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I shall be brief. As the last three years have shown, banks and building societies can fail. The Banking Act 2009 provides for a system of bank resolution that is more flexible than simply liquidating the failed institution, using insolvency law and paying, if necessary, compensation to depositors who would have lost money in the process. Bank resolutions can be costly but they can save the Financial Services Compensation Scheme from having to make compensation payments to the depositors from the institution concerned. It is right, therefore, that the FSCS should have to contribute towards resolution costs and it is equally right that contribution to such costs should be capped at the cost of the compensation that it would otherwise have had to pay, taking into account recoveries that it would be expected to make. These regulations do not change those principles but ensure that they can be correctly applied in the real world, where bank resolutions take time and the FSCS would have to borrow heavily to fund compensation payouts. There is, of course, a

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lot of technical detail in the regulations-that is inevitable-but the basic idea is simple. The reason for the large amount of technical detail, in answer to the point made by the noble Lord, Lord Davies of Oldham, is that checking the accounts is not simple.

I do not know how properly to address the points made by my noble friend Lord Newby, who would like to use this opportunity to hear about wider developments in EU and international financial regulation. The only point that I make now is that, of course, the question of bank resolution and particularly of globally significant systemic institutions is one on which the G20 Ministers are focusing at the moment. In our small way, tidying up the FSCS regulations fits into a wider picture of the direction of travel and the focus of the global regulatory developments.

Motion agreed.

National Minimum Wage Regulations 1999 (Amendment) Regulations 2010

Copy of the SI
Copy of the Report

Motion to Approve

5.50 pm

Moved By Baroness Wilcox

The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Baroness Wilcox): My Lords, I am pleased to present these regulations to the House. My Government are committed to the national minimum wage as we believe that it gives protection to low-income workers and provides incentives to work.

The regulations implement recommendations contained in the Low Pay Commission's report of 2010. They do three things. First, they increase the hourly rate of the minimum wage for adults and younger workers, and they increase the maximum amount for living accommodation that is allowed to count towards pay for minimum wage purposes. Secondly, they provide that from 1 October this year, 21 year-olds are eligible for the adult rate of the minimum wage. Thirdly, they remove the existing exemption from the minimum wage for apprentices who are either aged under 19 or aged 19 or over and in the first year of their apprenticeship. The regulations replace that exemption with a new apprenticeship minimum wage rate.

I turn first to the increases in the minimum wage rates contained in Regulations 3, 5 and 6. The Low Pay Commission recommended that the adult minimum wage rate should increase by 2.2 per cent in October. We believe that this increase strikes the right balance between ensuring that low-paid workers are treated fairly and preventing adverse economic effects. It is based on sound evidence and consultation, and takes into account the present economic circumstances.

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The commission considered carefully the position of young workers in the labour market. It found that the employment prospects for younger workers have deteriorated consistently over a period of years, with a more substantial decline during the recession. For that reason, it concluded that it was appropriate to increase the youth rates by slightly lower proportions than the adult rate. We consider that this is the right approach.

That brings me on to the treatment of 21-year-olds. The Low Pay Commission has consistently recommended that they should be entitled to the adult minimum wage. The commission looked again at all the evidence in its 2010 report and continues to believe that the adult rate should start at 21. The Government have accepted that view.

It is, of course, important that any changes to the rules on entitlement to the minimum wage should not adversely affect people's employment prospects. I do not consider that starting the adult rate at 21 would do so. Around 90 per cent of 21 year-olds are already paid at or above the adult minimum wage rate, and earnings and employment data suggest that 21 year-olds are already more closely aligned to 22 year-olds than to their younger counterparts. Research undertaken for the Low Pay Commission concerning the effects on labour-market behaviour of people turning 22 concluded that lowering the starting age of the adult rate to 21 would do little harm to their employment prospects.

We estimate that around 85,000 21 year-olds will benefit from this change and that it will increase labour costs by £48 million. In view of the small differential in earnings between low-paid 21 and 22 year-olds, we believe that the businesses affected should be able to absorb the additional costs imposed by this change.

The Low Pay Commission's report reaffirmed its long-standing belief that lower minimum wage rates for younger workers are still justified to protect employment and, at the same time, reflect the training element attached to younger workers. We agree with this approach. There is little point in pushing wages up if it means that jobs are no longer available. Once young people are in work, they are gaining important skills and experience that will help them progress. They are not doing so if they are out of work.

