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Further, as my noble friend made quite clear, there is the possibility of perverse incentives, as in the position where defence solicitors could ask for a longer curfew period just to make sure that the custodial sentence was likely to be reduced because, as he put it, it covered more than the eight and a half hours, or whatever the limit was. We would have defence counsel arguing for a longer curfew period than he would otherwise think necessary purely to get time off for his client on a later occasion.
As I said the Minister thought that he and the Government were on a roll when they dealt with this issue last time. It might have been because we had just had one of those Divisions that sometimes happen late at night that the Government had managed to win. On this occasion, I will listen carefully to what the Government have to say but unless the Minister can come up with better answers than he did before I will be tempted to test the opinion of the House again. I beg to move.
Lord Hunt of Kings Heath: My Lords, I am most grateful to the noble Lord, Lord Henley, for allowing us to discuss this matter again. I shall not tempt fate by describing why I said we were on a roll when we debated it last time. The noble Lord is right that the measure comes as a result of the review of prisons by the noble Lord, Lord Carter, and it is one of the steps that we would like to take to help manage demand for prison places. We have discussed prisons for some weeks now, and noble Lords will know of the challenge of the current demand for prison places. The Carter proposals are a mixture of an expansion of places over the next few years, together with what is described as demand management. Our proposal is one of those initiatives to reduce demand for prison places.
I confirm to the noble Lord that to qualify for the curfew credit, defendants must have been subject to an electronically monitored curfew for at least nine hours per day to reflect the position that being subject to a curfew does not equal a deprivation of liberty, whereas remand to custody clearly does. Each curfew day will provide potential credit against sentence of no more than half a day. The court will be required to take into account the defendants compliance with the curfew when deciding the period to be credited. The credit will not be made on the basis that the defendants have been deprived of their liberty; they will be credited for the fact that they have complied with their bail conditions while having their liberty restricted on a preventive rather than punitive basis. The credit will be made on the basis that even though being under a curfew is less arduous than being remanded in custody, both are intended as a preventive measure designed to secure the judicial process rather than to punish the offender. The provisions will apply only to defendants bailed under the Bail Act, as amended by the Bill, who are subject to an electronically monitored curfew bail condition of at least nine hours per day.
I know that the noble Lord, Lord Henley, feels that this is a reward to watch Match of the Day, but it is not. The curfew times and hours will be decided by the court, which will take into account the nature of the bail represented by the defendant. Of course, the curfew may be imposed for periods when the defendant is considered more likely to offend or to interfere with witnesses. Such periods might often be during the evening and into the early hours when defendants can get into trouble after a night out at the pub. That is why typical curfew hours tend to be overnight. The curfew can be tailored to cover other risks. For example, the court could curfew a football hooligan during match times or a shoplifter during peak shopping hours.
On the question of a perverse incentive, we believe that this is a sensible preventive measure that will provide an incentive to those remanded on bail who are subject to an electronically monitored curfew to comply with their conditions. Of course in relation to the perverse incentive that is where I would rely on the discretion of the sentencer to arrive at the right decision. Given all our debates on the question of the discretion of the judiciary, surely the noble Lord, Lord Henley, could rely on that.
be taken into account. Does that mean that the Minister has in mind that the judge might impose a longer sentence than otherwise to allow for a sufficient period in prison, in which case he would probably be breaching the sentencing rules?
Lord Hunt of Kings Heath: My Lords, I am sure that is right. I thought the noble Lord, Lord Henley, was suggesting that, in certain circumstances, defence lawyers would request particular conditions because it would then lead to a certain time being taken off the defendant if subsequently convicted. I was answering that point.
Lord Lloyd of Berwick: My Lords, I would have more sympathy for the noble Lords amendment if I knew what the Conservative Party proposes to do in order to reduce the present overcrowding in prisons. Everything that has so far been proposed by the Government to this end has been opposed by the Conservatives. It would be helpful if they could put something positive in its place. In the mean time, this seems to be moving in the right direction; therefore I oppose the amendment.
Lord Henley: My Lords, the Minister cited, in support of his arguments, the Carter review of prisons, which he described as a mixture of expansion of places and a degree of what he described as demand management. We have supportedor supported in partthe expansion of places; we certainly object to the idea of Titan prisons as part of that expansion. I would paraphrase demand management as letting out early slightly more people than they should, which is a mistake, and
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(1D) Section 48 of the Armed Forces Act 2006 (attempts, conspiracy etc.) applies for the purposes of subsection (1C)(b) as if the reference in subsection (3)(b) of that section to any of the following provisions of that Act were a reference to subsection (1C)(b).
The noble Lord said: My Lords, I shall speak also to Amendments Nos. 66A to 66H, 115G, 115H, 115L, 115M and 115N. These amendments are miscellaneous minor and technical amendments to the release and recall provisions in Clauses 26, 29 and 32 as well as Schedules 26 and 27. I am of course happy to provide details if required but I do not want to unnecessarily detain the House with what are, in effect, minor amendments. I beg to move.
With your permission, Mr Speaker, I should like to make a Statement about this mornings announcement by the Bank of England to improve conditions in the financial markets. The scheme has been developed following extensive discussions with the Treasury and the Financial Services Authority.
I also want to report on the recent G7 meeting in Washington on restoring financial stability to financial markets. I will also report on measures we are taking here at home to strengthen the stability of the banking system, as well as to help homeowners with their mortgages.
The financial markets throughout the world remain turbulent, following the problems that arose in the US housing market last year. Functioning financial markets rely on banks and building societies being able to raise finance from each otherand from other investorsincluding through securitisation markets and inter-bank lending markets. These funds can then be used to finance lending to businesses and consumers, including for the provision of mortgages.
