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Lord Dixon-Smith: My Lords, the noble and learned Lord will be relieved to hear that we do not find anything controversial about these regulations in themselves, but I feel it is necessary to echo the words

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of the noble Lord, Lord Goodhart, because what is controversial about them is that this is secondary legislation. We are correcting an error in secondary or primary legislation, whichever way you want to look at it, and that indicates that we need to be very much more careful how we set about these things in the first place. One would have to be immensely optimistic to believe that this will not happen again and one has to hope that on this occasion the regulations are correct.

We accept what the noble and learned Lord has said and we are happy to support the changes that he is putting forward.

Lord Falconer of Thoroton: My Lords, I thank both noble Lords for their support. They are correct when they say that, although amendments were made by secondary legislation, it was primary legislation that was being amended. It is therefore of very considerable importance that errors are not made. I deeply regret that the errors were made.

My understanding is that where primary legislation is involved parliamentary counsel drafts the provisions. Where it is secondary legislation, even though it may be amending primary legislation, it is drafted by the department but sent to parliamentary counsel to look at. But I shall write to both noble Lords in relation to that point. In answer to the question of the noble Lord, Lord Goodhart, it would have been seen by parliamentary counsel but perhaps on a different footing from the way it would have been dealt with had it been primary legislation. I very much take on board the point made by both noble Lords that one has to take as much care as one possibly can to avoid these sorts of mistakes being made.

On Question, Motion agreed to.

Criminal Defence Service (Representation Order Appeals) (Amendment) Regulations 2002

7.45 p.m.

Lord McIntosh of Haringey rose to move, That the draft regulations laid before the House on 26th March be approved [25th Report from the Joint Committee].

The noble Lord said: My Lords, these amendments make two changes. The first is to change the time at which a representation order takes effect when the applicant has appealed against a refusal of funding. The second is a small group of technical amendments which are needed to support the bringing into the Criminal Defence Service of appeals from the Financial Services and Markets Tribunal.

First of all, on the timing point, at present when a defendant is refused a criminal representation order by a court he can appeal by making a fresh application to the same court. Regulation 6 of the CDS (General) (No.2) Regulations provides that a representation order takes effect from the date the court receives the fully completed application.

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Where the defendant has had to apply a second time, this means that his representation order takes effect only at the time he made the renewed application. This was not the position in the previous legal aid system. Regulation 44(7) of the Legal Aid in Criminal and Care Proceedings (General) Regulations 1989 allowed pre-grant costs to be paid where in the interests of justice work had to be done before representation had been granted.

Regulation 3 of this instrument amends the existing CDS (Representation Order Appeals) Regulations to restore that position. It provides that, where a second application has had to be made, any resulting representation order takes effect from the date the original application was received. This applies to all appeals in any court dealing with criminal matters.

I turn now to the financial services amendments. I would like to give some background on the procedure to which they relate. The Financial Services and Markets Tribunal was established on 30th November 2001 and deals with matters referred following a decision of the Financial Services Authority against an individual for market abuse. Applicants to the tribunal are helped by a legal assistance scheme which provides help for persons unable to afford the cost of legal advice and representation.

Appeals from the tribunal go to the Court of Appeal (Civil Division). However, the nature of the work—and in particular the fact that it can involve heavy fines—means that public funding has to be provided as if this were criminal work. This is to comply with our ECHR obligations.

At the moment, funding from the CDS is available only for cases in the Criminal Division. Parliament has already passed a number of regulations that remove this distinction and allow CDS funding to be used in either division, as appropriate. The amendments in Regulation 4 support this by making similar changes to the way appeals against a refusal of funding are dealt with. Specifically, they allow the necessary renewed application to be made to the head of the Civil Appeals Office, as with the original application.

A person appealing to the Court of Appeal will not be means tested. Funding will be subject to the interests of justice test. Again, as with other criminal representation, the court will be able to order defendants to repay some or all of the cost of their defence. I beg to move.

Moved, That the draft regulations laid before the House on 26th March be approved [25th Report from the Joint Committee].—(Lord McIntosh of Haringey.)

Lord Goodhart: My Lords, we on these Benches are perfectly happy with these regulations and have no objection.

Lord Kingsland: My Lords, for the reasons given by the noble Lord the Minister, we also support these amendments.

On Question, Motion agreed to.

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Scotland Act 1998 (Modifications of Schedule 5) Order 2002

7.48 p.m.

Lord McIntosh of Haringey rose to move, That the draft order laid before the House on 2nd May be approved [29th Report from the Joint Committee].

The noble Lord said: My Lords, in rising to move this order, I should like, with the leave of the House, to speak also to the draft Scotland Act 1998 (Transfer of Functions to the Scottish Ministers etc.) Order 2002.

The orders before us are principally constitutional in nature. The first is made under Section 30(2) of the Scotland Act and concerns an amendment to an area reserved by Schedule 5 to the Scotland Act 1998. The result of this is a change in the legislative competence of the Scottish Parliament. The second is made under Section 63 of the Scotland Act and provides for Scottish Executive Ministers to exercise executive powers in areas where primary legislation continues to be a matter for this Parliament. This is commonly known as "executive devolution".