The third area of change in the regulations relates to apprentices. At present, certain apprentices are not eligible for the minimum wage. Employed apprentices who are either under 19 or who are 19 or over and in the first year of their training are not eligible; neither are non-employed apprentices. The Low Pay Commission has carefully considered whether the treatment of waged apprentices is appropriate. It has concluded that there should be a new apprentice minimum wage rate of £2.50 per hour, and that this should apply to employed apprentices. We have accepted this recommendation. It is perhaps worth setting out the guiding principles that the commission used in designing the apprentice minimum wage. These are that such a wage should: support a competitive economy; be set at a prudent level; be simple and straightforward; and make a difference. We believe that the recommendations fully reflect these principles.

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The new rate will apply only to employed apprentices who are either aged under 19, or who are over 19 and in the first year of their apprenticeship. These apprentices are either employed under a contract of apprenticeship or are engaged in certain government-funded apprenticeship schemes. However, the current exemptions from the minimum wage will continue to apply to non-employed apprentices, including those who may be receiving an allowance paid by the state instead of a wage.

Apprenticeships offer those who undertake them the prospect of higher future earnings and better employment prospects. We consider that the new apprentice minimum wage is measured and practical. It will provide important legal protection for apprentices without compromising the commitment of employers to providing apprenticeships.

The programme for government which we published in May stated that the Government are,

The regulations before us today play their part in this. The changes to the minimum wage which they contain balance the needs of low-paid workers against the challenges that remain for businesses. They reflect our commitment to the fair treatment of low-paid workers as well as to business. I beg to move.

Lord Young of Norwood Green: My Lords, I welcome the Minister's support for the previous Government's proposals and what appears to be a Damascene conversion to the cause of the minimum wage. However, I do not wish to be churlish. The relevant adult rate was also proposed by the previous Government, and so I welcome it. The challenge for the Government in announcing 50,000 new apprenticeships is to create apprenticeships for 16 to 18 year-olds, which we always regarded as a key target area. I would welcome confirmation that the Government will not embrace the view of Mr Christopher Chope in the other place who proposed a Private Member's Bill which would allow people to be paid below the minimum wage. I would welcome confirmation from the Government that they will not support that approach. Other than that, I welcome and support this statutory instrument.

Lord Newby: My Lords, we welcome these proposals. Unlike our view on the measure we discussed earlier, where we considered that the Government's plan to protect and support people on low incomes was poor, we believe that the minimum wage is an unambiguous success. It is interesting to recall that when the minimum wage was being proposed siren voices suggested that hundreds of thousands of people would be put out of work as a result. That did not happen at all. All that happened was that hundreds of thousands of people were paid a decent wage instead of an indecent wage. That has undoubtedly helped to make society fairer.

It is therefore extremely welcome that the Government have approved and implemented the recommendations of the Low Pay Commission. The commission now clearly has bipartisan, or tripartisan, support and is almost beyond reproach in terms of a body assisting government to come to sensible conclusions. I seek an assurance from the Minister that this support this year for the Low Pay Commission and its work is likely to

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inform the Government's view going forward and we can expect next year and in subsequent years that when the commission comes forward with its report the Government will approve it, as they have done this year. We are happy to support this statutory instrument.

Baroness Wilcox: My Lords, I am very grateful to the noble Lord, Lord Young, and to my noble friend Lord Newby, who have in principle supported this measure and asked one or two questions. The noble Lord, Lord Young, mentioned the challenge of the 50,000 new apprenticeships and 16 year-olds. Yes, it is a challenge; there is no doubt about that. But we will strive to do the best we can on this. He asked me to confirm that the Government will not embrace the Private Member's Bill about the minimum wage. I do not know anything about this Bill, so I certainly cannot support something that I do not know anything about. So that is all right.

My noble friend Lord Newby said that this was beyond reproach. That is absolutely splendid. He asked for an assurance that the Government, who are supporting the Low Pay Commission this year, will do the same next year. If it says good things next year, I am absolutely sure that we will. So there we are.

The issues that we have been discussing are important because they concern the economy, employers and workers, so it is therefore right that we give careful consideration to these issues. I am very grateful to the noble Lord, Lord Young, and to my noble friend Lord Newby for their support. I commend these regulations to the House.

