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Lord Davies of Oldham: My Lords, we are inhibited in the degree of state aid that we can offer. We gave state aid for 12 years; it was worth £26 million last year. Under European rules, that must come to an end. I thought that the party opposite was in favour of organisations being run without state subsidy. The position is clear: we want negotiations to arrive at a position whereby the tunnel is viable and freight traffic, in particular, expanded. That would reduce lorry loads on our overcrowded roads and all the environmental difficulties associated with that. That is why we made strenuous efforts to ensure that EWSI could continue its services, but it is running at a loss, therefore the problems remain. That is why we are in vigorous discussions on these matters.

Lord Snape: My Lords, some of us who were around at the time consistently voted for this to be a public-sector project, unlike some who have recently come to that point of view.

A noble Lord: Shame.

Lord Snape: It might be a shame but it is true. Does the Minister agree that this somewhat bizarre charging regime has almost halved the amount of freight through the Channel Tunnel since the project was completed? Bearing in mind that every cancelled freight train means about another 30 heavy goods vehicles on Britain’s roads, as well as those of northern France, how does such a policy equate with the Government’s concern about global warming?

Lord Davies of Oldham: My Lords, the Government agree with the point that my noble friend is making, not for the first time. They are in favour of sustaining freight flows through the Channel Tunnel because of environmental considerations, but we are limited in the financial support we both ought to and can contribute.

Immigration: Harmondsworth Removal Centre

3.24 pm

Baroness Williams of Crosby asked Her Majesty’s Government:

The Minister of State, Home Office (Baroness Scotland of Asthal): My Lords, Her Majesty’s Chief Inspector of Prisons published her report of the inspection of Harmondsworth removal centre on 28 November. We are in the process of drawing up an action plan, in response to which we will incorporate initial lessons from last week’s disturbance.

Baroness Williams of Crosby: My Lords, I thank the Minister for that reply. There was a major riot on 29 November, the day after the report appeared,

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which was described by Her Majesty’s inspector of prisons as “the poorest report” she had ever delivered on any immigration centre. The riots began when a guard refused to allow the detainees to see on television Anne Owers’s report into their own detention centre. Will the action plan, which I welcome, look at the issue on which Anne Owers puts her finger: the very bad relations between the staff and detainees? More particularly, will it look at the fact that staff were not trained to recognise torture victims, of whom there were a substantial number in the detention centre? Incidentally, torture victims should not have been returned.

Baroness Scotland of Asthal: My Lords, we intend to look at all the issues raised by Her Majesty’s inspector of prisons in her report. I can reassure the noble Baroness that many of the issues had already been raised with the contractors. She will be aware that we were in dispute with the contractors until September this year, when the matter was settled. We received £5,096,000 as a result, together with some guarantees about behaviour, but there is much to do.

Lord Ramsbotham: My Lords, when I inspected Campsfield House immigration centre some seven years ago, one of the problems was a lack of line management by officials from the Immigration and Nationality Directorate. Can the Minister confirm whether it is true that officials from the Immigration and Nationality Directorate have been withdrawn from Harmondsworth for other tasks and replaced by administrators, which is not the same thing as regards helping the staff to look after detainees?

Baroness Scotland of Asthal: My Lords, the plan in place involves rigorous attempts to manage the situation in Harmondsworth. That was the basis of the concerns expressed and of the disagreement, therefore, between management. There is no suggestion that the management put in place by IND was in any way defective.

Lord Corbett of Castle Vale: My Lords, why are so many failed asylum seekers detained for so long at Harmondsworth? I have read about some examples of the difficulties of deportation, which lies behind the high numbers being kept there for such long periods.

Baroness Scotland of Asthal: My Lords, the period that people now spend at Harmondsworth has greatly decreased. About 50 per cent now stay for approximately seven days, and I am given to understand that the longest period, for a small percentage, is about two months. The number of people going through Harmondsworth has greatly increased, as has the speed at which they do so.

Baroness Anelay of St Johns: My Lords, what about the risk posed by detainees transferred from the prison estate to Harmondsworth? The report clearly states that the information about the risk such people pose is still of very poor quality. Why has the Home Office allowed that to happen with information from prisons, when it prejudices safety at Harmondsworth? What will it do to address that problem?

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Baroness Scotland of Asthal: My Lords, the director-general of the IND and the director-general of NOMS have been working very closely together for a number of months to ensure that the risks involved in moving detainees from one area to another are limited to the narrowest base possible.

Lord Avebury: My Lords, further to the question of the noble Lord, Lord Corbett, did the Minister notice that Anne Owers commented on the increase in the average length of detention from two to six weeks? To what extent does she think this is a product of the combined effects of the Legal Services Commission’s merits testing, cuts in legal aid in 2005 and the heavy burden of paperwork on practitioners, which has resulted in many going out of business or refusing to take some cases, leading to an increased caseload at Harmondsworth?

