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Viscount Ullswater: My Lords, at earlier stages of the Bill I made a rather narrow point about small PFI projects financed by the contractor or the service provider himself. The Minister replied--I think quite properly--that a certificate would not be required in such instances and that an NHS trust would be entitled to enter into such agreements under the original legislation setting up the trusts. However, I believe that the amendment introduced by the noble and learned Lord, Lord Brightman, gives great clarity to a situation where contractors and the like may be working with a series of contracts, some of which may be externally financed and which may be held up considerably if the contractor has to consider which contracts require a certificate and which do not. I ask the noble Baroness to look again at the clarity of the legislation. It appears from what is said by people much more learned in the law than I am that subsection (6) is not easy to interpret. The point of the amendment is that, however these contracts are made, they would not be ultra vires.

The Bill starts in this House. It may be inappropriate to try to amend it at Report stage here.

Noble Lords: Why?

Viscount Ullswater: My Lords, several speakers have said that the clarity given by the amendment is necessary. If the noble Baroness is not inclined to

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accept the amendment at this stage, perhaps she should look at it while the Bill is passing through another place.

Noble Lords: No!

Lord Monkswell: My Lords, when my noble friend responds to the debate, perhaps she can clarify one matter. It appears to me that the purpose of the Bill is to provide indemnity for the bankers that a project is certificated and the Government will therefore underwrite it in the last resort.

There is a provision in the Bill which suggests that if a project meets the criteria laid down but has not been submitted for certification, it will be deemed to have a certificate. That is one occasion when a project will not have a certificate. Another is when a project has been refused a certificate by the Government. We need to draw a distinction between a project which meets the criteria and which could expect to obtain a certificate if it had been submitted for one and a project which meets the criteria and has been submitted for a certificate but, for whatever reason, is refused one. That is the crux of the question and I hope that my noble friend can clarify the point. I suspect that the answer may be that the Bill has got it right and that the amendment, which is no doubt well meaning and which provides some clarity, would change the meaning of the Bill.

Baroness Anelay of St. Johns: My Lords, when the noble and learned Lord, Lord Brightman, introduced his first redrafting of subsection (6) at Committee stage, he made the comment that he thought that our deliberations on the subsection would not prove absorbing. My goodness, the noble and learned Lord has been proved wrong today! In Committee the noble and learned Lord set himself the task of rewriting Clause 1(6) so that it had greater clarity. I welcomed his efforts, providing his amendment did not undermine the policy intention of the subsection. The Minister assured us that,

    "the existing text satisfies the reasonable concern that the validity of an agreement which meets the conditions set out in subsection (3) cannot be challenged merely because it has not been issued with a certificate under this clause".
She went on to say that the noble and learned Lord's amendment made an unnecessary point in suggesting that,

    "the validity of any agreement into which a trust enters, whether externally financed or otherwise, should not be affected"
adding that,

    "a trust has express powers to enter into such contracts--under paragraph 16 of Schedule 2 of the 1990 Act which set up the trusts".--[Official Report, 19/6/97; col. 1365.]

I was content to accept that explanation as to the legal position and I remain so. But the noble and learned Lord, Lord Brightman, has today provided us with a rewrite of subsection (6) which seems to me, first, to be much clearer and more intelligible than the form in the Bill and, secondly, to meet the points made by the Minister in Committee. The noble and learned Lord

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spoke in Committee and today about the need to use plain English in legislation wherever possible. Like other speakers, I agree wholeheartedly with him.

When I read Bills I often feel myself transported back some 30 years to my days at university when I struggled with the convoluted syntax of Latin texts. I hope we can escape that one day--30 years on my nightmares ought to have finished. I hope that one day we shall find a way of following the noble and learned Lord's example and write legislation in plain English.

Today, we on these Benches recognise the valuable contribution that the noble and learned Lord has made in rewriting this subsection. We support his amendment.

4 p.m.

Baroness Jay of Paddington: My Lords, the House will not be surprised to hear that, as an active supporter of the Plain English Campaign and a non-lawyer, I am extremely grateful to the noble and learned Lord for his proposed amendment. Indeed, I do understand that it seeks to clarify the Bill. I am also grateful to him for his enormous courtesy in discussing this matter with me before he tabled the amendment and then discussing the exact terms of his amendment once he had done so. The amendment's objective is one with which we are in full agreement. I am grateful to the other noble Lords for their animated discussion of the particular points as they relate to this Bill and even more so for the general points that they raised about the nature of legislation.

