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The system requires that holding assets or investments has a cost—that is what the water company will be doing. It should be transparent and reflected in the budgets. The Treasury has determined the cost of these investments in the GoCo, which should be at a rate of 5.8 per cent of the value of the investment, so the amount will be a charge on the public expenditure in Northern Ireland every year. That is the starting point from which Northern Ireland Ministers have virtually no discretion. That does not mean it cannot be discussed within government. As that cost arises, I presume, for water and sewerage, it is reasonable that those who receive the service—both domestic and non-domestic—should pay it. I do not think anybody should mention non-domestic cases today, so I will not answer any questions on it, but they are equally involved in this.

11 Dec 2006 : Column 1396

4.45 pm

Any and all amounts paid by way of dividends are available for investment in the public service in Northern Ireland. The money will be retained in Northern Ireland—that is what the investment is all about. We are prepared to raise again within government the figure of 5.8 per cent compared with 5.1 per cent. There is probably a really good accountancy Treasury reason for that, but it is a reasonable question to be asked by the average person on the street in Northern Ireland, who is being asked to pay for something that they thought they already paid for but did not—it is an extra charge over which they pay now. It brings them somewhere near the charges in England, Scotland and Wales, because they are, massively, double the amount of household charges. Therefore, I think it behoves us to go back into government and at least raise the question again.

The noble Lord, Lord Glentoran, asked about the regulator’s powers. Certainly the annexe—indeed, the whole letter that was issued to him on Friday, I hope, and, if not, at the weekend—will be put in the Library, because it sets out clearly the powers of the regulator and where the authority is. In respect of the question from, I think, the noble Lord, Lord Trimble, the regulator’s powers are enshrined in the legislation; they do not derive from the licence. It is very important to note that. The details of the GoCo’s appointments are in the licence, but the powers are enshrined in legislation, so that cannot be mucked about with in the licence—not that we intend to do so.

Another important point, because the regulator has work to do, is that the order makes provisions for the enforcement of the GoCo’s duties and obligations. The department will provide the authority with a general authorisation to exercise its full enforcement of the undertaker’s statutory duties from 1 April 2007, or as soon as practicable. I am not sure what day of the week 1 April is, but the regulator will start work straightaway, from day one or as soon as is practicable, with those powers.

It is true that the draft licence was issued for consultation on 4 December. We believe that a lot of time has been spent on it—seven months, through an engagement with key stakeholders. We believe it builds on the best regulatory practice and provides the means by which the regulator can ensure that Northern Ireland Water is focused on efficiency and consumer service. It protects the interest of customers through robust regulatory scrutiny while setting the appropriate framework. Importantly, the draft licence would improve on the licences in place in England and Wales by, for example, requiring Northern Ireland Water to submit an estate management plan to ensure high visibility of any plans to sell surplus land. In an early part of my speech I described the rules for disposing of land or not. Some land may have been acquired by compulsory purchase. Land may be acquired in the future, and one has to look at the position, but certainly the regulators have got to have a key power in that.

The regulator’s powers are important and can be dealt with only at some length, but are nevertheless dealt with in the annexe in the letter that I sent to the

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noble Lord, Lord Glentoran. In respect of enforcement, a wide range of powers go to the regulator or to the authority on authorisation by the government department. But from 1 April, the department will issue a general authorisation to the regulator to carry out enforcement where there is a choice between it and the department. That annexe, which will be placed in the Library, sets out where the power is clearly for the authority, or where it is the department or the authority. We have said that, where there is a choice between the regulator and the department as to who does what, the regulator will exercise the powers. I cannot be clearer than that. We have protected the poorest people in Northern Ireland.

I genuinely apologise that this measure is in the form of an Order in Council, because it has not been subject to the scrutiny that a proper Bill would receive in this or the other place. Although I do not want to upset the noble Lords sitting behind me to my right, I repeat that, if the Assembly had reconvened last week or the week before, the order would have been its responsibility. In fact, it is the Assembly’s responsibility—it should not be ours. We have repeatedly made it clear that, while the politicians of Northern Ireland, of whatever party and for whatever reason, refuse to take up their responsibilities, we will not stop the reform programme for the people of Northern Ireland, in whatever area—be it local government or rates reform.

