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House of Lords

Tuesday, 22 April 2008.

The House met at half-past two: the LORD SPEAKER on the Woolsack.

Prayers—Read by the Lord Bishop of Newcastle.

EU: Traffic Offences

Baroness Gardner of Parkes asked Her Majesty’s Government:

Lord Bassam of Brighton: My Lords, we very much welcome the Commission’s proposal for a common system of information exchange to facilitate the recovery of financial penalties for drink, speed, seatbelt and red-light offences from non-resident offenders. We are considering the practical issues involved in implementation.

Provisions in the Road Safety Act 2006, when implemented, will also enable the police and Department for Transport officials to issue on-the-spot financial penalties to drivers of foreign-registered vehicles in the United Kingdom.

Baroness Gardner of Parkes: My Lords, I thank the Minister for that helpful reply. Is he aware of the problem—particularly in London, which has a large number of foreign-registered vehicles—of the unreadability of number plates by the automatic number plate recognition system? It cannot read plates in Cyrillic or Arabic and, in future, it will no doubt be unable to read Chinese. These drivers are escaping parking penalties and congestion charging simply because their number plates cannot be recognised.

I understand that some countries propose issuing such people with temporary number plates on arrival—perhaps they have to put up a bond for that. I think that our Government have such proposals for lorries, but not for others. Can the Minister tell me the position?

Lord Bassam of Brighton: My Lords, the noble Baroness raises an interesting point about enforcement. All vehicles manufactured since 1 January 1973 must have a number plate made of reflecting material; that at the front must be white, that at the rear must be yellow and they must have black characters. We expect that for conformity. The typeface of number plates has to be substantially the same. If it is not, the police are entitled to investigate and to bring an offence. The issue is important and I accept that there is a problem. The police are aware of it and we need to deal with it. The noble Baroness’s point about foreign countries issuing temporary plates is very useful.

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Lord Bradshaw: My Lords, the Minister has frequently answered questions from me about foreign lorries and consistent breaches, particularly of the drivers’ hours regulations, which are gross and very dangerous. When will the regulations come into force so that these people can be prosecuted? Will the penalties reflect the enormous advantage such hauliers are gaining over British hauliers?

Lord Bassam of Brighton: My Lords, on the implementation of the Commission’s directive raised by the noble Baroness in her Question, we anticipate that we will resolve the issues and be able to do that at some time in the spring of 2009.

Lord Corbett of Castle Vale: My Lords, can my noble friend assure me that the safety checks on foreign lorries entering the United Kingdom are at least as strict as those for lorries which are domiciled here?

Lord Bassam of Brighton: My Lords, where checks are made by our enforcing officials, they will be to the same enforcement standard.

Lord Pearson of Rannoch: My Lords, can the noble Lord confirm that a new offence is to be added to the list of offences that he read out in the shape of a ban on our ordinary headlights and an insistence on the extremely nasty, glaring headlights used on the Continent? Is the noble Lord aware that the motor bike fraternity is worried about this new imposition from our masters in Brussels? How will it be enforced in this country?

Lord Bassam of Brighton: My Lords, I was a bit concerned when I realised that this Question would appear on the Order Paper on the same day as the European legislation, and I anticipated that we might have a Eurosceptic view on road traffic enforcement. It is important that we have high standards in this area. Is the noble Lord saying that we should not have those high standards? I am not sure where he is coming from in that regard. We would like a higher degree of cross-border conformity in Europe because that would make it much easier for us to enforce traffic regulations and laws and for us to push up standards on an international level.

Baroness Finlay of Llandaff: My Lords, how many fatal and serious accidents occur annually due to non-UK-registered vehicles of all types?

Lord Bassam of Brighton: My Lords, in 2006, the year for which I have statistics covering all accidents of varying severity, 2,398 involved foreign-registered vehicles.

Lord Trimble: My Lords, could the Minister turn his attention to the United Kingdom’s only land frontier, where the issue of vehicles travelling across the border is particularly significant in terms of numbers? The Minister may be aware that some years

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ago there was a proposal to provide for the mutual enforcement of penalties—not only cash penalties but also points penalties—between the United Kingdom and the Republic of Ireland. Has that proposal been progressed?