Noble Lords may care to note that Ministers in the lead policy departments have been fully involved in preparing both orders before the House today. In the case of the Section 30 order, the lead policy department is the Department of Transport, and in the case of the Section 63 order it is the Department of Transport and the Department of Trade and Industry.

The first order is made under Section 30(2) of the Scotland Act. Schedule 5 to the Scotland Act forms part of the definition of the legislative competence of the Scottish Parliament and sets out the matters that are reserved for the purposes of the Act.

Section 30 of the Scotland Act provides a mechanism whereby Schedules 4 or 5 to the Scotland Act can be modified by an Order in Council, subject to the approval of both Parliaments. This allows the boundaries of the Scottish Parliament's legislative competence to be adjusted, either by removing existing reservations in whole or in part, or by adding new ones.

Following devolution, railways are a matter reserved to this Parliament. However, commitments were made during the passage of the Scotland Bill in 1998 to devolve a number of measures relating to railways in Scotland. What is known as the McLeish settlement ensures that Scottish Executive Ministers have a significant level of control over Scottish passenger rail services within the overall Great Britain framework. Elements of the package have already been implemented by previous orders under the Scotland Act. Other elements of the McLeish settlement were implemented by the UK Transport Act 2000.

The order amends Section E2 of Schedule 5 to the Scotland Act. It transfers to the Scottish Parliament legislative competence over powers for the promotion and construction of railways in Scotland. Once implemented, project promoters will be able to apply

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to the Scottish Parliament for all the necessary permissions to initiate projects. They will no longer have to go to Westminster to do so.

The order fulfils the commitment made in the McLeish settlement to ensure that promoters of railways, stations and maintenance depots would be able to seek the powers for proceeding with construction from the Scottish Parliament. Until now, all projects involving the construction of railways in Scotland have been scrutinised at Westminster. This has been done either through the order-making procedures of the light railways Acts or through the Private Legislation Procedure (Scotland) Act 1936.

In future, permissions for railway projects that are wholly within Scotland will be granted at Holyrood and only cross-border developments will continue to be dealt with at Westminster. Scottish projects, which I understand will be dealt with by private legislation in the Scottish Parliament, will include both heavy and light railways. Procedures for Private Bills were updated and improved by the Scottish Parliament in November 2000.

Powers for the development of heritage railways have traditionally been granted through light railway orders. These light railway orders will continue to be made, but by Scottish Ministers.

Noble Lords may be aware that a number of new railway projects in Scotland are currently being considered that will require legislation, including the link between Stirling and Alloa. The order is being enacted in advance of any Private Bill associated with these projects being lodged.

The second order, the draft Scotland Act 1998 (Transfer of Functions to the Scottish Ministers etc.) Order 2002, is made under Section 63 of the Scotland Act. Section 63 provides a mechanism to allow functions of a Minister of the Crown to be exercisable by Scottish Ministers in or as regards Scotland instead of, or concurrently with, the Minister of the Crown. The order is being brought forward today primarily as a result of joint efforts between the Scotland Office and the Scottish and Northern Ireland Executives to establish ferry services between Ballycastle in Northern Ireland and Campbeltown in Kintyre.

At the end of 1999, Sea Containers, which had run summer-only commercial operations on the route since 1997, was encountering heavy losses and indicated that the service would not return in summer 2000. The service had been established to take advantage of the strong historical and cultural links between Kintyre and Antrim. It was also to build on the potential tourism benefits of linking these two neighbouring regions of outstanding natural beauty. Loss of the service would affect both already fragile local economies. Moreover, both Ballycastle and Campbeltown had newly built and publicly funded port facilities in danger of becoming permanently redundant.

Having identified that a service could operate only with a public subsidy, the first task was to investigate whether a subsidy could legally be paid by declaring a public service obligation. Following discussions with

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Commission officials, and having seen the evidence provided by consultants, Commission officials agreed informally that a ferry service would not infringe state aids legislation.

Section E3 of Schedule 5 to the Scotland Act reserves responsibility for financial support for shipping services that do not begin and end in Scotland. The uniquely peripheral nature of the Highlands and Islands is such, however, that the primary purpose of any new ferry service to Northern Ireland would always be to assist economic development rather than merely as a commercial transport link. It was on that basis that both the Northern Ireland and the Scottish Executives have from the start of this process undertaken that any eventual subsidy would be found from within devolved resources.

Scottish Ministers have requested this order to allow them to make payments directly to an operator of ferry services between the Highlands and Islands and Northern Ireland. In future, the Scottish Executive will be able to take action to promote ferry services to Northern Ireland to support its economic development role in the Highlands and Islands. It will be for the devolved administrations to decide how to make use of these powers and to take forward the tendering processes. I beg to move.

Moved, That the draft order laid before the House on 2nd May be approved [29th Report from the Joint Committee].—(Lord McIntosh of Haringey.)

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