Local government in Northern Ireland benefits from this order as extra money can flow to the public services. If the measure is not carried, it puts at risk the £200 million a year borrowing power secured previously by the respected former First Minister. With the order, more money can flow into public services in Northern Ireland and, above all, Northern Ireland can get a water service which is at least equal to that in England and Wales. As I said, at the moment the quality and parameters of the service are like those in England and Wales 16 years ago. It is time to move on. The costs are not onerous either for the poorest or the wealthiest in Northern Ireland. I simply ask for support for the order.

Lord Trimble: My Lords, I shall try not to take too much time in responding. However, I have to observe that the Minister spent a lot of time on the amount of the charge as though it was being opposed here, which it is not. It was not necessary for him to spend so much time on that, either when he first introduced the order or in his response. I make the same comment about the detail in which he went through the slow-motion legislative timetable, which is not relevant to this matter. The Assembly and its Members are familiar with the issues here, and I am confident that, if it went to the Assembly, they could deal with it in half, or perhaps less, the time stated in the timetable read out by the Minister.

I turn to the matters of substance. There was a fear of privatisation or partial privatisation. I read out an e-mail and, in response to that, the Minister said that no decision had been made. The e-mail did not say that a decision had been made but it pointed very

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clearly in a certain direction. All of us who are familiar with the situation know precisely the direction in which the Treasury intends things to go.

The order is detailed and complex in respect of regulation, and I am not sure that I agree entirely with what the Minister said. However, I am at a slight disadvantage. The noble Lord, Lord Glentoran, let me glance at the letter that he had received but I did not have the opportunity to study it. The Minister did not think of sending a letter to me, although he might have thought that that was of some importance. I certainly thought that it was, but I am biased on the matter. Not having received or studied the letter, I am not in a position to sign off what the Minister might have said. I did not find what he said particularly clear as I listened to him this afternoon, but that might have been down to his delivery or my understanding.

On the matter with which I concluded when I spoke earlier—namely, the rate of return—the Minister made two comments. He said there was a case for looking at it again and that it behoved him to go back and ask the question again. While that may be an indication of good intent, it is not a matter of any great substance on which I can base a decision.

I thank other noble Lords who spoke in support. I particularly welcome the comment of the noble Lord, Lord Morrow, on the reform and reinvestment initiative that we undertook.

Finally, I commend to the House the words of the noble and learned Lord the Lord Chancellor last week. He referred to the excellent report by the Joint Committee chaired by the noble Lord, Lord Cunningham, on the conventions of the House—and indeed it is excellent. In commending it to the House, the Lord Chancellor will also have commended the Joint Committee’s recommendation that the House should exercise its powers to vote down Orders in Council in appropriate cases. I think that this is an appropriate case. I would like to test the opinion of the House.

4.55 pm

On Question, Whether the said amendment shall be agreed to?

Their Lordships divided: Contents, 83; Not-Contents, 158.

Division No. 1


Addington, L.
Alderdice, L.
Alton of Liverpool, L.
Arran, E.
Ashdown of Norton-sub-Hamdon, L.
Avebury, L.
Barker, B.
Blood, B.
Bonham-Carter of Yarnbury, B.
Bradshaw, L.
Browne of Belmont, L. [Teller]
Chidgey, L.
Chorley, L.
Clement-Jones, L.
Cobbold, L.
Cotter, L.
Dholakia, L.
Dykes, L.
Falkland, V.
Falkner of Margravine, B.
Fearn, L.
Flather, B.
Fritchie, B.
Garden, L.
Gardner of Parkes, B.
Goodhart, L.
Hamwee, B.

