and perhaps the Minister can explain them to me.
These regulations are necessary because set-aside is part of the common agricultural policy, as we know. I hope that the Government are moving towards a regime in which, if set-aside has to continue, land is not set aside simply not to produce things on it, but for positive environmental reasons. That is absolutely crucial. The whole concept of set-aside, as we have known it, does not have general public support. People think it is stupid to pay people for not growing things on land. They have a great deal of justification for feeling that.
In the longer run we must move either to a system in which set-aside means something quite different—where it means something positive and not something negative—or, alternatively, move towards a situation where set-aside is no longer part of the regime.
If you have a regime based on production subsidies, then set-aside has a logic to it. If you have a regime based on whole farm payments with lots of environmental and social benefits built into the results of those payments, set-aside begins to lose its logic completely. Really, we should be moving towards a regime in which set-aside is abolished.
Lord Whitty: My Lords, I thank noble Lords opposite. The noble Baroness ranged rather widely away from the order against which she was praying. I shall not be able to answer all her points tonight. I will deal separately with those that I can by correspondence or by talking to her.
On these provisions, as the noble Lord, Lord Greaves, said, we have a proposition which is a consequence of the decoupled payment and the substantial reform of the common agricultural policy introduced last year. That decoupled payment has been largely welcomed by the leadership of the agriculture and land-owning interests and has both economic and environmental benefits. It has economic benefits because it frees farmers to pursue the markets which are there and growing, which they can access and which are most profitable, rather than chasing the subsidy. It is environmental because some of the conditions attached via cross-compliance will improve the quality of our land in a number of areas.
However, the noble Lord, Lord Greaves, has a logically sensible point. It is true that some of the detailed regulations attaching to the decoupled payment across

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Europe have not been contrived by ourselves, but by, if you like, a legacy of past schemes which were not eliminated cleanly by this latest negotiation. Regrettably, set-aside is one of those. I am not saying that there should be no role for set-aside, but that the application of set-aside across the board to a decoupled payment is not hugely logical, as the noble Lord said.
However, it is there as a European requirement and we have to make as much sense of it as we can, subject to interpretation by the Commission. While we have managed to bring back to national level, and, indeed, sub-national level, many decisions on agricultural policy as part of this reform, this was not one of them. We are, therefore, making the best of a situation we would probably rather not be in.
Nevertheless, I think that some of the reaction to the matter has been exaggerated. Essentially, in England there will be a set-aside rate required of 8 per cent in the lowlands, 1.3 per cent in the uplands and nothing for moor land. That means some of the farmers indicated by the noble Lord, Lord Greaves, are exempt, or almost exempt. Small producers with less than 19.48 hectares outside upland SDAs and 122 hectares in the uplands, other than moorland, would not have to set aside any land at all. Many small farmers of all kinds would be excluded. As the noble Lord also says, of course, arable farmers are used to this, but dairy farmers are now brought in, as is horticulture, which was not previously subject to any support system. While horticulture will benefit from that system, it will have to get used to set-aside, at least to a limited degree.
It is claimed that dairy farmers are the most affected, which adds to their other problems. We have had discussions, in this House and elsewhere, about the position of dairy farming. I was chairing a meeting of the Dairy Supply Chain Forum this morning, where we discussed the future for the industry, and some interesting topics arose. It is true that dairy farming is facing a number of difficulties at present, but as regards this proposition, apart from the small farmers to whom I have already referred as being excluded, particularly in the uplands, most dairy farmers will not be required to meet set-aside, because, by any definition, the land they are dealing with is permanent pasture.
The issue arises when the pasture is regarded under Commission rules as temporary—that is, when it has been used for something else within the past 5 years. That will apply to some dairy farmers, although it is not the case on a large number of such farms, many of which would be excluded anyway. The temporary grassland is effectively the area where a set-aside requirement now applies that has not applied before. However, that is not the whole range of dairy farming, and certainly not of upland farming in general. Nevertheless, I recognise that this is a complexity we could well do without, and which dairy farmers will have to get used to where it applies to them.
We are currently discussing with the Commission what can be done to reduce, for example, the set-aside requirements for farmers who were affected by foot-and-mouth, where land that would not normally trigger obligation was, by derogation allowed during
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that period, considered as set-aside. If that was an interruption to permanent pasture, some inequity clearly arises from that. We are discussing that and a number of other anomalies with the Commission to minimise the unfair effects of this requirement.
Nevertheless, the broad range of farmers who will now be freed from the obligation to chase the subsidy will be used to set-aside. It will be a minimum obligation on others, and it is in any case one we cannot avoid under the EU rules. The regulations before us tonight, which I hope the noble Baroness will not press her objection to, make the best of the system, and help to deliver and clarify the way in which the rules should be operated. Further information on this area will be going to farmers and their advisers. While I accept the logic of the noble Lord, Lord Greaves, I am not able to follow it completely, but I think we are doing our best within this system.
I have to underline that the decoupling of the payment is such a major advance for agriculture that these little irritations have to be lived with.
The Duke of Montrose: My Lords, I should like a point of clarification before the Minister sits down. The rules may not be exactly the same for a farmer north of the Border as they are down here, but I understood at my end that temporary grassland was land that had been in crop for four years before the introduction of the IACS scheme, which I believe was in about 1996. There may be an anomaly: people with farms that were in arable crop in 1991, but have never been so since, may suffer from this classification of "temporary grassland".
Lord Whitty: Yes, my Lords, the rules in Scotland are different. However, if land has already been classified as temporary grassland, the presumption is that the set-aside rules would apply. The issue is where land which anybody would regard as permanent pasture may have been disrupted relatively recently before the reference period and therefore there is dubiety about whether it is temporary grassland or permanent pasture. I suspect that there will be difficult cases, both north and south of the Border, in that respect. I am afraid that the noble Duke will have to address any more detailed points on that to the Scottish authorities.
Baroness Byford: My Lords, does the noble Lord wish to come back?
Lord Whitty: My Lords, this confirms that the basic definition of permanent pasture and temporary grassland is the same throughout the United Kingdom. The payment system and the requirements on set-aside are different in Scotland but the definition will be the same. What the land was used for prior to the original IACS, pre-1992, is not relevant; it is where the land in the reference period for this scheme was already classified as temporary grassland.
Baroness Byford: My Lords, I am most grateful to the Minister for his response to my Motion, and to the

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noble Lord, Lord Greaves, and my noble friend the Duke of Montrose for their questions. The cross-compliance regulations that are evolving create challenges. The noble Lord said that they would not affect many people; I think that they will affect a few more than he thinks.
The question of temporary pasture is outstanding and, as the noble Lord said, there are still more outstanding matters. The one thing that the Minister is aware of is the difficulty of planning the best way for the future so that we get a balance between the regulations being laid down and better environmental circumstances, which we would all like to see. That has added to the uncertainty.
I am grateful to the Minister for answering some of my questions. He did not refer to the two issues that I raised on bovine TB. I am sorry that he felt unable to comment on that today because it is a very big issue. It is relevant because it creates huge problems for dairy farmers. I am not surprised that he did respond to my point about things being changed overnight. I am grateful for the opportunity to raise the matter because it is important. If regulations are to be changed overnight and nobody knows about them, including the department, how on earth are practitioners who are trying to keep within the law to know what is expected of them? I gave just one example that hit the headlines yesterday. I hope that the Minister will take up my invitation to make a statement to clarify the matter tomorrow, because we are uncertain whether there has been a change, and, if there has been a change, what it involves.
I am very grateful, as always, to the Minister, who is extremely knowledgeable and addresses all our concerns in a very genuine manner. I thank other noble Lords who have spoken. I do not regret raising this subject, because it has given us the chance to clarify some of the issues that have been raised. At this stage I beg leave to withdraw the Motion.
Motion, by leave, withdrawn.

South-west Territorial Waters (Prohibition of Pair Trawling) Order 2004
9.14 p.m.
Baroness Wilcoxrose to move to resolve, That this House calls on Her Majesty's Government to revoke the order laid before the House on 23 December 2004 (SI 2004/3397). [8th Report from the Merits Committee].
The noble Baroness said: My Lords, I beg to move the Motion standing in my name on the Order Paper. I propose to speak to both this Motion and the second Motion standing in my name.
I am aware that this House only very rarely divides on Prayers to Annul, and to that end they do not necessarily imply that the individual making the Prayer is opposed to the policy contained in the order. Rather they are hooks upon which to hang a debate about a particular issue—the more so here because, given that the trawling orders are negative, they would
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not normally be debated. In that sense, opportunities to question the Government about their policies on the issue are few and far between. This Prayer offers me and your Lordships the chance of seeking clarification of the Government's intention on a most important issue.
I have to thank the Merits of Statutory Instruments Committee, which, in its eighth report, alerted me and your Lordships' House to the danger in the two orders. It states:
"These orders are drawn to the special attention of the House on the grounds that they give rise to issues of public policy likely to be of interest to the House, and that they may imperfectly achieve their policy objectives".
That policy objective, to which I can hardly object, is based on the Conservative Party's fishing Green Paper, which sets out our oft-stated policy of managing the sea fisheries in UK waters in such a manner as to safeguard the natural environment, rebuild our fish stocks and marine wildlife.
So, in principle, I support the idea of reducing pair trawling for bass and the huge level of by-catch of common dolphins. The orders will penalise the UK's south-west fisheries while our partners in the CFP fish on. It is the other fishing partners who are causing the real damage outside our territorial waters, particularly the French effort in the Channel. The French effort, which is so huge and so damaging, is really where the problem lies. Ours is a small effort in comparison.
I will quote from the Merits Committee's report because it will make me succinct and my voice is not doing too well tonight. Paragraph 6 refers to.
"the option recommended, namely to take action on a UK basis, and then approach the European Commission to make the prohibition … DEFRA notes that in July 2004 it put the case to the Commission for the use of emergency powers for the closure the offshore pair trawl fishery for bass, and that the Commission did not accept this case. At paragraph 18, DEFRA states that, if the Commission is not persuaded by a new approach to agree that the prohibition be extended to other Member states. DEFRA 'would continue with the introduction of measures to apply to UK vessels only'".
Well, whacko. What fun. It may be fun for the officials, and fun even for the Ministers, but it is our fishermen's lives and our fishermen's livelihoods with which the Government are playing politics. The report continues:
"Paragraph 29 of the RIA summarises the results of a consultation process on the proposals, which was carried out over a three-week period in October and November 2004. It makes it clear that a number of objections have been raised to the action being pursued by DEFRA, including that 'many stakeholders are concerned that these measures are discriminatory as French and offshore fishery will continue where most cetacean bycatch is seen'.
We understand the importance of safeguarding the marine environment, including protecting dolphins against the damage caused by bycatch".
Hear, hear! So do we all.
The report continues:
"However, we question whether the policy being pursued by DEFRA through this Order will be effective in securing such protection since, as the RIA indicates, overall bycatch levels from the French fishery effort may well be higher than levels resulting

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from the UK element; and since there is a clear possibility that the Commission may not agree that the prohibition effected by the Order should be extended to other Member States".
Where are we then? The report concludes:
"We question again whether DEFRA's decision in the case of the 2004 Order, to proceed with a national prohibition before agreement at the European level, is an effective approach".
I remind your Lordships' House—I do so because I know that it will go into Hansard and be read outside the group that is here tonight—that this relatively new committee is a cross-party committee and that it has reached that conclusion jointly.
So while the French go laughing all the way home to the bank, our British fishermen stand by while the Government play politics with their lives and their livelihoods. The resentment that is building in the home fleet can be measured only by how I am approached when I go home. This is where I admit that, yes, this is close to my heart. This is my home fishery, my friends and family. It is very tough to be a pawn in this game.
I ask the Government to clarify some of the details in this order and to try to explain their thinking to me. What are the implications of the Government taking this unilateral action for the fisheries of the United Kingdom? What is the Minister's estimation of our European partners following suit? Is it worth sacrificing our own fleet to an ideal not shared by our partners in Europe?
Moved to resolve, That this House calls on Her Majesty's Government to revoke the order laid before the House on 23 December 2004 (SI 2004/3397). [8th Report from the Merits Committee].—(Baroness Wilcox.)
Viscount Ullswater: My Lords, I support my noble friend Lady Wilcox and agree with her on three matters. Unilateral action on a very small fishery is most unfair when competition from France, under Annex 1 of Council resolution 2371/2002, has access rights in the six to 12 mile limit. Greenpeace has sent me some briefing on this subject, which I quote:
"Last year, the Government announced a ban on UK pair trawlers operating within 12 miles of the UK coast. As very little trawling takes place within those 12 miles, and most of the fishing is done by French boats, Greenpeace argued at the time that this move would achieve 'nothing"'.
To put that into context, out of 6,700 fishing vessels in the UK, only seven pairs fished for bass in 2003–04.
My noble friend Lady Wilcox has indicated that there may be some merit in what the Government call a "stepwise" approach—I must say, it is a new word to me—which may not lead to agreement with other member states, particularly the French, any more than negotiations to date. I would like to hear from the Minister what those negotiations with the French, and perhaps other member states, were, to see whether there is any movement, or, if we take this stepwise approach, they are likely to follow us.
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Having said that, and having agreed with those limited points that my noble friend Lady Wilcox has made, I concentrate my remarks on another aspect of this instrument. Why was it necessary to make this order on 22 December, lay it before Parliament on 23 December—when Parliament was not sitting—and for it to come into force on 24 December?
For clarification, I should declare that I am a Member of the Merits of Statutory Instruments Committee, but of course I speak entirely on my own behalf. I cannot deny, however, that I have taken part in those discussions. The committee published its special report for the Session 2003–04 on 29 November 2004. In paragraph 57, it drew special attention to the 21 day rule convention. We comment on this again in our eighth report of the Session in paragraph 11. with regard to this particular instrument.
I am not convinced that, after noting the by-catch problem as explained in the explanatory memorandum as long ago as 2002, it was necessary to bring the order into force and break this convention so flagrantly. Did the department consider our report before advising the Minister to sign the order?
I know from the Explanatory Memorandum that the rather lame reason for bringing forward the order so urgently is because of the seasonal nature of the fishery. But why start consulting on it as late as October, as the EM states, if the problem was identified in earlier years, so that at least Parliament could have been given enough time to consider it within the 21 days? There is also a problem if the praying time of 40 days goes over the time that such an order comes into force—as in this case—as if it is successfully prayed against there may be pending prosecutions. That would be difficult both for the fishermen and, I suggest, the Government.
Can the Minister give the House a satisfactory reason why, when in this case no treaty date obligation is under consideration and purely unilateral action is intended that will not even cease pair trawling in the six to 12-mile limit, our fishermen were given absolutely no warning whatever to cease their activities virtually overnight? The EM states that the fishery closes for Christmas. Surely it cannot be so urgent, for the reasons I have explained, that 21 days should be given to Parliament to consider the order. After what our committee reported a month beforehand, it looks like a discourtesy to Parliament, to say the least.
Lord Greaves: My Lords, the noble Baroness, Lady Wilcox, is right to bring this matter to the attention of the House, although I do not agree with a lot of what she has said in moving her Motion. However, our debate tonight has demonstrated that the Merits of Statutory Instruments Committee is proving to be useful in scrutinising delegated legislation that previously was not adequately examined. The reports of the committee do not use very often the phrase set out here:
"These orders are drawn to the special attention of the House".