Motion agreed.

Armed Forces Act (Continuation) Order 2010

Copy of the SI
Copy of the Report

Motion to Approve

6.02 pm

Moved By Lord Wallace of Saltaire

Lord Wallace of Saltaire: My Lords, this continuation order is required as part of the process whereby the sovereignty of Parliament has been established over the Executive's powers. The noble Lord, Lord Lee, said to me on the way in that he wanted to ask whether we would continue to do this annually after the 2011 Act. The noble Lord, Lord Tunnicliffe, and I had an interesting exchange earlier this afternoon on whether the Bill of Rights had been passed in 1688 or 1689. After a certain amount of chasing around, I discovered that the Act was indeed passed in early March of what, in the old calendar, was still 1688, as the old calendar changed on 25 March. However, under the new calendar it was clearly 1689. That encouraged me to read the English Bill of Rights, which clearly states:

"That the raising or keeping a standing army within the kingdom in time of peace, unless it be with consent of Parliament, is against law".

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That is the basis for our annual continuation order. It is better not to read the following paragraph, which states:

"That the subjects which are Protestants may have arms for their defence suitable to their conditions and as allowed by law".

It also complains that His Majesty King James II had caused,

There are many things in our ancient constitutional rights which are not entirely appropriate to where we are now. However, that is the basis for this annual order.

Four years ago, the House passed a major change in the disciplinary orders, the Armed Forces Act 2006, which brought together the separate service discipline Acts. That was intended to last for five years, so that next year we will have another, rather more important, Armed Forces Act. That will be prepared over the next few months and presented to the House in the later stages of this Session. That said, and this being a formal duty to allow our Executive-whom we should all, as parliamentarians, distrust a little-to maintain a standing army with the necessary discipline for a further year, I beg to move.

Lord Tunnicliffe: My Lords, we on these Benches have no concerns about this order. I reflect that during the year or so when I used to move orders, I would receive 20 detailed questions, mostly about the primary legislation, after the opener on the opposition Benches had said that they were going to support it. I shall not do that. My only question has been answered. It was about the fascinating fact that our Armed Forces exist only by annual approval of an order and that every five years there has to be a fresh Act. It is a fair question whether that should be debated-I do not have a view on it because this is about debate-when we come to what will be the 2011 Bill and Act. I do not believe that many members of Her Majesty's Armed Forces understand, at least formally, how tenuous their existence is. It is extremely important-I would not dare hint otherwise-that the supremacy of Parliament should be restated now and again, but this is a particularly interesting example.

I shall use this occasion to comment on the bringing together of the various codes of discipline in the Armed Forces, and on any problems that seem to be emerging. However, I am pleased to report, with my limited research capability, that the 2006 Act-which, although it was an Act of my Government, noble Lords approached very consensually in debating, probing and passing it-seems to have worked very well. I have heard of no dissent. The order will not go in front of my friends at the other end until September, and they may unearth some disquiet, but I very much doubt it. It has been a successful Act and I do not expect it to be seriously amended in the 2011 Bill, when we see it. It has brought the forces together in-in the dreadful word of the 1998 defence review-joinery. Having worked for the MoD, I recall that we used to call it "purple". That sounds rather better than joinery, which suggests woodwork or something. The Act is working well and I am delighted to support this order, which maintains our Armed Forces for a further year. As part of that, it also continues the single service discipline Act that seems to be working so well.

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Lord Craig of Radley: My Lords, I support this order. As a member of the Armed Forces, I have always recognised the primacy of Parliament over us, and it is right and proper that the order should be placed. The Minister mentioned the next review of the Armed Forces Act. I hope that it may then be possible to have a further look at the impact of the Human Rights Act on the Armed Forces and their discipline because it is quite clear from the passage of time that problems arise here. I do not have a solution to how they can be dealt with. When the Human Rights Bill was being passed, I attempted to have the Armed Forces excluded on the basis that they, uniquely, have other Acts, including this one, to do things and to respond to orders in a way that is quite unlike any other member of the public, and that can at times conflict with the strict application of the Human Rights Act, as we have seen. However, I support this Motion.

