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Lord Davies of Oldham: My Lords, I do not think that my noble friend is being quite fair to the governor and the Monetary Policy Committee by suggesting that inflation is the only issue they consider, although it is certainly very important that it is kept under control. My noble friend is absolutely right to note that of course the governor has

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concentrated on the question of liquidity for British institutions in circumstances where a whole range of resources has dried up internationally, but he will also appreciate that the governor has been concerned to ensure that those who caused the crisis should pay for the crisis, and not the British taxpayer.

Lord Forsyth of Drumlean: My Lords, could the quid pro quo for central banks providing enhanced liquidity to banks be that the banks themselves do more to strengthen their balance sheets by raising capital? What is the Government’s position on that?

Lord Davies of Oldham: My Lords, the Government’s position is to agree with the noble Lord, which he might find an exceptional occurrence. It is necessary that we see a significant change in bank balance sheets. A number of institutions left themselves very exposed to the developments that have occurred internationally in recent months. That exposure has cost institutions dear, but it has the potential to have a significant effect on the wider economy.

Lord Oakeshott of Seagrove Bay: My Lords, do the Government agree that if a bank is too big to be allowed to fail, it is also too big to be allowed to be taking billion-pound bets with taxpayers’ money? It is high time that Britain’s biggest banks stopped gambling and started banking again. Would not Mr Bob Diamond in particular, the boss of the Barclays casino, who is on £21 million a year, be happier working in Las Vegas rather than in London?

Lord Davies of Oldham: My Lords, the pouring of moral obloquy upon the various actors gives a great sense of self-satisfaction but does not produce any direct remedy to the position. It is important that banks recognise that, so far as the authorities are concerned, the banks will bear the costs of their misjudgments, but it is also important that we introduce the necessary regulation to ensure that banks are better placed to face such crises in future. As noble Lords will appreciate, the Government have impending legislation for regulation in these areas.

The Lord Bishop of Chester: My Lords, does the Minister agree that there may be remedy in the verse in the psalm that was read at Prayers, which says that we should not incline our hearts to covetousness? One of the lessons of this whole affair is that responsible borrowing and lending must be the foundation of any society, not least in relation to vulnerable groups and young people.

Lord Davies of Oldham: My Lords, the House will appreciate the sentiments expressed by the right reverend Prelate. Covetousness has perhaps outreached the banks and their ability to control the level of debts they were potentially incurring. However, we want to see that society’s financial needs are transferred to these significant people in terms of proper responsible banking. The Government and this House will have to play their part with the appropriate legislation.

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Baroness Noakes: My Lords, we have heard this week of Northern Rock’s plans to create hundreds of thousands of mortgage orphans, First Direct has closed its doors to new mortgages and other banks have put their rates up. Do the Government have any policies to mitigate the impact of these factors on stressed borrowers?

Lord Davies of Oldham: My Lords, the Government assured small investors regarding banks right at the beginning. With regard to stressed borrowers, the important thing is that we get the situation with banks and building societies into some degree of order. A large number of our institutions are perfectly healthy and safe, although they face the problem of being able to get the resources in order to maintain their mortgage offers. Part of that, so far as the ordinary mortgage holder is concerned, is interest rates, which the Bank of England is concerned to control.

Taxation: Foreign Footballers

3.29 pm

Lord Faulkner of Worcester: My Lords, I beg leave to ask the Question standing in my name on the Order Paper. In doing so, I declare an interest as vice-chairman of the Cardiff Millennium Stadium.

The Question was as follows:

Lord Davies of Oldham: My Lords, the Government do not withhold tax from payments made by non-UK football clubs to their employees when they play for their club in team competitions in the United Kingdom. Non-resident footballers may be liable to UK tax on payments relating to games played in the UK and would have to complete a tax return for any UK tax liabilities arising. The legislation and its implementation have remained unchanged for many years.

Lord Faulkner of Worcester: My Lords, I thank my noble friend for that Answer. He will have seen press reports at the weekend that according to UEFA the Football Association’s bid to stage the 2010 Champions League final at Wembley was dismissed for the reason that Her Majesty's Government, unlike the authorities in Germany and Spain, could not give an undertaking that the players taking part would not be subject to British taxation. As my noble friend knows, UEFA takes the view that they should be taxed only in their country of domicile. As the Government’s position may have been misunderstood, would Ministers allow my noble friend Lord Triesman to get back in touch with Mr Platini and make it clear that we are anxious to see the 2011 Champions League final at Wembley and indeed the 2012 final at Cardiff? Will he ensure that no taxation issues stand in the way of that or of our staging other international events, such as the ICC’s World Twenty 20 Cricket Cup in 2009?