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When they do, Members of this House are obliged to ensure that the concerns outlined are raised on the Floor of the House and Ministers are asked to account for their actions. The committee has proved very useful and its reports are valuable.
We must consider two issues which stand at opposite ends of the argument about what should be done. The first is the substantive issue: many dolphins are killed each year as a result of pair trawling using very large pelagic nets. The number of dolphins being washed up in nets or found dead on beaches is a matter of great public concern. There is no doubt about that and the Government are right to look to see what they can do about it.
In passing, I also compliment those responsible for producing the regulatory impact assessment on this matter. It is a model of its kind in explaining complicated matters both clearly and simply. We are now all experts in Article 7 of Council Resolution 2371/2002 and Article 9 of the same. I am sure that the Minister carries such details in his head, but most of us have to rely on assessments like this one, which is very good indeed.
It is suggested that during the 2003–04 season, the number of dolphins killed as a result of this kind of trawl fishing was 439. That is a precise number and therefore probably not quite accurate. That is United Kingdom boats—we are told that there are perhaps seven pairs. The French have perhaps five times as many as we do, so the true total might be more than 2,500, including the French and UK boats. It is a significant slaughter of intelligent creatures, which we must take very seriously.
The second issue is whether the Government have tackled the problem in the right way, which is the issue that the noble Baroness raised. The Government have been under considerable pressure from organisations such as the World Wildlife Fund, the Wildlife Trusts, Greenpeace, and so on, as well as public opinion. My honourable friend Andrew George, who is the Member of Parliament for the far end of the southwest in St. Ives, and our fisheries spokesman, has put pressure on the Government to do something about the problem.
His advice is that banning that activity is not a disaster for fishing in the south-west. A good living can be secured, as it is in Cornwall, by using a line and hook to catch deep sea bass. The resulting product is much higher quality and much more marketable than fish that have been damaged in a trawl net. I am no expert but I am willing to take Andrew George's advice on that matter.
The Government are caught in a difficult situation. They tried, quite rightly, to get a European-wide ruling under Article 7 but failed to do so. They are now going under Article 9 and making a limited attempt to do something about it. It is a limited attempt because it covers only British boats and only 12 miles, whereas a lot of such fishing takes place well beyond 12 miles. The Government can then ask the European Commission if the action that has been taken can apply to other boats, especially French ones.
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That is the only course of action now open to the Government. It may be successful or it may make little difference. The Government should be complimented on trying to do something about the problem. It may be that introducing the order the day after it was published and making it the day after Parliament rose was undesirable. Clearly that is undesirable. The noble Baroness asked the reasons for that.
I suspect that it is a cock-up rather than a conspiracy, and that the Government were not organised enough to do it properly and make the order earlier in anticipation of what would result from the consultation. Had they done so, they would have been accused of bouncing the consultation before the period had finished. You cannot win on such things.
In the circumstances the Government are in a difficult position. They are trying to do their best to deal with a real problem that must be tackled. In the unlikely event that the noble Baroness pushes the matter to a vote, I shall not support her.
Baroness Byford: My Lords, I thank my noble friend for bringing forward this very important issue. Had she not done so, I would have done so myself. With her great expertise and knowledge of this topic I am doubly grateful. I am even more grateful as for the past two weeks she has been very unwell, and she has nearly lost her voice. We are very pleased to see her in her place, although I am not so sure that the Minister will be so thrilled with her moving the Motion.
Noble Lords have raised some important and interesting issues and I await the Minister's response. I go back to the Merits of Statutory Instruments Committee report, which says that,
"these orders are drawn to the special attention of the House on the grounds that they give rise to issues of public policy"—
I should like the Minister to comment on that—
"likely to be of interest to the House, and that they may imperfectly achieve their policy objectives".
Again, I should like the Minister to comment on that. As with the earlier orders, it is very easy for the Minister to respond in a general way and not to address the issues that are directly before us.
My noble friend quite rightly raises the issue of pair trawling. We would like to see it banned. Our party has certainly been pushing for this issue to be addressed. As my noble friend Lord Ullswater clearly stated, this is not a new problem. We have known about it for some time. The common fisheries policy has been highlighted in report after report. The great sadness is that no action has followed.
The Government are taking this step, and we support anything that will lessen the loss of so many wonderful and beautiful dolphins and porpoise. Greenpeace estimate that each year something like 10,000 of those wonderful beasts are killed unnecessarily. It is not a narrow issue; huge numbers are being killed.
I want to reiterate one or two points. I shall not go through each section of the report to which my noble friend Lady Wilcox referred. She has put the points very clearly, and although I had highlighted them, I shall leave the matter there.

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As the noble Lord knows, Greenpeace has already launched a challenge in the High Court against the Government to save dolphins being caught. Greenpeace has filed papers that seek a ban on all fishing boats pair trawling for sea bass within 200 miles of the UK. That is the type of fishing which is responsible for more than 2,000 dolphins dying in the Channel every annual fishing season, and those are just the numbers in our area.
On the timing mentioned by my noble friend Lord Ullswater, I too had raised the issue of the sudden desire to bring forward a statutory instrument when the House was not sitting. It was introduced on 22 December, brought forward on 23 December and came into being in a very short space of time. I have to ask why. Why, when this problem has been known for so long, was it decided to push it through, like any bad news from this Government, when it is hoped that the House will not notice? I am sure that that is not true of the Minister, but it leaves a nasty taste in the mouth. I believe that the Minister must answer that question very clearly today. The noble Lord, Lord Greaves, said that he thought that was not intentional. Bad organisation, or whatever, is undesirable and I believe that that point should be answered tonight.
My noble friend clearly said that the Commission was not persuaded of the need to address the issue. What action has the Minister taken since it was turned down, and what action does he believe will be achieved at the end of the day? Is he willing to accept that it will have a detrimental effect on UK fishermen? In my view, it certainly will.
I want to draw to the Minister's attention the enormous amount of work undertaken by my honourable friend Owen Paterson in recent months on our fisheries policy. He is very concerned and supportive of the stance that we are taking tonight and he, too, wants answers to this imperfect way of trying to achieve policy objectives. We, the Conservative Party, support the idea of reducing pair trawling, which we would like to see banned for environmental reasons, for the benefit of both recreational and commercial fishing, particularly as regards bass, which is predominantly fished by using rods and lines. We respect the value and importance of bass and believe that it is a waste of a resource for it to be fished by pair trawling.
The problem with these regulations is that British boats are not really the problem. It is, as other noble Lords have said, the French boats that are causing more damage, but this statutory instrument does not address that at all. Again, I would like to know from the Minister what negotiations he or his department have had directly with their French counterparts. If the problem predominantly lies with them, then surely there should have been some discussions.
In 2003, the Royal Society said that European Union politicians were gambling with the health of the remaining European fish stocks, and that it was an outrage. I reiterate that.
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We have spoken on many occasions about the state of the fishing industry and of our fish. Will the Minister comment on why the Government decided not to bring in a marine Bill, but instead to pursue a hunting Bill? One would have saved and protected animal welfare, albeit fishing, whereas the other certainly does not protect any animal welfare. A marine Bill was welcomed and supported on all sides of the House. It would have addressed this very issue.
I am grateful to my noble friend Lady Wilcox for so clearly identifying the issues before us tonight. I hope that the Minister will answer these direct questions and not say that he will write to us later. There has been enough notice. I hope that he is able to answer. My thanks to my noble friend; she has brought an important issue before us tonight.
Lord Whitty: My Lords, while I do not entirely thank the noble Baroness, Lady Wilcox, for raising this issue, I am grateful that she is here tonight and in reasonably good voice. We have had an interesting debate.
Let me point out two or three things about the debate. First, everybody recognised that there is a problem with dolphin, cetacean, by-catch. We should do something about that. Secondly, everybody recognised that although it would be better to do something on a Community basis, the UK Government have some responsibility. Thirdly, everybody recognised that pair trawling is not a desirable practice in these fisheries. There is rather more common ground in this debate than might have been assumed at the beginning.
Perhaps I may explain the Government's position—which ends up looking bizarre because we are planning the introduction of statutory instruments to ban UK vessels from participating in a fishery while other member states are allowed to continue.
Our research first identified a problem in the pair trawl fishery in 2001. We have been trying to make progress in reducing the by-catch. As I suspect the noble Baroness knows, we have invested a fair amount of research money in trying to find a system of separation, a grid that would limit that by-catch. It appeared that that device might have the potential to reduce significantly the number of dolphins caught by the fishery. Regrettably, those experiments were disappointing. They showed clearly that the exclusion grid would not present an early or immediate solution to the problem.
There is long-term potential for a solution, as Community legislation now requires observer schemes to be set up, particularly for pelagic fisheries. The data collected from those, once undisputed, could lead to Community action. However, that review will not take place until 2007–08. On the basis of the data we have available, and certainly with the assumptions on the French catch as well, there is a significant threat to dolphin stocks and numbers.
As the noble Lord, Lord Greaves, said, the RIA made it clear that as this is a fishery where the majority of vessels are from other member states, if we take the total fishery, Community action would be desirable.

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We applied to the Commission in July 2004 to use those provisions for an emergency closure of pelagic pair trawl fishing for bass in the English Channel. We felt that we had presented the Commission with a substantial case, given all the scientific information that had been assembled by the UK.
But, as has been said, regrettably the Commission did not accept our case or regard it as sufficient for an immediate closure. It acknowledged that considerable efforts were being made to try to find a solution and we are continuing to pursue these options with the Commission.
However, as the noble Lord, Lord Greaves, indicated, there is a considerable and wide concern, not least in the south-west, about the effects of such fishing on the dolphin. It was necessary, therefore, in default of a Community approach, for the UK to consider what we could do ourselves at least to limit the damage that was being caused. To demonstrate that, we decided to use what are, effectively, the only powers available to us in the CFP, and to take action within the 12 nautical mile zone of the south-west coast of England, in our own territorial waters, to ban the practice for this year's fishing season.
The timescale gave rise to problems, to which the noble Viscount and others have referred, which meant that, reluctantly, we had to breach normal etiquette of the 21-day rule. But the fishery season starts around November and continues through to spring. It was therefore considered that, given the end of the consultation period, we should try to bring in the ban as early as we could within a season that had already started. If we had left it until well beyond Christmas and 21 days into January, we would have lost another month of the season.
At the same time, we had applied to the Commission to have the UK ban extended—which the Commission would have powers to do—to all pair trawlers in that 12-mile zone. Under long-established arrangements, France and Belgium have historic rights of access to this zone and, although there are only a limited number of French vessels making use of those rights, there remained the potential for them to make greater use of the zone. They form a larger element than the UK vessels.
We made it clear that this would be an interim step in moving towards a co-ordinated Community-level project but, even on that limited basis, the Commission was not prepared to accept the extension to non-British trawlers. We were disappointed that it was not prepared to do so but we still considered that we would do what was within our powers—and for which the Commission's permission was not required—and that was to limit fishing in that form in the fishery for UK vessels.
Obviously this is not a particularly satisfactory position. It is not one which endangers the south-west fisheries or the Scottish fisheries, which are also involved in this—Scottish boats fish in that area—to the extent that some people are claiming. Nevertheless, it is, in one sense, discriminatory and aimed at UK
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vessels. But the UK vessels are the only ones which, under the rules of the CFP, we can limit within this area.
It is important to recognise that although the Commission has rejected immediate action in this area it recognises the problem. It is therefore legitimate for us to say, whether or not we use the term "stepwise"—it is not a term which trips off my tongue either—that this is the first step in establishing, first within the British control zone and then within the whole of the fishery, a move to limit all boats from trawling in this way, with its knock-on effect on dolphins and other species.
If there is a step that we can take, we should take it. We have taken a step. It is a very limited step but we believe it demonstrates our determination to do something. It is one which, for all the criticism from all sides, it is essential for us to take if we are to convince others to take it.
The noble Baroness, and others, asked what the French were doing about this matter, and what stage our negotiations with them have reached. My colleague Ben Bradshaw has raised this issue directly with the French—he is capable of raising things very directly—but there has been no satisfactory response at the moment. If we are not going to reach a bilateral arrangement with the French our best bet is, therefore, to go through the Commission, which is more sympathetic. Yet the Commission is not prepared to take immediate action until it has more evidence. We are working on establishing the further evidence we need.
This is therefore a limited step, which we can carry out ourselves. It is not the most desirable position; it is a step in the right direction. The noble Baroness, along with the Merits Committee and everybody else, is quite right to say that this will not deliver the full objectives of the policy. Yet it is a step towards achieving it. In defence of the policy, it is possible that scores, or several hundred, dolphin might well survive as a result of this intervention—even if we do not extend it to other boats or areas. Demonstrating that we are prepared to do so—and continuing to gather the evidence—should help convince the Commission, first, to allow us to ban other vessels in that area and, secondly, to move to a Community level decision to ban that method of trawling, which is so detrimental to the dolphins in our waters and the waters of the Community.
I fully accept that the position is not an utterly satisfactory one, but we have taken action where we can. I therefore hope that the noble Baroness will not press her objection here tonight.
Baroness Wilcox: My Lords, I am grateful to those who have joined in this debate, particularly my noble friend Lord Ullswater. I realised only halfway through his speech that the noble Viscount was on the Merits Committee. I had not really looked to see who was on the committee, although I knew it was cross-party, which I found to be very favourable. I want to thank my noble friend for a point he made. I had not picked

