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Lord Pearson of Rannoch: Will the noble Lord give way? That of course depends upon what this place decides.
Lord Lester of Herne Hill: Of course, that is true. In this area, unlike European Community law, we have complete sovereign powers. If we do not use the powers in the way that the noble Lord wishes, then the only recourse will be to alien European judges in Strasbourg. It is well established in the case law of the European convention, contrary to the advice given to the Minister, as I understand the position, that the concept of possessions protected by Article 1 of the first protocol includes the economic interest concerned
with the running of a licensed business, and that the withdrawal, for example, of a licence constitutes a measure of control of the use of property which is protected by Article 1 of the protocol.One of the cases that lays that down is Tre Traktorer, the Swedish case decided in 1989. It is also clear that the deprivation of income from the use of an owner's property comes within Article 1 of the protocol. The European convention gives states a wide margin of appreciation in these matters, and the Committee is enjoying it today. We can decide, in a very wide margin of appreciation, what is a fair balance, but, in the end, under the convention--thank heavens!--in the absence of a written constitution or a Bill of Rights, the European Court of Human Rights has to determine, in its words:
- "whether a fair balance has been struck between the demands of the general interest of the community and the requirements of the protection of the individual's fundamental freedoms".
The court has held repeatedly--again I quote from Lithgow:
- "Compensation terms are material to the assessment whether the contested legislation represents a fair balance between the various interests at stake, and notably whether it does not impose a disproportionate burden on the applicants",
In my view, the absence from the Bill of the provision for compensation of any kind for disruption of business and livelihood is, to say the least, likely to raise powerful arguments of breaches of Article 1 of the convention's first protocol. That is the second point--if we do not do something about this then I suspect that the matter will have to go to the European court, which will be deeply regrettable. Although I make my living to some extent from cases in Europe, I am not satisfied by the fact that there are not effective remedies in Parliament and our own courts.
The third point is the question of precedent. The Government's position is that there are no precedents in favour of compensating in this kind of case. It is not correct to assert that there is no precedent for paying claims for business losses as a result of government legislation. I would add to the examples given by the noble Earl, Lord Lytton, for example, that nationalisation legislation has always provided for compensation for business losses resulting directly from the legislation. That occurred most recently in the Aircraft and Shipbuilding Industries Act 1977, where the businesses concerned were valued at vesting date as a means of calculating losses and assessing compensation. Another more recent example--I do not suggest that Parliament always does its job properly--arose in relation to the BSE affair where, as I understand it--I shall be corrected if I am mistaken--payments amounting to £30 million are to be made to slaughterhouses which continue to slaughter beef. Those payments are based on the throughput for 1995 to 1996; that is, as a calculation to enable fair compensation to be paid for the loss of the business caused by the effects of the ban.
Another precedent, which one cannot disregard and which is directly relevant, is the firearms legislation in Australia. As several noble Lords have pointed out, the Australian Government's guidelines provide that firearms dealers and importers are entitled to apply for compensation for any loss in the value of their businesses caused by these prohibitions. The noble Lord, Lord Gisborough, quoted all the principles and therefore I do not need to repeat them.
All the laws enacted in the states of Australia during the past six months provide for loss of business of dealers who sell, repair or import the prohibited firearms. The loss is valued as the difference between the value of the business prior to the new legislation and after the legislation, as assessed by a certified valuer and subject to independent audit.
I believe that the Bill should provide some compensation for loss of business. Parliament is making people in the business of selling and distributing guns forgo their livelihood for the safety and well being of society as a whole. We cannot in fairness expect them to bear an unreasonable and excessive individual burden for the losses suffered by them in what we as legislators perceive as the general interest of the community.
However, lest I am thought to be a fanatic in defence of the right to property, perhaps I may say that, although I support the principle on which Amendment No. 40 is based, it is, in my view, too generous in requiring full compensation at market value. That is not the standard of compensation required under the convention in such a case. What is required is fair but not full compensation.
Moreover, as the business has declined since the Dunblane massacre, it would be inequitable for any compensation scheme to fail to take account of that decline in business. There I join forces with the noble Baroness the Minister in the way in which she approaches the relevant date. Amendment No. 40 treats 1st January 1996 as the relevant valuation date. That seems to be much too generous to dealers and unfair to the general body of taxpayers. It is more generous than the Australian compensation scheme and I see no good reason for that.
Perhaps I may sum up. I very much hope that the Government will accept the principle of fair but not full compensation and bring a scheme back to the House which meets the justice of the situation.
5 p.m.
The Earl of Lytton: It has been a very interesting debate. Like the noble Lord, Lord Stoddart, I have never received so many letters on any other subject. I am grateful to the Minister for what she said, although I remain at least 80 per cent. unconvinced by it and I am sorry to record that.
I have great concerns as to how, in another place, a money resolution is put forward in terms which cover two heads of payment but the Government seek to limit public expenditure exposure to the first one only. That matter needs clarification.
We are dealing with an issue which has an effect of substantial finality to people who have no other option. The noble Earl, Lord Peel, referred to the fact and degree of the Government's liability to meet cost and to the absence of time to adjust. He said, "No product, no customer, no fault of their own". I agree with all those points. The noble Lord, Lord Stoddart, referred to justice and fairness and I support those sentiments too. The price of haste and lack of due consideration is full compensation, as I said. As I keep telling my clients in my professional capacity, "It is either your time or your money and you hope that it is not too much of both".
I was particularly pleased to note the contribution of the noble Lord, Lord Lester, because he dealt with the legal aspects upon which I am entirely unqualified to comment. I was not sure that I understood the difference between fair but not full compensation. I question whether in this Bill we have the right balance, given that at the date when the Minister suggests the Government should fix values for compensation purposes there was no market. How can one have a compensation scheme based on full or fair values if there is no market? However, I was heartened by the account of the discussions that are taking place in order to try to overcome that and I can hope only that they produce a satisfactory decision.
Obviously, it is up to Parliament to decide compensation, not government. The ban is not peripheral; it is fundamental. It is not tinkering at the edges of an industry; it is going to the core of it. That is the difference. I noted what was said by the noble Baroness in connection with the Labour Party and I noted what the noble Lord, Lord McIntosh, had to say. It is clear that public-sector costs are weighing more heavily in the balance in the Government's position than matters of fairness and justice. I find that deeply regrettable.
I do not intend to press my amendments. I cannot speak for other noble Lords, but if the noble Earl, Lord Shrewsbury, seeks to move his amendment I should be inclined to walk into the Lobby with him. Mine are simply probing amendments, but I must make it clear that I do not intend to let go on this issue. I do not believe that we have the balance right and almost certainly I shall return to the matter at a later stage. On that basis, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 34 to 36 not moved.]
Baroness Blatch moved Amendment No. 37:
On Question, amendment agreed to.
Divide Clause 11 into two clauses, the first (Payments in respect of prohibited small firearms and ammunition) to consist of subsections (1) to (3) and the second (Payments in respect of ancillary equipment) to consist of subsections (4) to (9).
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