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Lord Peyton of Yeovil: My Lords, given the proposed delay in introducing financial services regulation, are we to take it that the Government are actively engaged in the search for comprehensibility, and that they accept that comprehensibility in this field is a virtue?

Lord Haskel: My Lords, the Government are consulting with the practitioners and the public. The public are committed to having pensions and all kinds of financial services and it is difficult for them to change from firm to firm. It is for that reason that the Government are anxious to consult with the public and with the practitioners.

Privileges: Select Committee

3 p.m.

The Chairman of Committees (Lord Boston of Faversham): My Lords, I beg to move the first Motion standing in my name on the Order Paper.

Moved, That the Committee for Privileges be appointed and that as proposed by the Committee of Selection the following Lords together with the Chairman of Committees and any four Lords of Appeal be named of the committee:

L. Allen of Abbeydale, L. Campbell of Alloway, L. Carter, L. Cledwyn of Penrhos, V. Cranborne, L. Glenamara, L. Jenkins of Hillhead, L. Mowbray and Stourton, L. Nathan, L. Richard (L. Privy Seal), L. Strabolgi, L. Strathclyde, L. Weatherill, V. Whitelaw, L. Wigoder;

That the Committee have power to appoint sub-committees and that such sub-committees have power to appoint their own chairman; and

That the Committee have power to co-opt any Lord for the purpose of serving on any sub-committee.--(The Chairman of Committees.)

On Question, Motion agreed to.

Procedure of the House: Select Committee

The Chairman of Committees: My Lords, I beg to move the second Motion standing in my name on the Order Paper.

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Moved, That the Select Committee on Procedure of the House be appointed and that as proposed by the Committee of Selection the following Lords together with the Chairman of Committees be named of the committee:

B. Anelay of St. Johns, L. Brougham and Vaux, L. Browne-Wilkinson, E. Caithness, L. Carter, L. Chesham, V. Cranborne, B. David, E. Ferrers, L. Fraser of Carmyllie, L. Gladwin of Clee, B. Hamwee, L. Harris of Greenwich, L. Irvine of Lairg (Lord Chancellor), B. Jay of Paddington, L. Jenkins of Hillhead, L. Mackay of Clashfern, L. Richard (L. Privy Seal), Ly. Saltoun of Abernethy, B. Serota, L. Skelmersdale, L. Strathclyde, V. Tenby, L. Tordoff, L. Weatherill, B. Young.--(The Chairman of Committees.)

On Question, Motion agreed to.

Firearms (Amendment) Act 1997 Compensation Scheme

3.1 p.m.

The Parliamentary Under-Secretary of State, Home Office (Lord Williams of Mostyn) rose to move, That the draft scheme laid before the House on 3rd June be approved [1st Report from the Joint Committee].

The noble Lord said: My Lords, the draft compensation scheme which we are debating today has been laid under the terms of Section 18 of the Firearms (Amendment) Act 1997.

The Government accept the need to pay compensation to those firearm certificate holders and registered dealers whose high-calibre handguns become prohibited by the 1997 Act. The draft scheme which we are debating today offers fair compensation for the weapons that will become prohibited and the ancillary equipment used only in connection with those weapons. Subject to parliamentary approval of this scheme, the hand-in period for the weapons can begin on 1st July, with the appropriate payments starting to be made from that date.

I shall briefly explain how the scheme is intended to operate. Before the hand-in period begins, certificate holders and dealers will receive full details of the final scheme, together with application forms and advice on where and when to surrender their weapons. They must

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complete the appropriate form in respect of their weapons and equipment and hand it to the police at the time of surrender. Individuals will have a choice of three options. They may choose to accept a flat rate of £150 for each weapon. Alternatively, they may choose a standard rate for their weapon from the list of published values at Annex A of the scheme, which contains the majority of the most commonly held large-calibre handguns. If they do not wish to accept the flat rate payment, and if their gun is either not on the list at Annex A or is markedly different from those that are on the list, they may choose the third option. That means submitting a claim supported by an independent valuation or other evidence corroborating the value of the items surrendered.

Similar arrangements will apply to dealers and they will be able to claim under any of the three options. However, they will be able to claim under the third option even though their stock may already be listed at Annex A. That is because the second option reflects second-hand values while dealers' stocks will either be new or second-hand and have a higher retail value. I shall say more about the details of the values in the lists in a moment.

The weapons must be handed over to a designated police station, as specified by the chief constable for the force area concerned. Special arrangements will be made with dealers because of the number of weapons they will have in stock.