But global financial markets are not currently functioning normally. Across the world there is a lack of confidence in credit marketsmost notably mortgage-backed securities. That lack of confidence was prompted by the downturn in the US housing market and in particular by the problems associated with sub-prime mortgages there. Banks are reluctant to lend to each other, and as a result lending to customers is more expensive and more restricted.
Along with other central banks, the Bank of England has over the past few months made additional funding available to the markets through its regular market operations. The UK financial system remains fundamentally strong and the Bank of Englands action has helped to take some of the pressure out of the system by giving the banks additional liquidity to continue their usual banking operations. Last week, it made a further £15 billion available, over three months, as part of its open markets operations. And the governor has said that he is committed to providing the liquidity assistance that the system as a whole needs to function normally.
Here at home, the economy continues to grow. Last weeks figures confirm that unemployment remains low and employment high. That and the recent interest rates cut will provide wider support for the housing market and the wider economy.
As banks here and across the world disclose their losses and strengthen their financial positions, which will help to rebuild confidence, the Bank of England can now take action to ease conditions in the financial markets, particularly in relation to mortgage-backed securities.
The special scheme announced by the Bank of England today is a further step towards tackling these problems, which have become more evident in recent weeks, with the increasing cost and decreasing availability of lending by banks and building societies.
Under the new scheme, for a six-month period, the banks and building societies and other institutions that are eligible for the Bank's standing facility will be able to enter into agreements with the Bank of England under which they exchange high-quality asset-backed securities for Treasury bills. They can then hold these bills or trade them in the markets. Each exchange agreement will be for a maximum of a year, but can be renewed at the Banks discretion, so that the exchange could ultimately be for up to three years.
The arrangement is available only for assets existing at the end of December and does not
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At all times, the banks must provide as security to the Bank of England assets worth significantly more than the Treasury bills they receive in return. If the value of their assets falls, the banks must provide more assets to the Bank of England or return some of their Treasury bills. They will be charged a commercial rate, so there is no subsidy to the banking sector.
The Bank of England expects the initial take-up to be £50 billion. It will monitor the position daily, both to check new bids from the banks and to track the value of the assets exchanged as collateral.
The Treasury is supporting the scheme announced by the Bank of England by lending to itat a commercial ratethe Treasury bills that they will then exchange with the banks and building societies. As the House will know, the Government stand behind the Bank as its sole shareholder and we are making this clear by providing an indemnity. The Bank of England believes that these measures will support the banking sector during the present period of uncertainty and will help to restore the stability that the financial markets need, both now and in the longer term. This will help alleviate the problems that have seen banks reluctant to lend to each other, and in turn support the provision of new mortgage lending.
Maintaining economic and financial stability is the Governments key priority. In addition to the Bank of Englands announcement, I confirm to the House that the Government will take further action, at home and internationally, to restore stability in financial markets. It is important that banks continue to make full disclosure of their exposure to losses and do so as soon as possible. That is why, at the G7 and IMF committee meetings in Washington, we agreed that banks should be as open as possible, as quickly as possible, in order to remove the continuing uncertainty as to their true positions. This process has started throughout the world, including here in Britain, with banks disclosing their losses and making proposals to rebuild their capital positions. Transparency is an essential part, along with other steps we are taking, of stabilising financial markets.
In Washington last week, the Financial Stability Forum agreed a range of actions, some to be implemented in the next three months, others in the longer term. We agreed to strengthened oversight of risk management, including capital and liquidity; clearer standards for valuation and transparency; and changes in the role and use of credit ratings. We will strengthen international co-operation, so that we are better able to prevent
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Here at home, we are about to finish consulting on the reforms to the banking system that I announced in January. These reforms will make it easier to intervene in the event that a bank gets into trouble, in order to protect depositors and maintain the stability of the financial system. Because it is important that we get this right, I will continue to hold further discussions with the industry on the detail of these proposals before bringing forward legislation. We will also make changes to the Bank of England to emphasis its role in maintaining financial stability. The responses we have received so far to the consultation have made it clear that, given the importance of these reforms, it is crucial that we have further discussion. Once that is completed, I can confirm that it remains our intention to introduce legislation this Session to strengthen financial stability and depositor protection. The legislation needs to be on the statute book early next year, when some provisions of the Banking (Special Provisions) Act are due to expire.
Finally, we are determined to do everything we can to help homeowners, so I am meeting the Council of Mortgage Lenders, the Finance and Leasing Association and major lenders tomorrow, along with the Chief Secretary to the Treasury and the Housing Minister. Since 2004, mortgage lenders have been required by statute to treat their customers fairly, and at our meeting I will be discussing how banks and building societies can help people whose fixed rate mortgages are coming to an end, as well as helping people who may get into difficulties in repaying their mortgages. Banks and building societies have a duty to treat their customers fairly and, in the light of everything we are doing with them, I want to discuss with them how they can pass on the benefits of falling interest rates, as well as wider government support to mortgage holders. The Government will continue, along with the Bank of England and the Financial Services Authority, to do everything they can to maintain stability.
The announcement by the Bank of England this morning will help to resolve the problems in the wholesale financial markets, with their subsequent impact on the retail marketsso helping business, individuals and, in particular, the mortgage market. I commend this Statement to the House.
Baroness Noakes: My Lords, I thank the Minister for repeating the Statement made in another place. We support the principle of the Bank of England making greater liquidity available to banks. My honourable friend George Osborne has been calling for the use of a wider range of securities within Bank of England facilities, so this move is welcome.
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