Lord Moonie: I rise briefly as a former Minister for Defence who was lucky enough to take two Bills through the House. This was quite rare: it was bad enough getting one, but to have two was an excessive pleasure. I rise to support this order and to say how important it is, at a time when our Armed Forces are under such pressure, that this Act retains support on all sides of the House and that the defence of the realm is governed by all-party consensus, as has been the case in recent years. If any problems arise with the Act, it would be good to get advance notice of them in this spirit of co-operation. I say in passing that, had it not been for my vehemence in support of the Armed Forces Act, I doubt that it would have been brought to the House by 2006, because there was every chance that it could have taken another three or four years. However, I am delighted to see that it is working well.

Lord Borrie: My Lords, I intervene briefly. Perhaps the Minister is surprised at the greater interest in this than he imagined might be the case. My own interest goes back 50 years-plus to my national service, when I had a lot to do with courts martial. I did a little background research, as did the Minister for his work today. The idea of a standing army being a threat to the populace in the 20th and 21st centuries, as compared with the 17th century, has always struck me as amazing and extraordinary, yet we have gone on, year by year-occasionally I have attended the appropriate proceedings in this House-with the order that allows a standing army to continue for another year.

Now that we have a coalition Government, of which I am somewhat suspicious from the opposition side, I am anxious about even suggesting that we should have anything different in the way of a thorough re-examination of our constitution, of those of other countries, of how they manage and so on, because, although I trust the Minister as an excellent man of high repute, I do not trust the coalition to come up with something ideal. Therefore, at present, I would rather the Minister did not pursue his researches too far and did only the minimum to secure the changes needed for another year.

Lord Wallace of Saltaire: My Lords, I thank all those who have intervened in this extremely brief debate. The noble Lord, Lord Borrie, is clearly worried about

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whether the coalition will stick to the constitution. We are assailed about this on the airwaves all the time. Mr Ed Balls has asserted that the coalition is already deeply unconstitutional. I would not have thought that he was one of the most constitutionally minded members of the previous Administration, but there we have it.

We should not take military acceptance of civilian authority for granted. We have seen many other countries in which the professional military has developed a sense of corporate identity and a conviction that it represents the nation that have led it to resist civilian authority. It is one of the great benefits of the military tradition in this country that the acceptance of civilian control has been unquestioning. Perhaps this annual ceremony is one way in which we maintain and reassert that worthwhile tradition.

The noble and gallant Lord, Lord Craig, raised the issue of human rights. The impact of the Human Rights Act is an important and delicate question that we all understand. My notes state that Her Majesty's Government are satisfied that the legislation is compatible with the rights provided in the European Convention on Human Rights. This whole area is one that we will need to look at in the coming Act, although there are many other aspects of changing circumstances which affect the operations of troops in the field. We all understand that service discipline needs to affect the immediate needs of operations at a distance. We also now understand that, with modern communications, the visibility of the way in which your troops behave in operations at a distance very often comes back immediately to the press and the media in one's own country. So we are in a very delicate and rapidly changing area.

I also had in my notes that I would say a little about the military covenant, which, as some noble Lords will know, was one of the areas touched on in the coalition agreement. This order does not concern the military covenant, partly because the fulfilment of the promises made in that agreement to renew the military covenant will require a lot of work throughout Whitehall with other government departments-with the Department for Education and Skills, the Department for Business, Innovation and Skills and others-in order to fulfil some of the pledges that have been made. However, we are deeply committed as a coalition to carrying through that renewal of the covenant.

Having said that, and looking forward to the debate that we will have early next year in time for the expiry of the current five-year Act in November 2011, I commend this continuation order.

Motion agreed.

Fishing Boats (Electronic Transmission of Fishing Activities Data) (England) Scheme 2010

Copy of the SI
Copy of the Report

Motion to Approve

6.16 pm

Moved By Lord Henley

Relevant document: 1st Report from the Joint Committee on Statutory Instruments.

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The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Henley): My Lords, logbook and landing declaration information form an essential element of the means by which we monitor fishing activity data. Under Community law, fishing vessels with an overall length of more than 10 metres are required to keep a logbook to record estimates of the catch on board vessels. They are also required to submit landing declarations containing accurate figures on the quantities of fish landed.