11 Dec 2006 : Column 1399

Harris of Richmond, B.
Holme of Cheltenham, L.
Inglewood, L.
Jacobs, L.
James of Blackheath, L.
Jones of Cheltenham, L.
Kilclooney, L.
Laird, L. [Teller]
Lee of Trafford, L.
Mackie of Benshie, L.
McNally, L.
Maddock, B.
Maginnis of Drumglass, L.
Mar and Kellie, E.
Mawhinney, L.
Miller of Chilthorne Domer, B.
Molyneaux of Killead, L.
Monson, L.
Morrow, L.
Neuberger, B.
Newby, L.
Nickson, L.
Northbrook, L.
Northesk, E.
Northover, B.
Oakeshott of Seagrove Bay, L.
O'Neill of Bengarve, B.
Palmer, L.
Park of Monmouth, B.
Rana, L.
Redesdale, L.
Roberts of Llandudno, L.
Roper, L.
Ryder of Wensum, L.
Saltoun of Abernethy, Ly.
Scott of Needham Market, B.
Sharp of Guildford, B.
Sharples, B.
Shutt of Greetland, L.
Slim, V.
Smith of Clifton, L.
Steel of Aikwood, L.
Steinberg, L.
Swinfen, L.
Tebbit, L.
Teverson, L.
Thomas of Walliswood, B.
Thomas of Winchester, B.
Tonge, B.
Tope, L.
Tordoff, L.
Trimble, L.
Tyler, L.
Wallace of Saltaire, L.
Walmsley, B.
Williams of Crosby, B.


Adonis, L.
Ahmed, L.
Amos, B. [Lord President.]
Anderson of Swansea, L.
Andrews, B.
Archer of Sandwell, L.
Ashley of Stoke, L.
Bach, L.
Barnett, L.
Bassam of Brighton, L.
Berkeley, L.
Bernstein of Craigweil, L.
Bhattacharyya, L.
Billingham, B.
Bilston, L.
Blackstone, B.
Bledisloe, V.
Borrie, L.
Boston of Faversham, L.
Boyd of Duncansby, L.
Bradley, L.
Bragg, L.
Brett, L.
Brooke of Alverthorpe, L.
Brookman, L.
Brooks of Tremorfa, L.
Carter of Coles, L.
Chandos, V.
Christopher, L.
Clark of Windermere, L.
Clarke of Hampstead, L.
Clinton-Davis, L.
Cohen of Pimlico, B.
Corbett of Castle Vale, L.
Crawley, B.
David, B.
Davidson of Glen Clova, L.
Davies of Coity, L.
Davies of Oldham, L. [Teller]
Dean of Thornton-le-Fylde, B.
Donoughue, L.
D'Souza, B.
Dubs, L.
Evans of Parkside, L.
Evans of Temple Guiting, L.
Falkender, B.
Farrington of Ribbleton, B.
Filkin, L.
Ford, B.
Foster of Bishop Auckland, L.
Foulkes of Cumnock, L.
Fyfe of Fairfield, L.
Gale, B.
Gibson of Market Rasen, B.
Golding, B.
Gordon of Strathblane, L.
Goudie, B.
Gould of Brookwood, L.
Gould of Potternewton, B.
Graham of Edmonton, L.
Gregson, L.
Griffiths of Burry Port, L.
Grocott, L. [Teller]
Hannay of Chiswick, L.
Harris of Haringey, L.
Harrison, L.
Hart of Chilton, L.
Haskel, L.
Haskins, L.
Haworth, L.
Henig, B.
Hilton of Eggardon, B.
Hogg of Cumbernauld, L.
Hollis of Heigham, B.
Howarth of Newport, L.
Howells of St. Davids, B.
Howie of Troon, L.
Hughes of Woodside, L.
Hunt of Chesterton, L.
Hunt of Kings Heath, L.
Irvine of Lairg, L.
Janner of Braunstone, L.
Jay of Paddington, B.
Jones, L.
Jones of Whitchurch, B.
Jordan, L.
Kennedy of The Shaws, B.
King of West Bromwich, L.
Kingsmill, B.
Laming, L.

