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Lord Jenkin of Roding moved Amendment No. 38:

Line 1, leave out ("new").

The noble Lord said: With the leave of the Committee, I shall move Amendment No. 38 on behalf of my noble friend Lord Peyton of Yeovil.

This really is a "new" Bill--or will be by the time we have finished with it. I understand what my noble friend had in mind, but he is not here to make his points. It is right for me to say from the Back-Benches that we have had some extremely valuable and productive debates. Those who follow these matters from outside will recognise the value of parliamentary debate as a back-up to any amount of consultation between departments and industries. We are often able to achieve changes which those other channels cannot. We saw that in the course of today. I beg to move.

Lord Renton: I agree with my noble friend Lord Jenkin of Roding. We have had extremely valuable debates. I, and I am sure my noble friends, are extremely grateful to the noble Lord, Lord Whitty, for the way in which he responded to our complaints. He said that he will reconsider virtually the whole of Clause 1.

As to whether the Bill introduces a new system is doubtful. If we look at the second schedule the changes made in existing legislation, which at present controls pollution in various ways, are slight. The two most important references are to the Environmental Protection Act 1990--with one amendment being made to Section 9--and the Clean Air Act 1993 where there will be two minor amendments.

The existing system therefore is to continue. The Bill does not impose a new system; it adds to the present system by incorporating what is in the European directive and providing that special provision shall be made for consideration by the Welsh Assembly and the Scottish Executive. One hopes that they will find the existing system as modified as little as they require. My

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noble friend Lord Peyton of Yeovil was therefore well justified in suggesting that it was not really a new system; it is a new system to be adapted.

Baroness Farrington of Ribbleton: If this is the length of time it takes for minor, non-new modifications to be made to an existing system, I wonder how many hours we would have spent had it been totally new.

To describe our intentions for this Bill as "new" or "not new" is a somewhat subjective choice. On the one hand, we are replacing pieces of existing legislation, including all of Part I of the Environmental Protection Act 1990, with a new pollution control regime; on the other, the replacement is broadly similar, albeit with a few new elements--for example, a regard for energy efficiency and application to some new sectors.

We have already debated at length the purpose of the Bill and made it clear that it arises only from the need to implement the IPC directive in a way which fits coherently into other regulatory requirements. We promised to consider amending the Bill to restrict its scope for the purposes set out in it. We published draft regulations and will do so shortly for offshore installations which describe in detail how the provisions in the Bill will be used.

I hope that, with those assurances and safeguards, the noble Lord, Lord Jenkin, on behalf of the noble Lord, Lord Peyton, will not feel the need to press the amendment.

Lord Jenkin of Roding: I should like to associate the noble Baroness, Lady Farrington, with the kind words my noble friend Lord Renton addressed to the noble Lord, Lord Whitty. Both Ministers have been extremely responsive to all points made from all parts of the Chamber and will be seen eventually substantially to improve the Bill. I do not intend to press the amendment. I beg leave to withdraw it.

Amendment, by leave, withdrawn.

House resumed: Bill reported with amendments.

Development Commission (Transfer of Functions and Miscellaneous Provisions) Order 1999

7.25 p.m.

Lord Whitty rose to move, That the draft order laid before the House on 27th January be approved [7th Report from the Joint Committee].

The noble Lord said: My Lords, the purpose of this order is to achieve a number of things. First, it seeks to create the new countryside agency by renaming the Countryside Commission the "Countryside Agency"; secondly, to transfer the Rural Development Commission functions to the countryside agency; thirdly, to provide for appropriate Rural Development Commission property, rights and liabilities to be transferred to the countryside agency; and, fourthly, to enable the Countryside and Urban Regeneration Agency

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(known as English Partnerships) to provide specialised services, particularly information technology systems, in support of the RDAs.

This order is part of the process of implementing certain provisions of the RDA Act. In particular, it will put into effect the decision to create the countryside agency from the merger of the Countryside Commission with the parts of the Rural Development Commission which are not being transferred to the regional development agencies.