Current paper-based logbooks and landing declarations are both cumbersome and time-consuming for fishermen to complete. The input of the data from these paper records on to computerised databases is also resource-intensive for fisheries administrations. In November 2006, European Fisheries Ministers therefore agreed that vessels with an overall length of more than 15 metres should in future submit their logbook and landing declarations electronically.

This new technology will significantly improve the real-time monitoring of fishing activity, as logbook information will be transmitted back to shore on a daily basis, rather than having to wait for the vessel to complete its trip, as at present. It will also make it harder to misrecord catches and so contribute positively towards improving compliance. The benefits of this new technology are therefore plain for all to see. However, ultimately, electronic logbooks are essentially a control tool. In the past when similar control tools, such as vessel monitoring systems, have been introduced, these have been government funded. The Government are therefore pleased to be able to offer financial assistance to fishermen in the purchase of the necessary software. Similar assistance is being provided by other fisheries administrations in the United Kingdom and in other member states.

We have aimed to ensure best value for money by adopting a type of approval process under which any software supplier can submit its product for approval, thereby offering fishermen a choice of software to meet their own needs and introducing competition between suppliers. Grant aid will be made available only for approved software systems.

I nevertheless recognise that some fishermen may wish to purchase sophisticated software that contains functions beyond those necessary to comply with our EU obligations. I believe that it is therefore reasonable to place a limit on the level of financial assistance that we will provide. The Government thus intend to limit the amount of funding that will be available to English fishing vessels to £2,000 per vessel. On this basis, the overall cost of this funding scheme is not expected to exceed £560,000 for the 280 or so English vessels over 15 metres in length. Moneys for the scheme will be found from existing budgets, with some £530,000 of this recoverable from Community funds under the EU aid regime, which provides co-financing for member states' expenditure on statutory control measures.

The House may wonder why it has taken so long to put the funding scheme in place, given that the original date for vessels of more than 24 metres to have electronic logbooks was 1 January 2010. Noble Lords will not be surprised to hear that, as with many other IT projects,

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adopting this new technology has turned out to be somewhat more complicated than originally envisaged. As a result, all member states have been working hard to get their systems up and running. We now have two approved software systems, with more expected shortly. It is, therefore, now important that the funding scheme is put in place as soon as possible.

Finally, the House may be aware that European Fisheries Ministers have agreed to extend the requirement for electronic logbooks and landing declarations to vessels of more than 12 metres from 1 January 2012. A decision on the extent of any funding for 12-metre to 15-metre vessels will be taken nearer the time in the light of experience with vessels of more than 15 metres. I beg to move.

Baroness Quin: My Lords, the Opposition welcome the opportunity to debate this statutory instrument and, indeed, welcome the measure itself, not least because the work on its principles was undertaken by the previous Government after meetings and consultations with the fishing industry. We feel that the benefits of this legislation outweigh any disadvantages.

Paragraph 7.2 of the Explanatory Memorandum attached to the instrument sums up the benefits when it describes the purpose of the scheme, using words similar to those used by the Minister, which is to ensure,


There are other positive aspects to the measure, such as the reduction of the administrative burden and consequent considerable time savings, which again are detailed in the Explanatory Memorandum and the useful impact assessment.

However, while generally supporting the measure, I none the less want to put some questions to the Minister, particularly in the light of what he described, rightly, as the time pressures on us and other European states in complying with these regulations, as well as some of the difficulties connected with IT development with which we are familiar. The Minister said that two suppliers have now been identified, which means that there are two suppliers on the list that the Government have to draw up. How happy is he about the situation, given that obviously the greater the choice, the more likely it is that costs will be more competitive, particularly for the fishing industry? Can he assure us that all possible methods have been used to try to communicate with the industry and those affected by the scheme as much information as they need, so that, even with a limited choice, they will be able to make informed decisions?

In this age of devolution, the people affected will want to be assured that there is no discriminatory treatment for fishing vessels in the different UK administrations. I wonder whether the Minister can assure us of that in his reply. Certainly, the Explanatory Memorandum says that the aim is to ensure that,

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Any detail on that would be welcome. Furthermore, paragraph 9(2) of the scheme stipulates that the Secretary of State must,

Does the Minister think that there is a risk of shopping around in that way, or is that simply an additional safeguard in the legislation?

