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In general, this provision seems to be included only where the Bill gives examples of what may be included in a condition rather than limitations about what may not. However, is the requirement in subsection (3)(a), to abide by a scheme under Clause 40, not a restriction? I hope the Minister can give a little more explanation about this subsection and what it means. I beg to move.

Lord Carter of Barnes: Securing the provision of the universal service is, as we have discussed on a number of amendments, at the heart of the Bill. Clause 37 provides for general universal service conditions and recognises that to secure the provision of the

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universal service it may not be sufficient to impose conditions solely on the universal service provider—if not now, then at some probably surprising date in the future—and that therefore other postal operators providing services within the scope of the universal service may also have to have conditions imposed on them.

The purpose of subsection (5), which this amendment seeks to leave out, is to make clear that while the clause does specify that certain matters can be included in general universal service conditions, this does not mean that other matters cannot. It is, as the noble Lord rightly points out, to ensure that Ofcom has a degree of discretion—not a limitless discretion, but a degree of discretion—as the guardian of the universal postal service under this regime, thereby giving it the scope to do the task at the heart of the Bill, namely to secure the universal service. The amendment would remove that discretion from Ofcom. It would not in future be able to impose any other conditions even if it judged them to be necessary for the purpose of securing the universal service. Perhaps I may digress from my speaking notes to say that in telecommunications, for example, the regulator has a similar discretion albeit it is subject to the same restrictions of proportionality.

We know and have discussed that the postal market is changing very quickly. In those circumstances, this restriction could in future threaten the universal service. I also remind your Lordships that for the imposition of any regulatory conditions there are strict tests that Ofcom is required to have met. It is not our view that this subsection either removes or in any way reduces the need for those strict tests to be met.

I hope I have provided the noble Lord with reassurances that Ofcom already must meet tests before imposing regulations. To tie its hands now could put the universal service at risk in the future, or at worst slow it down in the process of reassessing the need for its provision. I would therefore ask the noble Lord to withdraw the amendment.

Lord Hunt of Wirral: I have followed very carefully what the Minister has said, but I did not quite understand what he meant by “some surprising date in the future”. Perhaps he could clarify what the word “surprising” means in this context.

Lord Carter of Barnes: I was just trying to surprise the noble Lord. My point was that it is an unpredictable date. The purpose of allowing the regulator the opportunity to exercise discretion is to be able to adapt at speed to a market that may change at a faster rate than we, with all our collective wisdom, may be able to predict in 2009. To underscore the central point—which perhaps does not need to be said but is worth placing on the record—all decisions of public bodies, particularly statutory competition regulators, must be reasonable or they will be challenged in the courts. Indeed, they have been.

Lord Hunt of Wirral: I am very grateful to the Minister. He will understand that I know the procedure for judicial review; no doubt we will come back to that at some stage. I am grateful for his clarification.

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I feel that we need more information. I sense that the Minister is beginning to understand why we are pressing him on these points. I am sure that we will return to them later, but, in the mean time, I beg leave to withdraw the amendment.

Amendment 89K withdrawn

Clause 37, as amended, agreed.

Clause 38 : Recovery of administrative charges incurred by OFCOM

Amendment 89L

Moved by Lord Hunt of Wirral

89L: Clause 38, page 22, line 2, after “impose” insert “proportionate”

Lord Hunt of Wirral: Our amendments in this group are intended to ensure that postal operators providing services outside the universal postal service order are not expected to bear a disproportionate administrative burden—or any burden at all where it would be inappropriate. I should also like to take the opportunity to probe a little further some of the specific requirements in Schedule 4.

My first amendment ensuring that the charges are proportionate is slightly otiose as the word appears in Schedule 4, but I wanted to ask the Minister on what basis the charge is to be proportionate. The word “proportionate” is one that he has already used on several occasions—indeed, the Secretary of State used it earlier—but it can mean different things. One can conceive of two companies, one big and one small, both providing services eligible for an administrative charge. I hope that the charge would not be proportionate to the entire company turnover but instead will be calculated considering only the relevant service.