Lord Bassam of Brighton: My Lords, progress has been made towards that objective. The noble Lord probably knows much better than I do that there is a disparity between the points system that we operate north of the border and that operated by the Irish Government. We are making progress, and I think that this will probably be the first area in which we achieve more effective joint working on cross-border issues.

Lord Lea of Crondall: My Lords, is my noble friend aware that there are enormous numbers of fraudulent plates on UK-registered vehicles and that there is no central collection of police information? Anecdotally, it is suggested that the figure is around 20 per cent. It might be useful to hold a pilot to show how many UK speeding and other offences cannot be prosecuted because the number plate is false.

Lord Bassam of Brighton: My Lords, my mind stretches back to the Vehicles (Crime) Act 2001 which I took through the House some years ago. The proposal embedded in that legislation sought to ensure that number plates are chipped, thus allowing them to be read in greater detail for the purposes of enforcement. Progress is being made towards that and the issue of fraudulent number plates should begin to diminish over time.

Earl Ferrers: My Lords, will the noble Lord address his mind to the question asked by my noble friend Lord Pearson? The Minister rather mobbed him up for asking a Eurosceptic question. I think that my noble friend asked whether it is true that our lorries will have to have different kinds of headlights in order to accommodate the laws in Europe. That is quite an important question, so can he answer it?

Lord Bassam of Brighton: My Lords, I am not aware that that is the case. However, the noble Lord, Lord Pearson, has raised a question about which I shall be more than happy to write to him.

Lord Roberts of Llandudno: My Lords, is there any procedure whereby foreign drivers, especially those from the now expanded European Union, are enabled to be aware of our traffic regulations and to read our road signs—in England and in Wales, which also has its problems?

Lord Bassam of Brighton: My Lords, I sometimes have difficulty with Welsh road signs, but I am sure that that is not a common problem on these Benches.

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Finance: Inherited Estates

2.45 pm

Lord Joffe asked Her Majesty’s Government:

Lord Davies of Oldham: My Lords, this is a matter for the independent regulator—the Financial Services Authority—and the courts. The Financial Services Authority sets the rules covering the management of with-profits funds. It requires firms pursuing reattributions to appoint an independent policyholder advocate to represent policyholders in negotiations with the firm. On completion of the negotiations, the FSA will assess the fairness of the deal and make public its conclusion on what fair treatment would require for consumers. Policyholders have a right to vote on the proposal.

Lord Joffe: My Lords, I thank the Minister for his reply, but the problem rests with the Financial Services Authority rules. My noble friend may not be aware that in the current negotiations relating to the reattribution of the inherited estate of the Norwich Union, amounting to £3.2 billion, both the policyholders’ advocate and Which? have expressed concern about whether policyholders will get a fair deal under the FSA rules. Although the FSA—

Noble Lords: Question!

Lord Joffe: My Lords, are not the Government concerned that the effect of these rules will be that much of the 90 per cent of the inherited estate due to policyholders, as set out in the Government’s published policy on inherited estates, will go to shareholders rather than policyholders? Will they put pressure on the FSA to ensure that the government policy of 90 per cent of the inherited estate to policyholders and 10 per cent to shareholders will be followed in reattributions?

Lord Davies of Oldham: My Lords, I am grateful to my noble friend for his question. There is a distinction between the distribution of surplus funds, which has followed and does follow the broad principle of 90 per cent to policyholders and 10 per cent to shareholders, and the issue of reattribution which arises in the Norwich Union case. This is because reattribution involves the buyout of policyholders and raises the issue of the company’s necessary assets for the future as well as accumulated assets in the past; it raises different issues. That is why the FSA scrutinises these arrangements with great care, as I indicated in my Answer. Negotiations are still going on between Norwich Union and the policyholder advocate. We await the outcome of those negotiations.

Baroness Turner of Camden: My Lords, in view of what my noble friend Lord Joffe has said, could not the FSA be reminded that the purpose of a regulatory framework is to protect the consumer rather than, inevitably, always the insurer? There would be nothing wrong in reminding the FSA of that requirement.