Obviously, we are all committed to the sustainable exploitation of fish stocks. I wonder therefore whether in response the Minister could say a few words about how the scheme fits in with, and perhaps complements, other initiatives on which it would be good to be updated, such as the use of onboard catch monitoring.

We know that the Marine Management Organisation will be administering the scheme and that it is expected that that can be done within existing resources. The Opposition are committed to the work of the MMO and we would be grateful for any information that the Minister can give today about the future budget of that organisation. We would like to feel assured that it will be able to continue its valuable work, which affects all those involved in the fishing industry and the overall health of our marine environment. My right honourable and honourable friends in another place, Hilary Benn and Huw Irranca-Davies, are concerned about this.

A number of other points could be raised, but, given that the scheme will be reviewed and its effect considered over the next three years, perhaps I may write to the Minister about them as part of the ongoing review process. That would be helpful. In conclusion, I reiterate our general support for the scheme and its provisions.

Lord Scott of Foscote: My Lords, this statutory instrument was considered by the Merits of Statutory Instruments Committee, of which I am a member, on Tuesday 6 July. There are two respects in which the committee reached the opinion, which I share, that the statutory instrument's drafting is profoundly unsatisfactory. Both those respects were drawn to the attention of Defra, whose written response was considered by the Select Committee the following week. The response in no way relieved the unsatisfactory respects of the original statutory instrument, so the committee decided that the chairman should write to the Minister, drawing his attention to them in the hope that he would withdraw the statutory instrument, make appropriate amendments, or cause appropriate amendments to be made, and then resubmit it. Unfortunately, the Select Committee meeting at which that was decided was on the Tuesday, and on the Wednesday or the Thursday-it does not matter which-the statutory instrument was put on the agenda for the business of the House today. Therefore I do not know what the Minister's reaction is to the letter, or whether he has seen it. Perhaps he can clarify that.

Perhaps I may draw attention to the two respects in which the committee thought that the statutory instrument was not satisfactory. The first arises out of paragraph 6. The instrument provides for applications for grants to be made by the owners of qualifying fishing vessels

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to help them in meeting the costs of the software that has to be installed in order to comply with the three or four regulations that have emanated from the EU. However, paragraph 6 provides:

"The amount of the grant-

(a) must not exceed the cost of the purchase or supply of the approved software"-

that is fine, and-

Read as it stands, that would give the Secretary of State the arbitrary right to reduce to a negligible amount the grant which was to be paid.

The Minister, in introducing the instrument, said that £2,000 per vessel would be the limit of the grant that would be approved. Somewhere else I saw a suggestion that £1,500 to £2,000 would be a reasonable amount. This point was drawn to the attention of Defra, which responded by stating that Defra Ministers had made a commitment to fund the reasonable costs of software. That is fine and is entirely consistent with what the noble Lord said. However, there is no word of that in the statutory instrument. The figure of £2,000, £1,500 or any other figure does not appear there. All that the statutory instrument states is that:

"The amount of the grant ... may be such lesser amount as is determined by the Secretary of State".

It is profoundly unsatisfactory to have a statutory instrument that does not spell out what are the conditions on which the grant is to be allowed. This statutory instrument does not. How easy it would have been for it to be amended so as to specify the figure of £2,000 to which the Minister referred and include it in the criteria governing the payment to be made by the Government.

One of the essential characteristics put forward about this House is that of revising legislation. Revision of legislation is generally understood as referring to primary legislation, but it is surely just as important in relation to secondary legislation such as this. The ability of the House to exercise a revising role in relation to secondary legislation depends on the points made by such committees as the Merits of Statutory Instruments Committee being taken into account, the Minister having an opportunity to make such amendments as are thought appropriate, having regard to the comments from the Merits Committee. That has not been done in the present case. That is a pity. If this House is to be held up as providing the valuable role of revision of legislation, that must surely apply to secondary as well as to primary legislation. Here, it seems not to have done so.

The second point arises from paragraph (10) of the statutory instrument. It states:

"The Secretary of State may revoke the approval of an application, or withhold payment of a grant, or of any part of the grant, if it appears that"-

note, "if it appears that"-

"(a) any condition of payment of the grant, or of any part of it, has been breached or has not been complied with; or

(b) the applicant has committed or may have committed an offence under section 17 of the Fisheries Act 1981".