11 Dec 2006 : Column 1400

Lea of Crondall, L.
Leitch, L.
Lipsey, L.
Listowel, E.
Lockwood, B.
Lofthouse of Pontefract, L.
McDonagh, B.
Macdonald of Tradeston, L.
McIntosh of Haringey, L.
McIntosh of Hudnall, B.
MacKenzie of Culkein, L.
Mackenzie of Framwellgate, L.
McKenzie of Luton, L.
Mallalieu, B.
Masham of Ilton, B.
Mason of Barnsley, L.
Massey of Darwen, B.
Maxton, L.
Mitchell, L.
Montgomery of Alamein, V.
Moonie, L.
Morgan, L.
Morgan of Drefelin, B.
Morris of Aberavon, L.
Morris of Manchester, L.
Morris of Yardley, B.
Murphy, B.
Northbourne, L.
O'Neill of Clackmannan, L.
Patel of Blackburn, L.
Paul, L.
Pitkeathley, B.
Plant of Highfield, L.
Prosser, B.
Quin, B.
Radice, L.
Ramsay of Cartvale, B.
Randall of St. Budeaux, L.
Rea, L.
Rendell of Babergh, B.
Richard, L.
Rooker, L.
Rosser, L.
Rowlands, L.
Royall of Blaisdon, B.
St. John of Bletso, L.
Scotland of Asthal, B.
Sewel, L.
Simon, V.
Snape, L.
Soley, L.
Strabolgi, L.
Taylor of Bolton, B.
Temple-Morris, L.
Thomas of Macclesfield, L.
Thornton, B.
Triesman, L.
Truscott, L.
Tunnicliffe, L.
Turnberg, L.
Turner of Camden, B.
Uddin, B.
Varley, L.
Warner, L.
Warwick of Undercliffe, B.
Whitaker, B.
Wilkins, B.
Williams of Elvel, L.

Resolved in the negative, and amendment disagreed to accordingly.

Motion agreed to.

Extradition Act 2003 (Amendment to Designations) Order 2006

5.05 pm

The Minister of State, Home Office (Baroness Scotland of Asthal) rose to move, That the draft order laid before the House on 7 November be approved. First Report from the Statutory Instruments Committee.

The noble Baroness said: My Lords, we are concerned here with the further secondary legislation required to amend the Extradition Act 2003 (Designation of Part 1 Territories) Order 2003 and the Extradition Act 2003 (Designation of Part 2 Territories) Order 2003. This is to reflect the separation of Serbia and Montenegro into two independent states and the accession of Bosnia-Herzegovina to the European Convention on Extradition, and to allow Romania and Bulgaria to operate the European arrest warrant procedure when they accede to the European Union on 1 January 2007. These amendments are necessary to ensure that the United Kingdom is able to comply with its obligations under the relevant international extradition agreements.

A referendum was held in Montenegro on 21 May 2006, and its citizens voted to separate from Serbia. Montenegro subsequently declared independence in June, and Montenegro and Serbia are now two separate countries. The amendment simply reflects

11 Dec 2006 : Column 1401

the new political status of those two countries, and extradition will continue to take place under the European Convention on Extradition, to which they are both a party.

Bosnia-Herzegovina is now also a party to the European Convention on Extradition (ECE), and an amendment is needed to reflect the changes required to update our extradition arrangements with that country, which currently fall under an old bilateral extradition treaty with Yugoslavia. That treaty required prima facie evidence in support of an extradition request, which is not a requirement under the European Convention on Extradition. This instrument therefore amends the designation of Bosnia-Herzegovina to make us comply with the terms of the ECE. This will mean that Bosnia-Herzegovina will no longer be required to submit prima facie evidence in support of its extradition requests in the same way as the UK is no longer required to provide prima facie evidence in any extradition requests made to Bosnia-Herzegovina.

Your Lordships will be aware that on 1 January 2007 Romania and Bulgaria will accede to the European Union. That means that, from that date onwards, EU extraditions with those states will cease to take place under the European Convention on Extradition and will fall under the European arrest warrant (EAW) procedure instead. It is therefore necessary to redesignate them as Part 1 territories to ensure that we comply with our obligations under the framework decision on the EAW.