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up the speed with which everything had been done; I can quite see that the noble Lord, Lord Greaves, would be generous in saying that it was a cock-up rather than anything such as the speed with which the fishery acted, or whatever else we might like to call it. It is a very unsatisfactory state of affairs.
The Minister has gone out of his way to explain how this came about and what is being done. The one thing he has made no mention of is the morale of our own fishermen. Yes, it is wonderful to save the dolphins. Frankly, if we all committed suicide at the same time, then the environmentalists would have their way. Yet the best of all possible worlds does not really exist. If, when we took our evidence to the Commission it said "No, not yet", then I really am sad that we walked away and said "So what, we are going to do it our way—and the only way we can is to do it to our own fishermen, at home".
The long term effect of this upon our fleet—not only the south west fleet, but the Scottish fleet—is a bad one. Science and fishing have gradually been coming together—gradually understanding each other and knowing what they need to do; first, to save their livelihoods and, secondly, to get the balance of the sea right. Every time we take a step forward it is wonderful. But to act unilaterally when we ourselves catch so very little of this by-catch, is awful.
Yes, it is awful to have dolphins caught. Yet I really take no joy in this. These orders are shameful. So it is with no joy at all that I beg leave to withdraw the Motion.
Motion, by leave, withdrawn.

South-west Territorial Waters (Prohibition of Pair Trawling) (Amendment) Order 2004
Motion not moved.

Regulatory Reform (Joint Nature Conservation Committee) Order 2005
9.54 p.m.
Lord Whittyrose to move, That the draft regulatory reform order laid before the House on 24 January be approved. [8th report from the Regulatory Reform Committee].
The noble Lord said: My Lords, this order will amend the Environmental Protection Act 1990 to enable the Joint Nature Conservation Committee to operate more effectively, mainly by allowing it to employ its own staff, remunerate its own chair and independent members and receive some funding directly from the Government.
The JNCC was established under the Act as a forum through which the three country nature conservation bodies set up to replace the former Nature Conservancy Council discharged their special statutory responsibilities
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for nature conservation across Great Britain as a whole and internationally. That Act requires the country bodies to provide the JNCC with staff, accommodation and other facilities, that the JNCC's grant funding must be routed through the country bodies and that its three independent members must be paid by them.
These arrangements are pretty indirect and needlessly bureaucratic. They are not a great help to the staff or the efficiency of the organisation. When we had the last review of the JNCC, the Government agreed that it was highly desirable to eliminate these unnecessary statutory complications and to go through a regulatory reform order. Because the JNCC is a cross-border body, this order is being made in agreement with the Welsh Assembly and the Scottish Executive. The main element of the proposals which were set out in a consultation paper in December 2003 is to give the JNCC the ability to employ staff.
In many cases, staff have been specifically recruited for their current JNCC roles but they have never worked other than on assignment to the JNCC via the country bodies. As a consequence, we have staff working next to each other who are doing similar work but are engaged on three different sets of terms and conditions. The resultant anomalies cause problems with staff dissatisfaction and the risk of legal challenge. By removing the statutory requirement for the country bodies to provide staff and enabling the JNCC to employ all staff, we can have a consistent set of terms and conditions.
The order also allows for the setting up of a company limited by guarantee to facilitate the employment of staff, as JNCC is an unincorporated public body. That would avoid problems of unlimited liability for joint committee members.
The order will also enable the committee to delegate functions to any staff employed either directly or through the company or the company itself. This is incidental to the proposal to allow the JNCC to employ staff and just allows delegations to be made to the equivalents of staff working for the country bodies to whom delegation is currently possible.
Enabling the JNCC to pay its chair and members directly will also avoid unnecessary administration. At the moment, liaison between the country bodies and the JNCC is complex and inefficient. Similarly, allowing the Government to fund the JNCC directly for the work it undertakes will avoid complications and make funding more flexible and transparent.
The Select Committee on Delegated Powers and Regulatory Reform concluded that these proposals were an appropriate use of the powers under the Regulatory Reform Act 2001 and would reduce burdens on the JNCC. I thank members of the committee for that opinion. The committee in another place also considered that the proposals were within the vires of the 2001 Act and that a convincing case had been made for them. The order has been unanimously approved in the other place, and I commend it to this House.

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Moved, That the draft regulatory reform order laid before the House on 24 January be approved. [8th Report from the Regulatory Reform Committee].—(Lord Whitty.)
Baroness Byford: My Lords, I thank the Minister for going through the explanation so fully. We support the order. The Delegated Powers and Regulatory Reform Committee expressed concern about the continuity of employment. I presume from what the Minister has said that he is happy that those concerns have been addressed. As he said, it is undesirable to have different terms and conditions of employment for people who work alongside each other. When Defra was formed, employees from the DETR and Defra experienced difficulties in that respect. If the Minister
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feels that those concerns have been addressed—I think I see him nodding—then I am more than willing to support the draft order.
Lord Greaves: My Lords, we on these Benches support the order and thank the Minister for his comments.
Lord Whitty: I thank both Front-Bench Members for their support.
On Question, Motion agreed to.

Constitutional Reform Bill [H.L.]
The Bill was returned from the Commons agreed to with amendments and with a privilege amendment.
House adjourned at ten o'clock.

Official Report of the Grand Committee on the Commissioners for Revenue and Customs Bill
(Third Day)
Wednesday, 2 March 2005.

Official Report of the Grand Committee on the Commissioners for Revenue and Customs Bill

  The Committee met at half past three of the clock.
  [The Deputy Chairman of Committees (Lord Tordoff) in the Chair.]
  The Deputy Chairman of Committees (Lord Tordoff): If we are all sitting comfortably, we can begin.
  Clause 21 [Disclosure to prosecuting authority]:
  [Amendments Nos. 48 and 49 not moved.]
  Clause 21 agreed to.
  Clauses 22 and 23 agreed to.
  The Earl of Northeskmoved Amendment No. 50:
  After Clause 23, insert the following new clause—
  "INFORMATION COMMISSIONER'S REPORT
  (1) The Information Commissioner shall keep under review the exercise and performance of the powers and duties conferred or imposed by or under sections 17 to 23 by the persons on whom they are conferred or imposed.
  (2) It shall be the duty of those persons on whom powers and duties are conferred or imposed by or under sections 17 to 23 to provide the Information Commissioner with all such information as he may require for carrying out his duties as mentioned in subsection (1).
  (3) The Treasury shall—

  (a) after consultation with the Information Commissioner, and

  (b) subject to their approval as to numbers,

  provide the Commissioner with such staff as is considered necessary for the discharge of his duties under this section.
  (4) As soon as practicable after the end of each calendar year, the information Commissioner must lay before Parliament a report about the carrying out of his duties under subsection (1)."
  The noble Earl said: I should begin by apologising to the Committee for my absence last Thursday. By way of explanation I was attending the winter meeting at the parliamentary assembly of the Organisation for Security and Co-operation in Europe in Vienna. Looking on the bright side, the Committee was graced with the much more expert, not to say eloquent, oratory of my noble friend Lord Kingsland as my substitute. For the record I should like to express my gratitude to him for moving my various amendments with his customary skill and flair.
  Needless to say, I have read the Official Report of the Committee's proceedings. Indeed, having done so, and again by way of explanation, that enabled me not to move the previous two amendments in my name. So
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  far as they are concerned, the response of the noble and learned Lord the Attorney-General to Amendments Nos. 41 and 42 offered me adequate reassurance.
  As to this amendment, evidently its purpose is to ensure that the disclosure regime operated by HMRC is subject to the external and independent oversight of the Information Commissioner. In so doing, it conforms with the paragraph 1.33 recommendation of the Joint Committee on Human Rights; namely:
  "In our view, there is a need for disclosure of confidential information by HMRC to be carefully monitored and the exercise of the power to disclose made subject to external oversight by an independent body (such as the Information Commissioner) capable of ensuring that in practice rigorous procedural safeguards are applied when deciding whether or not to disclose confidential information".
  Bluntly, I cannot improve on that as an eloquent and clear argument in favour of the new clause. Indeed, as my noble friend Lord Kingsland suggested with Amendment No. 43 last Thursday, I would hope that the noble and learned Lord the Attorney-General would consider the proposition to be wholly unexceptionable and unobjectionable.
  That said, I suspect that, as the noble and learned Lord argued in the context of Amendment No. 43, he will seek to suggest that the presence of Clause 22 renders the amendment unnecessary. Of course, I recognise that this ensures the involvement of the Information Commissioner in the disclosure regime, but I suggest that the amendment would stretch that involvement rather further than would ordinarily be permitted under the terms of the Data Protection Act. That Act states at Section 52:
  "The Commissioner may from time to time lay before each House of Parliament such other reports with respect to those functions as he thinks fit".
  The provision to prepare a report is therefore permissive rather than, as at subsection (4) of the amendment, compulsory. To my mind, this more properly reflects the importance that should be attached to the confidentiality of taxpayer information and the significance of its role in protecting the tax base. Moreover, the amendment at subsection (3) seeks to ensure that adequate resources are made available to the Information Commissioner to perform the relevant duties.
  Albeit that I have lifted the text from other statute, I freely concede that my drafting here may be somewhat less than perfect. Nevertheless, for me there is an important point of principle here. It is sanitary to reflect the extent to which the functions of the Information Commissioner have expanded since the establishment of his office in 1998. For example. I think I am right in saying that oversight of Part 1 of the Regulation of Investigatory Powers Act and of the freedom of information regime has been added to his brief. However, I am less certain that there has been a commensurate increase in the resources and funding available to him—a case perhaps of willing the ends and not the means. In other words, my aim with the

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  amendment is to seek to ensure that sufficient resources are made available for his intended duties to be performed adequately and properly. I beg to move.
  Lord Campbell of Alloway: I support the amendment. It implements the recommendations of the Joint Committee on Human Rights. Whether that is necessary is a matter for the House. I need say no more about it. I am not here today to argue necessity.
  The substance of the amendment will complement amendments proposed to be tabled on Report, which I have discussed informally with the noble and learned Lord the Attorney-General and with my noble friend Lord Kingsland, to bring on to the face of the Bill safeguards in accordance with the recommendations of the Joint Committee on Human Rights. I suggested to the noble and learned Lord that he could not possibly agree with these amendments and I think that he rather accepted that. But, again, that is a matter for the House. While I am here, I want to express my gratitude to the noble and learned Lord for the courteous and constructive way in which he demolished my amendments on the previous occasion.
  This amendment, even if my amendment on Report were not accepted, to which it would be complementary in its own right, should stand.
  Baroness Noakes: Before I make a few brief remarks about my noble friend's amendment, I want first to return to a matter which arose earlier in Grand Committee; namely, the meeting held on 8 February. I apologise to the noble and learned Lord and to his officials because there was notification of that meeting in our party notice. However, for some reason neither I, nor the researcher allocated to the Bill, nor my Whip noticed it. I cannot explain that collective act of negligence, but the meeting occurred. That led me to criticise the noble and learned Lord and I wish unreservedly to apologise for that.
  Turning to the amendment, we debated Clauses 18 to 20 on our second Committee day. There were many problems and the noble and learned Lord will be aware that we are seeking further safeguards to be built into those clauses. In the absence of those safeguards, a report such as this becomes essential to ensure that the right kind of public spotlight is focused on the potential use of such important powers. Even if the Government were to agree that some safeguards should appear in the Bill, one would still say that a report was necessary, but not quite so necessary as when one has the Bill as currently drafted without the safeguards.
  I want also to underline the point my noble friend made about resources. Bodies like the Information Commissioner often have their activities constrained by the resources they are given. It is important, when identifying an area that needs scrutiny, that the right resources are made available. Therefore, the element of my noble friend's amendment, which seeks to ensure that the right degree of resources are placed in the body, is crucial.
  Lord Newby: This seems to be a sensible amendment. One of my concerns about amendments
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  which require the production of reports is that there is a danger of suffering from report overload. As the noble Baroness, Lady Noakes, missed something in the Whip, many of us miss the publication of reports. However, given the concerns expressed in Committee, this amendment is sensible.
  I hope that once the new regime settles down and the new merged department has been in operation for a few years, the report will not need to be long. Given the wide remit of the Information Commissioner, it is conceivable that his or her gaze would not automatically fall on this area to produce an annual report. Therefore, the provision has much to commend it.
  The Attorney-General (Lord Goldsmith): I start with three preliminary observations. First, I thank the noble Baroness for her gracious remarks in relation to the technical seminar. It goes without saying that, notwithstanding what she said, if it would be helpful for some further meeting to take place outside the Committee or the House that will be arranged. She need only let me know.
  Secondly, I say to the noble Earl, and no doubt I speak on behalf of the whole Committee, that we entirely understand why he was unable to be present on Tuesday. He was represented by an admirable Queen's Counsel. I can think of no better way of being represented, but I would say that, wouldn't I? I note that he has chosen to represent himself in person today, and we are happy about that.
  Thirdly, I made a number of commitments to write to noble Lords to assist with deliberations on the Bill. My intention was to write one letter focusing on the governance of HMRC and providing the additional information on structure that I spoke about on Thursday. I have now sent such a letter to the noble Baroness, Lady Noakes; and other noble Lords should have it this afternoon. It is being placed in the Library, and we will make sure that it is circulated. I do not think that it touches on anything for this afternoon, so there is no need for concern that it comes at this stage.
  So far as the other issues are concerned, I propose sending out a letter tomorrow or Friday, as I wanted to pick up on any issues that may arise today. I will write on a number of questions concerning the declaration of confidentiality and related matters, information about extra-statutory concessions, details of functions of HMRC that could be transferred out to another ministerial department using the Ministers of the Crown Act 1975 procedures under Clause 8. I hope that noble Lords will find this information of use when it comes to deliberations at later stages of the Bill. I am happy to discuss any of those matters informally if that is of assistance. I hope that covers the areas that noble Lords think I have agreed to write on. If there is anything else, I will do my best to meet those as well.
  We have debated at some length the issues relating to confidentiality arising from the amendment. There is nothing between us on the importance to be attached to taxpayer confidentiality, as was made clear in another place throughout the proceedings on the Bill. The difference between us is—notwithstanding what has been said including by the noble Baroness today—