Similar arrangements will apply to expanding ammunition and to ancillary equipment which can only be used in connection with firearms that become prohibited. The corresponding values are set out in Annexes B, C and D of the draft scheme. That is in accordance with the requirements of Section 17 of the 1997 Act and Section 16 in respect of expanding ammunition. The equipment will not itself become prohibited but the Government accept that where it cannot be put to any other use, such as for rifles or other legitimate uses, then compensation should be paid.

The claim forms will initially be checked by the police, who will then send them to the Firearms Compensation Section (FCS) of the Home Office, where they will be processed as quickly as possible. The FCS has been set up to handle claims for the 160,000 high-calibre handguns that will become prohibited and to deal with the claims for ancillary equipment. Fifty staff have been recruited and trained and the target is to deal with all claims within 18 months. The majority of the straightforward claims under options A and B will of course be dealt with quickly. A computer system has been introduced to ensure that each claim can be dealt with thoroughly and without delay and with the minimum of paperwork having to be created.

Once the claim has been settled and the claimant has no further interest in the guns or equipment, the FCS will issue disposal instructions to the police force storing the weapons and equipment and they will be destroyed in accordance with the local force practice. In a very few cases some weapons or equipment may be retained by police forces for training purposes or taken for public display in museums.

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I now turn to the details. Sections 16 and 17 of the Act make clear that the weapons and ancillary equipment must have been in the claimants' possession on or immediately before 16th October 1996, the date of the previous Government's announcement of their response to Lord Cullen's report. The draft scheme uses the values of weapons and equipment in the period immediately before that date. The values listed in Annexes A, B and D reflect the advertised prices as new in the trade journals at that time minus 25 per cent. for normal depreciation. These are the notional prices that we believe individuals might have obtained had they sold their guns or equipment at that time.

For individuals who submit independent evidence of the retail values of their guns and equipment and claim under option C, the FCS will normally pay out the retail value less 25 per cent. to reflect normal depreciation.

For dealers who submit independent evidence of the value of their stock and claim under option C, the FCS will normally pay out the cost price plus 25 per cent., which is a fair reflection of the return which they could have expected had the stock items been sold on. My officials have had contact with a number of gun dealers whose views have been taken account of during the preparation of the draft scheme. However, we have used published or advertised values of guns and equipment as they appeared in trade journals and other sources rather than simply the values cited by one or more of the dealers consulted. I believe that that is the best way of obtaining fair values for both claimants and ultimately the taxpayer.

There will be some concern about the position of dealers, gun clubs and others who will suffer losses as a result of the ban coming into effect. This was debated at length in this House during the passage of the Bill and it was decided at that time that such losses should not fall within the terms of the Act. The draft scheme therefore enables dealers and others to be compensated only for the weapons and certain ancillary equipment which they hand in; it does not extend to business losses, nor to equipment used in the manufacture of prohibited guns or ancillary equipment.

It may be helpful if I make clear the position on small-calibre pistols. These do not form part of the draft scheme because they are not prohibited by the Act. It is the Government's intention that there be a free vote in another place and, if the firearms Bill is eventually passed, then this category of handgun will also become prohibited.

In that expectation, certificate holders and dealers who own small-calibre pistols may hand in those weapons voluntarily to designated police stations at the same time as other handguns are surrendered. They will have to complete an application form, which will be processed by the FCS, and they will receive ex gratia payments for those weapons and related ancillary equipment. Details of these payments are available in the Library of the House and will be circulated to all claimants at the same time as the details of the compensation scheme itself. The values of these ex gratia payments have been calculated in exactly the

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same way as for the main lists--that is, on the basis of market values in the period immediately prior to last year's statement on 16th October. If the Bill is passed, the ex gratia list would become a formal scheme in its own right. That, however, is not the subject of today's debate but a matter for debate during the relevant stages of the Bill.

We believe that this draft scheme is fair and that it will properly compensate the legitimate owners of prohibited weapons and related equipment. On that basis, I commend it to the House. I beg to move.

Moved, That the draft scheme laid before the House on 3rd June be approved [1st Report from the Joint Committee].--(Lord Williams of Mostyn.)

3.10 p.m.

Earl Attlee: My Lords, I do not feel that there is an insurmountable difficulty with this compensation scheme. However, there are one or two points of concern and some assurances are required from the Minister.

We have debated the related primary legislation ad nauseam. I do not propose to repeat the arguments. However, the provisions of this legislation do not enjoy a favourable cost-benefit analysis. The Minister has already answered my written Parliamentary Question concerning records that will be kept of the compensation expenditure which will be incurred under the 1997 Act and the Bill currently going through another place. The Government may rest assured that in about 18 months' time we shall ask the Minister questions about crime with handguns and whether good value for money has been obtained for taxpayers' funds.