The accession of Romania and Bulgaria to the EU was not a decision taken lightly. The European Council and the Commission monitored both countries very carefully in order to be sure that they were ready to accede to the EU. Robust benchmarks for progress in justice and home affairs have been set for both countries. The benchmarks cover continued reform of the judiciary in both countries, including measures to enhance efficiency, transparency and accountability. The Commission will monitor them closely and will report to the Council and European Parliament on progress against the benchmarks by June 2007. In the event that they are not addressed adequately, the Commission can trigger the justice and home affairs safeguard, which means that it can suspend, on a temporary basis, specific rights of Bulgaria and Romania under EU laws and standards; for example, that could enable current member states to refuse automatic recognition and enforcement of certain civil and criminal judgments and arrest warrants in Bulgaria or Romania. That could include the European arrest warrant. The monitoring mechanism is a robust and unprecedented approach, which will also act as a powerful lever for further reform.

Failure to redesignate Bulgaria and Romania would place the United Kingdom directly in breach of our international obligations under the framework decision on the European arrest warrant. We have had extradition relations with Bulgaria and Romania since they became parties to the European Convention on Extradition in September 1995 and December 1997 respectively. Since that time they have not had to provide prima facie

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evidence in support of extradition requests made to the United Kingdom. Indeed, although the number of extradition requests between our two countries has been small, the arrangement is working well.

In any event, we are satisfied that sufficient safeguards are in place for those who may find themselves the subject of an European arrest warrant request from Bulgaria and Romania, as indeed there would be for any request received from one of our extradition partners. The Extradition Act 2003 contains a number of very effective safeguards. For example, the subject of a European arrest warrant cannot be surrendered to another member state if it appears that he or she is being prosecuted or punished on account of race, religion, nationality, gender, sexual orientation or political opinions. Extradition would also be barred if the judge decided that it would not be compatible with human rights. No UK national, nor indeed a national of any country, will be extradited to another country if it is believed that to do so would be a flagrant breach of the human rights of the person sought. In the event that a UK national was extradited to another country, they would be entitled to consular support from the UK’s embassy or high commission in the country concerned.

Romania and Bulgaria are also parties to the European Convention on Human Rights, which obliges them to ensure that any subsequent domestic criminal trial does not breach a person’s human rights under that convention.

I hope that, with that explanation, I can invite the House to agree to this order. I beg to move.

Moved, That the draft order laid before the House on 7 November be approved. First Report from the Statutory Instruments Committee.—(Baroness Scotland of Asthal.)

Lord Kingsland: My Lords, I would like to ask the Minister whether these states have given the benefit of the forum exemption to their own citizens, either with respect to Article 7(1) of the European Convention on Extradition, in the case of Montenegro and Bosnia, or to Article 4(7)(a) in the Council framework decision of 13 June 2002 on the European arrest warrant, in the case of Romania and Bulgaria. As your Lordships know, we have not done so in our own legislation.

I raise this issue, first, in the context of reciprocity. That was, of course, the central question in the great debate over the United States extradition treaty. We could not understand why the Government negotiators had not sought, let alone achieved, what Ireland and France had succeeded in achieving effortlessly; that is to say, the insertion of forum protection in the treaty to offset the continued requirement of the United States that we show probable cause.

The noble Baroness should not be lulled into thinking that, just because we decided not to vote to send the matter back to another place for a third time, we found the Government’s arguments in any way convincing. We, of course, have the right to do so, just as the Parliament Acts of 1911 and 1949 can, in

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response, be invoked by the Government. These are constitutional powers given to us by the elected House.

This right, I entirely accept, should be used extremely sparingly and only in appropriate circumstances. In the American case, the view was taken that, despite the breathtaking irresponsibility of the Government in the way they conducted the negotiations, we were faced with a concluded treaty with both states on the point of exchanging instruments of ratification.

5.15 pm

Two other considerations influenced us. Our amendments were added to a really substantial Bill which otherwise had nothing whatsoever to do with extradition. If the Government had invoked the Parliament Act, the whole Bill—a Bill which contained many good things that needed speedily to reach the statute book—would have been delayed. Moreover, it was plain that the revolt by the Government’s Back-Benchers against ratification of the treaty was substantially at an end. It may be, of course, that if we are one day to become an elected House, in similar circumstances a different approach would be adopted.

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