Baroness Scotland of Asthal: My Lords, I am not aware that that has made a significant impact but I shall be happy to find out what contribution, if any, it has made. The Legal Services Commission has been working very hard to enhance the quality of those who undertake that work because unskilled staff tend to work more slowly, to the burden of the system and the people they purport to advise.

The Lord Bishop of Chelmsford: My Lords, does the noble Baroness accept that when 500 people—mainly young men, multinational and multi-faith—who are on their way out of the country are locked up in an institution and treated like some of the worst criminals in the Prison Service, that is a pretty lethal cocktail? Will she not only consider what needs to be done at Harmondsworth but look more radically at this policy?

Baroness Scotland of Asthal: My Lords, the question of relationship is very important, and I agree with the right reverend Prelate on that point. However, it is also fair to say that Anne Owers’s report identified good relations with senior officers and poorer relations with other officers and a need to change. We are addressing that matter; a new centre manager has been put in place. He was previously an inspector and knows precisely what needs to be done to improve the situation.

Business of the House: Extradition Act 2003 (Amendment to Designations) Order 2006

3.31 pm

The Minister of State, Department for Environment, Food and Rural Affairs (Lord Rooker): My Lords, I beg to move the Motion on the Order Paper standing in the name of the Lord President.

Moved, That leave be given to advance the Motion for the approval of the draft Extradition Act 2003

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(Amendment to Designations) Order 2006 from Tuesday 12 December to Monday 11 December.—(Lord Rooker.)

On Question, Motion agreed to.

Representation of the People (Combination of Polls) (England and Wales) (Amendment) Regulations 2006

Lord Evans of Temple Guiting: My Lords, I beg to move the first Motion standing in my name on the Order Paper.

Moved, That the draft regulations laid before the House on 7 November be approved. Considered in Grand Committee on 5 December, First Report from the Statutory Instruments Committee.—(Lord Evans of Temple Guiting.)

On Question, Motion agreed to.

Animal Health and Welfare (Scotland) Act 2006 (Consequential Provisions) (England and Wales) Order 2006

Lord Evans of Temple Guiting: My Lords, I beg to move the second Motion standing in my name on the Order Paper.

Moved, That the draft order laid before the House on 6 November be approved. Considered in Grand Committee on 5 December, First Report from the Statutory Instruments Committee.—(Lord Evans of Temple Guiting.)

On Question, Motion agreed to.

Scotland Act 1998 (Transfer of Functions to the Scottish Ministers etc.) (No. 3) Order 2006

Lord Evans of Temple Guiting: My Lords, I beg to move the third Motion standing in my name on the Order Paper.

Moved, That the draft order laid before the House on 6 November be approved. Considered in Grand Committee on 5 December, First Report from the Statutory Instruments Committee.—(Lord Evans of Temple Guiting).

On Question, Motion agreed to.

Legal Services Bill [HL]

3.32 pm

The Secretary of State for Constitutional Affairs and Lord Chancellor (Lord Falconer of Thoroton): My Lords, I beg to move that this Bill be now read a second time.

The Legal Services Bill is an important landmark in the development, reform and modernisation of our framework for legal services regulation and provision.

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The Bill puts consumers’ interests at the heart of the regulatory arrangements. It provides for a Legal Services Board to provide strong, independent oversight with day-to-day regulation left to front-line regulators; statutory objectives for those with regulatory duties and principles for the legal profession; alternative business structures to enable lawyers and non-lawyers to work together on an equal footing to deliver legal and other services—external investment will also be possible; a single and fully independent Office for Legal Complaints; and a mechanism to protect consumers if new problems occur.

I pay tribute to Sir David Clementi, whose independent review brought a refreshing new dimension to the debate and set the direction for change which has shaped the thinking of not only Government but the stakeholders. I also thank those members of Which?, the National Consumer Council, Citizens Advice, the Federation of Small Businesses, and the Office of Fair Trading who, through membership of our Consumer Advisory Panel, have helped to shape the Bill before your Lordships today. I would also like to record my appreciation for the constructive way in which the leaders of the professional bodies—the Law Society, the Bar Council and others—have approached this major programme of change.

The Bill was published in draft earlier this year. I pay a genuine and particular tribute to the members of the Joint Committee on the draft Legal Services Bill, chaired by the noble Lord, Lord Hunt of Wirral, whom I am glad to see in his place. The committee carried out a very thorough scrutiny of the draft Bill against a pressing timetable. I consider that the Bill before the House today is now much improved as a result of the committee’s invaluable work.

The law and lawyers will at some stage touch the lives of just about every member of our society. We have a duty to ensure that the regulatory arrangements are fit for purpose. Our analysis is clear. Three underlying issues have led us to conclude that change in this sector is long overdue. First, there is a lack of consumer confidence in the way in which complaints about lawyers are dealt with. This is rooted partly in the way in which complaints have historically been handled by the Law Society, with well documented problems over the speed and quality of complaints-handling dating back to the 1980s. But it is not the Law Society’s problem alone. We hear a great deal about how much better the Bar is at handling complaints. One third of complaints dealt with by the Bar are referred to the Legal Services Ombudsman for reconsideration.