The concept of it appearing that the applicant may have committed an offence is such an unusual one as to make one wonder what provision there is for an

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appeal. The problems about that were drawn to the attention of Defra by the Merits Committee. The department's response was that,

The reply refers to "sufficient evidence". Where does one see the reference to sufficient evidence in the statutory instrument? Nowhere. The power to revoke and the power to demand repayment is simply left, apparently, at the discretion of the Secretary of State. That is profoundly unsatisfactory. That, too, would be capable of easy amendment. It is not the Minister's opinion that will be important; it is the objective facts. To hinge the revocation of a right to receive a particular payment on the proposition that it appears to the Minister, to the Secretary of State, that an offence may have been committed cannot be right. That is quite contrary to the basis on which judicial review, for example, proceeds.

Some of your Lordships may-certainly the lawyers present in this Chamber will-remember the great case of Liversidge and Anderson, where Lord Atkin gave a dissenting judgement which has formed the cornerstone of judicial review in modern times. Lord Atkin's point concerned a piece of legislation which allowed internment of individuals within the jurisdiction of this country if there was reasonable ground for suspicion that they were foreigners who might become engaged in nefarious activities. The question was whether the expression "there was reasonable ground" could be interpreted to mean "if the Secretary of State thinks that there was reasonable ground". Lord Atkin said that that could not be equated with "there was reasonable ground". Either there was or there was not, which was a matter which could be tested in the courts. There is no provision for appeal against the arbitrary exercise of power by the Minister under paragraph (10). That, too, is a profoundly unsatisfactory element in this statutory instrument.

The purpose of the statutory instrument is entirely unexceptionable. The explanations given by the noble Lord are unexceptionable, but they are not to be found in the statutory instrument. I would not wish to divide the House on the question of whether the statutory instrument should be approved, but I would wish to have an assurance from the noble Lord as regards his explanation in relation to paragraph (6)-the power to reduce the amount that can be claimed and should be paid-and paragraph (10)-the power to revoke a previous decision and, in the extreme case, call for repayment of money already paid-that those powers will not be exercised unless in the first case the amount falls above the minimum amount which the noble Lord mentioned and in the second case unless there is sufficient evidence. Both features are essential if these statutory instruments are not to go through the hoops of litigation, which is highly expensive to the country and thoroughly undesirable as a matter of principle.

Lord Lee of Trafford: My Lords, the Liberal Democrat Benches support the requirement in the scheme as a means of ensuring a more efficient and accurate form of recording fishing vessel activity than the previous practice of using paper logbooks and landing declarations,

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thus benefiting conservation. I have a particular question for my noble friend about training. In the validation and accreditation of the software systems that meet the agreed UK specification, how much regard do the contractors have for the need of training for fishermen and other operators when using the new electronic system? Many workers will have worked within the industry for a number of years and will not be used to operating such systems, so I hope that the contractors will have in mind systems that are user-friendly and simple to understand. Will the systems that meet the UK specification be similar to those used by other member states? Given the international nature of fishing operations, it would be pleasing to know that the UK Government have thought about electronic systems that will be used by neighbouring countries. Do Her Majesty's Government have an estimate of how long the scheme will run for? What is the appropriate appeals system should an applicant be turned down for a grant? Are new entrants into the fishing industry eligible for the scheme once this legislation has come into force? Overall, we wish the scheme well and hope to see its speedy passage into law.

Lord Greenway: Putting subsidies for software aside for the moment, can the Minister say whether all 200-plus fishing boats of more than 15 metres are fitted with the relevant hardware and satellite communications systems? How will that apply when the limit is reduced to 12 metres?

The Duke of Montrose: It is most interesting to see this issue brought forward at this time. I cannot go into the problems that have been dug up by the Joint Committee on Statutory Instruments, but I feel that we are going down the right road as regards the fishing industry. Countries such as Norway have had satellite tracking systems. I do not know whether, when the daily reports of the fishing vessels are submitted, that will include the satellite positioning of the boats. I would also be interested to know whether the data to be put in will include details of discards. I ask this because one of the problems with the common fisheries policy is the generally loose accuracy of reports in one way or another, including no reports of discards at all. Is that reporting a possibility under this software system? Lastly, the Minister said that at present a landing declaration has to be made. Will that be done electronically or will it be fed in separately?