Certainly, I do not wish to prolong the debate or appear to raise red herrings in the course of the comments that I want to make. But I am afraid that I may have to be slightly lengthy in trying to explain why, although officials and indeed I myself have spent some time poring over the amendment since the Committee stage, we still have some difficulty with it.

It may help if at the outset I explain a little more about the background to subsection (6). As my noble friend Lord Monkswell, just said, the underlying purpose of the Bill is to meet anxieties about vires raised by certain banks in relation to some of the very substantial PFI projects being promoted by NHS trusts. However--this is a point made by the noble Viscount, Lord Ullswater--as well as those large projects, many agreements of a less costly nature are regularly entered into between NHS trusts and private sector companies, for example, to provide equipment. Although they may seem to have the characteristics of PFI contracts, these agreements have not given rise to any practical concerns about vires. It is not our intention that these less costly agreements should attract the certification procedure of the more costly ones. As a matter of practice, agreements worth less than £1 million may be entered into by some NHS trusts without reference to the Secretary of State.

Clause 1(6)--we are discussing the amendment to it--has been included to displace any doubts which might otherwise arise, by reason of the enactment of the Bill, about the vires of agreements which appear to have the features of PFI agreements but which have not been certified under Clause 1. Our approach in preparing subsection (6) has been to avoid the need to determine

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whether a particular agreement could or would have been certified had it been put to the Secretary of State for that purpose. Paragraph (b) of the subsection simply recognises that an agreement would have been an externally financed development agreement had it been certified--I agree that the language is cumbersome--but it does not require any examination of the question whether the particular agreement would in fact be eligible for certification--or, indeed, if it were found to be eligible, whether the Secretary of State would choose to certify it.

Against that background, we can now look at the amendment proposed by the noble and learned Lord, Lord Brightman. The amendment sets out to identify the class of agreements to which subsection (6) is to apply by reference to the conditions in subsection (3). At face value, the test whether an agreement meets those conditions may seem to be a convenient and straightforward one. However, on close examination of the conditions, the exercise turns out to be very difficult, because it is necessary first to determine the attitude of the Secretary of State to the particular agreement. Paragraph (a) of subsection (3) requires that:

    "in his [the Secretary of State's] opinion the purpose or main purpose of the agreement is the provision of facilities in connection with the discharge by the trust of any of its functions".
So, until one knows the opinion of the Secretary of State regarding the purpose or main purpose of the agreement in question, one cannot tell whether or not the agreement meets the condition in paragraph (a). It was precisely in order to avoid the need to make that kind of detailed and subjective judgment--one might almost call it psychological analysis--in the case of each uncertified agreement that subsection (6) was drafted in its present terms.

I appreciate the considerable efforts which the noble and learned Lord, Lord Brightman, has made in seeking to furnish your Lordships with a provision which, on its face, certainly appears shorter and clearer than the existing subsection (6). I am also conscious--several noble Lords have referred to this point, as did the noble and learned Lord himself in bringing forward the amendment--that this present amendment reflects closely, in fact is similar to and identical with, some of the terms of the Notes on Clauses as they relate to this particular Clause 1(6). But, as your Lordships will know, those notes are not intended to be more than a guide in general terms as to the kinds of agreements to which the subsection is to apply. Inevitably--I am sure that this will have been your Lordships' experience in other Bills--the notes paraphrase and summarise to some degree the actual provisions of the Bill; but they cannot replace them; nor can they be regarded as exhaustive. So it does not follow that a subsection which is drafted in terms similar to or even identical with one of the Notes on Clauses will necessarily be effective as a legal provision. We believe that this amendment gives rise to the practical difficulties that I have described.

I hope that the noble and learned Lord and indeed other of your Lordships who have spoken in support of the amendment will appreciate that, although the language that he suggests is undoubtedly simpler, that simplicity may be an illusion, because it may create

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further complications in the enactment of the Bill. However, taking due regard of the point made by the noble and learned Lord, Lord Simon, about humility, I am certainly willing to take further what the noble and learned Lord, Lord Brightman, may wish to say.

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