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Lord Davies of Oldham: My Lords, there is nothing ever wrong in reminding the FSA of its obligations. That occurs from time to time, in this House as elsewhere, but the FSA is well aware of its responsibilities. At present it is carrying out consultation on whether the costs of compensation for mis-selling claims should be included in the settlement for the shareholders. As the House will appreciate, the Treasury Select Committee in the other place, to which the FSA will be obliged to give evidence, is also looking at these issues.

Lord Elton: My Lords, have not successive Governments, including the present Government, said that the reallocation of this money should be in the proportions mentioned by the noble Lord, Lord Joffe? Have the insurers not overprovided with money that was taken from the policyholders? Surely they must have a prior claim.

Lord Davies of Oldham: My Lords, I emphasise again the distinction I sought to make in my Answer. Where bonuses are paid on surplus funds, the allocation is generally on the basis of 90 per cent to policyholders and 10 per cent to shareholders, a formula that the FSA has recommended. The difficulties occur on reallocation, when shareholders are buying out policyholders. In that context, not just the interests of existing policyholders but the future operations of the company have to be taken into account. That is why the formula there is bound to be different from the 90 per cent plus 10 per cent that obtains on straight surpluses.

Lord Oakeshott of Seagrove Bay: My Lords, I think we all accept that this is very complicated and that there is no single right or wrong answer. I am grateful to the noble Lord for setting out the legal position, if I can put it that way. The Question was really about the steps the Government are taking and what their view is. As and when the FSA gives its ruling, will the Government have a view and get involved or do they just say that it is entirely a matter for the FSA?

Lord Davies of Oldham: My Lords, I take solace from the fact that the noble Lord finds these issues difficult and complicated. I emphasise that the FSA is the statutory body concerned with this regulation. It has not had complaints about the distribution of surplus funds. There is no doubt that the issues on reattributions are more complex, but we have a clear framework for the FSA to work within. The policyholders will see the FSA judgment on the allocation that is made and they have the right to vote against the proposals if they find them unacceptable—they can even go to court. We recognise that there are difficulties in this area, but regulation means a regulator independent of government, and that is what the FSA is there for.

Lord Turnbull: My Lords, the Minister will be aware that we face the greatest turmoil in financial markets in many decades and that many banks are being urged to increase their capital. Does he not therefore share my puzzlement—I am a director of a

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life insurance company with a large inherited estate—that insurance companies are being urged to do precisely the opposite; that is, to distribute more capital than their directors think is prudent in these times?

Lord Davies of Oldham: My Lords, if surpluses accrue in insurance companies, it is expected that they will be distributed. Such surpluses are unlikely to accrue in difficult times and are more likely to do so in more beneficial economic times. Several companies have surpluses at present, which is why my noble friend asked his Question.

Climate Change Bill [HL]

2.54 pm

The Lord Bishop of Liverpool asked Her Majesty’s Government:

The Minister of State, Department for Environment, Food and Rural Affairs (Lord Rooker): My Lords, the Climate Change Bill, together with the provisions of the energy and planning Bills, will give the United Kingdom a coherent legislative framework to ensure that policy is designed from the very outset to deliver our principal objectives; namely, to tackle climate change, to guarantee secure and affordable energy supplies and to ensure sustainable development.

The Lord Bishop of Liverpool: My Lords, I thank the Minister for his Answer. Will he explain why local authorities are required to consider climate change in relation to local developments, whereas there is no similar statutory obligation for the infrastructure planning commission to consider climate change when determining major infrastructure, especially nuclear power stations?

Lord Rooker: My Lords, I am in some difficulty. The Climate Change Bill has left this place; it has gone to the other place but has not yet started its journey. The other two Bills referred to have completed their Committee stage in the House of Commons; they await their Report stage. I am in no position to comment on the detail. They could be changed, and I have no doubt that the other two Bills will be bettered when they get to this place. But the fact is that the three Bills will be taken together. When the infrastructure planning commission is set up by the Planning Bill to deal with the large infrastructure and energy projects, particularly onshore generation of more than 50 megawatts and offshore generation of more than 100 megawatts, those projects will have to come under that commission, which will operate independently. It will have to take account of both climate change and sustainable development principles.

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