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  that I regard the safeguards already in the Bill, combined with the existing procedures under the Human Rights Act and the Data Protection Act, as already providing a solid and robust set of safeguards. Together with those cases where, for example, we debated the public interest exceptions, there will be a need for further parliamentary scrutiny. We may have to return to that, but in the light of what the noble Baroness said, I indicate that I will be strongly pressing that there is already a substantial degree of safeguards.
  The amendment touches on the issue of scrutiny. There is no difference between us on the importance of that. I want to indicate the strong scrutiny safeguards that already exist. They are not limited to, although they do include, the Information Commissioner. I will enumerate those. Clauses 17 to 23 govern the way in which HMRC can use its information. There is a code on how it can be used. As a result, there are numerous legal safeguards about what can and cannot be done. They are backed up by the statutory duty binding on all staff, and as we discussed, other people as well. There is the criminal sanction for unlawful disclosure; and there is also the symbolic, but all members of the Committee believe important, addition of the statutory declaration.
  3.45 p.m.
  In addition, as Clause 22 makes plain, the Data Protection Act 1998 also applies, so there will be obligations under that Act as well. It is important that that appears in the Bill—although it would probably apply in any event—so that there is no doubt about it. It states:
  "Nothing in sections 16 to 21 authorises the making of a disclosure which … contravenes the Data Protection Act".
  That is shortly expressed, but it is very important because it brings with it the safeguards in that Act. In addition, although we do not need to state it explicitly, the Human Rights Act applies. The noble Lord, Lord Campbell of Alloway, has already referred in some detail to the provisions of Article 8(2) and, rightly, made the point that HMRC will be a public authority bound by the requirements of the Human Rights Act.
  Those are the safeguards that apply. As for scrutiny, the new department will be heavily scrutinised by a number of external bodies to ensure that its practices are compliant with the Human Rights Act and other legislation. I shall enumerate them. First, complaints about the use of information may be directed to the adjudicator, who looks at complaints from the public about how matters are being handled by the department. The Committee may know that the adjudicator is currently the distinguished QC and former Director of Public Prosecutions, Barbara Mills. She is impartial and investigates complaints made by taxpayers against both predecessor departments and will in future against the HMRC. She has the power to make recommendations, such as providing redress to the complainant. In practice, recommendations are always accepted by the departments.
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  Secondly—the Committee may note that I am working up to the Information Commissioner—there is the Parliamentary Ombudsman, whose remit includes complaints from members of the public who feel that they have suffered injustice because of maladministration by government departments. The ombudsman, currently Ann Abraham, has the power to investigate complaints. She reports directly to Parliament. Recommendations in her reports are almost always accepted by the Government and may lead, for example, to redress for the complainant or to the department in question revising its procedures. That is a powerful procedure.
  Lord Campbell of Alloway: May I ask the Minister a question? Will there be an information commissioner?
  Lord Goldsmith: There is an Information Commissioner and I will come to the role of the Information Commissioner in relation to the department and to why my position is that it is unnecessary io include anything specific in the Bill.
  Thirdly, having referred to the Parliamentary Ombudsman, which has a strong and robust procedure, we are including external scrutiny of HMRC officers by the Independent Police Complaints Commission and Her Majesty's Inspectorate of Constabulary, and of the prosecutions office by the Crown Prosecution Service Inspectorate. That will create a high level of assurance that HMRC's performance meets the highest standards of professionalism.
  Then, because of the existence of the criminal sanction, there will then be the responsibility of the prosecuting authorities where there is a breach of the law. That is enormously important, because that provides what does not exist in other areas where there are obligations of confidentiality not backed up by a criminal offence: the rigour that prosecuting authorities can bring. Either the director of RCPO or the Director of Public Prosecutions will have that ultimate responsibility.
  Further, there will be parliamentary scrutiny by means of the Treasury Select Committee, the Public Accounts Committee and the National Audit Office, as well as by means of parliamentary Questions.
  All of those measures of scrutiny come before one gets to the Information Commissioner, which I said that I was working up to. As a result of HMRC being subject to the Data Protection Act, as Clause 22 makes clear, what happens in relation to data protection in the HMRC will continue to engage the interest of the Information Commissioner who will therefore have statutory powers to assess HMRC's compliance with the Act.
  It does not constitute a requirement on the Information Commissioner to produce specifically an annual report in relation to HMRC, as the amendment would do. But I would say to the noble Earl that, given the strength of the existing scrutiny safeguards, it is not necessary to add an additional requirement, as proposed by the amendment, which I would resist.

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  I know that reference has been made by Members of the Committee to the Joint Human Rights Committee. I do not understand the committee to have specifically raised a request for that reporting obligation to be in the Bill. I may be wrong about that, but I do not think so. It gives me an opportunity also to say that on the previous occasion we had a little confusion on whether the response provided to the Joint Human Rights Committee report had been seen by others.
  Perhaps it is my turn to say something in relation to that. At the time, we understood that that response would be circulated. It turned out that it went to the chair of the committee but was not circulated. I hope that Members of the Committee have now received a copy of that and will take account of it on Report, although the noble Lord, Lord Campbell of Alloway, was good enough to say that he had as a member of the committee seen it, but it did not change his view. I was labouring under a misapprehension. I am sorry if that led us into a muddle on that occasion.
  Before I sit down, I should like to acknowledge the characteristic graciousness with which the noble Lord, Lord Campbell of Alloway, referred to what I had to say about his amendments last week.
  The Earl of Northesk: I am grateful to the noble and learned Lord for his response. I am grateful, too, for the support of my noble friends and the noble Lord, Lord Newby. I particularly welcome his interpretation that the new clause is sensible and not a manifestation of what could be called "reportitis".
  I hear what the noble and learned Lord says in respect of other mechanisms for scrutiny of the disclosure regime. But I note that none of them is in the Bill. For example, HMRC is not necessarily particularly well versed in information and data in an IT sense, which is substantially the potential information about which we are talking. It is my judgment that this forms a natural fit with the Information Commissioner's job and functions. Therefore I sincerely believe still that external oversight by the Information Commissioner is necessary in that area.
  I welcome the support that I have received from all noble Lords, other than the noble and learned Lord. I have absolutely no doubt that I shall need to return to this matter on Report.
  Lord Goldsmith: Just in case what I said was not clear, the Information Commissioner does have and will have statutory responsibility in relation to HMRC. He or she oversees an enforcer's compliance with both the Data Protection Act and, of course, the Freedom of Information Act, which is not the issue on which we are concerned, and reports direct to Parliament. The issue is not whether this adds a power for the Information Commissioner. As I understand it, the Information Commissioner has that power. If there is any correction to make to that, I shall come back to it.
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  It is only a question about whether we should insist on a specific report being made by the Information Commissioner to Parliament. That is where I part company with the noble Earl in suggesting that he has not got an attack of "reportitis".
  The Earl of Northesk: I took that point, and my introduction drew the distinction between the drafting of the 1998 Act and the drafting of the amendment.
  Lord Brooke of Alverthorpe: What I am about to say is not directly linked to what has been said. I believe that we now have a greater panoply of measures in place for protection of confidentiality than we had in the past. But there is still one area in which I am at something of a loss to see how an individual can protect himself.
  One of my colleagues here in the Lords found that some of his income tax affairs were revealed in the newspapers. An inquiry was undertaken by the department, but so far as I could ascertain they could not trace the individual who leaked the information. We now have a broader range of sanctions and more bodies involved with endeavouring to ensure that 100 per cent confidentiality would be there. But what would happen in the circumstances that I have just described? Has any thought been given to action being taken on behalf of the individual against a newspaper, or the media, if they have leaked information, if all the inquiries do not yield the source? Yet those who have printed or published or gone on the air with that information will know the source. To whom can the individual turn and will the department or the Treasury give any support in those circumstances?
  Baroness Noakes: The noble Lord, Lord Brooke, rightly raises some important issues about individual taxpayers who know that their information has been misused. A lot of what the noble and learned Lord said earlier was about complaints procedures, in which people know that their information has been misused. The area in which one needs the greatest scrutiny is that in which the individual does not necessarily know whether his information has been used or how it has been used. It is that part of how information may be used that one needs to focus on, and not so much on individual remedies, although I concede that they are important. We need to focus on how HMRC operates the statutory provisions, whether or not an individual knows that his information has been abused. The provisions seem to be less strong at that end of the spectrum.
  Lord Goldsmith: I know that the noble Earl is about to sit down, but I shall respond to that. We are in Committee I suppose, so a degree of informality is allowed.
  Lord Brooke of Alverthorpe: I was looking for a peg.
  Lord Goldsmith: Peg found, I think.
  It seems to me—and this is the relevance to the debate that we are having—that the particular issue that my noble friend Lord Brooke raised and to which the noble Baroness, Lady Noakes, referred is not the slightest bit solved by the amendment. An Information

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  Commissioner will not be any better able to discover the source of a secret leak, which cannot be discovered when the prosecuting authorities or the adjudicator or any other third person gets involved. If they cannot do it, neither will the Information Commissioner.
  That is why, with all respect, it is not at all a buttress to the amendment to raise that problem. I do not criticise my noble friend for raising it, as it is an important point, and I should like to look at the effect of the statutory duty of confidentiality in relation to third parties who get hold of information which they must appreciate has come to them in breach of confidentiality and what steps can be taken against them. That is quite a different question from the purpose of a report. The variety of procedures and the different people whom we can keep under review and investigation is more than adequate to deal with the problem in hand.
  The Earl of Northesk: I would not want to trespass on the noble and learned Lord's territory, and I do not know whether this information will assist the noble Lord, Lord Brooke, but the Information Commissioner does have some powers of investigation and the Data Protection Act has a form of tribunal. So recourse could be sought on abuse of data via the Data Protection Act.
  The noble and learned Lord is quite right: the amendment does not march on that issue at all. The point of difference that he has correctly identified between us is simply that I am saying that the issue is too important for it to become permissive towards the Information Commissioner as to whether he makes a report. I am certain that I shall need to return to the matter on Report, but I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  4 p.m.
  Clauses 24 and 25 agreed to.
  Clause 26 [Rewards]:
  Baroness Noakesmoved Amendment No. 51:
  Page 14, line 5, at beginning insert "Subject to subsection (2),"
  The noble Baroness said: We now come to payments to informers, or rewards, as Clause 26 would have it. I am sorry to see that the noble Lord, Lord Barnett, is not in his place. Amendment No. 51 is merely a paving amendment and the substantive amendment to which I shall speak is Amendment No. 52.
  In this area of the Bill, there has been some levelling up. The current ability of the Customs and Excise is to pay rewards for unspecified services subject only to a power of Treasury direction. That was in the Customs and Excise Management Act 1879. The Inland Revenue has a power conferred by the Inland Revenue Regulation Act 1890 to pay rewards to any person who informs it of any offence against the Act or assist in the recovery of any final penalty. There is a limit of £50 without Treasury consent.
  Clause 26 therefore picks the loosest possible formulation and applies it to the new Revenue and Customs. The much looser Customs and Excise ability
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  to pay rewards for services which relate to functions has been selected over the narrower Inland Revenue formulation, which is linked to offences and recovery of fines and penalties. So, too, the lack of financial limit for Customs and Excise has been selected over the £50 limit for Inland Revenue. There is no explicit reference to the direction of the Treasury, although I accept that there is a power of direction in Clause 11.
  Amendment No. 52 does two things. First, it reinstates the limit beyond which Treasury consent is required. It may well be that £50 is too low for today's world and I would have no problem with a higher limit. But given that these rewards can be paid to staff as well as to outsiders, it seems that some limit should be placed on the commissioner's discretion.
  At Second Reading, the noble and learned Lord informed the House that Customs and Excise, which has the wider power, last year paid total awards of more than £940,000, ranging between £50 and £100,000, while the more constrained Inland Revenue paid only one amount of £100. The sums potentially involved seem to me to argue conclusively for some kind of additional control being exercised by the Treasury.
  The second part of Amendment No. 52 inserts new subsections (3) and (4) relating to parliamentary oversight and accountability rather than day-to-day Treasury control. These require a report to be made each year—a report to the Treasury but also, importantly, laid before each House of Parliament. Subsection (4) makes it clear that the report should be a general one and should not disclose the identity of individuals, which is extremely important. Parliament should be interested in the kinds of payments made and the reasons for the payments, not the individuals to whom they are made.
  Given the current disparity between practices of the component parts of what will be the new HMRC, I imagine that Parliament would want to know, if it continued to be the case, why rewards were concentrated in one part of the new department and not in the other. Parliament would also be interested if payments were made to staff rather than to outsiders and would want to know the reason for that. The bottom line is that payment of rewards opens up the possibility of abuse. The more that it is subject to transparency and openness the better. I hope that the Minister will agree with that.
  At the moment, it is open to the Comptroller and Auditor General to look at reward payments and to include his comments in his report on the annual accounts. However, I understand that he would not routinely look at that area. If an annual report is made, therefore, it may lead to the NAO looking at it on an annual basis. That is not however the purpose of the amendment: it is to enhance public scrutiny of an area which, by definition, is somewhat grey and murky. I beg to move.
  Lord Newby: I am sorry to disappoint the noble Baroness, but this does smack of "reportitis". I agree that it is sensible that the new merged department should explain its general policy on the payment of