Schedule 4 also raises some questions. In paragraph 1(1), it restricts the administrative charge to be eligible only on postal operators providing services within the scope of the UPS. That is quite correct, as Ofcom should only be regulating those services, but later it makes it clear that that charge is to cover Ofcom’s postal services functions, which can under paragraph 2(2) include setting up mechanisms for resolving disputes between postal operators and users. We will later come to the nitty-gritty of a consumer protection condition, but the dispute mechanism that Ofcom is expected to set up under this condition will presumably fall under the Schedule 4 description of postal services function. That condition is to fall on all postal operators and all services, not just those falling within the scope of the UPS. Does that mean that regulated operators will have to bear the burden of costs partly resulting from non-regulated operators?

I also ask your Lordships to note that Schedule 4 contains powers for Ofcom to impose penalty charges. Again, those are restricted to being appropriate and proportionate, but they could be significant, especially if a dispute reaches the level covered by paragraph 7, where Ofcom has the power to prevent an operator

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from providing the service at all. Will the Minister therefore clarify whether Ofcom could direct the operator to stop services falling outside the scope of the UPS? There seems to be nothing in the Bill to stop Ofcom getting involved in any area of the operator’s business. In addition—again we will turn to this issue later—there is no right of appeal. There is merely the right to make representations.

I hope we are talking about only small amounts of money here, but when the regulator has as much power as is being given to Ofcom in this case, would it not be better to allow for the penalty regime to have a right of appeal, as is usually the case? I know that in other legislation your Lordships have felt strongly about that. Therefore, I hope that the Minister will consider it. I beg to move.

Lord Carter of Barnes: My Lords, I agree with the noble Lord that that amendment probes a number of areas, some of which I hope I can give him some reassurance on; we may need to clarify others in writing. The specific amendment relates to Clause 38, which, as the noble Lord rightly points out, allows Ofcom to impose charges on postal operators providing services within the scope of the universal service and to meet the reasonable costs that Ofcom, as the proposed sector regulator, may incur in carrying out its postal functions.

Proportionality, which both these amendments promote, is, as the noble Lord has already accepted, a central tenet that Ofcom must follow when regulating and would apply to its costs and the allocation of its costs. As a point of record, it is my understanding that it would be required to consult on its charging regime and on the allocation of costs within that charging regime. It is also the case that Ofcom has committed itself to a level of efficiency and cost reduction over the period, which will have the effect of reducing in absolute terms the costs in total, although I understand the noble Lord’s point about to whom the costs are allocated. Those requirements are provided for in the original Communications Act, Schedule 6 to this Bill, and, specifically in relation to recovering administrative charges, paragraph 1(3)(b) of Schedule 4.

I therefore say to the noble Lord that his amendments, while laudably seeking to minimise regulatory costs, are unnecessary. I hope that he will see fit not to press them.

Lord Hunt of Wirral: If the Minister will allow me, I will take that as praise for my having moved the amendment, because we have raised some important points. I would now like the opportunity of considering carefully what the Minister has said. In the mean time, I beg leave to withdraw the amendment.

Amendment 89L withdrawn.

Amendment 89M not moved.

Clause 38 agreed.

Schedule 4 agreed.

House resumed.

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Prisons and Probation


4.03 pm

The Parliamentary Under-Secretary of State, Ministry of Justice (Lord Bach): My Lords, with the leave of the House, I will now repeat a Statement made in another place by my right honourable friend the Lord Chancellor and Secretary of State for Justice. The Statement is as follows:

“With permission, Mr Speaker, I should like to make a Statement on prisons and probation. Let me begin by paying tribute to the 70,000 staff working in these services. Last Monday, my right honourable friend the Prisons Minister issued a Written Ministerial Statement about the serious disturbance which occurred at Ashwell prison, Rutland, on Easter Saturday, 11 April. Prison Service staff acted with exemplary skill and professionalism in dealing with the riot. I thank them sincerely, as I do officers of Leicestershire Constabulary and other emergency services which so ably assisted. Prison Service and police investigations are now under way.

Investing in prison and probation services has been a key priority for this Administration. Prison places are up by nearly 25,000 to 85,000, with spending rising by a similar proportion, while the probation case load has risen by 52 per cent and spending has increased by 70 per cent in real terms. This is the first post-war Government to see a sustained reduction in crime, down 39 per cent since 1997, with the chances of being a victim the lowest for a generation. There has been a 23 per cent fall in adult reoffending between 2000 and 2006.

