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Lord Greenway: I have some sympathy with this amendment. It is important, when we are trying to work out this new system of charging, that we look very carefully at ring-fencing these charges. It might well also apply to the General Lighthouse Fund, which we shall discuss shortly. I understand that it is early days yet and there is still a good deal of discussion taking place about how to raise these charges. I hope the Minister and his department will consider carefully any ring-fencing proposals which are put forward.
Viscount Goschen: The specific amendments that the noble Lord, Lord Beaumont, has spoken to are Amendment No. 59 concerning definition and Amendment No.68 concerning the fund itself, as proposed in his amendment. Perhaps I could explain the Government's thinking behind these issues.
Amendment No. 59 would include in Schedule 2 an itemised definition of "counter-pollution capacity". We have broadened the definition of maritime services that may be charged for since we published our consultation draft. In our view, the definition used in that version of the Bill was not flexible enough to cover all the possible services we might wish to charge for. We need to cater for the scope of any international agreement which may be reached. The definition proposed in the amendment does indeed cover most of our present expenditure on counter-pollution activity, but it omits, for example, the staff costs of the Marine Pollution Control Unit, which might be a possible item to charge for.
It is also possible that there may be other items of counter-pollution expenditure which we cannot anticipate now but which may arise in the future. For these reasons, we believe that the more flexible definition in the Bill before the Committee today is the preferable approach. I can assure the Committee that we would consult interested parties before bringing forward any regulations. In particular, we would have to prepare a compliance cost assessment which would need to quantify the amount of expenditure for which we were seeking to charge.
With regard to the changes suggested by Amendment No. 68, I recognise that the proposal to establish funds, which the noble Lord, Lord Beaumont, spoke to, flows from the recommendations of the noble and learned Lord, Lord Donaldson. It is government policy to provide for the creation of separate funds only under prescribed circumstances. Appropriate levels of control and parliamentary scrutiny are ensured for other public revenue by their payment into the Consolidated Fund.
Broadly, the conditions which would both need to be met are that the revenue raised directly offsets the expenditure incurred directly and that there is a clear and demonstrable link between the payment of a specific charge by an individual and the receipt of a specific service by that individual. An example of this for
comparison is the costs of inspecting vehicles. They are covered by separate specific fees which relate to the inspection and which are then used to fund the Vehicle Inspectorate. I provide that merely as an example to illustrate the case. That would not be the case for a marine pollution response. The standing costs of maintaining an adequate response capacity cannot be attributed to any particular individual, but any ship may need to call on them and may benefit from their availability. Where appropriate, the charging schedule would allow us to continue to recover some costs by direct fees, although we would never recover the same costs by more than one means; in other words, we certainly would not be double charging.I also assure the Committee that, if charges were introduced, we would provide transparency by publishing accounts every year showing the amount raised and the expenditure incurred. We would thus ensure that the spirit of one of the recommendations of the noble and learned Lord, Lord Donaldson, was met: namely, that there should be full cost recovery, with charges sufficient but not more than is required to meet the costs, taking one year with another.
I also assure the Committee that we would consult the shipping industry on the level of charges; in particular, we would publish a compliance cost assessment which would take account of the industry's views on the structure of charges. Finally, I emphasise that any charges would apply to both UK and foreign ships.
I hope that I have been able to give the Committee the background to the Government's thinking behind the charging proposals, in particular with regard to the specific considerations concerning definition, counter-pollution response--the first of the noble Lord's amendments--and the issue of setting up a fund, which was the second one.
3.45 p.m.
Lord Clinton-Davis: I should like to ask the Minister a number of questions arising from the report of the noble and learned Lord, Lord Donaldson, and the Government's response to it in relation to Recommendations 95 to 97.
One of the points that was made in relation to Recommendation 95 was that there should be wide consultation. The Minister has referred to consultation with the industry, but consultation was recommended in the report with partners in the Paris Memorandum of Understanding as far as the system of charging to be adopted was concerned. It was also recommended that other partners in the Paris Memorandum of Understanding states should be encouraged to set up similar systems in the long term.