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  rewards, but I would have thought that that could be dealt with by a paragraph or two in the annual report rather than having a specific report.
  I disagree with the suggestion that any reward more than £50 should be referred to the Treasury. I simply do not think that the current structure, or relationship between the Treasury and the Revenue departments, makes the Treasury the best repository of knowledge about rewards. The people who know what makes a sensible reward in any given circumstances are the commissioners of the Revenue departments. I would have thought that if ever there was a case for operational discretion being left with the new merged department rather than going up to the Treasury, this is it.
  Report on it, by all means, via the annual report, but do not send up every time you give £100 to someone who has had a good idea that might save some revenue. I cannot see an argument for that having to be reported to the Treasury.
  Lord Goldsmith: The noble Lord, Lord Newby, makes the point strongly. There are two aspects to this: reporting, and approval issues. Like the noble Lord, Lord Newby, I think that it makes sense for these annually reported data to appear in future annual reports of Revenue and Customs. My right honourable friend the Paymaster General has already given an undertaking that data on rewards will be published in that way. I am happy to confirm that commitment to Members of the Committee, and I hope that will deal with that part of the amendment.
  I ought to get a couple of points out of the way on the second part. First, lest there be any misunderstanding, the rewards covered by the clause are not for departmental staff. There is no question of the staff themselves receiving those rewards; they are only for third parties.
  Secondly, why is it that Customs and Excise gives more by way of rewards than the Inland Revenue? There are specific reasons for that relating to the different business that they do. Customs deals with a wide range of enforcement tasks, including drugs and other smuggling, which involve serious and organised criminal enterprises. As I know from experience in my role as superintendent of prosecuting authorities, they are offences that, generally speaking, need information from others to discover them. Unlike offences such as burglary, attacks, or assaults, drug smuggling does not have victims who can come forward to say, "I was the victim of drug smuggling". That is all done covertly, and therefore discovering drug smuggling, or even people smuggling operations, depends in many cases on having information from outsiders. Therefore, rewards are an important means of discovering such offences, and the police find exactly the same.
  I do not know the comparative figures for the police, although Customs is particularly responsible for border control issues rather than the police. Those are important differences, and I have no reason to think that the difference between Revenue and Customs is
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  because of the Treasury control. It is for the reasons that I have given about the different nature of the business that is done.
  It is true that the Treasury will have powers of oversight, both through the general power in Clause 11 referred to by the noble Baroness, and through the financial management controls embodied in the Government Resources and Accounts Act 2000 and set out in Government Accounting, which are unaffected by the Bill.
  The sanctions in relation to payments will not come as a result of a requirement to refer these matters to the Treasury. It will be very difficult ever for a Treasury official, who is necessarily remote from the department's business and prevented for reasons of confidentiality from knowing all the details of individual cases, to veto such a payment. I entirely agree with the noble Lord, Lord Newby, that that matter is much better dealt with within the department. The superimposition of a requirement to go to the Treasury would simply add to bureaucratic control without providing any real comfort.
  There are a number of ways in which reward payments are controlled. Authorisation is required from a central team at the appropriate level of authority for the sum in question. Under existing standards, the higher the sum, the higher the level of authorisation needs to be. Strict criteria are set down for reward payments. One of the principles is that the decision whether to make an award and on the amount of the award is taken by a person independent of the original operational team. There is internal and external scrutiny of the system for payments and every care will be taken to ensure that those safeguards continue to work effectively in the new department.
  It is right also to note that one of those systems for external scrutiny is as follows. The use and management of confidential sources, which is what we are talking about, is and will be subject to the code of practice for covert human intelligence sources. For those who are not familiar with "chises", as we call them, they are what we might otherwise call an informer, but we do not call them informers, they are covert human intelligence sources.
  That is laid out in the code of practice issued by the Home Office under Section 71 of the Regulation of Investigatory Powers Act 2000. Of course, that applies to the police as well, and they are subject to an annual audit of their procedures by the Office of Surveillance Commissioners, who report annually on their overall findings. Paragraph 1.9 of the code notes that the proper authorisation of the source should ensure the suitability of the evidence obtained under the common law, Section 78 of the Police and Criminal Evidence Act and the Human Rights Act 1998. Furthermore, the product obtained by a source described in the code is subject to the ordinary rules for retention and disclosure of material under the Criminal Procedure and Investigations Act 1996.
  That introduces the code of practice for dealing with informers, human intelligence sources. In fact, there is an extra layer of protection, because if an informant is

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  called as a witness in the case, there will always be a question about the disclosure of any payment to that informant as part of those proceedings. That will almost certainly be disclosed to the trial judge, who may or may not require that to be disclosed more widely. So there is an additional level of scrutiny there.
  It is important that the system should continue. It is subject to appropriate control. There is internal and external scrutiny to ensure that public funds made available for that purpose are being properly managed. I note my noble friend Lord Barnett arriving at this moment. The noble Baroness and I know of his strong interest in this issue. All I can say to him is that, while safeguarding the interests of justice, I am satisfied that the appropriate safeguards will be there to ensure that the system continues in an appropriate and properly regulated way.
  Baroness Noakes: It is good to see the noble Lord, Lord Barnett, in his place. He has missed an important debate on the subject of "chises". If the noble Lord does not know what a "chis" is, I am happy to explain it to him afterwards. I learn something almost every day in this place and today is no exception. Before I decide what to do with my amendment, could the noble and learned Lord clarify one point? He said quite clearly that rewards cannot be paid to staff. Clause 26 does not appear to state that.
  4.15 p.m.
  Lord Goldsmith: It is quite right that it does not say that they cannot be paid to staff, but the criteria that are applied internally are absolutely plain on the matter. This is not a payment to staff.
  Baroness Noakes: I take that as an assurance from the Minister that Clause 26 would not be used to make payments to staff; that clearly satisfies one aspect.
  I note that the noble Lord, Lord Newby, displayed his Customs roots again—the free for all in Customs is okay. I share with him the feeling that the Treasury is not the right recipient of the power to prevent a body such as Customs and Excise doing something. I would not normally draft a power for the Treasury, but it seemed the only place to give it for the purpose of this debate.
  I am grateful to the noble and learned Lord, not only for his explanation of how controls would exist over payments but also for his assurance, which I had missed, that they would be given in the annual report, which does not happen routinely at present, as I understand it. I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  [Amendment No. 52 not moved.]
  Clause 26 agreed to.
  Clauses 27 to 31 agreed to.
  On Question, Whether Clause 32 shall stand part of the Bill?
  Baroness Noakes: The clause sets up the offence of assault against an office of Revenue and Customs. The Committee might think that when these Benches
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  oppose such a clause standing part of a Bill we are doing the equivalent of voting against motherhood; we are, after all, the party of law and order. But being the party of law and order does not mean that we accept every offence uncritically, as yesterday's debate on the Prevention of Terrorism Bill demonstrated.
  I reassure the Committee that in opposing the clause standing part of the Bill I am not suggesting that it is a good thing that officers of Revenue and Customs should be assaulted. It is the specific formulation of the offence that is the concern.
  First, we should be clear that this is not simply the carry-over of offences from existing legislation relating to Inland Revenue and Customs and Excise. As I understand it, there is a specific offence of assault against Customs and Excise officers but no equivalent in relation to Inland Revenue officers. So the provision marks a considerable extension of the scope of the offence, and the reasons for that extension have not been explained. One feels that it should at least have been explained in the Explanatory Notes, and I look forward to the Minister's comment on that.
  Secondly, the Bill aligns the penalties for those for offences relating to police equivalents. I quote the noble and learned Lord at Second Reading on 7 February when he said that this was to,
  "align their penalties with their police equivalents in order to deliver consistency across the criminal justice system" —[Official Report, 7/2/05; col. 590.]
  That implies that we are now to regard HMRC as in some way equivalent to the police. I could just about understand that equivalence in relation to some of the existing Customs and Excise functions, but I have grave difficulty in seeing that for all such functions—for example, in relation to VAT. I have even more difficulty with regard to PAYE inspectors or the staff processing schedule E returns or administering child trust funds.
  We in no way condone violence against public servants, but we do not see why the officers of Revenue and Customs should be singled out for police equivalence. I ask the noble and learned Lord whether he believes that an assault against a PAYE or a VAT inspector is worse than an assault against a member of the Pensions Service? I do not believe that the latter have the same protection. What about teachers, doctors and nurses? Why is it that PAYE and VAT inspectors are singled out?
  There is a perfectly good offence of assault in criminal law, and I cannot see why a special offence with special penalties should apply to the officers of Revenue and Customs. If the law of assault is good enough for a defenceless old lady of 90, I suggest that it is good enough for the officers of Revenue and Customs. For those reasons, we oppose Clause 32 standing part of the Bill.
  Lord Barnett: First, I apologise for being absent earlier. I was speaking in the House on the BBC Statement.
  I have been trying to work out why the noble Baroness, Lady Noakes, together with her colleague the noble Baroness, Lady Wilcox, decided that they

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  would rather not have Clause 32 in the Bill. A definition of assault would be useful, and I am sure that the Attorney-General will soon give us a definition in the context of the Bill.
  I declare an interest as a former senior partner in an accounting practice. There were times when I felt like assaulting members of the Inland Revenue, although not often. I am bound to tell Members of the Committee that I always found them wonderful people and marvellous to get on with. I see the noble Baroness, Lady Noakes, nodding in agreement. I never had any serious problems with inspectors of taxes in my experience over many years. Having declared that interest, there was the odd occasion when I felt like assaulting some member of the Inland Revenue, and I would welcome a definition of assault from the Attorney-General in this connection.
  I am not sure about the amounts involved and why it is necessary to have such a specific figure. I would rather leave it to the courts, which in my experience are very sensible. I was a magistrate for a short time before being elected to the House of Commons. I cannot therefore support the deletion of Clause 32, but I would welcome the definition, in this context, of "assault".
  Lord Brooke of Alverthorpe: I, too, was surprised that the noble Baroness, Lady Noakes, had given notice of her intention to oppose the clause. I welcome the general move to give greater protection to employees of both the Customs and the Revenue. When I first started with the Inland Revenue, the department gave little support to people when they were assaulted. In fact, the union provided insurance cover for its members who were assaulted on duty because often they were assaulted not only when conducting inspections and audits, but when collecting schedule D taxes and other taxes, and in particular when required to accompany bailiffs to distrain or recover the outstanding taxes in the form of chattels. Some people were off work for lengthy periods and suffered significant stress.
  The assaults were relatively small in number. Perhaps it is a general reflection on society, with people being assaulted in hospitals and so on, that increasingly people are being attacked in one form or another. I therefore hope that the noble Baroness will reflect on her previous decision.
  Furthermore, I tend to share my noble friend's views that equivalence with the police may be overstepping the mark a little and that there may be a case for reviewing the periods for sanctions. I hope that it will be a criminal act if committed against either set of employees. It is to be hoped that on Report we shall find a solution which gives an acceptable level of sanction.
  Lord Sheldon: There is a case for a clause in the Bill if it can be shown that the number of cases of assault have increased over recent years. Perhaps my noble and learned friend can explain how these matters have been dealt with and how often they occur. Will he also indicate the rise in numbers during the past few years?
  Lord Goldsmith: First, I shall respond to the question put to me by my noble friend Lord Sheldon, which
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  seems to meet the point. Violence and verbal abuse of staff in the course of their duties is a serious problem in Customs and the Inland Revenue. Internal reports of those incidents, which almost certainly understate the true incidence, show 21 physical assaults on Customs and Excise officers, 55 on Inland Revenue officers in the past 12 months, around 70 further cases of threatening behaviour or verbal abuse against Customs staff, and around 950 against Inland Revenue staff. Currently, there are between five and 10 prosecutions a year for assault on Customs and Excise staff. As the noble Baroness, Lady Noakes, said, there is a specific provision for an offence of assault against Customs staff.
  I shall come back to the definition that my noble friend Lord Barnett asked me about. Those are assaults against officers who are carrying out lawful functions, who are seeking to exercise functions on behalf of the whole of the public and who are often carrying them out in difficult, and sometimes—particularly for Customs officers—dangerous, circumstances. I go back to the point that I made in relation to the rewards: Customs officers particularly may often find themselves dealing with serious and dangerous criminals.
  That is the crux of the reason why it is absolutely right that they should be afforded no less protection against assault when seeking to carry out their lawful and public duties than police officers. They are often engaged in very much the same sort of exercise. I know that it is right that there frequently will be occasions when police officers and Customs officers are engaged in the same operation; for example, intercepting perhaps a cargo of dangerous drugs, or the smuggling of people or guns, or whatever. To put the Customs officers in those circumstances at a lesser degree of protection than police officers would send a wrong message about how we value their services and the protection that they should have while carrying them out.
  On assault, the definition is of course intended to be no different from that which common law and other statutory offences provide. To put it very broadly, an assault is the unlawful application of force to another. It may sometimes include an apprehension of the application of force. Members of the Committee may recall that I spent a little time dealing with that in the debate on reasonable chastisement and whether we should outlaw the smacking of children by their parents and set out something of a definition. I hope that that enables my noble friend Lord Barnett to see that our talking about assault is exactly the same as the offence in relation to police officers.
  That gives rise to two questions that the noble Baroness, Lady Noakes, has asked. Whether we should restrict assault offences to law enforcement is a valid question. When drafting the assault provision, it was considered whether somehow to limit the assault provision, even though it is not for Customs at the moment, to those who are engaged in law enforcement activities. The decision was made that, as with the existing Customs assault provision, it ought to cover all officers in the department rather than those just working in the law enforcement area.