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Lord Davies of Oldham: My Lords, the Government are concerned to safeguard the interests of international sport in terms of its performance in the United Kingdom. But, of course, we did stage the European cup finals in 2002 and 2004 under the tax arrangements that are still in force and have obtained over the past two decades. It may be that UEFA has misunderstood the position, which has caused it to make this decision on 2010—but we note that it is leaving open the decision on where the final should take place in 2011. Wembley will undoubtedly be a key bidder. There is time for us to clear up this matter.

Lord Triesman: My Lords, I declare an interest as the chairman of the Football Association. I assure the House that the competition to stage the finals is very tough and that people make bids in that light. Will my noble friend the Minister give the House an explicit assurance that the Treasury and all government departments will at least match the terms on which European Governments enable their sports federations to make bids successfully for these events, including waiving tax? Can he confirm that the Treasury actually understands that that is the necessary condition for delivering the decade of great sport in the United Kingdom that we have been promised?

Lord Davies of Oldham: My Lords, I was aware that my noble friend was chair of the Football Association. I emphasise that we are at present pursuing a tax regime which has ensured in the past that these games have come to the United Kingdom. If there is a change in the situation, of course we will examine it with the greatest care, but the change seems to have occurred in other countries. This country has reciprocal bilateral arrangements with other countries, made on the basis of firm agreements. Therefore, we will have some work to do to identify the nature of UEFA’s concern. In so far as UEFA expressed it in terms of Britain withholding tax with regard to matches played here, that is not so. UEFA is labouring under a misapprehension.

Lord Oakeshott of Seagrove Bay: My Lords, we all seem to be declaring interests today, so I should declare that I am an Arsenal season ticket holder and that my son works for the FA.

As the noble Lord made clear, we have just lost the 2010 UEFA cup final to Hamburg, so we are one-nil down against the Germans, and the ref has now given us a chance to equalise. How long does it take the Treasury to pick up the phone to Mr Platini and make the position clear? Are the Government more worried about having state visits at Arsenal rather than football finals?

Lord Davies of Oldham: My Lords, I think that the country appreciated that Arsenal was the host for part of the state visit last week, and I say that as a Tottenham Hotspur supporter. However, let me make it quite clear to the noble Lord: the Treasury has been taken aback by UEFA’s contention that we intended to do something that the Treasury has no intention of doing and has no legal authority to do: to withhold taxation.

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If there are other grounds that exercise UEFA in these terms that we need to address of course we will, because we are concerned that international events should come to Britain against a background where the greatest event of all, the Olympic Games, is coming in 2012.

Lord Lawson of Blaby: My Lords, is the problem not that taxes in this country are too high for professional footballers but that they are too high for everyone?

Lord Davies of Oldham: My Lords, I knew that the noble Lord would express sympathy for professional footballers on £180,000 a week or more. However, the British taxation regime has been in place, under a Labour Administration, for a decade and more, and we have held these matches in this country over that decade. The noble Lord must recognise that the Government have an issue to resolve with UEFA in its recent action.

Baroness Noakes: My Lords, I declare no interest at all in football—

Lord Stoddart of Swindon: My Lords, is the noble Lord aware that many people in this country are far more concerned about the taxation arrangements for poor people who have been hurt by the withdrawal of the 10 per cent rate than about well paid footballers from foreign lands?

Lord Davies of Oldham: My Lords, I am not always able to agree with the noble Lord, particularly in a week in which we are discussing European legislation, but I am in wholehearted agreement with the sentiment that he just expressed.


3.36 pm

Baroness Royall of Blaisdon: My Lords, given the late start on Wednesdays and the weight of today’s business, the Statement by my right honourable friend the Foreign Secretary on Zimbabwe will not be repeated in this House today. The usual channels are planning that the Statement will be repeated tomorrow, the weight of other business permitting. It is envisaged that it will be taken between the two balloted debates.

Borough Freedom Bill [HL]

Lord Graham of Edmonton: My Lords, I beg to introduce a Bill to enable rights of admission to the freedom of cities or towns to be extended to women; to enable other amendments relating to admission to be made; to confer powers to admit persons as honorary freemen of certain places in the Confederation of the Cinque Ports; and for connected purposes. I beg to move that this Bill be now read a first time.

Moved accordingly, and, on Question, Bill read a first time, and ordered to be printed.

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Marine Bill (Draft): Joint Committee

The Lord President of the Council (Baroness Ashton of Upholland): My Lords, I beg to move the Motion standing in my name on the Order Paper.

Moved, That it is expedient that a Joint Committee of Lords and Commons be appointed to consider and report on any draft Marine Bill presented to both Houses by a Minister of the Crown.—(Baroness Ashton of Upholland.)

On Question, Motion agreed to; and a message was sent to the Commons.

