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Lord Allen of Abbeydale: My Lords, can I ask a question about the role of the private contractor? As I understand it, if a prisoner is released, his performance will then be monitored by the private contractor and if he is in breach of curfew I think the Minister said that he will be immediately returned to prison. Who would pick him up and take him there?
Lord Williams of Mostyn: My Lords, the monitoring is very simple. One has the monitoring device attached in the prisoner's home and a tagging device attached to the prisoner's body. If the private contractor comes to the conclusion that there has been a breach, then the prisoner is returned to custody on the basis of a warrant, in other words, by a police officer acting on a warrant and not by the private contractor's employee.
Lord Ackner: My Lords, I agree with the noble Baroness, Lady Blatch, in that this is a dramatic U-turn. I do not agree with her that it is essentially Treasury led. I agree with the noble Lord the Minister that it represents a transition, but it represents a transition backed by the Government to the well-established principle that prison is a very expensive way of making bad people worse. That was the view expressed by previous Home Secretaries and adhered to until the advent of Mr. Howard as Home Secretary.
Ultimately, it has been realised that a grossly overcrowded prison system, coupled with the cutback in the finance available, means that there is no constructive time available in prison to provide even the hope of rehabilitation, let alone the probability of it being successful. That is the reason for what is proposed. It is a means whereby the Government get themselves off the hook upon which they have impaled themselves by accepting the minimum sentences and the automatic life sentences, despite the way in which both were criticised in this House prior to the change of government. I welcome the Statement as a step forward but I wish that the Government, in making a U-turn, would be a little more frank as to what motivated them.
Lord Williams of Mostyn: My Lords, I never look a gift horse in the mouth if at all possible; therefore I welcome the general support that the noble and learned Lord, Lord Ackner, has given. I venture gently to disagree with him. We are not getting off the hook on which we impaled ourselves. These are problems of long standing which do not derive from the automatic minimum sentences or the automatic life sentences. We are talking of a large number of persons who were sentenced under a regime which had no connection with those automatic sentences at all.
I well recognise the quotation which the noble and learned Lord provided to your Lordships. I think it was the noble Lord, Lord Hurd, when he was Home Secretary, who uttered those words. We are not concerned with a U-turn, because I do not recall that a
previous government has ever suggested this scheme, or, therefore, that we ever resisted it. I suggest again that this is a good deal more important than the usual knock-about party point. We are trying to deal with returning into the community those who have demonstrated themselves not to be equipped, not fit, to live in that community for a certain period of time. It is in everyone's interests that that transition should be properly and imaginatively managed.
Lord Harris of Greenwich: My Lords, is the noble Lord aware that many of us agree with him that this is a particularly inappropriate subject on which to have routine party knock-abouts? Whether the Government have or have not done a U-turn is irrelevant, given the gravity of the situation which the noble Lord indicated a few moments ago, with the prison population already at 63,000. Will the Minister recall that he recently wrote to my noble friend, Lord Rodgers of Quarry Bank, indicating that if the present trends in sentencing continue the prison population is expected to reach 71,800 by September of 1999, a truly frightening figure? All this being said, we welcome what the noble Lord said about reducing the prison population in the way he described.
Can I put two questions? First, will the Minister recognise with me that a good quality risk assessment by the prison authorities for longer sentence prisoners is possible? It is extremely difficult, on the other hand, to have a risk assessment for a very short sentence prisoner. These people are being warehoused at the moment in very large numbers and some go in and out of prison without many prison officers recognising the fact that they are going through their particular establishment.
Secondly, the Minister referred to four new prisons. Were those four new prisons in the building programme of the previous government and, therefore, allowed for in the public expenditure plans of the previous government? Or is this a new commitment to public expenditure?
Lord Williams of Mostyn: My Lords, I do not regard this as an occasion for trivial tittering; it is much more important than that. My belief is, I think, shared by the overwhelming majority of your Lordships. If the noble Lord, Lord Harris of Greenwich, expresses a reasoned public concern about the state of our prison system and, therefore, the state of the public good, and I happen to welcome that, I do not see that it is an occasion for merriment.
The noble Lord raises the question of the figures. I did indeed write to the noble Lord, Lord Rodgers of Quarry Bank, with those figures. No one with any sense or sensibility can close his eyes to them. Risk assessment, of course, will vary according to the period of time that a prisoner serves. The longer a prisoner is in prison, I suppose in the nature of things, the deeper the risk assessment is likely to be. Equally, one has to bear in mind--I make no apology for repeating it--that all of these prisoners in the band I described will be released automatically, as of right, after half the sentence has been served. It is true that many petty
inadequates are in and out of prison in a short period of time and that is something we constantly have to question. May I write to the noble Lord about his particular question, because in the moment or two available I have not been able to get specific information? I believe I know the answer, but I do not want to mislead him, even if inadvertently.
Lord Renton: My Lords, is the Minister aware that prisons are universities of crime, especially when they are overcrowded, and that therefore many of us welcome every effort being made by the Government to reduce the prison population so long as it is consistent with public safety? Will he therefore give us some idea of the degree of efficiency of the present tagging system, bearing in mind that he was kind enough to say that the first experiment was not fully successful?