Rural regeneration, currently carried out by the Rural Development Commission, will be an integral part of the RDAs' remit. The comprehensive spending review covering countryside and rural policy concluded that bringing together the remaining work of the RDC and the Countryside Commission would consolidate their work and create a powerful new champion for rural England. The merger was announced by my right honourable friend the Deputy Prime Minister on 27th March last year during the passage of the RDA Bill.

The combined experience and expertise of the Countryside Commission and Rural Development Commission in the new countryside agency will provide a national source of research and advice about countryside and rural issues. Its coverage will be social, economic and environmental and it will promote and help others to develop policies and programmes to overcome rural disadvantage.

In my opening I should perhaps mention one other matter for the record. It relates to the treatment of the staff at the various agencies. The staff transferring to all the new agencies will do so on their existing terms and conditions, with no detriment to any of their employment rights and with continuity of employment. As is usual in such cases staff will be offered broadly comparable pension provision, in this case through membership of the principle civil service pension scheme--a scheme with identical provision to that operated by the RDC. The transfers involved have been worked out by a series of steps. The trade unions have been consulted throughout and plans to overcome the mismatch of jobs have been pursued. A number of staff opted to take on new responsibilities and others took redundancy. However, most posts will be filled by this process.

This order will be of great benefit to the development of our countryside and rural policies. I beg to move.

Moved, that the draft order laid before the House on 27th January be approved. [7th Report from the Joint Committee].--(Lord Whitty.)

Lord Montagu of Beaulieu: My Lords, as a former member of the Development Commission I welcome amalgamation with the Countryside Commission. I am sure that the new body will do extremely well for the countryside. However, we should not let this moment go without pointing out that the Development Commission is Britain's oldest quango. It was founded in 1909 by Lloyd George and it contained the road board which had the wonderful idea of spending on the roads

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all the money taken from motorists in road tax. Unfortunately, that money was raided by Winston Churchill, and such hypothecation no longer happens, but many of us wish that it did. I think one ought to make the point that the commission has been doing a good job for a long time and I am glad that the staff will be properly looked after.

Lord Whitty: My Lords, I echo what the noble Lord, Lord Montagu of Beaulieu, has said. I would like to join him in paying tribute to the work of the RDC over the years and the Countryside Commission. The longevity of the RDC and the various purposes to which the RDC has been put over most of this century indicate the value of the work delivered by its personnel and its leadership. I wish to be associated with a tribute to those achievements. However, I believe that the new structure will be more effective in the present changed circumstances, as the noble Lord recognises.

On Question, Motion agreed to.

Scotland Act 1998 (Transitory and Transitional Provisions) (Finance) Order 1999

7.30 p.m

The Parliamentary Under-Secretary of State, Scottish Office (Lord Sewel) rose to move, That the draft order laid before the House on 4th February be approved [8th Report from the Joint Committee].

The noble Lord said: My Lords, this order is a significant step in the implementation of devolution for Scotland. The next financial year will be a particularly special one. At the start of the year the allocation of spending to individual services will be within the control of this Parliament, but by the end of the year it will be a matter for the Scottish Parliament. We have to provide for transitional arrangements to ensure that this historical transformation takes place as smoothly as possible and with the minimum of disruption to public services in Scotland.

Of course this order does not itself deal with the allocation of funds to individual services. That is solely a matter for the other place. That other place approved last week a draft of another order with a long and indigestible title, which I shall refer to as the appropriation order.

The order deals with the framework for the spending, accounting and auditing of money from the Scottish Consolidated Fund. That fund is being established from the beginning of the financial year in order that the payments from it can be authorised for the full year. The order provides for the transfer of the spending authorisations granted under the appropriation order from the Secretary of State to the Scottish Ministers.

Under Sections 65 and 70 of the Scotland Act 1998, the Scottish Parliament will have to legislate to put in place the detailed arrangements for the approval and spending of public money, including the accounting and auditing arrangements.

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A great deal of work has already been done to prepare the ground. In particular, the cross-party Consultative Steering Group has agreed a report from the Financial Issues Advisory Group which makes detailed proposals for all the necessary budgeting, monitoring, accounting and audit arrangements. That group, incidentally, included in its members Professor David Heald, a former colleague of mine at the University of Aberdeen, as was Dr. Michael Dyer, known to the noble Lord opposite. Professor Heald is a specialist adviser to Select Committees in the other place, and an acknowledged expert on public expenditure matters. He, like the other members of the group, gave freely of his time and knowledge. I would like, with your Lordships' permission, to place on the record our thanks for all the work they did. They rendered a considerable service to the public of our country.