The progress report in the document issued by the Government on 7th November does not mention any of those points at all, nor has the Minister alluded to that in his comments. Perhaps he will elaborate on that point.
Recommendation 96 said that the Government should set up a second new fund to pay for an emergency response and it dealt with what the fund should cover. Whether we agree with it or not, the Minister has done his best to answer that point.
On Recommendation 97, however, the Government are again encouraged to consult with their European partners on the general principles of charging, but this should not be allowed to delay the setting up of a UK fund. Has any discussion taken place with any of the parties mentioned in relation to Recommendations 95 and 97? So that we can look at this in the round, it is important to see what the Government have done in that respect.
Lord Simon of Glaisdale: May I say a word about Amendment No. 68 to which the noble Lord, Lord Beaumont, spoke. The first matter is the degree of parliamentary scrutiny. The Scrutiny Committee quite rightly, in my respectful submission, said that while there is a question of appropriation of money, if there is to be subordinate legislation the appropriate way of legislating is for the matter to be considered on affirmative resolution by the House of Commons. That entirely fits in with the concession since the 17th century, with a slight hiccup in 1909 and 1910 by your Lordships, that the other place has exclusive cognisance of those matters. That begs the question: should there be subordinate legislation at all on this matter?
The second thing is the Consolidated Fund, to which the noble Viscount referred. As your Lordships know well, the great revolution in public finance was the institution of the Consolidated Fund previously when some duty was imposed. When some act had to be performed which cost money, a charging provision providing for revenue was attached. In other words, revenue was hypothecated to the particular purpose. The great virtue of the Consolidated Fund was that all income--I mean not only revenue but capital--coming into the Exchequer was paid into the Consolidated Fund. The Government, with the assent of the House of Commons--in theory, at any rate--appropriated it according to their expenditure priorities.
What we have here is a proposal to allot capital to the Consolidated Fund. So far so good, but whose capital? It was generally agreed that the General Lighthouse Fund was the property of the shipowners. If the funds were to be wound up on every financial principle, the money should be returned to the owners and not transferred to the Consolidated Fund. That is a fundamental objection to the provisions which the noble Lord, Lord Beaumont, proposes to leave out in order to substitute his provision. I confess I am not entirely with him because if the funds, which are the shipowners' property, are to be wound up, it is almost as objectionable to transfer them to some new fund as to transfer them to the Consolidated Fund.
The final matter which I refer to without very much hope of anybody taking notice relates to the words in line 24, page 30,
- "with the consent of the Treasury".
I venture to support the proposal of the noble Lord, Lord Beaumont, that Amendment No. 68 is desirable--
[The Sitting was suspended for a Division in the House from 3.55 to 4.2 p.m.]
Lord Simon of Glaisdale: I was in the middle of a sentence when the noble Baroness, Lady Trumpington, not for the first and I fear not for the last time, shut me up. That was before the noble Lord in the Chair rose indignantly to adjourn the Committee. I have only a little more to say.
My objection was transferring what is the shipowners' money either to the Consolidated Fund or to the new fund which the noble Lord, Lord Beaumont, favours. It is wrong in principle. The money should be returned to the people who own it if it is no longer required for the specific purpose. Any new funds which require to be financed should be financed separately. One can argue about whether dues should be hypothecated at all to the new funds, but we should not transfer the shipowners' money to the new funds or to the Consolidated Fund.
I just want to add this. I could not help noticing that there crept into the tone of the noble Lord, Lord Beaumont, an all too frequent detestation of the Treasury. The word can hardly be said in this House without a hiss of hatred, but unless the Treasury kept the accounts we should be in a very sad mess. Having said that, I venture to support the noble Lord in his desire to excise those words, and I would like more consideration to be given to what should be substituted.
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