Consumers argue that the handling of complaints takes too long, focusing on technicalities rather than on providing quick and fair redress to the consumer. They argue that they can have no confidence in a system where complaints are dealt with by a lawyer’s own professional body. These public perceptions can have a corrosive effect on the reputation of the sector more generally.

The second issue is the potentially restrictive effect of the way in which the professions operate. In March 2001, the Office of Fair Trading published a report,

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Competition in Professions, which argued that such restrictions had the potential to drive up costs and prices, limit access and choice, reduce value for money, and inhibit innovation in the supply of services. That is all to the ultimate detriment of the public.

The third issue is what some have called the “regulatory maze”, under which we see a wide range of oversight regulators with overlapping responsibilities and few clear objectives. In July 2003, following an analysis of the regulatory framework, my department published a report which concluded that the current regulatory system was,

and we recommended that an independent review be carried out. Later that month, I appointed Sir David Clementi to carry out that review. Sir David published his final report in December 2004. In his foreword, he observed:

The problems are not restricted to oversight regulators. The legal professional bodies have contributed to the “maze” by failing to separate the exercise of their regulatory and representative functions until now. I congratulate both the Law Society and the Bar on their positive and proactive approach to this problem. They have already established separate regulatory boards to provide for a clear separation of these functions. I am very happy to see many members of those bodies watching in the Gallery today.

While our proposals are based largely on those of Sir David Clementi, a number of stakeholders saw a need for further analysis to underpin some of his main recommendations. The department therefore commissioned leading academics to carry out independent research in the following specific areas: how to make an oversight regulator an effective partner of front-line regulators; drivers for, and benefits of, external financing of law firms; internal incentives under various ownership structures; and the competition impact of restrictions on various forms of partnerships. The academics presented their work to the department in July 2005 and this informed the White Paper which we published in October of that year. As I have said, we have also had the benefit of pre-legislative scrutiny and have further refined our proposals in the light of the Joint Committee’s very helpful consideration. I shall now try to summarise the Bill.

Part 1 sets out the statutory objectives. Regulators must have clear objectives to guide them in exercising their functions and to provide a basis on which consumers can hold them to account. Part 1 sets out these objectives and principles. They will apply to the LSB, approved regulators and the Office for Legal Complaints. Here we have moved further than Sir David’s recommendation and have refined his suggested objective of,

so that the Bill refers to,

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“Independent” was added at the suggestion of the Joint Committee. “Diverse” was added to ensure that the board and approved regulators work together to remove the barriers that exist in the recruitment, retention and progression of legal professionals. We have also included a specific duty for the LSB to have regard to the public interest, again at the suggestion of the Joint Committee.

Part 2 of the Bill makes provision for the new oversight regulator, the Legal Services Board, to provide independent oversight of legal regulatory bodies. While day-to-day regulation should remain with the professions, the LSB will have a range of powers available to oversee approved regulators. The Secretary of State will appoint the chair and members of the LSB, and will do so subject to oversight of the Commissioner for Public Appointments. The Secretary of State can also remove members of the LSB subject only to strict criteria set out at Schedule 1 to the Bill. The Joint Committee expressed concerns about this and suggested that such appointments and dismissals should be made only after full consultation with the Lord Chief Justice. While I can see why that would give comfort to members of the legal profession, I have to say it gives little comfort to consumers, who rightly see the Lord Chief Justice, although he is a man beyond reproach, as another lawyer in the process.

There is nothing unusual about the arrangement proposed in this Bill. The chair and board members of many other regulators may be appointed and dismissed by the relevant Secretary of State; for example, the chair of the Financial Services Authority has been appointed since its creation by the Chancellor. I see no evidence that the financial sector is either not independent or suffering as a result of that. The chair and members of the boards of the Competition Commission and the Office of Fair Trading are appointed by the Secretary of State for Trade and Industry, without the requirement for external consultation. Again, I see no indication that the UK is any less competitive as a result of that. Of course the Lord Chief Justice himself has been appointed by the Prime Minister for many years. Nobody has suggested that the judiciary lacks independence as a result.

Part 3 of the Bill deals with activities described as “reserved legal activities”. These are the activities that will come under the regulatory control of the LSB such as the provision of advocacy and litigation services. It provides for the offences of offering or providing these services when not entitled to do so. It provides, too, for alterations to be made to the list of these activities by affirmative order. This is an important change because under the present arrangements additional activities cannot be brought under regulatory control without primary legislation. This involves a delay which can mean that consumers remain unprotected for months or even years.

Part 4 of the Bill sets out the arrangements under which the LSB will regulate “approved regulators” such as the Law Society and the Bar Council. This defines the regulatory and representative functions of

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approved regulators and importantly, at Clauses 28 and 29, provides for a proper separation in the exercise of these functions. While the LSB is prohibited from interfering in their representative functions it requires approved regulators to have internal governance arrangements that prevent regulatory decisions being unduly influenced by representative interests. The proper resourcing of regulatory boards is also required.

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