Understandable concern has been expressed about the number of juveniles and women held in custody. There has over the past year been a reduction of 8 per cent in the number of juveniles in jail, and the number of adult women prisoners has fallen by 3 per cent over the same period. In response to the recommendations of my noble friend Lady Corston, I have committed £15.6 million over two years to help divert vulnerable women offenders from prison. We also want the Prison Service and the NHS better to deal with offenders with mental health problems. The report of my noble friend Lord Bradley will be published shortly.

My noble friend Lord Carter of Coles was asked in 2007 to consider how better to manage short and medium-term prison pressures. I published his report alongside an Oral Statement on 5 December 2007. Since the publication of my noble friend’s report, we have already provided an additional 3,500 prison places. He recommended that net capacity should be brought up to 96,000 by 2014 and that 7,500 of these places should be created by the construction of three 2,500-place prison complexes, described as ‘Titans’. In June last year we launched a consultation on these proposals, and I am most grateful to all those who responded. The Government’s response to the consultation is published today, along with the document Capacity and Competition Policy for Prisons and Probation and an economic impact assessment. Copies are available in the Vote Office and the House Library.

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Once a prison is established in an area, almost without exception the local community becomes very supportive of it. A prison is a source of secure, well paid employment and a focus for much volunteering. The research evidence which shows that prisons have no adverse effect on house prices or crime rates is then borne out by experience. But proposals for new prisons can at first be controversial. I did see merit in the proposals of my noble friend Lord Carter for 2,500-place prisons, especially as they would have been complexes with four or five separate and distinct regimes. But most of those whom we consulted took a different view and believed that the disadvantages would outweigh the advantages. Not the least of those of this view was Dame Anne Owers, HM Chief Inspector of Prisons. I have looked very carefully at everything which has been said and have concluded that the right approach is to deliver the 7,500 places not through Titans, but through five prisons holding 1,500 offenders, each divided into smaller units. We already operate successfully prisons of this size.

These new prisons will be neither Victorian replicas nor large warehouses. They will be modern, purpose-built institutions for adult male prisoners only. They will be safe, secure and effective in helping prisoners deal with their offending, and will develop the work, education and life skills they need to turn their lives around.

I can announce today that we are working to secure sites for the first two 1,500-place prisons at Beam Park West in the London borough of Barking and Dagenham, and Runwell in the borough of Chelmsford in Essex. Both prisons will be privately built and run, and their construction and operation will sustain many hundreds of jobs. Prison capacity planning depends crucially on projections of future demand and judgments about the cost-effectiveness and appropriateness of replacing older places with new capacity. These and other considerations are kept under constant review, and further decisions as to sites and the removal of older provision will be announced in due course. In this context, I can tell the House that we will not be pursuing a prison on the Omega site in Warrington.

Meanwhile, work is already in hand to increase capacity by approximately 8,500 places over the next three years. It also remains my intention to withdraw the end-of-custody licence scheme as soon as safely possible. The expansion is going to include two new public prisons—Isis, adjacent to Belmarsh, and Coltishall, a former RAF base in Norfolk—and two new private prisons, Belmarsh West and Maghull. We are also expanding HMP Littlehey, near Huntingdon, to provide 480 places by early next year as a quicker, more cost-effective option than buying and converting a prison ship.

At all times, but especially in today’s economic climate, we have a duty to ensure that prison and probation services work as efficiently and effectively as possible in the interests of the public. We are seeking to improve the efficiency of public sector prisons through reforms to workforce structures for new uniformed staff and by reducing management costs. From today, we will be consulting on the detail of these plans.

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Nearly 90 per cent of prison places are delivered directly by the public sector but the private sector also plays an important part. The Government’s approach to competition was described in last November’s Pre-Budget Report and last Wednesday’s Red Book.

I have already set out the situation for new-build prisons. Five existing prisons have previously been subject to competition. Of these, Manchester, Buckley Hall and Blakenhurst are currently run by the public sector, and Doncaster and Wolds are run by the private sector. Each will be subject to a new competition as their current contracts end. Blakenhurst now forms part of Her Majesty’s Prison Hewell, so we will put the Hewell cluster to competition when the contract for Blakenhurst ends in August 2011. Two poorly performing public prisons, Birmingham and Wellingborough, will be market-tested this year. Public, private and third sector providers will all be invited to bid.