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  One may ask: why? In fact—the figures that I have given in respect of incidents demonstrate the point—the incidence of assaults is sadly not limited to those who are involved in law enforcement.
  4.30 p.m.
  I shall come to the position in relation to teachers, doctors and nurses, but I make the general point that for most—one would hope for all—right-thinking people, the services which they provide are not in any sense confrontational to the interests of the people who receive them; quite the contrary. That obviously is not always the view that is taken of what Inland Revenue or Customs officers are engaged in.
  The fact is that assaults can and do occur against officers in all parts of the two existing departments. Therefore, if we restricted the offence just to those in law enforcement, we would not deal with the part of the problem which relates to non-law enforcement. We would also send an unfortunate message to those working in the non-law enforcement part that we care less about their physical welfare than we do about that of their colleagues who work in law enforcement.
  There is a further good reason for the measure. I very strongly support the importance of the law being certain. To have a law which says that it is a specific offence to assault a Revenue and Customs officer, but only if that person is engaged in law enforcement activities, gives rise to all sorts of difficulties. Does the person who is assaulted realise that he or she is at that time engaged in law enforcement? Is it enough that the person was enforcing law half an hour ago and may be doing it again in an hour but is not doing it at this stage? That gives rise to many difficulties. It is much better to have a provision that is certain and applies to all Revenue and Customs officers.
  Of course, as the noble Lord, Lord Barnett, says, the actual sentence to be imposed in a particular case will be for the magistrates to determine. They can take account of all the circumstances. If they think that the circumstance is less heinous in the particular case because of what the officer was doing at that stage, they can reflect that in the sentence if they think fit. For those reasons I strongly resist an attempt to draw a distinction between the relevant people.
  The other issue that the noble Baroness raised is again a fair point. She asks whether we are doing enough to protect other public sector workers such as teachers, doctors and nurses against assault. I discussed with the former Secretary of State for Education and Skills, presently the Home Secretary, how we deal most effectively with the investigation and prosecution of assaults against teachers, which do take place. However, the fact that there may be questions about whether we are doing enough in that regard is not a reason for not giving proper protection to Revenue and Customs officers now.
  I repeat that, thank goodness, teachers, doctors and nurses deal with members of the public who are for the most part very grateful for what those public servants are doing for them, and quite rightly too. However,
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  Customs and Revenue officers, particularly Customs officers, are often dealing with serious and dangerous criminals and deserve the greater protection.
  A proper correction has been made to what I said earlier. I made the point that it is right that Customs officers and police officers engaged in the same operation ought to be subject to the same protection. I would have to look at the detail but I am told that in the circumstances of a particular case on joint operations the Customs officer might be covered by the police offence as it covers those who are assisting a constable. I ought to make that correction and I am grateful to those who pointed that out.
  But even so, without the clause an HMRC officer who was on the same operation but without a police officer present would have a lower level of protection. Therefore, maintaining this clause would put the protection of a Customs officer beyond doubt in all cases.
  The Deputy Chairman of Committees: A Division has been called. I therefore adjourn the Committee for 10 minutes.
  [The Sitting was suspended for a Division in the House from 4.35 to 4.43 p.m.]
  The Deputy Chairman of Committees: Does anyone mind if we start? We have a couple of minutes to go before the end of the Division but if the Committee wishes to start I think that we can.
  Baroness Noakes: I thank all noble Lords for taking part in this debate. The noble Lord, Lord Brooke, talked about victims of assault. I would not like any of my remarks to have implied that I had no feelings for those who are the victims of assault. Victims of assault who work in any of the public services should be supported by their organisations. I suspect that many public sector organisations have been slow to deliver the right levels of support. I support any actions taken to improve the level of support for victims in the workplace generally, whether they work in public or commercial services. That clearly is important but it is not the issue that I am addressing.
  I believe that the noble Lord, Lord Sheldon, said that if the number of assaults on officers of what will be HMRC is rising, there is a case for the clause standing part. The noble and learned Lord gave us some statistics on the rising number of assaults. I believe that reflects rising levels of assault generally in society. I do not have figures in front of me but I suspect that those levels of assault are not rising at the same rate as they are in the NHS, for example, where it is a very real problem. So far as I understand, certainly there has been no consideration given to try to address that.
  4.45 p.m.
  Similarly, in schools we have not only the spectre of children assaulting teachers, but also aggressive parents assaulting teachers and head teachers. The noble and learned Lord might not regard other public

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  service activities as intrinsically confrontational but, in practice, they can appear confrontational in many situations. That leads to a rising level of assaults.
  We have one part of public service being singled out for treatment as if it were the police. I do not question the need to ensure that public servants who are assaulted can be dealt with by the law. The purpose of asking whether Clause 32 should stand part of the Bill, which seems to have mystified Labour Members of the Committee, was to debate the issue of police equivalence and whether it is right to have the levels of penalty applying that are there for the police.
  Rather than keeping the existing provisions for Customs and Excise—the much smaller part of what will be HMRC—the decision has been taken to extend not only the offence, but the level of penalty to a large number of people who will not be in anything like the sense of danger to which the noble and learned Lord referred. In any event, if the note from his Box was correct, those people are already covered by an offence by assisting a constable.
  I am far from convinced that the Government are taking the right approach. In saying that, I do not wish to be taken to condone the assaulting of any public servant. I simply say that this category of public servant—the ones toiling away in current Inland Revenue offices and most of Customs functions—being given a new assault measure at a level that applies to police seems the start of a slippery slope to a sort of police state covering all public servants.
  Lord Goldsmith: The noble Baroness might like to expand on that interesting observation that protecting people who protect us against criminals is somehow a slippery slope into a police state. Given the debate in the House yesterday on prevention of terrorism, she might like to expand on Conservative policy on the matter.
  Baroness Noakes: I shall not rise to that. I was merely remarking that the assault which now has police-level penalties extends police-type treatments to a wider number of public servants, who are operating perfectly ordinary administrative functions. I regret that development; I shall phrase it in those terms. I shall want to consider carefully and possibly return to the clause on Report.
  Clause 32 agreed to.
  Clauses 33 and 34 agreed to.
  Schedule 3 agreed to.
  Clause 35 [Functions]:
  Baroness Noakesmoved Amendment No. 53:
  Page 19, line 4, leave out paragraph (b).
  The noble Baroness said: The amendment would delete paragraph (b) of Clause 35(5). In doing so, it would delete the definition of criminal proceedings from it, which deals with the functions of the new Revenue and Customs Prosecutions Office. The amendment is probing. It looks rather odd and may well have mystified officials who have had to prepare
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  speaking notes for the noble and learned Lord, so I took the precaution of letting his office and Bill team know the rationale for it. The amendment's purpose is to find out whether and to what extent the Hansard procedure used in the Inland Revenue, although not in Customs and Excise, will survive unscathed in the new world of the Revenue and Customs Prosecutions Office.
  Members of the Committee may be aware of the Hansard procedure, which has been used for more than 80 years. It typifies the culture of the Inland Revenue, as opposed to that of Customs and Excise, because it is designed to encourage a non-compliant taxpayer to become compliant provided that he pays a monetary settlement covering tax and penalties. The carrot is that the Inland Revenue may not institute criminal proceedings for fraud. There is no absolute guarantee that the Revenue will not take criminal proceedings, but where a taxpayer has made full and complete disclosure, he has a pretty good chance of avoiding prosecution. The matter then remains entirely civil. It usually costs the taxpayer a lot of money, as well it should.
  Once the Revenue and Customs Prosecutions Office is set up, the decision to prosecute will be taken not by the Inland Revenue—or HMRC in the new world—but by the RCPO. My question to the noble and learned Lord is whether the way in which the Hansard procedure has been used in the past is expected to change in any way when the RCPO takes over. I am sure that the culture of the new prosecutions office will be different from that of the Inland Revenue and I have no basic problem with that. But if that culture would override or ignore the Hansard procedure, that could have a big impact on relationships between the Inland Revenue, taxpayers and the advisers who often play a key role in resolving cases of tax fraud.
  Put simply, the Hansard procedure is intended to reward full disclosure with the probability—and it is no more than that—that criminal proceedings will not be instituted. The taxpayer has to make full disclosure and thereby in effect writes the prosecution case. In the past, the Inland Revenue has prosecuted only if other factors were involved.
  If in the new world the prosecutions office takes the files over and prosecutes in the absence of other factors such as incomplete disclosure, that would send shock waves throughout the taxpayer and tax adviser world and in effect the Hansard procedure would be dead.
  If the Hansard procedure is intended to survive into the new prosecutions office era, will the Attorney-General say whether the procedures will be in place between the RCPO and HMRC to ensure that it will work well in practice? If it is to survive, will he also say whether the Hansard procedure will be confined to the Inland Revenue areas or whether it will apply also to Customs and Excise? If it is not to survive, it will be important to have a clear understanding of that. I beg to move.
  Lord Goldsmith: I am grateful to the noble Baroness who let my office know the purpose behind the amendment. I will answer her specific question in

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  relation to the Hansard procedure. But I want to get on the record and get out of the way the specific amendment which she put forward. I recognise that it is a vehicle for that question, but it would be detrimental indeed if the Bill did not include this definition of criminal investigation. It is enormously important that the RPCO prosecutor should be available to give advice at the earliest stage and, if the clause were not here, identify what criminal investigation means. There could be considerable uncertainty about that and it might prevent the good advice being given at the earliest stage. For that reason, I ask the noble Baroness to withdraw the amendment.
  I turn to the real reason for the amendment being raised; the Hansard procedure. It is a well known procedure which has been used by Inland Revenue investigators for many years as an effective and efficient weapon in the fight against serious Revenue evasion. As she says, it is an effective way to do that. It does not necessarily prevent prosecutions taking place but it is enormously helpful.
  As to where the procedure is going to go, Hansard is one of a number of similar procedures which are at present subject to review by both the Inland Revenue and Customs as part of the process of integration or merger. Both departments want to ensure that HMRC's approach to civil sanctions in cases of serious evasion is consistent. This is a major review. The views of external stakeholders will of course be sought as a key part of the process. As an indication of the timescale to which the two departments are working, I am able to inform the Committee that it is envisaged that the review will produce some emerging findings within the next month or two. However, whatever the outcome of that review, I can confirm that individual agreements already entered into under the Hansard procedure will continue to be honoured by HMRC provided—as is understood—that HMRC is satisfied that the taxpayer in question continues to co-operate with the procedure. I also assure noble Lords that should any changes be proposed to Hansard following the consultation process I have outlined, those proposals will be announced to the House in the usual way. The Hansard procedure takes its name from the fact that it was recorded in Hansard.
  The noble Baroness asked me about Customs. That issue is under review but I can tell her that Customs has a similar approach although it is not specifically called the Hansard procedure. My recollection is that the Hansard procedure is so called because of a statement by the then Chancellor—I forget who it was—which was reported in Hansard. Plainly that has not happened as regards a specific parliamentary statement on behalf of Customs.
  I turn to the other part of the question; namely, how RCPO will relate to the Hansard procedure. A decision whether a suspected fraud should be dealt with using this procedure, or should be dealt with by RCPO for consideration as to whether a criminal prosecution is appropriate, will be in accordance with HMRC policy. A series of agreements between HMRC and RCPO is being negotiated at present. Included in those agreements will be an agreed consultation process between the director of RCPO and commissioners of HMRC on matters of
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  policy which are of potential interest to both departments to ensure a consistent and constructive approach. It will be particularly important that both HMRC and RCPO are clear on the policies for whether cases are pursued criminally or civilly in the public interest. At policy level RCPO will have a role in the decision-making process about which cases should be treated civilly and which should be treated criminally. Once finalised those agreements will be made publicly available.
  I hope that I have answered the specific questions that the noble Baroness put to me. Plainly, what she has said regarding the experience and the value of the Hansard procedure—which in large measure I have confirmed—will, I am sure, be borne very clearly in mind by those who are reviewing the process to which I referred earlier. I indicated that any changes to that process and agreements with RCPO would be the subject of announcements. I hope that that gives the noble Baroness enough information. I have addressed the amendment itself and I invite the noble Baroness to withdraw it.
  Baroness Noakes: The noble and learned Lord need not fear that I shall not withdraw the amendment as I had no intention of pursuing it, even if one could do so in Grand Committee.
  I am very grateful to the noble and learned Lord for his response, in particular for having confirmed that existing Hansard agreements would be honoured. That was a helpful assurance. The rest of his remarks were very helpful but as they were not definitive they clearly raise many other questions. I shall certainly draw the attention of those who I know are concerned about this matter to the contents of Hansard. It seems to me that big question marks now arise regarding the Hansard procedure and how it will work in practice, and in particular as regards the policy agreements between HM RC and RCPO.
  This is not the place to resolve those issues but I wanted to put them on the record so that those who are concerned about the matter have an opportunity to consider the comments and make appropriate representations at the appropriate time. I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Clause 35 agreed to.
  Clauses 36 to 49 agreed to.
  5 p.m.
  Baroness Noakesmoved Amendment No. 54:
  After Clause 49, insert the following new clause—
  "REPORT ON HER MAJESTY'S COMMISSIONERS OF REVENUE AND CUSTOMS
  (1) On or before the second anniversary of the coming into force of this Act, in accordance with section 53(1), the Chancellor of the Exchequer shall appoint an independent person or persons to report on the operation of Her Majesty's Revenue and Customs.
  (2) A person shall not be treated as independent for the purposes of subsection (1) if he is or has been—

  (a) a Commissioner for Her Majesty's Revenue and Customs;

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  (b) a Commissioner of the Inland Revenue or of Customs and Excise;

  (c) an officer of Revenue and Customs;

  (d) an officer of the Commissioners of Inland Revenue or the Commissioners of Customs and Excise;

  (e) an employee of the Treasury.