Lord Williams of Mostyn: My Lords, I am grateful for the support of the noble Lord who has significant experience of these matters having himself been a Home Office Minister. I agree entirely that if one keeps men in prison without education, training, or skill opportunities, one is likely to have a dismal outcome. Prison will then perform the important but limited function of merely keeping a man or woman out of circulation for a short period of time. I do not overlook the importance of that, but I agree with the noble Lord that the over-arch must be public protection. That is why we want public support; that is why we have built in careful provision; and that is why we have limited the scheme in the way I described. We are confident that the technology is now capable of working on every occasion. It is a rash layman who puts his faith in science to that extent, but that is the information we have. It is sufficiently sophisticated to be a foolproof scheme.
Financial Services Act 1986 (Extension of Scope of Act) Order 1997
4.21 p.m.
Lord McIntosh of Haringey rose to move, That the order laid before the House on 27th October be approved [11th Report from the Joint Committee].
The noble Lord said: My Lords, I must first apologise to the House for the fact that it was not possible to debate the Financial Services Act 1986 (Extension of Scope of Act) Order before it came into force on Monday 10th November.
When the Government issued their consultation document in May it was expected that the upgraded CGO system would come on stream at the end of August. By July the Bank of England had decided to delay the launch but without giving a further date. The existing form of paragraph 16A which is being amended presented a number of difficulties in drafting. Given the technical computing context, and the experience of the financial services regulators in operating the existing provision, it was particularly important that the drafting was done in close consultation with the regulators and
the Bank of England. As with all legislation the paramount concern must be that the legislation should be workable. The Government were not ready to lay the order before the summer Recess but intended to do so when the House reassembled in October. It was only at the beginning of October, while the House was in Recess, that the bank announced that the system would go live on 10th November.The order is made under a power within the Financial Services Act (Section 2) which allows a statutory instrument to be made with immediate effect but with the proviso that it shall cease to have effect if within 28 days it is not approved by Parliament. That is a particular procedure which is designed to allow regulatory protections to be applied immediately where circumstances require it in order to protect investors. Given that the upgraded CGO system was to be operational on 10th November, it was essential that the protection of the Act should commence on that day. The order was laid on 27th October and came into force two weeks later. The Bank of England and the regulators were, of course, aware of the timetable for the order. The bank agreed to alert anyone proposing to act as a sponsor of the requirements of the order of the need for authorisation. As it turned out, even by this stage, there are very few sponsored members and their sponsors are already authorised.
The order extends the definition of investment business in Schedule 1 to the Financial Services Act to cover the provision of sponsored membership services in the context of the upgraded Central Gilts Office settlement system. Its effect is to extend the protective mantle of the Act in terms of high standards and better security to people dealing in gilts.
The settlement system of the Central Gilts Office is already dematerialised; in other words, paperless. A number of firms have direct computer links to the system and their names appear on the central register.
The upgraded CGO system was, as I said, introduced on 10th November. It is designed to enhance the settlement of gilt repo transactions--which is the sale of gilts with a commitment to repurchase them at a later date at a particular price--and to introduce a facility to strip and reconstitute coupon-bearing gilts--which divides the repayment of the principal from the individual dividend payments and allows for each to be separately traded. It also provides a number of additional features, including a flexible membership structure.
As part of the more flexible membership structure, a new category of trader was introduced on 10th November, known as a sponsored member. The important feature is that the name of the sponsored member will appear on the central register even though the actual trading will be by someone else, a direct member or interface provider, who, for this purpose will be known as a sponsor.
The reasons for bringing "sponsors" within the definition of investment business in the Financial Services Act are twofold: first, sponsors will be interacting with the system on behalf of others, which creates the possibility of error, negligence or even fraud;
and, secondly, the system will be similar to that operating in CREST where sponsors are already required to be authorised. It is likely that, in due course, the CREST and CGO systems will merge. The order is thus designed to improve the protection provided for investors and to provide consistency of treatment with CREST within the regulatory environment. I beg to move.Moved, That the order laid before the House on 27th October be approved--(Lord McIntosh of Haringey.)
4.28 p.m.
Lord Mackay of Ardbrecknish: My Lords, the Captain of the Yeoman of the Guard will be relieved to hear that this is not nearly as controversial a matter as admission charges for museums. He will find that the Opposition, by and large, agree with the Motion. I shall not complain about the Motion being made now regarding something that is already in force, because I suspect that I can recall situations in which I was forced to do something similar. I see the noble Lord, Lord Eatwell, smiling at me and indicating that he probably harangued me on much the same issue. So I am being pretty careful about that.
I am in no doubt that it is important that the City moves into the new electronic age. Indeed, from the Government Dispatch Box I moved some of the affirmative orders that enabled CREST to start. This is but one more step on the road to ensuring that the City can compete in the modern world. That is extraordinarily important for our economy. I have no problems with the Motion.
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