The scheme itself is obviously designed to ensure that the maximum number of shooters go for the A or B schemes, as so carefully described by the Minister. I am sure that, on reflection, most shooters will go for the B scheme, even if they feel the valuation to be slightly on the low side. However, they may be deterred if they think that their compensation payments will be a long time in coming. On the other hand, if they are confident that they can hand in their hardware and obtain compensation within 30 days, they will not want the anguish of the option C scheme, as it is fraught with unavoidable difficulties and delay. That will sit conveniently with the new Government's policy on late payment of invoices and the statutory right to interest. I understand that the provisions will apply equally to the Government themselves.

The Minister may claim that there may be questions of identification of weapons. He may be right. But he will be aware that a shooter who attempts to defraud the scheme will leave himself open to prosecution for serious offences and the authorities will have good quality evidence. Will the Minister give an undertaking that all option B compensation payments will be made within 30 days? If 30 days is not long enough, what will the period be?

The list of guns under the option B scheme is not so comprehensive as in the original scheme. Bearing in mind the desirability of having the maximum number of guns come under the option B scheme, why are there no

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Luger or Webley handguns listed in the option B scheme? They are extremely common makes. Why go to the trouble of valuing each one? I should have thought that they would have been included, since the Minister has just claimed that his list included the majority of handguns. It might be helpful to the House if the Minister could provide an explanation.

There is a problem with paragraph 10 of the scheme, which reads:

    "However, individuals may only claim compensation under Option C for guns, expanding ammunition or equipment which are not listed under Option B, or for guns which are so listed but which have been adapted or customised"--
I repeat, adapted or customised--

    "in such a way as to significantly increase their value".
What happens if a collector has a handgun which is on the option B list and is not adapted or customised in any way but still has great historical value, with very good provenance?

I come to my final concern. Shooters will reluctantly accept the need for the legislation, or at least its inevitability. However, they will be very unhappy with the thought that their handguns, which they bought for perfectly legal sport, could end up being issued to a third world army. Logic suggests that there may be well over 1,000 Browning 9mm pistols. I understand that they are generally known as the Browning Hi-Power. Personally, I shall continue to use one, but noble Lords will be relieved to know that it is currently safely locked up in the armoury at the TA centre and also belongs to the Secretary of State for Defence. But I digress. Such a large quantity of handguns would be quite attractive to export.

Presumably, given that a firearms certificate is required for any pressure-bearing component of a firearm, a certificate is still required, even if the owner has sawn the handgun into two parts. If that action were taken, I do not think that any offence would have been committed. So the question is: will a shooter be able to render his handgun unusable but complete, hand it in and then receive full compensation under option B? If he could do so, it would be reassuring for the shooting community. I look forward to hearing the Minister's reply.

3.16 p.m.

Lord Swansea: My Lords, I shall be fairly brief. This is the first time that I speak from these Benches, which I occupy as a direct result of the Bill which gave birth to this scheme. I am glad to see that the Government are offering what appear to be some sensible prices for many pistols and accessories in common use, plus some others which may not be popular for target shooting. However, although the list appears at first sight to be comprehensive, it is in fact confined to pistols in current production, including replicas of earlier models. I can find no reference to earlier models, such as Luger, Mauser, Walther, etc., except for a brief mention under "Miscellaneous" of the Walther PPK--one model only. However, under "Magazines", there is a comparatively large section devoted to only a limited number of

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Walther models and only one mention of magazines for the Luger pistol. Of other types of pistol or their magazines, there is no mention.

It may be that the list is based on the current manufacturers' prices for pistols in current production, which may be deemed to be in "as new" condition. It may be difficult to put an exact price on older pistols, as so much may depend on their condition, but it might be of help if some older models had a "bracket" of values which they might be presumed to have had.

Finally, before long we shall be faced with a further Firearms (Amendment) Bill relating to pistols of .22 calibre, which the present Government intend to prohibit altogether. Following the presumed passage of that Bill, we shall again be faced with a similar order, relating to pistols of that calibre. Your Lordships may be forgiven for thinking that that is a somewhat untidy way of doing things.

3.19 p.m.

Lord Stoddart of Swindon: My Lords, the two previous speakers from the Back Benches dealt with the detail of this scheme. They did so extremely well and therefore I do not need to expand on their remarks. But, unlike the noble Earl, Lord Attlee, who seems to believe that this matter has been discussed ad nauseam, I do not think that such is the case. I believe that every time the matter is raised the arguments against the legislation should be made, and I shall make them. In fact, the scheme does not give scope for increasing or altering the range of compensation. That is a great pity. But, as I said, it gives the opportunity to return to the sheer injustice of the Firearms (Amendment) Act 1997.