  (3) A report under subsection (1) shall include assessments of—

  (a) the overall success or otherwise of Her Majesty's Revenue and Customs since its establishment including, but not limited to, a cost-benefit analysis,

  (b) the direct costs of effecting the integration,

  (c) the direct cost savings achieved by the integration,

  (d) whether efficiency gains have been achieved as a result of the establishment of Her Majesty's Revenue and Customs including, but not restricted to, the effects of the integration on the tax yield and the incidence of fraud,

  (e) the overall compliance burden, including the impact on day-to-day customer service and the experience of taxpayers in dealing with Her Majesty's Revenue and Customs,

  (f) the performance of Her Majesty's Revenue and Customs in the development and application of information technology and data systems,

  (g) the working relationship between Her Majesty's Revenue and Customs and the Treasury including, but not restricted to, the adequacy of arrangements for accountability,

  (h) the performance of the Revenue and Customs Prosecutions Office including, but not limited to, a cost-benefit analysis,

  (i) the work undertaken preparatory to the integration, and

  (j) any other area that the person appointed under subsection (1) considers relevant to an understanding of the creation or operation of Her Majesty's Revenue and Customs.

  (4) A report under subsection (1) shall not be expected to include any assessment of—

  (a) the annual performance of the Commissioners for Revenue and Customs in discharging their responsibilities as tax administrators and collectors, except in so far as these have been affected by the merger, or

  (b) any matter (whether relating to value for money or otherwise) that has been reported on by the Comptroller and Auditor General.

  (5) A report under subsection (1) shall be prepared annually for five years from the date referred to in that subsection and shall be laid before both Houses of Parliament and published.
  (6) The first report under subsection (1) shall be completed within 12 months of the date referred to in that subsection.
  (7) In this section "the integration" means the creation of Her Majesty's Revenue and Customs from the Commissioners of Inland Revenue and the Commissioners of Customs and Excise."
  The noble Baroness said: It is always a pleasure to come to the last amendment on, the Marshalled List, which is very often about report, so we are not disappointing the Grand Committee in this instance.
  The amendment would require a report to Parliament on the progress of the integration of HMRC. As the Committee will be aware, we have not opposed the integration of the Inland Revenue and Customs and Excise, but it is true that the benefits and practicalities have nowhere been spelt out with
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  absolute clarity. That is not perhaps a surprise given that the Government are such late converts to the idea of merging the two departments.
  We can accept the fact that a proper business case has not been put before Parliament; in effect, we are making an act of trust—but only on the basis that information will be made available to Parliament to allow the success or otherwise of the venture to be judged. As the noble and learned Lord said at Second Reading, the,
  "integration of Customs and the Revenue is a huge job. and it will take time to deliver it".
  He went on to explain that this Bill cannot itself deliver the immediate improvements that we shall in the end wish to see,
  "but it establishes HMRC and thereby allows it to make some changes now and to begin working towards more substantial reforms".—[Official Report, 7/2/05; col. 587.]
  That is exactly why we feel that an independent review is essential.
  We need to be able to check that the merger is working, not working the tax yield but increasing it, and not creating an unsustainable compliance burden for taxpayers. Indeed, the time lag that the noble and learned Lord referred to prompted us to select the need for a review to start two years on from Royal Assent and continue annually for five years after that. The benefits of the merger may take time to deliver, but that does not mean that Parliament should lose sight of its progress.
  I shall explain some of the detail of our amendment. It would create an independent report on the creation of Revenue and Customs, with a duty to include assessments covering 10 specific issues, listed in subsection (3) of the proposed new clause. The first feature of the amendment is that it is an independent person or persons undertaking the review. It was suggested in another place that the annual reports of HMRC would be the place to report progress, but we do not agree with that. Parliament needs an independent view, which is why we have suggested that the people eligible for an appointment are not or have not been associated with HMRC, the predecessor bodies or the Treasury.
  The first assessment I shall refer to is that of the work undertaken preparatory to integration, which is in subsection (3)(i). To date, the Government have not revealed plans for the way in which the new organisation will operate, although the noble and learned Lord has referred to some aspects, such as the organisation structure, on which he said that he would write to me. The general approach of project planning has not been revealed and we have little confidence to date that there is a clear and logical approach to the integration. Indeed, the rush towards creating the body, perhaps starting from next month, reinforces us in that.
  Similarly, the amendment would require an assessment of the overall success or otherwise of the integration, including the cost-benefit analysis, in subsection (3)(a). In the light of the apparent lack of planning that has gone into the integration, we remain unconvinced that the Government have fully thought

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  through how to capture the benefits of the merger or even tried to measure them that much. The full costs of completing the integration have not been spelt out, nor have implementation risks. Indeed, there is a distinct absence of quantification of benefits or costs, which is why our amendment requires assessments to be made of the direct costs of effecting the integration and the direct savings achieved by it, in subsections (3)(b) and (3)(c).
  The initial costs of the integration of the new department are quoted in the Explanatory Notes as "around £75 million" over two financial years. But there is a failure to quantify any further costs or even the cost that would arise from the risk of disruption while the merger occurs. While the current figure for savings in jobs related to the merger, at around £3,200, is relatively small, we know that we will be looking to much greater benefits than that—beyond the £100 million or so savings that have been quantified.
  I hope that the noble and learned Lord will agree that the real advantage of the merger should be the opportunity to increase tax yield, to reduce the tax gap and to reduce the incidence of fraud. As such, our amendment requires an assessment of efficiency gains as a result of the integration, which is captured in subsection (3)(d).
  Hand in hand with the need to study the efficiency gains is the need to study the impact on taxpayers and the overall compliance burden. I concede that the merger gives the opportunity for a win-win situation—efficiency gains to the Chancellor and service gains for the taxpayer—but there is also a very real possibility that it will cost a lot, deliver few yield benefits and burden taxpayers, which is why we need a report.
  A significant area of worry, which we have already highlighted at Second Reading and in Committee, is the integration, development and application of IT and data systems, which is an area of particular concern given the Government's track record on large IT systems in general and those of the Inland Revenue in particular. We do not have to think back very far to find that the electronic lodgement service collapsed over the critical weekend at the end of January. The tax credit system is fraught with problems. The Inland Revenue merged with the National Insurance Office a few years ago, but the IT systems remain wholly separate—and, in the case of national insurance, of low functionality.
  Can the noble and learned Lord say to what extent the new systems about to be installed in Customs and Excise will be merged with those in Inland Revenue? If so, that raises huge risks. There is so much that could go wrong that it is absolutely essential that there is proper scrutiny of the IT aspects of the integration, for which subsection (3)(f) calls. There are other aspects of the amendment, but I think that I have given a flavour of the reasons for it and its specific requirements.
  The amendment goes to the heart of our concerns on the Bill. I acknowledge that there are other methods by which the Treasury can report on HMRC's progress, which no doubt the noble and learned Lord will list. But I believe that most of those methods have deficiencies compared with the method proposed in
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  the amendment. An independent annual report, such as this, will provide much better understanding of the development of the new body in its early years and its aim to produce a coherent and consistent approach to meet taxpayers' needs as well as the needs of efficiency.
  I stress again that, most importantly, the review is independent. Without that, there is a very real danger that HMRC would be its own judge and jury in the matter of integration and its success. The noble Lord, Lord Newby, might think that I have another case of "reportitis". But because we have had so little hard evidence prior to the commencement of this integration, Parliament is owed a proper and coherent account during the critical phase when the integration will, I hope, deliver benefits but could also run into problems. That is when parliamentary scrutiny is certainly needed. I beg to move.
  Lord Newby: This amendment reaches the substance of much of our concern about the Bill. As we also made clear on Second Reading, we support the Bill in principle.
  [The Sitting was suspended for a Division in the House from 5.9 to 5.18 p.m.]
  Lord Newby: As I was saying, our main concern on Second Reading was not with the principle behind the Bill but the extent to which the aim of improved efficiency, improved collection of revenue and improved service to taxpayers will be met, given the two very different cultures in the new department and the relatively small amount of work that seems to have been done in advance of the Bill to consider how the new merged department will work.
  The Committee will remember that we were told that more work could not have been done before the Bill on the basis that there was no parliamentary sanction for the expenditure. I hope the noble and learned Lord will not mind my saying that that is the most extraordinary excuse that I have heard. On ID cards, where there is certainly no parliamentary sanction at this stage, tens of millions of pounds have already been spent to consider how they might work. The amount of money that would have been required to do the necessary work here would almost certainly have been significantly less than that. So that is a feeble and unacceptable excuse.
  We therefore find ourselves without the assurance that adequate work has been done to ensure that the full potential benefits of the merger are captured in reality. The danger is that the merger will take place and no doubt various policies will be introduced to capture the benefits, but they will not be adequately exposed to scrutiny. The merged department may take its eye off the ball in getting those benefits. Once the merger has taken place, it will be easy for the two component parts to sink back into their former ways of doing business, which have lasted a long time. Many of the things that will need to happen to capture the benefits, such as new IT systems operating across taxes, or new training systems to enable individual tax officers adequately to advise business taxpayers, in

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  particular, across the whole range of taxes rather than having former Customs taxes on the one side and former Inland Revenue taxes on the other, may not be put in place.
  We will not know how the whole thing is going. The amendment is intended to address the issue of exactly how best to ensure, first, that the pressure is kept on the departments to drive towards those efficiency savings and, secondly, how to ensure that Parliament and others can see what is happening. In a sense, I am agnostic about the precise form of doing it. I am not especially wedded to the amendment, but I am wedded to the concept of having both the pressure to get the benefits and the reporting of success or failure to achieve them. I look forward to hearing what the noble and learned Lord says to reassure me that the new, merged department will treat as a priority not just continuing to exist but achieving the benefits that are the real purpose behind the Bill.
  Lord Barnett: On Second Reading, I was also concerned about the benefits and efficiency of the merger, but I am bound to say to the noble Baroness that I find it difficult to understand the new clause. The Peers' seminar, if I may refer to that document again, deals with much that is relevant to the new clause. The new clause states:
  "A person shall not be treated as independent for the purposes of subsection (I) if he is"—
  I assume that that includes "she is"—
  "or has been … a Commissioner for Her Majesty's Revenue and Customs",
  and all the other commissioners. Frankly, someone who has been a commissioner could well be truly independent more independent than any of us in this Room.
  Then the new clause states:
  "A report under subsection (1) shall not be expected to include any assessment of—

  (a) the annual performance of the Commissioners for revenue and customs in distorting their responsibilities as tax administrators and collectors, except in so far as these have been affected by the merger, or

  (b) any matter (whether relating to value for money or otherwise) that has been reported on by the Comptroller and Auditor General".