The order before us deals with the financial year 1999-2000. It takes us, during the course of that year, from a Westminster public expenditure regime to one that is determined by and the responsibility of the Holyrood Parliament. It does so in the context of a financial year when spending responsibility will fall to the Secretary of State for Scotland in the first part of the year and from 1st July to the Scottish Executive.

In essence, the order puts in place, for the transitional year, arrangements governing the spending of and accounting for money paid out of the Scottish Consolidated Fund that are similar to provisions in a host of Acts of this Parliament, ranging from the Exchequer and Audit Departments Act 1866 to the National Audit Act 1983.

The order sets down the conditions under which sums may be paid out of the Scottish Consolidated Fund during the transitional year. It puts in place arrangements to ensure that any payments from the fund relate to functions that are or will be devolved and that they have the necessary legislative authority.

The next main provision transfers spending authority for those unspent balances at the date of devolution from the Secretary of State to the Scottish Ministers (and in certain cases to the Parliamentary Corporation). That is especially important, because it enables funding for public services to be approved for the entire transitional year and for allocations to move seamlessly from the Secretary of State to the control of Scottish Ministers without further approval.

While these provisions of the order concentrate on the spending of public money, others make sure that funds are properly accounted for. The order specifies accounting arrangements for the transitional year in some detail. In essence, it requires the Secretary of State to prepare accounts for transactions that take place prior to devolution and places an identical obligation on Scottish Ministers for the period after devolution. Both sets of accounts are to be audited by the Comptroller and Auditor General. They will be laid before this Parliament and the Scottish Parliament respectively. The Comptroller and Auditor General will also retain responsibility for examinations of economy, efficiency and effectiveness throughout the transitional year. The

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order enables him, if necessary, to complete those studies he has started but not finished during the transitional year.

The question of accountability clearly does not end with the specification of suitable financial accounting and value for money arrangements. We also need to make more general provisions, to ensure that Ministers and officials remain accountable until the Scottish Parliament has put its own arrangements in place. Therefore, the order requires the appointment of accounting officers in both the pre- and post- devolution periods.

While much of this order rightly concentrates on matters associated with the use and management of the Scottish Consolidated Fund, it also makes arrangements to continue the payment of certain designated receipts into the UK Consolidated Fund. Those receipts mostly relate to fines and to interest payments and are presently paid into the UK Consolidated Fund. They do not form part of the Scottish Office budget. The order ensures that these arrangements continue.

The majority of receipts are not subject to these special considerations and the order provides for these, so far as they relate to functions that are or will be devolved, to be paid into the Scottish Consolidated Fund or, more usually, appropriated in aid.

The final main provisions of the order are of a relatively technical nature. They allow the continuation of the Registers of Scotland Trading Fund for the remainder of the transitional year. Thereafter, it will be for the Parliament to decide on the financial and control arrangements for this body. It also allows the payment of a salary to the Auditor General for Scotland, thus allowing the Parliament to fill the post quickly, so that the incumbent can get on with the necessary planning work and be in a position to take up his full duties on 1st April 2000.

The order also caters for the possibility that it may be necessary to make contingency payments from the fund during the transitional year. Here too, the order builds on existing procedures. The effect is broadly similar to that of the Contingencies Fund Act 1947. As a result, there will be clear limits to the payments that may be made by Scottish Ministers.

The order, together with other provisions, particularly the appropriation order, sets out financial provisions for the transitional year. That procedure has allowed local authorities and the like to draw up their budgets for the year 1999-2000; it allows the Scottish Parliament to revisit the proposed allocations later in the year, but, above all, it provides a springboard for full and effective financial devolution for the future.

The order is an integral and critical part of the transition to the devolved Scottish parliament. I beg to move.

Moved, That the draft order laid before the House on 4th February be approved [8th Report from the Joint Committee].--(Lord Sewel.)

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