Lord Henley: My Lords, I start by saying how grateful I am for the response of the noble Baroness in saying that the scheme is timely. She said that she wants to see it passed because the Government of whom she was a supporter had been keen to see it brought forward. She is right and I agree with all her earlier comments.

The noble Baroness asked a number of questions, the first of which was about the number of suppliers on the list. At the moment we have two possible suppliers. We expect to have another three or so approved shortly and others are expected to come on board later, so we hope that there will be genuine competition, which, if anything, will keep the costs down. One wants to be wary of imposing a limit and suddenly seeing everyone rather miraculously getting up to that

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limit, but we think that there will be genuine competition. She was right to say that we must do all that we can to communicate these matters to the industry; indeed, we have done what we can. Letters alerting vessel owners to the need to have e-logbooks on board, plus the existing funding scheme, were sent out by the Marine Management Organisation sometime this month.

The noble Baroness went on to ask whether there would be any discrimination between the devolved Administrations and this country. I can assure her that we will discuss these matters with the devolved Administrations. They have all agreed to pay the reasonable costs of the software for their industries. They are expected to have similar limits, but obviously that has to be a matter for them, as is the case for England. I understand that, going beyond the devolved Administrations, most if not all other member states are also paying for the purchase of electronic software for their shipping industries.

The noble Baroness also asked whether under paragraph 9 the Secretary of State would be prepared to reject an application if she thought that individuals were shopping around between the different devolved Administrations. I do not think that I can say anything that might fetter the discretion of the Secretary of State, but certainly she would be prepared to take that into account.

I will come to the noble and learned Lord, Lord Scott, last of all because he has asked me the hardest questions, so they are the ones that need to be addressed more closely, but I shall pick up on the point made by my noble friend Lord Lee. He asked about training for individual masters of ships on how to deal with the software. I can give him an assurance that training will come from the software provider. As with any computer software package, training on how to use it will normally be offered as part of the package that the individual has bought into. I can also assure him that the software may be similar to that adopted by other member states, so again there is the possibility of further reform.

The noble Lord, Lord Greenway, asked whether all these boats had the relevant hardware. When we are talking about boats of 15 metres and above, it is likely that they do, but obviously we will have to look at this again when we consider extending the scheme. Again, I can give an assurance to the noble Baroness, Lady Quin, that all these matters will be reviewed when we come to extending the scheme to 12-metre boats in due course.

As a lawyer, one always feels a certain degree of terror when someone such as the noble and learned

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Lord, Lord Scott of Foscote, points out drafting errors in an instrument, as he perceives them, and I certainly take note of what he says. On his two principal points, he suggested that there was a power and ability in paragraph 6 for the Secretary of State arbitrarily to reduce the figure from £2,000 to a negligible sum. I can assure him that we certainly have no intention of doing that. I do not know whether, spoken at the end of the debate, this assurance counts as the considered remark of a Minister under Pepper and Hart rules but, if it does, I assure him that we would certainly want to stick with the £2,000 figure.

The noble and learned Lord asked about paragraph 10 and whether the department had sufficient evidence to go ahead. I think that we do and I give him a similar assurance, which I hope will be good enough. I shall look carefully at what the noble and learned Lord has said on this matter and, if I feel that I have not said enough, I will write to him further and deal with that point in greater detail when I have discussed it with officials and colleagues in the department. As to the noble and learned Lord's complaint that he received no reply to his letter, I can only apologise. I will make inquiries as to where things went wrong.

Lord Scott of Foscote: It was not a letter that I wrote; it was a letter that the chairman of the Select Committee was supposed to write.

Lord Henley: If it was from my noble friend Lord Goodlad-or from any Member of the House-obviously I take the matter extremely seriously. I will make inquiries about that letter and get back to the noble and learned Lord and respond in the appropriate way.

What the noble and learned Lord said about the generality of the scheme-we are all in favour of it-inclines me to say that we should go ahead and pass it now. However, if we have got some of the drafting wrong, again I can only apologise, say "Mea culpa" and state that we will not do it again-at least, I hope that we will not do it again. I see in the Chamber other former Ministers from the department who may have been in this position. We shall try not to get it wrong again and will always remember that it is a very uncomfortable position to be in when a noble and learned Lord tells us that we have got something wrong.

Motion agreed.

House adjourned at 6.47 pm.

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