Criminal Justice and Immigration Bill

3.38 pm

The Parliamentary Under-Secretary of State, Ministry of Justice (Lord Hunt of Kings Heath): My Lords, I beg to move that the Bill be now further considered on Report.

Moved accordingly, and, on Question, Motion agreed to.

Clause 9 [Purposes etc. of sentencing: offenders aged under 18]:

Lord Hunt of Kings Heath moved Amendment No. 36:

(a) the principal aim of the youth justice system (which is to prevent offending (or re-offending) by persons aged under 18: see section 37(1) of the Crime and Disorder Act 1998),(b) in accordance with section 44 of the Children and Young Persons Act 1933, the welfare of the offender, and(c) the purposes of sentencing mentioned in subsection (4) (so far as it is not required to do so by paragraph (a)).”

The noble Lord said: My Lords, we have had substantial and helpful debate, both in this House and in another place, on Clause 9, which sets out the purposes of sentencing for under-18s. The debate on Clause 9 has encapsulated much of our informed debate about the purpose and outcome of the youth justice system as a whole. Clause 9 is designed to clarify the current law and to remove a potential source of confusion for sentencers. It has been strongly welcomed by the Youth Justice Board and the Magistrates’ Association. It will, of course, underpin and inform the new community sentencing structure with its emphasis on rehabilitation and tailored interventions. It is very important that we get this clause right.

As drafted, the Bill states that when sentencing a young person the court must have regard primarily to the principal aim of the youth justice system, which is to prevent offending or reoffending by persons under the age of 18. The court should also have regard to the purposes of sentencing, as set out in subsection (4), and to the welfare of the offender in accordance with Section 44 of the Children and Young Persons Act 1933. Many noble Lords took the opportunity to

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speak to this clause in Committee and some expressed concerns that a hierarchy was built into it. Many felt that the welfare of the child was subordinate in the clause, a point that the Joint Committee on Human Rights made explicitly.

We have listened carefully to noble Lords; the group of amendments that I have tabled reflects that fact. We believe that our amendments are compatible with our international obligations under Article 3 of the United Nations Convention on the Rights of the Child. The amendments will, I hope, remove any argument about a hierarchy within the purposes of sentencing. Essentially, the court will have to have equal regard to the principal aim of the youth justice system, the welfare of the young person and the purposes of sentencing. I believe that the amendments clarify the position. I hope that they will reassure noble Lords that we do not believe that the welfare of the child should be a subordinate consideration. I am happy to make it clear that the welfare of the offender is a primary consideration and must be considered by the court as such. I beg to move.

Lord Thomas of Gresford: My Lords, Amendment No. 47 is grouped with these government amendments. I thank the Minister for listening to the various submissions made on this matter in Committee and for taking some steps towards removing the hierarchy to which he referred. However, in the classic terms of old Liberal assemblies, it does not go far enough. Consequently we are taking this opportunity in Amendment No. 47 to amend the principles of the youth justice system as set out in Section 37 of the Crime and Disorder Act 1998.

Your Lordships will observe that government Amendment No. 36 refers to,

as set out in Section 37(1) of the Crime and Disorder Act 1998. However, we urge your Lordships to consider that that Act was passed in 1998 and that matters in relation to youth offenders have moved on considerably since then.

Article 3 of the United Nations Convention on the Rights of the Child states that,

In domestic law, the Children Act 1989 establishes that decisions taken by the family court, dealing with a whole range of children’s issues, must be taken in the child’s best interests through the use of the welfare checklist. The 1998 Act was something of an exception. Not only did it address solely children who offend, but it stressed that the primary aim, to which I referred, is the prevention of offending above all other considerations.

There is an American film called “Parenthood”, which I urge all those interested in youth justice to see. It contains a sentence that I always regard with some affection. When a child is born and the new baby is presented to the mother and father, the father, Steve Martin, looks at the mother and says: “What a wonderful gift this child is, and so far we have done nothing to harm it”. That encapsulates in my mind where an awful lot of the problems that bring young people before the courts start. Maltreatment leads to

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offending behaviour. Children who offend grow up in an environment of poor parental supervision with a lack of discipline or with harsh and erratic parenting.

At earlier stages of the Bill, we talked about the role models that lead children to go astray. Children who offend have an increased likelihood of living in poor housing and experiencing family conflict. Their role models are their parents and grandparents but these families have a history of anti-social behaviour.

In young offender institutions within the prison system, children are treated as prisoners. They are confined. The staff are generally trained as though they were prison officers. Although it is suggested that courses should be offered, the atmosphere is that of a prison and not of a place where children can be persuaded to change their offending behaviour and to discuss problems or difficulties that they may have with safe and trusted adults.

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