I find that the public have a more balanced view of legislation as the distance in time from the awful tragedy of Dunblane increases. The Government should take that into account. The public increasingly appreciate that the Act and now this order undermine every principle of justice as it is understood by reasonable people. The Act imposes a collective punishment on tens of thousands of innocent people, guilty of no crime, for the actions of a single madman who would not have been in possession of legal firearms if a senior policeman had not failed in his judgment and duty. If that is repeating something ad nauseam, then I shall repeat it ad nauseam. That is what happened and that is what caused this grave injustice.

The Act is unjust because it kills a sport and a pastime enjoyed by decent, respectable, law-abiding taxpayers from all walks of life. It imposes fines--I shall explain why--on thousands of people who have done no wrong. They are fined because the full market value of handguns will not be paid. The full market value of handguns is the market value before 16th October and not at or after it. Many people will therefore be fined because they will receive a lesser value for their firearms than they otherwise would.

The Act takes away the livelihood of many businesses without proper compensation for loss of trade and business. This House, shooters and the traders who will be disadvantaged by the order will be interested to know that the defeated Tory MPs who voted to refuse dealers

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and manufacturers proper compensation for loss of trade will themselves receive compensation for loss of office by means of a resettlement grant which will give them at least 50 per cent. of their final salary; indeed, many will receive 100 per cent. of their final salary of £43,000. People may care to take note of that and, indeed, that the former Secretary of State for Scotland will receive, in addition, 25 per cent. of his ministerial salary by way of severance pay.

Therefore, those who brought in this Act are receiving compensation for loss of trade, so to speak, which they denied to the people who sell and manufacture guns. The minimalist payment under this order cannot possibly compensate owners of handguns, clubs and businesses for their tangible losses, let alone for the mental anguish of being demonised and insulted. They will not easily forget the Goebbels-esque tactics used to cast them in the role of potential killers and to make them social pariahs in order to rush unjust legislation through Parliament.

There is now the prospect--we heard about it again from my noble friend, who is a decent, quiet man--of a new firearms Bill being introduced and that will compound what the existing Act has already done. There can only be anger and cynicism when we see a situation where the only men and women who can possess guns are those in blue uniforms and criminals. Who can blame law-abiding gun owners and traders for feeling embittered. I understand their feelings even if others do not. They know that they have been sacrificed on the altar of political expediency and personal political survival--which did not come off; I call that poetic justice. They also know that there is no guarantee that further massacres will not take place by whatever means and that gun criminality will not increase rather than decrease.

We have to vote for the order because it provides some sort of compensation. But I repeat: I believe that the Bill was a bad Bill; it was an unjust Bill; it was an outrageous Bill; and I look forward at some time, even in the distant future, to its repeal.

3.26 p.m.

The Earl of Onslow: My Lords, I echo totally what was said by the noble Lord, Lord Stoddart. My noble friends on the Front Bench have absolutely nothing to be proud of over this issue. They penalised a large and legitimate section of the community because they panicked and hoped to get back into office. But they panicked and failed to get back into office.

The Front Bench opposite, having got into office, should have shown some magnanimity and said, "We do not have to follow the same form of panic". But they have gone down the same road and made the matter even worse. Some of us are in the minority; some of us feel that we should stick up for minorities to enable them to follow their lawful pursuits and hobbies. There is something cloying and unattractive about the whole of the firearms Act, which was the Act of a man who attempted to despoil English habits to be sure that he was re-elected as Secretary of State for Scotland. He failed to appease; he only panicked.

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The Bill was bad. However, I suppose we have to vote for compensation, though none of us should be anything other than ashamed of the way that Parliament behaved in its panic over minorities.

3.27 p.m.

Lord Burton: My Lords, perhaps I can ask the Minister three short questions in the light of what he said. First, he said that 50 staff had already been trained to help the police in regard to the handing in of weapons. Are those the people who will also carry out the valuations? It would be remarkable if that were so and they could be trained in such a short time. The revised list only appeared on 3rd June. If those are the people carrying out valuations of pistols, will there be any appeal? And, if so, what form will it take?

Secondly, are the police satisfied that they can implement the instructions that Parliament are about to give them in the required time? I have considerable doubts and the police themselves may have apprehensions.

Thirdly, how will those who live some distance from a central police station comply, particularly under option C? For instance, the owner of a weapon may live in the western or northern isles and it may take two or three days to reach the central police station in Inverness.

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