Let me now turn to probation. It is against a background of greatly increased real-terms budgets that the Probation service is now being asked to make some savings of low percentages this year and thereafter. Detailed analyses show that historically the workload and resources of probation areas have not necessarily been well matched, especially when measured against convictions, the key determinant of workload. So we are now seeking to target resources better to match needs. We want to be clearer about the service probation should deliver, to reduce administration costs and rigorously to manage contracts.

The probation trusts’ programme gives areas greater control over budgets and enables the private and third sectors to provide more services. If probation boards fail to become trusts, from 2010 options will include amalgamation into existing trusts or being put to competition in the open market. Probation court services will remain within the public sector, as required by the Offender Management Act 2007.

Probation areas are now also required to review their services against a national ‘best value’ framework. If services fail to meet the standards necessary, areas must improve performance or use competition to identify alternative providers. As the first services to be reviewed in 2009, at least 25 per cent of community payback and victim contact services will be competed in the open market.

We have provided nearly 25,000 prison places since 1997 to accommodate the most serious, dangerous and persistent offenders, and we are committed to bringing the total number of places up to 96,000 by 2014. Over the past decade, prison conditions have been transformed. As Her Majesty’s Chief Inspector of Prisons has acknowledged, prisons today are more decent, more constructive and considerably more secure. They are places of punishment and reform. The measures I have announced today for expanding and modernising the prison estate and the management of prisons and probation will allow us to realise still further improvements to public protection and reoffending, with maximum benefit for the taxpaying public.

I commend this Statement to the House”.

My Lords, that concludes the Statement.

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4.14 pm

Lord Henley: My Lords, as always, I offer my thanks to the noble Lord for repeating the Statement, but perhaps I might take him up on one or two of the figures that he has put before the House. He talks about this being the first post-war Government to have seen a sustained reduction in crime. At the same time, he boasts about having provided some 25,000 new prison places. All those new prison places seem to be full, because we know that the prisons are bursting at the seams. Why that has happened when we have had a sustained reduction in crime seems hard to understand, if one believes the government figures. Could it be that, at the same time as we might have seen a sustained reduction in crime, as the Minister has put it, we have seen a dramatic increase in violent crime? It is violent crime that most citizens in this country fear most of all. When the Minister comes to respond, will he acknowledge the fact that we have seen a near doubling of violent crime since 1997, and that is why the numbers in prison have had to go up by quite such a large number?

The Minister referred in his opening remarks to the recent disturbances at Ashwell prison. I acknowledge his remarks about how the Prison Service staff acted, and we offer our full support, but we await the result of the full investigations by the Prison Service and the police into what happened there. In the mean time, I would be grateful if he could tell us what warnings his right honourable friend the Secretary of State received about any potential unrest there and what further warnings he might be receiving about problems arising at other prisons that are bursting at the seams.

I shall move on to the central part of the Statement: the whole question of Titan prisons. We on these Benches welcome the fact that the Government are performing an admirable U-turn here and are getting rid of those prisons, even if they are to be replaced by mini-Titans, which we will get on to later on, and even though we suspect that this is done not as a result of the consultation—we know the attitude that this Government normally take to consultation—but merely to save money. I hope that the noble Lord will be able to start by offering some assurance to the House about what the alleged savings are likely to be from changing from Titans to mini-Titans, as they have announced today.

I shall expand, because the Minister asked me to, on the comments that I made at Question Time on the parole system. I said on that occasion that I welcomed the alleged 14 per cent increase—I say “alleged” because we never know with this Government just whether they will be offering an increase or not, and because, although we might welcome more money coming in, we want to see a parole system that is working properly and will deliver genuine savings to the Prison Service by getting some people out of prison earlier. We want to know how that money is going to lead to the easing of the pressure and whether it really will do so. What will that alleged 14 per cent do and when will it come in? We have considerable fears that, although the Government may boast about an improvement in cash, as we have seen so often before in so many other

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parts of the Government’s activities over the past 11 years, we will not see any improvement in the actual service.

On the prisons themselves, the Minister tells us that the three Titans are to go—that is, 7,500 of the places that the Government were offering. They are to be replaced by what I think we will call “mini-Titans”, which will be five prisons of 1,500 places each. Just what will the saving be from doing that? As I understand it, the cost of one of the three Titans appears in the current spending round, but the cost of the other two does not. Now that we have five mini-Titans replacing three Titans, which ones appear in the current spending round and which ones do not? Is it one, two, three or whatever? No doubt the Minister will be able to tell us.

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