  They will not know on what the Comptroller and Auditor-General is going to report, so, presumably, it would come later.
  As I said, I do not know how many Members of the Committee have had the good fortune of reading the Peers' seminar document which, I may say, was not given to me when I attended the seminar; I got it later. I assume that the new body would not consist of just one or two people; it would be a new bureaucracy. The noble Baroness, Lady Noakes, is madly in favour of new bureaucracies, and she would certainly get one here. All the work could not be done without a reasonable-sized staff. The body would not need them, however, as we are told on pages 11 and 12 of the Peers' seminar document what would be done in that regard.
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  So far as prosecutions are concerned, we will have an independent complaints commission—the IPCC—and also HMIC. All those words will be very clear to the noble Baroness, I am sure. On the costs of running the new department and the managing and accounting for revenues, there will be the introduction of,
  "new arrangements for funding shortfalls in cash on days when revenue outgoings—such as tax repayments and tax credit payments—exceed revenue receipts. These arrangements enhance Parliamentary scrutiny of the process by replacing the current system of making an automatic claim on the Contingencies Fund … Then, the Treasury must seek permission from the C&AG. thereby enhancing transparency and Parliamentary oversight".
  All that will be done.
  Does the noble Baroness really imagine, from her knowledge of the National Audit Office and the Comptroller and Auditor-General, that he would not look at the various matters covered by the proposed new clause? It mentions the direct costs of the effect of the integration,
  "the overall success or otherwise of Her Majesty's Revenue and Customs since its establishment … the working relationship",
  and,
  "the performance of the Revenue and Customs".
  What does she think that the Comptroller and Auditor-General does? I declare a past interest as chairman of the Public Accounts Committee. Those are precisely the areas at which the Comptroller and Auditor-General will be looking. Indeed, if he—or she, perhaps, one day—is not looking at them, I would ask a lot of questions. You do not need a new body to look at them. How will the new body operate without asking the Comptroller and Auditor-General what he or she plans to do?
  I hate to say so but, frankly, the noble Baroness must know that the amendment is something of a nonsense. I look forward to her withdrawing it.
  The Earl of Northesk: On the margins of my noble friend's amendment, I wonder whether the noble and learned Lord could help me with something. As my noble friend explained, subsection (3)(f) in the amendment refers to,
  "the performance of Her Majesty's Revenue and Customs in the development and application of information technology and data systems".
  It is well recognised that successive administrations have encountered grave difficulties in the procurement and introduction of IT systems. Indeed, my noble friend alluded to such problems in her introduction.
  As the noble and learned Lord will be aware, the Government introduced the Gateway Review process as a mechanism for scrutinising and assessing IT and other projects, in a bid to check for signs of failure during any given initiative's development. The process involves a system of RAG—red, amber and green—statuses awarded to each gateway stage. He will no doubt also be aware that, following a freedom of information request submitted by Government Computing News, the Office of Government Commerce revealed yesterday that no fewer than 10 current IT projects had received consecutive red lights, suggesting at the very least that they are perilously placed.

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  Certainly, according to the OGC's official guidance, a red light signifies that "remedial action" must be taken immediately. Unfortunately, however, the OGC declined to indicate which projects were at risk. Accordingly, will the noble and learned Lord guarantee that IT projects currently being procured by either the Inland Revenue or Customs and Excise have managed so far to proceed through the Gateway process without acquiring any red lights? It states the obvious to say that the continuing viability of HMRC's IT systems is absolutely crucial to the success or otherwise of the proposed integration. On that basis, we really need to know whether any Gateway red lights have been applied to any of its projects.
  5.30 p.m.
  Lord Sheldon: The role of the Comptroller and Auditor-General is obviously important, but it comes some time after these events, which are so important and serious that we need something a little earlier than the final decisions or recommendations that we get from the Comptroller and Auditor General and the report that is made to the Public Accounts Committee.
  I have expressed a number of serious reservations about this merger. We need to have a more frequent progress report. I am not saying that it should take place every week or every month, but we need to be informed about how it is proceeding and what the problems are. We need to keep in touch with developments. As has been mentioned, there is the important aspect of the tax yield, but there is also the most important point about fraud and honesty. Two different cultures are being brought together, which have had enormous standards of honesty and probity over hundreds of years. Bringing them together and having to adapt to different procedures puts that at risk. Because of that, we need to keep a closer watch than might normally he expected.
  I note that some of those reservations have been shown by the Government in some changes in the way that they have spoken since those debates in December, when there was much greater enthusiasm and much greater expectation of rapid progress than we have seen subsequently. I have seen that in some of the statements and points that have been made.
  It may be good in the end to bring the Inland Revenue and Customs and Excise together, but we will see serious problems in the transition period. I want to make sure that we can have some report on how the money is coming in. I notice that the money is now reduced to very small amounts indeed by comparison with the vast sums that the Government thought they were going to get. My own view is that we are not going to make money—we are going to lose money. The cost of bringing them together is greater than the trivial sums that they expect to get from it. In the end, if it is successful in five or 10 years time, it could be a good thing, but the transition is the serious part. I would like to see some sort of information being given to Parliament on how it is proceeding so that we can be in touch with developments.
  Lord Goldsmith: In introducing this amendment, the noble Baroness—I recognise that it was a slip of the
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  tongue—said that it was the last report. That is exactly the point that I wanted to make. This is the third amendment proposing putting statutory reports in the Bill to do things that are going to happen in any event. It is that on which I want to concentrate.
  Plainly, reports will be made, but there will also be important external, independent scrutiny. Before I come to the details of that, I want to touch on one or two points that to some extent reflect back to the Second Reading debate. We are confident that this integration, merger, or whatever you want to call it, makes sense in the efficiencies that it will create, and the benefits not just for the collection of revenue, not just to deal with fraud and dishonesty, but in dealing with individual taxpayers.
  The O'Donnell review reached a clear conclusion on the reasons of principle supported by evidence to consider an integrated department, and as I said in winding up the Second Reading debate that is supported by individual, expert, independent persons, whose commendation of the conclusions are set out in the O'Donnell review. I have made clear that many of the benefits from the merger will accrue over time and will stem from decisions to be taken over the next few years. Notwithstanding that, we see those benefits accruing in future as the advantages of integration and the advantages of merger are seen by the new department. Already, ambitious efficiency savings over the 2004 spending review period are anticipated, so targets have been set to achieve savings of at least £0.5 billion by 2007–08. That is not an insignificant figure.
  I also emphasise that the integration that we are discussing is not happening independently of the day-to-day business that the departments will carry out. On the contrary, it is fundamental to the business that they will be doing. All the parliamentary and external independent processes that will be looking at the business that the department is carrying out will inevitably be looking at the success of the integration process at the preparatory stage and as we move forward; they would be doing that even if they did not try to do so, but I am sure that they will.
  I come back to the details of reporting and scrutiny. I have referred already to the reporting that will take place through the annual reports and accounts that will be submitted by HMRC to Parliament and which will be published. They will provide extensive information on the costs incurred and the other financial aspects of integration and the integrated departments' day-to-day business, including—7 very importantly—progress against the departments' public service agreements and efficiency targets. Those are precisely the aspects that will help one to measure the benefits that the noble Lord, Lord Newby, referred to. He has been consistent in his support for what is happening, but he is determined to see that the process produces the full benefits.
  The Revenue and Customs Prosecutions Office will be required to make an annual report to me about the exercise of its functions, under paragraph 6 of Schedule 3. That report will be laid by me before

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  Parliament. Under corporate governance arrangements, the commissioner's audit committee, chaired by a non-executive, which we discussed during our last sitting day, will scrutinise the new departments.
  Managing the integration will be a prominent element of the risk management arrangements. I note—and the noble Lord, Lord Sheldon, made the same point, wisely, at Second Reading—that we must be careful about the risks while the integration takes place. I take that point, but those responsible for the process take the point also. I have no doubt that that will be looked at very carefully and kept well in mind as the integration continues. The noble Lord referred at Second Reading to the important culture of honesty and integrity which, as I said in that debate, both departments have. I hope that he will accept the assurance that I have then, that that aspect is regarded as very important, and is one of the proud traditions of the two predecessor departments that will be carried forward into the new department. That will be looked at.
  Let me turn to the scrutiny, since the noble Baroness asks for independent scrutiny elsewhere. Accounts will be scrutinised in the usual way by both the National Audit Office and the Public Accounts Committee. Those bodies are very important and independent; I hope that no Member of this Committee would take the view that the sort of scrutiny that Parliament provides should be regarded in some way as second best and that instead we must look to some independent person, with "independent" defined as it is in the amendment proposed by the noble Baroness. As the noble Lord, Lord Barnett, says, that person could not have, and would be precluded from having, direct personal experience of how the department operates.
  The Public Accounts Committee can request the Comptroller and Auditor-General to examine and report on the progress. The noble Lord, Lord Sheldon, made the point that that may happen some time after the event. But the fact that the Public Accounts Committee can call for that and can call for the sort of rigorous scrutiny which the Comptroller and Auditor General can produce will always be clearly in mind as the integration and the new department takes place.
  My final point on scrutiny is that the Treasury Select Committee has already indicated that it will take a very keen interest in these events. I fully expect that it will question my right honourable friend the Chancellor and senior officials regularly over the next few years.
  I venture to suggest that no one need tell the Treasury Committee that what is taking place here is a very important step. The role that the two departments presently play, and will play as a single department, in the life of the nation is of the greatest importance. I have no doubt that they will want to apply their minds conscientiously, rigorously and carefully to the matter, and will press hard to make sure that the operation produces all the benefits that it can for the people of this country.
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  I was asked a specific question about information technology by the noble Earl. The very fact that he is able to draw attention to the work of the OGC demonstrates the strength of existing scrutiny that takes place of important aspects of government business. I am not in a position to tell him about individual projects, but I assure him that the OGC review process itself identifies risks, as his question made clear, and that the department is bound to deal with them.
  The noble Baroness placed her emphasis on independence. All the scrutiny in the list to which I referred is independent of HMRC. There is its audit committee, the National Audit Office, the Public Accounts Committee and the Treasury Committee, and the important role of parliamentarians under our system of parliamentary Questions, bolstered by the Freedom of Information Act. I venture to suggest that no one can have any doubt—to put it in positive terms, I am sure—that the way this important and major merger will take place will be subject to strong scrutiny. It is not necessary to place in the Bill the sort of reporting requirement that the noble Baroness seeks.
  I say all that without adopting, which I otherwise respectfully would do, the concerns raised by my noble friend Lord Barnett about the structure of what is proposed in relation to the report. Let the bodies that I have identified do their job. They will do it strongly, robustly and independently and can give us all the assurance that we need that the integration will be a success and will bring considerable benefits, as the O'Donnell review anticipated.
  Baroness Noakes: I thank all Members of the Committee who took part in this important debate at the conclusion of the Committee stage of our consideration of the Bill.
  Our concern for independent scrutiny stems from the lack of a clear setting-out of what the integration is all about. As I said, we were prepared to take that on trust, provided that there was enough information afterwards. The noble and learned Lord talked about the O'Donnell review being supported by evidence. Frankly, we dispute the strength of that evidence. Much of it is assertion or extrapolation from minor government department rationalisations and reorganisations. We do not want to go into that, however. The integration will go ahead, and we are not trying to stop it. We are trying to see that there is proper scrutiny of the progress of the integration to ensure that it lives up to all the claims made for it, and that it does not deliver unintended consequences.
  As I expected, the noble and learned Lord read out a list of scrutiny mechanisms that would somehow ensure that there was enough scrutiny of the integration. However, none of those mechanisms was exclusively focused on the issues that I listed in subsection (3) in the amendment, which is really designed to give an update on what is happening with the integration on a regular basis.
  The noble and learned Lord said that the Treasury Committee would take a keen interest. Yes, I am sure that the Treasury Committee will take a keen interest, but interviewing the Chancellor of the Exchequer,

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  other Ministers and senior officials is not the same as having some form of independent report on what is happening as a basis for scrutiny.
  The Attorney-General also talked about the NAO being able to look at how the integration was proceeding and the NAO's reports being considered by the PAC. The issue is not whether it can but whether it will be able to do that on a timely basis. The NAO issues value-formoney reports that focus on particular issues, and it has a programme. It is extremely unlikely, knowing the way that the NAO and the C&AG operate, that they would keep the matter under regular, annual review because it does not flow automatically from the accounts of HMRC.
  Lord Goldsmith: I invite the noble Baroness to consider my point. Because the integration is about how the department does its business, the accounts showing how it has done its business necessarily throw light on the effects of the integration, whether it is achieving benefits or creating disadvantages, and whether it is fully achieving those benefits.
  Baroness Noakes: I have to say that that is so only in the most technical of senses, in that it can provide the starting point for looking for something. When you are trying to consider how integration is working out in practice, you do not start from the audited accounts. You start from understanding what are the costs and benefits, where the yield benefits are and what is the compliance burden. Those do not flow naturally from the accounts. I am not saying that the Comptroller and Auditor General could not use the annual report as a starting point, but it would not flow naturally out of an annual examination of the accounts.
  The starting point would come from a specific study of progress on the integration, which is exactly the kind of study that the C&AG does. I considered including the C&AG in the amendment because he is the most independent and relevant person to undertake that
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  report. As a matter of parliamentary propriety, it is impossible to require the C&AG to carry out particular activities, because he is accountable to Parliament and works under the direction of the PAC in choosing his studies. If it were possible to put the C&AG into the amendment, I would.
  The noble and learned Lord also referred to the audit committee, but that is an internal process focusing on some risks. The audit committee will not, unless it has the most extraordinary terms of reference, examine all the items in subsection (3) of the new clause.
  I am not surprised that the noble and learned Lord replied as he did, because I have taken part in these debates before and there sometimes appear to be two universes—one on the Government side, where it is asserted that scrutiny takes place and it will all be fine, while we assert that the ordinary processes of scrutiny will not put sufficient of a spotlight where we want it. The list of ways in which the integration can be highlighted does not come anywhere close to the kind of scrutiny of the integration that we have in mind.
  I shall read carefully in Hansard what the noble and learned Lord said, before considering what to do on Report, but I give notice now that proper, open scrutiny of the progress of the integration is very important. We should ensure that that is dealt with properly in the Bill. I beg leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Clause 50 agreed to.
  Schedule 4 agreed to.
  Clauses 51 and 52 agreed to.
  Schedule 5 agreed to.
  Clauses 53 to 57 agreed to.
  Bill reported without amendment.
  The Committee adjourned at ten minutes before six o'clock.

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